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SERVICE TAX
2020-TIOL-632-CESTAT-HYD
Sravan Shipping Services Vs CCE, C & ST
ST - As per Rule 3(2) of ST Credit Rules, 2002, if the provider of output service opts not to maintain separate accounts, he shall utilise credit only to the extent of 35% of service tax payable up to September 2004 - After September 2004, in terms of Rule 6(3)(i) of CCR 2004, they could utilise CENVAT Credit to the extent of only 20% of the service tax payable up to 31.03.2008 and after 01.04.2008, in terms of Rule 6(3)(c) of CCR, 2004, the assessee not maintaining separate account had to pay an amount equal to 8% of the value of exempted services - It appeared that the appellant was not maintaining separate records and had utilised CENVAT Credit in excess of 35% up to September 2004, 20% of service tax payable from September 2004 to 31.03.2008 and in excess of 8% of the value of exempted services from 01.04.2008 - SCN was issued for recovery of credit irregularly utilised - Adjudicating authority confirmed an amount of Rs. 55,43,101/- as irregularly availed CENVAT Credit utilised by the assessee, penalty was also imposed - appeal to CESTAT.
Held: Commissioner is required to examine the issue from the point of view of the appellant's eligibility to avail the CENVAT Credit and utilise it after 01.04.2008 - If the appellant is so eligible, the only mistake of the appellant is utilising the CENVAT Credit well in advance of the date when he was not entitled to utilise it - Accordingly, interest for the differential period may have to be calculated and recovered - Commissioner should also examine the claim that there was no demand in terms of revised Rule 6(3)(c) of CCR, 2004 - Matter remanded: CESTAT [para 7, 9]
- Matter remanded: HYDERABAD CESTAT
2020-TIOL-631-CESTAT-MAD
Southern Digital Screenz India Pvt Ltd Vs CGST & CE
ST - Appellants are engaged in providing leasing of digital cinema equipments to theatres - Department was of the view that such activity would fall under 'supply of tangible goods' service and liable to service tax - SCNs were issued and demands confirmed with penalty and interest - aggrieved, appeal filed before CESTAT.
Held: Said issue is already analyzed and decided by the Tribunal in the case of Qube Cinema Technologies Pvt. Ltd. - 2018-TIOL-2239-CESTAT-MAD wherein it is held that supply of goods involves transfer of right of possession and effective control on such goods and, therefore, would fall under the category of deemed sale - following the said decision, impugned order cannot sustain - appeals allowed with consequential relief: CESTAT [para 4, 5]
- Appeals allowed: CHENNAI CESTAT
CENTRAL EXCISE
2020-TIOL-630-CESTAT-ALL
Phoenix International Ltd Vs CCE
CX - If there are no allegations that the price was not the sole consideration for the sale and if there are no allegations that the buyers were not at arm's length and if there are no allegations that there was flow back of money from the buyers to the assessee, then revenue cannot reject the price declared by the appellant - In the present case there were no allegations that the price of the goods was not available - In fact, the goods were cleared by the appellant during the relevant period with total assessable value of Rs.28,99,988/- as stated in the show cause notice - There were no allegations in the show cause notice that price was not sole consideration for sale and there were no allegations that there was any flow back of money from the buyers to the appellant, therefore, Bench holds that there are no grounds for holding that the appellants have undervalued their clearances during the period from August, 1996 to December, 1996 - No merit in the allegations raised in the said show cause notice dated 21.02.1997, hence impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 5, 6]
- Appeal allowed: ALLAHABAD CESTAT
2020-TIOL-629-CESTAT-KOL
Philips Carbon Black Ltd Vs CCGST & CE
CX - Central Excise Revenue Audit (CERA) was conducted at the Appellant's premise (Durgapur) when it was noted that the ISD invoices issued by the Head Office to the Appellant unit was defective, as these did not contain the description of the input service, name of the input service provider, etc. - Pursuant to the CERA Audit, the Appellant was served a Show Cause notice dated 05/09/2006 seeking to disallow the CENVAT credit on the ground that the ISD invoices were defective having been issued without the necessary particulars - A similar Show Cause notice dated 19/04/2007 was served on the Appellant unit - The said notices were adjudicated and confirmed against the Appellant - In appeal before this Tribunal, these cases were remanded to the adjudicating authority vide Final Order No. 76842/2018 dated 13/06/2018 - The present appeal concerns Show Cause notice dated 02/07/2008 issued to the Appellant specifically in respect of the five debit notes issued by Delicious Trade Links Private Limited and seeks to disallow CENVAT credit of Rs.41,40,343/- - As the lower authorities confirmed the demand, appeal filed before CESTAT.
