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2023-TIOL-684-CESTAT-MAD
Tamil Nadu Generation And Distribution Corporation Ltd Vs CST
ST - Appellant is a Government of Tamil Nadu undertaking engaged in generation of electricity, during course of which fly ash is generated as a by-product - Thus, generated fly ash was supplied, as per Government policies to cement manufacturers - SCNs were issued inter alia proposing to treat supply of fly ash to cement companies under category of business support service under Section 65(104c) of Finance Act, 1994 and thereby, proposing to demand Service Tax for period from May 2006 to September 2010 apart from applicable interest/(s) and penalties - A more or less identical issue has been considered in Mettur Thermal Power Station 2014-TIOL-2200-CESTAT-MAD wherein this Bench has followed its earlier order in 2013-TIOL-2116-CESTAT-MAD - Issue on hand is no more res integra in view of the fact that same has already been decided by this very Bench in case of M/s. Mettur Thermal Power Station and hence, following the same, it is observed that disputed activities of appellant cannot be treated as business support service and consequent demand would not therefore survive - Impugned orders are set aside: CESTAT
- Appeals allowed: CHENNAI CESTAT
2023-TIOL-683-CESTAT-HYD
Syniverse Mobile Solutions Pvt Ltd Vs CC, CE & ST
ST - The appellant is providing services of data clearing and financial settlement service to various mobile operators - A SCN was issued on the ground that services undertaken by appellant fall under category of Business Auxiliary Services - On this count demand for Rs. 1,15,79,699/- was raised - On the allegation that they have not paid service tax towards import of services, the demand of Rs. 12,40,303/- was raised - On perusal of SCN, it is seen that entire portion of Section 65(19) pertaining to Business Auxiliary Services has been extracted at Para 2 of SCN without any reference whatsoever as to under which clause of Section 65(19) the services referred by Appellant would fall - Tribunals have been consistently holding that it is essential for SCN issuing authority to clearly indicate the sub-clause under which service tax in question would fall - If the demand is made merely stating that services rendered falls under Business Auxiliary Services without mentioning specific clause, the demands cannot be legally sustained - In case of HMM Ltd. 2002-TIOL-120-SC-CX , demand was made by invoking the proviso to Section 11A(1) of Central Excise Act, 1944 by demanding Excise Duty for extended period - From said judgment, it gets clarified that even when extended period is invoked in terms of Section 11A(1), Department should clearly specify as to under which of the sub-clause SCN is being issued - In respect of confirmed demand of Rs. 12,40,303/- in respect of import of services, there are number of decisions by various Tribunal and High Courts holding that Service Tax liability on RCM basis will arise for importer from 18.04.2006 onwards - Therefore, confirmed demand of Rs.11,13,764/- pertaining to demand till 17.04.2006 is set aside - As Appellant has already paid the balance of Rs. 1,26,539/- along with interest of Rs. 15,368/- for subsequent period and issue was under litigation for quite sometime, penalty imposed is also set aside - In respect of confirmed demand on account of financial settlement services, Appellant has paid the same along with interest in course of adjudication process - Therefore, taking a lenient view, penalty of Rs. 9,05,651/- stands reduced to Rs.2,26,425/-: CESTAT
- Appeal partly allowed: HYDERABAD CESTAT
2023-TIOL-682-CESTAT-KOL
Telco Construction Equipment Company Ltd Vs CCE
CX - Appeals are filed by Appellants seeking dropping the penalty of Rs.1.00 Lakh imposed on them under Rule 26 of Central Excise Rules, 2002 - One M/s. Model Heavy Fabrications Pvt. Ltd. and M/s. JMT Auto Ltd. were engaged in manufacture and clearance of excisable goods namely excavator parts - It is alleged that said manufacturer under-valued the goods supplied to appellants as they have not included value of drawing & design supplied by appellants free of cost - Therefore, proceedings were initiated against manufacturer/job-worker and appellants for demand of duty and to impose penalty on appellants - None appeared on behalf of Appellants, nor any request has been received - Considering the issue itself can be decided at this stage, therefore the appeals are taken up for consideration - Similar issue has come up before Tribunal in case of Tata Motor Ltd. & Others v 2009-TIOL-241-CESTAT-KOL where penalty imposed on supplier of drawing and design free of cost to job-worker under Rule 26 was set aside - Therefore, following the said decision of Tribunal, it is held that penalty under Rule 26 is not imposable on appellant - Accordingly, impugned orders qua imposing penalties on appellants are set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
2023-TIOL-681-CESTAT-MUM
Godrej Agrovet Ltd Vs CCGST
CX - The issue involved herein is whether the products Zymegold Plus and Dripzyme are classifiable under CTH 3808 - 'Plant Growth Regulator' as re-classified by the department or under CTH 3101 - 'Fertilizer' as claimed by the Appellant - The appellants are engaged in the manufacture and clearance of 'Zymegold Plus granules' and also 'Zymegold Plus liquid' as Organic Fertilizer by classifying the same under CSH 31010099 without payment of any Cenvat duty and also of Dripzyme w.e.f. August, 2011 as Organic Fertilizer under the same heading - Admittedly Organic Fertilizer attracts Nil rate of duty - CSH 31010099 covers only animal and vegetable fertilizers whether or not mixed or chemically treated - The Department, being not satisfied with the classification made by the appellants, issued different SCNs to the appellants from time the time for the period July, 2011 to December, 2013 as detailed in the table above which culminated in seven Adjudication Orders decided against the appellant and the products viz. 'Zymegold Plus granules', 'Zymegold Plus liquid' and Dripzyme were classified under Chapter Sub-Heading No. 38089340 and demand of Excise duty was upheld alongwith interest and penalty - All the seven appeals filed by the Appellants against the Adjudication Orders/Orders-in-Original were disposed of by maintaining the duty demand and modifying the amount of penalty under section 25(1) of the Central Excise Rules, 2002.
