| SERVICE TAX
2020-TIOL-1098-CESTAT-ALL
Kanpur Industrial Corporation Vs CCE & ST
ST - Proceedings were initiated against appellant by way of invoking the extended period on the allegations that the appellants have not included the reimbursable expenses in the case of Cargo Handling Services and have not paid the Service Tax on the same - The notice issued to the appellant culminated into order passed by the lower Authorities confirming the demand and imposing penalties, therefore, appeal to CESTAT.
Held: Matter needs to be remanded back to the Original Adjudicating Authority for fresh consideration in the light of the law declared in the cases of Intercontinental Consultants & Technocrats Pvt. Ltd. - 2012-TIOL-966-HC-DEL-ST and Shri Bhagavathy Traders - 2011-TIOL-1155-CESTAT-BANG-LB - Inasmuch as the matters are being remanded on merits, the issue of limitation is kept open for the asseessee: CESTAT [para 4, 5]
- Matter remanded: ALLAHABAD CESTAT
2020-TIOL-1097-CESTAT-DEL
MP Housing & Infrastructure Development Board Vs CC, CE & ST
ST - Revenue, by entertaining a view that the appellant [M.P. Housing Board] has provided services falling under the category of renting of immovable property, which is liable to service tax, initiated proceedings against them for recovery of service tax to the tune of Rs. 3.84 crores approximately - The appellant contested the said demand on the ground that they are not providing any renting services inasmuch as the ground rent as also the value of the property collected by them from M/s R.K. Investment Private Limited was transferred to the State Government through his treasury account and is not chargeable to tax as being Union Government income by virtue of Article 289 of the Constitution of India – Adjudicating authority reduced the proposed service tax to Rs. 2.33 crores approximately by observing that clause (v) which provided the renting of vacant land for future use of construction thereon was introduced in Section 65(105)(zzzz) of Finance Act, 1994 only with effect from 1.7.2010 and as such the same has to be held as prospective only – Being aggrieved, both the assessee as well as Revenue is in appeal before CESTAT.
Held: Facts in the case of M/s Bhopal Vikas Pradhikaran dealt with by the Commissioner in the above referred order and the facts available in the present appeal are similar - Service tax being a central levy, requires all the assessees to be treated on the same platform - it is not clear as to whether the above referred order of the Commissioner in the case of M/s Bhopal Vikas Pradhikaran stands accepted by the Revenue or not - Although the appellant had taken a stand that this Bhoo Bhata collected by them is not retained by them and is further transferred to State Government but the adjudicating authority has observed that the appellant has not adduced any documentary evidence to support their above stand - For verification of the said factual position, matter is remanded: CESTAT [para 8, 9]
Revenue appeal is against that part of the impugned order vide which the Commissioner has observed that the insertion made with effect from 1.7.2010 in the provisions of the relevant section 65 of Finance Act, 1994 could be effective only from the said date and would not have any retrospective effect – Adjudicating authority has relied upon the decision in CIDCO Ltd. Vs. Commissioner of S. Tax - 2014-TIOL-1368-CESTAT-MUM - Revenue is silent about the applicability of the said decision – since the issue stands decided by the Tribunal in the cited case, Revenue appeal is rejected: CESTAT [para 10, 11]
- Appeals disposed of: DELHI CESTAT
CENTRAL EXCISE
2020-TIOL-1260-HC-GUW-CX
SC Johnson Products Pvt Ltd Vs UoI
CX - Petitioner is an industrial unit, which had set up its manufacturing unit in the North-eastern region on the basis of certain industrial policy by which 100% exemption was granted in respect of excise duty - Writ petition is instituted on the grievance that as per the further clarification of the Supreme Court in its judgment dated 22.04.2020, a consideration is required to be given to the said applications of the petitioner inasmuch as, it is a pending refund application, which the Supreme Court required that it be decided by the authorities as per the terms of the subsequent notification/industrial policies, which were assailed before the respective High Courts - A further apprehension has been raised by the petitioner that they had given a bank guarantee up to 100% of the excise duty and the respondent authorities may encash the bank guarantee without arriving at a decision on the said applications of the petitioner - Counsel for Revenue fairly submits that the applications of the petitioner do require a consideration as clarified by the Supreme Court in its judgment dated 22.04.2020 - 2020-TIOL-83-SC-CX-LB and further that the respondent authorities at present do not have any intention to encash the bank guarantee without giving a due consideration to the said applications of the petitioner.
