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SERVICE TAX SECTION
ST - Collection of fees for promoting or allowing the person to use the facility by National Rifle Association of India will not make the building commercial – ICFAI University, Dehradun building is for use by a recognized university for education and cannot be considered as a commercial building - ST demand under the head "Commercial and Industrial Construction Service" for the activity of constructing the two buildings not sustainable – impugned order set aside and appeal allowed: CESTAT [para 5, 6] -
Appeal allowed
: DELHI CESTAT
ST - Assessee was issued a SCN alleging that they were providing both taxable and non-taxable service (IUC) and was thus required to maintain separate accounts in respect of input services and CENVAT Credit on such input services in terms of Rule 6(2) of CCR in respect of taxable and non-taxable output services - Original authority held that credit amounting to INR 7,63,18,307 availed on capital goods was not admissible and confirmed demand for the same - He, further, held that in the month of January, 2005, there was excess utilisation of Cenvat Credit to the tune of INR 59,77,550/-, which should have been paid in cash, therefore, such utilisation of credit was disallowed and demand in respect of the same was confirmed and penalty of an equal amount was also imposed under Rule 15(4) of CCR read with Section 78 of Finance Act, 1994 - It is a settled principle of law that no demand can be sustained unless the same is based on a proposal in SCN - The SCN is foundation in the matter of demand and recovery of duty, penalty and interest as held by Apex Court in case of Ballarpur Industries Ltd. 2007-TIOL-153-SC-CX - Once the SCN do not propose to deny any CENVAT Credit availed on items treated as capital goods, the same could not have been taken up and adjudicated - Thus, demand of INR 7,63,18,307/- confirmed in impugned order on this issue is not sustainable and is set aside - Further, on the issue of excess utilisation of credit, it is evident that assessee was entitled to further utilise credit amounting to INR 20,66,664/- and INR 90,78,879/- in the months of November and December, 2004 and there is no bar in law to restrict the utilisation of such quota of entitlement in subsequent months - Thus, the entitlement of INR 1,11,45,561/- (INR 20,66,664/- + INR 90,78,897/-) is in excess of INR 59,77,551/- which is the short fall in the month of January, 2005 - Tribunal agrees with the ratio of decisions on this issue in matter of Idea Cellular Ltd. 2009-TIOL-387-CESTAT-DEL and Vijyanand Roadlines Ltd. 2007-TIOL-614-CESTAT-BANG where it was held that utilisation is not restricted to monthly or quarterly basis and it can be utilised at any point of time - In view of the same the demand of INR 59,77,551/- confirmed on this issue is thus not sustainable and is set aside - Since the demands confirmed are set aside, therefore, demand of interest as well as imposition of penalty has also been set aside: CESTAT -
Appeal allowed
: ALLAHABAD CESTAT
CENTRAL EXCISE SECTION
CX - Case originated from M/s. Agarwal Plastics, a manufacturer of PVC compound who had stopped production in January 2002 but continued issuing invoices for passing on ineligible cenvat credit - It was noticed by Department that such Cenvat Credit has been passed on by issuing fraudulent invoices - Shri Rajeev Aggarwal, authorised signatory of M/s. Aggarwal Plastics in his various statements have admitted these facts - He admitted that the receivers used to take Cenvat Credit mentioned in the invoices, make payment by cheque out of which he used to return the amount in cash after retaining commission to the extent of 1% to 2.5% of the invoice value - He further admitted that he had only sold "sales invoices" without supplying the raw materials - Such invoices stand issued to M/s. Satvik Industries, who was a manufacturer of PVC insulated wire - Such invoices have also been issued to M/s. Asha Chemicals a registered dealer who in turn passed on such credit after retaining their commission to the tune of Rs. 20-25 Paise per KG of weight of the goods mentioned in the dealers invoice - It stands admitted by all concerned persons that only invoices have been issued for transfer of credit and no goods have accompanied such invoices - In addition to such inculpatory statements, investigations undertaken by revenue has conclusively established that registration number of various vehicles shown in invoices are vehicles such as private cars and auto rikshaw which are incapable of transporting the goods said to be covered by the invoice - Verifications have been undertaken with RTO authorities with reference to specific registration numbers of vehicles found in the invoices - This evidence conclusively establishes that the invoice indicating duty amount has covered only paper transactions and cannot be a valid document for transfer of credit: CESTAT -
