2021-TIOL-1311-HC-KAR-CUS

UoI Vs Ruchi Soya Industries Ltd

Cus - Appeal is filed by the Union of India, the Commissioner and Deputy Commissioner of Customs, being aggrieved by the order of the Single Judge dated 06.03.2018 = 2018-TIOL-638-HC-KAR-CUS - In that petition, respondent had sought a declaration that the reassessment of the subject goods imported by the respondent on 17.09.2015 and demanding the higher rate of duty of 12.5% for clearance of the subject goods was illegal - The Single Judge, accepted the contentions of the respondent-importer and quashed Annexures - W, X, Y and Z and held that the respondent was liable to pay duty only at 7.5% based on Notification No. 12/2012-Cus. dated 17.03.2012 - Consequently, the differential duty as per Notification No. 46/2015-Cus. dated 17.09.2015 at the rate of 12.5% was not applicable to the respondent herein - Appeal is listed to consider IA No. 1/2021 seeking dismissal of the Revenue appeal on the basis of Section 31 of the Insolvency and Bankruptcy Code, 2016 and on the basis of the latest judgment of the Supreme Court in the case of Ghanashyam Mishra and Sons Private Limited through the Authorized Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director [ 2021-TIOLCORP-23-SC-IBC-LB ] (Ghanashyam Mishra) to the effect that the claim of the Revenue as well as the liability of the respondent has stood extinguished permanently.

Held:

+ The Latin Maxim 'ignorantia Juris non excusat ' (ignorance of law is no excuse) means that everyone is presumed to know the law. The said presumption could apply only when the law is made known to the person to whom it would apply. This is particularly so in the case of delegated legislation. [para 44]

+ Where publication of a Notification is a mandatory requirement even on the date of its issuance, it must be sent for publication in the Official Gazette. [para 47]

+ Where the date of enforcement of a Notification is having due publication of the same in the Official Gazette, the rules cannot be said to have force, if not published in the Gazette. Also, the rules are not enforceable, if published in any other mode but not in the Gazette. Therefore, while the Notification or rule is made before its publication, the condition that, it would not come into force without publication in the Gazette, has to be read as essential or mandatory condition. [para 50]

+ Publication of the rules or Notification in the Official Gazette gives authenticity to the same and it creates certainty in the mind of the individual that the rules have been duly made, also the individual can have easy access to the rules or Notification, where to look for the rules or Notification made under any statute. [para 51]

+ A notification issued under that Section (25) would not become enforceable only if it is issued and sent for publication and not published at all. It would become enforceable only when such a notification is published and also offered for sale on the date of its issue. In other words, if a notification is published in the Official Gazette and not offered for sale on the date of its issue, such a Notification cannot be enforced on the date of its issue itself. This is because, the provision provides for enforcement of a notification on the date of its issue itself provided the two conditions namely; (i) its publication in the Official Gazette and (ii) the same being offered for sale on the date of its issue, are also complied with. The same is evident from the use of the word "also" in Section 25(4)(b) of the Act. [para 52]

+ If the instant case is viewed in light of the aforesaid decision [ Govindlal Chhaganlal Patel vs. The Agricultural Produce Market Committee, Godhra and Others [AIR 1976 SC 263] .], it must be held that, the Gazette publication being offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi, is also a mandatory requirement and until the same was available for sale, the notification though issued and published in the Official Gazette could not have been enforced. Therefore, the enforcement of the notification has to coincide with the date of its issuance and publication and offered for sale on the date of its issuance, in the instant case. [para 57]

+ In view of the judgment of the Supreme Court in Param Industries Ltd. [ 2015-TIOL-140-SC-CUS ], also, having regard to the reply given by the Department to the query made by the respondent under the provisions of the RTI Act, 2005, it is held that, the notification dated 17.09.2015, not being available for sale on the said day and the same being available for sale only on 21.09.2015, the said Notification could not have been made applicable to the subject goods imported on 17.09.2015. That too, by reassessing the bills of entry which had already been assessed on 16.9.2015 itself, prior to the issuance of the Notification de hors the legal position as per Section 15 of the Act. [para 58]

