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2023-TIOL-1687-HC-MP-CT
Hotel Prestige Princess Vs CTO
Whether before deciding an application for rectification the competent authority is obliged to afford prior opportunity of being heard to the assessee irrespective of the fate of rectification application - YES: HC
- Petition allowed: MADHYA PRADESH HIGH COURT
2023-TIOL-1112-CESTAT-BANG
Xiaomi Technology India Ltd Vs CC
Cus - The only issue arises is, whether the Mi Web Camera imported by appellant is classifiable under Chapter Heading 8473 as claimed by appellant or under Chapter Heading 8525 as claimed by Revenue - Impugned order does not dispute the fact that this Web Cameras satisfies the condition laid down under Chapter Note 5(C) and to be excluded from Chapter 8471, it needs to fall under one of the exclusions as specified under Chapter Note 5(D) - As per Chapter Note 5(C) and 5(D), the items are rightly classifiable under Chapter Heading 8471 as long as they satisfy the conditions laid therein and there is no dispute that these conditions have not been satisfied, the item has been excluded from Chapter 8471 only on the ground that Chapter Note 5(D) excludes television camera, digital cameras and video camera recorders - Moreover, the imported items web cameras are used principally with ADP machines is not under dispute - The imported item under question is a web camera and as has been already decided in case of Hi-Tech Computers 2004-TIOL-1010-CESTAT-BANG , the Tribunal has clearly distinguished that the web cameras are not digital camera nor it can be considered as a television camera - Therefore, the web cameras are rightly classifiable under Chapter Heading 8473 as claimed by appellant and not under Chapter Heding 8525 as classified by Department - Following the ratio of said decision, it is held that Mi Web Cameras are rightly classifiable under Chapter Heading 8473 - Consequently, impugned order is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT
2023-TIOL-1111-CESTAT-MAD
Pr.CC Vs Contemporary Leather Pvt Ltd
Cus - The Assessee-company vide letter dt. 23.11.2017 had requested for conversion of Free Shipping Bills to Drawback Shipping Bills with regard to the exports made by them for the period from 2013-14 to 2016-17 - The request was rejected - The Assessee filed an appeal before the Tribunal - As per the Final Order No.42456/2021 dated 07.12.2021 the Tribunal allowed the appeal observing that the request for conversion of the shipping bills falling within the period of three years when computed from the application i.e., 23.11.2021, is to be allowed - The adjudicating authority was directed to verify as to whether any shipping bill is filed beyond the limitation period of three years as stated in the decision of the Tribunal in the case of M/s.Autotech Industries (India) Pvt. Ltd. - Pursuant to the said final order, the matter was taken up by the Principal Commissioner of Customs and the present impugned order was passed wherein the conversion of 342 numbers of free shipping bills to drawback shipping bills falling within the period of three years from the date of application was allowed - Hence the appeal by the Department.
Held - The Review Committee put forward grounds challenging the Final order passed by the Tribunal dt. 30.09.2021 directing the adjudicating authority to verify and allow the conversion of shipping bills - When the order passed by the Department denying the request for conversion has been set aside by the final order dt. 30.09.2021 passed by Tribunal, the only remedy available for the Department is to file an appeal against such order before the Higher Forum - The Tribunal while passing the Final order has already taken into consideration the Board's circular as well as the decisions passed on the very same issue - The Commissioner has correctly followed the direction of the Tribunal and passed the impugned order - For this reason, there are no grounds to interfere with the impugned order - It is seen that the matter does not involve any duty, penalty or fine, or confiscation of goods and it falls below Rs.50 lakhs and therefore falls under the new Litigation Policy with regard to Customs cases to be filed before the Tribunal - The appeal falls within the monetary limits of litigation policy: CESTAT
- Appeal dismissed: CHENNAI CESTAT
2023-TIOL-1110-CESTAT-MAD
JSW Steel Ltd Vs CCE & ST
CX - The Assessee is engaged in the manufacture of finished Billets, Flats and Wire Rods and is registered with the Central Excise Department - It availed CENVAT Credit on various capital goods, inputs and services under the provision of the erstwhile CENVAT Credit Rules, 2004 - During the course of audit of accounts, it was noticed that the Assessee had imported Burnt Lime Lumps (Quick lime) by classifying the same under CTH No. 25221000 and paid duties of Customs viz., Basic Customs Duty (BCD) @ 5%, Addl. Duty of Customs (CVD) @ Nil rate and Addl. Duty of Customs in lieu of Sales Tax (SAD) @ 4% - The Audit had observed that during the investigation initiated by the DRI, it was noticed that the said product should be classifiable under CTH No. 28259090 which attracted BCD @ 7.5%, CVD @ 12.5% and SAD @ 4% and therefore an offence case was booked by the DRI in F.No. 10/2016 dated 23.01.2017 for misclassification of Burnt Lime Lumbs imported by the Assessee - Subsequently, a Show Cause Notice dated 23.01.2017 proposing to demand the differential duty of Customs from the appellant was also issued - After the receipt of the said Show Cause Notice, the Assessee voluntarily paid the duty 'under protest' and also availed the CVD & SAD paid by them as input credit on the basis of TR 6 Challans on 30.06.2017 - According to the Department, as per Rule 9(1)(b) of the CENVAT Credit Rules, 2004, supplementary invoice, shall include challan or any other similar document evidencing payment of additional amount of duty leviable under Section 3 of the Customs Tariff Act which is a prescribed document to avail CENVAT Credit except, where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Excise Act or Customs Act or the Rules made thereunder with intent to evade payment of duty - The Department was of the view that in the present case, the DRI had booked an offence case on 23.01.2017 alleging misclassification of goods imported by the Assessee with an intention to evade payment of duty and therefore the CENVAT Credit availed in respect of CVD and SAD was not eligible in terms of provisions of Rule 9(1)(b) of the CENVAT Credit Rules, 2004 - Show Cause Notice was issued to the Assessee alleging wrongful availment of credit and proposing to recover the same along with interest and for imposing penalties - Thereafter, the original authority confirmed the demand, interest and imposed penalties - On appeal, the Commissioner upheld the same.