Held: Considering the matter in its entirety, Bench requires the respondents in the Excise Department to give a consideration to the applications of the petitioner and pass reasoned orders on the same - The requirement of passing the reasoned order be done within a period of three months; that till such consideration are made and the reasoned orders passed, the authorities in the Excise department shall not encash the bank guarantee given by the petitioner in respect of 100% of the excise duty paid by them - Writ petition stands disposed of in the above terms: High Court [para 6]
- Petition disposed of :
GAUHATI
HIGH COURT
2020-TIOL-1258-HC-AHM-CX
Century Copper Rod Pvt Ltd Vs ASST.CCE & ST
CX - Tribunal had allowed the appeal of the assessee and directed the department to grant refund of Rs.3,62,90,547/-, being the amount of CENVAT credit lying in their account upon closure of the factory, along with interest of @6% - the assessee had approached the jurisdictional Assistant Commissioner but the refund was rejected on the ground of unjust enrichment and the amount was ordered to be credited to the Consumer Welfare Fund - Commissioner(A) by order dated 27.09.2019 allowed the appeal of the assessee and the matter was remitted to the Assistant Commissioner to pay the refund amount along with interest - however, since the Assistant Commissioner had not made any payments, the assessee petitioner has approached the High Court by way of the present petition - Counsel for Revenue informed the Bench that the only reason for withholding the refund is that the Department has preferred an appeal before the High Court against the order of the Tribunal dated 09.05.2019 in the month of February, 2020 and that too accompanied by delay condonation application.
Held: Bench is of the view that the defence taken by the Counsel for Revenue cannot be sustained under any circumstances; that the Bench is convinced that the amount has been withheld by the Assistant Commissioner for extra legal reasons; that once the Tribunal had clearly held that the petitioner was entitled to refund of the amount, there was no reason for the Assistant Commissioner to withhold the said amount by not making the payment of the petitioner and keeping it under "Consumer Welfare Fund" only on the pretext that the Department may in future file an appeal - No orders can be passed on the basis of apprehension or assumption that something may happen in future and deprive the petitioner which is a private limited company and will be requiring funds - Even after the remand by the Commissioner (Appeals) vide order dated 27.09.2019, the Assistant Commissioner has still not made the payment - Bench is of the considered opinion that there is no justification to withhold the payment - on the insistence of Revenue Counsel that better sense may prevail on the officers and amount would be fully paid to the petitioner within 24 hours, Bench adjourns this matter for day after tomorrow i.e. 29.07.2020; Bench directs that the interest of 6% would be payable up to the date when the amount was credited in the account of the Consumer Welfare Fund and after that date the petitioner should be entitled to higher rate of interest, say 18%, till the date of actual payment and the excess amount of interest so paid to be recovered from the officers found responsible for not making payment in time after due inquiry by the Department - Further, the petitioner should be entitled for costs of the petition which could be fixed at Rs.1,00,000/- which amount may also be recovered from the erring officers after due enquiry - On the next date i.e. 29.07.2020 in addition to the amount of refund with admissible interest, the respondents would come prepared with drafts / cheques for the proposed additional interest and costs - If on the said date, full compliance as noted above is not made, the Assistant Commissioner would remain present along with his explanation - matter be listed on 29.07.2020: High Court [para 4 to 7] - Matter listed : GUJARAT HIGH COURT 2020-TIOL-1096-CESTAT-DEL
Hindustan Zinc Ltd Vs CCGST
