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SERVICE TAX
2019-TIOL-446-SC-ST
CST Vs Tata Projects Ltd
ST - The assessee entered into three agreements with M/s APPDCL as per the LOI issued by them, of which two are supply contracts and one is a contract for services which also included supply of some material - He also had an umbrella agreement combining these three agreements - The Tribunal observed that in addition to the supply, the assessee discharged VAT/CST in respect of the supply contracts - The only question remains to be answered is whether the value of this onshore and offshore supplies by assessee need to be included in value of services rendered by them under the works contract scheme - It is not in dispute that the material in question was supplied by assessee with respect to this particular contract and after the supply was completed, the goods which were supplied were given by APPDCL back to assessee for execution of the contract - A plain reading of CBEC circular 334/13/2009-TRU explains that such values became includible in value of works contract as per the amendment made vide notfn 23/2009-ST - By inserting an explanation, it was also clarified by CBEC themselves that the inclusion of the values would not apply to such contracts where either the execution of works contract has already started or any payment has been made on or before 07.07.2009 - In this particular case, the payments in respect of all the three contracts were made prior to 07.07.2009 - Needless to say that there is no separate payment under the umbrella contract because it was only a combination of the other three contracts - This issue was agitated by assessee before the adjudicating authority who, however, did not agree with this contention - The value of the material supplied under off-shore and on-shore contracts cannot be included in the value of the works contract service as the advance payment in respect of all the three contracts are received prior to 07.07.2009 - This case is identical to the case of ESSAR Projects (India) Limited - 2013-TIOL-1951-CESTAT-AHM in which a similar view has been taken - Hence, the demand of service tax and interest and imposition of penalties in order in question are unsustainable.
Held - Delay is condoned - Notice be issued - Matter be tagged with Civil Appeal No. 5670-5671 of 2014: SC
- Notice issued: SUPREME COURT OF INDIA
2019-TIOL-2806-CESTAT-MUM
Motilal Oswal Commodities Broker Pvt Ltd Vs CCGST & CE
ST - CENVAT - Rule 2(l) of CCR, 2004 - Appellant cannot render their output service as broker in absence of margin money to be provided to the respective stock exchange, therefore, ‘bank guarantee charges' incurred is input service and credit is admissible of the tax paid thereon: CESTAT [para 5]
ST - CENVAT - Annual Charges/Subscription charges is incurred by way of subscription for journals and for attendance at the events which are connected to the appellant's line of activity viz. stock broking - as continuous education programme is an essential element for providing stock broking service, appellant is eligible to avail CENVAT credit of tax paid on these charges: CESTAT [para 6]
ST - CENVAT - Appellant has to be essentially registered as a member with the stock exchange (NSE & BSE) to render services as a broker - therefore, they are entitled to avail credit on such ‘membership subscription fee': CESTAT [para 7]
ST - Mobile/telephone charges, Air travel charges, manpower supply services are essential for the business activity of stock broking, hence are to be treated as Input Services and credit of tax paid thereon is admissible: CESTAT [para 8 to 10]
Impugned orders are set aside and appeals are allowed with consequential relief: CESTAT
- Appeals allowed: MUMBAI CESTAT
2019-TIOL-2805-CESTAT-MUM
Vasantrao Naik Shetkari Sahayata Trust Vs CCE & C
ST - Supply of manpower - Aggrieved by the devolution of tax liability under the Finance Act, 1994 [Act] on them in connection with receipt of Rs.33.04 crores from M/s.Vasant Sahakari Sakhar Khar khana Ltd. [M/s.Vasant] between 2004-05 to 2007-08, this appeal has been filed by the appellant - in O-I-O dated 26.12.2011, the Commissioner confirmed tax liability of Rs.3.76 croresalong with interest, imposed penalties - appeal to CESTAT.
