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2020-TIOL-1919-HC-MAD-CX
Chennai Petroleum Corporation Ltd Vs CGST & CE
CX - Refund - The scheme of the Act contained in Section 11B of the Act read with other relevant provisions of the Central Excise Act with regard to refunds is very clear viz., that it is only the person who has borne the incidence of Excise Duty, which was not leviable in law is entitled to claim refund of the same, subject to his locus standi and the limitation prescribed in Section 11B of the Act - There is hardly any doubt on facts in the present case, where, admittedly, the invoice of the appellant for the supply of raw naptha which is a dutiable product, was raised by the appellant M/s.CPCL on its marketing company M/s.IOCL, which is a separate company, who in turn raised invoice on the purchaser or buyer of the said raw naptha M/s.PPN, who in turn, manufactured power by use of such raw naptha and other raw materials - If at all, duty can be said to have been collected in excess on account of over valuation of the supplies, it is the consumer of the said raw material/raw naptha, viz., M/s.PPN who could have claimed the refund of Excise Duty as per the settled legal position - Merely because M/s.IOCL issued a credit note to the buyer M/s.PPN, it cannot be said that the incidence of Excise Duty was not passed on to the purchaser M/s.PPN - Once the incidence of Excise Duty has been passed on, whether it is further passed on to the ultimate buyer or consumer or not, is not the relevant question - The appellant Assessee M/s.CPCL, cannot be said to have borne any incidence of Excise Duty illegally levied and, therefore, the right of the appellant Assessee to claim any refund cannot arise - The law in this regard of unjust enrichment has been settled as aforesaid, beyond pale of doubt, by the Constitution Bench Judgment of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. (2002-TIOL-54-SC-CX-CB): High Court [para 10(a)]
CX - Refund - The question raised relates to question of locus standi of the person who is claiming the refund and not on what basis it is claimed - Whether on the basis of Credit Note issued by M/s.IOCL, a refund of Excise Duty could be made or not is not the question, and the claim of the Assessee is not fortified merely because the show cause notice refuted the claim of the Assessee on the basis of credit note alone - The facts before us are clear and undisputed and there is no material or facts available on record which even prima facie could indicate that the appellant Assessee has borne the incidence of Excise Duty which, in law, could not be charged from it - The moment it raised the invoice on M/s.IOCL and M/s.IOCL issued Invoice on M/s.PPN, the incidence of Excise Duty is definitely passed on to the buyer or consumer of raw naptha, viz., M/s.PPN - Therefore, the right to claim refund by the Appellant M/s.CPCL is completely lost - Appeals are devoid of merits, hence dismissed: High Court [para 10(b)]
- Appeals dismissed: MADRAS HIGH COURT
2020-TIOL-1902-HC-MUM-CUS
Mumbai Fabrics Pvt Ltd Vs UoI
Cus - Customs Preventive Commissionerate is investigating the petitioner as a case of misclassifcation of goods that are imported in concealed manner as scrap tyres - P etitioner seeks quashing of the seizure memos dated 26 th August, 2020 and further seeks a direction to the respondents for release of the seized goods - Question for consideration is whether the seized goods imported by the petitioner are old and used rubber tyres reusable as tyres or are old and used rubber tyres scrap being in pressed baled form ?
Held: [para 37 to 42]
+ From a conjoint reading of the provisions of 110, 110A, 111, 124 of the Customs Act, 1962, it is evident that seizure of goods is not an end in itself. Goods can only be seized if the proper officer has reason to believe that such goods are liable to confiscation. Further more, seizure cannot also be for an indefinite period. Timeline is provided in sub section (2) of section 110. In case of confiscation, the statute has provided for the requisite procedural safeguards in section 124. As a pragmatic measure, provisional release of seized goods pending adjudication is provided in section 110A.
+ Bench feels that it may not be proper for the writ court to step in at this stage to render a finding as to whether the seized goods are old and used rubber tyres scrap in pressed baled form or rubber tyre in reusable form; in other words, whether the imported goods fall under the customs tarif heading of 4004 or under the heading of 4012, which will basically be a fnding of fact. Therefore, Bench is of the view that this aspect should be best left to the adjudicating authority to decide, if it requires adjudication. Preempting an adjudication on this issue by the writ court by taking a view one way or the other may not be justifed. Moreover, having regard to the provisions of section 110, it may also not be proper for the writ court to fx a timeline for winding up of the investigation and for commencement and completion of adjudication at a stage when notice under section 124(a) of the Customs Act has not yet been issued.
