HIGH COURT

2019-TIOL-1956-HC-AHM-GST

Perfect Boring Pvt Ltd Vs UoI

GST - Court had directed the applicant to furnish a bank guarantee for a sum of Rs.55,00,000/- to the respondent No.2 within a period of one month from the date of the order and to also file an undertaking to the effect that he shall pay the balance amount of Rs.55,00,000/- in equal monthly installments within a period of eight months - Applicant submits that the first three installments have already been paid but the fourth could not be paid as the bank account has been attached by the respondent as they could not furnish the bank guarantee within the period specified, therefore, they seek extension of time period.

Held: Having regard to the facts, the court is of the view that the request of the applicant for extending the period for furnishing the bank guarantee is a reasonable one, more so, considering the fact that substantial amount out of the outstanding amount has already been paid - However, at the same time, to protect the interest of the Revenue, it is ordered that in case of default on the part of the applicant to pay any further installment, respondents are permitted to resort to the provisions of section 83 of the CGST Act, 2017 for attaching the bank accounts of the applicant - period for furnishing bank guarantee for a sum of Rs.55,00,000/-, as directed vide order dated 08.02.2019, is extended for a further period of FOUR MONTHS - Application allowed: High Court [para 8, 9]

- Application allowed: GUJARAT HIGH COURT

2019-TIOL-1951-HC-MUM-GST

High Ground Enterprises Ltd Vs UoI

GST - Petitioner has sought to question the refusal by the Officers of the Director-General of GST Intelligence, Mumbai to supply documents to the Petitioner seized by the officers and also sought a direction to the Respondents to hand over copies of the documents seized on 9 January 2019 and 10 January 2019 - Petitioner, in the meanwhile, received notices from the Bombay Stock Exchange and the National Stock Exchange in connection with the non-submission of financial results - Bombay Stock Exchange issued a notice to the Petitioner imposing a penalty of Rs.1,06,200/- payable till 17 June 2019 and thereafter Rs.5,000/- per day - Since the documents were not given to the Petitioner and the Petitioner is facing coercive action from the Stock Exchange, the Petitioner has filed the present petition seeking direction to the respondent authorities to hand over the copies of the documents seized - Petitioner clarifies that they seek copies of the documents seized by the respondent authorities and not the originals thereof - Counsel for Revenue contended that it is open to the Chartered Accountant of the Petitioner to take inspection of the record; that handing over documents at this stage will gravely prejudice the investigation; that the investigation is at a sensitive stage and considering the complexity, it would be prejudicial to the investigation, if the copies are given to the Petitioner; that the Petitioner is likely to manipulate the documents and alert its associates and stall the progress of the investigation.

