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2021-TIOL-169-SC-ST
CCE Vs APM Terminals India Pvt Ltd
ST - Appellant carries on with 'maintenance, management or repair services' undertaken by their Equipment, Maintenance and Repair Division for the shipping line of the AP Moller-Maersk Group whose containers may undergo damage while being handled or during voyages - Normally, steel sheets, wood, steel articles, compressors and similar parts of refrigerated containers are utilised for effecting repairs - It is common ground that liability as provider of 'management, maintenance or repair' service is discharged on the labour component of the contracted activity - The appellant was proceeded against in three show cause notices to recover amounts collected towards materials utilised in rendering the service - All three were adjudicated in a single order-in-original by CCE, Raigad confirming the demand of Rs. 13,75,68,767/- along with penalty and interest – appeal filed - Later the Tribunal held that while discarding the taxability as provider of 'works contract service', owing to the non-conformity with the specific activity enumerated therein, the adjudication order has not been able to establish that the claim of being 'works contract' is not tenable - On the contrary, the supply of goods that lose their identity in the object worked upon is a foundation that has been accepted - The transaction is, undoubtedly, in pursuance of 'works contract' and though, by lack of jurisdiction, not taxable under Finance Act, 1994 is yet saved from total exclusion owing to voluntary vivisection of the service simpliciter - Such discharge of liability is sufficient compliance of levy on taxable services under Finance Act, 1994 - There is, thus, no need to ascertain eligibility for abatement of cost of materials and excludability of the demand by the bar of limitation - For this reason, the differential tax sought to be recovered in the impugned order is without authority of law and must be set aside - Hence the Tribunal set aside the subject order.
Held - In pursuance of an order passed by the Supreme Court in the assessee's own case, a report was submitted by the Registrar of the Customs, Excise and Service Tax Appellate Tribunal dated 31 March 2021, explaining the steps which have been taken for making the orders of the CESTAT available expeditiously on the website - he circumstances in which the delay took place in the present case have been set out in the report. Sufficient cause for condonation of delay has been made out - Hence the delay is condoned - Moreover, no error is found in the Tribunal's judgment so as to warrant intervention: SC
- Revenue's Appeal Dismissed :SUPREME COURT OF INDIA
2021-TIOL-168-SC-ST
CCE & ST Vs Reliance Industries Ltd
ST - Whether the Tribunal was right in holding that the adjudicating authority has exercised discretion to allow filing of refund claim beyond one year by the respondent, when the adjudicating authority had not recorded any reasons to condone such delay - Whether the Customs, Excise and Service Tax Tribunal was justified in holding that in case of ISD invoices, for all purposes, be it cenvat or refund, the ISD invoice is deemed to be tax paying document, and hence, the date of that invoice has to be taken even for computing the one year stipulated in clause (e) of paragraph 3(III) of Notification No.12/2013-ST dated 1st July, 2013 - Whether the Customs, Excise and Service Tax Tribunal was justified in holding that no reasons are required to be assigned for extending the period for filing refund claims.
ST - Madras High court has [ State of Tamil Nadu v. Arulmurugan and Company, (1982) 51 STC 381 (FB) ] held that whatever discretion is conferred on the assessing authority for purposes of assessment, must so be regarded, as a matter of statutory construction, to have been conferred on the appellate authority even without the concerned statutory provision expressly naming the appellate authority in that behalf. An appellate authority, engaged as it is in precisely the same task under the fiscal statute as that of the assessing authority must also be possessed of like powers as those of the assessing authority - Supreme Court has in Commissioner of Income Tax v. McMillan & Co., AIR 1958 SC 207 = 2002-TIOL-1187-SC-IT-LB , held that the appellate authority can exercise the power which the Income Tax Officer could exercise - In the light of the principles enunciated in the above decisions, the powers of the appellate authority being an extension of the powers of the assessing authority, any order that could be passed by the assessing authority can be passed by the appellate authority - Under the circumstances, no infirmity can be found in the view of the Tribunal that if the adjudicating authority has not exercised the discretion to condone the delay, the Tribunal can exercise such discretion - On a conjoint reading of rules 7 and 9 of the CC Rules, it emerges that the input service distributor has to distribute the CENVAT credit in respect of service tax paid on input service to its manufacturing units whether in the DTA or the SEZ; and in terms of rule 9 of the said rules, the unit concerned which in the present case is an SEZ unit, is entitled to take CENVAT credit on the basis of an invoice issued by the input service distributor under rule 4A of the Service Tax Rules. Therefore, an invoice issued by the input service distributor is proof of payment having been made to the service provider and can be said to be a taxpaying document - However, while such document is proof of payment of tax, the date which such document bears is not the date of actual payment of service tax as contemplated in clause (e) of paragraph 3(III) of Notification No.12/2013-ST dated 01.07.2013: HC
ST - It may be noted that the Tribunal, in the impugned order, has held that as the refund in respect of services covered in Table-II of Form A-4 can be preferred by the SEZ unit only after the input service distributor in the DTA distributes the tax pertaining to invoices under which services common to the SEZ and DTA units have been received, the approach, adopted by the adjudicating authority is correct - The Tribunal has further noticed that it is only after the input service distributor issues the invoice distributing the tax credit, that the SEZ unit is made aware of the tax liability pertaining to such invoices of which, it can claim refund. The Tribunal has further observed that, it is an undisputed position that the legislature has provided that there cannot be any tax incidence on any service which is used by an SEZ unit for undertaking its authorized operations. In line with its objective, the Central Government has formulated a refund mechanism in respect of services which are common to both the DTA unit and the SEZ - Therefore, as long as the SEZ unit files the claim for refund within one year from the input service distributor unit distributing credit to it, it is reasonable to condone the delay, if any, in filing the claim for refund from the time period of one year from the end of the month, in which tax payment is made to the service provider as envisaged in clause (e) of paragraph 3(III) - Input service distributor is an office of the SEZ unit and, therefore, they are not separate entities. While rule 7 of the CC Rules may not provide for any time limit for distribution of credit, inasmuch as it only provides for the manner of distribution of credit; clause (e) of paragraph 3(III) of Notification No.12/2013-ST dated 01.07.2013 does provide for a limitation for filing refund claims - Therefore, the input service distributor is well aware that the SEZ unit is required to file the refund claim within a period of one year from the end of the month in which actual payment is made. Therefore, if the respondent desires to claim refund under clause (e) of paragraph 3(III) in respect of credit distributed to its SEZ unit, it is for the respondent to ensure that such credit is distributed within sufficient time so as to enable the SEZ unit to file the refund claim within the time provided therein - Distribution of credit is an internal administrative matter of the SEZ unit and the input service distributor and they have to manage their affairs in a manner whereby, the refund claims can be made within the prescribed time limit. The Tribunal was, therefore, not justified in holding that the date of the ISD invoice has to be taken for computing the one year stipulated in the notification - While this may be a good ground for extending the period for filing the refund claim, there cannot be an absolute proposition that in all cases where the refund claim is filed within a period of one year from the end of the month in which the ISD invoice is issued, the period for filing refund claim has to be extended as the same would amount to reading into clause (e) of paragraph 3(III) of Notification No.12/2013-ST dated 01.07.2013 something that the authority which issued the notification did not intend - In the opinion of this court, the time limit for filing the refund claim cannot be extended in such a casual manner by adopting a thumb rule that in all cases, where refund claim is filed within a period of one year from the end of the month when the ISD invoice is issued, the refund claims have to be accepted - Held that the CESTAT was not justified in holding that in case of ISD invoices, for all purposes, be it cenvat or refund, the ISD invoice is deemed to be taxpaying document, and hence, the date of that invoice has to be taken even for computing the one year stipulated in clause (e) of paragraph 3(III) of Notification No.12/2103-ST dated 1st July, 2013. It is further held that the Customs, Excise and Service Tax Tribunal was not justified in holding that no reasons are required to be assigned for extending the period for filing refund claims. Both the above substantial questions of law stand answered accordingly, in favour of the appellant and against the respondent - While not agreeing with the reasoning adopted by the Tribunal and answering the above questions in favour of the appellant (Revenue), the court does not deem it fit to interfere with the impugned order to the extent it upholds the order of refund - Court has left the issue regarding applicability or otherwise of clause (e) of paragraph 3(III) of Notification No.12/2013-Service Tax dated 1st July, 2013 to refund claims made under Table-II of Form A-4 open, to be decided in an appropriate proceeding before the appropriate forum.
Held - Issue notice on the application for condonation of delay as well as on the Special Leave Petition - 2 weeks' time is granted to file reply affidavit, and thereafter, 1 week's time is granted to file rejoinder affidavit - Matter listed for hearing after 3 weeks: SC
- Notice issued :SUPREME COURT OF INDIA
2021-TIOL-167-SC-CX
CCE Vs Vijai Marine Services
CX - Classification of 'MV Royale Floatel' - Appellant was contracted for the conversion of 'dumb barge' and 'other equipment' into a self-propelled luxury floating hotel which, the impugned order holds as to be amounting to manufacture and classifiable in chapter 89 of First Schedule to the CETA, 1985 - Clearance, at a declared value of Rs. 11.89 crores, had been effected by the appellant at 'nil' rate of duty applicable to heading no. 8905 with entitlement to exemption under notification no. 12/2013-CE dated 1st March 2013 - SCN proposed recovery of undischarged duty liability on the ground that the vessel was intended for deployment as an 'offshore casino' to be operated on the Mandovi river in Goa and that, under the pretext of clearing the same as a 'conveyance', the true intent of use and actual design of the impugned goods had been concealed to avail the consequences of the claimed classification; that vessel is correctly classifiable under heading no. 89039990 as 'yachts and other vessels for pleasure or sports; rowing boats and canoes' - It is alleged that the 'dumb barge' converted as a 'self-propelled floating hotel' as per contract with M/s Highstreet Cruises and Entertainment Pvt. Ltd was, thereafter, handed over to M/s Delta Pleasure Cruise Company Pvt Ltd on 'bare boat charter' and that the latter was a known operator of floating casinos, including MV Casino Royale, at the same location in Goa - Adjudicating authority came to the conclusion that, notwithstanding the subsequent 'bare boat charter' and ultimate deployment as a floating casino, the evidence on record did not advance the proposal in the notice and that the vessel failed classification, at the time of clearance, as anything other than as conveyance for persons - it was concluded by the adjudicating authority, that floating casinos are not 'vessels for pleasure or sports' - On appeal, the CESTAT observed that in the view of Officers of Central Excise, gambling gives pleasure and the inclusion of such expression in heading no. 8903 of First Schedule to Central Excise Tariff Act, 1985 would suffice for resorting to that classification - An examination of the headings in chapter 89 of the First Schedule to CETA, 1985, as well as the Explanatory Notes, does not throw light on an exhaustive enumeration of 'boats for pleasure or sport' - It is common ground that the vessel was described as a 'floating hotel' - A vessel, whether of the simplest and most rudimentary structure or as opulent as the Titanic, is a mode of transport/habitation that is capable of buoyancy in water - Even if such floating structure were to include facilities for games of skill, games of pleasure and games of chance, the functionality, as a means of transport, does not undergo transformation - opulence of the vessel or facilities available on board should not metaphonically capsize the classification on the figurative iceberg of taxation - In the absence of a specific description of 'casino vessels' and for the want of definition of 'pleasure boats', recourse to Rules for Interpretation of the Schedule cannot be had - In the light of the decision in re Ashok Khetrapal and the absence of other binding precedent on the classification of 'casino vessels' as 'pleasure boats', Bench finds no reason to interfere with the order of the adjudicating authority - Revenue's appeal was dismissed.
