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SERVICE TAX
2020-TIOL-1312-CESTAT-HYD Vivimed Labs Ltd Vs CCE, C & ST
ST - Appellant had availed the services of M/s Hanovar Square Capital (UK) Ltd., M/s City Bank N.A. (Singapore) and M/s Atherstone Capital Markets Ltd., Mumbai for placing Foreign Currency Convertible Bonds (FCCB) in the International Capital Market to raise capital – For this purpose, the appellant paid fees to the above companies in the form of Lead Manager Charges, Agreement Fee, Corporate Advisory Fee, Listing Fee and other professional charges – DGCEI informed the appellant that since they had availed the services of the above companies located outside India and paid service charges, as service recipients, they were required to pay service tax under reverse charge mechanism under Section 66A of the FA, 1994 - Service tax amounting to Rs. 58,86,315/- was paid by the appellant along with an interest of Rs. 5 lakhs during the investigation itself - Later, a SCN dated 09.10.2009 was issued to the appellant demanding the aforesaid service tax and proposing to appropriate the amount already paid by them as service tax along with interest and further proposing to impose a penalty equal to the amount of service tax u/s 78 of the FA, 1994 - SCN culminated in the issue of the impugned order confirming the demand along with interest and imposing penalties as proposed - Aggrieved, the appellant is in appeal and contests the demand, both on merits and on limitation – Appellant argument is that the Corporate Advisory Services and professional charges can by no stretch of imagination classified as "banking and other financial services" and also cannot be classified as "merchant banker services"; that the service tax was not paid by them on their bonafide understanding that no such service tax was payable and this bonafide belief negates any allegation of suppression of facts.
- Appeal allowed: HYDERABAD CESTAT
2020-TIOL-1311-CESTAT-DEL
Techsearch Consultants & Engineers Pvt Ltd Vs Asstt CST
ST - Refund - Rule 5 of Export of Services Rules, 2005 - Notification No. 11/2005-ST - Limitation period of three years as is impressed upon by the appellant to be applicable is flowing from the Limitation Act - The Limitation Act is a Central/General Act, whereas the Central Excise & Finance Act are special Acts - It is former that will be applicable had the special Act been silent about any period of limitation - For the application, as the one in question, since it is maintainable under Section 11-B of Central Excise Act, irrespective out of the benefit flowing from the notification No. 11/2005-ST dated 19.04.2005, the period of one year from the relevant date shall be applicable to claim the refund of the tax paid qua export of service - Where the recipient of any service is located outside India, irrespective of the fact that the recipient has some establishment in India as well, the taxable service has to be treated as export of service - Apparently and admittedly, the appellant was providing services to the clients situated outside India - Accordingly, the taxable service provided by the appellant was the export of service - Therefore, they had rightly filed the refund claim in furtherance of notification No. 11/2005 and were actually entitled for the said refund provided the same is within the period of limitation – Appeal partly allowed i.e. to the extent of denying the refund of Rs. 1,72,125/- as the same is apparently time barred: CESTAT [para 8, 11, 12, 13]
- Appeal partly allowed: DELHI CESTAT
CENTRAL EXCISE
2020-TIOL-1465-HC-MUM-CX
Mahindra And Mahindra Ltd Vs CCT & GST
CX - The appeal under Section 35G of CEA, 1944 challenges the final order of Tribunal in 2018-TIOL-3631-CESTAT-MUM - In a group of appeals in respect of assessee's own case, said framed questions of law have been decided against the Appellant in the decision 2019-TIOL-2769-HC-MUM-CX - Hence, it do not arise for consideration in this appeal - The decision having been rendered in appellant's favour on merits, the issue of penalty is answered in favour of appellant and against the Respondent: HC
- Appeal disposed of: BOMBAY HIGH COURT
2020-TIOL-1310-CESTAT-MUM
Deepak Fertilizers & Petrochemicals Corporation Ltd Vs CCE & ST
CX - Rule 6 of CCR, 2004 - Case of the Department in this case is that the appellant had adopted incorrect value of "P" in the formula 'M/N*P' provided under Rule 6(3A)(c)(iii) ibid inasmuch as the factor "P" denotes total Cenvat credit and not common Cenvat credit - Department had initiated show cause proceedings against the appellant, which culminated into the adjudication order dated 30.11.2016, wherein an amount of Rs.25,51,063/- along with interest was ordered for recovery and penalty of Rs.2,50,000/- was imposed on the appellant - appeal to CESTAT.
