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SERVICE TAX
019-TIOL-1083-HC-KAR-ST
Kin-Ship Services India Pvt Ltd Vs UoI
ST - In W.P.No.40985 and 42534/2017, the show cause notice dated 19.4.2017 issued by respondent No.3-Commissioner of Central Excise and Service Tax is challenged - the primary grievance of the petitioners is the denial of permission to cross examine the respondent no.4 and the petitioner no.2:
Held : Indisputably, the statements of the petitioner no.2-the Managing Director of petitioner no.1 company were recorded by the respondent nos.3 and 4 (in W.P.No.34990-34991/2016) - petitioner no.2 cannot seek for cross examination of himself - similarly, respondent no.4 is the Superintendent, who is the adjudicating authority, has discharged the statutory functions, exercising the powers vested under the provisions of the Act - no cross-examination of any witnesses whose statements are recorded by the adjudicating authority is sought in the present proceedings, petitioner no.2 is requesting to cross examine himself and the adjudicating authority which is inappropriate and cannot be acceded to - however, considering the totality of the circumstances of the case, this Court deems it fit to provide an opportunity to the petitioners to adduce any evidence to substantiate their stand - keeping open all the rights and contentions of the parties, the proceedings are restored to the file of the Commissioner of Central Excise and Service Tax to provide an opportunity to file reply/objections and to adduce evidence, if any, to the petitioners - the Commissioner shall consider the same and pass appropriate orders in accordance with law - with the aforegoing observations and directions, writ petitions stand disposed of : HIGH COURT [para 10, 13]
- Writ Petitions disposed of : KARNATAKA HIGH COURT
2019-TIOL-1426-CESTAT-HYD
Aegis Ltd Vs CC, CE & ST
ST - The appellant-company is a public company engaged in providing IT-enabled services taxable u/s 65(105) of the Finance Act 1994 - The BPO division of one Ms Global Vantedge Pvt. Ltd., demerged from the parent company and merged with the appellant - Such process was with the approval of the High Court of Bombay and the High Court of Delhi - For the period between 01.04.2007 to 04.04.2008, M/s Global was to carry on its activities in the normal course of business for and on account of and in trust of the appellant company - Besides, all profit earned or loss incurred would be treated as that of the appellant - The assessee later availed Cenvat credit, a part of which pertained to input services used by M/s Global during such period - An SCN was issued seeking to deny the credit availed on inputs utilized by M/s Global, on grounds that the same was inadmissible as per Rule 10 of CCR 2004 - It was also alleged that M/s Global did not have the credit which was taken by the appellant - Hence the SCNs proposed to recover the credit so availed, along with interest - Penalties were also proposed u/r 14 of CCR 2004 r/w Section 73 of the Finance Act 1994 - Further penalties were imposed u/r 15(4) of CCR 2004 r/w Section 78 of the Finance Act 1994 - On adjudication, the credit was disallowed and the interest & penalties were upheld, albeit with option of reduced penalty being offered in case the determined duty is paid with interest within 30 days of issuing such order - Hence the present appeal.
Held: There is nothing contained in the provisions of Rule 10 which indicate that the company must transfer entire business or that it cannot hive off one part of the usiness and sell it to another company - In normal course of business, it is usual for one to sell part of one's business to another firm - In such case, the business is de-merged from the parent company and merges with the buyer - Rule 10(2) of CCR 2004 covers such cases - Hence the Revenue's reasons for denial of credit are unsustainable: CESTAT (Para 12)
Held: Insufficient credit available with merged company - M/s Global did not avail credit of input services utilized by the BPO division since the same was to be sold to the appellant - The BPO division too did not avail credit as it did not need the same, being engaged in export of service which did not require its utilization - The second component of credit availed by the appellant pertains to the input services which were used by them to render output services from 01.04.2007 onwards - The ST-3 returns filed by the appellant disclose the amount of credit availed - Hence the appellant fulfilled its obligations under the CCR 2004: CESTAT (Para 13)
- Assessee's appeal allowed: HYDERABAD CESTAT
2019-TIOL-1425-CESTAT-ALL
CCE Vs Piem Hotels Ltd
ST - The assessee is engaged in the Hotel industry and holds service tax registration for providing various services such as Mandap Keeper, Beauty Parlor, Internet Cafe, Business Auxiliary Service and Restaurant Service - The assessee availed Cenvat credit on various input goods & services - It also availed abatement in respect of accomodation service & restaurant service as per Notfn N0 01/2006-ST - On scrutiny of records, the Revenue opined that the assessee availed credit and abatement simultaneously, which was in violation of Notfn No 01/2006-ST - SCN was issued to deny the abatement & duty demand was raised for its recovery - On adjudication, the original authority observed that the evidence at hand established that credit was not availed or else where availed, had duly been reversed as per Rule 6(3)(ii) of CCR 2004 - Hence the proceedings were dropped on grounds that no credit remained to be reversed - Hence the Revenue's appeal.
