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2022-TIOL-59-HC-KAR-CUS
FCI Oen Connectors Ltd Vs UoI
Cus - Exemption Notification No. 20/2020-CUS, dated 09.04.2020 - Respondent No. 2 informed the petitioner that he had incorrectly claimed the benefit of exemption hence the Customs duty is payable - It is the grievance of the petitioner that though Section 128 of the Customs Act, 1962 provides for an appeal to be filed within a period of 60 days from the date of the Order-in-Original dated 10.03.2021, the respondents have illegally and highhandedly proceeded to recover the sum of Rs. 34,09,343/- by encashing the bank guarantee on 11.03.2021 in a sum of Rs. 5,25,000/- and invoking the continuity bonds executed by the petitioner for the balance of Rs. 28,84,343/- without waiting for the statutory period of 60 days to expire within which the petitioner was entitled to prefer an appeal - It is submitted by the respondent Revenue that since the petitioner had not preferred an appeal before the Appellate Authority nor obtained any stay of the Order-in-Original, they were fully justified in invoking the continuity bonds and encashing the bank guarantee pursuant to the impugned order; that in view of the undisputed fact that the petitioner has already preferred an appeal which is pending before the Appellate Authority, the question of directing any refund of the amount recovered from the petitioner does not arise; that the petition needs to be dismissed. Held: In the light of the undisputed fact that the Order-in-Original dated 10.03.2021 itself states that the petitioner had a period of 60 days to prefer an appeal under Section 128, coupled with the Circular dated 16.09.2014 and the decision of this Court in Oracle's case ( 2013-TIOL-544-HC-KAR-CUS ), the impugned letters dated 11.03.2021 and 16.03.2021, whereby the respondents have encashed the bank guarantee and invoked the continuity bonds in respect of the entire disputed amount as directed in the impugned order is not only contrary to law and the facts and probabilities of the case but also opposed to the principles of natural justice, in that no opportunity, much less reasonable or sufficient opportunity was provided to the petitioner to prefer an appeal within the statutory period of 60 days and the respondents have hastily and hurriedly proceeded to issue the impugned letters which cannot be countenanced under any circumstances whatsoever and the same deserve to be quashed - Maximum liability to deposit the disputed amount in the appeal already preferred by the petitioner, which is pending adjudication is 7.5% of the disputed amount, out of the total sum of Rs. 34,09,343/-, i.e., Rs. 2,55,701/- - Respondents are directed to retain a sum of Rs. 2,55,701/- and refund the balance of Rs. 31,53,642/- to the petitioner within a period of four weeks - issued by respondent No.2 are hereby quashed - Petition is allowed: High Court [para 9, 10, 11]
- Petition allowed: KARNATAKA HIGH COURT
2022-TIOL-58-HC-AHM-CUS
CC Vs Rajkamal Industrial Pvt Ltd
Cus - Assessee imported Base Oil SN50 and filed bills of entry by classifying under CTH 27101960 - The DRI officers received information that the product imported was High Speed Diesel (HSD) and not Base Oil - Revenue issued SCN calling upon assessee to show cause as to why the entire consignment of HSD should not be confiscated and penalty be imposed under Section 112(a) and (b), Section 114AA r/w Section 117 of Customs Act - Appeals admitted on substantial questions of law - The court would like to frame one additional substantial question of law in exercise of powers under proviso to sub-Section (4) of Section 130 of the Act, 1962: HC
- Matter listed: GUJARAT HIGH COURT
2022-TIOL-57-HC-AHM-ST
Sanjoo Prints Pvt Ltd Vs UoI
ST - The petitioner is engaged in business of 'dyeing and printing of textile articles' i.e. providing job work service in textile industry - It is their case that the services, which are being provided are exempted vide Entry No. 30 of Notfn 25/2012-ST from applicability of Service Tax and is also exempted from Excise Duty vide General Exemption 21 and Notfn 214-1986-CE - According to petitioner, it being a private limited company at the most is liable to pay Service Tax on Reverse Charge Mechanism on the basis of receiving some services such as GTA Service and Legal Services - There is no good ground made out to directly entertain this application questioning the legality and validity of O-I-O - It prima-facie appears from reliefs prayed for that if an appeal is filed, then towards pre-deposit, petitioner is obliged to deposit 7.5% of total demand - This may be a little difficult for petitioner but that by itself is not sufficient for this Court to entertain this writ-application, more particularly, when there is an alternative remedy of statutory appeal being available to writ-applicant: HC
- Writ application disposed of: GUJARAT HIGH COURT 2022-TIOL-62-CESTAT-HYD Hindustan Urban Infrastructure Ltd Vs Pr.CC