Held - Appeal admitted - Matter be tagged with C.A. Nos. 3183-3184 of 2015: SC
- Notice issued :SUPREME COURT OF INDIA
2021-TIOL-846-HC-MUM-ST
Chinar Shipping And Infrastructure India Pvt Ltd Vs UoI
ST - SVLDRS, 2019 - Petitioner is before us questioning propriety and validity of the statement in form SVLDRS-3 and praying to issue a writ/order setting aside the same with a further direction to allow declaration of petitioner in form SLVDRS-1.
Held: There is no dispute on that petitioner is eligible person to claim benefit of Sabka Vishwas scheme and had accordingly had made a declaration in Form SVLDRS-1, as provided - The same was responded to by issuing SVLDRS-2 by the designated committee - While the estimate under SVLDRS-2 exceeded the amount declared by the petitioner, it will entail an opportunity to petitioner on its disagreement over the estimated amount before issuing statement SVLDRS-3 indicating the amount payable by the declarant - The scheme also provides for an accommodation of adjournment for hearing - Statement with regard to amount payable has been issued in Form SVLDRS-3 on 19th February, 2020 - It is the case of the petitioner that communications are required to be made either on ‘email id' or via 'SMS' on registered mobile/phone - While petitioner asserts the same, there is no definitive response on the same - It does not appear to be certain that communications had ever been issued to petitioner on 'email id' or via SMS on the registered mobile/phone - It may have to be referred to that there is no specific record made available about the same - The objective of computerization programme is to improve efficiency and effectiveness of tax administration; to provide management with reliable and accurate information with certainty in its accuracy - Before insisting on payment of excess amount or higher amount, the designated committee is required to give an opportunity of hearing to the declarants - Impugned declaration in the form of SVLDRS-3 issued by respondent No. 4 on 19th February, 2020 is set aside restoring the proceedings before the authority - The authority concerned is to give an opportunity of hearing to petitioner and decide the matter - Petition disposed of: High Court [para 21, 22, 23, 27]
- Petition disposed of: BOMBAY HIGH COURT
2021-TIOL-845-HC-MAD-CUS
AB Kanisha Timbers Vs CC
Cus - Import of Teak - Since the goods were not cleared within the time limit stipulated in Section 48 of the Customs Act, 1962, the customs authority proposed to auction the goods - The goods had been kept in the warehouse maintained by M/s. Continental Warehousing Corporation Limited - The warehousing charges had also mounted to more than a crore of rupees - In this background, these two writ petitions came to be filed.
Held: The customs authority at no point of time detained the goods, therefore, this is purely a contractual issue between the petitioner on the one hand and the private respondents on the other - In such a case, it would not be open to the Writ Court to issue any Mandamus compelling the private respondents herein to permit clearance of the goods, even though the petitioner has not satisfied the contractual demand raised by the shipping liner/warehousing entity - Bench cannot find fault with the customs authority nor can it issue any mandamus for compelling the private respondents - The petitioner is a genuine importer and he honoured the demand raised by the shipping liner - The goods are not prohibited goods - Unfortunately, though the amount was debited from his account, it did not get credited in the account of the fourth respondent - It is most unfortunate that delay of few days in the matter of crediting in the fourth respondent's account has given rise to the present situation - The amount then involved was hardly Rs.65,564/- - The petitioner could have made the payment without prejudice to his contention that he was not liable to pay - The fourth respondent could have been magnanimous enough - Both adopted a wooden headed approach - As a result, the detention charges have mounted to astronomical levels - Even if the goods are brought to sale, the warehousing entity and the shipping liner can realize only a miniscule portion of the demand - On account of the delay in clearing the goods, the value of the goods has also come down drastically - Everyone is a loser in the situation - While the petitioner is willing to pay a sum of Rs.2,00,000/- to the warehousing entity, the demand of the third respondent is Rs.35,00,000/- - Since Bench does not see any meeting point, no purpose will be served in keeping the issue alive - Since Bench cannot grant any relief in these writ petitions, these Writ Petitions stand dismissed - Since the petitioner's counsel insisted that he would be able to persuade the warehousing entity/ shipping liner, Bench directs the customs authority not to bring the goods to e-auction for a period of ten days from the date of receipt of a copy of this order: High Court [para 11, 12, 13]
- Petitions dismissed: MADRAS HIGH COURT
2021-TIOL-844-HC-RAJ-GST
HR Enterprises Vs State of Rajasthan
GST - Petitioners have challenged order of detention dated 18.03.2021 and the very jurisdiction of respondent No.2 to proceed in the matter - Counsel for Revenue submits that the petitioners have directly rushed to this Court without even filing reply before the respondent No.2; that the petitioners could have applied for release of the goods as provided under Sections 67, 68 and 129(1) of the Act of 2017, instead of invoking writ jurisdiction of this Court; that as an efficacious alternative remedy of preferring an appeal against the detention order is available to the petitioners, instant writ petition is not maintainable.