+ The proposition that any information being made available on the website of the Department would comply with Section 25(4)(b) of the Act, cannot be accepted in view of the provision being otherwise on the statute book at the relevant point of time. We also observe that the dictum of the Madras High Court [= 2021-TIOL-1010-HC-MAD-CUS ] is contrary to the dictum of the Supreme Court in Param Industries Ltd. [para 59]

+ Section 25(4)(b) of the Act states that apart from a Notification coming into force on the date of its issue, when the same is sought for publication in the Official Gazette, the same must also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. In other words, mere issuance of a Notification per se would not make it enforceable. [para 61]

+ Mere issuance of a Notification without its publication is of no consequence, inasmuch as unless a Notification is published, the persons to whom it applies would not be aware of the same, unless there is knowledge or awareness of issuance of such a Notification. The person to whom it is to apply cannot be affected by the consequence of such a Notification or have the benefit of such a Notification in the absence of having knowledge about the same. [para 62]

+ Single Judge was justified in holding that notification dated 17.09.2015 could not have been made applicable to the imported goods in question and the demand for payment of differential amount of duty was rightly quashed. [para 63]

+ Revenue appeal is dismissed.

+ The resolution plan in the instant case was approved on 24.07.2019 and 04.09.2019. The dues, in the instant case, arose in the year 2015, which is prior to the approval of the resolution plan; that unless and until the said dues are made part of the resolution plan, the same cannot be recovered. This is having regard to the latest dictum of the Supreme Court in the case of Ghanashyam Mishra (supra). [para 69]

+ If the resolution plan approved by the National Company Law Tribunal (NCLT) does not comprise all the claims of the Central / State Governments or the local authority, the said claim shall stand extinguished and the proceedings relating thereto shall stand terminated. Hence, the Hon'ble Supreme Court held that with regard to any claim prior to the approval of the resolution plan cannot be continued and would stand extinguished, if not made a part of the plan. Thus, claims which are not part of the resolution plan, shall stand extinguished. [ Ultra Tech Nathdwara Cement Limited vs. Union of India in D.B. Civil Writ Petition No. 9480/2019 = 2020-TIOL-760-HC-RAJ-GST relied upon] [para 75]

+ The provisions of Section 238 of "IBC" states that the provisions of "IBC" shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Further, it is noted that crown debts do not take precedence even over secured creditors, who are private persons. This is clear on a reading of Section 238 of "IBC" which provides for the overriding effect of "IBC" notwithstanding anything inconsistent contained in other law for the time being in force or effect by any such law. Therefore, if the departments of Central or State Governments do not file an application or participate in the resolution process, their claims automatically get extinguished having regard to the judgment of the Hon'ble Supreme Court in the case of Ghanashyam Mishra (supra) . [para 77]

Conclusion:

++ The appeal is dismissed on merit.

++ The application in I.A. No. 1/2021 is allowed.

-Appeal dismissed : KARNATAKA HIGH COURT

2021-TIOL-1310-HC-DEL-CUS

Solar Power Developers Association Vs UoI

Cus - Anti-dumping duty - Challenge is laid to the notification dated 15.05.2021, issued by respondent no. 2, for initiating anti-dumping investigation in respect of imports of solar cells, whether or not assembled into modules/panels, originating in or exported from China PR, Thailand and Vietnam - Petitioner raises various grounds in support of the prayers made in the writ petition.

Held: Bench is of the view that the matter requires further examination; but before that, Bench is inclined to array Indian Solar Manufacturers Association (ISMA) as a party to the proceedings - Counter affidavit(s) will be filed within four weeks - In the meanwhile, the time limit provided in paragraph 25 of the impugned notification for furnishing information shall stand extended to a date beyond the next date of hearing fixed in this Court - Matter listed on 19.07.2021: High Court [para 7.2, 8, 9]

- Matter listed: DELHI HIGH COURT

2021-TIOL-319-CESTAT-DEL

Surya Alumex Vs CCGST

CX - The assessee is engaged in the manufacture of aluminium alloy ingot and aluminium dross - In course of internal audit, and on scrutiny of the financial records for the year 2014-15 and 2015-16, it was observed that the assessee had purchased various capital goods during the year 2013-14 and 2014- 15 - Full invoice value including the Central Excise duty amount has been shown in the balance sheet for the year 2014-15 and the assessee had claimed depreciation of entire invoice value of capital goods as were purchased during the year 2013 -14 - The assessee has also claimed 100% Cenvat Credit of capital goods on 31.07.2014 - Vide show cause notice No. 2843 dated 22.06.2017, the Department alleged that the assessee has taken the Cenvat credit of Rs. 7,45,626/- on the capital goods which were capitalised in the balance sheet at full invoice value inclusive of Excise duty and have also claimed depreciation thereupon - Accordingly, the Cenvat credit was proposed to be disallowed and to be recovered along with interest and proportionate penalty - The said proposal was rejected vide Order-in-Original No. 20/2018-19 dated 20.06.2018 and appeal was preferred before the Commissioner (Appeals) by the Department which has been allowed vide the impugned order under challenge.

