SERVICE TAX

CENTRAL EXCISE

2018-TIOL-2142-CESTAT-DEL

Central Goods and Service Tax and Central Excise Vs C P Udyog

CX - Assessee was engaged in manufacture of detergent and soap and was enjoying exemption under Central Excise - It was on an enquiry as was initiated against it that they were found to have been availing the exemption of Notfn 8/2003-CE incorrectly - Resultantly, SCNs were issued - The issue to be decided is whether the location of factory of manufacturer i.e. the Derathu village falls within the municipal limit of Nasirabad cantonment or was not without going into the details of definition of rural area as impressed upon by both the parties, the apparent admission is that village Derathu is outside the periphery of the cantonment area i.e. beyond 2 Kms thereof - It is only if the unit falls within municipal limit or within the limits of Cantonment Board that it shall be out of the definition of rural area and out of the ambit of notification under which assessee has claimed benefit - The provision is absolutely silent extending any peripheral area to be included within the definition of said municipal area or the Cantonment Board Area - It is not the duty of court either to enlarge the scope of legislation or the intention of legislature, when the language of provision is plain - The court cannot rewrite the legislation for the reason that it had no power to legislate - The court cannot, on an assumption that there is a defect or an omission in the words used by the legislature, correct or make up assumed deficiency, when the words are clear and unambiguous - Courts have to decide what the law; is and not what it should be - Commissioner (A) has rightly adjudicated upon the controversy holding that village Derathu does not fall within the cantonment area in as such is well covered under the definition of rural area for which the notification is very much applicable: CESTAT - Appeal rejected : DELHI CESTAT

2018-TIOL-2141-CESTAT-BANG

B S Refrigerators Ltd Vs CCE

CX - Assessee is engaged in manufacture of refrigerators and filed price list / declaration in respect of clearance of refrigerators / refrigerator spares from their factory - They cleared their final product on provisional assessment and executed a bond - Thereafter a SCN was issued proposing to disallow the deductions claimed with respect of secondary packing, transportation including insurance, turn over tax, quantity & prompt payment discount - As per the settled law, assessee is entitled to prompt payment discount, quantity discount and turn over tax provided the discounts are known to the customers before the clearance of goods and secondly there are sufficient documents to show that the discounts have been passed on to the customers - Original authority has observed that regarding prompt payment and quantity discount, assessee has disclosed some copies of credit notes issued at various branches to the dealers towards prompt payment discount and quantity discount and regarding turn over tax, assessee have enclosed photocopies of challan showing turn over tax has been paid to the Sales Tax Department in respective states - Though some of copies were produced before Commissioner (A) but the Commissioner (A) has not taken note of the same and has observed that assessee has failed to produce any documents - The assessee submitted that on account of fire, most of the documentary evidences have been destroyed but from other sources and other records, they may prove these abatements and turn over tax if the matter is remanded to the original authority - Thus, the appeal is allowed by way of remand: CESTAT - Matter remanded : BANGALORE CESTAT

2018-TIOL-2140-CESTAT-BANG

Confitdent Dental Equipments Ltd Vs CCE & ST

CX - Assessee is engaged in manufacture of medical and dental equipments - They also manufacture steam cleaner which they claim to be exclusively used in Prosthetic Dentistry and classified the same under Tariff Heading 9018 4900 of CETA, 1985 - The Department, however, classified the same under 8419 2090 - Sterilizing and steaming apparatus is specifically covered under Heading 8419 - Since there is a specific heading covering the item, therefore, steam cleaner manufactured by assessee falls correctly under Heading 8419 2090 of CETA, 1985 - However, as assessee have been regularly filing returns as the department is aware of his activities, extended period cannot be invoked as held by Supreme Court in HMM Ltd. 2002-TIOL-120-SC-CX , Kaur & Singh 2002-TIOL-724-SC-CX and Aban Lloyd Chiles Offshore Ltd. 2006-TIOL-97-SC-CUS - Therefore, invocation of penalty under Section 11AC of CEA, 1944 set aside: CESTAT - Appeal allowed : BANGALORE CESTAT

