|
SERVICE TAX
2019-TIOL-1062-CESTAT-MUM
CCE Vs Sesa Goa Ltd
ST - In Revenue appeal the issue is whether the services provided by M/s Goldman (Sachs) Asia LLC and M/s Morgan Stanley & Co., International PLA, situated outside India, to the respondent falls under the category of 'Banking and Other Financial Services' or under 'Underwriter Services' and is chargeable to service tax on reverse charge basis.
Held : Upon examination of the subscription agreement, it can be safely inferred that even though the amount paid for the services by the respondent has been described as 'Management underwriting commission and selling commission', but the core service provided by the Lead Managers is that of 'underwriter service' and not managerial service for the issue of bonds as is evident particularly from clause 4.1.33 where under it is mentioned that none of the managers has to provide any legal, accounting, regulatory and tax advisory; clause 9 mentions the expenses that are to be borne by the issuer and the Lead Managers - Once it is concluded that the service provided to the respondent falls under the category of 'underwriter service', the amount paid by the respondent to the Lead Managers for the services performed outside India would come under the scope of rule 3(iii) of Taxation of Services (Provided from outside India and received in India) Rules, 2006 and accordingly not chargeable to service tax - Impugned order upheld and Revenue appeal dismissed: CESTAT [para 26]
- Appeal dismissed: MUMBAI CESTAT
2019-TIOL-1061-CESTAT-MUM
Prashant Transport Excavation Division Vs CGST
ST - Penalty - Records and documents of the appellant were audited by the Audit Wing on earlier occasions, therefore, imposition of penalty u/s 78 of FA, 1994 is unjustified - appellant has already paid the service tax along with interest - penalty u/s 70 & 77 are upheld but that u/s 78 is set aside - Tribunal decision in P Vinod - 2018-TIOL-2228-CESTAT-MAD relied upon: CESTAT [para 7, 8]
- Appeal partly allowed: MUMBAI CESTAT
2019-TIOL-1060-CESTAT-MUM
Diagold Designs Ltd Vs CGST & CE
ST - Adjudication orders were received by appellant on 21.01.2016 and, thereafter, appeals were filed before Commissioner(A) on 22.04.2016 - Section 85 of FA, 1994 mandates that the appeal shall be filed within ‘two months' from the date of receipt of adjudication order - Commissioner(A) is not empowered to condone the delay if the appeal is presented before him beyond the period of three months - since the appeals were preferred beyond the prescribed time limit in the statute, Commissioner(A) has rightly rejected the same on the ground of limitation - appeals dismissed: CESTAT [para 3]
- Appeals dismissed: MUMBAI CESTAT
CENTRAL EXCISE
2019-TIOL-829-HC-MEGHALAYA-CX
CGST Vs Meghalaya Cast And Alloys Pvt Ltd
CX - The O-I-O was challenged in an appeal before the Tribunal, which to the extent of imposition of penalty has been set aside on the ground that there has been no suppression on the part of assessee - Furthermore, whatever duty paid was to be refunded to the assessee - It appears that in the context of revenue neutrality, imposition of penalty has been set aside - The question of total revenue neutrality in terms of notfn 32/1999-CE was eclipsed by notfn dated 27.03.2008 where-under duty refund has been reduced - Section 11AC (1)(a) of CEA, 1944 envisages that intent to evade payment of duty attracts imposition of penalty - It is clear that the duty is chargeable but it is 100% refundable, the question of intention to evade payment of duty pales into insignificance - But where the duty charged is not 100% refundable, then any act of concealment, misstatement or suppression of facts will give rise to the intention to evade payment of duty - The Tribunal has not looked into the above circumstances, more particularly, notfn dated 27.03.2008 and in the same context, it appears that Tribunal has opined that assessee was entitled to get refund of tax discharged by them, as a result whereof, imposition of penalty has been set aside - The case is remanded back to Tribunal for deciding the appeal afresh: HC
