SERVICE TAX

Great Eastern Energy Corporation Ltd Vs UoI

ST - The present petition was filed to challenge duty demand raised against the assessee - The assessee requested the Revenue to postpone recovery of duty in light of the prevailing circumstances - The assessee's counsel claimed that the issue involved in this writ petition raises a substantial question of law as also jurisdictional issue, which needs to be thrashed out - It was also submitted that different High Courts in India are considering the same issue and in fact a larger Bench of the Supreme Court is in session over the matter and it is only in the fitness of thing that the adjudication must await till the decision of the Supreme Court.

Held - Considering that a substantial question of law is raised and also considering the pandemic situation, which leads to difficulty in participating in adjudication proceedings, the Revenue authorities concerned are directed to not enforce the assessment order in challenge - Matter listed for hearing in September 2020: HC

- Case deferred: CALCUTTA HIGH COURT

2020-TIOL-1199-CESTAT-ALL

Kedar Nath & Sons Vs CCGST

ST - Demand of Service Tax was confirmed against assessee by way of passing an O-I-O - The same was challenged before Commissioner (A), who, dismissed the appeal of assessee as barred by limitation - Same was upheld by the Tribunal - Thereafter, assessee filed letter dated before Joint Commissioner (Adjudication) seeking ROM in the order dated 30/03/2013 passed by Deputy Commissioner - The Joint Commissioner vide his letter dated 16/02/2018 informed the assessee that the said ROM was not maintainable inasmuch as the order was passed by Deputy Commissioner and the same was also barred by limitation inasmuch as time limit prescribed under Section 74 of Finance Act was only two years - The Appellate Authority rejected the same - The ROM filed by assessee in respect of O-I-O passed in year 2013, after a gap of around three years and that too when the appeal against the O-I-O stand rejected by higher appellate forum - As such, no infirmity found in the impugned order of Commissioner (A): CESTAT

- Appeal rejected: ALLAHABAD CESTAT

2020-TIOL-1198-CESTAT-BANG

Sitaram Trading Company Vs CCE, C & ST

ST - The issue involved is whether the assessee have been rightly subjected to tax on the reimbursement of expenses received by them from Hindustan Unilever Ltd, for which they are working as C&F Agent - The items of dispute are receipt of various amounts under the accounting Heads 'Miscellaneous Bill', 'Inter-depot Transportation Freight' and 'Loading and Unloading' - The subsequent SCNs are bad for invocation of extended period of limitation, being SCNs dated 19th October 2005 and 17th October 2006 - So far as SCN dated 29th June 2005 is concerned, the same is remanded to the adjudicating authority for re-determination of tax liability after going through the evidences produced or now produced by assessee and also taking into consideration the ruling of Supreme Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd 2018-TIOL-76-SC-ST - The assessee is directed to appear before the original adjudicating authority with a copy of their representation and a copy of the order of Tribunal, along with evidences, to seek opportunity of hearing: CESTAT

- Matter remanded: BANGALORE CESTAT

CENTRAL EXCISE

2020-TIOL-132-SC-CX-LB

Mahle Engine Components India Pvt Ltd Vs UoI

CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Appeal filed against the disallowance of CENVAT Credit of Service Tax amounting to Rs.1,68,882/- paid on outward transportation of goods from the premises of the appellant manufacturer to the premises of buyer during the period from April, 2006 to March, 2011 - Later, the High Court noted that it was held by the apex court in the case of Ultra Tech Cement Ltd.- that the assessee is not entitled for CENVAT Credit for input services - goods transport agency service availed for transport of goods from the place of removal to buyer's premises - therefore, as the issue has been concluded by the judgment delivered by the Supreme Court, no question of law arises in the present appeal - Appeal was dismissed and the order passed by the adjudicating authority as well as the appellant authority were affirmed.

Held - Delay in filing appeal be condoned - Notice issued to the parties: SC

- Notice issued: SUPREME COURT OF INDIA

2020-TIOL-1348-HC-DEL-CX

Chaque Jour HR Services Pvt Ltd Vs UoI

SVLDRS - The present petition was filed in challenge of order rejecting the petitioner's application filed in Form SVLDRS-1 under the Sabka Vishwas Legacy Dispute Resolution Scheme 2019 - The petitioner also canvassed that the provisions of Section 126 of the Scheme and Rule 6 of the SVLDRSR, 2019 are violative of Articles 14 and 19(1)(g) of the Constitution.

