2022-TIOL-NEWS-229 Dated : Thursday, September 29, 2022

2022-TIOL-891-CESTAT-MUM

Wheels India Ltd Vs CCGST & CE

CX - Issue involved is for denial of credit on services actually received by appellant but at the premises which are unregistered - It was submitted that in terms of Rule 3(1) of CCR, 2004, input services should have been received in registered premises of appellant - A plain reading of Rule 3(1) shows that requirement of receipt in the premises of manufacturer or provider of output service is in respect of inputs and capital goods - There is no requirement as per this rule which provides that input services should have been received in registered premises of appellant - Since there is no requirement as per Cenvat Credit Rules which supports the case that input services should have been received in registered premises of appellant, case made out cannot be sustained - Impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

2022-TIOL-890-CESTAT-DEL

Shankar Lal Dhingra Vs CCE & CGST

CX - Department had conducted raid upon three manufactures of confectionary items along with two non registered dealers on the same date i.e. on 23.10.2013 - SCN for seizure of goods is under consideration as against M/s. Amber Nutrition Pvt Ltd. - Issue arises for consideration is as to whether the manufactured goods of confectionary items which got detained from several places were meant for clandestine removal and as such demand of duty has rightly been confirmed upon them; whether the penalty upon manufacturer thereof and upon inchrarge of these manufacturers and penalties upon their unregistered dealers can be imposed under Rule 25/ Rule 26 of CER, 2002, are justified - There is no inculpatory statement by any of representative of manufacturers; department had not conducted any investigation to prove clandestine manufacture - There also appears no enquiry as regards the procurement of various raw materials as was detained - Nor any inquiry as regards the transportation of goods except from driver of truck which was found parked loaded with 100 boxes of mix fruit flavour lolypop that too in the third party premises of M/s. Amber Confectionary Pvt. Ltd. - It is well settled law that neither the shortage/ excess of one or more of the raw material nor the unaccounted finished goods found lying in premises of manufactures during search can lead to inevitable conclusion of clandestine manufacturer and removal - Above all, there is no denial to facts that goods in question were found in third party premises and the apprehension is also on the basis of third party statement - Allegations of clandestine removal of goods against both the manufactures and their office bearers/ owner (also appellants herein) are without any cogent basis and accordingly, are not sustainable - Coming to the issue of imposition of penalties upon office bearers/ incharge of manufacturers, there is no evidence even about any cash flow which may prove element of any mens rea/bad intention to evade duty, question of imposition of penalty does not at all arise - Duty demand with respect to M/s. Amber Nutrition has admittedly been set aside by department itself, there arises no question for seizure of goods or for imposition of penalty on proprietor thereof - The order imposing penalty upon manufacturers or their office bearer/ incharge/owner is hereby set aside - As regards to imposition of penalty upon dealers of manufactures who are M/s. Amber Sales Corporation and M/s. Satyam Traders - Both these dealers apparently are non registered dealers - Imposition of penalty upon non registered dealers that too under Rule 25 and Rule 26 of Central Excise Rules is absolutely unreasonable, infact is beyond the statutory provisions - Accordingly, same is set aside - Coming to imposition of penalty upon truck driver, Shri Jhabbu Singh, it is observed that he not being the manufacturer, nor registered person of ware house or a registered dealer, does not come under scope of Rule 25 and Rule 26 of CER, 2002: CESTAT

- Appeals allowed: DELHI CESTAT

2022-TIOL-889-CESTAT-MAD

IFB Industries Ltd Vs CC

Cus - I ssue arises is whether the appeal is time-barred as held by Commissioner (A) - It is noted by Commissioner (A) that O-I-O is signed by adjudicating authority on 06.04.2015 - Merely because the appellant had mentioned date of receipt of order in Form C.A.1 as 09.03.2015, Commissioner (A) has blindly accepted this date for computing period of limitation - When it is obvious that date mentioned in Form C.A.1 is an inadvertent error, Commissioner (A) ought to have considered the argument put forward by appellant with regard to error committed by them - OIO having been signed on 06.04.2015 and the impugned order having been received by appellant only on 09.06.2015, when computed from date of receipt of impugned order, appeal ought to have been filed on 08.08.2015 - Appeal is filed on 13.08.2015 with a delay of 5 days which is within condonable period of limitation - Matter remanded to Commissioner (A) who shall give an opportunity to appellant to file an application for condonation of delay in filing the appeal - Commissioner (A) shall consider the application and hear the appeal on merits: CESTAT

