| SERVICE TAX
2020-TIOL-1494-HC-GUW-ST
Urban Systems Vs UoI
ST - SVLDRS, 2019 - Petitioner had provided taxable services to its customers but failed to file returns in respect thereof & also the required amount of service tax was not paid by them - In order to claim benefit under Scheme 2019, the claimants are required to submit the Form SVLDRS - 1 - The relevant columns in the Form SVLDRS - 1 pertaining to making voluntary disclosures can be found in clause 9.4 - The petitioners while submitting the Form SVLDRS - 1 made an inadvertent mistake by stating the duty payable by them in clause 9.1 [Litigation] instead of clause 9.4 [Voluntary Dislosure] - Because of such inadvertent mistake made by the petitioner while making the entries in Forum SVLDRS - 1, the respondent authorities rejected the claim of the petitioner under Scheme 2019 on the ground that no SCN/demand was issued to the petitioner - Writ petition filed against this order of rejection.
Held:
+ Scheme 2019 does not provide for any provision for re-submitting an application claiming the benefit under the scheme.
+ Whether by not mentioning the dues payable in clause 9.4 and instead mentioning it in clause 9.1 of the Form SVLDRS - 1, the petitioner had committed an incurable mistake so as to disentitle the petitioner from the benefits under the Scheme 2019 or the mistake that was made can be allowed to be corrected.
+ Apparently, a mistake made can be of two different types, one being a mistake based upon which a legal right is claimed so that the mistake made can be construed to be an act of misleading the authorities to claim a benefit which otherwise a party is not entitled or the mistake made was more of inadvertent nature, which can also be termed to be a callous mistake, which does not give the party making such mistake the benefit of an undue advantageous position so as to make them entitled to a benefit which they are otherwise not.
+ A mistake that was deliberately made to claim an undue benefit which the party was otherwise not entitled, would definitely have to be construed to be an incurable mistake but at the same time an inadvertent mistake which may creep in due to an oversight or because of a callous attitude of the person making the claim but the ultimate result of such mistake would not accrue a benefit which he otherwise would not have been entitled can be accepted to be a curable mistake.
+ In the instant case, the mistake made by the petitioner was that they had stated in clause 9.1 about the undisclosed dues instead of stating it in clause 9.4. By stating the required information in clause 9.1 instead of clause 9.4, it cannot be said that by making the mistake, the petitioner had claimed an undue benefit which they are otherwise are not entitled under the law.
+ It is an agreed position of the parties that the petitioner may make an application to the appropriate respondent authorities to consider the claim of benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 by allowing the petitioner to make necessary correction in the information provided as regards the earlier penalty imposed on them. It is further agreed that upon such application being made, the authorities would pass an appropriate order thereof as per their discretion.
+ Writ petition stands disposed of by requiring the petitioner to submit an application before the respondent authorities for the correction to be made in the information provided in the Form SVLDRS-1 as regards the disclosure of the dues from them and upon such application being made, the respondent authorities would pass a reasoned speaking order thereon. The requirement of submitting application be made within a period of 15 days from obtaining the certified copy of the order and upon receiving of the application, the respondent authorities shall pass an order on the same within a period of 2 months from the date of receipt of the application.
