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SERVICE TAX
2019-TIOL-2355-CESTAT-MUM DS Chavan Engineering Works Vs CCE & ST
ST - Appellant got part relief in the appeal preferred before the Commissioner (Appeals) which was again challenged in the CESTAT which by its order dated 4-8-2015 and subsequent rectification dated 29-2-2016 gave its finding that the views undertaken by both lower Authorities as to the activity undertaken by the Appellant would fall under the category of 'manpower, recruitment and supply agency' needs to be set aside - refund claim filed in respect of the amounts paid during investigation - claim rejected, hence appeal to CESTAT.
HELD: Admittedly, as apparent from record, no document was produced before the adjudicating authority and Commissioner (Appeals) to justify non-applicability of doctrine of unjust enrichment to the appellant but submission of CA Certificate and Balance Sheet of company during hearing of the appeal, which is not objected by the Respondent Department, the same can be taken as additional evidence as per rule 23 to CESTAT Procedure Rules, 1982 - cursory reading of the documentary evidence would reveal that incidence of tax has not been passed on by the appellant to any other person - this being so, in carrying forward the judicial precedent set by the Tribunal in the decision of CCE v. Clariant (I) Ltd. [ 2015-TIOL-322-HC-MUM-CX ] that such refund is admissible as a consequence of judgement/order of Appellate Tribunal even if the payment was made voluntarily and without any protest, the following order is passed - the appeal is allowed and the impugned order is set aside - the appellant is entitled to get refund of Rs.3.11 lakh with applicable interest - Department is directed to pay the same within three (3) months: CESTAT [para 5, 6]
- Appeal allowed: MUMBAI CESTAT
2019-TIOL-2343-CESTAT-ALL
GPL Polyfils Vs Commissioner (Audit) GST, CC & CE
ST - The service tax demand was confirmed against assessee alongwith confirmation of interest and imposition of penalties under category of "Supply of Tangible Goods Service" - As regards the supply of Bailing Press Machine to a third party person, the Lower Authorities have referred to the various clauses of agreement establishing that the right of possession shall rest with the user who would be having overall supervision and effective control of the machines - In terms of the definition of "Supply of Tangible Goods", the activity would not be considered as taxable services if the right of possession and effective control of the machine is transferred to the recipient of the machines - The payment or nonpayment of VAT is not one of the requisite condition of definition of Supply of Tangible Goods - It is settled law that no condition or requirement, which is not a part of definition can be introduced by the adjudicator - No doubt the payment of VAT would establish the transaction to be a deemed sale and thus not covered by definition but nonpayment by itself does not lead to the contrary, especially when it stands established from the agreement entered between the parties that the supply was alongwith possession and effective control of the machines - As such, no reasons found to confirm the service tax demand confirmed for the period 2010-11 - Accordingly the same is set aside alongwith setting aside of penalty: CESTAT
- Appeal disposed of: ALLAHABAD CESTAT
2019-TIOL-2342-CESTAT-MUM
Greatship India Ltd Vs Commissioner of CGST
ST - Assessee was engaged in business of provision of offshore logistic service and support services for exploration and production of oil and gas and it entered into charter hire contract with ONGC for vessels - A new taxable entry called 'mining service' was introduced w.e.f. 1-6-2007 and there was confusion in trade if such charter hiring vessels would fall under taxable entry of "mining service" for which assessee paid Service Tax under protest and duly shown the same in ST-3 returns as well as filed refund claim on 24-3-2008 claiming refund of Service Tax paid between August 2007 to February 2008 - The assessee had utilised CENVAT credit on tax paid on services extended by it which was subsequently held by High Court not included in category of definition of services as prevailing them and the