| SERVICE TAX
2020-TIOL-981-CESTAT-MAD
Vinayaga Transports Vs CCE & ST
ST - It is not in dispute that the appellants have paid-up service tax along with interest much before the issuance of the show-cause notice - Further, on perusal of records, there is no evidence adduced by the department to establish that appellants are guilty of suppression of facts with intention to evade payment of service tax - Under sub-section (3) of section 73, the appellants having paid the service tax along with interest on their own ascertainment or being pointed out by the officers of the department, no show-cause notice was required to be issued - impugned order is modified to the extent of setting aside the penalty imposed under section 78 without disturbing the demand, interest or the penalty imposed under section 77 of the Finance Act, 1994 - Appeal is partly allowed: CESTAT [para 5]
- Appeal partly allowed: CHENNAI CESTAT
2020-TIOL-980-CESTAT-KOL
Ayesha Mazumdar Vs Commissioner of CGST & CE
ST - The issue relates to waiver of penalty imposed under section 78 and under section 77(1)(d) of FA, 1994 - The assessee had been issued a SCN alleging non-payment of Service Tax under category of 'Renting of Immovable Property Service' during the financial year 2010-11 amounting to Rs.1,16,381/- - Originally the SCN was issued for an amount of Rs.2,92,493/- - Subsequently the adjudicating authority has confirmed the demand of Rs.1,16,381/- and Rs.36,479/- which is quite less than the original demand - It is observed that the assessee has paid the entire demand alongwith interest much before the issuance of SCN - Issue is no more res integra in view of the decision of Tribunal in case of R.K. REFRESHMENT & ENTERPRISES (P) LTD. 2018-TIOL-817-CESTAT-DEL - The penalties imposed under section 78 and 77(1)(d) are set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
CENTRAL EXCISE
2020-TIOL-1156-HC-KAR-CX
CCE & ST Vs L And T Komatsu Ltd
CX - Respondent assessee submits that in the instant case, substantial question of law which has been raised by the revenue relates to the applicability of notification No.13/2008-CE dated 01.03.2008 amending the notification No.108/95-CE dated 28.05.1995 namely whether it is prospective in nature or retrospective and as such, an appeal under Section 35L of the CE Act lies to the Supreme Court and present appeal filed by the revenue under Section 35G before this Court is not maintainable.
Held: A conjoint reading of Section 35G and 35L, it could be seen that an appeal would lie to the High Court against every order passed in an appeal by the appellate tribunal, if the case involves a substantial question of law - However, exception to this general rule is that an appeal would lie before the Apex Court and not before this Court against an order relating, amongst other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment - Comparative analysis of Section 35G and 35L of the Central Excise Act would indicate that they are mutually exclusive, therefore, dispute which would be in the domain of Section 35L cannot be held or presumed that it would incidentally fall within the domain under Section 35G also - Parliament would not have envisaged vesting of overlapping of jurisdiction - issue as to whether the said notification would empower the revenue to deny the exemption provided under the notification dated 28.08.1995 is an issue which has to be determined by formulating substantial question of law framed in that regard and same has to be answered - In other words, the issue involved relates determination of excisability of the goods for the purposes of assessment by virtue of the clarificatory notification dated 01.03.2008 - Hence, Bench is of the considered view that appeal under Section 35G before this Court would not be maintainable and appellant-revenue has to pursue its grievance by filing an appeal under Section 35L before the Apex Court - Revenue appeal dismissed: High Court [para 8, 10, 11]
- Appeal dismissed: KARNATAKA HIGH COURT
2020-TIOL-979-CESTAT-KOL
Multitech Auto Pvt Ltd Vs CGST & Excise
