2021-TIOL-420-CESTAT-DEL

Krishna Food Products Vs Addl.CCGST & CCE

CX - The appellant was authorised by Parle Biscuits to manufacture on its behalf, "biscuits" and to comply on its behalf all the procedural formalities contemplated under CEA, 1944 and the Rules framed thereunder in respect of goods manufactured on behalf of Parle Biscuits and also to furnish information relating to price at which Parle Biscuits would sell the said biscuits in order to enable the determination of value of said goods under section 4A of Excise Act - The inputs used for manufacture of biscuits are supplied by Parle Biscuits which pays for the inputs but appellant takes credit of the same and utilises the credit for payment of duty on the biscuits cleared on account of Parle Biscuits - The appellant also claims that it availed and utilised input services used in relation to the manufacture of biscuits for Parle Biscuits in accordance with the provision of CENVAT Credit Rules 2004 - Various inputs services were procured by Parle Biscuits on payment of service tax - However, as biscuits were manufactured not only in the factories of Parle Biscuits, but also in the factories of other contract manufacturers, it was thought, as a business strategy, that advertisement, market research, sales promotion and marketing should be centralised and handled by the office of Parle Biscuits - The issue involved is, whether Parle Biscuits was justified in distributing credits on input services attributable to the final product on a pro-rata basis proportionate to the turnover of each unit between the manufacturing plants of Parle Biscuits and its contract manufacturing units, including Krishna Foods, under rule 7(d) of the CENVAT Rules - In view of the Larger Bench of Tribunal in 2021-TIOL-294-CESTAT-DEL-LB , Parle Biscuits was justified in distributing credits on input services attributable to the final product on a pro-rata basis - Thus, the order passed by Commissioner (A) cannot be sustained and is set aside: CESTAT

- Matter remanded : DELHI CESTAT

2021-TIOL-419-CESTAT-MAD

Barry-Weihmiller International Pvt Ltd Vs CGST & CT

ST - The appellant filed refund claims under Rule 5 of CCR, 2004 in terms of Notfn 27/2012-CE (NT) - They have not been able to explain the required documents before refund sanctioning authority - The appellant has submitted that they would be able to produce and also explain in regard to necessary documents if they are given further chance - The matter requires to be remanded to the refund sanctioning authority: CESTAT

- Matter remanded : CHENNAI CESTAT

2021-TIOL-418-CESTAT-MAD

Hyundai Merchant Marine India Pvt Ltd Vs CC

Cus - The appellant failed to file Export General Manifest (EGM) - SCNs were issued alleging violation of Section 41 of Customs Act, 1962 and proposing to impose penalty under Section 117 of the Act ibid - In view of Section 41 as it stood prior to amendment, it can be seen that it mandates person-in-charge to file EGM and it does not speak any other person - After amendment "any other person as may be specified, by notification" is also included with the duty to file export manifest - A registered Shipping Liner shall also file EGM - The occurrences of non-filing of EGM in regard to these shipping bills are all prior to 1.8.2019 i.e., prior to amendment of Section 41 - Apart from this, though it is stated in Section 41 that the EGM has to be filed before departure of conveyance from Customs station, it was not so earlier - It was usually also filed within 7 days from the date of sailing of vessel - By Public Notice No. 17/2018, the said facility of allowing 7 days time to file EGM has been withdrawn by department - By this Public Notice, department started insisting on filing EGM before departure of conveyance itself in consonance with the SCMT Regulations - From the two public notices, it is seen that there was a sudden shift from the practice of filing EGM within 7 days from date of sailing of vessel to the requirement of filing EGM before departure of vessel - The period involved in these shipping bills are during this transition period - It can be seen that only for continued non-compliance beyond 1.4.2019, the penalty is required to be imposed - On receiving the notice from department, appellant has immediately rectified the defect - There is no allegation of continued non-compliance - The error was only due to inadvertent omission/system error - If there was no willful intention/wrongful mind for violating the law and such violation occurred was only due to inadvertent omission/system error, imposition of penalty is unwarranted - After the amendment to Section 41, the section itself provides for penalty not exceeding Rs. 50,000/- - That too only if proper officer is satisfied that there is no sufficient cause for delay in filing EGM - This being so, the invocation of Section 117 is not legal or proper - Impugned orders are set aside: CESTAT

- Appeals allowed: CHENNAI CESTAT