- Petition disposed of: GAUHATI HIGH COURT
2020-TIOL-1331-CESTAT-KOL
BSNL Vs CGST & CE
ST - The issue is regarding procurement of hardware equipments on centralized basis and transferred under cover of an "Advice of Transfer Debit" (ATD) to different exchanges from where, the services were provided and the concerned Offices took Cenvat Credit of duty paid on equipments based on this ATD - The assessee have availed cenvat credit on capital goods on the basis of an Advice Transfer Debit Bill issued by Central Office, since the Central Office had procured the hardware equipments on centralized basis and transferred to different exchanges from where the services were provided under the cover of an Advice Transfer Debit Bill and concerned exchanges would take cenvat credit of duty paid on equipment based on such ATD - Issue is no more res-integra in view of the various decisions of Tribunal and the same has also been accepted by the Department - From the copy of the ATD Bills submitted during hearing, it is found that the ATD Bills contained the details, which are required as per Rule 9 (2) of CCR, 2004 - The observation of Adjudicating Authority and the lower appellate authority, are contrary to the facts noticed by Tribunal on the basis of documents submitted before them - Since it is not clear as to whether the same documents, which are produced before Tribunal, were produced before the adjudicating authority or not, the matter is remanded to the adjudicating authority, who shall go through the documents and readjudicate the matter afresh : CESTAT
- Matter remanded: KOLKATA CESTAT
2020-TIOL-1330-CESTAT-CHD
Darsan Singh Vs CCE & ST
ST - The assessee is co-owner of property No. 53 and 58 Chandigarh and rented the same alongwith co-owners - The assessee is receiving rent with the co-owners and their share is deposited in their account separately - Revenue views that the premises rented out is treated as one and therefore, on the rent received, assessee is liable to pay service tax under category of Renting of Immovable Property Service - As the rent is more than Rs. 10,00,000/-, accordingly, they are not entitled to exemption under Notfn 06/2005-S.T. - The said issue has been decided by Tribunal in case of Anil Saini - As the issue has already been decided by Tribunal and the rent received by assessee remains within the threshold limit of SSI exemption under Notfn 06/2005-ST, therefore, assessee is entitled for exemption under Notfn 06/2005-S.T. - Hence, no service tax is payable by assessee - Accordingly, the impugned order is set-aside: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
CENTRAL EXCISE
2020-TIOL-1493-HC-AHM-CX
Synpol Products Pvt Ltd Vs UoI
CX - Issue arising in this petition is with regard to the rejection of the declaration made by the petitioners by the Designated Committee formed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on the ground that the cases of the petitioners involving confiscation and redemption fine are not covered under the Scheme, and therefore, the declarations filed by the petitioners cannot be accepted and no relief can be granted to the petitioners under the Scheme.
Held:
+ Supreme Court in the case of K.P. Varghese v. Income-tax Officer, Ernakulam and others = 2002-TIOL-128-SC-IT has held that for interpretation of any statute marginal note to the sections as well as interpretation made by the authority is also relevant.
+ In view of the provisions of the Scheme r/w. flyers, FAQs and press note issued by the Board, the intent and purpose of the Scheme appears to reduce litigation by giving a window to the taxpayers to pay the tax and end the litigation. The object of the Scheme was to provide one time measure for putting an end to past disputes of central excise and service tax and to provide the opportunity of voluntary disclosure to non complying taxpayers.
+ Section 121(c) of the Scheme defines the 'amount in arrears' which means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account of adjudication by the competent authority or on account of admitted tax liability but not paid.
+ Section 125 of the Scheme provides for 'declaration under scheme' and excludes certain categories of persons who are not eligible to make a declaration under the Scheme as per clauses-(a) to (h). On perusal of the clauses-(a) to (h) of sub-section 1 of Section 125 does not include the case involving confiscation / redemption fine. Thus, the show cause notice issued with regard to the confiscation / redemption fine under Section 34 of the Central Excise Act, 1944 would make such person eligible to file a declaration under the Scheme. Such persons cannot be not considered as ineligible under clauses (a) to (h) of sub-section 1 of Section 125 of the Scheme.
+ In the facts of the present case, the designated committee has rejected the declaration itself on the ground that the Scheme does not apply to the cases involving confiscation / redemption fine.
+ Clause (a) of sub-section 1 of Section 129 of the Scheme provides that the declarant shall not be liable to pay any further duty, interest, or penalty, it does not expressly provide that the declarant shall not be liable to pay fine / redemption fine, and, therefore, the controversy has arisen, as in the present proceedings, as to whether the Scheme is applicable to the cases involving confiscation / redemption fine or not.
+ Though, there is no express provision in the Scheme with regard to providing immunity from payment of fine, the respondent authorities have specifically stated in FAQs, press notes and flyers that the Scheme provides for full waiver of interest, fine and penalty. In the facts of the case, there is no other fine which is envisaged under the indirect tax enactment.
+ Contention raised on behalf of the respondents that the fine would mean the fine to be levied by the competent Court under Section 9 of the Central Excise Act and not fine as referred to be the redemption fine under Section 34 of the Act cannot be accepted considering overall intent and object of the Scheme.
