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SERVICE TAX
2020-TIOL-1538-CESTAT-MUM
Yes Bank Ltd Vs CST
ST - CENVAT - Rule 2(l) of CCR, 2004 - Input Service - Assessee appellant is engaged in the business of providing Banking and Other Financial Service (BOFS) - Issue involved pertains to eligibility of Cenvat Credit of service tax paid on the insurance service received by the bank from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Held: Larger Bench of the Tribunal in the case of South Indian Bank - 2020-TIOL-861-CESTAT-BANG-LB has held that the insurance service provided by the Deposit Insurance Corporation to the banks is an "input service" and CENVAT credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering 'output services' - Since the issue is no more res integara, the appeal filed by the appellant assessee is allowed by setting aside the impugned order: CESTAT [para 5, 6]
- Appeal allowed: MUMBAI CESTAT
2020-TIOL-1537-CESTAT-HYD
Concast Ferro Inc Vs CCE, C & ST
ST - The assessee is holder of ST registration in relation to GTA Service - During relevant period, they had received GTA service but failed to pay appropriate Service Tax by wrongly availing the benefit of exemption Notfn 32/2004-ST and 1/2006-ST thereby short paid Service Tax - Consequently, a SCN was issued to them for recovery of said amount along with interest and penalty - The two conditions contained in proviso to said Notfn had been removed w.e.f. 01.03.2008 by Notfn 12/2008-ST - The allegation against assessee is that they have failed to comply the condition i.e. furnishing necessary declaration on the consignment note that no credit of duty paid on inputs or capital goods used for providing such taxable services had been availed by Goods Transport Operator nor the benefit of Notfn 12/2003-ST was availed by them - On going through the appeal memo, it is found that certain evidence has been enclosed by assessee in support of their argument that necessary declarations have been made in respective consignment note and/or declarations which they had obtained from respective consignors to the effect that neither CENVAT Credit on capital goods and input services nor benefit of Notfn 12/2003-ST have been availed in providing taxable services - This aspect needs to be verified - Therefore, matter remanded to the adjudicating authority to examine the evidences enclosed with appeal paper book and the evidence that would be furnished during the course of de novo proceedings: CESTAT
- Matter remanded: HYDERABAD CESTAT
CENTRAL EXCISE
2020-TIOL-1547-CESTAT-DEL
Bharat Aluminium Company Ltd Vs CCE
CX - SCN dated 11.10.2010 was issued asking M/s Vedanta Aluminium Limited (VAL) to show cause as to why duty of Rs. 64,70,09,162/- + cess totalling Rs. 66,64,19,436/- as per the calculation chart be not demanded and recovered under proviso to sub-section (1) of Section 11A of Central Excise Act alongwith interest and with proposal to appropriate the proposed demand from the amount of Rs. 66,64,19,436/- already deposited towards differential duty liability on the alumina removed during the period August, 2007 to August, 2010, alongwith proposal to impose penalty under Section 11AC read with Rule 25 of Central Excise Rules, 2002 - M/s VAL filed an application before the Settlement Commission at Kolkata for settlement of the aforementioned show cause notice - dispute was settled by the Settlement Commission at Kolkata vide Final Order No. F-282/CE/11/-SC (KB) dated 23.09.2011 - Contending that the differential duty relates to allegation of suppression of assessable value of clearances of calcined alumina, on the ground that as per rule 9 of the CCR, 2004, CENVAT of the duty so paid and passed on to M/s Bharat Aluminium Company Limited (M/s Balco) on supplementary invoice is inadmissible, the same was denied and equivalent penalty under Rule 15 of Cenvat Credit Rules was imposed on M/s Balco and further penalty of Rs. 5 crore has been imposed on M/s Vedanta Limited and on the other appellants of Rs. 2 lakhs each under rule 26 of the Central Excise Rules, 2002, who are the Officers of M/s Balco and M/s VAL - appeal filed before CESTAT by all the noticees.
