SERVICE TAX
2019-TIOL-3389-CESTAT-MUM
Oracle Financial Services Software Ltd Vs CST
ST - Refund - Rule 5 of CCR - Impugned order has disallowed the Cenvat benefit mainly on the ground that there is no nexus between the disputed services and the output service provided by the appellant and that no supporting evidences were produced by the appellant to demonstrate that the disputed services can be considered as input service for the Cenvat benefit - appeal to CESTAT.
Held: Under the un-amended definition of input service (effective upto 31.03.2011), the phrase "activities relating to business" was specifically finding place for considering a service as input service - Since the value of taxable service along with service tax paid there-on was reflected as business expenses in the Books of Account, the disputed services should be considered as input service in terms of Rule 2(l) of the Rules for the period upto 31.03.2011 - Under the amended definition of Rule 2(l) ibid (with effect from 01.04.2011), the assessee is permitted to avail credit on any service used for providing the output service, excepting the excluded category of services mentioned in the definition of input service - as the description of disputed services provided in the impugned order, do not fall under the excluded category provided under Rule 2(l) of the Rules, therefore, denial of Cenvat benefit on the disputed services will not be proper and justified on the ground that those services have no nexus with the output service provided by the appellant - However, since the original authority had specifically recorded the findings that the appellant had not produced any documentary evidences to show nexus as well as the eligibility of Cenvat benefit on the disputed services, matter remanded to the original authority for verification of the documentary evidences to be produced by the appellant to establish that the disputed services are in fact, conforming to the definition of the input services and were used/utilized for providing the output service: CESTAT [para 6]
- Matter remanded: MUMBAI CESTAT
2019-TIOL-3388-CESTAT-MUM
CCGST Vs Bharat Mumbai Container Terminals Pvt Ltd
ST - Respondent filed on 30th August 2016, its claim for refund of tax included the dues of Rs. 43,16,39,802/- payable to M/s. Afcons Infrastructure Ltd and of Rs. 5,45,36,119/- to M/s ITD Cementation India Ltd. - In effect, though the tax liability had been discharged by these two sub-contractors and the recipient of the service was the contractor of Jawaharlal Nehru Port Trust charged with execution of the project, eligibility for the claim was sought as 'person' who had borne the incidence of tax - lower authorities examined the eligibility of retrospective exemption granted for the period 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive) vide section 103 of the Finance Act, 1994 inserted vide Finance Act, 2016 and also 'unjust enrichment' held that the refund was admissible - Revenue is in appeal against this order.
Held: Impugned order cannot be assailed for non-compliance with the certification prescribed in the exemption notification as the certificate furnished, though issued on the letterhead of the Port Trust, has been attested by the Deputy Secretary in the Ministry of Shipping, Government of India - The exemption notification 9/2016-ST has not prescribed the form or manner in which the certificate of the Ministry is to be authenticated - Attestation of the certificate signed by Chairman, Jawaharlal Nehru Port Trust by the competent authority in the Ministry of Shipping, therefore, suffices as compliance - Commencement of commercial operation took place only in March 2018 and, hence, in view of the refund claim having been filed, the amortisation had not been taken place - Therefore the apprehension of amortisation, or any other downstream benefit of capitalisation, will not arise - no reason to interfere with the order of the lower authorities - appeal dismissed: CESTAT [para 7, 10, 11]
ST - Refund - s.103 of the FA, 1994 - The issue of whether any claim for refund has been preferred by the two sub-contractors who included the tax in the invoice raised on the respondent herein or had availed benefits is too vague on allegation to be raised at this juncture - There is no essaying of any facts, or even speculation, on the nature, and extent, of benefits that could be availed - The Tribunal is not to be expected to either undertake an enquiry, or direct any of the lower authorities to proceed in that direction merely on the basis of apprehensions entertained by the Committee of Commissioners: CESTAT [para 8]
- Appeal dismissed: MUMBAI CESTAT
2019-TIOL-3382-CESTAT-DEL
Jain Carrying Corporation Vs CCE
