2019-TIOL-NEWS-305, Dated: Saturday, December 28, 2019

2019-TIOL-3644-CESTAT-AHM

Welcome Hotel Vadodara Vs CCE & ST

ST - This ROM application has been filed by assessee against order dated 03.05.2019 - The assessee contended that in the impugned proceedings, duty was demanded from them on the ground that they had availed Cenvat Credit on common input services availing exemption notfn 01/2006-ST - In defense, it was contended by assessee that they had not availed credit on common input services and that whatever was availed by them, they had reversed - It is pointed out that while the first contention, that the assessee had not availed the credit, was rejected, demand was confirmed, the second contention that they had reversed the credit, was not examined in the order dated 03.05.2019 and no findings were given on that aspect - There is an error - As a result of omission of this issue in the order dated 03.05.2019, the order is consequently amended by substitution of ‘para 5' of the order - If the assessee have reversed the Cenvat Credit attributable to alleged common services, they are entitled to benefit of notfn 01/2006-ST - Consequently, the impugned order is set aside and the matter is remanded for the verification of facts: CESTAT

- ROM application allowed: AHMEDABAD CESTAT

2019-TIOL-3643-CESTAT-DEL

Vijay Pratap Vs CGST, C & CE

ST - The assessee is in the business of retail sale of liquor in malls under the license from Chhattisgarh State Excise department - The department's case is that the services provided by government or a local authority by way of granting permission/licenses have been subjected to Service Tax under reverse charge w.e.f. 01.04.2016 by virtue of notfn 18/2016-ST - Service Tax amount of Rs. 26,70,281/- for the period May, 2016 to February, 2017 was proposed to be recovered along with interest at the appropriate rate and the proportionate penalties - Relevant provision for filing appeal is Section 35 of CEA, 1944 - Thus, the appeal can be filed in a period of 60 days from the date of communication of the said decision to the aggrieved person - Commissioner (A) has a power to condone delay of subsequent 30 days in case some sufficient cause preventing the assessee to present the appeal within the said time is shown to him - There is no denial on part of assessee for receiving the SCN and no apparent demand for seeking an opportunity to reply - The initial adjudicating proceedings were also in his notice and even his employee appeared on 04.10.2017 - Apparently and admittedly there is no effort on part of assessee to enquire the status of his proceedings till he received the e-mail dated 27.07.2018 - From the O-I-A, it is rather observed that the assessee while filing an appeal before Commissioner (A) had also filed an application praying for condonation of delay of 24 days on the ground that the said order was received over e-mail on 27.07.2018 by Shri Sadanand Singh, Manager of the assessee - The said application amount to dismissal in view of order of Commissioner (A) dismissing the appeal as a whole on ground of limitation - It is observed that date of receiving the e-mail is still mentioned as 27.07.2018 - The affidavit of Shri Sadanand Singh also records the date of receipt of e-mail as 27.07.2018 - The appeal, however, is silent as to why this e-mail was forwarded from the department, nor the assessee had enlightened the bench for the same - However, perusal of order-under-challenge itself shows that Commissioner (A) got conducted an enquiry about the dispatch of the O-I-O and it came on the record that the letter was dispatched through Speed-Post itself - As a consequence, the appeal in hand is hereby dismissed: CESTAT

- Appeal dismissed: DELHI CESTAT

2019-TIOL-3642-CESTAT-HYD

Shakti Hormann Pvt Ltd Vs CCT, CE & ST

CX - The assessee-company manufactures Steel doors and also trades in parts of steel doors - It also provides service of installation of steel doors to its clients - The issue in the present case arose in respect of cenvat credit availed on common input services such as renting of immovable property, internet services on which the assessee availed credit - The Revenue claimed that the assessee availed credit on the common inputs used for manufacturing excisable goods as well as provision of taxable service and provision of exempted services, the assessee was liable to reverse credit u/r 6(3) r/w Rule 6(3A) of CCR 2004 - The assessee claimed to have substantially complied with the mandate of Rule 6(2) of the CCR, by taking credit periodically once in every 6 months, calculating the turnover of taxable service and dutiable goods to the total turnover and availed credit attributed to the input service used in provision of taxable service and clearance of excisable goods - Nonetheless, duty demands were raised and were sustained by the Commr.(A) - Hence the present appeal.

Held - The issue at hand stands settled through a judgment passed in the assessee's own case for a previous period - It was held therein that the intent of the Legislature was that a manufacturer or a service provider should not avail the entire CENVAT credit of the service tax paid on common input services and should avail proportionate credit attributable to the taxable output service for which the CENVAT credit Rules provides for maintaining separate accounts - It was also held that the assessee had followed this rule by taking the credit of only an amount which is attributable to the taxable services provided by him and not availing the CENVAT credit of the input services which are attributable to the trading activity - Hence by availing only the CENVAT credit of the service tax paid attributable to the taxable services, the assessee had complied with the provisions of Rule 6(2) - In light of such findings, the duty demands merit being set aside: CESTAT

