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2023-TIOL-1156-CESTAT-AHM
Nayara Energy Ltd Vs CCE & ST
CX - The facts of the case are that Appellant are operating a petroleum refinery and manufacturing various petroleum products. They had taken cenvat credit on pipes used for transporting crude from the Single Buoy Mooring ('SBM') set up in the sea to land fall point of refinery outside the factory premises, during the period from Nov. 2006 to Nov. 2008 - As per revenue, since the pipes were used outside the factory premises it cannot be termed as received and used in the factory of manufacture of final products - Thus the appellant had wrongly availed the cenvat credit on the pipes used outside the factory premises - Therefore show cause notice dated 04.11.2009 was issued to the appellant for recovery of wrongly availed Cenvat Credit alongwith interest and penalty. The show cause notice was adjudicated vide OIO dated, 29.03.2011 whereby cenvat demand was confirmed with interest and penalty - Aggrieved from the said order, appellant filed the appeal before Tribunal and vide final order dated 06.07.2021 matter was remanded - In de- novo adjudication cenvat demand was confirmed vide impugned order. Held - The very same issue has been considered by the Apex Court in the case of Vikram Cement v. CCE, Indore reported in 2006 (194) E.L.T. 3 (S.C.) = 2006-TIOL-04-SC-CX-LB and 2006 (197) E.L.T. 145 (S.C.) = 2006-TIOL-150-SC-CX - The Apex Court in the case of Vikram Cement v. CCE, Indore while dealing with the question as to whether the explosives used in the mines to produce lime stone for use in the manufacture of cement and clinker in the factory situated at some distance away from the mines, would be eligible for Cenvat credit in terms of the provisions of Rule 57A of the Central Excise Rules, 1944, held that the Cenvat credit in respect of explosives used in the mines for blasting purpose to produce lime stone would be admissible if the mine is the captive mine and that utilization of input only within the factory premises is not necessary - In this case the disputed pipeline have been installed by the appellant for connecting the Single Buoy Mooring with Crude Oil Tanks and which is ultimately used by the appellant for manufacturing their final product which has been cleared on payment of duty - Therefore, relying on the case laws cited by the appellant which are squarely applicable to the facts of this case, we are of the considered view that the Appellant has correctly availed the credit on pipelines - Hence the order cannot be sustained: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2023-TIOL-1155-CESTAT-KOL
Herbo Foundation Pvt Ltd Vs CCE
Cus - The Appellant is a manufacturer of Cosmetics falling under Chapter 33 of the Central Excise Tariff, 1985 - The Appellant has been availing the benefit of Notification 32/99-CE dated 08.07.1999 - In the relevant period, the Government of Assam enacted a scheme allowing Excise duty exemption to goods cleared from units located in Export Promotion Industrial Parks located in the State of Assam - The exemption was allowed to new industrial units commencing production or or after 24.12.1997 - In terms of the notification, the exemption was given effect to by refunding the entire amount of Excise duty paid by an assessee using its account current (PLA) - The Appellants set up manufacturing plants at Bamunimaidan Industrial Estate, Guwahati and started their commercial production - The entire excise duty paid by the Appellants during this period was paid using account current (PLA) - The Appellants took refund of such Excise duty paid through PLA which was also allowed by the proper officer as the same was in compliance of the notification - The CENVAT credit availed by the Appellants on inputs and capital goods during such period kept on accumulating - The scheme was subsequently amended, as per which, a a manufacturer was only allowed refund of excise duty paid through PLA after utilizing the entire amount of CENVAT credit availed of - Notification No 42/2002-CE(NT) was also brought into effect amending Rule 3 of the CENVAT Credit Rules, 2002 - By this amendment, it was stipulated that CENVAT credit of duty paid on inputs of the final product cleared after availing exemption under NN-32/99-CE shall be utilized only for payment of duty on final products cleared after availing exemption under the said notification - Thereafter, vide Circular No. 683/74/2002-CX it was clarified that amendments made by NN- 61/2002-CE and NN- 42/2002-CE (NT) were done in order to prevent unintended benefit of higher amount of refund and also to stop diversion of credit - The Appellants accordingly amended their system and started utilizing CENVAT credit for payment of duty on clearance of its final products. The entire accumulated CENVAT credit as on 22.12.2002 was utilized by the Appellants during this period, leading to the scenario of Nil refund during the period February 2003 to May 2003 - Thereafter, the Finance Act, 2003 was notified - Vide Section 153(1) of the Act the amendment made by NN-61/02-CE was given retrospective effect from the date of bringing into effect NN-32/99- CE that is w.e.f. 08.07.1999 - Therefore, the restrictive condition brought into effect for the very first time vide NN-61/02-CE will deem to always have been in place