+ It needs no reiteration that the writ court is primarily concerned with the decision making process and not with the correctness of the decision per se . The decision making process and by extension the investigation process has to be fair and reasonable, adhering to the due process consistent with the principles of natural justice.
+ While respondents may place reliance on the report of the Chartered Engineer, petitioner would have the right to question the said report. Further more, request of the petitioner to draw samples from the seized containers and thereafter to send the samples for testing before an accredited laboratory, in this case IRMRA, cannot be brushed aside as being of no consequence. As a matter of fact, respondents themselves have allowed the same vide panchnama dated 9 th September, 2020 though with the rider that customs department would have nothing to do with the testing; and that the drawing of samples for the purpose of testing has been facilitated on the request of the petitioner.
+ Bench fails to understand the rationale behind such a stand taken by the respondents. While respondents have stated that getting the goods examined by a Chartered Engineer is a well established departmental procedure, it is also a well established departmental procedure that in the case of seizure, samples are drawn and then sent for testing in accredited laboratory/laboratories. Bench sees no harm in acceding to such a request of the petitioner. Rather it will only facilitate a fair investigation and consequently fair adjudication. Test report from a laboratory which is accredited to the Ministry of Commerce and Industry, Government of India would certainly merit consideration being a relevant document and should be considered alongwith all other relevant documents including the report of the Chartered Engineer by the investigating/adjudicating authority. After all, the procedure, be it investigation or adjudication, must not only be fair but must also be seen to be fair.
+ Directions issued
- Petition disposed of: BOMBAY HIGH COURT
2020-TIOL-1900-HC-KAR-CUS
Miven Mayfran Conveyors Pvt Ltd Vs CCT
Cus - Being aggrieved by the order dated 21.01.2016 passed by the Commissioner of Customs (Appeals), Bengaluru, the appellant filed an appeal before the Tribunal on 18.05.2018 - The aforesaid appeal was dismissed by the Tribunal by an order dated 20.06.2018 inter alia on the ground that the appellant has failed to make out a sufficient cause for condonation of delay of 751 days in filing the appeal - It was held that if the appellant would pursue the matter before the Director General of Foreign Trade for obtaining EODC, it could have as well filed an appeal – aggrieved, the present appeal before the High Court.
Held: It is well settled in law [ 2020-TIOL-93-SC-VAT ] that the expression 'sufficient cause' should receive liberal consideration so as to advance the cause of justice and the same should not be used as a penal statute to punish the erring parties - From perusal of the order passed by the Commissioner of Customs (Appeals), it is evident that the order is solely based on non-issuance of EODC - The appellant was prosecuting the matter before the Director General of Foreign Trade for issuance of EODC and, therefore, the delay has been caused in filing the appeal - Sufficient cause for condonation of delay in filing the appeal is made out - In the result, delay in filing the appeal is condoned and the substantial question of law framed by this Court is answered in favour of the appellant and against the revenue - Impugned order dated 20.06.2018 passed by the Tribunal is hereby quashed and the matter is remitted to the Tribunal: High Court [para 4 to 6] - Appeal allowed :
KARNATAKA
HIGH COURT
2020-TIOL-1599-CESTAT-DEL
Quippo Oil & Gas Infrastructure Ltd Vs CST
ST - The assessee-company is engaged in providing mobile drilling services to various companies in the Oil & Gas industry - The assessee obtained Service Tax registration under Mining of mineral, oil or gas Mining services - The assessee's accounts for the relevant period were audited, whereupon, the Revenue opined that the assessee had been providing Site formation and clearance, excavation and earthmoving and demolition service in the relevant period - SCN was issued to the assessee proposing to raise duty demand under Site formation and clearance, excavation and earthmoving and demolition service - Extended period of limitation was also proposed to be invoked - On adjudication, an order was passed confirming the proposals in the SCN of raising demand for duty, with interest and imposition of penalty.
