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SERVICE TAX
2019-TIOL-1242-CESTAT-ALL
CCE & ST Vs Light House
ST - The assessee-company is registered for providing Management, Maintenance and Repair and Erection, Commissioning and Installation Services - Upon investigation, SCN was issued proposing to raise duty demand with interest & penalties - On adjudication, such demands were confirmed with equivalent penalty - On appeal, the Commr.(A) quashed the demands, having accepted the assessee's contentions of having provided such service to Govt authorities, due to which the same were exempt as per the megal exemption Notfn No 25/2012-ST - Hence the Revenue's appeal. Held: Considering the findings of the appellant authority and also noting that the Revenue put forth no evidence to prove that they are perverse in any way, the O-i-A is sustained: CESTAT
-Revenue's appeal dismissed : ALLAHABAD CESTAT
2019-TIOL-1241-CESTAT-MAD
Ambattur Developers Pvt Ltd Vs CST
ST - The appellant company is registered for providing Renting of Immovable Property service & Business Auxiliary Service - Upon audit, it appeared to the Revenue that the appellant rented out immovable properties by sub-leasing the premises taken on lease from the actual owners of the properties - It was noted that the appellants paid rent to the owner of the properties & remitted the property tax on their behalf - It was then observed that the appellant deducted property tax paid from the rent amount collected from the tenants to determine the taxable value for payment of service tax, which resulted in non-payment of some amount of tax - It was also noted that the appellant was constructing a hotel on the premises owned by it & had received services from the companies situated in India as well as abroad, in respect of design and technical consultancy used for construction - The appellant paid service tax on services imported from services imported from service providers situated abroad under RCM as per Rule 2(1)(d)(iv) of STR 2004 - It was noted that the appellants availed credit of service tax paid on several services but such services had not been used to provide any output services - Hence the Revenue proposed to disallow the credit availed - Duty demands were confirmed upon adjudication & penalties were imposed - Hence the present appeal. Held: The issue at hand stands settled in a number of cases - All these cases reiterate that services used for constructing materials which were then rented out are very eligible input services - Besides, the Tribunal in Rattha Holding Co.Pvt. Ltd. Vs CST relied upon the decision of the Andhra Pradesh High Court in Sai Samhmita Storages (P) Ltd. wherein it was held that disallowance of credit on input services used for construction of buildings is justified - There are no grounds to deviate from the view taken in these cases - In this case, the order in challenge merits being set aside - However, the demand raised on account of non-payment of service tax is confirmed with interest - Penalties imposed are set aside: CESTAT (Para 1,4.3,4.4)
-Assessee's appeal partly allowed : CHENNAI CESTAT
CENTRAL EXCISE
2019-TIOL-975-HC-MUM-CX
Siddesh Tours And Travels Vs CST
CX/ST - Pre-deposit - Section 35F before amendment by Finance Act, 2014 - Issue which arises is the correct meaning/ interpretation to be given to Section 35F of the CE Act - A bare reading of Section 35F of the Act makes it clear that a party who desires to challenge the order in appeal will, pending the appeal, deposit with the Adjudicating Authority, the duty demanded or penalty levied - The requirement to deposit the duty or penalty levied is to be fulfilled "pending the appeal" and not "pending the filing of the appeal" - This is the only reasonable interpretation to the above provision, otherwise it would require adding the words 'filing of' to the above provisions and which is not permitted: High Court [para 7]
CX/ST - Section 35F of the Act, as it stood at the relevant time, did not bar a party from filing an appeal unless the amounts of tax and penalty confirmed by the adjudicating authority, is deposited - Whenever the Parliament so desired to restrict the right to file an appeal only on paying the amounts it has so provided as is evident from Section 106 (7) of the Central Goods and Service Tax Act, 2017 which, inter alia, provides that no appeal shall be filed with the Appellate Authority unless the amount of tax and duty is deposited along with the appeal - Thus, in terms of Section 35F of the Act, so long as the appeal is not disposed of/dismissed by the Appellate Authority, it is open to the party to file an application for dispensing with pre-deposit of duty and penalty pending the disposal of the appeal - Once such an application is filed pending the appeal, then in terms of the second proviso to Section 35F of the Act, it has to be disposed of by the Appellate Authority whenever possible within 30 days of filing of such an application: High Court [para 7]
