2021-TIOL-138-SC-CX-LB

CX - The assessee is engaged in manufacture of pharmaceutical products such as Beneficiale Liquid and DSN capsules which were being cleared at nil rate of duty by availing exemption Notification No. 49/2003-C.E. - The Revenue received intelligence that the assessee mis-classified the manufactured products and claimed wrong benefit therein, the DGCEI officers initiated investigation - As per intelligence, the products were rightly classifiable under CETH 2106 instead of CETH 3406 inasmuch as they were of the nature of nutrition supplement/proprietory foods - Accordingly, SCNs were issued to the assessee & upon adjudication, duty demand was sustained along with interest and imposition of penalty - Such orders were sustained by the Commissioner (Appeals) - The product in question has been tested by the CRCL - Though the report is not contested by the assessee, it is nonetheless claimed that a test report cannot be relied upon, on grounds that the chemical examiner is not required to decide upon classification of the product as other than medicament - Considering the entries in CETH 3004 and CETH 2106, it is clear that the subject goods will be classified under the former heading - The assessee canvassed that its product is covered under the definition of medicament on grounds that such products are used to cure or treat diseases and are regularly prescribed by medical practitioners - The assessee also produced affidavits from various medical practitioners to support its claims - The prescription indicates that the two products are prescribed to treat diseases and boost the immune system and for removal of condition of weakness - Hence the Revenue's contention that the subject items are dietary supplements is not correct, in light of the prescriptions issued by medical practitioners - Moreover, the CETH 2106 is a residuary entry - The product which is more appropriately classified under specific headings has to be preferred before resorting to classification of goods in the residuary entry - Besides, merely because the product can also be used otherwise, will not convert it into food supplement - Moreover, the classification is to be done on the basis of common parlance test, which is how the product is understood by the user, customer or medical practitioner - In the present case, the product in question is regularly prescribed by the medical practitioner to cure ailments even though the products are available over the counter - Besides, the Revenue also claimed that the assessee did not have drug license in the relevant period - However, the court agrees with the assessee's contention that the drug license is issued under a generic name and not in the trade name of the drugs manufactured - Such fact is evident from the drug license & also the composition of the products of the two licenses - The CESTAT held that the products were classifiable under CETH 3004 and are also eligible for accompanying exemption.

Held - Issue notice, returnable in four weeks: SC

- Notice issued: SUPREME COURT OF INDIA

2021-TIOL-637-HC-KAR-CX

Sanjay Alloys Pvt Ltd Vs CCE

CX - Assessee is in appeal against imugned order wherein the Tribunal by order 2017-TIOL-3994-CESTAT-BANG has dismissed their appeal by placing reliance on the decision of Apex Court in Doaba Steel Rolling Mills 2011-TIOL-59-SC-CX and held that the issue is squarely covered in favour of Revenue - Assessee submitted that the order passed by Tribunal suffers from the vice of non-application of mind inasmuch as no reasons worth accepting have been assigned by Tribunal - The Tribunal has merely relied on said judgment of Supreme Court and has not even assigned any reason as to how the aforesaid decision applies to the fact situation of the case - Thus, the order passed by the Tribunal is cryptic and suffers from the vice of non-application of mind - Therefore, matter is remitted to the Tribunal for fresh adjudication after considering the submissions made at the Bar and to decide the matter by a speaking order: HC

- Matter remanded : KARNATAKA HIGH COURT

2021-TIOL-636-HC-DEL-NDPS

Mohit Aggarwal Vs Narcotics Control Bureau

NDPS - Petitioner was arrested by the officials of Narcotic Control Bureau on 11.01.2020 and is in judicial custody since 11.01.2020 - The present petition has been filed seeking bail on the ground that petitioner is a law abiding citizen and is running business in the name of Madhav Pharma for sale, purchase and transport of various medicines while holding valid drug license under Form 20B & 21B of Drugs & Cosmetics Act, 1945; that he has maintained all records complying with all the terms and conditions of the license; that no contraband was recovered from his possession and he has been falsely implicated in this case.

Held: It is an admitted case of both the sides that name of petitioner popped up in this case in the statement made by co-accused Gaurav Kumar Aggarwal - It is also an admitted case that at the behest of Gaurav Kumar Aggarwal, the NCB team visited the shop of petitioner and upon search, nothing incriminating was recovered - The solitary ground to involve petitioner in the present case is his statement made under Section 67 of NDPS Act, which he had retracted at the first opportunity available to him - Supreme Court, by majority view, while answering to a reference with regard to the evidentiary value of Section 67 of NDPS Act in Tofan Singh ( 2020-TIOL-171-SC-NDPS-LB ) has held that the officers who are invested with powers under section 53 of the NDPS Act are "police officers" within the meaning of section 25 of the Evidence Act, as a result of which any confessional statement made to them would be barred under the provisions of section 25 of the Evidence Act, and cannot be taken into account in order to convict an accused under the NDPS Act; that a statement recorded under section 67 of the NDPS Act cannot be used as a confessional statement in the trial of an offence under the NDPS Act - Keeping in mind the observations made in Tofan Singh (supra) and upon a bare reading of petitioner's statement recorded on 09.01.2020, it is apparent that petitioner has not admitted that he was a party to the transaction or in possession of recovered and seized contraband substance - Though he has admitted in custody to have illegally traded the tablets under the NDPS (which is now inadmissible, unless proved otherwise) but since no recovery has been affected from his person or shop in this case, prosecution can only attempt to prove its case on the basis of circumstantial evidence, that is to say, by corroborating the call detail record or other material available and reliance cannot be solely placed upon disclosure statement of co-accused to keep him behind bars, especially when the recoveries of the instance were before the arrest of the petitioner and the statement given by co-accused has been retracted at the first available opportunity - In the case in hand, investigation is said to be complete - As per impugned order dated 21.07.2020 complaint/charge sheet has already been filed, however, besides confessional statement recorded under Section 67 of NDPS Act, no other material is forthcoming - Since no incriminating material was recovered at the instance of petitioner, this strengthens the view of this Court that petitioner is not likely to commit offence if released on bail - Moreover, nothing stops the prosecution to prove its case on merits during trial - In the aforesaid view of the case, requirements under Section 37 of NDPS Act are fulfilled - In the peculiar facts and circumstances of the case, without commenting on the merits, petitioner is directed to be released forthwith on his furnishing personal bond in the sum of Rs.25,000/-, and one surety in the like amount to the satisfaction of trial court/duty magistrate subject to the conditions as laid down – Petition allowed: High Court [para 23, 27, 32, 35, 36]

