| SERVICE TAX
2020-TIOL-1055-CESTAT-KOL
SK Sarawagi & Company Pvt Ltd Vs CCGST & CE
ST - The assessee filed the refund claim under Notfn 52/2011 - The assessee is in appeal before Tribunal on the ground that all the conditions are satisfied under Notfn 52/2011 and also as per the clarification issued by CBEC vide Circular 104/4/2008 being satisfied by them and the export being made through M/s MMTC Ltd. which was the statutory provision in Trade Policy Schedule-II, SL. 80 and the money is realized after export of goods - The service tax paid in terms of services utilized in export of goods to be claimed as refund was rightfully sanctioned - The role of M/s MMTC Ltd. is only like an intermediary because of restriction imposed in Foreign Trade Policy Schedule-II, SL. 80 which states that the Manganese Ore can only be exported through MMTC Ltd. - The restriction imposed in respect of Manganese Ore is governed by Section 3 of Import and Export (Control) Act, 1947 - It is apparent that M/s MMTC Ltd. stands indemnified of all claims and damages of the foreign buyer and/or vessels owner in respect of exports to be made through them and assessee, the owner of the goods, is not allowed to export directly under Section 2 (20) of Customs Act, 1962 as well as under the definition of 'exporter' in the Foreign Trade Policy, 2009-14 under Chapter 9.26 - The role of M/s MMTC Ltd. in export of Manganese Ore is a compulsion to be observed by assessee and it is not by choice which has led to the present dispute - No infirmity found in the order passed by Refund Sanctioning Authority and accordingly, the same is upheld: CESTAT
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1054-CESTAT-CHD
Ramdiya Sharma Gautam Vs CCE & ST
ST - The assessees are distributors of M/s. FSPL - The working of assessees is like that the M/s. FSPL is marketing the consumer goods through multi level marketing system - A customer comes to the showroom and makes certain purchases and the customer pays the price and is allowed certain discount - M/s. FSPL asked the assessees whether they would like to be a distributor for the company wherein the distributor is required to introduce two customer - This system of marketing is called RCM - As per agreement, assessees agree to be distributor and introduces B and C two customers - When B and C make purchases, discount is allowed to B and C and part of discount goes to the assessee-A - Further, B and C also register themselves as distributors and introduce D -E and F –G another two customers each - The discount allowed to D-E and F-G goes to these purchasers and part goes to BC- A - The tree of distributors goes up, the discount comes down the line - On these discounts received by assessees, the Revenue sought to demand service tax under category of BAS - Therefore, a SCN was issued to assessees by invoking extended period of limitation - The issue has been decided by Tribunal in the case of Charanjeet Singh Khanuja and others , wherein the benefit of extended period of limitation is granted - In view of this, the extended period is not invokable, consequently, penalty is not imposable on assessees - The assessees are directed to deposit service tax for period within the limitation period within 30 days along with interest after communication of this order: CESTAT
- Appeals disposed of: CHANDIGARH CESTAT
CENTRAL EXCISE
2020-TIOL-1053-CESTAT-KOL
CCE Vs Bisco Sponge Iron Ltd
CX - The assessee is registered with the department and manufactures sponge iron - After investigation, Revenue came to the conclusion that they were selling the goods to another company M/s.Bharat, who appeared to be related persons - The assessee is a limited company and so is M/s. Bharat Ingots and Steel Company (P) Limited, the alleged buyer - The two companies are different legal entities - It does not matter that some directors may be common between the two companies - In this case, as correctly pointed out by Commissioner, there is nothing in records to show that the two companies are related i.e., they are inter-connected undertakings or relatives or one is a distributor of the other or they are so associated that they have interest directly or indirectly in the business of each other - No infirmity found in the order of Commissioner, once he held that there is no evidence that the two companies are related persons - Therefore, there is also no ground whatsoever to deny them the benefit of SSI exemption individually - It is the case of the Revenue that they are located on the same plot of land and have three common directors and were using the same office and telephone, that in one letter-head of M/s.Bharat, the name of assessee was also printed on the right side - It is further the case of the Revenue that the balance sheet and profit and loss account of the two companies show that one amount went to the other - None of these facts, if true, would meet the requirement under section 4(3)(b) for the two companies to be called related persons - The impugned order is upheld: CESTAT
