CIRCULAR

cuscir33_2017

IGST on high sea sale transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. at the time of Customs clearance - Board clarifies  

CASE LAWS

2017-TIOL-274-SC-CX

CCE Vs MAIHAR CEMENT : SUPREME COURT OF INDIA (Dated: July 24, 2017)

CX – Clearance of cement to individuals, schools, educational institutions, hospitals, co-operative societies, malls, government department, public sector undertaking, industrial consumers etc. – Revenue alleging that benefit of concessional rate of duty in terms of Sl. No. 1C in  Notification No. 4/2007-CE  dated 01.03.2007 is not admissible, however, original authority extending the same by placing reliance on Board Circular 12.06.2008 and decision in Grasim Industries Ltd. = 2008-TIOL-2328-CESTAT-DEL - CESTAT while rejecting Revenue appeal held that Revenue has not produced any decision of High Court or Supreme Court overruling the Tribunal decision in Grasim Industries (supra); that it is also not correct for the Revenue to say that the Board circular will be applicable only to some portion of the country and should not be relied upon by others; that in terms of Rule 2(q) of PCR, 1977, to qualify as a "retail sale" such sale of any commodity should be through an intermediary to an ultimate consumer; that since in the present case, sales are made directly to various actual users, same will not be covered by the category of "retail sale" – Civil Appeal filed by Revenue before Supreme Court.  Held:   After condoning delay, appeal admitted and tagged with C.A No. 6542 of 2011: Supreme Court

Appeal admitted

2017-TIOL-273-SC-CUS

PROFLEX SYSTEMS Vs CC : SUPREME COURT OF INDIA (Dated: July 31, 2017)

Cus - Notfn . 102/2007- Cus - Appellant has not paid VAT on imported coil sheets and what is sold subsequently is " Proflex Roof" on which the VAT has been paid - High Court held that  Refund of SAD rightly denied.

High Court Order Confirmed - SLP Dismissed

SLP Dismissed in favour of Revenue

2017-TIOL-1468-HC-DEL-CUS

YU TELEVENTURES PVT LTD Vs UoI: DELHI HIGH COURT (Dated: July 26, 2017)

Cus - Refund - Respondent department had to examine whether the claim of the Petitioner that it had not passed on the incidence of CVD in respect of the B/Es for 27th March, 2015 to 31st March, 2015 to the customer was supported by proper documentation - Interestingly, the Petitioner had submitted the same CA certificate and documents (including sales invoices) for the aforementioned period as well as for the period June and July, 2015 - Respondent had accepted these very documents for the claim in respect of June and July, 2015 - By the same yardstick, there was no reason whatsoever for Respondent not to accept the very same documents in respect of the imports between 27th March, 2015 and 31st March, 2015 - The certificate of the CA is categorical that the incidence of CVD, even in respect of these imports, had not been passed on to the customers - Consequently, there was no valid justification for Respondent No. 4 to have denied the refund claim - Given the history of the case where the Petitioner has to approach the Court again for relief, the stand taken by the Respondents regarding the maintainability of the present petition is rejected - Respondent appears to be unwilling to accept the legal position and is persisting with rejection of the refund claims of the Petitioner on specious grounds - writ petition is allowed: High Court [para 25 to 29]

Petition allowed

2017-TIOL-1460-HC-MAD-CUS

CC Vs VARDHAMAN LIFE SCIENCES PVT LTD: MADRAS HIGH COURT (Dated: June 9, 2017)

Cus - By virtue of O-i-O dated 7.10.2014/10.10.2014, the Commissioner of Customs (Seaport-Import) denied the request of the assessee to extend the period of warehousing, in respect of the subject capital goods - by virtue of impugned judgment, the Tribunal allowed the appeal of the assessee and set aside the said O-i-O - appeal by Revenue before High Court on the following - (i) whether the Tribunal misdirected itself, in coming to the conclusion, that the first proviso to section 61 of the Customs Act, 1962 [Act] does not require, that an application be made, prior to the expiry of the warehousing period?(ii) in case, the answer to question no.(i) above is in favour of the Revenue, whether the assessee could be called upon to pay interest, as contended by the Revenue?

