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2023-TIOL-474-CESTAT-MAD
Chennai Petroleum Corporation Ltd Vs CGST & CE
CX - Demand is raised only because of difference in quantity when petroleum products are despatched from refinery and after it is received at terminals at Muttam - There is no allegation of clandestine removal - It can be reasonably perceived that loss of quantity is due to temperature variation, variation caused in dip method of measurements - As goods are petroleum products, which are volatile in nature, some times there may be loss in quantity at the time of receipt at terminal - Likewise, there may be receipt of excess quantity reaching the terminal as some quantity may be retained in pipeline - Department has issued clarification that net quantity after adjusting the gain and loss has to be taken for demand of duty - Though this clarification is dated 14.02.2014, said method has to be applied for disputed period also being a clarification issued by department - Therefore, matter remanded to original authority who is directed to re-quantify the duty liability in accordance with clarification issued by department - The second issue is with regard to demand of duty on pipeline quantity of Naphtha - It is seen that appellant has paid duty much before issuance of SCN and therefore department ought not to have imposed penalty - The penalty imposed are entirely set aside: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2023-TIOL-473-CESTAT-MAD
CC Vs K K Impex
Cus - The assessee, Proprietor of M/s. K.K. Impex had imported silk fabrics vide 2 Bills of Entry and claimed the benefit of CVD @ 8% under Notification No. 30/2004-CE., dated 09.07.2004 - The original authority vide orders of assessment dated 24.02.2010 and 25.02.2010 denied benefit of Notification No. 30/2004-CE on the imported goods - Against such order the assessee filed appeal before the Commissioner (Appeals) - The order passed by original authority was set aside by the Commissioner (Appeals) vide the order impugned herein and held that the assessee is eligible for the benefit of notification. Held - The very same issue came up for consideration before the Apex Court in the case of SRF Ltd. Vs CC, Chennai and it was held that the assessee would be eligible for the benefit of notification - The Apex Court opined that the benefit of notification cannot be denied if the condition is such that it is practically impossible to satisfy the condition - Following such judgment of the Apex Court, the order passed by the Commr.(A) does not warrant interference with: CESTAT
- Appeals dismissed: CHENNAI CESTAT
2023-TIOL-472-CESTAT-DEL
Clarity Gold Pvt Ltd Vs CC
Cus - The appellant had imported and cleared capital goods under EPCG Licence No. 1330001563 dated 14.03.2017 at concessional rate of customs duty of 5%, under Notification No. 97/2004-Cus., dated 17.09.2004, as amended, subject to the condition that the appellant fulfils Export Obligation as prescribed, in the said Notification - As per the Notification, the appellant was required to fulfill the conditions to produce and within 30 days of the expiry of each block year from the date of issue of licence, evidence showing the extent of Export obligation fulfilled, and where Export Obligation of any particular block is not fulfilled, the importer shall within 3 months of the expiry of said block, pay duties of Customs of an amount equal to that portion of the duties leviable on the goods, but for the said exemption, which bears the same proportion as the unfulfilled portion of the Export Obligation bears to the total Export Obligation, together with interest at the rate applicable from the date of clearance of goods - However, the appellant failed to produce such Export Obligation Discharge (EODC) before the proper officer within the prescribed time limit - Hence, a SCN dated 23.06.2016 was issued to the appellant - The Adjudicating Authority vide the impugned Order-in-Original No. HKP/ADC/ACE/59/2017, dated 02.05.2017, ordered to recover customs duty of Rs. 9,18,589/- under Section 143(3) of the Customs Act, 1962 by enforcing the bond/Bank Guarantee executed by the appellant and demanded interest on the amount due from the appellant under Section 28AA of the Act - Redemption fine of Rs. 5,00,000/- was also imposed u/s 125 of the Customs Act, 1962 and penalty of Rs. 2,00,000/- u/s 112 of the Act upon the appellant. Held - I find from the EODC dated 1.2.2019 granted by the Competent Authority is sufficient proof that the appellant have discharged their export obligation in respect of EPCG licence No. 1330001563, dated 14.03.2007 - The Court below have in a callous manner ignored the written submissions and evidence placed before it, which is highly undesirable and unbecoming of a court - Hence the order in question merits being set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2023-TIOL-471-CESTAT-DEL
CST Vs BSL Training Company Pvt Ltd
