|
2023-TIOL-523-CESTAT-CHD
Punjab Telenet Cables Ltd Vs CCE
CX - The appellants are engaged in the manufacture of Plastic Furniture - they entered into an agreement for manufacture and sale of the products with M/s Nilkamal Limited on principal-to-principal basis - the appellants used the raw material purchased by them but conforming to the specifications given by the buyers and from the moulds supplied by the buyers - the appellants cleared the manufactured furniture to M/s Nilkamal Limited - the Department was of the opinion that the appellants were job workers of M/s Nilkamal Limited as such they were required to pay duty on the sales price of M/s Nilkamal Limited at their depots - Two SCNs dated 23.12.2010 and 27.01.2011 covering the period 01.03.2007 to 31.12.2009 and 01.01.2010 to 30.09.2010 were issued - The Commissioner of Central Excise, Chandigarh-II by a common order dated 30.03.2012 confirmed the demand after allowing cum duty benefit & imposing penalties on the company as well as on the Director of the company - Hence the present appeal.
Held - The appellants might have used the raw material as per the specifications supplied by M/s Nilkamal Limited - This fact alone will not satisfy the contention that the inputs for the manufacturing of the goods are supplied by the principal manufacturer - The crux of the definition of job worker is in the use of inputs supplied by the principal manufacturer - It is a common understanding that a job worker is the one who works upon the goods supplied directly or indirectly by the principal manufacturer - This fact is totally missing in this case - Neither from the terms of contract nor from the SCNs, it is inferred that the goods are supplied by M/s Nilkamal Limited - Therefore, the appellants do not fit into the definition of 'job worker' even for the purpose of Rule 10A - On this contest, we find that the demand is not sustainable - The adjudicating authority while deciding the appellants' own case vide order dated 21.12.2012 for the period October, 2010 to March, 2011, has clearly brought out as to who would constituted a job worker - The Tribunal and the Department themselves have dropped the demands of similar nature against various suppliers of M/s Nilkamal Limited - In the appellants' own case also, the original authority has dropped the proceedings - We are not in agreement with the contention of the Departmental Representative that the said orders have been accepted by the Department on monetary grounds - Hence the appeals merit being allowed: CESTAT
- Appeals allowed: CHANDIGARH CESTAT
2023-TIOL-522-CESTAT-MUM
Sadguru Sri Sri Sakhar Karkhana Ltd Vs CCGST
CX - Issue to be decided is, whether Cenvat credit availed by appellants on structural steel used for erection of poles for transmission of electricity from MSEB feeder to factory and vice versa and for supporting other capital goods is admissible - So far as issue on merits is concerned, entire credit availed by appellants on MS Angles, MS Beams, MS channels and poles for wire for transmission of electricity from MSEB feeder to factory manufacturing sugar and vice versa has been denied on the ground that it is outside factory premises and not eligible capital goods - It is not disputed that poles were used for supplying electricity in factory for purpose of manufacture sugar and it's by product molasses - For running the machinery, electricity is essential without which there will be no production - The poles might be outside the factory but for purpose of manufacturing activity inside the factory - The location is not of much relevance here but the purpose - It is directly related to manufacture of final product in factory - Therefore, the goods, in issue, even though it is used outside the factory, since it is used in or in relation to the manufacture of final product, the credit is admissible in terms of Rule 2(a) ibid - So far as steel items are concerned, it is the case of appellant that they have been used for supporting structure of machinery and also for erection of poles for transmission of electric energy from MSEB feeder to factory and vice versa and since nothing contrary has been produced on record anywhere therefore same is treatable as accessories and would fall within definition of capital goods as provide by Section 2(a) ibid being the components/ parts/accessories of capital goods which are specifically covered within definition irrespective of its classification - Therefore credit availed on MS Beam, MS channels is also admissible - Extended period has been invoked by revenue whereas it is specific case of appellants that availment of Cenvat credit has been duly declared by them in their books of accounts, Cenvat credit registers and ER-1 returns as well which they filed from time to time - Therefore, no suppression can be alleged against appellant and extended period cannot be invoked nor penalty be imposed on that count - Since complete information was given in statutory returns, normal period of one year would be applicable whereas proceedings are initiated at a later date and hence demand is barred by limitation: CESTAT
- Appeal allowed: MUMBAI CESTAT
2023-TIOL-521-CESTAT-DEL
Pr.CCGST Vs Delhi Development Authority
ST - The assessee, M/s Delhi Development Authority, New Delhi, are registered with Service Tax Department for provision of various services - The assessee were recovering license fee from shops, hotels, covered parking areas, open land leased to petroleum companies, CNG/PNG stations - On the basis of an audit conducted on the records of the assessee, the Department observed that the services provided by the assessee are covered under the taxable category "Renting of Immovable Property Services" under Section 65 (90a) of Finance Act, 1994, and that the assessee did not discharge applicable service tax - Accordingly, an SCN dated 24.10.2013 demanding service tax of Rs. 6,67,48,423/- along with interest and proposing to impose penalties was issued to the assessee - The Commissioner of Service Tax, Delhi II vide order dated 06.04.2017 has dropped the proceedings initiated by the SCN - Hence the Departmental appeal.