Held: Scheme of Section 67 of the CGST Act, 2017, more particularly sub-section (5) thereof, suggests that as far as copies of the documents so seized, a person from whose custody such documents have been seized will have right to get the copies thereof - This right is qualified with a contingency where giving such copies will prejudicially affect the investigation - The legislative intent as far as the documents and books which are seized under section 67(2), is clear - The originals of documents or books so seized must be kept by the officer only for a period as may be necessary for an inquiry - Meaning, such documents or books should not be needlessly kept in custody which will otherwise gravely prejudice the person from whose custody the said documents were seized - if the originals cannot be returned, at least the person is entitled to receive copies thereof, the idea being that businesses should not be subjected to needless harassment - There are two facets of the opinion of the Proper Officer as contemplated under section 67(5) of the Act - Firstly, the opinion, which would be a decision, should be reflected in the record - The opinion cannot be a mere ipse-dixit of the Proper Officer - There must be cogent reasons to withhold giving of copies to the person - A mere statement that it will prejudicially affect the investigation would be only chanting the language of the section - Respondents have stated that according to their intelligence input, there may be some shell companies involved in evasion of tax - Then the Respondents state that if the copies are given, they may be manipulated or fabricated to evade the payment of tax - It is stated that most of the documents that have been seized are photocopies and not the original - Then it is stated that if the copies of the documents are given to the Petitioner, such copies will be used to alert its associates and, lastly, which is a contradiction, that soft copies are available with the petitioner - Section 67(5) of the Act creates a right to receive the copies by a person from whose custody the documents are seized - The said person need not give justification why he needs the copies of the documents seized - Therefore, the argument that the Petitioner must show a cogent reason why the Petitioner needs copies and only an inspection by the Chartered Accountant will suffice has to be rejected - As regards the tampering of evidence is concerned, it is not explained how, when the originals are with the respondent authorities, the said documents will be tampered by the Petitioner - Second, if the soft copies are available with the Petitioner, the argument that if the copies are given, now the Petitioner will alert its associates is also not explained - upon going through the file noting, it is seen that Note states that giving of copies would prevent investigation - This is only a reproduction of the language of the section - Further, the Note is prepared on 7 August 2019, i.e. one month after the present writ petition was filed - Therefore, first, no reasons are given in the said note as to how giving of copies will prejudice the investigation and, second, the record is created subsequently - averment in the affidavit filed by the Respondents is that the Petitioner did not co-operate by answering the summons, however, the petitioner has pointed out that they attended subsequently, which fact is not mentioned in the affidvait filed by respondents and the same is not an innocuous mistake - authorities ought to place all the material facts before the Court - It appears that partial averments are made to give different colour to the adjudication - legislative intent is clear that the documents or books seized must not be kept in the custody of the officer for more than the period necessary for its examination and copies thereof need to be given to the person from whose custody the said documents or books are seized - documents were seized in January 2019, and the petition is being heard in the middle of August 2019, prejudice to the Petitioner has been demonstrated - refusal by the respondent-authorities to give copies of the documents to the Petitioner which are seized under Panchanama dated 9/10 January 2019 is not justifiable and the Petitioner is entitled to the mandatory direction as prayed for - authorities to furnish copies of the documents seized under Panchanama dated 9/10 January 2019 within two weeks - Petition disposed of: High Court [para 10 to 20]

- Petition disposed of: BOMBAY HIGH COURT

AAR CASE

2019-TIOL-276-AAR-GST

Rajasthan Rajya Vidyut Prasaran Nigam Ltd

GST - The applicant-company has been declared as State Transmission Utility by the State Government of Rajasthan - As it is a transmission licensee and owns a transmission system, the exclusive right of modification/augmentation/shifting/additions to its transmission system remains with it - As transmission licensee, the applicant is required to develop transmission system in the State of Rajasthan and provides the pathway for power in the whole state - The applicant owns, builds, maintains and operates high-voltage electric transmission system - It also owns shared generating projects - Since the exclusive right of deposit work to the applicant's transmission system remains with the applicant and it has to comply with the technical grid standards of operation and maintenance of transmission lines specified by the Central Electricity Authority, the deposit work to the applicant's transmission system is carried out on the request of the consumer under two methods, with the whole work either being executed by the applicant or by the intending agency under the applicant's supervision - Hence the applicant approached the AAR seeking to know whether facilitating execution of works requiring modification/augmentation/shifting/additions to the transmission system of RVPN at the specific request of the consumer/intending agency under Deposit Work qualifies as supply u/s 7 of the CGST Act - If so, the applicant sought to know the value of supply u/s 15 of the Act in event of work executed by the applicant itself as well as by the intending agency - It sought to know the GST rate applicable on such supply.

