| SERVICE TAX
2020-TIOL-780-CESTAT-BANG Aditya Birla Minacs Worldwide Ltd Vs CST
ST - Rule 5 of CCR, 2004 - Notification No.12/2005-ST dt. 19/04/2005 - Requisite declaration as required under condition of Notification has been filed on 31/05/2005 and revised on 16/06/2005 on account of some inadvertent error and the same has been placed on record - filing of declaration is a procedural requirement and the delay, if any, in filing the same cannot be used for denying the substantive benefit to the appellant when the appellant is otherwise entitled to the benefit under the said Notification No.12/2005-ST - Commissioner(Appeals) has laid importance on procedural requirements without appreciating the fact that the input services have been received by the appellant and used for providing output services, which were exported out of India and thus fulfilling the substantive requirement under Export of Services Rules and the Notification – Further, rebate claim for the period October 2005 to March 2006 was rejected on the ground of time bar as the same has been filed beyond one year as prescribed under Section 11B of Central Excise Act, 1944; but this time limit of Section 11B is not applicable in the present case because the said notification does not provide for any time limit within which the rebate claim should have been filed - Rejection of rebate claims is not sustainable in law – Impugned order set and appeal allowed with consequential relief: CESTAT [para 6, 7]
- Appeal allowed: BANGALORE CESTAT
2020-TIOL-778-CESTAT-BANG
Chetana Consultants Vs CCT
ST - From the very beginning, the stand of the appellant is that they are rendering the services of soil testing, survey and map making services, site formation and clearance excavation, earth moving and demolition services to the prime consultant who has paid the service tax and, therefore, the appellant cannot be asked to pay the service tax once again on the same service - This contention of the appellant is backed by the Trade Notice dated 4.7.1997 - Further, Tribunal in a catena of decisions has consistently held that once the contractor pays the service tax then subcontractor need not pay the service tax as it will amount to double taxation - The ratio of these decisions has not been considered by the Commissioner who only relied upon the Circular dated 23.8.2007 which is issued much after the period of dispute - Other contentions of the appellant regarding the reimbursable expenses and export of service have also not been considered and no findings have been returned by the Commissioner in the impugned order - In the facts and circumstances of this case, alleging suppression with an intent to evade payment of tax is not justified - Since the Commissioner has not considered various certificates/letters filed by the appellant from various prime consultants, this case needs to be remanded back to the adjudicating authority with a direction to pass a de novo order after considering all the documentary evidence which may be produced by the appellant in support of their claim: CESTAT [para 6, 6.1]
- Matter remanded: BANGALORE CESTAT
CENTRAL EXCISE
2020-TIOL-966-HC-KAR-CX
West Coast Optilinks Vs CCT
CX - Tribunal in Revenue appeal had held that in view of the fact that request for provisional assessment had been denied by the department, the refund claim ought to have been filed in time and not having done the same, the same were barred by limitation - assessee is in appeal before High Court and contends that in view of the Board Circular F.No. 390/Misc./163/2010-JC dated 17.08.2011 fixing monetary limits for filing appeal before CESTAT, since the refund amount involved was Rs.1,81,754/- i.e. below Rs.10 lakhs, the Revenue appeal ought not to have been entertained inasmuch as it was not maintainable and the Tribunal ought to have dismissed it on that ground itself without adjudicating the appeal on merits.
