SERVICE TAX

2019-TIOL-2488-CESTAT-ALL

Allahabad Development Authority Vs CCE, C & ST

ST - Service Tax of Rs.9,48,480/- stands confirmed against the assessee under category of "renting of immovable property" - Assessee had taken a stand that said income was from renting of residential dwelling, which were not taxable - However, the said plea of assessee does not stand accepted by adjudicating authority on the ground that they have not submitted any evidence or proof in support of their assertion that the properties rented out by them were used solely for "residential dwelling for use as residence" - Inasmuch as the issue relates to production of evidence to support the assessee's stand, assessee should be given another chance to produce the evidence, in support of their plea - Accordingly, the impugned order is set aside and matter is remanded for fresh decision: CESTAT

- Matter remanded: ALLAHABAD CESTAT

2019-TIOL-2487-CESTAT-KOL

Dankuni Coal Complex Vs CGST & CE

ST - The assessee operates a coal carbonization plant at Dankuni, West Bengal - It availed services from GTA for which there was a non-payment of service tax under reverse charge mechanism - Enquiry was initiated for non payment of service tax - Subsequent to said enquiry, assessee obtained registration and discharged payment of service tax by availing prescribed abatement under GTA services - SCN was issued which culminated into O-I-O wherein the Commissioner confirmed service tax under section 73 of FA, 1994 as amended, and appropriated an amount paid by assessee after claiming abatement - Further, a penalty was also confirmed under section 78 and 77(1)(a) of the said Act respectively.

Held: The levy of service tax under GTA service under reverse charge was a new subject for which there was non-payment of tax - The assessee is a PSU - No evidence has been brought on record to show that tax was deliberately not paid - On being pointed out, the assessee obtained service tax registration and made the payment by availing prescribed abatement - In the adjudication order, the demand was confirmed by disallowing the abatement which was also not disputed by assessee and they made payment of the differential tax with interest - They are only seeking waiver of penalty - Assessee is entitled to relief under Section 80 of the Act for waiver of penalty: CESTAT

- Appeal allowed: KOLKATA CESTAT

CENTRAL EXCISE

2019-TIOL-2022-HC-MAD-CX

Vedanta Ltd Vs CCE

CX - Commissioner(A) rejected the appeal of the assessee on the ground of being time-barred - High Court vide its order dated 03.12.2014 disposed of the writ petition by granting liberty to the petitioner to file an appeal before the CESTAT against the impugned order and while considering the question of limitation, the CESTAT was directed to exclude the period during which the Writ Petition was pending before the High Court i.e. from 04.08.2008 till the date of the order- Tribunal in its order noted that there is no direction to dispose of the appeal on merits of the case and, therefore, since the Commissioner(A) had rejected the appeal on the ground of time-bar, the Tribunal cannot go into the merits of the matter; that there is no flaw in the rejection of the appeal by the Commissioner(A) and accordingly the appeal was rejected - assessee is in appeal before the High Court against this order dated 30.01.2019.

Held: The ground of time bar is a technical bar to the maintainability of the appeal before the competent forum and even if beyond a period, the time bar cannot be relaxed by the Appellate Authority itself, but, when once there was an intervention by the High Court under Article 226 of the Constitution of India and the Single Judge had clearly expressed in the order that a period of approximately six years was to be excluded from the period of limitation, merely because the Single Judge did not direct further to decide the Appeal on merits, in the opinion of the Bench, the CESTAT should not have dismissed the Appeal on the same ground without deciding the merits of the Appeal - delay of 391 days in filing appeal before the Commissioner(A) occurred in a bonafide manner - nonetheless, Bench is of the opinion that even both the first Appellate Authority and the final Appellate Authority ought to have decided the Appeal on merits, at least after the intervention of the High Court under Article 226 of the Constitution of India - Tribunal has not understood the letter and spirit of the order passed by the Single Judge - To allow the Revenue's interest to be compensated in this case, though obviously no prejudice has been established to have occurred to the Revenue Department, Bench directs that subject to payment of cost of Rs.1,00,000/- by the Appellant Company to the Revenue Department, the Commissioner(Appeals) shall decide the appeal now on merits and in accordance with law - impugned order passed by the first Appellate Authority as well as the Tribunal are set aside and the Appeal is restored to the Commissioner(Appeals) where the parties may appear in the first instance without any further notice on 12.9.2019 and the Commissioner(A) to decide within a period of six months - appeal disposed of: High Court [para 5 to 8]

- Appeal disposed of: MADRAS HIGH COURT

2019-TIOL-2020-HC-MUM-CX  

Ismt Ltd Vs UoI

CX - Petitioner challenges the Tribunal order dated 16.05.2017 wherein it is held that the Product Development Cost of Rs.2.50 crores & Rs.1.30 crores incurred by the appellant is addable to the assessable value of the goods manufactured and cleared; that although the duty thereon has been paid, penalty is imposable on account of the questionable conduct and oblique motive of the appellant; that Revenue neutrality is not a factor while deciding dutiability and that not only the appellant but the Director had defrauded Revenue and, therefore, penalties imposed were upheld along with the duty liability - grievance of the petitioner is that the impugned order dated 16th May, 2017 is a non-speaking order and, therefore, in breach of natural justice; that the impugned order has given contradictory findings as on one hand it holds that the petitioner disputes the due liability on merits while on the other it states that the petitioner is not contesting the duty liability.

