SERVICE TAX
2020-TIOL-1267-HC-MP-ST
Supranee Construction Vs UoI
ST - Petitioner assails the order dated 24.02.2020 passed by the Prinicipal Commissioner CGST & Central Excise, Bhopal levying an amount of Rs.4,20,01,216/- as service tax for the period from April- 2014 to June-2017 in respect of contract of construction of road undertaken - Petitioner while assailing the aforesaid order raises a singular plea of denial of reasonable opportunity of being heard before passing the order - It is submitted that in the absence of said opportunity, the impugned order deserves to be set-aside with direction to the competent authority to re-hear the petitioner and then pass a fresh order - Counsel for respondent submitted that SCN dated 28.08.2019 gave the petitioner thirty days time to make their submissions and another notice dated 30.01.2020 was issued granting personal hearing - petitioner had by their letter dated 29.01.2020 sought time till 15.02.2020 to file reply but despite the aforesaid, the petitioner failed to avail the opportunity extended and, therefore, the competent authority was compelled to pass the impugned order.
Held: Court is of the considered view that due and sufficient opportunity of being heard of reasonable nature was extended to the petitioner to respond to the show cause notice which was issued about 9-10 months back - If the petitioner had any genuine intentions of filing reply and not delaying the matter, petitioner would have availed the opportunity - However, it seems that intention of petitioner was to indulge in procrastination - the sole ground of denial of reasonable opportunity fails - Petition is, therefore, dismissed: High Court
- Petition dismissed: MADHYA PRADESH HIGH COURT
2020-TIOL-1264-HC-GUW-ST
Acme Trade And Agencies Vs UoI
ST - SVLDRS, 2019 - Petitioner in order to avail the benefits of the scheme submitted their particulars in the prescribed SVLDRS-1 form - Inadvertently while submitting the form, the penalty imposed on the petitioner (of Rs.86,74,199/-) was not stated and, in turn, in the relevant column it was stated that the penalty imposed upon the petitioner was '0' - Application stood rejected by the order dated 31.12.2019 for the reason that the amount of penalty had not been stated in the SVLDRS-1 form which makes it an incorrect declaration - Aggrieved, petitioner is before the High Court.
Held: Issue as to whether an inadvertent mistake as regards the penalty imposed being not correctly stated in the SVLDRS-1 form, has been decided by this Court in its judgment dated 04.05.2020 in WP(C)No.2149/2020 and wherein it is observed - "6.In the circumstance, the only issue before the Court would be whether the claim of the petitioner for the benefit under Scheme 2019 would stand rejected as because of the aforesaid mistake of not mentioning the penalty or a different view can also be taken in the matter. Admittedly the Finance Act, 1994 wherein, Scheme 2019 has been incorporated does not provide for any provision for re-submitting an application claiming the benefit under the scheme." - Parties agreed that the issue involved in this writ petition is also squarely covered by the said judgment dated 04.05.2020 in WP(C)No.2149/2020 - In view of such agreement, this writ petition also stands disposed of by requiring the petitioner to submit an application before the respondent authorities for correction to be made in the information provided in the Form SVLDRS-1 as regards the penalty imposed - The requirement of submitting application be made within a period of 15 days from obtaining the certified copy of the order and upon receiving of the application, the respondents shall pass an order on the same within a period of 2 (two) months from the date of receipt of the application - Writ petition disposed of: High Court [para 4 to 6, 8]
- Petition disposed of: GAUHATI HIGH COURT
2020-TIOL-1106-CESTAT-BANG
Mandovi Motors Pvt Ltd Vs CCE & CT
ST - Once the appellant had paid the service tax before the issue of show-cause notice along with interest and there is no fraud, willful misstatement or suppression of facts with intent to evade tax, then he is not liable to pay any penalty – Following the decision in Bhoruka Aluminium Ltd. - 2016-TIOL-3060-CESTAT-BANG , penalty imposed is not sustainable in law – Appeal allowed: CESTAT [para 6, 7]
- Appeal allowed: BANGALORE CESTAT
2020-TIOL-1105-CESTAT-AHM
Gea Process Engineering India Pvt Ltd Vs CCE & ST
ST - Issue involved is whether the projects of "Erection, Installation and Commission" executed by the appellant admittedly with the supply of material is classifiable as "Works Contract" and not liable to service tax prior to 01.06.2007 or is classifiable as "Erection, Installation and Commission" and liable to service tax even before 01.06.2007 – Bench finds that this very issue has been finally decided by the Supreme Court judgment in the case of Larsen and Toubro Ltd. - 2015-TIOL-187-SC-ST – As the adjudicating authority had no occasion to consider the said judgment as the same was delivered after passing the impugned order, matter remanded: CESTAT [para 4, 5]