Held: Issue arising out of the present dispute is no more res integra , in view of the decision of this Tribunal in the case of Reliance Industries Ltd. - 2019-TIOL-1593-CESTAT-AHM - It is held therein that if the whole Rule 6(1), (2), (3) is read harmoniously and conjointly, it is clear that "Total Cenvat Credit" for the purpose of formula under Rule 6(3) is only total Cenvat credit of common input service and will not include the Cenvat credit on input/input service exclusively used for the manufacture of dutiable goods; that if the interpretation of the Revenue is accepted, then the Cenvat credit of part of input service even though used in the manufacture of dutiable goods, shall stand disallowed, which is not provided under any of the Rule of Cenvat Credit Rules, 2004 - following the same, impugned order is set aside and appeal is allowed: CESTAT [para 5, 7]
- Appeal allowed: MUMBAI CESTAT
2020-TIOL-1309-CESTAT-HYD
Andhra Cements Ltd Vs CCT
CX - The short issue to be decided is in a case where goods (cement) are sold by assessee to their customers on FOR destination basis, whether they can claim CENVAT credit on the outward transportation of goods from their premises to the buyers premises - An identical matter was before the Apex Court in case of Ultra Tech Cement 2018-TIOL-42-SC-CX - It has been decided by Apex Court that no CENVAT credit is admissible for transport of goods by the assessee to the buyer's premises - This issue is no longer Res integra - In that case, the original adjudicating authority namely the Assistant Commissioner had denied the benefit of CENVAT credit on the outward transportation of the goods from the factory to the buyer's premises when the sale was on FOR destination basis - The assessee challenged the order of original authority and the Commissioner (A), relying on the Board Circular dated 23.08.2007 has held that the assessee is entitled to benefit of CENVAT credit on the outward transportation of goods up to the buyer's premises - This order of the Commissioner (A) was also upheld by Trbunal and High Court of Karnataka - The approach of these courts has been held to be untenable by the Apex Court and it has been held that no CENVAT credit is admissible - The Apex Court has laid down that where the goods are sold on FOR destination basis i.e., where the ownership of the goods gets transferred only at the buyer's premises also no CENVAT credit is admissible for transportation of goods to the buyer's premises - No CENVAT credit is admissible to the assessee: CESTAT
- Appeal rejected: HYDERABAD CESTAT
CUSTOMS
2020-TIOL-144-SC-NDPS-CB
Mukesh Singh Vs State Narcotic Branch of Delhi
NDPS - Doubting the correctness of the decision of this Court in the case of Mohan Lal v. State of Punjab - 2018-TIOL-381-SC- NDPS taking the view that in case the investigation is conducted by the police officer who himself is the complainant, the trial is vitiated and the accused is entitled to acquittal, initially by order dated 17.01.2019 the matter was referred to a larger Bench consisting of three Judges and the three Judge Bench vide order dated 12.09.2019 has referred to a larger Bench of five Judges.
