2021-TIOL-1855-HC-MAD-CX

Ran India Steels Pvt Ltd Vs C & CE Settlement Commission

CX - The petitioner-company is engaged in manufacture of MS Ingots & CTD Bars - The present petition was filed seeking to quash an order passed by the Customs and Central Excise Settlement Commission - The petitioner also sought that directions be issued to re-dispose the application for settlement filed by the petitioner u/s 32E of the CEA 1944 - In the relevant period, the premises of the petitioner-company were subject to search operations whereupon the Revenue seized two hard disks, in presence of officials from the petitioner-company - The petitioner claimed that when the matter was subsequently being heard by the Settlement Commission, the seized drives were not presented before it as evidence - Hence the petitioner claimed there to be no transparency in the matter of conducting an investigation by the Department officials - Pursuant to the search, SCN was issued, whereupon the petitioner had approached the Settlement Commission.

Held - Settlement of issues between the parties is an enabling provision under the Act - Settlement of issues can never be claimed as a matter of right by the Assessee - Person who is approaching the Settlement Commission with clean hands alone is entitled to get the relief under the provisions of the Act - Adjudication before the Settlement Commission can never be compared with the regular investigation or enquiries to be conducted by the Competent Authorities under the provisions of the Act: HC

+ Perusal of the above findings made by the Settlement Commission would reveal that the Commissioner's Investigation Report dated 21.06.2013 and its authenticity of the GEQD Report, cannot be disputed. Primary evidences were also recovered from the premises of the petitioner. Thus, the position of the Revenue was well established. In such circumstances, the petitioner has neither agreed to the Revenue's stand nor produced any fresh evidences to reconsider the matter (Para 22);

+ Importantly, if the Report of the Commissioner (Investigation) is not agreeable to the petitioner-Assessee, then the petitioner-Company is expected to submit contra evidences to disprove the report filed by the Commissioner (Para 23);

+ Mere objection in this regard is insufficient and based on such objections not supported with any evidences cannot be relied upon by the Settlement Commission for the purpose of settling the issues between the parties. Thus, it is an established principle, where the Competent Investigating Authority submitted a report in a particular manner and such a report is disputed by the Assessee, then the Assessee is obligated to submit evidences to disprove the findings in the Investigation Report, then alone the Settlement Commission would be in a position to adjudicate the contentions raised on behalf of the petitioner-Assessee and form an opinion for the purpose of settling the issues (Para 24);

+ In the present case, the Revenue could establish their position based on Investigation Report along with the primary evidences recovered from the premises of the petitioner. However, the petitioner had neither agreed to the Revenue's stand nor produced any fresh evidences for the purpose of reconsidering the issues, as the said exercise was done by the Settlement Commission pursuant to the directions issued by this Court in WP No. 13754 of 2011 (Para 25);

+ Settlement of issues between the parties is an enabling provision under the Act. Settlement of issues can never be claimed as a matter of right by the Assessee. The provision for settlement is provided under the Act with a legislative intention to produce evidence by the Assessee, by submitting true and full disclosure of material facts. Thus, a person, who is approaching the Settlement Commission with clean hands alone is entitled to get the relief under the provisions of the Act and the adjudication before the Settlement Commission can never be compared with the regular investigation or enquiries to be conducted by the Competent Authorities under the provisions of the Act. Thus, the scope of settlement of issues are confined with reference to the scope available under the provisions of the Act. The Settlement Commission is not empowered to go beyond the procedures contemplated as well as the scope enumerated. (Para 26);

+ This being the principles, settlement of issues are possible only when a person making an application has approached the Settlement Commission with full and true disclosure of all material facts and further cooperate with the proceedings throughout, enabling the Settlement Commission to form an opinion that the person approached the Commission is entitled for settlement of issues. Accordingly, the writ petition stands dismissed. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are also dismissed (Para 29).

- Writ petition dismissed: MADRAS HIGH COURT

2021-TIOL-1854-HC-MAD-CUS

GE India Industrial Pvt Ltd Vs UoI

Cus - The petitioner-company is engaged in manufacturing, trading, services of many products, including equipment for Wind Operated Electricity Generators - The petitioner regularly imports goods, which are used by it for its manufacturing purposes - The petitioner imports the goods through JMFTWZ unit of DHL Logistics Private Limited, located in the Free Trade Warehousing Zone (FTWZ) - The petitioner clears the goods to its units located in the Domestic Tariff Area (DTA) as stock transfers for the purpose of trading as well as carrying out certain manufacturing activities - The petitioner states that a FTWZ is a Special Economic Zone (SEZ), wherein mainly trading, warehousing and other activities related thereto are carried out - The present petition was filed to question the validity of the Circular No. 44/203-Customs dated 30.12.2013 and the consequential letter issued to the petitioner based on such Circular - The petitioner further claimed that an Advance Ruling order passed in its own case, has been ignored by the Revenue while passing the subject order.