Held: By Circular dated 17th August 2011, the monetary limit fixed for the Appellate Tribunal had been restricted to Rs.5 lakhs and above and this came to be enhanced to Rs.10 lakhs by Circular dated 17th December 2015 - CBEC had vide Instruction dated 1st January 2016 clarified that Circular dated 17th December 2015 fixing the monetary limits is applicable to all pending appeals before CESTAT and High Courts - Therefore, an appeal which was pending as on 1st January 2016 is to be governed by the revised monetary limits - since this aspect was not noticed by the Tribunal in the instant case, they could not have entertained the Revenue appeal and the same was required to be dismissed as the quantum of refund in the instant case and which was subject matter of appeal was Rs.1,81,754/- - moreover, all the refund orders relate to one transaction which the assessee had with BSNL, hence denying the benefit would be definitely discriminatory inasmuch as department cannot take a different stand - appeal of the assessee, therefore, deserves to be allowed: High Court [para 11, 12]
- Appeal allowed: KARNATAKA HIGH COURT
2020-TIOL-965-HC-MAD-CX
DLF Utilities Ltd Vs UoI
CX - Petitioner has challenged the impugned Guideline dated 6.4.2015 bearing of the 1st respondent - The impugned guidelines seeks to restore earlier Guideline dated 27.2.2009 - As a result of the impugned Guideline, the petitioner was required to procure High-Speed Diesel Oil (HSD) on payment of excise duty during the period in dispute between 1.4.2015 and 15.02.2016 -Since the petitioner had procured HSD Oil from Indian Oil Corporation Ltd. (IOCL) without payment of excise duty between 1.4.2015 and 3.10.2015, the 2nd respondent, the Development Commissioner, MEPZ, Chennai has issued the impugned SCN dated 30.3.2016 calling upon the petitioner to pay a sum of Rs.11,13,78,979/- in terms of Rule 27(3) of Special Economic Zone Rules, 2006 read with Section 26 of the Special Economic Zones Act, 2005 -Petitioner has, therefore, challenged the aforesaid show cause notice dated 30.3.2016.
Held: [para 59, 61, 62, 65, 66, 69 to 74, 76]
+ Under section 26(1)(c) of the Act, every Developer and the entrepreneur is entitled for exemptions, drawbacks and concession from any duty of excise, under the Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or any other law for the time being in force on goods brought from Domestic Tariff Area into a Special Economic Zone or Unit, to carry on "authorised operation " by the Developer or entrepreneur.
+ The liability to pay excise duty is on the manufacturer and not the buyer though burden of such duty is passed on to the buyer. There is no provision under the Central Excise Act,1944 by virtue of which excise duty is payable on reverse charge basis by the buyer. Therefore, interpretation of the provision of Special Economic Zones Act, 2005 cannot be in direct violation of the provisions of the Central Excise Act, 1944. Duty if any, is payable only by the manufacturer.
+ Further, the exemption under Section 26(1) is subject to the restriction in section 26(2) of the Act. The phrase used in section 26(2), is "the Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions, concessions, drawback or other benefits shall be granted to the Developer or entrepreneur under sub-section (1)".
+ Supplies from the Domestic Tariff Area to a Unit or Developer for their authorized operations are eligible for export benefits as admissible under the Foreign Trade Policy.
+ Thus, the DTA supplier is not only entitled to the exports benefits under the Foreign Trade Policy in terms of Rule 23 of Special Economic Zone Rules, 2006 but was also entitled to clear the goods under bond or claim rebate of tax/duty paid by it in terms of Rule 30 of the aforesaid Rules.
+ Procurement of HSD by the petitioner from IOCL did not qualify as an import within the meaning of Section 2(o) of the Special Economic Zones Act, 2006. Therefore, there cannot be a demand for customs duty and interest thereon on the excise duty foregone by IOCL at the time of clearance of HSD from its factory/refinery to the petitioner under section 28 or 28AA of the Customs Act, 1962.
+ Further, Rule 47(5) of the Special Economic Zones Rules, 2006 has been inserted vide GSR 772 (E) dated 5.8.2016 with effect from 8.8.2016. As per the above provision, "Refund, Demand, Adjudication, Review and Appeal with Regard to Matters Relating to Authorised Operations under the Special Economic Zones Act, 2005, transactions, and goods and services related thereto, shall be made only by the jurisdictional Customs and Central Excise Authorities in accordance with the relevant provisions contained in the Customs Act, 1962, the Central Excise Act, 1944 and the Finance Act, 1994 and the rules made thereunder or notification issued thereunder”.
+ The impugned show cause notice is also liable to be declared as without jurisdiction. Even if it is assumed that the clearance of HSD Oil was without the authority of law by the DTA supplier (M/s IOCL), only the jurisdictional officer concerned under the Central Excise Act, 1944 within whose jurisdiction IOCL is registered is competent to issue a show cause notice to recover the excise duty under section 11A of the Central Excise Act, 1944.
