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SERVICE TAX
2019-TIOL-2940-HC-MUM-ST
New Era Fabrics Ltd Vs Appellate Tribunal Of Customs
ST - The Petitioner had been issued two SCNs levying Service Tax - The first one was issued on 23 October 2015 and the second one was issued on 28 June 2017 seeking to recover Service Tax - The Petitioner separately contested both the notices - However, a common adjudication order dated 29 September 2017 was passed in respect of both the notices through which he confirmed the SCN dated 28 June 2017 and dropped the SCN dated 23 October 2015 - The Petitioner being aggrieved by the order dated 29 September 2017 to the extent it confirmed the SCN dated 28 June 2017, filed an appeal to the Tribunal - As the amount in dispute was less than Rs.50 lakhs, the appeal was heard by a single member of Tribunal - On 5 July 2018, the Tribunal allowed the petitioner's appeal by setting aside the order dated 29 September 2017 passed by the Commissioner and restored all issues before the adjudicating authority - The Petitioner in its rectification application pointed out that the order dated 5 July 2018 of the Tribunal should be restricted only to the proceedings emanating from notice dated 28 June 2017 as the appeal of the revenue from order of Commissioner dated 29 September 2017 to the extent it emanated from notice dated 23 October 2015 is pending before the Division Bench of the Tribunal - The Tribunal by impugned order dated 11 July 2019 refused to rectify the same holding that the order was dictated in the open court and in the presence of both sides - Thus, the rectification application was not maintainable as there was no apparent error in the order of the Tribunal - The Tribunal ought to have allowed the petitioner's rectification application and restricted its order dated 5 July 2018 only to the SCN dated 28 June 2017 by which the Petitioner was aggrieved - The Tribunal could have addressed the above issue in favour of the Petitioners while disposing of the rectification application - Thus the impugned order dated 11 July 2019 is set aside - The parties are ad-idem that the order dated 5 July 2018 of the Tribunal deals only with the Petitioner's appeal and not with the Revenue's appeal which is pending with the Tribunal - Therefore, instead of restoring the Petitioners rectification application to the Tribunal for final disposal, the order of the Tribunal dated 5 July 2018 is only restricted to the Petitioner's appeal arising on account of confirmation of the SCN dated 28 June 2017: HC
- Petition disposed of: BOMBAY HIGH COURT
CENTRAL EXCISE
2019-TIOL-2944-HC-ALL-CX
Commissioner of CGST Vs International Tobacco Company Ltd
CX - The assessee-company manufactures various brands of cigarettes on job work basis for M/s Godfrey Philips India Ltd - On assessment, certain cigarettes manufactured and removed by the assessee on payment of Excise duty were returned by M/s Godfrey Philips India Ltd for various reasons, whereupon the assessee claimed that such goods were brought back to the factory for refining - The assessee took Cenvat credit by treating such returned goods as inputs for the relevant periods - The assessee claimed entitlement to credit u/r 16(1) of CER 2002 and availed credit u/r 16(2) of the CER 2002 when the goods were removed from the factory after refining - Noticing such transactions, the Revenue issued SCNs stating that refining of cigarettes was not covered u/r 16 of CER 2002 and that the assessee engineered the return of the so-called non-marketable cigarettes with intent to unlawfully avail benefits u/r 16(1) of the CCR by misleading the Revenue Department - It was also alleged that the assessee wilfully, with mala fide intent availed credit recoverable from it u/r 14 of CCR 2004 r/w proviso to Section 11A of the CEA 1944 with interest u/s 11AB of the Act - Penalty was also imposed u/s 15(2) of the CCR 2004 r/w Section 11AC of the Act - On adjudication, the proposals in the SCN were confirmed on grounds that the assessee wrongly availed cenvat credit - On appeal, the Tribunal quashed such orders - Hence the present appeals by the Revenue.
