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2023-TIOL-1173-CESTAT-BANG
3M India Ltd Vs CCE
CX - During the period September 2006 to December 2007, they have availed cenvat credit amounting to Rs.1,56,29,750/- on the service tax paid on reverse charge mechanism for receiving 'Management Consultancy Service' from foreign service provider. Subsequently, on the basis of audit of their records, a show-cause notice was issued to them on 08.04.2009 for recovery of the said credit with interest and penalty - On adjudication, the demand of Rs.79,22,225/- and interest of Rs.15,38,789/- attributable to trading activities and demand of Rs.15,83,168/- being credit availed at Bangalore pertaining to manufacturing units located at Ahmedabad and Pune was confirmed with a penalty of Rs.95,05,393/-, without having ISD registration - Hence the present appeal.
Held : Confirmation of demand with interest by the Commissioner invoking extended period of limitation on cenvat credit availed on trading activity is upheld in view of the High Court decisions in in Ruchika Global Interlinks [2017-TIOL-1235-HC-MAD-ST] & Lally Automobiles Pvt. Ltd. [2018-TIOL-1472-HC-DEL-CX] - Cenvat credit cannot be denied to the assessee prior to its registration as an ISD, since the same is a procedural irregularity [ Hinduja Global Solutions Ltd [2022(61) GSTL 417 (Kar.)] relied upon] - Since the cenvat credit and applicable interest is paid much before the issuance of show-cause notice, the appellant is entitled for the benefit of 25% of penalty imposed under Section 11AC of the Central Excise Act read with Rule 15(4) of CENVAT Credit Rules, 2004 - Impugned order is modified to the extent of confirming inadmissible cenvat credit of Rs.79,22,225/- attributable to trading activity and applicable interest of Rs.15,38,789/- paid on the said credit amount - Demand of cenvat credit, taken before ISD registration, of Rs.15,83,168/- is set aside - Appeal disposed of: CESTAT [7.1, 7.2, 8, 9, 10, 11, 12]
- Appeal disposed of: BANGALORE CESTAT
2023-TIOL-1172-CESTAT-BANG
DTDC Courier And Cargo Ltd Vs CCE & ST
ST - Short question involved in the present appeals for determination is: Whether the amount paid by the appellant to the overseas joint-venture companies in delivering the consignments of consignors in India to consignees situated outside India is leviable to service tax under "Business Support Service" for the period 07/2006 to 09/2013.
Held : The issue has been considered by this Tribunal in a series of cases referred to by the appellant and this Tribunal has consistently held that the service received by the appellant from the overseas companies in delivery of the couriers/ parcels of the customers of India at various international destinations fall under "Courier Agency Service", and the services so rendered is in the nature of co-loaders service; accordingly held to be outside the purview of Business Support Service - Also, it is held that since the service is performance based service and provided outside India; hence not taxable - In view of the consistent stand of different Benches of the Tribunal including Bangalore Bench in the case of TNT India Limited (2020-TIOL-475-CESTAT-BANG), Bench does not find any reason not to follow the said judgment - Besides, demand notices for different periods issued to the appellants for different periods have been set aside by the Department and no appeals have been filed by the Revenue accepting the said principle of law - In the result, the impugned orders against which appeals filed by the appellant are set aside and their appeals are allowed with consequential relief - The impugned orders challenged by the Revenue are upheld and Revenue's appeals are rejected - Appeals disposed of: CESTAT [para 10, 11]
- Appeals disposed of: BANGALORE CESTAT
2023-TIOL-1171-CESTAT-DEL
Lupin Ltd Vs CC
Cus - The Assessee is a SEZ unit, engaged in manufacturing and export of pharmaceutical products for which they procured some input goods from DTA unit - Since certain input goods remained unutilised, the Assessee supplied back the said goods to the DTA on payment of duty under protest - Accordingly, they filed the refund application amounting to Rs. 36,65,884/- - The show cause notice dated 28.10.2021 was adjudicated whereby the refund claim was rejected being not admissible under the provisions of Special Economic Zone Act, 2005 (hereinafter referred to as SEZ Act, 2005) read with the Customs Act, 1962 - The appeal filed by the Assessee challenging the order in original dated 01.12.2021 was also dismissed by the Commissioner (Appeals) vide Order-in-Appeal.
