- Whether appellate authority has power to allow appeal to be presented beyond period of 30 days after expiry of 60 days which is normal period for preferring appeal - Held, no - Appellant had filed appeal before Commissioner (Appeals) after 21 months from date of service of original order - Commissioner (Appeals) dismissed appeal on ground that it was filed beyond period of limitation - Appellant’s writ petition before High Court against that order was also rejected - Whether since appellant had immediately handed over original order on receipt to consultant for filing an appeal, appellant’s explanation that because of lack of experience in business there was delay had no acceptable value for condonation and, therefore, appeal against order of High Court was to be dismissed - Held, yes - Singh Enterprises v. CCE (SC)

Instructions to Central Excise Officers

- Whether a beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively - Held, yes - Suchitra Components Ltd. v. CCE (SC)

- Whether circulars issued by CBEC are binding on department and, therefore, Board’s Circular No. 39/99/Cus., dated 25-6-1999, extending benefit of brand rate of drawback to compensate exporters for re-rolled steel products and processed fabrics is binding on department - Held, yes - Union of India v. Arviva Industries (I.) Ltd. (SC)

Central Excise Act, 1944

- Section 35

- Section 37B

Cenvat Credit Rules, 2002

Cenvat Credit

- Cenvat credit was denied to appellants on ground that they had taken credit on basis of endorsed invoices - Duty was demanded along with interest and penalty - Commissioner (Appeals) confirmed demand of duty holding that appellants had not contested demand of duty liability but had contested only against interest and penalty - Appellants contended that, in view of Circular No. 218/52/96-CX, dated 4-6-1996, no duty could be demanded and inputs delivered to them by an endorsed document showing payment of duty would not disentitle them to credit of Cenvat relief - Whether only conclusion that could be drawn was in consonance with circular as aforesaid to grant relief of Cenvat credit to appellants - Held, yes - Magnet Industries (Cal.) (P.) Ltd. v. CCE (Kol. - CESTAT)

- Assessee, manufacturer of ceramic tiles, imported honed marble slabs - Assessee was required to discharge liability to additional customs duty (countervailing duty) (CVD) equivalent to central excise duty leviable in respect of goods - Revenue’s case was that correct classification of product was under CET sub-heading 2504.21 attracting duty at rate of 16 per cent and Cenvat credit on such goods was restricted to Rs. 30 per sq. mtr. under rule 3(6)(c), but assessee had mis-declared CET heading as 6807.90 instead of 2504.21 with a view to avail credit to extent of full CVD paid and overcome restriction under Rules - Adjudicating authority rejected claim for classification under sub-heading 6807.90 for purposes of levy of CVD - Whether process by which marble slabs obtained from marble blocks does not amount to manufacture and, therefore, imported marble slabs cannot be subjected to CVD - Held, yes - Whether since assessee had already taken cenvat credit of CVD already paid and it was not eligible to refund of CVD, no CVD was at all leviable on imported marble slabs - Held, yes - Nitco Tiles Ltd. v. CCE&C (Mum. - CESTAT)

- Period from August, 2003 to March, 2004 - Assessee, a manufacturer of ceramic tiles, imported honed marble slabs - Adjudicating authority issued a show-cause notice to assessee demanding Cenvat credit of Rs. 94,44,272 availed during relevant period - Commissioner held that goods in dispute fell within ambit of CET sub-heading 2504.21 restricting availment of cenvat credit of CVD to extent of Rs. 30 per sq. mtr. in terms of rule 3(6)(c), which worked out to Rs. 11,74,825, and that Cenvat credit was not admissible for reason that process carried out by assessee did not amount to manufacture - Therefore, entire amount of Cenvat credit availed was disallowed by Commissioner who ordered recovery of same together with interest and also imposed penalty - Whether assessee was not required to pay duty at all on polished marble slabs because activity carried out by it did not amount to manufacture and, thus, whatever credit had been taken and utilized for payment of CVD on marble slabs should be treated as reversal of credit itself - Held, yes - Nitco Tiles Ltd. v. CCE&C (Mum. - CESTAT)

Cenvat Credit Rules, 2002

- Rule 3

Circulars & Notifications

- Board’s Circular No. 39/99/Cus., dated 25-6-1999

- CBEC Circular No. B/II/I/2002-TRU, dated-1-8-2002; and Circular F. No. B/II/I/2002-TRU, dated 1-8-2002

- Circular No. 218/52/96-CX, dated 4-6-1996

- Notification No. 12/2003-ST, dated 20-6-2003

Finance Act, 1994

- Section 65

Management, maintenance or repair

- Period from 16-6-2005 to 31-3-2006 - Assessee was rendering ‘repairs and maintenance service’ to customers of ‘M’ Ltd. - Assessee paid service tax on 30 per cent of gross value of invoice which was attributable to ‘repair and maintenance service’ - Revenue demanded service tax on rest of gross value of invoice which was material cost incurred by assessee in rendering said service - However, exemption Notification No. 12/2003-ST, dated 20-6-2003 allowed deduction of value of goods and materials sold by service provider to service recipient, from value of taxable service, subject to condition that no credit of duty paid on such goods/materials had been taken by service provider under provisions of Cenvat Credit Rules, 2004 - Whether since assessee had not taken any such credit, prima facie it was eligible for benefit of above notification - Held, yes - Whether therefore, assessee was entitled to waiver of requirement of pre-deposit and stay of recovery in respect of amounts of tax and penalty - Held, yes - PLA Tyre Works v. CCE (Chennai - CESTAT)

Storage and warehousing

- Period from 16-8-2002 to 30-6-2003 - Assessee, a minor port, was set up to handle liquid and gaseous chemicals at time of importation as well as exportation - It was registered with department for providing ‘Port service’ and was paying service tax for that service - Assessee was also providing services of storage and warehousing of liquid chemical products to exporters and importers - Revenue classified said storage services provided under category of ‘Storage and warehousing service’ and demanded service tax thereon from assessee - Whether a specialized port could not be imagined without a storage facility when it was set up with an objective of handling bulk liquid cargo - Held, yes - Whether since storage facility provided was integral part of port service which was not meant for public at large but exclusively for exporters and importers who used port facilities and that too in terms of legal obligations of rule 42 of Major Port Trust Act, such service could not be separately made liable to tax as storage and warehousing services - Held, yes - Whether since definition of ‘Storage and warehousing’ did not underwent any change with effect from 1-7-2003 when ‘Port services’ were introduced, assessee being accepted as a port could not be held to be a storage and warehousing keeper for period prior to 1-7-2003 - Held, yes - Gujarat Chemical Port Terminal Co. Ltd. v. CCE&C (Ahd.) (TM)

Technical inspection and certification

- Period July 2003 to March 2005 - Assessee was a jewel appraiser attached to a bank - Revenue demanded service tax from assessee under head ‘Technical inspection and certification’ - Whether since revenue had not established that touchstone used by assessee for ascertaining quality of jewellery was capable of yielding chemical composition of goods in terms of percentage of gold and copper and further assessee had not undertaken any scientific technique for purpose of determining purity of jewellery, revenue was not justified in demanding service tax from assessee under head ‘Technical inspection and certification’ - Held, yes - Whether therefore, there would be waiver of pre-deposit requirement of service tax - Held, yes - S. Murugan v. CCE (Chennai - CESTAT)

SERVICE TAX TODAY

Vol. 12, Part 1, for the week of January 4–January 10, 2008