SERVICE TAX

2019-TIOL-79-CESTAT-HYD

Essar Projects India Ltd Vs CCE, C & ST

ST - Assessee has entered into contract for procurement of plant and machinery, construction and setting up of facility with Hy-Grade Pellets Limited (HGPL) for construction of 'Iron Ore Beneficiation Plant', 'Iron Ore Fine Slurry Pipeline' from beneficiation plant, construction of plant, two pipelines and other service - Apart from the various agreements entered into with HGPL, they entered into three separate contracts with the same Hy-Grade Pellets Limited for sale/supply of material, equipments, machinery and items required for construction of iron ore beneficiation plant and iron ore fine slurry pipeline, pelletization plant and power plant - The contracts entered by assessee for construction of plant and machinery, beneficiation plant, pelletization plant and power plant included supply of materials and services - It is also undisputed that period involved in this case is prior to 01.06.2007 and one of the main allegation is that the cost of free supplies needs to be included for arriving at the value of the services rendered - Both the issues are now settled by judgment of Apex Court in case of L & T Limited - 2015-TIOL-187-SC-ST and Bhayana Builders (P) Limited - 2018-TIOL-66-SC-ST - Since the issue is no longer res-integra, impugned order is unsustainable and same is set aside: CESTAT

- Appeal allowed: HYDERABAD CESTAT

 

 

 

CENTRAL EXCISE

2019-TIOL-78-CESTAT-AHM

Bhagwati Spherocast Pvt Ltd Vs CCE

CX - The assessee is engaged in manufacture of raw casting - For the purpose of manufacture of raw casting, they have got some patterns manufactured on job work basis from the job worker and paid for such pattern to the job worker - The case of department is that patterns which are owned by buyer of goods were since used for manufacturing goods sold to the buyer, the amortization cost of pattern so used in manufacture of raw casting should be included in value of raw casting - Accordingly, the differential duty demand was raised - The issue on merit to be decided is whether the amortization cost of pattern is to be included in assessable value of final product manufactured and sold by assessee and whether the demand is hit by limitation - The amortization cost of pattern was rightly included by lower authority in assessable value of final product - In terms of Rule 6, amortization cost is to be included over and above the transaction value - Even if the submission of assessee is accepted regarding CA certificate, since the said amortization cost as claimed by assessee has been included in transaction value, it is not amortization cost but a part & partial of transaction value - Therefore, amortization cost of pattern used by assessee has to be included in transaction value - As regard the issue on limitation, assessee has shown income from sales of patterns in the balance sheet from which no one can make out that whether the sales of pattern is related to those patterns which were used in manufacture of final product for buyer by using pattern belonging to the buyer - Therefore, there is a clear suppression of facts and mis-declaration on the part of assessee - As regard the claim of assessee that on the same issue second SCN invoking extended period was issued, as per Nizam Sugar Factory - 2006-TIOL-56-SC-CX , the demand is not sustainable in this regard - The second SCN is for the period which is prior to the period of first SCN - Since, there is a clear suppression of facts in both the SCN, 5 years period is available to Revenue for issuing the sub SCN - In the case of Supreme Court judgment in case of Nizam Sugar Factory , the fact was different that for the same issue if a SCN for the subsequent period is issued invoking extended period, the demand is hit by limitation - However, the SCN period is not for the subsequent period but for the previous period - Therefore, the ratio of Supreme Court judgment in case of Nizam Sugar Factory shall not apply in the present case - As regard the judgment in assessee's own case of Tribunal, the demand for the subsequent was raised invoking extended period - Therefore, the tribunal applying the ratio of Nizam Sugar Factory , set aside the demand for extended period - Therefore, the tribunal's decision will be of no help to the assessee - The demand of duty confirmed by lower authority is clearly sustainable - Hence, the impugned order is upheld: CESTAT