ST - Appellant was registered as a service provider under the category of supply of tangible goods, cargo handling service, site preparation and clearance, transport of goods by road and business auxiliary service - the appellant entered into two agreements with M/s. Ambuja Cement Ltd. [ACL], both dated 1 July, 2004 - the first agreement was for 'Hiring of Heavy Earth Moving Equipment' while the second was for 'Transportation of Limestone' - it appeared to the Department that the assessee had not paid ST on the taxable service provided to ACL namely, 'site formation and clearance, excavation and earth moving and demolition services' [site formation] and 'cargo handling services' during the period October, 2005 to September, 2010 which resulted in non payment / short payment of service tax amounting to Rs.2.97 crore and, therefore, a SCN dated 19.4.2011 was issued to the appellant - the SCN relied upon the two agreements referred to above and the statement of Shri Pradeep Jain, Deputy Commissioner Finance and Accounts of ACL - demand confirmed, equivalent penalty imposed under sections 76 and 78 of the Finance Act, 1994 [Act]
Held: Whether the activity performed by the appellant would fall under the category of 'Site formation ' - On a reading of section 65 (105) (zzza) and the definition of 'site formation' contained under section 65 (97a) and the budget letter dated 27 July, 2005, there is no manner of doubt that the service referred to is prior to the actual activity of mining - drilling, boring and core extraction services for construction of geophysical, geological or similar purpose is carried out to determine the feasibility for digging any mine prior to mining and it is this service on which service tax is sought to be levied under section 65 (105) (zzza) - it is not the case of the department that the activity that was carried out by the appellant was prior to mining - in such circumstances, it is not possible to accept the contention of the Department that the services would fall under the category of "'Site Formation": CESTAT
Cargo Handling Service' or 'Good Transportation Agency Service " - What is found from the record, and what has also been noticed by the Commissioner, is that the cost of transportation is Rs.29.60 per ton out of which the labour element is 10% i.e. Rs. 2.96 per ton of limestone quantity delivered - the work of loading and unloading is incidental to 'transportation', which has also been clarified by CBEC Circular dated 6.8.2008 in regard to ST levy on goods transport by road services - a perusal of para 3 of the said Circular shows that composite service may include various intermediary and ancillary services such as loading/ unloading, packing / unpacking etc. provided in the course of transportation of goods by road - these services are not provided as independent activity but as means of successful implementation of the principal service, namely the transportation of goods by road - it has, therefore, been clarified that a composite service even if it consists of more than one service, should be treated as a single service based on the main or principal service - it has, therefore, been held that any ancillary / intermediate service provided in relation to transportation of goods, and the charges, if any, for such services are included in the invoice issued by the Goods and Transport Agency and not by any other person - such service would form part of Goods and Transport Agency Service and , therefore, the abatement of 75% would be available on it - it has, therefore, to be seen whether in the present case transportation is the main service and loading / unloading is ancillary service provided for successful completion of the main service - the cost of transportation charge is Rs.29.60 per ton of limestone quantity delivered to the crusher out of which the labour element is only Rs.2.96 per ton - it is apparent that the essential feature of the service is transportation - loading and unloading are ancillary / intermediate service provided in relation to transportation of goods, and such service would be Goods and Transport Agency Service - it cannot be 'Cargo Handling Service' as was found by the Commissioner: CESTAT
In view of the decision of the Supreme Court in the case of Bhayana Builders (P) Ltd. - 2018-TIOL-66-SC-ST , it has to be held that cost of diesel cannot be included in the gross amount since it has been supplied free of cost by the service recipient: CESTAT
Thus, for all the reasons above, the impugned order deserves to be set aside and is, accordingly, set aside - the appeal stands allowed : CESTAT [para 20, 21, 22, 24, 25, 29, 30]
- Appeal allowed: DELHI CESTAT
2019-TIOL-3381-CESTAT-KOL
Jai Jaganath Steel and Power Vs CCE & ST
ST - During the period under dispute, the appellant availed cenvat credit of ST paid on 'container services' received from M/s.CONCOR for use in outward transportation of their final product i.e. Sponge Iron upto the place of buyers - SCN dated 19.3.2009 was issued alleging that the service in question do not qualify to be an "Input Service", in view of the definition of "Input Service" as provided in the Cenvat Credit Rules, 2004 [CCR] - vide impugned order, the Commissioner (Appeals) upheld disallowance of Input Service Credit of Rs.2.73 lakh for the period June, 2008 to August, 2008 on the ground that "container services used for outward transportation of the final products upto the place of buyer" are not "Input Services" in terms of rule 2(l) of the CCR - appeal to CESTAT.
