12 May 2017   

NOTIFICATIONS

it17not37

Mandatory quoting of Aadhaar - CBDT exempts non-residents, senior citizens and residents of Assam & J &K

cnt44_2017

Restrictions removed - Unloading of imported goods and loading of export goods or any class of such goods allowed from Port Dhamra in State of Orissa

ctariffadd17_017

Definitive anti-dumping duty imposed  on Hot Rolled Flat Products of alloy or non-alloy steel imported from China PR, Japan, Korea RP, Russia, Brazil or Indonesia  from the date of imposition of the provisional anti-dumping duty viz. 08.08.2016 but not applicable during the period 08.04.2017 to 10.05.2017.

Draft Notification

Draft Income Computation and Disclosure Standard [ICDS] Real Estate Transactions

ORDER

Order No 66

CBEC reshuffles Members' charges; Mahender Singh gets GST + R K Mahajan gets Legal & Budget

TOP NEWS

Disinvestment - Govt achieves average of Rs 29000 Crore in last 3 yrs

CASE LAWS

2017-TIOL-222-SC-IT + Story

RAJ DADARKAR AND ASSOCIATES Vs ACIT : SUPREME COURT OF INDIA (Dated: May 9, 2017)

Income Tax - Sections 23, 27(iiib) & 148

Keywords - Deemed Owner - Maintenance Charges - Service Charges - Rental Income - Income from House Property - Profits & Gains Business & Professions.

The Maharashtra Housing and Developing Authority (MHADA) had constructed buildings known as Shyam Sunder Cooperative Society, Ram Darshan Cooperative Society and Sindhu Cooperative Society in Jariwala Compound Market, Opposite Navjivan Post Office, Lamington Road, Mumbai. There was a reservation for Municipal retail market on the plot on which MHADA had put up the construction. Ground floor [stilt portion] was handed over of the above said buildings and admeasuring around 17,925 sq. ft. (hereinafter referred to as the "market portion") to Market Department of Municipal Corporation of Greater Bombay ("MCGB"). This land was acquired by the MCGB from the MCGB by recovering the necessary cost.

The Market Department of the MCGB auctioned the market portion on a monthly license [stallage charges] basis to run municipal market. The Assessee firm participated in the auction to acquire the right to conduct the market on the market portion. The assessee was the successful bidder and was handed over possession of the market portion. The terms and conditions subject to which the Assessee was given the said market portion to run and maintain municipal market contained in the terms and conditions of the auction. The premises allotted was a bare structure, on stilt, that was, pillar/column, sans even four walls. In terms of the auction, it was the appellant who had to make the entire premises fit to be used a market, including construction of walls, construction of entire common amenities like toilet blocks, etc. Accordingly, after taking possession of the premises, the assessee spent substantial amount on additions/alternations of the entire premises, including demolishing the existing platform and, thereafter, reconstructing the same according to the new plan sanctioned by the MCGB. [Rs. 1,83,61,488/- spent from Financial Year 1993-1994 to 2001-2002] The Assessee constructed 95 shops and 30 stalls of different carpet areas on the premises under the market name "Saibaba Shopping Centre". The appellant also obtained, in terms of the conditions of the auction, necessary registration certificate for running a business under the Shop and Establishment Act and other licenses/permissions from MCGB and other Government and semi-Government bodies for carrying on trading activities on the said premises. The Assessee firm was responsible for day-to-day maintenance, cleanliness and upkeep of the market premises. Assessee collected various types of receipts such as maintenance charges for the premises, service charge and the fee payable by the sub-licensee.

The Assessee filed returns of income and right from the year 1999 till 2004, it had been offering the income from the aforesaid shops and stalls sub-licensed by it under the head "Profits and Gains of Business or Profession" of the Income Tax Act, 1961. The income was also assessed accordingly. The case of the Assessee for the Financial Year 1999-2000 was reopened by the Revenue by issuing notice u/s 148 of the Act and in response to the same the assessee filed its return. Notice u/s 143(2) of the Act was also issued. Reassessment order was framed, computed the income from the shops, and the stalls under head "Income from House Property" of the Act. Assessee's first appeal was allowed but the ITAT reversed the order of the CIT (A) and the HC dismissed the appeal.