Held: Admittedly, the transaction between BALCO and VAL is duly documented and properly recorded in the books of accounts of both the companies - Bench further finds that the method of valuation adopted for clearance of calcined alumina from VAL to BALCO was under a business like formula based on the price of aluminium at LME - From the facts on record, it is found that there is no incentive for VAL to suppress the clearance value or pay lower tax - Whatever duty was payable as per the invoice, the same was to be paid by BALCO to VAL - Secondly, it has been demonstrated from the appeal paper book, being the extract of cenvat credit, that VAL alone had sufficient credit balance in their cenvat account exceeding Rs. 1 crore, whereas the duty payable was in few lakhs only and thus the cumulative credit balance in cenvat register of VAL was increasing from month to month - Further, it is evident from record that the parties suo motu changed the basis of valuation to the tender price of NALCO for calcined alumina (under International Competitive Bidding) - Situation is wholly revenue neutral as BALCO is clearing their finished product on payment of duty, and whatever duty is charged by VAL is available to BALCO as cenvat credit - Upon enquiry and investigation by Revenue, disputing the method of valuation of calcined alumina by VAL, on being so advised agreed to the valuation as suggested by Revenue and suo motu deposited the differential duty alongwith interest much prior to issue of show cause notice - VAL also bonafide issued supplementary invoice to BALCO in December, 2009 - Thus, the issue is wholly interpretational in nature and there is no element of fraud, suppression or intention to evade payment of duty - Reliance placed by Revenue on the show cause notice of VAL is erroneous and misconceived - Allegations by Revenue are bald and unsubstantiated - Only for the reason that VAL instead of contesting the show cause notice went for settlement before the Settlement Commission, no adverse inference can be drawn against the appellant BALCO - Order of Settlement Commission cannot be used for making allegations against the appellant M/s Balco - Benefit of Notification No. 214/86-CE was available to BALCO i.e. they could have received calcined alumina from VAL without payment of duty - extended period of limitation is not warranted in the facts and circumstances, there being no suppression of facts or attempt to evade duty - Appeals are allowed by setting aside the impugned order - Appellants are entitled to consequential benefit in accordance with law: CESTAT [para 31, 32]
- Appeals allowed: DELHI CESTAT
2020-TIOL-1539-CESTAT-HYD
Singareni Collieries Company Ltd Vs CCE, C & ST
CX/ST - AR submitted that in the appeals before the Bench, the assessees applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and discharge certificates have been issued - Bench, therefore, dismisses the appeals as deemed to have been withdrawn as per section 127(6) of the Finance Act (No.2), 2019: CESTAT [para 2]
- Appeals dismissed: HYDERABAD CESTAT
CUSTOMS
2020-TIOL-1764-HC-MUM-CUS
Horticulture Produce Exporters Association Vs UoI
Cus - Petitioner is the registered association of exporters of onions whereas petitioner No.2 is a member of petitioner No.1 being proprietor of Fair Agro Enterprises - Challenge is to the notification No. 31/2015-20 dated 14.09.2020 issued by Director General of Foreign Trade, Department of Commerce, Ministry of Commerce and Industry, Government of India prohibiting the export of all varieties of onions with immediate effect - Petitioners further seek a direction to the respondents to release the goods (onions) for export where shipping bills of export were filed and generated with respondent Nos.4, 5 and 6 before issuance of the impugned notification.
