| SERVICE TAX
2020-TIOL-1554-HC-MAD-ST
TV Sundaram Iyengar & Sons Pvt Ltd Vs CCGST & CE
ST - The first respondent issued show cause cum demand notice dated 28.08.2018 of Rs.67,81,07,326/- under Section 73(1) of Finance Act, 1994 - In their interim reply, the petitioner contended that there are certain basic errors in the show cause notice and that it would be better if a verification exercise is carried out - Petitioner took the stand that certain documents are to be provided by the respondents so that they could submit a consolidated reply to the show cause notice - The third respondent had undertaken a verification exercise and also prepared a Scrutiny Report/Verification Report - The petitioner requested the first respondent [Commissioner] to furnish them with a copy of the Scrutiny Report prepared by the third respondent [Superintendent, HQ Preventive], so that they can submit their final reply and also take part in the personal hearing - The first respondent, however, decided that the petitioner is not entitled to the said copy of the report and fixed the personal hearing on 29.07.2019 and to this effect, communication dated 10.07.2019 was also issued to the petitioner - This communication is under challenge in this Writ Petition.
Held: In the case on hand, the petitioner's demand is for supply of a copy of the Scrutiny report prepared by the third respondent - Counsel for the Revenue informs that there is such a report and the first respondent proposes to rely on the same - Bench does not agree with the contention of the Counsel that the verification exercise undertaken by the third respondent is an integral part of the adjudication process - The first respondent is an independent adjudicating authority and he cannot delegate his adjudicating power to any one - Scrutiny report was prepared after the submission of interim reply to the show cause notice - If the report in question is not furnished to the petitioner and if an adverse order based on the said report is passed, then the adjudication would be set aside on that sole ground - Therefore, by furnishing a copy of the report, the department is not going to suffer any prejudice, on the other hand, it will avoid multiplicity of proceedings - The communication impugned in the writ petition is quashed and the writ petition is allowed - The first respondent is directed to make available the Scrutiny report submitted by the third respondent to the petitioner herein - Within a period of four weeks thereafter, the petitioner would submit their final reply and the petitioner will also take part in the personal hearing, without asking for any further extension of time - Petitioner should co-operate with the entire adjudication process, so that it can be concluded as early as possible - With the above direction, the Writ Petition is allowed: High Court [para 5, 6]
- Petition allowed: MADRAS HIGH COURT
2020-TIOL-1385-CESTAT-AHM
SEM Construction Vs CCE & ST
ST - Appellant was awarded a contract under agreement dated 01.04.2011 by M/s. Archelean Chemical Private Limited at Rann of Kutch for job of "metal spreading for supply uncourse black Trap Rubble stone" and its spreading/dressing along the outer edge of bund for formation of toe wall land filling the trenched with stones above ground level, constructing the pitching above toe line, using stones or filling at various cuts in bunds and dressing of entire bund slope, before metal spreading - appellant had discharged the service tax on the aforesaid activities under the three taxable service categories of works contract, construction service & formation service - The department sought to deny such classification of services and contends that the services provided by appellant to M/s. Archelean Chemical Private Limited, are classifiable under "site formation and clearance and excavation, earthmoving services" under section 65 (105) zzza of the Finance Act, 1994 as against the claim of appellant under 'works contract' - SCN dated 09.10.2015 was issued for the period 2010-11 to 2014-15 wherein the differential service tax demand was raised along with proposal for penalties and interest – aggrieved by the order passed by the Commissioner confirming the demand, the appellant is before the CESTAT.
