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2021-TIOL-177-SC-ST
CCGST & CE Vs Prathamesh Dream Properties Pvt Ltd
ST - SVLDRS, 2019 - Petitioner is engaged in the business of construction of warehouses and letting them out on rent to wholesalers and retailers - SCN dated 08.04.2014 was issued by Commissioner of Service Tax demanding service tax of Rs. 3,60,03,185/- for the period 2008-09 to 2012-13 - During investigation and prior to issuance of SCN, petitioner paid service tax dues of Rs. 2,80,74,255/- The debtor was instructed by the service tax authorities to remit the rental dues to be paid to the petitioner to the account of the Service Tax Commissionerate account - And accordingly, a total amount of Rs. 17,94,402/- remitted by M/s Future Retail Limited towards lease rent during the period when the said debtor account was frozen by the service tax authorities was appropriated by the service tax authorities - later, the freezing of account was lifted w.e.f 30.06.2014 - Thus according to petitioner, it had paid a total amount of Rs. 2,80,74,255/- on account of service tax dues prior to issuance of SCN and a further amount of Rs. 17,94,402/- was appropriated from the debtor's account prior to and immediately preceding the SCN dated 08.04.2014 - Consequently, an order-in-original was passed on 18.09.2018 confirming the service tax demand of Rs. 3,60,03,185/- along with interest and penalty - An appeal was filed against this order on 17.12.2018 before the CESTAT along with payment of statutory fees but the said appeal was kept aside as defective and subsequently the appeal was dismissed on 09.12.2019 - Petitioner states that the alleged intimation by the registry for rectification of defect was never received by the petitioner - Since their appeal was pending before the CESTAT as on 30.06.2019, they filed an application under the SVLDRS, 2019 on 23.12.2019 under 'pending litigation category' - However, the Designated Committee issued notice in form SVLDRS-2 to the petitioner on 23.01.2020 treating the petitioner as a declarant under 'arrears category' and not under 'pending litigation category' - Vide the said notice, the Designated Committee proposed the amount in arrears at Rs. 79,85,457/- and on that basis the relief to the petitioner was determined as Rs.31,94,182.80 - An amount of Rs. 47,91,274.20 (Rs. 79,85,457/- minus Rs. 31,94,182.80) was quantified as the dues payable by petitioner - the Designated Authority accepted Rs. 2,80,17,728/- as pre-deposit and not Rs. 2,98,68,657/- - Petitioner disagreed with the computation and the categorisation as 'arrears category' and consequently a personal hearing was granted on 31.01.2020 - the Designated Committee issued SVLDRS-3 dt. 06.02.2020 restating the earlier position and directing the petitioner to pay Rs. 47,91,274.20 and consequently the petitioner, having no other alternative, deposited the said amount on 05.03.2020 and a discharge certificate in form SVLDRS-04 dated 06.03.2020 came to be issued for a full and final settlement of tax dues u/s 127 of the FA, 2019 - In writ, the High Court held that ordinarily, it would not enter into determination of facts & figures, but in this case, would proceed on the projection of the petitioner that if its application (declaration) is treated as one under the 'pending litigation category', it would be more beneficial to the petitioner as not only no further amount would be required to be paid by the petitioner; rather it would be entitled to refund of the amount paid by it because this aspect is not disputed by the answering respondents in their affidavit - It observed that admittedly, petitioner's appeal was pending before the CESTAT as on 30.06.2019, may be, in defective form. The statute does not say that for being entitled to the relief under the 'pending litigation category', the appeal must be pending as on 30.06.2019 on being admitted by the appellate forum. This is not the requirement of the law. To hold so would be doing violence to the plain language of the statute. When something is not required or provided by the statute, it would be wholly untenable to add or read such a requirement into the statute to the disadvantage of the applicant (declarant). All that is provided for and is required, is that an appeal must be filed and that appeal should be pending as on 30.06.2019. It is immaterial whether the appeal has been provided a regular number or given a diary number - Hence the High Court held that the appeal filed by the petitioner before the CESTAT against the order-in-original dated 18.09.2018 was pending as on 30.06.2019 and, therefore, the application (declaration) of the petitioner should be treated as one under the 'pending litigation category' and not one under the 'arrears category' - Hence the matter was remanded back to the Designated Committee to take a fresh decision as to the consequential relief to be granted to the petitioner, including refund of the amount paid by the petitioner, treating the declaration of the petitioner as one under the 'pending litigation category' after affording reasonable opportunity of hearing to the petitioner.
