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2023-TIOL-967-HC-DEL-ST
Blackberry India Pvt Ltd Vs Asstt. CCE & CGST
ST - Petitioner impugns the order passed by the Adjudicating Authority to the extent that it denies the petitioner's claim for interest u/s 11BB of CEA, 1944 r/w s.83 of the FA, 1994 on the amount of refund sanctioned - Adjudicating Authority has denied the interest on the ground that the refund has been sanctioned within a period of three months - Impugned order indicates that the Adjudicating Authority had considered the date of application for refund as 07.02.2023, instead of the dates on which the applications were first made.
Held: In a case where Revenue denies the claim for refund and the assessee succeeds before the Appellate Authorities, the interest is required to be calculated from the date immediately after the expiry of three months from the date of application for the refund and not from the date of the appellate orders - Said issue stands authoritatively settled by the Supreme Court in Ranbaxy Laboratories Ltd. = 2011-TIOL-105-SC-CX - Adjudicating Authority has correctly proceeded on the basis that the interest under Section 11BB of the Excise Act would be payable from the date immediately after the expiry of three months from the date of application for refund - However, he erred in holding that the petitioner's letter dated 07.02.2023, requesting for processing its claims for refund is to be considered as its application for refund - Adjudicating Authority has failed to consider that the petitioner had filed its applications of refund on 28.03.2013, 31.03.2014 and 30.06.2014 and the interest payable to the petitioner is required to be calculated from the date immediately after expiry of three months from the dates on which those applications were made - Adjudicating Authority is directed to forthwith process the petitioner's claim of interest - Petition is allowed: High Court [para 13, 14, 15, 16] - Petition allowed: DELHI HIGH COURT
2023-TIOL-966-HC-P&H-CX
Winsome Yarns Ltd Vs CCE
CX - GP sheets etc. are required for proper functioning of air humidifiers machine which ultimately supports the working of machinery and plant etc. of the appellant Company used in manufacture of cotton yarn and, therefore, they are integral part of the machinery as well as capital goods, as these ducts hold the air humidifier machine in position which ultimately helps in proper manufacturing of final product - It is not the case of the revenue that these items were not required to be used for making ducts - They might not be falling under Rule 2(a)(A)(i) of the Rules, 2004 but they certainly fall under Rule 2(a)(A)(iii) of the Rules, 2004 and can also be treated as spares and accessories of the capital goods i.e. humidifier machine - GP sheets and GP coils etc. used as ducts for the humidifier machine also fall within the definition of 'inputs' as given in Rule 2 (k) of the Rules, 2004 which says that input includes goods used in the manufacture of capital goods which are further used in the factory of the manufacturer - GP coils, GP sheets or aluminum sections which were used for preparing air ducts for the humidifier machine installed in the factory premises of the appellant were not only inputs but could also be treated as components or accessories of the humidifier machine and as falling within the definition of Rule 2(a)(A)(iii) of the Rules, 2004 and were entitled to cenvat credit - Tribunal was not justified in rejecting the claim of the appellant for availing cenvat credit - Appeal is allowed and the order passed by the Tribunal is set aside: High Court [para 14, 15, 16]
- Appeal allowed: PUNJAB AND HARYANA HIGH COURT
2023-TIOL-965-HC-P&H-CX
Pr.CCGST Vs Avon Meters Pvt Ltd
CX - Adjudicating authority observed that the invoices showing purchase of goods/inputs in dispute from various suppliers were paper transactions and this observation was made by relying upon statements of the suppliers - Such statement could not be considered to be relevant and admissible and hence had rightly not been relied upon by the Tribunal - Revenue failed to produce any material on record to show that either the goods qua which invoices were issued by the suppliers had been diverted to some third party or there was any instance of the money being received back in cash by the assessee as shown to be paid on account of purchase of the disputed inputs - The appellant-revenue had also failed to ascertain as to how much quantity of the inputs was required for manufacturing finished goods which were found at the time of the search - The Tribunal, after analyzing the material placed on record had