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2023-TIOL-113-SC-ST
UoI Vs ATA Freight Line India Pvt Ltd
ST - Petitioner has prayed for a declaration that the impugned show cause notices are void and bad-in-law in view of non-adjudication after a lapse of nearly 10 years from the date of issuance of first SCN - Since the Revenue was totally responsible for gross delay in adjudicating the SCNs issued by the Revenue causing prejudice and hardship to the petitioner and have transferred the show cause notices to call book and kept in abeyance without communication to the petitioner for more than 7 to 11 years, the Revenue cannot be allowed to raise alternate remedy at this stage - Moreover, no order has been passed by the Revenue on the said show cause notices, therefore, the question of filing any appeal by the petitioner, therefore, did not arise - Writ petition is allowed in terms of prayer clauses (a) and (b) inasmuch as the SCNs are quashed and set aside.
Held - There are no good grounds to interfere with the judgment and order passed by the High Court - Accordingly, the Special Leave Petition is dismissed: SC
- SLP disposed of: SUPREME COURT OF INDIA
2023-TIOL-870-HC-MAD-VAT
Hotel Jeeva Vs Asstt. Commissioner (ST)
In writ, the High Court observes that the Revenue authorities ought not to have proceeded until the matter had been resolved by the Supreme Court. Moreover, the assessee was also not given an opportunity to present its case. Hence the assessment order merits being set aside with directions to pass fresh order within 3 weeks of receiving this order.
- Writ petition allowed: MADRAS HIGH COURT
2023-TIOL-676-CESTAT-MUM
Technoforce Solutions India Pvt Ltd Vs CCGST & CE
ST - The main thrust of adjudicating authority while rejecting the refund claim was that the agreement between parties was for export of 'goods' and not for export of 'service', and therefore they are not eligible/entitled for refund of Service Tax paid by them and also that there is no evidence of export of 'service' - The Commissioner failed to touch this issue and did not give any finding whether the agreement was for export of goods or for services which goes to the root of issue involved herein - Therefore, without going into other submissions, Tribunal is inclined to remand the matter back to Commissioner (A) for deciding the appeal afresh after giving proper reasoning for upholding/rejecting the finding of adjudicating authority - Accordingly, impugned order is set aside: CESTAT
- Matter remanded: MUMBAI CESTAT
2023-TIOL-675-CESTAT-MAD
Tafe Access Ltd Vs CGST & CE
ST - Appellants are authorised dealers of M/s. TATA Motors and are engaged in selling passenger cars and also provide free services to their customers during warranty period - The expenses incurred by them for providing such free services are reimbursed by manufactures namely M/s. TATA Motors - Department was of the view that appellant has to include cost of spares/materials used for providing free services - SCN was issued proposing to demand service tax along with interest and also for imposing penalties - The very same issue as to whether the cost of spares and material used for free services during warranty period has to be included in taxable value or not was considered by Tribunal in case of M/s. ABT Ltd. and others 2018-TIOL-2187-CESTAT-MAD wherein it was observed that spare parts have in fact been sold on payment of VAT, cost of spare parts cannot be included for purposes of levy of service tax - In present case also, the demand cannot sustain - Impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-674-CESTAT-KOL
Tata Steel Ltd Vs CCGST & CE
CX - Issue involved is regarding eligibility of availament of Cenvat credit on inputs when the process undertaken on inputs does not amount to 'manufacture' within the meaning of Section 2(f) of Central Excise Act - Appellant is engaged in manufacturing of excisable goods at its steelworks at Jamshedpur - They received full hard rolled coils from Tinplate Company of India Ltd (TCIL) on payment of duty in their Cold Roll Mill and carried out process of 'galvanization' - There is no dispute that said goods were cleared by TCIL upon payment of duty - Therefore, appellant was eligible to take Cenvat credit of duty paid on said goods as if such goods were received as 'inputs' under Cenvat Credit Rules and utilise this credit according to Rule 3 (4) of Cenvat Credit Rules - Since the process of 'galvanization' undertaken by appellant did not amount to 'manufacture' within meaning Section 2(f) of the Act, as per Rule 16(2) they have to make payment of an amount equal to Cenvat credit taken - Appellant had paid duty on said goods removed after galvanization, which is in excess of Cenvat credit availed - Thus, requirement of Rule 16(2) of said Rules have been complied with - Accordingly, impugned order disallowing the credit availed is not sustainable - Department has not disputed the payment of duty on galvanised coils cleared from appellant's factory - Having accepted the duty paid by appellant, department cannot deny credit availed on inputs used in duty paid goods - Appellant stated that demand confirmed in impugned order is barred by limitation - SCN was issued long after prescribed period of one year contained in Section 11A (1) of the Act - There is no suppression established in this case and hence invocation of extended period of limitation as contained in Proviso to Section 11A (1) of the Act is untenable - Availment of credit on inputs received and process of 'galvanization' undertaken by appellant are known to department and there is no suppression of fact involved in this case - Hence, extended period cannot be invoked to demand duty - Accordingly, imposition of penalty on appellant under Rule 15(2) of said Rules read with Section 11AC of the Act is unsustainable - Impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-673-CESTAT-KOL