Held: The adjudicating authority [AA] has discarded the appellant's submission of not having supplied any employees to the sugarcane farmer/harvester, or anyone else, by referring to the contracts with the labour contractors for that very purpose, to conclude that this was tantamount to rendering the service to M/s.Vasant, the receiver of the harvested produce, who makes the payment to the appellant - the AA also discounted the claim of the existence of agreement between the farmer/grower and M/s.Vasant for not being evidenced by any agreement - the decision of the Tribunal in the case of Satara Sahakari Sheth Audyogik Oos Todani Vahtook Society - 2013-TIOL-2362-CESTAT-MUM and the findings in the impugned order do establish that the appellant was a mere intermediary between its constituents, albeit as a separate artificial person, and the labour contractors to empower in securing most economical supply and to ensure handing over of consideration from the dues, held by M/s.Vasant, in accordance with the public procurement policy for sugarcane - accordingly, it is found that the issue stands settled and the adjudicating authority had rendered its findings without the benefit of the decision -in these circumstances, the impugned order is set aside and the appeal is allowed : CESTAT [para4, 5, 6]
- Appeal allowed: MUMBAI CESTAT
2019-TIOL-2804-CESTAT-HYD
Krishna Industrial And Agricultural Exhibition Society Vs CC, CE & ST
ST - The assessee is engaged in organizing a Business Exhibition every year at Vijayawada and also on some special occasions like Pushkarams - It collects amounts from exhibitors and provides them with tents of specific areas and other infrastructural facilities like electricity, water and sanitation - It is also providing advertising services by erecting advertisements and printing advertisements on the entry tickets during exhibition and is collecting advertisement charges/sponsorship charges from customers - A SCN was issued to assessee - After following due process, the Additional Commissioner confirmed the demand of Service Tax and Education Cess and imposed penalties under sections 76 & 77 of FA, 1994 - The assessee have paid Rs. 6,24,414/- towards Business Exhibition Service together with interest before issuance of SCN - Further, the remaining amount of Rs. 1,75,645/- represents towards the electricity charges which were collected by assessee from the stall owners and directly paid to the electricity department and the same does not found part of the assessable value and is not liable to pay service tax on this amount - Further, as far as the demand of service tax on advertising agency is concerned, assessee does not fall in definition of 'Advertising Agency' as contained in Section 65(3) of FA, 1994 - The said definition of the term 'Advertising Agency' means "any person engaged in providing any service connected with the making, preparation, displaying for exhibition of advertisements and includes advertising consultant - Assessee was engaged in not any of the above activity during the relevant period nor fall in the definition of 'Advertising Agency' - Therefore, the demand of service tax on advertising agency is also not sustainable in law: CESTAT
- Appeal allowed: HYDERABAD CESTAT
2019-TIOL-2803-CESTAT-ALL
Jai Jagdamba Malleable Pvt Ltd Vs CCE & ST
ST - The challenge in the appeal is only to imposition of penalty under Section 78 of the Act and of Rs.10,000/- each in terms of Section 77(1) (a) and 77(2) of the Act - The assessee was providing services to their clients by way of marketing and promoting their products which service falls under the taxable category of BAS - The audit conducted in assessee's factory revealed that the assessee was not paying service tax on the commission earned by them - On such detection, assessee deposited the entire service tax - As such the issue to be decided in the present appeal is as to whether it is a simple case of non-payment of service tax, which might have occurred on account of any bona fide belief entertained by the assessee - Admittedly, the assessee was collecting service tax from their clients - However, instead of depositing the same with exchequer, they were pocketing the said service tax amount so collected by him - This fact clearly reflects upon the mala fide of assessee - It is a fraud committed on exchequer and the provisions of Section 73(3), which are applicable only to an innocent assessee, would not apply in the present case - As such, no reasons found to set aside the penalties imposed upon the assessee - The impugned order is uphold: CESTAT
- Appeal rejected: ALLAHABAD CESTAT
CENTRAL EXCISE
2019-TIOL-2823-CESTAT-MUM
Print Electronics Equipments Pvt Ltd Vs CCE