- Assessee's appeal allowed: HYDERABAD CESTAT

2019-TIOL-3641-CESTAT-ALL

Shyam Traders Vs CCGST, CE & ST

CX - The assessee-company manufactures Pan Masala Gutkha under brand name of Shyam Bahar, falling under Chapter 24.04 of the first schedule to the CETA 1985 - DGCEI officers searched various premises, including the assessee's factory premises, whereupon some quantity of Gutkha was seized, apart from currency being seized from the residence cum factory premises of the assessee's propritor - Offices of the transporters were searched too, whereupon some more quantity of Gutkha was seized - The premises of various suppliers were searched too - Further investigations were carried out and GRs recovered from the premises of the transporters - Some samples were drawn and sent for testing - Based on the test report and tobacco content and from various statements and documentary evidences collected and the waste generated, the assessee was issued SCN raising duty demand, with proposal to appropriate an amount already deposited during investigation - The SCN also proposed to confiscate currency on account of it being proceeds from sale of clandestinely cleared goods and also proposing to impose penalties - On adjudication, the demands were confirmed as were the proposals to confiscate the currency - The appeals against the O-i-O were disposed off by the Tribunal by setting aside the duty demands, confiscation and penalties - On Revenue's appeal, the High Court reversed such findings of the Tribunal, whereupon the Revenue reiterated the duty demands - Hence the present appeal.

Held - As directed by the High Court, it was the onus of the original adjudicating authority to ensure that the 25 persons whose cross examination had been sought for were presented for cross examination by the assessee - It is seen that the original adjudicating authority sent a letter to six appellants, informing them of the date of hearing - The O-i-O nowhere indicates that the adjudicating authority put in efforts to present 25 prosecution witnesses before the assessee for cross examination - Hence the directions of the High Court were not followed by the original adjudicating authority - It was clearly indicated in the Tribunal's order that the cross examination of partners and employees of three transport companies were necessary to ascertain as to on what basis they stated that all consignments where description of goods in the GRs and lorry challans was mentioned as Zarda, Masala or Shyam Bahar were Gutkha clandestinely removed by the assessee - The cross examination of another person was found to be necessary to ascertain as to on what basis he stated that waste in the form of dust generated in the processing of supari was 4% - The cross examination of the chemical examiner who tested the samples was also necessary to ascertain by which method the test had been conducted - Since the cross examinations were not conducted, the basis for concluding the total quantity of Gutkha allegedly cleared clandestinely is not established - Besides, wherever Zarda, Masala and Shyam Bahar was stated in the GRs and lorry challans the same was clandestinely removed Shyam Bahar Gutkha without payment of duty by the assessee has also not been established because the cross examination of the representatives of transporters was not allowed - Therefore, the clandestine manufacture and clearance of alleged quantity of gutkha is not established - Consequently, the currency seized cannot be deemed to be sale proceeds of clandestinely cleared Gutkha - Hence the duty demand is unsustainable as is the confiscation of the currency - Hence the penalties too are not imposable and no interest is recoverable: CESTAT

- Assessee's appeal allowed: ALLAHABAD CESTAT

Cus - The present writ petition assails orders passed by the jurisdictional Asst Commr. of Customs u/s 142 of the Customs Act, detaining capital goods imported by the petitioner under cover of various EPCG licenses issued to them - The goods had been detained on account of the fact that the petitioner did not fulfil the conditions regarding installation of the imported items of capital machinery within the specified period after their import and had consequently lost their entitlement to claim benefit of concessional rate of duty in respect of imports made under the EPCG scheme - The detention notices were issued for recovert of the differential Customs duty forgone at the time of import of such items.

Held - Though the petitioner was unable to install the items of capital machinery imported by it under the EPCG scheme within the time specified after their import, it is also a fact that their case for waiver of the procedural requirements under the EPCG scheme is pending consideration before the EPCG Committee, pursuant to permission stated to have been granted to them by the DGFT - The application for reviewing the earlier decision of the EPCG Committee rejecting the petitioner's request for waiver of the procedural conditions under the EPCG scheme, appear to be based on the general power of review that is conferred on the DGFT under the HBP to the FTP 2015-20 - It is not disputed that the request for review is pending before the EPCG Committee, of which Director General of Foreign Trade, the 3rd respondent herein, is the chairperson - Besides, if a decision favorable to the petitioner is taken by such committee in the review petition, it would obviate the necessity of pursuing the demand for differential Customs duty at the instance of the authorities - In such backdrop, it would be prudent to direct the EPCG Committee to consider and pass orders on the application within an outer time limit of 6 minths from the date of receipt of a copy of this judgment, after hearing the petitioner in this matter - It is also appropriate the extend the time limit for completing the installation of the imported capital machinery till 31.03.2020 - Nonetheless, such extension is subject to the orders passed by the EPCG Committee and the fact that such an extension is granted would not prevent the authorities from taking any independent decision regarding the procedural relaxation sought for by the petitioner - Thereby, the detention notices too cannot survive and the same merit being quashed without prejudice to the right of the Customs authorities to issue fresh notices on a later date: HC