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SERVICE TAX
2019-TIOL-3523-CESTAT-HYD
ITC Ltd Vs CC, CE & ST
ST - Allegation is that the appellant had during the period April 2007 to March 2008 utilised CENVAT credit for discharge of service tax liability under GTA services and which is incorrect - demand confirmed with interest and penalties - appeal to CESTAT.
Held: Issue for the impugned period is covered by the Larger Bench decision in Panchmahal Steel Ltd. - 2014-TIOL-510-CESTAT-AHM-LB and wherein it is held that there is no legal bar to utilise CENVAT credit for the purpose of payment of service tax on GTA services - since this order has been upheld by the Gujarat High Court - 2015-TIOL-25-HC-AHM-ST by dismissing the Revenue Tax appeal, impugned order confirming demand and imposing penalties/interest is required to be set aside - appeal is allowed: CESTAT [para 6, 8]
- Appeal allowed: HYDERABAD CESTAT
2019-TIOL-3522-CESTAT-MUM
Kyal Trading Pvt Ltd Vs CST
ST - Appellant hadavailed common input services for providing taxable service as well as for thepurpose of trading activities - taking of CENVAT credit in such circumstances wasobjected by the Audit wing and, therefore, appellant had reversed the same - SCN issued seeking confirmation of amount so reversed and demanding interest and penalty -demand confirmed alongwith penalty andinterest, therefore, appellant is beforethe CESTAT challenging imposition of penalty as well as interest on the ground that they had no malafide intention in defraudinggovernment revenue and also had sufficient balance in the CENVAT credit account.
Held: Department has not specifically allegedthat the appellant had not maintained sufficient balance in its CENVAT account between the period of taking irregular CENVATcreditand subsequent reversal thereof - Taking of credit in the CENVAT account under such circumstances would beconsidered as a mere book entry inasmuch as there is no loss of revenue to the Government exchequer - law withregard to levy of interest on delayed reversal of CENVAT credit is no more res integra in view of the Karnataka High Court decision in Bill Forge P Ltd. - 2011-TIOL-799-HC-KAR-CX - relyingupon thisdecision, Tribunal has in the case of Nova Petrochemicals Ltd. set aside the interest and penalty demand - impugned order confirming penalty and interest is set aside and the appeal is allowed: CESTAT [para 5, 6] - Appeal allowed
: MUMBAI CESTAT
2019-TIOL-3521-CESTAT-MUM
Arvee Electricals And Engineers Pvt Ltd Vs CCE
ST - Appellant provides taxable service under the category of ‘Erection, Commissioning & Installation Service' - A part of such service was assigned to a sub-contractor - While making payment of billed amount raised by such sub-contractor, the appellant had retained some amount as security deposit - however, the appellant had availed the entire CENVAT credit of service tax amount indicated in the invoices issued by the sub-contractor - Revenue disputed this availment on the ground that under the provisions of sub-rule (7) of Rule 4 of CCR, 2004 the assessee was only entitled to avail credit of the amount paid to the service provider - demand confirmed by lower authorities, therefore, appeal before CESTAT.
Held: Identical matter had come up before the Tribunal in the case of Hindustan Zinc Ltd. 2018-TIOL-2574-CESTAT-DEL wherein the CESTAT had held that in case a part amount of value of service is retained from the bills of the service provider, CENVAT credit cannot be denied for the full amount of service tax claimed in the invoices - therefore, there is no merit in the impugned order passed by Commissioner(A) - same is set aside and the appeal is allowed: CESTAT [para 4, 5]
- Appeal allowed
: MUMBAI CESTAT
2019-TIOL-3514-CESTAT-KOL
SK Mineral Handling Pvt Ltd Vs CCE, C & ST
ST - During the relevant AY, the assessee executed composite activity of local transportation of Iron Ore from mines dump yard to the Rail Track Heads/Railway Sidings upto lead of 1/2 km in Automated Tipping Trucks, with incidental loading into such tipping trucks and automated unloading at the Railway Track Head - The automated tipping trucks are fitted with Hydraulic Jack for automatic unloading without human intervention - The assessee prepares bills for local transportation on their clients - The Revenue raised duty demand in respect of such activities - The SCN alleged that the transportation for short distance is treated by the Revenue as shifting for short distances which the assessee claimed to be transportation, but as per the Revenue, was Cargo Handling activity - Such demands were sustained upon adjudication and later on by the appellate authority.