Held - The adjudicating authority records finding to the effect that the assessee filed a declaration under VCES-2013 on 18.11.2013 and VCES-2 (acknowledgement of declaration) was issued to them on 18.11.2013 - The assessee claims that they did not receive any VCES-3; no order for rejection also has been received - The Commissioner has observed that as the audit of the records of the assessee was conducted on 21, 21 and 24 June, 2013, the assessee was eligible for opting for VCES as no enquiry, investigation or audit has been initiated were pending against them as on 01.03.2013 - The assessee have made payment of 100% tax dues on 21.11.2013; the Designated Authority did not issue VCES-3 within 7 working days from the date of furnishing of details of payment of tax dues in full under sub-Section (vii) of section 107 of the Act - The Commissioner rightly held that under the circumstances that he did not have any other option, but to accept the declaration of the assessee - As the assessee discharged service tax liability under VCES 2013, they shall get immunity from penalty, interest and other proceedings and, therefore, the SCN was dropped - The Adjudicating authority further finds that as the demand raised for the period 01.01.2013 to 31.03.2013 also stands paid by the assessee, the demand is liable to be dropped - Moreover, the assessee is found to have paid tax which is more than double the tax demand raised - Hence there was no way that Commissioner could have confirmed a lesser amount than the amount paid by the assessee - The assessee also paid 100% tax under VCES 2013 & since such payment was accepted by the Designated Authority u/s 109 of VCES 2013, the assessee is not entitled to refund thereof - Hence appropriation of tax paid under VCES is an empty formality and would be beyond the scope of SCN - Hence the demand was correctly dropped: CESTAT
- Appeal dismissed: DELHI CESTAT
2023-TIOL-520-CESTAT-MUM
M Suresh Company Pvt Ltd Vs CST
ST - The appellant is engaged in the business of manufacture and sale of cut and polished diamonds - The appellant procures the rough diamonds from the overseas supplier M/s. Diamond Trading Company Ltd. (DTC), a De-Beers Group Company, London - For procuring the said goods from the overseas entity, the appellant also availed the services of M/s H. Goldie & Co. Ltd., United Kingdom, who assists the appellant in procurement of the goods on commission basis - Apart from supplying the rough diamonds, M/s DTC has also provided the other Value Added Services (VAS) to the appellant - The Department interpreting that such value added services provided by the overseas entity should be taxable under the category of "Business Support Service" (BSS) and since appellant is the recipient of such service in India, it should be liable for payment of Service Tax, under Section 66A of the Finance Act, 1994 - Similarly, the Department has also interpreted that the services provided by M/s. H. Goldie & Co. Ltd. and the commission charged by them from the appellant should be considered as a taxable service under the category of "Business Auxiliary Service" - On the basis of investigation, the Department initiated show cause proceedings against the appellant, seeking confirmation of service tax demand on the provision of both the category services namely "Business Support Service" and "Business Auxiliary Service" - The matter arising out of the show cause notices was adjudicated vide the impugned order dated 27.11.2015, wherein the learned Commissioner of Service Tax-IV, Mumbai had confirmed the service tax demand of Rs.83,58,374/- for the period 2011-12 and Rs.54,07,332/- for the period 2012-13 along with interest.
Held - Demand raised under the heading of Business Support Service is unsustainable - The demands under Business Auxiliary Service have not been segregated w.r.t. the two categories of services confirmed - Hence the case is remanded for requantification of tax demand raised under Business Auxiliary Service: CESTAT
+ Insofar as Business Support Service is concerned the basic element to be looked into is that it is only on the outsourced services, the tax can be imposed and not otherwise. Considering the true scope and purpose of the definition of Business Support Service, the Tax Research Unit in the Department of Revenue vide D.O.F. No.334/4/2006-TRU dated 28.02.2006 has clarified as under. Such clarification was furnished pursuant to the changes made in the Finance Act, 1994 with regard to introduction of the new levy under the category of Business Support Service as a part of Finance Bill, 2006 - From the above clarification issued by the TRU, it is observed that the intention of the legislature was to collect service tax on the outsourced services only. In the present case, since for provision of the value added services, the appellant had not outsourced services to the overseas entity, it cannot be said that such services provided by the overseas entity should be taxed under the category of Business Support Service. Thus, we are of the considered view that confirmation of the service tax demand in the adjudication order on Business Support Service will not stand in judicial scrutiny;
+ With regard to the Business Auxiliary Services provided by M/s. H Goldie & Co. Ltd. to the appellant, we find that in an identical situation, Tribunal has dismissed the appeal in favour of the importer holding that the activity provided as a commission agent should fall under the category of Business Auxiliary Service. Further, the appellant has also concedes the fact that it is not contesting the demand confirmed under Business Auxiliary Service. Therefore, we are of the view that the appellant is liable to pay service tax confirmed in the adjudication order with regard to that category of service. Hence, we do not find any infirmity in the impugned order insofar as it has confirmed the adjudged demands under the Business Auxiliary Service. However, since the adjudicating authority has not segregated the demand in respect of the two category of services confirmed in the impugned order, we are of the view that the matter should go back to the original authority for the limited purpose of quantifying the service tax demand with regard to the Business Auxiliary Service, which should be paid for the units by the appellant. It is expected that while computing the service tax liability to be confirmed under such service, the adjudicating authority should observe the process of law, natural justice and should grant an opportunity of personal hearing to the appellant to present their case before him.