- Matter remanded :
MEGHALAYA
HIGH COURT
2019-TIOL-1059-CESTAT-MUM
Hindalco Industries Ltd Vs CCE & ST
CX - CENVAT - Rule 2(l) of CCR, 2004 - Input Services - Insurance and Group Mediclaim policy - Appellant had not challenged the legality of inadmissibility of credit on insurance and group mediclaim services before the adjudicating authority but on that score alone the same service cannot be considered as inadmissible since its legality is to be scrutinized at any stage of the proceedings in the touchstone of Article 265 of the Constitution of India - not contesting a particular duty would not make the same admissible unless it is in conformity to s.265 of the Constitution - Commissioner(A) should have entertained the grounds taken by the appellant and given his considered opinion rather than erroneously interpreting rule 5 of the CE (Appeal) Rules, 2001 and equate the same with additional evidence - extension of insurance benefits to employees is a statutory requirement without which manufacturing unit cannot operate - it is only w.e.f 01.04.2011 that exclusion clause was introduced in CCR laying down that credit is inadmissible if those are used primarily for personal use or consumption - credit is admissible: CESTAT [para 6, 8]
CX - CENVAT - Rule 2(l) of CCR, 2004 - Input Services - Dismantling services - such dismantling was carried out at Kalwa factory for the purpose of erection of machineries in the appellant's Mouda complex, therefore, appellant's claim that part of process is carried out will not be accepted for the reason that no activities in the appellant's Mouda complex had taken place that would have any bearing on product at the appellant's unit - credit inadmissible, however, since taking of credit cannot be attributed to suppression or misstatement of fact, extended period of limitation is not invokable and so also penalty u/r 15(2) of CCR, 2004 r/w s.11AC of CEA, 1944 is not imposable - as the Commissioner(A) has held that credit has been taken only in the books of accounts as verified by him and not availed, no recovery - appeal allowed: CESTAT [para 7, 8]
- Appeal allowed: MUMBAI CESTAT
2019-TIOL-1058-CESTAT-MUM
Mukesh Sampatraj Jain Vs CGST
CX - Assessee availed CENVAT credit without receipt of goods in their factory premises - such irregularly availed credit was reversed before issuance of SCN along with interest - original authority, therefore, extended the benefit of payment of reduced amount of the penalty to the assessee in terms of s.11AC of the CEA, 1944, however, penalty equivalent to the fraudulent credit availed was imposed on the appellant, the partner of the assessee firm in terms of rule 26 of CER - since the appellant had played an active role in the wrong availment of CENVAT credit, imposition of equivalent penalty is justified, however, since on the partnership firm the adjudicating authority had imposed the reduced penalty of 25% of the credit availed, such benefit should also be available to the partner of the said partnership firm - impugned order modified to the extent of reducing the quantum of penalty to 25% of the duty amount of Rs.11,28,706/- - such benefit is available if the reduced penalty amount is deposited within thirty days from the receipt of this order: CESTAT [para 6, 7]
- Appeal disposed of: MUMBAI CESTAT
2019-TIOL-1057-CESTAT-MUM
Tex-Fab Fabricators Vs CCE
CX - Appellant manufacturing Tanks which are mounted on chassis supplied by principal manufacturer - appellant clearing the same after availing the benefit of notification 6/2002-CE - SSI exemption benefit under notification 8/2003-CX denied to appellant on the ground that their aggregate value of clearances crossed the limit prescribed by the notification - Inasmuch as the appellant had not included the value of chassis while determining the value of the tanker (tank mounted on chassis) supplied by them - appellant not disputing the demand which would be within the normal period of limitation but challenges invocation of the extended period - appeal to CESTAT.