CX - The assessee is engaged in manufacture of parts and accessories of motor vehicle including engine parts, transmission shafts and leaves, screws, bolts, nuts, screw hooks and washers - The proceedings were initiated for failure to file ER- 6 monthly return - The assessee was required to submit, within ten days from the close of each month, a monthly return in the Form specified by a Notification in respect of information regarding the receipt and consumption of each principal inputs with reference to quantity of final products manufactured by them to the Range Superintendent - Simultaneously, Notfn 39/04-CE (NT) was also issued, which extended the exemption from filing such return to the assessee, whose payment of excise duty through account current during preceding financial year, was less than Rs.1.00 Crore - Subsequently, the expression "through account current" was omitted by Notfn 41/2008-CE (NT) - This Notification escaped the attention of assessee, which resulted in failure to file ER-6 return upto March, 2016 - The assessee have reflected the details of cenvat credit taken and utilized noticing monthly return (ER-1) filed on month to month basis within specified due date and have also filed ER-5 returns i.e information relating the principal inputs - It is their submission that they were under bonafide belief that there is an exemption from filing ER-6 return under Notfn 39/2004-CE (NT) as long the duty paid through PLA does not exceed the ceiling of Rs.1.00 Crore - A lenient view can be taken and quantum of penalty can be reduced to meet the ends of justice and accordingly, the quantum of penalty is modified - The total amount of penalty would be Rs.500/- X 36 ER-6 Returns under Rule 15A of CCR, 2004: CESTAT
- Appeal partly allowed: KOLKATA CESTAT
2020-TIOL-978-CESTAT-KOL
Commissioner of CGST & CE Vs Hindustan National Glass And Industries Ltd
CX - Assessee is engaged in business of manufacture of "Glass & Glassware" viz. Glass Bottles - The dispute relates to the Cenvat credit availed by assessee on commission paid to its agents situated in and outside India and appointed for the sale and marketing of their goods - The issue stands already settled and decided in favour of assessee - It is also seen that the First Appellate Authority has extended the benefit on the basis of the decision of Tribunal in the case of Essar Steel India Ltd. 2016-TIOL-520-CESTAT-AHM - No infirmity found in the impugned order and the same is hereby sustained: CESTAT
- Appeal rejected: KOLKATA CESTAT
2020-TIOL-977-CESTAT-CHD
Reena Ispast Uyog Vs CCE
CX - A SCN was issued to assessee on the ground that M/s. Aggarwal Steel Rolling Mills & Metal Industries has fraudulently passed on Cenvat credit by issuing cenvatable invoices on which the clearances were shown to be of defective bars/rounds, short length rounds and rejected rounds whereas normally produced finished goods were sold in cash in the open market and by mis-declaring their final rolled products as defective in the invoices which have been manufactured and accounted for in their daily production (RG-1) register and monthly ER-1 returns as normal quality of finished goods - Therefore, it was alleged that the assessee have indulged in paper transactions only in connivance with the concerned manufacturers/dealers - The sole allegation of Revenue is based on opinion of Shri R.K. Bagchi, Deputy Director, NISST, Mandi Gobindgarh that minimum 75% normal defect free saleable products can be manufactured by M/s. Aggarwal Steel Rolling Mills & Metal Industries - But at the time of manufacturing, there is no evidence on record to show that during the said period i.e. 1.4.2004 to 23.11.2004, the unit was manufacturing 75% defect free goods - In the absence of evidence placed on record, the opinion of expert cannot be the basis to allege that they have cleared the normal finished goods in the open market by showing in invoices as defective to the manufacturer/buyers - Moreover, no evidence has been placed on record by Revenue to deny Cenvat credit to the manufacturers/buyers - As the Revenue failed to prove that M/s. Aggarwal Steel Rolling Mills & Metal Industries have not manufactured defective goods during the impugned order, therefore, the allegation of issuance of cenvatable invoices without accompanying the goods is not sustainable - In these circumstances, the penalties are not imposable on assessees: CESTAT
- Appeals allowed: CHANDIGARH CESTAT
CUSTOMS
2020-TIOL-1160-HC-MUM-CUS
PT Paracha Impex Vs CC
Cus - The petitioner claimed to have supplied goods to the respondents, who did not make the necessary payments and later informed the petitioner to recall the goods - The petitioner made an application to the Customs Department seeking permission to re-export the goods and later filed the present writ.
