2018-TIOL-2929-CESTAT-DEL Manish Dhuppad Kailash Traders Vs CCE & ST
CX - The first appellant is a company engaged in the manufacture of MS Ingots - The other appellant is engaged as Commission agent dealing in various iron and steel items which are supplied to the first appellant - The premises of the second appellant were raided by the Department whereupon certain documents were recovered - As such records named the first appellant as well, the Department alleged clandestine removal of MS Ingots - Duty demand was raised with interest & penalty - The Commr.(A) upheld all the demands.
Held: The duty demanded was reduced by the Commr. considering that allegation of clandestine removal was primarily based on heavy consumption of electricity - The remaining demand with interest & penalty was sustained - Such findings warrant no interference as they are in consonance with the Apex Court's decision in R.A. Castings (P) Ltd. - Besides, a charge of clandestine removal is serious in nature & so must be backed with clinching evidence - Statements of buyers based on their memories is insufficient evidence.
- Appeal allowed: DELHI CESTAT
2018-TIOL-2928-CESTAT-CHD
Honda Motor Cycles And Scooters Ltd Vs CCE
CX - Assessee is engaged in packing and re-packing of automotive spare parts - During audit, it was observed that assessee appeared to have availed inadmissible Cenvat credit - Business Support Service has been used for logistic support services like verification of goods and receipt of goods which is covered in definition of 'input service’ at the given time - In view of decision in case of 2012-TIOL-2024-CESTAT-AHM, input service credit in business support service is admissible to assessee - As for Outdoor Catering Services, the same has been held to be admissible service for the purpose of input service credit in the light of decision of Bombay High Court in Ultratech Cement Ltd. 2010-TIOL-745-HC-MUM-ST - Accordingly, input service credit is admissible to assessee for this service - As for the Commercial or Industrial Construction Service used for construction of the factory, issue is no longer res integra and has been decided in favour of assessee in case of Bellsonica Auto Components India P. Ltd - The input credit relating to Courier Service was admittedly taken for transportation of goods for sale to customers - The amount has been paid as service tax to its vendors for providing the taxable service of 'Courier Services’ for the purposes of transportation of finished goods (spare parts) to its distributors/dealers - Amount of input credit availed before 01.04.2008 is admissible to assessee as the same is linked with activity of business or manufacture - However, the input service in relation to outward transportation beyond the place of removal is not included in definition of 'input service’ after 01.04.2008 - As for the CHA Service, same is denied on the ground that service was availed beyond the place of removal - However, the issue is no longer res integra and has been decided in favour of assessee in case of Dynamic Industries 2014-TIOL-1692-HC-AHM-ST - By following the said judgment, input service credit for CHA Service is admissible to assessee - As for the Manpower Recruitment and Supply Service, amount was paid by assessee as service tax to the vendors for providing recruitment services for supply of manpower on temporary basis - It is not disputed that said manpower was essential for purpose of carrying the operations of business of assessee - The finding of Commissioner that the service does not appear to have been used in relation to manufacture of final product is tentative - In view of the judgment of Tribunal in case of Honda Motorcycle & Scooter (I) Pvt Ltd 2016-TIOL-2127-CESTAT-CHD, wherein it was held that credit on manpower recruitment and supply service is admissible to manufacturer, the input service credit in this category is admissible to assessee - As for Management, Maintenance and Repair Service, the same has been used in relation to maintenance/repair of capital goods and equipment in the factory of assessee - Since the manufacturing activity service of assessee cannot take place without the repair/maintenance of equipment and capital machinery, the input service credit is admissible to assessee - Since the demand of Cenvat credit of Rs.29,46,646/- along with interest in respect of Courier Service for the period after 01.04.2008 is upheld, the question of penalty for this period is to be decided - Considering that the issue was finally settled at the level of Apex Court, the penalty for this period is not justified - Accordingly, no penalty is imposable on assessee: CESTAT
- Appeal partly allowed: CHANDIGARH CESTAT
2018-TIOL-2927-CESTAT-AHM
Motorol Lubricants Pvt Ltd Vs CCE & ST
CX - The Department alleged that the assessee company had clandestinely cleared finished goods - Notices were also served to certain officials in the assessee company wherein personal penalties were imposed on them - The Tribunal had earlier found the assessee company and its officials to be guilty as charged as the labor contractors gave evidence substantiating such charges - Also loose sheets with entries in them were found which tallied with the labor contractor's evidence - Shortages of raw materials and finished products were also found by the Revenue officials - However, the Tribunal had remanded the matter for re-determine the quantum of the penalties imposed on the officials - On re-adjudication, duty demand was raised with equivalent amount of penalty u/s 11AC and interest u/s 11AB.
