Prashant Bhushan

Miscellaneous - Contempt of court - The Supreme Court initiated suo motu proceedings for contempt of court, against the contemnor, who wrote certain objectionable statements against the Chief Justice of India and the functioning of the Supreme Court, on a social media website - The contemnor was stated to have critised the CJI, for being outdoors without wearing a mask in the backdrop of the COVID 19 pandemic while on the other hand keeping the supreme court from functioning normally due to the pandemic situation - The contemnor had justified his statements by claiming that such curtailed functioning of the court adversely affected the fundamental rights of the citizens & more so, those litigants who were destitute or were facing urgent grievances - The contemnor had subsequently posted another statement on the same social media website, holding the Supreme Court, past CJIs and the incumbent CJI, amongst others, responsible for what the contemnor perceived to be a destruction of democracy in India over the preceding few years - The contemnor went on to allege that the CJI and his predecessors abused their powers as Master of the Roster, so as to enable authoritarianism, majoritarianism & stiffling of dissent.

Held - It is settled position in law that the summary jurisdiction exercised by superior courts in punishing contempt of their authority exists for the purpose of preventing interference with the course of justice and for maintaining the authority of law as is administered in the courts; that the object of contempt proceedings is not to afford protection to judges personally from imputations to which they may be exposed as individuals - It has been held, that it is intended to be a protection to the public whose interests would be very much affected if by the act or conduct of any party, the authority of the court is lowered and the sense of confidence which people have in the administration of justice by it is weakened - It is also held that such a conduct tends to create distrust in the popular mind and impair the confidence of the people in the courts, which are of prime importance to the litigants in the protection of their rights and liberties - It was also held in various precedents that it is not necessary to prove affirmatively, that there has been an actual interference with the administration of justice by reason of such defamatory statement and it is enough if it is likely, or tends in any way, to interfere with the proper administration of justice - It is also held that the court can intervene where the a Judge has been villified in his or her capacity as a judge, as such conduct substantially affects administration of justice & such activity becomes public mischief punishable for contempt and it does not matter whether such an attack is based on what a judge is alleged to have done in the exercise of his administrative responsibilities - It has been held, a Judge's functions may be divisible, but his integrity and authority are not divisible in the context of administration of justice - It has been held, an unwarranted attack on him for corrupt administration is as potent in doing public harm as an attack on his adjudicatory function - It is well settled law that a citizen in exercise of rights under Article 19(1) can make fair criticism of a judge, the judiciary & its functioning - However, the provisions of clause (2) of Article 19 impose certain restriction upon the freedom enshrined in clause (1) - The right as well as the reasonable restriction have to be balanced - Where in exercise of right as per Article 19(1), a citizen oversteps the limits and makes a statement which tends to scandalize the judges and institution of administration of justice, such an action would come in the ambit of contempt of court - If a citizen makes a statement which tends to undermine the dignity and authority of this Court, the same would come in the ambit of ‘criminal contempt' - When such a statement tends to shake the public confidence in the judicial institutions, the same would also come within the ambit of ‘criminal contempt' - when such a statement is calculated in order to malign the image of judiciary, the Court would not remain a silent spectator - When the authority of this Court is itself under attack, the Court would not be a onlooker - The contemnor, a practicing advocate, has appeared before the court for over 30 years and has represented in many issues of public importance - The alleged contemnor being part of the institution of administration of justice, instead of protecting the majesty of law has indulged into an act, which tends to bring disrepute to the institution of administration of justice - The alleged contemnor is expected to act as a responsible officer of this Cour - The scurrilous allegations, which are malicious in nature and have the tendency to scandalize the Court are not expected from a person, who is a lawyer of 30 years standing - It cannot be said that the tweets can be said to be a fair criticism of the functioning of the judiciary, made bona fide in the public interest - The statements made by the contemnor undermine the dignity and authority of the institution of the Supreme Court of India and the CJI and directly affronts the majesty of law - The statements which are based on the distorted facts, in our considered view, amount to committing of ‘criminal contempt' - Hence the contemnor is held guilty of having committed criminal contempt of court: SC LB

