2022-TIOL-790-CESTAT-BANG
Essae Teraoka Ltd Vs CCE & ST
ST - Appellant is engaged inter alia , in the manufacture of weighing scales/machines of various capacities - Sometimes, while placing purchase orders the customers pay advance amount and the balance is payable after installation of weighing machines at the customer's site - Department entertained a view that the activity of installation of weighing scales/machines at the customers premises should be considered as a taxable service, defined under Section 65(39) of Finance Act, 1994 - Accordingly, the department issued the first show cause notice to the appellant on 15.10.2008 (and the second periodical SCN on 25.04.2011), alleging that as per the purchase orders issued by the customers, the price of weighing machines included installation and commissioning and that final payment was made only on successful installation or commissioning of machines and thus, the appellant was liable to pay service tax on the activity of installation or commissioning - As there was no break up in the price towards the installation, the department took the view that 33% of the price/value should be treated as value of taxable service - Suppression charges have also been invoked in both the demand notices covering the period from August 2003 to February 2011 - Demands were confirmed by the Commissioner and, therefore, the present appeals before the CESTAT. Held: Appellant had not separately charged, billed or received any amount from the customers towards installation charges for installing the weighing machine at the customer's site - Since on the entire value of excisable goods, the appellant had discharged the Central Excise duty liability in terms of Section 4 of the Central Excise Act, 1944 and had not claimed any deduction, exclusion, abatement towards installation charges, they cannot be taxed under the provisions of Section 65(39) ibid, considering the appellant as a service provider - Further, it is not the case of department that over and above the transaction value determined by the appellant, any other amount towards installation or commissioning had been charged by the appellant - Thus, there was no consideration for the provision of any service and hence, no service tax liability can be fastened on the appellant - Issue arising out of the present dispute is no more open for any debate - Impugned orders cannot be sustained for judicial scrutiny - Impugned orders are set aside and appeals are allowed: CESTAT [para 4, 5, 7]
- Appeals allowed: BANGALORE CESTAT
2022-TIOL-789-CESTAT-ALL
Reciprocal Infrastructure Pvt Ltd Vs CC
ST - The present appeal is filed to contest the validity of an order passed by the CESTAT Bench at Lucknow - Duty demand for service tax had been raised under proviso to Section 73(1) of the Finance Act, 1994 along with demand for interest and imposition of penalty - The order dealt with three services, namely 'works contract services', 'work of demolishing' and 'inadmissible CENVAT credit' - The SCN sought to invoke the extended period of limitation under proviso to Section 73(1) ibid - The appellant filed a detailed reply specifically contending that the extended period of limitation could not have been invoked in the facts and circumstances of the case. It was contended that the appellant had filed all the ST-Returns during the period from 2008-09 to 2012-13 and though a mistake may have been committed in filing the return, but it was not with an intention to evade payment of service tax. Held - The order does not deal at all with the invocation of the extended period of limitation - It was absolutely necessary for the adjudicating authority to form an opinion that the appellant had deliberately suppressed material information with an intention to evade payment of service tax - Unless the adjudicating authority had come to a conclusion that the extended period of limitation was rightly invoked in the show cause notice, it could not have confirmed the demand for any period beyond the normal period of limitation - In Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay , the Supreme Court observed that section 11A of Central Excise Act, 1944 empowers the Department to reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts - It is, therefore, clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty - Thereby, the confirmation of demand for the period beyond the normal period of limitation by invoking the proviso to section 73(1) ibid cannot be sustained - However, the confirmation of demand for the period within the normal period is sustained - Demand for extended period is quashed: CESTAT
- Appeal partly allowed: ALLAHABAD CESTAT
2022-TIOL-788-CESTAT-MUM
CCE Vs Britco Foods Company Ltd