Held: Issue in dispute in the present case is squarely covered by the judgment of the Supreme Court in the case of Ultra Tech Cement Ltd. - 2018-TIOL-42-SC-CX - t he Supreme Court has laid down thus "13. The upshot of the aforesaid discussion would be to hold that Cenvat Credit on goods transport agency service availed for transport of goods from place of removal to buyer's premises was not admissible to the respondent…………" - by respectfully following the ratio as laid down by the Supreme Court, no reason found to interfere with the impugned order and the same is, accordingly, sustained - the appeal filed by the appellant is dismissed: CESTAT [para 4]
- Appeal dismissed: KOLKATA CESTAT
2019-TIOL-3380-CESTAT-HYD
K12 Education Management Pvt Ltd Vs CC, CE & ST
ST - Whether prior to 01.07.2012 the services rendered by appellants-assessee is taxable under Business Support Services as held by Hon'ble Member (Technical) or not taxable as held by Hon'ble Member (Judicial) - in view of difference of opinion, matter referred to the Third Member.
Held: Third Member - on perusal of Trust Deed, it shows that these are trusts formed with primary and predominant object of imparting education - these trusts carry out their objects by running schools and junior colleges - it can be seen that prior to 2012, there has been several exemptions in relation to education services - after 2012, the classification of various services has been given away with and there is more clarity as to the services which are intended to be taxed - there is no dispute that the educational institutions run by these Trusts are recognized by Andhra Pradesh Board - merely because the schools run by these trusts collect fees from the students and also engage in providing integrated intermediate education, it cannot be said that they are not rendering education services - the Board and Universities which grant recognition to the institutions conducting the courses are instrumentalities of the State - the schools/colleges/institutes imparting education are monitored by Board/University - the 'State' is duty bound to provide education services to its subjects - Article 21A recognizes education as a fundamental right - when the State does not have necessary wherewithal to fulfill this obligation, it uses the machinery of private sector to render these services - thus the fees collected by an institution cannot change the nature of the services rendered by them - the unaided institutions more often than not provide additional facilities and comforts for students and staff which are not done so by Government run institutions - provision of such additional comforts will obviously entail additional costs which is surely not reimbursed or subsidized by the Government - if the ultimate service delivered is granting of a certificate or degree recognized by law, they would still enjoy the exemption available to educational institutions - notification 14/2004 or the mega notification 25/2012 does not refer to quantum of fees collected for availing the exemption - legislature has consciously left out such conditionality of fees and has emphasized on the course being recognized by law - in para 3 to 6, Member (Technical) has analyzed the issue of levy of ST for the period prior to 1.7.2012 and observed that the service recipient are rendering services on an industrial scale and the revenue running into thousands of crores of rupees is not a charity and, therefore, service recipients are running 'business' - I am not able to agree with this view for the reason that profits made or turnover cannot be a yardstick for deciding the classification of services - for a particular activity to be subject to levy of ST, it has to fall within the four corners of the definition - when admittedly these Trusts are rendering education services and the courses are recognized by Andhra Pradesh Board, it cannot be said that since fees is collected or that fees collected is high, the education services are in the nature of a business - it is also to be stressed that the alleged huge revenue /profit discussed is not of the assessee who is subject to levy of ST in this dispute but of the service recipient - the Revenue has emphasized that all the profits derived are being ploughed into the Trust back, the nature of the trust being family and, therefore, these trusts cannot be considered as charity organization - the fact that these trusts are recognized as charitable trust under the Income Tax Act is not disputed - so also these trusts render education services and are outside the scope of levy of ST as per the mega notification post-1.7.2012 - this being so, I do not consider that trust being formed by the family members would make any difference to hold that the services rendered by them has to be in the nature of 'business' only - from the above discussions, I agree with the view taken by Member (Judicial) that prior to 1.7.2012, the services rendered by the assessee is not taxable under Business Support Services: CESTAT Third Member [para 14, 16, 17, 18, 19, 20, 21, 22]