- Appeal allowed: AHMEDABAD CESTAT
2020-TIOL-1384-CESTAT-KOL
Biswanath Hosiery Mills Ltd Vs CST
ST - The assessee has entered into User Agreements with its clients whereby clients were granted the right to sell the goods using trade mark 'LUX' owned by assessee in return of consideration mentioned in said agreement - SCN was issued proposing demand of service tax under category of "Intellectual Property Services" for period 10.09.2004 to 15.02.2005 in respect of consideration amount received by assessee in terms of subject User Agreement - The issue stands settled in favour of assessee by series of decisions rendered by various coordinate Benches of Tribunal wherein it has been held that the intellectual property service which is made the subject matter of service tax levy is transferred prior to the date of introduction of taxable entry under the head "Intellectual Property Services" w.e.f. 10.09.2004, no service tax is leviable - Thus, s ervice tax cannot be demanded from assessee when the subject service was rendered prior to the introduction of taxable entry under the head "Intellectual Property Service" i.e. 10.9.2004 - The impugned demand of service tax, interest and penalty are set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
CENTRAL EXCISE
2020-TIOL-1388-CESTAT-MUM
Reliance Industries Ltd Vs CCE & ST
CX - Reversal of proportionate Cenvat credit under formula prescribed in Rule 6(3A) of CCR, 2004 is the subject matter of dispute - The issue arising out of present dispute regarding determination and payment of amount as per the formula prescribed under sub-rule (3A) of Rule 6 ibid is no more open for any debate in view of Co-ordinate Bench decision of Tribunal in case of assessee itself in 2019-TIOL-1593-CESTAT-AHM - In view of the settle position of law, no merits found in the impugned order passed by Commissioner (A) - Accordingly, after setting aside the same, the appeals are allowed in favour of assessee: CESTAT
- Appeals allowed: MUMBAI CESTAT
2020-TIOL-1387-CESTAT-KOL
Sova Solar Ltd Vs CCE & ST
CX - The assessee had imported inputs claiming the benefit of exemption notfn 52/2003-CUS for Basic Customs Duty and applicable Central Excise Duty - They were supposed to manufacture solar modules and export - However, assessee was not able to export goods and had cleared their final products in DTA claiming exemption under notfn 24/2005- CUS as amended by notfn 132/2006-CUS and notfn 06/2006-CE and notfn 12/2012-CE - The final products manufactured by assessee were fully exempted from payment of duty - The question which arises is, whether the assessee is entitled to claim the benefit of exemption notifications meant for 100% EOUs in respect of the inputs which they had procured - It is not in dispute that the final products manufactured and cleared by assessee are exempted from both the basic customs duty and additional duty of customs - Therefore, they are non-excisable and inputs used in their manufacture are clearly not covered by exemption notifications originally claimed by assessee and which were sought to be denied in SCN - Hence the demands on this ground must sustain - The assessee is not entitled to benefit of the exemption notfn 24/2005-CUS or 132/2006-CUS in respect of the inputs procured by them - As far as the exemption notfn 06/2006-CE is concerned, what is claimed is an exemption available for "parts consumed within the factory of production of such parts for manufacture of goods specified at Sl.No.1-20 above" - Clearly, there is no dispute with regard to the parts manufactured by assessee and consumed within their factory - What is in dispute is that the parts which they have procured either by importing or from other indigenous suppliers, those are not consumed within the factory of production - There is no exemption for such parts - Therefore, the assessee is also not entitled to the benefit of exemption notfn 06/2006-CE - Notwithstanding the observations and clear finding that assessee is not covered by any of the exemption notifications claimed, even if a view can be taken that the exemption notifications may be available to them, the benefit of such doubt cannot go to the assessee as this is a case of exemption notification which must be interpreted as per the ruling of the Constitutional Bench of Supreme Court in case of Dilip Kumar & Co. and Ors 2018-TIOL-302-SC-CUS-CB - The assessee is not entitled to the benefit of exemption notifications which they have wrongly claimed and is liable to pay duties on inputs as demanded in SCNs - As regards to the penalties imposed under Rule 25 of CER, 2002, the Commissioner imposed penalties under Rule 25 r/w Section 11AC of CEA, 1944 without specifying as to which particular clause of Rule 25 has been contravened by assessee - None of the SCNs mentioned regarding