2021-TIOL-112-SC-CX

CCE Vs Ispat Industries Ltd

CX - The Revenue's appeal was delayed by 724 days - The Revenue filed application for condonation of delay, claiming that it received a copy of the Tribunal's order several months after it has been passed - It claimed that the subsequent processing of papers for filing appeal had commenced & further delays were caused by the COVID 19 pandemic and the lockdown that followed.

Held - Considering the reasons laid down to explain the delay in filing appeal, the same merits being condoned - Notice be issued to the parties - Counter affidavit be filed in four weeks' time: SC

-Notice issued :SUPREME COURT OF INDIA

2021-TIOL-111-SC-CX

Balaji Metals Vs CGST

CX - Allegation of clandestine removal of bare copper wire without payment of Central Excise duty - Demand confirmed by original authority and upheld by CESTAT, hence appeal before High Court - Later the High Court held that counsel of Appellant before the appropriate forum, himself had agreed to proceed with the case without waiting further for cross examination of Panchas, and thus, once the adjudicatory authority had proceeded to adjudicate on such a premise, the Appellant, cannot before the High Court invoke the ground of not cross examining the Panchas at such an appellate stage merely because the adjudication did not result in his favour - The High Court observed that the Tribunal in its order had already noted that there existed no evidence of threat or coercion on the proprietor of the Appellant firm in recording of the statement of 8th November 2011 - Since no cogent ground for the same has been adduced before the Bench to buttress the same, a mere allegation of the same at this stage is ill-conceived - Moreover, the proprietor in the subsequent statements has reiterated the same with minor retractions, and thus it would be farfetched to hold that there had been gross duress on the proprietor of the Appellant at every instance of tendering his statements on various dates - Appellant in the present case, has merely assailed the judgement and final order of CESTAT on facts - Since the substantial question of law being purely factual, the Bench saw no reason to entertain this appeal.

Held - SLP along with pending applications is dismissed: SC

-Assessee's SLP dismissed :SUPREME COURT OF INDIA

2021-TIOL-110-SC-ST

CCE & ST Vs Reckitt Benckiser India Ltd

ST - The Appellant is engaged in the manufacture and sale of various formulations (fast moving consumer goods) - Appellant discharged Service Tax liability on the royalty paid by the Appellant to the licensors under the category of IPR Service under reverse charge mechanism - The Appellant also paid R & D cess @5% and availed the benefit of Notification 17/2004-ST dated 10 September, 2004 – Revenue view is that the services are correctly classifiable under the category of "franchise service" and consequently the benefit of the aforesaid exemption notification is unavailable – SCN issued demanding the service tax differential for the period 2005-2006 to 2009-2010 - Commissioner confirmed the demand of Service Tax with interest and penalty, but dropped the demand for the period prior to 18 April, 2006 – On appeal, the Tribunal held there to be nothing in the agreement to indicate that the "franchisee" has lost its individual identity and is representing the identity of the franchisor to the outside world - The arrangement is clearly a typical case of a licensing transaction and is in no way similar to a 'franchisee' agreement as understood in the commercial world - In a 'franchisee' agreement, the franchisor owns IPR and allows the franchisee to set up and run the business in the name of the franchisor - The customers coming to the outlets of the franchisor believe that they are directly dealing with the franchisor - The agreement executed between the parties in the instant Appeal clearly shows that the licensor does not have any significant control over the manner in which the Appellant conducts its operation - The Appellant is free to procure the raw materials as per its will and it has a right to fix the selling price of the final product - It is also free to run its business, marketing, distribution, sourcing and other activities as per its own choice without any inference by the licensors - It also makes its own marketing strategy - The only right which the licensor has is to supervise whether the products manufactured by the Appellant are in conformity with the quality, since the brand name of the licensor is being used by the Appellant - This singular right under the agreement will not constitute any control, much less significant control over the operations of the Appellant – The arrangement between the Appellant and the licensors will not constitute a franchisee agreement, since the licensor does not have any significant control over the operations of the Appellant - It is clear that the services have been correctly classified by the Appellant as IPR - O-i-O was quashed.

Held - Notice be issued to the parties concerned - Matter be tagged with Civil Appeal Diary No 37710 of 2017: SC

-Notice issued :SUPREME COURT OF INDIA

2021-TIOL-100-CESTAT-DEL

India Guniting Corporation Vs CCT

ST - The appellant is engaged in commercial construction and management, maintenance and repair - The first SCN dated October 13, 2011 for the period 2006-07 to 2010-11 was earlier adjudicated upon by an order dated March 20, 2013 - The impugned order was set aside and the Adjudicating Authority was directed to scrutinise the nature of each of the work covered in SCN - The demands made on 'works contract' prior to June 1, 2007 were directed to be excluded - The Authority was also directed to re-examine whether any of the repairs and alteration contracts related to buildings that are being rented out to public offices so that the demand made on such contracts could also be excluded - In the mean time, a second SCN was issued to the appellant for the subsequent period from 2011-12 to 2012-13 - The Commissioner proceeded to examine the contracts in the light of directions issued by Tribunal and scrutinised each of the contracts to determine whether the projects undertaken by the appellant would fall in the classification alleged in SCNs or would be more appropriately classifiable under "works contract", if the contracts involved both goods as well as services - The Commissioner has recorded a categorical find that each of the "works contract" undertaken by appellant are not covered under three services namely, commercial or industrial construction, construction of complex and management, maintenance or repair mentioned in the first SCN - The Commissioner further recorded a categorical finding that the activities undertaken by the appellant would be classifiable as "works contract" as they involved goods as well as labour services - The Commissioner therefore, dropped the demand for the period prior June 1, 2007 - But for the demands for the period w.e.f. June 1, 2007 the Commissioner proceeded to examine whether the particular work performed under "works contract" is exempted from levy of service tax under Notifications issued from time to time - It would be pertinent to refer to the decision of Mumbai Tribunal in Ashish Ramesh Dasarwar 2017-TIOL-3230-CESTAT-MUM - A Division Bench of Tribunal in M/s Gurjar Construction 2019-TIOL-2199-CESTAT-DEL also examined such a position and observed that a demand made under a particular category cannot be sustained under a different category - In view of said decisions of Tribunal, it has to be held that the Commissioner was not justified in confirming the demand of service tax under category of "works contract" for the period post June 1, 2007 - The order dated January 31, 2018 passed by the Commissioner that has confirmed the demand of service tax, therefore, is set aside: CESTAT

- Appeal allowed: DELHI CESTAT