Held - The petitioner sought to amend the petition so as to delete the challenge to the legality of the SVLDRS, 2019 - As such petition is at the initial stage and the procedure for amendment is time consuming, the petition and pending applications are disposed of: HC

- Writ petition dismissed: DELHI HIGH COURT

2020-TIOL-1197-CESTAT-KOL

Paharpur Cooling Towers Ltd Vs CCE

CX - The assessee is engaged in manufacture of cooling towers and parts thereof - The dispute is regarding the valuation of goods cleared by assessee from Diamond Harbour Unit to other sister unit - Since no sale is involved in such transfer, valuation is required to be done in terms of CEVR, 2000 - During Audit, the Departmental officers, after scrutiny of records, came to the conclusion that the valuation has not been properly adopted in accordance with CAS-4 specification - The assessee has since reworked the valuation of goods cleared during the disputed period in terms of CAS-4 Valuation and has admitted the liability and paid differential duty to the extent of Rs.46,44,174/-, but the adjudicating authority has taken the view that in addition of the amount admitted as payable by assessee, further differential duty is required to be paid by including freight, which is payable for transfer of the goods from the Diamond Harbour Unit to their other sister units - No legal basis found for addition of this freight amount - The goods are required to be valued at the time of clearance from the assessee's unit and freight upto the recipient unit is not required to be added - As such, there is no justification for adding such amount for arriving at the differential duty - In respect of PVC Waste, the claim of assessee is that the value is not required to be done on the basis of Rule 8 and CAS-4 Standard inasmuch as the value for clearance to independent buyers was available - No infirmity found in this stand since as per the decision of Larger Bench of Tribunal in Ispat Industries 2007-TIOL-245-CESTAT-MUM-LB , the valuation of the goods as per sale to independent buyer, may be adopted even in respect of clearance to sister unit - In any case, this is a case for revenue neutrality inasmuch as any differential duty paid by Diamond Harbour Unit will be available as cenvat credit by receiving unit - On the ground of revenue neutrality also, no basis found for demand of differential duty and imposition of penalty: CESTAT

- Appeal partly allowed: KOLKATA CESTAT

2020-TIOL-1196-CESTAT-KOL

Jagatdal Jute & Industries Ltd Vs CCGST & CE

CX - During the course of checking of Central Excise invoices of assessee, it was noticed that the assessee was supplying jute products to different Government agencies as per supply orders placed by Directorate of Supplies and Disposals (DGS&D) under the Ministry of Commerce, Govt. of India - Upon scrutiny of sale invoices to the Govt. Departments alongwith the corresponding supply orders, it was noticed that the assessee did not include all the additional price elements in the transaction value of their goods - The DGS&D supply orders indicated certain price elements in addition to the prices of goods (i) Banding charges (iii) Safety stitching charges (iii) Departmental charges (supply) and (iv) departmental charge (inspection) - The Department was of the view that the assessee was required to include the Departmental charges for inspection as well as supply in the ex-factory price of their products - The supply orders placed by DGS&D indicate that Service Tax @ 12.36% is payable on such Departmental charges - The letter issued by DGS&D dated-14/11/2014 directed the jute mills not to claim the departmental charges and Service Tax and informed that such departmental charges will not be reimbursed to the jute mills - The assessee has supplied the goods as per the supply orders placed by DGS&D and issued sale invoices - Such sale invoices indicate only ex-factory price of the goods and nothing extra is indicated or collected from the buyers in the nature of Departmental charges - Consequently, no justification found to include such departmental charges in the assessable value under Section 4(3)(d) of the Act - It is nobody's case that charges payable by purchasing department to DGS&D should be included in transaction value - The impugned orders are set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT

2020-TIOL-1195-CESTAT-ALL

Sikka Papers Ltd Vs CC & CE

CX - The assessee is engaged in the manufacture of various types of papers, some of which are dutiable and some are exempted - They are also availing the benefit of Cenvat Credit of duty paid on various raw-materials including imported waste paper used in manufacture of both the kinds of final products i.e. dutiable as also exempted - As per Audit Report, the Cenvat Credit was being availed by assessee on common inputs used for manufacture of dutiable as also exempted final products, in which case they were required to discharge a particular percentage of the value of the final exempted products in terms of the provisions of Rule 6(3) of CCR, 2004 - Accordingly, proceedings were initiated against them - Though the assessee during the course of adjudication contended that either they have maintained separate Cenvatable accounts for Cenvat Credit or wherever a common input is used, they have reversed the proportionate Cenvat Credit - The legal issues stand finally decided by catena of judgments - If an assessee has maintained separate Cenvatable accounts for the dutiable as also the exempted goods, he has no obligation to either reverse the proportionate Cenvat Credit or to apply the provisions of Rule 6(3) of CCR, 2004 - However, this fact requires verification, for which purpose, the impugned order is set aside and the matter is remanded back to the Commissioner for doing the needful and re-deciding the issue: CESTAT