Held - It is seen that the Customs officer concerned has not rejected the petitioner's application - Hence directions are issued to the officer concerned to decide upon the petitioner's representation within three weeks' time from date of receipt of this order: HC
- Writ petition disposed of: BOMBAY HIGH COURT
2020-TIOL-1159-HC-AHM-CUS
AD Enterprise Vs UoI
Cus - Petitioner has prayed for quashing and setting aside Public Notice No.PS-11/2019 dated 13th September 2019 and in the alternate direct Respondent No.2 herein to streamline the procedure for Import of Poppy Seeds in India from Turkey pursuant to Public Notice No.PS-11/2019 dated 13th September 2019 so as to ensure that procedure is fair, reasonable, transparent and open to all the importers; that pending the hearing and final disposal of the petition, stay implementation and operation of Public Notice No.PS-11/2019 dated 13th September 2019 and direction to not register contracts or issue permits to import of Poppy Seeds (WPS) from Turkey to India in accordance with Public Notice No.PS-11/2019 dated 13th September 2019.
Held: Bombay High Court in the case of Chailbihari Trading Private Limited and another - 2019-TIOL-2021-HC-MUM-NDPS took the view that there is a power to regulate and a power to impose quantitative restrictions, and in the absence of challenge to the exercise of such power, the guidelines in the form of policy cannot be declared as ultra vires the provisions of the Constitution of India; that the guidelines are a step towards implementing a policy that had been in place past couple of years but, was in furtherance of a policy to promote the larger public interest - After the decision of the Bombay High Court (supra), the policy came to be amended with effect from 13th September 2019 - There has been a remarkable shift in the new policy, however, what is hurting the writ-applicant is the policy of 'first-come-first-serve' - although we are not inclined to strike down the guidelines in the form of a policy as ultra vires the provisions of the Constitution of India, yet we remind the Union of India of the observations made by the Delhi High Court in the order dated 11th September 2019 passed in the Writ Petition (C) No.7676 of 2019 - Needless to mention that it is the prerogative of the respondents to frame a policy - However, such policy must be transparent, fair and reasonable – Bench suggests that the Union should consider framing a policy which provides for a fair chance to every applicant in procuring the importable quantity irrespective of the date of their application - The process can be made more transparent if the list of successful candidates is uploaded on the website of the respondent no.2 as was being done before the policy dated 25th June 2019 - In the opinion of the Bench, adopting a methodology of first-come-first-serve has inherent flaws and anybody having access to the power corridor at some level is likely to secure unfair advantage at the cost of the other applicants who may not have similar access - In such circumstances, it is suggested that the respondents should device a better mechanism/policy for the allotment of quota so as to make the process much more competitive, transparent, fair and reasonable - writ-application disposed of: High Court [para 15 to 17, 19 to 21]
- Petition disposed of: GUAJARA HIGH COURT
2020-TIOL-997-CESTAT-MUM
Sushil Goel Vs CC
Cus - Allegation is that importers have undervalued their imports; that Satish Luthra imported in the name of other companies and arranged to pay the differential amounts to foreign buyers through Hawala - SCN sought to redetermine the value of imported goods and to impose penalties on various persons individually and severally – in adjudication, Commissioner of Customs (Import), ACC, Sahar rejected the declared and/or assessed transaction value; redetermined the value; confirmed duties along with interest on Satish Luthra, holding him to be the actual importer; imposed equal penalty u/s 114A on various importers; confiscated the goods seized and allowed them to be redeemed on payment of fine of Rs 2,00,000 and appropriated the amounts deposited during the investigation – appeal to CESTAT.