CX - Whether during the relevant period 2004-2005 to 2008-2009, the appellant had exceeded the SSI exemption limit of Rs.1.00 crore/1.50 crore, as the case may be, prescribed under notification no. 8/2003-CE, dated 1.3.2003 as amended - the allegation of the Revenue is that even though the appellant during the period manufactured and cleared the goods from the said premises but has not included the value of clearance of all the manufactured goods in their gross turnover, and part of the clearances were effected on the invoices of M/s. J.R.S.Electronics [JRSE]
Held: Bench finds substance in the argument of the appellant inasmuch as the entire case has been built up by the Revenue mainly on the ground that since JRSE is alleged to have no adequate manufacturing facility on the date of visit of the officers to the premises at Bangalore, one of the employee of the appellant firm stationed at Bangalore and statements of employees/Director that all the goods must have been manufactured at the premises of the appellant firm at Malad, Mumbai and cleared without payment of duty, under the invoice of JRSE - there is no evidence to the effect that the appellant had procured raw material assembled at their premises at Malad and cleared/sold in the market without payment of duty - no evidence has been brought on record of those buyers who purchased the said goods and to whom the manufactured goods were sold and mode of delivery of alleged goods clandestinely from the manufacturing premises at Malad to the buyer's premises - in absence of substantial evidences of manufacturing and clearances of the goods, it cannot be assumed that since, the facility of manufacture at the premises of JRSE, is inadequate, therefore, the goods must have been manufactured and cleared from the premises at Malad Unit of the appellant in the local market against the invoices of JRSE - the kind of electronic goods manufactured by the appellants, do not require a huge premises and machineries; it could be assembled with simple tools/machineries - in the result, the demand confirmed by clubbing the clearances of the appellant with that of JRSE, is not sustainable, accordingly set aside - consequently, the penalty imposed on all the appellants are also set aside - the impugned Order is modified accordingly and the appeals are disposed of accordingly : CESTAT [para 16, 17, 18, 19]
- Appeals allowed: MUMBAI CESTAT
2019-TIOL-2822-CESTAT-MUM
Spacetech Equipments And Structurals Pvt Ltd Vs CCE
CX - The main issue involved in these appeals pertains to clubbing of clearance of the appellant's unit with the clearances of two proprietorship concerns namely, Industrial Engineering Company [IEC] and Rashmi Shellcast & Foundry [RSF] - on the basis of investigation, the department contended that both IEC and RSF belonged to the appellant and as such, the benefit of notification nos.175/86 dated 1.3.1986 and 1/93 dated 1.3.1993 should not be available inasmuch as the combined turnover of all the three units during the disputed period had exceeded the eligibility criteria of Rs.200/300 lakhs - accordingly, SCN dated 3.10.1994 issued – vide impugned order, the Commissioner clubbed the clearance value of excisable goods of the proprietorship firms with the clearance value of the appellant's unit and confirmed CEX demand of Rs.33.24 lakhs along with interest and also imposed equal amount of penalty on the appellant company, besides imposing penalties on the other appellants – appeal to CESTAT.
Held: Since the appellant is a private limited company, its clearances cannot be clubbed with the clearances of the proprietorship concerns, as per the principle laid down by the CBEC Circular No.6/92 dated 25.9.1992, in terms of section 37B of the CEA – in view of the settled position of law, the appellant should be entitled to the benefit of notification no.175/86 for the clearances effected by it prior to 1.4.1993 - the genesis of the present impugned notice dated 3.10.1994 is the interception of two LPG Road Tankers on 8.7.1993 in the course of transit checks by the department - the investigation subsequently culminated in a separate SCN dated 16.12.1993 issued to IEC, treating it as a manufacturer - since, the department has considered IEC as a manufacturer of excisable goods and accordingly, proceeded for confirmation of the duty demand, such stand cannot be altered subsequently, to hold that the said unit was physically not in existence and, therefore, the clearances made by it should be clubbed with the value of clearances of the appellant – the impugned order has invoked the provisions of erstwhile rule 173Q of the CER, 1944 read with section 11AC of the CEA for imposition of penalty equal to the adjudged amount of central excise duty confirmed on the appellant - section 11AC ibid was inserted in the statute book w.e.f. 28.9.1996 by section 76 of the Finance (No.2) Act, 1996 - the period in dispute involved in the present case is prior to the date of