- Petition disposed of: SUPREME COURT OF INDIA

SERVICE TAX

2020-TIOL-1219-CESTAT-MUM

Sharada Clearing & Forwarding Agency Pvt Ltd Vs CCE

ST - The assessee, a holder of custom broker license was proceeded against in accordance with regulation 20 of CBLR, 2013 by issue of notice prescribed for invoking regulation 18 to revoke license, forfeit security or impose penalty for having failed to comply with regulation 11(n) of Regulations - Accepting the report of inquiry officer, Commissioner of Customs ordered the revocation of license - It is settled law that in the absence of a specific procedure, the principles of natural justice shall govern any action that leads to detriment - It would appear that the inquiry had not distinguished itself by conformity to the fundamental requirement of notice of intention to conduct hearings - The request for cross-examination of investigating officer emanated from the charged 'customs broker' and it was incumbent upon inquiry authority to intimate and carry on with the deposition of summoned witness, in, and unfailingly so, the presence of the noticee - Any finding arrived at thereafter, based on such unchallenged testimony, is not acceptable and the failure to furnish the report of Presenting Officer to enable participation in further proceedings has compounded the breach of principles of natural justice - Not unnaturally, the inquiry report is bereft of sanctity accorded to it by the Commissioner of Customs - Thereby, the finding in impugned order also stand vitiated - In the absence of acceptability of enquiry report and consequent reliance placed upon it by Commissioner of Customs, Tribunal is unable to take a view on the correctness, or otherwise, of the charge in notice issued to the assessee - Consequently, unable to decide on the notice itself - Accordingly, the impugned order is set aside and the Commissioner of Customs is directed to institute a fresh inquiry and after detailed consideration of the report arising therefrom as well as the response of the noticee, if any, to pass a detailed order of finding - The inquiry was undertaken in ignorance of principles that govern such proceedings - The assessee is directed to cooperate with and participate in the fresh proceedings: CESTAT

- Appeal disposed of: MUMBAI CESTAT

2020-TIOL-1218-CESTAT-MUM

CCGST Vs Future Generali India Life Insurance Company Ltd

ST - Issue in Revenue appeal is as to whether dropping the demand in respect of "proposal deposits/unallocated premium" collected during the period from April 2009 to 30.03.2011 (i.e. prior to 01.04.2011) towards service to be provided, under the category of "Life Insurance Services", was legal and proper and deserves to be set aside.

Held: Bench notes that the observations of the adjudicating authority in para 12.6 and 12.7 of the impugned order, for the period prior to 01.07.2011 are contrary to the observations made by the Tribunal in case of ICICI Prudential Life Insurance Company Ltd - 2019-TIOL-1075-CESTAT-MUM - Bench is, therefore, not in position to uphold the order of Commissioner - Accordingly, the appeal filed by the revenue is allowed and the matter remanded back to original adjudicating authority as prayed by the revenue: CESTAT [para 4.3, 4.4]

- Matter remanded: MUMBAI CESTAT

2020-TIOL-1217-CESTAT-ALL

CCE & ST Vs Utility Powertech Ltd

ST - Respondent entered into a contract with M/s NTPC for maintenance of various lawns, flower beds and other horticulture work - For the said purpose, they engaged the services of various sub-contractors who further engaged number of gardeners/labourers, etc. for the said job - Revenue entertained a view that the assessee has provided Manpower Supply Services to M/s NTPC and accordingly raised a service tax demand which was confirmed by original authority but the Commissioner(A) set aside the demand, hence Revenue is in appeal.

