2021-TIOL-58-HC-AHM-ST
Bhavani Contractor Vs UoI
ST - Short point is whether the Designated Committee should have given an opportunity of hearing to the writ applicant before passing the impugned order dated 17.06.2020.
Held: In the case on hand, the Designated Committee took the view that as an inquiry has been initiated pursuant to the summons under Section 14 of the Central Excise Act, 1944, the declaration of self-assessment cannot be accepted - Let Notice for final disposal be issued to the respondents, returnable on 19.01.2021: High Court [para 6]
- Notice issued: GUJARAT HIGH COURT
2021-TIOL-57-HC-AHM-ST
EI Dupont India Pvt Ltd Vs Designated Committee
ST - SVLDRS, 2019 - As the other side (Revenue) is not ready with the matter, it is not possible for this Court to proceed today with the hearing of the main matter - As a last chance, matter is posted on 20.01.2021 - Bench is adjourning this matter with a distinct understanding that on the next date of hearing, if none appears for the respondent, this Court shall proceed to hear the writ applicant on merits and pass an appropriate order: High Court [para 4]
- Matter posted: GUJARAT HIGH COURT
2021-TIOL-53-HC-KAR-ST
Pierian Services Pvt Ltd Vs Designated Committee
ST - SVLDRS, 2019 - Right to Tax relief under the SVLDR Scheme is a substantial right, and until and unless a declarant is ineligible for tax relief, the benefit of such relief cannot be refused on technical grounds - Section 124(2) stipulates that the 'Tax Relief' shall be calculated subject to the condition that any deposit during enquiry or investigation or audit shall be deducted when issuing the statement indicating the amount payable by a declarant and subject to the condition that if the amount so paid exceeds the amount payable by the declarant as indicated in the statement, the declarant shall not be entitled to any relief - Petitioner would be entitled Tax Relief subject to deduction of Rs.92,33,857/- - However, the Tax relief is refused referring to the order-in-original which does not even refer to the deposit made by the petitioner after the Show Cause Notice dated 29.12.2014 - Writ Petition is allowed - The impugned Form No. SVLDRS-2 and Form No. SVLDRS-3 issued by the Designated Committee, SVLDRS are quashed and the first respondent is called upon to issue appropriate Discharge Certificate: High Court [para 10]ST - SVLDRS, 2019 - Right to Tax relief under the SVLDR Scheme is a substantial right, and until and unless a declarant is ineligible for tax relief, the benefit of such relief cannot be refused on technical grounds - Section 124(2) stipulates that the 'Tax Relief' shall be calculated subject to the condition that any deposit during enquiry or investigation or audit shall be deducted when issuing the statement indicating the amount payable by a declarant and subject to the condition that if the amount so paid exceeds the amount payable by the declarant as indicated in the statement, the declarant shall not be entitled to any relief - Petitioner would be entitled Tax Relief subject to deduction of Rs.92,33,857/- - However, the Tax relief is refused referring to the order-in-original which does not even refer to the deposit made by the petitioner after the Show Cause Notice dated 29.12.2014 - Writ Petition is allowed - The impugned Form No. SVLDRS-2 and Form No. SVLDRS-3 issued by the Designated Committee, SVLDRS are quashed and the first respondent is called upon to issue appropriate Discharge Certificate: High Court [para 10]
- Petition allowed : KARNATAKA HIGH COURT
2021-TIOL-27-CESTAT-KOL
CCE & ST Vs Integrated Coal Mining Ltd
ST - Commissioner held that sized coal is an excisable product and sizing operation is an activity incidental and ancillary to the completion of a manufactured product and since the value of sizing is includible and has been included in the assessable value of coal sold to the customers, CESC Ltd. and Cresent Power Ltd. (CPL) by ICML (the respondent), sizing of coal cannot be termed as a service taxable under the heading "Business Auxiliary Service" in terms of the Finance Act, 1994 - Aggrieved by this order, Revenue is in appeal before CESTAT - It iscontended that the Adjudicating Authority had erred in holding that sizing of coal is a process incidental and ancillary to manufacture of coal and that coal is a manufactured product and thereby dropping the demand of service tax made in the show cause notice.
