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2022-TIOL-573-HC-AHM-CUS
Mihir Maheshkumar Chevli Vs UoI
Cus - Short question for consideration is as to whether the show cause notice given under Section 124 of the Act after six months of seizure can be sustained under the law - Petitioner avers that 21 months elapsed after the seizure and since no notice had been issued within a period of six months as statutorily prescribed from date of the seizure, the seized cash, computers and mobile phones were needed to be returned to the petitioner and his family - Therefore, this petition. Held: In the instant case, admittedly there has been no provisional release of the seized goods - Further extension of six months with the reasoned order by the Principal Commissioner of Customs or Commissioner of Customs also is completely missing - The period of six months from the date of signature expired on 03.10.2019 - Even further period of six months as provided in the first proviso to Section 110(2) also got over on 03.04.2020 - It is quite unfathomable as to why the time limit is not adhered to and issuance of the show cause notice has been delayed beyond the statutory time period and hence, intervention will be necessary at the end of this Court by keeping open the rights of the respondents to initiate adjudication process afresh in accordance with law - Respondents shall return the cash and articles/goods to the petitioner not later than period of eight weeks - Petition allowed: High Court [para 11, 13, 14] - Petition allowed: GUJARAT HIGH COURT
2022-TIOL-572-HC-AHM-CUS
Amit Harishkumar Doctor Vs UoI
Cus - Short question for consideration is as to whether the show cause notice given under Section 124 of the Act after six months of seizure can be sustained under the law - Petitioner avers that 19 months elapsed after the seizure and since no notice had been issued within a period of six months as statutorily prescribed from date of the seizure, the seized cash and mobile phones were needed to be returned to the petitioner and his family - Therefore, this petition. Held: In the instant case, admittedly there has been no provisional release of the seized goods - Further extension of six months with the reasoned order by the Principal Commissioner of Customs or Commissioner of Customs also is completely missing - The period of six months from the date of signature expired on 03.10.2019 - Even further period of six months as provided in the first proviso to Section 110(2) also got over on 03.04.2020 - It is quite unfathomable as to why the time limit is not adhered to and issuance of the show cause notice has been delayed beyond the statutory time period and hence, intervention will be necessary at the end of this Court by keeping open the rights of the respondents to initiate adjudication process afresh in accordance with law - Respondents shall return the cash and articles/goods to the petitioner not later than period of eight weeks - Petition allowed: High Court [para 11, 13, 14] - Petition allowed: GUJARAT HIGH COURT
2022-TIOL-336-CESTAT-MUM-LB
Reliance Industries Ltd Vs CCE & ST
CX - Case before the Larger Bench of the CESTAT is whether CENVAT credit of Rs.1,33,37,699/- could have been availed by the appellant of the service tax paid on insurance premium for availing mediclaim facility for employees who had opted for 'Voluntary Separation Scheme' VSS announced for regular employees of the Vadodara Complex who had attained 40 years of age or had completed 10 years of service as regular employees with the Indian Petrochemicals Corporation Limited IPCL, which had been taken over by the appellant - Division Bench also referred the applicability of CAS-4 for determination of eligibility to CENVAT credit to the Larger Bench of the Tribunal. Held: Judgment of the Supreme Court in Maruti Suzuki was in the context of 'input' defined under rule 2 (k)and not 'input service' under rule 2 (l) of the 2004 Rules and, therefore, would not be applicable to the present dispute - Contrary views have not been expressed by any Court or Tribunal on the aforesaid two principles culled out from the decisions of the Supreme Court in Coca Cola India and Ultratech Cement - The one time amount paid by the appellant as premium towards the medical insurance policy is borne out of a contractual obligation in the regular course of its business and cannot be termed as a gratuitous payment, which would depend on the free will of a person - The premium amount paid by the appellant effectuates a Scheme of early retirement, a part of the "golden handshake" between the appellant and its employees who agree to take premature termination of the employment contract, aimed at keeping the business operations of the appellant cost effective and viable - It has to be held that credit can be availed on the amount of insurance premium paid by the appellant to the insurance company for availing mediclaim of employees who had opted for the VSS announced by the appellant as the service that was rendered would amount to 'input service' in terms of rule 2(l) of the 2004 Rules, as it stood at the relevant time; it being in relation to activities relating to business - Since CAS-7 defines the expression 'employee cost', in general, all references to employee costs in the Cost Accounting Standards, including in CAS-4, will have to take the same meaning as provided in CAS-7 - It is thus clear from CAS-7 that medical benefits pertaining to employees and dependents, even if they are in terms of VRS/retirement/separation schemes, are an integral part of the 'employee cost' - Held, therefore, that the appellant would be entitled to avail CENVAT credit on the service tax paid on insurance premium for employees who had opted for the 'Voluntary Separation Scheme'; Cost Accounting Standard-4 would be applicable for determination of eligibility to CENVAT credit even if the goods are not captively consumed: CESTAT Larger Bench [para 37, 38, 39, 53, 69, 70, 71]