- Matter remanded: AHMEDABAD CESTAT
2020-TIOL-1104-CESTAT-AHM
Adani Enterprises Ltd Vs CCE & ST
ST - 41/2007-ST - Refund claim cannot be rejected merely because the service provider has not mentioned registration number in their invoices - Moreover, there is no dispute raised by the Revenue on the facts that goods have been exported, service was used for export of goods and the value of service including service tax was paid to the service provider - rejection of refund on this count is not sustainable: CESTAT [para 9]
ST - There is no dispute that even though refund is for the quarter October 2007 to December 2007 but the same was filed within six months i.e. on 29.05.2008 from the end of the quarter - The adjudicating authority adjudicated the show cause notice on 31.03.2009 and by which time the period of 60 days was extended to six months, therefore, the extended period upto six months should have been considered - Accordingly, refund was well within time period of six months and hence is not hit by limitation: CESTAT [para 10]
ST - Rejection of refund of service tax of GTA service used for transportation of goods from ICD to Port, on the ground that appellant failed to correlate with the export documents - Services covered under Serial No. 6 of Notification No. 41/2007-ST does not stipulate any condition - Moreover, transportation of goods from ICD to Port was undoubtedly for export of goods only, therefore, importing any condition which is not existing in the notification is beyond the jurisdiction of Commissioner (Appeals) - Refund could not have been rejected on the said ground: CESTAT [para 11]
ST - Refund claim in respect of service of storage and warehousing service was rejected on the premise that there is no correlation of export with the documents of service provider - There is no dispute that the entire storage area was exclusively used for export of goods - It is not the case of the revenue that such storages and warehouses are also used for other than export goods, therefore, rejection of claim is incorrect: CESTAT [para 12]
ST - Rejection of the refund claim is on the premise that Lorry Receipts issued by the transporters did not mention name of the appellant - Appellant is a merchant exporter and the goods are manufactured and cleared by Mafatlal Industries Limited - Since the goods were transported directly from the factory to the Port, though all the related documents were in the name of the appellant, the Lorry receipt does not bear the name of appellant is obviously due to inadvertent mistake on the part of the transporters - It is also certified by the transporters that against the said Lorry Receipts the invoices were raised on the appellant and the same was paid by them - With these ample evidences, merely that the name of the appellant is not appearing on the Lorry Receipts, cannot be the reason to reject the refund - Appeal allowed with consequential relief: CESTAT [para 13]
- Appeal allowed: AHMEDABAD CESTAT
CENTRAL EXCISE 2020-TIOL-1103-CESTAT-KOL
Sai Sulphonate Pvt Ltd Vs CCE
CX - The assessee is engaged in manufacture of LABSA (90% of Acid Slurry), which is the main product and spent Sulphuric Acid emerges as by-product - They are also engaged in manufacture of own goods as well as on behalf of client (conversion job) - Their main product, LABSA 90%, commercially known as Acid Slurry, is a major raw material for all laundry detergents - The same is manufactured from LABSA and Sulphuric Acid resulting in the production of LABSA 90% and Spent Acid - SCN was issued for suppression of quantum of production of LABSA (Acid Slurry) in respect of their own finished goods for the period from April, 2010 to March, 2011 demanding Central Excise duty along with applicable interest and for imposition of penalty - There is hardly any difference between in respect of own manufacture and conversion job - The Department has nowhere alleged that they procured excess quantities of LAB to manufacture the excess quantity of Acid Slurry or LABSA 90% nor have the Department produced any evidence or referred to any materials to show how excess amounts of LAB were brought into the factory and how the same were removed after being manufactured into LABSA - In the premises, the allegation being leveled by Department is highly illogical and not supported by any materials and/or evidence in the records of the case or without any basis whatsoever - Further, the cases of clandestine removal cannot be built on the input-output ratio as has been held by Tribunal in case of M/s Hindustan Coca Cola Beverages Pvt. Ltd. 2006-TIOL-1081-CESTAT-MUM - Apart from the input output ratio, there is no evidence on record to show clandestine manufacture and clearance of the goods - Such cases are required to be established beyond doubt on the basis of concrete and positive evidences - Therefore, the impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1102-CESTAT-KOL
