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SERVICE TAX
2020-TIOL-1322-HC-MAD-ST
Doosan Infracore India Pvt Ltd Vs Assistant Commissioner
ST - Refund Petitioner filed refund claims on 28.03.2017 and 27.12.2016 respectively, being the Input Service Tax Credit taken, under Rule 5 of the CENVAT Credit Rules 2004 r/w Notification No. 27/2012-CE (NT) dated 18.06.2012 Department objected the claim contending that the refund claim is to be filed within a period of one year from the relevant date and the relevant date would be the date of receipt of payment in convertible foreign exchange with regard to the export made during the relevant period, for which the refund application is made - Aggrieved against both the rejection orders, the present Writ Petitions are filed.
Held: Through a Notification No. 14/2016-CE (NT) dated 01.03.2016, Clause 3(b) of Notification No. 27/12-CE (NT) dated 18.06.2012 came to be substituted, whereby the term 'relevant date', in the case of service provider was clarified to be after one year from the date of - (a) Receipt of payment in convertible foreign exchange where provision of service have been completed; (b) Issue of invoice where payment for the service had been received prior to the date of issue of the invoice - Since the respondent has found that the date of receipt of payment in convertible foreign exchange with regard to the exports made during the period was after the one year period referred above, both the applications were held to be time barred and thus rejected - short point involved in the present Writ Petitions is as to whether the reckoning of the relevant period brought about through the notification No. 14/16-CE (NT) dated 01.03.2016 by substitution would be prospective or retrospective in nature - The term "Substitution" literally means as a thing acting or used in place of another - While that being so, it cannot be construed as a new amendment for giving effect to certain procedures prospectively, but rather requires to be interpreted as having replaced the original procedure and thereby, the replacement would come into effect for the same time as the original procedure was provided for - If this interpretation is applied to the facts of the case involved, the reasoning of the respondent adduced in the impugned order that the relevant date would be the date of receipt of payment in convertible foreign exchange and thereby, the findings that the application was time barred, cannot be found fault with - When the original provision itself has been substituted, the procedure contemplated in the original notification becomes redundant and the subsequent substitution would have been replaced therein decisions in Tarajyot Polymers Ltd. - 2017-TIOL-2396-HC-MAD-CUS and Sodexo Food Solutions distinguished No merits in the contentions raised by the petitioner - Accordingly, both the Writ Petitions stand dismissed: High Court [para 6, 9, 10, 11, 12, 16]
- Petitions dismissed: MADRAS HIGH COURT
2020-TIOL-1321-HC-MAD-ST
CGST & CE Vs Saksoft Ltd
ST - Revenue is in appeal against Tribunal order dated 27.02.2019 - 2019-TIOL-1728-CESTAT-MAD - It is submitted that without discussing the taxability part of the service provided by the Assessee, the Tribunal has not allowed the Revenue to apply the extend limitation in the case of the Assessee merely because in the contemporary period, there are two views of the Tribunal itself in two different orders.