Held:
+ A bare reading of the definition implies that the term "importer" includes any person holding himself out to be the importer - It is important to note that such a person holding himself out to be the importer would be considered an importer any time between the importation of the goods and the clearance of the same for home consumption - It is evident that Satish Luthra has not been held to be an importer before the clearance of goods for home consumption and as such he cannot be held to be an importer after the clearance of the goods for home consumption – through an amendment incorporated only in the budget of 2017, in Section 2(26) of the Customs Act, "the beneficial owner" is included in the definition of an importer, however, the same is after the impugned imports have taken place – therefore, for the purpose of Section 2 of the Customs Act 1962, Satish Luthra cannot be held to be an importer and as such cannot be a person referred to in Section 28 of Customs Act 1962 and consequently neither the demanded duty nor the imposed penalty can be held to be devolved on Satish Luthra: CESTAT [para 12]
+ Department has sought to re-determine the value of such goods which have been already cleared for home consumption without filing appeals against the respective assessments in the Bills of Entry – it is settled principle of law that adjudication authority is not to assume upon itself the role of investigating agency and go on to investigate something which has not been alleged in the SCN - The evidence that Commissioner seeks to rely during the course of adjudication is not supplied to the appellants and thereby, an opportunity to defend themselves has been denied to them - Under the circumstances, Bench finds that such an order is not maintainable and is liable to be set aside - Moreover, even though, the SCN and the impugned order alleged that the differential between the actual price and declared price of the imported goods has been sent through Hawala route using the services of Shri Sushil Goel aka Arjun, no evidence whatsoever, even for a single transaction has been produced to establish the fact - it can be seen that the Commissioner has not only travelled beyond the SCN but also did not bother to supply the copies of the Bills of Entry, which he relied upon to come to the conclusion that some of the goods are branded – Further, proviso for extending the limitation for demanding duty has not been invoked in the Show Cause Notice and there is no mention as regards invocation or finding as regards justification for the same, in the impugned order - No suppression of facts etc has been either alleged or substantiated: CESTAT [para 13, 14, 15, 16, 18]
+ Entire case of the Department is built upon the statements of different persons involved and most of the statements have been retracted - Once, the statements have been retracted, the onus lies on the Department to prove that the statements are correct but the same has not been discharged – Moreover, other than statements, no evidence documentary or otherwise has been put forth by the Revenue to substantiate the allegation of under-valuation - No samples were drawn and no enquires were made - Impugned order suffers from various lacunae and thus is liable to be set aside - When the charge of under-valuation is not established, no case is made out for imposition of redemption fine, penalties and demand of duty from any of the appellants involved - Appeals filed by Revenue are rejected and other appeals are allowed with consequential relief: CESTAT [para 19, 21]
- Revenue appeals rejected/Assessee appeals allowed: MUMBAI CESTAT
2020-TIOL-996-CESTAT-DEL
Mercedes Benz India Pvt Ltd Vs CC
Cus – Impugned orders have been passed in the matter of alleged use of false and fabricated Telegraphic Release Advice (TRA) by the importers to clear the good imported by them duty free under various export promotion schemes such as Duty Exemption Passbook (DEPB), Focus Product Scheme (FPS), Vishesh Krishi and Gram Udyog Yojna (VKGUY) and Duty Free Import Authorization (DFIA) under Foreign Trade Policy - Various penalties have been imposed on the importers, exporters etc. - DRI also took up the matter with the DGFT concerned for cancellation of fraudulently obtained licenses and the same have been cancelled in most of the cases, ab initio – appeals filed.
Held:
+ Issue is as to whether the appellants had validly imported the consignments duty free on the strength of the licenses involved in these appeals - It is not disputed by the appellant that these licenses were obtained in a fraudulent manner by the exporters or the importers/manipulators, but their contention is that they have purchased these licenses through various brokers on payment of consideration through banking channels and, therefore, they cannot be held responsible for any manipulation by the transferor of these licenses - As the transferee, they have taken enough precaution before purchasing these scrips from open market by verifying on the DGFT website - They have also made payment to the brokers of license through banking channel/account payee cheques - Regarding obtaining of TRA with the transfer license, the appellants admitted that the TRAs were also made available to them with the transfer licenses but they were not aware that these TRAs were also manipulated - In such circumstances, they pleaded that being bona fide purchasers of the licenses, they should not be penalized for any lapse committed by the exporter – Case of the department is that as these licenses have been cancelled or are in the process of cancellation, the license are void ab initio and the duty liability with interest and penalty has been rightly imposed.
+ The importers purchased these licenses, which were transferrable from the license brokers - After the purchase of license, the importers did not apply for the issue of Telegraphic Release Advice (TRA) from the port of Registration (POR) as was required to be obtained - Not only that, they also failed to ascertain the veracity of such TRAs from the Port of Registration, thus, the due diligence that was required to be exhibited by the importer was not carried out.
