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2023-TIOL-420-CESTAT-KOL
SAIL Alloy Steel Plant Vs CCE
CX - The appellant supplied billets, rounds, HT Bars and blooms to its independent customers as well as cleared the same to its job workers for job-work upon payment of excise duty on value determined as per Rule 4 of Central Excise Valuation Rules, 2000, viz. independent sale price of such goods - However, department vide SCNs alleged that Rule 8 of Valuation Rules was applicable on such clearances and appellant was liable to pay differential excise duty - The methodology explained by appellant for valuation of goods as per Rule 4 by making adjustment as to grade of finished goods cleared to job workers, appears to be correct - Thus, at the first instance, duty was correctly paid by appellant - Even otherwise, if Tribunal consider the report of jurisdictional Assistant Commissioner, arriving at transaction value of goods cleared by appellant in form of a number of annexures and by working out short/ excess payment of duty by appellant, it emerges that in overall, appellant has paid much more duty than what is confirmed by order appealed against - This bench finds that the approach of Commissioner in confirming demand by considering the annexures relating to short payment of excise duty alone is legally erroneous - The Commissioner ought to have allowed the adjustment of excess excise duty paid against short payment, prior to raising any demand on appellant - Demand raised vide impugned order is not sustainable as appellant had paid correct duty arrived at in terms of Rule 4 of Valuation Rules - Moreover, appellant has paid much higher duty than what is demanded in impugned order, adjustment of excise duty must have been allowed instead of raising any further demand - Further, as duty demand is not sustainable, there arises no question of sustaining demand for penalty or interest: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-419-CESTAT-KOL
Sripada Barik Vs CC
Cus - Confiscation of gold - Appellant has not been given proper opportunity to defend his case - They were not allowed to cross-examine the crucial witness i. e. Mr. Siddharth Mehta, Accountant and Signatory of M/s J. J. House Pvt. Ltd. whose recorded statement is relied upon to place emphasis that the gold was delivered to appellant only on 18/11/2017 while as per appelant, subject goods were delivered to them on 17.11.2017 - It is seen that even the statement of Mr. Sripada Barik was retracted by him - It is felt that matter is required to be re-visited at Adjudication level - Matter remanded to Adjudicating Authority for limited purpose to consider that appellant should be given an opportunity to crossexamine Shri Siddhartha Mehta, Manager of J. J. House Pvt. Ltd. and he should be given the details of delivery of goods by Brinks India to Appellant No.2 after the invoice was prepared by J. J. House Pvt. Ltd. on 17/11/2017 from Brink India's Records - Adjudicating Authority will follow the principle of natural justice and after fulfilling the conditions, he may pass a suitable order - As the matter is being remanded, the Department is directed to not dispose off the confiscated goods till the issue is finalized: CESTAT
- Matter remanded: KOLKATA CESTAT
2023-TIOL-418-CESTAT-MAD
CC Vs Mohammed Ali Jinnah
Cus - On specific intelligence that one person by name Mohammed Ali Jinnah would be arriving at Chennai from Pudhupattinam by bus carrying a black colour backpack with crude gold bars of foreign origin/foreign marked gold bars which are smuggled into India from Sri Lanka, the officers of Directorate of Revenue Intelligence (DRI) maintained surveillance at the bus stand - On search of his backpack, the officers found two packets wrapped with blue adhesive tape and kept in green and blue polythene bag. On cutting open these packets, it contained two crude gold bars (of weight 1720 and 1377 grams) totally weighing 3097 grams and valued at Rs.91,98,090/- (Rs.2,970/- per gram) - The respondent did not have any valid document for the possession of the gold and it appeared to the department that these two crude gold bars are smuggled into India from Sri Lanka without declaring it to customs with an intention to evade payment of customs duties and that for this reason, the gold bars were liable for confiscation under the provisions of the Customs Act, 1962 - The same were seized under mahazar dated 23.1.2017 - The statement of the respondent was recorded under sec. 108 of the Customs Act, 1962 on the same day - He admitted to have concealed the smuggled gold in his back pack & stated that he did not know the address of Murugan and