2021-TIOL-217-SC-CX

CE & C Vs Kotak Mahindra Bank Ltd

CA 6900-6901/2011

CX - Attachment of immovable property - State Bank of India was a secured creditor and the debts were transferred to the respondent Bank - Secured debt was created on 24.06.1985 - M/s Amod Petrochem Private Limited which gave the security both of movable and immovable property fell into difficult financial position - Single Judge by an order dated 03.02.2010 raised certain issues, including, whether the Bank could steal a march over the rights of the central government to recover its dues - The matter was kept pending and the Bank, aggrieved by the same, filed a Letters Patent Appeal and by an elaborate judgment, the Letters Patent Appeal and the Writ Petition both were allowed in terms of the impugned judgment dated 17.09.2010 - When the matter came up before the Supreme Court, notice was issued and status quo was directed with regard to the nature, title and possession in respect of the immovable property by an order dated 03.01.2011.

Held: Bench is of the view that there is little doubt that the situation that emerges is a creation of a secured debt in favour of the State Bank of India on 24.06.1985 and thereafter the transfer of the debt to the respondent Bank - It is the original date of creation of the security which is of relevance - It is not possible for the appellant Revenue to plead that they have crown debt which would take precedence over a secured liability - Respondent Bank cannot be prevented from exercising its rights as a secured creditor on the pretext that there is a debt to the Excise Department arising from the confiscation order dated 25.02.2006 - On realization of the dues of the Bank, if amounts are still left, those amounts can be utilized to satisfy the dues of the Excise Department and naturally, if there are still amounts left, the debtor would be the beneficiary of the same - Possibly, the passage of time may have resulted in real estate escalation which may, in turn, result in satisfaction of everybody's claim! - The appeals stand dismissed: Supreme Court

SLP(C) No. 20699/2011

CX - Recovery - Facts being even more gross because the alleged crown debt of the Excise Department came into being after the respondent had purchased this property in pursuance to an auction to realize debts of a respondent corporation, the Special Leave Petition is dismissed in view of the orders passed in Civil Appeal Nos. 6900-6901/2011: Supreme Court

- Appeals dismissed: SUPREME COURT OF INDIA

2021-TIOL-216-SC-CX

CCE Vs JSW Steel Ltd

CX - By a majority decision, the CESTAT had held that the CENVAT Credit on Capital goods/input/input services used on power plant (CPP - captive power plant) situated at a different premises is admissible subject to exclusive supply of power by the impugned plant to the assessee manufacturing unit; that the title of the property is not relevant for availing CENVAT credit on capital goods - Revenue appeal against this decision was dismissed by the High Court, hence Revenue has filed SLP.

Held: Bench is not inclined to entertain the SLPs under Article 136 of the Constitution - Special Leave Petitions are dismissed: Supreme Court

- Petitions dismissed: SUPREME COURT OF INDIA

2021-TIOL-1711-HC-MAD-ST

Chennai Citi Centre Holdings Pvt Ltd Vs Designated Committee

ST - SVLDRS, 2019 - Renting of Immovable property service - Petitioner has challenged the order passed by the Designated Committee calling upon the petitioner to remit an amount of Rs. 1.45 crores as a pre-condition for issuance of the Discharge Certificate - Petitioner inter alia submits that the lessees of the petitioner have effected remittances towards the service tax dues and the petitioner is entitled to take credit of the amount that has been deposited by lessees; that the amount payable by it under the Scheme, i.e. 50% of the disputed demand should be taken to be remitted by way of adjustment of earlier remittances.  Held:  In respect of the application filed by the petitioner, the respondent issued form SVLDRS-II on 19.02.2020 computing the amount payable figure as Rs.1,55,92,131/- - Pursuant to the hearing and written submission made, the impugned order in Form SVLDRS-III was issued on 04.03.2020 wherein credit has been given only to an amount of Rs.10,73,726/- and the petitioner has been called upon to pay a sum of Rs.1,45,18,405/- - The order does not contain any reasoning for the restriction of the credit only to a sum of Rs.10.73 lakhs and the rejection of the petitioner's request for credit of a sum of Rs.1.55 crores - Order of rejection suffers from a lack of reasoning as it ought to have set out the reasons cogently for the variation in the estimate arrived at between the Declarant petitioner and the Designated authority - Orders are not like old wine becoming better over time [SC in Mohinder Singh Gill 1978 AIR 851 relied upon] - Thus, an order, to be valid must speak for itself and contain reasoning for the conclusions arrived at - Impugned order is clearly deficient in this regard - To set right this flaw, the petitioner will appear before the respondent on 19th August 2021 to put forth its case and also to provide proof of payment of tax by the lessees - Respondent is at full liberty to take a view in accordance with law as to the veracity or otherwise of the petitioner's declaration and whether credit may be taken of payment effected by lessees (third parties) in regard to the declaration filed by the landlord - Orders to be passed within four weeks i.e. on or before 20.09.2021 - Writ petition is disposed of: High Court [para 7, 9, 14, 18]