such statutory enactment and thus, the provisions of section 11AC are inapplicable to the facts and circumstances of the case inasmuch as such enactment will have prospective effect and cannot be applied retrospectively - section 11AB was inserted in the statute w.e.f. 28.9.1996 - the Bombay High Court upon interpretation of the statutory provisions, have held in the case of Dev Ashish [2015-TIOL-233-HC-MUM-CX] that the provisions of section 11AB inserted w.e.f 28.9.1996 are in nature of penal interest and thus, the rigor would apply only to those cases, where clearances were affected after such effective date - thus, the impugned order confirming the interest demand is not sustainable – rule 173Q of the erstwhile Central Excise Rules was omitted by notification dated 12.5.2000 – as per the judgment of the Gujarat High Court in the case of Kotak Mahindra Bank Ltd. [ 2011 (267) ELT 614 (Guj.) ] and the decision of this Tribunal in the case of Choice Ceramics Tiles Pvt. Ltd. [ 2010 (258) ELT 283 (Tri.-Ahmd.)], the subject goods cannot be ordered for confiscation and, accordingly, no redemption fine can be imposed on the appellant - the other aspects considered in the impugned order for sustaining the duty demand have not been substantiated with any tangible documentary evidence, supported with the provisions of the statute - on the contrary, the Bench finds support from the submissions made by the appellant that the charges cannot be leveled against it, in support of confirmation of the adjudged demand - in view of the foregoing discussions and analysis, no merits found in the impugned order - therefore, by setting aside the same, the appeals are allowed in favour of the appellants : CESTAT [para 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 7]
- Appeals allowed: MUMBAI CESTAT
2019-TIOL-2812-CESTAT-MAD
Sri Velayuthaswamy Spinning Mills Pvt Ltd Vs CGST & CE
CX - Appellants, engaged in the manufacture of cotton yarn, were clearing 100% Cotton Yarn on payment of duty under notification no.29/2004-C.E. dated 9.7.2004 as amended and were also availing full exemption under notification no.30/2004-C.E. dated 9.7.2004 - they were reversing the proportionate credit availed on common input services used in the manufacture of both dutiable as well as exempted final products - Department was of the view that the amount so reversed is incorrect - the appellant had not taken into account the clearances for export claiming exemption under notification no.30/2004, clearances without payment of duty under notification no.30/2004 manufactured on job work basis and clearances of yarn waste without payment of duty - Department was of the view that the appellant in doing so has short reversed the credit, for which a SCN dated 17.6.2015 was issued proposing to recover the same along with interest and for imposing penalties - after due process of law, the Original Authority confirmed the demand, interest and imposed penalty - in appeal, the Commissioner (Appeals), vide impugned order, upheld the order passed by the Original Authority in respect of not including the clearance for export claiming exemption under notification no.30/2004 as well as clearance of yarn waste without payment of duty - however, the issue with regard to the clearance of yarn manufactured on job work basis was remanded to the Original Authority for verification - the appellant is now before the Tribunal against the issues that have been upheld by the Commissioner (Appeals).
Held: First issue is with regard to the requirement of including the value of clearances of export made by the appellant of the goods for which the exemption under notification no.30/2004 has been availed - as per Rule 6(6)(v) of the Cenvat Credit Rules, 2004, when exempted goods are cleared for export under bond, the bar under rule 6 (1) not to avail credit on common inputs/input services is not applicable - the demand has been raised stating that notification No.42/2001 has done away with the requirement to exclude a bond when exempted goods are exported - in the case of Drish Shoes Ltd - 2010-TIOL-350-HC-HP-CX, the High Court has analyzed the issue as to whether credit is eligible on the duty paid on inputs and input services used in the manufacture of exempted goods which are exported - it was held that even if the exempted goods are exported, credit is eligible - the Tribunal in Jolly Board Ltd - 2014-TIOL-316-CESTAT-MUM had occasion to consider the issue post amendment vide notification no.42/2001 - the Tribunal, after referring to the decision in Repro India Ltd - 2007-TIOL-795-HC-MUM-CX, has held that the requirement for execution of a bond is only a procedural one and therefore, refund cannot be denied - the said decision in Jolly Board Ltd. has been upheld by the High Court of Bombay [ 2017 (50) S.T.R. 131 (Bom.)] - while analyzing the