ST - The assessee was providing health services - The said services became exempted with Notfn 30/2011-ST w.e.f. 01.05.2011 - Thus during the period 01.07.2010 to 30.04.2011, assessee was under legal obligation to discharge Service Tax liability on the said services so provided by them - Proceedings were initiated against assessee for confirmation of demand of Service Tax - The said SCN was adjudicated by original adjudicating authority, who after allowing the deduction for the cost of medicines consumed in providing the health services confirmed the demand of Service Tax along with confirmation of interest and imposition of penalties - Admittedly, the demand for the period 01.07.2010 to 30.04.2011 stands raised by way of issuance of SCN i.e. by invoking the longer period of limitation - The dispute relates to the interpretational issue i.e. as to whether the cost of the medicines are required to be formed part of the value of the services - The original adjudicating authority had extended the benefit to the assessee - This fact, by itself, shows that the issue is a bona fide issue of interpretation and is capable of being interpreted in two different maners - In such a scenario, no mala fide can be attributed to the assessee - As such, the impugned order of Commissioner (A) on limitation is not sustainable: CESTAT

- Appeal disposed of: ALLAHABAD CESTAT

ST - The present appeal stands abated as per Rule 22 of the CESTAT (Procedure) Rules as the proprietor of the appellant-company is deceased: CESTAT

- Appeal dismissed: KOLKATA CESTAT

ST - The assessee has been providing the service of stevedoring service at Karwar Port and discharging the goods from vessel to the wharf - During audit, department found that the assessee has not obtained service tax registration under category of Cargo Handling Service and has not paid the service tax - Subsequently, SCN was issued to assessee proposing to demand service tax during period from 16.8.2002 to 30.6.2003 - The services rendered by assessee does not fall in category of Cargo Handling Service prior to 1.7.2003 - During the impugned period, the services rendered by assessee fall in the category of Port Service and not Cargo Handling Service as held by Apex court in case of Sushil & Co - 2016-TIOL-47-SC-ST and also clarified by Board Circular dated 1.8.2002 - Therefore, the demand of service tax on Cargo Handling Service for period 16.8.2002 to 30.6.2003 is not sustainable in law - Further, entire demand is also barred by limitation because the SCN was issued on 18.7.2009 proposing to demand service tax for the period from 16.8.2002 to 30.6.2003 and in the SCN, there is no allegation of fraud, collusion, willful misstatement or suppression of fact with intent to evade payment of tax - Assessee had a bona fide belief that services rendered by them within the minor port or other port are liable to service tax only from 1.7.2003 and they have paid the service tax accordingly from 1.7.2003 - The impugned order is set aside on merit as well as on limitation: C

- Appeal allowed: BANGALORE CESTAT

CX - Allegations of clandestine manufacture and removal without payment of duty - CESTAT is the final fact finding authority, and in matters such as this, an appeal lies, from the final order of the CESTAT, to this Court, only on substantial questions of law - Matters involving appreciable evidence ordinarily, would not involve substantial question of law, as High Court, in exercise of its powers conferred by Section 35H of the Act, is not empowered to reappreciate evidence, which has already been appreciated by the CESTAT - It is only where the appreciation of evidence by the CESTAT is perverse, to the extent that no reasonable man conversant with the facts of the law, would arrive at the said conclusion, that this Court could interfere – Bench is not convinced that the manner in which evidence has been appreciated by the CESTAT, in the present case, suffers from such perversity, as would justify interference: High Court [para 14]

CX - CESTAT has also held that it was not permissible to proceed on the basis of the computer printouts, in view of Section 36B of the Act - There is nothing to indicate compliance with the strict stipulations contained in subsections (1) and (2) of Section 36B of the Act in the present case - Bench, therefore, find no reason to interfere with the findings of the CESTAT regarding non-compliance of Section 36B of the Act either - no perversity of the evidences on record by CESTAT - no substantial question on law is involved in this Central Excise Appeal and the same is, therefore, dismissed: High Court [para 16, 17]

 - Appeal dismissed : DELHI HIGH COURT

NDPS - Petition under Section 439 of Cr.P.C. seeking bail is filed by accused, alleged of offences punishable under NDPS Act, 1985 on various grounds viz. (a) that petitioner was kept in illegal detention from 1st May 2019 till he was produced before the learned Special Judge; (b) the garage premises from where contraband was allegedly recovered was not in petitioner's possession; (c) no FIR has been registered and no case diary is maintained by the NCB; (d) Panchanama dated 1st May 2019 conducted at 22.00 hours is contrary to law;(e) 'Ketamine Hydrochloride' is not a drug under the NDPS Act but finds it's place in Drugs and Cosmetics Act 1940;