Held: The issue at hand stands settled by the Tribunal's decision in the case of M/s The Oberoi Rajvilas vs. CCE, Jaipur-I wherein it was held that the reversal of credit as above satisfies the requirement of non availment of credit laid down in the Notification No. 1/2006-ST - Hence the O-i-O in challenge merits being sustained: CESTAT
- Revenue's appeal dismissed: ALLAHABAD CESTAT
2019-TIOL-1424-CESTAT-MAD
West Asia Maritime Ltd Vs CST
ST - The assessee had provided two ships on time charter basis to M/s.Poompuhar Shipping Corporation for transhipping of coals vide Time Charter Agreements - It appeared to department that the said activity would be a taxable service under category of "Supply of Tangible Goods Service" leviable to service tax, which had not been disputed by assessee - Accordingly, a SCN was issued inter alia, proposing demand with interest thereon for the ships provided on time charter basis - The assessee have pointed out that the delay in discharging service tax liability was only due to Poompurhar disputing the applicability of service tax on the grounds that they were a government owned company - No doubt, the SCN mentions that though the assessee obtained service tax registration and had raised invoices on service receiver by charging service tax separately, however they did not pay service tax liability - From perusal of correspondence submitted by assessee between them and Poompuhar clearly shows to indicate that there was considerable resistance from the latter for paying up service tax component of invoices raised by assessee - It was only vide their letter dt. 25.03.2009 that Poompuhar, finally agreed to process and release service tax payments w.e.f. 16.05.2008 on certain conditions - However, there was still further correspondence on this very dispute even till April 2009 - These correspondences only serve to indicate that assessee did not receive the service tax component from Poompuhar for a long time - It is certainly not the case that assessee merely collected the service tax but had chosen not to discharge the liability to the exchequer - Once the matter was pointed out by audit, and the amount was received from Poompuhar, the assessee not only paid up tax liability for the period 16.05.2008 to 11.11.2008 but also tax liability for further period upto February 2009 - There is reasonable cause for assessee in their failure to discharge tax liability when it was due - In any case, the amount of Rs.7 crores appropriated by adjudicating authority is more enough to cover the interest liability that would accrue due to late payment - Assessee is entitled to get waiver from penalty under Section 80 ibid - Accordingly, penalty imposed under Section 78 of the Act is set aside and the appeal partly allowed in this regard: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
CENTRAL EXCISE
2019-TIOL-1423-CESTAT-DEL
Otsuka Chemical India Ltd Vs CCE & ST
CX - The assessee is covered by Investment Promotion Schemes of Rajasthan Government - In terms of various schemes of Rajasthan Government, the assessee is required to discharge their VAT liability by making payment of the same - Out of such VAT credited to Government, a certain portion is disbursed back to them in the form of subsidies - Such disbursement happens in the form of VAT 37 B, challan which can be utilized in subsequent periods to discharge VAT liability - The crux of dispute is; whether such subsidy amounts are required to be included in assessable value of the goods manufactured by assessee in terms of Section 4 of CEA, 1944 - In terms of scheme of Government of Rajasthan, payment of VAT using such Challan are considered legal payments of tax - Revenue is not correct in taking the view that VAT liability discharged by utilizing such subsidy challans cannot be taken as VAT actually paid - By following the decision of Tribunal in the Welspun Corporation Ltd. - 2017-TIOL-1287-CESTAT-MUM, there is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-1422-CESTAT-KOL
CCE Vs Paras Surti Products Pvt Ltd
CX - The assessee had filed a claim of refund for non-production from one Single Track pouch packing machine, for the period from 5.11.2013 to 30.11.2013 under Rule 10 of PMPM Rules, 2008 and under notfn 42/2008-CE and 30/2008-CE(NT) - The assessee had requested for opening one Single Track pouch packing machine to manufacture Pan Masala without tobacco and nicotine - Same was opened and installed on 01.11.2013 - Subsequently, the assessee intimated that they would close their production from 5.11.2013 due to poor uptake and requested the Department to seal the machine w.e.f. 5.11.2013 - Accordingly, the machine was sealed and uninstalled - The assessee have already deposited Rs. 51 lakhs per month per machine in terms of Rule 9 and therefore the refund claim was filed - SCN was issued alleging non-fulfilment of criteria under Rule 10 for abatement in case of non-production of goods - According to Rule 10 of PMPM Rules, 2008 and notfn 42/2008-CE and 30/2008-CE(NT), if a machine does not produce for a continuous period of 15 days, than the duty shall be calculated on proportionate basis and the balance amount of duty shall be abated for the non-production period subject to the condition - The primary condition is that the assessee shall file an intimation to the Deputy/Assistant Commissioner of Central Excise with the copy to the Superintendent of Central Excise at least 3 working days prior to commencement of non-production period and on receipt of such intimation, the Superintendent shall seal and uninstall the PMPM machine under his proper supervision rendering the PMPM machine in-operable during the period of closure - It is the case of Department that the assessee had intimated for closure of production from 5.11.2013 and accordingly it was construed that intimation for non-production of goods is only prior to 2 working days as against the required 3 working days since the Central Excise office had their weekly off on 2/11/2013 and 3/11/2013 being Saturday and Sunday - Hence, the assessee do not fulfil the criteria of 3 days prior intimation for abatement as laid down under Rule 10 - It is the contention of assessee that the intimation to the Department was well prior to 3 working days from closure since 2.11.2013 (Saturday) was a working day for their factory and as such the condition of Rule 10 has been fully complied - It is also the case of assessee that when there is no dispute regarding the sealing and uninstalling of the PMPM machine and further the 3 working days are all working days in their factory and their intimation was duly submitted prior to 3 working days as required - No reason found to interfere with the impugned order and accordingly the same is sustained: CESTAT
- Appeal dismissed: KOLKATA CESTAT
CUSTOMS
2019-TIOL-1085-HC-MUM-NDPS Okacha Mike Vs UoI
NARCOTICS Drugs and Psychotropic Substances Act, 1985 [NDPS Act] - Appellant/accused has been convicted of offences punishable under sections 21(c) read with 8(c) read with 28 read with 23 of the NDPS Act - he is sentenced to undergo rigorous imprisonment for 13 years - in addition, he is directed to pay fine of Rs.1 lakh and in default, to undergo further simple imprisonment for 6 months:
Held : Merely for non-compliance of mandatory provisions of section 313 of the Code of Criminal Procedure [CCP], accused is not entitled for acquittal - failure of justice occasioned due to prejudice caused to the accused on this aspect is required to be demonstrated - perusal of statement under section 313 of the CCP shows that the trial court has meticulously drawn all incriminating circumstances available against the appellant/accused - those incriminating circumstances were put to him in a simple, lucid and logical manner - no substance is found in contention of the appellant/accused that for want of putting evidence of PW8 Anil Mestry - panch witness to the appellant/accused in his examination under section 313 of the CCP, he is entitled for acquittal on that count alone - bare reading of this provision makes it clear that no finding, sentence or order of the court can be faulted with merely on the ground that there is error or omission in framing of the Charge - error or omission in framing of the Charge can be taken advantage of by the accused only if he demonstrates that such error, omission or irregularity in framing of the Charge has resulted in failure of justice - in the case in hand, it is not pointed out to this Court as to how failure of justice has occasioned because of mentioning of quantity of heroin as 2.890 kilograms, when according to the prosecution case, the quantity seized was 2700 grams - going by mathematical calculations also, it cannot be said that error or omission in the Charge framed against the appellant/accused has resulted in miscarriage of justice - the quantity of heroin still remained to be a commercial quantity, even if it is tested on the yardstick of quantity of contraband seized by the prosecution agency - in the result, error in mentioning the quantity of heroin in the Charge has not resulted in any failure of justice - cumulative effect of evidence of PW1 Sanjay Kumar, Intelligence Officer, coupled with that of PW8 Anil Mestry and contemporaneous documentary evidence in the form of Panchnama, unerringly points out that the grey coloured hard top strolley suitcase was in possession of the appellant/accused and he was having with him the baggage claim tag in respect of that bag - there is nothing in cross-examination of PW1 Sanjay Kumar, Intelligence Officer as well as PW8 Anil Mestry to doubt their evidence regarding seizure of the bulk as well