2021-TIOL-575-CESTAT-MUM

Infrastructure Leasing and Financial Services Ltd Vs CST

ST - The appellant engaged in providing 'financial services', was found to have failed to discharge liability on 'commission' charged for providing 'corporate guarantee' to their customers despite specific inclusion in section 65(12)(ix) that defined 'banking and other financial services' for purpose of levy under section 65(105)(zm) of Finance Act, 1994 - Adjudication of two SCNs confirmed recovery under proviso to section 73(1) ibid along with interest thereon under section 75 ibid, besides imposing penalty of like amount under section 78 ibid for the period from 2004-05 to 2008-09 and confirmed recovery of Rs. 94,08,029 under section 73 ibid, along with interest thereon besides imposing penalty under section 76 ibid - The decision in re Olam Agro India Ltd 2018-TIOL-2826-CESTAT-DEL has established that commission earned by providing 'corporate guarantee' is taxable, as 'business auxiliary service', under section 65(105)(zzb) ibid - The decisions of Tribunal, in re Bank of Baroda 2014-TIOL-560-CESTAT-DEL and in re Radiowani 2018-TIOL-1898-CESTAT-MUM , reinforce the imperative of certainty of tax, as reflected in classification of service proposed by tax authorities in SCN, and as the pivot for fulcrum of adjudicatory competence - It can be gauged from narrative of impugned order that, initially, the tax authorities had the same inclination but, for unfathomable reasons, a different 'taxable service' was invoked for initiating recovery proceedings - Consequently, there was patent lack of certainty of tax in the mind of SCN issuing authority - On the issue of non-payment of tax on 'bank guarantee' issued by bank of appellant to one customer against their limits, the impugned order has failed to set about determining the congruity of that facilitation within the definition of 'taxable service' in section 65(105)(zm) of Finance Act, 1994 - Impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

2021-TIOL-574-CESTAT-MAD

Seaport Lines India Pvt Ltd Vs Commissioner of GST & CE

ST - During verification of records of assessee, it was noticed that they had hired containers from different liners like Maersk, Hapag Lloyd and sell the containers to their customers; that while arranging container for shippers, assessee collected ocean freight and local charges like terminal handling charges, documentation charges; that they also avail CENVAT Credit on such charges and pay Service Tax on the invoice amount raised on customers - It was noticed that the assessee collected ocean freight charges higher than the actual amounts charged by shipping lines/steamer agents; however, they did not include the ocean freight charges collected in taxable value for the purpose of payment of Service Tax - That the services provided by assessee were classifiable under "Support Services of Business or Commerce" as defined under Section 65(104c) of Finance Act, 1994 - A SCN was issued to assessee for recovery of Service Tax for the period from 2007-08 to 2010-11 under proviso to Section 73(1) of the Act ibid, along with interest under Section 75 of the Act and penalty under Sections 76 and 78 of the Act - For the subsequent period 2011-12 and 2012-13, one more SCN was issued to assessee - Vide common O-I-O, said proposals were confirmed, but however, the Service Tax liabilities were reduced - Thereafter, appellant pursued by way of appeals before First Appellate Authority, which came to be rejected - The Hyderabad Bench of Tribunal has decided an almost identical issue in the case of M/s. Marinetrans India Pvt. Ltd. 2019-TIOL-1260-CESTAT-HYD - In view of the same, lis appears to be no more res integra and therefore, impugned orders cannot be sustained: CESTAT

