2019-TIOL-2140-HC-AHM-ST

TGB Banquets And Hotels Ltd Vs UoI

ST - Settlement Commission rejected the application of the petitioner and sent the matter to the adjudicating authority under section 32L of the Act - Settlement Commission has taken the non appearance on the part of the petitioner when opportunities of hearing were granted prior to the report having been furnished to it for the purpose of holding that there was non-cooperation on the part of the petitioner - In ordinary parlance, the word cooperation, in the context of adjudication, is taken to mean the non-participation of the party concerned, in the proceedings - However, in the context of settlement, it has a different connotation, altogether - The cooperation in such instances connotes the true and full disclosure of the facts pertaining to the assessee; and non-cooperation, the opposite of it - Settlement Commission has not recorded any finding that the petitioner has not made a true and full disclosure of the facts pertaining to it - More importantly, the Settlement Commission has relegated the matter to the adjudicating authority not on account of failure to make a full and true disclosure on the part of the petitioner but because it was of the view that the case will necessarily involve proper appreciation of facts and circumstances based on documents and records available with the petitioner and correct interpretation of law and procedure - In this view of the matter, when having regard to the totality of the facts of the case, the conduct of the petitioner cannot be said to amount to non-cooperation and the fact that the Settlement Commission has thought it fit to send the matter to the adjudicating authority as it was of the view that it does not have the jurisdiction to decide the dispute with regard to either applicability of service tax and/or entering into the questions raised before it, in the opinion of this court the Settlement Commission was not justified in sending the matter to the adjudicating authority under section 32-L of the Act which has serious consequences in view of the provisions of section 32-O(1)(iii) which postulate that where the case of such person is sent back to the Central Excise Officer having jurisdiction by the Settlement Commission under section 32L, then he shall not be entitled to apply for settlement under section 32E in relation to any other matter - In the opinion of this court, if the Settlement Commission was of the opinion that considering the nature of the dispute raised before it, the matter was required to be remitted to the adjudicating authority, it should have done so in the exercise of powers under section 32F(5) of the Act which empowers it to pass such orders on the application as it thinks fit - The impugned order passed by the Settlement Commission, to the extent it holds that the conduct of the petitioner in the proceedings before it amounts to non-cooperation and, therefore, is liable to be rejected and sent back to the adjudicating authority on this ground alone is hereby quashed and set aside - The consequence thereof would be that the application would be deemed to have been sent back to the adjudicating authority under section 32F(5) of the Act - The operative part of the impugned order of the Settlement Commission shall, therefore, be read accordingly - Petition partly succeeds: High Court [para 17, 18, 19]

- Petition partly allowed: GUJARAT HIGH COURT

2019-TIOL-2644-CESTAT-MAD

CST Vs Buysell Interactions Pvt Ltd

ST - The issue to be decided is; whether the demand is hit by limitation as claimed by assessee and whether they are liable to pay service tax on stall charges, events conducted abroad claiming export of services and media charges during the disputed period - The allegations of short payment of service tax was brought up against assessee after audit and verification of Profit and Loss Account and Trial Balance - The difference between the taxable value shown in ST-3 returns and the P&L account was alleged to be suppressed and non declared value and hence the tax liability was confirmed with interest thereon - Even before the adjudication stage, the assessee has been contending that no tax is required to be paid both on stall charges and export services - It is not the allegation that assessee had not filed ST-3 returns - There are no justifiable reasons or grounds to allege suppression or fraud with intention to evade payment of tax on the part of assessee - Even as early as on 23.09.2004, assessee had submitted a letter addressed to the department wherein they had informed the scope of nature of their activities - Therefore, the Commissioner (A) is correct in ordering that the extended period of limitation cannot be invoked and that the SCN will only be valid for the normal period of limitation - Regarding media charges also, the Commissioner (A) has correctly concluded that services rendered by assessee under Section 65(105) (zzzm) ibid, namely services provided in relation to sale of space for advertisement in print media are exempted from paying service tax as per provisions of law during disputed period - In ST-3 returns filed to the department during relevant year, the assessee had given details regarding export of services - They had further produced copies of invoices/letters from the High Commission of India, Colombo, copy of NOC issued by Indian Trade Promotion Organization for conducting 'Image Today' exhibition in Colombo and copy of VAT invoice issued by Director of venue where the exhibition was conducted in Colombo - The Commissioner (A) is correct in concluding that assessee is not liable to pay service tax on the services rendered for conducting events in Sri Lanka, hence exempt from levy of service tax - No merit found in the appeal filed by Revenue, same is dismissed: CESTAT

