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2023-TIOL-468-CESTAT-CHD
Champion Flavours Vs CCGST
CX - The Appellant was engaged in the manufacturing of Menthol, Menthol Crystal's and DMO and was availing area based exemption under Notification No. 56/2002 dated 14.11.2002 - The Appellant filed refund claim of Rs. 5,72,340/- vide letter dated 28.10.2010 on account of balance lying in their personal ledger account (PLA) which was pending unutilized due to withdrawal of duty vide Notification No. 10/2010-CE dated 27.02.2010 - The Appellant did not sanction refund claim inspite of repeated reminders made by the Appellants - In the meantime, a case was made out against the Appellant on the allegation that the Appellant was not engaged in physical manufacturing of the goods and therefore, SCN dated 24.09.2012 was issued proposing recovery of refund of self credit amounting to Rs. 23,49,397/- which was culminated into vide Order-in-Original dated 06.05.2016 - The Appellant filed appeal before this Tribunal against the said Order-in-Original which was allowed by the Tribunal vide its Final Order dated 22.10.2019 - The Appellant during the pendency of the appeal before the Tribunal deposited Rs. 1,76,250/- as pre-deposit i.e. 7.5% of the confirmed demand - The Appellant vide letter dated 07.11.2019 filed refund claim of Rs. 1,76,250/- and also requested the Revenue to sanction refund claim of Rs. 5,72,340/- which was filed on 28.10.2010 but the Revenue vide Order-in-Original dated 31.08.2020 sanctioned the refund claim of Rs. 5,72,340/- and the refund of predeposit Rs. 1,76,250/- - Further, interest on delayed refund of predeposit amounting to Rs. 42,804/- was also granted, but interest on delayed payment of refund claim of Rs. 5,72,340/- was not sanctioned - Aggrieved by the order of the original authority, the appellant filed appeal before the Commissioner (Appeals), Jammu who vide Order-in-Appeal dated 12.10.2022 rejected the appeal of the Appellant. Held - The Appellant is entitled to interest on the delayed refund in view of the judgement of the Apex Court in the case of Ranbaxy Laboratories Ltd. vs. UOI - Moreover, as per Section 11BB of the Act, the interest is payable after the expiry of 3 months from the date of receipt of application - Therefore, in this case, the Appellant is entitled to interest on delayed payment from 27.01.2011 to till date of credit to the account of the appellant at the rate of 6% as per the statute - In view of this, the present appeal is allowed and the original authority is directed to compute the amount of interest and pay the same within the period of 2 months from the date of receipt of this order: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-467-CESTAT-KOL
Kariwala Industries Ltd Vs CCGST & CE
ST - Issue relates to non-payment of service tax on GTA service incurred in connection with export of goods - It is appellant's case that they were unaware of fact of liability to pay tax on expenses incurred under Head Goods Transport Agency under reverse charge mechanism and on being pointed out they have duly complied with and deposited the Service Tax payable along with interest - With respect to service tax amount of Rs. 42,343/-(not paid) they submitted that they were not liable to pay said tax, since such charges were used for export of goods which is exempted under Notfn. 18/2009-ST & Notfn. 31/2012-ST - The service availment for export purposes is not disputed and it is only procedural conditions prescribed in notification that appellants could not adhere to - It is settled law that a substantial exemption notification benefit cannot be denied on the ground of failure to comply with certain procedural conditions prescribed - The fact of export not in dispute, technicalities of procedures cannot stand in the way of availment of otherwise admissible substantive benefit - Since there is no dispute about rendering of services for export and which is exempted, it is clear that appellant is rightly eligible for availing the benefit of notification - Further, it is very clear from CBEC's Circular 334/13/2009-TRU , that the conditions not fulfilled were merely procedural and not mandatory, required for availment of benefit - No merit found in order passed by Commissioner (A), same is therefore set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-466-CESTAT-MAD
Micro Chip Office Solutions Vs CCE & ST