Held: There is no mention of any person to be supplied by the assessee to M/s NTPC to work under their instructions, so as to hold that the assessee has provided Manpower Supply Services; that the contract terms nowhere mention the number of persons to be engaged by the assessee, therefore, M/s. NTPC is having no control over the sub-contractor, directly or indirectly and the work orders were primarily and mainly for execution of horticulture work - There is no infirmity in the aforesaid findings of the Commissioner(A) and Revenue has not advanced any reason so as to justifiably interfere in the impugned order - no merit in the Revenue appeal, hence same is rejected: CESTAT [para 4, 5]

- Appeal rejected: ALLAHABAD CESTAT

CENTRAL EXCISE

2020-TIOL-1216-CESTAT-DEL

HL Passey Engineering Pvt Ltd Vs Pr CCGST & CE

CX - Notification 3/2005-CX prescribes Nil rate of duty for construction activity undertaken at site under various infrastructure projects such as roads, flyovers, bridges etc. - The appellant is having an independent manufacturing unit at Bhopal where they are carrying out fabrication and manufacturing activity - The pre-fabricated structures classifiable under CETH 7308 9010 are being taken in the CKD/SKD condition to different locations all over India - Manufacturing is the primary work undertaken at the factory of the appellant and the pre-fabricated structures are only erected, installed and commissioned at the site of the various petrol pumps - Insofar as applicability of the latter Notification No. 12/2012-CE is concerned, the construction work of a road or flyover is being primarily undertaken at the site and only some components, blocks are manufactured by the contractor at different site and in that case the benefit of the Notification No. 12/2012-CE is available - However, in case of the appellant, the primary activity is of manufacturing and fabrication and then only goods are being taken for assembly, erection or commissioning at a given petrol pump - Bench is of the view that by no stretch of imagination, the benefit of Notification No. 12/2012-CE can be extended to a manufacturing activity which is being undertaken at a factory and thereafter the fully manufactured pre-fabricated structures are taken in the form of the CKD/SKD condition for installation at the given site - No force in the arguments advanced by the appellant for allowing them the benefit of Notification No. 12/2012-CE dated 17/03/2012 as well as previous Notification No. 3/2005-CE dated 24/02/2005 - no merit in assessee appeal, hence same is rejected: CESTAT [para 12, 13]

CX - Only ground on which the appeal has been filed by the Department is that the Adjudicating Authority erred in holding that there is no allegation in the show cause notice that the assessee/respondent was also availing Cenvat credit on the goods used for exempted goods - It is seen that the Adjudicating Authority has gone in detail on this subject and only after a meticulous perusal of the trial balance and other financial details has reached a conclusion that the respondent/assessee had maintained a separate record with regard to inputs which have gone in the manufacture of non-taxable goods/services - As the Department has not adduced any concrete evidence to contradict the findings given by the Adjudicating Authority, there is no substance in the appeal filed by the Department - Appeal is dismissed: CESTAT [para 14 to 16]

- Assessee/Department Appeal dismissed: DELHI CESTAT

2020-TIOL-1215-CESTAT-ALL

DR Auto Industries Vs CCE, C & ST

CX - CENVAT - Allegations against the appellant were that in some of the invoices related to receipt of inputs, certain particulars such as mode of transport etc. were not available, therefore, it appeared to Revenue that the appellants were not entitled to Cenvat credit of duty paid through the said invoices - Further when the inspection was carried out, certain final products were found short as compared to balance recorded in RG-1 - On the basis of said facts, proceedings were initiated to disallow the Cenvat credit of around Rs.14.45 lakhs - Cenvat credit was disallowed with imposition of equal penalty and Central Excise duty demand of Rs.1,45,931/- was confirmed in respect of goods found short - appeal to CESTAT.

Held: Entire case of Revenue is based on few deficiencies in the invoice issued by the supplier of inputs - There are no allegations that the final products were not manufactured and duty on final product was not paid - There is no investigation as to how final product was manufactured without receipt of inputs, therefore, there is no merit in the allegation that appellant M/s D.R. Auto Industries did not receive the said inputs into their factory - Insofar as CE duty on final products found short, the appellant has paid the same and it has been appropriated and the said issue is not pressed - Since the Revenue did not make out a case that the appellant did not receive inputs on which Cenvat credit was availed, the demand of disallowance of Cenvat credit alongwith equal penalty is set aside - Appeals partly allowed: CESTAT [para 3, 4]

- Appeals partly allowed: ALLAHABAD CESTAT

2020-TIOL-1214-CESTAT-ALL

CCGST & CE Vs Hindustan Industrial Products

CX - Revenue is aggrieved by the order of Commissioner (Appeals) through which the inputs were allowed to be released - The said inputs were found in excess in the premises of the respondent and the Commissioner (Appeals) has relied on various decisions of this Tribunal to hold that there are no provisions in Central Excise law, rule 25 of CER, to confiscate raw material - Revenue is in appeal.