ST - The issue arises for decision is, whether assessee is entitled to benefit of exemption Notification No. 12/2003-S.T. - Another issue is for setting aside the penalty under section 78 and extending benefit of section 80 of Finance Act - As regards the issue of abatement of value for supply of material by a coaching centre, issue is no longer res integra and has been settled by decision in M/s. Cerebral Learning Solutions Pvt. Ltd. 2013-TIOL-834-CESTAT-DEL - Therefore, Commissioner (A) was correct in extending benefit of abatement available under Notification No. 12/2003-ST - Though the assessee had applied for Service Tax registration on 09.10.2010, there was no follow up done by them - No attempt was made to seek any clarification from department as to why the registration had not yet been granted to them - Sub-Rule (5) of Rule 4 of Service Tax Rules categorically state that if registration certificate is not granted within a period of 7 days of receipt of application, then the said registration is deemed to have been granted - Once the registration was not granted even after lapse of 7 days, it is seen that assessee did not make a single attempt for more than a year to seek clarification - It is evident that assessee in the meantime was collecting service tax from his students for services being extended by them - So, it is apparent that assessee was very much aware that service tax was liable to be paid but they did not deposit the said amount so collected to Government exchequer nor did they file their ST-3 returns - Urgency for seeking registration was shown only once the investigations was initiated by department - Penalty under section 78 upheld by Commissioner (A) is correct: CESTAT
- Appeals dismissed: DELHI CESTAT
2023-TIOL-470-CESTAT-DEL
Sew Infrastructure Ltd Vs CCE
ST - The appellant claims to be an infrastructure construction company engaged in executing turnkey projects in various fields, such as, irrigation projects and power projects - M/s Bhilai Electric Supply Company Limited Bhilai Electric is a company engaged in generation of electricity and it awarded a contract for setting up of a power plant to M/s Bharat Heavy Electricals Limited - BHEL sub-contracted a portion of the work to the appellant by a work order dated July 08, 2005 - The job to be performed by the appellant under the work order was of land development which involves earth work, excavation, back filling, site levelling, grading and disposal - A SCN dated August 29, 2006 first SCN was issued to the appellant for the period July 2005 to August 2006 proposing a demand of service tax of Rs. 1,51,14,126/- on the allegation that the appellant had undertaken the activity of preparation of site for the power plant which would be covered under the category of 'site formation and clearance, excavation and earthmoving and demolition' services as defined under section 65(97a) of the Finance Act, 1944 the Finance Act which was taxable under section 65(105)(zzza) - The SCN was adjudicated upon by an order dated July 30, 2007 and the demand was confirmed - Payment of service tax through credit of Rs. 1,12,38,313/- was also rejected on the ground that the invoices against which credit was availed were not issued to the Bhilai premises of the appellant - The second SCN dated January 18, 2008 was also issued to the appellant for the period from March 2006 to September 2006 on the same ground as the first SCN and it proposed a demand of Rs. 61,44,148/- - The credit of Rs. 1,16,86,444/- availed by the appellant was also denied. The second show cause notice was adjudicated by an order dated September 30, 2008 and the entire demand was confirmed. Held - The work order is a composite contract comprising services as well as goods - This would be clear from serial no. 6 which mentions 'Earth work in excavation for levelling and grading using borrowed good earth'. It specifies that borrowed good earth has to be arranged by the contractor at its own cost - There can be no manner of doubt that the work order comprises both the service element as well as the goods element - Hence it has to be examined whether the work to be performed would actually fall under the category of Site Formation service - The Supreme Court in Larsen & Toubro in paragraph 24 drew a distinction between the service contracts simpliciter and a composite works contracts which would involve both services and goods and held that it is only w.e.f. June 01, 2007 that composite contracts can be subjected to levy of service tax and not before this date - It has been found as a fact that the work order in the present case, involves both supply of services as also goods - It is, therefore, a composite contract - In view of the decisions of the Supreme Court in Larsen & Toubro and Total Environment Building Systems it has to be held that the services performed by the appellant under the work order would fall in the category of 'works contract' service and not 'site formation' service - The finding of the Commissioner on this issue, therefore, cannot be sustained and is set aside: CESTAT Held - The next issue that arises for consideration in this appeal is as to whether the appellant would be justified in availing CENVAT credit - A provider of taxable service shall be allowed to take CENVAT credit under rule 3 of the CENVAT Credit Rules, 2004 the 2004 Rules on the service tax leviable under section 66 of the Finance Act - The Commissioner had examined documents to ascertain whether the appellant was justified in availing CENVAT credit, but in view of the finding recorded in this order that the appellant would not be liable to pay service tax, the appellant cannot avail the benefit of rule 3(l) of 2004 Rules - Interest cannot be imposed on the appellant as demand of service tax is not sustainable and credit was reversed by the appellant - Thus the confirmation of demand of service tax deserves to be set aside and is set aside - The imposition of penalty and interest also deserves to be set aside and is set aside: CESTAT
- Appeal allowed: DELHI CESTAT |
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