Held: It is specifically alleged that approximately 68 containers of exportable onions were brought to the parking plaza outside the customs area but respondent Nos. 4, 5 and 6 during the entire day on 14.09.2020 did not process the Let Export Orders of those containers despite filing and generation of shipping bills - The above grievance was immediately raised by the petitioners by sending e-mail to respondent No.3 on 14.09.2020 at 4:11 p.m - Thereafter, prayer was made before the Commissioner, Nashik on 17.09.2020 to take up the matter with respondent No.3 - In the first affidavit of respondent Nos.4, 5 and 6 dated 30.09.2020, it is stated that impugned notification bearing No.31/2020 dated 14.09.2020 was received by the office of the answering respondents at 07:59 p.m. on 14.09.2020 - It is admitted that petitioners' submission that Let Export Orders of 68 containers which were kept outside the parking plaza were not processed is quite possible as the containers were not brought inside the parking plaza nor documents relating to the containers were registered; at the same time there is an evasive denial by the said respondents to the allegation that customs authorities acted arbitrarily on 14.09.2020 by not processing Let Export Orders for the 68 containers - In the second affidavit filed on 05.10.2020, regarding the contention of the petitioners about parking of 68 containers in the parking plaza, it is stated that no documents have been placed on record to show that the containers were parked in the parking plaza, including any gate slip issued to show entry of the containers into the parking plaza - It has been clarified that those containers which were gated in the customs area and registered in the Electronic Data Interchange system upto the date of the notification would be allowed to be exported - Though petitioners have made a specific and serious allegation of insider knowledge of the customs authorities during the morning hours of 14.09.2020 about a notification to be issued prohibiting export of onions and acting upon such insider information did not accept any container of onions during the whole day of 14.09.2020, the same has not been specifically denied by respondent Nos. 4, 5 and 6 in the three affidavits - In a categorical finding it has been held by the Supreme Court [in M/s. G. S. Chatha Rice Mills, = 2020-TIOL-157-SC-CUS-LB ] that the revised rate of import duty in terms of the notification would apply to bills of entry presented for home consumption after the notification was uploaded in the e-gazette at 20:46:58 hours on 16.02.2019 - Though respondents have stated in their first affidavit that they received copy of the same at 7:59 p.m. of 14.09.2020, from a perusal of the notification, Bench finds that the same was uploaded digitally on 14.09.2020 at 22:28:11 hours - Thus having regard to the above and considering all aspects of the matter, Bench is of the view that a case for admission and interim relief is made out - export of onions in respect of the shipping bills which were presented and generated prior to 22:28:11 hours on 14.09.2020 shall be allowed subject to the clarification given by the Central Board of Indirect Taxes and Customs in its communication dated 18.09.2020 - matter to be listed in the first week of December, 2020 for fixing a date of hearing: High Court [para 7.1, 7.2, 8, 8.1, 9, 13, 14, 15]
- Interim relief granted: BOMBAY HIGH COURT
2020-TIOL-1763-HC-MUM-CUS
Harihar Collections Vs UoI
Cus - Government of India in the Ministry of Commerce and Industry (Department of Commerce) had issued a notification dated 29.03.2019 amending the import policy in respect of peas (pisum sativum) including yellow peas, green peas, dun peas and kaspa peas having Exim code 0713 1000 - By the said notification, the said items have been put under restricted category allowing import upto total quantity of 1.5 lakh MT - This was followed by trade notice No.6 of 2019-2020 dated 16.04.2019 laying down the modalities for import of peas - Petitioner placed orders for import of yellow peas, consignments of which were received in several batches in the month of November, 2019 - The said consignments were covered by eight bills of entry, all dated 18.11.2019, for total quantity of 38,500 MT - However, customs authorities did not permit clearance of the above goods - As a result, petitioner was forced to shift the entire consignment of yellow peas to customs warehouse under section 49 of the Customs Act, 1962 - It is stated that in order to ensure that the yellow peas were not damaged, fumigation had to be carried out regularly to prevent insect contamination - This resulted in incurring of further expenditure by the petitioner in addition to rent paid to the customs warehouse - On request of the importer, show cause notice was waived but personal hearing was granted - Adjudicating authority passed the order-in-original on 28.08.2020 confiscating the goods with an option to redeem the same on payment of redemption fine of Rs.1.5 crores - penalty imposed of Rs.2.35 crores - pursuant to the order-in-original, petitioner paid the customs duty, redemption fine and the penalty totalling Rs.44,21,31,298/- - petitioner received a letter dated 09.09.2020 from respondent No.7 stating that the cargo stored in its premises would not be released in view of directions received from the customs authorities - aggrieved, the present petition.