ST - The appellants are engaged in the sale of computers, printers and peripherals and other related accessories apart from undertaking maintenance of computers, printers and "RICOH" brand "Photo copier machines" on annual contract as well as on call basis - They were issued with a Show cause notice for non-payment of service tax under the category of "Management, Maintenance or Repair Service" for the period from 01.04.2006 to 30.09.2011, proposing to demand service tax of Rs.5,30,181/- along with applicable interest and also for imposition of penalties under Section 76, 77 & 78 of Chapter V of the Finance Act, 1994 - On adjudication, the Joint Commissioner of Central Excise & Service Tax, Trichy, vide Order-in-Original No. 01/2013-ST, has confirmed the above demand of service tax and interest thereon and also imposed a penalty of Rs. 2,74,400/- calculated at the rate of Rs. 200/- per day from 06.07.2005 to 07.04.2009 for failure to take service tax registration in terms of Section 77(1) (a) of the Finance Act, 1994 - Further, a penalty of Rs. 5,000/- under Section 77 (2) and a penalty of Rs. 5,30,181/- under Section 78 of the Finance Act, 1994 were imposed. The Commissioner of Customs & Central Excise (Appeals), Trichy has upheld the above Order-in-Original dated 11.02.2013 and rejected the appeal filed by the appellant. Held - AMC Service - On the issue of the appellant's eligibility for the benefit of Notification No. 12/2003-ST dated 20.06.2003, the lower adjudicating authority has held that the appellant has not produced any evidence regarding consumables or spare parts used while providing the AMC service to its customers and the service provider has charged service tax on the gross amount received for the AMC and 4C Bills raised upto April, 2009 and adopted the method of artificially splitting the AMC charges from 20.04.2009 onwards in the ratio of 75% to supply portion and 25% of AMC charges to service portion to avail the benefit of exemption from service tax in respect of value of goods and material sold by the service provider to the recipient of service. Under the Notification No. 12/2003-ST dated 20.06.2003, the appellant is required to provide documentary proof specifically indicating the value of the said goods and materials used in providing the service - The appellant is engaged not only in providing AMC services but also in selling computers, printers and peripherals In the absence of any documentary evidence of value of consumables and other materials used co-relating to AMC services, we have to hold that the benefit of notification is rightly denied to the appellant: CESTAT Held - The appellant is engaged in the sale of computers, printers, peripherals and consumables and also in providing services of annual maintenance contract of "RICOH" brand photo copier machines to various customers since 2006 onwards but failed to obtain service tax registration and also to file ST-3 returns - They were also found collecting service tax on the consideration received for the AMC of photo copiers from their customers - The appellants have shown in their P&L Account for the year 2007-08, an amount of Rs. 94,180/- as service tax payable - Even though they have obtained service tax registration on 08.04.2009, for the year 2009-10 and 2010-11 the appellants have paid service tax of only Rs. 7,225/- and also not filed ST-3 returns - The conduct of the appellant indicates utter disregard for compliance to the provisions of service tax law - We find that the appellant's reliance placed on the case laws cited at paragraph No. 2.3 above and also in the grounds of appeal, is not at all applicable to the facts of this case and distinguishable as the appellant has collected service tax without registration and without filing ST-3 returns and failed to credit the same into the Government account - As such, we find that the extended period is rightly invoked for demand of service tax and also for imposition of penalties in this case: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2023-TIOL-465-CESTAT-MAD
Shri Shyam Sundar Textiles Pvt Ltd Vs CC
Cus - It appeared to revenue that importer had imported cotton knitted coloured rags without valid import license from DGFT, contravening the provisions of Customs Act, 1962 read with Para 2.17 of FTAP 2009 - 2014 and also they had misdeclared the value - A notice was issued to appellant - The appellant is not contesting classification of goods - As regards the requirement of an import license it is seen that on examination of goods, it was found to be 'fabric waste and cutting of factory textiles in torn and dirty condition in various sizes and width more than ten inches' - Some pieces were in continuous length and some were in small length - In case of another Bill of Entry, goods were found to be 'sorted fabric cotton knitted clips in small cut pieces of