| SERVICE TAX 2019-TIOL-1220-CESTAT-MAD
CGST & CE Vs Srivari Infrastructure Pvt Ltd
ST - The assessee is engaged in execution of works contract in the nature of construction of residential unit - The land owners entered into joint agreement with the assessee for construction of flats - The contracts entered into by assessee are a composite contract involving supply and transfer of property in goods during the execution of contract - SCN was issued proposing to demand service tax for the period June, 2005 to February, 2010 along with interest under Section 75 and penalty under Section 76, 77 and 78 of FA, 1994 - On a careful consideration of the Order of this Bench in the case of M/s. Real Value Promoters Pvt. Ltd. (supra), we find that this Bench has after considering the judgements of various higher fora including that of the Hon'ble Supreme Court - The issue in case of M/s. Real Value Promoters Pvt. Ltd. - 2018-TIOL-2867-CESTAT-MAD is identical and that therefore the ratio is required to be followed - Going therefore by the ratio laid down in said case, the demand is not sustainable for which reason same is set aside: CESTAT
- Revenue's appeal dismissed : CHENNAI CESTAT
2019-TIOL-1219-CESTAT-HYD
Duraflex Services And Construction Technologies Ltd Vs CC, CE & ST
ST - The appellant is a service provider but is registered with the Central Excise Department for providing Cargo Handling Service, Clearing & Forwarding agency service & storage & warehousing service - The Revenue gathered intelligence that the appellant did not pay tax on the Storage & Warehousing service & that it had wrongly utilized Cenvat credit on input services consumed for providing exempted output services - Duty demand was raised under Storage & Warehousing Service along with interest & EC and SHEC - Penalties were imposed u/s 76 & 78 of the Finance Act 1994 - Demand was raised for reversal of 8% of credit availed, equivalent to the value of exempted services - Penalty was imposed u/s 78 of the Finance Act r/w Rule 15 of CCR 2004 - A similar demand for reversal of credit was raised for a different period - Hence the present appeal.
Held: Storage & Warehousing service - The demand is raised on warehousing charges collected by the appellant from its sister concern for storage of Soya Bean meal which is subsequently exported - Once the appellant is charging a sum for storage of foods which belong to another legal entity, the amounts charged is to be treated as storage and warehousing charges on which service tax is payable - Such tax was neither paid nor were details disclosed to the Department - Such details were not produced despite being called for by the Department - Only detailed investigation by the Department & upon recording statements, did the full extent of the service charges collected came to light - Hence it is a fit case to invoke extended period of limitation - Thus the duty demand with interest is liable to be sustained: CESTAT (Para 7)
Held: Duty demand raised for availing 100% credit instead of 20% as was prevalent during the relevant period as per Rule 6(3)(c) of CCR, 2004 - Although it is true that in such period, only 20% of the credit could be utilized, but then the appellant's contention is also true that it was not barred from taking credit but were barred from utilizing it - The appellant was free to utilize the remaining 80% in the succeeding FY - Hence the duty demand raised is not sustainable: CESTAT (Para 8)
Held: Demand for reversal of credit on 8% of value of exempted services - Both demands were raised on grounds that the appellant availed credit of common input services during the relevant period - The appellant claimed to have reversed the credit taken on common input services - In such case, the demand raised under Rule 6(3) r/w Rule 14 of the CCR 2004 does not sustain - The interest be set aside too: CESTAT (Para 9)
- Assessee's appeal partly allowed : HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1218-CESTAT-AHM
Maheshwari Dychem Vs CCE
CX - The application seeks recall of the order passed by a coordinate bench - Under Central Excise Act, the tribunal does not have any power to review its own order - However, in terms of section 35C sub section 2, the tribunal can entertain an application for rectification of mistake apparent from the record - The key is that tribunal can amend an order only "with a view to rectifying any mistake apparent from the record" - Thus, if there is no mistake apparent on record no amendment to order can be made - It is apparent that final decision pronounced in the court has not been altered - What has happened is that the reasoning which was given by dictation in brief in the courts, has been elaborated in the written order in so far as merits are concerned - Such changes are acceptable in terms of decision of Apex Court in case of Surendra Singh and Others - Thus, Tribunal is not able to conclude that there is any error apparent on record as far recording of