| 2020-TIOL-2064-HC-MAD-CUS
Hoewitzer Organic Chemical Company Vs PR CC
Cus - Respondent has passed Order-In-Original dated 29.06.2016 confiscating goods under the provisions of the Customs Act, 1962 - The said order itself specifically mentions that the Petitioner is entitled to prefer appeal before the CESTAT against that order u/s 129-A of the Act but the Petitioner did not prefer any such appeal before that Appellate Authority, but has instead filed this Writ Petition on 26.10.2016 challenging the order passed by the Respondent.
Held: There is no acceptable explanation from the Petitioner for not having resorted to that alternative remedy provided under the statute - Supreme Court of India in Assistant Collector of Central Excise -vs- Dunlop India Limited = 2002-TIOL-156-SC-CX-LB has succinctly explained the legal position relating to the exercise of discretionary powers under writ jurisdiction – Inasmuch as Article 226 is not meant to short-circuit or circumvent statutory procedures and it is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution – In the result, the Writ Petition, which cannot be entertained, is dismissed: High Court [para 4]
- Petition dismissed: MADRAS HIGH COURT
2020-TIOL-2063-HC-MAD-CUS
B Karthik Vs PR CC
Cus - Respondent has passed Order-In-Original dated 29.06.2016 confiscating goods under the provisions of the Customs Act, 1962 - The said order itself specifically mentions that the Petitioner is entitled to prefer appeal before the CESTAT against that order u/s 129-A of the Act but the Petitioner did not prefer any such appeal before that Appellate Authority, but has instead filed this Writ Petition on 26.10.2016 challenging the order passed by the Respondent.
Held: There is no acceptable explanation from the Petitioner for not having resorted to that alternative remedy provided under the statute - Supreme Court of India in Assistant Collector of Central Excise -vs- Dunlop India Limited = 2002-TIOL-156-SC-CX-LB has succinctly explained the legal position relating to the exercise of discretionary powers under writ jurisdiction – Inasmuch as Article 226 is not meant to short-circuit or circumvent statutory procedures and it is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution – In the result, the Writ Petition, which cannot be entertained, is dismissed: High Court [para 4]
- Petition dismissed: MADRAS HIGH COURT
2020-TIOL-2062-HC-MAD-CUS
Antoine And Becouerel Organic Chemincal Company Vs PR CC
Cus - Respondent has passed Order-In-Original dated 29.02.2016 confiscating goods under the provisions of the Customs Act, 1962 - The said order itself specifically mentions that the Petitioner is entitled to prefer appeal before the CESTAT against that order u/s 129-A of the Act but the Petitioner did not prefer any such appeal before that Appellate Authority, but has instead filed this Writ Petition on 21.06.2016 challenging the order passed by the Respondent.
Held: Supreme Court of India in Assistant Collector of Central Excise -vs- Dunlop India Limited = 2002-TIOL-156-SC-CX-LB has succinctly explained the legal position relating to the exercise of discretionary powers under writ jurisdiction - Inasmuch as Article 226 is not meant to short-circuit or circumvent statutory procedures and it is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution - In the result, the Writ Petition, which cannot be entertained, is dismissed: High Court [para 3]
- Petition dismissed: MADRAS HIGH COURT
2020-TIOL-2061-HC-MUM-ST
Elaf Tours And Travels Vs UoI
ST - Petitioner No.1 carries on the business of Haj and Umrah tours/journeys to Saudi Arabia and has been facilitating Haj pilgrimage to Saudi Arabia since many years - SCN dt. 05.04.209 was issued alleging that the petitioner No.1 had failed to pay service tax amount of Rs.19,21,465.00 for the period from 2013-14 to 2017-18 (upto June, 2017) - Adjudicating authority vide order dated 09.08.2019 confirmed the demand besides ordering payment of interest and imposition of penalty - Petitioner filed application u/s 125 of the FA, 2019 on 08.01.2020 under the arrears category with further sub-category of appeal not filed or appeal having attained finality - However, petitioner received an email dated 14.03.2020 rejecting the declaration filed - Respondent department has referred to section 125(1)(c) of Chapter-V of the Act to contend that petitioner No.1 was not eligible to file declaration under the scheme - P etitioners are, therefore, before the High Court and seek quashing of order dated 14th February, 2020 passed by the respondents rejecting the application (declaration) filed by petitioner No.1 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and further seeks a direction to the respondents to consider the said application (declaration) as a valid declaration and grant the reliefs to petitioner No.1 in terms of the aforesaid scheme - Petitioner also submits that impugned rejection is in violation of the principles of natural justice as no notice or hearing was given to the petitioners before rejection and, therefore, is required to be set aside and quashed.
