| SERVICE TAX
2019-TIOL-2885-CESTAT-MAD
Powergear Ltd Vs CGST & CT
ST - The assessee is a SEZ Unit holding service tax registration - They filed application claiming refund of service tax paid on specified services as per Notfn 12/2013-ST for the quarter July, 2016 to September, 2016 - The refund sanctioning authority initially rejected the refund without stating any reasons against which the assessee filed appeal before Commissioner (A), who remanded the matter to the lower authority observing that the order is not a speaking one - The Commissioner (A) upheld the view taken by refund sanctioning authority that the refund claim is time-barred - The issue is with regard to rejection of refund claim on the ground of being time-barred - At the outset, it has to be stated that no SCN/deficiency memo was issued to assessee stating reasons for rejecting the refund - The refund sanctioning authority in the first round of litigation has rejected the refund without stating any reasons - The Commissioner (A) has remanded the matter directing the adjudicating authority to pass a speaking order and also to look into the report of the range officer - In such remand proceedings, assessee was given a copy of range officer's report - On perusal of range officer report, it is categorically stated by range officer that refund claim is well within time - On reading of Notfn, it can be seen that the assessee can file one claim for every quarter - The refund claim for invoices under dispute has been filed on 14.06.2017, which is well within the time - Therefore, the refund claim filed is well within time, and, therefore, the rejection of same stating the ground of limitation is unjustified - The impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-2884-CESTAT-DEL
Max Life Insurance Company India Ltd Vs CCE & ST
ST - The issue in the present case is, whether Service Tax under category of "Management of Investment under ULIP service" is leviable on Surrender Charges, which are deducted from fund value, as per policy provisions for pre-mature withdrawal from the scheme - Surrender charges are permitted to be levied by IRDA, by way of penal charges towards recovery of initial expenses incurred by insurer in marketing and distribution of policy - As IRDA has fixed limits as to recovery, which can be made from time to time from the initial cost, accordingly, IRDA have permitted to recover surrender charges in case of pre-mature policy so as to enable the insurer to recoup the cost incurred by them - Further, legislature have clarified by substituting clause (ii) in Explanation to Section 65(105)(zzzzf), that service tax is leviable only on the management fee or charges which are either fixed by IRDA or actually levied by the insurer, whichever is higher by substituting the explanation w.e.f. 01.07.2010 - An Explanation is meant for clarifying the provision of main section and accordingly has retrospective effect and is normally effective from the date of the statute, unless otherwise provided in the amending Act or notification - Thus, in view of the clarification by way of substitution of Explanation-II, service tax is not leviable on surrender charges by any stretch of imagination - It has also been clarified by the CBEC vide TRU No. 334/1/2010, that the charge pertaining to asset management alone should form the value for taxation in case of ULIP policy - Accordingly, the impugned order is set aside - As the appeal allowed on merit, the question of limitation left open: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-2883-CESTAT-BANG
RNS Motors Vs CCE, C & ST
ST - Assessee is dealer of cars manufactured by Maruti Suzuki - The assessee is collecting some amounts from their customers/purchasers of cars from their showroom and using the money for getting the vehicle registered with the RTO - Certainly the assessee is rendering a service to the customers and they are also getting a remuneration - However, on this very count, such revenue generated cannot be visited with service tax unless it falls under one or the other definitions of service tax under various headings given under Section 65 - The Department intends to charge the service tax under BAS - However, Tribunal fail to understand as to which business of customer, who buys the cars for his personal use, are supported by activity of assessee - The activity of assessee does not come under BAS insofar as it does not support any business whatsoever of customer - Tribunal has taken a stand that such amounts collected for facilitating the registration from the RTO is not taxable under service tax: CESTAT
- Appeal allowed: BANGALORE CESTAT
CENTRAL EXCISE
2019-TIOL-2882-CESTAT-AHM
Nova Petrochemicals Ltd Vs CCE
CX - The issue involved is that the assessee has not paid National Calamity Contingent Duty on Polyster Filament Yarn cleared to 100% EOU and that cleared for captive consumption - They were issued SCN for recovery of same - The issue is no more res-integra as the Apex Court in case of M/s Bajaj Auto Ltd. - 2019-TIOL-127-SC-CX has held that exemption of excise duty would be applicable to NCCD also as the same is surcharge - The demand of NCCD on goods cleared for captive consumption and to 100% EOU is not sustainable - The impugned order is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2019-TIOL-2881-CESTAT-KOL
Steel Authority Of India Ltd Vs CCE
