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2021-TIOL-762-CESTAT-MUM
Harman International India Pvt Ltd Vs CC
Cus - Appellants filed B/E for clearance of goods described as "Liquid Crystal Devices-TFT-LCD 4.8 IN" quantity declared is 3072 pieces - The importer classified the said goods under CTH 90138010 and claimed BCD 'NIL' duty vide notfn 24/2005 - Revenue was of the view that the imported goods being part of Car Audio/Video Players classifiable at CTH 85229000 with merit duty - Apart from submission made by importer vide his letter, there is nothing available on record to show that the imported goods are solely meant for use as part of car audio/ video assembly - As per the submissions made by revenue also, literature describes the imported goods as "LCD Module" - The term is wide enough and cannot be limited to mean the part of car audio/ video assembly - The observations made by Deputy Commissioner for holding the classification under chapter 85 do not flow from any evidence or literature but is based on his opinion - Just because the PCB is attached to LCD, will make the LCD a part solely for use in car audio/ video assembly, is observation made - LCD is only the display device to display parameters intended to be displayed - It can be used with hundred of devices for displaying parameters - The reason stated by deputy commissioner for distinguishing the decision in case of Secure Meters 2015-TIOL-100-SC-CUS , was rejected by CESTAT Delhi Bench in case of Samsung Electronics India Pvt Ltd - The issue is squarely covered by said decision of Apex Court and the goods imported would be correctly classifiable under heading 90138010 as claimed by appellants - Thus, no merits found in impugned order and the same is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2021-TIOL-761-CESTAT-MUM
CCGST Vs Intertek India Pvt Ltd
ST - The issue to be decided is, whether Revenue's appeal be decided on merit or monetary limits in the light of Circular No. 390/MISC/116/2017-JC - At para 4 of said Circular, it is stated that issues involving substantial questions of law as described in para 1.3 of instruction would be contested irrespective of prescribed monetary limits - Issue relates to demand of Service Tax on testing charges received by it in respect of services rendered in India to its foreign client - As per said issue involved, it does not fall under any of the two categories, which are specified in para 1.3 of Circular - Therefore, merely if any substantial question of law involved, Revenue is not allowed to file appeal before Tribunal - Since the amount involved is less than Rs. 50 lakhs, as per the clear positions from Circulars, no substantial question of law related to constitutional validity of law and/or ultra vires of notification/instruction/circular/order involved in the present case - Appeal filed by Revenue is dismissed on monetary limits vide Circular dated 22.08.2019: CESTAT
- Appeal dismissed: MUMBAI CESTAT
2021-TIOL-760-CESTAT-AHM
Bochasanwasi Shri Aksharpurushottam Swaminarayan Sansth Vs CC
Cus - Whether the interest on refund has to be calculated from expiry of three months after passing of Tribunal's final order or it has to be calculated from the date of final order of Tribunal - Whether the rate of interest should be 6% or 15% or any other rate - Whether the appellant is entitled for interest on interest - In view of concurrent orders of Tribunal as well as High Court, since it was held that the interest arises from date of order and this finding was not challenged by revenue, it attains finality - Therefore, appellant is entitled for interest from the date of order of Tribunal and not from expiry of three months from the date of order - Accordingly, order of Commissioner (Appeals) on this issue is not sustainable - As regard the second issue i.e. rate of interest, the rate of interest is statutorily prescribed under section 27(A) read with Notification issued there under according to which 6% as rate of interest was prescribed - The departmental officer is bound to follow the statutory provision strictly and therefore, no interest more than 6% can be calculated - Accordingly, rate of interest, i.e., 6% decided by Lower Authority is correct and legal - Therefore, Commissioner (Appeals) has rightly held that the Adjudicating Authority has rightly applied simple rate of interest as 6% p.a. - Therefore, appellant cannot be granted interest at the rate of 15% or any other rate above 6% - As regard to issue of interest on interest amount, appellant has heavily relied upon the Supreme Court Judgment in Sandvik Asia Ltd 2006-TIOL-07-SC-IT - No infirmity found in said finding - Even this Tribunal also being a creature under statute of customs Act cannot decide anything beyond the provisions of statue of Customs Act - There is no statutory provision for granting interest on interest - Therefore, decision on this issue by Commissioner (Appeals) is legal and correct - Accordingly, the impugned order stands modified: CESTAT
- Appeal partly allowed: AHMEDABAD CESTAT
2021-TIOL-759-CESTAT-HYD
Nava Bharat Ventures Ltd Vs CCE, C & ST
CX - The assessee-manufactures Ferro-Manganese and Silico-Manganese classifiable under Chapter 72 of Central Excise Tariff and pays Central Excise Duty - It has a captive power plant and part of the electricity generated is used in the manufacture of the final products and part is wheeled out to A.P. Transco, Subhash Kabini Power Corp. Ltd., Reliance Energy Trading Limited, A.P. Power Purchase Co-ordination Committee, etc. To the extent, the electricity is captively used in manufacture of final products, there is no dispute - The dispute is regarding the CENVAT Credit availed on the inputs and input services used in production of electricity to the extent it is wheeled out - The assessee reversed proportionate amount of CENVAT Credit attributable to the inputs/input services to the electricity which was wheeled out - However, while calculating this proportionate amount of CENVAT credit, the credit on the input services mentioned in Rule 6(5) of CCR was not taken into account and no proportionate reversal was done on such input services. The show cause notice demanded an amount equal to 8%/10% of the value of the electricity that was wheeled out under Rule 6(3A) of CCR - In the order, the adjudicating authority accepted the proportionate reversal and therefore, did not confirm the demand in the show cause notice of 8% or 10% of the assessable value - However, the input services under Rule 6(5) while calculating the amount to be reversed was not excluded and hence the amount confirmed was higher than as