Pradeep Jain - Chartered Accountant

Case: CCE, Mangalore versus Beau Monde’s Clinic

Citation: 2009 (92) RLT 183 (Kar.)

Judgement:

Issue:

The activities of Electro Homeopathy Consultation and hair bonding/hair weaving be covered under “Beauty Parlour Services” and chargeable to service tax.

Brief Facts:

The appellant raised the demand for payment of service tax from the assessee, who carried out activities of Electro Homeopathy Consultation and simultaneously he was carrying out activity of hair bonding/ hair weaving and have also undertook sale of wigs, clips, etc.

Appellant’s Contention:

The appellants alleged the activities carried on by the respondent as to be covered under Beauty Parlour Services. The appellant contended that it was not only carrying on activity of fixing wigs, but it was also selling the wigs and doing Electro Homeopathy Consultancy. Hence, such activities would amount to rendering of service and would fall within the ambit of beauty treatment under the heading beauty parlour Service.

Respondent’s Contention:

The said services would not be liable for tax as these do not amount to rendering of service.

Decision:

Karnataka High Court gave the decision in the favour of assessee and dismissed the Revenues appeal on the ground that the said activities which were carried on by the assessee by their nature do not fall under the Beauty Parlour Service and consequently it would not be liable to Service Tax.

Case: Commissioner of Central Excise versus A.C.C. Ltd

Citation: 2009 (92) RLT 109 (HP)

Judgement:

Issue:

The issue aroused in this case was whether the Copper / Aluminium Conductor, Impeller and Bulldozer as well as cold frame Sections, can be treated as capital goods or not?

Brief Facts:

The Hon’ble Tribunal allowed the Modvat Credit on goods under question but Commissioner of Central Excise alleging the goods to be not covered under the definition of Capital Goods filed the appeal against the said order.

Appellant’s Contention:

The said goods are not said to be capital goods and are also not eligible for CENVAT Credit as per Rule 57Q of Central Excise Rules, 1944.

Respondent’s Contention:

Respondent contented that in the explanation to said Rule, the said goods are rightfully covered under the meaning of capital goods.

Decision:

Seeking to the definition the Hon’ble High Court upheld the decision of the Tribunal and gave the decision in the favour of assessee.

Case: CCE, Surat- I versus Shagun Processors P. Ltd.

Citation: 2009 (92) RLT 146 (Cestat – Ahmd.)

Judgement:

Issue:

Shagun Processors P. Ltd. (herein the case referred to as “the Respondent”) cleared the goods to the merchant exporter against CT-1 but was unable to export the same. Consequently no proof of export was produced within the six months and revenue on said ground imposed penalty.

Brief Facts:

The respondents are engaged in the manufacturing of processed fabrics and ready – made garments. They cleared the goods for export through merchant manufacturers, without payment of duty against ARE – 1 under bond produced by the said merchant exporter.

Appellant’s Contention:

Appellant contented that as the goods were not actually exported, the department has right to recover the duty from the manufacturers and to impose penalty upon them.

Respondent’s Contention:

Respondent has argued that since the department has not established any patent irregularity on their part, no penalty can be imposed on them under Rule 19.

Decision:

It was held in this case that the having cleared the goods against ARE 1 and there being no dispute about the genuineness of the said documents; failure on the part of the merchant exporter to export the goods would not invite any penal action against the manufacturer.

Case: G.M.R. Industries Limited versus CCE, Vishakhapatnam

Citation: 2009 (92) RLT 157 (Cestat – Ban.)

Judgement:

Issue:

G.M.R. Industries Ltd. (herein after referred to as “the Appellant”) took Cenvat Credit on MS Plates/Mill Plates, MS Angles, MS Channels, MS Beams and Welding Electrodes used for the manufacture of capital goods (storage tanks). The question arouse as to whether these goods are eligible inputs or not?

Brief Facts:

The appellants are manufacturer of VP Sugar and Molasses and discharge the appropriate duty liability. The appellant took Cenvat Credit on the above mentioned inputs and used them in manufacture of capital goods (storage tanks).

Appellant’s Contention:

The appellant had submitted that all the inputs mentioned above are used in the construction of storage tanks and also that they have submitted all the necessary details regarding their eligibility to claim Cenvat credit on such inputs.