Held - Facilitating the execution of Deposit Work by the applicant to the consumer/intending agency is covered under the scope of supply u/s 7 of the CGST Act - Also in both circumstances mentopned by the applicant, value shall be the transaction value, that is the price actually paid or payable in terms of Section 15 of the CGST Act 2017 - Hence the rate would be 18%, being 9% CGST + 9% SGST: AAR

- Application disposed of: AAR

SERVICE TAX

Hungama Digital Media Entertainment Pvt Ltd Vs CST

ST - Appellant presses following questions of law (i) Whether the Tribunal was right in not considering the decision of coordinate bench passed in Ceolric Services V. CCE - 2011 (23) STR 369 to hold that the revised ST3 returns filed by the appellant could not be considered as the same were filed after two years of filing the original ST3 returns?; (ii) Whether nonpayment of service tax due to genuine financial difficulty and suo moto payment of part service tax before the start of investigation be equated to willful nonpayment of tax leading to imposition of penalty? And (iii) Whether the Tribunal was right in not granting the benefit of Section 80 of the Finance Act, 1994 when in the similar case of appellant itself for prior period and on identical facts, the benefit of Section 80 was granted and penalties imposed on it were set aside?

Held: It is an undisputed position that the appellant had collected service tax from its customers - It is also undisputed that the same was on the representation that the appellant would be handing it over to the State - Mere claim of financial difficulty would not justify the appellant's conduct of collecting tax from its customers and not passing it on to the State, which conduct itself would warrant imposition of penalty - The fact that for the earlier period the Tribunal by its order dated 2nd September, 2016 took a lenient view, would not give rise to a enforcible right to the appellant to continue failing to discharge its obligation in law - A lenient view, by itself, means that in law what is being done is not correct - Nevertheless, no penalty is being visited upon the party in view of the lenient view taken by the Tribunal despite its conduct - It is not correct for the appellant to proceed that a lenient view gives it a license to misrepresent to its customers that the amounts are being collected for being handed over to the State and then keep it with itself - The submissions that as the taxes have been paid to State along with interest will in fact warrant no penalty is strange - State is not in the business of banking / money lending - Submission that a part of the service tax was paid by the appellant before the investigation had commenced in these facts, would not warrant waiver of imposition of penalty - The benefit under Section 80 of the Finance Act, 1994 can be granted only when the conduct is bona fide and in the present facts, Bench does not find it to be so - finding of the Tribunal cannot be found fault with - questions (ii) and (iii) do not give rise to any substantial question of law, thus, not entertained: High Court [para 3, 4]

ST - Insofar as the question (i) is concerned, prima facie, the impugned order while dealing with this issue has given no reasons - appeal is admitted on the substantial question of law as formulated at question (i) - final hearing of this appeal is fixed on 21st October, 2019: High Court [para 4, 5]

- Hearing fixed: BOMBAY HIGH COURT

2019-TIOL-2443-CESTAT-BANG

Bruhat Bangalore Mahanagara Palika Vs CST

ST -Whether the activity of appellants in renting out immovable property, space for advertising, space for parking etc. attracts Service Tax during the relevant periods of the demand.

HELD: Argument of the Revenue with regard to renting of immovable property is acceptable - the constitutional validity of the same is upheld by the Delhi High Court in the case of Home Solutions Retails (India) Ltd. [ 2011-TIOL-610-HC-DEL-ST-LB] - Madras High Court has upheld the applicability of the same to Municipalities in the case of Tenkasi Municipality [ 2015(37) STR 696 (Mad) ] - there is dispute regarding the quantification of duty and the nature of renting of immovable property and leasing out/sale of space for advertising as to whether are not for the purposes of furtherance of business interest or otherwise - it is not forthcoming from the OIO whether the appellants were put to sufficient notice before finalization -this is certainly against the principles of natural justice -further, as submitted by the appellants, there are four divisions and different officers, as a result of change/transfer, submitted different figures -therefore, it is quite possible that contradictory and different figures are submitted at different times -considering these circumstances and facts of the case, the matter requires going back to the original authority for reconsideration of the issue afresh in the light of submissions of the appellants, in the interest of justice - therefore, appeals are allowed by way of remand to the adjudicating authority -all issues are kept open - the appellants are ordered to provide all the requisite data within 6 weeks - the adjudicating authority shall pass an appropriate order, as far as practicable, within further 8 weeks of such submission after giving due opportunity of being heard to the appellants -all the four appeals are disposed off in the above terms : CESTAT [para8]