Held - It is seen from the SCN that service tax is demanded only on the local transportation/shifting charges collected by the assessee, which includes loading of tipper, transportation upto Railway Track Head and automated unloading of tipper at the Railway Track Head - Perusal of SCN shows that demand raised in this case is on the work of shifting of Iron Ore lumps and fines from dump yard to Railway Siding, which involved loading at Dump Yard, transportation and unloading at Railway Siding - The assessee already paid service tax on wagon loading activities which is clear from the quantification made in the SCN - Moreover, it is seen that the contract is essentially for the transportation of goods which incidentally involve loading of tipper/unloading of tipper at Railway Track Head/Railway Siding which cannot be taxed under Cargo Handling Service simply because rates for loading of tipper at Dump Yard and unloading of tipper at Railway Siding is not provided separately - The Commr.(A) erred in placing reliance on Board Circular No.B11/1/2002-TRU dated 01-08-2002 which does not apply to the facts of the present case - Moreover, it is nobody's case that the assessee is a Cargo Handling Agent to attract duty under Cargo Handling Services - Hence the O-i-A in challenge merits being quashed: CESTAT
- Assessee's appeal allowed: KOLKATA CESTAT
CENTRAL EXCISE
2019-TIOL-3513-CESTAT-CHD
Rachna Overseas Pvt Ltd Vs CCE
CX - The assessee is engaged in manufacture of paper labels as also bar code and were availing the benefit of small scale benefit exemption notification - However, the investigations conducted by Revenue revealed that they were not paying duty even after crossing the SSI exemption limit - Accordingly, proceedings were initiated against them resulting in passing of impugned orders, confirming demand of duty and imposing penalties - The assessee is not disputing the fact that they crossed the small scale exemption limit and as such were required to pay duty on their final product for the excess clearances - However, he submits that bar code printing ribbon have been assessed by authorities below under Section 4(A) of CEA, 1944, but clarifies that since the same were being sold by them to institutional buyers as receipt by them, there was no requirement to print the same with the MRP, in which case the same would be assessed to duty in terms of Section 4 of Central Excise Act - Admittedly, the assessee would be entitled to benefit of Cenvat credit and the duty required to be paid by them would get neutralised to that extent - The benefit of Cenvat credit would be dependent upon the production of evidence of payment of duty on raw material/inputs and verification of the same - In as much as the matter is being remanded on first ground, the authorities below are directed to examine the said aspect also - Member (J) allowed the appeal by way of remand - Member (T) agrees with Member (J) as far as the remand direction for verification of documentary evidence pertaining to application of Rule 4A and for verification of the duty paid documents for extending the benefit of cenvat credit is concerned - However, he differed on the question of penalty on the Managing Director and held that there is no need for remand as the liability has been admitted by assessee, who did not pay duty for four long years after crossing the SSI limit and Sh. Khanna was in overall control of the affairs of assessee - Hence, the penalty on Sh. Prem Khanna, M. D. is upheld - In view of the difference of opinion emerging between Members on the issue of penalty on Sh. Prem Khanna, M. D. matter is referred to third Member who observed that both Members were in agreement to remand the matter to the adjudicating authority for fresh calculation of demand payable by the main party - In that circumstance, the whole order is required to be reconsidered by adjudicating authority for both the assessees before Tribunal - For the issue of imposition of penalty on Shri Prem Khanna, M.D., matter is remanded back to the adjudicating authority - In view of the majority order, the matter is remanded to the Adjudicating Authority for fresh adjudication: CESTAT by majority
- Matter remanded: CHANDIGARH CESTAT
2019-TIOL-3512-CESTAT-AHM
Nilkamal Ltd Vs CCE & ST