- Disposed of: MADRAS HIGH COURT

2021-TIOL-590-CESTAT-DEL

Ghadshyam Enterprises Vs CCGST

ST - From the O-I-O, it is apparent that the assessee could not appear before Original Adjudicating Authority despite three opportunities for hearing was afforded to them - But from the arguments of assessee, it is coming apparent that they in-fact, were not served with even with the copy of SCN which became the reason for him to not to appear before the Original Adjudicating Authority and the same was the reason for acquiring no knowledge of O-I-O till the recovery proceedings got initiated against them - Mere dispatch of order cannot be considered as service - The period of 2 months for filing the appeal has to reckon not from the date of order announced but from the date of receipt of said order by assessee in terms of Section 35 of Central Excise Act, 1944 - Section 37C ibid further provided the mode of service - In view of those statutory provisions, it is not appropriate to consider the proof of dispatch as sufficient proof of service - In view of the decision of High Court of Madras in case of Shree Steels 2020-TIOL-452-HC-MAD-CUS and M/s. Kumar's Electronics 2020-TIOL-766-CESTAT-MAD , it is held that it is mandatory for the appellate authority to verify as to whether the order challenged before him was duly received by assessee or not - Mere dispatching of order does not imply the receipt of the same - Since admittedly no acknowledgement receipt was received by Revenue, question of production thereof on the record does not at all arise - The Original Adjudication order was not received by appellant prior to 20th February, 2019 - The appeal filed before Commissioner (Appeals) on 18.04.2019 was very-much within the period of two months as is required under section 35 of Central Excise Act, 1944 - The Commissioner (Appeals) is directed to decide the matter on merits: CESTAT

- Matter remanded: DELHI CESTAT

2021-TIOL-589-CESTAT-MAD

Sri Shipping Services Vs CC

Cus - A SCN was issued to appellant under Regulation 22 of CHALR, 2004 alleging violation of provisions of Regulation 13 and 19(8) of CHALR, 2004, proposing to revoke CHA license issued to the appellant and for forfeiture of security deposit - The allegation is that the exporter had availed ineligible drawback - The drawback is sanctioned to exporter by department and the CHA has no connection with drawback - The role of appellant is limited to filing of shipping bills and to attend to other connected activities relating to clearance of goods - Further, there is no evidence to conclude that the appellant has any role in the fraudulent acts committed by exporters - For the acts or omissions which are done before CHALR, 2004 came into force vide Notfn 21/2004-Cus . (NT), the erstwhile CHALR, 1984 would apply - The shipping bills in these transactions are of the year 2003 - So also in SCN, department has mentioned the number of two shipping bills for which there was no IE Code mentioned in shipping bills in respect of M/s. Gomathy Garments and M/s. Akshaya Impex - When the transactions are of year 2003, the provisions in Regulation 2004 cannot bind the appellant - The allegations raised in SCN is that the appellant has violated provisions of Regulation 13(a), (d) and (e) as well as Regulation 19(8) of CHALR, 2004 - This plea was raised by appellant before adjudicating authority also - But the same has not been considered - The charges levelled against appellant under CHALR, 2004 cannot sustain when the acts / omissions / cause of action has happened prior to the introduction of the Regulations - The SCN itself is not sustainable in law and the entire proceedings are vitiated - The impugned order revoking the license or directing to forfeit the security cannot sustain in law: CESTAT

- Appeal allowed: CHENNAI CESTAT

2021-TIOL-588-CESTAT-MAD

Elgi Ultra Industries Ltd Vs CGST & CE

CX - The appellant has cleared the final product viz. Belt & Accessories (Pulleys and V Belts) after payment of excise duty - When the appellant has discharged excise duty on final product then the department cannot disallow credit alleging that there is no process of manufacture - In case of any doubt, the department ought to have intimated the appellant before discharge of excise duty - Payment of duty on inputs is not disputed - The High Court of Bombay in case of Ajinkya Enterprises held that when the duty has been paid on finished products then the availment of credit of duty paid on inputs cannot be faulted - This view of High Court has been applied in case of Vishal Precision Steel Tubes and Strips Pvt. Ltd. 2017-TIOL-613-HC-KAR-CX - Applying the ratio of said decisions, the demand cannot sustain: CESTAT

- Appeal allowed: CHENNAI CESTAT

2021-TIOL-587-CESTAT-KOL

RNB Carbides And Ferro Alloys Pvt Ltd Vs CCE

CX - The appellants were engaged in manufacture and sale of Ferro Alloys, Ferro Silicon and Ferro Slag - The dispute pertains to refunds obtained by appellants from time to time in terms of exemption Notification No. 32/99-C.E. - It was the revenue's case that the appellant had overvalued its products by including freight charges which ought not to have been included under Section 4(1) of Central Excise Act, 1944 r/w Rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Contracts executed by appellant were FOR contracts - The contracts/ purchase orders specified 'door delivery' at all-inclusive prices - Neither did the invoices reflect the transportation costs separately nor were such charges recovered separately from the buyers - The buyers were not concerned with the goods unless and until the same were delivered in an acceptable condition at their premises and, in fact, bought by them after inspection - The invoices issued by appellant incorporated details of relevant purchase orders issued by buyers and as the agreed upon price was as per FOR destination, there was no reason to charge any freight component separately - The invocation of Rule 5 of Valuation Rules, 2000 by the Revenue was misplaced - The said Rule applied to cases only where goods were sold at the place of removal but were to be delivered elsewhere, which condition could not have applied in the given facts and circumstances - Even if it be assumed that the appellant had paid higher Central Excise duty than was leviable, the Department was not at liberty to retain any part of such excess amount collected as duty - Basic purpose and object of notification in question was to promote industrialization in the north-eastern part of country - Revenue can retain only those sums which represent the actual duty leviable under a statute and therefore, any excess amount collected as duty ought to be refunded - The appellant has further placed reliance on Board's Circular No. 59/1/2003-CX and Circular No. 988/12/2014-CX - The Department by relying on subsequent decision of Supreme Court in Ispat Industries 2015-TIOL-238-SC-CX has proceeded to take a view that freight amount can never be included in the assessable value - The refund already sanctioned cannot be termed as "erroneous refund" more so in view of the fact that refund has been duly sanctioned by Department as per the laws prevailing then duly supported by CBEC clarifications at relevant point of time: CESTAT

- Appellant's appeals allowed: KOLKATA CESTAT