2022-TIOL-NEWS-257 Dated : Thursday, November 03, 2022

2022-TIOL-984-CESTAT-AHM

Kkalpana Industries India Ltd Vs CCE & ST

CX - The Cenvat credit was denied by Lower Authorities on the ground that since there is a suppression of fact in terms of Rule 9(1)(bb) of Cenvat Credit Rules, 2004, appellant is not entitled for Cenvat credit and consequential the refund - Though appellant have paid Service Tax on Ocean freight on instruction of audit, but no SCN was issued for demand of such Service Tax - In absence of any proceedings with respect to demand of Service Tax, charge of suppression of fact does not exist, for holding that there is a suppression of facts on the part of appellant - It is necessary that said charge is adjudicated by issuing a SCN and adjudication process, which is absent in present case - Since, there is no suppression of fact, Rule 9(1)(bb) ibid is not applicable, accordingly, appellants are entitled for Cenvat credit - As regard the cash refund of said amount, even though there is no provision under Section 11B but as per special provision under Section 142(3) of CGST Act, appellant is prima facie entitled for cash refund - Moreover, issue of taxability on Ocean freight has now been decided in case of M/s. SAL Steel limited 2020-TIOL-163-HC-AHM-ST - Since this judgment was not available before Lower Authority, issue of taxability is also kept open and appellant has liberty to raise this issue also before Adjudicating Authority - Accordingly, impugned orders are set aside: CESTAT

- Matter remanded: AHMEDABAD CESTAT

2022-TIOL-983-CESTAT-DEL

M B Industries Pvt Ltd Vs CCGST & CE

CX - Issue involved is, whether issuance of Input Service Distributor (ISD) invoice by M/s Parle Biscuits Pvt. Limited to its contract manufacturing unit M/s M.B. Industries Pvt. Ltd., is legal and correct when the contract manufacturing is carried in terms of Notification No. 36/2001-C.E. (N.T.) - Issue herein is squarely covered in favour of appellant by Larger Bench ruling of Tribunal in case of Krishna Food Products 2021-TIOL-294-CESTAT-DEL-LB - Even in terms of provisions of Rules 2(m) and 7 of Cenvat Credit Rules, 2004, as they stood prior to 01.04.2016, appellant company can distribute CENVAT credit in respect of service tax paid on input services to its manufacturing units, including a job worker - Following the said order, impugned orders are set aside: CESTAT

- Appeals allowed: DELHI CESTAT

2022-TIOL-982-CESTAT-MAD

Hari Prabhu Vs CC

Cus - One M/s Universal Exim, (IEC No. 0415019303) had imported goods declared as "Stationery Goods" vide Bill-of-Lading dated 02.01.201 - The consignment was imported in container bearing number TCNU8248262 at M/s. A.S. Shipping Agencies Private Limited,- As on the date of the Demand-cum-Show Cause Notice, the importer had not filed Bill-of-Entry for clearance of the said cargo - Based on specific intelligence, the consignment was taken up for examination wherein it was observed that apart from stationery goods, the consignment also contained cosmetic items of various brands like MAC, HUDA BEAUTY, KYLIE, LAKME, MAYBELLINE, LOREAL, MATRIX, etc. - The consignment consisted of 108 cartons of stationery goods, 445 cartons of cosmetic items of various brands like LAKME, MAYBELLINE, LOREAL, MATRIX, etc., that were registered with the Customs for the purpose of Intellectual Property Rights (IPR) and 303 cartons of non-IPR infringing cosmetic items bearing various brand names like Chanlanya, Glammiere, Huda Beauty, Kylie, Kryolan, etc - The Revenue suspected that there was infringement of Intellectual Property Rights of some of the above brands - The importer had mis-declared the description of the subject goods as "Stationery Goods" by unauthorizedly importing 445 cartons of cosmetic items, as indicated above, in violation of the Trademark Act, 1999, which prompted the authorities to believe that the above goods appeared to be prohibited under Section 11 of the Customs Act, 1962 read with the Intellectual Property (Imported Goods) Enforcement Rules, 2007 and that consequently, the said goods were liable for confiscation under Sections 111(l) and 111(m) ibid - Such findings were sustained on appeal - The Officers of the SIIB, during investigation, summoned various persons and recorded statements under Section 108 and thereafter, penalties were proposed on various persons including penalties under Section 112(b) and Section 114AA ibid on the appellant before this forum. Held - The findings of the AO clearly exonerates this appellant from the penal action under Section 114AA of the Customs Act, 1962, for the reason that there was no material on record to prove that the appellant had submitted the fake gate pass - This, combined with another part of the order holding there to be no evidence other than statement of one Shri R Suresh to suggest the involvement of this appellant in the illegal removal of the subject container, clearly indicates that the appellant has been targeted for no reason whatsoever in this case - Also, there is no material on record as to role of the appellant, omission or commission, that has led to the confiscation of the prohibited goods and it is a matter of record that no goods were confiscated at all in this case on hand - It is also a matter of record that the subject container was very much in the custody of the SIIB Officers since no Bill-of-Entry was ever filed and hence, the alleged removal from the CFS could only attract act of 'theft' under the Indian Penal Code, for which a separate police complaint was lodged and the Revenue has not placed before me the current status of the said complaint - The Revenue has also not placed anything on record as to against whom such complaint has been lodged and if this appellant is one of the accused - Hence, as far as this appellant is concerned, the statement of Shri Chandrasekhar or even that of Shri R. Suresh is clearly insignificant, also for the reason given by the AO in the Order-in-Original and hence, the penalty levied on this appellant is arbitrary and unsustainable: CESTAT + The Revenue appears to have relied on the statement of Shri R. Suresh, Partner of M/s. Saptagiri Logistics, at whose godown it is alleged that the Container No. TCNU 8248262 reached on 20.08.2018, which was referred by his friend Shri Chandrasekhar for the job of shifting the cargo contained in this trailer to other vehicles and hence, both Shri R. Suresh and Shri Chandrasekhar would be the necessary parties who could have revealed the truth. There is nothing on record other than Shri Chandrasekhar informing Shri R. Suresh that the above job was given to him by the appellant before this forum. Surprisingly, this Chandrasekhar, who is alleged to have been assigned the job, is not a party/co-noticee. It is also a matter of record that in his voluntary statement, said Chandrasekhar has denied having known this appellant.