On appeal, the Supreme Court held that,

Whether merely because there was an entry in the object clause of the business showing a particular object, would be the determinative factor to arrive at a conclusion that the income from house property is to be treated as income from business - NO: SC

++ section 4 of the Act is the charging Section as per which the total income of an assessee, subject to statutory exemptions, is chargeable to tax. Section 14 of the Act enumerates five heads of income for the purpose of charge of income tax and computation of total income. These are: Salaries, Income from house property, Profits and gains of business or profession, Capital gains and Income from other sources. A particular income, therefore, has to be classified in one of the aforesaid heads. It is on that basis rules for computing income and permissible deductions which are contained in different provisions of the Act for each of the aforesaid heads, are to be applied. For example, provisions for computing the income from house property are contained in Sections 22 to 27 of the Act and profits and gains of business or profession are to be computed as per the provisions contained in Sections 28 to 44DB of the Act. It is also to be borne in mind that income tax is only One Tax which is levied on the sum total of the income classified and chargeable under the various heads. It is not a collection of distinct taxes levied separately on each head of the income;

++ there may be instances where a particular income may appear to fall in more than one head. These kind of cases of overlapping have frequently arisen under the two heads with which Court was concerned in the instant case as well, i.e. income from the house property on the one hand and profits and gains from business on the other hand. On the facts of a particular case, income has to be either treated as income from the house property or as the business income. Tests which are to be applied for determining the real nature of income are laid down in judicial decisions, on the interpretation of the provisions of these two heads. Wherever there is an income from leasing out of premises and collecting rent, normally such an income is to be treated as income from house property, in case provisions of Section 22 of the Act are satisfied with primary ingredient that the assessee is the owner of the said building or lands appurtenant thereto. Section 22 of the Act makes 'annual value' of such a property as income chargeable to tax under this head. How annual value is to be determined is provided in Section 23 of the Act. 'Owner of the house property' is defined in Section 27 of the Act which includes certain situations where a person not actually the owner shall be treated as deemed owner of a building or part thereof. In the present case, the assessee was held to be "deemed owner" of the property in question by virtue of Section 27(iiib) of the Act. On the other hand, under certain circumstances, where the income may have been derived from letting out of the premises, it can still be treated as business income if letting out of the premises itself is the business of the assessee;

++ the test which has to be applied to determine whether the income would be chargeable under the head "income from the house property" or it would be chargeable under the head "Profits and gains from business or profession", is the question. That merely because there was an entry in the object clause of the business showing a particular object, would not be the determinative factor to arrive at a conclusion that the income is to be treated as income from business. Such a question would depend upon the circumstances of each case. It was held by the Constitution Bench of the Apex Court in Sultan Bros. (P) Ltd. v. CIT, 2002-TIOL-925-SC-IT-CB;

+ it is to be seen as to whether the activity in question was in the nature of business by which it could be said that income received by the assessee was to be treated as income from the business. Before us, apart from relying upon the aforesaid clause in the partnership deed to show its objective, the counsel for the assessee has not produced or referred to any material. Apex Court found that ITAT had specifically adverted to this issue and recorded the findings on this aspect;

++ the ITAT being the last forum insofar as factual determination is concerned, these findings have attained finality. In any case, the counsel for the assessee did not argue on this aspect and did not make any efforts to show as to how the aforesaid findings were perverse. It was for the assessee to produce sufficient material on record to show that its entire income or substantial income was from letting out of the property which was the principal business activity. No such effort was made;

++ reliance placed by the assessee on the judgments of this Court in Chennai Properties & Investments Ltd. and Rayala Corporation (P) Ltd. would be of no avail. In Rayala Corporation (P) Ltd., fact situation was identical to the case of Chennai Properties & Investments Ltd. and for this reason, Rayala Corporation (P) Ltd. followed Chennai Properties & Investments Ltd., which is held to be inapplicable in the instant case;

++ we are of the opinion that these appeals lack merit and are, accordingly, dismissed with cost.

Assessee's appeal dismissed

2017-TIOL-221-SC-VAT

PARLE AGRO PVT LTD Vs CCT : SUPREME COURT OF INDIA (Dated: May 9, 2017)

Kerala Value Added Tax Act, 2003 - Section 6(1)(a), (c) & (d)

Keywords - fruit juice - aerated drink - classification.

