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2023-TIOL-1077-CESTAT-DEL
Institute of Clinical Research India Vs CST
ST - The Appellant-company filed the present appeal against an Order-in-Original passed by the Adjudicating Authority, pursuant to issue of two Show Cause Notices for the relevant period - The Commissioner confirmed the demand of service tax proposed in the two show cause notices under 'commercial training or coaching' services defined under section 65(26) of the Finance Act, 1994 the Finance Act and made taxable under section 65(105)(zzc) of the Finance Act, with interest and penalty - The Appellant claims to be a society which is also a charitable organisation and that it holds registration under Section 12AA of the Income Tax Act 1961 - The Appellant was engaged in imparting education in the form of Post-Graduate courses - Such courses would be offered in collaboration with a UK-based university, as per an agreement between the Appellant and the University - As per recent amendments to the Agreement, the Appellant could conduct 2-year PG courses in clinical research, while the degrees for the same would be awarded by the UK University - The Department alleged that the Appellant was providing Commercial training or coaching services as it conducted courses in collaboration with the UK university and so the fees collected by the Appellant from the students who pursued the course, would attract Service Tax - 5 SCNs were issued to the Appellant and the same were adjudicated through a common order - Penalties were also imposed under sections 76 and 77 of the Finance Act and payment of interest under section 75 of the Finance Act for delayed payment of service tax, was directed to be paid - Hence the present appeal.
Held - The Commissioner has recorded a finding, after careful examination of the activities undertaken by the Indian Institute that it was providing training or coaching for a consideration - There is no error in this finding as indeed the Indian Institute was engaged in imparting education in the field of Post Graduate courses in 'clinical research' for a consideration - The Commissioner has also recorded a categorical finding that the term 'recognised by law for the time being in force' would mean certificate/degree recognised by Indian law and so the certificates/degrees granted by the UK University would not fall in the category of certificates/degrees recoginsed by law for the time being in force - The contention of the Chartered Accountant for the appellant that since the Indian Institute is a registered society and is working without profit, no taxable service can be said to have been provided cannot also be accepted - The contention of the Chartered Accountant for the appellant that since the order passed by the Commissioner is an ex parte order, it should be set aside as it violates the principles of natural justice cannot also be accepted - The Commissioner had proceeded to adjudicate the show cause notices on the basis of the facts on record and the written submissions submitted by the appellant for the reason that despite repeated opportunities, the appellant and its representatives did not appear for personal hearing - Thus, if the Indian Institute itself did not appear before the Commissioner despite ample opportunities having been provided, it cannot be permitted to raise any grievance about violation of the principles of natural justice - The contention of the Chartered Accountant for the Appellant that since there was no malafide intent to evade payment of service tax, penalty under section 76 of the Finance Act should be set aside, cannot also be accepted - There is no error in the findings recorded by the Commissioner - When the provisions of sections 65(26) and 65(27) of the Finance Act are so clear, the Indian Institute cannot claim to have formed a bonafide belief that it was not liable to pay service tax - Section 77 of the Finance Act provides penalty for contravention of any provisions for which no penalties are provided under Chapter V of the Finance Act - Under section 70 of the Finance Act, every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed - The Indian Institute had not filed the prescribed returns with complete and authentic details - Thus, penalty under section 77 of the Finance Act was correctly invoked - This matter has not been examined by the Commissioner - In the facts and circumstances of the case, it would be appropriate to remit the matter to the Commissioner to decide this aspect only, namely as to whether the Indian Institute would be entitled to the aforesaid benefits out of the total demand that has been confirmed - Thus, while confirming the findings recorded by the Commissioner, the matter is remitted to the Commissioner to decide whether the Indian Institute would be entitled to the aforesaid benefit from out of the demand that has been confirmed. The appeal is, accordingly, allowed only to the extent indicated above: CESTAT
+ 'Commercial training or coaching' means any training or coaching provided by a commercial training or coaching centre and commercial training or coaching centre has been defined to mean any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than sports. Institutes or establishments which issued certificates, diplomas or degrees recognised by law for the time being in force were excluded prior to 01.05.2011; (P 24)
- Appeal partly allowed: DELHI CESTAT
2023-TIOL-1076-CESTAT-CHD
Matrix Clothing Pvt Ltd Vs CCE & ST
