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2021-TIOL-683-CESTAT-MUM
V Arjoon Vs Pr.CC
Cus - The appellant is engaged in the business of rendering services of Customs Broker - Subsequently, the appellant's license was suspended and later revoked - An inquiry was initiated vide SCN for alleged violation of Regulation 10(d) of CBLR, 2018 - Enquiry report was submitted holding that charges were 'Not Proved' for the reasons stated therein - disagreement memo was issued alleging that the Enquiry officer has not properly appreciated the statements and gave report based on assumptions and presumptions - O-i-O was passed revoking the licence revoking the license; forfeiting the security deposit and imposing the penalty of Rs. 50,000 on the appellant.
Held - Customs Broker cannot be charged with gross negligence or lack of due diligence solely on the basis of investigations being conducted in respect of the exporter, which may or may not lead to confirmation of offences by the exporter - Even if one concludes only on the basis of contradictory statement of the director of exporter, that the Customs Broker had initial knowledge of the actual port of discharge to be different from the port of discharge declared in the shipping bills, the punishment suffered for two years is enough to mitigate his violation or contravention of Regulation 11D of CBLR, 2013 - Hence imposition of penalty would be sufficient punishment whereas suspension of license would be excessive - Revocation of license set aside, forfeiture of security deposit & imposition of penalty sustained: CESTAT
+ We find that the enquiry officer found that the custom broker mentioned port Jebel Ali as port of discharge in the shipping bills as informed by the exporter. He also found that there is no iota of evidence that the fact of discharge of the goods at Bandar Abbas (UAE) was known to the custom broker. He relies upon the statement dated 10.03.2017 of Director of exporter that the destination was changed after finalization of the shipping bills and they have never informed the CHA about the change of destination before filing of the documents and that they themselves know of the same when the buyer directed them to change the destination after filing the shipping bills. However, the director stated on 22.05.2018 that the custom broker were aware of the actual port of discharge while filing the shipping bills. It is seen that there is a long gap, more than a year, between the two statements of the exporter. We find that the enquiry officer has based his finding on the above. It is not made clear in the facts of the case that the appellants were aware of the actual port of discharge. The only argument of the adjudicating authority that the appellant was aware of the actual port of discharge was based on the contradictory statement of the exporter and the investigation conducted against the exporter. We are of the considered opinion that while the investigation conducted may or may not lead to the confirmation of the offenses by the exporter (which is any way beyond the purview of the present appeal), it would not be a conclusive evidence to establish gross negligence or misconduct on the part of the appellants. No documents whatsoever have been produced by the Adjudicating Authority or the respondents to substantiate the allegation that the appellants were in the knowledge of actual port of discharge. Under the circumstances, negligence or lack of due diligence is not established in our considered opinion. It can also be seen that in the instant case the timeline prescribed in the Regulations have not been adhered by the enquiry officer and the adjudicating authority notwithstanding the discussion as to whether the timelines prescribed in the said regulation are mandatory or advisory. We however, are not going into the above issue looking into facts and merits of the case. (Para 12);
+ In the instant case, the alleged offence took place in 2015 and the custom broker licence was suspended in 2019 after a period of four years. Normally, a punitive action like suspension is to be taken immediately, if the same is taken after four years, the sanctity of the same is vitiated. We also find that the custom broker has already suffered a lot. The livelihood of the custom broker and the employees dependent upon is at stake. Even if one concludes only on the basis of contradictory statement of the director of exporter, that the custom broker had initial knowledge of the actual port of discharge to be different from the port of discharge declared in the shipping bills, the punishment suffered by him for two years is enough to mitigate his violation or contravention of Regulation 11D of CBLR, 2013 (now Regulation 10D of 2018). We have also gone through the various case laws cited by the appellants, we find that this Tribunal was consistently holding though the custom broker is cast upon the responsibility, the mitigation of the same would lie in imposition of penalty and forfeiture of the security deposit and revocation of licence which is agreeably a very harsh punishment, which is not warranted in such circumstances. Therefore, we are of the considered opinion the interest of justice will be met if the revocation of custom broker licence is set aside while upholding the order inasmuch as forfeiture of security deposit and imposition of penalty are concerned. (Para 13)
- Appeal partly allowed: MUMBAI CESTAT