+ The entire racket has been carefully planned and executed by Paresh Daftary, Prabir Ghosh and Jyoti Biswas - These three persons circumvented all the laws, be it Customs, Foreign Trade or Exim Policy - They attempted to hoodwink all the government agencies and committed a fraud, which could only be detected, subsequently, in the investigation by the DRI - The appellants have not asserted that the exports had not been effected for they only contend that they were not a party to the fraudulent activities - The Adjudicating Authority has taken great pains to evaluate the entire sequence of events - Bench has very carefully examined the findings which are based on evidence produced and sees no good reason to take a different view.
+ In Eastern Silk Industries , it was held that the State cannot be deprived of its share of duty if the same is claimed by fraudulent act of exports; in Friends Trading Co., it was held that where DEPB was fraudulently procured by the predecessor of appellant, the duty demand from the appellant cannot be withdrawn, as the importers who utilised these licenses had placed before seller forged document and they cannot be allowed to retain the benefit that were obtained illegally; Similar observations were made by the Supreme Court in Aafloat Textiles (I) Pvt. Ltd. and it was also held that in case forged license is purchased from the market, the burden of proof remains with the purchaser of the license following the principle of buyers be aware as observed in Friends Trading.
+ An identical issue where not only DEPB scrips were forged but also the Telegraphic Release Advice for use of this DEPB scrips on port other than port of export was considered extensively in K.I. International and it was held that importer transferee would be liable to compensate the customs duty and also would be liable to penal provision and interest.
+ The Tribunal in M/s Dow Agro Sciences India Pvt. Ltd. held that in a situation pertaining to fraudulently obtained DEPB and TRA's, demand would be sustainable against the transferee under the Customs Act along with interest and penalty.
+ In such circumstances, there is no reason to disagree with the findings of the adjudicating authority regarding the role played by him - The appellant Ghosh has been found to be indulging in nefarious activities of manipulating the forged export as 'G' card holder of CHA firm on the basis of detailed investigation carried out by the DRI-KZU.
+ As far as the six appeals filed by the Department are concerned, it is seen that the adjudicating authority, in the impugned order, has wrongly held that the appellants have utilized forged TRA, although the issue pertained to the utilization of FPS licenses, therefore, the appeals filed by the department are allowed and they are remanded to the adjudicating authority for a fresh decision after granting a hearing to the appellants.
Conclusion: Appeals of the importers/exporters and Prabir Ghosh are dismissed by upholding the impugned orders. The appeals filed by the Revenue are allowed by way of remand. [para 24, 25, 26, 39 to 44, 48 to 50]
- Appeals of importers/exporters dismissed/Revenue appeals allowed by way of remand: DELHI CESTAT
2020-TIOL-976-CESTAT-MAD
CC Vs Tamilnadu Newsprint And Papers Ltd
Cus - Commissioner(A) held that financial status of a company is reflected in the balance sheet and the balance sheet clearly mentions the amount receivable by them under various sub-headings and entries which itself is an ample proof that the claim is not hit by unjust enrichment; that addition of 2% notional high sea sales commission is also not proper as the transaction value is available - Revenue is in appeal before CESTAT.
Held: It is not the case of the department that the respondents have paid any amount over and above such transaction value - Therefore, in terms of Section 14 of the Customs Act, 1962, the transaction value requires to be accepted as done by the Commissioner (Appeals) - Moreover, in view of Circular No. 32/2004-Cus. dt.11.5.2004, high sea sales commission cannot be notionally arrived at 2% particularly, when there is documentary proof to that extent - Balance sheet as on 31.3.2016 very clearly shows these amounts as receivables under current assets from the department and this was an ample proof that the application for refund is not hit by unjust enrichment - Orders passed by Commissioner (Appeals) are legally tenable and sustainable and there is no reason to interfere with the same - appeals of department are rejected: CESTAT [para 5 to 7]
- Appeals rejected: CHENNAI CESTAT |