Held - The classification of the goods as adopted by the assessee is correct - The orders in question merit being set aside: CESTAT
+ Presence of micronutrients in the products in issue has been taken against the appellants by the learned commissioner. It is interesting to note that plant growth regulators are grouped under CETH 38.08 alongwith other insecticides, fungicides, herbicides and disinfectants, all of which are intended to destroy pathogenic germs, insects, mosses and moulds, weeds, pests to achieve their results. They even considered as pesticides in some parts of the world whereas micronutrients are promoting only growth and health of the plant. A co-ordinate Bench of the Tribunal in the matter of CCE vs. M/s. Aries Agrovet Industries Ltd. , while taking note of the job etc. of micronutrients has come to the conclusion that micronutrients cannot modify inhibit retard the growth of plants like plant growth regulators and they only promote normal growth. Therefore, in our opinion, the presence of micronutrients in the products in issue before us does not make them plant growth regulator. We also find support on this from the decision of this Tribunal vide Order No.A/86615/ 2018 dated 31.5.2018 in the matter of CCE, Mumbai vs. Aries Agro-Vet Industries Ltd . in which it has been held that 'micronutrients' and 'macronutrients' are required for agriculture as fertilizers and 'micronutrients' are not plant growth regulators;
+ A strong reason which wade into the mind of learned commissioner while passing the impugned order is the order passed by his predecessor in appellant's own cases on identical issue for the earlier period but we are afraid that it cannot be accepted, as the Tribunal in appellant's own case for the earlier period vide its order dated 29.7.2022 has allowed the Appeals filed by them for the period November, 2006 to June, 2011 and held that the product Zymegold Plus is a fertilizer and we see no reason to differ with the same as the department has failed to produce any document to show that the same has been challenged in appeal anywhere by the department or that any stay of the said order has been obtained by the department. The reasoning given by the Tribunal for Zymegold Plus is equally applicable for Dripzyme also as it also contains seaweed extract based product alongwith various other nutrients. It contains soluble like seaweed extracts, proteins, carbohydrates, inorganic salts and other inherent nutrients contained in the product of vegetable origin along with substantial portion of adjuvant and aqueous diluents. The appellant had also placed on record the test report on analysis of sample of Dripzyme issued by SGS India Pvt. Ltd.- a laboratory which also supports the claim of the appellant that it supplies nutrients whereas the department has failed to produce any test report to the contrary;
+ In yet another decision dated 6.11.2018 in the matter of Bahar Agrochem & Feeds Ltd.(supra) also the Tribunal has held that since the product Zymegold contains nitrogen and chlorine therefore is suffice to characterize the product as fertilizer. In arriving at the conclusion therein the Tribunal also relied upon its order dated 31.5.2018 in the matter of Aries Agri-vet Industries Ltd. (supra). We have also noticed that the department has taken resort to the definition of 'fertilizer' as provided in Fertilizer Control Order, 1985 for changing the classification which, according to us, could not have been done as the definition provided in other statutes, totally unrelated to statute in issue, cannot be made the basis for changing the classification. If the appellants are not complying with or are in violation of any provision of the said order, then it is for the authority mentioned therein to take necessary steps but on that basis the classification cannot be changed at all as the Excise Act is a complete code in itself and the authorities herein have to act within the four corners of the said statute.
- Appeals allowed: MUMBAI CESTAT
2023-TIOL-680-CESTAT-MUM
Jadhav Exports Pvt Ltd Vs CCE
Cus - Appellant was issued with permission to operate under 'export-oriented unit (EOU)' scheme in Foreign Trade Policy (FTP) by competent authority in 2000 - Admittedly, appellant was unable to fulfil prescribed export obligation for the first five years of operation and therefore, in accordance with policy prescriptions and corresponding exemption notifications issued under CEA, 1944 and Customs Act, 1962, became liable to duties in accordance with scheme - Appellant also was liable to be proceeded under Foreign Trade (Development & Regulation) Act, 1992 by designated authority competent to impose penalties for such failure - Between 2002-03, when appellant ceased to export and effective closure of factory in 2006 as well as proceedings initiated under Customs Act, 1962/Central Excise Act, 1944 in 2011, several changes had been made to the scheme - Concurrently, perception on liabilities arising from non-fulfilment of export obligation had also undergone transformation in terms of judicial determination - As substantial part of amount in dispute pertains to capital goods and adjudicating authority would need to reappraise the demand in accordance thereof requiring the matter to be remanded, it would also be in consonance thereof for dispute relating to raw materials also to be reconsidered at the same time - To enable such re-determination, impugned order is set aside and matter is remanded back to original authority for a fresh decision in accordance with law as enacted and as judicially determined: CESTAT
- Matter remanded: MUMBAI CESTAT |
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