2021-TIOL-165-SC-ST
UoI Vs Ruchi Goyal
ST - The present review petition was filed on grounds that when this petition was heard and allowed by following earlier decision of this court in Suresh Kumar Bansal v. UOI the attention of this court had not been drawn to the fact that Rule 2A of the Service Tax (Determination of Value) Rules, 2006 had been amended - The amendment provided a mechanism to separately determine the value of land and the value of goods for the purposes of WCS - Later, the High Court held that it does appear that the amendment to Rule 2A is specific to a works contract since the title of Rule 2A itself reads 'determination of value of service portion in the execution of the works contract - In Suresh Kumar Bansal v. UOI it was noted that while Section 65(105)(zzzza) dealt with WCS and it is possible to argue that a composite contract for the development of complex and sale of units could fall within its scope, this Court did not propose to examine that issue since the entire argument revolved around the scope of taxable service as envisaged u/s 65(105)(zzzh) of the Finance Act, 2010 which is specific to construction of complex - Hence the amendment to Rule 2A would not advance the case of the review petitioner.
Held - Leave granted - Matter be heard along with C.A. No. 5690 of 2012: SC
- Notice issued: SUPREME COURT OF INDIA
2021-TIOL-164-SC-ST
CGST & CE Vs Ocean Interiors Ltd
ST - Department was of the view that the appellants failed to include the value of materials consumed by them while providing the finishing services - Further, it was seen from the invoices raised by the assessee to their client that they were paying VAT on 79.85% of the value of invoices and Service Tax on 20.15% of the remaining value - Department was of the view that the appellant has to pay Service Tax on the gross amount received for completion and finishing services - demand confirmed and penalty imposed, therefore, assessee in appeal before CESTAT, which then held that Rule 2A continues after 2012 also and the Composition Scheme has been replaced and inbuilt in the Rules itself in a different form whereby the service portion in Works Contract is specified at a percentage of gross value based on the nature of activities on which normal Service Tax rate applies instead of a lower composition rate on the gross value under the erstwhile composition scheme - Thus, the principle of valuation of taxable service under the amended provisions also remains the same - It was also held that the assessee arrived at the value of service portion of Works Contract Service as per Rule 2A (i) whereas the Department has proceeded to arrive at the value as per Rule 2A (ii) for the period after 01.07.2012 and under the Composition Scheme for the period prior to 01.07.2012 - Rule 2A (ii) would apply only if the value is not determined under clause (i) - The appellant in the present case has arrived at the value and also paid VAT as per the VAT Law - The value of transfer of property in goods has to be arrived at on the basis of purchase price of various goods, apportionment of overheads and profit margin - The appellant, being an assessee under the VAT Law, has to abide by the state law for payment of VAT - Thus, he can only arrive at the value of goods used in the Works Contract by applying the VAT Law after deducting the value arrived for payment of VAT; the remaining portion has been subjected to payment of Service Tax - When VAT has already been paid on the value of goods, the same cannot be subjected to levy of Service Tax again.
Held - Notice be issued to the parties in respect of the application for condonation of delay and the Civil Appeal - Notice returnable in four weeks' time: SC
- Notice issed: SUPREME COURT OF INDIA
2021-TIOL-838-HC-MUM-CUS
Rika Global Impex Ltd Vs UoI
Cus - Notification No. 19/2015-2020 Dated 5 th August 2017 - Petitioner has prayed for a writ of mandamus to respondent No.2 i.e. the Commissioner of Customs (NS-I) and respondent No.3 i.e. the Assistant Commissioner of Customs, Appraising Group - I & IA to allow clearance of 2,650 MTs of Pigeon Peas covered under Bill of Entry for home consumption which have been held up inspite of having valid registration of Advance Payment Certificate issued by the office of the respondent No.5 i.e. the Director General of Foreign Trade) permitting import of Pigeon Peas under the Foreign Trade Policy 2015-2020.
Held:
++ In the facts of the present case the RC is binding on the respondents until the completion of the import quota mentioned therein and considering that the petitioner has imported the import item before 31.03.2021, petitioner's import is required to be declared as valid import under the FTP. [para 14]
++ On perusal of the notification dated 05.08.2017 it cannot be said that it imposed restriction to complete the import of goods only during the fiscal year 2017-18; though there is a reference to the fiscal year appearing in condition No.2 of the said notification as regards the quota of 2 lakh MT per annum; this reference is merely for the purposes of procedure to be notified for such import in terms of para 2.08 of the FTP; however the subsequent trade notice dated 31.08.2017 which directly concerns the petitioner's case in hand does not mention its applicability to the fiscal year 2017-2018 and categorically specifies its applicability to the contract under the FTP. [para 14]
++ It is clearly discernible that petitioner's import of 22000 MTs of Pigeon Peas under the RCs issued to the petitioner is valid up to 31.03.2021 and the case of the respondents that the same is restricted only to the fiscal year 2017-18 is clearly untenable. [para 16]
++ Deputy DGFT clarified that the validity of the RC was only for the fiscal year 2017-18 as the provision for registering RCs was made with reference to notification No. 19/2015-2020 dated 05.08.2017 and the date of expiry is the date of lapse of notification i.e. 31.03.2018. [para 17.1]
++ If the objection raised by respondent Nos. 4 to 6 is to be countenanced, then there was no reason for the respondents to clear the 25 shipments of the petitioner after 31.03.2018, i.e. from 23.04.2018 to 25.07.2020. The stand adopted by the respondents especially respondent Nos.4 to 6 is against the spirit and contents of the FTP.