order on merit on 23.04.2018 in the court is concerned - It is not in dispute that the order in court was pronounced by President, while order on 23.04.2018 was issued "Per" Member Technical - No authority has been brought before Tribunal that prescribes that the member who pronounced the order in the court is required to dictate or draft the order - The practice of Tribunal is that the order is pronounced in the court by the senior member and thereafter senior member either writes the order himself or marks it to other member - No authority has been brought before Tribunal which makes it mandatory for the member pronouncing the matter to also draft the final order - Thus there is no error in the order so far as this aspect of the order is concerned, as long as the fact is recorded or disclosed in the order - In the instant case the coordinate bench has found it necessary to pass certain remarks on the basis of extraordinary events that happened on 23.04.2018 - In any case it is not any error apparent on record - In case of Arun Devendra Oza , the remarks made by High Court of Gujarat were challenged before Hon apex court - Similarly, in the case of V Santhanam High court of Madras intervened only after it was directed by apex court - It is only superior court that can consider such matters - Tribunal do not have jurisdiction to review the decision of a coordinate bench - The next issue raised related to passing of adverse comments without giving an opportunity to the counsel to defend himself - It is apparent that recording observation without giving the assessee an opportunity to defend himself is an error apparent on record - Thus, there has been an error apparent on record as the order has been passed without granting any hearing to assessee - The Miscellaneous application is allowed and the order dated 23.04.2018 is recalled and the appeal is restored to its original number: CESTAT
- Misc application allowed : AHMEDABAD CESTAT
2019-TIOL-1217-CESTAT-CHD
Great India Steel Fabricators Vs CCE
CX - The assessee is engaged in manufacture of goods and had filed two refund claims on the ground that they were supplying the goods to Mega Power Project under International Competitive Bidding, which is deemed export in terms of Foreign Trade Policy - The refund claims were filed in terms of Rule 5 of CCR, 2004 - The adjudicating authority rejected both the refund claims against which the assessee went in appeal - The common issue involved is whether the goods supplied to a Mega Power Project, treated as deemed export in terms of Foreign Trade Policy, are eligible for refund under the provisions of Rule 5 of CCR, 2004 for the period from March, 2015 to June, 2015 - The assessee have also relied upon the case law of Uttam Steels Ltd. - 2015-TIOL-98-SC-CX to argue that in the case of refund, Section 11B has overriding effect - Since the rebate application was filed within a period of one year from the date of shipment, the assessee claimed that they were in time - Further, the Proviso to Rule 12 (1) of CER, 1944, which allowed the Commissioner to allow rebate even if some conditions had not been met - The Supreme Court by relying on the ratio of Mafatlal Industries Ltd. - 2002-TIOL-54-SC-CX-CB held that since the claims for rebate were made beyond the original period of six months, assessee cannot avail of extended period of one year on subsequent amendment to Section 11B - Since there was conflict between said Rule and the Section, the Supreme Court held that subordinate legislation cannot dispense with requirement of Section 11B - In the present case, however, such conflict as was seen in the case of Uttam Steel is non-existent - The provision in section 11B empowers refund to be made in accordance with Rule and notification and no provision of Rule 5 is in conflict with Section 11B - Hence, the ratio of the Uttam Steel is not applicable to the facts of this case - The assessee have relied upon the judgment of Madras High Court in case of Cappithan Agencies - 2016-TIOL-874-HC-MAD-CUS - However, the said decision is in the context of CBLR, 2013 and not in the context of CCCR, 2004 under Central Excise Act - The issue in the cited case was whether Regulation 23 of CBLR, 2013 has been rendered otiose by misinterpreting Regulation 19 ibid - However, in the present case, there is no such conflict as the larger bench of the Tribunal in the case of Steel Strips has held that refund of unutilized credit is not a vested right - Law has only recognized physical exports as eligible for refunds and when right to refund does not accrue, the claim is thus inconceivable - The assessee have also relied on the judgment of Suksha International & Nutan Gems & Anrs. wherein it was held that the interpretation unduly restricting the scope of a beneficial provision is to be avoided so that it may not take away with on hand what the policy gives with the other - In this case, the dispute was about certain incentives to Export Houses and there was dispute in the interpretation of clause 4 and 7 of para 185 of the Import-Export Policy, 1982-83 - In the present case, there is no ambiguity in the wording of the Rule 5 of CCR or in Section 11B nor is there any contradiction between the two - Intent of the legislature is clear from the plain wording of the Rule - Hence, the ratio of the said case is not applicable to the facts of the present case - In view of foregoing discussion and reasoning, no infirmity found in the order of the Commissioner (A) and the same is sustained: CESTAT