Batcha, named in his statement, and that earlier on four or five occasions, he had travelled by bus and handed over the smuggled gold, collected from Murugan for monetary consideration of Rs.5,000/. He furnished the mobile numbers of Shri Batcha @ Pitchai and Sri Murugan - Search of the respondent's residence did not reveal any incriminating evidence - The respondent was again issued summons to produce bank account details, income, source of funds and income tax statements - He appeared on 7.6.2017 and gave a voluntary statement u/s 108 of the Customs Act, 1962 wherein he agreed that he was present during the mahazar proceedings - He agreed that he had travelled as per the tickets obtained from the State Transport Corporation - It was also stated that he maintained a bank account with IOB, Devakottai and later his wife's name was added to the bank account - He earlier worked in Malaysia and Saudi Arabia and submitted a copy of his passport - He did not have PAN and was not an income tax assessee - He did not have any proof of his savings/documents for the licit purchase of gold or to prove that the crude gold bars were not of smuggled nature - In the absence of evidence on the part of respondent to prove that the gold was legally procured and in view of the fact that the crude gold bars had 999.9 purity, it appeared to be smuggled into India in violation of Foreign Trade Policy 2015 - 2020 read with RBI Regulations and having been found to be concealed in a bag, a SCN dated 21.7.2017 was issued to the respondent by the Additional Director, DRI as to why the crude gold bars should not be confiscated and penalties should not be imposed under the Customs Act, 1962 - Order-in-Original was passed, raising duty demand and imposing penalties - On appeal, the Commr.(A) quashed such findings. Held - The allegation in the Show Cause Notice is that the gold seized from the respondent is gold smuggled into India without declaring it to Customs for avoiding payment of customs duties - The first issue that requires to be analyzed is whether the gold is of foreign origin - Admittedly, the gold does not have any foreign markings - It is the case of department that the gold assayer Sh. G.K. Shankar has issued certificate that the purity of the gold is 24 karat and of 999.9% - It is contended by department that only foreign gold would have such high purity - It is seen mentioned in the mahazar dated 23.1.2017 that the gold was assayed by the assayer on the same day. However, the said document is not made part of relied upon documents for the purpose of issuing Show Cause Notice - The counsel for respondent has submitted that the respondent was not served with copy of this document - The said contention was raised before the Commissioner (Appeals) also - On the date of hearing of this appeal by us, the AR has produced a copy of this document purported to be issued by assayer - We do not understand what prevented the Department from placing this document as part of relied upon documents - Usually, only copies of the Relied Upon Documents are given to the noticee - It can therefore be inferred that the appellant was not given copy of this document - Although it is seen mentioned in the mahazar that the assayer certified the purity of gold on the same day of the incident (23.1.2017), the date mentioned in the certificate produced by the learned AR is 24.1.2017 - Further, it says 24 karat gold and does not say 999.9%. This document is produced only now, at the second appeal stage. This document which is not made part of RUD and of which a copy has not been served to the respondent, when produced at the fag end of proceedings cannot be viewed without suspicion: CESTAT Held - In the case on hand, the certificate does not mention 999.9% as contended by department - It merely says 24 carat. It does not mention the method adopted to test the purity - Further, the certificate is not made part of RUD - The copy of certificate is not given to the respondent - Again, the request to cross-examine the assayer was denied - It is produced belatedly and there is no petition filed by AR stating reasons to accept the document at the appellate stage. - On the totality of these facts, we have to hold that the certificate of the assayer produced by the AR cannot be accepted in evidence - Apart from the certificate, the Department relies on the statements given by the respondent on 23/24.1.2017 - These statements have been retracted later by the respondent - In such circumstances, the Department has to place reliable evidence to prove that the gold is smuggled from Sri Lanka - There is no evidence to prove that the gold is smuggled from Sri