Held: Since Revenue could not rely on any such provision through which raw material could be confiscated, Bench does not interfere with the order of Commissioner(A) - there is also no ground for imposing penalty under rule 25 or 26 of CER - Revenue appeals are rejected: CESTAT [para 2]

- Appeals rejected: ALLAHABAD CESTAT

CUSTOMS

2020-TIOL-1361-HC-MAD-CUS

Binary Holdings Vs CC

Cus - Petitioner is aggrieved against the Mahazar dated 01.07.2014 whereby certain goods relating to parts of sewing machine were seized - Pending the writ petition, Court, by an order dated 21.08.2014, had directed for removal of the lock and seal and release of the goods, on condition that the petitioner pays a sum of Rs.2 lakhs and also furnished a bank guarantee to the extent of Rs.1.80 lakhs - Petitioner had complied with the said directions and consequently the goods were released; that SCN was issued on 27.10.2017 demanding differential duty and reply was filed on 15.12.2017 - Counsel for Respondent Revenue submits that the petition is, therefore, not maintainable and hence is required to be dismissed.

Held: Issue as to whether the writ petition could be maintained or not does not require consideration at this stage, since the respondents have chosen to proceed with the demand of the differential duty and the second respondent had also issued a show cause notice and which has been replied to - Therefore, if the respondents are directed to further adjudicate on this issue, the ends of justice could be secured - direction is, therefore, issued to the Joint/Additional Commissioner of Customs, Commissionerate, Chennai - 600002, to consider the petitioner's reply and after giving personal hearing, decide the case within a period of 12 weeks - Petition disposed of: High Court [para 6 to 8]

2020-TIOL-1360-HC-KERALA-CUS

CC Vs N C John And Sons Pvt Ltd

Cus - The Tribunal specifically found on the materials on record that the respondent had as a matter of fact declared their intention to claim MEIS benefit in all the shipping bills which have been produced - It was noticed that the only lapse on the part of the respondent was that, in the reward column instead of mentioning 'Y' it was mentioned as 'N' - The Tribunal held that it is only a procedural defect and that the respondent is entitled to MEIS benefit - Commissioner of Customs has challenged this order.

Held: Issue involved is no longer res integra - In a similar circumstance, where the exporter had indicated their intention for claiming the reward in a specific box provided in the software through which it is uploaded to the web portal of the Central Government, but failed to check the correct box in a further column, the exporter had approached this court and the writ petitions were allowed by a Single Judge holding that it was an inadvertent mistake which is apparent from the perusal of the shipping bill, which shows both the words "we intend to claim reward under MEIS" as also "No" in the box against the query, with regard to intention to claim MEIS benefit; that the Writ appeals filed by Revenue were dismissed by a Division Bench by judgment dated 04.03.2020 - 2020-TIOL-832-HC-KERALA-CUS upholding the findings of the Single Judge - Bench agrees with the aforesaid decisions of the High Court and does not find any reason to interfere with order of the CESTAT - since the appellant does not have any case that the conditions stipulated in Section 149 are not existing, there can be no denial of the permission to amend the shipping bills - Customs Appeal is dismissed: High Court [para 5, 8]