Held: It is stark that the invoices issued by Delicious Trade Links Private Limited, credit for which is disputed by the Revenue Department, forms part of ISD invoice dated 31/08/2005 and parallel proceedings i.e. double demand - In the present facts, the Department had conducted an audit of the Appellant unit (pre- 2006) and scrutinized the ER-1 return filed for the month of August 2005 wherein the Appellant had availed CENVAT credit in respect of the said invoices issued by Delicious Trade Links Private Limited, and this fact is also recorded in Show Cause notice dated 06/09/2006 - Bench finds that in this case the entire facts were within the knowledge of the Revenue Department and there is no suppression of material facts from the Department - On the contrary the relevant facts and information were known to the Revenue Department by the ER-1 filed and during course of its audit specifically concerning CENVAT credit - Despite this, the Revenue Department issued the subsequent Show Cause notice no. 36/JC/ST/Bol/08 dated 02/07/2008 and which led to duplicity of demand and these proceedings - The demand is for longer period and is thus hit by limitation - The impugned order is set aside and Appeal is allowed: CESTAT [para 11, 12]
- Appeal allowed: KOLKATA CESTAT
CUSTOMS
2020-TIOL-628-CESTAT-DEL
Dinesh Bansal Vs CC
Cus - The issue in these appeals is whether the 59 (Ten Tola) gold bars recovered/seized from the appellant Shri Dinesh Bansal, have been properly explained in discharge of onus under Section 123 of Customs Act, 1962 or the impugned order confiscating the 59 gold bars alongwith the vehicle, with further order imposing penalty on Shri Dinesh Bansal, Mr. Suresh Soni, The Managing Director of Lawat Jewellers Pvt. Ltd. (Seller), and penalty on Lawat Jewellers Pvt. Limited, under Section 112 (a) & (b), whether the same is justified - The appellant, Mr. Dinesh Bansal, who was in possession of 59 gold bars, from the very time of interception and seizure, in his statement recorded under Section 108, soon thereafter, stated that he has purchased the gold bars from M/s.Lawat Jewellers Pvt. Ltd., Jaipur on the same day - This fact has been corroborated by Shri Suresh Soni, Managing Director of M/s.Lawat Jewellers Pvt. Ltd., wherein he affirmed having sold the 59 gold bars in question to the appellant and also produced the invoices - He also stated that the gold bars were delivered by their employee, Shri Parmeshwar in the premises of Corporation Bank, Jaipur on 10.09.2002 - Further, the officials of Corporation Bank have also affirmed of having delivered the gold bars being 380 nos. on 10.09.2002 to M/s.Lawat Jewellers Pvt. Ltd. - In the course of investigation, it has come out that sometime in 2002, CSFB has set up their own mint in Switzerland and are also supplying gold bars under their brand name – 'CREDIT SUISSE' - So far further investigation done by Department resulted into the receipt of purported letter dated 10.12.2002 by fax from CSFB, Zurich by Corporation Bank, Mumbai - This letter on the one side states that the CSFB has been supplying South African Origin gold from Rand Refinery and Harmony Refinery and thereafter, have vaguely stated that CSFB did not have stock of South African gold from July, 2002 and has supplied 'Credit SUISSE' brand gold from their own mint in Switzerland - This letter only creates a presumption, but is not conclusive - This letter supports the stand taken by the officials of Corporation Bank, Jaipur and M/s. Lawat Jewellers, Jaipur that they have been receiving gold bars of South African origin from CSFB, which they have been selling to traders/dealers including M/s. Lawat Jewellers - Further, the bank officers themselves in Invoice for delivery of gold bars to M/s. Lawat Jewellers, have mentioned 'Harmony' brand, at the request of Shri Suresh Soni at the time of delivery - Thus, it is evidently clear that the subsequent change of statement of the bank officers is under undue influence exerted by Revenue Officers - Said letter issued by CSFB through fax, is not a reliable piece of evidence, as the person issuing the said letter on behalf of the CSFB has not been examined nor the authenticity of the fax message is established, under known process of law - Accordingly, the appellant, Shri Deepak Bansal has proved the source of acquisition and also the source of the source of acquisition - However, the mandate of Section under Section 123 (2) of Customs Act requires a person in the possession of gold bars, having foreign markings, to only prima facie establish the proof of licit acquisition, and is not require to prove source of source - Revenue has not been able to establish its allegation that the seized gold is different from the gold delivered by the Corporation Bank on 10.09.2002 to M/s. Lawat Jewelers - Accordingly, the impugned orders are set aside: CESTAT