Held: Under section 125(1)(c) a person who had been issued a show cause notice under an indirect tax enactment and the final hearing had taken place on or before 30th June, 2019 would not be eligible to make a declaration under the scheme - Stand taken by the respondents to justify rejection of the declaration of petitioner No.1 is that under section 125(1)(c) the final hearing in the case of petitioner No.1 who had been issued a show cause notice had taken place on 9th May, 2019 i.e. before 30th June, 2019 and, therefore, petitioner No.1 was not eligible to make the declaration - Referring to section 125(1)(c), it was clarified by the Board Circular dated 25th September, 2019 [para 2(vii) refers] that such cases may still fall under the arrears category once the appellate or adjudication order, as the case may be, is passed and has attained finality or appeal period is over and other requirements under the scheme are fulfilled - This position was reiterated in the subsequent Circular dated 12.12.2019 (paragraph 2(viii) refers) - Board clarified that since the main objective behind the scheme is to liquidate the legacy cases under central excise and service tax, it would be desirable that the taxpayer is given an opportunity to avail its benefit - Question No.8 of the frequently asked questions FAQs prepared by the department pertaining to the scheme is quite instructive since as per the same, in a case where show cause notice was issued and final hearing had taken place on or before 30th June, 2019, the declarant would not be eligible to make a declaration under the litigation category but once the order is passed the declarant can file a declaration under the arrears category provided no appeal against the order is filed or the appeal period is over - Above clarification itself clinches the issue - Moreover, rejection order is devoid of any reason and has not preceded with any notice or hearing - W hile considering a declaration seeking amnesty under the scheme, the approach should be to ensure that the scheme is successful and, therefore, a liberal view embedded with the principles of natural justice is called for - Held that rejection of the declaration of the petitioner dated 8th January, 2020 by the Designated Committee on 14th February, 2020 is not justified - Accordingly the same is hereby set aside and quashed - Matter is remanded back to the Designated Committee to consider the declaration of petitioner No.1 dated 8th January, 2020 as a valid declaration and thereafter grant consequential relief in terms of the scheme after giving an opportunity of hearing to the petitioners, who shall be informed about the date, time and place of hearing - Petition allowed: High Court [para 19, 24, 28, 30, 36, 37, 38]
- Petition allowed: BOMBAY HIGH COURT
2020-TIOL-2056-HC-MAD-ST
Protech Structure Pvt Ltd Vs Pr.CGST & CE
ST - Second Respondent passed the order in Order-in-Original No. 70/2016-17 (ST-1) dated 31.03.2017 and the Petitioner had received copy of that order on 20.04.2017 - Petitioner was entitled to prefer appeal against that order under Section 85 of the Act, however, the Petitioner did not prefer any such appeal before the Appellate Authority, but has instead filed this Writ Petition on 15.09.2017 challenging the order passed by the Second Respondent.
