2021-TIOL-509-HC-MAD-ST

CGST & CE Vs Rakindo Kovai Township Ltd

ST - CENVAT - Bench need not labour much to answer the substantial questions of law raised for consideration as they have been answered in several decisions - Held in Aravind Fashions Ltd. = 2011-TIOL-748-HC-KAR-ST that though the assessee therein was a recipient of service, the service provider being outside India, the assessee therein was to be treated as a service provider and that therefore, the assessee therein was entitled to use CENVAT credit available with it to discharge service tax on the service rendered - In the case of mPortal India Wireless Solutions (P) Ltd. = 2011-TIOL-928-HC-KAR-ST it was held that the service tax registration was not mandatory for refund of accumulated CENVAT credit of service tax paid on input service used for export of service - Civil miscellaneous appeal is dismissed by answering substantial question of law Nos.2, 3 and 4 against the Revenue: High Court [para 5, 6, 8]

- Appeal dismissed : MADRAS HIGH COURT

2021-TIOL-127-CESTAT-DEL

Royal Industries Vs CC

Cus - The assessee is operating in India and is in the business of import, manufacturing and export of goods - They imported '10 kgs. of 1, 3-DIHYDROXYNAPHTHALENE through FEDEX - As per information on package, FEDEX declared the value of goods at USD 900.00 (FOB), equivalent to assessable value involving customs duty issued by Shanghai Hohance Chemical Co. Ltd., China - The goods were examined and it was found that declared value of the goods appeared to be on lower side - Assessee submitted the proforma invoice for USD 21,500.00 (CIF), covering the item imported vide above mentioned HAWB - The value as per proforma invoice i.e. USD 21,500.00 (CIF) equivalent to assessable value of Rs. 14,85,650/- is considered as fair and reasonable value of the imported goods in terms of Section 14(1) of Customs Act, 1962, read with Rule 3 of CVR, 2007 - The total duty leviable on goods, therefore, comes to Rs. 4,12,045/- against the declared duty of Rs. 20,892/-, on the declared value - It, thus, appeared to Revenue that the importer has misdeclared the value of imported goods to evade customs duty to the tune of Rs.3,91,153/- - The impugned goods therefore, appeared liable to confiscation under Section 111(m) of Customs Act, 1962 - It is the obligation of authorised courier to file the 'Courier Bill of Entry' based on information contained on package - Evidently, it is a case of clerical mistake by shipper, who has wrongly declared the lower value instead of the correct value - The assessee have at the very first instance on query raised by Department, have come forward with the correct value based on the proforma invoice - Further, it is an admitted fact that assessee have remitted the price of USD 21500 through authorised banking channel, and as such no case of any malafide is made out against the assessee - At best, it is the mistake of authorised courier who was not vigilant at the time of booking of the courier parcel to ensure the correct declaration by shipper - No case of any collusion is made out against shipper and /or against the courier - Penalty have been imposed mechanically without proper appreciation of facts and the law applicable - Accordingly, the order of confiscation as well as the penalties imposed under section 112(a) and 114AA of the Act are set aside: CESTAT

-Appeal allowed : DELHI CESTAT

Hyundai Steel India Pvt Ltd Vs CGST & CE

CX - The appellants are dealing in Cold/Hot Rolled Steel Coils and sheets - They were importing and locally procuring steel coils and trading the coils as such only to M/s. Hyundai Motor India Ltd., Irungadukottai - The imported coils were slitted into smaller coils or sheared into sheets of required sizes - They were filing nil ER-1 return as a manufacturer and as a dealer, they were passing on CVD duty and Special CVD on the imported coils/locally procured steel coils - The Department views that the scrap arising out of such activity of cutting and slitting of steel coils is covered under definition of 'waste and scrap' mentioned in Note 8 to Section XV of CETA, 1985 and therefore, same is liable to Excise Duty - The C.B.E.C. vide Circular 811/8/2005-CX has clarified that the process of cutting of HR/CR coils of iron or non-alloy steel into sheets or slitting into strips of lesser width would not amount to manufacture - So also, in the cases of M/s. Faridabad Iron & Steel Traders Association and M/s. Indian Aluminium Company Ltd. 2006-TIOL-129-SC-CX, it has been held that the process of cutting/slitting of jumbo coils into baby coils/sheets would not amount to manufacture - When the process of cutting and slitting itself does not amount to manufacture within the meaning of Section 2 (f) of CEA, 1944, scrap arising out of such activity cannot be subjected to Excise Duty for the simple reason that the appellant has not consciously manufactured any waste or scrap - Emergence of such waste and scrap of iron is incidental to the activity of slitting and cutting of bigger coils into smaller ones - Notfn 89/95-CE also supports the contentions of appellant - The demand of duty cannot sustain : CESTAT

-Appeal allowed : CHENNAI CESTAT

State Bank Of India Vs CST

ST - CENVAT - Rule 2(l) of CCR, 2004 - Input Service - Whether  insurance service provided by the Deposit Insurance Corporation to the banks is an 'input service' and credit is admissible -  Matter remanded by Bombay High Court - 2020-TIOL-1665-HC-MUM-ST to decide the issue on the basis of the LB decision in South Indian Bank & Ors.  - 2020-TIOL-861-CESTAT-BANG-LB . Held:  As to whether the LB decision (supra) satisfies the test laid down by the five member bench of Supreme Court in case of Dilip Kumar and Co. - 2018-TIOL-302-SC-Cus-CB ; whether the CENVAT credit of the Service Tax paid on the services availed (from DICGC) to fulfil a statutory obligation should be admissible even if the services availed do not otherwise qualify to be 'input services' as defined under rule 2(l) of the CENVAT Credit Rules, 2004, has been referred to the CESTAT President for the purpose of constituting a five-Member Bench by the Tribunal in the case of Bank of America - 2020-TIOL-1614-CESTAT-MUM and which reference is pending as on date - Both sides agree that it is prudent to await the outcome of the said reference - Matter is, therefore, adjourned to 21/01/2021: CESTAT [para 2, 3]