issue, the High Court has endorsed the view taken in Drish Shoes Ltd. - further, the decisions in Lavino Kapur Cottons Pvt. Ltd - 2013-TIOL-2207-CESTAT-MUM as well as GPI Textiles Ltd. [2017 (48) S.T.R. 172 (Tri. - Chan.)] are judgements wherein the eligibility of credit on input services for the goods exported after availing the exemption under notification no.30/2004 was considered - from the above, and also following the decisions cited supra, the credit availed on input services is eligible and the contention of the Department that the credit has to be reversed is against the provisions of law - the first issue is, therefore, found to be in favour of the appellant - the second demand is with regard to the requirement of including the turnover of yarn waste cleared by the appellant - the Department is of the view that the credit on inputs contained in the waste is not eligible and has to be reversed by the appellant - as pointed out by the appellant, rule 57D of the erstwhile MODVAT scheme had specifically mentioned that the credit on inputs contained in waste is eligible - it is very much clear from paragraph 3.7 of the Supplementary Instructions issued by the Department after introduction of the Cenvat Credit Rules, 2002, that credit is admissible on the amount of inputs contained in any waste, refuse or by-product - the argument of the Department that the appellants are manufacturing waste cannot be accepted - the appellants are not consciously manufacturing waste and it is merely a refuse or waste which is not dutiable, as held by the Supreme Court in various decisions - the Tribunal in the case of Eveready Industries India Ltd - 2018-TIOL-2135-CESTAT-ALL has held that the credit on inputs contained in waste is not required to be reversed - following the said decision, the appellant succeeds on the second issue also - the impugned order, to the extent as discussed above, is set aside without disturbing the direction of the Commissioner (Appeals) remanding the issue with regard to clearances of goods manufactured on job work basis - the appeal is allowed : CESTAT [para 6.1, 6.2, 6.3.1, 6.3.2, 6.3.3, 6.4, 7.1, 7.2, 7.3, 8, 9]
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-2801-CESTAT-KOL
SAIL Vs CCE
CX - Assessee is engaged in manufacture of iron and steel products in their factory - They manufacture oxygen gas in their factory - They consume oxygen in the manufacture of iron and steel products, availing exemption contained under Notfn 67/95-CE - They also clear a part of the oxygen manufactured to others on payment of duty - A SCN was issued and was adjudicated by confirming a duty of Rs.2,40,66,670/- along with equal penalty - The alleged discrepancy is due to Page No.369 of Annual Statistics Reports which puts the consumption figure of oxygen gas as 80660.124 Cu.Mtr., whereas one more sheet of the same Account Books puts the same as 1,11,796.522 Cu. Mtr. - These figures have been allegedly used by Department to foist the case of clandestine removal against the assessee - No statements have been recorded and no further investigation has been done - The Commissioner has simply proceeded by brushing aside the submission made by assessee - Assessee submitted that at Page 429 of the Annual Report, it cannot be seen in isolation and at other pages i. e 369 & 197 also show the consumption of oxygen gas internally - The Commissioner has not given any reasoning for not considering the statistics reflected in other pages and has concluded that the assessee have not shown any reasons as to why such figures were shown in Page 429 of Annual Statistics Reports - No other effort has been made by Department to find as to what has happened to the balance quantity, if at all, there was a discrepancy - No statements were recorded and no proof of any clandestine removal, transportation of the same and financial transaction in that regard are put forth - It is seen that not even a statement of person, who managed the production/consumption of oxygen or the person who has maintained the statistical report, has been recorded by Revenue - Without such bare a minimum enquiry, the charge of clandestine removal, cannot be sustained - Moreover, the issue pertains to 2001-2002 - The Annual Book of Statistics was given to the authorities in 2002 itself - The Revenue does not deny this fact and therefore, issuing the SCN, after two years, is not tenable - The impugned order is also hit by limitation - The demand is not sustained either on merits or on limitation - Therefore, penalty imposed is also not sustainable: CESTAT
- Appeal allowed: KOLKATA CESTAT
2019-TIOL-2800-CESTAT-MUM
CCE Vs Unicon Fibro Chemicals Pvt Ltd
CX – Whether the appellants are required to discharge duty on the differential value, arrived at after applying the CAS-4 method for the period July, 2000 to Sept, 2007.