Held:
+ Section 53 does not speak that all those officers to be authorised to exercise the powers of an officer in charge of a police station for the investigation of the offences under the NDPS Act shall be other than those officers authorised under Sections 41, 42, 43, and 44 of the NDPS Act. It appears that the legislature in its wisdom has never thought that the officers authorised to exercise the powers under Sections 41, 42, 43 and 44 cannot be the officer in charge of a police station for the investigation of the offences under the NDPS Act. [para 9.3.8]
+ Investigation includes even search and seizure. As the investigation is to be carried out by the officer in charge of a police station and none other and therefore purposely Section 53 authorises the Central Government or the State Government, as the case may be, invest any officer of the department of drugs control, revenue or excise or any other department or any class of such officers with the powers of an officer in charge of a police station for the investigation of offences under the NDPS Act. [para 9.4]
+ NDPS Act does not specifically bar the informant/complainant to be an investigator and officer in charge of a police station for the investigation of the offences under the NDPS Act. On the contrary, it permits, as observed hereinabove. To take a contrary view would be amending Section 53 and the relevant provisions of the NDPS Act and/or adding something which is not there, which is not permissible. [para 9.5]
+ Insofar as the submission on behalf of the accused that so far as the NDPS Act is concerned, it carries a reverse burden of proof under Sections 35 and 54 and, therefore, if the informant who himself has seized the offending material from the accused and he himself thereafter investigates the case, there shall be all possibilities of apprehension in the mind of the accused that there shall not be fair investigation and that the concerned officer shall try to prove his own version/seizure and, therefore, there shall be denial of the "fair investigation" enshrined under Article 21 of the Constitution of India is concerned, it is required to be noted that whether the investigation conducted by the concerned informant was fair investigation or not is always to be decided at the time of trial. The concerned informant/investigator will be cited as a witness and he is always subject to cross-examination. [para 10]
+ Reference may be made to illustration (e) to Section 114 of the Indian Evidence Act. As per the said provision, in law if an official act has been proved to have been done, it shall be presumed to be regularly done. Credit has to be given to public officers in the absence of any proof to the contrary of their not acting with honesty or within limits of their authority. Therefore, merely because the complainant conducted the investigation that would not be sufficient to cast doubt on the entire prosecution version and to hold that the same makes the prosecution version vulnerable. The matter has to be left to be decided on a case to case basis without any universal generalisation.[para 10.1]
+ It is required to be noted that in cases where any person empowered under Sections 42, 43 or 44 of the NDPS Act acts vexatiously or maliciously, the statute itself has provided the punishment as per section 58 and it is an offence under section 58 which is a cognizable offence and such an offence is required to be investigated by the "officer in charge of a police station" other than the officer who exercised the power of entry, search, seizure or arrest under Sections 42, 43, or 44 as naturally in such a case he would be a proposed accused and, therefore, he cannot be permitted to investigate and to be a judge in his own cause. However, so far as the investigation against the accused for the offence under the NDPS Act is concerned, the same analogy may not apply for the reasons stated hereinabove. [para 10.2]
+ Insofar as the observations made by this Court in para 13 in Mohan Lal ( 2018-TIOL-381-SC- NDPS ) that in the nature of reverse burden of proof, the onus will lie on the prosecution to demonstrate on the face of it that the investigation was fair, judicious with no circumstance that may raise doubt about its veracity, it is to be noted that the presumption under the Act is against the accused as per Sections 35 and 54 of the NDPS Act. Thus, in the cases of reverse burden of proof, the presumption can operate only after the initial burden which exists on the prosecution is satisfied. At this stage, it is required to be noted that the reverse burden does not merely exist in special enactments like the NDPS Act and the Prevention of Corruption Act, but is also a part of the IPC - Section 304B and all such offences under the Penal Code are to be investigated in accordance with the provisions of the Cr.P.C. and consequently the informant can himself investigate the said offences under Section 157 Cr.P.C. [para 10.3]
+ There is no reason to doubt the credibility of the informant and doubt the entire case of the prosecution solely on the ground that the informant has investigated the case. Solely on the basis of some apprehension or doubts, the entire prosecution version cannot be discarded and the accused is not to be straightway acquitted unless and until the accused is able to establish and prove the bias and the prejudice. [para 11]
+ NDPS Act is a Special Act with the special purpose and with special provisions including Section 68 which provides that no officer acting in exercise of powers vested in him under any provision of the NDPS Act or any rule or order made thereunder shall be compelled to say from where he got any information as to the commission of any offence. Therefore, considering the NDPS Act being a special Act with special procedure to be followed under Chapter V, and as observed hereinabove, there is no specific bar against conducting the investigation by the informant himself and in view of the safeguard provided under the Act itself, namely, Section 58, we are of the opinion that there cannot be any general proposition of law to be laid down that in every case where the informant is the investigator, the trial is vitiated and the accused is entitled to acquittal. [para 11]
+ Similarly, even with respect to offences under the IPC, as observed hereinabove, there is no specific bar against the informant/complainant investigating the case. Only in a case where the accused has been able to establish and prove the bias and/or unfair investigation by the informant-cuminvestigator and the case of the prosecution is merely based upon the deposition of the informant-cum-investigator, meaning thereby prosecution does not rely upon other witnesses, more particularly the independent witnesses, in that case, where the complainant himself had conducted the investigation, such aspect of the matter can certainly be given due weightage while assessing the evidence on record. Therefore, as rightly observed by this Court in the case of Bhaskar Ramappa Madar (supra), the matter has to be decided on a case to case basis without any universal generalisation. [para 11]
+ As rightly held in the case of V. Jayapaul (2004) 5 SCC 223 ), there is no bar against the informant police officer to investigate the case. As rightly observed, if at all, such investigation could only be assailed on the ground of bias or real likelihood of bias on the part of the investigating officer, the question of bias would depend on the facts and circumstances of each case and, therefore, it is not proper to lay down a broad and unqualified proposition that in every case where the police officer who registered the case by lodging the first information, conducts the investigation that itself had caused prejudice to the accused and thereby it vitiates the entire prosecution case and the accused is entitled to acquittal.
