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SERVICE TAX
2019-TIOL-3639-CESTAT-DEL
Skylark Hi-Tech Solution Pvt Ltd Vs CST
ST - An application filed for praying for rectification of mistake in final order in - 2019-TIOL-1136-CESTAT-DEL - The SCN proposing the demand of Rs. 64,04,301/- was served upon the assessee observing that the assessee having a number of companies under its aegis and being run by Capt. T.C. Rao was availing payment of Service Tax by suppressing the full taxable amount collected from various clients who were receiving the services as the security agency and manpower supply services from the assessee - The impugned final order after relying upon the decision in case of Rajasthan Ex-servicemen Ltd. which has also been confirmed by Rajasthan High Court has set aside the contention about SCN being vague and arbitrary - The contention about SCN being barred by time has also been duly considered - Finally, the contention that the demand on gross turnover of all the services provided by assessee without bifurcation thereof has also been, specifically, dealt with as the matter has been remanded back for the quantification of the demand on the basis of financial year-wise receipt service tax value - The adjudicating authority is also directed to examine the balance-sheet and other statements - Impugned final order is itself sufficient to reflect that all the contentions as were raised by assessee have duly been dealt with in the said final order - As far as the arbitrary/vagueness of SCN is concerned, the same is held to be correct in principle - The decision cannot be re-opened under the guise of rectification of mistake - Support drawn from the decision of M/s SRF Ltd. which clarifies that a decision on debatable point of law or fact cannot be corrected by way of rectification - Otherwise also the impugned final order has remanded the matter to the adjudicating authority below for quantification of the demand - There seems no error which is apparent of its record in the impugned final order: CESTAT
- Application dismissed: DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-2953-HC-DEL-CX
Nidhi Gupta Vs UoI
Sabka Vishwas Legacy Dispute Resolution Scheme - The respondent-Union floated the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - The petitioner drew attention to certain provisions in the scheme from which it emerged that the cut off date is 30.06.2019 and four types of cases could be settled under the scheme - However, the petitioner claimed that the cut off date of 30.06.2019 was not being maintained by the respondent and that the respondents were settling cases in which notices were issued after 30.06.2019 and demands were quantified after 30.06.2019 - The petitioner claimed that the the Circular dated 25.09.2019 issued by the respondents is in violation of the Scheme and that the respondent were settling cases beyond the scheme.
Held - In view of Rule 3 of the Scheme, which is floated under the provisions of the Finance Act 2019 and looking to the definition of amount in arrears it cannot be said that relevant portions of the Circular were in violation of the Scheme - Even if the demand is quantified and no appeal is preferred or even if the appeal is preferred but the assessee is applying under the Scheme, it will mean to be covered by Clause 3(b) of the Scheme - Moreover, looking to Rule 3 of the Scheme, the cut off date of 30.06.2019 is inapplicable in all the four eventualities and that the cut off date of 30.06.2019 is applicable only in the eventualities which are covered u/r 3(a) or 3(c) - The cut off date of 30.06.2019 is inapplicable for the cases which are covered under Rules 3(b) and 3(c) - This cut off date has been clarified in a Circular dated 25.09.2019 - Besides, the present petition is a PIL and when such types of assessees or petitioners are approaching this court, the case can be decided looking into the facts of the individual case - The present Circular dated 25.09.2019 is prima facie not violative of the provisions of the Scheme or of the Finance Act - It is expected from the respondents that the provisions of the scheme would be followed scrupulously - As and when the individual case will come to the Court in detail, the provisions of the Scheme, 2019 and the relevant Act shall be matched with the facts of that individual case: HC
