2021-TIOL-83-SC-ST-LB
Metropolitan Event Management Vs CCE
ST - Appellant is operating parking areas in Malls by way of providing parking to the patrons/visitors of shopping malls - For this purpose, they have appointed an outside agency (Third Party Agency) for managing the parking area who is collecting "Parking Fees" on behalf of the appellants and remitting the proceeds to the appellant - The third-party agency raises the invoice for operating cost and its management fee and charges Service tax on these amounts and pays the remainder amount of gross collection on monthly basis after deducting its direct operating cost and management fee - The entire revenue generated by way of selling parking tickets belongs to the appellant - Parking income is recorded as "evenue" by the appellant in its books of accounts - The appellants claims that the income earned from parking fees belongs to appellants entirely and nothing is remitted to the mall owners from the collections made or otherwise - Revenue alleged that the activity amounted to 'Management, Maintenance or Repairs' which was leviable to service tax - In appeal against the confirmed demand, the CESTAT opined that it cannot accept the appellant's plea that huge parking space area was given to the appellant without any agreement with respect to financial consideration or without an agreement with respect to contingent liabilities with respect to theft, injuries, fire or other liabilities; that even otherwise, it is not necessary that the service recipient, namely the mall owners should receive any pecuniary consideration; that the appellant providing a hassle free parking is a service to the mall owners; that as far as the business activity is concerned qua the appellant, it is operation of the parking area but when this activity is examined qua the mall owners they are providing the service of 'management, maintenance or repairs' to the mall owners; that the right to collect parking fees given by the mall owners is nothing but a consideration provided to the appellant by the mall owners and the measure of such consideration is the gross income generated through the parking fees in terms of s.67(1)(i) of the Finance Act, 1994 - That the Appellant would be eligible to avail CENVAT credit of the service tax paid on input services, which have been provided to the appellant by third party agency or any other service providers in providing the said service of 'management, maintenance and repairs' of the parking area and, therefore, the matter was remanded to the adjudicating authority to re-determine the taxable demand, interest and penalties - Aggrieved by this order, the appellant has filed Civil Appeal before the Supreme Court.
Held: Issue notice, returnable within four weeks - In the meantime, the operation of the impugned judgment shall remain stayed: Supreme Court Larger Bench
- Notice issued: SUPREME COURT OF INDIA
2021-TIOL-82-SC-CX-LB
CCGST & CE Vs Bhagirath Coach And Metals Fabricators Pvt Ltd
CX - Rule 7 of CER, 2002 - Rule 10A of Valuation Rules, 2000 - During the period of dispute, the respondent Company was clearing finished goods i.e. motor vehicles manufactured on job work basis for Volvo to various depots of Volvo for further sales to independent buyers - after the job work, assessee paid the excise duty on some other goods and at the end of the month, the assessee has adjusted duties (short paid with excess paid) - This adjustment was denied by Department and in those circumstances, an appeal was preferred before the Tribunal - Tribunal has after taking into account the judgment delivered in the case of M/s. Godrej Consumers Products Ltd. has allowed the appeal which was filed by the assessee - Later, the High Court referred to findings of the Division Bench which had dealt with a similar issue & had held that no substantial question of law was found to arise in the matter - The controversy involved in the present case also relates to adjustment, which has been done by the respondent and, therefore, in light of the Division Bench judgment dated 23.04.2019 as adjustment was done by the assessee by adjusting the excess amount already paid towards duty in subsequent months, no case for interference was made out in the present appeal.