- Matter remanded: BANGALORE CESTAT

Bestech India Pvt Ltd Vs CCE

ST - The assessee is a real estate developer engaged in business of development of land by constructing residential & commercial real estate projects for purpose of selling it to the intending customers - It received certain administration charges / transfer charges from customers intending to change their name in the ownership records upon transfer of property in the name of the prospective buyers - Revenue believed that the said mentioned administrative charges were received towards the services of 'Real Estate Agent's Service' provided by assessee and since assessee had not discharged service tax on this activity, a SCN was issued for demand of service tax.

Held: In Ansal Properties Infrastructure Ltd. 2017-TIOL-3154-CESTAT-DEL, the Tribunal held that the transfer charges received by assessee for permitting the transfer of land from one person to another cannot be taxed as 'Real Estate Agent Service' - In Ansal Housing & Construction Limited 2017-TIOL-4333-CESTAT-DEL and MGF Developments Limited the Tribunal took the same view - The Appellate Authority has completely failed to appreciate the contentions advanced by assessee and committed an error in holding that the payment received by assessee towards the administrative charges was as 'Real Estate Agent Service' - In fact, the Appellate Authority relied upon an interim order passed in the appeal filed by M/s MGF Developments Limited, which appeal was ultimately dismissed - Thus, the impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2019-TIOL-2441-CESTAT-AHM

Corner Point Infrastructure Pvt Ltd Vs CCE & ST

ST - The assessee is engaged in developing various residential and commercial projects - They used to receive advances for sale of property on which Service Tax was paid by them - In cases where they received unsecured loans, they did not pay the Service Tax - A SCN was issued to assessee on various grounds demanding Service Tax as well as denial of Credit - As regards the demand of Service Tax of Rs.Rs.2,64,357/- raised on presumed receipt of money to the extent of Rs.82,70,000/- presumably received by assessee as per certain scribbling made by the Accountant noticed at the premises of assessee, it is trite law that the onus is on revenue to prove their case beyond mere scribbling - In absence of any proof regarding receipt of such consideration, demand on this count also must fail - As regards the demand of Service Tax of Rs.67,10,232/- on certain Cash income, purportedly received by assessee and not taken in books of accounts, no independent corroborative evidence, except some loose entries in the computer of the Accountant has been adduced by the revenue authorities to substantiate such serious charge - No statement of any buyer is also recorded to corroborate such facts - In absence of any independent corroborative evidence, mere loose entries done in computer for practice of accounts of statement that too when retracted, cannot form sole basis for demanding the tax - As regards the credit of Rs. 2,793/- assessee during the course of hearing conceded to the same considering smallness of the amount - The said demand is therefore confirmed - As regards the Cenvat Credit of Rs. 6,18,478/-, the credit is sought to be denied on the ground that it pertained to cancellation of certain bookings where tax was also refunded to prospective customers - At the same time, the revenue authorities allege that since tax was not paid originally, there is no question of allowing credit thereof to the assessee - That inasmuch as SCN at ANNEXURE A, B & C has already demanded Service Tax on whole of bookings, denying credit simultaneously on the ground that while upon cancellation refunds were made to customers, but Tax was not paid earlier, is not proper - That since such tax is demanded with interest, there is no need to deny credit simultaneously on cancelled bookings - Penalty on Director is also uncalled for and the same is set aside - As regards the plea that since the assessee was under financial distress and hence there was delay in payment of Service Tax and reliance on the decision in case of Onward E-Services Ltd 2018-TIOL-1393-CESTAT-MUM, the original authority is directed to consider the same in course of re-adjudication of specific issues - The appeals are disposed of by way of remand: CESTAT