Held: As is evident in the present case, if a Check Post Officer or Anti Evasion Officer intercepting the goods and vehicle while in transit, is permitted to carry on such fishing and roving inquiry, it would impede, rather retard free flow of trade resulting in unnecessary and unwarranted harassment to the carrier of goods, so also to the consignor/consignee - In preliminary opinion of this Court, once the goods in question are in conformity with the documents of transit, the scope of inquiry under Section 68 of the Act of 2017 by Anti Evasion Officer/Check Post Officer or flying squad ends and he cannot kick start an inquiry relating to the genuineness of purchase and corresponding input tax credit, which essentially relates to purchase of goods - Thus, in the prima-facie opinion of this Court, provision of Section 129 cannot be resorted to - It is more so, when the allegation is, that the seller/consignor is seeking to avail wrong input tax credit - The incident or occasion of availing input tax credit is an event preceding the transaction in question and completely divorced from the movement/transit in question, which is in pursuance of inter-state sale - All stakeholders are treading in the new GST regime with uncertainties as the path is comparatively unfamiliar, unmarked and unpaved - The parameters of the authorities' powers and dealers' duties/responsibilities/liabilities are yet to be demarcated - Notice dated 18.03.2021 is an example of such uncertainty - In the opinion of this Court, the statutory remedies will be inefficacious - Even, remedy relating to release of goods under Section 129(1)(c) of the Act of 2017 would be illusory - In the interest of justice it is deemed expedient and hence, respondent No.2 is directed to release the goods and vehicle in question forthwith, in case petitioner No.1 furnishes two solvent sureties to the tune of Rs.15 lakhs executed by dealers registered in the State of Rajasthan - Respondent no.2 shall not insist upon furnishing of bank guarantee or cash security - Case listed on 19.04.2021: High Court [para 14, 16, 19, 25, 26, 30, 32]
- Matter listed: RAJASTHAN HIGH COURT
2021-TIOL-204-CESTAT-DEL
Al Sadik Haj Tour Organizers Vs CC, CGST & CE
ST - Refund - Assessee is in appeal against impugned order vide which the appeal has been dismissed on grounds of limitation - The refund claim of assessee was sanctioned initially vide O-I-O - Para 5 thereof specifically records that the submissions made by claimant have been considered by original adjudicating authority thereby proving that the assessee was given due opportunity of hearing and the said order is not an ex parte order - There is no reason for assessee to say that he had no knowledge about the order and that for receiving the copy thereof he had to file the RTI application - There seems no cogent reason for impugned RTI application except for gaining time that too to create/manipulate the sufficient reason for delay - There is a statutory mandate upon Commissioner (Appeals) to not to hear the appeal, which is filed beyond the period of 60 days extendable to another 30 days if sufficient cause for delay is shown - No infirmity found in the order when the impugned delay of one month and 20 days is denied to be condoned for no sufficient cause - In this context, Tribunal relied upon the decision in case of Singh Enterprises 2007-TIOL-231-SC-CX - The order under challenge is upheld: CESTAT
- Appeal dismissed: DELHI CESTAT
2021-TIOL-203-CESTAT-KOL
T And T Metals Pvt Ltd Vs Pr.CCGST & CX
CX - The assessee is engaged in manufacture of non-alloy steel ingots - A SCN was issued to assessee wherein it was alleged that they had undervalued their final products inasmuch as the assessable value adopted for payment of duty is lower than the actual cost of manufacture of said products and therefore, the valuation cannot be made in terms of Section 4(1)(a) of Central Excise Act, 1944 but under Section 4(1)(b) of the said Act, read with Rule 8 and Rule 11 of Central Excise Valuation (Determination of Price of Excisable) Rules, 2000 - On perusal of clarifications vide Circular No. 983/7/2014-CX , it is noted that the