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2023-TIOL-562-CESTAT-MAD
Beach Minerals Company Vs CC
Cus - The appellant has adopted classification under CTH 2614 00 20 as beneficiated/processed Ilmenite whereas Department has held that the goods exported will fall under CTH 2614 00 10 as unprocessed Ilmenite - The major objection put forward by Department is that the appellants have not undertaken any beneficiation process to make mined sand into processed/upgraded Ilmenite - Appellant has produced flow chart showing various processes undertaken before goods are exported - It may be true that the mine sand has not undergone any chemical treatment or roasting - It has to be seen that said flow chart has been approved by Mining Department as well as Atomic Energy - From the flow chart, it can be seen that the various processes undertaken on raw sand by appellants achieves the purpose of regulating size, removing unwanted impurities and also improving quality or SI grade of Ilmenite - Therefore Tribunal find it difficult to agree with the view of Department that to obtain beneficiated Ilmenite processes like roasting and chemical treatment is mandatory - Without furnishing any evidence to establish said contention, processes undertaken by appellant would result in beneficiated Ilmenite - Though the original authority had discussed and held that goods are not upgraded Ilmenite, however, has held in operative part of order that goods which are upgraded ilmenite has to be classified under CTH 26140010 - Commissioner (A) held that goods are unprocessed and has to be classified under 26140010 - Such processes result in beneficiated Ilmenite - The goods which are upgraded/processed Ilmenite are classifiable under 2614 00 20 - Impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-561-CESTAT-HYD
Nanda International Vs CC
Cus - One M/s Rupesh Xerox imported a consignment of goods declared as photocopy machine spares - However, on opening of the container in the presence of Shri B. Sudhakar, employee of Customs Broker and Importer Shri R. Saravanan, they found certain discrepancies in respect of description of the goods mentioned in IGM and the description given in invoice and packing list - On further examination of goods in the container, in the presence of the Customs Broker, they found inter alia 43 copying machines - The Original Authority adjudicating came to the conclusion that it was a clear case of import of used Xerox/ photocopy machines under the cover of spare parts and accordingly penalty was imposed on Shri K. Saravanan, the actual Importer and Shri Shakelly Venkat Chand, Business Partner of M/s Rupesh Xerox under Section 112 & 114AA of the Customs Act respectively. With regard to the role of Customs Broker, the Original Authority held that the Appellant Shri Shakelly Venkat Chand, Business Partner of Customs Broker firm, has not carried out the required due diligence and in fact, despite not having seen or meet the importer, accepted and proceeded with the documents given by one Shri Bhaskaran, who later on turned out to be a person impersonating the actual importer - In this case, a person impersonating as actual importer was not pointed out by the Customs Broker or their employee even though they were aware of his not coming out clean with regards to his actual identity - The Original Authority upheld that this tantamounted to Appellant giving false information and therefore, liable for penalty under Section 114AA of the Customs Act. Held - Thus, there is not much merit as regard to argument of his being not aware about mis-declaration - In light of the facts of the case and in the interests of justice, the penalty imposed u/s 114AA of the Customs Act is reduced to Rs. 25000/- from the original quantum of Rs. 1,00,000/- - The remaining portion of the order is sustained: CESTAT
++ the moot question for deciding in this Appeal is whether in the facts of the case, the Appellant viz., Shri Shakelly Venkat Chand was acting in good faith, exercising due diligence or there was any malafide intent in tacitly helping the importer to clear the consignment, which was found to be grossly misdeclared. The role of the Customs Broker is very crucial in the process of clearance of goods as they are required to do due diligence before facilitating filing of relevant documents for clearance of goods. As a regular Customs Broker, it is not expected that he would accept any document including KYC in a mechanical manner. He is expected to exercise due diligence to satisfy about the bonafide of the importer and the documents submitted by him. The employee of the Customs Broker in the instant case has in fact noted and admitted that there was some kind of impersonation and that should have alerted him and he should have brought to the notice of the Customs Authority immediately, instead he remained silent. This is the admitted position in the statement given by the Appellant and the Appellant is also not denying this fact nor giving any substantive reason about him being silent about the impersonation in the first place. He is responsible for the act of his employee also who is misrepresenting the CHB before the Customs Authorities.