- Appeals allowed: DELHI CESTAT
2020-TIOL-627-CESTAT-KOL
Manidipa Debroy Chowdhury Vs CC
Cus - On 23.06.2017 Smt. Manidipa Deb Roy Choudhury (Appellant No. 1) while travelling to Kolkata by Air India Flight at around 10.30 Hrs. was intercepted by the CISF staff during Security Check in course of frisking in the ladies booth of Security Hall area at Agartala Airport - Appellant No. 1 was wearing 18 Nos. Gold Bangles in her both hands - CISF Officers suspected that the said bangles were smuggled gold converted into ornaments - Appellant no. 1 during the interrogation by the CISF Officers stated that she was not the owner of the Bangles and the same were given to her by somebody to be carried to Kolkata for delivery - CISF Officer handed over the appellant no. 1 with gold bangles to the Divisional Preventive Force of Agartala Customs Division on the same day i.e 23.06.2017 - Customs authorities seized the gold bangles under a reasonable belief that the gold bangles were smuggled into India and it violated the Customs Act, 1962 - The appellant no. 1 was arrested - in her statement, the appellant stated that the owner of the gold bangles is Smt. Rama Choudhury (Appellant No. 2), Mother-in-Law of the appellant no. 1, who claimed the gold before the Customs Authorities - SCN dated 15.11.2017 was issued proposing absolute confiscation of the seized gold and also to impose penalties on various persons including the appellants - Adjudicating authority ordered absolute confiscation of the 18 nos. of gold bangles totally weighing 1034.28 Grams, valued at Rs. 28,80,471.00 and also imposed penalty of Rs. 1,00,000/- each on the appellant no. 1 and appellant no 2 - as the Commissioner(A) rejected their appeals, both the appellants are before the CESTAT against imposition of penalty as well as appellant no. 2 claiming the seized gold.
Held: It is noticed that in reply to Show Cause Notice, the appellant no. 2 submitted photocopy of the Invoices of one "Ram Thakur Jewellery" to substantiate the purchase documents and claimed the ownership of the gold - It is seen from the impugned Order that the Customs Officers during verification found that there is no existence of the shop "Ram Thakur Jewellery" - The contention of the department is that the Invoices produced were fabricated and an afterthought to escape the clutches of law - The Agartala Customs Division visited the related Jewellery shop i.e. Ram Thakur Jewellery - As per the Investigation Report, there was no shop titled as "Ram Thakur Jewellery" in the area, however, one of the Shop Keepers in the area stated that there was a shop titled as Ram Thakur Jewellery which has lost its existence 15 years back, and that he is not aware of the whereabouts of the then owner of the shop of Ram Thakur Jewellery - Shri Jawahar Banik - It may be noted that the Purchase documents indicate the purchases undertook in 1989-1991, i.e. about 30 years ago - According to the local people, there was an existence of Ram Thakur Jewellery 15 years back - It appears that the Investigating Officer had not taken any pains to enquire about the existence of "Ram Thakur Jewellers" from the local market or with the municipal authorities concerned whether there was any shop titled "Ram Thakur Jewellery" in 1988-89 - Thus, the said documents cannot be brushed aside as after thought - In effect, the appellant produced the documents for purchase of the said seized gold which was not bearing any foreign mark, hence, the appellant discharged the onus under the provision of the law regarding the acquisition of the gold - Bench finds that the entire case was made out by the department as smuggled gold on the basis of conjecture and surmises that the seized gold bangles were made out of smuggled gold converted into ornaments - It appears that the Investigating Officer in the present case had merely proceeded on the basis of the initial statement and have not examined the details thoroughly - They have not investigated even the Invoices submitted by the appellants with the proper local authorities - In such situation, the seizure of gold bangles worn by the Appellant No. 1, cannot be sustained - gold bangles cannot be held to be of smuggled nature, hence, the confiscation of the gold bangles and imposition of penalties are not justified - impugned order is set aside and appeals are allowed with consequential relief: CESTAT [para 8, 9, 11, 14]
- Appeals allowed: KOLKATA CESTAT
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