- Appeal partly allowed: MUMBAI CESTAT
2023-TIOL-519-CESTAT-MAD
Nubiola India Pvt Ltd Vs CC
Cus - Issue to be decided is, whether declared transaction price was acceptable or did it require loading, as proposed for the reasons discussed in orders of lower authorities - Appellant nowhere denied, and rightly so, that its imports were sourced from its relative entity and accordingly hit by Rule 2(2)(i), (iv) and (v) ibid wherein "related" is defined - It is most relevant to ascertain if value so declared is at arm's length - Burden is therefore on the appellant to establish that transaction value declared by it was not influenced by relationship with its supplier - Though appellant contended that declared value was at arm's length, lower authorities have disputed the same - No supporting material is placed to dislodge the findings of lower authorities - If price declared was at arm's length, then perhaps there would not be any such long drawn dispute at all - Therefore, declared value was not at arm's length - Next question is, whether the value was influenced by relative party transaction, in terms of Rule 4(3)(a) ibid - When such a doubt is expressed by authority, then the burden is on appellant to discharge the same to establish that transaction value was at arm's length - There is a related party transaction and hence, in first place appellant has to pass the test of Rule 4(3)(a) ibid - Rule 4(3)(b) could be invoked only when importer demonstrates as to meeting three requirements thereunder - But it is to be noted that Rule 4(3)(b) does not talk anything when value is held to be at arm's length - The Adjudicating Authority has adopted Rule 5 as against which, appellant urges for adaptation of Rule 7 - It is thus urged by appellant to violate the sequential Rule and choose the one which perhaps suits it, for which no justifiable reason is advanced - It is not only for jumping the sequence, but also for choosing Rule 7 that proper case has to be made out otherwise, Adjudicating Authority has to follow the mandate of Rule 3(ii) ibid, which is perfectly in order - Necessary opportunities were given to appellant for producing all evidence based on which Adjudicating Authority passed a detailed speaking order and consequently, appellant cannot be heard to say it was not given sufficient opportunities and nor is there any such ground to that effect - Hence, impugned order does not call for any interference: CESTAT
- Appeal rejected: CHENNAI CESTAT
2023-TIOL-518-CESTAT-KOL
CC Vs Atul Automation Pvt Ltd
Cus - The assessee imported old and used Digital Multifunction Printer and filed various bills of entry - The goods of the assessee were examined in the presence of Customs Officials, Chartered Engineer and representative of the appellant and found to be old and used having residual life of more than six years and the said machines were found to be minor reconditioning and values were assessed on the enhanced value as compared to declared value - The said value was arrived by Chartered Engineer after inspection and production of market value recommendations based on several aspects like useful life of machines/Make & Model/technology/country of origin/physical condition/comparison with similar goods imported in past/internet information/reconditioning etc. - It was held that the said consignment being second hand was restricted item in terms of Para 2.17 of Foreign Trade Policy, 2009 – 2014 and Para 2.33 & 2.33A of HBP and could be imported against valid license. On appeal, the Commissioner (Appeals) held that for the impugned goods, no license is required in terms of restrictions made under Para 2.17 of the Foreign Trade Policy 2009-2014 and Para 2.33 and 2.33A of HB Procedure. It was also held that the value can not be enhanced based on Chartered Engineer's Valuation - Hence the present appeal.
Held - As was held in the case of Bhawani Enterprises for earlier import of identical goods, it was held that there was no restriction of import of the subject goods, we hold that no specific license is required for import of the impugned goods - We further find that for enhancement of value, the Chartered Engineer's Certificate cannot be relied upon unless there is corroborative evidence, we hold so - Hence there is no infirmity in the O-i-A in question and the same is upheld: CESTAT
- Appeal dismissed: KOLKATA CESTAT |
|