++ in the facts of the case on record, there is enough material to substantiate the allegation of malafide against the Appellant and therefore, Section 114AA has been rightly invoked by the Department and upheld by the Commissioner (Appeals). However, it is further seen that the Original Authority has imposed redemption fine of Rs. 1,00,000/- each on used Xerox/ photocopy machines and spare parts. He has also imposed penalty of Rs. 3,00,000/- on importer and Managing Partner of M/s Rupesh Xerox for their act of improper import. It is also noted that a penalty of Rs. 1,00,000/- each has been imposed on Shri B. Sudhakar, employee of Nanda International, Shri Ashok and Shri Bhaskaran alias R. Saravanan also. Considering the roles played by each one of them, the penalty of Rs. 1,00,000/- on the Appellant does not appear to be proportionate to his role in the attempted clearance of undeclared/ restricted goods. It is also informed by both the sides that no action was taken by the Department for revocation or suspension of CHA license for the aforesaid acts of Shri Chand and Shri Sudhakar, under the applicable law and regulation.
- Appeal partly allowed: HYDERABAD CESTAT
2023-TIOL-560-CESTAT-MUM
Sajjan Mohan Tibrewal Vs CCE, C & ST
CX - Through detailed investigation it has come to the knowledge of the Revenue that during the period November, 2006 to November, 2007 M/s. Surabhi Corporation had availed Cenvat Credit of Rs.1,67,84,392/- in contravention of various provisions of Cenvat Credit Rules, 2004 by fraud, collusion, suppression of facts and willful misstatement which, according to them is recoverable from the assessee as they had shown utilization of inadmissible Cenvat credit for payment of Central Excise duty without any manufacturing activity and without removing any finished excisable goods - They were passing on ineligible Cenvat credit to their customers without actually supplying any goods with the invoices, so issued by them - There was no such company in existence at the premises declared in their Central Excise Registration and the premises was also procured on the strength of forged document - As per investigation the assessee neither purchased any ‘Polyester Yarn' nor manufactured any ‘Polyester Grey Fabric' - It has come into light during investigation that the appellants herein i.e. the brokers were also involved in the procuring of polyester yarn form various manufactures in the name of the assessee and in turn selling the same in the open market to other unregistered powerloom owners/weavers and were supplying only the invoices to the assessee without any goods on the strength of which the assessee were availing in-admissible Cenvat credit - Accordingly, a SCN dated 21.11.2011 was issued to the assessee, the appellants and also to other co-noticees i.e. transporters etc. which was culminated into the Order-in-Original dated 10.10.2012 i.e. the impugned order.