Appeals dismissed
: DELHI CESTAT
CX - the assessee-company claimed unutilized Cenvat credit at the time of its amalgamation with another unit - Such availment was challenged by the Revenue - On appeal, the Commr.(A) held that the assessee was ineligible for claiming such credit, considering Rule 10(3) of the CCR, 2004 - However, the Commr.(A) also held that extended limitation could not be invoked in recovering credit so availed - Held - Considering the relevant findings of the Commr.(A), the evidence was analyzed in detail w.r.t. disclosure of availing credit and the amalgamation of the units, before it was held that no suppression of fact was involved - Revenue's appeal devoid of merit: CESTAT (Para 2,4) -
Appeals dismissed
: AHMEDABAD CESTAT
CX - Appeal is directed against impugned order whereby the Commissioner (A) has partially allowed the appeal of assessee and allowed the CENVAT credit with regard to certain input services and rejected with regard to other services - Dispute relates to availability of cenvat credit of service tax paid on various invoices of service providers and Input Service Distributor (ISD) invoices on services such as printer charges, AMC-photocopy machine, AMC UPS system, AMC of computer, AMC of coffee machine, housekeeping, professional charges, business consultant, air ticket charges and legal services - Assessee has submitted the sample copies of invoices issued by service provider charging service tax therein which clearly demonstrate that services are received in relation to business of manufacture of garment - None of the services are personal in nature but are genuine and bona fide business expenditure without which manufacturing activity cannot carried on smoothly and this issue is no more res integra and is settled in favour of assessee by various decisions - Further, invoice found in the name of Gokuldas Images Pvt. Ltd. (GI) Division and service tax has been paid on the advance amount and therefore, finding of Commissioner (A) is wrong that the service has not been provided to Gokuldas Images Pvt. Ltd. (GI) Division - Moreover, assessee is the division of Gokuldas Images Pvt. Ltd., who is working as ISD and this credit has been distributed to assessee by ISD - Demand of interest and penalty on credit reversed prior to issue of SCN is not tenable - Impugned order set aside: CESTAT -
Appeal allowed
: BANGALORE CESTAT
CX - Pursuant to investigation conducted by revenue officers at the premises of Commission agents and alleged buyers of goods, SCN was issued to assessee wherein it was proposed to demand duty from them and impose penalties - The demands were based upon records/ pads/ loose papers of brokers, buyers of goods and their statements - Reliance was also placed upon statement of director of assessee concern - All other assessees were also made co-noticee and it was proposed to impose penalties upon them - Adjudicating authority vide impugned order confirmed the demand - It has been alleged that assessee was clearing goods under cover of invoices and once the goods reached the destination the invoices were taken back by assessee and were destroyed - There is no evidence to corroborate such allegation - In none of seized records the reference of such invoices is appearing which can show that initially the goods were cleared under cover of invoice and were later taken back by assessee and destroyed - The brokers or commission agent during the cross examination has stated that they did not receive goods from assessee and the name of the consignor appearing in their papers did not pertained to assessee - Adjudicating authority refused to accept the cross examination on the ground that the same has been given after two and half year and that the panch witness were not examined - Reasoning given by adjudicating authority towards non acceptance of cross examination is not legal - The cross examination cannot be brushed aside on the ground of having been conducted after some time - Almost all the persons has refused the goods to be belonging to assessee and in such case the statements cannot be accepted as it is - Tribunal's views are based upon the judgment of High Court of Delhi in case of VISHNU & CO. PVT. LTD. 2015-TIOL-2792-HC-DEL-CX.