found that the appellant Revenue had failed to prove that the inputs in question were not utilized by the respondent assessee for manufacturing of final product - The dispute which has been raised by the appellant is purely of facts and no substantial question of law can be stated to be involved in the same - It is well settled that in an appeal under Section 35G of the Act, 1944, this Court cannot re-appreciate the evidence and conclude that the finding of fact is incorrect so the appeal can only be maintained on the substantial question of law - Since the findings recorded by the Tribunal are essentially the findings of fact recorded on appreciation of material brought on record, the same cannot be gone into by this Court u/s 35G of the Act, 1944 - Respondent in CEA No.5 of 2022 cannot also be held liable to pay any penalty, therefore, the appeal CEA No.5 of 2022 is also dismissed: High Court [para 11, 12]
- Appeals dismissed: PUNJAB AND HARYANA HIGH COURT
2023-TIOL-964-HC-MP-CUS
Hitesh Nagwani Vs CC
Cus - Petitioner is aggrieved by the action of respondent whereby they are allegedly not complying the Final Order of CESTAT= 2022-TIOL-787-CESTAT-DEL - The petitioner filed an application on 07.11.2020 for provisional release of seized currency - Vide order dated 15.12.2020, the department rejected the request of the petitioner - However, Vide order dated 18.08.2022, the Tribunal has set aside the order dated 15.12.2020 - After the aforesaid order, the petitioner made representation on 23.11.2022 to the Commissioner of Customs for release of the currency of Rs.82,67,900/- and USD 5000/- Vide letter dated 01.12.2022, Deputy Commissioner of Customs submitted an information to the Commissioner that the Chief Commissioner, Bhopal Zone has accorded concurrence on 01.12.2022 for acceptance of the CESTAT final order - Petitioner submits that the order passed by the CESTAT has attained finality as the respondent/department has accepted the same and hence, there is no reason for not releasing the said currency to the petitioner.
Held: Before the said order could be complied with, the Principal Commissioner of Customs (Adjudication) Mumbai has passed the Final Order against the M/s Rudras Overseas (Company) and the petitioner for confiscation of the seized currency - Petitioner is not disputing that he was not aware about above order passed against him, at the time of filing this petition - In all fairness, the petitioner ought to have disclosed this Final Order dated 11.01.2023 passed by the Principal Commissioner of Customs - When the currency has finally been directed to be confiscated under the provisions of 121 of the Customs Act, 1962 as a sale proceeds of smuggled goods, then the prayer for provisional release cannot be considered - Subordinate authorities have not denied the compliance of order passed by the Tribunal for provisional release but before the goods could be released, the final order of confiscation has been passed which is an appealable order, therefore, the order passed by the Tribunal cannot be complied with - Since, the petitioner has suppressed the fact of passing of final order of confiscation which was well within his knowledge and filed this present petition seeking provisional release of the goods, the cost of Rs.25,000/- is imposed - Writ petition is dismissed: High Court [para 8, 9, 13, 14]
- Petition dismissed: MADHYA PRADESH HIGH COURT
2023-TIOL-749-CESTAT-KOL
Tripura State Cooperative Bank Ltd Vs CCE & ST
ST - The Tripura State Cooperative Bank Ltd, Agartala(TSCBL), registered under banking and financial services awarded contract for construction of a multi-storied building for the bank purpose to Tripura Housing and Construction Board, Agartala (THCB) for an amount of rupees 4,56,00,000/- - The appellant submits that THCB further awarded and has subcontracted the construction of the building to Shri Dipak Paul, for a value of Rs. 4,06,16,850. 00/- - That the service tax liability on this amount received by Shri Dipak Paul comes to Rs. 19,13,494.00/- - By virtue of reverse charge mechanism for payment of service tax, vide notification 30/2012 ST (Sr. No. 9 of the table) dated 20.06. 