2020-TIOL-1341-CESTAT-DEL

Bharat Heavy Electricals Ltd Vs CCGST, CE & ST

CX - Appellant is engaged in the manufacture of Electrical and Mechanical Equipment, besides transmission, utilization, conservation and generation of power and as such are supplying equipment for generation at and transmission of electrical energy ex-Thermal, Hydro, and Nuclear Power Station - They have been carrying the un-utilized Credit Balances [Service Tax & CX Input credit - Rs.8.22 Crores, Education Cess - Rs.63.75 lakhs; SHEC - Rs.33.70 Lakhs; KKC - Rs.58.80 Lakhs] as reflected in their ER-Returns as 30th June 2017, the date on which the new GST Regime came into force - This credit was accumulated for the reason that their products were exempted from payment of duty and Sub-rule 6(6) of the CENVAT Credit Rules 2004 allowed retention of such credit - The appellants did not go for refund of unutilized CENVAT credit in terms of Rule 5 of the CCR, 2004 on the expectation that they would be able to use the credits available with them on domestic clearances on the basis of their past clearances - While the credit balance of service tax & central excise duty was carried over through TRAN-1 under the new GST Regime, the credit balances of the three Cesses namely Education Cess, Secondary and Higher Education Cess and the Krishi Kalyan Cess remained un-utilizable inasmuch as these Cess stood abolished in the new Tax Regime - Appellant filed refund claim of the unutilized cesses with the Adjudicating authority, which rejected the refund claim of the appellant on the ground that since there was no provision to carry over the impugned cesses under the GST regime and there was no provision for refund of the same, such credits would lapse - Even their appeal was rejected by the Commissioner (Appeals), hence assessee is in appeal before the CESTAT against the rejection order of their refund claim of the Ed. Cess, S&H Cess and KK cess.

Held: There is no dispute that on 01/07/2017, the cesses credit validly stood in the accounts of the assessee and very much utilizable under the existing provisions - The appellants could not carry over the same under the GST regime - Thus the appellants were in a position where they could not utilize the sam - Bench agrees that the credits earned were a vested right in terms of the Apex Court judgement in Eicher Motors case - 2002-TIOL-149-SC-CX-LB and will not extinguish with the change of law unless there was a specific provision which would debar such refund - It is also not rebutted by the revenue that the appellants had earned these credits and could not utilize the same due to substantial physical or deemed exports where no Central Excise duty was payable and under the existing provisions, had the appellants chosen to do so they could have availed refunds/ rebates under the existing provisions - There is no provision in the newly enacted law that such credits would lapse - Thus merely by change of legislation, suddenly the appellants could not be put in a position to lose this valuable right - Thus Bench finds that the ratio of Apex court's judgment is applicable as decided in cases where the assessee could not utilize the credit due to closure of factory or shifting of factory to a non-dutiable area where it became impossibly to use these credits - assessee is eligible for the cash refund of the cessess lying as cenvat credit balance as on 30/06/2017 in their accounts - impugned order-in-appeal is without any merit and is, therefore, set aside - appeal is accordingly allowed: CESTAT [para 4, 5]

- Appeal allowed: DELHI CESTAT

2020-TIOL-1326-CESTAT-DEL

All True Components Vs Pr CCGST

CX - The assessee is in appeal against impugned order vide which confiscation of goods inside the factory premises and the shop premises has been confirmed alongwith imposition of redemption fine and penalty, though the amounts thereof have been reduced - It is apparent that the raid of assessee premises was conducted on 29.10.2015 and the assessee had obtained Central Excise Registration on 24.11.2015 that is subsequent to the allegation leveled by department against the assessee - Assessee, admittedly, is manufacturing various types of LED Lights, including LED Tubes, Track Lights, LED Panels of different specifications and different watts in brand name of "ATC Lumen", "ATCOM Lumen" and "ATCOM LED" - This observation itself is sufficient to hold that the assessee was manufacturing excisable goods and had not obtained the Central Excise Registration - Nothing else need to be proved to hold that the assessee have intention to not to pay excise duty on the goods manufactured by them despite that those were excisable - Thus, it is clear that assessee has violated Rules 4,5,6,8,9,10,11 and 16 - As far as the applicability of Section 11AC of Central Excise Act is concerned, the only element for applicability thereof, no doubt, is mensrea that is the intent to avoid the tax liability either in full or in half - The above observation that assessee knew about his goods to be excisable not only this he was also aware about the concept of SSI exemptions but failed to prove that his entire stock is covered under said SSI exemption - The absence of Central Excise Registration is nothing but the intent of assessee to avoid his tax liability - It has been settled that for imposition of penalty mensrea has to be there.

- Appeal dismissed: DELHI CESTAT

2020-TIOL-1325-CESTAT-KOL

Bhawani Alloys & Engineering Company Vs CCE

CX - The assessee is engaged in manufacture of Motor Vehicle parts and accessories - The issue relates to availment and utilization of Cenvat Credit - The assessee purchased the input materials from M/s. TRL, who sold the said goods as registered dealer - SCN was issued alleging that the assessee had taken Cenvat credit of duty passed on by M/s.TRL, a registered dealer, under supplementary invoices issued by M/s.TRL, which were not considered as eligible documents as per Rule 9(1)(b) of CCR, 2004 - The input supplier also issued supplementary invoices to the assessee whereby additional duty was paid - No reason found to hold that the supplementary invoice evidencing payment of additional duty amount should be treated on a different footing vis-à-vis the original invoices evidencing payment of duty on the said goods in as much as both these documents were issued under the same provisions of law - If the assessee was entitled to take credit on their inputs on the strength of original invoices issued by supplier, they can validly claim to be entitled to take Cenvat credit of the additional amounts of duty paid on the same goods by supplier under supplementary invoices - In any case, it was not in dispute that the inputs were received in assessee's factory - The substantive requirement of Cenvat credit were thus met by the party - The benefit was not liable to be denied on procedural grounds - The impugned order is set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT

2020-TIOL-1324-CESTAT-CHD

Jawala Fastness Pvt Ltd Vs CCE & ST

CX - The assessee is a manufacturer of hex nut and fasteners availing Cenvat credit on inputs and paying duty on finished goods - A SCN was issued to assessee to demand duty on shortage of finished goods as well as raw material found short during investigation - Admittedly, duty has been demanded from assessee on shortage of raw material - Since these goods have not been manufactured by assessee, therefore, no duty can be demanded from them on shortage of raw material - At the most, the Cenvat credit can be asked to reverse which is not the case of Revenue - The said mistake done by Revenue cannot be rectified at this stage - The same view was taken by Tribunal in case of Sada Shiv Steel Mills 2017-TIOL-662-CESTAT-CHD - Therefore, the demand of duty in shortage of raw material is set aside - The shortage of finished goods found short has been explained by assessee that they have issued invoices 180 and 181 on the same day on which duty has been paid and the same has been explained by them very next working day but no investigation was conducted - As for the value adopted for clandestine removal of finished goods, no explanation has been given by Revenue as how they have calculated the price of finished goods @ Rs. 50,000 /MT for hex nut and Rs.50, 000/ MT for hex bolt - In the absence of any evidence placed on record with regard to that, the duty paid by assessee of Rs. 1,04,500 is taken to be corrected as the issuance of these invoices have not been disputed by Revenue before issuance of SCN - When these invoices are in the knowledge of revenue now, the issue arises whether in these circumstances penalty can be imposed on assessee - Relying on the decision of jurisdictional High Court in Anand Founders & Engineers 2015-TIOL-2655-HC-P&H-CX , penalty cannot be imposed on assessee - In these terms, penalty imposed on assessee is set aside: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

2020-TIOL-1328-CESTAT-DEL

Burberry International Vs CC

Cus - Import of 'Silicone Weather Proofing Sealant', 'Fast Track Acqua – tech very high bond foamed acrylic tape' imported from China – declared value rejected and goods revalued upon re-determination of assessable value at the lowest price obtained as per NIDB data; differential duty demanded and confirmed along with order of confiscation/redemption fine, imposition of penalty – appeal to CESTAT.

Held: Impugned order has been passed in accordance with law - Appellant have failed to bring any cogent evidence on record, even before the Tribunal, inspite of being regular importer importing under their own brand name - Thus, apparently the appellant has not come with clean hands before this Tribunal - agreeing with the findings of the Commissioner (Appeals), impugned order is upheld and appeal is dismissed: CESTAT [para 14]

- Appeal dismissed: DELHI CESTAT

2020-TIOL-1327-CESTAT-CHD

Karan Logistics Vs CC

Cus - The appellant is a Customs Broker - During the relevant period, the DRI received intelligence about certain imports made by a firm, and that such imports were processed by the appellant and that the appellant was aware about the consignment being mis-declared w.r.t. its description & value - Upon investigation, an SCN was issued to the importer u/s 111(d), 111(e), 111(i), 111(j), 111(l) and 111(m) of Customs Act, 1962 along with provisions of the Intellectual Property Rights (Imported goods) Enforcement Rules, 2007 and FT (D&R) Act, 1982 - The statements of the assessee-company's proprietor were recorded as well & he was also a co-noticee for the act of commission & omission committed by the Customs Broker - Subsequently, an SCN under Regulation 11 of the CBLR 2013 was issued to the appellant, proposing to revoke its license and to impose penalty on it under Regulation 18 of the CBLR for failure to comply with provisions of the CBLR and for misconduct on its part - An enquiry was conducted into the charges against the appellant, whereupon the appellant was held guilty of unintentional negligence, as charges of connivance were not proven - Thereafter, the Commissioner revoked the appellant's CHA license and also imposed penalty on the appellant as per Regulation 18, 20 & 22 of the CBLR 2013 - Hence the present appeal.

Held - The SCN issued to the appellant does not state as to which provision of Section 11E was contravened by it - It is also on record that the appellant obtained all the records required for the verification of KYC documents of the importer at the time of import of their first consignment and on receipt of KYC documents, the appellant has also conducted verification of the address of the importer from KYC details and which was found to be in existence at their declared premises - As per Regulation 11 of CBLR 2013, there is no requirement of physical verification of registered premises of importer & only verification of documents is required - It is settled position in law that Customs Broker is required to verify the antecedent of importer and based on the existence of IFC code and documents submitted to the CHA and not the basis of physical verification of the premises of the appellant, IE Code required to be verified from the DGFT site and other related documents such as PAN number, service tax, sale tax registration - There is no need for physical verification of the registered premises of the appellant for purpose of verification of KYC norm - Hence it is seen that the appellant has not failed in its duty cast upon it under the CBLR 2013 - Hence the order of the Commissioner, revoking the license of the appellant and imposing penalty, is not sustainable: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

TII

TP - TP adjustment made on account of variation in price of goods sold to foreign AEs & domestic Non-AEs, is sustainable, where such different arises due to volume discount offered to AE: ITAT

I-T - Agency acting as an independent entity without any authority to conclude contracts on behalf of foreign principal, can be treated as 'dependent agency PE: ITAT

TIOL CORPLAWS

Arbitration and Conciliation Act - Non-est filing can stop limitation and be ground to condone delay: HC

Competition Act - If there are other real estate service providers for developing and sale of residential flats in Pune District, OPs cannot be considered as dominant in relevant market: CCI