- Petition allowed :DELHI HIGH COURT

2021-TIOL-635-HC-MAD-CUS

Indian Christian Outreach Ministries Vs CC

Cus - The petitioner had imported goods way back in 2013 which were without license and therefore the imports were restricted - Imported medical equipments were ordered to be confiscated with an option to pay redemption fine in lieu of confiscation and subject to payment of applicable customs duties and penalty - The redemption fine imposed under Section 125 of Customs Act, 1962 and penalty imposed under Section 112(a) of Customs Act, 1962 were reduced by Commissioner (A) - The Commissioner (A) also ordered waiver of detention and demurrage charges - By an order dated 07.09.2015, the writ petition filed by petitioner was disposed by directing the 2nd respondent to pass appropriate orders with regard to waiver of demurrage charges upto 14.08.2015, on the basis of recommendation of 1st respondent vide letter dated 06.08.2015 and on consideration of the complaint of petitioner dated 11.08.2015 - The petitioner submits that the 1st respondent has now filed a compliance report dated 10.11.2020, in terms of which, it has been stated that the Principal Commissioner of Customs is having administrative control over the Custodians of Container Freight Station for appointing or suspending them under Handling of Cargo in Customs Areas Regulations, 2009 and that pursuant to the interim direction of this Court on 09.10.2020, steps have been taken by the 1st respondent as per law against the 2nd respondent and a SCN has been issued to the 2nd respondent - It is stated that the notice has been issued calling upon the 2nd respondent to show cause why the approval granted for custodianship and CCSP to them, shall not be revoked and why penal action shall not be taken against them under Regulation 11(1) read with Regulations 6(1)(I) of Handling of Cargo in Customs Areas Rules, 2009 - By an order dated 09.10.2020, this Court merely directed the 1st respondent to file report on the action taken based on the representation dated 11.08.2015 of the petitioner against the 2nd respondent - On the other hand, the so called compliance report dated 10.11.2020 of the 1st respondent seems to indicate that action has been taken pursuant to a direction of this Court dated 09.10.2020 - It is not clear on what basis the 1st respondent has issued the said SCN to the 2nd respondent - This Court vide its order dated 09.10.2020, merely called upon the 1st respondent to file a report of the action taken - Since the relief as prayed for has worked out, this Writ Petition is closed: HC

- Writ petition closed :MADRAS HIGH COURT

021-TIOL-629-HC-MUM-CUS  

Cus - Return of bank guarantee - The petitioner had imported goods "Trapazoidal Shaped Pre-Painted GI Roof Profiles" and filed bill of entry when the shipment reached the concerned seaport - On the ground that the customs tariff heading of imported consignment declared by petitioner was not correct leading to under valuation, demand cum SCN was issued to the petitioner - The imported goods had been cleared under provisional assessment by executing bond and bank guarantee - Adjudicating authority imposed redemption fine of equivalent amount under section 125 of Customs Act, 1962, besides confirming demand of differential duty with applicable interest - The petitioner preferred appeal before Tribunal which allowed the appeal of the petitioner - After the appeal of petitioner was allowed by Tribunal, petitioner submitted application before Respondent No. 4 for return of bank guarantee and bond executed at the time of provisional release of the goods as well as for refund of pre-deposit made under section 129E of Customs Act alongwith interest - Respondent No. 4 only confined to the refund of pre-deposit without taking a decision on petitioner's request for return of bank guarantee and bond - Department has filed appeal before Supreme Court against the order of Tribunal - If the respondents obtain a stay order from the Supreme court, the operation of this order would remain in abeyance otherwise respondents shall return the bonds and bank guarantees within a period of three months: HC

- Writ petitions disposed of: BOMBAY HIGH COURT

ST - The appellant is engaged in business of imparting commercial coaching to the students of Engineering Examinations and thus, is duly registered with Service Tax department for payment of service tax under category of Commercial Training and Coaching Service (CTCS) - They are receiving various input services including services of advertising agency and availing credit thereon, which was duly reflected in their ST-3 returns - On examination of invoices raised by advertising agencies, a SCN was issued to the appellant, proposing to deny benefit of cenvat credit alongwith interest and penalty, invoking extended period of limitation, alleging that cenvat credit was wrongly availed of service tax paid on commission amount on the invoices raised by advertisement agencies, inasmuch as service tax was paid by the advertising agents on the services rendered by it to print media and not to the appellant - Further, the service rendered by advertising agencies qualify as input service for the print media and thus are not relatable to the appellant, hence cannot be treated as input service under Rule 2(l) of the Credit Rules, 2004- The SCN is wholly misconceived as Department is trying to classify the service at the end of recipient of service - Further, admittedly appellant have received the input service and utilised in providing the output service - In terms of Rule 2(l), appellant is entitled to take cenvat credit of any input service which is received, by any name called, which are utilised in providing output service - Accordingly, the impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT