2021-TIOL-334-HC-AHM-CX

EI Dupont India Pvt Ltd Vs Designated Committee

CX - SVLDRS - The assessee-company is engaged in manufacturing of polymers, crop protection products insecticides and fungicides, herbicides, resins - It carried out its manufacture operations from a unit located in Vodadara, Gujarat. With respect to the manufacturing activities, the audit proceedings were carried out for the period from June 2014 to June 2017, whereupon some discrepancies were found and thereafter a letter was issued to the assessee, directing payment of tax with interest and penalty. Subsequently, the Sabka Vishwas Legacy Dispute Resolution Scheme 2019 was rolled out and the assessee sought resolution of its case thereunder - The assessee filed declaration seeking tax benefit to the extent of 50% of the total tax dues of Rs 2.52 crores as quantified by the Revenue - The category under which the application (declaration) filed was investigation, enquiry or audit and it was disclosed that, Rs 1,22,18,781.05/- as being the amount payable for availing the benefit under the Scheme 2019 - Hence the tax payable by the assessee was quantified at Rs 1.22 crores - Subsequently, the assessee's declaration was rejected on grounds that the application was ineligible under the category of investigation, enquiry or audit - The assessee filed its objections thereto and stated the the proposed ineligibility as not communicated to it, but such objections were rejected.

Held -

++ after considering the aspects as referred above with regard to opportunity for personal hearing for the explanation given by the authority, which confined to only estimated amount determined by the Designated Committee. Therefore, as per the provision, if declarant is not agree with the amount determined by the Designated Committee, he having given right to hearing to explain why he is not agree with the estimated amount determined by the Designated Committee;

++ in the instant case, there is no dispute with regard to estimated amount determined by the Designated Committee. Notice for hearing was for the limited issue with regard to agreement or disagreement with the estimated amount determined by the authority. Record shows that, in statement in Form SVLDRS-2, no specific notice for affording the opportunity of hearing was given to the writ applicant with regard to variance of quantified amount. In this circumstances, we do not agree with the stance of the respondent No.1 that, the statement in Form SVLDRS-2 had been issued for the clarification with regard to the quantification amount. In that view of the matter, we have no hesitation in holding that, the action of the respondent No.1 issuing statement in Form SVLDRS-2 is in contravention of the Section 127 (1) read with Rule 6 (2);

++ the decisions of rejecting the application by the respondent No.1 were in violation of principles of natural justice. It appears from the record that, no specific amount of variance being brought into notice of the writ applicant. The only remarks appended to the statement in Form SVLDRS-2 without any specification, is not sufficient to hold that, the principles of natural justice have been complied by the respondent No.1. The contents of the rejection letter would go to show that, in the absence of any clarification on the part of the Designated Committee, the application was rejected. In this circumstances, we are of the view that, no sufficient reason being assigned on the issue of variance of the amount while rejecting the application. It is required to be noted that, the amount of variance with regard to quantification having not specifically mentioned in the statement in form SVLDRS-2, nor being stated in the rejection application. Had the respondent No.1 provided the varied estimate in the statement in Form SVLDRS-2, the writ applicant would have submitted their response and sought a personal hearing. It is pertinent to note that, against the rejection of the letter dated 05.05.2020, the writ applicant had requested twice for process of the application. However, the respondent No.1 did not have assign any reason with regard to varied amount. Therefore, the whole process undertaken in this case was not fair and the mechanical rejection of the application is against the settled principles of natural justice. It is settled that, any order which has civil consequences must be passed after giving an opportunity to be heard;

++ having regard to the discussion as above, we hold that, the statement in Form SVLDRS-2 dated 07.02.2020 is in contravention of the provisions of the Act and the Rules thereunder and the same deserves to be quashed and set aside and accordingly, it is quashed and set aside. Consequently, the impugned rejection letters dated 05.05.2020 and 11.06.2020 are also quashed and set aside. The Designated Committee is directed to decide the application of the writ applicant afresh after giving an opportunity of hearing to the writ applicant and take appropriate decision and pass reasoned order keeping in mind the discussions made by us in this order within 8 days from the date of receipt of this order.

- Writ petition allowed: GUJARAT HIGH COURT

2021-TIOL-333-HC-MAD-ST

Srinivasa Real Estate Vs Addl.CST

ST - First appellate authority did not render any independent finding, but chose to interfere with the order of the Adjudicating Authority by deleting the penalty under Sections 76 and 77 of the Act - No independent reasons have been given by the first appellate authority to confirm the penalty under Section 78 of the Act - When the matter went before the Tribunal, no attempt has been made to examine the facts of the case and the Tribunal also was of the view that the assessee had separately collected the service tax and not remitted to the Department, but filed Nil return - This being contrary to facts, Bench is of the considered view that both the authorities and the Tribunal committed error in levying/confirming the penalty under Section 78 of the Act - Appeal is allowed, the impugned order dated 17.03.2015, is set aside and the substantial question of law is answered in favour of the assessee taking note of the facts and circumstances of this case: High Court [para 12, 13]