Held: The first SCN from July, 2000 to March, 2005 has been issued on 3.8.2005 invoking extended period of limitation - the assessee appellant, while clearing the excisable goods to their Silvassa unit, determined the assessable value of the goods on cost construction basis without adopting the CAS-4 method, resulting into short payment of duty - periodical SCNs were issued thereafter demanding differential duty from the assessee-appellant - the Commissioner (Appeals), while considering the issue, examined the CAS-4 certificates produced by the appellant and accordingly, re- determined the assessable value and also the differential duty payable - merely because, the CAS-4 certificates were not produced before the adjudicating authority, the said determination of value and differential duty cannot be said to be incorrect unless contrary certificate is produced by the Revenue to establish that the said method of determination of assessable value is incorrect or CAS-4 certificate produced by the assessee-appellant is incorrect - therefore, no merit found in the observation of the Commissioner (Appeals) in arriving at the assessable value of stock transferred goods adopting CAS-4 method for the entire period - CAS-4 method for assessing the value of stock transferred goods have been introduced in the year 2003 - before, the said introduction, there were lot of confusion in the determination of value of stock transferred goods and goods captively consumed - in these circumstances, no justification found to impose penalty on the assessee for not applying CAS-4 method in the determination of assessable value initially - consequently, the penalty imposed on the assessee-appellant is set aside and the demand limited to the normal period of limitation - the assessee's appeals are remanded to the adjudicating authority to re-quantify the demand for the normal period of limitation - the Revenue's appeals consequently being devoid of merit are dismissed - appeals stand disposed of accordingly : CESTAT [para8, 9]
- Appeals disposed of: MUMBAI CESTAT
CUSTOMS
2019-TIOL-2293-HC-PATNA-CUS
Ramesh Kumar Baid And Sons HUF Vs UoI
Cus - Petitioner seeks a writ in the nature of mandamus commanding the authorities to release 20,650 kgs of Betel Nuts (Arecanuts) and the truck which was seized, unconditionally Samples of Betel Nuts are in damaged condition with presence of insects.
Held: Court finds that the submissions of learned counsel for the parties are identical to the submissions raised in C.W.J.C. No. 10109 of 2019 which has been disposed of today itself - judgment would fully apply in the facts and circumstances of this case - Court has taken note of the reports and other circumstances as stated in paragraph '7' to '11' of the counter affidavit of the respondents - samples of Betel Nuts are in damaged condition with presence of insects and these are thus, unsafe for human consumption - petitioner no. 1 is, thus, unable to make out a case for direction to release the Betel Nuts - For the reasons stated in paragraph '41' of the judgment in C.W.J.C. No. 10109 of 2019, this Court would not interfere with the seizure at this stage - Insofar as release of vehicle in question, it is open for petitioner no. 2 to make an appropriate application before the competent authority who will consider the same and pass an appropriate order thereon within a period of 30 days: High Court [para 12 to 14]
- Petition disposed of: PATNA HIGH COURT
2019-TIOL-2292-HC-MAD-CUS
Kawarlal And Company Vs JOINT DGFT
Cus - IEC granted to the petitioner has been suspended u/s 8(1)(a)(b) of the FTDR Act on the ground that the petitioner company has got criminal antecedents since he has violated the Drugs and Cosmetics Act and a criminal case is pending against the petitioner filed by Central Bureau of Investigation on the file of the VIII Principal Special Judge for CBI cases, Chennai; that in the FIR it is alleged that the petitioner imported bulk drugs raw materials from China in criminal conspiracy with public servants and with Customs clearing agents without a valid Registration Certificate and import license; that petitioner is a habitual offender and hence it was deemed prudent to suspend the IEC of the petitioner as preventive step to stop further import of illegal, unregistered bulk drugs ito the country which have grave implication on public health under Foreign Trade (Development and Regulation) Act, 1992 - petitioner challenges the suspension.
