| SERVICE TAX
2020-TIOL-1425-CESTAT-MAD
Madras Club Vs Commissioner Of GST & CE
ST - The assessee has filed this appeal against impugned order, whereby the rejection of their claim for refund under Section 11B of CEA, 1944 came to be upheld - A refund could be granted if conditions laid down under Section 11B are satisfied and the primary condition is principle of unjust enrichment - This test the assessee is unable to clear since they are nowhere disputing the fact that it had passed on the duty element to its customers - There has also been an admission that as and when the refund is obtained, the duty element collected from its customers would be paid back - By this safe play, the assessee has ensured itself no loss since the same has been recovered and it has come in appeal by taking a chance - The fact that the assessee has passed on the tax element to its service recipient, the refund of which is not made as on date, coupled with the assessee's claim for refund of "tax" clearly attracts the principles of unjust enrichment and hence cannot be entertained - The lower authority has therefore rightly rejected which action does not call for any interference: CESTAT
- Appeal dismissed: CHENNAI CESTAT
CENTRAL EXCISE
2020-TIOL-1604-HC-MUM-CX
Essel Propack Ltd Vs UoI
CX - Petitioner had sought for rectification of the order dated 27th September, 2018 2018-TIOL-3214-CESTAT-MUM wherein a finding was recorded by CESTAT that Ex.A, B and C filed by the appellant i.e., the petitioner should be considered as misstatement or fraud, whereafter the appeal was dismissed - Petitioner submits that they have availed the Amnesty Scheme and the tax demand has been settled and their grievance is limited to the finding of the CESTAT that they had played fraud on the Court - Furthermore, the petitioner had filed a rectification application against the order dated 27 September 2018 (supra) but the same was rejected with costs, therefore, the present petition.
Held: Notice issued only on the limited issue in respect of the finding recorded by CESTAT that petitioner in the appeal had played fraud and the rejection of the rectification application on this point - Notice returnable within six weeks - Stand over to 3rd November, 2020: High Court [para 5, 8]
- Matter listed: BOMBAY HIGH COURT
2020-TIOL-1595-HC-MUM-CX
Paras Motor Mfg Company Vs UoI
CX - The present appeal was filed in challenge to an order passed by the Tribunal and was pending disposal before this court - In the meanwhile, the Central Government introduced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - To avail benefit under this scheme one condition is tht any appeal pending before the High Courts or the Supreme Court be withdrawn unconditionally - Hence the assessee sought withdrawal of the present appeal.
Held - The assessee stated that its application under the SVLDRS had been accepted and all dues payable by it were paid - However, the appropriate order was not passed in respect of the application solely due to pendency of the present appeal - In such circumstances, the present appeal is allowed to be withdrawn: HC
- Appeal dismissed: BOMBAY HIGH COURT
2020-TIOL-1594-HC-MAD-CX
Gunnebo India Pvt Ltd Vs CCE
CX - The assessee filed the present writ, being aggrieved by the Revenue's refusal to accept surrender of the assessee's Central Excise Registration Certificate - The Revenue claimed that since there was an enforceable demand against the assessee's company and that there was no provision in the CEA 1944 to accept such surrender, the assessee's request could not be granted.
Held - In the counter affidavit filed by the Revenue, it is admitted that there are no enforceable dues as against the assessee & as such, the Revenue may not be justified in refusing the acceptance of the surrender of the assessee's Central Excise Registration Certificate on the ground that there were demands pending - Besides the demand, which was a subject matter in the CESTAT before the Supreme Court, no longer exists - Hence on this ground too, the Revenue cannot refuse to accept surrender of registration certificate - Hence directions are issued to the Revenue authorities concerned to accept the assessee's surrender of its registration certificate: HC
- Writ petition allowed: MADRAS HIGH COURT
2020-TIOL-1423-CESTAT-CHD
Sita Singh And Sons Pvt Ltd Vs CCE & ST
CX - Facts of the case are that the appellant received duty paid chassis from M/s SML ISUZU Ltd. for the purpose of fabrication of Ambulances falling under Chapter 87 of CETA, 1985 - The appellant supplied the manufactured ambulances to the depots of SML and paid excise duty on the basis of the cost of chassis plus body building charges - During the period December 2009 to September 2014, the view of the Revenue was that the ambulances are rightly classifiable under CSH 8703 3392 of the CETA, 1985 and that the valuation ought to have been arrived at in terms of rule 10A of the Valuation Rules, 2000 and paid duty paid accorrdingly – SCNs issued and matter adjudicated by confirming the duty demands as proposed – appeal to CESTAT.