ST - Appeal is directed against impugned order whereby the Commissioner (A) has rejected refund claim by upholding the O-I-O - Appellant is exporting readymade garments manufactured by them and are registered with Central Excise Department - As per Notfn 40/2007 S.T. and Notfn 41/2007 exemption from service tax was granted in respect of certain specified services received and used by exporters for exporting the goods manufactured by them - Accordingly, appellant opted for availing the refund as per Notfn towards services used for exporting goods out of India - As far as Terminal Handling Services are concerned, these services have been rendered for handling export containers at the port of exports and they fall in nature of port services - Further, Terminal Handling Services have been held to be specified services and appellant is entitled to refund of same - Similarly, with regard to GTA Service, said service has been received from third party transporter for transporting the stuffed containers with seal from factory of appellant to ICD/CFS or to the port of export - As per notification, CHA Services are specifically covered and appellant has furnished bills issued by CHA containing details of payment - Impugned order is not sustainable in law and same is set-aside by allowing the appeal of appellant: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-1075-CESTAT-MUM
Ginza Industries Ltd Vs CCE
CX - The Assessee-company, a manufacturer of 'branded garments' and excluded from liability to duties of central excise by notification no. 30/2004-CE dated 9th July 2004, claimed to have paid duties on stock manufactured prior to 1st March 2011 and lying unsold in their warehouse owing lack of clarity in law and, consequent upon communication dated 25th March 2011 of Central Board of Excise & Customs (CBEC) from F No. B-1/3/2011-TRU , filed claim for refund of Rs. 95,169 out of the liability of Rs 3,06,745 paid for clearances of March 2011 upon rescinding of benefit of exemption to 'branded garments' vide notification no. 12/2011-CE dated 1st March 2011 - The Assessee claimed that details of the goods had already been furnished to Central Excise authorities in letter of 4th March 2011 and copy was also enclosed along with other relevant documents - The application was responded to with notice proposing rejection which was confirmed by the competent authority on the finding that the impugned goods were merely 'stock transfer' from which clearances are subsequently made and that, in the absence of challan evidencing clearance at 'nil' rate of duty, these should be presumed as liable to duty. Failure of appeal before Commissioner of Central Excise (Appeals), Mumbai Zone -I, communicated in order.
Held - The original authority has premised ineligibility with the finding that the date of sale of goods being undisputedly after the levy came into force, there is no alternative but for duty to be discharged - This is an improper appreciation of the nature of this levy and, more so, on induction of impugned goods into the list of taxable goods - Being a tax on manufacture, goods produced prior to the levy having come into force are not to be subjected to duties of central excise - Registration, as well as acknowledgement, as a factory is necessary only after the levy came into force and, till then, there could be no distinction between production facility and storage facility inasmuch as both are not under the ambit of the taxing statute - Therefore, 'stock transfer', as an internal nomenclature, has nothing to do with clearance of goods which would be subjected to dutiability from 1st March 2011 - It is clear from the communication of the Central Board of Excise & Customs (CBEC) that the specific aspect referred to in the order of the original authority is restricted to goods lying in the registered factory premises as on date of imposition of levy which, uncontestedly, is not the issue here - The explanation therein relating to private store room in conjunction with clearance at 'nil rate' of duty is mere clarification and cannot be taken as intent to levy duty on goods that are, without doubt, outside the factory even though under the ownership of assessee - That would be travesty of law - The finding of the original authority does not meet the test of law - As the impugned goods were not dutiable, eligibility for refund should follow - The claim of the Assessee being that duty had, nonetheless, been discharged, it was incumbent upon them to demonstrate such payment - The Assessee had submitted details of goods lying elsewhere and to the extent that these can be correlated, that onus will stand discharged - It is on record that the Assessee had, in proceedings before the original authority, submitted that challans could be produced and it is on record that these had not been - Therefore, it is only appropriate that this be complied with and, upon such, there need be no further controversy over duty having been discharged on non-dutiable goods - Refund application stands restored: CESTAT
- Appeal allowed: MUMBAI CESTAT
2023-TIOL-1074-CESTAT-MUM
Mehta Intertrade Steels Pvt Ltd Vs CCE
CX - The Appellant procured Hard rolled (HR) coils/sheets along with other inputs, for supply to job workers, for production and return of Mild Steel Pipes - The Appellant availed Cenvat credit for clearing finished goods from its premises - The Appellant also produced MS Pipes manufactured by job workers on their own account and subjected the same to processes like end cutting and varnishing - The Department opined that this process did not amount to manufacture despite which they had not only been clearing these as though excisable but also availed credit of duty paid on such purchases - Tax demand for the relevant period for confirmed on grounds that the procured MS Pipes were not inputs as defined in Rule 2(k) of the CCR 2004 and hence were ineligible for cenvat credit as per Rule 3 of the CCR 2004 - Another demand was raised seeking reversal of cenvat credit availed in respect of tax paid on procurement of angles, beams and channels, on grounds that these were neither inputs in Rule 2(k) of CCR 2004 used in manufacture of excisable goods nor finding fitment as required for manufacture of 'capital goods', as defined in Rule 2(a) of CCR 2004 as permitted in Explanation 2 below the former definition - Inevitably, applicable interest was ordered to be recovered under section 11AB of Central Excise Act, 1944 besides penalty of Rs. 54,28,853 under section 11AC of Central Excise Act, 1944 being imposed.