Held - Notice be issued to parties concerned, returnable in three weeks' time: SC
- Notice issued: SUPREME COURT OF INDIA
2021-TIOL-176-SC-CX-LB
CCGST, Excise & Customs Vs Kaipan Pan Masala Pvt Ltd
CX - Issue which arises for consideration in these appeals are as to whether the goods manufactured by the appellant are classifiable as Chewing Tobacco (CT) under chapter heading 2403 9910, or whether as Zarda Scented Tobacco (ZST) under Chapter heading 24039930 - The tariff does not define the product Zarda Scented Tobacco (ZST) and Chewing Tobacco (CT), however, Bureau of Indian Standard (BIS) provides the characteristics of ZST and CT separately vide entry Nos. I523441994 and 1530411994 respectively - Commissioner of Central Excise and Custom Raipur (Chattisgarh) confirmed the demand of Central Excise Duty of Rs. 16,95,33,000/- and imposed equal penalty as well as penalty on Director of company – Later, the CESTAT held that Perusal of test reports indicates that all the chemical characteristics required for determination of products as to whether ZST or CT have not been discussed by the CRCL in its report - The CRCL has although considered the criteria of moisture content and total ash content but there are neither of ZST nor that of the CT as indicated in BIS specification specified in aforesaid paragraph - In such a circumstance, not permitting the re-test of the samples by the adjudicating authority is not correct and legal - The Central Board of Excise and Customs has published supplementary instructions under the Central Excise Act which in Chapter 8.1 to 8.4. mandates that in case of any assessee is not satisfied with the test result the same is required to be re-tested again by the CRCL - similar issue had come up for consideration before this Tribunal in case of Flakes-n-Flavours - 2014-TIOL-3280-CESTAT-DEL wherein it was observed that the product in question has to be treated as per the description of the product for the purpose of classification as CT or flavoured chewing tobacco - adjudicating authority did not follow the said order on the ground that an appeal has been filed by the department against this order – goods would be appropriately classifying as Chewing Tobacco under heading 24039910 of the Central Excise Tariff and filing of the appeal before the Supreme Court will not render the findings of the Tribunal inoperative, hence the impugned order passed by the Commissioner was not sustainable - It was further held that in regard to the order passed by the Commissioner (Appeals) at paragraph '8' in respect of Kay Pan Masala, Bhopal, the Commissioner (Appeal) has not passed any order on merits of the case and, therefore, the same is non speaking - Merely, saying that a separate show cause notice has been issued by the Commissioner regarding classification of goods based on the test reports, as above is not appropriate and he should have passed the order as per various grounds contained in the appeal memorandum - Commissioner (Appeals) has treated part for the order as an administrative order regarding the capacity determination which is also illegal incorrect - It was incumbent upon the Commissioner (Appeals) to decide the entire issue contested before him in appeal as per the provisions contained in Section 35 of the Act, therefore, the order passed by the Commissioner (Appeals) in respect of these cases was held to be unsustainable & liable to be set aside. Held - Notice be issued to the parties in respect of the Civil Appeal as well as the accompanying application for condonation of delay - Matter be tagged with Civil Appeal No. 5146 of 2015: SC LB
- Notice issued: SUPREME COURT OF INDIA
2021-TIOL-175-SC-CUS
UoI Vs Geeta Fibres Pvt Ltd
Cus - SCN on 07.03.2000 came to be issued, wherein the petitioner, a 100% EOU, was called upon to show cause as to why the customs duty amounting to Rs. 40,25,373/- should not be recovered under section 12 of the Customs Act read with proviso to sub-section (1) of section 28 of the Customs Act on non-duty paid raw material used in manufacturing of non permitted goods in Bonded premises and for recovery of payment of penalty under section 11AC of the Central Excise Act and other such matters - Petitioner submits that they had replied to the SCN on 24.02.2001; that the first date given for hearing of the show cause notice was on 15.12.2017 - It is the grievance on the part of the petitioner that for the entire