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SERVICE TAX
2019-TIOL-1229-CESTAT-MUM
Jet Airways India Ltd Vs CCE
ST - CENVAT credit - Allegation is that the appellant had u/r 6(3A) of CCR, 2004 reversed lesser credit to the extent of Rs.1.01 crores; that appellants were availing CENVAT credit on Aviation Turbine Fuel and also in respect of other input services, however, discrepancy is noticed in respect of CENVAT credit as per ST-3 return and 3CD statement and which discrepancy was rectified by appellant by reversing the excess credit availed, however, interest was not paid - SCN issued and adjudicated by Commissioner, hence appeal before CESTAT.
Held: It is seen that the appellant has actually included the cancellation of ticket charges as taxable revenue for determining the amount to be reversed under rule 6(3A)(c) as 10% - if the taxable CENVAT credit ratio is calculated excluding the said revenues then the ratio would work out to 9.4% - inasmuch as by inflating the said ratio, the appellants had under rule 6(3A) reversed lesser credit to the extent of Rs.1.01 crores and which has now been reversed - entire argument by appellants is based on certain procedure which they have devised/adopted but which does not find support in law - It is a settled principle in law that when a statute prescribes a manner for doing a thing then it is the only correct manner and all other manners are barred - Furthermore, ‘no person should be allowed the benefit of his own wrongs' is another settled principle - rule 6(3A)(c) of CCR clearly and unambiguously lays down the manner for determination of amount of credit attributable to exempted goods/services and appellants should have followed the same - Even if the argument of rounding off was to be considered, then rounding off could have been done in respect of the amount determined and not on the percent calculated by them - since appellants have not determined the amounts to be reversed correctly and had never disclosed the manner adopted by them for determination of the amount to be reversed, to the department, extended period of limitation is rightly invoked - adjustment of the excess amount paid in the year 2009-10 cannot be adjusted with the amount payable for the year 2008-09 as the determination of amounts under rule 6(3A) is financial year wise - interest liability cannot be wished away - it is a settled law that interest in respect of short payment of taxes is a strict civil liability and has to be complied with - mandatory penalty u/s 78 is also imposable, however, penalty u/s 76 of FA, 1994 is set aside but penalty u/s 77 is upheld - Appeal no. ST/87203/14 is dismissed and appeal no. ST/87425/2014 is partly allowed: CESTAT [para 7.2, 7.4, 7.5, 8.2, 8.3, 11. 6, 11.8, 12.1, 12.2]
- Appeals disposed of: MUMBAI CESTAT
2019-TIOL-1211-CESTAT-MAD
Siva Engineering Company Vs CGST & CE
ST - The assessee is engaged in execution of works contract - They were engaged by Tamil Nadu Police Housing Corporation Ltd. (TNPHCL) which is a Government of Tamil Nadu company wherein 100% of shares are held by Tamil Nadu Government for construction of police quarters - A SCN was issued to them proposing to demand service tax under category of 'Construction of Residential Complex Service' for the period from February 2006 to February 2008 - The period involved is prior and after 1.6.2007 - Thus, by applying the decision in case of Larsen & Toubro - 2015-TIOL-187-SC-ST , it is held that the demand for period prior to 1.6.207 is not sustainable - Undisputedly, the assessee have entered into an agreement with TNPHCL for providing services in relation to construction of residential complex - However, these are meant for use of police personnel - The said issue was considered by Tribunal in case of Nithesh Estates - The said decision was followed by Tribunal in case of Lanco Tanjore Power Co. Ltd. - 2018-TIOL-2138-CESTAT-MAD - Following the said decisions, the levy of service tax cannot sustain - The impugned order is set aside: CESTAT
- Appeal allowed : CHENNAI CESTAT
2019-TIOL-1210-CESTAT-DEL
Sarveshwari Logistics Vs CCE & ST