CX - The assessee is an integrated steel plant, manufacturing iron and steel products - SCNs were issued proposing demands of duty as per Rule 223A of the erstwhile CER, 1944 on shortage found as contained in the Annual Shortage and Surplus Report, arrived on stock verification during the material periods, which were duly intimated to the jurisdictional Central Excise authority by assessee - Proceedings under Rule 223A for shortage of goods is to be based on stock taking in the factory "in the presence of the proper officer" - The said rule makes it explicit that the involvement of the "proper officer" for applicability of said provision and for initiation of any proceeding for recovery of any duty short paid found on the basis of said stock taking carried out in the presence of "proper officer" is an absolute requirement - The materials on record undisputedly evidence that there was no involvement of "proper officer" in the subject annual stock taking carried out on its own by the assessee - The "proper officer", as required under Rule 223A of the said Rules, having not ascertained the stock nor being involved with the said annual stock taking by assessee, the provisions of Rule 223A is inapplicable - Consequently, the proceedings initiated by the two SCNs under Rule 223A of the said Rules were held without the condition precedent there for being satisfied - There is thus no stock taking under Rule 223A of said Rules - Hence, the impugned order and duty demand confirmed thereby under Rule 223A are also sustainable since the stock taking cannot be held to be under Rule 223A of the said Rules - There is no denial of the fact that the stocks were ascertained by assessee on the basis of sectional measurement basis and not on actual weighment basis, but, however, the clearances were effected upon actual weighment basis - In such cases, there is bound to be difference in weighments - A case of shortage or excess of stock and/or clandestine removal thereof without payment of duty is not established in such a situation - The impugned order cannot be sustained and it is accordingly set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2019-TIOL-2880-CESTAT-BANG
TVS Motor Company Ltd Vs CCT
CX - The assessee is engaged in manufacture of two wheeler motor vehicles and clears goods to the depots/branches and dealers - Certain abatements viz. Freight, Free Service Charges, Discounts, Additional Discount for rural sales is not known at the time of removal of goods from the factory - Provisional assessment of goods cleared from factory gate was resorted - Subsequent to the sale from the factory gate, they have issued credit notes to the dealers to pass on the various abatements based on final price of goods cleared from depot - The provisional assessment for the period 2005-06 was finalized vide OIO and it was held that the assessee was eligible for refund of excess duty paid on such abatements in the refund order - Since the department had filed an appeal before Apex Court against the decision of Madras High Court in case of Addision & Co. , a notice was issued to assessee proposing to hold the sanction of refund as irregular and recover the same along with interest - Apex Court allowed the appeal filed by department and held that the doctrine of unjust enrichment has to be satisfied by the assessee and the discounts has to be passed on to the ultimate buyer as envisaged under Section 11B read with Section 12B of CEA, 1944 - Based on this ruling, the adjudicating authority has held that the sanction of refund vide OIO dated 29.10.2007 was ordered to be recovered along with interest - In assessee's own case, this Tribunal has held that in any appeal against the sanctioning of refund order, the Revenue cannot recover erroneously sanctioned refund by parallel proceedings by issue of SCN - The Division Bench of Delhi Tribunal in case of Bridgestone India Pvt. Ltd - 2019-TIOL-1856-CESTAT-DEL after considering the various decisions of High Courts as well as the provisions of Central Excise Act has held that Section 11A of the Act cannot be resorted to by the Department for recovery of duty which it believes was erroneously refunded if the order passed by Adjudicating Authority for refund of duty under Section 11B of the Act on an application filed for refund of duty attained finality for the simple reason that it cannot fall in category of 'duty erroneously refunded' - The impugned order is not sustainable in law and therefore the same is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT
CUSTOMS
2019-TIOL-2879-CESTAT-DEL
Skytrain Services Vs CC
Cus - The appellant is a Customs Broker whose license was issued by the Commissioner of Customs (General), New Delhi - During the relevant period, the Revenue noted that an entity imported a consignment of mobile accessories through the appellant & that the value and quantity of the same had been mis-declared - On examination, the quantity and description of the goods were found to have been mis-declared - The products were also found in the consignment which was registered with Customs under IPR (Imported Goods) Enforcement Rules, 2007 - Thus, goods infringing the IPR Rules were also found in the consignment - The AR of these brands was called on to verify the IPR infringement and later certified that the Samsung brand products found in the consignment were counterfeit and requisite action was sought for - Hence the goods in the BoE were seized & were handed over to the AR of the appellant - The proprietor of the importer requested warehousing of the goods u/s 49 of the Customs Act on account of bearing heavy demurrage charges - Permission for the same was granted - Upon visit by officers of the Preventive Unit, it was found that the goods had never been warehoused - The warehouse operator submitted evidence of communications issued to the importer regarding issuance of space certificate - Further investigation revealed that the goods bound for warehousing were diverted elsewhere, the packing was opened, the goods were unloaded and switched with bricks and stones and were then sent for warehousing - Since the bags containing the bricks and stones were refused to be warehoused, they were subsequently destroyed - Thereafter, the official addresses of the importer and its proprietor were both found to be false - Based on statements taken from various persons, the Department concluded that the appellant had got the goods cleared & on the pretext of seeking permission for the warehousing of the goods, had mis-declared the quantity and quality of the goods and also contravened the IPR Rules - The appellant was charged with having violated the provisions of the CBLR and the seized goods never reached the warehouse, owing to their being stolen from their carrier - Hence, SCN was issued proposing to revoke the appellant's license, forfeit part of entire security amount & impose penalty on the appellant - These proposals culminated into an O-i-O - Hence the present appeal.