Held:
++ When this Court had taken cognizance of the grievance made by the petitioner and was in session of the matter fixing 06.10.2020 for consideration, it was highly improper on the part of Commissioner of Customs (Import-II) to have passed the order dated 01.10.2020 without any intimation to or taking leave of the Court. It needs no reiteration that when the court, that too the High Court, is in session of a matter, an administrative or executive authority cannot start a parallel proceeding on the very same subject matter at its own ipse dixit and record a finding. It would amount to interfering with the dispensation of justice by the courts. In the instant case, when the Court was set to examine the grievance of the petitioner regarding non-release of the goods despite the order-in-original, what was sought to be done was to present the Court with an order passed in the midst of such examination keeping the Court totally in the dark saying that the order-in-original suffers from illegality or impropriety directing the subordinate authority to apply to the Commissioner (Appeals) to set aside the order-in-original and then contending that the writ petition should be dismissed because of the subsequent development or that the petitioner should be relegated to the appellate forum to contest the subsequent order. As pointed out above, this amounts to interfering with the administration of justice and is thus not at all acceptable. A view may be taken that such an order should be ignored as it is contumacious. [para 26]
++ Though the said order has been termed as a review order, we have already discussed above that the jurisdiction conferred upon the Principal Commissioner of Customs and Commissioner of Customs under section 129D(2) of the Customs Act is revisional. In fact it is an order passed in exercise of the suo-motu power of revision. Before dealing with the contents of the order, it needs to be mentioned that the Commissioner had three months time to pass the said order, further extendable by another thirty days. Yet he chose to pass the order most hastily in the midst of the court proceeding keeping the Court completely in the dark. [para 29]
++ Prima-facie, on examination of the grounds as above, we cannot say that the order-in-original is unlawful or inappropriate or unjust or that the adjudicating authority acted beyond the bounds of his authority. However, since application has been filed which will now be decided by the Commissioner (Appeals) as an appeal, we only limit our examination to the justification or otherwise of not releasing the goods of the petitioner on the strength of the order dated 01.10.2020. [para 36]
++ The order-in-original is holding the field. The same has neither been set aside nor stayed. Petitioner has complied with the terms and conditions of the order-in original and made the necessary payments. Out of charge has been issued. Because of warehousing of the goods under section 49 of the Customs Act, petitioner is required to pay a substantial amount to the customs authority. In the above context and after thorough consideration of all aspects of the matter, we are of the view that non-release or withholding of the imported goods of the petitioner any further would not be just and proper. At least, the grounds given in the order dated 01.10.2020, which order itself was passed in a highly improper manner, do not justify that the goods should be withheld or denied release notwithstanding the order-in-original and compliance thereto. [para 37]
Conclusion: [para 38 to 41]
+ Respondents are directed, more particularly respondent Nos.4 to 7, to forthwith release the goods of the petitioner covered by bills of entry all dated 18.11.2019. Similar direction also follows in Writ Petition No.3502 of 2020 in respect of bills of entry, all dated 01.11.2019.
+ Both the writ petitions are accordingly allowed. No costs imposed.
+ Additional Solicitor General made an oral prayer that the effect of the judgment should be kept in abeyance for a reasonable period to enable the contesting respondents to move the Supreme Court. Bench finds no good reason to keep the same in abeyance. Consequently, prayer made is rejected.
- Petitions allowed: BOMBAY HIGH COURT
2020-TIOL-1548-CESTAT-DEL
RVL Logistics India Pvt Ltd Vs CC
Cus - Penalty of Rs. 50,000/- has been imposed under Regulation 20(7) and 22 of CBLR, 2013 for the alleged act of omission and commission; however, the proposal to revoke the Customs broker licence and forfeiture of security deposit was dropped - aggrieved by the imposition of penalty, the CHA is before CESTAT.