- Appeals allowed: CHENNAI CESTAT

2021-TIOL-573-CESTAT-BANG

Niligiris Mechanized Bakery Ltd Vs CCE

CX - The appellant is engaged in manufacture of cookies, biscuits, cakes, chocolates and sugar confectionaries - They have been availing exemption under Notification No. 8/2001-C.E. available for small-scale industries and have been filing intimations as required under Central Excise Rules - They have filed a declaration effective from 01.03.2001 indicating that they will be clearing bread and bun chargeable to NIL rate of duty - There is no ambiguity in the wordings of Notfn - Therefore, no reason found for appellant to entertain any doubts regarding the notification - The appellant's submission that they had a bona fide belief that goods attracted NIL rate of duty was same as non-excisable goods - No merit found in the argument - As the notification is very clear, there is no scope for entertaining any interpretation as held by Apex Court in the case of M/s Dilip Kumar & Company - The appellant is a regular manufacturer and has been availing the very same benefit for quite some time - It is difficult to accept that the appellants had a bona fide belief - The appellants have not given any declaration to the effect that they manufacture excisable goods which are chargeable to NIL rate of duty and they consider the same to be non-excisable goods - The only declaration given by appellants that to w.e.f. 01.03.2001 is to the effect that they are manufacturing bread - It is not understood as to how the Department would be in the knowledge that the appellants are manufacturing same goods in 2004 and would treat them as non-excisable goods - It is not the case of appellants that their unit has been subjected to audit in between - The Department had no way to be in the knowledge of activities of appellants - Therefore, it can only be concluded that the appellants have suppressed material facts from the Department - Thus, extended period is rightly invocable: CESTAT

- Appeal rejected: BANGALORE CESTAT

2021-TIOL-572-CESTAT-AHM

Gujarat Insecticides Ltd Vs CCE & ST

CX - The limited issue is that in the case where appellant has availed Cenvat Credit on Outdoor Catering Services and admittedly the portion of service charges was contributed by employee is not Cenvatable whether the interest and penalty is chargeable - The issue of availment of Cenvat credit on employees' contribution in respect of Outdoor Catering Services was debatable and the issue has been finally settled in case of Ultratech Cement Ltd 2010-TIOL-745-HC-MUM-ST - The mala fide intention cannot be attributed to the appellant - Therefore, the penalty imposed by Lower Authority is not sustainable hence, same is set aside.

As regard the levy of interest on availment of Cenvat credit, it has been settled that the credit on Outdoor Catering Service to the extent of contribution of services charges borne by the employee is not Cenvatable - Therefore, credit taken by appellant is wrongly taken credit - In terms of Rule 14 of CCR, 2004, interest is chargeable - The judgment of Apex Court in Ind Swift Laboratories Ltd 2011-TIOL-21-SC-CX being binding on all the forums, following the same, appellant is held liable to pay interest: CESTAT

- Appeals partly allowed: AHMEDABAD CESTAT

2021-TIOL-571-CESTAT-MUM

Agrasha Alloys Trading Pvt Ltd Vs CC

Cus - Appeals are directed against impugned order - The consignments were after clearance from customs were detained and seized by DRI, and after investigations, these consignments along with other two consignments for which the bill of entries were filed in January 2010, were proposed for confiscation for misdeclaration of value, stating that appellant had accepted the enhance value, so the charge of misdeclaration of invoice value stand established against them - The two consignments in respect of which the duty was already paid on assessed value as enhanced were also confiscated along with other two consignments - The action of confiscation of goods which have been cleared on payment of duty as assessed, are proposed for confiscation, for the reason that appellant have admitted to enhancement of value - The matter do not rest here, while enhancing the value, SCN takes into account all the four consignments, and enhances the value of all four consignments - On the enhanced value of all four consignments the duty has been demanded - The demand made as per the SCN has been mechanically confirmed by the adjudicating authority and upheld by Commissioner (Appeals), without taking into account the fact that the total duty paid by appellant on two consignments cleared by them was Rs. 2,65,198/- for which the TR-6 Challans have been produced by appellants - If the total duty determined on the four consignments is on enhanced value of Rs. 41,73,804/- is less than the total duty already paid by the appellants, then what the case of revenue is - There appears to be gross misapplication of mind by authorities concerned - The entire issue of misdeclaration of value needs to be reconsidered by authorities below and proper speaking order giving proper reasoning for the enhancement of value needs to given, just acceptance by the importer of enhanced value in import of some consignment, solely cannot be ground for establishing the charge of misdeclaration against him - Matter is remanded back to the original authority for reconsideration of matter against the two appellants: CESTAT

- Matter remanded: MUMBAI CESTAT