SERVICE TAX

2020-TIOL-1267-CESTAT-DEL

Royal Jordanian Airlines Vs CCGST & CE

ST - The issue involved is regarding inclusion of fuel surcharge, administrative charge, passenger services fee and airport taxes for the computation of assessable value under the provisions of Finance Act for the purpose of payment of service tax - The assessee has calculated and paid service tax on the amount of basic fare only and fuel surcharge, insurance surcharge, administrative charge, passenger service fee and airport taxes were not included in the gross taxable value for payment of service tax - The issue stands decided by various orders of Tribunal, including one in their own case - In view of decision of Tribunal in M/s Asian Airlines 2019-TIOL-571-CESTAT-DEL , the impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2020-TIOL-1266-CESTAT-DEL

Om Logistics Ltd Vs CCGST

ST - The issue arises is, whether the cenvat credit taken by assessee on the "Term Insurance Policy" on the life of Managing Director-Shri Ajay Singhal, is rightly taken, and for determining whether these policies are taken by assessee, which is the Policy Holder in the policy in question, and whether the policy was taken in respect of 'Keyman-person' - It is clearly mentioned in the policy documents, that the benefit under the policy in question is payable to the policy holder – assessee - Nomination is generally required to get benefit of the policy - Where the policy holder is a company under the Company Act, in such cases, no nomination is required - Thus, the Court below was in error in imposing demand along with interest under Section 75 ibid and holding that the assessee is not the beneficiary in the policy - Accordingly, assessee is entitled to benefit of cenvat credit under Rule 2 (l) of Cenvat Credit Rules on the Keyman Insurance - The impugned order is accordingly modified: CESTAT

- Appeal allowed: DELHI CESTAT

CENTRAL EXCISE

Shree Cement Ltd Vs CCE, ST & CGST

CX - The issue involved in this case pertains to inclusion of VAT subsidy amount (in the form of Vat-37 B challans, which can be utilized for subsequent period for discharge VAT), for arriving at the assessable value under Section 4 of CEA, 1944 - The Revenue proceeded to include such subsidy amount in the value of goods cleared by assessee and demanded the differential duty - Both of the parties agree that the issue is covered by Final Order of this Tribunal in their own case pertaining to other unit wherein it is held that there is no justification for inclusion in the assessable value, the VAT amounts paid by assessee using VAT 37B Challans - In view of same, impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2020-TIOL-1265-CESTAT-KOL

Incorporated Daub Verhoeven Ltd Vs CCE

CX - The assessee was engaged in manufacture of furnace and ovens - They were availing the facility of CENVAT Credit for discharging Central Excise duty - During the months of October and November, 2005, assessee defaulted in making payment of Central Excise Duty - The entire defaulted amount of duty was paid on 10/5/2007 and the applicable interest was also paid on 18/8/2007 - The duty from May to August, 2007 was paid in a consolidated manner through CENVAT Credit instead of paying from PLA - Revenue views that the assessee was required to make payment only on consignment to consignment basis and that too with cash for making use of accumulated amount of CENVAT Credit - The provisions of Rule 8 (3A) of CER, 2002 based on which the demand of duty has been raised by Department has been struck down by various High Courts as ultra vires - In this connection, some of the decisions referred are Indsur Global Ltd. 2014-TIOL-2115-HC-AHM-CX , Sandley Industries 2015-TIOL-2490-HC-P&H-CX , Malladi Drugs & Pharmaceuticals Ltd. 2015-TIOL-1262-HC-MAD-CX , Precision Fasteners Ltd. 2014-TIOL-2211-HC-AHM-CX and A.T.V. Projects India Ltd. 2016-TIOL-2015-HC-ALL-CX - Even though Revenue has challenged such decision of various High Courts before the Supreme Court, the jurisdictional High Court at Calcutta in case of Goyal MG Gases Pvt. Ltd has followed the decision of Gujarat High Court in case of Indsur Global Ltd. and has held the portion of Rule 8 (3A) as ultra vires - By following the said decision, it is held that there is no bar in making use of accumulated CENVAT Credit in making payment of Central Excise duty even during the default period - The impugned order is set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT

CUSTOMS

2020-TIOL-1419-HC-AHM-CUS

Angel Enterprise Vs UoI

Cus - Writ applicant seeks to challenge the order dated 24th June 2019 passed by the Commissioner of Customs ordering provisional release of the goods on the condition that the writ applicant shall furnish a bond of re-determined value, pay the amount of differential duty and submit bank guarantee of 30% of the differential duty.