CX - The assessee is manufacturing plastic furniture and crate - They are selling some quantity of crates to M/s SMS and the sale constitutes 4% to 5% of total production - They were issued SCN alleging that the duty on goods cleared to M/s SMS during the period April' 2002 to March' 2006 was payable on sales price of SMS in terms of Rule 9 of Central Excise Valuation Rules since the assessee has shown M/s SMS as their "related concern/ undertaking" in balance Sheets/ Financial reports - Earlier twice the matter was remanded by Commissioner (A) on the ground that the said orders were passed beyond the scope of SCN and also that Section 4 (3) (b) clause (ii) and (iii) are not applicable - The findings of Commissioner (A) had attained finality as the same was not challenged by revenue - The Appellate Authority thus cannot nullify its earlier findings - The Appellate authority in his earlier O-I-A held that clause (ii) and clause (iii) of Section 4 (3) (b) of the Act are not applicable and directed the adjudicating authority to verify if there is mutuality of interest in each other's business - Thus the adjudicating authority was to examine only sub clause (iv) of Section 4 (3) (b) - In such case, the Appellate Authority could not have re-visited and nullified his own findings and only the limited scope left to be examined as whether the sub clause (i) is applicable - Clearly the O-I-A travels beyond his own categorical findings which had attained finality - Further in earlier round of proceedings the adjudication orders were twice set aside on the ground of having been passed beyond the SCN - The Appellate Authority has himself travelled beyond the scope of SCN - The SCN only invoked provisions of Section 4 (3) (b) (ii), (iii) and (iv) - The clause (i) was never invoked in SCN and the adjudication order as well as Appellate order never examined sub clause (iv) - Hence the O-I-A is not sustainable on this ground - Otherwise also, provisions of Rule 9 of Central Excise Valuations Rules invoked in impugned order in no way affects the valuation if the person is related person - When the sale price of independent buyer and prices at which the goods were sold to M/s SMS are equal and in some cases even the sale price to M/s SMS are more, there is no reason to disturb the valuation method followed by assessee - The sale price to M/s SMS is not influenced by any extra commercial consideration - The depot of M/s SMS cannot be considered as of the assessee - The Appellate authority has also relied upon the transportation cost incurred by M/s SMS over the period of time - M/s SMS are not only trading in crates manufactured by assessee but in products which are manufactured by other entities only - Hence the transportation charges incurred by SMS which includes towards other goods also cannot be a ground to disturb valuation - Further the SCN does not make any such allegation against assessee - Assessee have also challenged the SCN on grounds of being time barred - The demands raised by invoking extended period of limitation are not sustainable - Thus, apart from not sustaining on merits, the demands raised by invoking extended period of limitation are also time barred: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
CUSTOMS
2019-TIOL-2779-HC-DEL-CUS
MD Overseas Ltd Vs UoI
Cus - Petitions revolve around Notifications Nos. 24/2015-2020 and 25/2015-2020, dated 25th August, 2017 issued by the Directorate General of Foreign Trade (DGFT), and their applicability to gold coins, imported by the petitioners - It is clear from a reading of Paras 2.17 (a) and 9.11 of the HBP 2015-20, that the date of import, for the purposes of application of the provisions of the FTP and HBP, would be the date of shipment/dispatch of goods from the supplying country of export - This date would, ordinarily, be the date of airway bill, issued by the last port, from which the goods departed en route to India - In all the cases, the invoices and packing lists, relatable to the gold coins, were dated 24th August, 2017/25th August, 2017 - Till 25th August, 2017, gold coins, which were classifiable under Tariff Heading 7114, 1910 of the Customs Tariff, were freely importable as per Schedule I to the ITC (HS) subject to production of a certificate evidencing that the goods have been imported from Korea ("Country of Origin Certificate") - It is undisputed that the imports of gold coins, in all these cases, were accompanied by the requisite Country of Origin (COO) Certificate - On par with Notification No.24, Notification No.25, also issued by the DGFT on 25th August, 2017, inserted policy condition no. 4 in Chapter 71 of the ITC(HS) 2017, which, too, made imports of gold coins, classifiable under Tariff Heading 7118 of the Customs "restricted" - By virtue of their becoming "restricted", consequent on the issuance of the impugned Notifications Nos. 24, and 25, dated 25th August, 2017, gold coins could not be freely imported, and had to be imported in accordance with a Public Notice issued in that behalf - petitioners contend that the impugned Notification Nos. 24/2015-2020 and 25/2015-2020, both dated 25th August, 2017, became effective only consequent on their publication in the Official Gazette; that the gold coins in