period of 17 years, the show cause notice issued in the year 2000 was not heard and surprisingly the date of hearing was given after 17 years - It is also urged that the petitioner was not informed the reason for not deciding the case for a long time, nor the reason for reviving the case of adjudication, and thus there is no justification or reason brought on record by the respondents for transferring the case to call book and for retrieving the case from call book, and thus there is no justification or reason on record showing why the case remained unattended for about 19 long years - In writ, the Bench found there to be no grounds put forth by the Department which could attribute any of the reasons for the assessee for delay caused in adjudicating the matter - The provisions of law have been made apparently clear and the ratio is emphatically focused on adhering to the time limit while adjudicating the SCN - In absence of following statutory details, this Court relies on the findings and observations in the case of Siddhi Vinayak Syntex Pvt. Ltd . - 2017-TIOL-911-HC-AHM-CX wherein it is held that revival of proceedings after a long gap of ten to fifteen years without disclosing any reason for the delay, would be unlawful and arbitrary and would vitiate the entire proceedings - Following the said ratio, the Court allowed the writ petitions. Held - Notice be issued to the parties - Matter be tagged with SLP (C) No. 18214 of 2017: SC
- Notice issued: SUPREME COURT OF INDIA
2021-TIOL-174-SC-CUS
UoI Vs Amrut Impex
Cus - Petitioners have sought grant of extension of two months to enable them to complete the import of "poppy seeds", for which registration certificates have been issued by the Central Bureau of Narcotics - The Petitioners also pray for quashing and setting aside the impugned order dated 21st October, 2020, passed by the Director, Department of Revenue, Ministry of Finance, Government of India, by which the representation of the Petitioners seeking an extension for completing the imports was also rejected - In writ, the High Court held that finally, the reasoning that has been adopted in the impugned order is that since 1802 metric tons out of 2499 metric tons had already been imported by the end of February, 2020, there is no justification to not have had imported the remaining portion of the said consignment - The outbreak of the pandemic around early 2020 is a matter of fact which cannot be disputed - The period when the outbreak may have taken place in China, as per the Chinese exporter's letter, ought not be doubted in the manner in which the impugned order doubts the same - The COVID-19 pandemic originated in China, and hence the adverse effects and problems due to the outbreak could have been much earlier in China, than in India - The Chinese exporter has repeatedly contacted the Petitioners and has expressed its willingness to complete the contract and to supply the product - However, despite repeated letters and reminders requesting an extension by the Petitioners, the Government has not responded to the same, leading to the filing of these writ petitions - The only reasoning which the impugned order provides is that there is no justification for not having completed the supplies prior to March, 2020. This court is of the opinion that this reasoning is not acceptable, as it seeks to completely ignore the fact that the outbreak had begun earlier in China, as compared to India, and COVID-19 related problems were present in China in February, leading to the non-supply of the said consignments - The Petitioners being Indian importers, who have paid huge sums of money to the Chinese company, which is the only recognized company for the import of poppy seeds from China, would be put to severe financial difficulties if the extension is not granted - They may not be able to recover the advances paid - Considering that the pandemic has had a debilitating effect on Indian businesses, including Indian importers and exporters, there seems to be no rationale whatsoever to refuse extension - Moreover, the threat that the Chinese company may not enter into further transactions with the Petitioners, cannot be said to be devoid of merit - Even a reasonable apprehension that the said Company may either refuse to export in future or impose stringent conditions would be sufficient to consider the case for extension - Hence the High Court found the subject order to be irrational and so permitted the petitioners to import the permitted and licensed quantity of poppy seeds in accordance with the guidelines on or before 31st March, 2021. Held - Notice be issued to the parties, returnable in 2 weeks' time - Meanwhile, the order of the High Court is to remain stayed: SC