- Appeal dismissed: CHENNAI CESTAT

CENTRAL EXCISE

CCE, C & ST Vs Shanti Engineering

2019-TIOL-415-SC-CX

2019-TIOL-2659-CESTAT-MUM

Nasik Strips Pvt Ltd Vs CCE (Dated: February 07, 2019)

CX - Allegation is that the appellant had manufactured and cleared 2678.743 MTs Ingots without payment of central excise duty - this quantity has been determined solely on the basis of technical report/opinion of Dr. N.K.Batra of IIT, Kanpur - demand confirmed of Rs.74,15,196/- along with imposition of interest and penalty on company and on Director - appeal to CESTAT.

Held: Issue is no more res integra being considered and settled by the Jharkhand High Court in the case of Balashri Metals P Ltd.  2016-TIOL-2590-HC-JHARKHAND-CX  and wherein it is held that merely on the basis of Dr. N.K.Batra's report, demand of duty alleging clandestine manufacture and removal cannot be sustained as it is calculated taking only the electricity consumption details and without examination of further corroborative evidences like procurement of raw material, movement of finished goods etc.; that in the case of SRJ Peety Steels P Ltd. - 2014-TIOL-1530-CESTAT-MUM, the Tribunal by Majority had while allowing the appeal of assessee held that only on the basis of electricity consumption demand of duty cannot be confirmed against appellant - following the said precedents, impugned order is set aside and appeals are allowed: CESTAT [para 5, 6]

- Appeals allowed: MUMBAI CESTAT

2019-TIOL-2646-CESTAT-AHM

Century Copper Rod Pvt Ltd Vs CCE & ST

CX - The assessee is engaged in manufacture of Copper Rods and availing cenvat credit on inputs, capital goods and input services which were utilized for payment of duty on the clearance of finished goods - Their factory has closed down their manufacturing activity, the assessee filed application for refund of such cenvat credit lying in balance in cash since they were not in a position to utilize the said credit due to closure of the factory - The claim was rejected - The assessee's factory was closed down since October 2015 and they were filing NIL return - The Appellate Commissioner should have considered the said facts and should have applied the reasoning that when there is no production and the assessee have sold/ cleared the machinery and capital goods itself that means that they have closed down their production and the factory is lying closed - In such case, the assessee is eligible for refund of accumulated cenvat credit as once the factory is closed, there is no place for utilizing accumulated cenvat credit - Placing reliance on the Tribunal's order in case of Slovak India Trading Company 2005-TIOL-1698-CESTAT-BANG , as upheld by High Court 2006-TIOL-469-HC-KAR-CX and Apex court and also upon Gujarat High Court judgment in case of Ishan Copper Pvt. Ltd 2018-TIOL-1361-HC-AHM-CX , the assessee is eligible for refund of accumulated amount of modvat / cenvat credit - The impugned order is set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

