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2021-TIOL-2114-HC-KAR-CUS
Aisin NTTF Pvt Ltd Vs UoI
Cus - Petitioner had imported certain capital goods under the Export Promotion Capital Goods (EPCG) Scheme - Petitioner submits that he received a redemption letter dated 18.01.2017 as per which there was a clear finding that export obligation has been discharged against the authorisation in terms of Para 5.13 of Hand Book of Procedure - The petitioner further submits that on 31.05.2017, demand notice came to be issued by the respondent no.2-Deputy Commissioner of Customs (EPCG), according to which, the authorities pointed out failure of the condition of EPCG Notification No. 102/2009-Cus, which had imposed prohibition on transfer of goods till export application is completed - As per the said demand notice, the petitioner was called upon to pay duty of Rs.28,34,120/- along with applicable interest failing which action would be initiated under Section 142 of the Customs Act, 1962 - They submit that if the petitioner were afforded an opportunity of personal hearing, it would have demonstrated that export obligation was fulfilled and only thereafter, sale was made - Petitioner, therefore, seeks setting aside the said notice and the recovery notice dated 18.09.2018 and also refund of Rs. 4 lakhs realised by encashment of bank guarantee.
Held : A perusal of the records would indicate that no show-cause notice has been issued as the first step in the proceedings of adjudication as contemplated under Section 28 - It is admitted that petitioner was not afforded any opportunity of personal hearing - Wherever the benefit conferred upon the petitioner by issuance of redemption letter is sought to be revoked, there has to be strict adherence to the principles of natural justice - Recovery notice dated 18.09.2018 issued by the respondent no.3 and the letter dated 18.09.2018 are set aside - The respondent authorities are directed to issue a show-cause notice and decide the matter after affording an opportunity of personal hearing to the petitioner - Action of invocation of bank guarantee by the respondent is set aside and the communication of the authority to the bank is held to be illegal - Nonetheless, if the adjudication after issuance of show-cause notice is not completed within a period of six months from the date of release of the order, the amount of Rs. 4 lakhs is required to be refunded: High Court [para 9 to 12]
- Petition disposed of: KARNATAKA HIGH COURT
2021-TIOL-691-CESTAT-MUM
Autobahn Enterprises Pvt Ltd Vs CST
ST - The appellant is an authorized dealer of M/s Skoda Auto India Pvt Ltd and in accordance with their agreements is allowed to offer discounts on sale of vehicles to their corporate customers to be reimbursed to them and had facilitated banks and financial companies as well as insurance companies to service loan and insurance requirements of customers from their premises - The demands were confirmed by lower authority under section 73 of Finance Act, 1994 along with interest thereon under section 75 ibid, while imposing penalty of like amount under section 78 ibid - The dispute pertaining to discount offered to corporate customers has attained finality - In view of the decision of Tribunal in re Toyota Lakozy Auto Pvt Ltd 2016-TIOL-3152-CESTAT-MUM, discounts offered by car manufacturers to their dealers for onward transmission to corporate customers is not liable to tax as 'promotion or marketing or sale of goods produced or belonging to clients' within the enumeration of 'business auxiliary service' in section 65(19) ibid - Accordingly, the demand along with interest and penalty under section 78 ibid fails to survive - Appellant has admitted and discharged liability arising on receipt of 'commission' from financial institutions and insurance companies - Furthermore, finality was accorded to tax liability by C.B.E. & C. Circular 87/05/2006-S.T. - Invoking of extended period for the purpose of imposition of penalty is not sustainable - Accordingly, the penalty imposed under section 78 ibid is also set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2021-TIOL-690-CESTAT-DEL
Pr.CC Vs Dish TV India Ltd
Cus - The assessee-company is engaged in providing Direct to Home d2h television channel services to its subscribers for which purpose, it imported Set top boxes STB and Transmission Dishes and viewing cards - The DRI received inputs that the importer imported viewing cards for set top boxes & had misdeclared the same as smart cards and had misclassified the same, leading to undervaluation - The DRI also received information that the importer had wrongly availed duty exemption for which it otherwise was ineligible - It was also alleged that the royalty/license fee paid on these cards was not included in the price declared by the importer thereby undervaluing them - The DRI also alleged that the importer was paying Licence fees in relation to the STBs but was not including it in the prices declared in their Bills of Entry resulting in under valuation of the STBs - In all these cases, the Bills of Entry were already filed, assessed by the jurisdictional officers and the goods were cleared - The assessee was subjected to search & operations and statements were recorded - Thereafter, SCN was issued by ADG DRI proposing to re-classify the Viewing Cards under Tariff Item 8528 71 00 of Customs Tariff Act, 1975 (instead of Tariff Item 8523 52 90), enhance the assessable value, consequently, recover the alleged short paid duty under Section 28(4) of Customs Act, 1962 along with interest under section 28AA, confiscate the imported goods (which were not available) under section 111(m), impose penalty on the importer under section 112 and/or 114A, and 114AA - Personal penalties were also proposed to be imposed on the CFO and the VP of the importer company, u/s 114AA of the Act.