Held - Notice be issued to the parties - Matter be tagged with SLP(C) Diary No 40292 of 2019: SC LB
- Notice issued: SUPREME COURT OF INDIA
2021-TIOL-81-SC-CX-LB
CCE Vs Gautam Ferro Alloys
CX - Department is in appeal challenging dropping of CE duty demand of Rs.2.34 crore for the period from 1997-98 to 2001-02 (upto Oct' 2001) on grounds of undervaluation of Silico Manganese, being appeal no.E/590/2009 -the assessee is in appeal challenging confirmation of CE duty demand of Rs.13.36 lakh along with interest for the period Jan' 2001 to Aug' 2001 and imposition of equal penalty under section 11AC of the CEA on the ground of undervaluation of their final product i.e. Silico-Manganese for the period from January 2001 to September 2001 and shortage of 10.005 MT of Silico Manganese being appeal No.E/584/2009 -the Managing Director, Shri Hari Krishna Budhia and Shri A.D. Singh, Authorised Signatory have filed separate appeals challenging imposition of personal penalty of Rs.5 lakhs and Rs.2 lakhs respectively under rule 209A of the Central Excise Rules, 1944/ rule 26 of Central Excise Rules, 2001, being appeal nos.E/585/2009 and E/586/2009 - Later the Tribunal held that in absence of evidence of flow back of funds over and above the invoice price, which are missing in the instant case, the charge of undervaluation cannot be sustained -there is no material on record to prove that the material supplied by the assessee were not of inferior quality but were prime material -the Department failed to cull out evidence in investigation with the buyers in support of the charge as none of the buyers have accepted payment of any amount over and above the invoice price nor receipt of prime quality materials in the guise of inferior quality material -further, the entries found in the private diaries were only for the period Jan' 2001 to Sep' 2001 i.e. eight months - No hesitation to hold that the order of the Commissioner is in accordance with law and hence upheld and the Department Appeal is devoid of any merits- the Commissioner has confirmed duty demand of Rs.13.36 lakhs on the basis of 40 entries in the private diary as per which the appellant assessee supplied goods to various buyers who were never identified or examined to cull out evidence - the duty demand of Rs.13.36 lakhs is upheld by Commissioner merely on the basis of entries in the private diary maintained by the Managing Director who never confessed to the guilt and whose statement is not tested in accordance with section 9D of the CEA - Accordingly, the said demand of Rs.13.36 lakhs is set aside - However, the duty demand of Rs.24,012/- on shortage of Silico-Manganese is upheld - Te Department Appeal was dismissed and the Assessee's Appeal was partly allowed - The Appeal filed by Sri Hari Krishna Budhia, Managing Director and Sri A.D. Singh, Authorised Signatory challenging imposition of penalty under rule 209A of the Central Excise Rules, 1944/Rule 26 of Central Excise Rules, 2001 are allowed and the penalty was set aside. Held - Notice be issued to the parties concerned: SC LB
- Notice issued: SUPREME COURT OF INDIA
2021-TIOL-80-SC-ST
CCE & ST Vs Fanuc India Pvt Ltd
ST - Revenue alleged that the appellants had rendered services relating to sales promotion of the specified products produced by their parent company, Fanuc Ltd., Japan and the said services fall within the ambit of BAS; that the appellant had also rendered Maintenance or Repair Services in respect of products manufactured by Fanuc Ltd., Japan and imported by customers in India, during the warranty period - SCNs were issued and confirmed by the adjudicating authority with penalties and interest, therefore, appeals before CESTAT - in the matter of stay application, Tribunal had noted that in a similar dispute in the case of IBM India P. Ltd. - it was held that such services of sales promotion are to be considered as export of services and, therefore, prima facie , demand was not sustainable to the said effect; however, in respect of maintenance or repair done in India, same cannot be considered as export and accordingly ordered pre-deposit of of Rs.42,49,818/- Later the Tribunal held that as per the Article of the Consignment Sales Agreement dated 17th August 1998 entered into by the appellants and Fanuc Ltd., Japan, the appellants are expected to visit customers, to explain to the customer about the product and to supply customers with documents; make advertisement on contract products in contract territory; inform customers of the condition of sales agreements and to inform Fanuc Ltd. of the progress of the contract negotiation; provide the employees of Fanuc India engaged in sales activities with necessary training; advise Fanuc of the market trends of Contract product and competitive products in the contract territory; to do other activities necessary for receiving orders from customers - beneficiary of the service is situated outside India and the services are rendered in India and the renumeration was paid in convertible foreign exchange - CBEC has vide Circular 56/5/2003-ST dated 25.04.2003 clarified that service tax is destination based consumption tax and is not applicable on export of services; export of services would continue to remain tax free even after withdrawal of 06/99-ST - services such as rendered by the appellants to their foreign principal fall under Export of Services Rules and are eligible for exemption in terms of notifications, Export of Services Rules and Circulars issued by CBEC from time to time for the entire period 01.07.2003 to 19.11.2003, 15.03.205 to 30.09.2007 and 01.10.2007 to 30.09.2008 - Issue is also no longer res integra in view of the Bench's decision in Mapal India P Ltd. - and other cases cited by appellants - Appellants are not liable to pay Service Tax under the heading Business Auxiliary Service - Consequently penalties u/ss 76, 77, 78 are also not sustainable - Insofar as demand of service tax under Maintenance or Repair Service for the period 01.10.2007 to 30.09.2008, appellants have fairly considered applicability of such tax and submitted that the duty demand was sustainable; that due to the continuous change in law and interpretation by the Courts, the appellants were under a bonafide belief that the tax is not payable; that the tax payable is available as CENVAT credit as it amounts to output service by them to the India customers; that under the circumstances, penalty is not maintainable. Held - Notice be issued to the parties in respect of the present appeal and the application for condonation of delay: SC LB
- Appeals partly allowed: SUPREME COURT OF INDIA
2021-TIOL-214-HC-KERALA-CUS
Amman Dhall Mill Vs CC
Cus - Import of green peas - Against the order of CESTAT dated 16.12.2020 = 2020-TIOL-1720-CESTAT-BANG , Customs Appeal No. 13 of 2020 is at the instance of Importer challenging the levy of penalty of Rs. 4 lakhs and Customs Appeal No. 14 of 2020 is at the instance of Revenue questioning the release of subject goods on payment of redemption fine of Rs. 12 lakhs.