2019-TIOL-2645-CESTAT-MUM

Amit Paper Mill Vs CCE

CX - The main dispute is, as to whether, the assessee had satisfied the condition namely, "the Principal Process of lifting the pulp is done by hand", as mentioned in sub-heading No. 4802.20 and in Notfn 3/2005-CE - In this context, if Tribunal look into the manufacturing process mentioned, it would be noticed that the liquid with pulp fibres is the mixture of waste paper, waste paper tubes / coals and sludge pulp, which is pumped into a storage tank through pipe lines - The main process is the liquid with pulp fibres form layer on the cylinder moulds is transferred through the felt over a sheet copper roll, from where the wet sheets are cut / slit and lifted by hand - It is found from the manufacturing process that wet sheets are cut / slit and lifted by hand and therefore, the condition of Tariff heading and the notification are fulfilled - In the HSN, it is stated that these pulps are obtained by a series of mechanical or chemical cleaning / screening and de-inking processes - The adjudicating authority while passing the impugned order, had emphasized on the words "lifting of pulp by hand and ignored the words "principal process", as mentioned in the Tariff / notification - To extend the benefit of exemption notification, only the Principal Process of lifting of pulp by hand would be looked into - Therefore, the benefit of exemption notification cannot be denied to the assessee, as the liquid with pulp fibres is pumped from the pulpier to storage tanks through pipe lines - The other issue is that during the visit of the officers, it was found that width of all the three cylinders Mould Vats exceeded the limit of 40 inches, as prescribed in Condition No. (b) of Tariff / notification - It is contended by assessee that while measuring the width of cylinder Mould VAT, the perforated portion of cylinder, where the pulp layer is formed would be considered - It appears from the impugned order that this measuring of perforated portion of cylinder Mould Vat was not taken into account and therefore, the question of violation of Clause (b) of the Tariff / notification cannot be sustained - The assessee have obtained the certificate dated 14.01.2010 from KVIC for the material period, which is placed in the paper book - As the assessee obtained the certificate from the KVIC, the allegation against assessee on this issue also cannot be sustained - The issue involved interpretation of Tariff heading and the notification - Hence, it cannot be construed that there is suppression of fact, with intent to evade duty - It is noted that the proceedings were initiated in earlier occasions, which was decided by Commissioner (A) by order dated 04.03.1996 in favour of assessee - No merits found in impugned order, same is set aside: CESTAT

- Appeals allowed: MUMBAI CESTAT

CUSTOMS

Mohammed Fasrin Vs State

NDPS - Sections 8(c), 29, 21, 23(c) & 27(A) - The appellant was arrested for exporting or importing contraband substance (heroin) into India - Initial charges against the appellant were of financing and of indulging in international smuggling of contraband for which no evidence was adduced - The Trial Court convicted the appellant and passed a sentence for a period of 15 years - Fine of Rs 1,50,000 was imposed - Madras High Court upheld the conviction.

Held: The only evidence is the statement of a co-accused (accused no.2) and his own alleged confession - Even if it is admissible, the Court has to be satisfied that it is a voluntary statement, free from any pressure and also that the accused was apprised of his rights before recording the confession - It is also well settled that a confession, especially a confession recorded when the accused is in custody, is a weak piece of evidence and there must be some corroborative evidence - The confession of the co-accused, which was said to be a corroborative piece of evidence is of no material value - The prosecution has gathered no evidence to link the appellant with the commission of the offence - As such, even if these confessions are admissible then also the evidence is not sufficient to convict the accused - The judgment of both the Courts below are set aside - Appeal is allowed.

- Appeal allowed: SUPREME COURT OF INDIA

2019-TIOL-2643-CESTAT-MUM

DHL Express India Pvt Ltd Vs CC

Cus - The assessee filed Form V Bill of Entry in respect of Airway Bill declaring the imported goods as CPU Board imported by one M/s Ispat Industries Ltd. - The said consignment was detained for filing regular Bill of Entry - Consequently, the importer had filed a regular Bill of Entry providing true description of goods and declared the assessable value - Later, the assessable value was enhanced by assessing authority - The adjudicating authority directed confiscation of imported goods with an option to redeem the same on payment of fine and imposed penalty on assessee under section 112(a) of Customs Act, 1962 - In the grounds of appeal, assessee has made an attempt to make out a case that imposition of penalty on them is arbitrary and harsh, as they did not have any intention for evasion of duty on account of revision of assessable value - Also, referring to the meaning of old and second hand machinery, they were of the view that no restriction is provided in the policy and it is freely importable - The issue raised by assessee has been considered by Tribunal in assessee's own case, taking note of Regulation 13 of Courier Import and Export (Clearance) Regulations, 1998 - No reason found to deviate from the finding delivered in similar facts and circumstances of the case - Consequently, the impugned order is upheld and the appeal being devoid of merit, accordingly dismissed: CESTAT

- Appeal dismissed: MUMBAI CESTAT