++ Para 1.07 of Chapter 1 of the FTP 2015- 2020 states that DGFT has a commitment to function as a facilitator of exports and imports. Focus is on good governance, which depends on efficient, transparent and accountable delivery systems. It further states that in order to facilitate international trade, DGFT consults various Export Promotion Councils as well as Trade and Industry bodies from time to time. Thus the DGFT is required to act as a facilitator which is however not seen in the present case.
++ Paragraph 9.23 defines 'free' and states that free as appearing in the context of import / export policy for items means goods which do not need any 'Authorisation' / license or permission for being imported into the country or exported out. Paragraph No.9.43 defines 'quota' to mean the quantity of goods of a Specific kind that is permitted to be imported without restriction or imposition of additional duties. Therefore the objection raised by respondent Nos.4 to 6 that the notification dated 05.08.2017 and the two trade notices dated 11.08.2017 and 31.08.2017 would restrict the import of Pigeon Peas only upto 31.03.2018 stands squarely rejected. Paragraph 9.47 defines 'restricted' to mean a term indicating the import or export policy of an item, which can be imported into the country or exported outside, only after obtaining an Authorization from the office of DGFT. [para 19]
Conclusion: [para 21]
++ Respondents shall allow clearance of 2650 MT of Pigeon Peas covered under Bill of Entry nos. September and October 2020 for home consumption.
++ Considering the lapse of time from the date of filing of the petition i.e. November 2020 till the present order is passed, Bench directs that respondents shall allow clearance of the balance 8350 MT of Pigeon Peas if imported by the petitioner for home consumption under the RC File dated 06.09.2017 upto a period of 6 weeks from the date of passing of the present order.
- Petition allowed: BOMBAY HIGH COURT
2021-TIOL-837-HC-MUM-CX
Supermax Personal Care Pvt Ltd Vs UoI
CX - Undoubtedly, manufacturing process of the goods in question was carried out by Tigaksha Metallics Pvt. Ltd. (job worker) at its factory at Una, Himachal Pradesh and insofar as central excise is concerned, the taxable event is manufacture of the goods - Concepts like ownership, title holder, ultimate manufacturer etc. have no bearing on the taxable event - In the order in original dated 20.11.2019, respondent No. 3 had recorded a clear finding of fact that since the goods in question were manufactured by Tigaksha Metallics Pvt. Ltd. at Himachal Pradesh, it was beyond the jurisdiction of the Thane Commissionerate to demand central excise on such manufacture - Both the findings i.e. that the goods in question were manufactured by Tigaksha Metallics Pvt. Ltd. at Himachal Pradesh and that such manufacturing process was beyond the jurisdiction of Thane Commissionerate have not been challenged by the respondents and thus have attained finality - Central Board of Excise and Customs has vested territorial jurisdiction upon various central excise officers vide Notification No. 13/2017 dated 09.06.2017 - From the said notification, it is evident that Commissioner of Central Excise, Shimla has territorial jurisdiction over the entire State of Himachal Pradesh and he, in turn, is under the administrative jurisdiction of Chief Commissioner, Chandigarh - On the other hand, Commissioner, Thane who is under the administrative jurisdiction of Principal Chief Commissioner, Mumbai has territorial jurisdiction over the areas falling under the pin-codes which are in the State of Maharashtra - Therefore, it is evidently clear that the taxable event i.e. manufacture of the goods in question had taken place in the factory premises of Tigaksha Metallics Pvt. Ltd. at Una in Himachal Pradesh - Thus, neither respondent No. 2 nor respondent No. 3 has the territorial jurisdiction to issue any notice to show cause-cum-demand for levy of central excise duty on such products - Furthermore, in the order in original dated 20.11.2019, the adjudicating authority had recorded a clear finding that the only presumption for the demand was that because the maximum retail price of the goods manufactured at Una, Himachal Pradesh and those manufactured elsewhere by the petitioner, which included excise duty, were the same, therefore the maximum retail price of the goods manufactured at Una, Himachal Pradesh included central excise duty which were collected from the ultimate consumers but not deposited in the government treasury - Negating the fallacy of this presumption, the adjudicating authority held that other than such a presumption, there was no evidence at all to establish that any amount was collected by the petitioner as representing duty of excise - And in such a case, provisions of section 11D of the Central Excise Act would not be applicable - This again is a conclusive finding of fact which has remained undisturbed - Consequently and in the light of the discussions made above, Bench is of the opinion that the impugned show cause-cum-demand notice dated 26.05.2020 is clearly without jurisdiction and is an attempt to reopen an issue which was concluded by the adjudicating authority vide the order in original dated 20.11.2019 which is not permissible - Impugned show cause-cum-demand notice dated 26.05.2020 is hereby set aside and quashed - Writ petition is accordingly allowed: High Court [para 37, 38, 39, 40, 42, 43]
- Petition allowed: BOMBAY HIGH COURT 2021-TIOL-201-CESTAT-MAD
MT and N International Corporation Vs CC