HELD - A plain reading of the provisions of section 61 of the Act, as it obtained, at the relevant time, would show that there is no impediment under the Act, in the Revenue extending the warehousing period, after it has expired - this view has also found favour with the Bombay High Court in the case of Sunil Jugalkishore Gupta [1988 (36) ELT 75 (Bom.)], albeit, in the context of section 61 of the Act, which was some what differently worded -the ratio of the Bombay High Court judgement can be applied to the issue at hand arising in the instant appeal -in the context of section 61 of the Act, as obtaining at the relevant point in time, the initial warehousing period could be extended on a "sufficient cause" being shown -there is nothing in Section 61(1)(b)(i)(B), which is suggestive of the fact, that an application, for that purpose, was required to be moved, prior to the expiry of the initial period of warehousing - the Revenue seeks to claim interest, based on its argument that since the warehousing period had expired and the demand had been raised under section 72 (1), on 13.3.2013, the clearance would only have been under the provisions of Section 72 of the Act and not Section 68 of the Act - the argument is misconceived, for the reason that though the demand in the first instance, was raised on 13.3.2013 under section 72(1) of the Act, and the same was followed by a notice dated 26.03.2013, under Section 72(2) of the Act, it was ultimately dropped, as is evident upon a plain reading of communication dated 9.4.2013 -the intent initially expressed by the Revenue, to auction the good by taking recourse to section 72(2) of the Act, appears to have dissolved - furthermore, what is evident from the record is that the assessee had obtained a licence under the EPCG Scheme on 20.3.2013 and, accordingly, the subject capital goods, were cleared from the warehouse, without being mulct with duty - the record shows that the Bills of Entries were assessed on the following dates: 12.9.2013, 23.6.2015 and 23.6.2015 - in such circumstance, it cannot be said that the clearance of the subject goods, was under section 72 of the Act, as contended on behalf of the Revenue - since the goods were cleared against zero per cent duty, no interest could have been levied - this is evident, upon a plain reading of the provisions of section 62 (2) (ii) of the Act -the provision makes it clear that interest, is to be calculated, only on the "amount of duty payable" at the time of clearance of the subject goods, in accordance with the provisions of section 15 of the Act- the instant clearance was under the provisions of section 15(1)(b) of the Act read with section 68 - this view is supported by the observations of the Supreme Court made in Pratibha Processors - 2002-TIOL-273-SC-CUS - the appeal is accordingly dismissed - the questions of law, as framed, are answered in favour of the assessee and against the Revenue : HIGH COURT [para 25, 26, 26.1, 27, 28, 28.1, 29, 29.1, 29.2, 29.3, 32]

Revenue appeal dismissed

2017-TIOL-1461-HC-MUM-CX

CONROS STEELS PVT LTD Vs CCE, C & ST : BOMBAY HIGH COURT (Dated: July 3, 2017)

CX -Writ Petition filed against the order rejecting the application for rectification - since in a similar issue in Appeal No.284 of 2014, this Court had admitted the said appeal, the instant appeal is admitted - the writ petition is also admitted: High Court [para 2, 3]

Petition admitted

2017-TIOL-2758-CESTAT-DEL

MOHIT AGENCY Vs CCE & ST : DELHI CESTAT (Dated: July 3, 2017)

ST-Appellant filed declaration under the Voluntary Compliance Encouragement Scheme (VCES) and declared unpaid ST amounting to Rs.6.47 lakhs - on scrutiny, department of the view that the declaration was partially false - SCN issued to appellant proposing to reject the declaration and to demand ST amounting to Rs.22.28 lakhs - vide impugned order, the adjudicating authority held that the declaration is not required to be rejected, since it does not fall under the category of substantially false - however, the demand of Rs.1.06 lakh was confirmed along with penalty of equal amount - appeal to CESTAT.

HELD-The Commissioner has confirmed the ST demand amounting to Rs.1.06 lakh in the impugned order - since the same is not pressed it is upheld - however, there is no justification for imposition of penalty on the appellant, in view of the fact that he has come forward and declared unpaid tax under the VCES scheme - accordingly, the appeal is partially allowed and impugned order is modified to the extent above : CESTAT [para 6, 7]

Appeal partially allowed