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SERVICE TAX
2020-TIOL-1625-HC-MUM-ST
Capgemini Technology Services India Ltd Vs UoI
ST - Petitioner is challenging the issuance of Form SVLDRS-3 against the Declaration dated 27.12.2019 filed in Form SVLDRS-1 under Section 125 of the Finance Act, 2019 and the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 made under Section 120 of the said Finance Act which, inter alia, requires the Petitioner to deposit an amount of Rs.2,19,82,499/- as against Rs.71,11,033.80 initially approved in Form SVLDRS-2 dated 21.02.2020 on the ground of violation of the principles of natural justice - The Petitioner is also challenging the inaction on the part of Respondents 3 and 4 in not disposing of the application filed by the Petitioner seeking rectification of the error in form SVLDRS-3 issued to the Petitioner - Since the last date to make payment to avail of the benefit under the Scheme as per the Taxation and Other Laws (Relaxation of certain Provisions) Ordinance 2020 dated 31.03.2020 was 30.06.2020, the Petitioner filed this Petition - However, since the matter could not be listed before 30.06.2020, the Petitioner has made the payment of the said amount electronically and also filed a letter dated 30.06.2020 stating that the said payment is under protest and strictly without prejudice to the claim of refund in the pending Writ Petition.
Held: If at all the Designated Committee wanted to increase the payable amount, the least they should have done was to give an opportunity of hearing to the Petitioner after affording the Petitioner an opportunity to review the report of the jurisdictional divisional Commissioner - With respect to the rectification application made by the Petitioner under Section 128 of the Finance Act, it has been stated by the Respondents in their reply that they have considered the same but since there was no change in the amount after certification from the concerned authorities, they have not issued a revised SVLDRS-3 - No order has been passed as contemplated under Section 128 of the Finance Act and this is not acceptable - The action and conduct of the Respondents in firstly accepting the amount stated to be payable by the Petitioner under the Scheme and issuing SVLDRS-2 of the said amount and then without the knowledge or notice or an opportunity of hearing to deal with the report of the jurisdictional divisional Commissioner issuing SVLDRS-3 for an amount of Rs.2,19,82,499/- as against Rs.71,11,033/- as accepted in Form SVLDRS-2A by the Petitioner is grossly in violation of the principles of natural justice - It is axiomatic that when a person is visited by adverse civil consequences, like enhancement of dues, principles of natural justice like notice and hearing would have to be complied with - Non-compliance would impeach the decision making process rendering the decision invalid in law - Also the failure of the Respondents to pass an appropriate order under Section 128 of the Finance Act with respect of the Petitioner's rectification application and merely to state in the Reply Affidavit that since there was no change in the amount after certification from the concerned authorities, they have not issued revised Form SVLDRS-3 is in gross in breach of Rule 6(6) of the SVLDR Rules –Bench, therefore, quashes and sets aside the Form SVLDRS-3 dated 06-02-2020 and Form SVLDRS-4 dated 03-07-2020 and directs the Designated Committee under the SVLDR Scheme to give an opportunity of hearing to the Petitioner and after considering all the material furnished and submissions made by the Petitioner as well as the payment made by the Petitioner under protest, issue appropriate orders as per law including issuance of revised Form SVLDRS-3 and Form SVLDRS-4 within four weeks from the date of this order – Petitions allowed: High Court [para 21 to 25, 27]
Petitions allowed: BOMBAY HIGH COURT
2020-TIOL-1445-CESTAT-MUM
UFO Moviez India Ltd Vs CCGST & CE
ST - It is the case of the Department that as per Rule 6 of the Service Tax Rules, 1994, the Appellant was obligated to pay service tax by the 5th day of the month immediately following the calendar month in which the service is deemed to have been provided - As the Appellant herein was debiting its Books of Account every six months, the Appellant had deliberately delayed the payment of service tax and, therefore, was liable to pay interest on such delayed payment under Section 75 of the Finance Act, 1994 – SCN issued and demand confirmed along with penalty, which order was upheld by Commissioner(A), hence appeal to CESTAT.