- Appeal allowed: CHENNAI CESTAT

2022-TIOL-981-CESTAT-AHM

Ultratech Nathdwara Cement Ltd Vs CC

Cus - Applicant filed the application in view of NCLT order - NCLT has passed an order by approving resolution plan of company M/s. Binani Cement Limited in favor of M/s. Ultratech Nathdwara Cement Limited, who is resolution applicant - As per resolution plan approved by NCLT and in light of Supreme Court judgment in case of Ghanashyam Mishra & Sons Pvt. Ltd. , it prima facie appears that adjudged dues cannot be recovered by department however, issue has to be decided by department and not by Tribunal - For this reason, that firstly, there is no provision made in Customs and Central Excise Act to give effect of NCLT proceedings - This Tribunal being creature under Customs Act, even though the Insolvency and Bankruptcy Code have over riding effect over all the other Acts in absence of any explicit provision under Customs/Central Excise Act, Tribunal cannot decide finally whether adjudged amount can be recovered by department or otherwise - Appeal became infructuous - Both the sides have liberty that in case of any amicable resolution is not arrived at between the appellant and respondent to approach this Tribunal to revive the present appeal and be decided on merit if required - The assessee against whom IBC proceedings are initiated invariably approach Tribunal through miscellaneous application for disposing of appeals in the light of NCLT's orders - However, in absence of any guideline by CBIC, revenue is unaware as to what stand is to be taken in such cases - Therefore, Central Board of Indirect Taxes & Customs may consider issuing guideline/procedure for dealing with case before this Tribunal wherein, against the assesse's company IBC proceeding has been initiated: CESTAT

- Appeal dismissed: AHMEDABAD CESTAT

2022-TIOL-980-CESTAT-AHM

Chashmita Engineers Pvt Ltd Vs CCE & ST

ST - Assessee is in appeal against demand of Service Tax, interest and imposition of penalties - Assessee is seeking benefit of Notification No. 20/2003-ST in respect of service provided by them in respect of AVETCS system - It is seen that Notification No. 20/2003-S.T. provides exemption only to maintenance or repair of computers, computer systems or computer peripherals - The AVETCS systems can by no means be called computers, computer systems or computer peripherals - The mere fact that AVETCS contains computer system does not make it Computers, Computer Systems or Computer Peripherals - Appellant is not entitled to benefit of said Notfn - The second issue relates to imposition of penalty in respect of payments for period September, 2006 to March, 2007 and April, 2007 to June, 2007 are concerned - Appellant has claimed that payments were made voluntarily - Significant force found in argument given by Commissioner (A) in impugned order consequently, the appeal filed on this count is also dismissed: CESTAT

- Appeal dismissed: AHMEDABAD CESTAT