activities carried out by assessee was not to be equated with mining service which was included in taxable entry w.e.f. 1-6-2007 - Bombay High Court's order was pronounced on 23-3-2009, basing on which assessee's refund application was processed by jurisdictional officer and in his detailed order, refund claim of assessee was allowed - On perusal of refund order, it is quite clear that refund was allowed on basis of order passed by High Court of Bombay, though refund application was filed prior to such pronouncement of order by High Court - Therefore, putting the assessee under notice that it had wilfully suppressed the fact of excess utilisation of CENVAT credit way back in 2007 would bring an inference that assessee had knowledge of such order to go in its favour in 2010, appears illogical and beyond once's comprehension - Therefore, invocation of extended period in making duty demand against utilisation of CENVAT credit which had become excessive subsequent to such payment is irrational, contrary to the law and without any legal basis - Further, asking for recovery of allegedly excess credit through a SCN and subsequent adjudication process is unrecognised in law, when such order of refund could have been appealed by Department, if refund was made in excess of what was due to the assessee - Otherwise also on merit of appeal, decision of CESTAT, in Idea Cellular Ltd. 2019-TIOL-329-CESTATE-MUM is that there is no bar on availment of unutilized CENVAT credit as there is no lapsing provision for balance 80% for which recovery of credit cannot be done, though interest can be imposed at the best for such excess utilisation - Further, circular no. 137/72/2008 made it clear that there was no lapsing provision incorporated and the existing Rule 6(3) of CENVAT credit rule had not explicitly barred the utilisation of accumulated credit subsequent to repeal of Rule 6(3)(c) CCR, 2004 and contention of revenue that no such circular was in existence cannot sustain in view of the fact that Indian evidence Act under section 78 puts such notification in the category of public documents to be presumed as genuine as per section 79 of Evidence Act - Therefore, when no suppression is made out, extended period is not invocable and therefore interest on duty cann't also be enforced: CESTAT
- Appeal allowed: MUMBAI CESTAT
CENTRAL EXCISE
2019-TIOL-366-SC-CX
CST Vs Lake View Developers
CX - On adjudication for the relevant period, the original authority raised duty demand against the assessee under the heading Management, Maintenance or Repair Service - Such demand had been raised in respect of amounts collected from prospective flat buyers for maintainance of the building - Duty demand with penalty was also raised in respect of Goods Transport Agency service - Subsequently, the Tribunal quashed such duty demands - It also set aside the penalty imposed in respect of GTA service, on grounds that the duty amount was negligible - Later, the High Court noted that the issue stood resolved in the assessee's favor as the Tribunal's verdict had been upheld by the High Court - Hence it found no question of law warranting its intervention.
Held - Leave granted: SC
- SUPREME COURT OF INDIA
2019-TIOL-1864-HC-MUM-CX
Raymond Ltd Vs UoI
CX - Petitioner challenges the action of respondent No.2, the Commissioner CGST and Central Excise Thane in seeking to revive six show cause notices dated 4th April, 2001, 18th September, 2001, 24th January, 2002, 24th June, 2002, 26th March, 2003 and 12th January, 2004 under the CEA, 1944 by issuing notices for personal hearing in respect thereof on 26th June, 2018 and 11th July, 2018 - grievance of the petitioner is that by issuing notices for personal hearing long after the impugned show cause notices i.e. between 14 to 17 years of its issue and after 15 years of the last hearing in 2003 in respect of some of the impugned notices, is bad in law; that this revival of abandoned show cause notices long after the last hearing in 2003, causes prejudice to the petitioner as the relevant documents pertaining to the impugned notices were not available so as to appropriately meet the charge in the impugned show cause notices; that holding adjudication, after a long delay after the issuing of show cause notices, is bad in law.
