| SERVICE TAX
2020-TIOL-1276-CESTAT-BANG
Etisalat Software Solutions Pvt Ltd Vs CCT
ST - Application filed for condonation of delay of 289 days in filing appeal - Department has not brought any evidence on record to prove that the Order-in-Original No. 54/2016 dated 18/03/2016 passed by the Assistant Commissioner of Central Tax, Bangalore was received by the appellant - respondent department has only proved the dispatch of the Order-in-Original but has not proved the receipt of the same by appellant - Moreover, the company during the relevant period was passing through a difficult phase of their business and was suffering loss of business and many employees left the service of the company and there was relocation of the company's premises and shifting of various assets - the company was also going through the voluntarily liquidation process - In view of these reasons as also mentioned in the affidavits of the Director, Consultant of the company and the Official Liquidator of the company, Bench is of the considered view that rejection of the appeal by the Commissioner (Appeals) is not sustainable in law - There was a delay of 24 days in filing the appeal before the Commissioner (Appeals) which ought to have condoned - Bench condones the delay of 24 days in filing the appeal before the Commissioner (Appeals) and remands the matter with a direction to decide the appeal on merits within one month - Application allowed and appeal disposed of: CESTAT [para 9]
- Application allowed/Appeal disposed of: BANGALORE CESTAT
2020-TIOL-1275-CESTAT-HYD
Infotech Enterprises Ltd Vs CC, CE & ST
ST - The assessee had set up subsidiaries in different countries for delivery of software services - As the subsidiary is a separate legal entity than the assessee, agreements have been entered into between the assessee and their subsidiaries located in different countries - As per these agreements, all of which seem to be more or less identical, the subsidiary is required to deliver software services as per the work order issued by assessee - In return for rendering these services, the subsidiary got paid - There is nothing in agreements to show that the subsidiary is required to provide manpower to the assessee in those countries - The argument of Department is that the billing is done by subsidiary in terms of number of manpower or man days of different persons required/utilised for performing the services - Merely because the total amount has been billed using the number of man hours / man days as a measure, it does not become a manpower supply service - If this logic is accepted, every case where the billing is done based on the number of man hours/man days should be treated as a manpower supply service - The real test of determining the nature of service is to go through the agreement to understand what is the deliverable which the service provider has to deliver to the service recipient - In this case, this deliverable service is the delivery of software services to the clients of the assessee - The demand made by Revenue upon assessee in the two SCNs under the head "manpower recruitment and supply service" under reverse charge mechanism is set aside along with interest - Consequently, penalties imposed upon assessee under Section 76, 77 and 78 are also set aside - In so far as the demands under the other heads namely "business auxiliary service", "management or business consultancy services" are concerned, assessee has paid these amounts along with the interest and has not contested them: CESTAT
- Appeal disposed of: HYDERABAD CESTAT
CENTRAL EXCISE
2020-TIOL-1282-CESTAT-BANG
Hical India Pvt Ltd Vs CCE
CX - Appellant is engaged in the manufacture of camera (re-loadable) under contract manufacturing agreement with M/s Kodak India P Ltd. - Duty on the said goods classifiable under heading 9006 5100 is assessed on the basis of MRP u/s 4A of the CEA, 1944 - appellant had availed CENVAT credit on the 'film rolls' which is supplied free of cost by M/s Kodak for bundling with the camera manufactured by the appellant so as to clear the goods as 'combination pack' containing the camera and film roll - Department has denied the CENVAT credit so availed on the 'film rolls' - appeal before CESTAT.
