CASE LAWS

2015-TIOL-2613-CESTAT-DEL-LB

TOWER VISION INDIA PVT LTD Vs CST: DELHI CESTAT (Dated: November 3, 2015)

Service Tax - Admissibility of CENVAT Credit on Telecom Towers - Revenue seeking an adjournment on the ground that the decision of the Mumbai Regional Bench in the case of GTL Infrastructure Ltd.- 2014-TIOL-1768-CESTAT-MUM and Reliance Infratel Ltd. - 2015-TIOL-516-CESTAT-MUM allowing credit was appealed against by Revenue before the Bombay High Court and is listed for pre-admission hearing on 16.11.2015 – on the presumption that adjournment would be granted, Revenue representative unprepared to proceed with hearing. 

Held:  Although there is no justifiable reason to adjourn the hearing of the matter merely on account of pendency a pre-admission hearing before the Hon'ble High Court, Bench adjourns the hearing to 08.12.2015 peremptorily: CESTAT LB [para 4]

Matter adjourned

2015-TIOL-2737-HC-DEL-CUS

CC Vs AVINASH DAWAR: DELHI HIGH COURT (Dated : December 3, 2015)

Cus - Settlement Commission passing final order & settling case relating to seized gold - Delhi High Court in the case of Shri Ram Niwas Verma - 2015-TIOL-2010-HC-DEL-CUS has held that no application under Section 127B(1) of Customs Act, 1962 can be made in relation to gold - since Settlement Commission did not have the jurisdiction to entertain such an application as there was a complete bar provided in the third proviso to Section 127B(1) r/w Section 123 of the said Act, order of Settlement Commission set aside - there cannot be any estoppel against the statute - Once the statute is clear that where the subject matter is ‘gold', the Settlement Commission would not have any jurisdiction to entertain the application under Section 127B, any order passed in contravention of the statute cannot be sustained on the ground of estoppel - case relegated to the stage when the respondent had been issued the SCN dated 29.08.2014 - Respondent to submit reply within one month & Adjudicating authority to grant hearing and pass order within two months - All amounts paid by the respondent by way of customs duty, penalty, fine and interest, would be adjusted against any amounts found payable, upon adjudication - Petition filed by Commissioner of Customs allowed: High Court [para 4, 5]

Petition allowed

2015-TIOL-2736-HC-KAR-CX

CST Vs KYOCERA WIRELESS INDIA PVT LTD: KARNATAKA HIGH COURT (Dated: October 28, 2015)

Central Excise - Refund - appeal has been filed by the Revenue raising the following substantial questions of law: (i) Whether the CESTAT is correct in directing the Revenue to refund of unutilized CENVAT credit along with interest under Section 11B and 11BB of Central Excise Act, 1944 when the exact amount of eligibility for refund is yet to be quantified on the basis of verification and the issue of interest is still under challenge before the CESTAT and not reached finality? And (ii) Whether the Revenue is liable to pay interest on delayed refund when the refund claim itself is rejected by the Revenue and the same is still under challenge?"

Held: For the reasons given in the Karnataka High Court ruling in the case of Fosroc chemicals, the questions raised in this appeal are answered against the Revenue and in favour of the assessee. [Para 4]

Appeal dismissed

2015-TIOL-2735-HC-P&H-CX

CCE Vs PERFECT DYEING & FINISHING INDUSTRIES: PUNJAB AND HARYANA HIGH COURT (Dated: September 21, 2015)

Central Excise - Clandestine clearances - The assessee is engaged in the business of dyeing of cotton, PC, polyester knitted fabrics - On a specific intelligence that the assessee was indulging in clandestine removal of polyester knitted fabrics without payment of duty and without any statutory records, the preventive staff officers visited the factory premises and detected excess stock of dyed polyester fabrics, which was seized; and also recovered some loose challans and a diary evidencing unaccounted transactions of dyed fabrics - Shri Varinder Kumar, partner of the appellant firm, admitted in his statement that the said diary was being maintained by them and explained the entries thereof; that the goods mentioned in the said diary were not accounted for in their records to escape duty liability and were cleared clandestinely without payment of duty - He further stated that the said diary was being maintained by Shri Harbans Lal, Dyeing Master on his instructions and the loose challans were retained by them upto the date of settlement of accounts and thereafter the same were destroyed - The parties (15 in number) whose addresses were disclosed by Shri Varinder Kumar, during investigation also confessed to having got dyed their fabrics with the appellant - The Adjudicating Authority confirmed the duty demand along with interest and also imposed penalty of equal amount on the appellant - However, no penalty was imposed on 15 parties on the ground that there was no allegation that they had acted in collusion with the appellant - Commissioner (Appeals) set aside the order of the Adjudicating Authority; same upheld by Tribunal and agitated by Revenue herein.

