2023-TIOL-62-SC-CUS
UoI Vs A B P Pvt Ltd
Cus - Civil appeal arises from a judgment of the Calcutta High Court which held the withdrawal of a customs notification invalid - High Court observed that the imported machine was neither manufactured in any part of the country at the relevant point of time nor any copy of representation received from domestic manufacturers questioning the exemption granted to the imported machine was shown by the revenue - High Court further noted that the assessee is entitled to claim the benefit of the concessional rate of customs duty paid on the imported goods instead of the higher tariff as sought by the amended notification - The Union is aggrieved by the impugned order and has approached theSupreme Court.
Held: Once it is recognized that it is the executive's exclusive domain, in fiscal and economic matters to determine the nature of classification, the extent of levy to be imposed, and the factors relevant for either granting, refusing or amending exemptions, the role of the court is confined to decide if its decision is backed by reasons, germane, and not irrelevant to the matter - Judicial scrutiny can also extend to consideration of legality, and bona fides of the decision - The wisdom or unwisdom, and the soundness of reasons, or their sufficiency, cannot be proper subject matters of judicial review - In the present case, the impugned judgment has virtually conducted a merits review of the concerned economic measure - Court is of the opinion that the High Court, by the impugned judgment, erred in judging the merits of the reasons which led the executive government to issue the Amended Notification - Grant of exemption to a class of goods, which are similar to those manufactured within the country, and its likely adverse impact on such manufacturers or producers, is germane and relevant - Impugned judgment cannot be sustained; it is accordingly set aside –Revenue appeal is allowed: Supreme Court [para 28 to 30]
- Appeal allowed: SUPREME COURT OF INDIA
2023-TIOL-61-SC-CT
K B Tea Product Pvt Ltd Vs CTO
Sales Tax - Blending of tea - Appellants submit that had been allured by the State of West Bengal Government to set up new industrial unit in expectation of getting benefit of tax for a period on fulfilment of certain requirements and once on the basis of such requirements such industrial unit is given such benefit, subsequently, by way of amendment such right cannot be taken away - It is submitted that the State action in this case, fails to meet the test of reason and relevance, as no explanation has been given by the State for rescinding the benefits.
Held:
Two substantial questions of law have been raised:
I. Whether the appellants herein have a vested right in claiming exemption from payment of sales tax under the Act, since the vested right was accrued upon the appellants before the amendment was made under Section 2(17) of the Act?
II. Whether the doctrine of legitimate expectation is applicable in the present case since the appellants had set up their industrial units on the basis of the allurement of a tax holiday granted by the Government?
Per: M R Shah
+ It is required to be noted that this is a case of claiming exemption from payment of sales tax. As per the settled position of law, nobody can claim the exemption as a matter of right. The exemption is always on the fulfilment of the conditions for availing the exemption and the same can be withdrawn by the State. To grant the exemption and/or to continue and/or withdraw the exemption is always within the domain of the State Government and it falls within the policy decision and as per the settled position of law, unless withdrawal is found to be so arbitrary, the Court would be reluctant to interfere with such a policy decision. [para 8.1]
+ Definition of "manufacture" as contained in Section 2(17) of the Act, 1994 came to be amended w.e.f. 01.08.2001 vide West Bengal Finance Act, 2001 and the activity of "tea blending" came to be excluded from the definition of "manufacture". Consequently, the appellants ceased to be the manufacturers. Once the appellants ceased to be the manufacturers, the appellants shall not be entitled to the exemption from the payment of sales tax, which was available to the appellants as a manufacturer being in the activity of "tea blending". Therefore, on and from 01.08.2001, "tea blending" activity ceased to be the manufacturing activity and the appellants ceased to be the manufacturers and therefore, on and from 01.08.2001, the appellants shall not be entitled to the exemption from payment of sales tax. Thus, the withdrawal of exemption from payment of sales tax would be prospective and not retrospective. So long as the appellants continue to be the manufacturers as per Section 2(17) of the Act, 1994 prevailing prior to 01.08.2001, the appellants can be said to be entitled to the benefit of exemption from payment of sales tax as manufacturers being in the activity of "tea blending". The moment, "tea blending" activity ceases to be the manufacturing activity, on and from that day, the appellants shall not be entitled to the exemption from payment of sales tax. [para 8.2]
+ So far as the submission on behalf of the appellants on legitimate expectation and/or promissory estoppel and the submission on behalf of the appellants that the "vested right" cannot be taken away is concerned, the aforesaid has no substance. There cannot be any promissory estoppel against the statute as per the settled position of law. [para 8.3]
+ Bench is in complete agreement with the view taken by the Tribunal as well as the High Court that on and after 01.08.2001 and in view of the amendment to Section 2(17) of the Act, 1994, by which the definition of "manufacture" is amended and "tea blending" is excluded from the definition of "manufacture", the appellants shall not be entitled to the exemption from payment of sales tax. Appeals fail and the same are accordingly dismissed. [para 9]
- Appeals dismissed: SUPREME COURT OF INDIA
2023-TIOL-60-SC-CX
CCE Vs Reliance Media Works Ltd
Whether findings recorded by CESTAT regarding classification of silver residue and demand of excise duty on same, does not lead to any question of law, worth interference - YES: SC
- Revenue's appeal dismissed: SUPREME COURT OF INDIA
2023-TIOL-59-SC-ST
CCGST & CE Vs Sasan Power Ltd
On appeal, it is noted that a request for adjournment made on behalf of the Revenue is seriously objected by the counsel for the assessee. Though, the objection cannot be said to be unjustified, the Supreme Court in the interest of justice, extended an opportunity and listed the matter for next week.
- Case deferred: SUPREME COURT OF INDIA
2023-TIOL-345-CESTAT-DEL
CCE & CGST Vs Rajasthan Spinning And Weaving Mills (RSWM) Ltd
CX - The question of law sought to be raised by revenue is that whether assessee is entitled to claim modvat credit on parts /components of DG set as they are not the manufacturer of these DG sets which was commissioned/directed by another person - Issue is no longer res-integra as same has been decided in several decisions of Tribunal which have been affirmed by High Court and Apex Court - It is observed that DGPP sets on which modvat credit is allowed is part and parcel of factory of assessee which is ultimately used in manufacture of end product- cement - Therefore, Sl. No. 5 of Table appended to rule 57 Q shall be attracted and assessee shall be entitle to modvat credit on such DGPP sets being part/components of cement plant/final manufacture product - Assessee acquired the components of generating set, not for use in manufacture of generating set as a final product but to generate electricity which was required for manufacture of yarn which was their final product - Needless to mention that parts, spares and accessories are covered under definition of capital goods under Rule 57-Q - Order of Commissioner (A) is upheld - Consequently, appeal of revenue is dismissed: CESTAT
- Appeal dismissed: DELHI CESTAT
2023-TIOL-344-CESTAT-MUM
Future Generali India Insurance Company Ltd Vs CC
ST - Department has proceeded against appellants for confirmation of adjudged demands on the ground that no services were provided by automobile dealers and therefore, Cenvat credit is not available to appellants, based on invoices issued by such dealers - On the contrary, facts are not under dispute that dealers of automobiles are registered with service tax department for provision of taxable output service(s) and that service tax collected by them from appellants were remitted into Government exchequer - Since, the issue regarding payment of service tax and compliance of statutory provisions, more specifically as contemplated under Rule 4A of Service Tax Rules, 1994 have not been disputed at service provider's end, same cannot be questioned or objected to by service tax authorities, having jurisdiction over premises of appellants, as recipient of such taxable service, at the time when Cenvat credit of service tax was availed by them - An identical issue came up for consideration by Madras High Court in case of M/s. Modular Auto Ltd. - It is observed that by placing reliance on judgement of Madras High Court, Tribunal in the cases relied upon by appellants has held that unless and until the assessment made at dealer's end is revised or altered, the Cenvat credit availed on the basis of invoices by recipient's unit cannot denied/whittled down - No force found in impugned order, insofar as it has confirmed adjudged demands on appellants - Therefore, impugned order is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2023-TIOL-343-CESTAT-HYD
Sandor Medicaids Vs Pr.CC
Cus - Issue involved is with regard to classification of imported goods namely; I Stat Blood Gas Investigation Cartridges, I Stat Wireless Analysers with printer kit and I Stat Alinity Instruments with accessories - Whether said goods are classifiable under Customs Tariff Heading 9027 as classified by appellant or under CTH 9018, as contended by Revenue and further regarding eligibility of concessional duty/exemption under Notfns 24/2005-Cus and 25/2005-Cus - Facts are squarely covered by precedent order of Tribunal in Bayer Pharmaceuticals Pvt. Ltd. 2015-TIOL-2159-CESTAT-MUM, wherein Tribunal was considering the classification of blood glucose meter or glucometer, which analyses only one component i.e. blood sugar - There are more than one parameters, being analysed, in addition to blood glucose like sodium, potassium, calcium, hemoglobin, blood gases, ACT, coagulation parameters and cardiac markers - On going through the product catalogue, it is held that instrument - I Stat System along with cartridges are prima facie used for anylysis of various parameters of blood, and is prima facie a blood analyser - Both in case of glucometer or in case of present I Stat System with cartridge, blood is drawn and a few drops of blood are put on cartridges or test strip and thereafter, on being attached to I Stat System/Analyser, gives the readings - The only difference is that the item under consideration is more sophisticated than glucosemeter - The testing of blood by analyzing and indicating various parameters is undisputedly an outcome of chemical analysis - The heading 9027, which covers instruments for chemical analysis is more specific than CTH 9018, which covers instruments used in medical/surgical science - Further, Rule 3 of General Rules of Interpretation provides that a specific description is to be preferred over a general description - Court below have erred in deciding classification relying on the facts that goods in question are mostly used on bedside or in an ICU - Accordingly, following the precedent ruling of Tribunal in Bayer Pharmaceuticals , goods under consideration are appropriately classifiable under CTH 9027 - Extended period of limitation is not attracted, issue being wholly interpretational in nature and there being no res judicata in tax matters, impugned order is set aside: CESTAT
- Appeal allowed: HYDERABAD CESTAT |
