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SERVICE TAX
2019-TIOL-2292-CESTAT-MAD
KGK Jet India Pvt Ltd Vs Commissioner of GST & CE
ST - The issue is with regard to rejection of refund claim filed by assessee for refund of service tax as per Notfn 41/2016-ST - Same has been rejected by department on the ground of being time-barred - The refund claim has to be filed within a period of six months from 01.04.2017 when the notification has received the assent of President of India - SIPCOT had collected the service tax from assessee and they were under the impression that SIPCOT would be filing the refund claim - The assessee has produced letter issued by SIPCOT to them from which it is very much clear that SIPCOT has informed the assessee to file refund claim only with much delay - The last date for filing the refund claim is 30.09.2017 - The letter has been issued by SIPCOT only on 12.09.2017 although notification was issued on 22.09.2016 - However, assessee has taken efforts to file the refund claim on 03.10.2017 - It is brought to the notice that 29th, 30th of September, 2017 as well as 1st and 2nd October, 2017 were Government holidays and non-working days in the State of Tamil Nadu - Therefore, the next working day was only 03.10.2017 - The assessee has approached the Alandur office on 03.10.2017 and from there they were directed to approach the Egmore office - Thus, assessee has taken all steps to make the refund claim within time - Considering the fact that there has been delay on the part of SIPCOT to inform the assessee and also taking note of the fact that the last date for filing the refund claim was a holiday, in the interest of justice, the delay of one day, if any, has to be condoned - The delay of one day is condoned: CESTAT
- Appeal allowed : CHENNAI CESTAT
2019-TIOL-2291-CESTAT-DEL
Kassa Finvest Pvt Ltd Vs CST
ST - The assessee is engaged in providing Stock Broking Services - While conducting audit, it was noticed that assessee have been recovering from their customers brokerage as well as transaction charges - However, the service tax has not been paid on the gross value in terms of Sections 67 and 68 of FA, 1994 - A SCN was issued to assessee proposing a demand as service tax qua the transaction charges as received - The interest at the appropriate rate was also demanded - The assessee as a stock broker was admittedly providing services to the investors/ clients on their own behalf of stock exchange and the transaction charges in addition to brokerage charges are collected by assessee from the clients irrespective of their own behalf or on behalf of stock exchange - It is also apparent fact that at the relevant time no service tax was leviable on any services provided by stock exchange and therefore tax liability arising out of sale and purchase of securities for purpose of service tax was to be discharged by stock brokers only and moreover, these liabilities in any case could never has been discharged by the individual investors - From the record as well as the order under challenge, it is observed that though the Commissioner (A) has appreciated that the assessee is not functioning as a pure agent but since it is an apparent fact that he is simultaneously acting as a pure agent - It was mandate for the authorities below to verify the records to distinguish the cases where the assessee has provided services as pure agent on principal to principal basis from those where the assessee has provided stock brokerage services on its own behalf - Without this distinction, the correct assessment of liability of assessee as stock broker cannot be ascertained - Matter is remanded back to the adjudicating authority: CESTAT
- Matter remanded : DELHI CESTAT
2019-TIOL-2290-CESTAT-HYD
Kedia Electricals Ltd Vs CC, CE & ST
CX - The assessee is engaged in manufacture of fans and pressure cookers - A SCN was issued to assessee alleging that they had received invoices on which they have availed cenvat credit without actually receiving the corresponding goods - It is a case of Revenue that the investigation conducted by DGCEI showed that the goods were supplied by suppliers to some other party while the invoices were sent to the assessee - They relied on statement of Managing Director of assessee as well as several others in order to establish that the assessee had not received the materials in question - The next point of dispute is that the goods in question could not have been used by assessee at all for manufacture of fan blades and that they had no facility to re-roll the goods in question to appropriate thickness to use as fan blades - As far as question of goods being suitable for manufacture of fan blades is concerned, both the goods in question cannot be used for manufacture of fan blades but they could have been used for pressure cookers which is also one of the products of assessee - Adjudicating authority has examined the matter in depth and has not found sufficient evidence to substantiate the allegation that the assessee has not received the goods in question covered by the invoices - All the alleged suppliers of goods have been made co-noticees in SCN for imposition of penalties - The co-noticees become very relevant because they were supposed to have issued the fake invoices which forms the basis of allegations against the assessee - Apart from a blank statement that the investigating agency had conducted fool proof investigation, the First Appellate Authority has not explained at all as to why the adjudicating authority was wrong in concluding that there is no evidence of non-receipt of goods covered by the invoices in question - The department has not been able to establish that the goods covered by invoices have not been received by assessee - The First Appellate Authority has erred in setting aside the order of the lower authority - The impugned order is set aside: CESTAT
- Appeal allowed : HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1815-HC-MAD-CX
CCE Vs Pricol Ltd
CX - CENVAT - Issue is whether the transportation charges incurred by the manufacturer for clearance of final product from the place of removal, are included in the definition of "input service" for eligibility to availment of CENVAT credit of service tax or not ? - Revenue in appeal against order of Tribunal.
Held: Bench is satisfied that the matter may go back to the Tribunal to look into the factual aspects of the matter again with respect to the applicability of the above two judgments of the Apex Court viz. 2018-TIOL-90-SC-CX & 2018-TIOL-45-SC-CX in the case of assessee - Revenue appeal disposed of and matter remitted to the Tribunal to decide the matter afresh in accordance with law: High Court [para 5]
- Matter remanded: MADRAS HIGH COURT
2019-TIOL-1805-HC-MUM-CX
CC & CE Vs Twenty First Century Wire Rods Ltd
CX - The first appellant company supplies steel ingots - During the relevant period, it was alleged that it clandestinely cleared such goods without payment of duty - On adjudication, duty demands were raised with interest & penalties - Before the Tribunal, the assessee-company claimed that the Revenue had not followed the principles of natural justice, as they were not provided copies of the relevant RUDs and other documents seized during search were not returned to them - It was also claimed that request for cross-examination of relevant witnesses was rejected - In light of the same, the Tribunal partly allowed the appeals and remanded the matter for non-observance of principles of natural justice - Hence the Revenue's appeals.
Held - The Tribunal rejected the assessee's plea in respect of rejection of cross examination - It did not disclose that the adjudicating authority gave any credence to the statements of various persons whose cross examination was sought, but had decided the matter based on other evidence found during investigation - The Tribunal found there to be no denial of natural justice & rightly held that whilst assessing the merits of a case of violation of principles of natural justice, the Court has to assess not merely the technical aspect of refusal to allow cross examination but whether as a result, a failure of justice has been caused - As the statements of persons, whose cross-examination was sought for by the assessee, were not relied upon for raising duty demand with interest or penalty, no failure of justice can be said to have occurred - Regarding the plea of non-furnishing of documents, the Tribunal observed that duty demand was raised based on documents collected during investigation & such documents had indeed been relied upon - Hence it concluded that there had been a failure to follow the principles of natural justice in this regard - Moreover, where the Tribunal allowed the appeal of the first appellant and remanded their matters for fresh adjudication to the Adjudicating Authority on the ground of violation of principles of natural justice, it is inconceivable that an appeal challenging a similar order passed in case of another appellant could be dismissed - Hence the Revenue's appeals are partly allowed: HC
- Revenue's appeals partly allowed : BOMBAY HIGH COURT
2019-TIOL-1797-HC-MP-CX
Firm Kalekhan Mohammad Vs UoI
CX - The assessee-company manufactured Beedis and paid Excise duty on the same - During the relevant period, the Revenue officers found a hand cart containing some bags of Beedi & seized the same - SCNs were issued to the assessee - On adjudication, penalty was imposed on the assessee on grounds that the beedis were removed from place of manufacture without payment of duty - However, such order was later quashed - The assessee claimed that the beedis in question were not manufactured by it and that the entire proceedings and imposing of penalty involved malicious intent and ignored the applicable law or common prudence - The assessee claimed to have suffered loss of reputation and that its business had been adversely affected and damaged - Hence the assessee claimed compensation and filed the present suit for recovery of the same.
Held: It is seen that the provisions of Section 40 of the CEA 1944 are applicable to the present circumstances - This provision provides protection from suits or legal proceedings against the Central Government or any officer of the Central Government or a State Government for anything which is done, or intended to be done, in good faith, in pursuance of this Act or any rule - It is found that the Revenue officers concerned acted in good faith - Hence no suit, prosecution or legal proceedings are maintainable against the Department or the Central Govt: HC
- Suit dismissed : MADHYA PRADESH HIGH COURT
2019-TIOL-1796-HC-ALL-CX
Mamta Steel India Pvt Ltd Vs CCE
CX - The assessee-company manufactures MS Ingots falling under Tariff Heading 72061090 of the CETA 1985 - The other assessee is the director of the first assessee-company - On adjudication for the relevant period, it was observed that upon visiting the assessee's premises to check available stock of excisable goods, a shortage of some quantity of MS Ingots was recorded - Statements of the assessee-company's director were recorded, admitting that the assessee received unaccounted raw material and deliberately suppressed production of finished goods by issuing false and forged invoices - Hence duty demand was raised and penalty was imposed, along with personal penalty on the director - Such findings were sustained by the Commr.(A) and by the Tribunal after it - Hence the present appeal.
Held: Perusal of the order in challenge shows that the assessee raised several grounds, such as that the weight of MS Ingots was determined by eye estimation & not actual weighment - It was also stated that the invoice books were compared in a follow-up action and no discrepancy was found - It was also claimed that the assessee-company's director made no admissions before the authorities - Perusal of the judgment shows that the Tribunal did not consider any of the arguments raised by the assessee & dismissed the appeal based on the SCN issued - It also recorded that the assessee did not put forth a robust defence - An order without valid reasons is unsustainable & to give reasons is engrained in principles of natural justice - Providing of reasons in orders is of essence in judicial proceedings - Every litigant who approaches the Court with a prayer is entitled to know the reasons for acceptance or rejection of such request - The Court cannot lose sight of the fact that a losing litigant has a cause to plead and a right to challenge the order if it is adverse to him - The opinion of the Court alone can explain the cause which led to passing of the final order - Reason is the very life of law. When the reason of a law once ceases, the law itself generally ceases - Such is the significance of reasoning in any rule of law - Hence even if the Tribunal is in agreement with the order passed by the Commr.(A), it is obliged to record own reasons and findings indicating application of mind in respect of the grounds raised - Thus the matter warrants remand to the Tribunal: HC
- Case remanded : ALLAHABAD HIGH COURT
CUSTOMS
NOTIFICATIONS
dgft25pn019
Modification of Para 4.12(vi) of HBP and addition of Appendix 4P to Hand Book of Procedures 2015-20
36/2019-Cus (NT/CAA/DRI) Appointment of CAA by Pr. DGRI
cnt60_2019
Customs new exchange rates to come into force from Aug 15 CASE LAWS 2019-TIOL-1819-HC-DEL-CUS
Wide Impex Vs PR CC
Cus - In the present case, the provisional release order was passed by the Respondent on 27th April, 2018 subject to certain terms which were then modified by the CESTAT on an appeal by the Petitioner by its order dated 2nd July, 2018 = 2018-TIOL-2751-CESTAT-DEL - Petitioner seeking an unconditional release of the goods imported on the ground that the same were detained illegally and seized on 30.01.2018 in the absence of any SCN u/s 124 of the Customs Act - Counsel for Revenue submits that since the provisional release order has been passed before the expiry of six months from the date of seizure, the second proviso to s.110 of the Act would apply and if it does, then the need for issuing an SCN within a period of six months from the date of seizure will not apply; therefore, the Petitioner cannot insist on unconditional release of the goods.
Held: Two significant amendments have been made to Section 110 of the Act with effect from 28th March 2018 by the Finance Act, 2018 - wording of first proviso to Section 110(2) of the Act has been changed and the second proviso, which did not exist earlier, has been inserted - It must be noted that a SCN was subsequently issued to the Petitioner on 11th April, 2019 and those adjudication proceedings pursuant thereto are in progress - It appears to the Court that the legislative intent was to ensure that the person whose goods are seized is not left in a state of uncertainty, with neither the goods being released nor an SCN being issued despite six months having elapsed since the date of seizure - The second proviso states that where any provisional release of the seized goods is ordered under Section 110A of the Act, then the specified period of six months, as indicated in Section 110 (2) of the Act, would not apply - This is only to make sure that at least there is a provisional release of the seized goods as quickly as possible - In the present case, a valuable right might have accrued to the Petitioner for unconditional release of the goods if no provisional release order had been passed before the expiry of six months from the date of seizure of the goods - The second proviso does contemplate a provisional release order being passed in respect of "seized goods" i.e. goods that had already been seized even when the provision was amended on 29th March, 2018 - In the present case, the period of six months had not expired, calculated either from the date of seizure of goods i.e. 30th January, 2018, or even 11th December, 2017 (as per Petitioner's contention) on the date of the provisional release order i.e. 27th April, 2018 - Therefore, no valuable right of the Petitioner had yet accrued for seeking unconditional release of the goods - In other words, the second proviso did not take away what was already available to the Petitioner - In that sense, the second proviso in the present case cannot be said to have applied retrospectively in order to deprive the Petitioner of a valuable right that had accrued to the Petitioner - Court is, therefore, unable to accept the plea of the Petitioner for unconditional release of the goods in question - Petition is dismissed: High Court [para 12 to 15]
- Petition dismissed: DELHI HIGH COURT
2019-TIOL-1814-HC-DEL-NDPS
Amit Ranjan Vs Narcotic Control Bureau
NDPS - Petitioner has filed an application for grant of anticipatory bail contending that he has been falsely implicated in this case and is apprehending arrest at the hands of the NCB.
Held: As per the provision of Section 37 of the NDPS Act, it is mandatory that before the petitioner is entitled to be released on bail, the Court has to be satisfied that there are reasonable grounds for believing that the petitioner is not guilty of such an offence and that he is not likely to commit the same again while on bail - It is also a fact noticed by the Courts that generally, the conspiracy is hatched in secrecy and it may be difficult, if not impossible, to obtain direct evidence to establish the same - It is prima facie evident from the NCB investigation that all the accused persons are part of a conspiracy and they are connected with each other in view of their respective statements as well as from the recoveries made by the NCB - There is no doubt that the anticipatory bail may be granted when there is material on record to show that prosecution was inherently doubtful or where there is material on record to show that there is a possibility of false implication - However, when the element of criminality is involved; the custodial interrogation is required and/or the other aspects and facts are required to be unfolded in investigation, the applicant is not entitled for anticipatory bail - It is also well-settled law that while considering the question of grant of anticipatory bail, the Court prima facie has to look into the nature and gravity of the alleged offence and the role of the accused - The Court is also bound down and must look into, while exercising its power to grant bail, the antecedents of the applicant and also the possibility of the applicant fleeing from justice, apart from other factors and parameters in view of the facts of each and every case - do not find anything on record, at this stage, to satisfy this Court that there are grounds, or more to say, reasonable grounds, believing that the petitioner is not likely to commit such an offence again and is also not likely to commit the same while on bail - The custodial interrogation of the petitioner is also required in this case, specifically, to unearth and connect the wires of conspiracy, more so, their modus operandi as well as involvement of the petitioner and other persons - The investigation is at the initial stage - The petitioner is stated to have not co-operated in the investigation as the NBWs were issued against him and he has not joined investigation despite repeated notices - Hence, taking into consideration the conduct of the petitioner as well as transfer of huge funds and nature and gravity of the accusations, the stage of the investigation and the alleged role of the petitioner, this Court does not find any merit in the anticipatory bail application of the petitioner - Anticipatory bail application is dismissed: High Court [para 20, 21, 23, 29, 30, 32, 33, 34]
- Application dismissed: DELHI HIGH COURT
2019-TIOL-1813-HC-MAD-CUS
Kawarlal And Company Vs Joint Director General Of Foreign Trade
Cus - SCN was served on the writ petitioner in person (hand delivery) at 4.00 p.m. on 15.05.2019 - It is pointed out that in the said SCN, writ petitioner has been asked to appear before the Officer, who issued the said SCN, on 17.05.2019 at 3.30 p.m - On the same date i.e., 17.05.2019, an order captioned 'Order in Original' came to be passed – impugned order has been called in question in the instant writ petition.
Held: Court is convinced that time granted, which is less than 48 hours, is too short and certainly does not qualify as reasonable time within the meaning of Section 8 of Foreign Trade Development Act, more particularly Section 8(1)(c) of Foreign Trade Development Act – moreover, the order-in-original as served on the writ petitioner shows that it has been signed by an Officer other than the one before whom the writ petitioner appeared for personal hearing, the records show that the order has, in fact, been passed by the same officer before whom the writ petitioner has appeared and the other officer has merely communicated the said order - At best it could have been sent under cover of letter saying that an order passed by another Officer is being communicated - In any event, the order has to be signed by the Officer who has passed the order and in instant case, the order has been signed by an Officer who is not the one, who held the personal hearing - Court is convinced that the same Officer, who held the personal hearing ought to have passed the impugned order and, therefore, the impugned order is liable to be set aside on this ground also - Court is of the considered view that it would serve the purpose to set aside the impugned order without expressing any opinion on merits and directing the second respondent to afford a fresh personal hearing, pass orders afresh after taking into account the response and records of the writ petitioner - impugned order-in-original being order dated 17.05.2019 is set aside without expressing any opinion on merits and the matter will be heard afresh including holding a personal hearing by Joint Director General of Foreign Trade in Bangalore – Petition disposed of: High Court [para 7, 8, 9, 10, 12, 13]
- Petition disposed of: MADRAS HIGH COURT
2019-TIOL-1812-HC-MAD-CUS
Khivraj Tech Park Pvt Ltd Vs UoI
Cus - Petitioner made an application to the second respondent seeking permission for setting up a 'Software Technology Park' - Aforesaid application was processed and a communication dated 29.11.2005, was sent by the Ministry informing that writ petitioner's application was considered in the 'Inter-Ministerial Standing Committee' meeting held on 04.04.2005 and that an approval for setting up infrastructure facility for STP under STP scheme has been given - Writ petitioner sent a representation dated 09.02.2006 to the Director General of 'Software Technology Park of India' submitting that their imports had already arrived in Chennai Port during October-November 2005 and, therefore, sought amendment of effective date of approval of their application and wanted effective date of approval to be made as 04.04.2005, so that the import consignment can be cleared by taking advantage of and by taking benefits under Customs Notification No.153/93 - After sending a reminder on 21.03.2006 alleging inaction, writ petitioner filed an earlier writ petition in this Court - when the writ petition was taken up, writ petitioner, restricted/abridged its prayer and, therefore, writ petition was disposed of with a direction to the respondent concerned to consider the representation of the petitioner dated 09.02.2006 and reminder dated 21.03.2006 - Ministry passed an order dated 12.12.2018 informing that it had not acceded to the request of the writ petitioner - petition filed.
Held: It is very clear that the application is dated 25.01.2005 and the earliest point of time at which the writ petitioner was informed about the approval of its application for setting up STP is only 29.11.2005, but writ petitioner has chosen to make imports in October-November 2005 itself - In other words, writ petitioner has jumped the gun and made imports even before approval of its application was communicated to it on 29.11.2005 - To state this with clarity and specificity, on the dates of imports in October-November 2005, writ petitioner did not have any communication regarding approval of its application for setting up STP - Therefore, having imported without any document in its hand with regard to approval of its application for STP, writ petitioner cannot now be heard to contend that effective date of approval should be advanced to an earlier point of time - no tenable arguments has been made to say that the impugned order needs to be interfered with when the refusal to advance the effective date is based on the undisputed factual position that writ petitioner had only Letter of Intent (LOI) and went ahead without waiting for Letter of Permission (LOP) - Court does not find any ground to interfere with the impugned order, therefore, Petition is dismissed: High Court [para 12 to 14]
- Petition dismissed: MADRAS HIGH COURT
2019-TIOL-1811-HC-MAD-CUS
Raj Television Network Ltd Vs CC, CE & ST
Cus - Notfn. 55/2003-Customs - Appellant urges that once the benefit of exemption is denied to the assessee, confiscation under section 111[o] of the Customs Act, 1962, could not have been ordered by the Tribunal.