- Reference answered: MUMBAI CESTAT
2022-TIOL-335-CESTAT-MUM
Mahanagar Gas Ltd Vs CCGST & CE
CX - Issue relates to denial of CENVAT credit to the appellant on tax paid for laying of pipeline of inward transmission of CNG, service availed for inspection at a new sites, credit on input service mistakenly taken at zone I that pertains to zone II and services for medical check-up in health camp arranged for auto and taxi drivers using CNG under CSR Scheme - The issue of laying of pipeline for inward transmission of CNG has been settled by Tribunal in appellant's own case pertaining to a different period - Appellant's claim in this regard is, therefore, accepted and the benefit of availment of such credit is hereby extended to appellant. Concerning credit of input services taken on Zone I and II, it is observed that appellant had registered itself under Centralised Registration Scheme and these zones were subsequently demarcated as CBSE Circular No. 875/13/2008-CX clearly stipulates that separate registration is required under each jurisdiction of Chief Commissioner - Since it had done the changes that is required for availing credit in the other zone, it should not have been denied the credits for narrow technical consideration as it is in no way stand as a stumbling block in extending such benefit - Hence, credit on input services pertaining to zone II is allowed to the appellant who had already made necessary changes of transfer of such credits between the zones. The dispute concerning inspection at new site and denial of CENVAT credit on input services availed for such inspection needs discussion on two counts - Firstly, appellant contended that it is statutory/ mandatory requirement for them to have inspection of geographical area of city/locality where compressed natural gas distribution is to be effected - It furnished a copy of notification dated 19.03.2005 of Petroleum and Natural Gas Regulatory Board to substantiate that without such inspection of geographical area and approval of detail feasibility report by Board of Directors of Petroleum and Natural Gas Regulatory Board, no such distribution point for natural gas can operate - Therefore, appellant is entitled to avail credit on tax paid on inspection services at the site/locality. The only other denial of credit is concerning services of free medical check-up of drivers on which appellant claimed CENVAT credit on the ground of meeting corporate social responsibility but there is nothing available on record to show that such services are freely extended to all CNG Drivers irrespective of the fact that they were consuming CNG from the appellant services station or elsewhere - Appellant is not entitled to get benefits of CENVAT credit on services availed for providing free medical check-up : CESTAT
- Appeal partly allowed: MUMBAI CESTAT
2022-TIOL-334-CESTAT-BANG
Athani Sugars Ltd Vs CCT & CE
CX - The appellant is in appeal against impugned order vide which, Commissioner (Appeals) has remanded, the issue of a part of disputed CENVAT credit to lower authority, for verification of invoices and did not pass any specific order on other portions of disputed credit - As far as credit of Rs. 12,36,533/- availed by appellants on the basis of invoices issued prior to 01.09.2014, Tribunal in cases of Sarda Energy and Minerals Ltd. 2020-TIOL-1129-CESTAT-DEL and Suryadev Alloys and Power Pvt. Ltd., has held that credit is admissible - Commissioner (Appeals) also does not dispute the same; instead of allowing the credit he remands the case following Bharat Aluminium Company Ltd. 2019-TIOL-2567-CESTAT-DEL ; issue of any discrepancy in documents was not raised in SCN - Therefore, it was not required to remand back the case to Original Authority for verification - Similarly, with regard to other credits, having found the same eligible on merits, commissioner (Appeals) should not have stopped just by observing that the appellants have reversed the same - Reversal would not take away the right of appellants - Moreover, appellants have contested the invocation of extended period of limitation - SCN was issued on 04.10.2018 covering the period from July 2014 to February 2017; issue has been in knowledge of Department in view of audit and other verifications conducted - There is no scope for invoking extended period - It was not discussed or controverted at Original Authority level - Matter remanded to lower authority to verify the documents and allow the credit within four weeks: CESTAT
- Matter remanded: BANGALORE CESTAT
2022-TIOL-333-CESTAT-DEL
Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Ltd Vs CCGST & CE