- Matter remanded: ALLAHABAD CESTAT

2020-TIOL-1193-CESTAT-BANG

CX - Classification - Period involved is September 2004 to December 2015 - Issue which remains to be decided is as to whether the impugned products contained cocoa butter so as to be categorised as White Chocolate under CETH 1704 and thus rendering them ineligible for exemption contained in the Notifications 6/2002-CE, 3/2006-C.E. and 12/2012-CE - Facts of the present case are different from those dealt by the Coordinate Bench in the case of Nestle Products decided in 2008 - 2008-TIOL-2843-CESTAT-MUM and therefore, the ratio of the decision has no precedent value as far as this case is concerned - Moreover, Tribunal, Allahabad in the case of  Marko Foods - 2018-TIOL-3384-CESTAT-ALL  held that a similar product i.e., Parle 2-in-1 Eclairs" and "Kismi Toffee and Bar", to be boiled sweets containing no cocoa butter and having 8% fat content, are not "white chocolate" under Tariff Item 1704 90 30 of Central Excise Tariff and held that the said goods are eligible to benefit of Notification Nos.6/2002-CE, 3/2006-C.E. and 12/2012-C.E - Department has not conclusively established that the appellant's claim that the impugned products did not contain cocoa butter during the impugned period with any indisputable proof or test report - Therefore,  the impugned goods i.e. Nestle Milky bar and Nestle Milky bar Eclairs are not excluded for the purpose of exemption contained in the Notifications 6/2002-CE, 3/2006-C.E. and 12/2012-CE - Appeals allowed with consequential relief: CESTAT [para 28, 29]

- Appeals allowed: BANGALORE CESTAT

CUSTOMS

2020-TIOL-1350-HC-DEL-NDPS

Jai Bhagwan @ Bhedha Bhai Vs NCB

NDPS - Petitioner seeks bail in SC No. 311/2019 - Narcotic Control Bureau (NCB) filed a complaint alleging that on 11.01.2019, secret information was received by one of the Intelligence Officers that one person named Bhagwan Singh, aged about 35 years, would come to Anand Vihar Bus Stand New Delhi in Bus No. UK07PA1517 and would be carrying a huge quantity of charas - petitioner was arrested on 14.06.2019 after his statement had been recorded at the NCB office - He was produced before the court concerned on the same date and has remained in judicial custody since that date.

Held: It is apparent that the NCB's case rests, essentially, on the statements of Bhagwan Singh and the petitioner recorded under Section 67 of the NDPS and the analysis of their call records - both these statements were retracted by the petitioner - It is well settled that a statement of a co-accused has limited evidentiary value and it is difficult to sustain a conviction solely on the basis of a statement/testimony of a co-accused. At best, the same can be used as a corroborative evidence - Thus, the alleged voluntary statement of Bhagwan Singh may not be sufficient to convict the petitioner of the alleged offence - No incriminating material was found from the petitioner - it is also relevant to mention that the issue whether a self-incriminating statement made by an accused under Section 67 of the NDPS Act is admissible in evidence is pending consideration before a larger Bench of the Supreme Court in Tofan Singh - 2013-TIOL-51-SC-NDPS and even if such a statement is considered as admissible, it is a weak evidence with limited evidentiary value - Considering that the NCB's case rests substantially on the statements of the petitioner and that of the accused Bhagwan Singh, Court is of the view that there are reasonable grounds to accept that the petitioner may not be involved in the offence and he may be acquitted - in view of Section 37 of the NDPS Act, this Court is required to examine the material on record for the limited purpose of considering whether to release the accused on bail - Court allows the present petition and directs that the petitioner be released on bail on his furnishing a Personal Bond in the sum of Rs. 50,000/- and one surety of an equivalent amount to the satisfaction of the Trial Court/Duty Magistrate and also compliance with other conditions mentioned - petition is allowed in the aforesaid terms: High Court [para 22, 29, 30, 31, 34, 36 to 38]

- Petition allowed: DELHI HIGH COURT

2020-TIOL-1346-HC-MAD-NDPS

Abdinasir Ugas Ali Vs ACC

NDPS - Petition has been filed to quash the proceeding initiated for the offences under Section 8(C) r/w Sections 22, 23, 28 of Narcotic Drugs and Psychotropic Substances Act, 1985 r/w Sections 135 and 135(1)(a) of the Customs Act, 1962, against the petitioner - Petitioner submitted that the Khat Leaves were neither a narcotic drug nor psychotropic substance under the NDPS Act and it came to be included in the list of psychotropic substances under the NDPS Act, by virtue of a notification No.S.O.821(E) dated 27.02.2018 - According to the complainant, the package was booked prior to 27.02.2018 i.e., on 24.02.2018 and hence no offence can be tried, since as on date of the booking of the package, the substance was not banned.