Held: Appellant discharges its service tax liability by debiting its Cenvat credit account - The Appellant debits its Cenvat register every month, however, in its Books of Accounts, the Appellant passes the relevant journal entry only every six months - Appellant has alo maintained sufficient credit balance in their Cenvat credit account at all times, therefore, the Appellant had no intention to evade the payment of service tax - Since the Appellant duly debited its Cenvat register as per Rule 6 of the Service Tax Rules, 1994, the corresponding entry being made by the Appellant in its Books of Accounts cumulatively for six months, can at best qualify as a procedural irregularity and can in no way constitute a statutory violation, as alleged by the Department - Appellant had filed the statutory returns within the stipulated time period and the monthly liability had been properly disclosed in such returns - Therefore, the manner in which the Appellant was recording the journal entry in its Books of Accounts alone, in the absence of any statutory violation, is not sufficient to conclude that there was a delay in payment of Service Tax on the part of the Appellant – Appeal allowed: CESTAT [para 3, 4]
- Appeal allowed: MUMBAI CESTAT
2020-TIOL-1444-CESTAT-DEL
Star Agriwarehousing & Collateral Management Ltd Vs CCE & ST
ST - Taxable and exempted services – CENVAT - Alleging that the appellant neither maintained separate records in terms of Rule 6(2) of the Cenvat Credit Rules, 2004 nor have paid the amount as per the conditions and procedure specified under Rule 6(3)(i) and (ii) of the Cenvat Credit Rules, 2004 readwith sub-Rule (3A) of Rule 6 of the Cenvat Credit Rules, 2004, the Department have issued a show cause notice dated 24 April 2014 whereunder the reversal of Cenvat credit amounting to Rs. 4,87,28,002/- have been demanded as per provisions of Rule 14 of CCR r/w s.73 of the FA, 1994 – demand confirmed with penalties, hence appeal to CESTAT.
Held: Once the proportionate reversal of the Cenvat credit has taken place, that tantamounts to not availing of the input services credit of the common inputs which are going into the exempted services - only ground that the appellant have not followed the laid down procedure of availing the option of Rule 6(3A) like not declaring value of turnover of exempted services in their periodic service tax return etc. can be minor procedural lapses, but same cannot become ground for denying a substantial benefit to the appellant – order set aside and appeal allowed: CESTAT [para 8 to 11]
- Appeal allowed: DELHI CESTAT
CENTRAL EXCISE
2020-TIOL-1623-HC-MUM-CX
Induction Hardening Company Vs CCE
CX - Appeal under section 35G of the Central Excise Act, 1944 has been filed challenging the order dated 09.09.2016 passed by the CESTAT and same is pending before this Court having been admitted on 21.08.2018 - Appellant seeks to avail the SVLDRS, 2019 scheme and for claiming the benefits under the scheme the appellant is required to unconditionally withdraw the appeal which is pending before the High Court and, therefore, they have filed the present application seeking withdrawal of appeal - It is stated that though the SVLDRS application has been accepted by the respondents and all the dues have been paid by the appellant, appropriate order has not been passed on the application only on the ground of pendency of the present appeal – Considering the above, Bench allows the appeal to be withdrawn: High Court [para 8]
- Appeal withdrawn: BOMBAY HIGH COURT
2020-TIOL-1443-CESTAT-AHM
Wilson Paper Mills Pvt Ltd Vs CCE & ST
CX - The assessee is engaged in manufacture of Kraft paper - The case of departments is that the assessee have clandestinely manufactured and cleared the kraft paper by evading excise duty - During investigation, the officers found shortage of finished goods to the tune of 22,481KGs of kraft paper, four dispatch slips claimed to have been recovered from M/s. Gajanand Packaging, Morbi, two delivery challans claimed to have been recovered from factory of M/s. Wilson and also taken printouts from computer CPU available at residence of one of the directors of M/s. Wilson - The main evidence for making allegation of clandestine removal and raising demand is computer printouts - The investigation reveals that the printout was taken from seized computer wherein, the data was copied and the computer on which the data was produced originally the hard disc of the same was destroyed by the directors of M/s. Wilson - The computer printouts does not bear the name or logo of assessee company - Whether it belongs to M/s. Wilson or otherwise is based on the statement of directors of M/s. Wilson - Since the statements are under serious dispute and the statements are not admissible evidence - For this reason also the mere computer printout which is not the conclusive evidence of clandestine removal is not admissible as evidence - As per statutory provision under Section 9D and also settled law, all the statements which were retracted in the form of reply to SCN and without allowing the cross-examination of witnesses cannot be used as admissible evidence, therefore all the statements are discarded - The major demand is based on the computer printout and various statements - Since both are not admissible evidence, the charge of clandestine removal is not established - Assessee did not have production capacity of more than 10,000 MT P/A - Accordingly, the allegation of clandestinely manufactured and clearance over and above the production capacity is beyond imagination - As the demand on the basis of computer printout is not sustainable, consequential penalties and interest are set aside - As regards to demand based on packing slips recovered from M/S. Gajanand Packaging & M/S. Wilson which was prepared for clandestine removal of kraft paper however, no duty paid invoice have been issued by M/S. Wilson - The assessee could not make out convincing defense as regard this demand therefore, on the basis of evidence namely packing slip the demand of Rs.58302/- is sustainable - Since the amount of duty out of total duty confirmed in the impugned order has been re-determined, assessee is entitled for reduced penalty of 25% under Section 11AC in terms of the proviso thereof - In respect of the coappellants a penalty under Rule 26 was imposed - This penalty is consequential to the demand confirmed by the Adjudicating Authority - Since the major demand of duty confirmed itself is not sustainable, penalties of co-appellants are also not sustained - Accordingly, the impugned order is modified: CESTAT
- Appeals partly allowed: AHMEDABAD CESTAT
CUSTOMS
2020-TIOL-1632-HC-AHM-CUS
PR CC Vs Shantilal Javerchand Jain
Cus - Revenue is in appeal against the order dated 25.06.2019 passed by the CESTAT and the question of law inter alia proposed is whether an appeal u/s 129A(3) is maintainable before the CESTAT challenging a compounding order passed by the authority; whether the Tribunal was right in coming to a conclusion that there was no demand of redemption fine.