Held: Supreme Court of India in Assistant Commissioner (CT) LTU, Kakinada -vs- Glaxo Smith Kline Consumer Health Care Limited - 2020-TIOL-93-SC-VAT has emphatically laid down that the High Court in the exercise of powers under Article 226 of the Constitution of India ought not to entertain Writ Petition assailing the order passed by a Statutory Authority which was not appealed against within the maximum period of limitation before the Appellate Authority concerned - Writ Petition, therefore, cannot be entertained and is dismissed: High Court [para 3]
- Petition dismissed : MADRAS HIGH COURT
2020-TIOL-2047-HC-KERALA-CUS
Real Marketing Vs ACC
Cus - The appeal is from the interim order refusing to release the seized goods unconditionally; especially when a provisional release order has been issued - The assessee vociferously argued that despite satisfying the differential duty claimed, the Department is seeking further payment of Rs.25,00,000/-, which is arbitrary and illegal - The contention of Department is that the bills of entry and the invoice value shown therein were grossly undervalued - Out of 37 invoices referred to in the 37 bills of entry, 12 parallel invoices showing amounts more than that disclosed in the bills of entry were recovered from the mobile phone of the Managing Partner - The Managing Partner in his voluntary statement agreed to produce the parallel invoices with respect to 25 invoices referred to in the other 25 bills of entry - The same having not been produced, a computation was made of probable under valuation based on the average under valuation; practiced by assessee in recovered parallel invoices - On a rough computation, the liability to duty with interest would come to Rs.18,11,000/- - There would also be penalty payable, in which circumstances a further amount of Rs.25,00,000/- has been provisionally assessed, which demand was raised for provisional release - Considering the prima facie proof of under valuation practiced, no infirmity found in provisional release order - Rs.25,00,000/- demanded therein is not a replication of the Rs.20,72,000/- already paid by assessee - The differential duty already paid is with respect to the recovered parallel invoices and the demand now raised is based on computation of probable under valuation with respect to the other bills of entry, which also disclosed only lesser invoice value as admitted by Managing Partner of assessee - No reason found to interfere with impugned order - On the apprehension raised by asesssee that release would be only on deposit of cash, it would be made clear that the order itself provides for execution of bond or Bank Guarantee to the satisfaction of Commissioner: HC
- Appeal rejected: KERALA HIGH COURT
2020-TIOL-1659-CESTAT-BANG
Federal Mogul Trp India Ltd Vs CCT
CX - Period - April 2008 to April 2010 - Appellants have filed four appeals against the impugned orders passed by the Commissioner of Central Taxes whereby the Commissioner has denied the CENVAT credit on sales commission paid to sister concern and Commissioner has also denied the CENVAT credit of service tax paid on outward transportation from factory to the buyers premises during the period from April 2008 to April 2010 and also imposed penalties.
Held: I nput service as defined under Rule 2(l) of CENVAT Credit Rules, 2004 explicitly includes activity of sales promotion and the explanation to Rule 2(l) of CENVAT Credit Rules, 2004 inserted by Notification No. 2/2016-CE(NT) dated 3.2.2016 holds that sales promotion includes services by way of sale of dutiable goods on commission basis - This explanation added by way of amendment is declaratory in nature and is applicable retrospectively as held in the decision in the case of Essar Steels India Ltd. and others - 2016-TIOL-520-CESTAT-AHM - In appellant's own case for the subsequent period, Tribunal vide its Final Order No.20201- 20205/2019 dated 25.2.2019 - 2019-TIOL-976-CESTAT-BANG has allowed the credit on sales commission covering the period January 2015 to February 2016 - Board vide Circular No. 96/85/2015-CX dated 7.12.2015 has clarified that decision in the case of Cadila Healthcare Ltd. - 2013-TIOL-12-HC-AHM-ST applies in case where the agent is undertaking only sales and no sales promotion w hereas in the present case, it is clearly evident from various terms and conditions contained in clause (3) of the Agreement that M/s. FMGIL undertakes the activity of sales promotion - Issue is, therefore, no more res integra and has been settled in favour of assessee - denial of CENVAT credit on sales commission is not sustainable in law: CESTAT [para 6]
Limitation: CENVAT credit on Outward transportation from factory to customer's premises - During the relevant period, the Larger Bench of this Tribunal in the case of ABB Ltd. was in favour of the appellant and the appellant had a bonafide belief that they are entitled to credit on freight charges paid to the transporter as activity relating to business - that out of CENVAT credit of Rs.2,98,262/-, credit of Rs.2,41,168/- availed on freight charges paid for the period April 2010 to January 2011 is barred by limitation - Tribunal in the case of M/s. Sanghi Industries Ltd. vs. CCE, Kutch: - 2019-TIOL-1709-CESTA-AHM has held that the demand is barred by limitation - Out of CENVAT credit of Rs.2,98,262/-, credit of Rs.2,41,168/- is barred by limitation and for the remaining amount, appellant is not entitled to avail CENVAT credit: CESTAT [para 7]
- Appeals disposed of: BANGALORE CESTAT
2020-TIOL-1656-CESTAT-MUM
CCE Vs Raymond Ltd
CX - The appeal of Revenue lies against impugned order which dropped proceedings initiated for recovery of amount alleged to have been wrongly availed as CENVAT credit between January 2005 and October 2007 - The establishment of respondent had been receiving materials issued by unit at Thane who were alleged to have ceased to be manufacturer as, since 2005, the processing was restricted to annealing which did not amount to manufacture - The impugned order holding that there was no dispute on discharge of duty liability by Thane unit or about receipt of materials at the Ganekhadpoli unit, held in favour of assessee leading to scrutiny of said order for legality and propriety by competent authority under section 35E of CEA, 1994 - The issue of entitlement to avail credit by recipient of material on which liability to duty has been discharged by supplier, despite non-leviability of duty, is now settled by decision of Tribunal in Neuland Laboratories Ltd 2013-TIOL-1970-CESTAT-BANG - The order of Tribunal has been upheld by High Court of Andhra Pradesh - Accordingly, the appeal of Revenue is dismissed: CESTAT
- Appeal dismissed: MUMBAI CESTAT
2020-TIOL-1655-CESTAT-BANG
Skol Breweries Ltd Vs CCE & CST
ST - Assignment of trademark by Foster's Australia Ltd. (Fosters) to the appellant for which the Deed of Assignment dated 12/09/2006 was executed and payment of Rs. 162 crores was made by the appellant to Foster's - Appellant clarified to the audit authorities that this was the case of permanent transfer of all rights, title and interest in the said trademark/brand by Fosters to the appellant and the said transaction qualified as "permanent transfer? or "sale transaction? and, therefore, was not liable to service tax - However, Department issued a show-cause notice dated 21/04/2011 raising a demand of Rs. 20,03,80,320/- along with interest and penalty - Commissioner passed an order dated 23.04.2012 confirming the demand along with interest and penalty, therefore, appellant is before CESTAT.
Held: After seeing the clauses 5 and 7.1 of the Deed of Assignment, Bench finds that the impugned order has wrongly interpreted the terms of the Deed to mean that there is only grant of right to use the trademark and no permanent transfer of trademark to the appellant in India - Commissioner has ignored the substance of the clauses and has picked a part of the clause to suit his purpose and used the same to hold that there is no assignment of the trademark and the brand Intellectual Property, but there is only a transfer of right to use - it has been held by the Supreme Court in the case of Rainbow Colour Lab & Anr. vs. State of Madhya Pradesh & Ors [2002-TIOL-373-SC-CT] that the dominant intention of the contract has to be considered - Besides the Deed of Assignment clearly showing that there is an exclusive perpetual and irrevocable transfer of trademark and Intellectual Property Rights in favour of the appellant from the other corroborative evidence produced by the appellant but which has not been considered by the Commissioner at all - The appellant has also produced on record the Income Tax Assessment Order for the financial year 2006-2007 wherein the Commissioner has recorded the purchase of trademark by the appellant - Further, the appellants have got registered in his favour Foster's trademark as a proprietor under the Trademark Act, 1999 - Bench is of the considered opinion that the assignment of trademark and the IPR amounts to permanent transfer and no service tax is applicable on permanent transfer of IP Rights by Foster's to the appellant - As far as invoking the extended period of limitation is concerned, we find that the Department was fully aware of the Assignment Deed executed by the appellant with Foster?s Australia. The Deed of Assignment was executed on 12/09/2006 and the present show-cause notice was issued on 21/04/2011 and during the same period the Department audited the appellant and also issued a show-cause notice No.67/08-09 dated 31/03/2009 for the period 10/09/2004 to 31/03/2008 which was challenged by the appellant and the same is sub judice before the Karnataka High Court - Further, the transfer of Deed of Assignment was disclosed by the appellant in the Books of Accounts and with the Income Tax Authorities and was also registered in their name as proprietor under the Trademark Act, 1999 - All these facts clearly show that the appellant has not suppressed any material facts from the Department and the Department was very much aware of the said transaction, hence alleging suppression on the part of the appellant is not sustainable - entire demand is, therefore, also barred by limitation - Impugned order is set aside and Appeal is allowed with consequential relief: CESTAT [para 6.1, 7, 8]
- Appeal allowed: BANGALORE CESTAT |