+ Therefore, on this count also the impugned show cause notice issued by the 2nd respondent is unsustainable and the demand proposed is liable to be quashed.
+ As such, the Development Commissioner appointed under section 11 of the Special Economic Zones Act, 2005 is neither a "proper officer" within the meaning of Section 2(34) the Customs Act, 1962 nor a Central Excise Officer for the purpose of Section 11A of the Central Excise Act, 1944, to demand excise duty vide impugned show cause notice.
+ Moreover, the demand proposed is revenue neutral inasmuch as the duty paid by the supplier is available by way of rebate under the provisions of the Central Excise Rules, 2002.
+ Even otherwise in view of the consistent policy of Government to allow procurement of goods from 2012 vide 2012 Guidelines dated 21.3.2012 and thereafter 2016 Guidelines dated 16.09.2016, denial of the benefit of procurement of goods without payment of duty is unsustainable under the impugned 2015 Guidelines dated 6.4.2015.
- Writ petitions allowed: MADRAS HIGH COURT
2020-TIOL-777-CESTAT-MUM
Softesule Pvt Ltd Vs CCE
CX - Short issue is whether physician samples manufactured by appellant on job work basis and sold on principal to principal basis to customers should be valued as per Rule 4 of the Valuation Rules, 2000 by adopting the pro rata value of the trade pack of the medicaments or in terms of rule 8 of Valuation Rules, 2000.
Held: Tribunal in the case of Medispray Laboratories Pvt. Ltd. - 2017-TIOL-916-CESTAT-MUM , following the ratio laid down in Sun Pharmaceuticals Inds. Ltd.'s case - 2016-TIOL-10-SC-CX held that Rule 4 of the Valuation Rules, 2000 will not apply to the aforesaid situations - in view of the aforesaid precedent, impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 6, 8]
- Appeal allowed: MUMBAI CESTAT
CUSTOMS
2020-TIOL-791-CESTAT-DEL
Kanak Exports Vs CC
Cus - The assessee, engaged in exporting Gold jewellery and Gold Medallion, did not make a declaration in the shipping bills regarding its intent to claim refund of service tax, during the relevant period - Hence the assessee sought an amendment in the 31 shipping bills for stating therein that it should be granted rebate by way of refund of service tax paid on the specified services in terms of paragraph 2 of the notification - The assessee had filed an application u/s 149 of the Customs Act, seeking amendment of 31 shipping bills - Such application was rejected on grounds that documentary evidence ought to have been made available at time of export - Such findings were sustained by the Commr.(A) - Hence the present appeal.
Held - The Commr.(A) rejected the amendment application on grounds that the assessee did not produce any documentary evidence about receiving, using receipt of services and tax paid on services and so the requirement was not met - The Commr.(A) failed to distinguish the requirements of paragraph 2 of the notification and paragraph 3 of the notification - The documents which the Commr (A) sought from the assessee are in relation to the requirements of paragraph 3 of the notification and in fact even the information sought in the format is a format contemplated in paragraph 3 of the notification - Paragraph 2 of the notification required a declaration to be made in the shipping bills regarding the intention to claim rebate either under paragraph 2 or paragraph 3 of the notification - Neither the Adjudicating Authority nor the Commr.(A) have mentioned about any requirement of paragraph 2 of the notification not having been met by the assessee - For applicability of section 149 of the Customs Act relating to amendment of documents, all that has to be seen is that documentary evidence should have been in existence at the time the goods were exported - There is no document which was not in existence at the time the goods were exported for the simple reason that all the assessee was claiming by the amendment was incorporation of the declaration that the assessee intended to avail the rebate under paragraph 2 of the notification - It is clear from the nature of the amendment that was sought by the assessee in the BoE and also from the provisions of section 149 of the Customs Act and the notification dated 29 June, 2012 that the amendment sought by the assessee in the shipping bills of entry was liable to be allowed since only a declaration was sought by the assessee that rebate should be granted by refund of service tax paid on the specified services under paragraph 2 of the notification - Hence the subject O-i-A merits being set aside: CESTAT
- Assessee's appeal allowed: DELHI CESTAT
2020-TIOL-779-CESTAT-MAD
Ravi Sadanand Vs CC
Cus - Smuggling of Red Sander logs - Adjudicating authority ordered confiscation of the Red Sanders, cabbage (which was destroyed since found rotten and unfit for consumption) and Ashok Leyland Truck - penalties imposed on six persons including the two appellants - appeal to CESTAT.