- Reference answered: HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-3392-CESTAT-MUM
Echjay Industries Pvt Ltd Vs CCE
CX - Rule 14 of CCR, 2004 - It is not disputed that the irregularly availed Cenvat Credit was reversed by the appellants immediately upon being pointed out by the audit that too with interest and therefore no show cause notice was issued for that purpose - The said credit was not utilized by the appellant for payment of excise duty etc. and it is merely a book entry and, therefore, the credit wrongly availed does not amount to short payment of duty - Interest is compensatory in nature and is liable to be paid only when the principal amount is paid belatedly or there is any loss to the government exchequer - In other words, the provisions to recover interest are enacted to compensate the exchequer for the delay it suffers in receiving the revenue due to it - The credit having been taken inadvertently stands reversed by the Appellant even before utilisation, no interest liability would arise inasmuch as there is no loss to the Revenue - Since there was no loss of revenue to the government exchequer, therefore, the question of compensating the revenue by way of interest does not arise - appellant is not liable to pay the interest while reversing the Cenvat credit belatedly - Appeal allowed: CESTAT [para 6, 7]
- Appeal allowed MUMBAI CESTAT
2019-TIOL-3379-CESTAT-MUM
Sahyadri SSK Ltd Vs CCGST
CX - The issue involved is about the reversal of cenvat credit on bagasse under rule 6 of Cenvat Credit Rules, 2004 [CCR] for not maintaining separate accounts - vide O-I-O, demand of Rs.48.34 lakhs confirmed along with interest, penalty imposed - on appeal, the Commissioner (Appeals) upheld the O-I-O with certain modification and held that the demand has to be calculated as per rule 6(3A) of CCR - against upholding the demand, the assessee filed the appeal and against the modification of the O-I-O, the Revenue has filed the appeal:
Held : the Supreme Court in the matter of D.S.C.L. Sugar Ltd. - 2015-TIOL-240-SC-CX has laid down that Bagasse is agricultural waste of sugarcane and the waste and residue of agricultural product during the process of manufacture of goods cannot be said to be result of any process - admittedly, there is no manufacturing process involved in Bagasse's production - "Bagasse, press mud and composed fertilizer" is not 'goods' but merely a waste or byproduct, therefore, rule 6 of the CCR shall have no application in the present case and they are bound to come into existence during the crushing of the sugarcane and are an unavoidable agricultural waste - the amendment dated 1.3.2015 in rule 6 has wrongly been relied upon by both the authorities below while coming to the conclusion that the assessee is liable to reverse the cenvat credit availed by them - as per rule 6(1) read with Explanation-1, non-excisable goods which are manufactured by the manufacturer in his factory will get covered under rule 6(1) and those goods which were not manufactured, like bagasse in these appeals, will not be covered under rule 6 despite being non-excisable goods because bagasse is not being manufactured in the factory but emerged as agricultural waste or residue - rule 6(1) was amended in order to include the inputs used in relation to the manufacture of exempted goods - as such it can be seen that the same relates to the manufacture and it can safely be concluded that there has to be a manufacturing activity for invoking the aforesaid rule - if bagasse is not manufactured, the same cannot be held to be excisable, in which case the amendment which has been relied upon by the authorities below as well as by the Revenue, would not apply - in all the decisions of the Tribunal which has been cited by the assessee, a consistent view has been taken that 'bagasse' which emerges as a waste/by-product, falls outside the scope of rule 6 of CCR - in view of the above, even after amendment to rule 6 of CCR, bagasse which emerges as a waste/ byproduct, falls outside the scope of the said rule - the appeal filed by the assessee is, therefore, allowed and the Revenue's appeal is dismissed, accordingly : CESTAT [para 5, 6]
- Appeal of Assessee allowed/ Appeal of Revenue dismissed: MUMBAI CESTAT
2019-TIOL-3378-CESTAT-DEL
Jagdamba TMT Mills Ltd Vs CCE & CGST
CX - The appellants herein are engaged in manufacture of MS Ingots and MS Bars - the Department observed that appellants have fraudulently availed cenvat credit based on the cenvatable invoices issued by M/s. Isha Enterprises in favour of the various dealers including the appellants without supplying any goods as mentioned therein - SCNs issued - demands confirmed - on appeal, the Commissioner (Appeals) dismissed the appeals, hence assessee before CESTAT.
Held: (A) The denial of opportunity to cross-examine to cross-examine the witnesses by the Adjudicating Authority : The statements of witnesses namely Mr.Jadish Lal Bhatia & Mr.Gulshan Bhatia, both partners of M/s. Isha Enterprises were made the basis of the impugned order alongwith the documents as were recovered from the house of Baldev Raj Bhatia, a relative of above two witnesses - admittedly, neither both the witnesses were allowed to be cross-examined by the appellant nor the opportunity to confront those documents was given - the same amounts to a serious flaw which makes the order under challenge nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected - law has also been settled that payment of duty under protest does not estop the assessee from challenging the illegality - the improved statements of the witnesses without them being cross-examined by the assessee cannot form the basis of confirming the demand against the assessee - admittedly, none of those witnesses are from appellant's company - the evidence otherwise becomes a third party evidence with no cogent corroboration from appellants
(B) Lack of evidence : The Department has alleged that appellants have fraudulently availed cenvat credit on such invoices along which there was no delivery of goods - this Tribunal in the case of Lloyds Metal Engineering Ltd. [2004 (175) ELT 132 (Tribunal)] has held that burden to prove the non-receipt of inputs is required to be discharged by Revenue by producing sufficient evidence - if there is no such evidence, credit availed on the basis of invoices issued by the Registered dealers cannot be denied on the ground that the transporters have admitted the fact of non-transportation of goods - present is not the case of ‘No GRs' but out of 75 objected GRs, the appellant had already provided 33 GRs to the Department - Department has not raised any dispute qua those GRs - the absence of remaining GRs is not that relevant specially when the appellants have given the explanation that the delivery was at times on FOR basis and at times otherwise, that is, whenever appellants had to make the payment they were receiving GRs whereas when the payment was made by M/s. Isha Enterprises, the receipts would have been retained by them - admittedly, no investigation with M/s. Isha Enterprises has ever been done by the Department to this aspect, except recording the statements of both the partners thereof - the admission coming out of from both the said statements is the sole basis to adjudicate against the present appellants - the adjudicating authority has committed an error because the admission of the maker though can be used against the maker thereof but cannot be used against any other person, except after the said other person is provided an opportunity to cross-examine the maker of admission - as already discussed above, no such opportunity was provided - there seems no justification for remanding the matter to grant an opportunity to the appellants to cross-examine those witnesses because there is no other documentary evidence produced on record by the department to rebut the documents of appellants as that of invoices, GRs etc. which have presumption of correctness attached - thus, the order under challenge is passed under ignorance of the documents which already supports the appellants' contentions and are sufficient to falsify the allegations of cenvatable invoices being received by appellants without delivery of goods
In view of the above, the orders under challenge have not stood the scrutiny of settled principle of law - accordingly, are hereby set aside - all the three appeals, therefore, stand allowed : CESTAT [para 6, 9, 10]
- Appeals allowed: DELHI CESTAT
CUSTOMS
2019-TIOL-2632-HC-PATNA-CUS
Prakash Transport Vs CC
Cus - Whether the finding of the statutory authority which has culminated in the order dated 16.7.2004 of the Customs Excise and Service Tax Appellate Tribunal, Eastern Regional Bench, Kolkata in Appeal Nos.CDM-28-30 of 2003 and 45 of 2003 insofar as the appellant Naresh Kumar Goyal is concerned is resting on no evidence and the only evidence relied by the statutory authority which is that of the driver Sheikh Ahmad, nowhere indicts the appellant, rather specifically names the Manager Ishwar Chand Goel.