- Appeal dismissed: KOLKATA CESTAST
2020-TIOL-1052-CESTAT-KOL
Anmol Industries Ltd Vs CCGST & CE
CX - The assessee is engaged in business of manufacture of different varieties of Biscuits - Based on an EA, 2000 audit of the excise and service tax records of assessee for the period 2013-14 and 2014-15, a SCN was issued alleging irregular availment of Cenvat credit - The assessee has also produced a CA certificate showing the reversals made for FY 2014-15 on account of following the procedure as per Rule 6(3) of CCR, 2004 - Also a verification report as submitted by Range office of assessee is placed on record which shows that they had actually reversed Cenvat credit following the said process for FY 2014-15 - The assessee cannot be asked to pay more than what it has actually availed - In this regard, reference made to the decision of Tribunal in case of M/s MERCEDES BENZ INDIA (P) LIMITED 2015-TIOL-1550-CESTAT-MUM which has carved out the intent of legislature as regards reversal of amount if no option is exercised under Rule 6(3) by an assessee - Applying the same principles in the instant case, assessee cannot be asked to reverse more than the actual Cenvat credit availed by them and based on CA certificate and Range report, there is no doubt as to the fact that the assessee has actually followed the process of proportionate reversal under Rule 6(3) of CCR, 2004 - Thus, the demand on the said ground is set aside - As regards imposition of penalty, the disputed amount had been paid before the issuance of SCN, and the entire amount was paid alongwith interest - Therefore, the payment of duty should have been treated as payment of central excise duty under Section 11A (2B) of the Act and the SCN should not have been issued - Additionally, the Revenue has not been able to prove beyond reasonable doubt, the presence of fraud, collusion, willful misstatement or suppression of facts on the part of assessee - Therefore, imposition of penalty under Section 11AC of the Act is unwarranted: CESTAT
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1051-CESTAT-ALL
Sandeep Manufacturing Strips Vs CCE
CX - M/s SMS is engaged in manufacture of Copper Wires and Copper Strips - The case of revenue is that Shri Sandeep Gupta was employee of SMS - At the residential premises of Shri Sandeep Gupta officers found 31 small spiral pads and 9 small files containing loose papers - Officers recorded statement of Shri Subodh Gupta who decoded the entries made in the said spiral pads and files containing loose papers and decoded information revealed that SMS was receiving raw materials i.e. Copper Ingots from M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog without payment of Central Excise duty and without raising of invoice on cash basis - On the basis of decoded information, revenue was able to know that M/s Mayank Metal supplied around 7.1 lakhs Kg of Copper Ingots to SMS without payment of Central Excise duty - Further, it was revealed through decoding that M/s Shivam Metal supplied around 11.5 lakhs Kg of Copper Ingots and M/s Vasudev Udyog supplied around 1.41 lakh Kg of Copper Ingots to SMS in similar manner - On the basis of said decoding, demand of Central Excise duties were raised against M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog - The said raw material received by SMS was used in manufacture of Copper Wires and Copper Strips by SMS and the manufactured final products were cleared by SMS without payment of Central Excise duty and therefore, demand of Central Excise duty of around Rs.6.71 crores was raised against SMS - The representatives of M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog have denied the statements recorded before Central Excise Officers during their cross examination - They have categorically stated that they did not have any transactions with SMS - The revenue has not collected any evidence of procurement of raw materials by M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog nor they have collected any evidence in respect of excess production, dispatch of the goods, transport of goods and realization of sales proceed and therefore, as held by Allahabad High Court in case of Continental Cement , clandestine manufacture & removal of Copper Ingots by M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog is not established - Further, Shri Subodh Gupta though had appeared before the Original Adjudicating Authority on 01.02.2018 was not offered for cross examination by the Original Adjudicating Authority - Applying the ruling of Allahabad High Court in the case of Parmarth Iron Pvt. Ltd. , the evidence recovered from Shri Subodh Gupta is not admissible - Therefore, the impugned O-I-O is set aside and the appeals filed by M/s Mayank Metals, M/s Shivam Metals, M/s Vasudev Udyog and Shri Subodh Gupta are allowed - Since it is established that M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog did not clear Copper Ingots in clandestine manner to SMS, therefore, receipt of raw materials by SMS is not established - Further, revenue has not brought on record any other source of receipt of non duty paid raw material by SMS - Therefore, clandestine manufacture by SMS is not established - Shri Subodh Gupta appeared before Original Adjudicating Authority and was not offered for cross examination - As per ruling by Allahabad High Court in case of Parmarth Iron Pvt. Ltd. the said 31 small spiral pads and 9 files containing loose papers are not admissible as evidence for the reason that cross examination of Shri Subodh Gupta was not carried out - Therefore, the appeals filed by M/s SMS, Shri Subodh Gupta and Shri Mukesh Chauhan are allowed: CESTAT
- Appeals allowed: ALLAHABAD CESTAT
CUSTOMS
2020-TIOL-1050-CESTAT-BANG
Ebro Armaturen India Pvt Ltd Vs CCE
Cus - The crux of the impugned OIA is that the imports made by the appellant on the basis of inter-company price list is not acceptable as import of identical and similar goods are available and M/s Sergi India have imported the same at a value much higher than the value at which the appellants have imported – In appeal, the appellant contends that the valves imported by M/s Sergi needed were different and M/s Sergi needed valves with modified shafts and special painting which will undergo substantial modifications in terms of material and labour; therefore, the prices quoted by M/s Sergi cannot be compared as the items are not comparable - The next objection taken by the appellant is that the OIA simply mentions the grounds of appeal and goes by the same alone and rejects the value declared under Rule 3(3)(a) of CVR, 2007 without laying down the principles as to how the valuation has to be arrived at; that the valuation cannot be rejected as there is no allegation or proof of any flowback; that the principals offer a lower price to the appellants to compensate them for the services rendered in marketing the product and in obtaining orders for the same and profit percentage earned by the appellants cannot by itself a matter of suspicion.
Held: Bench finds that the objections raised by the appellants are justified; that the OIA is very cryptic and does not give any cogent reasons for rejecting the declared assessable value - Moreover, the Appellate Authority does not discuss the submissions of the appellants as to why the price at which M/s Sergi have imported are at variance from that of the importer – Bench finds that there is a pre-notified inter-company price list and the prices were as declared in the same - It is not correct to reject the transaction value just because there are imports at a higher price by third parties - Appellate Authority also did not discuss on the methodology to arrive at the import price having rejected the declared value - No directions are given to the lower authorities about the manner in which the valuation is to be arrived at and the rules thereunder to be applied - Such an order cannot be implemented - appeal is allowed: CESTAT [para 8 to 10]
- Appeal allowed: BANGALORE CESTAT
2020-TIOL-1049-CESTAT-KOL
Sadguru Forwarders Pvt Ltd Vs CC
Cus - The assessee is a Customs Broker having license - In the course of an investigation by DRI, it was suspected that the Customs Broker is actively connected with fraudulent import of certain consignments - Accordingly, their CBLR licence was suspended under Regulation 19(2) of CBLR, 2013 - No SCN has been issued proposing either revocation of licence or imposition of penalty upon them by the Commissioner and therefore, no proceedings were pending - Assessee submits that no inquiry officer has also been appointed - The continuous suspension of licence of Customs Broker without either conducting an inquiry or issuing a notice for revocation of licence or imposition of penalty is bad in law and needs to be set aside - Therefore, assessee have made out a case for seeking the revocation of suspension of Customs licence - Without passing any remarks on the merits of case of revocation of license or imposition of penalty and giving Commissioner full liberty to proceed in the matter as per the regulations, the order of the suspension of the Customs Broker Licence is revoked - The impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
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