Held - It is observed that when the assessee was subsequently asked about the said adjustment to have been made in the balance sheet for the year 2015-16 and 14-15, the appellant did not respond nor submitted any revised balance sheet for the aforesaid period - In absence thereof, it actually remained unclear as to whether the double benefit claimed by the appellant i.e. 100% availment of Cenvat Credit on the capital goods purchased in the year 2013-14 and 2014-15 and also claiming depreciation thereupon has actually been surrendered by the assessee or not - In fact Rule 4(4) of CENVAT Credit Rules, 2004 do not permit CENVAT Credit in respect of part of value of capital which represents duty of amount on such capital goods or which the manufacturer or producer of output service claims as depreciation under section 32 of the Income Tax Act - Hence there is definite violation of said Rule by the assessee - The adjustment in the balance sheet of 2015-16 cannot be considered as reversion of the depreciation claimed in the balance sheet of the year 2013-14 and 2014-15 - Accordingly, there is no infirmity in the findings of the Commissioner (Appeals) where it has been held that the adjudicating authority has grossly erred in interpreting the provisions of Rule 4(4) of CENVAT Credit Rules, 2004 - Once the full depreciation was claimed, the assessee could not claim availment of cenvat credit on capital goods - Corrective measures taken by the assessee but in subsequent financial year definitely does not make good irregular availment of CENVAT Credit during the previous year - No doubt the idea of the Rule 4(4) of CENVAT Credit Rules, 2004 is to prevent the double benefit but as already discussed above, the appellant has failed to produce any evidence that double benefit which admittedly was claimed by him, as to actually been reversed for the relevant financial year: CESTAT

-Assessee's appeal dismissed : DELHI CESTAT

2021-TIOL-318-CESTAT-KOL

SK Timber And Company Vs CC

Cus - The assessee-company applied for refund of 4% SAD paid against goods imported during the relevant year - The applicable Sales Tax/VAT liability was discharged while making sales domestically - The assessee's claim was allowed by the Proper Officer and the refund amount was sanctioned - Later, an SCN was issued proposing to recover the refund amount from the assessee, on grounds that the CA certificate submitted by assessee was improper - On adjudication, ex parte order was passed confirming such demand with interest & penalty, on grounds that the CA certificate was issued by a firm whose existence was questionable, in which case, the certificate was improper - Hence it was held that refund was wrongly sanctioned on basis of forged documents - The assessee's appeal was rejected by the Commr.(A) on grounds of fraud, despite the assessee having submitted fresh CA certificate - Hence the present appeal.

Held - The refund of 4% SAD that was sanctioned to the assessee was neither reviewed not challenged - Such fact is not disputed by the Revenue - SCN was issued u/s 28 of the Customs Act to recover the amount refunded with the presumption that refund was erroneously granted to assessee - Whether or not refund has been erroneously granted would have to be decided in the manner provided in law. Section 128 of the said Act provides liberty to 'Any Person' aggrieved by the decision or order to prefer an appeal before the Commissioner (Appeals), which has not been done in the facts of the present case - It is settled by the Apex Court in ITC Ltd vs. CCE, Kolkata that the phrase any person has wide amplitude - The Revenue, as well as assessee, can also prefer an appeal aggrieved by an order of assessment - It is not only the order of reassessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self--assessment - Therefore in light of this legal position, neither the assessee can seek refund nor Revenue can proceed to recover the refund already sanctioned without challenging the earlier order by way of remedy provided in Section 128 of the Act - Having not challenged the previous order, the Revenue cannot be allowed to re-open the issue - The duty demand with interest and penalty stands quashed: CESTAT

- Assessee's appeal allowed: KOLKATA CESTAT