The appellant, M/s. Parle Agro (P) Ltd. is a dealer engaged in fruit juice based drink known as 'Appy Fizz' which has obtained certificate of registration under KVAT. The appellant was classifying the product as fruit juice based drink under Entry 71 of the notification issued u/s 6(1)(d) till 2007 and was paying @ 12.5% VAT. One M/s. Trade Lines, a distributor of appellant Company, was assessed by the authorities under the KVAT Act holding that it is liable to pay tax @ 20% on the product. M/s. Trade Lines filed OT Revision in the High Court of Kerala against the order passed by Kerala Value Added Appellate Tribunal dismissing the appeal. The High Court dismissed the revision petition upholding the order passed by the AO & FAA. Thereafter, assessment notices were issued to the appellant for AY 2009­15 proposing classification of 'Appy Fizz' as "aerated branded soft drink" and tax liability @ 20% . After receipt of the notices appellant filed an application seeking clarification of product 'Appy Fizz'. In the clarification application the appellant claimed that product 'Appy Fizz' had rightly been clarified as 'fruit juice based drink' and which has tax liability of 12.5%. Writ Petition was also filed by the appellant before Kerala High Court seeking direction to the CCT to consider and pass order on the application for clarification within a specified time and the proceedings initiated by the CCT by different notices be kept in abeyance. The Single Judge disposed of the writ petition directing the CCT to consider and pass orders on the clarification application within a period of one month from the date of receipt of the judgment and further proceedings in various notices were kept in abeyance. The AC & CCT filed a writ appeal against the judgment of the Single Judge before Division Bench of the Kerala High Court. The Division Bench of Kerala High Court dismissed the writ appeal by affirming the decision of the Single Judge. After the above judgment of the Division Bench, the Committee of Joint Commissioner passed the clarification order classifying the product as 'aerated branded soft drinks', @20%. Against the order, the appellant filed O.T. Appeal in the Kerala High Court. The Division Bench dismissed the appeal filed by the appellant upholding the order. A review application was also filed by the appellant to review the said dismissal. Civil Appeals have been filed against the aforesaid order and the review order.

The Assistant Commissioner (Assessment) and the Commissioner of Commercial Taxes have filed this appeal challenging the judgment by which writ appeal filed by the Assistant Commissioner(Assessment) and another against the direction of the Single Judge has been dismissed. M/s. We Six Traders Etc. is a dealer in fruit juices and other drinks manufactured by M/s. Parle Agro (P) Ltd. Assessment Commissioner has issued notices for AY 2010­11 to 2013­14 and April to June 2015 proposing to classify the product 'Appy Fizz' as 'aerated branded soft drink' @ 20% VAT. After the judgment of the High Court in the case of M/s. Parle Agro (P) Ltd. order of assessment was issued against which the assessee filed appeal before Kerala Value Added Tribunal in which appeal the Tribunal directed the assessee to deposit 30% as pre­condition to hear the matter on merits. The assessee filed writ petition in the High Court challenging the aforesaid order passed by the Tribunal on the stay petition. The assessee submitted before the High Court that against the judgment of the High court dated 5th February, 2016 in the case of M/s. Parle Agro (P) Ltd. SLP has already been filed, hence, the assessee should not have been called to remit the entire amount. The High Court disposed of the writ petition directing the demand made in the above cases shall remain stayed till disposal of the appeals on condition of assessee depositing 50% of the amount involved. Civil Appeals have been filed against the aforesaid judgment and order of the Kerala High Court.

Having heard the parties, the Supreme Court held that,

Whether delegated legislative power for issuing notification u/s 6(1)(d) can be used by the State only in respect of goods falling u/s 6(1)(a) or (c) - YES: SC