- Writ petition disposed of: DELHI HIGH COURT
2019-TIOL-2951-HC-AHM-CX
Synpol Products Pvt Ltd Vs UoI
CX - The petitioners are in appeal against the order passed by Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 rejecting the declarations made by petitioners - The dispute involved in this case is, whether the waiver from payment of redemption fine is allowed under the Scheme - The Designated Committee has rejected the declarations made by petitioners on the ground that no relief as regards confiscation and redemption fine has been allowed under the Scheme and therefore, the entire matter covered under the declarations cannot be accepted - While clause (a) of subsection (1) of section 129 of Finance Act provides that the declarant shall not be liable to pay further duty, interest or penalty, it does not expressly provide that the declarant shall not be liable to pay fine/redemption fine; which is why the present controversy has arisen - It may be noted that while under the Scheme no express provision has been made discharging the declarant from the liability to pay fine, the Directorate General of Taxpayer Service, the Board has issued FAQs, flyers and press notes wherein it is specifically stated that the most attractive aspect of the Scheme is that it provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine and penalty - In all these cases, there would be no other liability of interest, fine or penalty - There is also complete amnesty from prosecution - Thus, in terms of FAQs, press notes and flyers issued by Board, the Scheme provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine and penalty - Thus, having regard to the fact that: (i) section 125 of the Finance Act says that all persons shall be eligible to make declaration under the Scheme except for the categories specifically enumerated therein; and (ii) under section 125 of the Finance Act, cases involving confiscation and fine in lieu of confiscation (redemption fine) are not excluded from the benefit of the Scheme, and (iii) according to the Board, the Scheme provides relief in tax dues for all categories of cases; prima facie it appears that the legislature did not have the intention of excluding cases involving confiscation and fine in lieu of confiscation from the purview of the Scheme.
By the communication dated 20th December, 2019, the Board has stated that in case where redemption fine has been imposed and quantified, the discharge certificate can be issued only after settlement of redemption fine - Therefore, it is not the case of the Board that declarations involving redemption fine cannot be accepted - The stand of the Board that in case where redemption fine is imposed and quantified, discharge certificate can only be issued after settlement of redemption fine, is not in consonance with the Scheme which contemplates putting an end to the matter - The matter requires consideration - Hence issue Rule, returnable on 23rd January, 2020 - Since the last date for filing declarations under the Scheme is 31st December, 2019, the respondents are directed to permit the petitioners to file fresh declarations under the Scheme without payment of redemption fine, subject to the final outcome of the petition - Upon such declarations being submitted, the same shall be further processed by the Designated Committee and shall not be turned down on the ground that the Scheme does not cover cases involving confiscation and redemption fine: HC
- Interim Relief granted: GUJARAT HIGH COURT
2019-TIOL-3638-CESTAT-MUM
Jabil Circuit India Pvt Ltd Vs CCE
CX - Valuation – Section 4 of the CEA, 1944 - M/s Jabil Circuit India Pvt Ltd is in the business of manufacture of 'set-top-boxes' for M/s Tecnicolor India Pvt Ltd who, in turn, sold these exclusively to M/s Tata Sky Limited - Case of the department is that the appellant-assessee is a job-worker who had been discharging tax liability on clearance of 'set-top-boxes', to M/s Tecnicolor India Pvt Ltd, by resorting to valuation under rule 6, instead of computing on the basis prescribed in rule 10A, of Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000 - While M/s Jabil Circuit India Pvt Ltd is in appeal against demand of duty, as well as imposition of penalty, M/s Tecnicolor India Pvt Ltd. is in appeal against the penalties.
