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2021-TIOL-742-CESTAT-BANG
Hindustan Petroleum Corporation Ltd Vs CCT & CE
ST - The assessee is engaged in manufacture of Ethanol Blended Petrol, falling under Tariff Item 2710 11 19 of the Schedule to the Central Excise Tariff - The case of the Department is that during the disputed period, the assessee had manufactured 156KL of 10% Ethanol Blended Petrol, but did not discharge the duty liability attributable to such manufacturing activity - On the basis of such observations, show cause proceedings were initiated against the assessee, which culminated in the adjudication order, wherein the Additional Commissioner of Central Excise & Customs, Belgaum confirmed Central Excise duty demand along with interest and also imposed penalty on the assessee - Feeling aggrieved with the adjudication order, the assessee had preferred appeal before the Commissioner (Appeals), Mangalore, which was disposed of vide order upholding the adjudication order and rejecting the appeal filed by the assessee. Held - The issue involved in the present case is whether the production of 10% Ethanol Blended Petrol ('EBP') which involves the blending of 10% duty paid ethanol with 90% duty paid Motor Spirit (MS, commonly known as petrol) amounts to manufacture in terms of Section 2(f) of the CEA and whether the same is liable for excise duty prior to the issuance of Notification Nos. 61, 62, 63 & 64/2008-C.E., dated 24.12.2008 - This issue stands settled by the Tribunal in M/s Bharat Petroleum Corporation Limited wherein it was held that the blending activity only improves the quality of the MS/HSD resulting in better value addition, without charging the basic characteristics and usages of the products - Hence the appeal filed by M/s BPCL was allowed - Following this case, the duty demands raised in the present case cannot be sustained on merits: CESTAT
- Assessee's appeal allowed: BANGALORE CESTAT
2021-TIOL-741-CESTAT-KOL
Monarch International Vs CC
Cus - One M/s. R C Metal Industries Ltd., the exporter, filed Shipping Bill No. 849680 dated 18.11.2013 to export 'Nozzle filling compound' - The DRI received information that the exporter had misdeclared the nature of the export goods and that the export consignment was, in fact, 'Chromium Concentrate' chargeable to export duty - The DRI investigated the matter, recorded statements, collected prints of emails correspondence between the exporter and its overseas buyers and seized the export goods - The seized goods were subsequently provisionally released on bond and a bank guarantee and exported. DRI also found that same exporter had, in fact, exported similar consignments through 15 shipping bills through Kolkata port and three shipping bills through Inland Container Depot (ICD) Durgapur falling under the jurisdiction of Commissioner of Customs, Central Excise and Service Tax, Bolpur - After investigation, DRI issued the SCN answerable to Commissioner of Customs (Port) Kolkata and to the Commissioner, Bolpur with respect to the consignments exported/ attempted to be exported through the respective ports.