Conclusion:
I. That the observations of this Court in the cases of Bhagwan Singh v. State of Rajasthan (1976) 1 SCC 15; Megha Singh v. State of Haryana (1996) 11 SCC 709; and State by Inspector of Police, NIB, Tamil Nadu v. Rajangam (2010) 15 SCC 369 and the acquittal of the accused by this Court on the ground that as the informant and the investigator was the same, it has vitiated the trial and the accused is entitled to acquittal are to be treated to be confined to their own facts. It cannot be said that in the aforesaid decisions, this Court laid down any general proposition of law that in each and every case where the informant is the investigator there is a bias caused to the accused and the entire prosecution case is to be disbelieved and the accused is entitled to acquittal;[para 12]
II. In a case where the informant himself is the investigator, by that itself cannot be said that the investigation is vitiated on the ground of bias or the like factor. The question of bias or prejudice would depend upon the facts and circumstances of each case. Therefore, merely because the informant is the investigator, by that itself the investigation would not suffer the vice of unfairness or bias and, therefore, on the sole ground that informant is the investigator, the accused is not entitled to acquittal. The matter has to be decided on a case to case basis. A contrary decision of this Court in the case of Mohan Lal v. State of Punjab - 2018-TIOL-381-SC-NDPS and any other decision taking a contrary view that the informant cannot be the investigator and in such a case the accused is entitled to acquittal are not good law and they are specifically overruled. [para 12 ] - Reference answered :SUPREME COURT OF INDIA
2020-TIOL-1467-HC-DEL-CUS
Aida Askerbekova Vs Department of Customs
Cus - Allegations levelled against the petitioners by the Customs Authority are to the effect that they were intercepted on 13.09.2019 at the IGI Airport, New Delhi, having arrived from Almaty and 3150 gms of gold was recovered from the possession of the petitioner no.1 and 1875 gms of gold was recovered from the possession of the petitioner no.2 with the consolidated recovery as per the Customs Department being 5025 gms which was valued at Rs.1,91,74,395/- - The petitioners were enlarged on bail vide the order of the CMM, Patiala House Courts, New Delhi, with the condition imposed that they would not travel abroad without the permission of the Trial Court - The petitioners herein moved an application before the Trial Court to travel abroad which was declined vide order dated 10.12.2019 of the learned CMM, Patiala House Courts, New Delhi - Therefore, the petitioners i.e. Ms. Aida Askerbekova, holder of Kyrgyzstan Passport No. AC 3167256 & Begaim Akynova holder of Kazakhstan Passport No. 8622501, both currently in Delhi vide the present petition under Section 482 of the Cr.P.C., 1973 assail the order dated 30.05.2020 of the ASJ declining the prayer of the petitioners herein seeking permission to go abroad to their home town in Kyrgyz Republic,- was disallowed whilst upholding the order dated 10.12.2019 - It has been submitted on behalf of the petitioner no.1 that the grant of permission to the petitioner no.1 for traveling abroad for the cure of her son's ill health which is becoming progressively worse, is a basic right to which she is entitled in terms of Article 14 & 21 of the Constitution of India - Embassy of Kyrgyzstan has thus vouched for the correctness of the medical documents of the son of the petitioner no.1 and also of the aspects that the son of the petitioner no.1 requires a medical surgery as soon as possible and that apart from the petitioner no.1, there is no one in the family to take care of her critically ill son and that her presence is thus, required unavoidably to ensure her son's good health and surgery - Customs Authority has placed on record a letter dated 21.07.2020 from the Director CPV, Ministry of External Affairs, PHC, New Delhi addressed to the Additional Commissioner of Customs, IGI Airport, T-3, New Delhi along with which is a communication dated 21.07.2020 from the Attaché (Consul), Embassy of Kyrgyz Republic in India addressed to the Director, CPV Division of the MEA of the Government of India vouching the correctness of issuance of the undertaking on behalf of the Embassy of Kyrgyz Republic dated 06.03.2020, letter no.202/2019 addressed to the District and Sessions Judge, PHC, New Delhi as having been issued by the Embassy of Kyrgyzstan in Delhi qua the Kyrgyz national Aida Askerbekova i.e. in relation to the petitioner no.1 - a submission was made on 08.07.2020 during the course of the hearing of the present petition that the spouse of the petitioner no.2 was suffering from COVID-19 - said communication dated 29.06.2020 issued by the Head of the Consular Section, Embassy of Kazakhstan in India was vouched to be correct by the Head of its Consular Section, Embassy of Kazakhstan in India - respondent- Department of Customs through its reply submitted that this petition was not maintainable as being the second revision petition; that the petitioners are foreigners and if granted permission to go abroad on any condition whatsoever, they will never return - The respondent-Department of Customs has further inter alia submitted that the petitioners have been arrested for smuggling of gold on a large scale and in adjudication proceedings, the seized gold has been confiscated absolutely and the Adjudicating Authority has also imposed a penalty of Rs.20,00,000/- upon the petitioner no.1 and a penalty of Rs.12,00,000/- upon the petitioner no.2 and the petitioners are yet to deposit the amount of the penalties - that the petitioners are liable to be prosecuted under the provisions of the Customs Act, 1962 and that the prosecution for the same under Section 135 of the Customs Act, 1962 was in the process of being filed and the personal presence of the petitioner would be required during trial; that any undertaking/assurance of the Embassy is of no consequence as the Embassies are not subject to Indian laws and such undertaking/assurance cannot be enforced and there is no extradition treaty with Kyrgyzstan.
Held:
+ It had been submitted on behalf of the petitioner no.2 that her spouse is suffering from COVID-19, taking into account even though the said document of the medical ailment of the husband of the petitioner no.2 has been verified by the Embassy of Kyrgyzstan, the very nature of the ailment of which the spouse of the petitioner no.2 suffers from, makes it incumbent on the sufferer of the said ailment to be away from other persons whilst in quarantine - Apparently thus, the prayer made by the petitioner no.2, cannot be granted as is declined: High Court [para 24]
+ The verified documents as verified by the Customs Department and as verified by the Attaché (Consul), Embassy of the Kyrgyz Republic in India, it is apparent that the child of the petitioner No.1 born in the year 2018 is unwell. The record also indicates vide document dated 06.03.2020 as issued by the Embassy of the Kyrgyz Republic in India that vide paragraph 5 of the same that there is no one in the family of the petitioner No.1 to take care of her critically ill son and that her presence is required to ensure her son's good health and surgery. [para 25]
+ Undoubtedly, as observed by the learned Revisional Court vide the impugned order dated 30.5.2020 in CR No. 881/2019 there is no extradition treaty between India and the Republic of Kyrgyzstan. However, placed on record is the Treaty between the Republic of India and the Kyrgyz Republic on Mutual Legal Assistance in Criminal Trials with Article 1 thereof relating to the obligation to grant mutual legal assistance with paragraph 1.4 dealing specifically with criminal matters including investigations or proceedings relating to criminal offences concerning taxation, duties, customs and international transfer of capital or payments, including those for perpetuating terrorism. [para 26]
+ As per Clause 1.6 of this Treaty, assistance that is to be provided mutually between India and the Kyrgyz Republic relate to clause 1.6.8 to making persons in custody and others, including experts, available to evidence or to assist investigations through Clause 1.6.10 taking measures to locate, identify, restrain, seize and confiscate funds meant for the purposes of terrorism, thus as it has been undertaken by the Embassy of the Kyrgyz Republic through its Attaché Counsel vide clause 6 of its verified document dated 6.3.2020 to the effect: "6. In view of the above fact we undertake that under the circumstance M. Aida Askarbekova may get a leave from this Hon'ble Court to travel (to) her home, we shall ensure her presence in India as and when required by the Courts or Custom Department." [para 26]
