2018-TIOL-706-CESTAT-HYD

Photon Energy Systems Ltd Vs CC, C & ST

CX - Assessee manufactures solar photovoltaic modules in their 100% EOU - In adjacent plot, they set up a service unit registered in respect of Erection, Commissioning and Installation, GTA, works contract and management and Business Consultant Service - Upon enquiries, authorities noticed that assessee paid Rs. 10,04,379/- as service tax, on reverse charge on commission paid to a foreign agency for rendering marketing service; and this amount shown as input credit and shown on ER2 returns and debits were shown - The debits to an extent of Rs. 7,53,963/- relate to the proportionate input credit in respect of inputs involved in goods used in manufacture of DTA clearances and Rs. 2,50,416/- was in respect of service tax liability in other service tax unit in Plot No. 46 - Discharge of Central Excise/Customs Duty to the tune of Rs. 10,04,379/- in cash would mean that Revenue has already received the amount twice - Assessee is eligible to avail Cenvat credit and could have claimed the refund of such credit, it is fair and just and assessee be allowed to take credit which was debited, first towards duty and subsequently paid in cash as per the direction of lower authorities - As regards the penalties imposed on assessee for this infraction, penalties so imposed under section 112 of Customs Act, 1962 for violation of conditions of notfn, though on lower side, needs to be modified and it is held that a penalty of Rs. 15,000/- is just in interest of justice as a deterrent - As regards the penalty imposed under rule 25 of CER, 2002 and penalty imposed under rule 15(1) of CCR, 2004, both these penalties are unwarranted on the fact of records that assessee had not cleared the goods without payment of duties and has not availed any improper cenvat credit - Penalties imposed under these two heads are also set aside - As regards penalty imposed under rule 27 of CER, 2002, said penalty has been correctly imposed and no interference is called for - Assessee could have misunderstood the provision of Section 76 of Finance Act inasmuch, he had availed the credit of the service tax paid under reverse charge mechanism and utilized the same for making the payment - It is also undisputed that assessee had mentioned in returns filed before the authorities regarding availment of such credit and utilization thereof - There could be a bonafide error in understanding the law, hence this is a fit case wherein provisions of Section 80 of Finance Act, 1994 are invokable - By invoking the provisions of Section 80 of FA, 1994, penalty imposed by adjudicating authority under section 76 and upheld by first appellate authority is set aside: CESTAT - Appeal disposed of: HYDERABAD CESTAT

2018-TIOL-705-CESTAT-HYD

Raghav Ispat Vs CCE, C & ST

CX - Assessee is manufacturer of MS ingots /MS Angles - During search of office-cum-residence of assessee, certain private records recovered under Panchnama - Scrutiny of certain entries in private records revealed that assessee had received amounts from six units - Department took a view that said amounts received and shown in private records of assessee was pertained to clandestine clearances of MS ingots by assessee to said units - Assessee put forth the contention that cash receipt entries were pertains to their trading activity in scrap, but this was never placed before the investigating agencies - The assessee failed to prove with documentary evidence that subject cash entries pertains to their scrap sales - No doubt, VAT returns/some scrap purchase documents submitted by assessee may show that the assessee was into trading activity of scrap, but these alone would not establish that subject cash entries were related to such scrap sales and to rebut the evidence collected, without any cogent and corroborative evidence on record - Assessee also failed to correlate any of the subject cash receipt entries with scrap sales made to respective parties, with relevant ledger extracts maintained by them, even to consider their submissions - In view of this, Tribunal cannot agree with assessee's contention that subject cash receipt entries were related to their trading activity - Department had adduced evidence in the form of scrap and sponge iron purchased from M/s Archana Iron Trades and M/s Sheetal Shipping respectively - Assessee had also admitted that they use to purchase scrap/sponge iron without bills and made payments for such purchases - Moreover, manufacturers engaged in clandestine manufacture and clearance would not maintain any records and create evidence for such activity - Department cannot be expected to unearth every piece of evidence which is in the domain knowledge of manufacturers engaged in such activity to prove the case with mathematical precision - Therefore, in cases of clandestine clearances, the preponderance of probabilities, in the face of evidence collected and statements recorded, the charge against assessee held to be as proved - The partners of assessee, having admitted clandestine removals, giving details, it cannot be said these statements were given out of confusion lack of documents as they are the only persons who will be benefited by clandestine operations - No merits found in appeals filed by assessee: CESTAT - Appeals rejected: HYDERABAD CESTAT

2018-TIOL-704-CESTAT-BANG

Shashank Jain Vs CCE, ST & C

CX - Assessee engaged in manufacture of wires and cables and availing facility of cenvat credit on inputs, input services and capital goods under CCR, 2004 - Investigation revealed that assessee have collected an amount as central excise duty under invoices from their customers and have not remitted the same with Department - The company was closed from August 2008 due to labour unrest - The impugned demand pertains to capital goods and notice obtained by Bank to recover dues - Further the goods were cleared under cover of excise invoices but returns were filed belatedly discharging duty by utilizing credit - Delayed payment of duty/reversal of credit in terms of Rule 3(5) and 3(5A) of CCR, 2004 was due to the fact that company was not in possession of any of records to pay the dues/reverse the credit and immediately after the receipt of records from the Bench the company has paid/reversed credit in terms of Rule 3(5) and 3(5A) - Further, clearance of goods was not at all in hands of assessee to invoke Rule 26 - Further, Revenue has not been able to bring any material on record which shows that there was a malafide on the part of assessee for availment of Rule 8(3A) - Impugned order is not sustainable in law and therefore, same is set aside by dropping the penalty on assessee: CESTAT - Appeal allowed: BANGALORE CESTAT

 

 

 

CUSTOMS SECTION

NOTIFICATION

cnt18_2018

CBEC modifies forex exchange rates for import & export of goods

CASE LAW

2018-TIOL-703-CESTAT-AHM

Best Marketing Vs CC

Cus - the assessee-company filed a refund claim for 4% SAD - However such claim was rejected - Later, while the Commr.(A) granted refund in 2013, the assessee did not approach the Department till February 2016 - Thereafter, the Department rejected their claim on limitation - The Commr.(A) also rejected the refund claim -

Held - The refund had initially been allowed by the Commr.(A) - Thereby, the Department cannot direct the assessee to file a fresh application, due to delay in collecting the refund granted - Order in dispute merits being set aside: CESTAT (Para 2,5) - Appeal Allowed: AHMEDABAD CESTAT