++ All goods enumerated in Section 6(1)(a) by the Legislature itself indicates that higher rate of tax has been fixed for those goods which are harmful for environment and health. Aerated branded soft drinks, excluding soda is also in the company of the above goods described in Section 6(1)(a). Section 6(1(d) empowers the State to notify a list of goods which are taxable at the rate of 12.5% which does not fall under clause (a) and (c). The delegated legislative power of issuing notification to the State Government is thus restricted and can be exercised only when goods do not fall under Section 6(1)(a) or Section 6(1)(c). The State of Kerala exercising its delegated legislative power has issued notification under Section 6(1)(d). The aerated branded soft drinks, excluding soda were always covered under Section 6(1)(a) prior to 1st April, 2007. When fruit juice based drinks were covered under Entry 71 the State Government knew that fruit juice based drinks were not covered by Section 6(1)(a). Applicability of the power of State to issue notification under Section 6(1)(d) arises only when goods were not covered by Section 6(1)(a). Fruit juice based drinks, thus, were never treated as 'aerated branded soft drinks' which was the understanding of State of Kerala while issuing notification under Section 6(1(d). Had fruit juice based drinks were also to be covered by aerated branded soft drinks, there was no occasion for subordinate legislative authority, i.e., the State Government, to include such products in notification under Section 6(1)(d).

Whether High Court should go beyond the common parlance test in case where the word  in question is a scientific and technical word and has been repeatedly used in different statutes - YES: SC

++ applying the common parlance test, the High Court concluded that product in question is covered by 'aerated branded soft drink'. The principle of statutory interpretation with regard to a word in taxing statutes are well established. This Court has clearly and unequivocally laid down that it is absolutely necessary to depart from the trade meaning or commercial nomenclature test where the trade or commercial meaning does not fit intotheschemeof the commercial statements. It is, of course, well settled that in taxing statue the words used are to be understood in the common parlance or commercial parlance but such a trade understanding or commercial nomenclature can be given only in cases where the word in the tariff entry has not been used in a scientific or technical sense and where there is no conflict between the words used in the tariff entry and any other entry in the Tariff Schedule." In the present case, the Entry 2 under Section 6(1)(a) uses the word 'aerated'. This is scientific term and has been repeatedly used in different statutes including the Central ExciseTariff and different HSN codes also uses the term'aerated'. The word 'aerated' is scientific and technical word used under different statutes andthe scientific and technical meaning of the word'aerated' can be looked into for finding out thereal import of the Entry. In view of the above, we are of the opinion that common parlance and commercial parlance test was not the only test which could have been applied for interpreting the entries in items mentioned in Section 6(1)(a) and the entries which contain scientific and technical word were also to be looked into in technical and scientific meaning. Both the High Court and the Committee of Joint Commissioners discarded the evidence of technical and scientific meaning of word. The appellant has rightly relied on the technical evidence brought on the record which indicate that use of carbon dioxide to the extent of 0.6 per cent was only for the purpose of preservative in packaging the commodities and the product was thermally processed and carbon dioxide was added to as the preservative.

++ applying the principle of construction of 'noscitur a sociis' on Entry 71, it is clear that clause 5 of Entry 71 has to take colour and meaning from the other items included in Entry 71. Item 5 of Entry 71 uses the words "similar other products not specifically mentioned under any other entry in this list or any other schedule". Thus, the products which are to be covered under Item No.5 are similar other products. When Item No.2 of the Entry 71 that is fruit juice, fruit concentrates, fruit squash, fruit syrup and pulp, and fruit cordial and item No.4 that is health drinks of all varieties, are kept in mind the fruit juice based drink shall fall in Item No.5. Both High Court and Committee of Commissioners overlooked this principle while interpreting item No.5 of Entry 71.

++ the order passed by the Division Bench in M/s. Trade Lines was a case of assessment of another assessee which decision was based on the materials brought on the record by the said assessee and could not have precluded the appellant from filing the application u/s 94 and when the Division Bench dismissed the appeal of the Revenue, the Committee of Commissioners ought to have followed the observation given by the Division Bench to this effect.Thus, we are of the view that the judgment of the Division Bench of Kerala High Court in M/s. Trade Lines did not conclude the issue and the Committee of Commissioners was not absolved from its duty of deciding the same in accordance with the materials brought on the record by the appellant and although the Committee noticed all the pleadings and contentions but mainly relying on the ruling of M/s. Trade Lines dismissed the clarification application which cannot be sustained.

Assessee's appeal allowed

2017-TIOL-898-HC-CHHATTISGARH-ST

MAHADEV LOGISTICS Vs CC & CE SETTLEMENT COMMISSION: CHHATTISGARH HIGH COURT (Dated: April 12, 2017)

ST -The petitioner calls in question the legality, validity and correctness of the final order dated 3.3.2015 passed by the Customs & Central Excise Settlement Commission [Settlement Commission] whereby a penalty of Rs.4.50 lakhs has been imposed upon the petitioner by the Settlement Commission in exercise of the powers conferred under section 78 of the Finance Act, 1994.

