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2022-TIOL-166-HC-MUM-ST
UCC Infrastructure Pvt Ltd Vs UoI
ST - SVLDRS, 2019 - On 9th December, 2019, the respondents rejected the application filed by the petitioner on the ground that the investigation was initiated against the petitioner and thus the petitioner was not eligible to file declaration under ‘voluntary category' - On 30th December, 2019, the petitioner again filed Electronic Declaration Form under SVLRDS-1 on CBEC website under ‘voluntary category' for the same period but the said form was once again rejected by the respondents on 20th February, 2020 - Petition filed. Held: Court in case of M/s. New India Civil Erectors Private Limited ( 2021-TIOL-618-HC-MUM-ST ) has considered identical facts and after adverting to various provisions of the said Scheme held that if any enquiry or investigation or audit was initiated on or before 30th June, 2019, such a person would not be eligible to make declaration under the voluntary disclosure category - Logical corollary to this would be that an enquiry or investigation or audit post 30th June, 2019 would not act as a bar to the filing of declaration under the ‘voluntary disclosure' category - Court also adverted to the judgment in Thought Blurb [ 2020-TIOL-1813-HC-MUM-ST ] and was pleased to quash and set aside the order impugned in the said writ petition and remanded the matter back to the Authority for taking a fresh decision on the declaration filed by the petitioner therein treating the same as a valid declaration under the ‘voluntary disclosure' category and thereafter to grant the admissible relief to the petitioner after giving an opportunity of hearing - Respondents had issued a summons only on 30th August, 2019 i.e. after 30th June, 2019 and thus summons issued after the cut-off date of 30th June, 2019 could not be the ground for declaring the application filed by the petitioner under SVLRDS-1 ineligible - Since while rejecting the declaration form submitted by the petitioner respondent did not grant any opportunity of being heard to the petitioner, impugned order is in gross violation of principles of natural justice - Impugned orders are quashed and set aside and respondent is directed to pass a reasoned order, in accordance with the law within a period of eight weeks - It is made clear that the respondents are empowered to take action under Section 129(2)(c) of the said Scheme, if within a period of one year of issuance of the discharge certificate against the petitioner, the respondent no.3 finds that the material particulars furnished in the declaration filed by the petitioner are found to be false: High Court [para 11, 12, 14, 15]
- Petition allowed: BOMBAY HIGH COURT
2022-TIOL-165-HC-MUM-ST
UCN Cable Network Pvt Ltd Vs Designated Committee
ST - SVLDRS, 2019 - Demand of service tax dues of Rs.43,62,79,032/- was confirmed and demand arising from disallowing of CENVAT credit was toned down considerably - As per the adjudication order, after adjusting the amount already paid against the service tax liability of the petitioner, an amount of Rs.65,22,938/- was found to be in arrears and recoverable from the petitioner - Petitioner filed his declaration in form SVLDRS-1 on 14.1.2020 under “arrears” category - It was proposed by the department that the petitioner's declaration would be considered under “litigation” category and not under “arrears” category and accordingly, a show cause notice in the form SVLDRS-2 was issued to the petitioner indicating that the disputed liability was of Rs.88,97,26,968/- and the amount payable under the Scheme would be 50% of the same; that as the petitioner had already paid an amount of Rs.2,38,00,334/-, the amount ultimately payable by the petitioner would be Rs.42,10,63,150/- - Accordingly, form SVLDRS-3 was issued to the petitioner - Aggrieved by it the petitioner has filed the present petition. Held: There is a clearly discernible distinction between the reliefs available under Section 124(1)(a) and those under Section 124(1)(c) of Finance Act, 2019 - A “litigation” category case would be one wherein the amount of duty has not been confirmed and has not attained finality and whereas an “arrears” category case would be the one where the amount of duty has been confirmed and has attained finality - A case could be put in “litigation” category if the amount of duty claimed by the department has not attained finality or has not been admitted by the declarant as recoverable from him and that a case can be placed in “arrears” category where the amount of duty has attained finality on account of appeal having been not filed before the expiry of the limitation period or the appellate order having attained finality or the amount of duty having been admitted by the declarant - Adjudication of the show cause notice during the validity period of the Scheme, 2019 in this case is what transformed it into a case under “arrears” category which, otherwise, would have continued to be in “litigation” category -Therefore, the action of the respondent in treating declaration filed by the petitioner as falling under “litigation” category instead of “arrears” category is contrary to the provisions of the Scheme and hence not permissible in law - On this count, the action of the department needs to be quashed and set aside - On payment of the tax dues determined under the Scheme, certain benefits in the form of waiver of interest, fine, penalty and immunity from prosecution are conferred - The whole focus is on unloading of the baggage of pending litigation arising from disputes relating to pending liability to pay service tax and excise duty - With such a nature of the Scheme, 2019, which is remedial, a liberal interpretation of the provisions of the Scheme is required to be made - It is for the reason that settled canons of interpretation of statutes tell us that a remedial or beneficial statute receives liberal and wider interpretation - It would also mean that if two interpretations are possible, that interpretation which frustrates not, but accomplishes most the remedy must be embraced - It, therefore, follows that while understanding the Scheme and applying it's provisions, it must not happen that a declarant is pushed into a worst scenario than before - A declarant cannot be made to encounter a situation where he would find that he was happily placed before