Held: Such suspension or cancellation of IEC can be made , after giving a notice to that person in writing, informing him of the grounds, on which it is proposed to cancel or suspend IEC Code Number and after giving a reasonable opportunity of making a representation in writing within such reasonable time - Thus, it is evident that the suspension or cancellation of the IEC cannot be done without putting the concerned person on notice and providing him an opportunity of hearing - show cause notice was issued on 15.05.2019 and on very same day, the Order in Original also was passed suspending the IEC - said order dated 17.05.2019 was set aside by this Court in W.P.No.19527 of 2019 - 2019-TIOL-1813-HC-MAD-CUS by remitting the matter and the present order has been passed on 26.07.2019 without stating any reasons or giving any findings - first respondent has stated that he ordered the suspension in view of the report submitted by the CBI and on going investigations thereof - above statement of the first respondent in the impugned order lacks any material details and particulars to support the order of suspension - Licensing Authority, if it intends to suspend or cancel the license, should state specific details and particulars as to the reasons which made him to take such action - In the absence of any such finding or reason, such order cannot be sustained - matter needs to go back to the first respondent once again for passing a speaking order - Petition allowed accordingly: High Court [para 11, 12, 14]
- Matter remanded: MADRAS HIGH COURT
2019-TIOL-2291-HC-DEL-CUS
Agrawal Traders Vs Principal Commissioner
Cus - Refund - In view of the declaration of the law in ITC Ltd.- 2019-TIOL-418-SC-CUS-LB, it is obvious that the AC was correct in observing, in the impugned letter dated 12th September, 2017, that the petitioner ought to have appealed against the assessment of the three Bs/E filed by it - Any claim for refund could be maintained, by the petitioner, only after the assessment, of the three Bs/E, stood reversed on appeal - petitioner has fervently submitted that, if such a view is taken, his client would be rendered remediless, despite having paid duty in excess and being entitled, in principle, to refund thereof - Bench is not called upon to express any opinion on any appeal which the petitioner may, if so advised, choose to prefer, against the assessment of the three Bs/E filed by it, either on the aspect of limitation, or on merits and any such appeal, preferred, would, needless to say, have to be decided, by the competent appellate authority, in accordance with law - Petition disposed of: High Court [para 24 to 26, 29]
- Petition disposed of: DELHI HIGH COURT
2019-TIOL-2290-HC-DEL-CUS
Diamond Entertainment Technologies Pvt Ltd Vs CCGST
Cus - Petitioner has submitted that the appellant has preferred an appeal before CESTAT, Delhi against an order dated 23rd February, 2018 u/s 35F of the CEA, 1944; u/s 129E of the Customs Act, 1962 in original passed by Commissioner – Petitioner seeks waiver of the pre-deposit of 7.5% of the duty demanded that is required to be deposited by them and direct the CESTAT to hear the appeal on merits. Held:+ Bench notes that by the amendment to s.35F of the CEA, 1944/s.129E of CA, 1962, which is made effective from 6th August, 2014, the Statute has already waived 92.5% of the duty demanded even in cases where there is no hardship, therefore, Bench cannot be more lenient than law itself - The highest charitable person is the law and hence, Bench sees no reason to further waive the pre-deposit as required to be made under the law: High Court [para 3] + It can no longer lie in the mouth of any assessee, filing an appeal, before the CESTAT, after 6th August, 2014, to contend that, merely because the period of dispute, in its case, or the date when show cause notice was issued to it, was prior, in point of time to the amendment of Section 35F of the Central Excise Act/Section 129E of the Customs Act, it would not be required to make mandatory pre-deposit, or that it was entitled to seek waiver thereof, either in whole or in part: High Court [para 10] + A reading of Section 35F of the Central Excise Act reveals, by the usage of the peremptory words "shall not" therein, that there is an absolute bar on the CESTAT entertaining any appeal, under Section 35 of the said Act, unless the appellant has deposited 7.5 % of the duty confirmed against it by the authority below: High Court [para 18] + Allowing the CESTAT to entertain an appeal, preferred by an assessee after 6th August, 2014, would, therefore, amount to allowing the CESTAT to act in violation, not only of the main body of Section 35F but also of the second proviso thereto, and would reduce the command of the legislature to a dead letter: High Court [para 20] + Prayer of the petitioner for being permitted to prosecute its appeal before the CESTAT without complying with the condition of mandatory pre-deposit, cannot be granted: High Court [para 22]
- Petition dismissed: DELHI HIGH COURT
2019-TIOL-2821-CESTAT-MUM
Raghav Overseas Vs CC