HELD -It is true that agreement between the petitioner and respondent no.3 (service recipient) clearly provides that the petitioner would produce the ST registration certificate and likewise, reimbursement of ST was limited to the production of demand regarding payment of ST but, it is not in dispute that the petitioner did not produce the ST registration certificate to respondent no.3, however, immediately after initiation of investigation and upon service of notice of investigation by respondents no.1 and 2, the petitioner had already discharged its tax liability before issuance of SCN and before receiving the said ST amount from the service recipient - it is also an admitted fact that the ST was recoverable from respondent no.3 and the petitioner would get nothing from evasion of tax, as it was not to be paid by the petitioner from its own funds, it was to be recovered from respondent no.3 on production of ST registration certificate and evidence of it and it could have been reimbursed by respondent no.3 - therefore, there is no reason for the petitioner to evade the tax liability -apart from the fact that the Tax Tribunal itself has held the disclosure to be full and true disclosure, it has accepted the duty liability and interest therein and had already granted immunity from the prosecution which clearly and unmistakably demonstrates that there is no mens rea on the part of the petitioner to evade the tax -otherwise, there is no reason for the Settlement Commission to grant immunity to the petitioner from criminal prosecution -as held by the Supreme Court in the cases of Pepsi Foods Ltd - 2010-TIOL-109-SC-CX-LB and Rajasthan Spinning and Weaving Mills - 2009-TIOL-63-SC-CX , presence of mens rea is a necessary constituent for imposing penalty under section 78 of the Finance Act, 1994, which is absolutely absent in the present case and there is no intention to evade tax by the petitioner, it was a bona fide mistake on its part which it immediately rectified on being noticed - there is no willful suppression of facts to evade tax on the part of the petitioner and it was bona fide on the part of the petitioner, it was not deliberate and in absence of finding relating to mens rea recorded by the Settlement Commission, the penalty imposed upon the petitioner under section 78 of the Finance Act, 1994 deserves to be quashed - resultantly, the writ petition is allowed and part of the order imposing penalty of Rs.4.50 lakhs up on the petitioner under section 78 of the Finance Act, 1994 is hereby quashed- If penalty already recovered or paid, same to be refunded within four weeks : HIGH COURT [para 18, 19, 20]

Writ Petition allowed

2017-TIOL-897-HC-MAD-ST

WIPRO LTD Vs CCE : MADRAS HIGH COURT (Dated: April 12, 2017)

ST - Tribunal, vide impugned order, allowed the appeal of the Revenue partly, inasmuch as it held that the assessee's claim to cenvat credit on house keeping and landscaping services was declined – Questions before High Court are (1) Whether the Tribunal was right in rejecting the cenvat credit availed on house keeping and landscaping services from the scope of term "input service" defined in rule 2(1) of the Cenvat Credit Rules, 2004 by the appellant (2) Whether the Tribunal was right in partly allowing the appeal filed by the respondent without taking in account the decision of the High Court of Karnataka in Commissioner of C.Ex, Bangalore II Vs. Millipore India Pvt Ltd., which was subsequently followed by this High Court in the case of Commissioner of Central Excise and Service Tax Large Tax Payer Unit vs. Rane TRW Steering Systems Ltd. 2015-TIOL-1057-HC-MAD-CX .

HELD - This Court, in the case of Rane TRW Steering Systems Ltd., in similar circumstances, held that cenvat credit would be available to an assessee with respect to house keeping and landscaping services – Revenue does not dispute the fact that the house keeping and landscaping services are availed of, by the assessee, in its factory premises – the ratio of the judgments rendered in the cases of Rane TRW Steering Systems Ltd. and Millipore India Pvt. Ltd. would apply to the facts of this case – accordingly, both the questions of law, are answered in favour of the assessee and against the Revenue – impugned judgment and order of the Tribunal is set aside – appeals allowed : HIGH COURT [para 5.4, 6, 7, 8]

Appeals allowed

2017-TIOL-896-HC-MAD-ST

P JOHN JOSEPH Vs JCCE : MADRAS HIGH COURT (Dated: March 13, 2017)

ST– The petitioners claiming to be co-loaders of M/s.Blue Dart Express Limited, Salem, which is a courier agency, challenged the impugned O-i-Os, mainly by contending that the same came to be passed in violation of the principles of natural justice in as much as the respondent relied on certain materials collected from the courier agency later to the hearing conducted and passed the impugned orders of adjudication, in violation of the principles of natural justice, as the respective petitioners were not served with copies of such documents.

HELD - It is well settled that the appellate authority being the fact finding authority as well is certainly entitled to consider all the objections raised by the petitioners, even in respect of the letter dated 10.10.2016 issued by Blue Dart Express Limited and also their invoices, at the time of hearing the appeal -the petitioners are certainly entitled to raise all the objections and grounds in respect of those documents relied on by the adjudicating authority - this Court has decided the similar issue regarding maintainability of writ petition in W.P.(MD) Nos.121 and 122 of 2017 dated 5.1.2017 [ 2017-TIOL-381-HC-MAD-ST ], wherein it has been observed that filing of writ petition cannot be entertained by way of short-circuiting the procedures, especially when a statutory remedy is available for the petitioner to go before the competent original or appellate authority, more particularly, when the factual aspects of the matter have to, necessarily, be gone into only by those authorities vested with such power under the statute - these writ petitions are not maintainable and accordingly, the same are dismissed without expressing any view on the merits of the matter, as it is for the appellate authority to consider and decide the same- liberty is granted to the petitioners to file the appeal before the appellate authority within a period of four weeks and appellate authority to decide appeal on merits without reference to the limitation : HIGH COURT [para 11, 12, 13]

Petitions dismissed

2017-TIOL-895-HC-MUM-CUS

RUPIN BANKAR Vs UOI : BOMBAY HIGH COURT (Dated: April 10, 2017)

Cus –The petitioner was associated in the capacity of Director of one Terrapolis Commercz Pvt. Ltd. [Terrapolis] - a SCN dated 14.5.2013 was issued to Terrapolis – the statement of the petitioner dated 13.12.2012 recorded during investigation was relied upon – the matter is pending before Commissioner (Appeals) – similar SCN was issued to one Merill Tradecom Pvt. Ltd. [Merill] – the statement of the petitioner recorded during investigation was relied upon – the modification application preferred by Merill is pending before Commissioner (Appeals) – in the meanwhile, the impugned SCN dated 26.8.2015 was issued to the petitioner for imposition of penalty under section 112(a) of the Customs Act, 1962 for improper importation of goods – petitioner before High Court challenging this SCN

HELD - In the impugned SCN dated 26.8.2015, the prima facie allegations against the petitioner is that he is the mastermind in this total operation of import of bogus memory cards and he hatched this conspiracy of import from his own country – this SCN is addressed admittedly before the adjudication against the two private limited companies [Terrapolis and Merill] reaching any finality – therefore, this is not an afterthought or a mere change of opinion - secondly, this is not a case like before the Supreme Court or other High Courts where the earlier SCNs were adjudicated, findings were recorded, conclusions were reached and yet on the same set of allegations, the second SCN was issued to the same parties - this is a first and substantive SCN to the petitioner - his role has already been set out in the SCNs issued to the private limited companies - it is only with a view to get over any technical objections that a separate SCN has been issued to the petitioner - there is, therefore, no impediment in an adjudication of the SCN issued to the petitioner – however, in order to take care of the apprehensions of the petitioner and in the facts peculiar to the petitioner's case, the appellate authority is directed to decide the matter, namely, the appeal preferred by Terrapolis and the modification application by Merill and, thereafter, the adjudication into the SCN against the petitioner be taken up by the adjudicating authority – writ petition disposed of as above : HIGH COURT [para 22, 24, 25]

Petition disposed of

2017-TIOL-894-HC-DEL-CUS

KUNAL TRAVELS (CARGO) Vs CC : DELHI HIGH COURT (Dated: March 27, 2017)

Cus - Customs House Agents Licensing Regulations, [CHALR], 2004- Commissioner of Customs revoking the appellant's Customs House Agent [CHA] licence and forfeiting its security deposit of Rs.1 lakh - on appeal, CESTAT upholding the O-i-I - appellant before High Court.

