CASE LAWS
2016-TIOL-1522-HC-MAD-CUS
Krishna Tarpaulin Industries Pvt Ltd Vs CC: MADRAS HIGH COURT (Dated: June 29, 2016)
Customs - Relied upon documents / Origin of Import - The petitioner is one among the eighteen noticees with allegations related to the import of PVC Flex banners, which, according to the petitioner, was imported from Malaysia, but the Department proposed to reject the stand and state that the goods are of Chinese Origin - on receipt of the show cause notice, petitioner sought for copies of documents recovered from M/s. JayamImpex, M/s. Kamadaa Impex and M/s MM Enterprises - Correspondence ensued, and a notice of personal hearing was issued to the petitioner, on receipt of which the petitioner submitted another representation, requesting the copies of the documents and requesting permission to cross-examine the persons from whom documents have been recovered - In the meantime, there has been several other correspondences and the petitioner, on 21.12.2015, submitted their interim reply, pursuant to which, the personal hearing was fixed and at that stage, the petitioner filed the instant writ petition.
Held: It is not in dispute that those mahazars are drawn at the office premises of those three companies and not from the petitioner; and those three companies and its Partners / Directors are also Noticees in the show cause notice - Therefore, during the course of adjudication, if the petitioner's contention is that, certain documents recovered from the office premises of those three companies are relevant, it would always be open to the petitioner to raise such a plea before the Adjudicating Officer and that cannot be a reason not to submit a proper reply to the show cause notice and participate in the adjudicating proceedings - Therefore, at this stage, the petitioner cannot insist upon the documents, which they now seek for, which are admittedly not recovered from their business premises; and the prayer sought for by the petitioner cannot be granted - However, the petitioner is directed to submit their reply to the show cause notice, within a period of two weeks from the date of receipt of a copy of this order, after which the respondent shall fix the date of personal hearing and proceed to complete the adjudication, in accordance with law. [Para 8, 9]
WP dismissed
2016-TIOL-1521-HC-MAD-CUS
Green Line Vs CC: MADRAS HIGH COURT (Dated: June 22, 2016)
Customs - Undervaluation - The imported goods are Sub-woofers, Amplifiers and CD players of the brands Sony, JVC Kenwood and Pioneer and a Bill of Entry was filed by the petitioner for clearance of the goods - On examination of the Cargo by the SIIB, it was reported that the products are all manufactured by well known manufacturers and the bill of entry has been filed grossly undervaluing the goods - The stand of the Department is that as per IEC profile, M/s.Green Line is a proprietorship concern with Mr.S.Ariya as the proprietor - On investigation, the Department has prima facie concluded that the IEC profile obtained in the name of M/s.Green Line represented by Mr.Ariya as proprietor is by giving a fake address and initiated seizure and other proceedings - the only issue to be considered herein is as to whether the provisional clearance of the goods should be permitted.
Held:Admittedly, the goods are not the prohibited items and the stand of the Department opposing the prayer made by the petitioner for provisional release is primarily on two grounds: Firstly, on the ground of undervaluation and mis-description and secondly, on the controversy with regard to the IEC code - Under similar circumstances, provisional release has been allowed by the Court in other cases - there cannot be a straight jacket formula in all cases and each case has to be decided on the facts placed before the Court; therefore, sufficient safeguards should be made to protect the interest of revenue while directing provisional release of the goods. [Para 6, 7]
Therefore, the petitioner is directed to (i) remit the entire duty as assessed by them; (ii) pay 50% of the differential duty which has been arrived at by the Department as Rs.22.72 lakhs; (iii) execute a bond for the remaining amount to the satisfaction of the respondents; (iv) execute an indemnity bond stating that in the event of Shir.S.Ariya raising any claim over the goods or concerning the use of IEC code issued in favour of M/s.Green Line, the petitioner Mr.MohamedKalith alone would be fully responsible for the same and no liability can be fastened on the respondent Department and the indemnity bond should be furnished in the form approved by the respondents - Subject to compliance of the above conditions, the goods shall be released by the respondents, who are directed to proceed with the adjudication; notices should be issued to the Firm (M/s.Green Line) as well as to Mr.MohamedKalith and Mr.S.Ariya and all the parties should co-operate with the adjudication proceedings. [Para 8, 9]
WP disposed of
2016-TIOL-1520-HC-MAD-CUS
Cma Cgm Agencies (India) Pvt Ltd Vs CC: MADRAS HIGH COURT (Dated: June 29, 2016)
Customs - CHALR 2004 / CBLR 2013 - The petitioner is a Steamer Agent, holding a license issued under 2004 Regulations - In the year 2009 as well as in October 2012, the petitioner was granted a license by the 2nd Respondent each for a period of two years; however, when they applied for renewal in October/November 2015, the 2nd respondent decided to grant only a temporary renewal on the ground that a show cause notice is pending adjudication and that the petitioner had filed a writ petition for release of 75 containers related to melting scrap confiscated in adjudication - During the pendency of the writ petition, the license has been temporarily renewed, culminating in the instant WP.
Held: The pendency of a show cause notice for adjudication that too for a period of three years cannot be a sole ground to grant temporary renewal to the petitioner - No reason for the Officer, who had adjudicated the show cause and given a personal hearing on 21.06.2012, has not passed any orders on the petitioner's application - merely because the petitioner has approached the Court seeking certain relief and the writ petition is pending does not mean that the petitioner is charged with a misconduct; therefore, the reason assigned by the respondents in the counter affidavit for not granting renewal for a longer period and renewing the license temporarily is not sustainable - the 2nd respondent is directed to consider the petitioner's application dated 18.11.2015 and renew the petitioner's license for a period of one year with effect from 05.07.2016 and within the said time, the concerned authority viz., the Additional Commissioner of Customs (MCD), Customs House, Chennai shall complete the adjudication of the show cause notice dated 15.02.2012 after affording a fresh opportunity of personal hearing to the petitioner [Para 6, 7]
WP Allowed
2016-TIOL-1519-HC-MAD-ST
Gamesa Renewable Pvt Ltd Vs Principal CST: MADRAS HIGH COURT (Dated: June 27, 2016)
Service Tax - Natural justice - Demands related to denial and recovery of irregularly availed cenvat credit confirmed in adjudication assailed on the lone ground of violation of principles of natural justice, inasmuch as the petitioner has not been given adequate opportunity to put forth their case by way of personal hearing.