Cus - These appeals have been filed by six companies and their Proprietor/Directors/ Partners - companies imported Brass Valve & Zinc Valves from China during the period 2008-09 - based on intelligence, the import documents of these companies were scrutinized and it was found that the declared transaction value of the imported goods was even less than the cost of raw material i.e. Brass Scrap in case of Brass Valve and Zinc Ingots (LME price) for Zinc Valves - in their statements recorded under section 108 of Customs Act, 1962 [Act], Proprietor/Director/Authorized persons of the companies accepted the fact about declaration of lower value than that of raw material cost - on the basis of investigations made, the declared transaction value was rejected under the provisions of rule 12 of Customs Valuation (Determination of Price of imported Goods) Rules, 2007 [CV Rules] and re-determined under rule 8 ibid - the re-determined value based on the cost of raw material plus 30% manufacturing cost was accepted by the appellants - they also paid part of duty voluntarily – SCNs issued - the adjudicating authorities confirmed the demand of differential duty with interest and also imposed penalties - in cases where the adjudication was undertaken by the officers lower in rank to Commissioner, appellants preferred appeals to the Commissioner (Appeals), which were dismissed – present appeals are against the o-in-o passed by Commissioner and o-in-a passed by Commissioner(A).Held: The Bench is in agreement with the submissions made by the counsel for the appellant that the issue is squarely covered by the decision of Tribunal in the case of S.K.Dhawan [2016-TIOL-1219-CESTAT-MUM] – the distinction sought to be made by the Authorized Representative of Revenue, do not address the crux of issue of rejection of transaction value - without rejecting the transaction value, the application of any other rule, for re-determination of the value for the purpose of levy of Custom Duty is neither permissible nor admissible position in law – in view of the above, the impugned orders are set aside and appeals allowed : CESTAT [para 4.2, 5.1]
- Appeals allowed: MUMBAI CESTAT
2019-TIOL-2802-CESTAT-DEL
Manish Goel Vs ADDL CC
Cus - The issue to be determined in this case as to which is correct value at which the goods imported which is required to be accepted for the purpose of assessment of Customs duty - It is on record that the assessee has submitted the first invoice declaring the value of imported consignment as per invoice - The another invoice was obtained from E. Mail of assessee which showed the value to the extent of USD 75175.28 but having same invoice - Yet another Invoice having the same was obtained by Department which showed the price of USD 129573.28 for the same consignment - The Department has not investigated the matter to find out as to why there are three different invoice of same number, one submitted along with the Bill of Entry other, retrieved from the E. Mail of assessee and third one at which the consignment has been assessed obtained from the source unknown to the assessee but available with Investigation officer - The Department has also conducted the market survey of various items imported by assessee but could not find any market price for those goods in view of there not being available for the purpose of comparison - The assessee contends that these goods were imported for one M/s Jagdamba International who was also investigated by Revenue - The sale price submitted by M/s Jagdamba International confirmed with the price are in the range of the value declared in first invoice submitted along with the Bill of Entry - These prices were not for the same goods which were being imported by assessee but was of the similar goods imported by them on the previous occasion for M/s Jagdamba International - Department has also not conducted any investigation regarding the payment made to the overseas buyer for export of these goods covered by said Bill of Entry filed by assessee - On the other hand, assessee categorically states that they have not made any payment over and above the first invoice value i.e USD 48016.38 - Regarding the second invoice having the value of USD 75,175,28 which was retrieved from the E. Mail of assessee it is submitted that the same was obtained in order to get quick clearance from the customs as desired by the Investigating Officer, but stressed that they have not paid over and above the price of USD 48016.38 - Assessee has not accepted the value of assessment as per the third invoice at USD 129573.28, which is clearly manifested from the endorsement made on the said invoice and produced - This cannot be said to be their voluntary acceptance of price for the imported consignment - The valuation of imported goods has to be done as per Section 14 of Customs Act read with CVR, 2007, which has not been followed in this case - Investigation has been done in an unprofessional manner and prices has been arbitrarily enhanced by Customs Officer which has not been rectified in impugned order in spite of various submissions made by assessee - The Department has not been able to provide any value for contemporaneous import but for the third invoice the source of which is not disclosed - It will be inappropriate and contrary to the provisions of Section 14 of Customs Act read with CVR, 2007 to reject the transaction value as has been held by the lower adjudicating authority and Commissioner (A) in the impugned order - The impugned order is set aside - The department is directed to release the consignment at declared price within a fortnight: CESTAT
- Appeals allowed: DELHI CESTAT |
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