-Matter adjourned : MUMBAI CESTAT

2021-TIOL-123-CESTAT-MAD

Sak Soft Ltd Vs CGST & CE

ST - The matter has come up for hearing as per the remand order of High Court in CMA dated 4.8.2020 - The appellant is engaged in providing information technology related solutions including maintenance of software - They are paying service tax under Information Technology Software Services after such services have become taxable in 2008 - The department was of the view that for the period prior to 2008, as per the agreements entered by appellant with various clients, the appellants have rendered Manpower Recruitment or Supply Agency Service (MRSA) services to these clients - There is no iota of evidence to show that the appellants were rendering MRSA service during the disputed period - On merits, the issue is settled by decision in case of Cognizant Tech Solutions 2010-TIOL-698-CESTAT-MAD - The demand under MRSA cannot sustain - The High Court has remanded the matter to reconsider the issue on limitation also - The entire demand is raised invoking the extended period - In Coromandel Infotech India Ltd. 2019-TIOL-122-CESTAT-MAD , the Tribunal had occasion to consider the issue of limitation when there were two conflicting views on the very same issue - Moreover, in the present case, apart from bald allegation that the appellant has suppressed facts with intention to evade payment of service tax, there is no positive act brought out to establish the allegation of suppression - The appellant has enclosed the various correspondences between them and department prior to issuance of SCN - From the correspondences between the parties, it is evident that the appellant was all along responding and cooperating with the department - The SCN is issued only on 23.4.2010 - No evidence found to support the allegation that the appellant has suppressed facts with intention to evade payment of service - The appellant has relied on the decision of Supreme Court in Continental Foundation Jt. Venture 2007-TIOL-152-SC-CX - For this reason, the appellant succeeds on limitation also: CESTAT

- Appeal allowed: CHENNAI CESTAT

Transpeed Logistics Pvt Ltd Vs CC

Cus - The appellant is in appeal against impugned order dated July 05, 2019 passed by Commissioner revoking License of the appellant and also forfeiting the security deposit and imposing penalty - The SCN alleges violation of Regulations 10 (a), (d), (e) and (n) of 2018 Regulations - The offence report relates to certain importers who were mis-using the DFIA by importing maize popcorn and declaring the same as maize corn in order to avail undue benefits of DFIA - It also mentions about exporters who had obtained DFIA - Encanterra Traders had imported and had also exported the goods - The appellant had undertaken the work of customs clearance and had acted as a Customs Broker only for Encanterra Traders, for which six export Shipping Bills were filed in years 2016 and 2017 - The appellant had not submitted documents of Encanterra Traders for import of goods - The appellant has referred to a letter submitted by Lal Chand Sharma, authorized signatory of appellant, to the DRI regarding submission of the documents - The Commissioner has ignored this letter for the reason that the authorization letter is signed by some unnamed authorized signatory - A perusal of the said letter clearly shows that it is signed by Rakesh Kumar, who is the Director of Company - The Commissioner completely failed to appreciate that Rakesh Kumar was the Director of the Company - In fact the KYC documents were also enclosed with the letter, which amongst others, included the Aadhar Card of Rakesh Kumar - The Commissioner, therefore, could not have ignored the authorisation letter - The Commissioner, therefore, committed an illegality in holding that Regulation 10(a) of the Licensing Regulations had been violated - Regulation 10(d) requires a Customs Broker to advice his client to comply with the provisions of the Act and the Rules and Regulations - Regulation 10(e) requires a Customs Broker to exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage - The appellant submitted that due diligence does not mean actual physical verification - In fact, the practice always has been to verify the correctness of the information provided by examining the KYC documents prescribed in Circular dated April 08, 2010 - Out of the documents listed in Annexure to the Circular, only two documents have to be obtained - The appellant did obtain two documents - It is not the case of the Department that the documents that had been obtained were forged documents - It was also stated that Anil was an employee of appellant who had been contacting the Directors of Encanterra Traders who had supplied the documents - The reply submitted by appellant has not been discussed at all nor any reason has been assigned as to why these documents could not be considered - Encanterra Traders cannot be said to be a fictitious firm as proper verification was done from the Registrar of Companies and the Director General of Foreign Trade who had provided the Certificate as well as the IEC - The appellant had also submitted copies of Aadhar Card, IEC, Pan Card, Certificate of Incorporation of Company, Memorandum of Association and Article of Association of Company - The findings that the appellant had not followed the provisions of Regulations 10(d) and 10(e) of Licensing Regulations is, therefore, erroneous - The basic requirement of Regulation 10 (n) is that the Customs Broker should verify the identity of the client and functioning of the client at the declared address by using, reliable, independent, authentic documents, data or information - The KYC documents were submitted by appellant and the verification was undertaken by Anil, an employee - The communications with the Encanterra Traders was also done through mail - The self attested Pan Card, Aadhar Card of the Director and Pan Card of the Company had been submitted by letter dated September 10, 2018 - A physical verification of the premises was not necessary to be carried out - The Commissioner, therefore, committed an error in holding that the appellant failed to ensure due compliance of the provisions of Regulations 10(n) of the 2018 Regulations - It is not possible to sustain the impugned order, same is set aside: CESTAT

- Appeal allowed: DELHI CESTAT