Dabur India Ltd Vs Commissioner of CGST

GST - Appellate Authority has upheld the ruling of the Authority for Advance Ruling classifying Odomos, under HSN 3808 9191 of Chapter 38 of the Customs Tariff Act, 1975 Aggrieved, the Petitioner has prayed that a writ in the nature of mandamus be issued for classification of the product Odomos as medicine under heading no. 3004 of the Customs Tariff Act, 1975.

Held: Courts have consistently adopted the "common parlance test" as the most reliable standard for interpreting terms and entries in taxing statutes - This is of course subject to various exceptions where the statutory text is completely contrary to the "common parlance" context - The common parlance test is also considered an extension of the established canons of statutory interpretation of taxing statutes - materials in the records before the authorities below corroborate the fact that the petitioners pitched the product in their sale material and advertisements as a mosquito repellent - product is not normally prescribed as a medicine by medical practitioner as a drug - There is no restriction on sales and the product is sold on demand at the counters in shops and establishments inasmuch as sales are not restricted to chemists/druggists alone - product is a mosquito repellent by virtue of its mosquito repelling characteristics and is so understood in common parlance - The dealers identify and sell the product as a mosquito repellent and the customers purchase the same and use it in the like manner - In the wake of the said findings the common parlance test or the market identity test for classification of the product was satisfied - The conclusion that the product is a mosquito repellent is a logical sequitor of the above process of reasoning - holding of the Appellate Authority that the active component of the product is DEET and that NNDB is its improved version cannot be called perverse - The chemical composition test created by the Supreme Court has been correctly applied by the Appellate Authority to construe the product as a mosquito repellent - For like reasons, contention of the respondent / assessee cannot be viewed with favour by this Court - Under rule 3 of the general interpretation rules, resort cannot be had to a general entry called "others" or any other heading when the product clearly falls under a specific classification heading - A perusal of the classification heading no. 3808 9191 shows that the product in question is a neat fit into the description of products laid down therein - No laboured process of reasoning is required since the heading no.3808 9191, is clear as daylight - invocation of the general entry called "others" by the petitioner is clearly misconceived, since the product in question is covered by a specific description in the heading under which the product has been classified - Court is not persuaded to take a different view in the light of the preceding discussion: High Court [para 20, 30 to 33, 40, 45, 47, 49, 50]

GST- Article 226 of the Constitution of India - Judicial Review - Judicial review is confined to the decision making process and is not directed against the decision itself - The court of judicial review examines the manner in which the decision was made - In judicial review the Court scrutinizes the correctness of the decision making process and not the decision itself - While exercising powers of judicial review, the Court has to find whether the decision making authority acted within its jurisdictional limits, committed errors of law, adhered to the principles of natural justice or acted in breach thereof, and whether the decision is perverse or not - The powers of judicial review are thus distinct from powers of an appellate court - The order of Appellate Authority can be judicially reviewed and not appealed against - Courts exercising judicial review do not ordinarily substitute the decision of the authority by their judgment - Merely because two views are possible, a court sitting in judicial review shall not exercise its discretion in favour of an alternative view to that of the authority - Court finds that the petitioners were given full opportunity of hearing before the authorities below - The Appellate Authority as well as Original Authority have adhered to the principles of natural justice while deciding the controversy - The order of the Appellate Authority assailed in the instant writ petition reflects due application of mind to the relevant facts and material in the record and is supported with cogent reasons - No arbitrariness or perversity in the findings of the Appellate Authority could be pointed out during the course of arguments - In fact, two views are not even possible in the facts of this case - This is not a fit case to judicially review the impugned order - Consequently, Court declines to exercise its discretionary jurisdiction under Article 226 of the Constitution of India in favour of the petitioner - order passed by the Appellate Authority is liable to be upheld and stands affirmed accordingly Petition dismissed: High Court [para 53 to 58]

- Petition dismissed: ALLAHABAD HIGH COURT

2020-TIOL-169-CESTAT-DEL

Easy Bill Ltd Vs CCE

ST - The assessee-company is engaged in providing an efficient and easily accessible payment collection service for bill issuers for collection of payments from the customers who choose to settle bills from bill issuer over the counter - Based on specific intelligence, the assessee's records were checked whereupon it was observed that the assessee entered into Retail Agent agreements with various retailers for providing licenses for opening shops in its names and that the assessee collected service fee from them - Such service fee was held to be taxable under Franchise Service u/s 65(47) of the Finance Act 1994 - SCNs were issued to the assessee on grounds that the assessee evaded payment of service tax - Duty demands were confirmed with interest and penalty for recovery of such amounts.

Held - It is seen from the agreement that it is to be on principal to principal basis - Perusal of the section reveals the subsequent portion explains the term principal to principal to mean that the agreement is not intended to constitute a partnership, joint venture or employer employee relationship between the company and the retail agent - Hence the use of the phrase principal to principal basis cannot be read for the arrangement between the assessee and its agents to be called as franchise service - The payment in question is not for the consideration towards purchase of representational rights by the agent from the assessee - The agreement is that payment to be made by the assessee to the agent per bill basis - This particular term of the agreement is against the intent of what can be called as Franchise service - Hence the adjudicating authority erred in interpreting the term franchise service and did not observe the actual intent of the agreement involved - Hence the O-i-O is not sustainable: CESTAT