ST - The appellants are public sector undertakings established by Government of Madhya Pradesh for distribution of electricity - As the issues have already been decided by Gujarat High Court which decision was followed in respect of same appellant by this Bench, no reason found to take a different view in the matter - The issues arises for consideration are exigibility to service tax and consequent imposition of penalties upon appellants for non-payment of Service Tax in respect of Late payment surcharge, Meter renting charges, Supervision charges also known as re-connection and dis-connection charges, Lease rental, Works contract service and Liquidated damages - The issue is whether service tax can be levied on liquidated damages received by appellants from other parties who failed to perform as per contracts - This issue was not specifically dealt in final order dated 14 January 2021 in respect of appellant - However, this matter was dealt with in M/s. South eastern Coal Fields 2020-TIOL-1711-CESTAT-DEL - The view constantly held by Tribunal is that there is a distinction between consideration under a contract and compensation for failure to fulfill the contract - While the consideration is something done by one party at the desire of other party, Compensation or damages are paid when one party fails to perform - No service tax can be levied on liquidated damages received under any contract - The demand of service tax on late payment surcharge meter renting charges and supervision charges are set aside - The demand of service tax on works contract service and lease rent is upheld and the same stands already deposited by appellant - The penalties for extent of service tax on works contract service and lease rent is upheld and the remaining penalties are set aside - The demand on meter rent and re-connection and dis-connection charges in impugned order are set aside and the demand of service tax on rental received from poles use by cable TV network are upheld - The penalties are also upheld only to the extent of this income and the remaining penalty is dropped: CESTAT
- Appeals partly allowed: DELHI CESTAT
2022-TIOL-332-CESTAT-DEL
Rajasthan Housing Board Vs CCE & GST
ST - Assessee is in appeal against impugned order wherein their appeal was rejected on the ground of limitation only and the merits were not at all considered - Commissioner (Appeals) has rejected the appeal on the ground of limitation while laying emphasis upon decision of Apex Court in case of M/s. Singh Enterprises 2007-TIOL-231-SC-CX - The Commissioner and the High Court were justified in holding that there was no power to condone the delay after expiry of 30 days period beyond two months from the date of receipt of O-I-O - Commissioner (Appeals) has committed no error while rejecting the impugned appeal on the grounds of limitation - The simultaneous fact which is apparent beyond anybody's control is that during the said period of two months there had been unprecedented condition of outbreak of covid 19 panedemic resulting into complete nation wide lockdown - It is in view of these circumstances that the Tax department had issued ordinance 2/2020 extending the period of limitation - Keeping in view the same and mandate of article 141 of Constitution of India the period from 02.03.2020 when appeal would have been filed before Commissioner (Appelas), that Commissioner (Appeals) has not committed any error while dismissing the appeal on the ground of limitation, it being statutory mandate on Commissioner (Appeals) on 25.09.2020 when appeal before him was actually filed is hereby excluded from the period of limitation - The period till 30.9.2020/ 28.2.2022 still remains excluded, hence appeal filed on 25.09.2020 is held to have been filed within the period of limitation - Irrespective that the benefit of both these announcements have to be extended in favour of appellant, matter cannot be held to have crossed the period of its limitation as the same was extended in terms of above discussion - The appeal accordingly held to be a fit case to be remanded back to Commissioner (Appeals) for adjudication on merits without considering plea of limitation: CESTAT
- Matter remanded: DELHI CESTAT
2022-TIOL-331-CESTAT-AHM
CC Vs Shell Energy India Pvt Ltd
Cus - Appellant has paid a certain amount of Customs duty - Thereafter, they had sought to create an asset in shape of 'receivables' so as to not pass the effect of payment of duty to the profit and loss account - To nullify the effect of entry 'receivables', it has created a parallel entry exactly opposite to receivables in its ledger as 'provisions' - The net effect of creating 'receivables' and 'provisions' on profit and loss and balance sheet is that the customs duty paid is included in expenditure shown in profit and loss account - The ledgers on the one hand recognizes the disputed amount of customs duty as receivables (an asset) and simultaneously, creates a provision (a liability) for the same amount - These are obviously artificial accounting juggleries as the net combined effect of these two ledger entries in profit and loss account is that the customs duty gets reflected in profit and loss as expenditure - By creating an entry for receivables and thereafter, creating an entry for provision in ledgers, appellant has nullified these entries - Consequently, entire amount of duty paid is passed on as an expenditure to the profit and loss account - Thus, appellant has failed to discharge the burden of unjust enrichment: CESTAT
- Appeals dismissed: AHMEDABAD CESTAT |
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