ST - The assessee is providing services under category of Site formation and clearance, excavation, earth- moving and demolition services and are discharging Service Tax to the Exchequer - However, Department received the information that the full Service Tax Liability has not been discharged by assessee for the period April 2014 to December, 2014 nor the ST-3 Return has been filed - Proposing the recovery of said short payment alongwith interest at appropriate rate and proportionate penalties that SCN was served upon assessee - The entire duty as has been proposed to be recovered from the impugned SCN - The interest has also been deposited vide challan dated 19.03.2003 - The fact has very much been acknowledged in SCN itself - Perusal makes it clear that the entire payment alongwith interest was made much prior the SCN - There is no reason to deny the benefit of sub section (3) of Section 73 of the Act to the assessee - The intimation was also very much to the Department vide the letter on record dated 17.10.2015 - Since the facts were to the notice of Department, the Department was liable to issue SCN, during the normal period of one year - The Department is therefore opine to have wrongly invoked the extended period - For the said reason itself, it is held that the plea of suppression of facts as is alleged against the assessee is not sustainable - SCN is accordingly held to be barred by time - Section 73 to sub-section (3) is held to be applicable to the given facts and circumstances - No question of imposition of penalty at all arises - Order imposing the same is hereby set aside: CESTAT
- Appeal allowed : DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-1230-CESTAT-MUM
CCE Vs Konkan Railway Corporation Ltd
CX - Pursuant to ad hoc exemption order dated 01.05.2002 in respect of manufacture of concrete sleepers, appellants filed two refund claims u/s 11B in respect of the duty paid of Rs.87,78,584/- and Rs.3,50,34,644/- - both the refund claims were decided by the Assistant Commissioner who sanctioned the refund claim of Rs.3,50,34,644/- but ordered the same to be credited to the Consumer Welfare Fund and insofar as the refund claim of Rs.87,78,384/- is concerned, the same was rejected - Appeals were filed by the assessee and the Revenue before the Commissioner(A) who held that out of the refund claim of Rs.3,50,34,644/- an amount of Rs.36,10,832/- is admissible and the Revenue appeal was allowed - both, theappellant and the Revenue are in appeal before CESTAT.
Held:
+ What is the scope and impact of the ad hoc exemption order issued u/s 5A(2) of the CEA, 1944; whether the refund claim is permissible when the goods have been assessed to duty and cleared on payment of duty by the supplier at the time of supply of goods?
++ Ad hoc exemption order issued u/s 5A(2) is distinct from the general exemption granted u/s 5A(1) - such exemption is granted qua the user of the goods, exempted for specified purpose, and is issued in public interest and not to grant benefit to a particular person - in view of CBEC clarification given under Circular 12/97-Cus, such ad hoc exemption orders will be operated in cases of such goods cleared on payment of duty by way of refund to the person qua whom the said exemption has been issued - in the case of ad hoc exemption order, the goods in hand of the person clearing the goods continue to be dutiable and are assessed accordingly, however, these goods get exempted in the hands of recipient qua whom the ad hoc exemption order has been issued - thus the goods qua the supplier continue to be dutiable and are exempted only qua the recipient by the said ad hoc exemption order - insofar as operation of the ad hoc exemption order by way of refund is concerned, section 11B, clause (ea) in the Explanation mentions the ‘relevant date' in such cases as the date of issue of such order - contention of AR that there can be no case of refund in respect of ad hoc exemption order is untenable as then there would be no rationale behind the insertion of clause (ea) in s.11B: CESTAT [para 5.3, 6.3, 6.7, 6.12, 6.13]
+ Whether bar u/r 57C of the CER is applicable in this case?
++ In the present case, the goods have been cleared on payment of duty by the supplier/manufacturer who has availed MODVAT credit on the inputs used - once the goods are cleared on payment of duty, requirements of rule 57C are satisfied - bar u/r 57C is not attracted as the said exemption is qua the receiver of the goods: CESTAT. [para 7.1, 7.4]
+ Were the proceedings in respect of the refund of duty exempted under the ad hoc exemption order concluded, by the order of the Tribunal, dismissing the appeals filed by the appellants on the ground of seeking clearance from the Committee of Secretaries?
++ Tribunal had only asked the appellants to seek clearance from the Committee of Secretaries in view of the apex court order in M/s ONGC - After considering all the facts, the Committee directed the Ministry of Railway and Ministry of Finance to resolve the dispute and accordingly the ad hoc exemption order was issued in 2002 - refund claims have to be considered accordingly - principle of res judicata is not applicable to the present case: CESTAT [para 8.3, 8.4, 8.7]
+ Whether the second refund claim was maintainable consequent to issuance of second ad hoc exemption order in the year 2002 in supersession of the ad hoc exemption order of 1994?
