2020-TIOL-NEWS-258, Dated: Monday, November 02, 2020

ST - Rebate of tax paid on services exported - Appellant has not filed quarterly rebate claims as is required under Notification No.27/2012-CE dt. 18/06/2012 and, therefore, the claim filed by the appellant on yearly basis was held to be not maintainable and hence time-barred - appeal filed.

Held: In the present case, there is no dispute that the appellant's services qualified as export of service under Export of Services Rules, 2005 - The appellant had paid the service tax on exported output services and subsequently filed rebate claim under Notification No.11/2005-ST dt. 19/04/2005 which is a self-contained code to deal with the claim filed by the appellant - In the said Notification, no time limit is prescribed for filing rebate claim but this issue has been settled by various decisions of the Tribunal and the High Court that for claiming refund/rebate, the time limit prescribed under Section 11B of the Central Excise Act, 1944 is applicable - Further, as per the Export of Services Rules, 2005, the receipt of consideration in foreign exchange is a condition precedent for qualifying a service to be an export service - Since in the present case, the refund is filed for whole of one year i.e. for April 2006 to March 2007 and hence the limitation should be computed from the end of the year i.e. from 31/03/2007 and the appellant filed the rebate application on 04/03/2008 and hence it is within time - For the purpose of verification of documents regarding the payment of service tax on export of services and the corresponding FIRCs received by the appellant, matter is remanded to the original authority: CESTAT [para 6, 7]

ST - During audit of records of assessee, it was noticed that they have entered into agreement for renting of premises and machineries with M/s Agro Fab - On further scrutiny of records of M/s Agro Fab, it was noticed that apart from rent they were paying charges towards water and electricity, job charges, salary and wages to the employees, insurance and auditing charges on behalf of assessee, thus assessee have provided all the infrastructure support facilities along with manpower to them against an agreed consideration - Revenue views that the services provided by assessee were "infrastructure support services", classifiable under taxable category "Business Support Services" - The O-I-A is a classic case wherein Commissioner (A) has rejected the submissions made by assessee before him saying that the assessee have not made the submissions which he expected them to make - If the conclusion as arrived by Commissioner (A) were to be accepted then it would imply that the manufacturer by selling the goods manufactured by him to the independent trader will not be a case of sale of goods but a case of "Business Support Services" - Hence, Tribunal is not in position to agree to the logic of Commissioner (A) in not allowing the deductions claimed by assessee towards Sale of Good, Job Charges, Loan repayment, Excise Duty and Education Cess paid as per the explanation appended to Notfn 6/2005-ST as amended by Notfn 8/2008-ST - Assessee had made specific claim before adjudicating authority and the Commissioner (A) giving the break up of amounts received by them during the period of demand - They had claimed the benefit of small scale exemption and had themselves determined the value of taxable service and the tax payable for each year - Thus, after allowing the deduction as claimed by assessee towards Loan Repayment received, Sale of Goods, Job Charges received, excise duty and education cess the aggregate value of taxable services provided should be taken for computing the taxable value in the respective years and service tax liabilities determined accordingly after allowing the benefit of Small Scale Exemption under notfn 6/2005-ST as amended from time to time, subject to assessee fulfilling conditions as prescribed - No force found in the submissions made by assessee on the issue of limitation because the facts which led to short payment of Service Tax were only in the knowledge of assessee and they had failed to determine and pay the Service Tax due from them - The impugned order is set aside and the matter remanded back for recomputation of service tax payable: CESTAT

- Appeal partly allowed: MUMBAI CESTAT

CX - The assessee is engaged in the manufacture of cotton and man-made fabrics falling under Chapter 52, 54 & 55 of Central Excise Tariff Act, 1985 - For processing of the fabrics, the assessee used to prepare and consume within the factory "printing paste" falling under Chapter 32 of Central Excise Tariff Act, 1985 - The printing paste was prepared from the duty paid standardized, formulated and prepared dyes and chemicals purchased from the open market - The assessee then added Glauber's salt, Dextrin and other chemicals prepared the said paste, which was used in printing of cloth within the factory premises - The Revenue opined that the preparation of 'printing paste' fall within the scope of Note 6 to Chapter 32 hence resulted into 'manufacture' within the definition of 'manufacture' prescribed under Section 2(f) of Central Excise Act, 1944 and classifiable under sub-heading 3204.29 of Central Excise Tariff Act, 1985 - Hence SCNs were issued proposing duty demand for the relevant period & proposing to impose penalty - On adjudication, the demands were confirmed by the adjudicating authority with penalty - On appeal, the Commr(A) remanded the matter to the adjudicating authority for de novo consideration - The de novo adjudication was completed & the assessee filed appeal against the such order before the Commissioner (Appeals), who again remanded the matter to the adjudicating authority for verification of certain facts - On adjudication for the third time, the duty was confirmed with penalty - This time, such findings were upheld by the Commr.(A) - Hence the present appeal.