2021-TIOL-682-CESTAT-KOL
Bharat Coking Coal Ltd Vs CCE & ST
CX - Assessee is in appeal against impugned order, whereby the Cenvat Credit has been denied on services availed for setting up of Coal Handling Plant (CHP) for the period from June 2013 to November 2015 - The purpose of setting up of CHP is to load the coal into railway wagons in an automated manner after the coal is crushed into the desired size - Services used by appellant is for modernisation of coal loading process - In the case of Pepsico India Holdings (P) Ltd, Tribunal has observed that without setting up of the factory, there cannot be any manufacture and the mere fact that the words "setting up of factory" has not been retained in definition of input services post 01.04.2011, the same will not mean that the benefit of credit has been taken away by the legislature - Thus, services used for setting up of factory even after 01.04.2011 would be eligible for credit - The Commissioner has allowed credit on certain invoices assuming the same to be pure services and disallowed the credit on remaining portion by considering the same to be in the nature of civil portion - In view of the decisions of various High Courts and Tribunal wherein the user test principle has consistently been followed, Cenvat availed by appellant for setting up of CHP, which is used for evacuation of coal by rapid loading process, cannot be legally denied - Since the credit has been allowed by Department on certain invoices raised by Contractor, Department has in-principle found the service to be eligible for credit - The mode of valuation adopted by Contractor to discharge service tax on 40% of contract value is in accordance with law contained in Service Tax Valuation Rules and cannot be disputed while deciding credit eligibility at the appellant's end - When service tax has been levied only on 40% of the total value, it essentially means that service tax has been paid only on the service portion - Impugned demand order cannot be sustained and hence, the same is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2021-TIOL-681-CESTAT-MAD
Vodafone Cellular Ltd Vs CGST & CE
ST - The appellants assailed the impugned order, which was a culmination of proceedings initiated vide three different SCNs, seeking to disallow the CENVAT Credit on various inputs and input services - The disputed credit was mainly pertaining to capital goods and input services used in fabrication, Erection and commissioning of towers and shelters for base units and credit availed on other services - Bombay High Court in case of Bharti Airtel Ltd. 2014-TIOL-1452-HC-MUM-ST and Vodafone India Ltd. 2015-TIOL-2098-HC-MUM-ST held that to produce telecommunication service, cenvat credit on towers, prefabricated shelters and their accessories cannot be availed as the towers are fixed to the earth and became immovable property and ipso facto, non-marketable and non-excisable - Delhi High Court in the case of Vodafone Mobile Services Ltd., Tower Vision India Pvt Ltd., Bharti Infratel Ltd Vs CST Delhi 2018-TIOL-2409-HC-DEL-ST have taken a contrary view after examining and distinguishing the judgment of Bombay High Court - Chandigarh Bench of Tribunal has considered the decisions of Larger Bench, Bombay High Court and Delhi High Court and have dismissed the appeal filed by Revenue and allowed the appeal filed by appellant M/s.Bharti Infratel Ltd - The jurisdictional High Court has not passed any orders on this issue as on date - Therefore, Tribunal is required to follow the decision of Delhi High Court being subsequent to that of Bombay High Court and the decision of Chandigarh Bench in this regard - In view of the same, credit of inputs/capital goods and services utilized in fabrication, erection, installation of towers and shelters by appellants is admissible to them - The appellant's claim of credit of various inputs services is no longer res integra - The credit taken and availed by appellants on all the impugned services except the service relating to dismantling of towers is admissible to them - The appellants have not submitted any suitable reason to consider that the said service is required and the same is in the furtherance of their business - Therefore, to that extent, credit availed on service relating to dismantling of towers is not admissible to them.
Coming to the issue of limitation, in addition to the fact that the appellants are regular assessees who have been filing ST-3 Returns, the appellants have been issued SCNs - In view of the decisions in Hyderabad Polymers (P) Ltd. 2004-TIOL-35-SC-CX , ECE Industries Ltd. 2003-TIOL-89-SC-CX and Nizam Sugar Factory 2006-TIOL-56-SC-CX , it is not possible for this Bench to hold that the department is free to invoke extended period in subsequent SCNs - However, Tribunal have held that the credit is admissible to appellants and as such the appeal survives on merits and any findings on limitation would be redundant - As it is held that the impugned order does not survive on merits except for the credit availed by appellants on services relating to dismantling of towers, question of imposition of any penalty does not arise - The impugned order is set aside except to the extent of confirmation of credit availed on services relating to dismantling of towers for the normal period: CESTAT
- Appeal partly allowed: CHENNAI CESTAT |
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