| SERVICE TAX
2020-TIOL-1171-CESTAT-KOL
Naresh Kumar & Company Pvt Ltd Vs CST
ST - The assessee is undertaking job for its clients which include follow up on behalf of clients between collieries and railways, supervising, monitoring, witnessing the specified coal size and grade, ensuring optimum quantity of supply with correct measurement, organizing sampling and analysis of coal - A SCN was issued for the period from September 1999 to March 2004 proposing a demand of service tax under category of 'Clearing and Forwarding' services - The issued stands settled by Mumbai Bench of Tribunal in assessee's own case 2018-TIOL-121-CESTAT-MUM - The very essential requirement, in order to constitute clearing and forwarding services, of clearance of coal from the collieries is absent in the present case and that the assessee is only undertaking liaisoning related services to ensure smooth supply of coal - The issue is no longer res integra and therefore, the appeal of the assessee is entitled to succeed - In so far as the appeal filed by Revenue is concerned, the question of inclusion of other charges as deducted by Commissioner will not arise inasmuch as the very taxability under category of Clearing and Forwarding services cannot sustain and therefore, the appeal of the Revenue being devoid of merit is rejected - The demand of service tax, interest and penalty are set aside: CESTAT
- Assessee's appeal allowed: KOLKATA CESTAT
2020-TIOL-1170-CESTAT-CHD
S Sood & Company Vs CCE & ST
ST - SCN alleges that after 01.05.2006, the services allegedly provided by the appellant merits classification under the category of Business Support Service, however, the adjudicating authority held that said service qualifies under the Business Auxiliary Services – This means that the adjudicating authority has gone beyond the scope of the show cause notice, therefore, the adjudication order deserves no merits, hence the same is set aside – so also, once it is alleged that after 01.05.2006 the services rendered by the appellant qualifies under Business Support Service, therefore, for the period prior to 01.05.2006, demand of service tax cannot be raised against the appellant under the category of Business Auxiliary Service: CESTAT [para 7, 8]
ST - During the impugned period, it is seen that the appellant has collected certain amount as service tax for the services in question from their clients and the same is required to be deposited under Section 73(D) of the Finance Act, 1994 – appellant is directed to deposit whole of the amount collected as service tax from their clients along with interest within 30 days of the receipt of this order: CESTAT [para 9]
- Appeals disposed of: CHANDIGARH CESTAT
2020-TIOL-1168-CESTAT-CHD
Thapar Ispat Ltd Vs CC
ST - The assessee was engaged in the manufacture of M.S. Ingots, who imported 357.445 MT of Heavy Melting Scarp duty free in terms of Notfn 203/92 against value based advance licence - The assessee was allowed duty free import of non-alloy re-rollable scrap and not of M.S.Scrap - At the time of clearance of goods, this mistake was neither detected by Customs Officer while allowing duty free import of M.S. Scrap nor by the assessee - As the assessee could not fulfill condition of Notfn 203/92 alleging that they had failed to discharge their export obligation in respect of import of M.S.Scrap and they had availed benefit of Modvat on inputs used in exported goods whereas the said notification specifically barred availment of Modvat on inputs - The matter was adjudicated, the demand of customs duty and additional Customs duty was confirmed and penalty and redemption fine was also imposed - The said order was challenged before the Tribunal and the Tribunal remanded the matter back to the adjudicating authority for considering the submissions of assessee and again vide order dated 30.11.2005, the adjudicating authority denied the benefit of Notfn 83/90-Cus as amended by Notfn 116/93-Cus, which prescribed the customs duty @ 12% ad valorem as they had fulfilled substantive conditions of the said notification i.e. that they had utilized imported HMS in their own factory for manufacture of M.S. Ingots which were cleared on payment of duty and that the Deputy Commissioner, Central Excise verified the consumption of HMS and issued end used certificate - The benefit of Notfn 83/90-Cus was denied on the ground that once the assessee had claimed the benefit of Notfn 203/92-Cus, they cannot be allowed to change the benefit of other notification and confirmed the demand of duty and imposed penalty and redemption fine on them - The said order was challenged before this Tribunal and this Tribunal vide final order dated 24.11.2008 again remanded the matte back to the Commissioner to give finding on the issue raised on earlier stages - Thereafter the impugned order has been passed by denying the benefit of Notfn 83/90-Cus as amended to the assessee on the ground that they had failed to fulfill the two conditions of notfns - Further, the issue of revenue neutrality was also denied as whatever CVD was to be paid, the same would be availed as Modvat on inputs but set aside redemption fine and penalty imposed on the assessee - The questions referred to President for reference to third Member, for resolution in difference of opinion between both the members are; whether the benefit of exemption under notfn 83/1990-Cus should be allowed to assessee as has been held by Member (Jl) or disallowed as held by Member (T); whether the demand should be set aside on the ground of revenue neutrality as held by the Member (J) or the demand should be upheld as held by Member (T): CESTAT