Tata Motors Ltd Vs CCGST & CE
CX - The issue involved is with respect to eligibility of benefit of Exemption Notfn 108/95 as amended - Appellant has supplied chassis for executing projects funded by World Bank, by claiming benefit of Exemption Notfn 108/95 - Said Notfn grants exemption to all goods required for execution of projects financed by international organizations like World Bank, Asian Development Bank - To claim exemption, manufacturer has to obtain a certificate from the head of Project Implementing Authority, countersigned by an officer not below the rank of Joint Secretary to Government of India or Principal Secretary or Secretary to state Government to the effect that goods are required for execution of project which has been approved by Government of India - Appellant has got the certificates and hence they fulfilled the condition stipulated in said Notfn, to avail the exemption - The Appellant stated that after introduction of Explanation 2 to Notification, CBEC issued clarification vide Circular which has added words to Notification which were not there - Department wrongly interpreted the Explanation 2 to mean that only the goods which are consumed in project are eligible for exemption - If such a interpretation is accepted, then no capital goods will be eligible for exemption, as machinery or capital goods will not be get consumed in project - Thus, the only plausible interpretation for Explanation 2 would be that the goods brought into the project should not be withdrawn by contractor during course of execution of project - After the project is completed and if contractor shifts the capital goods to some other project, then the exemption cannot be denied - Appellant is eligible for benefit of Notfn 108/95, for the chassis cleared to projects funded by international organizations, as they have fulfilled the conditions stipulated in Notification - Accordingly, impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-672-CESTAT-MUM
Vandana Global Ltd Vs CCE
Cus - The issue involved is, whether appellant is liable to pay any penalty under Sections 114(i), 114(iii) and 114AA of Customs Act, 1962 for not acting judiciously and with diligence despite a clear finding that they are not directly involved in smuggling of red sanders - The allegation against appellant for which they were penalized, was that they did not act judiciously as they failed to monitor the receipts of their export proceeds in accordance with RBI circular and had they acted judiciously with due diligence, the export of 13 containers of red sanders by misuse of their export documents and cargo, could have been avoided - Tribunal cannot lose sight of the fact that appellant themselves are victim of fraud perpetrated by said syndicate who are into the smuggling of red sanders - The case laws cited by appellant against imposition of penalty on them were held as not applicable by Commissioner without any discussions merely by stating that 'it do not help their case' and thus 'not relevant' - The authorities below were also under an obligation to act judiciously and they are not justified in brushing aside the case laws cited by appellants in support of their submissions without any discussions by merely terming them as 'not relevant' - It is the first principle that justice need not only be done but must be seen to be done and by his act commissioner has not only violated the said basic principle but also the principle of natural justice - Noticing that there is violation of natural justice in cases, it would not be proper to deal with the matter on merits - Therefore, without expressing any opinion on merits, matter is remanded back to Commissioner to decide the same afresh after following the principle of natural justice: CESTAT
- Matter remanded: MUMBAI CESTAT
2023-TIOL-671-CESTAT-MUM
Excellent Betelnut Products Pvt Ltd Vs CC