Held: [para 7.2, 8.1, 8.3, 9, 10, 10.1, 11]
+ Section 65(19)(v) of the Finance Act includes, as "Business Auxiliary Service", production or processing of goods "for and on behalf of client". The requirement for application of this clause is that the goods in question has to belong to the client of the appellant assessee, on which production or processing which does not amount to manufacture of goods within the meaning of Section 2(f) of the Central Excise Act is carried out by the appellant assessee. This requirement is not satisfied in the instant case.
+ At the time when the sizing of coal takes place, they continue to remain ICML's property and not that of either CESC or CPL. The sale of coal and consequently the title thereof passes on to CESC/CPL only at the delivery point specified in the respective agreements, which is after completion of sizing of the coal. There is, therefore, no production or processing of goods for and on behalf of any client or customer, as required under Section 65(19)(v) of the Act.
+ Sizing of coal is an incidental and ancillary process to make coal marketable and thus complete "manufacture" of coal and to make it into "excisable goods" as per Section 2(d) of the Central Excise Act. The process of sizing of coal is also, therefore, outside Section 65(19) of the Act since it is a process in the manufacture of the final product, sized coal.
+ Further, in case of the period from March 24, 2011 to April 24, 2015 proceedings by issuance of show cause notices were initiated by the jurisdictional Commissioner/Principal Commissioner of Central Excise against ICML alleging undervaluation of the transaction values declared for the said period, of bituminous coal manufactured and cleared from the mine, by non-inclusion of elements, namely, royalty, stowing excise duty, primary education cess, rural employment cess, public works cess, road cess and AMBH fees and thereby short paying "central excise duty" to the extent contained in the show cause notices.
+ The proceedings under the said show cause notices have resulted in adjudication orders, passed by the Commissioner of Central Excise, Kolkata-I Commissionerate/Principal Commissioner of Central Excise, Kolkata-I, dated 16.12.2014, 14.10.2015 and 27.05.2016respectively. There the stand of the Central Excise Department is that ICML is engaged in the manufacture of bituminous coal classifiable under Chapter Sub-Heading 27011200 of the First Schedule to the Central Excise Tariff Act, 1985, for which it is holder of central excise registration number, and that ICML had manufactured and cleared the said goods on payment of central excise duty computed on the assessable value/transaction value that included the base price, sizing charges, washing charges and transportation charges, but had not paid central excise duty by not including cesses/fees, royalty resulting in short payment of excise duty payable of amounts confirmed by the respective adjudication orders.
+ Even for the periods pertaining to years 2015-16, 2016-17 and 2017-18 (upto June 30, 2017) the assessments under the Central Excise provisions have been finalised by the jurisdictional proper officer and differential central excise duty, as finally assessed, along with interest, were demanded and paid by ICML.
+ It is also not disputed that all along ICML has paid value added tax or Central Sales Tax on the coal and shale sold by it to CESC and CPL respectively.
+ In such circumstances, applying the principle laid down by the Supreme Court in Bharat Sanchar Nigam Ltd. Vs. UOI - 2006-TIOL-15-SC-ST-LB , since scheme of taxation under the Constitution of India provides for mutually exclusive levies, if certain activity amounts to "manufacture", it cannot become or be contended to be service. This issue is no more res integra .
+ In view of the decisions inCommr. of CE&ST Vs. Mahanadi Coalfields Ltd., Final Order No. 76585/2017 dated 21.08.2017, Northern Coalfields Ltd. Vs. Commissioner, CGST, CE&C, - 2020-TIOL-338-CESTAT-DEL South Eastern Coalfields Ltd. Vs. CCE&ST, - 2018-TIOL-1691-CESTAT-DEL no infirmity with the impugned order of the Commissioner.
+ The appeal of the Revenue has no merit.The impugned order dated 19.12.2013 of the Commissioner is,therefore, upheld and the Department's appeal is dismissed.