CX - The issue involved is allowability of cenvat credit on services utilised in factory of production - Admittedly all these services have been received and utilised inside the factory premises, relating to production directly or indirectly - The assessee is involved in mining of zinc and further beneficiation for getting the metal zinc which is a taxable output - In the process, certain hazardous waste is generated, which has to be properly stored and has to be disposed of as per the norms laid down by State Pollution Control Board to minimise air & water and land pollution - Jarofix yard site is essential in manufacturing of zinc, accordingly all these aforementioned services are admittedly used for managing the jarofix yard site, and also for maintaining greenery as per direction of State Pollution Control Board - Further, Monsoon shed is for storage of chemical and work in progress, during the rainy season which is essential activity for production - Similarly, AMC for plant and machinery, as well as security services and services for laying cable work at CISF Colony, is also related to security for the plant - Therefore, assessee is entitled to cenvat credit on all the items of input services in dispute, as the same has been received and utilised in factory of production allowable under Rule 2(l) of CCR, 2004 - Thus, the impugned order is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2020-TIOL-1095-CESTAT-AHM
Krishna Multifilaments Product Vs CCE & ST
CX - Narrow Woven Fabrics cannot be manufactured using unstable yarn which is not twisted - The appellant in their appeal memoranda also have themselves stated that unstable yarn cannot be used for multifilament and Narrow Woven Fabrics is produced by the process of weaving - The law is very clear, if the yarn produced at the intermediate stage is twisted /texturised before use for weaving, the same is liable to Central Excise duty - However, if twisted/terturised yarn does not come into existence before weaving, it may not be taxable - above facts needs verification – also certificate of machine manufacturer and certificate of Chartered Engineer were not available before the lower authorities - impugned order is set-aside and the matter is remanded to the original adjudicating authority: CESTAT [para 7 to 10]
- Matter remanded: AHMEDABAD CESTAT
2020-TIOL-1094-CESTAT-KOL
Bihar Raffia Industries Ltd Vs CCE & ST
CX - The issue involved is regarding the duty liability and denial of Cenvat credit on the stock of shortage noticed on account of raw material during the visit of Central Excise officers - Also, regarding the non-inclusion of sales tax collected under deferment scheme in the assessable value of excisable goods under section 4 of Central Excise Act - This issue has been clarified by CBEC Circular 378/II/98-CX wherein it has been clarified that in respect of deferred payment of sales tax for a particular period and the grant of incentive equivalent to sales tax payable by the unit, the sale tax paid has been clarified to be excluded from the assessable value of the goods - Reliance was also placed on the decision of Tribunal in case of Super Syncotex (India) Ltd. which was affirmed by Supreme Court in 2014-TIOL-19-SC-CX - Regarding the second issue, the stock verification report was not conducted by visiting officer but simply the statement was asked to be prepared by one of the employee of assessee namely, Shri Suman Kumar Mishra, Excise Clerk along with Shri Manoj Kumar Pandey and Shri Uday Kumar, all employee of the main assessee (BRIL) - As the stock verification report was not done on the physical weighment basis and even not verified by Central Excise officer as is evident from the stock verification report, its evidentiary value looses its significance, especially in view of the fact that the RG-1 Register and Form-IV Register were incomplete after 31.08.2006 - The assessee has taken Cenvat Credit on the basis of prescribed document as per Cenvat Credit Rules and therefore the impugned order is not correct in denying the same for which reliance placed on the decision of Allahabad High Court in 2014-TIOL-2693-HC-ALL-CX which upheld the order passed by Tribunal in case of Juhi Alloys Ltd. 2013-TIOL-1310-CESTAT-DEL - The Commissioner has not examined the maker of statements and not permitted the cross-examination of those persons by main assessee in spite of being specifically requested for - This is in clear violation of statutory provisions as contained in section 9D of Central Excise Act - This issue has been decided in many cases including that of M/s.Andamann Timber Industries 2015-TIOL-255-SC-CX - Accordingly these statements are required to be eschewed as a piece of evidence - If that being so, the clandestine removal of goods as alleged in the impugned order is not sustainable - The impugned order is not sustainable - As appeal against main assessee has been allowed, there is no question of imposition of any penalty on the other assessees - Accordingly, those are also being set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
CUSTOMS
2020-TIOL-1093-CESTAT-KOL
Maa Kamakhya Enterprise Vs Pr CC