Held - Once an assessment is completed, the assessing officer becomes functus officio and cannot modify the assessment & such order can only be appealed against - Assessments can also be appealed against by the Revenue. However, if duty is not levied, not paid, short levied, short paid or erroneously refunded, an SCN can be issued under section 28 by 'the proper officer' demanding the duty - Shipping Bill has to be filed with 'the proper officer' under Section 50 which can be re-assessed under Section 17 by 'the proper officer' and finally the clearance of goods under Section 51 is also to be given by 'the proper officer': CESTAT + The process of making an entry under section 50 and self assessment of duty under section 17(1) happen simultaneously because the data required for assessing duty such as the nature of the goods, their classification under the Customs Tariff, rate of duty, exemption notification, quantity and value are in the Shipping Bill and once these data is fed into the Customs EDI system both self assessment of duty under Section 17(1) and filing of Shipping Bill under Section 50 are complete and the arithmetical process of calculating the duty is done by the system itself. The Shipping bill passes through the Customs Risk Management System RMS and it can then either be sent to an officer for re-assessment or the self assessment may simply be accepted and the shipping bill moves to the proper officer who permits clearance of goods. Thus, the proper officer to whom the shipping bill is to be presented under section 50 is also the the proper officer who assesses it under section 17. Usually, it is the Assistant Commissioner/Deputy Commissioner in charge of exports. (Para 9)
+ The process of permitting clearance of export goods under Section 51 is commonly referred to as issuing of Let Export Order LEO. The proper officer who issues the LEO is different from the assessing officer and is usually posted in the Customs shed where he checks the documents and if required goods and issues the LEO. (Para 10) + Once an assessment is completed, the assessing officer becomes functus officio and cannot modify the assessment. The assessment order can, however, be appealed against to the Commissioner (Appeals) and then to CESTAT, High Court and Supreme Court. (Para 11)
+ Assessments can also be appealed against by the Revenue. However, if duty is not levied, not paid, short levied, short paid or erroneously refunded, an SCN can be issued under section 28 by 'the proper officer' demanding the duty. (Para 13)
+ Certitude in law, its application, adjudication of disputes, appeal, revision and review mechanisms are essential in fiscal laws which, on the pain of penalty, place obligations or restraints on individuals and entities. Insofar as the demands are concerned, use of 'the' (a definite article) instead of 'a' or 'an' (indefinite articles) or expressions such as 'any' or 'any of the' in the Sections brings in the certitude. Section 28 of the Customs Act empowers 'the proper officer' to issue a notice to demand duty while section 11A of the Central Excise Act and section 73 of the Finance Act, 1994 empower 'the central excise officer' to issue notices under those Acts. Even in the more recent law, the Central GST Act, 2017, demand under Section 73 can be raised by 'the proper officer'. This section also applies to demands under the Inter-State GST Act, 2017. State GST Acts, likewise empower 'the proper officer' to raise a demand. It is immaterial for this case as to who 'the proper officer' or 'the Central Excise officer' under these laws are. Suffice it to say that the Parliament has consistently ensured certainty by giving the power of raising a demand only to 'the officer' and not "officer" or "any officer". (Para 17)
+ Officers of DRI have been held to be NOT 'the proper officers' to issue a notice under Section 28 both in Sayed Ali and in Canon India. In the Customs Act, the Shipping Bill has to be filed with 'the proper officer' under Section 50 which can be re-assessed under Section 17 by 'the proper officer' and finally the clearance of goods under Section 51 is also to be given by 'the proper officer'. (Para 18)
+ As far as the past consignments are concerned, the SCN was issued by ADG, DRI under section 28 and he is not the proper officer to issue such as notice as per Canon India and hence the impugned order confirming such a demand needs to be set aside and we do so. The confiscation of goods and imposition of penalties, require a notice under Section 124 to be issued which need not be issued by 'the proper officer'. Hence, it was within DRI's power to issue such an SCN. However, the basis for imposition of penalty is the confiscation of the goods under Section 113 on the ground that there were mis-declarations in the Shipping Bills which resulted from a determination under section 28 on the notice issued by DRI. As the goods were not available, the Commissioner has not ordered confiscation of the past goods. He, however, imposed penalties which also cannot sustain once the reassessment of the exported goods under section 28 which forms the basis for the penalties fails. (Para 20)
- Appeals allowed: KOLKATA CESTAT
2021-TIOL-740-CESTAT-MUM
Harman Finochem Ltd Vs CCE & ST
CX - The issue arises is as to whether the assessee is liable to pay 10% of value of exempted goods in terms of Rule 6(3) when they had availed CENVAT Credit on common input namely, Furnace Oil for period May, 2005 to September, 2007 in the fact that the assessee had suo motu reversed proportionate credit before issuance of SCN along with interest @13% and subsequently remaining 11% interest was also paid in terms of retrospective amendment under Section 73 of Finance Act, 2010 - In view of the various judgments on the same issue, it is held that once the proportionate credit in respect of inputs used in manufacture of exempted goods has been reversed and interest thereupon was paid in case of any delay in reversal, the demand of 10% of value of exempted goods under Rule 6(3) will not sustain - Hence, the impugned order is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT |
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