Held: Tribunal-Bangalore in the case of Kodak India Ltd., under the erstwhile credit provisions in the Central Excise Rules has held that 'film rolls' cleared with the camera will constitute "accessories" and be eligible for modvat credit - Adjudicating authority distinguishing the said decision on the ground that the only condition for allowing the credit under the erstwhile rule 57B of CER, 1944 was inclusion of their cost in the assessable value of the final product is not proper inasmuch as once the film rolls are considered as 'accessories' to a camera, it qualifies itself as 'input' as defined in rule 2(k) of CCR, 2004 and is entitled to credit - moreover, when the film roll is being clubbed with the camera and both are packed in a combi-pack the MRP of the combi-pack will obviously include the value of film roll and make it eligible for credit - Gujarat High Court in the case of Prime Health Care Products - 2010-TIOL-901-HC-AHM-CX has held that credit is eligible on bought out toothbrush when cleared in a combi-pack with the tooth paste manufactured by the assessee inasmuch as the activity of repacking and relabelling of the combi-pack reaches to the final stage of marketability, will amount to manufacture, on which excise duty is being paid by assessee - Therefore, there is no merit in the impugned orders denying CENVAT credit - same are set aside and the appeals are allowed with consequential relief: CESTAT [para 9 to 12]
- Appeals allowed: BANGALORE CESTAT
Pepsico India Holdings Pvt Ltd Vs CCE
CX - The assessee is manufacturer of excisable goods, namely, Lehar Kurkure, Cheetos and Wheels and was classifying the said goods under heading 21.08 and availing exemption under Notfn 5/1999 - The proceedings were initiated against assessee to classify the said goods under sub heading 1904.10 to deny the benefit of Notfn 5/99 - In pursuance of classification sought by Revenue, assessee started paying duty by classifying their goods under sub heading 1904.10 under protest - The said fact was intimated to the department by assessee - Later on, the order classifying the goods under sub heading 1904.10 was challenged before this Tribunal and this Tribunal vide final order dt.26.09.2002 held classification of the goods under heading 21.08 and allowed the benefit of exemption Notfn 5/99 - The said order was challenged by department before Apex Court which was dismissed - Consequent to that, the assessee filed refund of duty paid under protest - A SCN was issued to assessee on 14.09.2012 alleging that the refund claim is time barred and the assessee failed to pass the bar of unjust enrichment - Same was rejected - Assessee has filed refund within one year from the date of order of Apex Court - Admittedly, prior to that, the Revenue has challenged the order of classification, in that circumstance, the time limit is to be taken from the date when the Supreme Court has settled the issue - Admittedly, assessee has filed refund claim within one year from the date of order of Supreme Court - Thus, the refund claim filed by assessee is in time - Therefore, the refund has rightly been sanctioned by the Commissioner (A) - The demand itself has been set aside by Tribunal, therefore, the order of appropriation is not sustainable and the same is set aside: CESTAT
- Assessee's appeal allowed: CHANDIGARH CESTAT
2020-TIOL-1273-CESTAT-DEL
Shree Ram Hitech Steel & Power Pvt Ltd Vs CC & CE
CX - M/s. Salasar Steel is the merchant exporter and they gave undertaking to the Department that for the purpose of export, they need the products manufactured by the appellants and accordingly, obtained CT-1 forms from the proper officer of Central Excise Department – however, it was found by the department that the good procured from the appellants wer not used for the purpose of export but were diverted for home consumption without payment of CE duty - High Court has not interfered with the demand of duty confirmed against M/s. Salasar Steel but have remanded only for the limited purpose of recalculation of interest under section 11AB and also for recovering the penalty imposable under section 11AC of the Act and to further give opportunity to pay reduced penalty, if paid within the stipulated time – in view thereof, the penalties imposed on the appellants under rule 26 of CER are also set aside and all these appeals are allowed by way of remand to the adjudicating authority for a denovo determination of the issue of imposition of penalty under Rule 26 after disposal of the matter in the case of M/s. Salasar Steel: CESTAT [para 8, 9]
- Matter remanded: DELHI CESTAT
2020-TIOL-1272-CESTAT-AHM
Renaissance Jewellery Ltd Vs CCE & ST
CX - The issue involves is that whether the assessee is entitled for Cenvat Credit in respect of Service Tax for Outward Freight Charges i.e. Indian Customs Ports to foreign destination for transportation of export goods - The assessee have been exporting their goods and in context of export of goods, they had claimed refund in respect of Input Services used in relation to the export of goods under Rule 5 of CCR, 2004 - The Sanctioning Authority in following Orders In Original sanctioned the refund of Cenvat Credit in respect of Input Services including Outward Freight Charges - The Orders In Original have been accepted by revenue, as no further appeal was made - It is obvious that the refund claim under Rule 5 is sanctioned only after ascertaining the admissibility of Cenvat Credit in respect of Input Service for which the refund is sought for - Therefore, the issue of admissibility of Input Service has been clearly examined by the refund sanctioning authority and the issue attained finality therefore, subsequently issue the SCN on the same Input Service Credit is not proper and legal - Revenue cannot take two yard sticks, one for allowing the refund and other for allowing the Cenvat Credit - The assessee have been filing the refund claim periodically from 2013 onwards in respect of the Input Service which is the subject matter in this case - Moreover, assessee had been filing ER2 returns regularly - Therefore, there is no suppression of fact on the part of assessee, hence the demand is also hit by limitation - The demand in the present case is not sustainable: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
CUSTOMS
2020-TIOL-1283-CESTAT-BANG
Himatsingka Seide Ltd Vs CC
Cus - On the basis of audit objection, department issued different SCNs to the units holding that for purposes of valuation of clearances of goods, by the holding company to the subsidiary company, the marketing expenses incurred by the subsidiary should be included to the value of the finished goods – demands confirmed, hence appeal before CESTAT.