- Appeals dismissed : CHANDIGARH CESTAT
CUSTOMS
2019-TIOL-948-HC-DEL-CUS
Camron Exports Vs CC
Cus - The petitioner states that his bank accounts have been frozen - The respondent/Customs Authorities issued notices on 06.02.2019, to enquire into allegations of bogus addresses for purposes of claiming IGST refunds - The petitioner relies upon the judgment of this Court in S.B. International 2018-TIOL-242-HC-DEL-CUS - In that judgment the Court, after considering the provisions of Customs Act and other similar enactments, held that the power to freeze or suspend operations of a bank account cannot legally be exercised - The impugned notices are, in effect, identical with that made in S.B. International - They cannot be allowed to stand; they are hereby quashed and set aside - At the same time, the writ petitioner is directed to join the investigation proceedings - He shall furnish an undertaking to this effect in this Court, within a week: HC
- Writ petitions allowed: DELHI HIGH COURT
2019-TIOL-1231-CESTAT-MUM
Seamec Ltd Vs CC
Cus - ROM - Appeals were disposed of by the Bench by holding that the three ships, not being conveyance but goods, were required to comply the procedural formalities of import on each entry into India, by approving the classification of the vessels under 8905 9090 against their claim under 8901 with consequential liability to duty and by upholding the confiscation of the three ships with attendant fine in lieu thereof, albeit with a substantial reduction from that imposed by the lower authority - claim of the appellant for fresh determination of duty liability in accordance with section 15 of the Customs Act, 1962 as well as exclusion of liability for the period beyond that barred by limitation with corresponding re-determination of penalty u/s 114A was accepted - Application for rectification of mistake filed inter alia on the ground that despite pleading, the Bench had not taken cognizance of the decisions in Hind Offshore Pvt. Ltd. - 2015-TIOL-320-CESTAT-MUM and L&T Sapura Shipping P Ltd..
Held: Tribunal proceeded to discard the primary contention of the appellant that the ships were conveyances and went on to the confirm the classification adopted in the impugned order - It is apparent that while and legal and logical superstructure was elaborated upon, the foundation for ascertaining dutiability was neglected - Definitions in the Customs Act are contextual and strictly intended to bring objects within the radar of customs enforcement, consequently, a general interpretation may not be appropriate - Adjudication order and the Tribunal appear to have skipped the first two steps on the ladder; the ascendance directly to the third is fraught with want of stability - assumption appears that the specialized ship with navigability as a subordinate characteristic, was, as an equipment, incapable of being a conveyance - usually regarded as a mode for transport of people and goods - It would appear that the adjudicating authority has failed to appreciate the sense and implication of the expression 'navigability' which is required to be harmoniously read with the description in that sub-heading instead of being read as the distinction between that sub-heading and other sub-headings of the Chapter - classification merits fresh determination particularly in the light of the various judicial decisions dealing with import of 'supply vessels' - these issues do not find sufficient coverage in the adjudication order - For the Tribunal to delve into these issues without the assistance of a comprehensive adjudication order would not be equitable to either side - consequently, the restricted remand in the order of the Tribunal dated 6 th December 2017 is enlarged to an open remand - Bench also takes note of the decision of the Delhi High Court in the case of Mangali Impex - 2016-TIOL-877-HC-DEL-CUS which has been stayed by the Supreme Court - 2016-TIOL-173-SC-CUS - A disposition of the issue on merit against the applicant without touching upon the issue of jurisdiction which, if ultimately in favour of the applicant would saddle them with the detriment that should never have been - On the other hand, such postponement of decision on merits is not to the detriment to the revenue - remanding the matter back to the original authority to await the final order on jurisdiction would best serve the ends of justice - in view thereof, it would be appropriate to set aside the confiscation ordered in the order-in-original - ROM application allowed: CESTAT [para 24, 26, 27, 29 to 33]
