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2023-TIOL-402-CESTAT-KOL
Prasanthi Wax Oils Pvt Ltd Vs CCE
CX - The Appellant is engaged in the manufacture of Transformer Oil (Servo electra) on behalf of M/s. Indian Oil Corporation Ltd - The main raw materials like Base Oil (Crude Oil), Additives, Barrels (Packing Material) etc. are supplied by M/s. IOC on which duty at the appropriate rate have already been paid - The Appellant undertakes the processing to convert the Base Oil into Transformer Oil and after packaging, the said finished products are supplied entirely to M/s. IOC as per the agreement - Since the duty paid raw materials and packaging materials supplied by M/s. IOC have been used in or in relation to the manufacture of the final product, the Appellant have been availing the Cenvat Credit of CE duty paid on the said inputs - At the time of clearance of the finished product, the Appellant have been availing the Cenvat Credit of CE duty paid on the said inputs - At the time of clearance of the finished product, the Appellant have been partly utilizing the Cenvat Credit lawfully earned and partly by debit from the account Current - Normally 85 to 90% of the monthly duty liability has been discharged by debiting the Cenvat Account and remaining 10 to 15% of duty liability has been paid from PLA - The Department initiated the proceedings directing the Appellant to show cause as to why the facility of monthly payment of duty by utilizing the lawfully earned Cenvat Credit should be disallowed for the entire period from 06/01/2009 to 14/12/2009 when the Appellant made good of the deficiency by making the payment of differential interest of meager amount of Rs.4,114.00. Held - The demand in the instant case has been raised for contravention of Rule 8(3A) ibid restricting utilization of Cenvat credit during the period of default which provision has been declared ultra vires /invalid by Court, hence the demand cannot be sustained and the Appeal, thus, succeed on this count - The issue is no more res integra and is squarely covered by the judgement of the Hon'ble Calcutta High Court in the case of M/s. Goyal MG Gases Pvt.Ltd. Vs. Union of India & Others wherein it is categorically held that when Rule 8 (3A) is declared ultra vires by the different High Courts then the Revenue cannot take a different stand contrary to the said judgements - The Court further declared Rule 8(3A) as invalid which is not stayed by the Supreme Court - The Gujarat High Court in the case of Indsur Global Ltd. v. UOI has declared the words "without utilizing Cenvat Credit" under Rule 8(3A) as ultra vires which means that the assessee can discharge duty by utilizing Cenvat Credit which is what exactly has been done in the instant case by the Appellant: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-401-CESTAT-KOL
Budge Budge Refineries Ltd Vs CCE
CX - Issue involved is valuation of waste/bye-product and applicability of cum-duty price for the goods cleared - There is no dispute regarding liability of Central Excise duty - Appellant has initially cleared the goods without payment of duty by availing the benefit of Notfn 89/1995 - Subsequently on the advice of Department, they agreed and paid duty by treating value as cum-duty price - Department has contested the adoption of cum-duty price and demanded differential duty - Appellant stated that issue has already been settled when Section 4 was amended and an Explanation to Section 4 was inserted w.e.f. 14.05.2003 - As per Explanation, the price actually realized is deemed to be inclusive of duty - 5. In support of their argument, The Appellant referred the Circular 749/65/2003-CX dated 26.09.2003 issued by the Board clarifying the above issue - From the Circular and Explanation to Section 4, it is clear that when duty is not charged separately, the price collected is deemed to be cum-duty price - Appellant has already adopted the value realized as cum-duty price and paid the duty accordingly - Thus, duty paid by appellant is in order - The decision in Triveni Udyog 2017-TIOL-2253-CESTAT-DEL , is squarely applicable in this case - Accordingly, demand raised on appellant is not sustainable and impugned order confirming the demand is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-400-CESTAT-KOL
Manashi Craft Pvt Ltd Vs CST
ST - Assessee is challenging for confirmation of demand of service tax under category of "Interior Decorator Service" for period June, 2007 to March, 2008 - Revenue is in appeal against impugned order wherein Adjudicating Authority did not impose penalty under Section 76 of Finance Act, 1994 - The entire service has been provided by assessee along with materials - Said fact has not been disputed either of the sides - Therefore, relying on the decision in case of Larsen & Toubro Limited 2015-TIOL-187-SC-ST and Spandrel 2010-TIOL-830-CESTAT-BANG , it is held that appropriate classification of said services is "Works Contract Service" - As there is no demand under "Works Contract Service" against assessee, but assessee opted to pay service tax under composite scheme of works contract, same has been taken on record - Appropriate classification of activities of works undertaken is "Works Contract Service" and they have discharged service tax liability - Demand against assessee under category of "Interior Decorator Service" is not sustainable - As demand is not sustained, question of imposing penalty under Section 76 of Finance Act, 1994, does not arise: CESTAT
- Assessee's appeal allowed: KOLKATA CESTAT
2023-TIOL-399-CESTAT-MAD
Madras Security Printers Pvt Ltd Vs CST