Held:
+ Brief issues that require consideration in the instant case are as to whether the appellants and their subsidiary are related and if so, whether such relationship has influenced the valuation of the goods cleared by the appellants; whether the Department has arrived at the valuation correctly and whether extended period was invocable - All the impugned orders decided the valuation in terms of Rule 7 of CVR, 1988 or Rule 8 of CVR, 2007 - The OIOs are silent on as to why the said Rule 7/8 have been invoked - There is no discussion on as to why the value declared by appellant needs to be rejected and why it should be arrived at under Rule 7/8 of Customs Valuation Rules, sequentially proceeding with preceding Rules in terms of Rule 3 - Apex Court has gone in to the issue of valuation of clearances by EOUs to DTA in the case of Morarjee Brembana Ltd - 2015-TIOL-62-SC-CX - In view of the said judgment, the issue needs to go back to the original authority to consider the Rules of valuation and to give clear findings on the conclusions arrived thereof - Moreover, the initial SCN was adjudicated by the Commissioner and the subsequent SCNs were adjudicated by lower authorities - In the interest of justice, Bench holds that all the SCNs be adjudicated now by Commissioner who is competent to adjudicate the case involving highest duty: CESTAT [para 9, 10, 12]
+ As an EOU, the appellants should have submitted a B17 bond to the jurisdictional authorities - However, the Show Cause Notices have not been issued invoking the conditions of the bond - Submissions of the appellants have not been considered in detail inasmuch as the manner in which the provisional assessments were finalised have not been discussed at all – Further, in the case of Goodyear South Asia Tyres and others 2015-TIOL-165-SC-CX , it was held that advancement of loan by itself cannot be a reason to hold them as related persons in terms of Section 4(4)(c) of Central Excise Act, 1944 – Bench finds that the impugned order has not considered the submissions of the appellants on this account - all the impugned orders are set aside and appeals are allowed by way of remand to Commissioner of Customs to pass an order within 4 months, as may be practicable: CESTAT [para 13, 14, 17]
- Matter remanded: BANGALORE CESTAT
2020-TIOL-1271-CESTAT-DEL
CC Vs RM Impex
Cus - The assessee claimed refund of 4% SAD, which had been levied u/s 3(5) of the Customs Tariff Act, 1975 - The refund of such duty is provided for under exemption Notfn No 102/2007-Cus - On assessment for the relevant period, such refund was partly allowed - On appeal, the Commr.(A) sanctioned the full refund claimed - The Revenue sought review of such order, but that too was passed in favor of the assessee - Hence the present appeal.
Held - The refund claim of additional duty due to the exemption flowing out of Notification No. 102/2007 has to be filed within one year in view of the subsequent Notification No. 93/2008-Cus which still holds good and also in view of Section 27 of the Customs Act, 1962 - Hence the Commr.(A) erroneously expanded the interpretation in respect of limitation, in favor of the assessee - Hence the O-i-A sanctioning entire amount of refund, merits being set aside: CESTAT
- Revenue's appeal allowed: DELHI CESTAT
2020-TIOL-1270-CESTAT-DEL
Daya Enterprises Vs CC
Cus - Application filed for condoning delay of 512 days in preferring the appeal against order-in-original dated 15.09.2017 - appellant submits that the impugned order was never served upon them and they came to know about the same only when the received the recovery notice dated 02.08.2018; pursuant thereto they took steps to obtain certified copy of order and file appeal on 18.02.2019 - appellant further submits that there is neither deliberate delay nor latches on their part in preferring this appeal and since the appellant has a good case on merits, they will suffer irreparable loss if their appeal is not admitted for hearing.
Held: Revenue has not produced the acknowledgement due as proof of delivery - Prima facie , it appears probable that the appellant did not receive the impugned order, and could know about the said order, only in August, 2018, when they received the recovery notice - in the interest of justice giving the benefit of doubt, Bench allows the condonation of delay application subject to payment of cost of Rs. 50,000/-, which shall be payable in the 'Prime Minister Cares Fund' - compliance to be filed before 19.10.2020: CESTAT [para 5, 6]
- Application allowed: DELHI CESTAT |
