Arshil Enterprise Vs State of Gujarat

Whether registration granted under GVAT can be cancelled retrospectively ignoring cascading effect of legitimate transactions - NO: HC

Whether appellate authority can travel beyond the show cause notice - NO: HC

- Assessee's appeal allowed : GUJARAT HIGH COURT

2020-TIOL-762-HC-KERALA-VAT

Oceanus Dwellings Pvt Ltd Vs State Tax Officer

CX - Appellant procured duty paid MS pipes (Black) although they are not input for the appellant and availed cenvat credit thereon - Said pipes were cleared without any process on payment of duty - Audit contended that the appellants were not entitled to avail credit as the same are not inputs for their manufacturing process - SCN issued to the appellant to deny credit on MS pipe (Black) - demand confirmed along with interest and penalty - appeal to CESTAT.

Held: Bombay High Court in the case of Ajinkya Enterprises - 2012-TIOL-578-HC-MUM-CX has held that if the activity does not amount to manufacture and goods have been cleared on payment of duty, the same shall amount to reversal taken of cenvat credit on the said goods - in view thereof, as the appellant has paid the duty, the same shall amount to reversal of CENVAT credit - impugned order is, therefore, not sustainable in the eyes of law - same is set aside and appeal is allowed with consequential relief: CESTAT [para 4, 5]

- Appeal allowed: DELHI CESTAT

CX - Case of the department is that the correct value of the goods is the value which was finally assessed, therefore, the respondents were not entitle for the cenvat credit paid in excess on the basis of provisionally assessed bills of entry - department also contended that the amount of duty paid on the provisionally assessed bills of entry is deposit and not the duty actually payable as per the finally assessed bill of entry, therefore, CVD paid as per provisionally assessed bill of entry is not admissible for cenvat credit to the appellant - adjudicating authority dropped the proceedings initiated under the show cause notice, therefore, Revenue is in appeal before CESTAT.

Held: Provisional assessment is also provided under a statute i.e. under Section 18 of the Customs Act, 1962, therefore, the duty paid on the provisional assessment of Bills of entry is also with authority of law - Therefore, it cannot be said that the payment made under provisionally assessed bills of entry is a deposit and not a duty - The provisionally assessed bills of entry is also valid document for availing the cenvat credit, for the reason that under Rule 9 of Cenvat Credit Rules, only bill of entry is prescribed on the basis of which the payment of customs duty was made, therefore, bill of entry whether it is provisional of finally assessed, the Cenvat Credit is admissible - There is no bar in the law to restrict the Cenvat Credit on the CVD paid on the basis of provisionally assessed bills of entry - Therefore, merely because the Cenvat Credit was taken on provisionally assessed bills of entry, there is no reason to deny the Cenvat Credit - It is a settled law that even if any duty or excess duty is paid which is otherwise not payable, the Cenvat Credit at the recipient end cannot be disputed - order of adjudicating authority is proper and hence needs no interference - Revenue appeal dismissed: CESTAT [para 5, 6, 8]

CUSTOMS

Cus - The assessee-company imported a consignment of lace from a Thai company and filed BoE - The assessee claimed benefit of exemption provided under Notfn No 32/97-Cus - The conditions therein were that the imported goods should undergo job work process within India and the job worked goods be exported to overseas supplier who had supplied the imported goods to the job worker in India - In the present case, the job work order was cancelled - Hence the assessee re-exported the goods in as it is condition to the supplier - The Revenue opined that the conditions of the notification were not fulfilled - SCN was issued seeking to deny benefit as per the notification and for payment of duty with interest - On adjudication, the proposals in the SCN were sustained - Such findings were sustained by the Commr.(A) - Hence the present appeal.

Held - Admittedly, the subject goods were imported for purpose of carrying out job work activities and for re-exportation of the job worked goods, pursuant to the contract entered into between it and the overseas supplier - But die to some unavoidable circumstances, the contract was cancelled by the overseas supplier, resulting in the return of the goods to the supplier - It is not the Revenue's case that SCN was issued before re-export of the goods by the assessee - Hence considering that the goods were not available in India at the time of issuing SCN, the conditions of the notification are found to be complied with - Hence the demands raised on the assessee warrant being quashed, inasmuch as the duty demand along interest is confined to irregular importation of goods, which has not been specifically alleged by the Revenue - Hence the subject O-i-A is quashed: CESTAT

- Assessee's appeal allowed: KOLKATA ITAT

Cus - The limited issue to be decided is whether the appellant is required to pay cost recovery charges in terms of Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR, 2009) or payment of Merchant Overtime (MOT) charges made by the appellant is correct - In the present case, the fact is not in dispute that the appellant was allowed to pay MOT charges as per Customs (Fee for Rendering Services of /Customs officers) Regulations, 1998 till separate posting of customs officials has been made on cost recovery basis by the office of the Assistant Commissioner, Customs Bhuj Division - This clearly shows that there was no posting of separate staff for the appellant's Jetty - It is the claim of the appellant that even subsequent to the letter of Customs Division Bhuj dated 05.05.2003, no separate officer was posted to supervise the work at appellant's Jetty and even if the Regulation of HCCAR, 2009 is applicable, the same could be operative for the appellant only if separate officer is posted - From the plain reading of regulation 5(2) and 6(1)(o), Bench finds that it is clearly provided that the cost of Customs Officer shall be borne by Customs Cargo Service Provider [CCSP] only when Custom Officer is posted at the Jetty of the appellant - In the present case, there is no evidence adduced by the department that any separate officer was posted by an order of competent authority for supervising the operations at appellant's Jetty - Therefore Rule 5(2) and Rule 6(o) is not applicable in case of the appellant - Moreover, the appellant have been paying MOT charges as per the authority of the department i.e. letter dated 05.05.2009 issued by the Assistant Commissioner, Customs Bhuj Division: CESTAT [para 10]

Cus - Regulation, whether retrospective - As regard the contention of the Adjudicating Authority that HCCAR is having retrospective effect, Bench finds that Regulation 4 is only to regularize the appointment of Customs Cargo Service Providers which have been given license prior to issue of the Regulation HCCAR, 2009 - Therefore, this regulation cannot be applied retrospectively for cost recovery charges, particularly when no separate officer was posted - Moreover, even by any stretch of imagination, HCCAR, 2009 in respect of cost recovery charges is made applicable retrospectively, even then cost recovery charges cannot be recovered in terms of regulation 5(2) read with regulation 6(1)(o) unless separate officer is posted - Therefore, under any circumstances, in the facts of the present case, the demand of cost recovery charges is not sustainable: CESTAT [para 11]

Cus -Andhra Pradesh High Court in the case of GMR Hyderabad International Airport Limited has not only set-aside the demand of Cost Recovery charges but even held that Regulation 5(2) of Regulation 2009 is illegal - Therefore, considering the entire facts and circumstances of case and settled legal proposition, Bench holds that demand of Cost Recovery charges will not sustain - impugned order is set-aside and appeal is allowed with consequential relief: CESTAT [para 13, 14]

- Appeal allowed: AHMEDABAD CESTAT