as samples - on the contrary, evidence of PW8 Anil Mestry is very natural and because of fading memory, this witness was not recollecting actual weight and number of samples drawn without refreshing his memory in the witness box - in the case in hand, the prosecution has established the fact that the appellant/accused was in possession of the grey coloured hard top strolley suitcase which was containing 2700 grams of heroin with 38.9% purity - the appellant/accused was certainly knowing the fact that the bag in his possession was containing heroin as he failed to explain the fact which was specially within his knowledge - this witness [PW2 Bhalchandra Madan, Intelligence Officer] was not having any knowledge as to the events which took place prior to recording of the statement of the appellant/accused by him - as such, no overbearing importance can be given to the material elicited from cross-examination of this witness about his satisfaction with the answer given to him by the appellant/accused regarding contents of the grey coloured hard top strolley suitcase - this evidence cannot be used to infer that possession of the appellant/accused over heroin in the grey coloured hard top strolley suitcase was unconscious possession - in the case in hand, four samples each weighing 5 grams were kept in polythene pouches with zipper lock and thereafter, those four polythene pouches were kept in a separate envelope which was sealed with "AIU Seal no.132" - therefore, it cannot be said that the guidelines [Standing Order No.1 of 1989] regarding packing of the samples was not substantially followed by the prosecuting agency - similarly, other clauses of this Standing Order No.1 of 1989 are also seen to have been substantially complied by the prosecuting agency, as reflected from evidence of PW1 Sanjay Kumar, Intelligence Officer - therefore, case of the prosecution cannot be doubted on this aspect - in the case in hand, after proof of the fact that the appellant/accused was found in conscious possession of heroin weighing 2700 grams of 38.9% purity, the appellant/accused has not discharged the burden which rested upon him - rather, he has chosen to feign ignorance by answering the questions in his examination under section 313 of the Code of Criminal Procedure by stating that whatever put to him is false or he does not know - the appellant/accused herein is the first time offender and as such he deserves to be imposed minimum sentence i.e. of 10 years instead of 13 years as ordered by the trial court - the appellant/accused is not having criminal antecedents and he has already undergone major part of substantive sentence of rigorous imprisonment imposed on him - therefore, the appeal deserves to be allowed partly by maintaining the conviction recorded by the trial court - as such, the following order : (i) conviction of the appellant/accused of offences punishable under sections 21(c) read with 8(c) read with 28 read with 23 of the NDPS Act is maintained (ii) however, the appellant/accused is directed to undergo rigorous imprisonment of 10 years as against that of 13 years imposed by the trial court - sentence of fine and default sentence imposed by the trial court is not interfered with (iii) in view of disposal of the appeal, Criminal Application No.323 of 2018 also stands disposed off (iv) the appeal is accordingly disposed of : HIGH COURT [para 8, 10, 14, 15, 16, 23, 25, 29, 30, 31, 32, 33]
- Criminal Appeal disposed of : BOMBAY HIGH COURT
2019-TIOL-1084-HC-AHM-CUS
Jupiter Solar Power Ltd Vs UoI
Cus - By this application, the applicant (original respondent no.8) has prayed that the interim order dated 28.12.2018 passed by this Court in Special Civil Application No.20957 of 2018 be vacated - the opponent No.8 (original petitioner) had filed the captioned petition seeking a declaration that the Final Findings dated 16.7.2018 issued by the Directorate General of Trade Remedies and the Notification dated 30.7.2018 as also Instruction No.14/2018-Customs dated 13.9.2018 are ultra vires the Customs Tariff Act and the Safeguard Duty Rules as well as unconstitutional in terms of Articles, 14, 19(1)(g), 21, 265 and 300A of the Constitution of India and other ancillary reliefs - by the Final Findings dated 16.7.2018, the Director General had recommended imposition of safeguard duty on imports of Solar Cells [product under consideration (PUC)] for a period of two years - pursuant thereto, the GOI had issued a notification dated 30.7.2018 levying safeguard duty at the rates specified therein - being aggrieved, the petitioner presented the captioned petition wherein this court, by the order dated 28.12.2018, had granted ex parte ad-interim relief in favour of the petitioner Held : The Director General has recorded a categorical finding that the two applicant units meet with the