Lanka or any connection of the gold with Murugan or Batcha - In the absence of foreign markings, there should be cogent evidence to establish that the gold is of foreign origin - The contention of the AR that if gold jewellery when converted into bullion will not have 999.9% purity is without any substance - The statement of respondent which has been retracted cannot be the basis for holding that the gold is smuggled unless corroborated by other evidences - the view arrived by the Commissioner (Appeals) is legal and proper and does not require any interference - The issue on merits is found against the appellant/Revenue and in favour of the respondent - We make it clear that in this appeal we have not addressed the issue as to whether the Show Cause Notice issued by DRI is valid and proper: CESTAT
- Appeal dismissed: CHENNAI CESTAT
2023-TIOL-417-CESTAT-DEL
Pr.CCGST Vs Boeing India Defense Pvt Ltd
ST - The Appellant had entered into an agreement with its holding company, namely The Boeing Company "TBC" for providing services on a cost plus mark-up basis - In order to provide service effectively and efficiently, the Appellant employed employees of TBC on secondment basis - The Appellant entered into a salary reimbursement agreement with TBC to facilitate secondment of employees from TBC to it and payment of remuneration to the seconded employee in their home country - Pursuant to service tax audit by the department, the SCN was issued demanding service tax on the expenditure incurred towards hotel stay, school tuition fees for the disputed period considering the same as part of the consideration paid for import of manpower services from April 2015 to June 2017 - Hence the present appeal was filed to challenge the vires of the tax demand raised along with interest and penalty imposed u/s 77 & 78 respectively of the Finance Act, 1994. Held - The issue of payment of service tax on secondment has been settled by the Supreme Court in the case of Commissioner of Customs, C.Ex and Service Tax, Bangalore (Adj.) Vs Northern Operating Systems Pvt Ltd - The issue is whether reimbursable expenses are includible in the gross value for levy of service tax - We note that the issue is no longer res integra - The High Court of Delhi in the case of Intercontinental Consultants & Technocrats Pvt Ltd Vs. Union of India held that reimbursements of amounts it received cannot be charged to service tax - This issue with regard to non-payment of service tax on the reimbursable expenses travelled upto Apex Court wherein it got settled by the decision in the case of Union of India and Anr. v. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. - The Apex Court has held as per Section 67 (unamended prior to 1st May, 2006) or after its amendment with effect from 1st May, 2006, the only possible interpretation of the said Section 67 is that for the valuation of taxable services for charging service tax, the gross amount charged for providing such taxable services only has to be taken into consideration - Any other amount which is not for providing such taxable service cannot be the part of the said value - It was clarified that the value of service tax cannot be anything more or less than consideration paid as quid pro quo for rendering such services - Accordingly, it was held that Section 67 of Finance Act, 1994 do not allow inclusion of reimbursable expenses in valuation of service rules - Following such findings, the demands raised in the present case merit being set aside: CESTAT
- Assessee's appeal allowed/Department's appeal dismissed: DELHI CESTAT
2023-TIOL-416-CESTAT-MAD
United Industries Ltd Vs CCE
CX - Appellant is engaged in manufacture of "Tread Rubber" used in retreading industry - On verification of accounts, it was found that appellant had not brought on account sales made to certain consumers, including some state transport corporations - Investigations were initiated and a SCN was issued proposing to demand duty and for imposing penalties - When the Tribunal had given a specific direction to extend cum-duty benefit to appellant, Adjudicating Authority ought to have calculated the demand after granting benefit - If Department has not filed any appeal against order passed by Tribunal directing to extend cum-tax benefit, Commissioner cannot deny the benefit stating that appellant is not entitled to modification of demand as they have issued parallel set of invoices - Impugned order is modified to the extent of reducing demand of Rs.4,66,796.14/- to Rs.3,69,606/- without disturbing amounts paid or penalties thereon: CESTAT
- Appeal partly allowed: CHENNAI CESTAT |
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