Held: Penalty imposed on the assessee company's Managing Director is rightly imposed as the MD would be in a position to benefit directly or indirectly from the proceeds of clandestine removal - However, the penalty also warrants being reduced as it is highly disproportionate - Regarding penalties imposed on two employees, it is seen that one of them maintained regular invoices on which landestine removal was done - He also maintained records of illicit clearances in a private record - He also gave directions for removal of the goods - Similarly, the other employee gave directions for removal of inputs to jbo workers & did not mention the same in the Excise records - He also fudged records to show huge quantity returned from job worker as residue - Hence both are equally involved in the evasion of duty & merit being penalized - However, the quantum of penalty be reduced - Lastly, penalty imposed on the company is reduced as well: CESTAT (Para 2,6,7)
- Appeals partly allowed: AHMEDABAD CESTAT
CUSTOMS
NOTIFICATIONS
ctariffadd18_049
Anti-dumping duty on Linear Alkyl Benzene imported from Iran, Qatar and PR China - exporters name substituted against two entries
ctariffadd18_048
Anti-dumping duty on Saturated Fatty Alcohols imported from Indonesia, Malaysia and Thailand - Table Substituted
CASE LAWS
Marinerans India Pvt Ltd Vs UoI
Cus - The assessee is engaged in activity of Freight Forwarder - The Commissioner of Customs (Export) had issued a Public Notice No.17 of 2012 inviting attention of Shipping lines / Freight Forwarders to follow the KYC norms in respect of export cargo booked in containers at the instance of their customers who do not disclose their correct identity - This leads to dead end during investigation of attempts to smuggle goods such as red sanders out of India - The impugned order of Tribunal has proceeded to hold that assessee is bound by Public Notice, therefore, they were obliged to follow the KYC norms prescribed in said public notice - Regulation 2009 clearly states that these Regulations apply to customs cargo service provider - Regulation 5 of the Regulation provides the conditions which have to be fulfilled by the Customs Cargo Service Provider within the meaning of which the Appellants undeniably falls - In fact, it provides that Customs Cargo Service provider will meet such conditions as required by the Commissioner of Customs (Exports) inter alia in case of export cargo - The source of power to issue said Public Notice is found in the Regulation which is issued under the Act - Thus, the question as proposed does not give rise to any substantial question of law, hence not entertained - Appeal admitted on the substantial question of law in regard to whether the Tribunal was justified in imposing penalty under Section 114 of Customs Act, 1962 after having recorded a finding that assessee is no way involved in smuggling of Red Sanders : HC
- Appeal admitted : BOMBAY HIGH COURT
2018-TIOL-2923-CESTAT-BANG
Kavveri Telecom Products Ltd Vs CC
Cus - The assessee company is engaged in manufacturing Antennas - During the period of dispute, the assessee imported connectors by availing exemption under Notfn No 53/97-Cus - The Department alleged that the assessee contravened the conditions of the Notfn as it did not use the connectors in the manufacture & export of final products within the prescribed time limit - Dut ydemands were raised & penalties were imposed in respect of four bonds executed - Such demands were upheld by the Commr.(A).
Held - The assessee's warehousing period had expired but the same was not renewed despite reminders from the assessee - They were informed about rejection of application for extension after about 4 years of expiry of such period - Duty demands with interest were raised & penalties imposed - Besides, the assessee had relinquished title over the goods - There is no prohibition on the owner of the goods to exercise the right to relinquish the title of goods after the expiration of warehousing period or after expiration of the extended period - Hence no duty liablity can be imposed - However assessee is liable to pay rent, interest & penalties - Hence the matter is remanded for requantifying such levies: CESTAT (Para 1,7)
- Appeal partly allowed: BANGALORE CESTAT
2018-TIOL-2922-CESTAT-MAD
Premkumar Mohan Vs CC
Cus - M/s. Point 2 Point Logistics India Pvt. Ltd. filed two shipping Bills for the export of 'Industrial Salt' (Sodium chloride) - On testing the goods, the same was found to be Potassium Chloride of 95% purity which is other than Sodium Chloride - As such, proceedings were initiated against them for mis-declaration on the ground of violation of provisions of FTDR Act, 1992 as also of the Fertilizer Control Order, 1985 - As regards to imposition of penalty of Rs. 10.00 Lakhs in terms of Section 114 (i) of Customs Act, 1962, admittedly the goods tried to be exported potassium chloride and not sodium chloride, as declared by the exporter, thus calling for penalty under the provisions of Section 114 (i) of the Customs Act, 1962 - However, appreciating the assessee's stand that they were not aware of the export restriction and appreciating that the goods have not been redeemed by them, penalty is breduced from Rs. 10.00 Lakhs to Rs. 7.00 Lakhs - As regards to imposition of penalty of Rs. 10.00 lakhs under Section 114AA, Tribunal decision in case of Arya International 2016-TIOL-204-CESTAT-AHM held that in case of mis-declaration of export goods, penalty is imposable under Section 114 (i) of the Customs Act, 1962 and there is no justification of imposition of penalty under Section 114 AA ibid - As such by following the said decision, penalty imposed under Section 114 AA of the Customs Act, 1962 is set aside - As regards to penalty upon Managing Director, Shri Premkumar Mohan, the exporter ie., M/s. Point 2 Point Logistics India Pvt. Ltd., has already been penalized and in absence of any separate role of Managing Director, imposition of penalty upon him may not be justified: CESTAT
- Appeals partly allowed: CHENNAI CESTAT