CX/ST - Limitation - There is no period of limitation provided in Section 35F of the Act to file an application for dispensing with pre-deposit of duty and penalty - Therefore, it is not open to read a provision of limitation where it is not found in the section - However, the conditions for the appeal being entertained are to be imposed by legislation and not by executive fiat / action: High Court [para 8]
CX/ST - Order of the Commissioner (Appeals) dated 10th December, 2015 and the impugned order of the Tribunal dismissing the appeal itself on the ground that the stay application has been filed belatedly in a pending appeal, is not sustainable - Appellant was entitled to file an application under Section 35F of the Act even after it had filed an appeal, provided it is filed before the appeal is dismissed for non-compliance of Section 35F of the Act - there is no period of limitation provided for filing an application under Section 35F of the Act - Section 85 of the Finance Act, 1994 does not prohibit/bar a person from filing an appeal with the Appellate Authority in the absence of depositing amounts of duty and penalty confirmed by the lower authorities - impugned order dated 4th August, 2016 of the Tribunal and the order dated 25th December, 2015 of the Commissioner (Appeals) are set aside, being bad in law - Matter remanded to Commissioner(A) for fresh consideration - Appeal and stay application of the Appellant before the Commissioner (Appeals) is restored to it for a fresh consideration and disposal in accordance with law - Appeal disposed of: High Court [para 9 to 12]
- Appeal disposed of: BOMBAY HIGH COURT
2019-TIOL-1240-CESTAT-CHD
Honey Biscuits Company Vs CCE
CX - The assessee is a manufacturer of biscuits but had not obtained Central Excise registration - The Central Excise staff searched the factory premises of assessee and three other companies, namely, M/s. HCW, M/s. MEW and M/s. SFPL - During the search, besides certain incriminating documents, the biscuits and raw materials/packing material lying unaccounted for were also seized - Searches were conducted at the residential premises of Shri Montoo and Smt. Geeta Rani - All the business affairs of both M/s. HBC and M/s. HCW like purchase of raw material, production, despatch, collection of sale proceeds were managed by Sh Montoo and Sh Jai Prakash - They are members of one family running both the units though these units have different family members as their partners - It is also evident that goods were moved in same vehicle under same invoices/kachha slip by the same salesman - Amount collected by the salesman cannot be segregated between the two units - The Benami accounts maintained with Oriental Bank of Commerce were used for transactions in respect of both the units - Since financial transactions cannot be segregated between the two units mutuality of interest is thus clearly established - The assessee have contended that the liability lays with managing partner of M/s. HBC - The assessee have also contended that proceeds of raw material and other goods were duly submitted to the office of Sh.Montoo only and there was no proof of any payment by Sh. Jai Prakash on behalf of assessee - The investigation has established that both Sh Montoo and Sh Jai Prakash used to make entries in private ledgers maintained by them - The total amount of each slip was entered in the ledgers - The deliveryman after handing over the goods to the shopkeepers/dealers used to collect part payment also and record same on the kuchha parchies - The slips were in the handwriting of both Sh Montoo and Sh Jai Prakash - Moreover, they were found to be maintaining six benami accounts with OBC for deposit of money received from bogus invoices - Chief Manager of the bank and also Sh Montoo admitted that they were operating three accounts each by S/Sh Montoo and Jai Prakash - It has also been contended that there was no mutuality of interest in business of any of the separate units and control of assessee M/s. HBC was with Sh. Montoo as only Managing Partner - Mutuality of interest is established in as much as that the accounts relating to purchase of raw material / sales of finished goods were commonly maintained - Goods sold from both the units were entered in common slips and payments received were entered in common slips/ledgers - The proceeds were deposited in six benami accounts, three operated by Sh.Montoo and other three by Sh.Jai Prakash - The control of the units thus was with both Sh Montoo and Sh Jai Prakash - It is also contended that both the firms had separate manufacturing premises, separate machinery manufacturing different goods and were owned by separate partnership firms - While the units have separate premises with separate machinery owned by separate firms, the partners of both the firms are close relatives and members of same family and as elaborated earlier there was overarching control of Sh.Montoo and Sh. Jai Prakash on these firms - In M/s. HBC biscuits were being manufactured and in M/s. HCW both biscuits and sweets (Toffies and Golis) were being manufactured - The adjudicating authority has correctly appreciated the facts and the evidence and therefore uphold the clubbing of clearances of M/s.HBC and M/s.HCW in the impugned order - Taking into account the modus operandi, as elaborated hereinbefore and the outright fraud committed by the appellant with bogus invoices, vitiated account books and benami bank accounts, the penalty has been correctly imposed by the adjudicating authority - No infirmity found in the impugned order - The appeal is devoid of any merit and deserves to be dismissed: CESTAT
- Appeal dismissed : CHANDIGARH CESTAT
2019-TIOL-1239-CESTAT-DEL
Popular Paints And Chemicals Referred AS Vs CCE & C
CX - Assessee is engaged in the manufacture of paints and varnishes and also availing SSI exemption under notification No.8/2003-CE - It was alleged that this party had cleared huge quantities of these plastic containers, clandestinely, to a numbers of buyers including the assessee - The main evidence which has been relied upon by Revenue are the computer printouts retrieved from the computers, which were seized from the factory as well as office premises of assessee and also the one computer which was handed over to the investigating officer by assessee themselves - The entire computer data which has been relied upon substantiate the duty demand to be highly unreliable for want of procedural irregularities - Computer printouts cannot be held to be an admissible evidence unless the conditions as laid in provisions of Section 36B of Central Excise Act are fully complied with - A perusal of section 36B would indicate that the Act has prescribed very stringent conditions for computer printouts to be a piece of admissible evidence - Assessee has invited attention particular to provisions of Section 36B(2) and (4) of Central Excise Act - It is evident that the investigation officers while seizing has failed to take safeguards as mandated under section 36B of Central Excise Act - Further the cloning process of the hard-disks and retrieval of the data is admissible for want of cross examination of Sh. Vipul Saxena, who has done cloning of the data from the computer system - The computer printouts cannot held to admissible evidence in terms of Section 36B (2) & (4) of Central Excise Act - It is an admitted position that the computer printouts were produced in Office of M/s Omnicorp behind the back of assessee - The assessee was never associated with retrieval of computer printouts - This Tribunal in case of Modern Laboratories - 2017-TIOL-1827-CESTAT-DEL has held that when computer printouts were taken in absence of assessee and when panchas were not allowed for cross- examination the data retrieved from CD is not an admissible evidence - The law laid down in this judgement is fully applicable and thus the same is to be discarded as a piece of evidence - The assessee is also required to pay interest at applicable rates prevalent during the material period upon the said duty amount - The impunged order is set aside except to the above extent of confirmation of duty demand of Rs. 1,95,227/-., confirmation of interest thereon and penalty of equal amount - The penalty is imposed upon assessee except to the extent of Rs. 1,95,227 is also set aside - The penalty imposed upon the two partners is also set aside: CESTAT
- Appeals disposed of : DELHI CESTAT
CUSTOMS
NOTIFICATION
cnt35_2019
CBIC notifies currency exchange rates for import & export purposes CASE LAWS 2019-TIOL-976-HC-DEL-CUS
Krishan Kishore Aggarwal Vs ADDL CC