Held: In the appellant's own case for the earlier period reported as - 2016-TIOL-2408-CESTAT-CHD , the Tribunal has concluded that the appellant is liable to pay duty as per Rule 10A and the vehicle in question is classifiable under Heading 87.02 of CETA – in view of the precdent decision, it is held that appellant is liable to pay duty as per Rule 10A and the goods are rightly classifiable under CSH 8702 of CETA, 1985 – appeal disposed of: CESTAT [para 4 to 6]
- Appeal disposed of: CHANDIGARH CESTAT
CUSTOMS
2020-TIOL-157-SC-CUS-LB
UoI Vs GS Chatha Rice Mills
Cus - Notification 5/2019-Cus dt. 16.02.2019 imposing duty of 200% on all goods originating in or exported from Islamic Republic of Pakistan was uploaded on the e-Gazette at 20:46:58 hours - power of re-assessment u/s 17(4) could not have been exercised for self-assessments made earlier in the day - Revenue appeals dismissed: SC LB
Cus - Section 8A does not provide power for increase of rate of duty with retrospective effect - the Notification 5/2019-Cus must be treated as having coming into force not before its publication which is at 20:46:58 hrs. on 16.02.2019 - Notification cannot be used to alter the rate of duty in respect of Bill of Entry presented several hours ago and the self-assessment was done - There cannot be re-assessment - The interpretation based on time of publication is in harmony with a view that accords respect for vested rights - Revenue appeals dismissed: SC LB
Appeals dismissed
Facts:
+ Following the terror attack at Pulwama on 14.02.2019, the Government of India published a Notification on 16.02.2019 imposing Basic Customs duty of 200% on All goods originating in or exported from the Islamic Republic of Pakistan - This notification came to be published in the Gazette at 20:46:58 hrs on 16.2.2019.
+ On the same day, i.e., on 16.02.2019, the respondents in the Appeals, who were the Writ Petitioners before the High Court, filed Bills of Entry under the Customs Act, 1962 in respect of goods imported from Pakistan. In fact, there was an agreement between India and Pakistan, both being SAARC Countries, under which, duty was to be levied on the imports from Pakistan at concessional rates, in those cases where imports were exigible to any duty at all.
+ The goods which were subject matter of import, had also arrived in the Customs Station and as noticed, during the course of the working hours on 16.02.2019 and well before the time of the Notification hereinbefore adverted to, the Bills of Entry came to be presented. The duty came to be self-assessed by the respondents.
+ It is, thereafter, that taking inspiration from the hefty increase in duty effected under the Notification the Writ Petitioners came to be faced with reassessment proceedings. It is accordingly that they approached the High Court and these Writ Petitions have been allowed by the High Court.
+ The Court took the view that the Notification which came to be published late in the evening on 16.02.2019 could not alter the destiny of the Writ Petitioners cases as regards the rate of duty.
+ Revenue is before the Supreme Court.
++ The principal argument of the Union of India is that these cases must be decided based on the provision of Section 15 of the Customs Act. In other words, since Section 15 of the Act contemplates that the rate of duty to be the rate in force during the day, and as the Notification was published on 16.02.2019, the day 16.02.2019 was not to be excluded. It was, in other words, to have operation throughout the day, 16.02.2019.
++ It is contended that there cannot be two rates of duty which are at loggerheads with each other on a single day. The time of the day at which the notification was actually published, would pale into insignificance in answering the question as to whether the said notification which is of the kind involved in this case was to hold sway during the course of the whole day. Any other interpretation would involve rewriting of Section 15 and the amendment of the provision which is plainly impermissible.