- Appeal allowed: MADRAS HIGH COURT

Seahorse Ship Agencies Pvt Ltd Vs UoI

Cus - Petitioner remitted Light Dues amounting to Rs.6,33,144/- through the web portal of the Director General of Lighthouses and Lightships (DGLL) - However, the receipt was not generated by the web portal, therefore, under the impression that the online payment had not gone through but since the vessel was to arrive in the evening and in the absence of proof of payment of Light Dues, the petitioner would have faced difficulties, the petitioner, therefore, made a manual payment of Rs.6,33,144/- before the Cochin Customs, for which Ext.P2 receipt was issued - On the following day, the petitioner-Company received receipt for the payment made online, therefore, petitioner submitted Ext.P3 letter to the 2nd respondent-Commissioner of Customs seeking repayment of the duplicate payment - Assistant Commissioner of Customs rejected the petitioner's application for refund on the ground that the claim was made after the period of six months prescribed under the Lighthouse Act, 1927 - On the ground that the appeal was filed beyond the period of limitation, same was dismissed by Commissioner(A) - Petitioner is before the High Court and seeks an order directing the 2nd respondent-Commissioner of Customs to return to the petitioner the duplicate payment of Rs.6,33,144/- made by the petitioner - 2nd respondent stated that Ext.P9 order is appealable before the CESTAT; that Customs authorities collect Light Dues on behalf of DGLL and the amounts will be transferred to DGLL, that, therefore, refund cannot be granted by the Customs authorities.

Held:

+ Section 19 of the Lighthouse Act, 1927 provides that where Light Dues have been paid in respect of any ship in excess of the amount payable under this Act, no claim for refund of such excess payment shall be admissible, unless it is made within six months from the date of each payment. It is relying on the said period of limitation prescribed that the Assistant Commissioner of Customs has rejected the application preferred by the petitioner.

+ The dual payment made by the petitioner in this writ petition cannot be described as excess payment, in the sense contemplated by Section 19 of the Lighthouse Act, 1927. What is effected by the petitioner is a dual payment or duplicate payment. The petitioner was forced to make such dual payment due to the failure of the web portal system to generate a receipt, when the petitioner made the first payment through the web portal. This Court is of the view that Section 19 is not intended to operate in such circumstances. If Section 19 does not apply to the dual payment made by the petitioner, then there is no question of a period of limitation under the Customs Act for making an application for refund of the dual payment.

+ The State and its authorities are not expected to act in a Shylockian manner and squeeze money from its citizens. Levy of any tax/dues should have the authority of law. If the petitioner calculated Light Dues in respect of the Vessel correctly and remitted the correct amount, then Section 19 of the Act, 1927 cannot be resorted to withhold an erroneous double payment or dual payment made by a citizen due to a system error or failure.

+ The State is not expected to get itself unduly enriched by erroneous or forced or inadvertent payments of money made by its citizens. The State is not expected to bring in defence of limitation in respect of such payments resulting in unjust enrichment. The claim of the petitioner for refund of the dual payment, in the circumstances, would not fall within the ambit of Section 19 of the Customs Act. Exts.P5 and P9 orders are therefore otiose.

+ Writ petition is allowed. The 2nd respondent and additional 3rd respondent are directed to refund to the petitioner the dual payment made, within a period of one month. [para 10, 19 to 21]

- Petition allowed: KERALA HIGH COURT

CCE Vs Pricol Ltd

CX - Revenue is in appeal on the following question - Whether the Tribunal is correct in allowing the CENVAT credit availed and distributed by the respondent prior to getting registered as an input service Distributor under the Act; setting aside the penalty imposed for the credit allegedly wrongly availed. Held: Issue has already been decided in favour of the assessee in the case of Commissioner of Central Excise vs. Doshion Ltd., = 2016-TIOL-111-HC-AHM-ST and this Order has been accepted by the Central Board of Excise and Customs, vide Circular dated 16.02.2018 - Therefore, the above questions have to be decided against the Revenue and accordingly, decided so: High Court [para 3, 4] CX - Tribunal allowing the CENVAT credit on Customs House Agents (CHA) services - Tribunal granted relief to the assessee on the ground that there was no material evidence and therefore, Bench is of the view that this issue cannot be a substantial question of law in this appeal - substantial question of law is kept open - Appeal dismissed: High Court [para 8, 9]

- Appeal dismissed: MADRAS HIGH COURT

Rajesh Kumar Mahajan Vs CGST & CE

CX - Issue before this court in the appeal is entitlement of the appellant to credit of additional duty of customs, education cess, secondary and higher education cess and special duty of customs paid on polyurethane resin for payment of CENVAT duty and the resultant legality of the order of the CESTAT holding that the activity of the appellant does not amount to manufacture - Based on the findings of the CESTAT on the above issues five show cause notices have been issued - Interim application has been filed by the original appellant in Central Excise Appeal No. 303 of 2013 for stay of various show cause notices issued during pendency of the appeal. Held: Bench is of the view that since the related appeal is of the year 2013, it would be just and proper to hear the appeal at an early date - Moreover, though the show cause notices may be post the decision of CESTAT which is being examined in the related appeal, those draw sustenance from the reasons recorded in the order of the CESTAT which is the subject matter of the related appeal - In the circumstances, Bench is of the view that it would be in the interest of justice if the show cause notices are not proceeded further till it decides the related appeal - Central Excise Appeal No. 303 of 2013 is to be listed for hearing on 19th March, 2021 - Interim application allowed in terms of prayer clause (c) - respondent restrained from proceeding with the adjudication of the SCNs: High Court [para 7 to 11]

