2022-TIOL-NEWS-247 Dated : Friday, October 21, 2022

2022-TIOL-1328-HC-AHM-CUS

CC Vs Patanjali Foods Ltd

Cus - Commissioner of Customs has filed this appeal under section 130 of the Customs Act, 1962 challenging the order dated 25.04.2018 passed by CESTAT and has proposed various substantial questions of law – Respondent submits that by order dated 24.07.2019 followed by order dated 4.09.2019, the application of the Resolution Professional was allowed by NCLT approving the Resolution Plan and accordingly, the management of M/s. Ruchi Soya Industries Limited came to be vested in the successful Resolution Applicant i.e. M/s. Patanjali Foods Limited; that the appellant Commissioner of Customs admittedly did not lodge any claim before the Resolution Professional after public notices were issued under sections 13 and 15 of the IBC and as such, the present appeal is required to be dismissed only on that ground without going into the merits.

Held: s.32A of the IBC Act clarifies that upon completion of corporate insolvency resolution process, even liability of corporate debtor for an offence committed earlier would cease and hence the appellant department cannot proceed further with the present appeal in absence of any claim lodged with the Resolution Professional during the insolvency resolution process before the NCLT - Taking into consideration the fact of the completion of the resolution process of the respondent by the NCLT and undisputed fact that the appellant has not lodged any claim in the capacity of the Operational Creditor before the Resolution Professional, this appeal is required to be disposed of as having become infructuous and abated with regard to any liability of any nature whatsoever having extinguished in view of the implementation of the Resolution Plan and change in management and control of the assessee in view of the provisions of section 31 and section 32A of the IBC as fortified by the orders passed by the Apex Court in case of Ghanashyam Mishra and Sons v. Edelweiss Asset Reconstruction = 2021-TIOLCORP-23-SC-IBC-LB - appeal accordingly stands disposed of as abated: High Court [para 11, 13, 14]

- Appeal disposed of: GUJARAT HIGH COURT

2022-TIOL-953-CESTAT-DEL

Shiv Naresh Sports Pvt Ltd Vs CST

ST - Appeals have been filed by appellant against rejection of their refund claims - Appellant is seeking to classify the services provided by them in service description of commercial and industrial construction - The activity of laying of Synthetic Athletic Track Surface is akin to activity of floor and wall tiling, wall covering and wall papering - The activity is of civil nature and, therefore, would be covered by activities described in definition of commercial or industrial construction service, however, since the same have been provided in respect of sport facilities owned by Government, State or Centre, same would not be chargeable to tax - It is seen from impugned order that since it was held that no refund is admissible, ground of unjust enrichment as well as limitation were not examined - Revenue has raised the issue regarding absence of challenge to self-assessment by appellant in light of decision of Apex Court in ITC Ltd. 2019-TIOL-418-SC-CUS-LB - This issue was not raised earlier, but being a legal issue, same can be raised - Impugned order does not contain any findings on the issue of limitation or unjust enrichment - Since the issue of unjust enrichment, limitation and the implication of decision of Apex Court in case of ITC Ltd. has not been examined by lower authorities, it needs to be sent back to original Adjudicating Authority - In so far as taxability of service provided is concerned, it is held that the services provided by appellant are not taxable: CESTAT

- Matter remanded: DELHI CESTAT

2022-TIOL-952-CESTAT-MUM

Rukminirama Steel Rollings Pvt Ltd Vs CC & CE

Cus - Controversy in this appeal is determination of appropriate rate of duty on 'used mild steel (MS) plates' imported upon procurement of these after demolition of six 'petrochemical tanks' in United Kingdom by M/s GK Middle East FZC - Customs authorities chose to classify impugned goods against tariff item 7208 2510 of First Schedule to CTA, 1975 corresponding to products in prime condition instead of declaration against Tariff Item 7204 49 00 corresponding to 'waste and scrap' in First Scheduled to Customs Tariff Act, 1975 - Description has been sub-classified at the eight digit level for one item and, for all other items, as seven enumerations 'in coils' and four enumerations for those 'not in coils', at six digit level and the adopted item lies with the first of these but, nonetheless, comprising 'flat-rolled products' 'hot rolled' in 'coils' without any explanation for concluding that plates were presented as coils - Clearly, classification adopted in impugned order does not relate to description of product as imported and presented - Not only is the revised classification inappropriate but there is also no reason for classification sought for in bills of entry to be substituted in view of its appropriateness; impugned goods have industrial significance only as 'waste and scrap' which is the feedstock for melting in furnaces - Consequently, eligibility for benefit of exemption notification as well as not being subject to restriction prescribed in Foreign Trade Policy on import of used goods is established - Impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

2022-TIOL-951-CESTAT-DEL

Baba Super Minerals Pvt Ltd Vs CCE, C & CCGST

CX - Appellant is manufacturer of Quartz powder & Grits & Marble powder which fall under Headings 2506 and 2517 which prescribes nil import tariff rate - Appellant filed refund claim of Cenvat credit in terms of Rule 5 of CCR, 2004 - After being scrutinized, claim was proposed to be rejected vide SCN on the ground that since the goods were exported without payment of duty but not under the bond or letter of undertaking, appellant was denied to claim the benefit of Rule 6(1) of CCR, 2004 - Admittedly, appellant has not exported manufactured quartz under bond or letter of undertaking - The object of this bond or letter of undertaking is that the registered person binds itself to pay leviable duty/tax along with interest at a subsequent date when at the time of export he is not willing to pay duty or is not in a position to pay the same - Goods admittedly were subjected to nil rate of duty, question of furnishing of bond or letter of undertaking does not at all arise - Thus, refund does not appear to be maintainable under Rule 5 of CCR, 2004 - Perusing Rule 6 of CCR, 2004, it becomes clear that Cenvat credit shall not be allowed to a manufacturer of final product on such quantity of input as is used in or in relation to manufacture of exempted goods - Rule 6 of Cenvat Credit Rules, prescribes the procedure of Cenvat credit on manufacturer who Manufacturers both dutiable and exempted products - However, certain categories of clearances are not covered under purview of said Rule and one among them was "Export under Bond" - Unfortunately, by amending Notification No. 42/2001-C.E., facility of export of exempted goods under Bond was withdrawn vide Notification No. 24/2010-CE (NT) - It is clear that goods subject to nil rate of duty are not eligible for Cenvat credit on inputs used in export of exempted goods - Appellant was not entitled to claim Cenvat credit of duty paid on imports used in manufacture of product to which nil rate of duty was applicable - In such situation if some credit has been availed Rule 14 should have first been applied by department - It is not coming apparent as to whether said rule 14 has been complied with by department prior rejecting the impugned refund - Accordingly, matter is remanded back to original Adjudicating Authority to check for compliance of Rule 14 CCR, 2004 and then to freshly adjudicate the impugned refund: CESTAT

- Matter remanded: DELHI CESTAT