2022-TIOL-1135-HC-MAD-CUS
Nordex India Pvt Ltd Vs CC
Cus - Wind Operated Electricity Generators - Petitioner imported Rotor Blades and availed the exemption - Petition is filed seeking quashing the order dated 19.12.2018 passed by the respondent - The adjudicating authority had held that the petitioner is not entitled for the benefit of concessional customs duty under Sl. No. 362(3) of notification 12/2012-Cus dated 17.03.2012 (read with condition no. 45) and exemption from additional Customs duty under Sl. No. 14C of notification 21/2012-Cus dated 17.03.2012 as amended (r/w condition 46 of 12/2012-Cus) on the ground that the petitioner has imported the goods under the exemption notification but has sold the same to the customer and thus violated the condition of the notification 12/2012-Cus which requires the importer to "use them for the specified purpose".
Held: It is not in dispute that the goods imported were used in the manufacture of Wind Operated Electricity Generators at the site of the customer - Thus, the goods have been used for specific purpose is confirmed - The only objection seems to be once the goods are sold by the petitioner to their client, the client becomes the manufacturer of Wind Operated Electricity Generators - It is incidental that the petitioner themselves had undertaken the job of fabrication assembly and erection, thus, the petitioner had not violated the condition that ''he should use the goods for specific purpose'', since the Rotor Blades have already been sold and straightaway taken to the petitioner's client, who used the imported Rotor Blades in the manufacture of the Windmill - It is an admitted fact that the petitioner used the Rotor Blades only in the manufacturing of Wind Operated Electricity Generators and further, Rotor Blades is not used for any other purpose - The only objection is that, clause (b) of Condition No.45 of Notification No.12/2012-Cus, dated 17.03.2012, is not followed for the reason that the petitioner/importer, shall not use them for specific purpose - In this case, it has been used for the specific purpose in the Windmill - It is only the word ''he'' is stressed against the petitioner - This cannot be looked into in isolation and it has to be considered as a whole - The petitioner had been awarded Turnkey project and there were two contracts and one of the contracts is for erection, installation and commission - This needs expertise - The petitioner having expertise applied with the Ministry of New and Renewable Energy, got approval, and then imported Rotor Blades and, thereafter, transported the same, erected and commissioned the same at the customer's site - It is a known fact that the Windmill has to be necessarily erected only in the site - It cannot be assembled in a factory and thereafter, moved to the site, which is impracticable - The imported Rotor Blades, thus, need no customisation and mechanisation - Hence, by raising an invoice in the name of his client namely, Sun Photo Voltaic Energy Private Limited after import and thereafter, transporting the same to the customer's site is only a notional exercise, by that alone, it cannot be said that the petitioner is not the importer and he is the person, who has used the same for a specific purpose, for which, it was imported - The payment to the petitioner is not on invoice to invoice basis, it is a turnkey project, wherein, the payments made at stages, which is no way correlated to the invoices raised - This Court as well as the Apex Court held that the purport of exemption is not to be diluted by imparting meanings to frustrate the purpose of notification - The exemption cannot be denied unless it is seen that it has been made to evade duty, it leads to evasion of duty - In this case, it is not so - The Rotor Blades has been fixed in the Windmill, which is a vital component for completion of the Windmill project - The specific purpose is the key word to be looked into, which is completed in the above case - Impugned order passed by the respondent, dated 19.12.2018, is quashed - Writ Petition is allowed accordingly: High Court [para 29, 30, 31]
- Petition allowed: MADRAS HIGH COURT
2022-TIOL-1134-HC-KERALA-ST
Grove Ltd Vs Joint Commissioner
ST - Aggrieved by the order passed by Commissioner(A) by which the appeal filed was rejected on the ground that the mandatory pre-deposit has not been made u/s 35F of CEA, 1944, the petitioner is before the High Court - Petitioner relies on the decision in Nattakam Service co-operative Bank Ltd. 2021-TIOL-107-HC-KERALA-ST , where it is held that if an appeal is dismissed for failure to make a pre-deposit, an opportunity can be granted for making such deposit which would enable the first appellate authority to consider the matter on merits.