- Case deferred: CHANDIGARH CESTAT
CENTRAL EXCISE 2020-TIOL-1192-CESTAT-DEL
Surya Wires Pvt Ltd Vs CC, CE & ST
CX - A SCN was issued proposing recovery of excise duty - Interest on these amounts was also proposed with the imposition of penalty upon Director of assessee under Rule 25 of CER, 2002 r/w Rule 15 of Cenvat Credit Rules - It was observed after conducting physical verification of stock of finished goods and raw-material available in assessee's premises that the assessee is engaged in procuring of unaccounted raw-materials for illicit manufacture of finished goods and its clandestine removal without payment of Central Excise duty - The documents as relied upon by adjudicating authority, while confirming the demand are delivery challan, estimated invoice and outgoing sheet but these documents admittedly and apparently have not been co-related with the documents submitted by assessee - Perusal of said documents with the delivery challans recovered by Department shows that the delivery challans are in the name of Sona wires Pvt. Ltd. and document of assessee are proving that Sona Wire were their job worker and the shortage as noticed by Department at the time of investigation was purely on account of the goods being given to said job worker - This perual makes it clear that the Department has ignored the supportive documents which are sufficient enough to falsify the opinion of Revenue formed at the time of investigation - The another ground for confirming the demand is shortage noticed after physical verification of goods, admittedly the goods were verified on the basis of eye estimation - Tribunal Delhi in the case of Sigma Castings Ltd. has held that where the shortages have been made purely on eye estimation basis without any actual weighment of goods, the demand alleging clandestine removal cannot be upheld - The eye estimation of stock without any other corroborative evidence of removal of inputs cannot be the evidence for the quantity of inputs to be short or to have been clandestinely removed - The onus is solely on Revenue to prove as to how much inputs have been used or disposed of - In the absence thereof no charges of clandestine removal survives - The document as relied upon by Department is absolutely insufficient to prove the removal of inputs clandestinely - There is no evidence of procurement of raw-material and consumption thereof - No single payment detail of clandestine sale has been discussed - Nor there is any evidence of any excessive power consumption which is otherwise required for alleged large scale production - Nor there is any record of recruitment of workers or staff required for alleged massive production with no payment of record of salary and wages to such workers - No document in the form of receipts of any cash or kind on account of clandestine clearance and sale of goods has been seized from the parties - demand has been confirmed invoking the extended period of limitation alleging suppression of facts on the part of assessee but it is an admitted fact that monthly E.R. Returns have regularly been filed by assessee - It becomes clear that all the relevant facts were in knowledge of Department authorities since beginning - Except omission to file the declaration about job work from Sona Wires in terms of Notfn 214/86-CE, there is no other allegation which may amount as suppression - Law has been settled that every omission cannot be suppression - The Department is not entitled to invoke the extended period of limitation - The entire demand being beyond the normal period is not sustainable - The order under challenge is hereby set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2020-TIOL-1174-CESTAT-ALL
Meenu Paper Mills Pvt Ltd Vs CCe & ST
CX - It is a well settled law that clandestine removal allegations are required to be based upon legal, positive and sufficient evidences so as to inspire confidence in the Revenue's allegations or to at least show the evidences, which may tilt the case in favour of the Revenue on the principle of preponderance of probabilities - The clandestine allegations, being in the nature of quasi-criminal proceedings, cannot be upheld on the basis of assumptions and presumptions and require sufficient evidences - Allegations of Clandestine manufacture and removal - It has been repeatedly held by the Courts that clandestine manufacture and clearance cannot be readily inferred from few documents and statements unless the allegations are also corroborated and established on evidence, relatable to or linked with actual manufacturing operations - In the present case there is no such evidence forthcoming in the records to suggest clandestine manufacture and consequent clearance by the appellant – Bench has already observed about the production capacity of the appellant - Admittedly for clearing the final product in a clandestine manner, the same is required to be first manufactured in the factory - Revenue has not produced any evidence of procurement of various raw materials required for manufacture of excess goods in the appellant's factory, especially when they have contested the fact of their production capacity, based upon the Tribunal decisions in their own case - The evidences of procurement of sludge, which can only be used as fuel as per Chemical Examiners' report also does not advance Revenue's case - In the absence of the manufacture of the paper in question, how the same could be cleared by the assessee in a clandestine manner is not understood - There is also no evidence of movement of cash or receipt of consideration by the appellant from the buyers – impugned order is set aside and all appeals are allowed: CESTAT [para 31, 34, 38]