Held: Goods in question are LED Television sets - There is no dispute with regard to the fact that the writ applicant has deposited a sum of Rs.18 lakh, which is approximately 40% of the amount of differential duty assessed - However, despite the deposit of Rs.18 lakh, the officer of the DRI declined to release the goods - It appears that the goods came to be seized way back in the year 2018 and the amount towards the differential duty is to the tune of Rs.48,80,647/- - Balance amount needs to be secured so as to protect the interest of the Revenue - The goods are lying with the respondents Nos.3 and 4 past almost two years - In such circumstances, Bench directs the writ applicant to furnish an indemnity bond of the balance amount of Rs.30,80,647/- within a period of eight days and on receipt of such indemnity bond, the necessary directions are to be issued to the respondent No.4 for the release of the goods - entire exercise be completed within a period of four weeks - Petition disposed of: High Court [para 9]

2020-TIOL-1264-CESTAT-KOL

Tarasafe International Pvt Ltd Vs CCE

Cus - The appellant is a 100% Export Oriented Unit and engaged in the manufacture of Fire Retardant Industrial Safety Garment - For the manufacture of these goods, they make use of Fire Retardant Fabric which is made by Coating the fabrics with certain specialised imported chemicals for providing fire retardant property - The appellant imported these chemicals duty free under Notification No. 52/2003-CUS - The appellant sent certain chemicals imported by availing benefit of Notification No. 52/03-Cus to the job workers who coated the chemicals on fabrics manufactured by them and returned the same to the appellant – In this regard, the permission in terms of para 4(iii) of the Notification No.52/2003-CUS was granted by the Development Commissioner for job work by certain associated manufacturers including M/s. JCT Phagwara - Department took the view that the appellant's act of clearing chemicals imported by them under Notification No. 52/2003 did not satisfy conditions stipulated in para 4 of the Notification and that the activity did not also satisfy the conditions of the CBEC circular No. 65/2002- CUS dated 7/10/2002 which dealt with the permission to be granted for job work – demand issued seeking recovery of duty on the imported chemicals and same confirmed along with imposition of interest and equivalent penalty – appeal to CESTAT.

Held: Expression of 'job work' has been interpreted in liberal terms by the Tribunal and Hon'ble High Courts - In the present case, the fire retardant chemicals imported duty free has been supplied to the job workers - Such chemicals were coated on the fabrics manufactured by the job workers. But it is seen that the Fabrics are shown to have been purchased by the appellant as evidenced by the invoices issued for such fabrics - In respect of the main job worker, M/s. JCT Faguara, it is further seen that the procurement of Fabrics from JCT is also supported by issue of CT-3 certificates issued by the Jurisdictional Superintendent for the appellant and this clearly evidences the fact that fabrics have been manufactured by JCT for supply to the appellant - In view of the above, Bench is of the view that the activity carried out at the premises of job workers will be squarely covered within the para 4 (iii) of the Notification under which due permission has been granted by the Development Commissioner - There is also no dispute that the processed fabrics on which the imported chemicals have been coated has been duly received in the premises of appellant - No justification for raising the demand for Customs duty that is not paid at the time of import on the chemicals - impugned order is set aside and the appeal is allowed: CESTAT [para 13 to 15]

- Appeal allowed: KOLKATA CESTAT

2020-TIOL-1263-CESTAT-HYD

Steer Overseas Pvt Ltd Vs CC

Cus - The assessee is engaged in export of Iron Ore Fines and during the relevant period, they had filed 55 shipping bills for export of iron ore fines declaring its Fe content between 61% to 61.5% - They claimed benefit of exemption notfn 62/2007- CUS accordingly - The export duty payable after the benefit of the said notification was Rs.50/- PMT whereas the normal rate of duty was Rs.300/- PMT - The short issue involved for determination is whether the assessee is entitled to the benefit of exemption notfn 62/2007-CUS on export of iron ore fines with Fe content claimed to be less than 62% - To ascertain the Fe content so as to extend the benefit of said exemption notification, sample was drawn and tested in the Customs Laboratory, Visakhapatnam, where its Fe content was reported as 62.67% - The said sample was retested at CRCL, New Delhi to ascertain its Fe content, when the case was remanded by Andhra Pradesh High Court, while disposing the writ petition filed by assessee challenging the initial test report - In the retest also the Fe content of the iron ore fines was found to be more than 62% - Assessee submits to reject both the test reports and to accept the private test report initially filed by them along with shipping bill where the Fe content was declared by assessee on the basis of said test report between 61% to 61.5% - No merit found in the contention of assessee being contrary to the principle of law in this regard laid down by Supreme Court in Reliance Cellulose Products Ltd 2002-TIOL-854-SC-CX - Needless to emphasize the samples drawn by department had been in accordance with the procedure prescribed under the Customs Act and the Rules made thereunder; also in the presence of both the parties i.e., department as well as the assessee, whereas the samples drawn by assessee and tested in private laboratory was without the knowledge or presence of the departmental officer - Hence, test report of said samples cannot be relied upon against the test report of Government laboratories - The impugned order is upheld and the appeal being devoid of merits, accordingly, dismissed: CESTAT

- Appeal dismissed: HYDERABAD CESTAT