Held: Tribunal has dealt with the issue of section 111[o] of the Customs Act, 1962, in the case of the assessee and in the facts of the case, has even determined the redemption of goods applicable to the assessee - Assessee, admittedly, did not satisfy the conditions of the Notification by producing the Installation Certificate before the Authority concerned, nor have they sought extension of period for producing such Installation Certificate - In these circumstances, whether the option for payment of fine or redemption of goods, would be available to the assessee or not, is a question that has already been decided by the Tribunal - no error in the order of the Tribunal - Appeal dismissed: High Court [para 5 to 7]
Cus - If there is any factual error in dealing with the facts produced by the appellant with evidence, they are at liberty to file an application before the learned Tribunal seeking appropriate review of the order impugned: High Court [para 7]
- Appeal disposed of: MADRAS HIGH COURT
2019-TIOL-1810-HC-ALL-CUS
Samsung India Electronics Pvt Ltd Vs UoI
Cus - The assessee-company manufactures electronic appliances - During the relevant period, it imported LCD panels and parts used in manufacture of colored televisions - On such import it paid Customs duties, Additional Customs Duty and CVD - As per Rule 3(vii) of the CCR 2004, the assessee was entitled to avail Cenvat credit on the CVD paid - The assessee used such LCD panels & parts in the manufacture activity - However, some of such LCD panels & parts were not used in manufacture inside India but were re-exported to other manufacturing locations outside India, in the same form and without any processing - As such panels and parts were removed from factory as per CCR 2004, the assessee reversed an amount of credit equivalent to the credit availed upon import of such goods - The assessee then claimed rebate as per Rule 18 of the CER 2002 r/w Notfn No 19/2004 - Such rebate claim was rejected on grounds that the goods re-exported not been manufactured inside India & no Excise duty was paid on them - Hence the present writ petition.
Held - As per Rule 18 of CER 2002, there is no direct specification that the goods eligible for rebate must be manufactured inside India - The requirement is with respect to any goods - The term any would include those goods manufactured in India or else received from outside India - The eligibility for rebate does not hinge on the fact of the goods having been manufactured in India but on whether the Govt notified the rebate on such goods, that goods must also be excisable goods, in respect of which the definition of the term u/s 2(d) is clearly applicable - Considering that LCD panels and parts are specified in the first or second schedule prior to its amendment in 2017, they qualify as excisable goods on which rebate can be claimed - Thus it must be seen whether any duty was paid on such excisable goods - As the goods suffered CVD, Cenvat credit could be availed as per Rule 3(1)(vii) of the CCR 2004 - Hence it cannot be said that the goods suffered no duty as per Rule 18 - There is no dispute that they were exported directly by the assessee to other manufacturing units outside India - In such circumstances, the O-i-O denying rebate is quashed & the matter is remitted to the adjudicating authority for granting the requisite relief: HC
- Assessee's writ petition allowed: ALLAHABAD HIGH COURT
2019-TIOL-1798-HC-MAD-CUS
Mahavir Trading Vs CC
Cus - The present writ was filed by the assessee contesting a decision of the Tribunal, quashing the O-i-A condoning delay of 273 days in filing appeal - The rationale behind such findings was that the Commr.(A) was not empowered to condone delay for period exceeding 30 days - The petitioner assailed the O-i-O on grounds that a copy of the same was not served to them owing to which no appeal was filed - The petitioner also sought to canvass that since the other appellants filed appeals against the O-i-O while the petitioner did not, it was inferred that the petitioner was not served a copy of the O-i-O - Hence it was claimed that the High Courts are empowered to condone such delay.
Held: Such submissions of the petitioner are not meritorious - Just because other appellants as well as the petitioner filed certain appeals against the O-i-O passed simultaneously with the present order in challenge, it cannot be presumed that the O-i-O in the present case, was not served on the petitioner and the same cannot be cited as a sufficient cause for condoning the delay - Moreover, it cannot be said that powers under Article 226 of the Constitution is restricted to condone delay of this nature - Such powers are to be exercised very sparingly in the rarest of rare cases only - Besides, as to whether or not a case falls within the bracket of rarest of rare can be determined only from the facts and circumstances of each case - Moreover, the Revenue's counsel claims to have sufficient evidence to prove that the O-i-O was duly served upon the petitioner - Hence the latter has no case even on merits: HC
- Assessee's writ petition dismissed : MADRAS HIGH COURT |
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