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2023-TIOL-431-CESTAT-DEL
Pr.CC Vs Omega International
Cus - The assessee filed Bill of Entry No. 3833046 dated 05.05.2021 declaring import of oxygen concentrators and oxy meters - This was the period of second wave of Covid wherein there was lot of hue and cry for these goods, due to massive spread of covid infections, the goods were subject to 100% inspection on 06.05.2021 under panchnama, and upon inspection the goods were found misdeclared - The goods also appeared to be undervalued as well as misdeclared as the importer did not give any evidence of contemporarious imports, the declared value appeared to be low and was rejected. The revenue got the goods revalued by the Government authorised valuer, due to non availability of data of contemporarious import on NIDB and also in that situation (Covid) the market enquiry etc. could not be resorted to due to the disturbed conditions - The valuer has revalued the goods at Rs. 62,35,923.50 which included the undeclared and mis-declared goods, against declared value of Rs. 13,31,102/- - On the same day, the statement of proprietor of importer-Mr. Surinder Kumar was recorded, who submitted that he was not aware about the mismatch in the consignment - He has filed the bill of entry as per the import documents and submitted that there is an error on the part of the supplier - However, he admitted the mis-declaration in respect of quantity and also some goods not being declared. He further agreed to the valuation as determined by the authorised valuer in terms of the customs valuation (determination of value of imported goods) Rules 2007 - He further requested for a decision on merits and waived is right to SCN, as the goods were lying in port - Accordingly, the Adjudicating Authority recorded the findings, that no independent correspondence had been produced, to substantiate the plea of the importer regarding mistake of the shipper - Thus it was observed that there is deliberate mis-declaration, as to quantity and description in the bill of entry - Accordingly, the declared value was rejected and the goods were revalued at Rs. 62,35,924/- and the differential duty was demanded amounting to Rs. 11,14,148/- (13,67,697-2,53,549/-) Further, the goods were held liable to confiscation under Section 111 (l) & (m) of the Customs Act with option to redeem on payment of RF of Rs. 12,50,000/-. Further penalty of Rs. 11,14,148/- was imposed under Section 114A of the Act, observing that the importer have failed to make a truthful statement declaration under Section 46 of the Customs Act r/w Rule 11 of Foreign Trade Regulations 1993 - Such mis-declaration tantamounts to smuggling. Accordingly, it was held that the appellant is liable to penalty under Section 114A of the Act.
Held - There is error in findings recorded in Commissioner (Appeals) as to penalty - I find that there is no mention of Section 28 anywhere in the adjudication order - As such, the adjudication order is definitely under Section 17 of the Act - Further, I find that the appellant have admitted the mis-declaration and have prayed for decision on merits, as the imported goods were ready market due to Covid pandemic disturbances, which was at its peak during the relevant time - However, I find that there is some arbitrariness in the valuation done by the registered valuer, which is on higher side by 25% - Accordingly, I modify the impugned order and confirm the penalty under Section 114A of the Act - However, so far the quantum of penalty is concerned, I reduce the same to Rs. 5 lakhs - Accordingly, the appeal is allowed in part and the impugned order is modified - Accordingly, appeal alongwith stay application is disposed of: CESTAT
- Appeal partly allowed: DELHI CESTAT
2023-TIOL-430-CESTAT-BANG
Triumph India Software Services Pvt Ltd Vs CCT
ST - Appellant was engaged in 'Technical Writing and Documentation Services' and were having major customers - Department alleged that they have not discharged service tax liability during period of April 2013 to March 2014 - It is also alleged that they have not filed ST-3 Returns during the period - During investigation, Managing Director of appellant-company Smt. Usha Mohan admitted that due to financial problems they could not discharge service tax liability and they have also not filed ST-3 Returns for said period - Regarding another appeal, Smt. Usha Mohan appeared in person and submitted that she was Managing Director of Company at relevant time - Due to financial difficulties, they could not pay service tax as submitted during investigation - Regarding appellant's responsibility to submit returns, appellant submitted that though she was Managing Director of Company, she was not personally looking after submission of returns and other day-to-day financial activities of company at relevant time - Penalty imposed on Smt. Usha Mohan is reduced to Rs.10,000/-: CESTAT
- Appeals partly allowed: BANGALORE CESTAT
2023-TIOL-429-CESTAT-CHD
Johnsons Controls Hitachi Air Conditioning India Ltd Vs CCGST & CE
CX - Appellant filed refund claim on account of value addition deductions for period of June, July and September 2014 - Same was rejected - Aggrieved by said order dated 25.03.2019 which was communicated to appellant on 18.06.2019 and appellant filed the appeal on 30.07.2019 before Commissioner (A) who without verifying the records merely relying on report of original authority dismissed the appeal vide impugned order on the ground that appeal has been filed beyond statutory period of 90 days - Revenue has not been able to produce any material conclusively showing that order dated 25.03.2019 was served on same day i.e. 25.03.2019 itself - The dispatch register produced by revenue only shows dispatch and there is no material on record showing that appellant was served the copy of order on 25.03.2019 itself - Moreover, appellant has filed affidavit stating that he got the copy of said order by hand on 18.06.2019 and same was communicated to company on 22.06.2019 and thereafter admittedly the appeal was filed within statutory period of limitation - Dismissal of appeal on limitation is not sustainable in law and therefore impugned order is set aside and matter remanded to Commissioner (A) with direction to decide the appeal on merits: CESTAT