Held: Counsel for the Revenue very fairly stated that no intimation of keeping the show cause notices in the call book was given to the petitioner - Court, in the case of Bhagwandas Tolani ( 1983 (12) ELT 44 (Bom.) decided as far back as 1982, has held that even if there is no time limit provided in the statute for adjudication proceeding, yet it is not permissible to commence adjudication proceeding after a long period of 10/15/20 years, particularly when the delay is not on account of any default on the part of the answering party - It was further held therein that reopening of an adjudication proceeding after a long time would cause serious prejudice to the parties, as in the meantime, the relevant records may have been misplaced, the persons who were in charge of the affairs relating to issue raised in the show cause notice may no longer be available - In the present facts, it is the case of the petitioner that because of long delay, papers and proceedings relevant to meet the show cause notice are not available, thus seriously hampering the petitioners to appropriately meet the show cause notice - This delay in taking up the adjudication of the show cause notice (in the absence of any fault on the part of the party complaining) is a facet of breach of principles of natural justice - It impinges on procedural fairness, in the absence of the party being put to notice that the show cause notices will be taken up for consideration, after some event and / or time, when it is not heard in a reasonable time - However, when the notices are being kept in abeyance (by keeping them in the call book), the Revenue should keep the parties informed of the same - This serves two fold purpose, one, it puts the party to notice that the show cause notice is still alive and is only kept in abeyance - Therefore, the party can then safeguard its evidence, till the show cause notice is taken up for adjudication - Secondly, if the notices are being kept in the call book for some reason, the party gets an opportunity to point out to the Revenue that the reasons for keeping it in call book are not correct and the notices could be adjudicated upon immediately - This is the transparent manner in which the State administration must function - In paragraph 9.4 of the CBEC Circular No. 1053 of 2017 dated 10/03/2017, Board has directed the officers of the department to formally communicate to the party that the notices which have been issued to them, are being transferred to the call book - This would be expected of the State even in the absence of the above circular; the circular only states the obvious - Therefore, it was reasonable for the petitioners to proceed on the basis that the department was not interested in prosecuting the show cause notices and had abandoned it - These proceedings are now being commenced after such a long gap, after having led the petitioner to reasonably expect that the proceedings are dropped, therefore, even if, notices can be kept in the call book to avoid multiplicity of the proceedings, yet the principle of natural justice would require that before the notices are kept in the call book or soon after, the petitioners are informed the status of the show cause notices so as to put the parties to notice that the show cause notices are still pending - Giving notices for hearing after gap of 17 years, as in this case, is to catch the parties by surprise and prejudice a fair trial, as the documents relevant to the show cause notices are not available with the petitioners - impugned show cause notices dated 4th April, 2001, 18th September, 2001, 24th January, 2002, 24th June, 2002, 26th March, 2003 and 12th January, 2004 and the consequent hearing notices dated 26/06/2018 and 11/07/2018 are quashed and set aside - Petition disposed of: High Court [para 6, 7, 9, 10, 11, 12]
- Petition disposed of: BOMBAY HIGH COURT
2019-TIOL-2354-CESTAT-MUM
Bilt Graphic Paper Products Ltd Vs CCE, C & CE
CX- Whether the Commissioner (Appeals) or the Tribunal is vested with the power to condone the delay in filing the appeal before the Commissioner (Appeals) beyond the condonable limit of 30 days in addition to the statutory limit of 60 days prescribed under the Central Excise Act, 1944.
HELD: Issue is now no more res-integra and covered by the decision of Supreme Court in the case of Singh Enterprises [ 2007-TIOL-231-SC-CX ] - from the judgment of the Bombay High Court in the case of Raj Chemicals [ 2012-TIOL-278-HC-MUM-CX ], there should not be an iota of doubt about the power/jurisdiction vested either with the Commissioner (Appeals) or with the Tribunal in condoning the delay beyond the condonable period of 30 days in addition to the statutory limit of 60 days prescribed under section 35 in filing the appeal before the Commissioner (Appeals) - in the result, the impugned order is upheld and the appeals being devoid of merit, are accordingly, dismissed : CESTAT [para7, 8]
- Appeals dismissed: MUMBAI CESTAT
2019-TIOL-2353-CESTAT-MUM
Creative Polymers Pvt Ltd Vs CCE
CX - Paints and varnishes - Appellant discharging duty adopting MRP based assessment in accordance with section 4A of the CEA -Revenue alleged that the goods are to be valued in terms of s.4(1)(a) of CEA, 1944 and demanded differential duty - demand upheld by Commissioner(A) - In the first round of appeal, Tribunal, observed that the goods are liable to be assessed in accordance with section 4(1)(a) of CEA but remanded the matter to the Commissioner (Appeals) for re-calculation of duty after allowing admissible deductions from the price to the appellant and extending the benefit of cum-duty price while determining the assessable value - in the de-novo proceedings, the Commissioner (Appeals) has dis-allowed deduction on account of commission paid to the indent agent and also had not allowed cum-duty price benefit to the appellant, hence appeal to CESTAT.