Respondent’s Contention:

Respondent contended that the said inputs are not entitled for the CENVAT credit because the said inputs are used in manufacturing of the storage tanks, as they are not excisable goods by virtue of being embedded to earth. Hence the SCN has been issued for the irregular availment of Cenvat credit and also for recovery of interest and imposition of penalty.

Decision:

The Hon’ble CESTAT gave the decision in favour of the assessee on the ground that as per explanation given under Rule 2 (k) of Cenvat Credit Rules, 2002/2004, the cenvat credit taken by the appellant on the inputs used for the manufacture of capital goods so the inputs are eligible to take Cenvat Credit.

Case: Vijay Shanthi Builders LTD. versus CCE, Chennai

Citation: 2009 (92) RLT 145 (CESTAT Chen.)

Judgement:

Issue:

The issue arouse in the said case was as to determination of value of clearances under Small Scale Exemption Notification will be as per Section 4A f CEA, 1944 or on the basis of invoice sale price.

Brief Facts:

The appellants are engaged in the manufacture of mineral water and availed SSI exemption under Notification No. 8/99. The appellants are paying the duty on the assessable value arrived at on the MRP basis after deducting the eligible abatement of 50% of the assessable value. The adjudicating officer imposed penalty and raised demand.

Appellant’s Contention:

The appellant contended that the value under said section is to be adopted after arriving at the aggregate value of clearances for the purpose of notification no. 8/99.

Respondent’s Contention:

Revenue contended that in RT – 12 Return it was noticed that they have wrongly computed aggregate value of first clearance of Rs. 100 Lakhs by taking invoice value which was less than the assessable value and avail 5% concessional rate of duty wrongly after crossing the limit of 100 lakhs on which duty should have been paid at 16% instead of which duty liability @ of 5% was discharged.

Decision:

The CESTAT partially allowed the appeal and held that as the question of interpretation of notification is involved no penalty is called for.

Case: CC, ICD, TKD, Delhi II versus Good Luck Steel Tubes Ltd.

Citation: 2009 (92) RLT 177 (Cestat – Del.)

Judgement:

Issue:

Whether DEPB rate as prevailing on Let export order date will be applicable or on the rate prevailing on the date of shipping bill will be applicable?

Brief Facts:

Respondent filed EDI shipping bill dated 1.10.04 for export of black pipe made of Hot rolled Steel Coiled and on 5.10.04, the goods were brought to the export shed. The goods were examined and let Export Order was given on the same day (i.e. 5.10.04).

On 6^th October, 2004, computerized processed Shipping bill was issued and on the same day new DEPB rates were introduced, which were lower than the earlier rates. The appellant claimed DEPB as per prevailing rate on 5.10.04. The Adjudicating authority allowed the DEPB rate as prevailing on 6.10.2004 on the basis of date of computerized processed shipping bills.

Appellant’s Contention:

Appellant’s main contention is that the DEPB rate would be applicable as per computerized processed shipping bill as per Customs Public Notice No. 19/98, dated 13.02.1998.

Respondent’s Contention:

Whereas the Respondent contended that goods were examined on 5.10.2004 and let export order was issued. On the basis of trade notice it is seen that the goods should be presented for the examination only after the full consignment has been physically brought inside the export shed of ICD. Hence DEPB rate will be applicable as on date of shipping bill.

Decision:

Revenue’s appeal was dismissed on the ground that the DEPB rate as prevailing on 5.10.2004 will be applicable.

Case: STI India Ltd. versus CC & CE, Indore

Citation: 2009 (92) RLT 107 (M.P)

Judgement:

Issue:

The revenue rejected the appeal on the grounds that the refund claim was time barred.

Brief Facts:

Appellant are engaged in the business of Cotton Yarn, Cotton Fabrics and Cotton Polyester Yarn. Appellant’s availed Modvat credit of duty paid inputs during Oct’1998 to Dec’1998. However since appellant during the relevant time were also availing the benefit under EPCG Scheme and hence they could not utilized the Modvat credit.

The appellant therefore filed refund claim before competent authority on 27.07.1999. The Revenue rejected the claim on the ground that the same was barred by limitation.

Appellant’s Contention:

Appellant had submitted along with application all necessary proof regarding exportation of goods and relevant extracts of form R.G. 23 A or deemed credit register maintained in respect of textile fabrics in original as the case may be. Once the appellant was able to satisfy these requirements to the satisfaction of authority concern then they were entitled to claim the refund of duty paid on inputs. As they have produced all these documents they are rightfully allowed to claim the refund.