Held: Tribunal has not at all assigned proper reasons for its order on the issue regarding taxability of the manpower services provided by the Assessee, and whether in those facts and circumstances of the case, the extended limitation could be invoked by the Department or not - Without discussing the relevant facts and ratio of its two judgments, referred to and relied on by the Tribunal, and the facts of the case of the respondent/Assessee, merely writing these citations in the said order itself is not enough - The order of the final fact finding body at the level of Tribunal has to be self contained and should discuss the relevant facts and reasons for arriving at a particular conclusion - The higher Constitutional Courts hearing the appeals against such orders cannot be expected to delve deeper into the study of facts and ratios of the orders of the Tribunal, in the manner in which the Tribunal perhaps thought - Mere reference of the citations in the order and then holding that the extended limitation could not be invoked to the Revenue is a serious prejudice caused to the interest of the Revenue, in the absence of discussing the relevant facts, and giving reasons, for arriving at a particular conclusion - Bench hopes and expects that the Tribunal Members who deal with the appeals from now onwards, in such Revenue matters, should understand the letter and spirit of these observations of the High Court - impugned order set aside and matter remanded to Tribunal with a request to hear the appeal de novo on the said issue and decide the same as expeditiously as possible - Appeal disposed of: High Court [para 6 to 10]
- Matter remanded: MADRAS HIGH COURT
2020-TIOL-1167-CESTAT-CHD
State Bank of India Vs CCGST
ST - Refund - It is a fact on record that whatever service tax was payable by the appellant under Banking and Financial Institution Services, the same has been paid by them and there is no dispute in this regard - The service tax for which refund has been filed by the appellant was paid under wrong head as Banking and Financial Service instead of Works Contract Service under reverse charge mechanism for the services availed by L.G. Electronics Pvt. Ltd. – Since this is a fact on record, the refund claim cannot be rejected on technical grounds that the appellant has not paid service tax under Works Contract Service – no merit in the impugned order, hence same is set aside and appeal is allowed with consequential relief: CESTAT [para 4 to 6]
- Appeal allowed: CHANDIGARH CESTAT
2020-TIOL-1166-CESTAT-CHD
Hitachi Metals India Pvt Ltd Vs CCE & ST
ST - As the appellant is not liable to pay service tax, therefore, the time limit prescribed under Section 11B of the Central Excise Act, 1944 for filing the refund claim is not applicable to the facts of this case - no merit in impugned order, hence is set aside and appeal allowed with consequential relief: CESTAT [para 6, 7]
- Appeal allowed: CHANDIGARH CESTAT
2020-TIOL-1165-CESTAT-ALL
Mayur Tourist Complex Vs CCE & ST
ST - Club or Association Services - Disputed issue was an interpretational issue and in the light of the Jharkhand High Court's order in Ranchi Club Ltd. - 2012-TIOL-1031-HC-JHARKHAND-ST the assessee could have entertained a bona-fide belief that the activity is not taxable – Moreover, the entire figures were collected by the Revenue from the records maintained by the assessee - In such a scenario, no mala-fide, with a motive to evade Service Tax can be attributed to the appellant - demand is, therefore, hopelessly barred by limitation - Order set aside and appeal allowed with consequential relief: CESTAT [para 8]
- Appeal allowed: ALLAHABAD CESTAT
CENTRAL EXCISE
2020-TIOL-1164-CESTAT-KOL
Hindustan Petroleum Corporation Ltd Vs CCE
CX - Commissioner has confirmed a central excise duty demand of Rs. 9,03,61,779/- against the appellant, along with interest thereon and equivalent penalty - appeal before CESTAT.
Held:
+ Issue which arises for decision is whether blending of MS and HSD with small quantity of multi-functional additives to make branded MS and HSD respectively amounts to "manufacture" within the meaning of Section 2(f) of the Act - issue has been decided in a large number of decisions of the Tribunal, all of them holding that there was no "manufacture" within the meaning of the Act in the said activity of blending of MS and HSD with multi-functional additives to make branded MS and HSD: CESTAT [para 4, 5, 8]
+ Just because blending improves their quality and after blending they are sold under different brand names, the MS and HSD received from IOCL do not become products different from unblended MS/HSD, with different characteristics and usages - Their characteristics remain the same, as they both have to conform to ISI specifications for unblended MS/HSD and their usage also remain the same - As such, there being no "manufacture" within the meaning of the Act, no excise duty is payable on the said blended MS/HSD: CESTAT [para 10]