- Appeal dismissed KOLKATA CESTAT
2021-TIOL-23-CESTAT-ALL
Kronos Solutions India Pvt Ltd Vs Commissioner of CGST
ST - A ppellant was registered with the Service Tax department for providing taxable service under the category of 'Information Technology Software Services" - They were availing the facility of CENVAT credit in terms of CCR, 2004 - As such on services being exported, they were entitled to refund of such accumulated credit - In terms of Rule 5 of said Rules read with Notification No. 27/2012-CE (NT) , the appellant was required to debit the CENVAT credit from their CENVAT Credit account at the time of filing of refund application - Appellant submitted a voucher dated 05.03.2014 indicating reversal of credit amount equivalent to the refund claimed by them - However, the said reversal was not reflected in the relevant ST-3 return for the period October, 2013 to March, 2014 but the same were shown in the ST-3 return filed for the period April, 2015 to September, 2015 - Therefore, Revenue entertained a view that the said condition 2(h) of the Notification does not stand satisfied and consequently, the appellant was not entitled to the refund - appeal filed.
Held: Appellant had taken a categorical stand that the debit was made on 05.03.2014 i.e. prior to filing of the refund claim - The Revenue is not disputing the said debit entry but is adopting a hyper technical view that such debit entry was reflected in the ST-3 return of subsequent period and not for the period in question - The entire idea of debit of CENVAT credit before filing of refund claim is that an assessee does not avail the dual benefit of credit as also refund of the same - It is primarily for this reason that the relevant rule read with notification in question requires debit before filing of refund claim so as to avoid double benefit to the claimant - Inasmuch the books of accounts stand already debited by the appellant on 05.03.2014 before filing of refund claim on 20.03.2014, Bench finds no justifiable reason to deny the refund claim on the said hyper-technical ground - Impugned order is set aside and Revenue is directed to refund the admissible amount of credit to the appellant - Appeal is disposed of: CESTAT [para 4, 5]
- Appeal disposed of :ALLAHABAD CESTAT
2021-TIOL-20-CESTAT-DEL
Jayaswal Neco Industries Ltd Vs CC, CE & ST
ST - The assessee is engaged in providing services of 'goods transport agency' and 'business auxiliary service' - During audit, it was noticed that Abhijeet Ltd. and Corporate Ltd. had received commission on account of sale of DRI and Pig Iron from assessee but had not paid service tax on such commission - Accordingly, a SCN was issued to assessee proposing service tax on commission/discounts paid to Abhijeet Ltd. and Corporate Ltd., alleging that they acted as commission agents of assessee and had received commission from assessee, which was taxable under BAS - The reason for demanding tax from assessee was that Abhijeet Ltd. and Corporate Ltd. had merged with assessee and, therefore, assessee is liable to pay service tax that was payable by Abhijeet Ltd. and Corporate ltd. - It is not in dispute that the assessee had taken on lease the manufacturing plants of Abhijeet Ltd. and Corporate Ltd. and the manufactured products DRI, Pig Iron and billets were sold to Abhijeet Ltd. and Corporate Ltd. - They shared profits with Abhijeet Ltd. and Corporate Ltd. by way of discounts and incentives, which were recorded in books of account of assessee as "COMM. SALES PIG IRON & DRI" and "COMMISSION OF SALES" - It is clear from the Scheme of Arrangement that only the "Demerged Undertakings" comprising the Sponge Iron Plants and Power Plants of Abhijeet Ltd. and Corporate Ltd. that alone were merged with the assessee - The body corporate of Abhijeet Ltd. and Corporate Ltd. did not merge with assessee and they continued to execute their business transactions - Thus, the liabilities of Abhijeet Ltd. and Corporate Ltd. could not have been fastened upon assessee - Thus, the SCN could have been issued to Abhijeet Ltd. and Corporate Ltd. and not to the assessee, which is a service recipient and not "a person" liable to pay service tax under section 68 of the Finance Act - The confirmation of demand for this reason is also bad in law - The impugned order is therefore set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2021-TIOL-19-CESTAT-DEL
Viwa Drymix Pvt Ltd Vs Pr CCGST, CE & C