- Application allowed
: MUMBAI CESTAT
2019-TIOL-1227-CESTAT-KOL
Indian Metals And Ferro Alloys Ltd Vs CCE & C
Cus - The assessee had imported Water Treatment and Distribution System comprising several packages - The said goods had been classified under tariff item 3209.10, which tariff entry had been mentioned by assessee in the aforesaid Bill of Entry - The said goods comprising 116 packages were warehoused in Customs Bonded Warehouse within the assessee's factory - One of the above 116 packages containing two centrifugal pumps were found missing before clearance for home consumption - Show cause proceedings were initiated against assessee who requested for remission of duty involved as per the beneficial provisions of Customs Act, 1962 - There is no denying that legal act of import would have been completed as and when the goods would have been cleared for home consumption by an order under Section 68 of the Act - The said provision read with Sections 15 and 60 of Customs Act supports understanding that in the case of goods cleared from warehouse, the relevant date was the date on which the said goods are actually removed from the warehouse - If this be the position in law, Adjudicating Authority could not have dismissed the claim for reclassification simply on the ground that the incident of pilferage /goods found missing had occurred after completion of the taxable event - In the instant case, while passing the earlier Order dated 03.12.2007, this Tribunal had recorded in clear terms that the impugned goods had been lost/ pilfered after depositing in the warehouse but before clearance for home consumption on payment of duty - The legal act of import had not been completed till the goods in question had been cleared under Section 68 of the Act - The act of finding the goods missing/pilferage was accordingly, not a post-import incident and its effect ought to have been considered while deciding the issue of re-classification - This point, however, need not detain further as assessee has a good case on merits - When this Tribunal had specifically remanded the matter for considering the issue of classification raised in earlier round, the Commissioner (A) could not have refused to consider the assessee's claim merely on the ground that the authority below had dealt at length with the question of classification while passing the O-I-O - The assessee correctly asserted that the Commissioner (A) had, by repeating the findings of Adjudicating Authority, failed to do precisely what he was required to do i.e. apply his mind independently and consider the evidences on record - The Department has not given any cogent reason as to why the goods in question were classifiable under tariff 3209.10 apart from the fact that this was the very entry mentioned by assessee in its Bill of Entry - A perusal of the relevant tariff entries given in Customs Tariff Act, 1975 supports the finding that centrifugal pumps, whether independently identified or considered as part of the Water Treatment and Distribution System, could not have been classified under the tariff 3290.10 - Contrary to Department's views, the goods in question are more appropriately classifiable under the tariff entry 8413.70 - As the Department has not been able to convince of the merit in its case, it would be inappropriate to reject the present appeal on the ground that the assessee's claim for reclassification had been raised belatedly - The impugned O-I-A ought to be set aside - Tribunal is not required to decide if the independent identity of the two centrifugal pumps in question had been established or not or whether the same had been correctly classified as part and parcel of the Water Treatment and Distribution System: CESTAT
- Appeal allowed: KOLKATA CESTAT
2019-TIOL-1226-CESTAT-HYD + Case Story
Elete Susheela And E Ram Reddy Vs CC
Cus - The appellants were intercepted by the Air Intelligence Unit of Customs at the Hyderabad airport - 5 Gold bangles of 99.9 purity & weighing 311 grams were seized - Such jewellery was not declared by the first appellant & had been recovered when she was exiting the airport - The first appellant claimed to have received the bangles from her daughter residing abroad - The Revenue opined that the appellant was not entitled to carry the Gold because they had not stayed abroad for more than six months to become eligible passengers for bringing Gold as per the FTP applicable during the relevant period - On adjudication, the Gold was confiscated u/s 111(l) since it had not been declared, with option of redemption fine being given - Duty demands were raised & penalty was imposed u/s 112(a)(ii) of the Act - Further penalty was imposed u/s 114AA of the Act - On appeal, the Commr.(A) upheld such findings, although the quantum of penalty imposed u/s 114AA was reduced - Hence the present appeal.