Held: Per Member (T) - Appellants were fully aware of their responsibilities and liabilities in terms of notification 8/2003-CE but in the declarations filed they had suppressed the value of goods by not taking into account the value of the raw material/chassis supplied free of cost by principal manufacturer - plea that the appellant were under a bonafide belief cannot be sustained as it is a settled principle of law that bonafide belief cannot be blind belief and appellants in order to claim that they were under such belief bonafidely will have to show the reasons for that - except asserting that they were under bonafide belief, nothing else has been put forth - no merit in the submission of the appellant that extended period of limitation cannot be invoked for demanding duty - as no other ground pressed, appeal is decided only on limitation - appeal dismissed: CESTAT [para 4.5, 4.11, 4.12, 5]
Per Member (J) - Extended period of five years in terms of provisions of s.11A of CEA, 1944 can be invoked only when the duty has not been paid on account of fraud, collusion, willful misstatement, suppression of facts or contravention of any provisions of the Act/Rules within an intent to evade payment of duty - it is settled law that mere omission to disclose the correct information is not suppression of facts unless it was deliberate to escape from payment of duty - even prior to 01.04.2003, the appellant was declaring annual value of Tanks which was not inclusive of the value of the chassis - it is only when the value of chassis is included that the total aggregate value crosses rupees four crores - chassis are provided by the customers only for the purpose of mounting the tanks and no work is undertaken by the appellant on the chassis - in such scenario the applicability of the apex court decision in Ujagar Prints - 2002-TIOL-02-SC-CX-CB is also doubtful - in any case, tankers were free from payment of duty of excise - As such, an assessee, who is not an excise expert, cannot be expected to apply the ratio of the said decision of the apex court to a situation, which is altogether on a different premise and to conclude that even for computing the aggregate value of clearances of rupees four crores, in terms of the SSI exemption, the said ratio is to be followed - appellant had been filing the declaration for the period pre as well as post amendment adopting only the value of the Tanks fabricated by them - Revenue was well aware of the amendment in law and on filing of declaration never raised any objection or any question to the assessee - therefore, mere non-inclusion of the value of chassis in the said declarations on a bonafide belief and continuation of their earlier practice would not be a sufficient factor so as to raise the extended period - Revenue is under an onus to show some positive guilty mind of the assessee to justify invocation of extended period of limitation: CESTAT [para 5 to 8]
CX - Limitation - Adjudicating authority had given a categorical finding of the assessee being under a bonafide belief and having given such a finding, it was not open to the authority to proceed ahead and confirm the demand which was clearly barred by limitation - said finding since not challenged by Revenue has attained finality - reasoning of the Commissioner(A) is also frivolous since he has simply gone by the conclusion of the adjudicating authority that appellant had not added cost of the raw materials in the assessable value without adverting to the other clear finding of the adjudicating authority - demand is time barred and the duty payable for the normal period of Rs.1,41,345/- is upheld - as there was no malafide, no penalty is imposable: CESTAT [para 9]
In view of difference of opinion, matter placed before President for reference to third Member for Majority decision: CESTAT
- Difference of Opinion: MUMBAI CESTAT
CUSTOMS
2019-TIOL-833-HC-MUM-CUS
CC Vs Fugro Survey (Middle East) Ltd
Cus - The present appeal is filed after a considerable period from such date of disposal of Department's appeal by Supreme Court - This Notice of Motion is strongly opposed by Respondent - Affidavitin Reply is filed - The main contention of Respondent is that the Department was aware about the disposal of appeal by Supreme Court - Firstly, the Department was present before the Supreme Court when the order was passed - Secondly, it was also brought to the notice of Department by Respondent - There is no explanation for delay in filing the appeal - Respondent contended that the Department has repeatedly been lethargic in filing the appeals - Having thus heard the parties and having perused the documents on record, we may recall, the Department had initially approached the Supreme Court by filing Appeal under bona fide belief that such appeal against the Judgment of CESTAT was competent before the Supreme Court - The Supreme