CX - Appeal filed against O-I-O which dropped proceedings initiated in three SCNs for recovery of differential duty from M/s Britco Foods Company Ltd (now M/s Coca Cola India Pvt Ltd) for having cleared 'non-alcoholic beverage bases/concentrates' on payment of duties of central excise at the rate prescribed for sub-heading 3302 10 of Schedule to Central Excise Tariff instead of sub-heading 2108 10 - Assessee had been adopting this classification owing specific direction in C.B.E. & C. Circular No. 114/18/86-CX - Contending that Finance Act, 1995 had incorporated sub-heading 2108 10 in the Schedule to Central Excise Tariff to cover the impugned goods, two notices were issued for the period from August 1995 to January 1996 and on 14th August 1996 for period from February 1996 to 6th March 1996 which were dropped in adjudication - Commissioner (A) having allowed the appeal of Revenue, assessee carried the matter to Tribunal which upheld the order of original authority - The Supreme Court disposed off appeal of Revenue by upholding decision of Tribunal on ground of revenue neutrality and with the clear observation that merit of rival claims was not being decided upon - The SCNs disposed off were periodical demands in continuation of first SCN and dispute therein had been carried to Tribunal in Britco Foods Company Ltd and the appeal of Revenue before Supreme Court was dismissed on acknowledgement that classification exercise was academic in light of consequence being revenue neutral - Considering the disposal by Supreme Court without going into rival entries in Schedule to CETA, 1985, impugned order may have been imprecise in its elaboration of law as settled - Scope of appellate remedy is unambiguously clear – challenge should be to an order for not being legal and proper – and solecism in articulation or inaccuracies of expression are not sanctioned as grounds for appeal - There is no doubt that Supreme Court did not render a finality to dispute over classification but Tribunal, indubitably, has - That finality can be shaken only by a reversal in highest court of land and, until then, law settled by Tribunal prevails; failure to recognise that finality places orders of original authority and first appellate authorities in peril and for consequences of breach of discipline - Issue was resolved in case of assessee for previous period in re Britco Foods Company Ltd - No case has been made out by Revenue for an alternate approach to classification as settled: CESTAT
- Appeal dismissed: MUMBAI CESTAT
2022-TIOL-787-CESTAT-DEL
Hitesh Nagwani Vs CC
Cus - Appeal has been filed against impugned order vide which request of importer for provisional release of seized currency and USD has been rejected on two grounds that since investigation by DRI was under process, release cannot be ordered; that there is no provision under Customs Act for provisional release of currency - From SCN issued to appellant i.e. after the order under challenge was passed, it is apparent that appellant has been mentioned to be a bona fide owner of goods imported by importer M/s. Rudra Overseas - Said allegations have been leveled based upon submissions of proprietor of M/s. Rudra Overseas as well as data as was retrieved from laptop of said Sanjay Punjabi - SCN is sufficient to show that investigation has been concluded in this matter - Hence first ground for rejecting appellant's request for provisional release of currency is now redundant - Coming to second ground of rejection, it is observed that section 110 of Custom Act 1962 rather requires that any goods seized under section 110 of Customs Act 1962 may pending adjudication can be released provisionally on taking bond with security or such conditions as may be required - No doubt the word currency is not been mentioned in said section but perusal of section 2(22) of Customs Act 1962 reveals that currency is included in definition of ‘goods' - No doubt in terms of section 121 of Customs Act, sale proceeds of smuggled goods shall be liable to confiscation, but apparently said provision shall not be applicable to present case wherein there is no allegation of goods imported in question to be smuggled one - There also has been CBIC Circular 35 /2017 laying guidelines for provisional release of seized goods under section 110 of Customs Act, 1962, according to which there is no bar on provisional release of Currency even if it is observed that no formal seizure order has been passed - Rather no seizure memo has been generated, there appears no reasonable ground for confiscation thereof - Above all, the goods for which impugned currency is alleged to be sale proceeds, already have been provisionally released in favour of importer against furnishing of bank guarantee and execution of bond as directed - Release of currency notes cannot be denied merely on basis of statements as was held by Supreme Court of Madras in case of J K.S. Air travels 2016-TIOL-49-HC-MAD-CUS - The order under challenge is held to be wrong, accordingly, is hereby set aside: CESTAT
- Appeal allowed: DELHI CESTAT