Held : From a perusal of the materials that was laid before the Commissioner, Patna and the Appellate Tribunal at Kolkata for their opinion, it would transpire that there is no material whatsoever against the appellant insofar as the seizure of the truck on 28.8.2001 and the undeclared goods, is concerned - the driver of the truck Sheikh Ahmed in his statement on 29.8.2001 has clearly stated that the goods were loaded on the truck on 28.8.2001 on the directions of Ishwar Chand Goel, the Manager and the truck was bound for Nepal - with respect to the appellant it was simply stated that he sits in Kolkata - the Manager Ishwar Chand Goel@ Pappu in his defence reply to the SCN has stated that the goods meant for transportation was loaded in his presence but no idol was loaded in the truck - even the Customs House Agent A.K.Sinha who was interrogated on 31.8.2001 by the Customs authorities stated that on being contacted by the Manager Ishwar Chand Goel, after preparation of the bills of export, the goods were loaded from Raxaul godown of the said transport company on the truck - with respect to the appellant it was stated that he was over all head and owner of the said transport company and it was under his directions that Ishwar Chand Goel, the Manager was working - thus, from the materials that has transpired including the statements/defence reply of the Customs House Agent A.K.Sinha, Manager Ishwar Chand Goel@Pappu and the driver of the truck Sheikh Ahmed, it is clearly evident that no legal/ admissible evidence had been brought on record to show the involvement of the appellant or that he was guilty of any act or omission or even guilty of abatement of such illegal act so as to fasten the penal liability of Rs.10 lacs under section 114 of the Customs Act 1962 - the other lacuna in the proceeding is that while holding the appellant guilty on grounds that he was overall in-charge of the partnership firm, the respondents did not choose to proceed against the other partner of the transport company namely, Rajesh Goel who is said to reside at A/23 Model Town, Delhi - in view of the facts stated herein above and taking into consideration the records of the case as also the submissions of the parties, the Court comes to the conclusion that the instant is a case of no evidence, so far as the appellant herein is concerned - with respect to the discussions made by the Commissioner, Customs, Patna and the Appellate Tribunal at Kolkata in the impugned order(s) is concerned, it stands long settled that suspicion, howsoever grave, cannot be a basis for imposing penalty and the same could not have been done in absence of any legal and admissible evidence to confirm the guilt of the appellant - for the reasons and discussions above, the Court hereby sets aside the order no. A-465-467/Kol/2004 dated 06.07.2004 passed in appeals CDM-28-30 and 45/03 passed by the Customs Excise and Service Tax Appellate Tribunal confirming the order dated 11.11.2002 passed by the Commissioner of Customs, Patna in 0/0 21-CC/ADJ/2002, in so far as the appellant herein is concerned - consequently, the order of personal penalty of Rs.10 lakhs imposed on the appellant under sections 114 of the Customs Act, 1962 is also set aside - the appeal stands allowed : HIGH COURT [para 26, 27, 28, 29]
- Appeal allowed: PATNA HIGH COURT
2019-TIOL-2631-HC-DEL-CUS
Brightpoint India Pvt Ltd Vs UoI
Cus - The petitioner is claiming a drawback claim of Rs.31,04,845/- - A Revision Application was dismissed, against which an appeal was also preferred, but the same was also dismissed - A Revision Application was preferred on 14th June, 2016 - No defect could be pointed out in the year 2016; whereas the defect was only pointed out in the year 2018 - Nonetheless, defect was pointed out on 20th March, 2018 and immediately thereafter, on 18th April, 2018 the court fee of Rs.1,000/- was paid by the petitioner - Thus, it cannot be said that the Revision Application, which was preferred by the petitioner, was barred by any limitation - This aspect of the matter has not been appreciated by Revisional Authority while deciding the Revision Application - The order passed by the Revisional Authority dated 6th August, 2018 is set aside - Revision Application is revived at its original number and the same will be decided by the Revisional Authority on its own merits in accordance with law and on the basis of evidence on record as well as after giving adequate opportunity of being heard to the petitioner: HC
- Writ petition allowed: DELHI HIGH COURT
2019-TIOL-3391-CESTAT-MUM
Force Appliances Pvt Ltd Vs CC, CE & ST
Cus - Appellant is aggrieved by the fastening of duty liability of Rs. 99,12,009/- being the duty foregone on 'parts of CD Deck mechanism' imported between February 2008 and February 2009 for not being in compliance with the conditions in notification no. 25/99-Cus dated 28th February 1999 (at serial no. 115) - said notification allows 'parts of CD/VCD/DVD mechanisms, viz., 'optical pickup assembly and parts thereof, DC Micro motors, Loader parts of plastic (parts of CD loader), cable connector, springs, screws, washer' to be imported at concessional rate of duty for use in manufacture of finished goods - allegation is that the parts so imported had been utilised in the manufacture of 'DVD players,' falling under heading no. 8521 9020 instead of 'CD Deck Mechanism', falling under heading no. 8522 9000, as specified in the said notification - Adjudicating authority has concluded that 'CD Deck mechanism', which is at the heart of 'CD players' is different from the deck mechanism of 'DVD player'.