various sizes/length' - Goods were cutting waste/ mutilated woven worn-out garments found not to be completely in running length, they were cut into small pieces which could not be used in manufacture of chindi rugs and also for pulling of fabrics - They hence do not come under purview of Boards circular 20/11-cus dated - Such goods which are totally unserviceable and beyond repair, are classifiable under CTH 63109020 and can be imported only under a license from DGFT - Issue regarding cut fabrics which are not in continuous length with a maximum width restriction of 10 inches not being given the benefit of Circular 20/2011-Cus . was decided in Revenue's favour by Tribunal in case of A nisha Impex 2015-TIOL-143-CESTAT-MAD - Tribunal follows the same - As regard valuation of goods, lower authority in impugned order has examined the matter and found that assessable value has been correctly redetermined and that appellant has not produced any evidence/document to show that goods imported by them are not similar/ comparable - Tribunal agree with impugned order on merits - However, redemption fine and penalty found to be excessive and modify the same to Rs. 2,00,000/- (two lakhs) fine and Rs. 1,00,000/- (one lakh) penalty: CESTAT
- Appeal disposed of: CHENNAI CESTAT
2023-TIOL-464-CESTAT-MUM
Mukadam Freight Systems Pvt Ltd Vs Pr.CC
Cus - The present appeal challenges the revocation of Customs Broker licence dated 23rd May 2022] of Principal Commissioner of Customs (General), Mumbai in proceedings under Customs Broker Licencing Regulations (CBLR), 2018 which, besides, has forfeited the security deposit and imposed a further penalty of Rs. 50,000/- under Regulation 18 of Customs Brokers Licensing Regulations, 2018 - Proceedings were initiated in accordance with regulation 17 of Customs Broker Licencing Regulation, 2018 consequent upon receipt of report that examination of consignments covered by shipping bills no. 9107154/24.11.2018, no. 9104269/24.11.2018 and no. 9104315/24.11.2018 filed by them, on behalf of M/s Tristar Trading, for export of 2990 kgs of 'parts and accessories of vehicles' showed the goods to be 3328 kgs of 'parts of 'two wheelers' with the declared heading no. 8714 2090 of ITC (HS) Classification, intended for 'carriages for disabled persons', corresponding neither to the declared, not actual, description of goods that was also, as per report of the chartered engineer, overvalued - The facts are not really material to proceedings under Customs Broker Licencing Regulations, 2018 though alleged discrepancies are - Show Cause Notice dated 1st January 2021 had been issued to the appellant proposing revocation of licence, along with forfeiture of security deposit, and imposition of penalty, envisaged by Regulation 14 and Regulation 18 respectively of Customs Brokers Licensing Regulations, 2018 for breach of Regulation 10(d), 10(e), 10(m) and 10(n) therein - The nominated enquiry authority, vide report dated 31st January 2022, held all the charges as proved following which the licencing authority invoked the full extent of powers vested in him. Held - There are, apparently, discrepancies in the declaration contained in the shipping bills - That the declarations should match the facts relating to exports is, no doubt, ideal - However, tendency to be casual about particulars that are 'not material' is a human failing - There is no evidence that the enumerated discrepancy has impacted the substantiveness of either the export or of the quantum of refund eligible - Not does it essay that the discrepancies came about because compliance with the law had not been insisted upon by the customs broker or that the discrepancies were so crucial to the outward clearance and benefit as to prevent the appellant from noticing those and reporting inappropriate action on part of the client to customs authorities - The facts do not invite the invoking of consequence of regulation 10(d) of Customs Broker Licencing Regulations, 2018 either - The Regulations have not, in any way, discharged 'proper officer of customs' from responsibility for undertaking functions under the Act and neither does the Act contemplate that the customs broker is the authorized person to whose compliance with the Regulations customs officers subordinate their statutory powers - Hence, the penalty imposed on the appellant is unwarranted: CESTAT + It is needless to state that, considering the proposal for deprivation of business and livelihood of the broker and its employees, such proceedings are not to be entered into lightly but only upon enumeration of the specific facts that evince departure from the norm intended