2018-TIOL-1340-HC-MAD-PMLA

Nalini Chidambaram Vs Directorate of Enforcement

PMLA Act - Section 50(2) & CrPC - Section 160 - The present intra Court appeal had been preferred by Nalini Chidambaram who is a senior advocate and wife of former Union Finance Minister P. Chidambaram. She had approached this Court challenging the summons issued by the Enforcement Directorate u/s 50(2) of Money Laundering Act seeking protective discrimination u/s 160 of CrPC. The said summons challenged under present appeal required the Appellant i.e., Nalini Chidambaram to appear before the Enforcement Directorate in connection with the Sharda Chit Fund Scam. The investigation pertained to the payment of Rs. One Crore made by a media company M/s Bengal Media Ltd which was owned by Mr. Sudipta Sen and who was the main accused in Sharda Scam to Nalini Chidambaram, which was claimed to have been received as advocate fees. Initially, the appellant engaged her authorised representative to appear and produce the documents. However, after having found that there were discrepancies between the statement of the Media company and the appellant, she was directed to appear in person through the summons. The counsel for appellant had therefore urged that as per Section 160 of the CrPC, no woman could be compelled to appear before police. He contended that the proceedings under PMLA Act were akin to investigation under Cr.P.C and hence the ED authorities were circumscribed by Cr.P.C. The appellant's counsel further contended that neither the CBI investigation in Sharda Fund Scam had revealed anything incriminatory against the appellant nor a supplementary charge sheet was filed naming the petitioner as eye witness. Whether summons issued by Enforcement Directorate in exercise of powers conferred on him u/s 50 of PMLA, has to be in confirmity with the requirements of Section 160 of CrPC . Whether the rationale provided under CrPC for exempting appearance of woman before police, will also apply to proceedings under PMLA

