2020-TIOL-NEWS-016, Dated: Saturday, January 18, 2020

ST - The assessee-company is engaged in the physical transportation of currency notes on behalf of banks - The insurance on cash vans was obtained as per RBI guidelines in order to secure the cash transportation - Such insurance is an essential requirement for rendering of output service of transportation of huge volumes of cash - Besides, the cash vans were capital goods covered under the CCR 2004 - The Revenue proposed to deny credit on such insurance service - Hence the present appeal.

Held - The definition of capital goods covers motor vehicles other than those used for providing output service the rules requires registration in the name of the provider of output service - Hence, when the assessee is trying to make out a case that the cash vans in question are its capital goods, then it has to necessarily prove that the same are registered in its name and that the same were registered in its name during the length of the period of dispute involved - Further, there is a clear finding by the lower authorities that the assessee did not produce any documentary evidence in its support to prove that the motor vehicle is registered in its name and hence, the lower authorities did not have the benefit of the registration certificate furnished for the first time before this forum - Filing of photocopy of registration certificate before this forum, that too for the first time, would not help anyone since it has to be established that those very vehicles were in fact used and for this, the Tribunal cannot go into this aspect - Hence photocopy of the registration certificate cannot be accepted since its relevance has neither been explained nor established and therefore, the case of the appellant falls back to the position where there is a categorical finding of the Adjudicating Authority as to non-furnishing of supporting documentary proof.

2020-TIOL-125-CESTAT-MAD

Pavitraa Graphics Ltd Vs CCE

CX - The assessee-company manufactures products of paper and for the printing industry - It was clearing products without payment of duty as it was under the impression that the goods were not excisable - Upon introduction of the new 8-digit CETA 1985 w.e.f. 1.3.2005, the Revenue observed that the items packing and wrapping paper, paper tags and trays manufactured and cleared by the appellant were excisable goods attracting duty - SCN was issued to the assessee proposing to classify the goods and raised duty demand accordingly - On adjudication, such demands were confirmed and the wrappers and trays were classified under Chapter 48 - The paper bags were also held to be classifiable under Heading 48211010 - On appeal, the Commr.(A) quashed the duty demanded on printed wrapper, but sustained the demand raised in respect of paper tags and trays - The issue of limitation was also settled against the assessee - Hence the present appeals by the assessee as well as by the Revenue.

Held - The assessee contests the issue of limitation only - Hence the matter is not discussed on merits - From the records, it is seen that the Revenue was well aware that the disputed goods were cleared by the assessee claiming exemption from duty by classifying them under Chapter 49 - It is also seen from a letter that as per the new harmonised classification which replaced 6 digit code to 8 digit code from 28.2.2005, the goods would attract duty, as the goods fall under Chapter 48 - This shows that the Revenue was well aware that the assessee was clearing goods without payment of duty even after 28.02.2005 - To this letter, the assessee filed reply on 8.9.2008, claiming that the goods were classifiable under Chapter 49 of CETA - However, the SCN is issued on 10.11.2009 - There is no evidence indicating suppression of facts - Besides, the dispute is one of classification - There is no positive act established by the Revenue to show that the assessee suppressed facts with intent to evade payment of duty - Hence the demand raised by invoking extended limitation merits being quashed: CESTAT

- Assessee's appeal allowed: CHENNAI CESTAT

2020-TIOL-122-CESTAT-CHD

Avon Meters Pvt Ltd Vs CCE & ST

CX - CENVAT - Apellant is engaged in the manufacture of Energy Meters - Revenue allegation is that the appellants have fraudulently availed CENVAT credit to the tune of Rs.1,25,72,580/- on electronic parts and batteries without actually receiving them and without using the same in their factory in the manufacture of their final product - demand issued and confirmed along with imposition of penalties and interest - appeal to CESTAT.