Cus - Appellant filed shipping bills and had mentioned 'NO' instead of 'YES' against the column to indicate if they wish to claim any benefit under scheme - However, on the face of Shipping Bills, it was categorically mentioned that it would claim the benefit of MEIS scheme - Now, appellant wants Shipping Bills to be amended so that the Shipping Bills say YES instead of NO against the column - Consequently, they want to get the benefit of MEIS scheme - Original authority has declined to amend shipping bills because the EGM has already been closed and it is not possible to amend shipping bill thereafter in EDI system - Appellant submits that the software should have been designed so as to enable amendment of Shipping Bill even after EGM has been closed so that appellant's request for amendment under Section 149 of Customs Act, 1962 could be considered - Appellant has made out a strong case for getting Shipping Bills amended because its intention to claim benefit was evident on the face of each Shipping Bill - Only an entry was made NO instead of marking YES and this should not deprive the appellant of its substantive benefit - The reason for not allowing amendment is that the EGM was closed which may be valid reason for not being able to make amendment in EDI system, but is not a valid reason for not allowing amendment under Section 149 ibid - Another prayer of appellant is that the Customs officers should be directed to transmit Shipping Bills to DGFT - Request before original authority and appeal before Commissioner (Appeals) were only with respect to permitting amendments in Shipping Bills - This issue has also not been urged at the time of hearing of appeal and is, therefore, not being decided - The Respondents are directed to amend fifteen shipping bills filed by appellant by changing the column from NO to YES either electronically or manually, as may be feasible: CESTAT
- Appeal partly allowed: HYDERABAD CESTAT
2022-TIOL-61-CESTAT-MUM
Nitin Jatania Vs CC
Cus - The issue that arises for consideration is, whether the Additional Director General, DRI had jurisdiction to issue SCN - This precise issue was examined by Supreme Court in Canon India Pvt. Ltd. 2021-TIOL-123-SC-CUS-LB wherein it is observed that the nature of power to recover the duty, not paid or short paid after the goods have been assessed and cleared for import is a power that has been conferred to review the earlier decision for assessment - This power which has been conferred under section 28 of Customs Act, 1962 on the proper officer, must necessarily mean the proper officer who, in the first instance, assessed and cleared the goods - Thus, the SCN issued by Additional Director General, DRI is, therefore, without jurisdiction as the said officer was not the proper officer and therefore all proceedings undertaken by Department on this SCN is without jurisdiction - The order passed by Commissioner (Adjudication) cannot be sustained - The Department, however submitted that the notice was also issued under section 124 of Customs Act for confiscation of goods under section 111 and imposition of penalty under section 112 of Customs Act, 1962 - Appellant, however placed reliance upon a decision of Tribunal in Bakeman's Home Products Pvt. Ltd. and contended that the proposal for confiscation of goods and imposition of penalty cannot be segregated from the duty demand and, therefore, if the duty demand fails as the SCN was not issued by proper officer, the proceedings for confiscation and penalty cannot survive - Thus, the impugned order cannot be sustained and is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2022-TIOL-60-CESTAT-AHM
National Plastic Industries Vs CCE & ST
CX - The issue involved is whether the appellant is liable to pay interest on differential duty paid by them in respect of goods cleared from depot - There is no dispute that differential duty and interest is payable in principal - However, appellant have raised dispute about calculation of duty - It is their submission that if cum-duty price is considered the duty amount will come to Rs. 12,95,181/- instead of total differential duty paid amounting to Rs. 15,01,214/- - This amount is sufficient to meet the differential duty of Rs. 12,95,181/- and Rs. 2,06,033/- towards interest - Accordingly, duty of Rs. 15,01,214/- paid by them may be considered as interest and duty and there is no further interest liability - As regard to cum duty price, statue provides that whenever duty is calculated, it should be calculated considering cum-duty price - However, there is no findings on the facts that whether price claimed by appellant is cum-duty or otherwise - Therefore, only for the purpose of recalculation of value and verifying related documents, matter is remanded: CESTAT
- Matter remanded: AHMEDABAD CESTAT
2022-TIOL-59-CESTAT-AHM
Synfab Sales And Industries Ltd Vs CCE & ST
CX - The issue arises is that when the assessee has availed exemption Notification No. 30/2004-C.E. which prescribed nil rate of duty but bearing condition that no Cenvat credit should be availed whether Cenvat credit lying in balance after reversal on inputs, WIP and inputs contained finished goods, shall lapse in terms of Rule 11(3) of Cevat Credit Rules, 2004 - From the plain reading of Rule 11(3)(i) and (ii), it is clear that in terms of Clause (ii) of Rule 11(3) balance credit shall lapse only if assessee availed an exemption which is absolutely and exempted which is other than absolute covered under clause (i) of Rule 11(3) - In case of clause (i) of Rule 11(3) no similar condition of lapsing of balance cenvat credit is provided - Case of assessee is covered by Rule 11(3)(i) therefore, remaining credit shall not lapse - One of the