HELD -There is nothing on record to show that the appellant had knowledge that the goods mentioned in the shipping bills did not reflect the truth of the consignment sought to be exported -in the absence of such knowledge, there cannot be any mens rea attributed to the appellant or its proprietor - simply because upon inspection of the goods they did not corroborate with what was declared in the shipping bills cannot be deemed as mis-declaration by the CHA because the said document was filed on the basis of information provided to it by the exporter, which had already been granted an IE Code by the DGFT -the IE Code is the proof of locus standi of the exporter -the CHA's due diligence is for information that he may give to its client and not necessarily to do a background check of either the client or of the consignment -documents prepared or filed by a CHA are on the basis of instructions/documents received from its client/importer/exporter -furnishing of wrong or incorrect information cannot be attributed to the CHA if it was innocently filed in the belief and faith that its client has furnished correct information and veritable documents -the mis-declaration would be attributable to the client if wrong information were deliberately supplied to the CHA -hence there could be no guilt, wrong, fault or penalty on the appellant apropos the contents of the shipping bills - the inquiry report revealed that there was no delay in processing the documents by the appellant under Regulation 13(n) of the CHALR, 2004 - any act to defraud presupposes the intention to obtain something fraudulently -in the present case, the appellant (through its proprietor) has all along contended that the documents were filed unauthorizedly by a person incompetent to do so; it has not defended the action of Mr Lalit Katoch, the sales executive of the appellant; it claims ignorance and innocence of the contents of the consignment; it objects to the very filing of the two shipping bills by either Mr Katoch or any person authorised on its behalf, hence there cannot be a presumption of its deliberate act/intention to defraud -there is no evidence of active facilitation of clearance of the consignment through customs by the appellant, hence, no mens rea can be inferred to defraud the government for obtaining duty drawback through a fraudulent transaction -consequently, the appellant cannot be faulted or punished in the manner it has been - in these circumstances, the revocation of the appellant's CHA license is unjustified and is accordingly, set aside -the revocation of license which is in operation since 2005 i.e. almost 12 years, is itself a severe punishment and could also serve as a reprimand to the CHA to conduct its affairs with more alacrity -in these circumstances, the forfeiture of the security amount and the imposed penalty of Rs.1 lakh also is set asideand thesaid amount shall be credited to the appellant's account - If the tenure of the license has expired but is otherwise extendable, then upon the appellant's application such extension would be granted - if an application is to be made for grant of a new license, then such an application if made, would be considered under the extant Regulations - Appeals disposed of: HIGH COURT [para 12, 14, 15]

Appeals disposed of

2017-TIOL-893-HC-MAD-CX

MANTRA INDUSTRIES LTD Vs CCE, C & ST : MADRAS HIGH COURT (Dated: April 12, 2017)

CX - Against the impugned O-i-O, the petitioners seek indulgence of this Court to entertain these writ petitions by contending that the first respondent has not applied a binding decision of the Tribunal made in Butterfly Gandhimathi Appliances - 2014-TIOL-2466-CESTAT-MAD .

HELD - it is evident from the finding of the respondent that he wants to distinguish the said decision of the Tribunal which is sought to be relied onby the petitioners–whether the Gandhimathi Appliances case would apply to the facts and circumstances of the present case or not, it is for the next fact finding authority, namely, the Appellate Tribunal to go into the same and decide about its applicability -since such fact finding exercisehas to be necessarily done in this case by the Appellate Tribunal, the petitioners cannot skip or bypass such alternative statutory appellate remedy and file the present writ petitions - admittedly, the petitioners are not questioning the jurisdiction of the respondent in any manner -it is well settled that in fiscal matters, short circuiting the proceedings by way of filing the writ petitions cannot be entertained, unless the order passed was without jurisdiction or the same is erroneous on the face of it– when the petitioner is having an alternative remedy of appeal to file the appeal before the CESTAT, it is for them to file such appeal and canvass all the points -this Court, exercising discretionary jurisdiction under Article 226 of the Constitution of India, is not inclined to entertain these writ petitions only on the reason of availability of alternative remedy – accordingly, writ petitions dismissed : HIGH COURT [para 6, 7, 8, 9]

Petitions dismissed