HELD: There was no scope left to the Commissioner (Appeals) to decide whether benefit of cum-duty price is to be extended or otherwise when the said benefit was already allowed to the appellant by this Tribunal in remand - as far as deductions on account of over-riding commission paid to the indent agent are concerned, the said commissions are paid to various dealers/agents who procure orders on behalf of the appellant - the principle of law in this regard is well settled by the Supreme Court in the case of Coromandel Fertilizers Ltd. [2002-TIOL-343-SC-CX-LB] holding that the commission paid cannot be considered as 'discount'- in the result, the appellants are not eligible to deductions claimed on account of commission paid to the indenting agents - however, to extend the benefit of cum-duty price, the matter is remanded to the Adjudicating authority - appeal is allowed by way of remand: CESTAT [para 5, 6, 7]
- Matter remanded: MUMBAI CESTAT
2019-TIOL-2352-CESTAT-BANG
Fleurdelis Technologies Pvt Ltd Vs CCT
CX - Wrong availment of CENVAT credit of ST on certain services - demand confirmed along with interest, penalties imposed under section 78(1) of the Finance Act, 1994 and rule 7C of Service Tax Rules, 1994 [STR] - on appeal, the Commissioner (A) upheld the O-in-O except setting aside penalty imposed under rule 7C of the STR - appeal to CESTAT in the matter of imposition of interest/penalty.
HELD: Appellants have reversed the wrongly availed CENVAT credit on being pointed out by the audit before the issuance of SCN - further, the appellant has filed the ER-1 returns along with the reply to the SCN wherein they have shown sufficient balance in their register till the date of reversal but the same was not considered by both the authorities below and they have only considered ST-3 returns and recorded the finding that the assessee did not have sufficient balance in their CENVAT register - further, this issue is no more res integra and has been settled in favour of the assessee by the Karnataka High Court in the case of Bill Forge Ltd. [ 2011-TIOL-799-HC-KAR-CX ] along with other decisions rendered by the Tribunal - by following said ratio, the impugned order is set aside by allowing the appeal of the appellant : CESTAT [para6]
- Appeal allowed: BANGALORE CESTAT
2019-TIOL-2351-CESTAT-MAD
Harekrishna Steel Industries Vs CCE
CX - MS bars/MS Rounds - Appellants were issued SCN demanding duty, interalia , on the ground that the aggregate value of clearances of M/s.Navneet Industries (which was functioning in the same premises) is to be added to the aggregate value of clearances of the appellant - demand confirmed along with interest, equal penalty imposed - appeal to CESTAT.