Held: Rule 10A of the said Valuation Rules is applicable in a situation of goods manufactured entirely out material provided by supplier - Quality is the hallmark of modern trade and, in particular, in securing of electronic equipment - In these circumstances, it is but natural for quality control to be ensured by identifying the vendors from whom the raw materials are to be procured by the manufacturer - Short-listing of vendors cannot be construed as supply on behalf of 'principal-manufacturer' because payment was made directly to the supplier of the goods by the appellant - Definition of 'job-worker', as incorporated in the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 would not cover the transactions, as well as the activities, that characteristically occur in the present dispute - Resort to rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is, therefore, not legal and proper - impugned order set aside and appeals allowed: CESTAT [praa 5, 8, 9, 10, 11]
- Appeals allowed: MUMBAI CESTAT
2019-TIOL-3637-CESTAT-AHM
CCE & ST Vs Oil Natural Gas Corporation Ltd
CX - Appellant is making payment of Oil Industries Development Act Cess (OID Cess) on the quantity of crude oil supplied to M/s. IOCL, Baroda - In the normal course, the payment of OID cess is made after the quantity received is ascertained and, therefore, there is finality to that assessment - However, in the month of March, 2009 the appellants were required to pay duty by 31 March, 2009 and resultantly, the appellant paid duty without ascertaining the final amount received leading to an excess payment, for which refund ws claimed - Refund claim was denied on the ground that the appellant had failed to opt for provisional assessment, therefore, assessee is in appeal – revenue is also in appeal aggrieved with the stand taken by the Commissioner(A) that the charge of unjust enrichment in inapplicable.
Held: Procedure of provisional assessment has been provided for the convenience of the assessee, it is not a mandatory requirement. In the instant case the claim has been filed within the limitation, and therefore, the refund cannot be denied on that count - The appeal of M/s ONGC on this count is allowed – insofar as Revenue appeal is concerned, decision of Tribunal in appellant's own case is squarely applicable in this case – relying upon the same, appeal of Revenue is dismissed: CESTAT [para 4 to 7]
- Assessee appeal allowed/Revenue appeal dismissed: AHMEDABAD CESTAT
CUSTOMS
2019-TIOL-2954-HC-DEL-CUS
Global Impex Vs Manager
Cus - The issue at hand is whether M/s CELEBI could charge demurrage on goods imported by the assessee and which were stored in the former's premises - The assessee claimed that no demurrage could have been charged by M/s CELEBI and relied on the provisions of Regulation 6(1)(i) of the Handling of Cargo in Customs Areas Regulations, 2009 - During the relevant period, the assessee filed BoE for import of unbranded ready made garments - The assessee also requested for first check of the consignment - Pursuant to 100% examination, the consignment was put on hold for further examination by the Preventive Unit - On subsequent examination, it was opined that there had been misdeclaration of quantity - Panchnama was drawn and the consignment was seized and handed over to M/s CELEBI for safe custody - A covering letter was sent too, stating that no demurrage be charged till the finalisation of investigation - In reply, M/s CELEBI claimed that charging of demurrage was subject to the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mails) Regulations, 2003 and that if the investigation was likely to take time, the assessee would be well advised to seek warehousing of the goods u/s 49 of the Customs Act - The assessee then made representations seeking that the goods be warehoused in order to avoid further demurrage charges - However, such application elicited no response - Meanwhile, O-i-O was passed holding there to be mis-declaration of both quantity and description of the goods - The declared value was rejected and the value was re-determined - Duty demand allegedly evaded, was raised, confirmed and directed to be recovered u/s 28 of the Customs Act - The goods were confiscated u/s 111(l) and 111(m) of the Customs Act, with option of redemption fine being given u/s 125 - Penalty was also imposed u/s 114A - The assessee claimed to be in the process of filing appeal against such O-i-O - In order to seek release of the seized goods, the petitioner deposited the entire amount of duty, penalty and redemption fine - Thereafter, the officer concerned addressed a letter counterpart in charge of Import Shed, informing that the Customs was lifting hold on the imported goods and that the Preventive Department had no objection to releasing the goods imported - When the petitioner approached M/s CELEBI seeking release of the goods, the latter refused to release the goods till the assessee paid the demurrage charges which had accumulated - Thus the present writ, claiming that M/s CELEBI was disobeying the directions of the Revenue to not raise demurrage charges and that such charges were so excessive in quantum that they rendered releasing the goods to be unviable.
