2020-TIOL-1980-HC-DEL-CUS
Nautilus Metal Crafts Pvt Ltd Vs Jt.DGFT
Cus - Petitioner is challenging the order dated 10.01.2020 passed by the Joint Director General of Foreign Trade, placing the petitioner in the Denied Entity List (DEL) - The petitioner further challenges the Show Cause Notice dated 08.11.2019 issued by the Assistant Director General of Foreign Trade, calling upon the petitioner to show cause as to why it be not placed in DEL so that benefit under Foreign Trade Policy (FTP) are stopped including future refusal of Authorisation/Scrips under Rule 7(c), 7(j) and 7(n) of the Foreign Trade (Regulation) Rules, 1993 - respondent no. 2 issued the impugned Show Cause Notice dated 08.11.2019 to the petitioner stating that the DRI had informed it that an investigation is being carried out against the petitioner "for gross overvaluation to fraudulently avail export benefits" and it had been requested not to issue any export incentives to the petitioner - The petitioner was asked to appear on any working day before 13.11.2019 with all documentary evidence in support of its case, in case it desired to be heard in person.
Held: [para 35 to 39, 41, 42, 43, 45]
+ A reading of the provisions of section 9 of the FTDR Act and Rules 7, 9 & 10 of the Rules would clearly show that any refusal to grant, suspend or cancel any licence, certificate, scrip or any instrument bestowing financial or fiscal benefits, can only be "by an order in writing".
+ In fact, Section 9(4) expressly mandates that suspension or cancellation of any licence, certificate, scrip or any instrument bestowing financial or fiscal benefits can only be "for good and sufficient reasons". The requirement of giving reasons cannot therefore, be dispensed with and is mandatory.
+ Even otherwise, it is now firmly established that even an administrative decision having civil consequences must record reasons as a mandatory compliance with principles of Natural Justice. This is especially so where the order itself is appealable, like in the present case. Even otherwise, the necessity of giving reasons cannot be undermined.
+ In the present case, the counsel for the respondents has admitted that except for the reference on the website to the Impugned Order dated 10.01.2020, there is no separate order dated 10.01.2020 recording reasons for placing the petitioner on DEL.
+ Therefore, in the so-called order there is no reference to the Show-Cause Notices and to the replies submitted by the petitioner and how they have been dealt with and appreciated by the Authority. In fact, it gives no reason except stating that the "Firm is under D.R.I Ludhiana Investigation". The respondent admits that barring receiving a reference/request dated 04.09.2019 from the DRI, it has no other material to proceed against the petitioner. The reference/request itself is cryptic.
+ The Show Cause Notice was for "availing Special MEIS benefits fraudulently by mis-declaration and forgery of documents". The petitioner in its reply had categorically submitted that it had not claimed or submitted any documents for grant of Special MEIS benefits till date. The petitioner had also requested for a copy of the communication received from DRI to understand the background for the proposed action. The Impugned Order dated 10.01.2020 does not show any application of mind to these submissions as the order contains no reasons.
+ It is stated (by the respondent in its counter affidavit) that when an entity is placed under DEL, it becomes ineligible to receive any Foreign Trade Policy benefits during the time of it being placed on DEL. It blocks future export incentives. Therefore, it is a final order having civil consequences on the petitioner.
+ It cannot, therefore, be accepted that the principles of Natural Justice, insofar as recording of reasons is concerned, need not be followed before passing such an order. Even if it is accepted that in grave and emergent circumstances, such order is required to be passed without giving an opportunity of prior hearing, reasons for the same must be recorded in such order and an opportunity of post-decisional hearing must be afforded to the affected party. In the present case, no reason is recorded showing such urgency.
+ In many other cases, on being challenged, the respondents had withdrawn similar Show Cause Notices and orders placing such parties on DEL reserving liberty to issue fresh Show Cause Notice and thereafter pass fresh orders.
+ Impugned Order dated 10.01.2020 and the Show Cause Notices dated 08.11.2019 and 02.12.2019 are set aside.
+ Respondents shall pay costs of Rs.25,000/- to the petitioner.
-Petition allowed : DELHI HIGH COURT
2020-TIOL-1635-CESTAT-AHM
CCE Vs Indian Farmers Fertilizer Cooperative Ltd
CX - Only one appeal needs to be filed against impugned order therefore, the second appeal No. E/12975/2019 and Cross Objection No. E/CO/10114/2020 are dismissed as infructuous: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2020-TIOL-1634-CESTAT-BANG
Plansee India High Performance Materials Pvt Ltd Vs CCT
ST - The assessee-company manufactures Tungsten and Molybdenum wire - Upon audit for the relevant period it was noted that the assessee availed irregular credit of BCD - Upon being pointed out, the assessee reversed the amount of credit, along with interest, albeit under protest - The assessee had also availed credit of service tax on services such as outdoor catering, health insurance for employees and vehicle insurance - The Revenue claimed that such services did not qualify as input services u/r 2(1) of CCR 2004 - SCN was issued to assessee proposing duty demand for reversal of such credit with interest and imposition of penalty - On adjudication, the proposals of the SCN were sustained - However, credit of service tax was allowed in part - The remainder was directed to be reversed with interest u/r 14 of CCR - Penalty u/r 15(2) of CCR was imposed - On appeal, such findings were sustained by the Commr.(A).
Held - The assessee produced ER-1 Returns for the month of January and the credit available in that Return is Rs.2,60,962/- whereas the Commissioner has only taken the closing balance of Excise and has ignored the credit of Service Tax and additional duty of Customs - The adjudicating authority also reflected the credit balance during the disputed period and it is clear that at no point of time during the relevant period, the credit was less than what was availed by the assessee wrongly - Therefore, it is clear that the assessee had sufficient balance during the relevant period and has not utilized the same - Therefore, in view of the decision of the Karnataka High Court in the case of CCE Vs Bill Forge Pvt. Ltd., the assessee is not liable to pay the interest and the penalty: CESTAT
Held - Vehicle insurance - The vehicle belongs to the company and are used for an activity indirectly in relation to production and therefore by the amendment in the definition of 'input service' w.e.f. 01.04.2011, the services used for maintenance of vehicle is not excluded because the same is not used for personal use of a particular person - Further, the O-i-A is wrong in denying the CENVAT credit of Service Tax paid on Outdoor Catering Service and Health Insurance Charges which had already been allowed in the OIO and the Department did not file any appeal against that nor the assessee has filed appeal before the Commissioner regarding Outdoor Catering Service and Health Insurance Charges - Therefore, the finding of the Commissioner (A) on this account is also not sustainable in law: CESTAT
- Assessee's appeal allowed: BANGALORE CESTAT |
