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2023-TIOL-1138-CESTAT-BANG
Chemplast Sanmar Ltd Vs CC
Cus - The issue involved is, whether quantity shown in import invoices and other related import documents be considered for assessment of bulk liquid cargo or actual quantity received in Shore Tank after import, be the basis for determination of value as well as duty - This issue has been considered by Supreme Court in case of Mangalore Refinery and Petrochemicals Ltd. = 2015-TIOL-199-SC-CUS after analysing the provisions of Customs Act, 1962, wherein it is observed that quantity of crude oil actually received into a shore tank in a port in India should be the basis for payment of customs duty - Pursuant to said judgment of Supreme Court, Board has issued Circular No. 34/2016 - The aforesaid principle of law as well as Board Circular has been followed by Tribunal in case of Hindustan Petroleum Corporation Ltd. = 2023-TIOL-314-CESTAT-AHM and Gemini Edibles and Fats India Pvt. Ltd. - No merit found in impugned orders - Consequently, impugned orders are set aside: CESTAT
- Appeals allowed: BANGALORE CESTAT
2023-TIOL-1137-CESTAT-CHD
Hero Motocorp Ltd Vs CCE & ST
CX - Appellant is engaged in manufacture and clearance of two wheelers - A SCN was issued to appellant demanding duty in respect of goods exported on FOC basis where no sale proceeds were received during period from 13.04.2015 to 23.03.2017 - They had exported the goods on FOC basis without receipt of foreign currency - There is no condition under Rule 19 of Central Excise Rules, 2002 read with Notfn 42/2002-CE (N.T.) mandating receipt of foreign currency in case of FOC exports by an exporter - At the time of export, no objection was raised by department neither at the time of export nor at the time of submission of document with Central Excise department that receipt of sale proceedings in foreign currency is required for FOC exports - Perusal of form A.R.E.1 shows that export goods were having no commercial value and value was declared for customs excise purpose only and no sale proceeds were realized against exports - Further, in invoices also it is clearly mentioned that impugned goods are for export, free of cost being sent for promotional purposes as trade sample on no returnable basis - Impugned order relying upon RBI Master Circular 14/2012-13 is not justified because there is no allegation regarding the same in SCN which is foundation upon which the department has to build its case - Therefore, entire demand is bad in law as the impugned order has travelled beyond SCN which cannot be done in view of decision of Supreme Court in case of Brindavan Beverages (P) Ltd 2007-TIOL-118-SC-CX - Impugned order is not sustainable in law, therefore, same is set aside: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-1136-CESTAT-MUM
Hawkins Cookers Ltd Vs CCGST & CE
CX - The Appellants herein are manufacturer of pressure cooker and for payment of central excise duty they are holding Central Excise registration with the jurisdictional Commissionerate - The Appellants are also holding Service Tax registration for payment of service tax under reverse charge mechanism in respect of various services such as Goods Transport Operator, Rent-a-Cab service and Security services - The issue in dispute is in respect of CENVAT Credit taken by the Appellants in respect of canteen facilities provided to their employees and staff, during shifts and office timings, and availing of service tax paid thereon in respect of services provided by an 'outdoor caterer' as eligible 'input service' - The Department has contended that in terms of Rule 2(l) of the CENVAT Credit Rules, 2004, 'outdoor catering service' has been excluded from the definition of input service for availing CENVAT Credit under the said Rules - Hence, show-cause proceedings were initiated for denying the inadmissible CENVAT Credit amounting to Rs.11,14,751/- for the period January, 2016 to June, 2017 under the provisions of Rule 14 ibid and for recovery of such tax along with interest under Section 73(1), 75 of the Finance Act, 1994 besides imposition of penalty under Section 78 ibid read with Rule 15(3) ibid - The issue was adjudicated on the basis of Appellant's reply letter dated 04.09.2018 to the show-cause notice and the submissions made during the personal hearing on 30.05.2019 - Vide Order-in-Original dated 27.06.2019, the original authority confirmed the demand of inadmissible CENVAT Credit under Section 73(2) ibid, read with Section 174 of the CGST Act, 2017 , besides ordering for recovery of interest and penalty equal to the amount of tax evaded under Section 78 ibid - The Appellants had preferred to file an appeal before the Commissioner (Appeals), Thane, who had rejected the appeal filed by the appellants by upholding the Order-in-Original dated 27.06.2019. Held - The demand for Cenvat credit of Service Tax paid on outdoor catering service for the normal period alone is sustainable - However, the demand of interest for extended period is not sustainable as Department was aware of the issue as evidenced by the order of the Tribunal dated 29.11.2017 and as the issue was agitated in the highest Court by various appellate authorities - Therefore, I set aside the interest and penalty imposed/confirmed in the impugned order by upholding the Order-in-Original dated 27.06.2019 and the matter is remanded back to the original authority to re-quantify the demand for the normal period with regard to outdoor catering service on which Cenvat Credit was taken by the Appellants: CESTAT + issue in dispute is availment of CENVAT Credit in respect of Service Tax paid on the input service namely, outdoor catering services during the period January, 2016 to June, 2017. In this regard, I find that the issue is no more res integra in view of the decision of the Larger Bench of the Tribunal in the case of Wipro Ltd. (supra), wherein it has been held that the definition of 'input service' has been amended w.e.f. 01.04.2011 providing the exclusion clause, wherein the definition of input service under Rule 2(l) ibid, specifically excludes 'outdoor catering services'. It has been concluded in the said order that the outdoor catering service is not eligible for input service credit post amendment dated 01.04.2011 vide Notification No. 3/2011-CE (NT) dated 01.03.2011. I also find that the Advocate for the appellants fairly concedes that the issue is now settled and the appellants are not eligible for the input credit in respect of Service Tax paid on outdoor catering service. I find that the total demand of inadmissible CENVAT Credit has been arrived at Rs.11,14,751/- in respect of 40 voucher entries covering the period January, 2016 to June, 2017, at para 2 of the Order-in-Original dated 27.06.2019. The original authority has confirmed the demand raised in the SCN dated 03.08.2018 holding that the availment of CENVAT Credit having knowledge that the same is inadmissible, amounts to suppression of facts and thus, by invoking the extended period, confirmed the entire amount of irregular CENVAT Credit. The same has been upheld by the learned Commissioner (Appeals) observing that this issue was known to the department only during the course of audit of records of the appellants. However, I find that the issue of availing CENVAT Credit on input service on outdoor catering service in respect of the canteen facility in the case of appellants has already been settled by this Tribunal in the assessee-appellant's own case vide Tribunal's Order No.A/90989/17 dated 29.11.2017; + various decisions given by the Tribunal bring out the fact that there was lack of clarity during the disputed period on the issue of availment of CENVAT Credit of Service Tax on outdoor catering service, and it was treated as an interpretational issue and there were divergent views till the issue was finally settled by the Larger Bench in case of Wipro Ltd. (supra). Therefore, the Tribunal in various cases held that penalty under Rule 15(2) ibid and invoking suppression of fact for demanding inadmissible CENVAT Credit cannot sustain and the same were set aside. It is also on record in the paper book compilation submitted by the learned AR that the dispute was finally settled at the highest forum by the Hon'ble Supreme Court in its order dated 18.11.2021 in the case of Toyota Kirloskar Motor Pvt. Ltd. Vs. Commissioner of Central Tax - 2021 (55) GSTL 129 (SC) having held that definition of input service post 01.04.2011 is very clear and outdoor catering services are not eligible, when such services are used primarily for personal use or consumption of any employee and thus, get excluded from definition of input service. From the above factual matrix, it could be seen that the issue has attained finality at the highest level by the Hon'ble Supreme Court on 18.11.2021 and thus, it is appropriate that demand of interest and penalty is not sustainable. This is more so, when the Tribunal has given the favourbale decision in the order dated 29.11.2017 on the basis of the judgment of Hon'ble High Court of Bombay in the case of Ultratech Cement Ltd. - 2017 (49) Service Tax Rules 94 (Bom).
- Case remanded: MUMBAI CESTAT
2023-TIOL-1135-CESTAT-KOL
Naya Sarai SSS Ltd Vs CST
ST - All the three appellant societies during material period executed various jobs entrusted to them in plants of HEC as per Work Orders issued by HEC, on principal to principal basis - Department claimed that the services rendered by appellants were in nature of 'Manpower Recruitment or Supply Agency's services as defined under Section 65 (68) of Finance Act, 1994 read with Section 65(105) (k) ibid and demanded service tax - A plain reading of definitions clearly reveals in order to fall within definition, the activity should be for providing any service directly or indirectly in any manner for recruitment or supply of man-power temporarily or otherwise to a client - A perusal of Work Orders issued by HEC clearly reveals that appellant societies executed the jobs as contractors by engaging workers from their roll and it further reveals that job was mentioned in terms of quantity and not based on number of workmen supplied or engaged - The rate was fixed per Ton basis - The agreements as per Work Orders did not require or specify the number of workers to be employed and number of days for which workers would be engaged - It is for respective appellant societies to execute jobs, specified in Work Orders by deploying as many numbers of workers as per its convenience and discretion - The Principal Company HEC was interested only in execution of job entrusted to Appellant societies at agreed rates and also within specified time frame - HEC as a responsible Public Sector Company, apart from making profit has the social obligation to ensure that workers employed by contractors in their factory are not subjected to any exploitation and they are paid their legitimate dues which they are entitled to appropriately and also in time - The Principal Company in discharge of its social commitment and obligation has ensured that the workers, working for them, although were in roll of appellant societies, are not exploited and provisions of Contract Labour (Regulations and Abolition) Act, 1970 are complied with - The wage bills of workers are not only properly prepared as per Minimum Wages Act, but also paid and their CPF, ESI are properly deducted and deposited to respective authorities - This does not means that man power supplied were under the rolls of HEC - Thus, the service rendered by Appellant would not fall within ambit of "Manpower Recruitment & Supply Agency" as defined under Section 65(68) of the Act read with Section 65(105) (k) - The impugned order confirming demands under Manpower Recruitment & Supply Agency service is not sustainable and hence the same is set aside - Since the demand itself is not sustainable, question of charging interest or imposing penalty does not arise - Impugned order is set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT |
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