++ When ad hoc exemption order of 2002 was issued, the authorities concerned in the Ministry of Finance were well aware of the rejection of the refund claims by the jurisdictional authorities and subsequent rejection of the appeal - nonetheless, the Ministry of Finance preferred to issue the ad hoc exemption order afresh in the year 2002 -section 38A of the CEA, 1944 would not be applicable in the present case as the section begins with the phrase ‘unless a different intention appears' - from a reading of the two ad hoc exemption orders of the year 1994 and 2002, it is apparent that the same have been issued for the rectification of the operational difficulties faced in the operation of the first order: CESTAT [para 9.4, 9.5]
+ Whether the appellants have produced sufficient documentary evidence to establish that they have paid the duty for which they are seeking refund to satisfy the requirements of s.11B of CEA, 1944?
++ Adjudicating authority has not disputed the production of the duty paying documents along with the refund claims - in absence of any evidence to the contrary, the averments made with regard to non-production of documents does not merit acceptance: CESTAT [para 10.2]
+ Whether bar of unjust enrichment is applicable in such cases where the refund claim is filed by the person qua whom ad hoc exemption order is issued?
++ There is no dispute about the fact that no refund claim can be sanctioned in favour of the claimant in terms of s.11B without recording a finding of fact to the effect that the person claiming the refund has suffered the burden of the duty paid by him and has not passed the same to any one else - When the amounts are shown as deposits with the Government under the head Loans and Advances, appellants themselves are treating the amount indicated therein as amount due from the government, then how can it be concluded that the burden of the said amounts have been passed on -bar of unjust enrichment is not applicable: CESTAT [para 11.7]
Conclusion: Revenue appeal dismissed and appellants appeal allowed
- Revenue appeal dismissed/Appellants appeal allowed: MUMBAI CESTAT
2019-TIOL-1213-CESTAT-KOL
Patliputra Industries Ltd Vs CCE
CX - M/s Swamy Packagers Pvt. Ltd. is engaged in manufacture of HDPE Containers and other Plastic Containers - The Department carried out certain investigations in connection with the allegation that the appellant has not paid Central Excise duty on the goods manufactured by them - A SCN was issued to assessee and other connected persons proposing the demand of duty on goods said to be cleared by assessee in name of three fictitious firms - It is pertinent to record that the appeal filed by M/s Swamy Packagers Pvt. Ltd . as well as Shri Deo Prakash Rungta, Director of the Appellant Company, came up before Tribunal and were decided the same vide Final Order dated 05.10.2018 - The Tribunal in that Order set aside the impugned final order and remanded the matter to the adjudicating authority for re-quantification of the demand against M/s Swamy Packagers Pvt. Ltd. as well as Shri Deo Prakash Rungta as also for redecision of the amount of penalty - In view of said decision, lower authorities are directed to decide the quantum of penalty, if any, against the present appellant also as part of the common proceeding: CESTAT
- Matter remanded : KOLKATA CESTAT
2019-TIOL-1212-CESTAT-CHD
Rohit Aggarwal Vs CCE & ST
CX - The sole allegation against assessee is based on investigation conducted by Commissioner of Central Excise, Merrut, and as per the investigation, it is alleged that farmers from whom the inputs were purchased were non-existence - The investigation was not conducted at the end of assessee and whole case has been based on the investigation conducted at Commissioner Central Excise, Merrut-II - Without investigation, it cannot be held that assessee was not manufacturer of finished goods during impugned period - Moreover, the entries of vehicles at the toll barriers also certified that the movements of raw material and finished goods - During period of investigation itself, the assessee was allowed to continue their activity by procuring inputs from UP based supplier and selling goods manufacturing to their buyers - During investigation itself, shows that allegation is only on the basis of assumption and presumption, therefore, it cannot be held that assessee had not manufactured the goods during impugned period - M/s S.B Aromatics was manufacturer during impugned period and paid duty on the goods manufactured by them, therefore, duty on account of erroneous refund cannot be demanded on the allegation that assessee was not a manufacturer - The impugned order is set aside: CESTAT
- Appeal allowed : CHANDIGARH CESTAT
CUSTOMS
NOTIFICATION/ INSTRUCTION
cnt34_2019
CBIC notifies tariff rates for Crude Palm Oil, Palmolein, Soya Bean Oil, Brass Scrap, Poppy Seeds, Gold, Silver & Areca Nuts
F/No.276/73/2019-CX.8A
Advance Authorisation Scheme - Pre-Import conditions - CBIC issues directions to officers on pending writs before HCs CASE LAWS
2019-TIOL-196-SC-CUS-LB
CC Vs Zenith Ltd
Cus - The respondent-assessees used certain Special Import Licences of Gold bars and Silver bars on payment of concessional rate of duty under Notfn No 117/94 dated 27.04.1994 - The Revenue claimed that the licenses were forged & had been fabricated - SCNs were issued to the assessees, stating that the Joint Director General of Foreign Trade had enquired into the genuineness of the licenses and had written a letter stating that no special import license had been issued to the assessees-importers - Hence the SCN alleged that the assessees were ineligible for the concessional rate of duty & were liable to pay full amount of duty - The SCN also alleged that the duty had been short-levied due to the wilful mis-declaration & suppression of facts by the assessees - Hence the SCN proposed penalty u/s 114A - Duty demand was raised u/s 28(1) with interest u/s 28AB of the Act - On adjudication, the demands were confirmed - On appeal, the Tribunal set aside the duty with penalty on grounds of limitation - Hence the Revenue's appeal.