Held: Bench observes that a common order was passed by the Tribunal in two appeals being the Customs Appeal No.12787 of 2018 and Customs Appeal No.12788 of 2018 respectively from which the present appeal arises before us; that against the order passed by the Tribunal in the Customs Appeal No.12787 of 2018, the Revenue had come before this Court by way of Tax Appeal No.106 of 2020 and a coordinate Bench of this Court vide order dated 27.02.2020 [ 2020-TIOL-968-HC-AHM-CUS ] had dismissed the Tax Appeal No.106 of 2020 while observing that the Tribunal in so-many words had observed that there was no clear proposal in the show cause notice with regard to imposition of the redemption fine and also in the order-in-original; that the tribunal has observed that there is no crystallized demand of redemption fine against each of the noticee - That, therefore, the present appeal arising from the self same order passed by the Tribunal should also fail - Appeal dismissed: High Court [para 3, 4]
- Appeal dismissed: GUJARAT HIGH COURT
2020-TIOL-1624-HC-DEL-NDPS
Girdhari Lal Bhagat Vs Directorate Of Intelligence
NDPS - Heroin recovered is 17.32 Kgs - Appellant has filed the present appeal impugning a judgment dated 10.03.2016, whereby he was convicted of an offence punishable under Section 21(c) of the Narcotic Drugs and Psychotropic Substances Act, 1985 - He also impugns an order dated 29.03.2016, whereby he was sentenced to twelve years of rigorous imprisonment with a fine of Rs.1,00,000/- and in default of payment of fine to undergo simple imprisonment for a period of one year for the offence under Section 21(c) of the NDPS Act.
Held: Court is of the view that there are certain mitigating circumstances which are required to be considered - The petitioner was the only male member of his family, which comprises of his widowed mother, his wife a daughter - It is also relevant to note that the appellant is not involved in any other case and has no criminal antecedents - It is also material to note that in Balwinder Singh ( (2005) 4 SCC 146 ), 175 Kgs of Heroin and 39 Kgs of Opium of foreign origin was recovered from the petitioner - However, the Court noted that the petitioner "was convicted of this offence for the first time” and considering the facts and circumstances reduced the sentence awarded - Appellant has been in custody since 04.02.2010 and has served more than ten years and six months of his prison sentence - His conduct in jail is also reportedly satisfactory - Considering the above, the sentence awarded to the appellant is reduced from twelve years rigorous imprisonment to the sentence already served - The appellant shall pay the fine of Rs.1,00,000/- as imposed and in default of which shall serve simple imprisonment for a further period of three months instead of one year as directed by the impugned order dated 29.03.2016 - The petitioner's appeal against the impugned judgment convicting him of the offence punishable under Section 21(c) of the NDPS Act is dismissed - However, the impugned order of sentence dated 29.03.2016 is modified to the aforesaid extent - The contrabands seized from the appellant may be destroyed and the motor vehicle (truck) may also be disposed of in accordance with law: High Court [para 18, 20, 21, 22]
- Appeal disposed of: DELHI HIGH COURT
2020-TIOL-1442-CESTAT-MUM
Gel Exim Vs CCE & C
Cus - The assessee had classified the imports, described as 'steel nuts' under heading 73181500 and 73181600 of First Schedule to CTA, 1975 and valued at US$987 per metric ton in bill of entry which, after ascertainment of 12.63% of chromium in 'bolts' and 9.5% of chromium in 'nuts' by 'hand held testing machine', was held to be more accurately describable as 'stainless steel bolts' and 'alloy steel nuts' respectively with the headings remaining unchanged but justifying revision of value to US$2081 per metric ton for 'bolts' and US$ 1708 per metric ton for 'nuts' by adopting London Metal Exchange (LME) prices - Recourse was had to the prices of constituent metals in LME for arriving at the enhanced assessable value, on the supposition that the goods had been mis-declared after discarding the value reflected in invoice - Hence, the primary requirement is to evaluate the finding in impugned order that the goods had been correctly re-determined as 'stainless steel bolts' and 'alloy steel nuts' instead of acceptance of declaration as 'steel bolts and nuts' in the bill of entry - On perusal of note 1 in chapter 72 of First Schedule to CTA, 1975, it is observed that several forms of 'iron and steel' have been described and while all