Held - Special economic zones created under the SEZ Act are on a different footing - Section 53 declares a special economic zone to be a territory outside the customs territory of India for the purpose of undertaking the authorised operations - Thus the Act itself treats SEZ as an area outside India and such zones are deemed to be a foreign territory for trade operations, duties and tariff purposes and have therefore been accorded special status - Section 30 of the SEZ Act makes any goods removed from special economic zone to the domestic tariff area, chargeable to duties of customs, including anti-dumping, countervailing, and safeguard duties - Further, Section 51 of the SEZ provides for a non-obstinate clause, conferring overriding effect upon the Act vis-a-vis any other law - The provisions of section 30 of the SEZ Act permits DTA clearances by a SEZ unit on certain conditions and that is goods to be removed from SEZ to DTA would be chargeable to duties of customs etc - It is a settled principle of law that once the provisions of an enactment are simple and there is no ambiguity there is no scope for interpretation - A three Judge Bench of the Apex Court in Kalyan Roller Flour Mills Private Limited Vs CCE, 2014 (16) SCC 375 , observed that when the language is clear and plain, the courts cannot enlarge the scope by interpretative purposes - Similar view has been reiterated by the Apex Court in State of Maharashtra Vs Shri Vile Parle Kelvani Mandal & Ors. 2022 (2) SCC 725 , that recourse cannot be had to any other principle of interpretation, when the words are clear and unambiguous. It also noted the observations of the earlier decision in Giridhar G Yadalam , where it has been held that in a taxing statute, it is the plain language of the provision that has to be preferred where language is plain and is capable of one definite meaning: CESTAT
Held - The Assessee has raised the contention that he has been wrongly denied the benefit of the exemption Notification No. 45/2017-Cus., which provides different levels / measures of exemption benefits to the re-imported goods depending upon which export benefits, like duty drawback, rebate etc., were availed and subject to several conditions - Further, from para 10 of the impugned order, it is found that the Commissioner has noted, that the appellant has submitted few sample invoices and on perusal of one tax invoice issued by the DTA, namely M/s Lupin Limited, Palghar to the appellant bearing Invoice No. 0000002152 dated 08.03.2017, it is observed that it has been dispatched on payment of Central Excise duty and drawback too have been claimed, however, the appellate authority has failed to examine the issue of exemption benefit under the said notification in detail, giving specific reasons - Hence the matter needs to be remanded on the applicability of the exemption notification and whether the appellant is entitle to any benefit in terms thereof - The appeal is partly dismissed and the matter is remanded for probing this aspect: CESTAT
- Appeal partly dismissed: DELHI CESTAT
2023-TIOL-1170-CESTAT-MUM
Savita Oil Technologies Ltd Vs CCE
CX - The issue is the stand of central excise authorities that, notwithstanding the duty liability having been discharged to full extend on procurement of inputs, viz., 'base oil' and 'other petroleum oils' which are volatile in nature, availment of credit to the extent of 'loss in transit', ascertained from measurement at the factory, is incorrect in terms of rule 3 of CENVAT Credit Rules, 2004 - Lower authorities had adopted benchmark of 2% as 'tolerance' and further denied credit wherever the difference was more than 0.4% as established by issue of debit notes - Payment of duty by supplier on clearance of goods, as well as inclusion thereof in invoices raised on appellant, is not in dispute and objection is solely on the ground that, in terms of rule 2(k) of CENVAT Credit Rules, 2004, only such 'duty paid' goods as have been used in manufacture of excisable goods are entitled to be availed as credit - Issue is no longer res integra - Tolerance limits are prescribed according to nature of goods and for purpose of computation wherever such quantity is critical - Insofar as CENVAT credit is concerned, underlying foundation is discharge of identical amount of duty on 'inputs' procured for manufacture or for rendering of service on the part of supplier.loss in transit is not includible for computation of 'assessable value'; conversely, inclusion therein implies higher value per unit and consequent absorption of higher liability of tax - Accordingly, nothing remains in impugned order which is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2023-TIOL-1169-CESTAT-HYD
Shriram Life Insurance Company Ltd Vs CC, CE & ST
ST - Appellant was depositing admitted taxes and filing periodical returns regularly - Pursuant to introduction of Service Tax on Life Insurance Premium, Board issued Circular 80/10/2004-ST by way of clarifying scope of newly introduced Services vide Finance Act (No. 2) of 2004, enacted on 10/09/2004, clarifying that the risk cover in life insurance becomes subject to levy of service tax - As appellant has been maintaining proper books of accounts as required under law, was registered with department, have filed periodical returns regularly, Revenue seems to have woken up only in year 2010-11, which is wholly due to change in interpretation on the part of Revenue - There is no element of suppression, fraud or misstatement made out from allegations in SCN - Revenue have erred in invocation of extended period of limitation and also at the same time denying benefit of closure of dispute under section 73(3) of the Act - Appellant relied on decision in case of CCI Logistics Pvt Ltd 2021-TIOL-345-CESTAT-KOL, wherein it was held that SCN was not required to be issued in view of provisions of section 73(3) of Finance Act, there being no evidence of willful short payment of tax, nor of any fraud or suppression, as entire service tax amount was deposited along with interest immediately after short payment of tax was informed by audit party - SCN was issued subsequently and appellant also places reliance on clarification issued by Board, wherein, it was clarified that amounts relating to deductions for mortallity, commission and expenses are not available for investment and an option was given to pay tax at the rate of 1.5% of gross premium amount - Thus, this subsequent clarification by Board is ample evidence that issue involved is one of interpretation of legal provisions and no case of fraud/suppression is made out - Appellant had rightly deposited tax, as clarified by Board Circular - Appellant was registered and have regularly deposited admitted taxes and have filed periodical returns - It is further evident that whole case is due to interpretational issue (change of opinion) on the part of Revenue - Benefit of closure under section 73(3) has been wrongly denied to appellant and no SCN was required to be issued - Accordingly, appellant is entitled to benefit of closure under Section 73(3) of the Act: CESTAT
- Appeal allowed: HYDERABAD CESTAT |
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