++ As soon as the factum of the notification having bearing came to light, proceedings for re-assessment were resorted to and no case was made out for the High Court to interfere with the action of the authorities in purporting to apply the correct rate of duty within the meaning of Section 15 of the Act.
Held: Per Dr. D Y Chandrachud, J and Indu Malhotra, J
++ The imposition of a tax encompasses three stages. The locus classicus on the subject is embodied in the dictum of Lord Dunedin in Whitney vs. Commissioners of Inland Revenue which has been consistently applied in the decisions of this court. There is, first , the declaration of liability which determines “what persons in respect of what property are liable”.
++ The second is the stage of assessment. Liability, it is well settled, does not depend on assessment since ex- hypothesi , that has already been fixed. Assessment particularizes the exact sum which a person is liable to pay.
++ Third (and the last) are the methods of recovery if a person who is taxed does not voluntarily pay.
++ In the present case the twin conditions of Section 15 stood determined prior to the issuance of Notification 5/2019-Cus on 16 February 2019 at 20:46:58 hours.
++ The rate of duty was determined by the presentation of the bills of entry for home consumption in the electronic form under Section 46. Self-assessment was on the basis of rate of duty which was in force on the date and at the time of presentation of the bills of entry for home consumption.
++ This could not have been altered in the purported exercise of the power of re-assessment under Section 17 or at the time of the clearance of the goods for home consumption under Section 47.
++ The rate of duty which was applicable was crystallized at the time and on the date of the presentation of the bills of entry in terms of the provisions of Section 15 read with Regulation 4(2) of the Regulations of 2018.
++ The power of re-assessment under Section 17(4) could not have been exercised since this is not a case where there was an incorrect self-assessment of duty. The duty was correctly assessed at the time of self-assessment in terms of the duty which was in force on that date and at the time. The subsequent publication of the notification bearing 5/2019-Cus did not furnish a valid basis for re-assessment.
++ There is no merit in the appeals. The appeals shall stand dismissed.
Per: K M Joseph, J
++ Following the unfortunate incident of Pulwama the Government of India in exercise of its powers under Section 8A of the Tariff Act decided to increase the rate of import duty on all goods in the manner done. The Notification was issued on 16.02.2019. It was published at about 20:46:58 hrs. In the meantime, during the course of the day, the writ petitioners before us who imported goods had filed Bills of Entry electronically. The goods were present in the Customs Station. To be more correct, the Bills were presented and self-assessment was undertaken. It is thereafter that late in the evening as a bolt from the blue, as it were, the notification came to be issued under Section 8A of the Tariff Act.
++ Rate of duty must be one which is provided by Parliament. An exception has been carved out under Section 8A to change the rate of duty under the Schedule to the Tariff Act. It is an emergency power vested with the Central Government. The emergency power vested with the Central Government is to change the import duty and the change is limited to an increase in the rate of import duty. The condition requisite is, no doubt, that circumstances exist which render it necessary to take immediate action for providing for an increase in the import duty. Section 8A, in fact, does not contemplate the power to amend the First Schedule. The power under Section 8A is confined to any article which is already included in the First Schedule.
++ It is clear that a Notification issued under Section 8A, increasing the import duty, is a species of delegated legislation. It must be remembered that Article 265 of the Constitution of India declares that no tax shall be levied except by the authority of Law. An increase in the rate of duty cannot obviously be affected by an Executive Order. That is not to say that when the Executive is empowered to increase the rate of duty by way of delegated legislation, it would not fulfill the requirement of Article 265 and there can be no hesitation in holding that it is law within the meaning of Article 13 of the Constitution of India and it is a species of delegated legislation.
++ In the matter of imports, the rate of duty, which is the sole area of controversy, is to be determined on the basis of the rate of duty which is in force on the day of the presentation of the Bill of Entry. It will be further noticed that an importer may, when the goods are physically present within the Customs Station in question, file the Bill of Entry for home consumption.
++ The next procedure contemplated under the Customs Act in regard to an importer entering any imported goods under Section 46 for home consumption is for the importer to carry out self-assessment except in a situation covered by Section 85 [See Section 17(1)].