Held: In order to grant bail, Court must record satisfaction on two aspects - Firstly, that there are reasonable grounds to believe that petitioner is not guilty of alleged offence and secondly that he is not likely to commit any offence while on bail - Prosecution claims to have arrested petitioner only on 3rd May 2019 - Admittedly, petitioner was produced before the Trial Court on 4th May 2019 - The application seeking bail was moved on 7th June 2019 - Trial Judge has recorded that the contention with regard to re-tracing the statement was brought up after nearly one and half months and that the petitioner did not complain about any ill-treatment when produced on 4th May 2019 and, therefore, this ground is untenable - lease agreement prima facie shows that petitioner was in occupation of entire building hence second ground also does not survive - In the case on hand, arrest memo has been served upon the petitioner and he has been produced before the Trial Judge and a remand application containing violation of various provisions of the Act has been filed - Respondent has placed on record the authorization under Section 41(2) of the Act dated 1st May 2019 issued by the Superintendent of NCB to Virender Singh, Intelligence Officer to search petitioner's building, therefore, this ground of Panchanama being contrary to law is also untenable - Admittedly, 'Ketamine' finds its place at Sl. No.110A of the Schedule - Salts and preparations find place at Sl. No.111, hence, 'Ketamine Hydrochloride' will have to be treated as a preparation of Ketamine - contention that petitioner is required to be tried only for violation of Drugs and Cosmetics Act, is also untenable - A careful analysis of dates and events discernable from petitioner's statement, seized documents and contraband do not instil confidence to record satisfaction that there exist grounds to believe that petitioner is not prima facie guilty of the alleged offence and that he is not likely to commit any offence, if released on bail - Petition dismissed: High Court [para 10, 12, 14, 15, 18, 21, 31, 32]

 - Petition dismissed : KARNATAKA HIGH COURT

Cus - Goods imported from the Republic of Korea - In terms of Notification No.151/2009-Cus dated 31.12.2009, goods imported from Republic of Korea was exempted from levy of Basic Customs Duty, subject to the condition that the importer proves to the satisfaction of the Authority of Customs that the goods are of the origin of Republic of Korea - since such a certificate could not be provided in time and the request for provisional assessment was rejected, the goods were cleared on payment of appropriate Customs duties - after receiving the Certificate of origin and other documents, claim filed for refund of Customs duty paid - However, Refund claim made by the importer was rejected as premature on the ground that the petitioner has not challenged the assessment - petition filed challenging this order.

Held: Court is of the view that the refund claim made by the petitioner was rightly rejected as premature, since the petitioner has not challenged the self assessment made through Bill of Entry as held by the Apex Court in ITC Limited vs. Commissioner of Central Excise, Kolkata IV - 2019-TIOL-418-SC-CUS-LB petitioner fairly submitted before this Court that liberty may be given to the petitioner to challenge the said self assessment before the Appellate Authority concerned - Writ Petition is, therefore, disposed of by granting liberty to the petitioner to file such appeal against the self assessment within a period of two weeks from the date of receipt of a copy of this order - If any such appeal is filed before the Appellate Authority, the same shall be taken on file and decided on its own merits and in accordance with law without reference to the period of limitation - depending upon the outcome of the order to be passed in the said appeal, the petitioner can work out the remedy for refund thereafter in accordance with law: High Court [para 6, 7]

 - Petition disposed of : MADRAS HIGH COURT

Cus - Notification No. 39/96-Customs dated 23.07.1996 - Department impugns the order of the CESTAT allowing the appeal of the CHA, on the ground that the Tribunal was not justified in dropping the penalties, without considering the merits of the case; that the Tribunal has failed to consider the failure on part of the Respondent in discharging its duties and responsibilities as a CHA; that Kailash Gupta, the Managing Director of the Respondent company in his statement dated 05.03.2009 admitted that he knew that exemption certificates were signed by the General Manger, OEF, Kanpur and as per the relevant notifications, the certificates ought to have been issued by an officer not below the rank of Joint Secretary to Government of India, Ministry of Defence; that despite being aware of the above legal position, he did not exercise due care in checking the genuineness of the exemption certificates and carelessly accepted the version of the importer that the General Manager of the OEF was equivalent in rank to the Joint Secretary of Government of India; that the CHA was obligated to verify whether the goods were eligible for exemption or not and since it failed to discharge its statutory obligations, it is liable to the imposition of the penalty under of the Act.

