Sri Kumaran Mills Vs ACCT

Whether orders of assessment routinely passed by simply relying on proposals received from Enforcement Wing, merits dismissal - YES: HC

- Assessee's petition allowed: MADRAS HIGH COURT

National Handloom Development Corporation Ltd Vs ACCT

Whether VAT liability can be imposed upon a trader by simply relying on statements of recipient, without even granting opportunity of cross examination - NO: HC

- Assessee's petition allowed: MADRAS HIGH COURT

- Petition disposed of: DELHI HIGH COURT

ST - The assessee is registered for providing service under storage and warehousing service - The credit availed by them includes as input service service tax paid on renting of immovable property hired for its office premises - Upon audit, it was found that the assessee rented the ground floor of a building for its office, but was using only one portion - The remaining area was used by the assessee's sister units without any charge - The Revenue opined that the the amount which is paid is only partly being used as input service for the output service and the rest is given away - Hence it could not be called an input service to that extent - The assessee was also unable to provide details of area occupied by it and given free of rent to its sister units - Hence SCN was issued proposing to disallow cenvat credit towards rent paid for office premises and also recover the same with interest and impose penalties u/r 15 of CCR 2004 r/w Section 77(2) & 78 of the Finance Act 1994 - On adjudication, only a part of the credit amount was permitted while the remaining portion was disallowed and sought to be recovered with interest & penalties - Hence the present appeal.

Held - The assessee rented the premises, part of which has gone as an input service to their own company and part of which is charged to sister companies because sister companies are not paying any rent - The relative proportion of these areas is not available in the record and was not disclosed by the assessee - The Revenue is partly correct in stating that the service was not fully utilised as input service for their output service by the assessee - However, there is no rule under the CCR under which against the same invoice, part credit can be allowed and part denied if only part of input or input service is used in the final product or service - Hence the assessee's appeal merits being allowed as there is no scope in the CCR to partly allow and partly disallow credit on the same invoice: CESTAT

- Assessee's appeal allowed: HYDERABAD CESTAT

ST - The assessee is engaged in designing, building and delivering imaging solutions - They had filed refund claims seeking cash refund of unutilized CENVAT credit in respect of input services received and used by them for providing output services which were exported by them - While part of the claim was sanctioned by jurisdictional Assistant Commissioner, certain part of the claim was rejected - Rejection of refund claim on the ground of non-mentioning of address of the premises in registration certificate is not sustainable in view of the decision of Karnataka High Court in the case of mPortal India Wireless Solutions P. Ltd. - 2011-TIOL-928-HC-KAR-ST - Availment of services and its utilization for providing output services has not been disputed and the service tax paid at the landlord’s end for renting of immovable property service is also not disputed - Therefore, rejection of refund on the ground of non-registration of the other floors within the same building is set aside - With regard to the rejection of refund in respect of certain activities on the ground of non-production of invoices, case is remanded back to the original authority to quantify the refund on the basis of documents which may be produced by assessee and thereafter, decide the refund - Consequently, the appeal is partially allowed: CESTAT

- Appeal partly allowed: BANGALORE CESTAT

Raajratna Ventures Ltd Vs UoI

Cus - The petitioner submitted that the decision of this court in Maxim Tubes Company Pvt. Ltd. - 2019-TIOL-459-HC-AHM-CUS has been challenged before Supreme Court in various Special Leave Petitions - It was pointed out that vide order dated 23.9.2019 passed in SLP No.23356 of 2019, the Supreme Court has stayed the operation and implementation of said judgment - The attention of the court was invited to the decision of Calcutta High Court in Pijush Kanti Chowdhury, wherein the court has held that the effect of the order of stay in a pending appeal before Apex Court does not amount to 'any declaration of law', but is only binding upon the parties to the said proceedings and at the same time, such interim order does not destroy the binding effect of judgment of High Court as a precedent because while granting the interim order, the Apex Court had no occasion to lay down any proposition of law inconsistent with the one declared by High Court which is impugned - It was submitted that the principles enunciated in decision of this court in case of Maxim Tubes Company Pvt. Ltd. would not stand defaced - Issue Notice, returnable on 19.12.2019 - By way of ad-interim relief, further proceedings pursuant to the impugned SCN are hereby stayed: HC

- Stay granted: GUJARAT HIGH COURT

Cus - The order passed by 2nd respondent directing confiscation of a 'used dialysis machine' imported by assessee, under Section 111(d) alleging violation of Basel No.1110 of Hazardous and Other Wastes Rules 2016; and also the imposition of penalty on assessee under Section 112(a)(i) of Customs Act, 1962, was under challenge - One of the main contentions raised in challenge of the impugned order was that, there occurred procedural irregularity in not issuing a SCN and in not affording any opportunity to assessee to object the proposal for confiscation - From the impugned judgment, it is evident that with respect to said irregularity pointed out, the respondent made a fair concession and agreed for re-adjudication of the matter after issuing a proper SCN - Taking note of the said submission, the Single Judge had disposed of the writ petition by quashing the impugned order of 2nd respondent - The 2nd respondent was directed to issue a SCN to the assessee intimating about the proposal for confiscation on the grounds available and to proceeded to re-adjudicate the matter afresh, after hearing the petitioner - The only restriction imposed by Judge in the matter is against the assessee raising contention based on question of limitation - Therefore, it is evident that the assessee will get an opportunity to oppose the proposal for confiscation on all the grounds available, except the question of limitation - Therefore, the assessee would not have any grievance about the judgment - He will be at liberty to raise all the contention before the adjudicating authority, including the contention that the proposal itself is not maintainable on its merits: HC

- Appeal dismissed: KERALA HIGH COURT

Cus - Commissioner Customs (General) has revoked the Customs Broker licence and also passed an order forfeiting the security deposit in full - aggrieved, appeal is filed by broker before CESTAT.

Held: When the Customs officers who are experts in the matter of classification themselves failed to determine the correct classification of goods after physically examining it and considering the issue for a substantial time, then can a Customs broker be accused of failing to determine the correct classification on the basis of description given by the importer in the import documents - In the impugned order, Bench does not find any discussion to show as to how the appellants have failed to comply with the requirements of regulations 11(d) and 11(e) of the CBLR - appellant had advised the client as per his understanding of the law and procedure and had exercised due diligence accordingly - in the view of the Bench, the only additional advise that he could have rendered in respect of the consignments imported and cleared under CTH 9503 could have been for complying with the requirements of ITC (HS) Import Policy, Condition no. 2 for import of goods under that heading viz. production of certificate - in case the said certificate was produced or insisted upon before clearance of the goods, the entire case of mis-declaration/mis-classification could have been averted - Bench views that revocation of licence would be too harsh a punishment when the fact of the matter is that even the Customs officers also had not insisted for such certificate - forfeiture of the security deposit for the same would have been adequate taking into account the fact that goods sought to be cleared were ‘blank guns' which could have been modified into lethal weapons jeopardising the national security and security of individuals - appeal partly allowed to the extent of setting aside the order of revocation of Customs Broker license of the appellants: CESTAT [para 4.10, 4.11, 4.12, 5.1]

- Appeal partly allowed: MUMBAI CESTAT