HELD: There is no proof brought forth in the SCN that Navneet Industries were actually and still functioning from the very same premises which had been taken over by the appellant - there is also no indication that investigations were extended by department to Navneet Industries also, to bring out irrefutable evidences that the said entity had been manufacturing in the same premises even after they handed over the premises to the appellants -the contention of the revenue that the lease agreement is not valid since it has not been signed by both the parties but only by the appellant and it has not been registeredcannot be made at this stage since the agreement was brought to the notice of the adjudicating authority at the stage of adjudication, and there has been no such discussion or finding to this effect - even otherwise, just because the agreement was not signed by the other partner or not registered, it cannot be concluded that it is an invalid one, unless it is conclusively proved that the agreement is concocted or forged one -the argument that in the present case, since clubbing is sought to be made of two units which are allegedly manufacturing and clearing goods from the same premises, therefore SCN is not required to be given to the other unit is a facile one -the allegations made by the department does not have any legal legs - the impugned order confirming the allegations made in the SCN cannot be sustained and is required to be set aside - accordingly, appeal is allowed : CESTAT [para 5.1, 5.2, 6]
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-2341-CESTAT-MAD
Jeevan Diesels And Electricals Ltd Vs CCE & ST
CX - Assessee, a 100% EOU is the manufacturers of 'Diesel Generator sets' and parts thereof - The assessee procured the goods by import as well as indigenously without payment of duty under Notfn 52/2003-Cus. and No. 22/2003-CE - The assessee had cleared one Diesel Generator set to M/s. ONGC, claiming exemption against Project Authority Certificate under Notfn 12/2012-Cus. - The said clearance was effected in DTA under Notfn 23/2003-CE read with Notfn 12/2012-Cus - The department took the view that since the assessee had cleared the goods at 'nil' rate of duty by availing exemption under Notfn 12/2012-Cus., they are not eligible to avail benefit of Notfn 22/2003-CE on the inputs procured by them for manufacture of the impugned Diesel Generator sets - The finished goods manufactured by assessee out of the inputs procured under Notfn 22/2003-CE, if imported are leviable to 'nil' rate of duty of customs and hence assessee is not entitled for exemption on the inputs imported indigenously procured under the said Notifications - No doubt, the intended purpose of the proviso in Notfn 22/2003-CE as amended seeking to deny the exemption from Central Excise duty on inputs in cases where goods cleared into DTA are non-excisable and similar proviso in Notfn 52/2003-Cus is basically to counter balance otherwise comparative disadvantage that DTA units manufacturing similar goods have to suffer duty on inputs phase - At the same time, it is to be kept in mind that the intended purpose of treating supply of goods to certain persons or organizations to be regarded as deemed exports is not only to provide a fillip for the goods manufactured in India but also enable saving of foreign exchange - CBEC Circular will apply mutatis mutandis to supply of deemed exports covered by category (f) of para-8.2 of FTP which covers supply of goods to a project of purpose for which the MoF, by a notification, permits import of such goods at zero customs duty - It is also clarified in para-8.2 that benefit of deemed export shall be available under para 8.2 (f) only if the supply is made under the procedure of International Competitive Bidding - Benefit of deemed export will be available to the supply of one Diesel Generator set made by assessee to ONGC under Project Authority Certificate issued by competent authority, interalia certifying that such benefit is permitted for the said supply in accordance with para 8.2 (f) and 8.4.4 (iii) of the FTP-2004-09, and the clearance of the impugned item will bet benefit of duty exemption as claimed by assessee - Impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-2340-CESTAT-BANG
Maharaja Industries Vs CCT
CX - The entire case has been made by department on the basis of Mahazar which is purely inadmissible evidence - The Department has not recorded any statement of Mr. R. Prakash, Manager of M/s. Maharaja Industries - The goods which were loaded in the truck parked inside the premises of assessee had not been removed from the factory and in the absence of removal of goods from the factory the question of payment of duty or issue of invoice does not arise - Further, the reasons given by assessee for not updating the daily stock account on account of the accident of Mr. Shashikumar who was maintaining the record was not verified by the Department - It is a settled law that power of confiscation does not extend to goods still inside the factory premises and not cleared without payment of duty and the various case laws clearly held that confiscation of goods and imposition of penalty is bad if the goods are not cleared without payment of duty and are