making a declaration under the Scheme - If we consider the demand made in impugned form SVLDRS-3, and determination made in order adjudicating it, we would find that it is much more than the amount of dues finally determined in original adjudication order deciding the show cause notice - In other words, the impugned form SVLDRS-3 has transposed petitioner from a small bonfire to a big blaze - Settled principles of interpretation of statutes would not let this happen - This is one more reason that the case of the petitioner falls in “arrears” category and not in “litigation” category, and the phraseology of the Scheme, 2019 permits such an interpretation - Rule 3(2) of the Rules, 2019, segregates cases, as can be seen from clauses (a) to (d), not on the basis of demands made in the show cause notice or what kind of liabilities are revealed in the enquiry or investigation or disclosed in voluntary disclosures, but on the basis of categories listed in clauses (a) to (c) thereof and considers declaration filed in any of the categories as forming one case, for the purpose of rule 3(2) -Respondent has fallen in error in not treating the declaration filed by the petitioner as constituting one single case in the category of “amount in arrears” and by considering two demands in the show cause notice, one relating to service tax dues and the other in relation to recovery of disallowed CENVAT credit, separately and individually, something not permitted under Rules, 2019 - On this count as well, the action of respondent is illegal and, therefore, deserves to be quashed and set aside - respondent is directed to reconsider the case of the petitioner in the light of the observations made herein-above and in accordance with law as expeditiously as possible - Petition is allowed: High Court [para 18, 22, 23, 24, 33, 34]
- Petition allowed: BOMBAY HIGH COURT
2022-TIOL-122-CESTAT-DEL
Bharat Swabhiman (NYAS) Vs CC, CE & ST
ST - The issue arises for consideration is regarding demand of service tax on donations received by appellant from its members and on freight charges paid by them under reverse charge mechanism - Appellant submitted that the demand of service tax on membership donation is not sustainable as their activities are exempt under Notfn dated 26.09.2016 from 01.07.2012 to 20.10.2015 and under Notfn dated 20.06.2012 w.e.f. 21.10.2015 - The appellant is registered under section 12AA of Income Tax Act and education and training in yoga provided by appellant is towards the activity of advancement of yoga - Thus, as both the conditions are satisfied by appellant, membership donations collected by appellant would be exempt from payment of service tax for period from 01.07.2012 to 20.10.2015 - Appellant is also entitled to exemption from payment of service tax under Notfn dated 20.06.2012 w.e.f. 21.10.2015 - An amendment was made in aforesaid Notfn by Notfn dated 21.10.2015 in paragraph 2(ii) - The definition of 'charitable activity' in Notfn dated 20.06.2012 was amended to include activities relating advancement of yoga - It is, therefore, clear that the twin conditions that the entity must be registered under section 12AA of Income Tax Act and activities must be carried out by way of charitable activities stand satisfied - As regards to service tax on freight amount paid by it on a reverse charge mechanism, consignment notes have not been issued and so the activities cannot be said to be covered under 'goods transport agency' services - In the case of Tribunal in Bhoramdeo Sahakari Shakhar Utpadam Karkhana, it has been held that service tax can be levied only if consignment notes are issued - Thus, service tax liability could not have been fastened on appellant under reserve charge mechanism - The impugned order, therefore, cannot be sustained, same is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2022-TIOL-121-CESTAT-MAD
Bonfiglioli Transmissions Pvt Ltd Vs CGST & CE
CX - The issue arises is, whether the appellant is eligible for exemption Notification No. 67/95-C.E. on intermediate goods captively consumed when the final products have been cleared to SEZ units - The said issue has been decided in favour of appellant by Tribunal in their own case for different periods by following the decision in case of Ultratech Cements Ltd. 2015-TIOL-2110-CESTAT-MAD - Applying the said decisions in appellant's own case, demand cannot sustain, impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2022-TIOL-120-CESTAT-CHD
BE Office Automation Products Pvt Ltd Vs CC
Cus - Appellant has imported one consignment and declared the goods - Same were examined and found to be as declared but as per FTP, goods were allowed to be imported under valid authorization which the appellant has failed to produce - In past also, although the goods were restricted but appellant has failed to produce valid authorization, therefore, goods have become prohibited goods, after re-determining the assessable value of impugned goods, same were held liable for confiscation and an option was given for re-export of same on payment of redemption fine and penalties were also imposed under Sections 112A(1) and 114AA of Customs Act, 1962 - Said issue has been examined by Apex Court in M/s. Atul Automation Pvt. Ltd. 2019-TIOL-35-SC-CUS-LB - Impugned goods are not prohibited goods but are restricted items for import - The Foreign Trade Act and Section 125 ibid does not make any bar from redemption of such restricted goods imported without authorization on payment of duty on retail market value and there is distinction between what is prohibited and what is restricted - The goods cannot be held absolutely confiscated or cannot be restricted for clearance for home consumption, hence, imported goods are allowed to be cleared for home consumption on payment of redemption fine and penalty - As the issue of valuation is pending adjudication before Apex Court in appellant's own case for earlier import, therefore, issue of valuation kept alive and the same shall be decided after decision of Apex Court on the said issue - In the meantime, adjudicating authority is directed to release the goods to appellant on payment of duty on enhanced value and on payment of redemption fine and penalty under Section 112A ibid during the pendency of issue of valuation: CESTAT
- Matter remanded: CHANDIGARH CESTAT |
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