- Petition disposed of: MADRAS HIGH COURT

2021-TIOL-1710-HC-DEL-NDPS

Madan Lama Vs NCB

NDPS - 47 packets containing 475 grams charas was recovered from the petitioner - Petition filed u/s 439 of CrPC for grant of regular bail in case registered at NCB for offences u/s 8, 20(b) and 29 of NDPS Act, 1985. Held: The petitioner being a citizen of Nepal has no roots in society and can be considered a potential flight-risk - There exists the danger of him absconding or fleeing from justice, if released on bail - It cannot also be ruled out that he will not indulge in such activities again - Petitioner has indulged in offences under the NDPS Act and the same cannot be equated with the offences under the IPC or other offences - The menace of drug abuse is also on the rise in the country and the consequences of the same can be experienced across the board from causing economic issues to societal disintegration - The purpose of enacting the NDPS Act was to curb this menace and this purpose must be kept in mind while considering the grant of bail in matter pertaining to the NDPS Act - Court does not feel that this is a fit case for grant of bail - The application is dismissed: High Court [para 12, 13]

- Application dismissed: DELHI HIGH COURT

2021-TIOL-1709-HC-MUM-CUS

Safe And Sure Marine Services Pvt Ltd Vs CC

Cus - Petitioner prays that the 1st respondent's communication dated June 25, 2021 informing them that the competent authority has directed provisional release of the Vessel under Section 110A of the Customs Act, 1962 on the condition of the petitioner furnishing bank guarantee or cash deposit of Rs. 1.5 Crores as security, and execution of bond equal to three times the value of goods [vessel and High Speed Diesel] and binding itself to pay duty, redemption fine, interest and penalty on completion of adjudication proceedings, be quashed and set aside - The seizure memo recorded that the petitioner had used forged stamps and signatures of the Customs Officers to manipulate entries in the logbooks, as also customs duty on the vessel and goods was sought to be evaded by the petitioner - It is also recorded that the Vessel has discharged 12 barrels of sludge oil and about 3 MTs of High Speed Diesel (HSD), which were restricted items for imports into India - The seizure memo recorded that there were reasons to believe that the petitioner had attempted to evade customs duty and had improperly discharged HSD and for such reasons the Vessel valued at Indian Rs. 7 Crores be seized. Held: Bench observes that the evasion of duty on the materials, namely, the HSD and the sludge oil does not appear to be of substantial amounts for which the bank guarantee of Rs. 35 lakhs, as furnished by the petitioner, can be said to be insufficient - As to whether the Vessel (valued at Rs. 7 crores) would be liable for confiscation and further consequential orders, is an issue which would be required to be decided in the adjudication of the show cause notice, which has now been issued to the petitioner calling upon the petitioner to reply the same within 30 days of its receipt - It would be appropriate that the respondents proceed to adjudicate the show cause notice, after the reply is filed by the petitioner - It may not be appropriate to consider the merits of the rival contentions which are certainly issues falling under the show cause notice - It would be in the interest of justice that provisional release of the Vessel by the respondents be ordered pending the adjudication of the show cause notice on the terms and conditions as detailed - writ petition is accordingly disposed of: High Court [para 9 to 11]