+ Amendments made to Exemption Notification No. 4/2006-CE by Notification No. 4/2008-CE dated March 01, 2008 does not make any difference - Notification No. 4/2006-CE, prior to amendment, provided for levy of duty on MS and HSD at a single rate, irrespective of whether or not they were being sold under a brand name or otherwise - By the amendment Notification No. 4/2008-CE, separate rates have been provided for both MS and HSD which are intended for sale with or without a brand name respectively, a higher rate being provided for sale of the products under a brand name - This amendment in no manner whatsoever alters the basic principles and tests laid down by the Apex Court, which have not been satisfied in the instant case, for a particular process to be "manufacture" of excisable goods within the meaning of the Act - The amended notification merely provides for two different rates of excise duty for MS and HSD, one for unbranded and the other for branded category and this does not and cannot mean that there is "manufacture" of excisable goods within the meaning of the Act by branding of MS and HSD or by addition of additives thereto - Moreover, merely because the aforesaid decision of the Tribunal dated 02.09.2008 [ Hindustan Petroleum Corporation Limited - 2008-TIOL-2668-CESTAT-DEL was delivered in respect of clearance prior to March 1, 2008, the same cannot be said to be not applicable to the instant case - impugned order of the Commissioner is unsustainable and is set aside and the appeal of the appellant is allowed with consequential relief: CESTAT [para 9, 12]
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1163-CESTAT-KOL
Glasspoll Fibreglass Industries Vs CCE & ST
CX - A Show Cause Notice dated March 25, 1999 was issued alleging that the appellant no. 1 was not eligible to the benefit of Notification No. 1/93-CE inasmuch as it had manufactured and cleared the goods viz. corrugation roofings and plain panels of "GLASSPOLL" brand of different sizes under brand name owned by M/s VMT Fibreglass Industries ("VMT") and hence the exclusion clause in the notification was applicable - appellant no. 1 submits that they were assigned the brand name for the products by a Deed of Assignment executed in its favour on April 7, 1993 by the brand owner VMT Fibreglass Industries ("VMT") - since the duty demand was confirmed along with imposition of penalties on the company as well as individuals, appeal filed before CESTAT.
Held: Issue as to whether goods manufactured by a small scale unit under a brand name of a person who is the owner thereof as per permission to use such brand name or under assignment granted by such person for manufacture of different goods than that being manufactured by the brandname owner, is entitled to exemption in terms of small scale industry exemption notification, such as Notification No. 1/93-CE and its earlier Notification No. 175/86-CE, now stands settled in terms of decisions of the Supreme Court Vetcare Organics (P) Ltd. - 2015-TIOL-135-SC-CX - It is held that permission to use such brand name does not make the user, the owner of such brand name - the appellant firm is not eligible to the benefit of exemption under Notification No. 1/93-CE, as held by the Commissioner in the impugned order - it can be concluded that the assessee had acted on a bona fide belief and, therefore, the extended period of limitation is not applicable - demand of duty is, therefore, to be restricted to the normal period of one year: CESTAT [para 11, 13, 14, 16]
- Appeal disposed of: KOLKATA CESTAT
2020-TIOL-1162-CESTAT-KOL
Eveready Industries India Ltd Vs CCGST & CE
CX - Assessee is engaged in manufacture of dry cell batteries and had availed Cenvat Credit on dry cell batteries supplied by one of their sister unit located in Lucknow during the accounting year 2012-13 vide RG 23A Part-II - The adjudicating authority has disallowed the Cenvat Credit taken on the basis of invoice issued by one of the assessee's sister unit located at Lucknow in respect of supply of dry cell batteries - The Commissioner (A) in the impugned order has observed that the battery so procured from Lucknow unit were exported 'as such' to Nepal without being put to use in any way in the factory of manufacture of its final products i.e. dry cell batteries - It is the case of Department that the dry cell batteries procured from the sister units of assessee were held finished products and they were not subjected to any further manufacturing process in assessee's factory and were exported as such to Nepal - Accordingly, the Cenvat Credit availed by assessee on the said product procured from their sister unit was termed as input - The Commissioner (A) has agreed to the pleas of assessee that the activity like checking, inspection and packing of dry cell batteries tantamount to manufacture in terms of Section 2(f) (iii) of the Act - However, he alleged that the assessee had not produced any document before him to substantiate their claim - The BSR (Balance of Store Report) /SSR (Stock Status Report) being financial records of assessee shows that such dry cell batteries were taken as input and BSR shows that the dry cell batteries were entered after manufacture - Therefore, the documentary evidence shows that said goods were entered as inputs and were cleared as finished goods - Activity in question does not amount to manufacture - In that case the rebate claim of Cenvat Credit available on inputs used for manufacturing the said finished goods which had been exported to Nepal is liable to be made before the Department - The impugned orders are set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
CUSTOMS
2020-TIOL-1161-CESTAT-MAD
Ahamed Gani Natchiar Vs CC
Cus - Appellant, a citizen and resident of Malaysia, is aggrieved by order-in-appeal in which the order of the original authority, absolutely confiscating 626 gms of gold jewellery, comprising of one gold chain and 10 gold bangles, valued at Rs.19,71,900/- and imposition of penalty of Rs. 1,95,000/- u/s 112(a) of Customs Act, 1962, has been upheld while dropping the penalty imposed by the original authority u/s 114AA of Customs Act, 1962.