Held - From the statements it has been proved beyond any doubt that the brokers were instrumental in availing of ineligible Cenvat credit by the assessee for payment of central excise duty without manufacturing/ removing any excisable goods and also for passing on the said Cenvat credit to their customers on the basis of the invoices only without supplying any goods to them - This has been established through the ER-1 returns also - Involvement of appellant Sajjan Tibrewal in the fraud has been proved beyond doubt as it has been corroborated by other statements also - He knowingly involved in the fraud as he himself admitted in his statement about his role, retraction of which was much belatedly and was rightly held by the authorities below as afterthought - No doubt there is a complete network in order to defraud the government exchequer - A careful scrutiny of all the statements placed on record, be it the assessee or the transporter or brokers etc. completed the chain of events and proved it beyond any doubt that the appellant Sajjan Tibrewal abetted in making the invoices on the basis of which the assessee has availed ineligible Cenvat Credit without setting up any factory for manufacturing polyester yarn - The said Sajjan Tibrewal played a vital role in diverting the polyester yarn, the main raw material/input required for manufacturing Polyester Grey Fabric, to small weavers and making available the invoices to the assessee who in turn availed Cenvat credit on those invoices - He procured the yarn from Surat etc., took possession of the same and diverted it to small weavers: CESTAT Held - So far as another appellant Mr. Pankaj Hari Pansari is concerned, although he also to some extent is liable for availing of ineligible Cenvat credit by the assessee but he cannot be said to be abetted the same as no knowledge or motive can be attributed to him in view of the evidences/ statements procured during the investigation - He can be said to be negligent but his actions cannot made him liable for any penalty under Rule 26 ibid - Nowhere it has come in any of the statements that he knowingly given the delivery of yarn received by him to some other persons unrelated to the assessee. His fault was that he did not ensure that the persons who took the delivery of polyester yarn are from the assessee company only and delivered the yarn to the persons whose names and phone numbers have been informed to him in the name of the persons of the assessee, by someone from the yarn company only from time to time and he did not keep the detailed information of those persons who used to take delivery of yarn for the assessee - Unlike appellant Sajjan Mohanlal Tibrewal, Mr. Pankaj Pansari nowhere made any admissions - Therefore, on the facts we are of the view that the Department has failed to make any case against the appellant Mr. Pankaj Pansari beyond reasonable doubt: CESTAT
- Appeals partly allowed: MUMBAI CESTAT
2023-TIOL-559-CESTAT-KOL
Marco Blowers (India) Pvt Ltd Vs Asstt. CCE
CX - The appellant is a manufacturer exporter of agricultural machinery falling under Chapter 84 - They source raw materials through Roshanlal Bhogirathmal a registered dealer - The Appellants manufacture parts of paddy driers out of M.S. Angels, M/s Channel, M/S Plates and R.S. Joist on which they availed input credit - During the period 2010-11 and 2014-15 the Appellants have availed Cenvat Credit for Rs. 1,77,745/- on the strength of cenvatable invoices issued by Roshanlal Bhogirathmal (RB) a first stage dealer - The invoices were issued in their name through the two said unregistered dealers - In the relevant period, Order-In-Original came to be passed after completion of proceedings, wherein Cenvat credit was disallowed and penalty was imposed besides demand for interest u/s 11AA of the Act - Such findings in the O-i-O were sustained by the Commr.(A).
Held - There is nothing to disentitle the availment of Cenvat Credit when such facility is clearly envisaged in law and the intention of the government so to do also spelled out by way of Circular to promote/facilitate ease of doing business, and the elaborate circumstantial evidence indicating the receipt of the goods - As the impugned goods have been found to be duly accounted for in statutory records, payments made, transportation details indicated in the invoices and as there is not an iota of evidence to suggest non-receipt of goods by the appellants, Cenvat Credit therefore cannot be denied - Also since it is not the case that no goods were produced by the appellants and also under the circumstances no alternative receipt/supply of goods for such manufacture has been brought out by the department, the charge levelled gets demolished under its own weight - In the case of Apollo Metalex PVt. Ltd. V. CCE & ST Noida 2015(323) E.L.T. 394T, the Tribunal held that it was not correct to disallow credit on the strength of invoices issued by unregistered dealer (intermediate supplier), when actual receipt of goods was not disputed: CESTAT