Held: In view of the said judgment, writ petition is allowed - Appeal will stand restored to the file of the second respondent on the condition that the petitioner makes the pre-deposit in terms of s.35F as made applicable to Finance Act, 1994, within a period of one month: High Court [para 4]
- Petition disposed of: KERALA HIGH COURT
2022-TIOL-777-CESTAT-ALL
Johnson Matthey Chemical India Pvt Ltd Vs Asstt. CCGST & CE
CX - Appeal was rejected by the Commissioner(A) on the ground that the appellant had not made the pre-deposit as per s.35F of the CEA, 1944 - Inasmuch as the appellant had deposited 7.5% of the disputed amount by way of reversal of CGST credit reflected in GSTR-3B and an additional 2.5% was deposited vide DRC-03 challan - Appellant submits that this finding of the Commissioner(A) is totally erroneous as the payment of pre-deposit through credit reversal has been well accepted by the Tribunal in case of Dell International Services India P Ltd. [ 2019-TIOL-286-CESTAT-BANG ]; that the old credit lying in balance has been transitioned to GST regime and forms part of GST credit pool, therefore, there should be no restriction in utilisation of that credit; that the present appeal should be disposed of in accordance with the provisions of the erstwhile laws as per the transition provisions contained in s.142(7) of the Act, 2017 - Reliance is also placed on the Circular no. 15/CESTAT/General/2013-14 dated 28 August 2014 and CBIC Circular 42/16/2018-GST dated 13 April 2018 and 58/32/2018-GST dated 4 September 2018 - Counsel for Revenue supported the stand taken by the Commissioner(A) and also placed reliance on Orissa High Court decision in Jyoti Construction [ 2021-TIOL-2007-HC-ORISSA-GST ]; further submitted that the decision relied upon by the appellant in the case of Dell International (supra) is an interim order and since there are conflicting decisions of the Tribunal on this issue, the decision of the High Court would prevail.
Held: As per the provisions of s.41 of the Act, 2017, credit lying in the electronic Credit ledger can be utilised only for self-assessed output tax - The judgment of the Orissa High Court in Jyoti Construction (supra) considered the provisions of CGST Act and held that CGST Act has no provision for utilisation of CENVAT credit, other than for payment of self-assessed output tax - The decision of the High Court is binding on the Tribunal and the appellant has not produced any judgment of any other High Court which supports the contention of the appellant - Case laws cited by appellant are about debit of pre-deposit amount from CENVAT credit register and as such the same are not applicable to the facts of the present case - Held, therefore, that the mandatory deposit u/s 35F of the CEA, 1944 cannot be made by way of debit in the Electronic Credit ledger maintained under the CGST Act - Four weeks time is granted to the appellant to make the mandatory pre-deposit so as to remove the defect: CESTAT [para 19, 21, 22]
- Appeal disposed of: ALLAHABAD CESTAT
2022-TIOL-776-CESTAT-KOL
BTL EPC Ltd Vs CC
Cus - Issue involved is, whether or not power tiller is covered under Notfn 12/2012 and, consequently, whether benefit thereunder is available to respective importers in respect of power tillers imported by them under Bills of Entry - It has been made clear that power tillers are also to be classified under CTH 84.32 - Circular 45/2001-Customs , which has been relied upon on behalf of Revenue, had clarified that "pedestrian tractors"/ "power tillers" were classifiable under CTH 87.01, whereas "rotary tillers" were classifiable under CTH 84.32 - Even DGFT authorities have recognised that power tillers come under HS Code 8432 8020 (CTH 8432 8020) - This appears from Notfn 19/2015-2020 issued by DGFT - Further, coordinate Bench of Tribunal in case of VST Tillers & Tractors Ltd. has also held that Power Tillers are classifiable under CTH 84.32 of Central Excise Tariff (which is pari materia to CTH 84.32 of Customs Tariff) - From the product literature of various manufacturers of power tillers/rotary tillers sold internationally under various brands, submitted by BTL, it is also evident that rotary tillers and power tillers are self same goods - To similar effect is declaration dated December 16, 2019 of the Chinese manufacturer of power tillers imported by BTL - Said declaration clarifies that primary function of a power tiller is nothing but a modified rotary tiller, inbuilt with an engine as source of power - From the import documents, along with declaration given by manufacturer, it is evident that consignments of power tillers imported by two importers are self propelled rotary tillers where the tractive unit and the tiller make up one integral part - Thus the contention that power tillers are different from rotary tillers are based on erroneous premises and thus unsustainable - Power Tillers imported by importers herein are therefore entitled to benefit of concessional rate of basic customs duty of 2.5% in terms of said notification, as per Sl. No. 399(x) of 'Table' thereof: CESTAT