Held: The Tribunal had noticed in para 5 of the order that the dyeing master Shri Harbans Lal during the course of adjudication had accepted that the entries made in the diary belonged to him and were relating to his business transactions - Tribunal further observed that the Commissioner (Appeals) also took into consideration the retraction made by the appellant by way of sending telegram and that theappellants have no capacity to manufacture such a huge quantity of poly fabrics - by merely observing that the Advocate for the assessee had placed on record the number of decisions laying down that entries made in the private note book read with statement can not be held to be evidence to conclude against the assessee, the Tribunal rejected the appeal of the revenue - The charges of clandestine activities are required to be adjudicated by appreciating the factual matrix and by giving sufficient and cogent reasons; no legally justified reasons have been recorded by the Tribunal for rejecting the appeal of the revenue - The Tribunal being a final fact finding authority was required to deal with all aspects of facts and also law and then record its conclusions based thereon - impugned order set aside and the matter is remitted to the Tribunal to decide the same afresh and for passing a well reasoned speaking order after affording an opportunity of hearing to the parties in accordance with law. [Para 6, 7]

2015-TIOL-2734-HC-P&H-ST

CCE & ST Vs THE PRINTER HOUSE PVT LTD: PUNJAB AND HARYANA HIGH COURT (Dated: September 29, 2015)

Service Tax - Intellectual Property service - Respondent entered into an agreement with M/s Solna Offset AB, Sweden for purchase of technical design, manufacturing and documents and process technical and to make payment of SEK 3 millions (Sweden currency) for technical drawings - a total payment of Rs. 442.41 lacs was made during the period of 2006-07 to 2009-10 to M/s Solna Offset Sweden - Since the said designs were covered under the "Intellectual Property Rights" as defined under Section 65(55a) of the Finance Act, 1994, Revenue viewed the transaction taxable, and the original authority adjudicated tax demand with interest and penalty - Commissioner (Appeals) upheld the demand and the matter was taken to Tribunal, who dismissed their appeal for non compliance of pre deposit but later restored the appeal and stay petition and granted full waiver of pre-deposit holding that the transaction falls outside the ambit of Section 65(55b)(a) of the 1994 Act - Revenue is aggrieved and filed the instant appeal.

Held: The Tribunal considered the agreement dated 20.12.2006, and came to the conclusion that there was a strong prima facie case in favour of the assessee as there was permanent transfer of intangible goods from the Swedish entity to the assessee and, thus, transaction falls outside the scope of Section 65(55b)(a) of the 1994 Act - finding strong prima facie case in favour of the assessee, Tribunal granted waiver of pre-deposit in full and stayed all further proceedings for realization of the adjudicated liability during the pendency of the appeal, which raises a debatable issue - No illegality or perversity could be pointed out in the findings recorded by the Tribunal which may warrant interference by the Court; no substantial question of law arises in this appeal, which is devoid of merit. [Para 5, 6, 7]

2015-TIOL-2733-HC-MAD-CUS

R K ENTERPRISES Vs CC: MADRAS HIGH COURT (Dated: October 12, 2015)

Customs - Seizure - petitioner imported 1172 cartons of garment packing materials and tailoring materials from China and filed Bill of Entry for Home consumption - thereafter, the value of the goods was enhanced and assessed by the proper officer who directed to pay duty - Subsequently, the SIIB Officers have examined the goods and found that while 1328 cartons were found on examination, the petitioner declared only 1172 cartons - the petitioner contacted the exporter, who accepted their mistake in sending the excess goods and also stated that their load man had wrongly shipped the above goods; same was informed to the Customs Department - Thereafter, the petitioner had requested the respondents to release the total quantity of 1328 cartons of the goods provisionally after collecting additional duty on the excess goods proportionately as per the value assessed by the Proper Officer under the Customs Act, 1962 - since no response was forthcoming, Writ Petition filed seeking appropriate direction for release of goods.

Held: The decision by the court pronounced on 08.10.2014 in W.P.No.21194 of 2014 while considering the prayer for provisional release, has taken a view that the interest of revenue has to be protected and at the same time interest of the importer should also be looked into, for which purpose, the following factors are to be considered, viz., :- (i) whether the goods are prohibitory goods; (ii) whether the goods require specific licence; and (iii) whether the goods are contra band - If these three factors are not available in a case which comes up for consideration, then, this court has to safeguard the interest of the revenue and the interest of the importer can be considered by imposing conditions - when the import is not hit by any of the above factors, the only issue to be considered is as to whether the goods declared by the petitioner is lower than the market value with an intention to evade payment of duty - said decision squarely applicable to the facts in this case also - in the light of the above, similar direction is to be given to give quietus to the issue; the differential duty is to be assessed by the authorities and on such assessment and intimation, the same shall be paid by the petitioner along with actual duty payable - On such payment, the goods shall be released forthwith leaving the other issues open to the respondents to proceed in accordance with law - The assessment of differential duty shall be completed by the respondent concerned within a period of one week from the date of receipt of a copy of this order. [Para 3, 5]

WP disposed of

2015-TIOL-10-ARA-CUS

TANUJ HYDRAULICS PVT LTD Vs CC: Authority for Advance Rulings (Dated: November 20, 2015)

Cus - Hydraulic Cylinders, i.e. 'Cylinders' and 'Cylinder Barrels' are appropriately classifiable under tariff item 8412 90 30 & 8412 90 90 respectively of the CTA as Revenue has accepted the classification - Matter disposed of: Authority for Advance Rulings [para 4]

Matter disposed of

CUSTOM CIRCULAR

cuscir15_030

Amendment to Board Circular No. 18/2015-Cus dated 9.06.2015- regarding