+ when non receipt of goods by the appellant, is not substantiated, it would not be appropriate to deny them the facility of Cenvat Credit availment on the strength of the invoice of the registered dealer, duly accounted for in their RG-23A-Pt.I & II. The Department's contention of mere receipt of documents and no goods were supplied is without even a toehold of substance. It is at best only presumed or assumed that the appellants had not received the said goods as per the said cenvatable invoices issued. There is no sound basis to allege so and harbor such a belief by the department. It is also stated both by the registered dealer as well as the appellant's in their statements before the authority that primarily it was the buyer (unregistered dealer) who would arrange for transport of goods, which were sent directly to the consignee. It is also noted that the invoice issued by the registered dealer clearly indicates the mode of transport and the vehicle number by which the said goods were supplied directly at the consignee's site. They have however, referred to various challans and consignments notes, in support of their stance of receipt of goods directly in response to Q. 13 of the statement of the Director, recorded under Section 14 of the Central Excise Act on 15.07.2015. Obviously, no finished goods would have been produced if said goods were not received by them. Also sourcing and negotiating of supplies through vendors, who may be unregistered is a normal industry practice, and seeks to improve and facilitate the conduct of business. So is also the purport of in the circular issued providing for direct dispatch of goods from a registered dealer to the consignee. It is also noted that the appellants have also enclosed bank statements showing the payments made to the unregistered dealer through whom the said purchases have been said to be negotiated with the registered dealer. I find the situation for supply of goods herein is specially provided for in Rule 11(2) proviso and it provides for availment of Cenvat Credit on the strength of the said invoices issued by the registered dealer. Further, the provisions have been made applicable mutatis mutandis in case of a first stage dealer or a second stage dealer (refer Rule 11(7) of the Central Excise Rules 2002.
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-558-CESTAT-DEL
Pr.CCGST & CE Vs S R Traders
ST - The Revenue filed the present appeal to contest findings of the Adjudicatory Authority in dropping the proceedings commenced against the assessee - The issue involved in this appeal is regarding non-payment of service tax on the amount paid to the Government or a local authority towards periodical charges for assignment of right to use of natural resource or quarry sand from the allotted mines. Held - This precise issue came up before a Bench of the Tribunal in M/s. Madhya Pradesh State Mining, Corporation Limited vs. Principal Commissioner, CGST & Central Excise, Bhopal - In regard to short payment of service tax on dead rent paid by the appellant to the State Government, which was taxable on a reverse charge basis against the receipt of services concerning grant of mining rights, the Bench held that for the purposes of levying service tax, the taxable event is construed at the time the service is provided or agreed to be provided - Therefore, in order to determine whether levy of services tax is applicable on a particular activity, it is necessary to determine the point of time when such activity is provided or agreed to be provided and since the agreements between the appellant and the State Government regarding grant of mining right were executed prior to April 01, 2016, on which date the transaction in mining of right to use natural resources became taxable, the appellant would not be liable to pay the service tax - The Point of Taxation Rules deal with the date on which payment of service tax has to be made and do not determine whether the service is taxable or not - These Rules, therefore, would not be applicable in the present case - In any view of the matter, the issue is covered by the decision of the Division Bench of the Tribunal in Madhya Pradesh State Mining Corporation - It has, therefore, to be held that the order passed by the Commissioner does not suffer from any illegality so as to call for any interference in this appeal: CESTAT
- Appeal dismissed: DELHI CESTAT
2023-TIOL-557-CESTAT-MAD
Shrinivasa Roadways Pvt Ltd Vs CGST & CE
ST - The issue arises is, whether appellant is liable to pay service tax for disputed period on freight charges for transport of goods by rail - Appellant has collected freight charges only for transportation of goods by road from service recipient - They had to opt for transportation of goods by rail due to unforeseen circumstances such as unavailability of lorries - The intention between the parties, namely service recipient and service provider, was not to provide transportation of goods by rail - From the invoices issued by appellant to service recipient, it is seen that the appellant has collected only freight charges for transportation by road as agreed between the parties - It is also mentioned in invoices that service tax is payable by consignor - Undisputedly, the consignor has discharged service tax on freight charges for transportation of goods by road - Merely because the appellant had to use rail transportation in certain occasions, it cannot be said that they have provided services of transportation of goods by rail - Further, service tax on rail freight charges also has been discharged - There is no legal basis for demand raised in SCN - Demand cannot sustain, same is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT |
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