the violation of particular clause of Rule 25 - In such circumstances, as per the Apex Court's decision in case of Amrit Foods 2005-TIOL-164-SC-CX imposition of penalty is bad in law and is set aside - In all the 4 SCNs issued to assessee, penalty was proposed under Section 112 of Customs Act, 1962 but while passing the impugned order, the Commissioner imposed penalty under Section 114A of the Customs Act by observing that the provision of Section 114A is more appropriate - It is settled law that any penalty not proposed in SCN cannot be imposed - Both the penalties imposed under Rule 25 of CER, 2002 and Section 114A of Customs Act, 1962 are set aside and rest of the impugned order remains intact and is upheld: CESTAT
- Appeal disposed of: KOLKATA CESTAT
2020-TIOL-1386-CESTAT-AHM
Sopariwala Exports Pvt Ltd Vs CCE & ST
CX - The appeals have been filed by assessee against order of Commissioner (A) remanding the matter back to original Adjudicating Authority which had rejected their refund claims - The assessee had two units, one in DTA unit and other is 100% EOU - DTA have cleared the goods against CT-3 to their 100% EOU and have claimed refund - The 100% EOU has claimed refund for goods exported - Earlier in the proceedings the matters was remanded by Tribunal - While revenue is of the view that only appeal No.E/13076/2018 is within the limitation of one year, the assessee views that both Appeal No. E/13076/2018 & E/13077/2018 are within the limitation of one year - It is seen that the Appeal No. E/13076/2018 pertains to period October' 12 to Dec.'12 and the refund claim was filed on 04.10.2013 - In appeal no. E/13077/2018 pertains to the period April'13 to June'13 and refund claim was filed on 09.04.14 - It is seen that in both these cases, the refund has been filed more or less within one year of limitation, the exact period of limitation would depend on the dates when the exports were made - As regard admissibility of refund in case of clearance from DTA to 100% EOU, the identical matter was decided by Tribunal in case of M/S. WAVE MECHANICS PVT. LTD. 2019-TIOL-3178-CESTAT-BANG - The assessee would be entitled to refund in respect of exports made from 4.10.12 onwards in case of Appeal No. E/13076/2018 and from 9.4.2013 onwards in case of Appeal No. E/13077/2018 - The matter regarding these two appeals is remanded for determination and sanction of exact amount of refund admissible - As regards other six appeals, the only issue is if the assessee is entitled to re-credit of Cenvat Credit reversed at the time of filing of these refund claims which were later rejected by revenue - It is obvious that the reversal of Cenvat Credit was for purpose of claiming refund and in these circumstances that the assessee is not granted refund, the credit reversed becomes admissible for re-credit: CESTAT
- Appeals partly allowed: AHMEDABAD CESTAT
CUSTOMS
2020-TIOL-153-SC-NDPS-LB
Jeet Ram Vs NCB
NDPS - It is always open to the appellate court to re-appreciate the evidence, on which the order of acquittal is founded, and appellate courts are vested with the powers to review and come to their own conclusion - Onus was on the appellant to explain the possession of 13 Kg. of charas and in absence of the same being discharged, presumption under Section 54 of the NDPS Act also will kick in - judgment of the High Court does not suffer from any infirmity: Supreme Court Larger Bench [para 10 to 13]
Facts: Appellant-accused was tried for a charge punishable under Section 20 of Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) - The Sessions Judge, Shimla by judgment dated 30.06.2003 acquitted the accused by recording a finding that the case of prosecution was not free from doubt and there were many infirmities in the case of the prosecution to hold that the accused was found to be in possession of charas , as alleged by the prosecution - Aggrieved by the judgment of the trial court, the NCB, Chandigarh filed appeal before the High Court of Himachal Pradesh at Shimla and the High Court by re-appreciating the evidence on record came to the conclusion that the prosecution has proved its case beyond reasonable doubt and also has proved that 13 Kg. of charas was recovered from the possession of the appellant-accused, who was managing the dhaba in question, and set aside the judgment of the trial court and ordered conviction of the appellant for offence punishable under Section 20 of the NDPS Act - By further hearing the appellant, order dated 31.12.2012 was passed sentencing the appellant-accused to undergo rigorous imprisonment for 15 years and to pay fine of Rs.2,00,000/- and in default, to undergo further imprisonment of one year - Aggrieved by the conviction recorded and sentence imposed by the High Court, appeal is filed by the accused before the Supreme Court.