++ The proper Officer is to verify the entries in the Bill of Entry entered under Section 46, inter alia , and the self-assessment of the goods carried out by the importer. He is clothed with the power to examine or test any imported goods, inter alia , for the purpose of such verification. The importer is to furnish any document for verification, as may be necessary towards the carrying out of the verification [See Section 17(3)]. It is thereafter that Section 17(4) empowers the Officer who carries out the verification to re-assess the duty leviable on such goods.
++ The perusal of Section 17(4) would reveal that such re-assessment can be done, when, on verification, examination or testing of the goods, the officer finds that the self-assessment is not done correctly. Section 17(4) also employs the expression “otherwise” after the words “verification, examination or testing of the goods”.
++ What is the time at which the importer who presents a Bill of Entry under Section 46 for home consumption is to effect payment of the import duty, when he carries out self-assessment? This question is answered in Section 47(2)(a) which provides that the importer is to pay the import duty on the very day of presentation of the Bill of Entry when the importer carries out self-assessment as is contemplated under Section 17(1) of the Act.
++ In the facts of these cases, there is no dispute that the imported goods were very much in the Customs Station and the Bills of Entry were presented under Section 46(1) on 16.2.2019. It is clear that the rate of duty, for the purpose of the cases before the Court, is to be determined with reference to the presentation of the Bills of Entry. The law does not take into consideration even the time of payment of the duty which is self-assessed by the importer. This is noted for the reason that the importer, who presents a Bill of Entry under Section 46 and who carries out self-assessment, is duty-bound to pay such duty on the very same date. The consequence of failure is only the liability to pay interest under Section 47 besides disabling him from clearing the goods. It does not postpone the point of time at which the rate of duty is to be determined.
++ A Notification, which is made by the Executive, must indeed be made known. Ordinarily this is made known by being published in the Gazette. This view came to be endorsed in a case under the Customs Act, which is reported in M/s. Pankaj Jain Agencies v. Union of India and others. Therefore, it is only with the publication effected at 20:46:58 hrs. on 16.02.2019, the Notification issued under Section 8A, increasing the rate of import duty, came into force.
++ While on publication required in law, to make a Notification effective, the decision of this Court, rendered under the Central Excise Act in Collector of Central Excise v. New Tobacco Company and others, is noticed. The question, which was considered, was whether a Notification under the Central Excise Act became effective from the date on which it was printed in the Government Gazette or from the date it was made available to the public.
++ It is to be noticed that it is in regard to a Notification issued under Section 25 of the Customs Act that the principles contained in sub-Section (4) and (5) will have effect from the date on which these provisions were brought into force. As far a Notification issued under Section 8A, with which this Court is concerned, it is the principle which has been laid down in Ganesh Das Bhojraj, which will apply.
++ In other words, as far as the Notification issued under Section 8A of the Tariff Act is concerned, the Notification would come into force on the date on which it is published in the Gazette. The question, however, which arises in this case is, as far as this Court is concerned, res integra , viz ., whether having regard to the time at which it was published, whether Notification would come into force on 16.02.2019, by including the whole of the day or will it operate from the time of its publication, or whether the Notification is to be enforced only after excluding 16.02.2019.
++ The question would pointedly arise whether it was to have effect for the whole of the day, viz ., 16.02.2019, which means, since the day 16.02.2019 was born, immediately after the midnight on 15.02.2019, does a day mean the first moment after the midnight? If that were the effect, what would be its impact on the Bills of Entry which were electronically presented under Section 46(1) of the Customs Act read with Rule 4(2) of the 2018 Regulations, which have already been referred to above. It is here that it becomes necessary to notice the provisions of Section 9 of the General Clauses Act, 1897.
++ In this case, there is no dispute that Notification under Section 8A was published in the Gazette. It was published at 20:46:58 hrs. on 16.02.2019. It is to be noticed that we are not dealing with a case, where a period of time, limited by two different termini , is present. A Statute may fix a terminus aquo . The Statute may be made to last without indicating when the period is to end, which is the terminus ad quem .