contention by adjudicating authority is that even though the argument of assessee that the Cenvat credit balance will lapse as per Rule 11(3) only, the product is exempted absolutely is accepted there is no dispute that Notification No. 30/2004-C.E. has been issued under section 5A of Central Excise Act, 1944 and assessee having opted for same, cannot escape from obligation relating reversal of balance Cenvat Credit - There is a clear distinction between an absolute exemption and conditional exemption - Therefore, contention of adjudicating authority that since the exemption notification was issued under section 5A assessee is otherwise required to pay balance credit is of no substance and has no basis - Issue has been considered by Tribunal time and again and after interpreting Rule 11(3)(i) and (ii) came to conclusion that in case of conditional notification, assessee is not required to lapse remaining credit after reversal on input as such, input in process and input contained in finished goods - On absolute identical issue involving exemption Notification No. 30/2004-C.E. Tribunal in various judgments held that balance credit shall not lapse in terms of Rule 11(3) of Cenvat Credit Rules, 2004 therefore issue is no longer res-integra - Accordingly, impugned order is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2022-TIOL-58-CESTAT-KOL
CCGST & CE Vs Lumino Industries Ltd
ST - Revenue is in appeal against impugned order, whereby the demand of Service Tax as proposed in SCN has been dropped by Commissioner - The only question to be decided is whether the valuation mechanism as per Rule 2A of Service Tax (Determination of Value) Rules, 2006 provides for optional methods - On the perusal of contract papers, it is seen that the contract provides for separate values for supply of materials and there being transfer of property in goods from respondent to the intended beneficiary, same cannot form part of value for purposes of Works Contract Service and since the value is clearly determinable in invoice raised by Respondent, same is to be allowed as deduction from the value of entire contract leading to conclusion that only the Erection and Commissioning job of contract would be leviable to Service Tax at full rate, which has been paid by Respondent and also accepted by Revenue during investigation proceedings - It is not the case of Revenue that Respondents have short paid Service Tax on erection job rather the allegation is short payment of Service Tax by treating the supply component also in valuation of Service Tax - Issue is squarely settled by judgment of Tribunal in case of Pragati Edifice 2019-TIOL-3095-CESTAT-HYD - Tribunal in said judgment has dealt in great details the option of paying Service Tax under composition scheme and it cannot be forced on assessee - By following the said principles, impugned order cannot be interfered with and accordingly, same is upheld: CESTAT
- Appeal dismissed: KOLKATA CESTAT
2022-TIOL-57-CESTAT-HYD
Ambience Constructions India Ltd Vs CC, CE & ST
ST - Appellant is engaged in construction activity and was awarded contract of construction of Paryatak Bhavan as a sub-contractor for M/s. RIL on back to back basis - Demand was raised by Department on the ground that Paryatak Bhavan, which was constructed for Tourism Development Corporation was primarily a commercial building as same was constructed as a part of infrastructure to promote tourism in State by Tourism Development Corporation and hence, comes within the scope of taxable services under category of 'construction service' - The issue that arises for consideration is as to whether service tax could be levied for period prior to 01.06.2007 - Services rendered by appellant falls under ambit of 'works contract' since composite services for construction of Paryatak Bhavan was provided for a lumpsum consideration known as 'contract price' - It is w.e.f. 01.06.2007 that clause (zzzza) was inserted in section 65(105) of Finance Act, 1994 in relation to execution of "works contract" - Thus, service tax could only have been demanded on 'works contract' services after introduction of a charge on a 'works contract' service and not under any other head - This is what was observed by Supreme Court in Larsen & Toubro 2015-TIOL-187-SC-ST wherein it is held that the scope of section 65(105)(zzzh) is limited to cover contract of service simplicitor only and not a composite 'works contract' - The Supreme Court noticed that a "works contract" is different from a contract for service simpliciter and that it is only w.e.f 01.06.2007 that section 65(105)(zzzza) was introduced to cover composite 'works contract' and so works contract cannot be covered under any other category of services prior to 01.06.2007 - Even post 01.06.2007 service tax could not have been confirmed under 'works contract' service - The SCN alleged that appellant was providing 'construction services' or 'commerical or industrial construction service' and demand has also been confirmed under this category by adjudicating authority - The impugned order, therefore, is set aside for post 01.06.2007 period also since the demand made under a particular category of service found to be incorrect in a subsequent proceeding, cannot be sustained: CESTAT
- Appeal allowed: HYDERABAD CESTAT |
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