Held:
+ Appellate court would not interfere with the judgment of acquittal only because another view is possible but at the same time whether the findings recorded by the trial court in support of acquittal are valid or not is a matter which is to be considered with reference to facts of each case and evidence on record.
+ On close scrutiny of the depositions of the witnesses examined on behalf of the prosecution as well as on behalf of the accused, Bench is of the view that the findings recorded by the trial court are contrary to evidence on record and view taken by the trial court was not possible at all, as such the High Court rightly interfered with the same and recorded its own findings to convict the appellant.
+ The trial court acquitted the appellant mainly on the ground that prosecution case was not supported by independent witnesses; conscious possession was not proved; non-compliance of Section 50 of the NDPS Act; proper procedure was not followed in sending the samples for examination and the case of the prosecution was unnatural and improbable.
+ Court in the case of State of H.P. v. Pawan Kumar has held that Section 50 of the NDPS Act is applicable only in the case of personal search, as such, there is no basis for the findings recorded by the trial court that there was non-compliance of provision under Section 50 of the NDPS Act.
+ Even with regard to the finding of the trial court that the case of the prosecution was not supported by independent witnesses, it is clear from the evidence on record that the incident had happened at about 10:30 p.m. in a dhaba which is away from the village site and all other persons who are found in the dhaba were the servants of the accused.
+ Bench is of the clear view that the view taken by the trial court was not at all possible, having regard to the evidence on record and findings which are erroneously recorded contrary to evidence on record were rightly set aside by the High Court.
+ It is always open to the appellate court to re-appreciate the evidence, on which the order of acquittal is founded, and appellate courts are vested with the powers to review and come to their own conclusion.
+ It is clear from the evidence on record that the appellant was on the counter of the dhaba which was constructed on the land owned by his wife near the temple and the charas was found in the counter of the dhaba in a gunny bag. The facts of the case show that accused not only had direct physical control over charas , he had the knowledge of its presence and character.
+ It is also fairly well settled that where accused offers false answers in examination under Section 313 Cr.PC, same also can be used against him. Further, onus was on the appellant to explain the possession and in absence of the same being discharged, presumption under Section 54 of the NDPS Act also will kick in.
+ The judgment of the High Court does not suffer from any infirmity so as to interfere with the judgment of conviction.
+ Having regard to peculiar facts and circumstances of the case and in view of the fact that the incident occurred in the year 2001 and as the appellant claimed to be a priest in the temple, who is now aged about 65 years, Bench deems it appropriate that it is a fit case to modify the sentence imposed on the appellant.
+ Accordingly, the sentence awarded on the appellant is reduced to a period of 10 (ten) years, while maintaining the conviction and the penalty as imposed by the High Court. The order of sentence dated 31.12.2012 passed by the High Court stands modified.
- Appeal partly allowed: SUPREME COURT OF INDIA
2020-TIOL-152-SC-CUS
Sterlite Optical Technologies Ltd Vs CC & CE
Cus - Application is filed by the appellant in the Civil Appeal seeking to withdraw the above appeal qua the duties of excise imposed under the order impugned in the appeal - According to the appellant, they went under the Sabka Vishwas (Legacy Dispute Resolution) (SVLDR) Scheme, 2019 issued under the Finance Act, 2019 for the settlement of the disputes qua the excise component alone and, therefore, the appellant seeks to withdraw only that part of the dispute in the above appeal which relates to the excise component, but retaining the appeal insofar as the customs component is concerned – Revenue counsel argues that once the above appeal is withdrawn with respect to excise component, the appeal will not even be maintainable in respect of the other portion – Bench is of the view that respondent cannot object to the appellant withdrawing any portion of the appeal, provided the appellant is not seeking any benefit from Court on account of the withdrawal - I.A.No.35035/2020 is allowed and the appeal shall be treated as withdrawn only in respect of the dispute arising out of the excise component - The liberty is reserved to the respondent to raise the question of maintainability of the appeal in relation to the surviving dispute: Supreme Court
- Application allowed: SUPREME COURT OF INDIA
2020-TIOL-1547-HC-MUM-CUS
Sidharth Vijay Shah Vs UoI
Cus - Petitioner seeks a direction to respondent Nos.2 and 3 to provisionally release the car imported by the petitioner and which has been seized by the said respondents vide seizure memo dated 20.03.2020 - Presently it is under the custody of the Customs Department - Petitioner requested the authority for provisional release of the vehicle - However, no decision was taken on such request of the petitioner - In such circumstances, it is submitted that petitioner preferred appeal along with miscellaneous application before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai on 22.06.2020 - Petitioner was informed by the CESTAT Registry that it was non-functional till 31.07.2020 and faced with such a situation, the present writ petition came to be filed seeking the relief as indicated above.