Statements or records of brokers/ agent has to be corroborated with evidences unearthed from assessee - However no evidence of clandestine clearance has been found from assessee - Without corroboration of any evidence the third party records and their statements cannot be made basis for upholding the demand - No independent evidences in form of Transportation of finished goods from assessee's factory to any of alleged customer/ traders, receipt of consideration towards clandestine removal, receipt of excess raw material, production records of any excess goods then that shown in records, any evidence of clearance of goods clandestinely from the assessee or any corroborative evidence or any transportation record or statement of transporter showing alleged removal or any transportation record has been brought on record - No evidence in form of excess consumption of power or receipt of consideration towards alleged clandestine removal has been brought on record - Even when the officers visited the assessee the stock of raw material and finished goods were found as per records and no discrepancy was found - In case of M/s CONTINENTAL CEMENT COMPANY 2014-TIOL-1527-HC-ALL-CX , High Court held that the clandestine removal should be proved by evidence of purchase of raw material, use of extra electricity, sale of final products, clandestine removal, transportation, payment, realization of sale proceeds, mode and flow back of funds and not be based upon the statement of buyers or assumption/ presumption - Further, in case of RAMA SPINNERS PVT. LTD. 2017-TIOL-505-CESTAT-HYD , the Tribunal held that the allegations based upon statements and some records recovered from third party and such statements having been back-tracked during their cross-examination cannot form basis of demand - Similar views has been adopted in case of CHARMINAR BOTTL. CO. P. LTD. 2005-TIOL-1108-CESTAT-DEL , SHIV PRASAD MILLS P.LTD. 2015-TIOL-1907-CESTAT-DEL and RAIPUR FORGING PVT. LTD. 2016-TIOL-1121-CESTAT-DEL - None of the above evidences has been adduced by revenue and hence the charges of clandestine removal against assessee are not tenable.
Statement of director of Unit on the basis of third party records cannot be basis of demand as corroborative evidence has been brought on record - Adjudicating authority has also relied upon the custom cases for confirming demand - However, demand cannot be based as revenue has to prove its case as it is the department who has made allegation - No incriminating paper or record has been found from assessee's possession and hence as held in case of M/s Vishnu & Co . the onus of showing evidence is on revenue - Thus, demand raised against assessee is not sustainable - Similarly, appeal filed by revenue is not sustainable as adjudicating authority has rightly held that revenue could not find any unaccounted physical stock or evidence related to sale of goods, unaccounted purchase of raw material or production of finished goods: CESTAT -
Appeal allowed
: HYDERABAD CESTAT
CUSTOMS SECTION
NOTIFICATIONS
ctariff18_025
Central Government exercises emergency powers u/s 8A of CTA, 1975 to increase Basic Customs Duty tariff rate on Chana (Chickpeas) from 30% to 40%
ctariff18_024
Import duty on all types of sugar [1701] increased to 100% (Tariff rate) with immediate effect and without an end date
CASE LAWS
2018-TIOL-214-HC-MAD-CUS
N Hyder Ali Vs CC
Cus - Petitioner preferred a revision before the third respondent and would state that the officer, who is manning the office of third respondent, is equivalent in rank to Commissioner of Customs and that therefore, he cannot decide the matter and hence, seeks to entertain the writ petition to test the correctness of order passed by first respondent - It may be true that there was a period when office of Joint Secretary, Department of Revenue, was manned by an officer equivalent in cadre to that of Commissioner of Customs - However, Punjab and Haryana High Court, in case of NVR Forgings 2016-TIOL-1066-HC-P&H-CX , interfered with such orders and held that they were without jurisdiction - The matter was taken up to the Supreme Court and in meantime, it appears that an officer, in cadre of Principal Commissioner (RA) and Ex-Officio Additional Secretary to Government of India has been appointed - Petitioner is unable to lay his hands on Notification of CBEC appointing an officer in rank of Principal Commissioner as Revisional Authority under the Customs Act and Notfn 27/17 CE (NT) pertains only to appeals arising under Central Excise Act - Respondents submits that Central Government, by now, would have issued the Notification under Customs Act as well and that if it has not been issued, it will be issued shortly and petitioner can pursue his revision before the third respondent - Hence, writ petition is held to be not maintainable, same is dismissed: HC -