- Matter remanded: CHENNAI CESTAT

2022-TIOL-888-CESTAT-AHM

Tejas Kanubhai Dayatar Vs CC

Cus - Appeal filed against impugned order whereby the Commissioner imposed penalty under Section 117 of Customs Act, 1962 - A plain reading of Section 117 of Customs Act clears that said provision provides for imposing penalty if a person contravenes any provision of Act or abets any such contravention - In impugned order, there is no mention as to which provision of law was contravened by appellants - For a penalty under Section 117, there must be finding of contravention of some legal provision and, further, a finding to the effect that such contravention was not covered by any other penal provisions of the Act - These pre-requisites are missing in impugned order - The ground on which penalty has been imposed on appellant i.e he was keeping silent about the illicit activities of Shri Jignesh, is not a valid ground for imposition of penalty under Section 117 of Customs Act - No other evidence attributing knowledge or intention on the part of appellant has been relied upon - Impugned order is not sustainable, same is set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

2022-TIOL-887-CESTAT-AHM

IDMC Ltd Vs CCE & C

ST - All the five units of appellant are engaged in manufacture of excisable goods and availing cenvat credit - Unit No. II has paid service tax on certain services under reverse charge mechanism - On inquiry from appellant regarding payment of service tax, appellant have submitted challans whereby service tax was paid by Unit No. II - Department considered the entire service tax paid by Unit No. II was availed as cenvat credit by Unit No. V and accordingly SCN for disallowance of cenvat credit was issued - All the documents had been submitted by appellant before both lower authorities and also before Tribunal which clearly shows that service tax was paid in respect of all five units and amount of service tax attributed to appellant unit is only Rs. 1,24,129/- - It is established from records that appellant have taken credit of Rs. 1,24,129/- only - This position was made very clearly before original authority as well as Commissioner (A) - Surprisingly both the authorities have discarded this defence stating that it is an afterthought - It is clearly a fact on record which both the authorities should have verified which they utterly failed to do so - Moreover, right from SCN stage till Commissioner (A) stage there is no evidence on record that appellant have taken cenvat credit of Rs. 20,72,909/- - For this reason also, entire basis of SCN has no leg to stand - As regard, the credit of Rs. 1,24,129/- availed by appellant, adjudicating authority and Commissioner (A) denied this credit on the ground that Unit No. II which has a centralized registration should have issued ISD invoice and in absence of ISD invoice, credit is not admissible - The invoice of service provider is in favour of appellant unit V, requirement of ISD invoice arises only when invoices is in name of Head Office - Since the service was received by appellant and invoice is in their name only, there is no need of any ISD invoice and appellant have correctly availed the credit - Merely because, Unit No. II has paid service tax, eligibility of cenvat credit of appellant's unit will not adversely be affected because irrespective of any unit paying service tax, all the units are under one single entity i.e. M/s IDMC Ltd. - Appellant is entitled for cenvat credit of Rs. 1,24,129/- and remaining amount for which appellant have otherwise not taken the credit, demand of same will not sustain - Thus, entire demand of cenvat, interest and penalty is set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

2022-TIOL-886-CESTAT-DEL

CCE & ST Vs Power Finance Corporation

ST - Respondent, Power Finance Corporation, is engaged in providing services under the category of 'Banking and other financial services (BOFS)' - In Audit, it was noticed that the respondent was providing loans for energy and energy efficiency projects, State Electricity Boards and private parties and even though the respondent had earned Rs.8,94,64,916/- as premium for restructuring of loans in 2008-2009 and Rs.6,76,027/- during 2007-2008 but the respondent treated these amounts as interest income and did not pay service tax - SCN dated 31.01.2011 was issued demanding service tax of Rs.1,11,57,422/- under BOFS but the same was dropped by the Commissioner, therefore, the present appeal by the Department. Held: In order to get the benefit of reduced rate of interest applicable on its loan, the customer approaches the respondent as per the proposal for interest restructuring - The respondent, in order to cover up some part of its losses (50%) due to reduction in interest rate, calculates the interest adjustment as per the formulae prescribed by the Reserve Bank of India and after receiving the same from the customer, agrees to restructure its applicable rate of interest to a lower rate (6%) - Relevant excerpts of Guidelines of the Reserve Bank of India (2008) in relation to interest restructuring shows that the method of computation of interest adjustment is nothing but the difference between the interest computed on higher rate of interest (say, 9%) and that computed on lower rate of interest (say, 6%) and such difference (including future instalments) discounted to Net Present Value - Thus, premium so charged by the respondent from its customers due to interest restructuring is nothing but net present value of loss of interest that will be caused to the respondent - Even if it is assumed that it is in the nature of 'foreclosure charges', the same cannot be subjected to service tax in view of the Larger Bench decision in the case of Repco Home Finance Ltd. - 2020-TIOL-1039-CESTAT-MAD-LB - Even otherwise, the extended period of limitation could not have been invoked in the facts and circumstances of the case as the respondent had duly disclosed and recorded the information in its books of account - Impugned order passed by the Commissioner, therefore, does not call for any interference in appeal - Revenue appeal is dismissed: CESTAT [para 13, 15, 18, 21, 22]

- Appeal dismissed: DELHI CESTAT