2012 as amended, the service provider, is liable to pay 50% of the tax that is an amount of Rs. 9,56,747.00/-, while the balance 50% is required to be paid by the service receiver - M/s Dipak Paul have discharged service tax liability along with interest and have paid an amount of Rs. 10,21,525/- to the Department, as share of their liability - Vide show cause notice issued in the matter, the appellant have now been called upon to pay the balance service tax amounting to Rs. 8,91,969/- under Section 73(1) of the Finance Act - Commissioner (Appeals) vide his order has fastened the balance liability on the appellants, on the plea that upon completion of the construction of the building M/s THCB had handed over the building to the appellants who upon getting possession of the said building released all funds due as per contract to THCB, towards the construction of their office building and the fact that the appellants are using the said office building, evidence that the appellant fell into the bracket of being the end user/beneficiary/ultimate recipient of the service, and therefore are required to pay the balance 50% of service tax as recipient of service in terms of Notification no. 30/2012 ST dated 20/06/2012 The same having not been discharged from their end, hence the impugned show cause notice. Held - The simple test of a service receiver and service provider would be borne out of the fact, as to who is paying as a client and who is getting paid as a provider of service - The obvious answer to this, as borne out of the facts of the case is that M/s Dipak Paul gets paid for (hence a service provider) by THCB (hence a service recipient) - Thus it is undoubtedly clear that M/s Dipak Paul have rendered services to THCB and not to the appellants herein - Thus in terms of RCM it was between both THCB & M/s Dipak Paul to pay equally the service tax as leviable - It is seen that no SCN has been issued to THCB for the differential payment of tax - For liability under RCM in relation to service rendered by M/s Dipak Paul , no liability can accrue to the appellants, for want of receipt of any service by them from M/s Dipak Paul directly - The finding of the Commr.(A) that the appellant released funds to THCB for construction of the office building and subsequently THCB in their turn engaged the contractor for such work though is factually correct - But the Commr.(A) has failed to appreciate its true purport - The mere fact that the appellant are making use of the said building and have moved their office into the same is not the test for the delivery of the service - The end user status/ultimate recipient of service test cannot therefore be interpreted to fix TSCBL as the service recipient directly from M/s Dipak Paul - It is undisputed that M/s Dipak Paul has been engaged at the behest of THCBL - There is no contract evidencing engagement of Dipak Paul by TSCBL - As per section 68(1) the Service Tax liability dwells upon the person, providing the taxable service - However, in terms of Notification No. 30/2012-ST, dated 30.6.12, this liability is divided equally between the service provider and the service recipient, with each sharing 50% tax payable - Hence in the present circumstances, no liability under Reverse Charge Method is accruable upon the appellant - It is M/s Dipak Paul who provided services to the appellant, who as per law, can avail credit of the tax paid by M/s Dipak Paul, as input service credit - No SCN was to be issued to the appellant w.r.t. the aforementioned services - As there exist, no relationship between TSCBL and M/s Dipak Paul as a service receiver and a service provider for the impugned works order - No liability accrues upon the noticee to pay Service Tax - The order passed by the Commr.(A) merits being quashed: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-748-CESTAT-DEL
Mahavir Metal Manufacturing Company Vs CCE & CGST
CX - The appellant was engaged in manufacturing of umbrella/ umbrella parts and the duty structure was almost just half on the finished goods as compared to the imports in terms of Notification No. 12/2002-CE dated 17.03.2012 - This resulted in accumulation of central excise duty and the corresponding Cenvat credit for an amount of Rs. 42,17,938/- - As such, a refund claim for the said amount of unutilized Cenvat credit was filed by the appellant on 15.04.2019 under Rule 5 of Cenvat Credit Rules, 2004 - The appellant, on being enquired, had informed that their factory got closed in the financial year 2016- 2017 and they had already applied to disconnect the power supply by their letter dated 19.04.2017 and 10.05.2017 - The supply was finally disconnected on 22.09.2017. The appellant also informed that they had migrated under GST, however, had not filed Trans-1 due to which the aforesaid amount of unutilized Cenvat credit could not be carried forward and was still lying in their books of account - Being unsatisfied with that response, the Department served a show cause notice bearing No. 2302 dated 01.11.2019 upon the appellant proposing the rejection of the refund claim of accumulated Cenvat credit - The said proposal was confirmed