CX - The issue involved is as to whether the valuation of wall putty in packages of 40kg should be determined under section 4 of CEA, 1944, as was contended by assessee or under section 4A of Excise Act as contended by Department - The interpretation of rule 3 of Rules and consequent non-affixation of MRP on the 40 kg packages, finds support from the clarification given by Legal Metrology Department by letter dated June 29, 2019 - The Legal Metrology Department clarified to assessee that "if wall putty is packed in packages above 25 kgs, as per Rule 3(a) of the said Rules, the provisions of Chapter II including Rule 6(1)(e), (requiring printing of MRP) do not apply to such packages" and further that "packages of 40 kg and 50 kg of all the goods other than cement & fertilizer", are exempted from affixing of MRP declaration - The reasons given by Principal Commissioner for discarding the clarification given by Legal Metrology Department on two counts, namely that the provisions of rule 3 are clear and it is not clear as to on what facts and documents the clarification was given, cannot be accepted - Merely because MRP was declared on package will not mean that the valuation of excisable goods for the purposes of charging of duty of excise should be carried out under section 4A of the Excise Act, if otherwise in law, the valuation is required to be undertaken under section 4 of Excise Act - The Board by a Circular dated February 28, 2002, has also clarified that section 4A will not be attracted when there is no statutory requirement of affixing MRP on the goods in question, even though assessee may have voluntarily affixed the MRP on such goods - Thus, as the assessee had cleared wall putty in packages of 40 kg, the provisions of rule 6 contained in Chapter II of the Rules will not apply and if this be so, the provisions of section 4A of the Excise Act under which the value of goods is deemed to be the retail sale price declared on such goods, would not be applicable - The assessee was, therefore, justified in determining the value of goods under section 4 of Excise Act - Thus, the Principal Commissioner was not justified in concluding that the valuation of wall putty in packages of 40 kg was required to be determined under section 4A of the Excise Act - The impugned order therefore is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2021-TIOL-18-CESTAT-KOL
Ocean International Vs CC
Cus - The goods declared as Tin Waste and Scrap were on verification by qualified Chartered Engineer certified as Tin Plated Steel Scrap since steel predominates by weight - The assessee had not asked for any re-test or alike at the relevant point of time - On the contrary under letter dated 24.01.2013, the assessee/ importer had waived his right of SCN and/or hearing at the stage of adjudication and hence, the contention of assessee that the certificate was issued by Chartered Engineer on visual examination, cannot come to their rescue with regard to the proper description of goods - It is not in dispute that for importation of steel scrap, Pre Shipment Inspection Certificate was mandatory in terms of FTP, 2009-14 - At the time of importation of goods, admittedly, Pre Shipment Inspection Certificates were not available and goods were wrongly described as scrap of tin instead of scrap of steel - The assessee could not even produce such certificates prior to adjudication and as such, the order of confiscation of imported goods are proper and correct under Section 111(d) of Customs Act, 1962 and thus same is upheld - With respect to imposition of penalty upon assessee being importer under Section 112 of Customs Act, 1962, the Adjudication Order does not provide any specific finding on the same - The assessee had declared goods in Bill of Entry in terms of documents of import provided by foreign supplier - The Revenue has also not alleged any connivance on the part of assessee/importer in alleged misdeclaration - No doubt has been expressed by any of the Authorities below with respect to subsequent correspondence from Overseas Supplier as on record - There is nothing on record to suggest any prior knowledge or reason to believe about the confiscable nature of imported goods under Section 111 of Customs Act, 1962 - Moreover, the goods imported in January, 2013 by assessee have already lost its market value and the assessee/importer has already suffered substantial loss and injury for no fault on his part - Neither there is any existence of ingredient of section 112 of Customs Act, 1962 nor any mens rea and hence, the imposition of penalty upon assessee is bad in law and liable to be quashed - The order of confiscation of imported goods under section 111(d) of Customs Act, 1962 is upheld but the penalty imposed upon assessee under Section 112 of Customs Act, 1962 is set aside : CESTAT
- Appeals partly allowed: KOLKATA CESTAT