still inside the factory - The Revenue has also failed to prove that the vehicle parked inside the factory and loaded with detergent cake and those cakes were manufactured by M/s. Maharaja Soaps Industries Pvt Ltd as the name of assessee as per the law should contain all the details relating to manufacture and manufacturer was missing - In the absence of any evidence of manufacture and removal of goods from the factory of M/s. Maharaja Soaps Industries Pvt Ltd without payment of duty, the order of confiscation of goods and penalty is not sustainable - As far as imposition of redemption fine and penalty on the proprietor of M/s. Harita Transport, no evidence has been brought on record by the Revenue that the Proprietor has deliberately used the vehicle for clandestine removal of the goods - There is no evidence either of the owner or driver of the vehicle having knowledge of the alleged removal of goods without payment of duty and the liability of said goods for confiscation - In the absence of such cogent evidence, the imposition of redemption fine and penalty is not sustainable: CESTAT
- Appeals allowed: BANGALORE CESTAT
CUSTOMS
2019-TIOL-363-SC-CUS
Commissioner Of Customs Vs Giorgio Armani India Pvt Ltd
Cus - The assessee-company is engaged in the business of fashion retail in India - It imported fashion apparel from various group companies - As the foreign suppliers and the assessee-importer were related entities u/r 2(2) of the Customs Valuation Rules 2007, the valuation of such imports was conducted by the Special Valuation Branch - On adjudication, it was held that the invoice value of imports were to be loaded with additional amounts, namely the annual franchise fee of 5% of value of net purchases, 2% of the institutional advertising and promotional campaign and 3% on account of advertising expenditure required to be undertaken by assessee in India as per terms of agreement - Thereafter, the Tribunal observed that such payments were made as a condition of sale of imported goods - Hence the loading of 2% amount was upheld by the lower authorities - As regards the loading of 3% of value of purchase, it was noted that such advertisement was carried out in India for promoting the Giorgio Armani brands & such expense was incurred after import of the goods - Hence it was observed that such expense could not said to have been incurred to satisfy the obligation of foreign principal - Hence the condition in Rule 10(1)(e) was not satisfied & loading the invoice value to this extent was untenable - Therefore, the loading of franchisee fee @ 5% and share of worldwide advertisement @ 2% was upheld, while loading 3% for advertisement expenditure incurred in India was quashed.
Held - Delay condoned - The findings of the Tribunal do not warrant any interference with: SC
- Revenue's appeal dismissed: SUPREME COURT OF INDIA
2019-TIOL-2339-CESTAT-AHM
Gastrade International Vs CC
Cus - The issue involved in the case is that whether the Commissioner is required to issue notice to the importer proposing extension of time limit for issuance of SCN or he may extend the time limit without putting the importer to the notice in this regard- On the identical issue for the prior period to the amendment in Section 110 i.e. before 29.03.2018, Bombay High Court considered the identical issue in case of Beauty Gem- From the said order, it is observed that for extending the time a SCN was issued despite this the High Court has held that exceeding of time limit cannot be made without recording any finding, accordingly, Revenue's appeal was dismissed - Similarly in the case of Gaunir Impex Pvt. Ltd., the High Court observed that even though a SCN for extension of time was issued by it is only before three days of the expiry of the period and seeking extension of time to reply the SCN was turned down - The High Court has held that the department has not followed the natural justice, the writ petition was allowed - In both the judgments, the department has issued SCN even for extending the time limit for issuance of SCN under Section 110 however in present case no SCN was issued - The department's submission is that after amendment in the Section 110, there is no need of issuance of SCN - The only requirement is that the Commissioner has to record the reason in writing while extending the time limit for issuance of SCN - Even the Commissioner has not recorded the reason properly in the order - However the same issue for the period even after the amendment in Section 110 has come up before the Tribunal in the case of M/s Swees Gems & Jewellery 2019-TIOL-1252-CESTAT-DEL the Tribunal after interpreting and discussing the difference in the provision of Section 110(2) before and after amendment came to the conclusion that the amendment is not such that the department is not required to issue SCN - In view of the above decision which is in respect of the amended provision of Section 110 (2), there is no legal authority with the department for dispensing with issuance of SCN to the assessee, therefore, the impugned order passed without issuance of any SCN will not sustain - Accordingly, the impugned order is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT |
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