Held - It is seen that the MS Pipes procured by the Assessee had been cleared on payment of duty after undertaking some processing - It is now settled law that with duty having been paid, it was not open to Central Excise authorities to dispute credit availed on the goods procured for the purpose - This is abundantly clear from the decision of the High Court of Gujarat Commissioner of Central Excise & Customs, Surat-III v. Creative Enterprises as well as the Tribunal's order in Commissioner of Central Excise & Customs, Aurangabad v. Fine Packaging Pvt Ltd - Beside the above findings, even if it is accepted that the activity of the Assessee does not amount to manufacture, Cenvat credit on the inputs cannot be denied as per the provisions of Rule 16 of the Central Excise Rules, 2002 - Moreover, it was not alleged in the notice that the Assessee was at any time deficient in credit availability at any point in time during the period of dispute; to allow the plea of remand would be nothing but authorizing contemplation of proceedings beyond the period of limitation by bringing new charges against the assessee - There is, thus, no ground for sustaining the disallowance of credit of Rs. 39,73,256: CESTAT
Held - For the claim of the appellant that 'angles', 'beams' and 'channels' were covered within definition of 'capital goods' in Rule 2(a) of CENVAT Credit Rules, 2004, reliance was placed on the decision of the Tribunal in re Mangalam Cement Ltd and in re APP Mills Ltd [2013 (291) ELT 585 (Tri-Bang)] as well as of the High Court of Chhattisgarh in re Singhal Enterprises Pvt Ltd. It is, however, on record that the appellant had not yet procured the 'cranes' for whose support the said goods had been purportedly deployed. The facts being, thus, at variance with the cited decisions and, the 'capital goods', not having been installed the claim of eligibility of goods used for installing 'structural support' is not tenable - The benefit available to such goods, in terms of rule 2(k) of CENVAT Credit Rules, 2004 when used for 'on-site' manufacture of 'capital goods' is extendable only when the site happens to the alternative location for manufacture of the said 'capital goods'; it is not clearly intended for facilitation of deployment of 'capital goods' on site after clearance from factory - In the light of these facts and circumstances, the disallowance of credit of Rs. 14,55,597 is in accordance with the scheme of CENVAT: CESTAT
Held - CENVAT Credit Rules, 2004 offers the framework and the mechanics for neutralization of duty discharged at preceding stage of 'value addition chain'; it is, therefore, procedural enunciation in which 'availment', as is 'reversal', is in the hands of 'assessee' while 'restoration', as is recovery, of credit is left to the jurisdictional authorities. While rule 14 of CENVAT Credit Rules, 2004 enables recourse to section 11A of Central Excise Act, 1944 as does rule 15 of CENVAT Credit Rules, 2004 enabling recourse to section 11AC of Central Excise Act, 1944, the latter cannot be drawn upon in the absence of the former. Legislative intent is amply clear that recourse to rule 14 and rule 15 of CENVAT Credit Rules, 2004 will have the effect, and consequence, of section 11A and section 11AC of Central Excise Act, 1944 respectively and not vice versa. It is, therefore, moot if every case of credit erroneously availed must necessarily be visited with penal consequence of section 11AC of Central Excise Act, 1944 that follows from invoking section 11A of Central Excise Act, 1944. Indeed, as reversal of credit is also within the competence of assessee without pre-requisite of approval by central excise authorities, it would appear that it is only recovery compelled by inaction on the part of assessee that lends itself to invoking of rule 14 and, thereby, rule 15 of CENVAT Credit Rules, 2004: CESTAT
Held - Penalty - It is on record that the credit of Rs. 14,55,597 had been reversed well before issue of notice - There was, thus, no cause to initiate proceedings under rule 14 of CENVAT Credit Rules, 2004; it would appear that absurdity of 'appropriating' credit already reversed, and not restorable without prior approval from jurisdictional central excise authorities, does not seem have occurred to the adjudicating authority as an exercise in futility - In the light of this legal position, the notice itself was void ab initio and, thereby, the penalty warrants being quashed: CESTAT
- Appeal partly allowed: MUMBAI CESTAT |
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