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2023-TIOL-1029-HC-MUM-CUS
Mayur Enterprises Vs UoI
Cus - Petitioner prays for declaring that the freezing of the petitioner's savings bank account and current account held with respondent no.2 is bad in law; that the respondent no.2 does not have the power to seal the godown premises; direct the respondent to un-freeze the petitioner's bank accounts, unseal the petitioner's godown.
Held: Where Mr. A who imports goods and sells them to third parties which are subject matter of various transactions leading to Mr. Z who is a third party purchaser from the open market, such goods cannot be subject matter of any detention by the Customs Authorities merely because import of goods by Mr. A is being investigated - If the case of the respondent is accepted that the department can detain any goods in the hands of subsequent purchaser of the goods who has purchased them from the open market, then it would lead to an anomalous and chaotic situation - Respondents have not referred to any material or have shown any documents as to how the attachment of the petitioner's bank account is to protect the interest of revenue or to prevent smuggling - Therefore, on both these counts attachment of the saving bank account cannot be held to be legal and valid - Further the provision of Section 111 provides for confiscation of improperly imported goods - Prima facie, the petitioner being a third party purchaser of the goods in question, this provision also may not be applicable - Section 135 would empower the respondents to initiate criminal action against the persons who are involved and satisfy the pre-condition under sub-section (1) of Section 135 of the Act - In the present case there is no such action which is under challenge or which is initiated and, therefore, justification sought to be made by the respondents of the impugned action on this ground is also without any authority of law - Section 28 BA of the Act provides for attachment of any property of a person on whom notice under Sections 28(1), 28(4), 28-AAA(3) or 28B (2) of the Act is served - In the present case, the respondents have not served notice/s under any of these sections on the petitioner and therefore even on this account the respondents are not justified in attaching bank account and detaining the goods and documents - Impugned action of the respondents in detaining the goods in question and attaching the bank account of the petitioner without there being any demand due from the petitioner or any proceedings pending is without jurisdiction and without any authority of law - Petition allowed: High Court [para 22, 23, 24, 25, 28]
- Petition allowed: BOMBAY HIGH COURT
2023-TIOL-782-CESTAT-DEL
GD Goenka Pvt Ltd Vs CCGST
ST - Initially, the matter was decided by the Commissioner by Order dated 10.4.2015 and on appeal, Tribunal, by Final Order dated 28.3.2019, remanded the matter to the Commissioner to examine the matter both on merits and on limitation - Following this order of the Tribunal, the impugned order was passed - Aggrieved with portions of this order, the present appeal.
Held : Case of the Revenue is that the appellant had wilfully and deliberately suppressed the fact that it had availed ineligible CENVAT credit on input services - The position of the appellant was at the time of self-assessment and during the adjudication proceedings and is before the Tribunal is that it is entitled to the CENVAT credit - Thus, it is a case of difference of opinion between the appellant and the Revenue - The appellant held a different view about the eligibility of CENVAT credit than the Revenue - Naturally, the appellant self-assessed duty and paid service tax as per its view - Such a self-assessment, cannot, by any stretch of imagination, be termed deliberate and wilful suppression of facts - Another reason given in the SCN for invoking extended period of limitation was that the appellant had deposited the disputed amount of service tax during audit but later disputed it which shows the appellant's intent to wilfully and deliberately suppress the facts - This reasoning cannot be accepted because there is nothing in the law which requires the assessee to accept the views of the audit or of the Revenue - There is nothing in the law by which an inference of intent to evade can be drawn if the assessee does not agree with the audit - If alleged incorrect self-assessment itself is held to establish wilful suppression with an intent to evade, then section 73 would be held to be otiose - The appellant cannot be faulted for not disclosing anything which it is not required to disclose - Form ST-3 in which the appellant is required to file the returns does not require details of the invoices or inputs or input services on which it availed CENVAT credit and the appellant is not required to and hence did not provide the details of the CENVAT Credit taken - If the format of ST-3 Returns is deficient in design and does not seek the details which the assessing officers may require to scrutinise them, the appellant cannot be faulted because as an assessee, the appellant neither makes the Rules nor designs the format of the Returns - So long as the assessee files the returns in the formats honestly as per its self-assessment, its obligation is discharged - Another ground for invoking extended period of limitation is that the appellant