Held: The PMLA Act is meant to prevent and prohibit money laundering. When money laundering takes place, it provides for confiscation of the property and for the matters connected there with and incidental thereto. Therefore, an authority constituted has got different roles to play. Such an authority has been clothed with sufficient powers since a consequence of an offence would be detrimental to the development and growth of country's economy. Section 50(2) of the PMLA gives sufficient ammunition to an authority to summon any person whose attendance is considered necessary. The word "shall" is to be interpreted to mean absolute power to seek attendance ofcourse to a subjective satisfaction. Such a power can be exercised requiring a person to give evidence or to produce during the course of investigation. An investigation cannot be given a restrictive meaning since it is included in the definition clause of "proceedings". Such an exercise of authority mandates a person so summoned to attend in person. Here also the discretion given to the authority is extended either to call a person or permit to represent by an authorised agent. Therefore, if an authority is of the view that the assistance rendered by an authorised agent is not sufficient enough, then certainly a person can be directed to attend physically. Coming to Section 160 of the CrPC, this provision deals with information to police and their power to investigate. This provision also authorises the police officer to require attendance of witnesses. However, the proviso to this section carries out an exception when it comes to woman. Thus, she shall not be required to attend the enquiry at any place other than the place in which she resides. As far as nexus between CrPC and PMLA is concerned, it is seen that under the CrPC, investigation is done by the police over a crime. On the contrary, under PMLA, an authority has got different roles to play in tune with the objectives. While PMLA speaks of an authorised agent, the same is missing under the Code. There is no proceedings under the CrPC as being dealt with under the PMLA by an authority. Merely because trappings of police power is given, an authority cannot be compared with the policemen under all circumstances and so is his office. Coming to the issue qua a woman, certainly an authority can call a woman, who comes within the definition of a "person", since the nature of investigation or a proceeding is totally different apart from being distinct from the one under the CrPC. After all, a wide discretion is given to an authority even to call a person or permit his or her authorised agent. Therefore, when once a satisfaction is arrived on the need to summon a person physically, the same has to be done to facilitate a smooth progress in the investigation process. Thus, the summons that were issued by Enforcement Directorate under PMLA was in exercise of powers conferred on the authority u/s 50. Therefore, there is no necessity to meet the requirements of the proviso to Section 160 of CrPC seperately. It is admitted that Section 65 of the PMLA provided for application of CrPC so as to enable the PMLA authorities to take recourse to CrPC wherever PMLA was silent regarding procedure for arrest, seizure etc. But that cannot be taken to mean that PMLA authorities have to act only as per CrPC. Thus, the rationale for exempting appearance of woman before police was not applicable in a proceeding under PMLA. An element of bias is likely to arise in any decision making process be it administrative, executive, quasi judicial or judicial. It emanates from the state of mind and thus, truth at times becomes rather elusive. However, while dealing with an official bias, sufficient material is required for the Court to hold so, which are to be seen from the purview of a reasonable man. When some one is discharging professional duty, the question of malice in law might arise very often as against malice in fact. However, as against bias, which can be tested on its likelihood or reasonable suspicion, a malice would require some concrete evidence. The Court has to satisfy on its existence. A deliberate attempt to use the law can certainly be a ground but it also requires motive and intention supported by adequate materials. It is an admitted fact that initially the appellant was permitted to appear through the authorised agent. The notice was issued on finding certain new facts and contradiction in the statements given, which could not be satisfactorily explained by the authorised agent. The appellant has been rendering a professional service by travelling extensively throughout the country. While doing so, the question of determination of sex did not stand in any way. However, for appearing before an authority, which is mandated by law, she seeks protective discrimination as a woman. A legal profession stands apart on its own. In discharge of a professional duty, there is no difference between a man and woman. The summons were issued to the appellant in her discharge and capacity as a professional and not otherwise. It is clear from reading of Section 160 of the CrPC, certainly. This Court is unable to see any demon in the summons issued at this stage. There is no need to speculate. Neither a likelihood of bias nor malice can be seen through the summons issued. The appellant did not choose to challenge the summons earlier. She did rightly appear through the authorised agent. Issues have been raised only when the Enforecement Official had asked her to appear in person. The Submissions on the CBI enquiry vis-a-vis the summons cannot be countenanced with the scope being totally different. Similarly, the scope and applicability of Sections 126 to 129 of the Indian Evidence Act, 1872, is not required to be gone into at this stage as otherwise we will be entering into a realm of speculation. We also find that the appellant is not entitled to invoke Section 160 of CrPC since the special enactment specifically deals with the power, authority and procedure for issuance of summons u/s 50 of the PMLA and therefore, there is no requirement to read the proviso to Section 160 of the Code of Criminal Procedure into Section 50 of the Act. The contention of Appellant's counsel that the averments not being controverted, there is a deemed acceptance, annot be countenanced. When there is no material to substantiate the averments, there is no need to deny them. - In favour of Respondent : MADRAS HIGH COURT

2018-TIOL-94-AAR-GST

Sardar Mal Cold Storage and Factory

GST - the appliant owns cold storage houses & provides storage & warehousing facilities to variety of agricultural produce - The applicant sought to know the ambit of the definition for 'Support Service' of loading, unloading, packaging, storage or warehousing of agricultural produce as provided under Explanation (i)(e) to Sr No 24 of the Notfn of 11/2017-CT(R) dated 28/06/17.

Held - the goods Fennel, Coriander, Cumin Seeds, Carom Seeds, Fenugreek Seeds, Mustard Seeds, Brown Mustard Seeds, Nigella Seeds & Poppy Seeds fall under the ambit of Agricultural produce under Notfn No 11/2017-CT(R) - Hence supply of cold storage service in relation to these is exempt from levy of GST - However any processing of these goods which is not usully done by cultivator or producer at farm level, then such goods would not fall within ambit of Agricultural produce - In such case, supply of cold storage facility would attract levy of GST - The other goods of Turmeric, Dried Ginger, Dates, Dry Dates, Tamarind, Dry Mango, Dry Gooseberry, Dry Water Caltrops, Dry Peas, Cinnamon, Gum, Arjuna Chaal, Groundnuts, Copra Gola & Dry fruits do not fall within the ambit of Agricultural produce - Hence cold storage service provided for these items will attract GST: AAR - Application Disposed Of: AUTHORITY FOR ADVANCE RULING