in each and every one of the mandates of proper conduct elaborated upon in regulation 10 of Customs Broker Licencing Regulations, 2018 and also in strict adherence to the prescribed timelines. Any disregard of the former or laxity in the latter has potential for fastening charges of misuse of authority and miscarriage of justice on the licencing Commissioner. We also take note that, though correctness of declarations is a consummation devoutly to be wished for, entries under section 46 and 50 of Customs Act, 1962 are adjuncts to the machinery provision of section 17 of Customs Act, 1962 and, unless demonstrated lack of meticulousness has had the consequence, or potential, of derailing assessment or warranted privilege, proposal for revoking of licence is hasty, illconsidered and disproportionate. Likewise, application of mind should be evinced by invoking the appropriate mandate of conduct as having been breached in a given factual matrix. We are constrained to embark upon this narration as, all too often, we are confronted with a buffet of facts and allegations that, taken together, may suffice to interdict a particular consignment and to penalise under section 112 or section 114 of Customs Act, 1962 in a episodic proceeding without impinging upon continuation of cross-border transactions often losing sight of the finality in proceedings to terminate livelihood warranting conformity with the intent of the Regulations; + Undervaluation is a determination on the part of the customs authorities and, in the absence of finding that the purported transaction price is supplemented by additional consideration or is partially reimbursed to exporter, any revision is merely exercise of empowerment to restrict benefit or recover duty; recourse to some rule of valuation is part of procedure of assessment which the licencing authority can hardly fasten on customs broker as normative conduct. Even the difference in weight, at about 10% of that declared, is so marginal, and with no discrepancy in declaration of quantity, as to have little impact on diligent completion of assessment. That goods appear to be not 'parts of motor vehicles' but of 'two wheelers' and that declared classification does not conform to either is not relevant to the factum of exports or of any benefit derived therefrom and to invoke detriment for any distortion of statistics therefrom is to burden customs brokers with custodianship of statistical integrity; that surely is not the objective of the Regulations and it is absurd to believe that a system which has invested heavily in data warehousing and analytics would be anachronistic enough to found its statistical veracity on such peripheral source. We fail to perceive any justification for concluding from these discrepancies that unascertained information has been provided to a client. The lack of any discussion on the norms actuated for compliance with the obligation in regulation 10(e) of Customs Broker Licencing Regulations, 2018 and of flouting of the norms flowing from the few available facts puts paid to the finding that this obligation has been breached; + The third is all about servicing of the client and would be invoked only upon grievance of a client that performance is bereft of speed and efficiency. There is no record of such complaint and there is no evidence to indicate want of speed or efficiency – which is about promptness in execution and avoidance of wasteful tasks – on the part of the customs broker in any aspect of engagement in the export transaction. It would appear that the charge of breach of regulation 10(m) of Customs Broker Licencing Regulations, 2018 has emanated from lack of application of mind to the norm intended by the said obligation. The fourth charge deals with verification of existence of client; here again, any deviation from the norm may be established only by evincing non-existence of the entity or existence at some other location and unconnected with the activities for which the broker had been engaged. There is no allegation that the client did not have 'importer exporter code (IEC)' number and 'goods and services tax identification number (GSTIN)' or that the declared address is incorrect. The goods are available and exports were permitted, albeit provisionally. The facts do not bear out the charge of breach of regulation 10(n) of Customs Broker Licencing Regulations, 2018 notwithstanding the statement relied upon which, in the light of the decision of the Tribunal in re Manjunatha Cargo Pvt Ltd, is not an admission of any breach.
- Appeal allowed: MUMBAI CESTAT |
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