right from the 08.07.1999 - Again, vide Section 153(4) of the Act, the Department was empowered to recover inter alia any amount of duty which has been refunded but which would not have been refunded, within 30 days, if the restrictive condition brought in by NN-61/2002-CE was applicable, right from 08.07.1999 - Thereafter, the Deputy Commissioner of Central Excise, Guwahati by exercising the power under Section 153(4) of the Finance Act, 2003 passed Orders dated 02.06.2003 and 03.09.2003 confirming the demand of Rs.39,81,566/- together with interest amounting to Rs.19,93,201/- for the period 24.02.2000 to 22.12.2002. On appeal the Ld. Commissioner (Appeals) passed the impugned order dated 12.02.2015, confirming the demands - Hence the present appeal. Held - As the issue involved is of a narrow campus, it is informed by the D.R. that this bench has decided similar issue in the case of M/s Ozone Pharmaceuticals Limited Vs Commissioner of Central Excise and service Tax, Guwahati vide Final order No. 75782 0f 2015 dated 26.09.2023 , wherein the appeal filed by the Appellant was allowed - In this order, the Tribunal had held that "... the refund claim of the appellants for the subsequent period, could not be rejected on the ground that the appellant has taken excess refund for the period prior to 22.12.2002, therefore, no demand is sustainable against the appellant as demanded in view of the letter dated 03.06.2003 by the Deputy Commissioner and the refund for the period August, 2006 to October, 2006 were not required to be appropriated..." - As this order is squarely applicable onto the present matter, the demand merits being set aside in the present case: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-1154-CESTAT-CHD
DLF Home Developers Ltd Vs CCE & ST
ST - There are two issues arises for consideration; whether the Revenue was correct in issuing SCN and imposing penalty in respect of Preferential Location Services wherein the appellants have paid applicable service tax before issuance of SCN and whether assessee are required to pay service tax under Head "Banking and Other Financial Services" on their act of providing bank guarantees to their group companies - As far as first issue is concerned, Section 73 (3) provides that Central Excise Officer shall not serve any notice under sub-Section 1 of Section 73 where the assessee pays service tax - The only exception to such non-issuance of SCN is provided under sub-Section 4 - Sub-Section 4 is attracted when elements like fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of provisions of this Chapter or of Rules made there under with intent to evade payment of service tax - Revenue has not established any such ingredients in impugned case except for stating that assessee have suppressed material facts - Courts and Tribunals have been consistently holding that mere non-obtaining registration, nonpayment of service tax and non-filing of ST-3 Returns cannot be a reason to allege suppression and that a positive act on the part of assessee with intent to evade payment of tax has to be established - Extended period is not invocable and hence, penalty cannot be imposed on service tax which stands paid before issuance of SCN - Coming to second issue, Department has not adduced any evidence to the effect that assessee have received any consideration in providing bank guarantees - This Bench in case of assessee's group company have decided the issue vide Final Order in their favour - Appeal survives on both issues: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-1153-CESTAT-KOL
C E Testing Company Pvt Ltd Vs CST
ST - The Assessee-company is registered for providing services under the category of 'Technical Testing and Analysis Service', 'Survey and Map Making Service' etc - On the ground that the turnover shown by them in the ST-3 Returns was lower than the turnover shown by them in their Income Tax and Balance Sheet, Show Cause Notice was issued on 31/3/2009 for the period July 2003 to March 2008 demanding Service Tax of Rs. 98,77,781/- - The Appellants argued both on merits and on account of limitation by providing various documentary evidence before the Adjudicating Authority - After due process, the Adjudicating Authority vide the impugned OIO, dropped the demand to the extent of Rs. 73,07,023/- - On adjudication, adjudicating authority confirmed the demand of Rs. 25,70,758 - Being aggrieved by the confirmed demand, the Appellant is before the Tribunal - Being aggrieved by the dropped demand of Rs. 73,07,023/-, the Revenue is before the Tribunal with their Appeal. Held - A cursory glance of the Show Cause Notice would clarify that the same was issued for the period which is even beyond the extended period of five years - This shows that the proper care was not taken by the Department while issuing the Show Cause Notice - The Show Cause Notice has been issued merely on the ground that the income shown by the Appellant in their P & L Account is higher than the turnover declared in the ST 3 Return - The Appellant has submitted a detailed Reconciliation Statement duly certified by the Chartered Accountant which has been taken on record by the Adjudicating Authority at Page 22 & 23 of the OIO - The Adjudicating Authority carried out thorough verification and has given reasoned Order for dropping the demand as well as confirming the demand. Therefore, we do not find any reason to interfere with his Order in respect of the dropped demand of Rs. 73,07,023/- - Accordingly, the Revenue's appeal is dismissed: CESTAT Held - In respect of the Appeal filed by the assesse for the confirmed demand of Rs. 25,70,758/-, as seen from the reproduced extract of discussions and findings, the Adjudicating Authority has held that the services provided by the assesse can not be termed as the 'Services provided by the sub-contractor to the main contractor - For this, he has relied on the Board's Circular dated 23/08/2007 - The Appellants have relied on the two Circulars issued in June 1997 and July 1997 about the sub-contracting work and non-taxability on the same - The Bench agrees with the submission of the assesse that till the new clarification was given on 23/08/2007, the Revenue was bound by the earlier clarification issued by the CBIC - Therefore, the demand prior to 22/08/2007 is legally not sustainable: CESTAT Held - Limitation - The Appellant has obtained Service Tax Registration in October 2003 and has been filing their Returns regularly - The Department in its over-enthusiasm has issued the Show Cause Notice even for the period prior to five years - The Show Cause Notice has been issued for Rs. 98.77 Lakhs whereas after thorough verification and reconciliation, the Adjudicating Authority has dropped the demand of Rs. 73.07 Lakhs - Even in respect of balance 25.7 Lakhs confirmed demand, it is found that the clarification given on 23/08/2007 has been applied for the transaction carried out between April 2006 to 31/03/2008 - Therefore, it is held that the demand for the extended period is legally not sustainable and confirmed demand for the extended period is set aside on account of limitation also: CESTAT Held - the Appellant is required to pay the Service Tax on sub-contract work (map making) undertaken by them for the main contractor between the period October 2007 to March 2008 only - It is noted from the OIO that the amounts paid by the assesse during the proceedings have been appropriated - The amount payable, if any, for the period October 2007 to March 2008 is required to be adjusted against such appropriation - The balance, if any, payable by the Appellant is required to be paid by them along with interest - On the other hand, if the appropriated amount is more than the net amount payable by the assesse, the balance amount should be refunded to the Appellant: CESTAT
- Assessee's Appeal allowed: KOLKATA CESTAT
2023-TIOL-1152-CESTAT-KOL
Jindal Steel And Power Ltd Vs CC
Cus - The Appellant is a manufacturer of steel products and undertook import and export the finished goods - In the month of October, 2010, the Appellant exported iron ore pellets vide two manually filed shipping Bills of Entry both dated 12.10.2010 & 15.10.2010 to the Customs House, Paradeep, on payment of the applicable export duty - With regard to such export, the Appellant applied for DEPB scrip under Para 4.3 of FTP 2009-14 read with Para 4.37 to 4.43 of the HBP Volume I, 2009-14 - Accordingly, the Joint Director of Foreign Trade, Paradeep Port, issued such DEPB post export authorization dated 12.02.2014 for a duty credit of Rs.22,44,375/- for utilization towards import of goods - Such DEPB license was issued in physical form and duly registered by the Paradeep Customs House on 27.03.2014 - For utilization of the duty credit scrip for imports at Kolkata, the appellant got the Telegraphic Release Advice (TRA) from the Customs Authorities at Paradeep to register the same at Kolkata - However, such TRA was returned by the Customs Authority, Kolkata on 01.10.2015 stating that incoming RA cannot be registered for central site - Thereafter, when the appellant requested the Customs Authority, Paradeep to register the DEPB Scrip online, such request was rejected by stating that since the Shipping Bills were filed manually, DEPB scrips issued physically to the appellant cannot be linked to Customs Portal - In that situation, where the appellant filed the Bills of Entry online due to introduction of EDI System w.e.f. 08.04.2011, but not being able to utilize the genuine DEPB scrip due to system issues as described above, the appellant requested the Customs Authorities, Paradeep, to permit the appellant to file manual Bills of Entry in terms of Board's Circular No.401/81/2011-Cus III dated 04.05.2011 read with corrigendum dated 12.05.2011 to undertake imports, so that, the duty credit endowed vide the DEPB Scrip can be utilized - However, such request was also rejected. Held - The Appellant was disallowed to file the Bill of Entry manually in terms of Section 46 of the Customs Act, 1962, which is the violation of principles of natural justice - The said act of the Adjudicating Authority debarred the Appellant to avail the benefit of DEPB Scrip - In that circumstances, as the Appellant is not able to take the benefit of DEPB Scrip, they are entitled to cash refund in terms of the order of this Tribunal in the case of Artex Textile Private Limited - The same view has been taken by this Tribunal in the case of Sel Manufacturing Company Limited - In light of both these orders, the Appellant is entitled for cash refund as per entitlement of DEPB Scrip: CESTAT
- Appeal allowed: KOLKATA CESTAT |
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