- Appeal dismissed :KERALA HIGH COURT

2020-TIOL-1359-HC-KERALA-CUS

M M Hassan Vs Superintendent Of Customs

Cus - Question is "whether in view of proviso to Section 110(2) of the Customs Act, 1962, Principal Commissioner of Customs or Commissioner of Customs is empowered to extend the period for issuance of notice under Section 124 of the 1962 Act to another six months and whether it is necessary to afford an opportunity of hearing at the time of extension or not" - In pursuance of search conducted on 16.10.2019 in the premises of petitioner No.2 as evidenced from the Mahazar (Exhibit P-11) recovery of 4392.05 grams of gold bars in 13 pieces having value of Rs.1,72,94,632/- was made from the premises of petitioner No.2, alleged to have smuggled gold - Indulgence of this Court has been sought for quashing of Exhibit P-11 dated 16.10.2019 regarding the seizure of gold as well as the illegality committed by Customs Authorities in granting ex parte extension dated 26.05.2019 (Exhibit P-19), communication thereof received by petitioner No.2 on 27.05.2020 i.e. beyond 40 days after expiry of six months of seizure at the back of petitioner No.2 - In the absence of any action taken within six months, a representation dated 12.01.2020 (Exhibit P-15) for provisional release, as per provisions of Section 124(a) of the 1962 Act, was submitted by 1st petitioner before the 2nd respondent - Similarly 2nd petitioner also submitted an identical representation dated 10.01.2020 (Exhibit P-16) - as no action was taken, petitioners approached the High Court.

Held: Court vide order dated 17.02.2020 (Exhibit P-17) directed 2nd respondent to dispose of the representations within one month from the date of receipt of certified copy of the order - Petitioners were heard on 19.03.2020 and accordingly order dated 13.04.2020 (Exhibit P-18) was passed whereby the Assistant Commissioner of Customs rejected the representations, which was communicated to the petitioners on 22.04.2020 - On 27.05.2020, a letter, which was signed on 26.05.2020, was received by the 2nd petitioner, intimating regarding extension granted by 2nd respondent from 15.04.2020 as per the provisions of Section 110(2) of 1962 Act - The seizure in the instant case was done on 16.10.2019 and the period of six months expired on 15.04.2020 - In view of the Ordinance dated 31.03.2020 promulgated before expiry of period, had already been extended upto 30.06.2020 but still vide Exhibit R1(a) dated 11.03.2020, the Commissioner of Customs (Prev) on the basis of report of Assistant Commissioner of Customs (P), Thrissur Division extended the period from 15.04.2020 to another period of six months - In the absence of Ordinance, there would have been a force in the arguments of the petitioners of non-adherence to the strict provisions of the Act as concededly the communication of extension received by the petitioner is dated 26.05.2020 (Exhibit P-19) - Thus, in the view of the Court, right of the petitioners has not been prejudiced or taken away in granting extension of six months for completion of proceedings under Section 124 of the 1962 Act - cited judgments pertain to unamended provisions of Section 110(2), thus, the ratio decidendi culled out would not apply in the instant case - question raised is answered against the petitioner and the writ petition is accordingly dismissed: High Court [para 11, 12]

- Petition dismissed :KERALA HIGH COURT

2020-TIOL-1213-CESTAT-ALL

CC Vs Arinit Sales Pvt Ltd

Cus - Amount involved in the Revenue appeal is Rs.7,96,300/- - Bench notes that as per the standing instruction of C.B.E.C. as it stood on 31 October, 2018 i.e. the date on which the appeal was filed, the appeal was not to be filed before this tribunal in the case of customs matters if the revenue involved is less than Rs.10 lakhs - In spite of such clear instructions, the said appeal was filed by Revenue on 31 October, 2018 and thus caused wastage of time of this court - Miscellaneous application filed by Revenue to rectify the mention of 35R of the CEA, 1944 in the final order dated 19 March 2019 is, therefore, rejected: CESTAT

- Application rejected: ALLAHABAD CESTAT

2020-TIOL-1212-CESTAT-MUM

CC Vs Rosenberger Electronics Company India Pvt Ltd

Cus - These applications seek withdrawal of appeals filed by Revenue against O-I-A challenging the remand direction by first appellate authority - It is submitted that as de novo proceedings has since been completed by adjudicating authority and the appeals rendered infructuous, these applications have been moved - Appeals stand dismissed as withdrawn: CESTAT

- Applications allowed: MUMBAI CESTAT