Held - The appellant claimed to have taken 5 kadas out of India while leaving - If so, it should have been recorded in the passport or the appellant could have declared the same somewhere before the Customs when leaving or could have produced the same to substantiate its claim that these bangles were actually taken by the appellant outside India while leaving & had been brought back in genuine personal baggage - Hence the appellant's claim of having received the bangles from her daughter during her stay abroad, does not hold any weight - On merits, it is seen that the appellant did not declare the bangles to the officers u/s 77 of the Customs Act - It is the responsibility of the passenger to make the declaration which the first appellant failed to do - The appellant could have claimed that the bangles were taken out of India by producing evidence that a declaration had been made before the Customs authorities while leaving the country - This too the appellant failed to do - Hence the Gold bangles so brought in without declaration cannot be considered bona fide baggage but only smuggled goods - The appellants cannot claim ignorance since they had blank baggage declaration forms which the appellants had signed & left in their pocket until caught - Moreover, the appellant's request to initiate disciplinary action against the investigating officers or against the adjudicating authority is downright absurd - No officer can be punished for catching an appellant who is engaged in smuggling goods or for investigating the matter or for issuing SCN or for adjudicating the matter or passing an order - The officers merely discharged their responsibilities - Thus, neither the confiscation nor the penalties warrant being interfered with: CESTAT (Para 2,4,5,6)
- Assessee's appeal dismissed : HYDERABAD CESTAT 2019-TIOL-1216-CESTAT-KOL
Indian Oil Corporation Ltd Vs CC
Cus - The dispute is regarding the inclusion of ship demurrage charges in assessable value of goods imported by assessee - The Customs (Valuation) Rules, 1988 was superseded by Customs (Valuation) Rules, 2007 w.e.f. 10/10/2007 - The Customs (Valuation) Rules, 1988 did not have specific provision for inclusion of ship demurrage charges - Such provision stands inserted only w.e.f. 10/10/2007 - As such, there is no mandate for inclusion of ship demurrage charges upto 10/10/2007 - This issue was considered at length by Larger Bench of Tribunal in Grasim Industries - 2013-TIOL-1387-CESTAT-AHM-LB - By following the decision of Larger Bench, impugned order is modified and the Lower Authority is directed to re-assess Bills of Entry of assessee for the period 02/03/2001 until 09/10/2007 without including the ship demurrage charges in assessable value of the goods: CESTAT
- Appeal allowed : KOLKATA CESTAT
2019-TIOL-1215-CESTAT-KOL
Opel Exports Vs CC
Cus - The appellants are aggrieved by orders passed by Commissioner rejecting the request of assessee for provisional release of seized goods under Section 110A of Customs Act, 1962 - Such rejection has been made by lower authority by taking the view that the imported goods are to be considered as prohibited goods, since the actual importers did not have IEC Code No. - Further, he has opined that the goods imported do not have any clear ownership, as such he has declined the request for provisional release - The Tribunal's earlier order has been passed in connection with certain other bills of entry which were the subject matter of investigation by DRI in the same set of cases - As such, this leads to conclusion that the goods imported in present bills of entry, also merit a similar dispensation - The investigations in present case have already been concluded by DRI, as evidenced by issue of SCN in which the seized goods have been proposed for confiscation under Section 111 of Customs Act, 1962 - The findings of lower authority are set aside - Warehousing of goods has already been allowed; hence the seized goods will not incur demurrage - Further, SCN has already been issued - Lower authority is directed to complete the adjudication of case within a period of two months, failing which he should pass order under Section 110A ibid for provisional release of goods as permissible under law: CESTAT
- Appeals disposed of : KOLKATA CESTAT
2019-TIOL-1214-CESTAT-AHM
Sairam Enterprise Vs CC
Cus - The issue involved is the enhancement of value of imported PU Belts imported from M/s. Wenzhou Wensen Leather Company Limited, Zhejiang, China, on the basis of NIDB data - In respect of the same product, supplied by the same supplier M/s. Wenzhou Wensen Leather Company Limited, Zhejiang, China, the Customs department made out various cases for enhancement of the value on the same facts and law point - In case of M/s. SRR International - 2019-TIOL-287-CESTAT-AHM , M/s. Sumit Enterprises and M/s. Liberty Enterprises - 2019-TIOL-380-CESTAT-AHM , this Tribunal has allowed the appeals of the assessee - Since the common issue and facts are involved, Tribunal need not to discuss the same again and again - Therefore, following the ratio of the decision of Tribunal, the impugned order is set aside: CESTAT
- Appeal allowed : AHMEDABAD CESTAT |