- Assessee's appeal allowed: KOLKATA CESTAT
2022-TIOL-775-CESTAT-KOL
Indian Oil Corporation Ltd Vs CCGST & CE
CX - Appellant is engaged in manufacture and sale of petroleum products - Said products are manufactured in refineries of appellant situated in various parts of country - In course of refining crude oil, one of petroleum products, Bitumen is produced - During period from April 2013 to June 2017, appellant used Crumb Rubber Modifier (CRM) for mixing with Bitumen to produce Crumb Rubber modified Bitumen (CRMB) which was cleared upon payment of duty from Haldia refinery - Permission for mixing CRM with Bitumen to produce CRMB was granted by jurisdictional Central Excise authorities - Dispute is regarding availment of Cenvat Credit on CRM and Handling service used within Refinery - It is an undisputed position that final product is treated as dutiable and duty is paid by appellant - When once duty is paid by appellant treating the activity as manufacturing activity by Department, Cenvat credit is available and there is no question of denial of Cenvat credit - Impugned order is not sustainable and same is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2022-TIOL-774-CESTAT-KOL
Tide Marketing Pvt Ltd Vs CCGST & CE
ST - Appellant is in appeal against impugned order, whereby Commissioner has imposed penalty of Rs.1,000/- under Section 77 and penalty of Rs.1,98,625/- under Section 78 - It is submitted that issue is no more res integra in view of decision of Tribunal in case of CHARANJEET SINGH KHANUJA 2015-TIOL-1205-CESTAT-DEL - It is also submitted on behalf of appellant that during relevant period, there were different views on whether commission received by an individual from M/s Amway or Britt or any such network marketing company was liable to Service Tax or not and therefore extended period of limitation is not applicable - The proceedings should have been concluded before issuance of SCN - Penalties imposed are set aside and no interfere required with Service Tax as confirmed in Adjudication order - Accordingly, impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2022-TIOL-773-CESTAT-CHD
KEC International Ltd Vs CCGST
ST - Appellant is engaged in manufacture of power transmission towers and parts and accessories - He is also engaged in supply of such towers, parts and accessories and erection, commissioning and installation of such towers - It was allotted two separate contracts by various Electricity Distribution Authorities EDAs - The first one was for ex-works supply of parts of towers manufactured as per designs provided by EDAs and second was for setting up of transmission line which included erection and installation of towers, for which, goods such as conductors, insulators were provided by EDAs - Appellant discharged excise duty and VAT on the sale price of parts of towers sold to EDAs under first contract - For second contract, appellant was using materials such as concrete, reinforcement steel, nuts, bolts and was discharging its service tax liability under works contract services - Department issued a SCN for period 01.06.2007 to 31.03.2011 alleging that value of towers/parts supplied by appellant under first contract should have been added to value of second contract for determining service tax liability - It was also alleged that appellant had artificially split the two contracts to evade payment of service tax - Appellant submitted that service for transmission of electricity was exempted for entire relevant period by virtue of Notification dated 20.07.2010 and the notification dated 27.02.2010 and, therefore, so far as activities undertaken by appellant are concerned, no service tax is payable as these activities are towards erection of transmission lines and hence, are exempted - Decision of Tribunal in Kedar Construction also considered the notification dated 27.02.2010 for the period 27.02.2010 onwards and held that since the exemption is available if taxable services are rendered for transmission of electricity, expression 'for' would cover a very wide gamut of activities and, therefore, the activities undertaken by appellant would be eligible to benefit of a notification - Appellant is, therefore, clearly entitled to benefit of both the notifications dated 20.07.2010 and 27.02.2010 - Impugned orders therefore cannot be sustained and are set aside: CESTAT
- Appeals allowed: CHANDIGARH CESTAT