- Matter remanded: CHANDIGARH CESTAT
2023-TIOL-428-CESTAT-MAD
Casa Grande Pvt Ltd Vs CST
ST - The only issue to be decided is, whether the authority below is justified in demanding Service Tax from appellant under 'works contract' service for period from December 2009 to September 2010 - The Order of co-ordinate Hyderabad Bench of CESTAT in case of M/s. Pragati Edifice Pvt. Ltd. 2019-TIOL-3095-CESTAT-HYD is a more recent one, which has considered many orders of other co-ordinate Benches and also the decision of Apex Court in case of M/s. Larsen & Toubro Ltd. 2015-TIOL-187-SC-ST - It has been categorically held that no Service Tax could be levied on construction of residential complexes prior to 01.07.2010 even when service is rendered either as service simpliciter or as a works contract - Evidently, period of dispute is up to September 2010 and hence, liability to Service Tax, if any, is restricted to period post 01.07.2010 - Consequently, demand for the period post 01.07.2010 is upheld and demand for the period prior to this date, is set aside - Matter remanded to Adjudicating Authority for limited purpose of calculating the Service Tax liability and interest after following the principles of natural justice: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2023-TIOL-427-CESTAT-MUM
TNET Messaging Services Pvt Ltd Vs CC, CGST & CE
ST - The issue involved is, whether 1st Appellate Authority is justified in dismissing the appeal on the ground of limitation and whether this Tribunal has power to condone the delay in filing appeal before 1st Appellate Authority beyond the period prescribed by Section 85(3A) of Finance Act, 1994 - The appellate authority can entertain the appeal by condoning delay only upto 30 days beyond normal period for preferring the appeal, which is 60 days - Commissioner (A) was, therefore, justified in dismissing appeal on the ground of limitation - Tribunal cannot lose sight of legal position that as per Article 141 of Constitution of India the law declared by Supreme Court is law of land and is binding on all Courts/Tribunals and Authorities - Therefore, it is clear that Commissioner has no power to condone delay beyond period prescribed by statute and appeal has been rightly dismissed by Commissioner on the ground of limitation - It is well settled that once the period of limitation expired as prescribed u/s. 85(3) ibid neither the Tribunal nor the first appellate authority has power to condone the delay in filing appeal beyond statutory period - Therefore, order of Commissioner (A) rejecting the appeal on the ground that appeal has been filed belatedly beyond the period stipulated under Section 85 of the Act does not warrant any interference and the same is accordingly dismissed: CESTAT
- Appeal dismissed: MUMBAI CESTAT
2023-TIOL-426-CESTAT-DEL
Max Life Insurance Company Ltd Vs CCE & ST
ST - The issue relates to leviability of service tax on re-instatement interest collected by appellant on delayed payment of premium by policy holder to reinstate a lapsed policy - Appellant considers this to be interest on delayed payment of premium by policy holder and hence, not exigible to service tax in view of provisions of rule 6(2)(iv) of Service Tax Rules, 2006 - The department, however, believes that appellant camouflaged the amount received towards processing/administrative charges as reinstatement interest collected on delayed payment of premium - A policy does not terminate on non-payment of premium due - It only terminates upon happening of any of events enumerated in clause 11 of policy contract - The contention of appellant is that all rights and obligations of parties under a contract come to an end only on termination of contract and not on lapse of policy - It is more than apparent that it is only in a case where policy has lapsed that it can be revived and a policy which stands terminated cannot be revived - The rights and obligation of parties under contract do not come to an end on lapse of policy as policy holder has an option to revive the policy on payment of premium with interest - This requirement of payment of interest for revival of a lapsed policy flows from policy contract - A policy holder is under an obligation to make timely payments of premium and if such payments are not made in time, the policy may lapse and to revive this policy interest has to be paid under terms of contract - The overdue premium interest is, therefore, linked to obligation of timely payment of premium - The Commissioner committed an error in concluding that relationship stands terminated upon lapse of a policy and, therefore, no interest can be charged for reviving it - The Commissioner also committed an error in concluding that since the rate of interest is not uniform, it cannot be considered as 'interest' - Section 65B(30) of Finance Act, 1994, which defines interest, does not impose any condition that interest that has to be charged has to be at a uniform rate - The manner in which interest has to be paid is governed by terms of contract agreed between the parties - Department cannot, therefore, urge that since uniform rate of interest has not been levied, amount collected would not partake the character of 'interest' but would be in nature of administrative/processing fee - Department itself charges simple interest for delayed payment of service tax at different rates as would be clear from Notification dated 11.07.2014 - The contract provides for levy of interest and not for processing or administrative charges - The order passed by Commissioner, therefore, cannot be sustained and is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
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