Held: The only area of dispute is that according to the petitioner, the imported vehicle is a brand new one whereas according to the respondents, it is a second hand model and this would have a bearing on the duty to be levied - Section 110A provides a pragmatic mechanism to facilitate provisional release of seized goods etc. to the owner pending adjudication but at the same time protecting the interest of the revenue - Though much emphasis has been placed by the respondents on categorization of the imported vehicle as prohibited goods as defined under sub-section (33) of section 2, Bench does not find any limitation imposed in section 110-A that a good which is categorized as a prohibited good under section 2(33) cannot be subjected to provisional release under section 110-A - The words "goods, documents and things seized" are expressions of general import without any qualifications and / or are not accompanied by any qualifying words and, therefore, no restriction or restrictive meaning can be read into the said expressions which is not contemplated by the statute - Decision of this Court in Ashish Puravankara - 2010-TIOL-349-HC-MUM-CUS is eminently applicable to the facts and circumstances of the present case - When the statute itself provides for provisional release of seized goods, merely on the ground that the good in question is a prohibited one or that the aggrieved person has filed appeal before the CESTAT cannot be the reason not to exercise the statutory discretion conferred by section 110-A - Directions issued for compliance - writ petition is disposed of: High Court [para 12, 13, 15] - Petition disposed of BOMBAY
HIGH COURT
2020-TIOL-1390-CESTAT-KOL
Ratan Kumar Shah Vs CC
Cus - The appeals arising out of impugned order order confiscating the gold, silver and currencies with the option to redeem the same on payment of redemption fine and imposition of penalty on the Appellant No.1 and penalty of Rs.2,00,000/- on Appellant No.2 and also directing to pay the duty of Customs on seized quantity of gold/silver on appeal by Department - On 04-08-2015, revenue searched the premises of Appellant No.1 and recovered three cut pieces of gold and some quantity of silver and silver coins along with Indian Currency and Nepali Currency, which has been reflected in Seizure List - The Officers did not take the jewellery from the shop premises of Appellant No.1 - Appellant No.1 was kept in custody of Customs Authority for the period from 04-08- 2015 to 07-08-2015 and he was allowed to leave the Customs House on 07-08-2015 on furnishing Bail Bond - This is a case of seizure from the shop premises/a case of town seizure by Customs Officials and not from any Port or Airport while being smuggled - Since the appellant was ill, he could not take steps for release of seized goods - Appellant No.1 made representation along with all documents for purchase of the said gold and silver before the Customs Authorities - He also explained the source of money for making payment to the seller of gold in cash and also extended his explanation in respect of currencies in his possession - On subsequent investigation at the sellers end at Jaipur, Rajasthan, the seller Shri Ratan Lal Soni of Shri Balaji Impex clearly accepted the transaction of selling gold and silver against two invoices mentioned - He had given statement accepting the transaction with the Appellant No.1 and receiving of payment - There is no evidence to show that the goods were actually having any foreign markings - The Essay Certificate do not also suggest the gold were of foreign origin since the purity was in the range of 992.8 to 993.6 - The imported gold generally is having purity of 999 per mille - Thus, it is very difficult to hold that the gold were smuggled one - The statement was taken from Appellant No.2, who in his statement accepted paying Rs.30,00,000/- as an advance towards purchase of gold ornaments - Before adjudication, the documents and statements were verified by Department and the entire goods and currencies were provisionally released on being satisfied about genuineness of the documents and ownership of goods - The Adjudicating Authority confiscated the goods wholly on the basis of assumption and presumption inferring some circumstantial evidence ignoring documentary evidence - The documents submitted by Appellant No.1 appear to be genuine and on