Held - It is seen that the CENVAT Credit availed on the CVD and SAD has been disallowed for the reason that an offence has been reported by DRI as to misclassification of imported goods and a Show Cause Notice has also been issued proposing to recover the duty - On perusal of the Show Cause Notice issued by DRI, it is seen that the main allegation is that of classification of the imported goods - The Show Cause Notice is issued under Section 28(1) and not under 28(4) - There is no allegation of fraud, collusion, wilful mis-statement or suppression of facts for the Show Cause Notice issued by DRI - The counsel for the Assessee has also submitted that the said Show Cause Notice has culminated in passing of the adjudication order - The said order dated 22.07.2019 shows that there is no finding with regard to fraud, collusion, wilful mis-statement or suppression of facts - The issue in the DRI Show Cause Notice is purely that of classification of the imported inputs - Needless to say that the classification of a product is interpretational in nature and when there is no allegation raised in the Show Cause Notice as to fraud, collusion, wilful mis-statement or suppression of facts, it cannot be a ground for invoking Rule 9(1)(b) of the CENVAT Credit Rules, 2004 - The Assessee has paid the duty on the inputs under protest - It is brought out from the facts that the Assessee has captively consumed the imported goods - The situation of issuing a supplementary invoice would arise only if the manufacturer sells the goods from his factory - In the present case, the Assessee has captively consumed the goods - The credit has been availed of the duty paid on the TR-6 Challans - Therefore, on the totality of facts presented before us, there is no reason to apply Rule 9(1)(b) of the CENVAT Credit Rules, 2004 - Hence the demand cannot sustain and the order in question merits being quashed: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-1109-CESTAT-KOL
Hindalco Industries Ltd Vs CC, CE & ST
CX - The issues at hand pertain to whether or not the Assessee-company is eligible to avail Cenvat credit of Business Support Services received by them from ABMCPL (group company) for the period from April 2006 to March 2016 and whether the Assessee-company is eligible to avail Cenvat credit on Mining Services received from Avian Overseas Pvt. Ltd. for the period from April 2006 to June 2011.
Held - The Assessee is eligible for the Cenvat credit of the input services received and used in the captive mines as the said services were used in mining of coal which was used for generation of electricity at their Captive Power Plant and the electricity was used in the manufacturing unit for manufacture of dutiable goods - Thus, it is held that there is a clear nexus between the input services on which Cenvat credit was availed and the manufacturing activity undertaken by the Assessee - Thus, it is held that the order demanding reversal of such credit along with interest and penalty is not sustainable and accordingly and hence the same is set aside - Regarding the grounds taken by the adjudicating authority to confirm the demands in the impugned order, it is observed that the adjudicating authority has observed that AOPL was providing 'site formation services' and not 'mining services' - Hence, it has no nexus with the manufacturing process of excisable goods - It is observed that the classification of service as either 'mining service or 'ancillary to mining service' or 'site formation services' is not relevant to determine the eligibility to Cenvat credit on the subject services, inasmuch as the services are used in the mines, coal extracted wherefrom has been used in their manufacturing unit - Accordingly, it is held that the demands cannot be confirmed on this ground - The adjudicating authority has also observed that AOPL issued the invoices on the Appellant's mines and not the factory address/ registered premise - On these ground the credit availed by the Assessee was denied - It is observed that even if such invoices were addressed to the mines, the Cenvat credit ought not be denied thereon on account of such procedural infirmities, in the absence of any dispute as to usage of such services by the Assessee - Accordingly, it is held that the Cenvat credit cannot be denied on this ground: CESTAT
+ Cenvat credit ought not to have been denied to service recipient when service tax paid by service provider has not been disputed at service provider's end. The service provider ABMCPL has filed returns intimating the payment of service tax on the Business support Service rendered by them to its group companies and filed their returns. The department has not challenged the assessment made by ABMCPL in the returns and accepted it. Without challenging the assessment, the department cannot question the Cenvat credit passed on by ABMCPL to the Appellant. We observe that the decisions cited by the Appellant mentioned in Para 5 supra supports this view. By following the decisions cited above, we hold that the demands confirmed in the impugned orders along with interest and penalty on this count are not sustainable and accordingly, we set aside the same;
+ The next issue to be decided is whether the Appellant is eligible to avail CENVAT Credit on Mining Services received from Avian Overseas Pvt. Ltd. for the period from April 2006 to June 2011? We observe that Cenvat credit amounting to Rs.11,85,22,981/- along with interest and penalty has been confirmed in the impugned order. The Appellant submits that they are entitled to avail all input services received and used in mines in accordance with the definition of 'input services'. We observe that the services ancillary to mining of coal in the Appellant's mine was used for generation of electricity at their Captive Power Plant located in their factory at Hirakud, Sambalpur, Orissa. The said electricity is supplied to their manufacturing unit for use in manufacture of dutiable goods. Thus, we observe that the services have intricate nexus with manufacturing of dutiable goods. The Appellant cited a plethora of decisions in support of their contention that the input services used in captive mines are available as credit to the manufacturing unit.