- Notice issued: SUPREME COURT OF INDIA
2021-TIOL-173-SC-CUS
UoI Vs Singhal Industries Pvt Ltd
Cus - The challenge in writ application is to Notification dated 13th October 2017, in which, the pre-import condition has been imposed on imports made under the advanced authorization licenses - The parties have brought to notice the judgement rendered by a Division Bench of Court in Messrs Maxim Tubes Company Pvt. Ltd . 2019-TIOL-459-HC-AHM-CUS - The Notification, which is a subject matter of challenge, has been struck down as ultra vires - The High Court held that nothing remained to be adjudicated in this petition, same was disposed of accordingly. Held - Notice be issued to the parties in respect of the SLP and the accompanying application for condonation of delay - The order of the High Court is stayed, in the meanwhile - Matter be tagged with SLP (Civil) No.23556/2019: SC
- Notice issued: SUPREME COURT OF INDIA 2021-TIOL-922-HC-DEL-ST
Hectafine Alusystems India Ltd Vs CCGST
ST - SVLDRS, 2019 - Petitioner has relied upon Clause 4 (a) and 10 (g) of the said Circular dated 27.08.2019 in support of his plea, that once admission of a liability is made, before the cut-off date, i.e., 30.06.2019, the applicant is eligible for availing of the benefits under the aforementioned Scheme. Held: It may be relevant to bear in mind that the word "admission" does not find mention in the Scheme, although, it appears in the Circular - This is an aspect which Bench will examine on the next date of hearing - Bench needs to ascertain the following viz. (i) As to what were the contents of the petitioner's communication dated 26.03.2019? Did the petitioner, as claimed, admit his liability?, (ii) As to what were the contents of the show cause notice which, was allegedly issued to the petitioner in September 2019? - Respondents to place on record the communication dated 26.03.2019 and the show cause notice issued to the petitioner and Matter to be listed thereafter: High Court [para 12, 12.1, 13]
- Interim order passed: DELHI HIGH COURT
2021-TIOL-222-CESTAT-MAD
Sreem Overseas Inc Vs CC
Cus - The appellant filed shipping bill for export of dyed and/or printed fabrics made of polyester filament yarn/textures yarn with or without embroidery - A SCN was issued alleging inter alia undue availment of DEPB - Original authority dropped the proceedings - Thereafter, appellant filed a refund claim of Rs. 25 lakhs - The refund sanctioning authority allowed the refund but however did not grant any interest - On appeal against denial of interest, Commissioner (Appeals) set aside the sanction of refund holding that the said amount is paid as duty and that the refund ought to be considered under Section 27 of Customs Act, 1962 - Interest also was not granted - Department has not filed any appeal against the order passed by original authority sanctioning the refund of Rs. 25 lakhs - In the appeal filed by appellant seeking relief of interest, Commissioner (Appeals) has gone to the extent of disallowing the refund that has been already granted - The department has no case that in the cross appeal filed by them they have challenged the sanction of refund - Even in the grounds of appeal by department extracted by Commissioner (Appeals) in impugned order, it is only seen stated that department is opposing grant of interest - On such score, the act of Commissioner (Appeals) in setting aside the order passed by original authority sanctioning refund is beyond the scope of appeal filed by appellant - The order of Commissioner (Appeals) setting aside the sanctioned refund is unjustified and same is set aside - The appellant is eligible for interest on the amount deposited from date of deposit till the date of payment: CESTAT
- Appeal allowed: CHENNAI CESTAT
2021-TIOL-221-CESTAT-DEL
Sundaram Packaging India Pvt Ltd Vs CC, CGST & CE
CX - The appellant is engaged in manufacture of PP woven fabrics and is also the recipient of few services - The SCN as well as the order of adjudicating authority have stated that provision of Rule 6(3) of CCR, 2004 are attracted and accordingly the appellant has been asked to pay an amount of 6% of value of empty drums and bags cleared from factory - Accordingly, the moot issue to adjudicate is as to whether Rule 6(3) of CCR, 2004 is applicable - The perusal thereof makes it abundantly clear that Rule 6(3) is applicable only to the manufacturers that too those who manufacture two classes of goods i.e. non-exempted and exempted goods - Apparently and admittedly the appellant is manufacturing only one kind of goods which is PP woven fabric - The empty polythene bags of raw-material and the empty drums of power oil as have been cleared by appellant, irrespective for consideration, are not the goods manufactured by appellant - No doubt there has been an amendment in aforesaid Rule w.e.f. 01.03.2015 by virtue of Notification No. 06/2015 - Irrespective of said amendment, scope of Rule 6 is still with respect to the inputs/inputs services used in or in relation to the manufacture of exempted goods along with manufacture of non-exempted goods - Hence, irrespective, exempted goods include non-excisable goods in view of the amendment in terms of Notification No. 6/2015 unless and until such exempted goods are manufactured that too alongwith the non-exempted goods by appellant, applicability of Rule 6 does not at all arise - No question of applicability of explanation thereof as inserted vide Notification No. 06/2015 also at all arises - There has already been the decision of Apex Court in case of DSCL Sugar Ltd. 2015-TIOL-240-SC-CX that the products which do not qualify the definition of manufacture in Section 2(f) of Central Excise Act, 1944, there cannot be any excise duty for such products - In case of Westcost Industrial Gases Ltd 2003-TIOL-03-SC-CX , it was held that no duty could be demanded on the containers used for packing of inputs on which credit has been taken, when cleared from the factory of the manufacturer availing credit as these containers could not be treated as waste arising out of manufacturing process - Relying upon the said decisions, the said Rule has wrongly been invoked in case of the appellant for demanding the reversal of Cenvat Credit availed by him at the rate of 6% of value of empty packets of raw-material and empty drums of the oils used by the appellant in manufacture of PP woven fabric when cleared for consideration - Commissioner (Appeals) is rather observed to has gone contrary to the allegations holding that these bags and drums are admitted by the appellant to be excisable goods - Hence, these findings are not correct - The order as such is not sustainable in the eyes of law, same is accordingly hereby set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2021-TIOL-220-CESTAT-BANG
Fort City Chits Pvt Ltd Vs CCT & CE
ST - The appellant is engaged in the business of chit funds and in return they receive consideration in the name of foreman commission - The appellant has filed three refund applications on the ground that levy of service tax on foreman commission of chit has come into effect only from 01/04/2015 as per the Finance Act, 2015 and there was no liability for payment of service tax till 31/03/2015 - Same was rejected by relying upon the decision of Kerala High Court and in the case of KSFE - The matter has been settled by Apex Court which has been admitted by both the authorities below but the only ground on which refund has been denied is that the appellant has not produced books of accounts to show that the service tax has not been passed on to its customers - Further, the appellant has produced Chartered Accountant certificate even before the authorities below but the Commissioner (Appeals) rejected the same without any legal basis - The certificate issues by Chartered Accountant certifies that the incidence of service tax claimed has not been passed on directly or indirectly to any other person and the said amount of tax claim as refund was actually paid by the service provider - Along with the certificate, the appellant has produced the books of accounts of company viz. Profit & Loss account and the balance sheet - After perusal of Chartered Accountant certificate, the appellant has proved that the incidence of service tax has not been passed on to anyone - Thus, the denial of refund for the period prior to 31/03/2015 is not sustainable in law and therefore the impugned order is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT |
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