questions having been imported prior thereto, inasmuch as they had left the country of dispatch on 25th August, 2017, Notification Nos. 24 and 25, both dated 25th August, 2017 and Public Notice No. 20, also dated 25th August, 2017, having been published in the Official Gazette three days thereafter, on 28th August, 2017, could not apply to them - petitioners have also filed, with the writ petition, a purported screenshot of the website of the Ministry of Commerce on 25th August, 2017, which does not reflect the aforesaid two Notification Nos. 24 and 25 - submission, of the petitioners in these writ petitions, that the imports of gold coins effected by them, could not be subjected to the rigour of Notification Nos. 24 and 25, dated 25th August, 2017 or Public Notice No. 20 dated 25th August, 2017, is well merited and commends acceptance - Court had, vide its interim order dated 14th September, 2017, observed that there was, prima facie, merit in the case of the petitioners, and had, therefore, permitted provisional release of the gold coins imported by them subject to furnishing of a Bond covering 100% of the value of the gold coins - Adjudication of the show cause notices issued to the petitioners was also stayed - In the absence of any challenge to the Show Cause Notices issued to the petitioners in these writ petitions (except in WP (C) 8667/2017), it is not possible for this Court to quash the show cause notices, dated 8th September, 2017, issued to the petitioners (except to the petitioners in WP (C) 8667/2017) and this Court would have, necessarily, to limit itself to directing that the Show Cause Notices be adjudicated in terms of this judgment: High Court [para 6, 12, 16, 18, 23, 24, 26, 36, 38, 40, 42, 43]
- Petitions allowed: DELHI HIGH COURT
2019-TIOL-2778-HC-DEL-COFEPOSA
Ram Niwas Mohar Vs UoI
COFEPOSA - Petition filed seeking quashing of the Detention Order dated 15th March, 2019 passed against the petitioner by respondent under Sub-Section (1) of Section 3 of the COFEPOSA Act.
Held: Court is of the view that the petitioner's contention that investigation is incomplete in the present case or that the detention order is based on perfunctory and inchoate material, is contrary to the facts - In fact, as smuggled gold had been found concealed in the consignment of apples imported by the petitioner, there is no dispute or inconclusiveness of the allegations in the present case - Moreover, recovery of smuggled gold proves that the petitioner has the propensity as well as potentiality to indulge in similar acts of smuggling of goods into India and it further proves existence of live-link - There is no denial by the petitioner to the fact that the retraction by Mr. Adel Saeeed Ghulam had been made post the detention order dated 15th March, 2019 having been passed and, therefore, there was no occasion for the Detaining Authority to have considered the same prior to passing the impugned order - Consequently, as there is no illegality in the impugned order, present writ petition is dismissed: High Court [para 15, 16, 18, 19]
- Petition dismissed: DELHI HIGH COURT
2019-TIOL-2775-HC-DEL-NDPS
NCB Vs Lee Wei Qi
NDPS - Appellant department has filed the present appeal impugning a judgment dated 22.11.2014 passed by the Special Judge, Patiala House Courts, New Delhi acquitting the respondent in a complaint case filed under section 20(b)(ii)(C) and 23 of the Narcotic Drugs and Psychotropic Substances Act, 1985 for possession and attempt to export of 7 kg of Hashish recovered from check-in baggage of the respondent (accused).
Held: Counsel appearing for the appellant (NCB) did not dispute that drawing of samples at the spot is mandatory and any failure in this regard would be fatal to the prosecution's case - It is apparent from the deposition of PW 5 that the samples were drawn at NCB office - Any ambiguity as to where the samples were drawn was resolved as in his cross-examination, he clearly stated that "at the office of NBC samples were drawn and sealed and recovery memo was prepared" - In his cross-examination, he deposed that "the baggage containing the substances was weighed at the belt itself which is used by us for weighing baggage" - trial court evaluated the evidence obtaining in this case and had concluded that the sampling procedure had not taken place at the spot - conclusion that the sampling procedure was not carried out at the airport, warrants no interference - It is not disputed that not following the procedure at the spot is fatal to the prosecution's case - Court does not find any compelling reasons to interfere in the impugned judgment, hence appeal of NCB is dismissed: High Court [para 12, 20, 23, 25, 26]
- DELHI HIGH COURT |
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