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-1108-CESTAT-KOL
Laing-Simplex JV Vs CCE & ST
ST - The issue to be decided is, whether activity of construction of Mega Sports Complex for hosting 34th National Games by Government of Jharkhand would amount to Works Contract Services as defined under Section 65(105)(zzzza) of Finance Act, 1994 - Adjudicating authority has held that activity undertaken by appellant are covered under Clause (e) mentioned as EPC project, whereas appellant claimed that their activity would fall under Clause(b) as it is construction of a civil structure not primarily meant for commerce or industry - A perusal of activity undertaken by appellant indicate that sports complex is a civil structure, primarily meant for conducting sports activities and not meant for commercial purposes - The facilities like Restaurants, VIP Guest house, Hotel facility is only for purpose of making sports complex habitable and functional and in accordance with international standards - The same in no way make the Sports complex is meant for commercial purposes - Accordingly, activity of appellant is covered under Clause (b) of definition of 'Works Contract Service' - The same view has been held by Principal Bench of CESTAT in case of Jatan Construction Pvt Ltd = 2018-TIOL-634-CESTAT-DEL , wherein identical case has been decided in favour of assessee by relying on the Larger Bench decision in Lanco Infratech Ltd = 2015-TIOL-768-CESTAT-BANG-LB - The activity undertaken by appellant is 'Works Contract Service' as defined under Clause (b) of Section 65(105)(zzzza) and hence the activities undertaken are not liable to service tax as the mega sports complex is not primarily meant for commercial purposes - As the demand itself is not sustainable, the question of charging interest and imposing penalty does not arise: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-1107-CESTAT-KOL
CST Vs Solux Galfab Pvt Ltd
ST - Assesse is a service provider and registered themselves with respondent during year 2004 - On the basis of investigation conducted against assessee by DGCEI, it was alleged that during financial year, 2004-05 to 2007-08, the assessee has provided services, namely, Business Auxiliary Service, Construction Service, Erection and Painting Service and Goods Transport Agency Service and did not pay any service tax prior to 03.07.2006 - During investigation, assessee paid a sum of Rs. 42,50,000/- - Later on, a SCN was issued to assessee to demand service tax along with interest and penalty under Section 78 of Finance Act, 1994 - Assessee is not disputing liability towards Business Auxiliary Service, Construction Service & GTA Service from 01.06.2007 onwards and the total demand of service tax for those services works out Rs. 22,70,491/- - The said demand is confirmed against assessee along with interest - If any amount is payable by assessee, same shall be adjusted as assessee has already paid an amount of Rs. 42,50,000/- during investigation and Rs. 14,13,327/ after issuance of SCN - The said amount is to be adjusted against confirmed demand along with interest - Prior to period 01.06.2007 as there is a composite contract wherein supply of materials is also involved, therefore, merits classification is works contract service, which was not in service tax net prior to 01.06.2007 - Therefore, no service tax is payable by assessee for the period prior to 01.06.2007 under category of construction services, therefore, said demand is set aside - Therefore, demand on account of business auxiliary service, GTA service and construction service w.e.f. 01.06.2007 onwards are confirmed along with interest and the amount already paid by assessee are to be appropriated if any excess amount is paid, same is to be refunded to assessee within a period of 30 days - No demand is sustainable against assessee under construction service prior to 01.06.2007 and no penalty is imposable on assessee: CESTAT
- Revenue's appeal dismissed: KOLKATA CESTAT |
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