ST - The appellant, engaged in printing of security documents and papers, had paid agency commission to its foreign agents who were engaged by the appellant for procuring export orders to the appellant - Entertaining a doubt, based on intelligence, that the appellant had not paid Service Tax on the commission paid to its foreign agents and further entertaining a doubt from the nature of transaction that the payment of commission for providing the business to the appellant was classifiable under 'business auxiliary service', a SCN dated 21.10.2011 came to be issued proposing to demand the Service Tax on the commission paid by the appellant to its foreign agents under reverse charge basis under the category of 'business auxiliary service' - The appellant filed a detailed reply thereby denying any liability to Service Tax on the payment of commission to its foreign agents inter alia claiming the benefit of exemption under Notification No. 14/2004-S.T. dated 10.09.2004, but however, the Adjudicating Authority i.e., the Commissioner of Service Tax, Chennai, having not accepted the contentions of the appellant, has vide impugned Order-in-Original No. 12/2013 dated 25.02.2013 confirmed the demands proposed against the appellant. Held - Considering the scope of the services rendered, it is seen that liaising with customers and getting export orders is itself a 'procurement of service' within the meaning of (a) under Notification No. 14/2004 and the same would also amount to provision of service on behalf of the client as per (c) of the above Notification - Hence, we do not agree with the findings arrived at by the lower authority that the activities of the foreign agents would not amount to any taxable service under Notification No. 14/2004 - Hence the denial of the benefit of exemption under Notification No. 14/2004 by the lower authority is not sustainable, for which reason the same is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-398-CESTAT-DEL
KVS Cargo Vs CC
Cus - Specific intelligence was gathered by the officers of Directorate of Revenue Intelligence, Delhi Zonal Unit that non-existent firm M/s Anand Enterprises, having Import Export Code (IEC) No. 0515055999 had filed 52 shipping bills for export of Ready Made Garments (RMG) at Inland Container Depot, Tughlakhabad, New Delhi to various countries under duty drawback scheme and an amount of Rs. 1,88,23,316/- was sanctioned to the firm towards duty drawback - Acting on the said intelligence, DRI requested to withhold the duty drawback pending to any to M/s Anand Enterprises - On further investigation, it appeared that the dubious plan hatched by Shri Anand Sharma, (PAN No. FXNPS427E) proprietor of bogus firm M/s Anand Enterprises forged the documents of one Shri Anand Sharma by superimposing his own photograph on Election Card No. TVN1668904 which was issued to real Shri Anand Sharma who was holder of PAN Card No. DLCPS7098Q. Having done so he obtained a bogus PAN card and on the basis thereof, IEC Code was obtained from DGFT, New Delhi and the bank account was opened in Punjab National Band , New Rajender Nagar, New Delhi - The real Shri Anand Sharma PAN No. DLCPS7098Q appeared in DRI office and denied having any firm in the name of M/s Anand Enterprises, he also denied that he had ever exported any goods in any firm - During the course of investigation, no firm in the name of M/s Anand Enterprises was found existing on the declared address - It thus appeared that Shri Anand Sharma (PAN No. FXNPS4247E) had created the bogus firm with intention of availing the duty drawback of huge amount of Rs. 1,88,23,316/- of making fraudulent export of readymade garments - Summons were issued to M/s Anand Enterprises which were received back by the postal authorities with remarks "no such firm existed" - Search was also conducted at M/s KVS Cargo, CHA, appellant herein, however, no incriminating documents were recovered from his premises - The Department issued SCN dated 09.05.2018 to M/s Anand Enterprises, M/s KVS Cargo and M/s Him Logistics Pvt Ltd. proposing demand for tax u/s 113(1) r/w Section 50 of Customs Act, interest on drawback amount u/s 75A(2) and penalties u/s 114 & 114A of the Act - Demands were sustained on adjudication. Held - In the facts of the present case no violation can be attributed on the appellant being a Custom House Agent - The allegations that the appellant did not verify the KYC documents of M/s Anand Enterprises which was a bogus firm created with forged documents and that he abetted the export of readymade garments are unsustainable in as much as the allegations of forging the documents is solely on Anand Sharma and no connivance of the appellant in that regard has been pointed out by the Department - The statement of Shri Bal Kishan Bhalla Chief Manager, Punjab National Bank under section 108 of Customs Act, wherein he specifically stated that Anand Sharma, the proprietor of M/s Anand Enterprises submitted self attested copies of PAN card, Voters card, Form C issued by Department of Labor, Service Tax Registration and that he had verified the said documents submitted by him from originals produced by him - If the Bank officials despite verification are not able to detect the fraudulent nature of the documents, how can one expect from CHA who is not even a public official to unearth the dubious plan of the exporter: CESTAT Held - From the facts of the case of M/s Him Logistics, it appears that he is otherwise a Custom House Agent but their license was under suspension and therefore when Anand Sharma came to their office for his export consignments of ready-made garment, as per the statement of Ms Rajni Kapoor, Sr. Executive of M/ Him Logistics, Shri Anand Sharma was explained about the necessary documents which were required to be filed before the Customs Authorities for export of goods - He later visited their office with those documents and since their license was under suspension, the documents were forwarded to KVS Cargo - The documents of M/s Anand Enterprises were not presented by M/s Him Logistics to the Customs authorities - In other words he never acted as a CHA for the export in question and therefore no liability can be attributed on them under the provisions of CBLR - From the records of the case, I do not find that any allegations of abetment are substantiated as it is not the case of the department that they were aware of the fraud or were beneficiary of the fraud - As pointed out above, the fraud played by Anand Sharma was not even ascertained even by public officials then how is it possible for a non official entity to identity the veracity of the documents - M/s Him Logistics was merely a facilitator in forwarding Anand Sharma to KVS Cargo, hence they cannot be roped in for any violation of the provisions of CBLR and therefore the penalty imposed on M/s Him Logistics by the impugned order is untenable - Hence the orders are set aside: CESTAT
- Appeals allowed: DELHI CESTAT |
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