Held: Normally, facts of what transpired in Court, such as submissions made, as recorded in the impugned order are accepted as final - In case, according to the party/parties, the facts are not properly recorded in the impugned order, then challenge to it cannot be before High Court - The remedy, if any, against the order of the Tribunal would be rectification application - Bench notes from paragraph 1 and 1.2 of the impugned order that it is not a case of incorrect recording of submissions but recording of contradictory submissions and then dealing with appeal on the basis of only one submission - In fact, the Tribunal records the appellant's submission that the appellant denies its liability to duty on merits and immediately thereafter it records that as the duty has been paid, it does not dispute it - Thus, the order itself is unclear as to what exactly is the finding of the Tribunal on this fact - Bench does not find any discussion in the impugned order on merits as to why the development cost incurred by the petitioner has nexus with the final product - In fact, the impugned order seems to proceed on the basis that as the petitioner has paid the duty without any dispute, it follows that duty liability is admitted - This is contrary to the view of this very bench of the Tribunal in its order dated 17th April, 2017 in respect of the same petitioner wherein it had categorically held that "Mere payment of duty by litigant does not prevent it from contesting the said duty paid against arise of liability. There should not be a misconception that when the duty liability was discharged, liability was admitted by the assessee." - Thus, Tribunal could not have taken a contrary view on a principle without explaining the context which would justify a different view in the present facts - impugned order set aside and matter restored to the Tribunal for a fresh disposal in accordance with law - Petition allowed in above terms: High Court [para 7, 9, 10]

- Petition allowed: BOMBAY HIGH COURT

2019-TIOL-2486-CESTAT-DEL

CCGST & CE Vs Dynamic Cables Pvt Ltd

CX - The assessee is engaged in manufacture of excisable goods and are discharging Central Excise duty on clearances of goods - The Department alleged short payment of Central Excise duty on part of assessee by not assessing the correct value in accordance of Rule 5 of CEVR, 2000 r/w Section 4 of CEA, 1944 - In as much as they have paid Central Excise duty on ex-factory value whereas their contract for supply of goods was on FOR basis - Perusal of both these provisions makes it clear that the amount to be included in transaction value is an amount till the stage the sale of goods gets completed - It becomes clear from these provisions that whether the FOR prices are inclusive or not at the time of clearances is not the criteria for assessing the transaction value - The only possible criteria for the purpose is as to whether the property in goods stands transferred to the buyer at the time when the goods are cleared whether from the factory of the manufacturer, its depot or warehouse or from any other place - No doubt the place can be the buyer's place as well but the criteria still remains the conclusion of sale - From the adjudicating authorities' order itself it is apparent that except for inclusion of freight prices in price of purchase, every other formality of completing the sale got concluded at the time of clearance itself - It has been acknowledged in the Order as well as in SCN that all the verifications, approvals as were agreed to be required by the buyer also got conducted at the manufacturers' factory itself - The sale of impugned goods got completed prior the goods got cleared from the manufacturers' factory - Resultantly, Commissioner (A) has rightly applied the M/s. Ispat Industries Limited case - 2015-TIOL-238-SC-CX and has rightly distinguished the M/s. Roofit Industries Ltd. - 2015-TIOL-87-SC-CX - No infirmity found in the said Order: CESTAT

- Appeal dismissed: DELHI CESTAT

2019-TIOL-2485-CESTAT-AHM

HK Impex Pvt Ltd Vs CCE & ST

CX - This is a case of recovery of erroneous refund under Section 11A on the ground that the assessee have neither received the inputs covered under duty paying cenvatable documents nor sent to the job worker for getting the final product manufactured, therefore, the credit availed by assessee is not admissible and consequently, the rebate of the same obtained by assessee under Rule 18 is also not correct and legal - The refund was sanctioned at the initial stage after verifying the procedure followed by assessee - However at a later stage on the basis of intelligence it was revealed by Revenue that the assessee have taken the refund of duty paid on inputs whereas the same inputs were not received by them nor the same were sent for job work for manufacturing of export goods - However the adjudicating authority confirmed the demand mainly on the ground that the process carried out by the job worker is amount to manufacture whereas as per para 4 of notfn 21.2004-CE(NT) the job worker are authorized only to carry out the activity such as test, repairs, refining, reconditioning or manufacture of intermediate products - The matter was reached up to the Tribunal and thereafter remanded to Commissioner for de novo adjudication - At the stage of de novo adjudication, raising a fresh issue which is not existing within the four corners of allegation made in the SCN, is not permitted under the settled law - Since the Commissioner decided the de novo adjudication on the basis of his own fabricated allegation which is not existing in SCN, entire de novo adjudication become futile and accordingly the impugned order cannot stand - Matter remanded to the adjudicating authority: CESTAT