submission of the documents he has discharged the burden under Section 123 of Customs Act, 1962 - There is no evidence on record to show that the seller Shri Ratan Lal Soni of Shri Balaji Impex was an active collaborator in this transaction, rather Department did not proceed to investigate in respect of the purchase documents submitted by Shri Ratan Lal Soni during investigation showing purchase of imported gold from different importers - Since the Appellant No.1 had discharged the burden, the confiscation cannot be held to be legal and proper - The decisions in the case of Imtiaz Iqbal Pothiwala 2018-TIOL-2221-HC-MUM-CUS , Ganesh Prasad 2005-TIOL-692-CESTAT-KOL , Madhukar Sonaba Bhagat 2020-TIOL-1107-CESTAT-KOL , Nand Kishore Somani 2015-TIOL-2712-CESTAT-KOL and Nand Kishore Modi 2015-TIOL-2182-CESTAT-KOL are squarely applicable to the facts of the present case on the proposition that the transaction between the appellant and the supplier was accepted by the buyer and seller, verified by the Department and the documents submitted in support of the licit acquisition amounting to discharge of burden under Section 123 of the Customs Act, 1962 - There is also no confession by the Appellant No.1 that the goods were smuggled - Without going into the proper determination of redemption fine, it is held that redemption fine is not required to be paid since the confiscation under Section 111(a) and (b) of the Customs Act, 1962 in respect of gold and silver has been held to be not maintainable as also confiscation of Indian Currency and Nepali Currency are held to be not maintainable under Section 121 of the Customs Act, 1962, in the absence of evidence that the said currencies are the sale proceeds of the smuggled goods - The imposition of penalty is also not maintainable apart from being not maintainable for imposing composite penalty - The imposition of penalty on Appellant No.2 is also not maintainable in the absence of any evidence of abetment in illegal importation of gold/silver since illegal importation has not been established in this case - Since the confiscation is not maintainable, the question of payment of Customs duty on the gold/silver also does not arise: CESTAT
- Appeals allowed: KOLKATA CESTAT
2020-TIOL-1389-CESTAT-AHM
Neptune Trade Link Pvt Ltd Vs CC
Cus - Appellant has imported the goods and declared the same as 'Naphtha' falling under Chapter 2710 11 19 of the first schedule of the Customs Tariff Act claiming benefit of Notification No. 21/2002-Cus dated 01.03.2002. After draw all of samples and testing Revenue sought to classify the same as "others" falling under heading 2710 19 90 instead of the same being treated as "Naphtha" falling under heading 2710 11 19 as declared in the Bills Of Entry - Revenue has got the samples tested in their laboratory as well as in the laboratories of M/s. Reliance Industries Limited and Oil India Limited.
Held: It is apparent that Commissioner after examining all the facts of the case and the cross examination of Assistant Chemical Examiner Chemical Assistant Grade-I could only reach to a conclusion that the appellant have failed to establish that ASTM D86 method was not followed - impugned order cannot, therefore, be sustained in the present form - It is seen that during cross examination, the Chemical Assistant Grade-I has clearly stated that log books and the registers are maintained in their laboratory, however, appellants chose not to ask for the same and Revenue chose not to produce the same - It was upto the Commissioner to get the necessary log books and lab records to bring out the real facts - It was also upto appellants to demand the same to prove their point - The matter was earlier remanded by allowing cross examination in order to bring correct facts on record, however, the entire purpose of remanding the case is defeated if the facts are not brought out completely Therefore, impugned order is set aside and the matter is again remanded for fresh adjudication after fresh cross examination of the Chemical Assistant Gr.-I, the person who actually undertook the tests and who is directed to produce all the lab records necessary to ascertain actual reading recorded and equipment used during testing and to prove his assertions appeals allowed by way of remand: CESTAT [para 14, 15]
- Matter remanded: AHMEDABAD CESTAT
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