of them are intended for determining the rate of duty in relation to goods enumerated in said chapter, those of 'steel', 'stainless steel' and 'other alloy steel' in (d), (e) and (f) in the note are intended to apply to such descriptions anywhere in the schedule - The first appellate authority cannot be faulted for reference to these descriptions for the purpose of chapter 73 of First Schedule to CTA, 1975 - The lower authorities have relied upon the ascertained chromium content - It is abundantly clear that to conform to description as 'other alloy' it should not be 'stainless steel' which is distinguished by being 'alloy steel' with the carbon content restricted to 1.2% or less and with chromium content of at least 10.5% - Consequently, it would appear that 'other alloy steel' should have at least 0.3% of chromium content - By the scale of chromium content, of itself, the re-assignment of description is not flawed - However, the carbon content is critical for determination of 'bolts' as 'stainless steel' and the presence, below the prescribed cap, of any other enumerated element would exclude 'nuts' from the category of 'other alloy steel' for the purpose of classification - The proceedings lack any record of determination of such contents - Consequently, the evidence on record is not sufficient to determine the impugned goods either as 'stainless steel' or as 'other ally steel' and, in the absence of such evidence, the declaration cannot be faulted - There is no ground to dispute the valuation - Hence, the enhancement of values and detriment built upon alleged misdeclaration fails: CESTAT
- Appeal allowed: MUMBAI CESTAT
2020-TIOL-1441-CESTAT-DEL
Kuber Impex Ltd Vs CC, CGST & CE
Cus - The assessee has imported VRLA batteries - SCN was issued by relying upon the data from seized hard disc and pen drive - However, assessee was informed later on that the said pen drive and hard disc are not traceable for the purpose of adjudication - One hard disc and pen drive was opened in the presence of Shri Sanjay A. Chothani, employee of the CHA firm and at the time of opening of another hard disc on the other date, nobody was present in absence of notice to the assessee to witness the retrieval of data - Thus, the whole exercise of the retrieval of data is vitiated rendering it unreliable - Representative of CHA was not the competent person to witness the proceedings relating to the retrieval of the data from hard disc /pen drive - Further, as required by Section 138 C of Customs Act, Revenue failed to bring on record the details of computer or machine, on which the data was prepared or compiled - Further, it is found that there is no specific correlation with the bills of entry under dispute with the alleged evidence of wire transfer - There is no investigation or confirmation from the persons, whose names have appeared from the email for wire transfer - Reliance has been made on the import cost sheet, which was retrieved from the seized hard disc /pen drive - The conclusion has been drawn by Revenue from the cost sheet on the basis of assumption and presumption - The cost sheet reflects the invoice value, which has been remitted through normal banking channel along with other expenses - The suppression of transaction value would also have been reflected in said cost sheet, which is not the case - The NIDB data is in respect of import of 12 V batteries by other importers, whereas the assessee has imported 6 V batteries - Hence, the NIDB data cannot be relied upon - None of the aforementioned aspects has been addressed by the court below - The documents /data retrieved from the hard disc/pen drive, in absence of authorised person of assessee, as admittedly no notice was issued to them, cannot be relied upon - There has been mis-carriage of justice by neither examining the persons, whose statements have been relied upon in the course of adjudication proceedings, nor they have been offered for cross examination by assessee - Thus, the issue as regards the transaction value of batteries imported from M/s. Shenzhen Leoch Battery Technology, China, requires re-consideration by the Court Below - Accordingly, matter is remanded as regards the three bills of entries for the batteries imported from M/s.Suqian Yongda Import & Export Co. Ltd. China, and the demand of differential duty and penalty with respect to the import from Power ROC Co. Ltd. is set aside - The penalty in respect of the appeal of the Director of company, Shri Kapil Garg is set aside: CESTAT
- Appeal partly allowed: DELHI CESTAT |
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