- Assessee's appeals allowed: DELHI CESTAT

2020-TIOL-31-SC-CUS

Granules India Ltd Vs UoI

Cus - Import of Acetic Anhydride under Advance Licence Scheme in December 1993 - Appellant claimed clearance of the consignment free of import duty in terms of Customs Notification nos. 203/1992-Cus, 204/1992-Cus, both dated 19.05.1992 - both notifications were amended by a Notification no. 183/1993-Cus dated 25.11.1993, by which the subject imports became liable for duty, the exemption having been withdrawn - Notification dated 25.11.1993 was further amended by another clarificatory Notification no. 105/1994-Cus dated 18.03.1994 permitting the import of the chemical Acetic Anhydride without customs duty subject to certain terms and conditions - such clarificatory notification was necessitated to obviate the difficulties faced by the importers like the appellant, who had imported the chemical under the advance licence issued by the Director General of Foreign Trade prior to the amendment Notification no. 183/1993-Cus dated 25.11.1993 - Appellants claim regarding exemption was considered favourably in respect of three other consignments under Bill of Entry No.312 dated 12.09.1993, Bill of Entry No.28 dated 10.02.1994 and Bill of Entry No.27 dated 09.02.1994 - In pursuance of the show cause notice, the appellant was held liable to duty by order dated 12.2.1998 with regard to the consignments under three Bills of Entry bearing nos. 290, 291 and 300 dated 01.12.1993, 01.12.1993 and 14.12.1993 respectively though these were also under the same advance licence - respondents while considering the reply to the show cause notice and fixing liability for payment of customs duty did not make any reference to their notification dated 18.03.1994 - Commissioner(A) rejected the appeal leading to the importer filing Writ petition - High Court opined that no mandamus for exemption could be issued; that the consignments were admittedly imported after 25.11.1993 and before the clarificatory notification dated 18.03.1994, therefore, there was no arbitrariness on part of the respondent - Rejecting the plea made in review petition, the High Court opined that since the appellant did not produce the clarificatory notification along with the writ petition and neither were the respondents aware of the clarificatory notification, the appellant was not entitled to any relief - aggrieved by these orders of the High Court, appeal filed before Supreme Court - Appellant submits that that denial of exemption to the consignment actually imported after 25.11.1993 under the advance licence obtained prior to 19.05.1992 notwithstanding the clarificatory notification dated 18.03.1994 holding the appellant liable for customs duty is completely unsustainable; that mere failure to enclose a copy of the notification could not be a ground for denial of relief; that denial of exemption in the facts and circumstances of the case in view of the statutory notifications were per se arbitrary.

Held: The fortuitous circumstance that part of the consignment was actually imported prior to 25.11.1993 and the rest subsequent thereto is hardly relevant in view of the clarificatory notification dated 18.03.1994 that the exemption would continue to apply subject to fulfilment of the specified terms and conditions - It is unfortunate that the High Court failed to follow its own orders in a similar matter [Shri Krishna Pharmaceuticals Limited vs. Union of India refers] - The High Court further gravely erred in holding that the authorities of the State were also unaware of the clarificatory notification and neither did the appellant bring it on record - The State stands in a category apart, having a solemn and constitutional duty to assist the court in dispensation of justice - In our considered opinion it is absolutely no defence of the State authorities to contend that they were not aware of their own notification dated 18.09.1994 - The onus heavily rests on them and a casual statement generating litigation by State apathy cannot be approved - impugned orders are, therefore, held to be unsustainable and are set aside - appeals are allowed: Supreme Court [para 8 to 11]

- Appeals allowed: SUPREME COURT OF INDIA

2020-TIOL-166-CESTAT-BANG

Charitable Education Society Vs CC

Cus - Import of two aircrafts - Appeal before CESTAT against the impugned order whereby the Commissioner has re-determined the value of the goods declared as USD 27,520 at 1.60 crore CIF and ordered confiscation of the same under section 111(d) & (m) of the Customs Act, 1962 [Act] and allowed the redemption of the goods on payment of fine of Rs.3 lakhs and duty at appropriate rates, also imposed penalty of Rs.1.50 lakh on the importer - Revenue before CESTAT on the ground that the redemption fine and penalty imposed by the Commissioner is less than even 10% of the reassessed value of Rs.1.60 crore and has prayed for enhancing the redemption fine and the penalty

Held: The Department has re-determined the value only on the basis of alleged contemporaneous import through NhavaSheva where the value was determined at Rs.87.35 lakhs - further, at the time of making the statement, the Chairman of the Institute produced original invoice No.1709 dated 11.10.2008 from M/s.J&S Aviation showing total value of the goods at USD 201025 equivalent to Rs.98.90 lakhs - further, the Adjudicating Authority has admitted that there is a difference in the year of manufacture of the aircraft imported in NhavaSheva compared to the aircraft imported by the appellant -further, the appellant submitted that identical aircraft imported by M/s. Global Aviation, Bhopal and the Department fixed the value at Rs.60 lakhs but the Department did not make any inquiry about the said import and simply relied upon the alleged contemporaneous import which was not identical because the said contemporaneous import was made under Risk Management System without examination and on NIL rate of Customs duty -further, once the original invoice value has come on record wherein it is clearthat the value of aircraft imported under Bill of Entry No.240130 dated 5.2.2009 is USD 201025 which is equivalent to Rs.98.90 lakhs - no reason found for the Revenue to reject this transaction value - in view of the above, the re-determined value of Rs.1.60 crore is not the correct valuation whereas the Customs duty should be assessed as per the invoice value of USD 201025 equivalent to Rs.98.90 lakhs - therefore, the impugned order is set aside and remanded back to the Customs Authorities to re-assess the value on the basis of original invoices placed on record -as far as imposition of redemption fine of Rs.3 lakhs and penalty of Rs.1.50 lakh is concerned, the same is found appropriate and does not require any modification -accordingly, both the appeals are disposed of on the above terms : CESTAT [para 6, 7]

- Appeals disposed of: BANGALORE CESTAT