Held - The purpose of manufacture of goods is sale - Bringing the goods back to the factory after removal for sale does not ordinarily make good business sense - However, upon there being valid reasons, the goods cannot be sold or are unfit for retention in the market, whereupon they may be recalled to the factory - A per Rule 16(1), these goods are brought back for being remade, refined, re-conditioned whereupon such goods become saleable commidity and worthy of acceptance in the market - The phrase or for any other reason u/r 16(1) of CER 2002 is necessarily to be read on the construction canon of esjudem generis and any other rule of interpretation would make the Rule unworkable and defeat the clear intention of the legislature - The Tribunal gave a wide interpretation to this phrase and thus included the offending transactions within its scope - The legislative intent was not to read the phrase in isolation and give it such a wide berth - Otherwise there would be no necessity to precede the phrase or for any other reason by the three processes of re-made , refined and re-conditioned - The three preceding phrases depicting three similar processes qualify and restrict the scope of the phrase or for any other reason - The legislature used the words re-made , refined , re-conditioned and the phrase or for any other reason and avoided the phrase for being scrapped - Understanding this distinction is key to interpreting the scope of re-made , refined , reconditioned and the phrase or for any other reason - The essential characteristics of the brought back goods survive even after being re-made , refined or reconditioned - The original identity of the goods is retained even after the goods undergo such process - When goods are scrapped, all the constituent components of the goods may be reclaimed, thereafter, the original identity of the manufactured goods completely perishes - Scrapping of goods is done for various purposes, including cannibalisation and extraction of vital or valuable parts of the original goods - Consequently, when goods are scrapped, it cannot be stated that the said goods were brought to the factory for being re-made , refined , re-conditioned , or for any other reason provided in Rule 16(1) - Scrapping of goods does not fall within the ambit and scope of Rule 16(1) - The offending transactions, the findings of the original adjudicating authority and of the Tribunal must be examined in light of the true scope and correct interpretation of Rule 16(1) - The Tribunal included scrapping within the fold if Rule 16(1) - It is evident that the Tribunal incorrectly interpreted the scope of Rule 16(1) by bringing scrapping within the embrace of Rule 16(1) and proceeded to legitimise the benefit of Cenvat availed by the assessee - Such fault lines vitiate the judgment of the CESTAT, which is thus unsustainable - The ingredients to avail credit of duty of goods brought back to the factory as per Rule 16(1) of the CER 2002 was not satisfied - The assessee was not entitled to avail benefit of cenvat credit of duty paid on the goods and illegally availed credit - The intent to defraud the Revenue and escape taxations is proved - The personal penalty imposed u/r 26 is sustained too - Hence the order of the Tribunal merits being quashed: CESTAT
- Revenue's appeals allowed : ALLAHABAD
HIGH COURT
2019-TIOL-2939-HC-MP-CX
Ajay Kumar Upadhyay Vs CCGST & CE
CX - The petitioner has filed this petition being aggrieved by order dated 24/5/2018 passed by Commissioner, CGST & Central Excise - The order is certainly an appealable order and appeal lies before the Tribunal in terms of Sec. 35B of CEA, 1944 and Sec. 129A of Customs Act, 1962 - Large number of Writ Petitions were also preferred before this Court challenging the same order and in all the cases this Court has held that there is a remedy of appeal and the petitions have been disposed of with liberty to prefer an appeal - As other Writ Petitions have also been dismissed, the petitioner does have an equally efficacious alternative remedy, the admission is declined with liberty to the petitioner to avail the remedy available under the law: HC
- Writ petition dismissed: MADHYA PRADESH HIGH COURT
2019-TIOL-2938-HC-MAD-CX
CGST & CE Vs Larsen And Toubro Ltd
CX - The Revenue is in appeal against order in - 2018-TIOL-1636-CESTAT-MAD holding that in view of the various decisions referred to by it, the assessee was not liable to pay interest - It was jointly submitted by both side that there is no detailed discussion of judgments cited by them in the subject case nor has the later amendment of law in this regard been discussed by Tribunal - The assessee also submitted that some of the contentions raised on the merits of the case have also not been discussed by Tribunal - The court is inclined to set aside the order of Tribunal with a direction to the Tribunal to pass a detailed and speaking order on merits and in accordance with law: HC
- CMA disposed of: MADRAS HIGH COURT
CUSTOMS
2019-TIOL-2937-HC-MP-CUS
Sanjay Kundra Vs UoI
Cus - This Court in the identical matter has held that there is a remedy of appeal under Section 129A of Customs Act and the appeal has to be preferred before CESTAT - It has been dismissed on account of non-compliance of the order passed by Tribunal - In light of the order passed in an identical case by this Bench only, this Court does not find any reason to interfere with the present writ petition - The admission is declined: HC
- Admission declined: MADHYA PRADESH HIGH COURT
2019-TIOL-2936-HC-MAD-CUS
Cochin Air Cargo Clearing House Vs PR CC
Cus - The petitioner is an Air Cargo Customs Clearing Agent Company - During course of business, they got an order for shipment of Air inlet automobile spare parts from a new customer named, Swiss Global - For the above shipment, bills were given by exporter to the Petitioner and the goods were received and sent for customs clearance - But the second respondent did not give customs clearance for shipment on the ground of over valuation of product - What was imported is neither a prohibited good nor an unlawful good, but it is only automobile spare parts - The second respondent had also conducted an enquiry with the Head of the Office of the Petitioner Company and also with the employees, several times - It is alleged that the authorities are misusing their power and harassing the Petitioner - Therefore, the Petition is filed for a mandamus directing the respondents not to harass the Petitioner in the guise of enquiry either by personal appearance or search warrant or interfering with the day-to-day business of the Petitioner's company - The search of the Head of the Office of the Petitioner company personally, is challenged - The action on the part of the respondents is quite natural and incidental - Hence, the Petitioner cannot preclude the officials of respondents from proceeding with their official duty - In the light of the facts, recording the paragraph of the counter, wherein, the respondents have given an undertaking that the Petitioner will not be harassed in the guise of enquiry and investigation, the respondents are directed to conclude the enquiry with the Petitioner and their staff members within a period of one month: HC
- Writ Petition disposed of: MADRAS HIGH COURT |
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