requirement of major share of Indian industry - however, prima facie, at this stage, without a detailed inquiry, it cannot be said that the applicants before the Director General do not meet with the requirements of domestic industry as contemplated under section 8B(6)(b) of the Customs Tariff Act - the Director General has found that domestic industry suffered serious injury during the POI and that there is threat of serious injury in future to the domestic industry - from the facts as emerging from the record, it is clear that the Director General has considered all relevant parameters in the final findings - as to whether such findings are justified having regard to the material on record, would be required to be gone into at the stage of final hearing of the petition - insofar as the question of balance of convenience is concerned, if the petitioner continues to make imports by simply executing a bond, the operation of the final findings in effect and substance remain stayed and the domestic industry does not get any benefit under the impugned notification and final findings - when the Director General (Safeguard) has found that the domestic industry has suffered injury and also faces threat of serious injury, if the ad interim relief granted earlier is continued, the domestic industry would continue to suffer such injury and may collapse under the impact of the onslaught of imports - the importers are duly protected from the increase in the change in domestic duties, levies, cess and taxes imposed by the Central Government, State Government or the Union Territories - besides, if the petitioner ultimately succeeds it would be entitled to the refund of the safeguard duty paid by it, whereas if the applicant (original respondent No.8) succeeds in the petition, it would not be possible to reverse the injury done to it if the ad interim relief granted earlier is continued - under the circumstances, the balance of convenience lies in favour of the domestic industry - the domestic industry would suffer irreparable injury if the ad interim relief granted earlier is permitted to continue - for the foregoing reasons, the application succeeds and is, accordingly, allowed - the ad interim relief granted vide order dated 28.12.2018 is hereby vacated : HIGH COURT [para 18, 22, 23, 24, 25, 26] Request for Stay of the order: Considering the fact that the duration of the levy of safeguard duty is limited and the petitioner has already enjoyed interim relief for a period of more than four months, immense prejudice would be caused to the domestic industry if the interim relief is continued any further - Request is, therefore, declined: High Court [para 27]
- Civil Application allowed : GUJARAT HIGH COURT 2019-TIOL-1081-HC-MAD-CUS PP Products Ltd Vs CC
Cus - The assessee-company filed application seeking refund of 4% SAD which had been paid by it for importing HDPE F0460, LDP LF2119 S, HDPE EGDA 6888, LLDPE 118W, HDPE FB1460, HDPEF 10750, LLDPE, vide 13 Bills of Entry - On adjudication, the refund claim was sanctioned in part, while another part was rejected on grounds that the products sold by the assessee did not match with those which were imported - On appeal, the Commr.(A) allowed relief to the assessee upon finding that the description of the imported goods in the bill of entry and in the invoices was the same, except that the assessee had used generic expressions - On Revenue's appeal, the Tribunal held that the identity of the goods could not be established by the refund sanctioning authority unless there is an acceptable match between the description of the imported goods as per the bill of entry and the corresponding sale invoices - Hence it was held that discrepancy in description of goods was not a curable defect - Hence the present appeal by the assessee.
Held: There are three documents which an importer must submit so as to be eligible for refund of SAD, namely - (i) document evidencing payment of the said additional duty; (ii) invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed; (iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods - The adjudicating authority rejected the claims on grounds that the assessee did not adopt the same code while describing the product in sales invoices - The adjudicating authority did not conclude that the product sold was entirely different - There is nothing on record to disprove the CA certificate stating that both products are one and the same - If such certificate is to be disproved, this must be based upon some material - Thus the findings of the Tribunal are unsustainable since the adjudicating authority was satisfied that substantial duty was refundable - Hence the Tribunal's order is quashed: HC (Para 5,6,10)
- Assessee's appeal allowed: MADRAS HGIH COURT |
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