Cus - The issue arises for consideration is, whether the appeal filed by appellant is timebarred - The appellant has explained that they had not been served with O-I-O and has received the copy only after making a request - The letter issued in February 2020 by the Revenue Recovery Unit shows that the O-I-O was served upon the appellant only in February 2020 - The contention of the department that since the O-I-O is issued by speed post, the appellant has been served with O-I-O cannot be accepted unless there is sufficient proof to establish that the same has been served and communicated to the appellant - The word used in section 128 as well as 153 is communication of the decision, summons and notices - By merely sending a copy of O-I-O by speed post, the department cannot wash of their hands when they are duty bound to serve the same on the appellant - The department ought to have tracked the consignment and made sure that it has been delivered to the addressee - They can obtain a copy of the same from the website after tracking the consignment and keep the same in the file so that it would be useful to prove that the O-I-O is served upon the addressee - The dismissal of appeal on the ground of time-bar is unjustified, same is set aside - The matter is remanded to the Commissioner (A) who is directed to consider the appeal on merits: CESTAT
- Appeal allowed: CHENNAI CESTAT
2021-TIOL-200-CESTAT-DEL
Head Post Office Vs CCE & CGST
ST - The appellant was paying service tax in respect of its taxable services including courier services by way of book adjustment or 'e-lekha' - With effect from 1.10.2014, there was an amendment vide Notfn 9/2014-ST, wherein the substituted Rule 6(B) to Service Tax Rules, 1994 was substituted - Accordingly, pursuant to show cause under the admitted fact the appellant has already deposited service tax through e-lekha but not deposited the service tax electronically as required under Rule 6(B), the duty with respect to the service tax for the year 2014-2015 was confirmed along with interest and further penalty was imposed under Rules 70, 76 and 77 of Finance Act, 1994 and also late fine for the half yearly ST-3 returns was imposed under Section 70 read with Rule 7(C) of Service Tax Rules - On appeal, the Commissioner (A) was pleased to record the finding that the appellant has already paid service tax through e-lekha portal and it is sufficient compliance of the law - Accordingly, the Commissioner (A) was pleased to set aside the demand of service tax with interest as well as penalty under Sections 76 and 77 of the Act - He was also pleased to uphold the penalty under Section 70 read with Rule 7 (c) - The third proviso under Rule 7(C) of Service Tax Rules 1994 provides that where the gross amount of service tax payable is nil, the central excise officer may, on being satisfied that there is sufficient reason for not filing the returns, reduce or waive the penalty - Admittedly, the appellant had paid the service tax and thus, there was no intention to evade payment of service tax - In this view of the matter, penalty under Section 70 is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2021-TIOL-199-CESTAT-DEL
Shree Rolling Mill Vs Commissioner
CX - Assessee is in appeal against impugned order wherein demand of duty has been confirmed on them - Vide the aforesaid order, where undersigned being one of the Member thereof, it has already been held that the search and seizure proceedings in factory of Noticees were made beyond the normal working hours and in violation of provisions of Section 100 of CRPC read with Section 18 of Excise Act, 1944 - It has also been held that the entire documents as per the Panchnama was the Computer data which got burnt into 2 writable CDs but no Certificate was obtained by Department as is required under the Provisions of Section 36B of the Act - While relying upon various case laws as Ambica Organics 2015-TIOL-745-CESTAT-AHM , Premier Instruments & Controls Ltd. 2005-TIOL-61-CESTAT-MAD , it was held that there is no cogent evidence but the violation of mandatory provisions on part of Department - The benefit whereof was ordered to be extended in favour of Noticees - It has also been already held that shortage was detected only on the basis of eye estimation/average weight - There was otherwise no document recovered from factory of the main Noticee and the residence of its Directors - No proof with respect to the loose documents recovered from the Car of the Accountant of M/s.Hariom Ingots was brought on record - Lack of proper estimation and requisite documents, there remains no cogent evidence to prove the charges of clandestine removal - The noncompliance of Section 36B of the Excise Act by the Department has been made the reason to extend the benefit to the Noticees of impugned SCN - In the present appeal, there is no additional document except the documents/evidences as have been discussed by Division Bench of this Tribunal in the said order with respect to the same SCN as has been adjudicated vide the impugned order under challenge - The reliance on third party documents while conforming demand against present assessee is also observed to be unjustified and unreasonable - No reason found to differ from the findings that have already been arrived at by a Division Bench on the same set of allegation and the same set of evidences - Being bound by the said findings, it is held that Department has failed to prove the allegations against the present assessee - The confirmation of duty demand alongwith interest and penalty against the present assessee is, therefore, held to have been confirmed without any cogent basis - Order under challenge is, accordingly, set aside: CESTAT
- Appeal allowed: DELHI CESTAT |