MCC PTA India Corporation Pvt Ltd Vs CCE & ST
CX - The assessee is engaged in manufacture of 'Purified Terephthalic Acid' (PTA) which attracts central excise duty of 16% - Notfn 37/2006-CE was issued to exempt excise duty beyond 8% on 'Pure Terephthalic Acid', so as to provide effective rate of 8% excise duty as against 16% - Accordingly, assessee started discharging central excise duty of 8% on PTA, by availing the aforesaid exemption benefit with necessary disclosures in the monthly returns - SCN was issued on the ground that the goods cleared by assessee was 'Purified Terephthalic Acid' and not 'Pure Terephthalic Acid' - The Commissioner in the impugned adjudication order has denied the exemption by differentiating the terms 'Pure' and 'Purified' materials - It is his contention that the exemption has been extended only to 'Pure Terephthalic Acid' i.e. terephthalic acid of 100% purity as against the one which is purified - The Commissioner has categorically accepted in his order that no such purity percentage has been prescribed in HSN and hence, resort has to be taken to market parlance i.e. the way product is understood in its ordinary sense - It is a settled position of law as also held by Supreme Court in case of Konkan Synthetic Fibres 2012-TIOL-29-SC-CUS that in a fiscal or taxation law that while ascertaining the scope or expression used in a particular entry, the opinion of the expert in the field of trade who deals in those goods should not be ignored, rather it should be given due importance - The certificate from the experts was not available before the Commissioner at the time of adjudication - In order to meet the ends of justice, matter should be remanded back to the Commissioner - In so far as the question of limitation is concerned, assessee have duly disclosed their product as 'Purified Terephthalic Acid' in the monthly ER- 1 returns filed by them with the Department, this is not the case of any suppression more so ever when the question of classification is involved - Therefore, the extended period of limitation is not available to the Department and on the same count, penalty imposed on the assessee is also not sustainable and hence set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1101-CESTAT-KOL
Diamond Beverages Pvt Ltd Vs CCGST & CE
CX - The Assessee is engaged in manufacture and clearance of Aerated water and Fruit based drinks and they also operates under Cenvat Credit Scheme and Sugar is one of the principal ingredients in manufacture of their dutiable final product - Proceedings were initiated against assessee by SCN proposing denial of Cenvat Credit of Sugar Cess aggregating Rs. 2,32,11,708/- claimed by assessee in ER-1 return for the month of June 2017 - The credit pertaining to the period September 2009 to August 2014 was taken for the first time in August 2014 itself under due intimation to the revenue authorities whereas the time limit for the purposes of taking credit was introduced for the first time only with effect from 1 September 2004 - The Sugar Cess credit from September 2014 onwards was taken by assessee on a month to month basis prior to its reversal in February 2016 on being objected by revenue while reserving the right to recredit - Therefore, it was a case of recredit and no time limit could be imputed for taking recredit of the amount so reversed under protest - Moreover, the views expressed by original authority as regards non-applicability of Circular dated 19 November 2014 is erroneous and unsustainable as the circular speaks about recredit in general and the situations which have been mentioned therein are only illustrative in nature - As a result, the impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
CUSTOMS
2020-TIOL-1263-HC-MAD-CUS
Ruchi Soya Industries Ltd Vs UoI
Cus - Petitioner entered into a contract on 15.1.2018 with its foreign supplier in Malaysia for purchase of Edible Palm Oil in bulk that was to be shipped from the port at Indonesia to be delivered at Chennai in India - dispute is with regard to payment of Customs duty and IGST for clearance of the subject goods, which the respondent department claimed on the strength of the notification dated 1.3.2018 - Contention of the petitioner is that the said notification dated 1.3.2018 was updated on 2.3.2018 and came to be published in the Official Gazette on 6.3.2018; that the customs duty, as was applicable, had already been paid along with the IGST on 1.3.2018 and 5.3.2018 respectively and, therefore, the enhanced amount realised from the petitioner is unlawful - After the petition had been filed, the petitioner came up with a plea that this issue, as has been raised in the present proceedings relating to the date of publication of an electronic copy of a gazette, has already been settled by the Delhi High Court by the Division Bench judgment dated 15.10.2019 in the case of M.D.Overseas Ltd. - 2019-TIOL-2779-HC-DEL-CUS .
Held: On the issue of the date of publication, the Delhi High Court in M.D.Overseas Ltd. (supra) while dealing with a similar notification held that the notification would come into effect from the date and time when it was electronically printed in the gazette and mere uploading on the website would have no significance - reasoning given by the Division Bench of the Delhi High Court in M.D.Overseas Ltd. (supra) does not appear to be suffering from any legal infirmity, nor any material or argument has been placed before the Bench to take a different view in the matter - Bench, therefore, accepts the contention of the for the petitioner on this count – Bench also finds that the aforesaid issue relating to publication has also been answered in favour of petitioner and not only this, the contention with regard to the amendment has also been answered in detail by the Division Bench of the Andhra Pradesh High Court in Ruchi Soya Industries Ltd. [MANU/AP/0325/2019] where it is held it that to avoid such contingency to give effect to the notification on the date of publication, the Government of India amended sub-section (4) of Section 25 of Customs Act, 1962 but, sub-section (1) and sub-section (2A) of Section 25 were not suitably amended and they remained as it is, therefore, sub-sections (1), (2A) and (4) of Section 25 are running contra to one another, creating confusion in the minds of public at large, atleast to the person who is dealing with the department; that Section 25(4) of the Customs Act is declared as arbitrary and contrary to Section 25(1) and (2-A) of the Customs Act, 1962 - issues already having been raised and decided, Bench has not been able to gather any other different reason to keep this matter pending, and adopting the reasoning given by the Andhra Pradesh High Court in Ruchi Soya Industries Ltd. (supra), Bench allows the writ petition on the same terms and direct the respondents to refund the entire excess amount paid by the petitioner as enhanced duty under protest, including the IGST amount, within a period of two months from today – Writ petition allowed: High Court [para 16, 17, 18, 20]
- Petition allowed: MADRAS HIGH COURT
2020-TIOL-1116-CESTAT-BANG
Bharat Tissues Pvt Ltd Vs CC
Cus - The main allegations in the SCN are about the shortage of the imported material at the appellant's premises which were certified by their internal auditors and later verified by the officers of DRI - The officers of DRI have found, in addition to the shortages detected by the auditors, shortages in respect of goods claimed to have been re-imported by the appellants in consequence to the rejection of the same by the foreign buyers - Revenue is of the opinion that these are statutory reports and, therefore, they are reliable - The company officials in their statements have accepted the shortage, therefore, whatever has been accepted need not be proved again by the Department.
Held:
++ If any action is required to be taken under the Customs Act, 1962, officers need to verify the stock physically to allege and prove the charge of shortage - If the appellants have made any mistake under any other Act, action can be taken by the officers concerned under the relevant provisions - Moreover, it is alleged that the auditors have prepared their reports on the basis of appellants records including those maintained as per the requirement of Customs and Central Excise Acts - In such case, the records were always open to the officers for examination and verification - Under such circumstances, it's not open to invoke the extended period - Moreover, the appellants have claimed that they have informed the bankers on their own; they have written letters i.e. Letter dated 18.03.2006 to SBI and Letter dated 13.06.2006 to Canara Bank; letter written to SBI is before the officers visited the premises of the appellant - The contents of the letter, reply by Bankers etc. have not been verified and discussed in detail - Other contentions of the appellants regarding the non-accounting of stock of work in progress; physical impossibility of counting the stock within 2 days; shortage being within permissible limits; eligibility to retain samples in terms of FTP etc have not been investigation and answered - Officers have also not taken physical stock, therefore, to this extent, Bench holds that demand of duty in respect of Sl. No. 1 to 5 & 7 of the table given at Para 59.2 of the OIO are not sustainable: CESTAT [para 15, 17, 18]
++ Regarding the shortage of 36049 Mtr/1609 Pcs in respect of re-imported export goods, Bench finds that the appellants submitted that no physical stock was carried; Manager, Import Export has stated that re-imported stock was not separately stored and they got mixed with regular stock and therefore, one-to-one co-relation was not possible - In respect of these goods, the appellants have violated the provisions of the Notification inasmuch as they could not maintain records properly; could not show the stock physically and could not show any proof of re-export, therefore, the arguments of the appellant in this regard are not acceptable and the lapses cannot be treated as procedural - Therefore, in respect of the re-imported goods, the allegations regarding Serial No. 6 of the table referred above, the Department has correctly confirmed duty of Rs.72,79,538/- in respect of these goods: CESTAT [para 19, 20]
Penalty - In view of the fact that the respective Bills of Entry have been assessed by the proper officers at the time of import, penalty under Section 114A and other penal provisions cannot be invoked, however, the Revenue will be free to recover duty along with interest in terms of the Notification 52/2003-Cus: CESTAT [para 21]
- Appeal partly allowed: BANGALORE CESTAT
2020-TIOL-1115-CESTAT-BANG
Bosch India Ltd Vs CC
Cus - Appellant imported 'Water Signal' by classifying under Tariff Item 9026 80 90 of the Customs Tariff Act, 1975 and claiming 'Nil' rate of duty - Revenue proposed to re-classify the sensors imported by the Appellants under Tariff Item 9032 89 90 on the ground that as per Explanatory Notes to Chapter Heading 9026, only instruments made to measure or give a direct reading of the matter being measured or checked are classifiable under Chapter Heading 9026; the water signal imported does not measure or check the quantity of water or does not read or give an output showing the quantity measured/checked and, therefore, the classification of these items under Tariff Item 9026 80 90 is incorrect; the 'Water Signal/ Sensors' monitors and regulates the level of water in the fuel feed system of endothermic engine and gives an indication when the level of the water reaches the pre-determined level; that with these functions, the water signal/ sensor are covered under Chapter Note 7(a) of Chapter 90 and is accordingly liable for classification under Tariff Item 9032 89 90 – SCN was issued demanding Customs duty of Rs.36,45,349/- and which was confirmed along with interest – since Commissioner(A) rejected their appeal, the importer is before the CESTAT.
Held: The crux of the argument on the part of the appellants was that the different items manufactured by them like water signal/sensors, pressure sensors, heart film air mass meters/air mass sensors and temperature sensors are classified under Heading 9026 and not under 9032 as contended by the Department because these are only measuring instruments and do not have any control on the operation of the main engines - in terms of HSN Explanatory Notes to Chapter 90, in order to fall under Chapter 9032, the impugned instrument should have three devices i.e., for measuring, comparing the measurement with the desired value and start or stop the engine to which they are attached - On going through the literature available on websites referred to by the AR, it is not categorically stated anywhere that the impugned instruments are capable of controlling the main machines; it is stated that the measurement is accurate and improves the engine performance - It is not coming forth from the literature that these are capable of triggering the stop or start of the engines - Thus, the Revenue could not establish the controlling feature of the instruments, therefore, Revenue has not discharged its final responsibility to establish the correctness of the classification proposed by them - Revenue was within their rights to obtain any technical opinion to establish the classification of the instruments under Heading 9032 and to counter the claim of the appellants about the classification under Heading 9026 – same not having been done, the claim of the appellant for classification under heading 9026 has to be accepted – appeal allowed with consequential relief: CESTAT [para 12, 13, 15]