Court, however, expressed a different view, dismissing the appeal of Department - While doing so, liberty was kept open for Department to file appeal before the High Court - It is true that even after this order was passed by Supreme Court, the Department has taken considerable time in filing Appeal before the High Court - However, according to Department, the order of Supreme Court was not received - The Respondent did not dispute this aspect but contended that the factum of order of Supreme Court was conveyed to the Department by Respondent - Even going by this assertion, it happened in February 2017 - The Department has also cited reasons for explaining delay - The issue has a possibility of recurring effect - In totality of facts and circumstances of the case, therefore, the delay is condoned on the condition of payment of costs of Rs.20,000/- to the Respondent which shall be paid by the Department latest by 31/05/2019: HC
- Notice of Motion disposed of
:
BOMBAY
HIGH COURT
2019-TIOL-828-HC-MAD-CUS
Asian Tea And Exports Ltd Vs CC
Cus - The Writ Petition has been filed by petitioner seeking a Mandamus for the release of "Yellow Peas/Green Peas/Dun Peas/Kaspa Peas" imported by them and further direct the respondents to issue a "Detention Certificate" for waiver of Demurrage and Container Detention Charges in terms of Regulation 6(1) (I) of Handling of Cargo in Customs Areas Regulations 2009 - The identical issue has been considered in case of M/s.Royal Impex 2019-TIOL-596-HC-MAD-CUS - The petitioner will remit the entire duty component of consignments imported by them in cases were such duty is leviable as per paragraph 15(iii) along with a bank guarantee for 10% of invoice value - In cases where the duty impact is neutral, the petitioner shall furnish a bank guarantee for 10% of the invoice value - Upon satisfaction of aforesaid conditions, the consignments shall be released forthwith - The authorities are at liberty to initiate proceedings in respect of the transactions in question and if done, the petitioner shall appear, be heard and file his submissions pursuant to which orders shall be passed by the authorities in accordance with law - In the light of Rule 6(l) of Handling of Cargo in Customs Areas Regulations, 2009, which provides that the Customs Cargo Provider shall not, subject to any other law for the time being in force, charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be, there shall be a waiver of demurrage charges: HC - Writ Petition disposed of
:
MADRAS
HIGH COURT 2019-TIOL-1056-CESTAT-MUM
Metro Industries Vs CC
Cus - Absolute confiscation of imported cosmetics on the ground that the importer had failed to obtain a NOC from the Assistant Drug Controller which restricts imports only to such points of entry as are specified under rule 43A of the Drugs & Cosmetics Rules, 1945 - appeal on the ground that the matter was decide ex-parte and for travelling beyond SCN as Cosmetics, not being prohibited, could not be subjected to absolute confiscation; that cross-examination of the Deputy Drugs Controller was not allowed and that the decision tantamount to stoppage of imports at Goa without authority of law.
Held : Submission in the grounds of appeal are not in consonance with facts - That Goa is not an approved place of entry for the import of Cosmetics is not in doubt - notwithstanding the commercial interest and emotional outburst of the appellant, the law, particularly those prescribed for the protection of its citizenry has to be strictly complied with - failure in compliance renders the goods liable for confiscation - appeals dismissed: CESTAT [para 5, 6]
- Appeals dismissed: MUMBAI CESTAT
2019-TIOL-1055-CESTAT-MUM
Lipi Data Systems Ltd Vs CC
Cus - Refund of SAD (Special Additional Duty) denied on the ground that it was time barred though filed on time but wrongly before another Customs Commissionerate.
Held : It is settled by a series of decisions that when the assessee had made the claim before the wrong authority, that authority should have guided the assessee immediately to the proper officer and if not so guided, no fault can be attributed to the assessee - therefore, the date of filing application before the Dadri Commissionerate is to be taken for the purpose of computation of refund claim of SAD - on account of inaction of the departmental authorities on the said refund application, five months were un-necessarily wasted and had it been the jurisdictional authority, the Government would have been burdened with payment of interest on late disposal of the refund claim - applicant would suffer financial loss when the fault lies at the end of the departmental authority in not acting upon promptly - appeal is allowed - applicant is entitled to get refund of Rs.12,62,790/- along with applicable interest within three months: CESTAT [para 5, 6]
- Appeal allowed: MUMBAI CESTAT |