Held - The issue involves in very narrow compass i.e. levy of duty on 'printing paste' prepared in the factory and used for printing textile goods - However, the matter was remanded by the Commissioner (Appeals) twice to ascertain the facts whether 'printing paste' prepared by the assessee in their factory premises is from formulated standardized or unformulated unstandardized dyes to apply Circular No. 2/93 dated 21.4.1993 - There has been dispute relating to levy of duty on preparation/ manufacture of printing paste by the Mills owners, and used in the factory premises captively during the relevant period - To resolve the confusion prevailing on the issue, clarification was issued by the Board under section 37B of Central Excise Act, 1944 bearing No. 2/93 - In this case, SCN was issued to the assessee back in 1990, alleging that the assessee had manufactured and captively consumed printing paste in their factory premises falling under Chapter sub-heading 3204.29 but failed to discharge duty on the same - By virtue of the decision of the Apex Court in Phoenix Mills Ltd. the burden lies on the Revenue to prove that printing paste manufactured in their factory premises and consumed captively was out of unformulated, unstandardized or unprepared form of dyes - On the contrary, from the records, it is seen that the assessee had produced purchase invoice of dyes, indicating that the dyes purchased by them were standardized one - Also, SASMIRA's certificate produced by the assessee reveals that printing paste prepared by the assessee are of short shelf life and cannot be marketable - Hence, in view of the overwhelming evidence and in absence of any contrary evidence produced by the Revenue to show that the printing paste manufactured by the appellant in their factory premises was from nonstandardized, non-formulated or non-prepared dyes, the o-i-o confirming the duty holding that the printing paste prepared by the assessee qualifies as 'manufacture as per Section 2(f) of CEA, 1944 & is accordingly dutiable under Chapter sub-heading 3204.29 of CETA, 1985, cannot be sustained: CESTAT

NDPS - Application has been filed by the appellant under Section 389 Cr.PC read with Section 482 Cr.PC for suspension of sentence during the pendency of the appeal – Appellant has been sentenced to 15 years RI and fine of Rs.1,50,000/-.

Held: The broad principles that the Court needs to apply and satisfy itself while considering an application for grant of suspension of sentence is that the appellant is not guilty of the offence and there are reasonable grounds to arrive at such a belief as also that he is not likely to commit the offence once the sentence is suspended – There is force in the contention of the appellant that the charge for the offence punishable under Section 29 of the NDPS Act pertaining to criminal conspiracy to possess the contraband substance or to deal with it, was held to be proved only against the co-accused Mandeep Kaur and not against the appellant; that the Trial Court has observed that there was no independent corroborative evidence led by the prosecution to substantiate the said charge; that the appellant was only a driver of the main accused Balwinder and had been hired by the latter a few days prior to the alleged incident; that the appellant had repeatedly pointed out that Balwinder is absconding for the last several years and his status as reflected is of a proclaimed offender; that the appellant had subsequently retracted the statement and, therefore, as per law a retracted statement, even though retraction is not proved, is a weak piece of evidence to connect the accused to the alleged offence; that being a driver, the appellant was prima facie not in conscious possession of the contraband and, therefore, there exists a reasonable ground to conclude that he may not be guilty of the alleged offence - As per the nominal roll against the sentence of RI for 15 years and fine of Rs.1,50,000/-, the appellant has undergone 13 years and 3 months, including the under-trial period; jail conduct for the past one year and even prior thereto has been satisfactory - In light of the aforesaid facts and circumstances, especially the fact that the appellant has undergone major part of the sentence and the fact that his wife is suffering from multiple medical ailments, with nobody to look after her and the four minor children, Bench is of the view that the present application deserves to be allowed - sentence awarded to the appellant shall remain suspended during the pendency of the appeal – application disposed of: High Court [para 13, 14, 16, 17, 18, 19, 20]

Cus - The assessee imported various consignments of CRGO of different grades, viz., M3/M4/M5 etc. and filed Bills of Entry for assessment and clearance of imported consignment before the Customs authorities - However, the value declared in the BoE was rejected by the Department in terms of Rule 12 of the Customs Valuation (Determination of value of imported goods) Rules, 2007 and the same was re-determined under Rule 5 - In support of rejection of the declared value and re- determination of the same under Rule 5 ibid, the original authority referred to the goods imported under the subject Bills of Entry against the contemporaneous higher import price of the similar goods made by the other importer - Duty demand was raised accordingly. Hence this appeal.

Held - On perussal of the description, grade & quantity of the goods mentioned in the O-i-O, it is seen that the original authority had referred to the description as CRGO-M3, M4, M5 - On comparison of the description with other particulars mentioned in the O-i-O vis-à-vis the import documents, viz., Bills of Entry, Purchase Order etc., it is found that the reference of such goods are not figuring in all the cases in the import documents presented by the assessee for assessment - Thus, the original authority had not referred to the contemporaneous import in the proper manner as prescribed under Rule 5 - Hence the matter should go back to the original authority for appreciation of the facts to the effect that the subject goods imported by the appellant were liable for rejection and the value can be redetermined by referring to the relevant provisions of the Valuation Rules, 2007 - For carrying out such exercise, the original authority should properly examine the import documents for a correct approval that the goods in question were in fact identical and similar in all respects and the requirements of the valuation rules have appropriately been complied with for the purpose of redetermination of the value - For carrying out the de novo adjudication proceedings, the assessee should produce the documentary evidences in support of its stand that the goods are neither similar nor identical and accordingly, the value declared for the purpose of assessment would be considered as transaction value, which cannot be discarded and re-determined under the Valuation Rules, 2007: CESTAT