Held - It is seen that in the SCN, the Revenue satisfactorily described the wrong transactions indulged in by the assessees and also demonstrated the illegal benefit obtained by them in respect of rate of duty - Now, if the assessee-importers are entitled to demonstrate that the allegations levelled against them could not be established based on the SCN, the same nonetheless does not entitle them to the relief of having the adjudication order being set aside on limitation - Besides, the Revenue claimed to have detected fraud on 26.1.1998 and have issued SCN on 20.04.1999 which is with 1.5 years of the period prescribed under the proviso to Section 28 of the Customs Act - Hence the order passed by the Tribunal is quashed: SC Larger Bench
- Revenue's appeals dismissed: SUPREME COURT OF INDIA
2019-TIOL-945-HC-MUM-CUS
Shah Nanji Nagsi Exports Pvt Ltd Vs UoI
Cus - FTP - As per SION, export item at serial No. E75 is ‘maize starch powder’ against which exporter is permitted to import "maize" without putting any condition or restriction as regards to variety, quality or characteristic in the said entry - Moreover, there is no such corresponding condition in licence - In its absence, any addition of words cannot be imported to change the equation - Import of popcorn maize is not excluded from the scope of term "maize" - Petitioner has imported maize which is capable of being used in the manufacturing of export goods namely maize starch powder - There is no "actual user condition" so as to restrict right of petitioner to import maize - So long as the export goods and the import item corresponds to the description given in the SION, it cannot be held to be invalid by adding something else which is not in the policy - Held that petitioner is entitled to import popcorn maize under DFIA scheme vide SION entry E75 - Petition partly allowed - respondents to take appropriate decision about issuance of authorisation, subject to the fulfillment of rest of the policy condition: High Court [para 27 to 30]
- Petition partly allowed: BOMBAY HIGH COURT
2019-TIOL-1209-CESTAT-DEL
Mita India Pvt Ltd Vs CC
Cus - Issue relates to conversion of Free Shipping Bill to Drawback Shipping Bill - The reasons given by Commissioner for rejection of conversion of Free Shipping Bill to Drawback Shipping Bill are not tenable as assessee had re-exported the goods under bond, which was, at the relevant time, alive and has not been examined by Customs - Further, the assessee has mentioned in body of shipping bill, wherein under the Col. "description", the assessee mentioned - Tractor Parts OCKSHAFT Assembly MC 750 CC SI + REMOTE /Re-Export against BOE - Thus, assessee has disclosed in shipping bill that they have re-exported the goods and all the information was on the record of Customs Department as is evident from the facts on record - At the relevant time, the bond had not been cancelled by Department - The fact of re-export under bond is established - Rejection of the request for conversion is not tenable - Accordingly, the impugned order is set aside and allow the conversion of the shipping bill to draw back shipping bill: CESTAT
- Appeal allowed : DELHI CESTAT
2019-TIOL-1208-CESTAT-KOL
CC Vs Rimple Trading Company
Cus - In view of the reasons as explained in Miscellaneous Applications, the delay in filing the appeals before this Tribunal, is condoned - The disputed duty involved is below the monetary limit of Rs.10 lakhs which has been notified by Government vide Circular 390/Misc./163/2010-JC and F.NO.390/Misc./116/2017-JC - Accordingly, the appeals are dismissed under National Litigation Policy - Stay Petition also get disposed off: CESTAT
- Appeals dismissed : KOLKATA CESTAT |