Held: Bench finds that the charge of violation under Regulation 11(n) as regards compliance of KYC norms is not established as admittedly the appellant have received several documents from their client viz. PAN card, KYC details in prescribed format, authorisation, self attested copy of IEC etc. which corroborate the genuineness of their client M/s AAA Impex Services and their working at their given address - Further, there is no document which raises suspicion - As regards the charge under Regulation 11(e), Bench finds that there is no act of omission or commission which indicates lack of due diligence to ascertain the correctness or any information imparted by the appellant to their client with reference to the work handled by them - Further, there is no case made out of any collusion or abetment - Further, no case of any illegal gains on the part of the appellant CB is made out, indicating their collusion, as alleged - Also, no case is made out that the appellant CB have knowingly allowed the alleged mis-declaration by their client - It is established principle of law that mere facilitation without knowledge of consequences, would not amount to abetting an offence - impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 18, 19] - Appeals allowed: DELHI CESTAT 2020-TIOL-1536-CESTAT-MUM
International Aircon Pvt Ltd Vs CC
Cus - Period involved is May 2013 and April 2016 - Exemption notification 85/2004-Cus for items covered under India-Thailand Free Trade Agreement - Appellant claimed the benefit of the notification, Sr. no. 49 exempting all goods under tariff item no. 84151010 of First Schedule to CTA, 1975 - The SCN issued by the department alleges that the goods had been wrongly classified to avail of the exemption to which they were not entitled as the claimed classification was intended to cover only 'self-contained' or 'split' units that are 'window' or 'wall' mounted with only cooling capability while the goods under import were either 'wall' mounted 'split' units performing dual functions of heating and cooling or were 'ceiling mounted' or 'ducted' for which tariff item no. 8415 8110, 8415 8190, 8415 8210, 8415 8290 and 8415 8390 of First Schedule to Customs Tariff Act, 1975 are more appropriate - Duty demands confirmed along with interest and mandatory penalties - While the misdeclared goods were held as liable to confiscation, only the live consignments, valued at Rs. 55,71,757/- were confiscated u/s 111 of the Customs Act redeemable on payment of fine of Rs.1 lakh - appeal to CESTAT.
Held: Show cause notice has tripped upon itself in its haste to carry the impugned goods beyond the scope of eligibility for the exemption notification - The applicability of sub-heading no. 841581, 841582 and 841583 to the impugned goods lacks substance - It is not the problem of fitment within the description corresponding to the sub-headings that has generated this dispute; it was the availment of the privilege afforded by notification no. 85/2004-Cus dated 31st August 2004 which, at sl. no. 49, exempts all goods classifiable under heading no. 841510 of the First Schedule to Customs Tariff Act, 1975 from levy of basic customs duty - The adjudicating authority appears to have accepted the convenience of 'ready fitting' descriptions at the eight digit level of tariff items to be in consonance with the mandate of rule 3 of General Rules for Interpretation which alludes to the most specific description being preferable to a general description - The primary influence was the availability of heating and cooling options in the wall mounted type and the location of the indoor unit on the ceiling which, according to him, rendered tariff items under sub-heading no. 841581, 841582 and 841583 to be more apt and, thereby, the eligibility for notification was excluded - A question that arises in this context of denial of the exemption is the justifiable cause to exclude some variants of 'air-conditioners' from that privilege - The exemption is in pursuance of a bilateral international agreement which, by no stretch, has deliberated only on 'air conditioners' for such narrow coverage - It is now settled law that though the importer may seek a classification it is the responsibility of the assessing officer to determine the appropriate heading; hence the application of rule 3 of General Rules of Interpretation are not intended for resolving difference of opinion between importer and assessing officer but for guiding the assessing authority in clarifying for itself when in doubt over two headings - The impugned goods are not 'window' type but they are all of the 'split' type with an external condenser unit and an indoor evaporator unit - In the Explanatory Notes to the Harmonized System of Nomenclature pertaining to sub-heading no. 841510, Bench finds no qualifying characteristic that restricts the adoption thereof to 'cooling facility' alone; neither is there any capacity qualification included therein - That would be tantamount to conferring approval to the attempt by the adjudicating authority to alter the logic, and structure, of the Schedule beyond the pale of General Rules of Interpretation and The General Explanatory Notes to Import Tariff - Before attempting re-classification, the adjudicating authority has failed to determine the scope of the primary residual heading and the consequential effect on the sub-headings and tariff items within it - The adjudicating authority has insinuated non-existent restrictive qualifications on the description of, and tariff item under, sub-heading no 841510 of the First Schedule to Customs Tariff Act, 1975 and that, too, without the assistance of definition of, or common parlance understanding of, the expression 'refrigerant unit' rendering the re-classification to lack the authority of law - impugned order is set aside and appeal is allowed: CESTAT [para 16, 17, 19, 20]
- Appeal allowed: MUMBAI CESTAT |
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