- Petition disposed of: BOMBAY HIGH COURT

2021-TIOL-1708-HC-AHM-CUS

Mohammed Karim Gouse Vs UoI

Cus - Petition filed against the order of adjudicating authority imposing penalty under various provisions of Customs Act, 1962 - The only issue is with regard to compulsory deposit of 7.5% for the appeal to become competent and to be heard - The declaration made in bill of entry of goods was very different from the goods which actually arrived in the country - In fact, the goods declared were furniture, whereas the goods arrived under the consignment included counterfeit/duplicate products of branded items like cosmetics, watches, shoes, underwears and other similar products - The submission of petitioner is that a very high valuation has been done by adjudicating authority without following the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - All these arguments can be raised before appellate authority and the appellate authority would be well within its powers either to itself examine these aspects of matter or to remand the matter for fresh valuation if it is convinced that the Valuation Rules of 2007 have not been followed: HC

- Petition dismissed: GUJARAT HIGH COURT

2021-TIOL-1707-HC-TELANGANA-CUS

Sony India Pvt Ltd Vs UoI

Cus - At the time of import of mobile phones in the BoE, petitioner had not claimed any exemption under Sl. No. 263A(ii) of the Exemption Notification which allowed a payment of C.V.D. at 1% - By virtue of the decision in SRF Limited - 2015-TIOL-74-SC-CUS , the petitioner contends that importers were also eligible to avail of the benefit of the reduced rate of 1% under the Exemption Notification; and after the above decision by the Supreme Court, it sought to claim benefit of the Exemption Notification (SL. No. 263A) for import of Mobile handsets including cellular phones - However, the EDI System used for filing the Bills of Entry was not updated (as confirmed by the information received under RTI Act, 2005) to make available the benefit of the said Notification; the benefit of the Notification was not extended to petitioner, despite it seeking the same; and due to deficiency in the system, the benefit of exemption otherwise eligible was deprived to it and it was forced to pay CVD at merit rate - Petitioner submitted letter dt. 22.11.2019 before the 2nd respondent requesting to amend 136 BoEs under Section 149 of the Customs Act to reassess the BoEs and grant subsequent refund, however, the 2nd respondent issued the impugned order dt. 07.02.2020 rejecting petitioner's request - This order is challenged under the present petition. Held: + Section 128 provides a remedy of appeal against any order passed by the Dy. Commissioner of Customs, who is lower in rank than a Commissioner of Customs, to the Commissioner (Appeals), therefore, the petitioner has a remedy of an appeal against the assessment of the BoEs in question. [para 30, 31] + Sec.149 is an additional remedy available to the petitioner to seek amendment of the BoEs subject to the condition that such amendment is sought on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported as the case may be. [para 33] + Therefore, the stand of the respondents in the counter affidavit that only reassessment under Section 128 is the remedy available to the petitioner, and Section 149 cannot be invoked, is not tenable. [para 136] + Law declared by the Supreme Court [in SRF Ltd. (supra)], unless made prospective in operation in its judgment, is always deemed to be the law of the land. It cannot be construed as applicable only after the date of pronouncement of the judgment of the Supreme Court. [para 40] + It is the duty and responsibility of the Assessing Officer/Assistant Commissioner to correctly determine the duty leviable in accordance with law before clearing the goods for Home consumption. The assessing officer instead, having failed in correctly determining the duty payable, has caused serious prejudice to the importer / petitioner at the first instance. Thereafter, in refusing to amend the Bill of Entry under Section 149 of the Act, to enable the importer / petitioner to claim refund of the excess duty paid, the Assessing Authority / Assistant Commissioner caused further great injustice to petitioner. [para 48] + Impugned order dt.07.02.2020 passed by the 2nd respondent cannot be sustained and is violative of Articles 14, 19(1)(g), 265 and 300A of the Constitution of India and also the Customs Act, 1962, and it is accordingly set aside. [para 50] + A Writ of Mandamus is issued to 2nd respondent to amend the subject Bills of Entry under Section 149 of the Customs Act to reflect the rate of tax as 1% as per Sl. No. 263A(i) of Notification No. 12/2012-C.E., dated 17.03.2012 within four weeks to enable the importer / petitioner to seek refund of excess duty paid under Section 27 of Customs Act, 1962. [para 51]

- Writ petition is allowed: TELANGANA HIGH COURT

2021-TIOL-482-CESTAT-DEL

Evershine Customs (C And F) Pvt Ltd Vs CC

Cus - Import of shoes - Under valuation - Counterfeit shoes - SCN issued and Order-in-Original passed on 31.03.2016 - Absolute confiscation of counterfeit shoes, confirmation of demand of duty, imposition of penalty, etc. - appeal unsuccessful, hence Importer as well as CB filed the instant appeals. Held: + Importer cannot escape his responsibility of making a true and accurate and complete declaration of the imported goods in the Bill of Entry. + Merely saying that I have a purchase order which says X but my supplier sent me Y cannot be an excuse as the only person in India who has knowledge about the imported consignment is the importer. If he has doubts, there are sufficient safeguards in the Act itself. [para 21] + CBLR, 2013 is a self-contained set of regulations which provides for penalties for not fulfilling the obligations - There is nothing on record to show that any act or omission on his (customs brokers') part has rendered the goods liable for confiscation under section 111. In fact, the only allegation in the SCN is that he failed to discharge his obligations under the CBLR 2013 and such a failure, even if correct, does not attract penalty under section 112. Penalty set aside. [para 22, 42] + Without the assessment u/s 17 being completed, there cannot be review under section 28 and the relevant date under section 28 for reckoning the time limit has not yet arisen. For this reason, the demand under section 28 in respect of the goods which have not yet been cleared for home consumption cannot be sustained and the answer to the question (c) which we raised is 'No demand under section 28 can be issued unless the goods have been cleared for home consumption and hence the demand does not sustain'. [para 32] + As regards demand raised in respect of goods seized from the shop of the importer, these goods have evidently been cleared for home consumption and hence a demand can be raised under section 28. [para 33] + Even if it is considered that the officers of DRI are 'proper officers' under Section 17, an SCN under Section 28 can be issued only by "the" proper officer and not "a" proper officer, i.e., the officer who has done the assessment under section 17 or his successor in office. + SCN demanding duty under section 28 issued by the officer of DRI is invalid as per the decision of Apex Court in the case of M/s. Canon India Pvt Ltd. - 2021-TIOL-123-SC-CUS-LB because there is nothing on record to show that the officer of DRI or his predecessor in office had done the assessment of the Bill of Entry in respect of the goods which were seized from the shop of the importer. [para 39 ] + Section 124 does not require the proper officer under section 17 to issue a notice. This is in the nature of anti-smuggling function of the department and notices can be issued by officers of DRI and so far, we are not aware of any judicial decisions holding otherwise. [para 41] + As far as the confiscation of goods and imposition of penalties on others is concerned, Bench finds it necessary to remand to the original authority to complete the procedure under section 138B with respect to each of the statements which has been relied upon in the SCN and decide afresh on the confiscations and penalties. [para 42]

- Appeals disposed of: DELHI CESTAT

2021-TIOL-481-CESTAT-MAD

CCE & ST Vs C-Dot Alcatel Lucent Research Centre Pvt Ltd

ST - The assessee had filed refund claim under Rule 5 of Cenvat Credit Rules, 2004 - The department filed appeal raising two grounds that the premises of assessee was not registered during that period under Service Tax Department and also that assessee have not been able to establish the nexus between input and output services exported by them - The first issue has been settled by decision in the case of M/s. mPortal India Wireless Solutions Pvt. Ltd. 2011-TIOL-928-HC-KAR-ST wherein it is held that i n the absence of a statutory provision which prescribes that registration is mandatory, a refund claim cannot be rejected on the ground which is not existence in law - As regards to the second ground, the definition of "input services" during the relevant period included "activities relating to business" - The department does not have a case that these input services were not used for export - The Commissioner (Appeals) has correctly granted the refund which does not require any interference: CESTAT

- Appeals dismissed: CHENNAI CESTAT

2021-TIOL-480-CESTAT-ALL

Jangipur Sahkari Kraya Vikraya Samiti Ltd Vs CCGST

2021-TIOL-479-CESTAT-AHM

P And B Pharmaceuticals Ltd Vs CCE & ST  

CX - The issue involved is that, whether the appellant is required to pay 10% of value of exempted goods in terms of Rule 6(3) of Cenvat Credit Rules, 2004 - There is no dispute about reversal of credit on input services attributed to exempted goods - It is also observed that appellant have paid Cenvat credit and wherever there is delay in such payment, the appellant paid interest - Thus, it should be considered as if appellant have not availed Cenvat credit - Accordingly, Rule 6(3) of Cenvat Credit Rules, 2004 shall not be invoked - In view of the decision in appellant's own case, the issue is no more res-integra - The impugned order is set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT