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2023-TIOL-407-HC-DEL-ST
Mahanagar Telephone Nigam Ltd Vs UoI
ST - Petitioner has filed the present petition impugning a show cause notice dated 22.05.2018 as being ex facie illegal and without jurisdiction - Principal controversy involved in the present case is whether MTNL is liable to pay service tax on the compensation of Rs.458.04 crores received by it from the Government of India on surrender of spectrum - 800 MHz CDMA - SCN proceeds on the basis that the surrender of spectrum against compensation is a "declared service" under Section 66E(e) of the Act and is thus chargeable to service tax.
Held: Limitation: The conclusion that MTNL had suppressed material facts or had contravened the provisions of the Act with an intent to evade service tax is not supported by any material on record - Since it was MTNL's understanding that the compensation received was not a consideration for any taxable service but for the surrender of spectrum, MTNL could not be expected to disclose the compensation as consideration for service in its Service Tax Returns - Respondents have faulted MTNL for not approaching the service tax authorities for clarification - There is no provision in the Act which contemplates any procedure for seeking clarification from jurisdictional service tax authority - Clearly, the reasoning that MTNL ought to have approached the service tax authority for clarification, is fallacious - It is also important to note that MTNL had declared the receipt of compensation as income in its books of accounts - The final accounts of MTNL are in public domain - In the circumstances, the allegation that MTNL had suppressed any material facts from the Service Tax Department is wholly without any basis - No intent to evade tax can be inferred by non-disclosure of the receipt in the service tax return: High Court [para 30, 31, 32, 33, 41]
Merits: The first limb of Clause (e) of Section 66E of the Act [ agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act ] relates to an obligation to refrain from an act or tolerate an act or a situation or to do any act - It is difficult to accept that MTNL had agreed to forbade doing any act as is contended on behalf of the respondents; it had merely agreed to surrender allocation of an asset - It did not agree to tolerate an act - Undisputedly, the act of transferring radio frequencies falls within 'declared service' by virtue of clause (j) of Section 66E of the Act [as introduced by the Finance Act, 2016] - There would be no reason for the Parliament to amend Section 66E of the Act to specifically include the assignment of the right to use radio frequency spectrum or its transfer as a separate 'declared service' if the same was covered under Section 66E(e) of the Act - MTNL had received the compensation during the financial year 2015-16, which was prior to 14.05.2016 - the date on which the Finance Act, 2016 came into force and Clause (j) was introduced in Section 66E of the Act - Thus, the surrender of any right to use the spectrum by MTNL prior to the said date would not be chargeable to service tax - In view of the above, the impugned show cause notice is set aside - Petition disposed of: High Court [para 50, 52, 55, 56]
- Petition disposed of: DELHI HIGH COURT
2023-TIOL-396-HC-AHM-CUS Sufi Impex Vs UoI
Cus - The Petitioner Nos 1-3 are the proprietary concerns which are engaged in import and trade of various commodities including food items - The Petitioner No 4 is the agent of Petitioners Nos 1 to 3 who filed Bills of Entry and other documents on behalf of petitioner traders - The challenge in the petition is directed against the seizure memo dated 20.01.2022 issued by Department which is common memo issued to all the petitioners under Section 11 of the Customs Act, 1962 - The petitioners imported the goods of the description of fresh Kiwi fruits or assorted fresh Kiwi in four different Bills of Lading - The goods came to be seized by aforesaid seizure memo on the allegation that the petitioners misdirected in furnishing details in relation to the import of the said goods - The goods were imported under Bills of Entry No. 1017867 dated 16.11.2022 - The goods were of Chilean origin, routed through Dubai to reach the destination Port - The goods were covered by Bill of Entry No. 1017867 dated 16.11.2022 - It was supported by Psytosanitary Certificate of Dubai authorities bearing no. 2129947 dated 10.10.2022 and Psytosanitary Certificate issued by Chile bearing No. 2171104, 2171710, 2166631, 2158829 dated 09.05.2022 - The Bill of Lading of Dubai was dated 14.11.2022 - Upon examination, the Department authorities found that Psytosanitary Certificate bearing no. 2166631 dated 09.05.2022 was used for clearing more than one consignment of similar quantity - It was found to have been used by as many as four different importers to clear the goods having declared Chile as origin - The authorities proceeded to exercise their powers under section 110 of the Customs Act, 1962, and seized the goods - In the seizure memo, it was stated that the same Psytosanitary Certificate bearing no.2166631 was used many times for similar quantity - The names of the parties who used the same Psytosanitary Certificate included A & A Shipping Services - It is reflected that though goods were seized on 20.11.2022, so far the petitioner is not issued show cause notice. In any case, the adjudicatory proceedings have not started. Held - The Bill of Entry in the present case indicated that they relate to fresh Kiwi fruits of the description mentioned therein - They are perishable foods - The adjudication is pending, not yet started - As far as the conditions on which the goods may be released to the petitioner, the court leaves the said aspect to the competent authority concerned who shall prescribe the conditions on the lines of the conditions prescribed by this court in M/s. A and A Shipping Services exercising sound discretion in that regard and upon compliance of such conditions shall provisional release the goods - Hence the goods are directed to be released subject to fulfilment of certain conditions: HC
- Writ petition allowed: GUJARAT HIGH COURT
2023-TIOL-264-CESTAT-MUM
Abhijit Logistics Vs CCE & ST
ST - During disputed period, appellant had discharged service tax liability from net value of services received from recipient of service - Short payment of tax was disputed by Department on the ground that appellant was required to pay service tax on the value indicated in invoices - Based on books of accounts, maintained by appellant, officers of service tax department had conducted audit and they have not disputed the authenticity or accuracy of records maintained by appellant - Further, towards provision of taxable service, appellant had received lesser amount than that as shown in invoices issued to service recipient - Since, towards provision of taxable service, appellant had received lesser amount, after adjustment of aforementioned deductions, their tax liability is confined only to the amount, which was actually received for provision of taxable service - Thus, charges of suppression cannot be levelled against appellant - Commissioner (A) has also modified adjudication order in setting aside the penalty imposed under Section 73 ibid - Thus, extended period of limitation cannot be invoked for recovery of adjudged demands confirmed beyond normal period of one year - No merits found in impugned order, insofar as it has confirmed service tax demand for extended period, beyond one year along with interest and penalty under Section 77 ibid on appellant - Therefore, same is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2023-TIOL-263-CESTAT-AHM
A Kumar Industries Vs CCE & ST
CX - The investigating officer visited factory of the appellant and conducted the stock verification of the finished goods - During the stock verification excess stock of 32.15 MT of MS ingots was found as compared to stock recorded in the stock register - The Panchnama was drawn and statement of Shri. Amit Gupta partner of M/s A Kumar Industries was recorded - Thereafter, a SCN was issued proposing confiscation of the excess stock, imposition of redemption fine and penalties - The adjudicating authority in the Order -In -Original confiscated the stock of 32.15 MT MS Ingots valued at Rs. 9,87,005/- and imposed redemption fine of Rs. 2 Lakhs and penalty of Rs. 35000/- and the penalty of Rs. 50,000/- was also imposed on Shri. Amit Gupta partner of M/s A Kumar Industries - Being aggrieved by the Order-In Original both the appellants filed appeals before the Commissioner (Appeals) - The Commissioner (Appeals) while passing order- in- appeal taking a lenient view reduced the penalty from 35000 to 10,000/- and on Shri. Amit Gupta from 50,000/- to 20,000/- - However, remaining part of the order was upheld. Held - As per the investigating officer excess stock of 32.15 MT was alleged as against the total stock recorded in RG-1 register of 625.710MT - The appellant have vehemently objected on this difference in the stock merely on the ground that no physical stock taking was conducted and methodology of the stock taking was not disclosed - We find that in this fact I do agree with the Counsel that the adjudicating authority was supposed to give the details of methodology in stock taking and also allowed the cross-examination of panchas - In this fact I am of the considered view that the matter needs to be remanded to the adjudication authority for reconsideration after allowing the cross examination of panchas - As regard appeal of Shri. Amit Gupta partner of M/s A Kumar Industries, I find that without going into the merit, it is settled law that once the penalty is imposed on the partnership firm it's partner cannot be imposed penalty separately - This issue has been considered and settled by the Gujarat High Court in the case Commissioner of Central Excise vs. Jai Prakash Motwani - Hence no penalty can be imposed on Shri Amit Gupta: CESTAT
- Appeal allowed: AHMEDABAD CESTAT |
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