- Appeal allowed: BANGALORE CESTAT
2020-TIOL-1100-CESTAT-KOL
Shri Hari Wax O Chem Pvt Ltd Vs CC
Cus - All the firms were the family concern in the nature of partnership and proprietorship under control of one, Shri Amit Agarwal, as the main person behind these units - During the impugned period, all these units imported consignment of slack wax and residue wax vide various Bills of Entry, which were assessed under Section 18 of Customs Act, 1962 pending valuation and test report - The importers submitted bond, bank guarantee and security for the release of provisionally assessed Bill of Entry under Section 18 of the Customs Act - The investigation regarding alleged evasion of customs duty on import of slack wax and residue wax by importers were taken up by DRI on the basis of intelligence inputs, supported by recovery of incriminating documents regarding under valuation of import of slack wax and residue wax through Kolkata/Haldia ports by certain importers - Consequently, premises of some of the importers and Custom House Agent were searched simultaneously at various location including the premises of M/s Deep Jyoti and Shiv Chemicals and M/s Chowdhury Udyog and Shree Hari Wax - The entire investigation is based on computer printout from impugned order - No separate investigation has been taken up against the appellant by DRI but the entire price available on invoice found in the computer system of M/s Shree Abhishek India and Abhishekh India has been borrowed without justifying their extra potation in the case of appellants - The computer printout which have been taken up as the relevant material for establishing undervaluation by appellant is not sustainable in view of the decision in case of M/s S.N. Agrotech 2018-TIOL-1614-CESTAT-DEL - As regards to the valuation issue, the adjudicating authority has discarded transaction value by applying the provisions of Rule 12 and arrived at the enhanced price in terms of Rule 9 of the Customs Valuation Rules read with Section 14 of the Act without following the sequential application of the rule 3, 4, 5, 7, 8 of Valuation Rules disregarding to the provisions of Customs Act and Rules made there under - Thus, the enhancement of value ignoring the transaction value is not sustainable - The evidence that department is trying to adduce about the higher contemporaneous import price, is only in photocopies - The department has not been able to show the original copies of the contemporaneous import price inspite of direction for adjudicating authority - The photocopies of the documents are not the admissible piece of secondary evidence in the proceeding as held in the cases of East Punjab Traders 2002-TIOL-658-SC-CUS and J. Yashoda 2007-TIOL-119-SC-MISC - Accordingly, the Department could not have issued the second SCN to the appellant for enhancing the valuation based on the data available in the computer printout - The Department has taken a stand before the Tribunal, High Court and also before the Supreme Court that assessment was provisional only on account of pending test report regarding oil content of the slack wax and residue wax and not on account of valuation is in fact contrary to the SCNs - It is on record that the Assistant Commissioner has finalized provisional Bill of Entry vide the assessment order accepting in terms of Section 18 of the Act without change in classification or any other aspect of provisional assessment - Accordingly, on the basis of which the order under challenge has been passed is contrary to the provisions of Section 18 of the Customs Act and there is no case of invocation of provisions of Section 28 of the Customs Act - As the impugned order itself is not sustainable, there is no question of other penalties on the Directors/officials of the appellants company to be sustained - Those penalties are set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
2020-TIOL-1099-CESTAT-DEL
Amanullah Vs CC
Cus - Condonation sought of delay of 110 days - Appellant submits that they were put to extra financial burden by exporter due to their misfeasance; that the appellant was pursuing with the exporter to get compensation; that the supplier had filed writ petition against the said o-in-o for re-export/re-sale of the goods and which is still pending and finally the exporter has reached an amicable settlement and writhdrawn the writ petition on 16.09.2019, all of the above lead to the delay in filing the appeal.
Held: Writ-petition was filed by one Shri Stanley Fernandes who though a consignor but apparently is not even the co-noticee in the impugned SCN dated 07 February 2018 - there is also no order passed against him as is apparent from the impugned order dated 30 January 2019 which is impugned - For this reason also, the pendency of said writ-petition does not seem to extend any benefit to the present applicant who is none but the importer and the proposed allegation of mis-declaration on his part to the extent of importing 43020 pieces of memory cards under the garb of three battery UPS, is not available to him - no sufficient cause shown for condoning the delay in filing the appeal - also the order under challenge has given the importer an opportunity for paying redemption fine but the appellant is miserably silent about exercising the said option - COD application is dismissed and so is the appeal: CESTAT [para 3 to 5]
- Application/Appeal dismissed: DELHI CESTAT |