had not sought any clarification from the department - Bench finds that there is neither any provision in the law nor any obligation on the assessee to seek any clarification - If the officer fails to scrutinise the returns and make the best judgment assessment and some tax escapes assessment which is discovered after the normal period of limitation is over, the responsibility for such loss of Revenue rests squarely on the shoulders of the officer - It is incorrect to say that had the audit not been conducted, the allegedly ineligible CENVAT credit would not have come to light - To say that had the audit not been conducted, the incorrect availment of CENVAT credit would not have come to light is neither legally correct nor is it consistent with the CBEC's own instructions [Central Board of Excise and Customs (CBEC) in its Manual for Scrutiny of Service Tax Returns] to its officers - CBEC took a conscious decision that detailed scrutiny of the Returns should be done only in some cases selected based on some criteria - In those Returns, where detailed scrutiny is not done by the officers, some tax may escape assessment which may not be discovered within the normal period of limitation - As a matter of policy, the CBEC, took such risk and the loss of Revenue is a result of the policy - As the entire demand except what has been conceded by the appellant falls beyond the value period of limitation it is not necessary to examine the merits of the case - Appeal partly allowed: CESTAT [para 14, 15, 16, 17, 18, 20, 22, 24, 26]
- Appeal partly allowed: DELHI CESTAT
2023-TIOL-781-CESTAT-DEL
Rajesh Bhola Vs Pr.CC
Cus - Smuggling of gold - It was gathered that Shri Rajesh Bhola, Director of the company was engaged in the illegal procurement of smuggled gold coins of foreign-made markings of King Edward and Elizabeth etc. - Searches were also conducted at the residential premises of the Director and gold bars having foreign marking, gold coins with foreign markings and gold jewellery were detained - Based on further investigations and the statements recorded by the officers of the Directorate of Revenue Intelligence, show cause notice no 47/2017 dated 05.10.2017 was issued to Shri Rajesh Bhola seeking to confiscate the seized goods - notice was adjudicated vide order in original dated 20.06.2018 wherein the gold bullion/coins/jewellery totally weighing 16143.794 gms was confiscated and penalty of Rs.50 lakh was imposed on the Director - The assessee filed an appeal before the Commissioner (Appeals), wherein part of the confiscated gold bullion/coins/jewellery was released but confiscation of remaining part of these goods was upheld - Department has filed an appeal against the order releasing the confiscated coins, gold bullion and jewellery whereas Shri Rajesh Bhola (appellant) has filed an appeal against the confirmation of confiscation of remaining part of the consignment.
Held : It is pertinent to note that the appellant is in family business of manufacture of gold coins, jewellery and trading of the same - Bench notes that the Commissioner (Appeals) has observed that despite various confessional statements of the Appellant, substantial quantity of gold, gold coins and jewellery had been released to him during the investigation itself - This fact itself is evidence that the confessional statement of the Appellant has no evidentiary value - The critical evidence on which the entire case has been based is on the statements dated 27.04.2017, 28.04.2017 and 29.04.2017 of the appellant, wherein he has stated that he had no bills/invoice for the gold with foreign markings - These statements have subsequently been retracted before the appropriate authority by the appellant - There are no other corroborative evidences which have been unearthed by the investigating team in support of their contention - Bench finds that the appellate authority has concluded that sufficient independent evidence needs to be adduced to corroborate the department's contention regarding smuggled nature of the gold and in the absence of the same, it cannot be concluded that all the gold which was seized from the business & residential premises was smuggled - There are catena of decisions that have consistently held that retracted statements cannot be the sole basis for action under the Customs Act without any independent corroborative evidence - Bench is, therefore, unable to accept the contention of the department that the statements were tendered voluntarily by the appellant and its subsequent retraction is a mere afterthought - Commissioner(A) has correctly held that the quantity of gold/gold coins/jewellery which does not carry any foreign marking or which carry BIS Hallmark, or stamps of Indian Banks, Indian jewellers, or company names are liable to be released and the department has not been able to disprove the positive evidence supplied by the appellant regarding the possession of this quantity of gold - However, since the lawful possession of the foreign marked gold biscuits were not proved, the same were held liable to confiscation - Commissioner Appeals has taken a fair stand and reduced the penalty amount, proportionate to the confiscated gold - Impugned order requires no modification - Both appeals dismissed: CESTAT [para 8, 9, 10, 11, 12, 13, 14]
- Appeals dismissed: DELHI CESTAT |
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