- Appeals allowed: ALLAHABAD CESTAT
2020-TIOL-1173-CESTAT-KOL
Mahanadi Coalfields Ltd Vs CCGST & CE
CX - The assessee is engaged in production of coal and is a 100% subsidiary of Coal India Limited - In the course of audit for the period 2012-13, the availment of CENVAT credit on the amount withheld from the invoices of service providers (contractors) towards "penalty for deficiency of services and price fall clause" was disputed - The assessee accordingly reversed the CENVAT credit on 30.09.2013 with interest for the alleged contravention of second proviso to Rule 4(7) of CCR, 2004 - Thereafter, a SCN was issued - The issue is no longer res-integra in view of the decision of Tribunal in case of Hindustan Zinc Ltd. 2017-TIOL-4243-CESTAT-DEL - Further, in the case of Reliance Infrastructure Ltd. 2017-TIOL-2117-CESTAT-ALL , it is noted that where the assessee had although reversed the credit amount, before issuance of SCN since disputed by the Department by invoking Rule 4(7) in identical facts, the Allahabad Bench held that the assessee was legally entitled to avail CENVAT credit - By following the decisions of co-ordinate Benches, the legal position stands settled in favour of assessee and against the Revenue - Assessee is legally entitled to CENVAT credit - T he impugned orders are set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1172-CESTAT-KOL
Electrosteel Casting Ltd Vs CCE
CX - The assessee is engaged in manufacture and export of Ductile Iron pipes and fittings - They operates under CENVAT Credit Scheme and had availed Cenvat Credit of service tax on inter alia 3 services, viz. Customs House Agent (CHA), Port Services and Steamer Agent Services at the Port of shipment for export of its finished goods on F.O.B. basis - The department has denied the CENVAT Credit on these three services on the purported ground that the services were used outside the factory premises and not being in relation to manufacture of their finished goods and therefore, did not qualify as an input service - Admittedly, such services have been utilized by assessee in carrying out the export of goods manufactured in their factory - There is no dispute about the fact that the goods have been exported - In such cases, the place of removal is the port where the export of goods is loaded on to the vessel - Inspite of the same, the Adjudicating Authority has denied such credit - The High Court of Gujarat in case of Inductotherm India Pvt. Ltd. 2014-TIOL-2678-HC-AHM-ST has granted the CENVAT Credit for Cargo Handling Services used for clearance of final product from the port for export - By following the said decision, it is concluded that the assessee will be entitled to CENVAT Credit - Accordingly, the impugned orders are set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
CUSTOMS
2020-TIOL-1328-HC-DEL-NDPS
Birpal Vs NCB
NDPS - Petition has been filed under section 439 Cr.P.C. read with section 37 of NDPS Act for grant of bail.
Held: Bench has carefully gone through the role assigned to the petitioner and co-accused Mohan Kumar who was granted bail by this Court vide order dated 23.03.2020 in Bail Appl.2839/2019 - In the opinion of the Bench, role assigned to co-accused Mohan Kumar as per prosecution is graver in comparison to the present petitioner - As per the panchnama, no recovery could be made out from the custody of petitioner - Admittedly, in the present case, there is no recovery being effected from the petitioner either for substance or money trail - Petitioner was employee of the company of Mohan Kumar and is not involved in any other case previously - His role, under any imagination, cannot be graver than Mohan Kumar - Court is of the view that prima facie case is not established against the petitioner, however, since the present order is being passed in bail application, therefore, without commenting on the merits of the prosecution case, the petitioner deserves bail who is in judicial custody since 02.07.2019 - Petitioner shall be released on bail on his furnishing personal bond in the sum of Rs.25,000/- with two sureties of the like amount to the satisfaction of the Trial Court - Petition allowed: High Court [para 11, 12, 18 to 20]
- Petition allowed : DELHI HIGH COURT
2020-TIOL-1169-CESTAT-HYD
Coromandel Fertilisers Ltd Vs CC
Cus - Without challenging the assessment of the bills of entry, appellants filed refund applications before the Assistant Commissioner which were returned with deficiency memos - After the deficiencies were rectified, the adjudicating authority rejected the refund claims on the ground that the appellant had not challenged the finally assessed bills of entry holding that such challenge is a necessary prerequisite for filing the refund claims in terms of the apex court judgments in Priya Blue Industries & Flock India P Ltd. - since this order was upheld by the Commissioner(A), the assessee is before the CESTAT.
Held: Larger Bench of the Apex Court in the case of ITC Ltd., - 2019-TIOL-418- SC-CUS-LB has held that no refund can be claimed in respect of any assessment including self assessment unless the assessment itself is challenged and set aside by the appellate authority - This is now the law which should apply to all cases including the present one, therefore, the refund claims have been correctly rejected as the assessment themselves have not been challenged in this case by the appellant - impugned orders are upheld and appeals are dismissed: CESTAT [para 7, 8]
- Appeals dismissed: HYDERABAD CESTAT |