- Appeals dismissed: AHMEDABAD CESTAT

2019-TIOL-77-CESTAT-DEL

Brij Textile Company Vs CCE & ST

CX - The assessee is engaged in manufacture of nylon fabric and they are also availing cenvat credit under CCR, 2004 - During an audit, it was noticed that assessee had availed and utilized the cenvat credit of Basic Customs Duty, Customs Education Cess and Customs Secondary And Higher Education Cess - Same was alleged to have been wrongly availed - The amount of cenvat credit was deposited by assessee alongwith interest much within the reasonable time of it being brought to the notice of assessee and much before the issuance of impugned SCN - It is apparent that said deposit was made almost 15 months prior to said SCN - The only adjudication remains is as to whether Commissioner (A) has rightly invoked Sub Section C of Section 11 AC of CEA - The perusal thereof makes it abundantly clear that in case the duty alongwith interest is paid before the issue of SCN, or even within 30 days thereof, no penalty shall be payable by person liable to pay the duty - The word used therein is 'shall' which makes it mandate for Department to act accordingly - The Sub Section C could have come into picture if and only if there had been some positive act observed by Department, that too by way of cogent evidence to show that there was an element of mensrea of tax evasion available with assessee while availing the impugned cenvat credit and even while utilizing the same, the Supreme Court in Hindustan Steel Limited 2002-TIOL-148-SC-CT-LB has held that no penalty should be imposed for any technical or breach of legal provisions or where the breach flows from the bonafide belief that the offender is not liable to act in the manner prescribed by statute - The findings of Commissioner (A) merely relying upon the deposit by assessee of wrongly availed cenvat credit as an admission and a reason to not to search for evidence qua the positive act of alleged fraud and mis-representation is a finding based on presumption and surmises - The same is therefore not sufficient to bring home the guilt of assessee - As a result, the impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

 

 

CUSTOMS

CIRCULAR/ NOTIFICATION

dgft18pn067

Export of Fertilizers under Chapter 31 of ITC(HS) Classification of Export and Import Items 2018 - Procedure to obtain permission / NOC from the Department of Fertilizers, Government of India

cuscir02_2019

Customs Post Clearance Audit

CASE LAWS

2019-TIOL-76-CESTAT-KOL

Fairdeal Enterprise Pvt Ltd Vs CC

Cus - The issue involves in this case is revocation of CHA licence granted to assessee by Respondent Commissioner for their alleged involvement of fraudulent drawback availed by their clients with their alleged help - The cause of action arose in Delhi Customs and prohibition order was issued to them, which resulted suspension and revocation of assessee's licence in Kolkata Customs House - It is on record that Cestat, New Delhi has set aside the prohibition order issued by Commissioner of Customs (General), New Delhi - It is also on record that the said order of CESTAT, New Delhi has been accepted by Commissioner of Customs, Kolkata - No other evidence regarding involvement of assessee is on record before the respondent Commissioner - There is no justification for revoking CHA licence of assessee at the strength of allegation contained in order of Commissioner of Customs, Delhi, which has been set aside by CESTAT, New Delhi and Revenue has not preferred any appeal against the order - Impugned order is set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT

2019-TIOL-75-CESTAT-BANG

Jasky Exports Pvt Ltd Vs CC

Cus - The assessee was sanctioned duty drawback under Section 75 of Customs Act, 1962 - Since the assessee failed to produce bank realization certificate evidencing the receipt of export proceeds, SCN was issued demanding the duty drawback along with interest - The Commissioner (A) has relied upon the decision of Singh Enterprises of the apex court but the said decision is not applicable as the order was passed ex-parte as the assessee have not received the SCN and not appeared before the original authority - The reasons given by assessee appears to be bona fide as the part of the unit of assessee was taken over by the Metro Rails and there were disruptions in the business activities of the assessee - It deems appropriate to set aside the orders and remand the matter back to the original authority to pass a fresh order after affording a reasonable opportunity of hearing and after complying with the principles of natural justice - Consequently, appeal is allowed by way of remand to the original authority to decide the case de novo after taking the reply of the assessee to SCN: CESTAT

- Matter remanded: BANGALORE CESTAT