+ Clarification issued by the respondent Board in communication dated 20.12.2019 is also contrary to the intent and object of the Scheme which is discussed at length in para-11 and 12 of the order dated 24.12.2019 passed by the Coordinate Bench of this Court, and we, therefore, concur on such prima-facie opinion.
+ When the respondents had issued show cause notice demanding excise duty together with confiscation of the goods in terms of Rule 25 (a) and (d) of the Central Excise Rules, 2002 and redemption fine in lieu of confiscation under Rule-25 as goods were not available for confiscation, it is clear that by issuing the show cause notice, the respondent has invoked Rule-25 of the Central Excise Rules, 2002 for levy of redemption fine in lieu of confiscation as goods which were sought to be confiscated were not available for confiscation. Therefore, the levy of the redemption fine equivalent to demand of central excise duty under Rule-25 of the Central Excise Rules, 2002 would be an amount in arrears as defined in Section 121 (c) of the Scheme along with the amount of duty which is recoverable as arrears of duty under indirect tax enactment.
+ Therefore, the test which is required to be applied to ascertain what is the amount in arrears as per the Scheme, it would include both the amount of duty as well as amount of redemption fine which is required to be recovered from the taxpayers. The amount of redemption fine cannot be treated separately than the amount of the duty under the Scheme. Therefore, the interpretation made by the Board in the communication dated 20.12.2019 that in order to consider the declaration made by the declarant, the payment of redemption fine is pre-requisite, is not tenable in law, because as per Section 125 of the Scheme a declarant cannot be made ineligible to file a declaration for non-payment of redemption fine. Moreover, the declarant is required to include redemption fine as part of the duty demanded, so as to calculate the amount in arrears as per Section 121 (c) of the Scheme.
+ The Supreme Court in the case of K.P. Varghese (supra) has laid down that the Rule of construction by reference to the principle of 'contemporanea exposition est optima et fortissima in lege' which is a well established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the statute is plain and unambiguous. Therefore, when the Central Board of Indirect Taxes has issued FAQs, press notes and flyers by way of explaining the scheme providing waiver of interest, penalty and fine and immunity from prosecution, then case involving confiscation / redemption fine cannot be excluded under the Scheme, as such explanation by the Board provides legitimate aid in the construction and interpretations of the provision of the Scheme.
+ Petition succeeds and is accordingly allowed. The declaration filed by the petitioners and other similarly situated persons are required to be considered by the Designated Committee without payment of redemption fine by the declarant.
+ The impugned orders passed by the designated committee are, therefore, quashed and set aside.
+ As observed by the Coordinate Bench of this court, the order passed in this petition would also apply to the similarly situated declarants who have not approached this Court, in order to reduce the multiplicity of proceedings. Accordingly, this order would apply to the cases of all the declarants involving confiscation / redemption fine.
+ Respondent authorities are directed to issue necessary discharge certificate under Section 129 of the Finance Act, 2019 to the petitioners subject to fulfillment of all other conditions as per the Scheme. -Petition allowed :
GUJARAT
HIGH COURT
2020-TIOL-1333-CESTAT-DEL
Shree Shyam Filaments Vs CCE & CGST
CX - In the facts involved in this appeal, where the finished goods were destroyed in fire partially and the same were cleared on transaction value, on payment of duty, and admitted by at much lower value than the normal value of finished goods, whether the assessee is liable to pay duty on damaged finished goods at the normal sale price/transaction value, as worked out by the Department - The leviability of excise duty under Section 3 of Central Excise Act arises at the event of manufacture of finished goods - Admittedly, the goods destroyed in fire were finished goods, duly entered in RG-I Register maintained by assessee - Only the duty payment is under the Rules, at the time of clearance from the factory of production for the sake of convenience, as central excise is an indirect tax and thus, the manufacturer has to collect and pay to the Government - Definitely, the liability to excise duty has arisen when the goods had reached the stage of the finished goods and entered in RG-I Register - The subsequent event of damage in fire does not ipso facto extinguish the tax