initially vide order-in-original No. 169/2020-21 dated 29.07.2020 on the ground that Rule 5 of Cenvat Credit Rules is not available for the purpose of refund that too after the closure of the factory - It was rejected also on the ground that post introduction of CGST Act the appellant has failed to transfer the closing balance of Cenvat credit through Trans-1 as was mandatory in terms of Section 140 of CGST Act 2017 - Section 11B of Central Excise Act is also held not applicable to the given facts and circumstances - These findings were confirmed by Commissioner (Appeals) vide order-in-appeal No. 309/2020 dated 15.10.2020. Held - Other than Rule 5 of Cenvat Credit Rules, there is no other provision either in Cenvat Credit Rules, 2004 or in Central Excise Rules, 2002 for giving cash refund of the accumulated Cenvat credit. Even Section 11B of Central Excise Act is only for the refund of duty paid either through cash or through Cenvat credit or for the Cenvat credit wrongly reversed - Hence, this section cannot be invoked in cash refund of the unutilized Cenvat credit lying in the Cenvat account of the manufacturer at the time of closure of the factory - Despite the manufacturing being closed in FY 2016-2017 and the appellant had already moved on the GST regime, but the refund claim could not have been filed before 16 April 2017 i.e. more than two years of the closure of manufacturing activity - There is no reason to hold that the time line as is given under Section 11B of Central Excise Act qua the refund of duty shall not apply to the refund of unutilized Cenvat credit in these peculiar circumstances - the Tribunal in Modipon Ltd. vs Commissioner of Central Excise, Ghaziabad has held that when a factory closes down the Cenvat credit lying unutilized in its Cenvat credit account shall lapse unless the factory resumes production - In the present case, in the light of above noted admitted facts it becomes clear that none of the condition as enumerated above for invoking Rule 5 gets satisfied - In addition, when admittedly, the appellant while registering into new GST regime has not filed Tran-1 showing the impugned unutilized Cenvat credit Section 140 of CGST Act resultantly cannot be invoked - The question of giving cash refund for unutilized lying Cenvat credit does not at all arises - The Adjudicating Authority has not committed any error while holding that Rule 5 of Cenvat Credit Rules, 2004 cannot be invoked to sanction the refund of unutilized Cenvat credit lying with the appellant much prior to April, 2017 that too in cash as per Section 140 of CGST Act, 2017: CESTAT
- Appeal dismissed: DELHI CESTAT
2023-TIOL-747-CESTAT-MUM
Trithi Robotics Pvt Ltd Vs CC
Cus - The Appellant herein has imported goods, declaring the same as "Precision Agri Spray Equipment, Charger and Smart Battery" - The classification of the said goods was claimed under Customs Tariff Item 8424 8200 - However, on examination of the goods on the second check basis the Shed Officer found that the goods were misdeclared by the appellant inasmuch as the imported goods were "Remotely Piloted Aircraft (RPA) which are appropriately classifiable under CTH 8804 - On the basis of examination, the matter was adjudicated by the Deputy Commissioner of Customs vide order dated 18.01.2021, wherein he had confiscated the goods under Section 111(d) and 111(m) of the Customs Act, 1962 - The adjudication order also imposed penalty on the appellant under Section 112(a) - Being aggrieved by the said adjudication order, the appellant preferred appeal before the Commissioner (Appeals) which was disposed of vide the impugned order dated 24.01.2022 in confirming the adjudication order passed by the original authority and rejecting the appeal filed by the appellant. Held - It is seen that the Department has not considered the submissions made by the appellant in the appeal memorandum filed before the Tribunal - Further, we are also surprised to know that how can a Shed Officer posted in the port of import without a detailed examination of goods, either by taking the assistance of technical expert or chartered engineer, can certify about a product and on the basis of such certification, the Department will proceed against the importer for confirmation of duty demand or for confiscation of the goods - Since the issue requires a detailed examination by an expert or specialist in the concerned field, we are of the view that the appeal is required to be allowed by way of remand to the original authority for carrying out an effective and meaningful adjudication: CESTAT
- Appeal allowed: MUMBAI CESTAT |
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