Held: Suppliers of the goods were not investigated - Merely on the basis of the test report, it has been concluded that supplies of the other inputs except polycarbonate are not inputs to manufacture the final product - in most of the cases, there is an entry at Information Collection Centre (ICC) of the state VAT, which shows that the goods have passed through ICC and reached the factory of the appellant - Moreover, no cross examination of the persons whose statements have been relied upon were granted, neither their statements have been taken in compliance to the provisions of Section 9D of the Central Excise Act, 1944 - in the show cause notice although various discrepancies were found during investigation in the records of the appellant, but, the main allegation made in the show cause notice is that the input in question on which cenvat credit sought to be denied are not input for the appellant as they were not used in the manufacture of their final product, but, it is mere paper transaction - It means that if it is a paper transaction then no goods should have been received in the factory premises of the appellant but during the course of investigation, statutory records are showing that all the inputs on which cenvat credit sought to be denied were in the stock - It is not the case of shortage of inputs by the revenue - Moreover, no efforts were made to know how much polycarbonate is required to manufacture such a huge quantity of 57,76,551 electric meters and whether the quantity of polycarbonate purchased by the appellant is sufficient - This shows that the investigation is faulty and such faulty investigation cannot be rectified at appellate stage - Bench further takes note of the fact that the Revenue has not been able to bring on record the evidence to show the diversion of the goods in question - No investigation was conducted with regard to the fund flow or the money has been received back in cash by the suppliers - To sum up, a) the input on which cenvat credit sought to be denied alleging that it is a mere paper transaction were found in stock; b) It is not the case of revenue that there is a shortage of inputs; c) The procedure laid down under Section 9D of the Central Excise Act, 1944 has not been followed; d) No ascertainment with regard to how much quantity of raw material is required to manufacture the finished goods manufactured by the appellant during the impugned period; e) No inculpatory statement on behalf of the appellant or its Director were recorded; f) the purchases made by the appellant were found recorded at Information Collection Centre (ICC) established by the Punjab Government - Bench holds that the appellant has correctly taken the cenvat credit on the inputs in question, therefore, the impugned order is not sustainable - appeals allowed with consequential relief: CESTAT [para 11 to 16]

Cus - The import consignment covered by bill of entry was filed for clearance of calcium carbonate and on physical examination of cargo, it was found to have fireworks and telescopic channels - It is a matter of record that in all the appeals, the physical recovery of prohibited and mis-declared goods have not been denied - It is also a matter of record that originally the import consignment of both bill of entry dated 2 November 2015 as well as the containers which were lying in the internal container depot for which no bill of entry was filed consignments were detected to have branded counterfeit spectacles and some other goods were imported by Shri Bhupesh Tyagi of M/s Swastic Trading Company and Director of M/s Royal Décor India Pvt. Ltd. - He has been helped in this work by one Shri Sanjeev Singh Yadav and the work relating to clearance of cargo was undertaken by CHA namely Shri Sunil Kumar of M/s Mouli Worldwide Logistics - It appears that Shri Sanjeev Singh Yadav and Shri Sunil Kumar also adopted illegally means for getting the clearance of mis-declared import cargo - Shri Sunil Kumar - CHA Proprietor of M/s Mouli Worldwide Logistics (CHA), has not shown due diligence while accepting the clearance work of import consignment as he has accepted the relevant import documents, such as, invoice, packing list and bill of lading from a third party rather than meeting the importer himself - It appears from the record that Shri Sunil Kumar has never interacted with the high sea sale buyers of the goods namely Shri Sanjay Gupta - Director of M/s Sanco Industries Ltd. - When the consignment was undertaken for examination and it was detected that the import consignment has been mis-declared and contains prohibited items, such as, fireworks, he has informed Shri Sanjeev Singh Yadav and also spoke to Shri Bhupesh Tyagi, however, he did not inform the customs authorities regarding the mis-declaration of the cargo - All the appellants in their various statements have confessed to their involvement or have confessed to their misdoings which is also corroborated with the facts of the case - No new facts or evidences have been adduced to impress that the amount of penalties imposed upon the appellants have been imposed in disproportionate to their role in attempted smuggling of prohibited and mis-declared goods into the country - No infirmity found in impugned order, same is upheld: CESTAT