Board has accepted that mere sale of price lower than the manufacturing cost cannot be made the criterion to reject the transaction value unless the aspects such as the percentage of loss at which such sale takes place and the period for which such loss takes place, reasons of sale at such loss are examined to ascertain if there was any "extra commercial consideration" - The assessee's case is squarely covered by the ratio laid down by Apex Court in case of Guru Nanak Refrigeration 2003-TIOL-02-SC-CX wherein also the Department proposed to reject the transaction value for the reason that cost of manufacture was found to be higher than the price at which goods were eventually sold - The Apex Court taking note of the fact that when there was no additional consideration and the goods were cleared to independent buyers, upheld the valuation adopted by assessee under Section 4(1)(a) - The said decision in Guru Nanak Refrigeration has not been held to be per incurium by the Apex Court as also noted in the aforesaid Board Circular and hence, has a binding precedence as on date and the same is applicable to the facts of the instant case - No reason found to reject the transaction value adopted by assessee in the absence of extra commercial consideration and thus, the demand cannot be sustained - In so far as limitation is concerned, apart from the general allegations levelled in SCN, no positive evidence found to show that there is any fraud or willful suppression on the part of the assessee and hence, the demand is clearly barred by limitation - The impugned order is therefore set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2021-TIOL-202-CESTAT-MAD
S Nagoor Gani Vs CC
Cus - The case of Revenue is that the appellants were involved in aiding one Shri M.S. Alaudeen, their employer, in melting smuggled foreign marked gold bars in order to make them appear as crude gold - Apparently, the penalty is levied as role of appellants was nothing short of abetment, by which the goods namely, gold, had become liable for confiscation under Section 111(d) of Customs Act, 1962 - One of the defence pleaded by appellants is the retraction statement of these appellants wherein they have inter alia mentioned that the 'Officers searched their Workshop in Ayanavaram when they were doing their job with regard to melting of Gold Pieces converting to Gold Rings which was given by customers' - Nowhere do they mention about any registration/licence for carrying out their job having been obtained by their employer nor would any of them even offer to furnish the details of their customers, including such customer who had given a foreign marked gold bar with the marking "Cambi, Suisse 100 gm Gold 999.9" with last five digits of Sl. No. "09053" - There is also no rebuttal as to the Officers' noticing one of them operating the furnace and thereby melting the gold - The retraction statement itself hints that they were aware/conscious of what job they were carrying on; the very fact that they were involved in melting gold of the alleged huge quantity cumulatively points to the modus operandi in converting smuggled gold bar into crude gold - In the case of their employer also, Shri Alaudeen has nowhere furnished or even offered to furnish any registration for having engaged in the job of nature they were involved in, nor has he come forward to furnish the details of their so-called customers, including such customer who wanted the melting of foreign marked gold bars - If they were aware of identity of their customers, then there was no need for the first appellant to go to the brokers in N.S.C. Bose Road to sell off the melted gold, which fact has neither been denied nor rebutted in their retraction - There is no other legal/technical objection urged on behalf of appellants as well and hence the melting activity was carried on by all three of them jointly to hide the identity of foreign marked gold bars, make them appear as crude gold and sell them locally, which clearly attracts the penal provision of Section 112 of Customs Act, 1962: CESTAT
- Appeals dismissed: CHENNAI CESTAT |
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