- Application disposed of: MUMBAI HIGH COURT

Pr.CC Vs Lykis Ltd

Cus - Respondents herein had preferred an application addressed to the Principal Commissioner Customs, Mundra for conversion of 204 shipping bills from Drawback Scheme to Duty Free Import Authorization (DFIA) Scheme - Such request came to be rejected by the Principal Commissioner, Customs on the ground that the same was time barred - The Principal Commissioner, Customs took the view that such a request was made for conversion after three months from the date of the Let Export Order (LEO) and if such a request is accepted, the same would be contrary to the Circular No. 36/2010-Cus dated 23.09.2010 - In appeal by the respondents, the Tribunal while allowing appeal took notice of section 149 of the Customs Act, 1962 and observed that no time limit has been prescribed under the statutory provision of Section 149 of the Act and, therefore, the Circular cannot prescribe particular time period, which is otherwise not provided in a statute - Revenue is in appeal against this order. Held: Bench is of the view that no error, not to speak of any error of law could be said to have been committed by the tribunal in passing the impugned order - Section 149 is applicable at the relevant point of time - In fact, the questions as proposed by the revenue cannot be termed as substantial questions of law as the issue is squarely covered by a decision of this Court in the case of Inter Continental (India) and the same is also upheld by the Supreme Court = 2008-TIOL-83-SC-CUS - In the result, this Revenue appeal fails and is hereby dismissed: High Court [para 6, 7]

- Appeal dismissed: GUJARAT HIGH COURT

Hitesh Nagwani Vs DRI

Cus - Petitioners are engaged in the business of importing nutrition supplements - It is alleged that the applicants were found to be involved wide scale duty evasion by undervaluing invoices of the goods, which were imported by them and for this purpose, a dummy firm M/s. Rax Trading Limited, Hong Kong was also formed by them with applicant No.2 Sanjay Panjabi being its sole Director - During the search in the premises of the applicants, it was found that an unaccounted sum of Rs.82,67,900/- plus 5,000 US$ were seized from applicant No.1 Hitesh Nagwani where from the possession of applicant No.2 certain incriminating documents were seized - applicant seeks enlargement on bail. Held : From the record, it appears that the allegations of evasion of huge amount of customs duty have been levelled against the applicants, as according to the respondent, actual value of goods imported by undervaluation on the basis of using fabricated invoices is Rs.11,93,03,316/- and the value of mis-declared goods is around Rs.1,07,29,025/- whereas the quantum of customs duty is Rs.7,22,00,000/- - Thus, this Court is of the considered opinion that since the charge is yet to be filed and one of the accused persons namely Uttam is still at large, it would not be appropriate for this Court to release the applicant at this stage of investigation - As the offences alleged under IPC are also non-compoundable - Court is of the considered opinion that at this stage, no case for grant of bail is made out - Miscellaneous Criminal Case No.53810/2020 stands dismissed: High Court [para 11, 12]

- Application dismissed: MADHYA PRADESH HIGH COURT

Himgiri Buildcon And Industries Ltd Vs UoI

Cus - It appears that some dispute arose between the petitioner and the high seas buyer which led to cancellation of the high seas agreement - Following repudiation of the high seas agreement, petitioner filed application dated 30.12.2019 before respondent Nos.3, 4 and 5 for amendment of the bills of entry by substituting its name as the importer in place of the high seas buyer and for clearance of the consignments on payment of customs duty - However, instead of responding to the request of the petitioner, the goods were detained and subsequently seized - By order dated 17.03.2020, Joint Commissioner of Customs rejected the request of the petitioner for provisional release of the seized goods - By the order-in-appeal dated 18.09.2020, the appellate authority allowed the prayer of the petitioner to carry out amendment in the bills of entry and directed the original authority to amend the bills of entry accordingly - Original authority was also directed to take a decision on the request of the appellant (petitioner) for provisional release of the subject goods within six weeks - However, since the said order has not been complied with, the present writ petition has been filed.

Held : More than four months have gone by without compliance - Bench sees no valid reason or justification for non-compliance to such order of the appellate authority - In so far the reply affidavit is concerned, all that the Bench can say is that the statements made in paragraph 25 are devoid of any particulars - Though this Court had taken cognizance of the grievance of the petitioner on 22.12.2020, nothing has been stated about moving the CESTAT for stay - In such circumstances, Bench directs respondent Nos.4 and 5 to carry out the order-in-appeal passed by the Commissioner of Customs (Appeals) dated 18.09.2020 within seven days, if necessary, by giving a hearing to the authorized representative of the petitioner - Both the writ petitions are accordingly allowed: High Court [para 15, 20, 21, 23]

- Petitions allowed: BOMBAY HIGH COURT