Cus - The assessee-company filed the present appeal to contest vires of an order passed by the Commr(A) in rejecting the assessee's request for provisional release of goods seized u/s 110A of the Customs Act 1962 - The goods, viz., 270 metric tons of 'API supari', imported from Indonesia in ten containers and sought to be cleared at ICD, Mihan against bill of entry no. 3060179/28.10.2022, were seized under section 110 of Customs Act, 1962 and the importer had, pending adjudication, requested the goods to be released to them - Report of test carried out by the customs laboratory at New Custom House, Mumbai on samples drawn therefrom was furnished to Superintendent of Customs (SIIB), Nagpur by communication dated 16th November 2022 along with remnant of the samples; according to the appellant, customs authorities, by letter dated 29th November 2022, suggested that the customs laboratory furnish additional details in response to the several parameters contained in the reference letter of 14th November 2022 and, apparently, by letter dated 2nd December 2022, the said laboratory intimated that the samples would need to be forwarded to FSSAI approved or other government-approved laboratory while reporting that the samples had tested negative for presence of starch - That Customs authorities had had tests conducted at two laboratories, viz., the customs laboratory reporting outcome in communication of 16th November 2022 and by M/s Anacon Laboratories Pvt Ltd, Nagpur, an FSSAI-accredited laboratory, reporting result on 24th November 2022 that was brought to the notice of the appellant only from letter dated 5th December 2022 of Superintendent of Customs - According to the assessee, the second communication, reporting absence of starch by the customs laboratory, that was withheld from them lacked several parameters, except moisture content and damage to, and pest infestation of, the nuts, that were reported on and contrarily to that of the accredited laboratory certifying that the samples, containing starch, were found to be boiled and fit for human consumption in compliance with FSSAI guidelines - It would appear that in the same letter, the assessee was informed of opportunity to seek retest at designated referral laboratory to which they responded, on 12th December 2022, seeking release of the imported goods on the basis of the report of the accredited laboratory which, according to them, was to be relied upon as per instruction no. 1/2020-Cus dated 12th February 2020 of Central Board of Indirect Taxes & Customs (CBIC).
Held - The past offers no expectation that the Commissioner would be sensible to the limits of the legal authority conferred by Customs Act, 1962 or that this Tribunal's elaboration here would persuade, not only about the extent of our appellate oversight over exercise of quasi-judicial powers, but also of the limits of the statutory authority vested in the Commissioner - Hence the seizure of goods does not warrant interference with & the Tribunal restricts itself to the remit of the High Court of Bombay to consider 'provisional release' under section 110A of Customs Act, 1962 - Hence, the goods be 'provisionally released' on furnishing of bond to the extent of value of the goods and subject to the procedural safeguards implicit in section 47 of Customs Act, 1962 within ten days of receipt of this order: CESTAT
+ It may also be inferred that provisional release is a facilitative measure. Though power to seize has inhered, and as it should, in Customs Act, 1962 from the very beginning, and, indeed, as legacy carried over from section 178 of Sea Customs Act, 1878, for close to a century and half, it was only by section 26 of Taxation Laws (Amendment) Act, 2006, incorporating section 110A in Customs Act, 1962, that 'provisional release' of seized goods by Commissioner of Customs pending order of the adjudicating officer found acknowledgment in law. The transition from statutorily implied continuation of 'unilateral' deprivation of custody till conclusion of adjudication to that of reverting custody by statutory recourse can only be described as facilitating. Undoubtedly, it was intended to benefit the importer but not to the disadvantage of the State. The composition of consumer goods in the product portfolio had dwindled; with increased codification procedural breaches came to dominate offence statistics and, with unfettering of industrial oversight, raw materials and inputs took centre stage. The cost of holding such goods under seizure with eventual redemption on payment of fine after confiscation far outweighed the economic detriment of delayed access. The facilitative enactment in public interest may well suffice to suggest that declining to release - direct or effective - is at the cost of the public except of goods whose import is prohibited and destined to be destroyed in public interest. The law does not intend that State is enriched by fines arising from breach of the law or by substituting for the importer to trade in goods, whether seized or even confiscated. Section 110A is couched in such plain language as to give no room for controversy in interpretation or speculation of legislative intent; indeed, it does not even offer scope for discriminatory treatment among imported goods. (Para 15)
+ A harmonious construction of chapter XIII and chapter XIV of Customs Act, 1962 can lead to no other conclusion than to infer the intent of the amendment as not for provisioning but to substitute whimsicality with uniformity. Approval of withholding of 'provisional release' except in circumstances of justification that it is not mere reasonable belief that has prompted so but that there are reasons to believe that goods are 'prohibited' would only weaponize whimsicality that the enactment intended to eliminate. (Para 16)
- Appeal disposed of: MUMBAI CESTAT
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