Held - Insofar as the right of M/s CELEBI to charge demurrage is concerned, the position qua such right is the same as that which was obtained in respect of the Mumbai Port Trust even though M/s CELEBI is admittedly not covered by the Major Port Trusts Act - This is so because in the case of M/s CELEBI, demurrage is charged based on regulations which are statutory by nature and which therefore partake the character of any other law for the time being in force for purposes of Regulation 6(1)(i) of the Handling of Cargo Regulations - The charging of demurrage by M/s CELEBI is by authority of statute or contract sanctified by statute - M/s CELEBI charges demurrage as per the clauses of its arrangement with M/s DIAL which was entered into in accordance with Article 2.1 of the OMDA which in turn was authorised by Section 12A of the AAI Act - This clearly constitutes law for the time being in force, within the meaning of the expression as employed in Regulation 6(1)(1) of the Handling of Cargo Regulations - The inevitable sequitur would be that the injunction, engrafted in Regulation 6(1)(1) of the Handling of Cargo Regulations, on the charging of demurrage in respect of goods detained/seized, or confiscated by the customs authorities, would not apply to, or affect, M/s CELEBI - It has to be remembered, in this context, that M/s CELEBI is required to pay a colossal sum of Rs 35 crores annually (which is subject to further upward revision) to M/s DIAL - Therefore, M/s CELEBI cannot be expected to cede its right to charge demurrage, solely on the basis of a "direction" by the Customs authorities - Moreover, the liability to pay demurrage charges rests with the assessee and the Customs authorities in the present case did not act in any mala fide manner to delay the release of the consignment - The Customs authorities, while exercising their power of search, seizure and investigation, are essentially discharging sovereign functions & a reasonable amount of time is expected to be expended in this process, and the mere fact that, by reason of the investigative exercise conducted by the Customs authorities, it has not been possible for the importer to clear its goods, cannot, ipso facto , lead to transference of liability to pay demurrage, to the Customs authorities - It is only where a clear case of unquestionable delay, bordering on mala fides and demonstrative of unreasonable harassment of an importer, is made out, that the customs authorities can be mulcted with the liability to pay demurrage or detention charges - Therefore, the demurrage charges payable to M/s CELEBI are payable by the assessee: HC
- Writ petition dismissed: DELHI HIGH COURT
2019-TIOL-3640-CESTAT-DEL
Bishal Export Vs Pr.CC
Cus - The appellants are importers of readymade garments from Bangladesh - The Bills of Entry were assessed and during examination it was found that the appellants had imported goods in excess of what were declared in the Bills of Entry and other documents - The goods imported from Bangladesh are exempted from payment of duty as per South Asia Free Trade Agreement (SAFTA) by Notfn 99/2011-CUS - After following due process, the adjudicating authority has held the entire goods imported by aforesaid consignments were liable for confiscation under Section 111 (e) and 111(l) of Customs Act, 1962 - He also gave the appellants an option to redeem the goods on payment of redemption fine under section 125 of Customs Act - Country of origin certificate from Bangladesh (SAFTA certificate) which would entitle them to import goods under an exemption also covered such quantity of the goods as was declared in their Bills of Entry - What is in violation of Customs Act is only the excess quantity of goods which have been imported by them without declaring in any of the documents - These goods are also not covered by SAFTA certificate - A plain reading of section 111 (e) and (l) shows that these apply to such goods only which have been concealed and have not been declared and not the entire quantity of goods - In fact section 111(l) is very categorical that it applies to goods found in excess of what have been declared - Therefore, excess goods are liable for confiscation and not the entire consignment imported by the appellants - The confiscation of the remaining goods is not supported by law and accordingly needs to be set aside - The denial of exemption Notfn for the entire quantity of goods when the bulk of the goods are already covered by SAFTA certificate is not supported by any legal provision - Therefore, the demands are set aside to that extent - The amount of redemption fine imposed by the impugned order as well as the penalties imposed upon the appellants need to be proportionately reduced - Appeals are partly allowed and the matters are remanded to the original authority for the limited purpose of calculation of the amount of duty, fine and penalty: CESTAT
- Appeals partly allowed: DELHI CESTAT | |