Held: Original Authority has very succinctly extracted the whole scheme of the attempt to smuggle red sanders by the appellant in connivance with the other occupants of the car - These findings have not at all been challenged - There is also nothing on record to even suggest that the statements of the appellants have been retracted and nor is there any attempt to deny their presence at the eventual spot on the eventful day - Adjudicating Authority has also traced the owner of the truck/lorry that was carrying the contraband and arrived at the conclusion that the same was with a fake registration number to mislead the investigation - This finding also stands unchallenged - appellants having accepted in their voluntary statements about their involvements have not brought anything on record to doubt the veracity of the findings or conclusions drawn by the Adjudicating Authority - Even though it has all along been argued that they did not claim ownership of either the truck or the contraband that was seized, they have not submitted any documentary evidence about their role/activity at the time, date and place when the interception took place - Having accepted in their voluntary statements as to their role, they prevented further investigations into the issue and, therefore, on a much later date they cannot turn around to say that their statements were not voluntary - Moreover, it is not a case where the penalty was levied based only on their statements since Revenue has linked each and every chain in the whole loop of the master plan to smuggle the contraband by identifying the involvement and role of each and every person whereas nothing is brought on record by the appellants to dislodge even a small link in the above chain - No reason to interfere with the meticulous findings of the Original Authority as upheld vide impugned Order-in-Appeal - Appeals dismissed as being devoid of merit: CESTAT [para 10.3, 10.5, 10.6, 10.7, 11]
- Appeals dismissed: CHENNAI CESTAT
2020-TIOL-776-CESTAT-MUM
Nathi Mal Rugan Mal Vs CC
Cus - Appellant imported 'Khubkalan (Sisymbriumlrio)' [Hedge Mustard seed] and sought classification under heading no. 1211 9099 but same was re-determined by the Customs authorities under heading no. 1211 9019 with duty liability of Rs. 2,10,579/- Attendant upon this revised classification is the restriction on import under ITC (HS), 2017, Schedule I of the Import Policy, therefore, the goods were confiscated and directed to be destroyed at the cost of the importer besides imposition of penalty of Rs.2 lakhs u/s 112(a) of the Customs Act - Commissioner(A) confirmed order of confiscation but set aside the order of destruction - aggrieved, appellant is before CESTAT contending that absolute confiscation is not warranted.
Held: Appellant, admittedly, is a trader and the import of seeds, covered by the revised heading of the First Schedule to the Customs Tariff Act, 1975, is restricted - The existence of such restriction, from the elaboration in the ITC (HS), 2017, Schedule I, can only be attributed to the intent of imposing quantitative restriction, therefore, Bench is not certain about the source from which the first appellate authority deduced that the prohibited goods should be confiscated absolutely instead of giving any option of redemption to the importer - in the absence of any elaboration on the restriction, other than licensing condition, Bench finds no reason to approve the absolute confiscation - Even if the apprehension of the first appellate authority that use of these seeds in medical preparations may jeopardise health of human beings, in the absence of explicit authority devolving on officers of customs for taking upon themselves such authority, Bench is of the opinion that the government agencies entrusted with the task of ensuring public health would not fail in discharging their responsibilities - the impugned order is modified to allow the confiscated goods to be released on payment of redemption fine of Rs.50,000/- and the penalty u/s 112(a) of Customs Act, 1962 is modified to Rs.50,000/- Appeal is disposed of: CESTAT [para 5 to 8]
- Appeal disposed of: MUMBAI CESTAT |