Cus - The assessee is a Customs Broker and a partnership firm - A case of fraudulent export under claim for draw back by M/s.S.K. Traders through Petropole Land Customs Station was being investigated by department - In the course of investigation, it was observed that 15 export consignments of aforesaid exporter were handled by assessee - The exporter had availed draw back from the Government, but had not submitted Bank Realization Certificates (BRS) against the said exports - It was apprehended that the exports under shipping bills had not been taken place physically and only effected on paper - Subsequently, the Customs Broker's licence was suspended under Regulation 16(1) of CBLR, 2018 w.e.f. 24.05.2019 - The suspension have been made by way of interim measure for alleged misgivings and/or or inaction on the part of assessee for imports in year 2015, almost after four years and as such interim suspension, pending enquiry is not warranted - The Bombay High Court in case of National Shipping Agency have noted that the power to suspend as an interim measure is to be used in those cases, where it is required that the Customs Broker Licence be immediately suspended - In the instant case, the alleged violation was of the year 2015 and the order of suspension has been issued in 2019 itself indicates that there is no emergency which requires that the licence be suspended - It is therefore ordered that the continuation of suspension of CHA licence vide the impugned order is set aside - The Principal Commissioner of Customs (Preventive) is directed to complete the enquiry proceedings expeditiously preferably within a period of six months - The CHA/CB firm is entitled to carry on its business as CHAs/Customs Broker with immediate effect: CESTAT
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1092-CESTAT-HYD
Asia Pacific Commodities Ltd Vs CC
Cus - The appeals have been filed by assessee and the Revenue against the same impugned order - The assessee is an importer of palm oil and they filed bills of entry in the months of January and February, 2005 - Samples of the oil were drawn by Port Health Officer and by the customs officer in the presence of importer on the same date and sent to the customs laboratory for testing - There is a difference between the test report by Port Health Officer and the test report of customs laboratory which lies at the root of these appeals - Crude palm oil falls under customs tariff heading 1511 and attracts duty at a rate of 100% of the tariff value - However, Notfn 21/2002-Cus as amended, gives concessional rate of duty on palm oil of edible grade subject to certain conditions - In respect of two bills of entry, they claimed concessional rate of 75% of the tariff value under exemption Notfn 21/2002-Cus - In this case, there are three issues; importability under Prevention of Food Adulteration Act, Classification of the imported oil and Eligibility of exemption notification which is available for only edible grade oil and not otherwise - In terms of importability under Prevention of Food Adulteration Act as well as the classification of the oil, the standards required are as laid down under A.17.19 of the Appendix to the Prevention of Food Adulteration Rules - No specific parameters have been laid down to determine if the oil is edible in exemption notification - However, the exemption notification required the goods to fall under the particular tariff heading and hence the same standard A 17.19 has been applied by Assessing Officer while determining the eligibility of exemption notification also - Determining the importability of oil in question and if it is not importable, acting against the imported goods and the importer is the responsibility of the Customs officers - No action has been initiated in imports which are the subject matter of these appeals because the Revenue accepted the test report of the PHO that it meets the standard as per A 17.19 of the Appendix to the Prevention of Food Adulteration Rules - This is also explicit in the denovo order of original authority - Having accepted that the consignment meets this standard, Revenue took a diametrically opposite stand with respect to the same consignments and the same standards while determining the eligibility of the exemption notification - Such a contradictory stand is not sustainable - The revenue, having accepted that the consignments meet standards A17.19 and hence are edible and accepting their importability cannot take a stand that the consignments do not meet the same standards and are therefore not edible, while deciding the eligibility of exemption notifications - Appeals filed by the assessee are allowed and appeal filed by the Revenue is rejected: CESTAT
- Assessee's appeals allowed: HYDERABAD CESTAT |