Held - It is clear from the definition contained in section 65 (97)(a) of the Finance Act that site formation includes drilling, boring and core extraction services for construction, geophysical, geological or similar purposes - A reading of the definition of site formation service shows that site formation service covers those activities which are taken prior to construction of buildings or factory or other civil structures or laying of cables or pipelines or exploring of minerals and mining and are in the nature of preparatory work for making the location suitable for construction or exploration or mining - These facts were specifically stated by the appellant in reply to the SCN, but the Commissioner has not considered the submissions in the order - The work required to be performed under the agreement was definitely not the work relating to preparation of site - The preparatory work was carried out by ONGC itself and the assessee carried out the activity on the prepared site - The activity undertaken by the assessee cannot, therefore, be classified under the category of site formation service - This issue was also examined by the Tribunal in Atwood Oceanics Pacific Ltd. Vs. Commr. Of Service Tax, wherein it was held that drilling of exploratory work is integral to mining and thus would be classifiable under mining services - Therefore, extended period of limitation also cannot be invoked: CESTAT
- Assessee's appeal allowed: DELHI CESTAT
2020-TIOL-1598-CESTAT-DEL
Regal Theatre Vs Pr CIT
ST - The assessee, an owner of a cinema hall called 'Regal Theatre' is engaged in business of exhibiting films in this theatre, has assailed the impugned order that confirms the demand of service tax under "renting of immovable property" service with penalty and interest proposed in two SCNs for the reason that they are providing service to the film Distributors by way of renting its theatre for screening the films - The Department views that copy rights of movies/ films were not transferred/ sold by the film Distributors, either temporarily or otherwise and so the assessee was only letting out its premises for exhibition of films to the Distributors - The agreements entered into between the assessee and the film Distributors clearly indicate that the film Distributors had granted theatrical exhibition rights to them and in return of transfer of such rights, assessee had agreed to pay certain amount to the Distributors, fixed generally as a percentage of Net Box Office Collection - The Principal Commissioner found that the assessee had provided 'renting of immovable property' services - For an activity to fall under 'renting of immovable property' services, the nature of the activity should be that of renting or letting or leasing or licensing or other similar arrangements of immovable property, for use in the course or furtherance of business or commerce - In the instant case, the immovable property i.e. the theatre is used and occupied by assessee in its own right to screen the films and at no point of time, the theatre is used by the Distributor - This issue also came up for consideration in Moti Talkies 2020-TIOL-922-CESTAT-DEL wherein it was held that the demand of service tax under 'renting of immovable property' service was not justified for the reason that the assessee had not provided any service to the Distributor nor the Distributor had made any payment to them as a consideration for the alleged service - It is, therefore not possible to sustain the finding recorded by Principal Commissioner that 'renting of immovable property' service had been rendered by assessee to the film distributors - The demand of service tax on the income head of 'weighing machine receipts' is not sustainable as the said income is on account of collections from the coin box kept with the weighing machine - By inserting a coin in the coin box, an individual would know the weight - This income cannot be classified as 'renting of immovable property' service - The income received under head 'miscellaneous receipts' is in connection with the screening of movies for the annual film festival held by Hindustan Times - The said income cannot also be said to be towards provision of any 'renting of immovable property' service - It is, therefore, not leviable to service tax - The incomes under both of these heads are exempted, being below the threshold exemption of Rs. 10 lakhs in terms of Notfn dated March 1, 2005 till June 30, 2012 and under Notfn dated June 20, 2012 with effect from July 1, 2012: CESTAT
- Appeal allowed: DELHI CESTAT
2020-TIOL-1594-CESTAT-CHD
Ranjeev Steels Pvt Ltd Vs CCST
CX - The assessee is in appeal against impugned order wherein the adjudicating authority has held that the cross examination of Shri Vinod Kumar Gupta and Shri Gurmeet Singh cannot be acceded to - Further, the request of cross examination on persons, namely, Shri Ravinder Sachdeva and Shri Satish Kumar can be considered only if the reasons for seeking cross examination are explained and the questions to be asked in specific to those persons are furnished to the adjudicating authority in advance - By going through the impugned order, it is found that the cross examination of the persons has been rejected without assigning any reasons - The way of working of the adjudicating authority cannot be appreciated in these terms - The adjudicating authority is directed to consider the request of assessee for cross examination of persons and personal hearing be granted for the said request and pass a speaking order whether cross examination can be granted or not - Further, it is held that the adjudicating authority cannot put a condition of providing questions to be asked in advance to the adjudicating authority while cross examining the witness: CESTAT
- Appeal allowed: CHANDIGARH CESTAT |
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