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SERVICE TAX
2019-TIOL-2043-CESTAT-DEL
Noble Grain India Pvt Ltd Vs CCE
ST - The assessee is registered under category of "Goods Transport Agency" - Vide a SCN, he was called upon to explain the non-payment of service tax on his part - The said SCN was originally adjudicated vide which the demand raised in SCN was confirmed - No doubt, the serving of notice vide original post is not the prescribed mode of service in view of Section 37C of CEA but the apparent fact remains is that the Order under challenge has been in furtherance of appeal of assesse itself who has been appearing throughout proceedings - He even marked his personal presence before Commissioner (A) on 25.02.2014 where after the matter was reserved for Orders - There is nothing on record by assessee to explain as to why he has failed to inquire about the outcome of his proceedings till October 2014, i.e. for subsequent 10 months thereof - Though the assessee has taken the plea that he acquired knowledge about order under challenge only after he received the recovery notice but has requested for seeking copy of the order only on 29.10.2012 that is also after delay of almost 15 days - There is no explanation to this delay of 15 days - Law of limitation is absolutely settled that delay even of single day has to be explained - Supreme Court in case Balwant Singh & Jagdish Singh has clarified the same - It was also clarified by Apex Court that a person seeking aid of judicial authority for exercising its discretionary power is expected to state correct facts and not to state lies before the court - Above all, it is not the case that address of assessee in ordinary post was wrong - It is also a settled law that technicalities of law are the handmade of the justice, any the party to litigation cannot be allowed to take any undue benefit therefrom - The applicant is held to have not observed the due diligence - Even after receiving the recovery notice, he failed to be prompt - Above all, as per Section 85 of Finance Act, Commissioner (A) had no discretion to condone the delay beyond a period of 3 months - The Commissioner is empowered to condone delay of further period of 30 days only - Section 5 of Limitation Act, 1963 is not applicable by virtue of Section 35 of CEA, 1944 - No infirmity found in the order under challenge: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-2042-CESTAT-MAD
P Mariappan And Sons Vs CCE
ST - Assessee had entered into a contract with TNEB for construction of a control room - They had also entered into contracts with CPWD for construction of buildings for Gandhigram Rural University - Proceedings had been initiated against assessee vide a SCN on the grounds that the assessee had rendered taxable service under category of Commercial or Industrial Construction Service for the period 2006-07 to 2010-11 resulting in apparent tax liability with interest thereon - The activities of construction of control room for TNEB is fully covered by Notfn 45/2010 - So also the argument that construction activity for educational institutions exempt from service tax is also no longer res integra - The case law of SRM Engineering Construction will stand support their contention - In the event, the contracts undertaken by assessee will not be exigible to service tax - The impugned order to the contrary cannot then sustain: CESTAT
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-2041-CESTAT-HYD
P Siva Prasad Vs CCE, C & ST
ST - The assessee is a contractor & is licensed to provide the following to the Indian Railways, namely supply of bed rolls, food and beverages in trains & on platforms & cleaning of compartments and toilets - The Revenue opined that the supply of bed rolls are taxable under BAS; that the cleaning of toilets & compartments is taxable under Cleaning Services and that the supply of food & beverages is taxable as Outdoor Caterer's Service - Duty demand was proposed with interest through several SCNs issued for different periods - The SCNs also proposed penalty u/s 77(1) & (2) and Section 78 on grounds that the assessee did not obtain registration or file ST-3 returns or pay service tax - Such SCNs were confirmed upon adjudication - On appeal, the Commr.(A) sustained the duty demands with interest while setting aside the penalty - Hence the present appeals by the assessee as well as the cross-appeals by the Revenue.
Held: Supply of bed rolls - The Revenue claimed that the supply of bed rolls amounts to supplying services to the Railways & is taxable under BAS - The Revenue's counsel claims that the issue is settled against the Revenue & so the same is not contested on merits - Hence the assessee is not liable to pay tax under BAS: CESTAT
Held: Cleaning Services - The issue here is whether the trains in which the cleaning services are rendered can be considered as commercial or industrial buildings or premises or factory or plant & machinery, tank or reservoir of such commercial or industrial building or premises or otherwise - In R.K. Refreshments and Enterprises Pvt. Ltd, the Tribunal had held that railway coaches or rolling stock of the Railways meant for transportation could not be considered as commercial or industrial building or plant & machinery - Hence the cleaning services rendered in railway coaches are not covered by the taxing statute - Since taxing statutes are to be interpreted strictly without regard to the consequences of such interpretation, hence railway coaches cannot be considered as commercial premises - Hence the assessee need not pay taxes on cleaning services: CESTAT
Held: Outdoor Catering Services - It is seen that the assessee is not selling the food items on its own account, but instead as per the contract entered into with M/s IRCTC - The amount collected by the assessee is remitted to IRCTC after deducting an amount as commission - Hence the assessee's case is one of rendering services - In the present case, the assessee supplies food items either cooked by it or supplied by the IRCTC kitchen to various persons in railway coaches or platforms - Issues similar to the one at hand stand settled by the High Court of Allahabad in Indian Coffee Workers' Co-op Society Limited vs. CCE&ST, Allahabad and by the High Court of Kerala in Saj Flight Services Pvt. Ltd. vs. SCE - Hence the assessee is liable to pay service tax on the supply of food items under Outdoor Catering Services: CESTAT
Held: Limitation - It is undoubtedly true that the assessee did not obtain registration or file ST-3 returns or pay service tax - The penalty imposed u/s 77 requires fraud, collusion, wilful mis-statement or suppression of facts, any of which have not been established in the SCN - Besides, the assessee cooperated with the Department throughout the investigation and provided whatever information had been sought - The registration had not been obtained on account of an impression that the assessee is not liable to pay service tax - Hence the assessee makes out a case for waiver of penalty u/s 80 of the FA 1994 - Hence the penalties are quashed: CESTAT
- Revenue's appeals partly allowed: HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-2040-CESTAT-KOL
Rupajulie Tea Estate Vs CCE
CX - The dispute is regarding the claim of assessee for the benefit of Area Based Exemption under Notfn 33/99 - The claim has been made under Notfn citing that installed capacity increased by more than 25% since 24/12/1997 - The assessee has augmented the machineries located in certain sections of the factory - The Chartered Engineer, after inspecting the factory, has certified the increase in installed capacity by as much as 36.2% - On the basis of such certificate, the requirement of minimum expansion of 25% appear to have been satisfied by assessee - However, during hearing, revenue has submitted that the certificate of Chartered Engineer appear to be at variance compared to the approved layout plan prior to and subsequent to the expansion of the unit - He has taken pains to submit that the number of saddles prior to the expansion appears to be 230 as per the approved lay out plan approved on 18/12/1997 - This could indicate that there has been no increase in excess of 25% in installed capacity since the Chartered Engineer has certified that the limiting factor in the case is not number of saddles but the capacity of Withering Trough - The order passed by Original as well as First Appellate Authority indicates that both the authorities have proceeded to reject the claim of expansion only on the ground that assessee has failed to submit the necessary documents supporting the claim of expansion - On the basis of documents submitted, the claim for benefit of Notification is required to be evaluated de novo after considering all these documents submitted - Impugned order is set aside and the issue remanded to original authority for a de novo decision: CESTAT
- Matter remanded: KOLATA CESTAT
2019-TIOL-2039-CESTAT-BANG
Sadashiva Sugars Ltd Vs CCT & CE
CX - The assessee is engaged in manufacture of sugar and molasses and are availing CENVAT credit on capital goods, input and input services as per the provisions of CCR, 2004 - Department entertained a view that assessee has availed irregular CENVAT credit on various items of iron and steel - The period involved is prior to 07.07.2009 and the amendment carried out in Rule 2(k) vide CENVAT (Amendment) Rules, 2009 is applicable prospectively and not retrospectively - Further, the Larger Bench decision in case of Vandana Global Ltd. has been set aside by Chattishgarh High Court in - 2017-TIOL-2853-HC-CHATTISGARH-CX - In assessee's own case for the earlier period on an identical issue, the CESTAT, Chennai after relying upon various decisions of Tribunal allowed the appeal of assessee by setting aside the order of the Commissioner - By following the ratio of said decisions, the impugned order is not sustainable in law and therefore the same is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT
2019-TIOL-2038-CESTAT-DEL
Shankar Lal Jain Vs CCE & ST
CX - As regards to demand in respect of "IN Slips" seized from premises of assessee, the receipt of unaccounted materials against these IN slips has been admitted by Director Sh. Bajrang Jain and he has also accepted to pay duty on supposed manufacture of finished goods from these unaccounted material - However, assessee has contested manufacture of finished goods from the raw materials covered under these IN slips on the ground that there no corroborative evidence of corresponding manufacture of finished goods from these materials - However, Tribunal is not inclined to accept this argument because once the non accountal of these raw materials was accepted by assessee, the onus lied upon him to prove that the same were not used in manufacture of finished goods - The assessee has further contested the demand arising out of certain supplies received as per these In slips from M/s Rashmi Sponge & Power Industries, M/s N.S.Ispat (India) Pvt. Ltd., M/S Shri Ram Rolling Mills & M/s Rooplaxmi Industries Pvt. Ltd. - Demand against whole of a quantity of 197.890 MT received from M/s Rashmi Sponge & Power Industries and a quantity of 25.520 MT of raw material received from M/s N.S.Ispat (India) Pvt Ltd. has been contested on the ground that the same was covered under proper invoices and was duly accounted for - The adjudicating authority has not disputed this fact that these clearances by M/s Rashmi Sponge & Power Industries and M/s N.S.Ispat (India) Pvt Ltd. were not against valid invoices - The charge against the assessee is that the same were not accounted for in their records - Neither before the adjudicating authority nor before Tribunal, assessee has produced any record with respect to specific entries with respect to accountal of these raw materials in their statutory records - Accordingly, Tribunal is not inclined to accept this plea - Similarly in case of M/s Rooplakshmi Industries (P) Ltd, though the supplier has claimed that all his supplies were against valid invoices and there is nothing against him to suggest any clandestine removals, there was an independent requirement on the part of assessee to account for all the supplies received from the raw material suppliers - Any non-accountal will be inferred as a clandestine manufacture of finished goods unless specifically controverted by assessee - As regards, the claim that 101.53 MT of ingots was returned to M/S Shri Ram Rolling Mills, the claim is without any documentary evidence produced with regard to the same - Moreover, charge of clandestine removal is confirmed against M/S Shri Ram Rolling Mills in adjudication order which has not been contested - Accordingly, demand is upheld alongwith interest and penalty under Section 11AC - As regards demand of Rs. 14,24,796, on shortage of 330.288 MTs, of 'cast iron ingot moulds' and 15.85 MT of M S Ingots and excess stock of 191.752 MT of MS channels/Angles, assessee has claimed that the shortage of 330.288 MTs, of 'cast iron ingot moulds' was on account of scrapped moulds on repeated use which were melted and used for manufacture of 191.752 MT resulting in corresponding excess stock of 191.752 MT of MS channels/Angles - Shortage of 15.85 MT of MS ingot has been claimed as weighment error - Assessee was under a stautory obligation to properly account for all the cenvatable inputs and finished goods in the statutory records - The failure would meet with all the consequences of demand and penalties - A mere mathematical possibility that the shortage of CI moulds could have resulted in manufacture of excess finished stock of angles and channels could not be accepted without respective entries in record - The claim is all the more not acceptable because the assessee has been found to be indulging in clandestine manufacture and clearance - Accordingly, the demand is upheld against shortages as well confiscation of the excess stock - Demand, interest, penalty and redemption fine are upheld - Shri Bajrang Jain, Director responsible for the purchase and procurement of Raw materials, Shri Shankar Jain, Director responsible for the work related to production of finished goods, Shri Kailash Agrawal, Director responsible for the marketing of finished goods for M/s Hanukripa Ispat Pvt. Limited are equally responsible for clandestine purchases, and manufacture and clearance of finished goods, hence are liable to penalty under Rule 26 of CER, 2002 - However, penalties on each of them is reduced to Rupees five lakhs each: CESTAT
- Appeal partly allowed: DELHI CESTAT
CUSTOMS
NOTIFICATIONS
cnt52_2019
CBIC notifies Customs exchange rates w.e.f July 19, 2019
dgft19not011
Merger of Council for Trade Development and Promotion (CTDP) in to Board of Trade (BoT) CASE LAWS
2019-TIOL-279-SC-CUS
UoI Vs Dimple Happy Dhakad
Cus - COFEPOSA - Smuggling of 75 kilograms of foreign gold in the form of vie circular discs valued at Rs.24.5 crores by a syndicate of persons from UAE to India - High Court had quashed the detention orders passed against the detenues by holding that there was no application of mind by the detaining authority in passing the detention orders; that the contention of the department that the preparation of copies of documents and bulk of records did not enable the respondent Revenue to serve the relied upon documents simultaneously with the orders of detention is unacceptable; that the preventive detention is in violation of Articles 21 and 22(5) of the Constitution of India and the Guidelines - Appellant Revenue before Supreme Court.
Held: Detention orders were served on the detenues on 18.05.2019 - since the documents were running into 2364 pages and there were fifteen detention orders passed against various detenues, the compilation of documents was served on detenues on 21.05.2019 and 22.05.2019 respectively and which is within the time period stipulated under section 3(3) of the COFEPOSA Act - Section 3(3) of the Act stipulated the statutory period of five days to serve the grounds of detention and in exceptional circumstances for reasons to be recorded not later than fifteen days from the date of detention - section 3(3) of the Act thus allows a leeway of five days at least for the grounds of detention and the documents relied upon in the grounds to be served on the detenues - by the term "as soon as may be…" the statute considers five days as a reasonable time in normal circumstances to convey the grounds of detention to the detenues - There is no statutory obligation on the part of the detaining authority to serve the relied upon documents on the very same day of the service of order of detention - the expression "as soon as may be" cannot be read in isolation from the phrase "but ordinarily not later than five days" - in view of the time stipulated in section 3(3) of the Act and the language used in Article 22(5) of the Constitution of India, "…earliest opportunity…", non-serving of copies of documents together with detention order cannot be a ground to quash the detention order - Preparation of copies of voluminous documents was a time-consuming process and it took time to serve the compilation of documents upon the detenues and, therefore, the orders would not be illegal - section 3(3) mandates to furnish the documents within five days and admittedly the copies have been furnished within the said period - There is no statutory obligation on the part of the detaining authority to serve the grounds of detention and relied upon documents on the very same day, more so, when there is nothing to show that the detaining authority was guilty of inaction or negligence - High Court, therefore, erred in quashing the detention orders on the ground that the documents and material were not supplied pari passu the detention orders - The 'Hand Book on Compilation of Instructions on COFEPOSA matters' is only in the nature of guidelines for the officers of the department - it is well-settled principle that any executive instruction like guidelines cannot curtail the provisions of any statute or whittle down any provision of law - In the present case, the detention orders dated 17.05.2019 record the awareness of the detaining authority that the detenue is in custody and that the bail application filed by the detenues have been rejected by the Court - It cannot be said that the detaining authority has not applied its mind merely on the ground that in the detention order, it is not expressly stated as to the 'detenue's likelihood of being released on bail' and 'if so released, he is likely to indulge in the same prejudicial activities', but the detaining authority has clearly recorded the antecedent of the detenues and its satisfaction that detenues Happy Dhakad and Nisar Aliyar have the high propensity to commit such offences in future - satisfaction of the detaining authority that the detenue may be released on bail cannot be ipse dixit of the detaining authority - High Court erred in quashing the detention orders merely on the ground that the detaining authority has not expressly recorded the finding that there was a real possibility of the detenues being released on bail which is in violation of the principles laid down in Kamarunnisa and Other judgments and Guidelines no. 24 - order of the High Court quashing the detention orders cannot be sustained - Constitution and the Supreme Court are very zealous of upholding the personal liberty of an individual but the liberty of an individual has to be subordinated within reasonable bounds to the good of the people - Order of detention is clearly a preventive measure and devised to afford protection to the society - When the preventive detention is aimed to protect the safety and security of the nation, balance has to be struck between liberty of an individual and the needs of the society - Object of preventive detention is not to punish a man for having done something but to intercept and to prevent him from doing so - In the present case, huge volume of gold had been smuggled into the country unabatedly for the last three years and about 3396 kgs of the gold has been brought into India during the period from July 2018 to March 2019 camouflaging it with brass metal scrap - Detaining authority has recorded a finding that this has serious impact on the economy of the nation - Detaining authority is also satisfied that the detenues have propensity to indulge in the same act of smuggling and passed the order of preventive detention, which is a preventive measure - High Court has, therefore, erred in interfering with the satisfaction of the detaining authority and the impugned judgment cannot be sustained and is liable to be set aside - Impugned judgment of the Bombay High Court quashing the detention orders of the detenues viz. Happy Arvindkumar Dhakad and Nisar Pallathukadavil Aliyar is set aside and the appeals preferred by Union of India are allowed - Consequently, appeals preferred by the detenues shall stand dismissed: Supreme Court [para 12, 19, 26, 35, 37, 38, 40, 41, 43, 44]
- Revenue appeals allowed: SUPREME COURT OF INDIA 2019-TIOL-278-SC-CUS
Khanbhai Esoofbhai Vs CC
Cus - Supreme Court while allowing the appeal in the case of Engee Industrial Services Co. Ltd. & Anr . = 2016-TIOL-40-SC-CUS held that when the product manufactured in India is exempted from excise duty, there is no question of payment of additional duty; that Ship imported for 'breaking' is not chargeable to additional duty - Consequently the appeal filed against the Gujarat High Court decision 2017-TIOL-322-HC-AHM-CUS is allowed - It shall be open for the appellant to request for refund of Customs duty paid by appellant: Supreme Court
- Appeal allowed: SUPREME COURT OF INDIA
2019-TIOL-2037-CESTAT-AHM
Devoir Trading Ltd Vs CC
Cus - The assessee-company imported Inshell Walnuts under transferable DFIA issued against export of biscuits as per standard input output norms - The DFIA was transferred by the Regional Licensing Authority after discharging export obligation by the exporter in terms of provision of para 4.36A of HBP-(2009-14) - Under the DFIA scheme, the goods are exempted by Notification No. 98/2009-Cus dated 11/09/2019 from the whole of Customs duty foregone leviable thereon which is specified in the first schedule of Custom Tariff Act, 1975 - The assessee claimed exemption based on the provisions of the FTP (2009-14) r/w Notfn No 98/09-Cus - Subsequently, the Dy Commr. of Customs re-assessed the Bills of Entry & classified the imported goods as Inshell Walnuts under CTSH 0803231000 attracting 100% duty instead of nil rate as claimed by the assessee - The duty paid under protest was appropriated - Such findings were upheld by the Commr.(A) - Hence the present appeal.
Held: There is force in the assessee's submissions that the term generic input and alternative input are not defined in the FTP (2009-14) and 2015-2020 and the relevant Public Notice No. 93 dated 01.02.2012 for export of biscuits under DFIA covered by SION E-5 and SION E-5 mentions that the description of import item in very specific details and rationalised quantities - As follows from the Bombay High Court's decision in Shah Nanji Nagsi Exports Pvt. Ltd., Vs. UOI it is beyond doubt that the actual use of the imported items in the manufacture of export goods is not a pre-condition to grant exemption under the DFIA - Once imported goods satisfy the description given in the SION and reproduced in the DFIA, they are clearly entitled to claim benefit without payment of duty on the strength of the valid DFIA irrespective of ITC (HS) number mentioned in the DFIA - No actual user condition is specifically mentioned in the SION E-5 - Hence the assessee is entitled to clear the imported 'Inshell Walnut' against the DFIA License obtained against export of 'Biscuits and produced before the Customs authority - Hence the O-i-A merits being quashed: CESTAT
- Assessee's appeal allowed: AHMEDABAD CESTAT |