Held: In the case on hand, the package reached the shores of Mumbai on 03.03.2018 and thereafter it reached the Foreign Post Office, Meenambakkam, Chennai on 05.03.2018 - Thereafter, on 12.03.2018, the parcel was examined and referred to Postal Appraisal Department - Thereafter only on 27.04.2018, in the presence of two independent witnesses, the officer in-charge has taken the parcel for examination and found two pink polythene bags containing khat leaves weighing 7.9 kg, addressed to the petitioner herein - Therefore, the commission of the offence had taken place on 27.04.2018 as such, on the date of commission of offence, the contraband called khat leaves were included as psychotropic substances and the same was notified by the Government of India, Ministry of Finance vide notification No.S.O.821(E), dated 27.02.2018 - Therefore, the judgement [Chirag Hasmukhrai Bhojani anr Vs. State of Gujarat, dated 09.05.2018 ] is not applicable to the case on hand and on the date of commission of offence the contraband called khat leaves were very much included in the list of psychotropic substances under the NDPS Act, 1985 - Petition is, therefore, devoid of merits and liable to be dismissed - Criminal Original Petition is dismissed: High Court [para 6, 7]

2020-TIOL-1200-CESTAT-KOL

Cus - Appellant filed two bills of export proposing to export 200 MT of Non-Basmati rice - At the time of filing the bills of export on 3/3/2008, there was no restriction on the export of non-Basmati rice - The goods covered by the bills of export were also entered duly for export loaded in the form of six trucks containing 200 MT of the goods - Non-Basmati rice was prohibited for export w.e.f. 24.03.2008 - Bench finds that 110 MT of Non-Basmati rice will not be hit by the prohibition imposed on 24/3/2008 inasmuch as these goods were entered for export on or before 6/3/2008 and were entitled to be exported in view of the relaxation given on procedural measures - Once it is held that 110MT of Non Basmati rice is not hit by the prohibition, the order of confiscation of the goods as well as the vehicles, are not warranted and are required to be set aside and are accordingly set aside - above findings of the Tribunal should not be construed as approval of the fraud done by way of fraudulently manipulating the number plates of the five trucks - The investigation has also identified the persons who have attempted to tamper the number plates presumably for reasons other than contravening the prohibition in the export of rice - Bench directs the Jurisdictional Customs authorities to take up these frauds with the appropriate agencies for further necessary action - impugned order is set aside and the appeals are allowed: CESTAT [para 12 to 15]

- Appeals allowed: KOLKATA CESTAT

2020-TIOL-1194-CESTAT-DEL

Hindustan Motors Ltd Vs CC, CGST, ST & CE

Cus - The assessee-company filed claim for refund of Customs duty paid under protest, upon import of diesel, petrol engine for motor cars classified under Heading 8407 8408 of CTA 1975 - Such duty had been paid in furtherance of an order passed by the jurisdictional Asst Commr. concerned - Such order was quashed by the Commr.(A) and such order subsequently attained finality - Thereafter, the assessee filed application for refund of the duty paid under protest - Such application was initially rejected by the Revenue but was later allowed by the Commr.(A) - Such findings of the Commr.(A) were sustained by the Tribunal - Thereafter, the assessee made another representation seeking that the refund amount be sanctioned to it along with interest - The Revenue issued an SCN proposing to reject the claim for interest - Such denial of interest was upheld by the adjudicating authority as well as the appellate authority.

Held - Section 11BB of the Act lays down that in case any duty paid is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application - The Explanation below the proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise but by an appellate authority or the court, then for the purpose of this section the order made by such higher appellate authority or by the court shall be deemed to be an order made u/s 11B(2) of the Act - Thus, it is clear that the Explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11BB - Hence the only interpretation of Section 11BB that can be arrived at is that interest under the said section becomes payable on the expiry of a period of three months from the date of receipt of the application u/s 11B(1) - Considering the relevant dates in the present set of facts, the assessee is entitled for interest on refund from the date of his application - The adjudicating authorities below had rejected the entitlement of appellant for interest along with refund claim in sheer violation of the decisions of the Supreme Court in Ranbaxy Laboratories Ltd. vs. Union of India - Such orders are unsustainable and merit being quashed: CESTAT

- Assessee's appeal allowed: DELHI CESTAT