per the assessee's calculations - The adjudicating authority also imposed penalty - Assessee is aggrieved both by the calculation in the order without excluding the credit of input services u/r 6(5) and also by the imposition of penalty - Revenue is aggrieved by the fact that the adjudicating authority allowed proportionate reversal which is permissible subject to some conditions which, according to the Revenue, have not been fulfilled by the assessee and hence the Commissioner should have confirmed the entire amount of demand as per the show cause notice. Held - Reversal of proportionate amount of CENVAT credit by the assessee in this case is not only sustainable u/r 6(3A) for the period post 1.4.2008 and under Finance Act, 2010 (for the period pre 1.4.2008) but such reversal itself meets the obligations of the assessee under Rule 6(1) (of not taking credit of inputs and input services used in exempted goods) and Rule 6(2) (of maintaining separate accounts) - Rule 15 provides for imposition of penalty if CENVAT credit has been wrongly availed which allegation must be made in the show cause notice with a proposal to recover such wrongly availed CENVAT credit under Rule 14 but such a demand has not been made - Since the show cause notice itself has been issued without authority of law, any penalty imposed in the impugned order in pursuance of it needs to be set aside too: CESTAT + Rule 6(1) prohibits taking of credit on inputs and input services used in manufacture of exempted goods or provision of non-taxable services. In some cases, if only some portion of such inputs or input services goes into exempted goods or services, reversal of such proportion of the credit meets the requirement of Rule 6(1). An illustration which everyone can relate to makes this position clear. A man buys a packet of milk worth Rs. 70 and gives the shopkeeper a hundred rupee note. The currency note cannot be cut to give 70% of its value to the shopkeeper. Therefore, the shopkeeper returns him thirty rupees. It amounts to the man paying seventy rupees only although he gave a hundred rupee note. Similarly, if credit is taken on an invoice of input or input service and part of the input or input service has gone into exempted products, proportionate reversal is as good as not taking the credit to that extent at all. (Para 9); + Rule 6(2) requires separate accounts to be maintained by someone manufacturing both dutiable and exempted products or providing taxable and non-taxable services. It however, does not prescribe a particular format for maintaining such accounts nor does it require the inputs to be purchased and stored separately for dutiable and exempted products. In case of common input or input services, it is often impossible or extremely difficult to do segregate the two at the stage of taking credit. The only practical way of maintaining separate accounts when the same input or input service procured by the assessee is to take credit and debit entries. Either the assessee can take credit of only that proportion of the inputs/input services which has gone into the manufacture of dutiable goods or it can take the entire credit and reverse that portion of the inputs/input services which have gone into producing exempted products. Such an accounting practice becomes all the more necessary in cases such as this when the output good viz., electricity itself is common and becomes either exempted (if wheeled out) or not (if it is used captively for manufacture of dutiable goods). Even in the normal accounting practices, debit notes and credit notes are issued to make adjustments towards excess payments or short payments. In our view, reversal of proportionate amount of CENVAT credit is a sufficient requirement under Rule 6(2). Supreme Court in Chandrapur Magnets also held so and the decision applies to this case. (Para 10); + After 1.4.2008, Rule 6(3A) specifically provides for proportionate reversal and provides a formula for the purpose and the assessee has followed it. Revenue's objection to accepting such reversal is on the ground that the assessee has not made the required declaration before the Superintendent but the assessee asserts that it made the declaration. Even if such a declaration was not made, in our considered view, such a technicality cannot deprive the assessee of its opportunity to avail Rule 6(3A). Thus, reversal of proportionate amount of CENVAT credit also satisfies the requirement under Rule 6(3A), in addition to meeting the requirement under Rule 6(1) and 6(2). (Para 11); + For the period prior to 1.4.2008, following the Finance Act, 2010, the assessee has reversed the credit and interest. Revenue's objection is that the declaration was filed with the jurisdictional Deputy Commissioner instead of the Commissioner and that the interest was not paid along with the reversal but much later. On the first question of declaration, we find that if the assessee made a declaration with the Central Excise department itself, even if wrongly with the Deputy Commissioner instead of the office of the Commissioner, it may be technically incorrect but such hyper-technicality should not deprive the assessee of substantial benefit. Similarly, Revenue's argument that interest was paid much later does not hold much water as long as it has been paid. (Para 12); + When Rule 6(5) explicitly excludes some services from the provisions of Rule 6(1), 6(2) or 6(3), the benefit of this cannot be denied to the assessee. Even otherwise, Revenue does not dispute that some of the common input services in dispute are used to produce electricity, which is further used in manufacture of dutiable products. Unless the services are exclusively used for production of exempted products, they are explicitly covered under Rule 6(5) and the assessee need not reverse proportionate amount of CENVAT Credit on such input services. (Para 18); + Rule 15 provides for imposition of penalty if CENVAT credit has been wrongly availed which allegation must be made in the show cause notice with a proposal to recover such wrongly availed CENVAT credit under Rule 14 but such a demand has not been made. Instead, a demand of an amount equal to 8%/ 10% of the exempted goods under Rule 6(3) has been made in the show cause notice, which is only an option to the assessee and cannot be demanded under Rule 14. Since the show cause notice itself has been issued without authority of law, any penalty imposed in the impugned order in pursuance of it needs to be set aside too. (Para 23).
- Assessee's appeal allowed/Revenue's appeal rejected: HYDERABAD CESTAT |
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