- Matter remanded: AHMEDABAD CESTAT

2019-TIOL-2484-CESTAT-HYD

Hindustan Coca Cola Beverages Pvt Ltd Vs CCT

CX - Whether the assessee is entitled to cenvat credit on sugar cess as the same is not one of the duties allowed for cenvat credit under Rule 3(1) of the CENVAT Credit Rules, 2004 (CCR, 2004).

Held: A plain reading of Rule 3 of the CCR, 2004 would show that all cesses have not been made eligible for cenvat credit but only duties of excise or additional duties of excise or education cess etc., have been made eligible for cenvat credit - sugar cess is clearly not covered in Rule 3 of CCR, 2004 - however, the High Court of Karnataka has allowed cenvat credit on sugar cess which leaves this Bench with no option but to follow this judgment while most respectfully disagreeing with it - in view of the above, the assessee's appeal needs to be allowed in view of the binding precedent of the judgment of the High Court of Karnataka - the specific question of whether cenvat credit is admissible on sugar cess paid on imported sugar was addressed only by the High Court of Karnataka in the case of Shree Renuka Sugars Ltd. - 2014-TIOL-98-HC-KAR-CX - respectfully following the ratio, it is held that the appellant is entitled to cenvat credit on the sugar cess paid on the imported sugar - the appeal is allowed and the impugned order is set aside : CESTAT [para 7, 8]

- Appeal allowed: HYDERABAD CESTAT

CUSTOMS

2019-TIOL-2021-HC-MUM-NDPS  

Chailbihari Trading Pvt Ltd Vs UoI

NSPS - Petitioners decry guidelines dated 25th June 2019 issued by the Central Bureau of Narcotics ("CBN") to regulate the import into India of poppy seeds - The proposed import in question is from Turkey - According to the Petitioners, these guidelines are an unconstitutional restriction on their right to trade and carry on business.

Held: There is no fundamental right to be an importer - There is no fundamental right to import poppy seeds - There is no fundamental right to import anything without restrictions, or only on terms benefcial to a particular person - Burden on the Petitioner is to show that the notifcation is manifestly arbitrary, i.e. that a patent arbitrariness exists on the face of it, without requiring any convoluted argumentation - It must, alternatively, be shown to be ex facie discriminatory, and not just discriminatory, but invidiously so - power to impose quantitative restrictions can be traced to Chapter III-A of the Foreign Trade (Development & Regulation) Act, 1992 - Merely saying that a certain clause is, in the Petitioner's view, sub-optimal, or leaves something to be desired, is not enough to warrant a striking down of the notifcation - Bench cannot, equally, substitute its view for government policy framed in legitimate exercise of statutory power - there is no data at all in the petition to support what the petitioners allege - In short, therefore, the entire case of the petitioners is this: "we do not like this new policy, though we do not question the power, and we would much prefer to be governed by the earlier policy, even if we have not been able to substantiate our reasons with any hard facts or data" - It is impossible to accept any submission framed like this - Writ petition is entirely without merit, hence is dismissed: High Court [para 8, 11, 12, 17]

- Petition dismissed: BOMBAY HIGH COURT

2019-TIOL-2489-CESTAT-ALL

CC Vs Harshit Enterprises

Cus - The assessee-company imported Betel Nuts - On adjudication, they were confiscated u/s 111(b) & 111(d) of the Customs Act, with option of redemption fine being given - On appeal, the Commr.(A) set aside such O-i-O - Hence the Revenue's appeal.

Held: In the O-i-A, it was observed that the betel nuts were not notified u/s 123 of the Customs Act & so the onus lay upon the Revenue to prove that they were not properly imported into India - It is seen that the Revenue relied upon the statements of one person to prove that the goods were smuggled - However, it is also seen that the deponent later disowned such statements and in the reply to SCN, stated that the goods were of Indian origin - There is no evidence produced by the Revenue to establish the route through which the goods were smuggled - Hence the O-i-A does not warrant any interference with: CESTAT

- Revenue's appeal dismissed: ALLAHABAD CESTAT