Held: There is nothing on record to establish that the import of gold jewellery is prohibited either under the Customs Act, 1962 or under any other law for the time being in force - Under section 33 of the Foreign Trade, Development and Regulation Act, 1992, it is only such goods, to which an order under section 32 of the same Act has been issued by the Central Government, that can be deemed to be prohibited goods under section 11 of Customs Act, 1962 - No such order is on record, therefore, Bench is unable to concur with the lower appellate authority that the jewellery imported by the appellant is prohibited - Consequently, the confiscation under section 111(d) of Customs Act, 1962 fails - On perusal of the Rules pertaining to importation of jewellery, as baggage by an arriving passenger, it is seen that the quantity in the present dispute is far in excess of that allowed free of duty on import into India, therefore, the passenger has failed to comply with declaration requirements and confiscation under section 111(1) of Customs Act, 1962 is not misplaced - The appellant is a citizen of Malaysia and intends to return to her country of domicile - She was unable to carry into, and wear the gold jewellery in, India and it is her request that she should be allowed to carry it back with her on the return trip to Malaysia - In view of these circumstances and this plea, while holding that the goods are liable for confiscation under section 111(1) of Customs Act, 1962, Bench sets aside the confiscation effected u/s 111(1) of the Customs Act, 1962 - As the goods were liable for confiscation, the liability to penalty under section 112(a) of the Customs Act, 1962 is not unwarranted – However, imposition of penalty of Rs. 1,00,000/- would suffice to meet the ends of justice - Impugned goods are not liable to duty as the same have not been cleared for home consumption - Appellant is directed to retrieve the gold jewellery and export it out of the country upon complying with the penalty imposed - appeal is, accordingly, disposed of: CESTAT [para 8 to 11]
- Appeal disposed of: CHENNAI CESTAT
2020-TIOL-1160-CESTAT-HYD
CC, CE & ST Vs GMR Hyderabad International Airport Ltd
Cus - Original authority by the impugned order, confiscated the goods and imposed redemption fine of Rs.2,50,000/- - He further imposed a penalty of Rs. 30,000/- upon the importer and a penalty of Rs. 7,500/- on the respondent custodian - Revenue is in appeal challenging the imposition of a small amount of penalty of Rs. 7,500/- only.
Held: Bench finds that no duty is involved in this appeal and Revenue is only seeking enhancement of penalty imposed upon the respondents - Bench also finds that Govt. of India is seeking to reduce and minimise litigation and, therefore, Customs cases involving less than Rs.10.00 lakhs are not to be pursued, as per the litigation policy Circular No. 390/Misc/163/2010-JC, dt. 17th December 2015 - In this case, the only question involved is enhancement of the penalty upon the respondent custodians from Rs. 7,500/- - As the amount involved is very small, Bench finds that the Revenue's appeals needs to be dismissed on monetary limits as per the above litigation policy - Even if the enhancement of penalty is considered, the total value of the goods involved is around Rs. 83.00 lakhs and usually 5 - 10% of this value is imposed as penalty, which will also be much lower than Rs. 10.00 lakhs threshold - Both the Revenue appeals are dismissed: CESTAT [para 6, 7]
- Appeals dismissed: HYDERABAD CESTAT |
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