Held:
Customs Appeal No. 14 of 2020 - Revenue appeal
+ Bombay High Court decision in Harihar Collections - 2020-TIOL-1763-HC-MUM-CUS is distinguishable and cannot be treated as an authority or as laying down a principle permitting release of goods on collecting redemption fine either by the primary authority or Appellate Tribunal - Tribunal misdirected itself in relying on the judgment of the Bombay High Court - we are of the view that judgment in Harihar need not be followed by this Court - ASG has mentioned that the Apex Court has suspended the judgment of Bombay High Court in Harihar case in SLP No. 14633-14634/2020 - The subsequent development is taken note of and is yet another reason weighing with us not to follow the view taken by Bombay High Court in Harihar case: High Court [para 21, 22]
+ If in every case goods are released on payment of redemption fine, by the primary or appellate Tribunal, then such decisions are unsustainable in law and judicial review: High Court
+ Exercise of power and discretion under Section 125 of Customs Act 1962, are specific and generally governed by the applicable policy, notification etc.: High Court
+ Notification dated 18.4.2019 stipulates restriction on import of a quantity of 1.5 lakh M.T only; stipulates minimum import price of Rs. 200/- and above CIF per kg and the import is allowed through Calcutta Sea Port only. These are the conditions which the licensee for import of the goods is expected to conform. The primary authority has noted that by keeping in view the stand taken by the Union of India before the Supreme Court in Agricas LLP case; the available stock position of green peas is treated as surplus, and declined release and ordered confiscation.
+ The exercise of above discretion by Customs Commissioner is the question for consideration before the Appellate Tribunal. The Appellate Tribunal on the contrary, as already noted, considered matters not completely germane for appreciating the mode and manner of exercise of authority by the Commissioner of Customs, but, however, recorded that the subject goods can be treated as restricted goods and can be released on payment of redemption fine.
+ The Tribunal fell in clear error of law. By holding that release of goods is the only option to Customs Commissioner in the case on hand, the language of Section 125 of Customs Act is fully liberalised. The reasoning of Tribunal is adopted both by other primary authority/Appellate Tribunal, then Exim policy, notifications are defeated and opens floodgates of the import Green Peas, and such contingencies are commented by Supreme Court in Agricas Case [ 2020-TIOL-141-SC-CUS-LB ]. We are of the view that the consideration of Appellate Tribunal in the case on hand is illegal, ignored relevant notifications, the mandate of FTDR Act and Customs Act, 1962.
+ The adjudications of a dispute in these matters is neither on the pedestal of travesty of justice or we have so much discretion for doing proverbial justice to an importer. In matters of this nature, such approach would go contrary to the object sought to be implemented by the authorities, in whom power is conferred particularly in matters of import, export, price etc. In our considered view, the other question whether it is restricted, prohibited the decisions rendered under customs under import and export etc., need not be considered. By juxtaposing the order of Commissioner of Customs and the order under appeal we are fully convinced that the Appellate Tribunal committed serious error in law by ordering release of goods under Section 125. [para 25]
Customs Appeal No. 13 of 2020 - Appeal by Importer
+ The importer, as noted by the Commissioner of Customs is familiar with the practices and procedures for import and export of goods. The importer used its volition and choices for importing the subject goods. Bench is in agreement with the view taken by the Appellate Tribunal for sustaining the levy of penalty on importer. The question is answered against the importer and in favour of Revenue. [para 26]
- Revenue appeal allowed/Assessee appeal dismissed : KERALA HIGH COURT