Held:

+ It would be worthwhile to note that the Commissioner of Customs (General) had also initiated proceedings against the CHA under the provisions of Customs House Agent Licensing Regulations, 2004, which culminated in passing of the order dated 12.05.2015 whereby a punishment of forfeiture of security deposit of Rs. 50,000 was imposed - The said order was impugned by the Customs Department on the ground that the punishment was not proportionate and commensurate with the allegations and the said appeal has been dismissed by an order dated 11.12.2017 - 2017-TIOL-2606-HC-DEL-CUS - The incident that resulted in the initiation of parallel proceedings against the Respondent under Customs Broker Licensing Regulations and the Customs Act, 1962 is the same - Thus, the facts noted in the order dated 11.12.2017 assume significance and on perusal of the same, it clearly emerges that the Court considered the obligation of the Customs authorities to examine the applicability of the conditions of the exemption Notification and genuineness of the documents submitted by the importer - Court also drew adverse inference on account of the fact that no departmental action had been taken against officers of the department - Pertinently, it was noted that the Central Bureau of India (CBI) had also investigated the issuance of bogus exemptions certificates and had not charge-sheeted the CHA inasmuch as the charge-sheet was filed only against the proprietor of the importer and its authorized signatory and the proprietorship concern - CBI in its charge-sheet recorded that the CHA had retained photocopies of the bills of exchange for its office records and had forwarded the original copies of the same along with his bill to the importer for getting payments, thus CHA's direct involvement with the importer was not established and which fact prevailed upon this Court in dismissing the appeal filed by the Customs Department, not finding it to be fit to impose harsher penalty: High Court

+ A perusal of the provisions viz. Section 112 (b) as well as 114AA of the Act clearly reveals that the penalty under the said provisions can be imposed wherever there is an element of mens rea or conscious knowledge, which is a sine qua non for imposition of the penalty - This is evident from a plain reading of Sections 112 and 114AA of the Act, which uses the expressions "does or omits to do" , "or abets the doing or omission of such act", "which he knows or has reason to believe are liable to confiscation under Section 111"- in Section 112 and "knowingly or intentionally" in Section 114AA - The facts of the case in hand do not reveal any such element of mens rea or conscious knowledge qua the importer - There is no active role attributed to the Respondent, which justifies the imposition of the penalty under Section 112 (b) and Section 114AA of the Act and nothing has emerged even in the criminal investigation - Though, for imposition of penalty in respect of the cases falling under Section 112 (a) of the Act, mens rea may not be required to be proved as condition precedent, however, when it comes to imposition of the penalty on an abettor, it is necessary to show that the said essential element/ ingredient is present: High Court

+ There is no element of mens rea or conscious knowledge which can be attributed to the CHA - The investigation carried out by the CBI and other facts reveal that the CHA acted bona fide and merely facilitated the imports on the strength of the documents which were handed over to him by the importer - There is no sufficient material on record to show that the CHA was actively involved in the fraudulent availment of the exemption by the importer warranting levy of personal penalty, therefore, Bench does not find any ground to interfere with the findings of the Tribunal vis-a-vis the Respondent - Appeal dismissed in limine: High Court [para 8, 9, 10, 11, 12, 13]

2019-TIOL-2504-HC-DEL-CUS

Jayant Vikram Vs ADDL CC

Cus - The SCN was issued upon petitioner as well as other co-noticees on 13th September, 2017 - The main allegation is about the misdeclaration of goods and the price for goods in question - The petitioner contends that the said SCN was never received by him - It is also submitted that the notice for personal hearing was never received - In view of these facts and even otherwise also for the co-noticees, the matter has already been remanded by this Court by quashing and setting aside the O-I-O, the writ petition is allowed - The matter is remanded for a fresh decision by the Additional Commissioner of Customs: HC

- Writ petition disposed of: DELHI HIGH COURT

2019-TIOL-3165-CESTAT-ALL

Vinod Kumar Varma Vs CC