Held: It would appear that the adjudicating authority has proceeded with his own line of thinking on the scope of the exemption notification - There is no doubt that an exemption notification will need to be construed strictly but an exemption notification that permits import of parts which, according to the adjudicating authority, cannot find use in the intended finished goods is also an indictment of the Central Government for indulging in superfluity - In the absence of such consideration by the adjudicating authority and casual discarding of the expert opinion of Department of Electronics, Bench is constrained to hold that the findings in the impugned order are not sustainable and must be set aside - As the response to the show cause notice, written as well as oral, have not been dealt with, there is no closure to the proceedings - Matter remanded to the original authority for fresh decision: CESTAT [para 10, 11]
- Matter remanded: MUMBAI CESTAT
2019-TIOL-3390-CESTAT-MUM
CC Vs Brimco Plastic Machinery Pvt Ltd
Cus - Respondent in the year 1998, on the basis of Chartered Engineer Certificate dated 18.07.1998 got the license amended to import various type of bearings, which were never used for the manufacture of export goods - This fraudulently amended license was transferred and used by various importers namely M/s Tulja Overseas, M/s Goodrick Enterprises, M/s Vinanyak Sales, M/s Gallium Inds. Ltd., M/s Roopam Trading Co., M/s Karuna Enterprises and M/s Darshan Enterprise (Respondent No 2 to 10) for importing roller bearings - Some of the importing firms were found to be the dummy companies floated by the Shri Anil B Garodia, MD of Respondent 1, Shri L K Vora, Authorized signatory and Shri Manharlal Vora - After completion of investigations a Show Cause Notice No DRI/MZU/D/5/2000 dated 25.07.2003 was issued to the respondents seeking to recover the duty short/ not paid in respect of the clearances made using the said license, and for imposition of penalties - show cause notice has been adjudicated by the Commissioner by the impugned order and it is against this order that Revenue is in appeal - incidentally, appeal filed by the Respondent 1 i.e. M/s Brimco Plastic Machinery Pvt Ltd has been dismissed by the Tribunal under Rule 22 of CESTAT Procedure Rules as the company has wound up and no application under the said rule was made by the official liquidator and the appeals filed by Shri Anil Garodia and others have been dismissed by the tribunal on merits vide final order No A/90893-90895/2017 dated 17.10.2017 - In its appeal, Revenue contends that Adjudicating authority had not fastened the duty on the actual importers viz M/s Tulja Overseas, M/s Goodrick Enterprises, M/s Vinanyak Sales, M/s Gallium Inds. Ltd., M/s Roopam Trading Co., M/s Karuna Enterprises and M/s Darshan Enterprises and had dropped proceedings against them holding that they are bonafide transferees; that while holding them to be the bonafide transferees, the adjudicating authority had failed to give any findings on facts or case laws on the basis of which he had arrived at the conclusion at para 34 (f) that they are bonafide transferees; that, in fact, of these seven firms M/s Tulja Overseas, M/s Goodrick Enterprises & M/s Vinayak Sales were benami firms and, therefore, the adjudicating authorities order is not a speaking order; that in view of the above, the departments appeal in case of M/s Brimco Plastic Machinery Pvt Ltd may also be allowed by way of remand.
Held: In terms of Section 125 (2) of the Customs Act, 1962, as interpreted by the Hon'ble Supreme Court in case of Jagdish Cancer and Research Centre - 2002-TIOL-119-SC-CUS-LB , the demand of duty against the confiscated goods is consequence of the release of the confiscated goods and hence the duty is to be paid by the person who seeks the release of the goods on payment of redemption fine; therefore, Bench does not find any merits in the submissions made by the appellants that demand should have been confirmed also against the respondents who were the innocent transferee of the fraudulently amended licence: CESTAT [para 4.4, 4.5]
Cus - At the material time (prior to 01.04.2012) there was no provision in the Customs Act, 1962 for confirmation of demand severally and jointly against the co-noticees in the proceedings initiated by a common show cause notice - Except for making a bald and vague assertion that adjudicating authority had failed to give any findings on facts or case laws on the basis of which he had arrived at the conclusion in para 34(f) of the impugned order, that the respondents were bonafide transferee, revenue has failed to state the fact and case laws which were to be considered and have not been considered by the adjudication commissioner - Commissioner has in his order at para 26C recorded that there was some collusion between the person procuring and getting the licenses amended fraudulently and the importer but has still concluded in para 34(f) against holding them they were bonafide transferees - In the appeal memo Bench does not find anything stated by which this finding of the Commissioner can be challenged - no appeal could be considered on the basis of such vague statements made in the appeal memo - No merit in Revenue appeals, hence dismissed: CESTAT [para 4.6, 4.7, 5]
- Appeals dismissed: MUMBAI CESTAT