++ Section 9 of the General Clauses Act enunciates the principle, that for, excluding the first in a series of days or any other period of time, it suffices to use the word “from”. It also provides, likewise, for the devise of using the word “to”, for the purpose of including the last in the series of days or other period of time. It is clear from Section 9 that it contemplates a period, or a series of days which is marked by both terminus aquo and terminus ad quem . Section 9 is expressly intended to apply to a Central Act or Regulation.
++ In this case, we are concerned with the Notification issued under the Statute, and which is a piece of delegated legislation, under which, the rate of import duty has been increased. The increase in the rate of duty is not for any period. In other words, it is not a case where the terminus ad quem or a period of time, is fixed for the operation of the increased import duty of goods imported from Pakistan. In other words, the increased rate of import duty under the Notification is to last indefinitely. The word “indefinite” is intended to mean that it is to bear life till it is increased, reduced or completely done away with, in exercise of powers available under the Customs Act or the Customs Tariff Act (See in this regard Section 25 of the Customs Act and Section 2 of the Tariff Act).
++ It is clear that the situation which is presented before us, is not covered by the principle which is embedded in Section 9 of General Clauses Act, 1897. In other words, having regard to the terms of the Notification, which is a form of delegated legislation, by which the Central Government has increased the rate of import duties of goods imported from Pakistan, though the notification is gazetted on 16.02.2019 at 20:46:58 hrs., there is no period for which it is to last as already noticed, and in that sense, it can be argued that there would be no occasion for exclusion of the date on which it was issued.
++ It is quite clear that the notification which is issued is one which is issued under Section 8A of the Tariff Act. The notification is not one which is made by Central Legislature, namely, the Parliament. It, therefore, is not a Central Law as defined in the Act. We have also noticed the definition of the word ‘Regulation'. The notification is not a regulation as defined in General Clauses Act. There is no merit in the contention of the Union of India that by virtue of Section of 5(3) of the General Clauses Act, the notification must be treated as effective from the point of time immediately after mid night on 15/16 February, 2019.
++ On one hand, we are dealing with a Notification by which the appellant has purported to increase the rate of duty to a hefty quantum of 200 per cent, following the incident which took place at Pulwama. Would it be a fair and reasonable to include the whole, the day 16.02.2019, having regard to the effect on the importer of the goods who would have struck the bargain on the basis of rate of duty being what it was prior to the Notification? Could it not be said that based on the contracts for import, the importer would have entered into contracts for sale of goods in India where the price would be fixed with reference to the position obtaining as on the date of contract for import.
++ On the other hand, what we are called upon to decide, is the question of time at which the delegated legislation will take effect. It is true that there is no equity about tax. The fact that there is a sudden increase in the rate of tax may not render it vulnerable on the score that it violates Fundamental Rights.
++ Yet another aspect which could not be over-looked is while it is true that in Section 15 of the Customs Act, what is referred to is the rate of duty enforced on the date, the law itself entitles importer to have the goods cleared upon payment of the duty which is accepted as correct in the self-assessment proceedings, following the due presentation of the bill of entry under Section 46 read with Rule 4(2) of the 2018 Regulations.
++ In conjunction with the mandate of charging section contained in Section 12 and Section 15 of the Customs Act which fixes the date according to the rate of duty as the date of presentation of the bill of entries, could it certainly not be said that the law would abhor the reopening of transactions which have culminated in proceedings which are otherwise impeccably correct and regular. By way of re-assessment can matters concluded in the eye of law be revisited on the basis of a notification which comes much later in the day? There is yet another aspect which must also be borne in mind. The question before us, arises on the basis of notification which is, indeed, a form of delegated legislation which is issued under Section 8A of the Tariff Act. Section 8A of the Tariff Act empowers the Central Government to increase the rate of import duty but the power to issue a notification under Section 8A, is not conferred to increase the rate of import duty with retrospective effect.
++ There can be no doubt that the principle which appears to have evolved over a period of time is that generally, the law frowns upon determining a day with reference to its fractions. Undoubtedly, in the case of Central Act or a Regulation, the principle is statutorily incorporated in Section 5(3), that unless a contrary intention appears, it begins its journey in the Statute Book from the first point of time past the stroke of the previous midnight. Section 5(3) does not apply to the notification which is a form of delegated legislation, as found hereinbefore.