Held - The importer contested the validity of the differential demands raised, claiming that as follows from the verdict of the Supreme Court in Canon India the officers of the DRI were not 'proper officers' empowered to issue SCN u/s 28(4) of the Customs Act - The assessee further claimed that in it's case, the DRI officers had issued SCN u/s 28(4) of the Customs Act in respect of the goods which were assessed and thereafter cleared by 'the proper officers' of the respective Customs Houses - As both sides agree that the case is covered by Cannon India, and that the SCN was issued by DRI, the impugned order arising out of the SCN cannot be sustained: CESTAT
- Revenue's appeal rejected/Assessee's appeals allowed: DELHI CESTAT
2021-TIOL-689-CESTAT-HYD
Lohiya Industries Vs CC, CE & ST
CX - The issue arises is, whether fatty acids, wax and gum arising in course of manufacture of refined vegetable oil are to be treated as "waste" for the purpose of exemption Notfn dated 18.05.1995 and would be exempted from duty under this Notification - The issue involved was referred to Larger Bench of the Tribunal - The Larger Bench of Tribunal had earlier answered a reference in Ricela Health Foods Ltd. - In regard to the period from September 01, 2006 to December 01, 2006, the larger Bench of Tribunal in M/s Lohiya Industries found no good reason to take a different view and accordingly, answered the reference in the same terms and held that the products gums, waxes and fatty acid, in the alternative, can also be treated as waste products and, therefore, would be covered by the exemption Notification - In regard to the period from May 2013 to April, 2014, the Larger Bench observed that the benefit of Notification would be available to the appellant despite the insertion of Explanation to section 2(d) of Central Excise Act, 1944, because even if a by-product is marketable, so long as it is not manufactured goods in terms of section 2(f) ibid, it cannot be exigible to excise duty - In the present appeals, the period involved is both prior to the amendment made in the definition of 'excisable goods' and after the amendment on 10.05.2008 - The benefit of Notification would, therefore, be available to the appellant - The impugned orders have denied the benefit of this Notification and have confirmed the demand of duty on clearance of soap muddy/ third grade oil/wax - The impugned orders, therefore, cannot be sustained and are set aside: CESTAT
- Appeals allowed: HYDERABAD CESTAT
2021-TIOL-688-CESTAT-MUM
Master Tobacco Company India Vs CCGST
CX - Appellant is a job worker of M/s. ITC Ltd. who received duty paid capital goods from ITC Ltd.'s factory at Kidderpore and Saharanpur under the cover of duty paying invoice raised by ITC - CENVAT credit was denied on the ground that transaction value of the capital goods of more than 10 years old carrying 'Nil' value were noted in the cover of invoice with the remark that it was a stock transfer and not sale for which credit was inadmissible - Denial of CENVAT credit availed in terms of proviso to Rule 3(5A)(a) of Cenvat Credit Rules, 2004, on the ground that transaction value against stock transfer is not a sale is assailed in this appeal.
Held : A close reading of the impugned order vis-à-vis Rule 3(5) and Rule 3(5A) would clearly reveal that 'removal after being used' is the requirement for availment of CENVAT credit and whether it is a sale transaction/not a sale transaction is not a criteria that would determine the eligibility of availment of such credit and, therefore, it would be erroneous to say that transaction value of the invoice would have no basis unless it is a sale transaction because CENVAT credit was taken at the time of purchase of capital goods that has already determined the transaction value and it is that value which is noted in the transfer challan - It is now a settled position of law that legality of such availment of credit cannot be questioned at the receiver's end let alone a revenue neutral situation - Appeal is allowed by setting aside the impugned order of Commissioner (Appeals): CESTAT [para 5, 6]
- Appeal allowed: MUMBAI CESTAT |
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