- Matter remanded: AHMEDABAD CESTAT

CENTRAL EXCISE

Man Made Spinners India Ltd Vs UoI

CX - Commissioner (Appeals) allowed the petitioner's appeal and directed a refund of Rs. 45 lakhs in cash to it - Revenue appeal before Tribunal was heard on 18 November 2016 and allowed on merits on the same date, in the absence of the petitioner - On learning of this order, in view of recovery proceedings, the petitioner filed an application for recall of the order dated 18 November 2016 to the Tribunal - On 25 May 2018, the application was dismissed by the Tribunal on the ground that its order dated 18 November 2016 in appeal was an order on merits and incidentally, this order was again passed without hearing the petitioner - Petitioner is, therefore, before the High Court - Counsel for Revenue argues that the remedy of the petitioner, if aggrieved, is to file a statutory appeal under Section 35G of the Act to this Court.

Held: It is an undisputed position that both the impugned orders dated 18 November 2016 and 25 May 2018 have been passed in the absence of the petitioner - This non-representation of the petitioner undisputedly was because notice of hearing issued by the registry of the Tribunal was sent to the old address and not the correct address - Thus, the petitioner had no notice of the fact that the Revenue's appeal was scheduled for hearing on 18 November 2016, therefore, unrepresented and which resulted in Tribunal passing the impugned order dated 18 November 2016 allowing the Revenue's appeal without having served any notice of hearing upon the petitioner - This only because the notice was served at an incorrect address, more particularly when the Revenue served the recovery notice, consequent to the order dated 18 November 2018 at the correct address, meaning that the Revenu was aware of the correct address and, therefore, the Respondents ought to have informed the Registry and ensured proper service - Similarly the application for recall/rectification of the order dated 18 November 2016 was made by the petitioner in 2017 and inspite of the petitioner having specifically given its new address, the notice of the hearing was not served at the existing address of the petitioner by the Registry leading to order dated 25 May 2018 without hearing the petitioner - Bench finds that both the impugned orders dated 18 November 2016 and 25 May 2018 of the Tribunal are in breach of principles of natural justice - The process of taking decisions having civil consequences include in it certain requirements such as an opportunity to party to put up its case and which is absent in respect of both the orders - Therefore, in exercise of its extraordinary jurisdiction under Article 226 of the Constitution by not relegating the petitioner, in the peculiar facts of this case, to the remedy of appeal provided under the Act, the impugned orders dated 18 November 2016 and 25 May 2018 of the Tribunal are set aside - Tribunal is directed to put up the Revenue's Appeal for direction on 9 September 2019 - On the said date, the petitioner would personally appear before the Tribunal and thereafter the appeal of the Revenue would be fixed and heard by the Tribunal on the date convenient to it - Petition allowed: High Court [para 6 to 8]

- Petition allowed: BOMBAY HIGH COURT

2019-TIOL-1949-HC-RAJ-CX

Triputi Commodities Vs CCGST

CX - An O-i-O had been passed against the assessee-company during the relevant period - It then approached the writ court, seeking that the requirement of making pre-deposit be waived off considering its weak financial position, owing to which it would be unable to pay the huge amount of pre-deposit - The High Court directed the assessee to approach the Tribunal, which was directed to pass an appropriate order keeping the assessee's financial stability in mind - Thereafter, the Tribunal proceeded to dismiss the assessee's application seeking waiver of pre-deposit - Hence the present appeal.

Held - Section 35F of the Act as it stood earlier invested the Tribunal with the discretion to dispense with the requirement of pre-deposit, if it opined that the pre-deposit of duty demanded or penalty levied would cause undue hardship to the person - This was however, subject to conditions as the Tribunal felt fit to impose so as to safeguard the interests of the Revenue - However, the amendment to Section 35F vide the Finance Act 2014 did away with such discretion - The High Court undoubtedly has a wider jurisdiction under Article 226 but the same must be exercised only in exceptional cases - Merely that duty demanded by the Revenue is considerably high and the assessee is not in a position to pay the same, is no grounds to waive the mandatory requirement of pre-deposit - Legislative mandate u/s 35F is intended to safeguard the interests of the Revenue as discretion provided in the earlier unamended provisions of Section 35F vested in the Tribunal led to enormous cases where litigants frequently cited reasons of undue hardship - The same consumed adjudicatory time and resources of the Tribunal - Hence the Parliament had amended Section 35F so as to suppress such mischief - Hence there are no good reason in the present case so waive off the mandatory requirement of pre-deposit - The present appeal does not involve any questions of law - Nonetheless, considering that the assessee pre-deposited 50% of the duty demanded, should the assessee deposit the remaining 50% of the duty within two months' time, the appeal would be revived on merits: HC

- Assessee's appeal dismissed: RAJASTHAN HIGH COURT

2019-TIOL-2440-CESTAT-CHD

Cepham Milk Specialties Ltd Vs CCE & ST

CX - The assessee is in appeal against impugned order whereas the demand @ 10% of valuable exempted goods has been demanded - On the merits of the case, there is no dispute that the assessee is not entitled to avail Cenvat credit on common input/input services to be used in manufacture of exempted as well as dutiable goods in terms of Rule 6(3) of CER, 2004, therefore, on merits, the assessee have no case - With regard to issue of limitation, initially, in 2007 the assessee was manufacturing only dutiable goods but in August 2007 they started manufacturing exempted goods also apart from dutiable goods and was availing Cenvat credit on common inputs and input services for manufacturing both dutiable exempted final goods and not reversing the proportionate Cenvat credit attributable to exempted goods or paying 10% of the valuable exempted goods - These facts were also available during course of audit and no objection was raised by the Revenue - Further audit take place on 17-21 May 2010 and it was objected to the assessee that they are not entitled to avail Cenvat credit on input and input services which were used commonly for manufacture of excisable as well as the exempted goods, therefore, they are required to pay 10% of valuable of exempted goods which the assessee admitted to pay and failed to do so, in that circumstances, the SCN was necessarily issued to assessee by invoking the extended period of limitation, therefore, the SCN is rightly issued to assessee by invoking the extended period of limitation - The assessee is required either to reverse the proportionate Cenvat credit attributable to exempted final product or to pay 10% of the value of exempted final product for the period 17.05.2009 till date 31.03.2011 along with interest - No penalty can be imposed on assessee, therefore, the penalty is dropped: CESTAT

- Appeal disposed of: CHANDIGARH CESTAT

Cenza Technologies Pvt Ltd Vs GST & CE

CX - Appellant, a Software Technology Park duly registered and engaged in the exportation of online information and database access/retrieval services, had filed two refund claims under Rule 5 of the Cenvat Credit Rules, 2004 in respect of the period from October 2016 to December 2016 and January 2017 to March 2017- claims partly allowed - on appeal for the portion rejected, the First Appellate Authority, vide impugned orders, rejected the appeals, hence appeals before CESTAT.

HELD: Common issue in both these appeals relate to the claim for refund of ST credit in respect of the following heads viz. room/laundry service, insurance, APR certification, AMC of lift and legal expenses -in respect of Room/Laundry Service, the Ahmedabad Bench of the Tribunal in the case of One Advertising & Communication Services Ltd. [ 2012-TIOL-969-CESTAT-AHM ] has held that hotel services is directly relatable to the business of the appellant and has a nexus and, therefore, cenvat credit is admissible - in respect of Insurance and AMC charges, the Bangalore Bench of the Tribunal in the case of CCL Products (India) Ltd. [ 2009-TIOL-656-CESTAT-BANG ] held that these services have been received or rendered only in relation to the manufacture of final products and rejected the appeals filed by the revenue - in respect of APR Certification/CA Services, the Bangalore Bench of the Tribunal in the case of Andhra Pradesh Paper Mills Ltd. [ 2010-TIOL-904-CESTAT-BANG ] held that the issue is now squarely settled by various decisions of the Tribunal -with regard to Legal Expenses, the Co-ordinate Bench of the Tribunal in the case of HCL Technologies Ltd. [2016 (42) STR 48 (Tri.-Del.)] has after considering various decisions held that the said service stands covered by decisions of the Courts including various High Courts and rejected the appeal of revenue -further, even the High Court of Judicature at Allahabad in the case of HCL Technologies [ 2014-TIOL-2001-HC-ALL-CX ] has held that legal consultancy services fulfill the definition of t he expression "input service" - on the other hand, revenue was unable to distinguish the applicability of the above case-laws nor filed any contrary decisions/orders and, therefore, following the above orders/judgements, the appellant is entitled for refund and rejection of the same cannot sustain -the impugned orders are set aside and the claim of refund is allowed -with regard to the other claim of Rs.2 lakhs being not considered for refund, there is no finding given by both the lower authorities and, therefore, in the interests of justice, this requires fresh adjudication -this issue is, therefore, set aside and remanded to the file of the Adjudicating Authority who shall pass a de novo order on this issue after considering all the contentions urged by the appellant -in the result, the appeals are treated as partly allowed and partly remanded on the above terms : CESTAT [para7, 8.1, 8.2, 8.3, 8.4.1, 8.4.2, 9, 10, 11]

CUSTOMS

Rajkalp Mudranalaya Pvt Ltd Vs UoI

Cus - Petitioner has prayed that the Court issue a writ of Mandamus or any other appropriate writ, order or direction to Extend the Export Obligation Period for 2 years prospectively so as to enable the petitioners to complete their export obligation under the EPCG Authorization issued to them as stipulated under Foreign Trade Policy; that the Extension given by respondent No. 2 vide License Amendment sheet dated 02.01.2017, expiring on 27.03.2017 may be extended or made applicable for a period of 2 years prospectively from the date of communication of the order of extension or from the date of Order of this Court.

Held: It is clear that the petitioner neither fulfilled the export obligations nor applied for extension in time even for the First Block and even the application for second obligation has also been rejected, therefore, the prayer of the petitioner to grant the extension for a period of two years cannot be accepted - The respondent authority has power to grant extension for two years, which the respondent authority has granted and such extension has been granted by the respondent authority from the date of expiry of original export obligation period and not from the date of approval by the DGFT - Even for the sake of arguments, if it is presumed that such extension can be granted for a period of two years, then also when the extension for two years was granted vide order dated 2/1/2017, the extension would have expired on 2/1/2019 - Today's date is 1/8/2019 and, therefore, there is no substance in the submissions and prayer prayed for by the petitioner in the present petition - Furthermore, the petitioner firm has not availed the option of approaching the Grievance Redressal Committee under 2.49 and 9.9 of FTP 2006-07 - Under the circumstances, there is no merit in the present petition - Petition rejected: High Court [para 7.07, 8]

- Petition rejected: GUJARAT HIGH COURT

2019-TIOL-1950-HC-P&H-CUS

Rasrasna Food Pvt Ltd Vs UoI

Cus - The assessee imported goods from Pakistan during the relevant period - The goods entered India through the Attari border at Amritsar on Feb 16, 2019, whereupon the assessee filed BoE as per Section 46 of the Customs Act, before closing of the working hours for the day - The assessee declarted the value, description and self assessed duty liability by levying 5% Customs duty along with 18% IGST in terms of the Notifications in force and filed respective Bills of entry in EDI System - The Revenue generated the duty payment TR-6 challans - Thereafter, in view of the Pulawama terrorist attack, the Centre vide Notfn No 5/2019 issued on the same day, i.e., Feb 16, 2019, raised the duty rate to 200% even though various products were exempt from Customs duty - Such Notfn had been issued in respect of goods imported from Pakistan - Hence the Revenue refused to release the goods based on the BoE which stood assessed @ 5% Customs duty and 18% IGST - The BoE were recalled and re-assessed by levying duty @ 200% and IGST @ 28%, owing to which the duty demand had been enhanced by about 40 times - Hence the present writ petition was filed challenging the validity of the Notfn dated Feb 16, 2019.

Held - The intent and purport of the Notfn No 05/2019 dated Feb 16 2019 was to discourage import from Pakistan and not to penalize Indian importers - The assessee presented BoE on Feb 16, 2019 during working hours and duty liability was assessed on the same day because the goods were presented along with BoE - As per Section 15, the rate of duty is applicable as on the date of presentation of the BoE which can be presented even before the arrival of the goods - As per proviso to sub-section (1), the date of entry inward or arrival of vehicle is relevant date if BoE is filed in advance - Hence it can be concluded that both elements, namely entry of goods and presentation of BoE are equally important for determining rate of duty - It may be noted that at the time of presentation of the BoE, the Notfn No 5/2019 was not existent & the goods had already entered into India - The twin conditions of presentation of bill of entry and arrival of vehicle had been complied with before issue of the Notfn - The BoE was presented electronically and all Customs formalities had been completed prior to the issuing of the Notfn & the determination of the rate of duty had been completed - Even if the goods were not cleared by the proper officer u/s 47 of the Customs Act, the same would not affect the rate of duty applicable upon fulfiling the twin conditions u/s 15 of the Act - The Notfn proposes 200% duty on the goods, which tantamounts to prohibition on import of goods from Pakistan - Such a notification does not have retrospective effect - It is trite law that delegated legislation does not have retrospective applicability - Admittedly, the assessee placed the import order on Feb 16, 2019 and before the Notfn in challenge had been issued - If such Notfn is made applicable to the assessee, it would amount to retrospective application, which is impermissible in law - Hence the Revenue is directed to release the goods as assessed to duty: CESTAT

- Assessee's appeal allowed: PUNJAB AND HARYANA HIGH COURT

2019-TIOL-2438-CESTAT-MAD

S Mangaleswari Vs CC

Cus - During the relevant period, DRI officers intercepted a car from which 73 Gold bars of 24 Carat purity were recovered - Four persons travelling in the car were also nabbed - SCN was issued to the owner of the vehicle, who is the appellant herein - When the appellant filed application for provisional release of the vehicle, the same was granted upon furnishing cash security - The appellant approached the Commr.(A) claiming that the security amount demanded for provisional release of the goods was on the higher side - During pendency of this appeal, the proceedings initiated through the SCN culminated into an O-i-O - Later, the Commr.(A) dismissed the appeal for provisional release on grounds that the appeal had been rendered infructuous since the SCN culminated into an O-i-O - The appellant also sought to contest the O-i-O before the Commr.(A), who rejected the appeal on grounds of being time barred - Hence the present appeal.

Held - It is seen from the facts of the case that the appellant was diligently prosecuting the appeal before the Commr.(A) against the order of provisional release - The Commr.(A) took a month to dismiss the appeal, observing that the application became infructuous - Had the appellant been informed that they could file an appeal against the O-i-O and that the request for provisional release of vehicle has become infructuous on the date of personal hearing itself, the appellant would not have waited or continued to prosecute the appeal against the provisional release order - Hence it is evidenced that all through till the date of filing the appeal against the O-i-A, the appellant consistently and diligently prosecuted her grievances for releasing the vehicle - The Commr.(A) was also duty-bound to inform the appellant during the personal hearing that when the SCN culminates into confirming confiscation of the vehicle, the application for provisional release is not sustainable - Hence the time period taken by the appellant for prosecuting the grievance before the wrong authority merits being excluded, in which case, the appeal would be within time - Also considering that the appellant was not involved in smuggling Gold, she deserves a chance to contest her grievance - Hence the O-i-A rejecting the appeal as being time barred is unsustainable: CESTAT

- Appeal allowed/In favor of appellant: CHENNAI CESTAT