++ If the contention of the Union of India is accepted, though the notification is issued late in the evening, the ‘day' referred in Section 15 of the Customs Act would commence from the first moment past the midnight of 15.02.2019. The diametrically opposite option would be to exclude the whole of the day on which the notification was issued and the third option is that the day would consist of the hours remaining of the day 16.02.2019 after the time at which the Notification was issued. In other words, under the third option, the time of operation of the notification was 20:46:58 hrs. and continued till midnight of 16.02.2019. It would indeed constitute a fraction or part of an ordinary day consisting of twenty-four hours.
++ In the context of the Customs Act, and having regard to the Scheme, which, in the case of import duty, consists of filing of Bill of Entry for home consumption, self-assessment and payment of duty on the basis of the same and the rate being clearly fixed with reference to the particular point of time when the Bill of Entry is presented and there is a deemed presentation and even a deemed assessment, which is otherwise in order, and bearing in mind the principle that Section 8A does not provide power for increase of rate of duty with retrospective effect, the Notification must be treated as having coming into force not before its publication which is at 20:46:58 hrs. on 16.02.2019. This would necessarily mean that the Notification cannot be used to alter the rate of duty on the basis of which, in fact, there was presentation of Bill of Entry several hours ago, the self-assessment was done and what is more, the self-assessment was completed under Regulation 4(2) of the 2018 Regulations. There cannot be re-assessment. The interpretation based on time of publication is in harmony with a view that accords respect for vested rights.
++ In the scheme of the Customs Act, the Tariff Act and the 2018 Regulations, the time at which the notification under Section 8A is published would indeed have relevance as already found.
++ In this view of the matter, the Revenue Appeals are found to be without merit and the same will stand dismissed.
- Appeals dismissed: SUPREME COURT OF INDIA
2020-TIOL-1606-HC-MUM-CUS
PT Paracha Impex Vs CC
Cus – Clove - Petitioner seeks quashing of order dated 22.07.2020 passed by the Commissioner of Customs (Import) and for a direction to the Respondent to allow re-export of the goods.
Held: Earlier, Petitioner had approached this Court by filing petition which was disposed of vide order dated 03.07.2020 = 2020-TIOL-1160-HC-MUM-CUS directing the respondent No.1 to take decision on the representation of the petitioner dated 19th June 2020, if not already decided - Prima-facie, Bench is of the view that aforesaid order passed by the Commissioner is not what the High Court had intended when it had passed the order dated 03.07.2020 - Such disposal of representation is no disposal - This Court had directed the Commissioner to take a decision one way or the other on the representation of the Petitioner to grant permission for re-export of the goods in question in accordance with law - Instead of taking the necessary decision, Commissioner has deferred taking such decision for an indefinite period - Commissioner is, therefore, directed to pass a fresh order within two weeks - Stand over to 06.10.2020: High Court [para 5 to 7]
- Matter posted: BOMBAY HIGH COURT
2020-TIOL-1424-CESTAT-MUM
Polycab Wires Pvt Ltd Vs CC
Cus - Assessee filed Bill of Entry for clearance of "Semi Conducting Compound" imported from Republic of Korea which were eligible to the benefit of Notfn 123/2011-Cus. read with Notfn 187/2009-Cus (NT) - The goods were assessed under Risk Management System (RMS) - Commissioner(A) has rejected the appeals only on the ground that the assessee cannot challenge their own self-assessment before Commissioner(A) under Section 128 of Customs Act, 1962 because self assessment is not an assessment - This issue is no more res integra and has been settled by Apex Court in case of ITC Limited 2019-TIOL-418-SC-CUS-LB - By following the ratio of said decision, the impugned orders are not sustainable in law and therefore same are set aside and matter is remanded back to the Commissioner(A) to decide the same on merits after affording an opportunity of hearing to the assessee and after complying with the principles of natural justice: CESTAT
- Matter remanded: MUMBAI CESTAT |