Cus - The narrow ground on which petitioners question the common order of Additional Commissioner of Customs, is that they were denied the permission to cross-examine the witnesses whose statements recorded under Section 108 of Customs Act, were taken into account by the authorities and ultimately, became a part of O-I-O - The view and approach of Additional Commissioner is flawed - A plain reading of the judgment in Kanungo & Co. 2002-TIOL-252-SC-CUS-LB, relied upon in the impugned order shows that the Additional Commissioner completely misinterpreted the terms and purport of the Supreme Court judgment - What the Court said in that case was that, if information is received by the statutory authorities, which triggers an inquiry and culminates in adjudicating proceedings, there is nothing in law to compel the authorities to involve the informant, in the judicial proceedings so as to warrant her or his cross-examination - This, however, does not imply that if an individual is involved in the proceeding, which results in an adverse order against a third party, the third party is precluded from seeking cross-examination of the informant, if the latter's statements were recorded or were to be considered in the proceedings as material evidence - This Court notices in the present case that the statements of the co-accused, recorded under Section 108 of the Act, ultimately became the basis of the impugned order - The denial of the right of cross examination of such witnesses, was plainly in violation of the principles of natural justice - The impugned order is set aside - The Additional Commissioner of Customs shall proceed to hear the petitioners and also grant appropriate and sufficient opportunity to cross-examine the witnesses: HC
- Writ petition allowed: DELHI HIGH COURT 2019-TIOL-1238-CESTAT-MUM
Shree Bhavani Minerals Vs CCE
Cus - Issue is whether the 'Iron Ore Concentrate' exported by the appellants can be treated as 'Iron Ore' and whether the benefit of notification 62/2007-Cus can be extended. Held : Order of Commissioner(A) is very cryptic and does not discuss various submissions made by appellants - As per the Chapter note of HSN, there is no difference between the 'ores' and 'concentrates' - From the judgment of Supreme Court in Minerals & Metals Trading Corporation of India case - 2002-TIOL-1605-SC-CUS-LB , it is clear that 'Ore' is genus and 'concentrate' is a species, therefore, a separate mention of 'Ore' and 'Concentrate' in heading 26.03 ipso facto will not imply that they are different - in view of the chapter notes to Chapter 26 of CTA, 1975 and in view of the case law cited, it has to be concluded that 'Ores' includes 'Concentrates', therefore, the benefit of notification 62/2007-Cus is applicable to 'concentrates' also - CRCL, New Delhi in its report has mentioned that the Fe contents in the export product is less than 62% - when the actual product exported is eligible for the exemption notification, mere description in the documents should not take away the benefits provided - moreover, procedural infractions cannot take away the benefits when substantial compliance is not disputed and when Tariff recognizes the description mentioned in the notification and the description mentioned in Shipping bill and other documents - Order set aside & appeal allowed with consequential relief: CESTAT [para 5, 5.1, 5.2, 5.3, 6]
- Appeal allowed : MUMBAI CESTAT
2019-TIOL-1237-CESTAT-MUM
Daulat Shetkari SSK Ltd Vs CC
Cus - Appellants have challenged the order of Commissioner contending that interest should be charged from them @15% instead of @24% as ordered - appellant relies on Public Notice no. 9 dated 22.05.2003 issued by DGFT. Held: Paragraph 2 of the DGFT Policy Circular does not state that the interest rate during the past period is also being reduced from @24% to @15% - Circular only says that the benefit of reduced rate shall be available to all pending cases of regularisation of EPCG licences - Thus, from the date of issuance of Circular, the interest rate will be 15% in respect of all EPCG licences irrespective of the date of issue and in respect of licences issued prior to the date of Circular, interest rate shall be 24% till the date of Circular and 15% from the date of Circular - Commissioner has, in his order, given the benefit of reduced interest rate from 13.05.2002 which is much prior to the date of issue of this Circular - Since Commissioner has himself allowed for computation of interest from the date of importation, no reason as to why the said issue has been agitated again in this appeal - appeal dismissed: CESTAT [para 5.3, 5.4]
- Appeal dismissed : MUMBAI CESTAT |
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