Writ petition dismissed
: MADRAS HIGH COURT
2018-TIOL-213-HC-MAD-CUS
Om Udyog Vs Addl.CC
Cus - Petitioners seek an order directing the respondents to have samples of imported goods tested by another laboratory, namely, CIPET, Lucknow, which is a GOI undertaking - Revenue stated that they are not in possession of samples earlier drawn and that same are with laboratory/laboratories to which they were earlier sent - He further states that goods, in any event, have been released and handed over to petitioners provisionally - Revenue have no objection to samples being forwarded by said laboratory CRCL and/or private laboratory to CIPET directly for determining the age - The petitioners then seek an order directing the revenue to permit cross-examination of witnesses - Same can be made to the adjudicating authority: HC -
Petition disposed of
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MADRAS HIGH COURT
2018-TIOL-212-HC-DEL-CUS
Lotus Herbals Ltd Vs Chief Commissioner of Custom
Cus - Present suit has been filed for permanent injunction restraining infringement of trade mark, copyright, passing off, rendition of accounts and directions - Predecessor of Court vide order dated 19th September, 2013 had restrained the defendants from selling any goods under trademark LOTUS or any mark bearing the word LOTUS either as a suffix or prefix - Defendant no.2 had placed an order for unbranded goods with defendant no.3 - In import consignment, certain branded goods bearing marks LAKME, MAC and LOTUS have been found - Defendant no.2 has not got any branded goods released from customs - Defendant no.2 has not imported any goods bearing the mark LOTUS and undertakes that even in future no goods bearing the said mark shall be imported without taking specific permission/authorization of plaintiff - The statements/undertakings given by defendant no.2 are accepted by Court and the plaintiff and defendant no.2 are held bound by the same - Consequently, suit is decreed qua defendant no.2 in accordance with aforesaid statements - Registry is directed to prepare a decree sheet accordingly - Defendant no.1 is permitted to confiscate and/or destroy the seized goods bearing the mark LOTUS - Defendant no.3 has already been proceeded ex parte vide order dated 17th August, 2015 - At this stage, plaintiff states that he is confining his relief to prayer 30(ii) and 30(iii) of plaint against defendant no.3.
Keeping in view the fact that defendant no. 3 has no real prospect of defending the claim as it has neither entered appearance nor filed its written statement or denied the documents of plaintiff, Court is of the view that there is no need to relegate the plaintiff to lead ex parte evidence - Accordingly, suit is decreed qua defendant no.3 in accordance with prayer 30(ii) and 30(iii) of the plaint along with actual costs: HC -
Suit disposed of
: DELHI HIGH COURT
Cus - Assessee is a Customs Broker who had filed Bill of Entry for clearance of Gold Bars on the strength of authorization given by importer - Goods were self-assessed and tariff value @ USD 449/10 Grams was declared - There was an AG's audit whereby it was noticed that the tariff value as on 26.04.2013 was USD 472/10 Grams, whereas the importer had adopted the un-amended tariff value of USD 449/10 Grams resulting in short payment - As the importer declined to make good the short payment, SCN was issued to assessee and also the importer - Amendment in Notfn 39/2015 was not uploaded in system on account of which the less duty was paid but as soon as it was brought to the notice of assessee, he sent the mail to importer to pay the differential duty and differential duty along with interest and 25% penalty was paid also by importer - There is no lapse on the part of assessee as changes were not updated in system and the assessee have only filed a Bill of Entry on behalf of their client and they have taken proper care to file the Bill of Entry and therefore no lapse found on their part so as to impose penalty for fault of the system which has not been updated as on date of filing of Bill of Entry - Further, in O-I-O, Additional commissioner has proposed to impose penalty on assessee under Section 112(a) and refrained from imposing any penalty under Section 117 whereas while passing the order, he has imposed penalty under the provisions of Section 117 of Customs Act, 1962 on assessee and similarly the Commissioner (A) has also upheld the O-I-O imposing penalty under Section 117 - Therefore, impugned order is not sustainable in law: CESTAT -
Appeal allowed
: BANGALORE CESTAT
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By Vijay Kumar 