Held - There is sufficient oral evidence in the form of statements taken from the persons concerned, that too in corroboration, about the consignment received to contain mis-declared and under-valued mobile accessories and also containing accessories which infringe IPR - Moreover, despite their seizure & permission for being warehoused, the goods were diverted to the premises of the actual purchaser of the goods, with the connivance of the G-card holder of the appellant and his associate - Such oral evidence received due corroboration from the documents as well - Physical verification of the warehouse operator reveals that the consignment was not found warehoused in the premises - Admittedly, the G-card holder of the appellant was physically involved in the entire events - His activities were never objected to by the appellant & were not reported to the Revenue - The appellant is otherwise bound to act by his G-card holder - Otherwise also, the goods could not have been diverted without knowledge of the Customs Broker - Hence the Customs Broker violated the obligations imposed on him under the CBLR - The violation of the Regulations is so grave that the principle of proportionality is not opined to have been compromised as is canvassed by the appellant - The failure thereof invites revocation of license - Considering the gravity of the illegality so perpetrated, which could have been avoided had the Customs Broker verified the antecedents such as correctness of IEC code and identity of the importer - There is apparent violation of Regulation 11(n) of CBLR as well as Regulation 79 of CBLR to hold that the Customs Broker is responsible for all acts or omissions of his employee during employment & is required to exercise supervision to ensure proper conduct of employees - Hence the O-i-O correctly held that the appellant failed to comply with the responsibilities cast on it as per Regulations 10(d), 10(e), 10(n), 12 & 13 of CBLR - Hence the revoking of license & forfeiture of security deposit is sustained: CESTAT
- Appeal dismissed/ In favor of Revenue: DELHI CESTAT
2019-TIOL-2878-CESTAT-MAD
Honda Siel Power Products Ltd Vs CC
Cus - The assessee-company imported goods and paid SAD as applicable on them - In terms of Notfn No 102/2007-Cus r/w Notfn No 93/2008, the assessee is entitled to refund of SAD paid if the imported goods are thereafter sold on payment of VAT subject to the conditions mentioned in the notification - One such condition mentioned in the notification as applicable during the relevant time was that the refund claim must be filed within one year - As the assessee filed all the refund claims after one year, all of them were rejected upon adjudication - Such findings were sustained by the Commr.(A) - Hence the present appeals.
Held - Section 27 of the Customs Act deal with refund of Customs duty - The High Court of Delhi in Sony India Pvt. Ltd. Vs CC took a liberal view on interpreting the exemption notification and held that since the purpose of availing SAD is to provide a level playing field between the imported goods and domestic goods, when the imported goods are resold on payment of VAT to the State Government, the exemption notification provides for refund of SAD - It may or may not always be possible for the importer to resell the goods and file refund claim within time depending on his market conditions - Taking a liberal view, the High Court held that refund is available without the limitation of one year, indicated in the exemption Notfn 102/97 after amendment - Meanwhile, the High Court of Bombay in CMS INFO Systems Ltd. Vs Union of India construed the exemption Notification strictly and held that the conditions including the time limit within which the refund claim has to be filed must be fulfilled - Moreover, the issue of strict versus liberal interpretations of the exemption notifications stands settled in the Apex Court's decision in Commissioner of Customs (Import) Mumbai Vs Dilip Kumar & Company and any benefit of doubt must go in favor of the Revenue & against the assessee - The five-judge Constitutional bench in this case also overruled any contrary decisions - Hence in keeping with the principle of judicial discipline, the exemption Notification must be interpreted strictly as it has been drafted including the time limit within which refund applications have to be filed - Ergo, the decision of the Bombay High Court in CMS INFO Systems Ltd. Vs Union of India is consistent and appropriate and syncs well with the decision in Commissioner of Customs (Import) Mumbai Vs Dilip Kumar & Company - Hence the Orders-in-Original rejecting the refund claims merit being sustained: CESTAT
- Assessee's appeals dismissed: CHENNAI CESTAT |