+ Subject to the petitioner No.1 depositing a sum of Rs.10,00,000/- in the form of an FDR in the Court of the Chief Metropolitan Magistrate, New Delhi, the release of which amount would be subject to the adjudication of any appeal against the order C.No.VIII (AP) 10/P&I/ Adj./346/2019/1594-75 dated 6.7.2020, ORDER-IN-ORIGINAL No. 69/ADJ./2020 if any, filed by the petitioner No.1, the petitioner No.1 is allowed to travel to Kyrgyzstan for a period of 45 days to get her child operated with the direction to the petitioner No.1 to return to India on the 46th day of her leaving India with the request to the Embassy of Kyrgyz Republic in India in Delhi, to ensure that the petitioner no.1 Ms. Aida Askerbekova, holder of Kyrgyzstan Passport No. AC 3167256 returns back to India on the 46th day from the date when she leaves India to Kyrgyzstan for the operation of her son which she is permitted to go only after the deposit of the sum of Rs.10,00,000/- in the form of an FDR as directed hereinabove, which on deposit is directed to be converted into an auto renewal mode. Furthermore, in the event of the petitioner no.1 not returning back on the 46th day of her leaving India to Kyrgyzstan, the said amount of Rs.10,00,000/- deposited in the form of an FDR as directed hereinabove, would stand forfeited. [para 26] - Petition disposed of: DELHI HIGH COURT
CCE Vs Rajalakshmi Textile Processors Ltd
CX - The Revenue sought to raise his contentions on merits by submitting that the striking down of Rule 96ZQ is not applicable to the facts of the present case - The court is not inclined to entertain these submissions unless such submissions have been first raised before the Tribunal and the same have been dealt with by Tribunal in appropriate manner by reasoned order thereon: HC
- Appeal dismissed: MADRAS HIGH COURT
2020-TIOL-1452-HC-KERALA-CUS
Somasundaram Vs CC
Cus - The petitioner held a valid IEC for importing food grains & cereals - The petitioner imported a consignment of Canadian Green Peas, a commodity restricted for import - Strict conditions must be fulfilled for importing the same and minimum import price of Rs 200/- per Kg CIF, has been fixed for it - The Revenue observed that a sister unit of the petitioner had challenged the notification restricting import of such item - Such petitions were filed before various High Courts and were subsequently transferred to the Supreme Court - The petitioner produced an order from the Supreme Court, wherein it is indicated that the importers' request for interim directions be taken up by that court pending disposal of the transferred petitions - In such backdrop, the petitioner sought provisional clearance of the goods imported by it, pending consideration by the Supreme Court in respect of the legality of the notification.
Held - The prayer for provisional release of the goods, as sought for by the petitioner, cannot be allowed - It cannot be overlooked that the petitioner chose to import a commodity which the Central Government has restricted for import, in order to safeguard the interests of the domestic industry - It is also not in dispute that the price at which the petitioner imported the commodity in question is significantly lower than the minimum import price stipulated for the product - Hence if allowed to be released provisionally, the imported goods would enter the domestic market & so frustrate the very objective of the Notfn - That apart, the challenge to the notification itself is pending consideration before the Supreme Court in a batch of transferred writ Petitions from various High Courts - Hence the petitioner, who imported goods in contravention of the notification aforementioned, cannot seek any exceptional treatment by approaching this Court for relief, in matters where the Supreme Court has interdicted the High Courts from considering the legality of the notification: HC
- Writ petition dismissed: KERALA HIGH COURT |
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