Respondent’s Contention:

The respondent has rejected the refund claim on the ground that it is time barred.

Decision:

It is decided that filling late by 27 days could not have been made the sole ground for the rejection of application as barred by limitation. As a consequence, the refund application made by appellant dated 27.7.99 is held to be within time.

Case: Shanthi casting works Versus CCE, Coimbatore

Citation: 2009 (91) RLT 759 (Cestat - Chennai)

Judgement:

Issue:

Appellant rendered services under the category of “Test Inspection and Certification” without following the statutory formalities prescribed in this regard. The appellant voluntarily paid the tax along with the interest. Still Revenue issued SCN to the appellant.

Brief Facts:

Appellant rendered services under the category of “Test Inspection and Certification” during the period of 01.07.2002 to 30.9.2009 without following the statutory formalities prescribed in this regard. On 17.12.2005 the appellant voluntarily paid the tax due of 26337/- along with the interest. Subsequently SCN was issued proposing the appellant for violation of various provisions of the Finance Act, 1994.

Appellant’s Contention:

The appellant submits that once the tax due was voluntarily paid along with interest it was not open to the department to issue any notice proposing any further demand or penalty against assessee.

Respondent’s Contention:

Penalty should be imposed because appellant has violated some provision of the Finance Act, 1944.

Decision:

As per subsection (3) of section 73, where an amount of service tax has not been levied or paid/ short levied or short paid, the person chargeable with service tax may pay the amount of such service tax on his own ascertainment and intimate the jurisdictional central excise officer of such payment in writing. No further action was warranted against the appellants once they had paid the service tax not paid earlier, along with interest. The appeal is allowed consequently the appeal also gets disposed of.

Case: AMA Enterprises vs. CCE, Jamshedpur

Citation: 2009 (91) RLT 683 (CESTAT – Kol.)

Judgement:

Issue:

Whether interest for delayed payment of Tax has to be collected at the rate of Rs. 1000/- per day under Rule 8 (3) of the Central Excise Rules, 2002 or at the rate of 13 % per annum?

Brief Facts:

Lower Appellant authority has stated that the original order to pay outstanding amount of interest is correct in law.

Appellant’s Contention:

Appellant had depended on the decision of Hon’ble Rajasthan High Court in the case of Lucid Colloids Limited vs. Union of India – 2006 (200) ELT 377 (Raj.). And also contended that at the material time, rate of interest notified was only 13% under Notification No.66/ 03-CE (NT) dated 12.9.03.

Respondent’s Contention:

The lower authority has held that the Rule 8(3) is ultravires the Section 11AB to the extent it provides the rate of interest in excess of amount notified under the said section.

Decision:

Taking note of the fact that the appellants have already paid interest @ 13%, the demand of excess interest confirmed in the impugned order passed by the authorities below set aside. The Appeal is allowed.

Case: Aditya Birla Nuvo Ltd. versus. CCE, Bhavnagar

Citation: 2009 (91) RLT 761 (CESTAT – Ahmd.)

Judgement:

Issue:

The CENVAT credit of service tax paid on merger charges, charges for issuance of NOC, annual custody fees and maintenance of fax machine is admissible.

Brief Facts:

The appellant is taking CENVAT credit of service tax paid on merger charges, charges for issuance of NOC, annual custody fees and maintenance of fax machine. Whereas revenue contended that the same is not admissible as these are not input services.

Appellant’s Contention:

The appellant submitted that merger charges are clearly covered in the category of financing. NOC is issued by bank when company wants to borrow and there is a service charge levied by bank which also covered under the category of financing. As regards to the annual custody fees he submits that this is an activity related to share registry. And as regards to fax machine maintenance charges, it has been installed in the house of the company’s executive for the purpose of company and if the service tax benefit can be extended for the telephones installed in the residence of officer this would also be admissible.

Respondent’s Contention:

CENVAT credit of service tax paid on merger charges, charges for issuance of NOC, annual custody fees and maintenance of fax machine is not admissible. These activities cannot be said to be related to the manufacturing activity directly or indirectly and therefore the credit is not admissible.

Decision:

By satisfying that the service on which the revenue has denied the cenvat credit in this case are all covered by the category of services enumerated in the definition as considered by the appellants. Appeal is allowed.

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