Held: The underlying object of affording an opportunity of personal hearing before passing the order, is to ensure that the principles of natural justice are complied with and the assessee has an opportunity to rebut the presumption drawn against him - In Taxation Statute, Courts have rendered decisions and stated that when complicated questions of facts are involved, it would be in fitness of things for the Authority to afford an opportunity of personal hearing, with a view to clarify the facts and also in a way to help the Adjudicating Officer to give a proper and just conclusion at the earliest - had the respondent afforded an opportunity to the petitioner as sought for in their representation dated 01.03.2016, the petitioner would not have approached this Court - the impugned order is set aside and the matter is remanded to the respondent for fresh consideration, who shall afford an opportunity of personal hearing to the petitioner as well as to their Counsel, consider their submissions and the documents produced and thereafter take a decision on merits and in accordance with law. [Para 5.4 & 7]
Matter remanded
2016-TIOL-1518-HC-MAD-ST
Infant Travels Pvt Ltd Vs CC and Excise Settlement Commission: MADRAS HIGH COURT (Dated: July 1, 2016)
Service Tax - Rent a Cab service - After verification of the documents and scrutiny of the Service Tax liability Statement, show-cause notice was issued to the petitioner proposing tax demand under the proviso to Section 73(1) of the Finance Act, 1994, with interest and penalty - The Settlement Commissioner allowed the application to be proceeded in which the petitioner had admitted his liability to a certain extent - there is no dispute or controversy with respect to turnover, sale of fuel, income from educational institutions and other income - With regard to income from hospitality services, the petitioner themselves admitted the liability - The only issue which was not decided in favour of the petitioner is with regard to income from SEZ; agitated herein.
Held: On a reading of the impugned order passed by the Settlement Commission, it is evidently clear that no opportunity was granted to the petitioner before the case came to be referred back to the jurisdictional Commissioner for adjudication - The respondents are not in a position to justify the impugned order as procedural error looms large on the face of the impugned proceedings; therefore, the impugned order with regard to the income from SEZ, calls for interference - the impugned order is set aside insofar as the findings rendered by the Commissioner under the head "Income from SEZ" is concerned, and the matter is remanded to the Settlement Commissioner for fresh consideration - the findings rendered on the other issues stand confirmed and the case can be settled on those lines - The Settlement Commissioner is directed to afford an opportunity of personal hearing to the petitioner and decide the issue in accordance with the provisions of the statute. [Para 5]
WP Partly allowed
2016-TIOL-1517-HC-MAD-CX
CCE & ST Vs Eid Parry (India) Ltd: MADRAS HIGH COURT (Dated: June 20, 2016)
Central Excise - Cenvat Credit - Respondents are manufacturers of sugar and molasses, and have installed a captive power plant or co-generation plant in their factory, availing credit of duty paid on the components and accessories used for setting up the co-generation plant - The department viewed the same inadmissible on the ground that the Captive Power Plant is a Turnkey project, which in turn are not excisable goods and are not goods conforming to the description of any machinery mentioned in Rule 2(a)(A)(i) / (iii) of Cenvat Credit Rules, 2004 and confirmed denial, recovery of irregularly availed credit with interest and penalty, in adjudication - The Tribunal set aside the demand, which is agitated by Revenue herein.
Held: It was contended that the Tribunal has not considered the matter while allowing the appeal with reference to allowing credit for the entire co-generation plant, without examining the eligibility of the individual items of capital goods for taking CENVAT Credit as per CCR 2004; simply followed the earlier order and granted relief without discussing the eligibility of individual items involved in the Appeal - the matter requires fresh adjudication; the impugned order passed by the Tribunal is set aside, and the matter is remanded to the Commissioner of Central Excise, Chennai (original adjudicating authority), to consider the issue afresh, in accordance with the provisions of the statute. [Para 7, 10]
Matter remanded
2016-TIOL-1516-HC-MAD-CX
NGA Steels Pvt Ltd Vs CESTAT: MADRAS HIGH COURT (Dated: June 23, 2016)
Central Excise - Cross examination - Demands were adjudicated and agitated before Commissioner (Appeals), contending that the principles of natural justice were violated inasmuch as cross examination of witness was sought but not granted; the appeal was rejected and agitated before the Tribunal, who remanded it to Commissioner (Appeals) for fresh decision - First appellate authority again held that the right to cross examine witness is not an absolute right, and rejected the appeal in remand proceedings - The Tribunal partly confirmed the demand and partly remanded the case, with both portions agitated in this WP.
Held: The plea regarding violation of principles of natural justice, in not permitting the appellant to cross examine the persons from whom statements were recorded / witnesses, has not been dealt with and answered, by the tribunal - On the facts and circumstances of the case, when a specific plea regarding violation of principles of natural justice is raised, CESTAT, Chennai, is bound to record a specific finding, which is conspicuously absent - The matter is remanded to CESTAT, Chennai to consider and to record a finding on the specific plea regarding cross examination of the persons from whom statements were recorded / witnesses, within two months from the date of receipt of a copy of this order [Para 10, 11, 12, 14]
Matter remanded