liability - Moreover, Rule 21 of Central Excise Rules provides the assessee to seek remission from payment of duty, so as to reduce the tax burden wherever the goods have been destroyed and rendered unfit and unmarketable - Accordingly, assessee is liable to pay duty on the finished goods - So far as the value is concerned, the amount of insurance claim received plus the transaction value of damaged finished goods will form the gross amount dutiable on cum duty basis - The liability of assessee does not extinguish on the fact that they have not claimed or received amount of excise duty on the damaged goods from the insurance company - Accordingly, the appeal is allowed in part and remitted to the Adjudicating Authority for re-calculation of duty payable on cum duty basis on the value indicated - So far as the penalty is concerned, issue being interpretational in nature and the transactions are duly recorded in the books of accounts, thus, the penalty is not exigible - Accordingly, the penalty imposed under Rule 25 of Central Excise Rules r/w Section 11 AC is set aside - So far as the issue of limitation is concerned, as the case of short payment of duty has arisen on assessee mis-interpreting the provisions of Act and Rules, the extended period is rightly invoked by the Revenue: CESTAT
- Appeal partly allowed: DELHI CESTAT
2020-TIOL-1332-CESTAT-HYD
Vijai Electricals Ltd Vs CCE, C & ST
CX – Valuation - Appellant paid excise duty on the value Ex-works/Ex-factory but Revenue is of the opinion that the sale of goods being on Free at Destination Stores (FADS) basis, the property gets transferred to the buyers only at the destination stores and, therefore, the "place of removal" under Section 4 shifts to the buyers' premises and consequently, the cost of transportation and transit insurance from the factory to the buyer's premises is also includible in the assessable value of the goods.
Held: In the case of Ispat Industries Ltd. - 2015-TIOL-238-SC-CX , Supreme Court has categorically held that the buyer's premises cannot be the "place of removal" and it has to be the seller's premises only even if the place of delivery is the buyer's premises – following the same, impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 4, 5]
- Appeal allowed: HYDERABAD CESTAT
CUSTOMS
2020-TIOL-1329-CESTAT-CHD
CC Vs Longowalia Yarns Ltd
Cus - The importers filed the bills of entry for clearance of 100% recycled polyester staple fibre made from PET bottle flakes (plastic waste)/polyester staple fibre manufactured from plastic scrap or plastic waste including waste PET bottles classifying the same under Tariff Item 550332000 of CTA, 1975 by claiming the benefit of Sl.No.172A of Notfn 12/2012- CE - The provisional assessment so finalized and the benefit of said Notfn was denied by adjudicating authority converted into the demand of duty @ 12% - On appeal, the Commissioner (A) examined the test report and allowed the benefit of Sl.No.172A of the said Notfn as amended - Against the said order, both sides are in appeal - The Revenue is in appeal on the ground that the importers are not entitled for benefit of Sl.No.172A of Notfn 12/2012-CE whereas the importers are in appeal on the ground that they were not given the benefit of reduced CVD in terms of Notfn 1/2011-CE - The goods were imported initially and assessed provisionally and the samples were drawn which were sent for testing to CIPET and clarification sought by Revenue vide letter dt.28.10.2015 - As clarification was answered by CIPET vide its letter dt.26.11.2015 and on the basis of said clarification, the Commissioner (A) held that the goods in question are made out plastic waste/scrap/waste PET bottles flakes - No report contrary in support of their claim by any expert has been produced by Revenue - The test report given by CIPET has been relied upon and is to be considered conclusive report - For earlier consignment imported by importers, the benefit of notification was granted on the basis of test report given by the CIPET - No infirmity found in impugned orders quo allowing to the importers the benefit of Sl.No.172A of the Notfn 12/2012-CE - Therefore, the Revenue's appeals have no merit and the same are dismissed - Now, come to the appeals filed by importers, it is the contention of importers that they have not taken the credit on inputs and input service, therefore, they are entitled to take the benefit of reduced duty to pay 2% in terms of decision of Apex Court in case of SRF Ltd. 2015-TIOL-74-SC-CUS and the said issue has not been examined by Commissioner (A) - Therefore, for the said limited purpose, the appeals are remanded back to the Commissioner (A) to decide the issue on the basis of records produced by the importers: CESTAT
- Matter remanded: CHANDIGARH CESTAT
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