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2023-TIOL-1053-HC-KOL-VAT
ASL Enterprises Ltd Vs Sr. Joint Commissioner Sales Tax
Whether when provisos to Section 84(1) are read together, it will clearly demonstrate that the provisos enumerate the procedure to be followed by an aggrieved dealer while exercising his substantive right of appeal u/s 84(1) – YES: HC
Whether where the application of Proviso has retrospective operation and all appeals filed on or after 1st day of April, 2015 will be entertained only if the conditions are complied with – YES: HC
Whether second proviso to Section 84(1) of WB VAT Act being procedural law, assessee dealers can claim no vested right in it - YES: HC
- Assessee's application dismissed: CALCUTTA HIGH COURT
2023-TIOL-1052-HC-ALL-CT
Jaypeeco India Vs CCT
Whether where no documents stands produced upon detention of vehicle transporting subject goods, penalty levied on account of evasion merits to be sustained – YES: HC
- Assessee's revision dismissed: ALLAHABAD HIGH COURT
2023-TIOL-797-CESTAT-KOL
Baid International Services Ltd Vs CC
Cus - Alleged fraudulent IGST refund - CBLR, 2013 - Customs brokers licence of the appellant was suspended - Later a SCN No. 7/2021 dated 13.10.2021, was issued to the appellant for revocation of the licence on the ground that in terms of Regulation 10(n) of CBLR as the Customs Broker is under obligation to verify correctness of IEC number, GST Identification number (GSTIN), identity of the client and functioning of the client at the declared address by using reliable, independent, authentic documents, data or information - The appellant submits that there has been no allegation, nor does the order charge the appellant for committing any offence under the Provisions of the Customs Act, 1962, in relation to various exports which were caused through the agency of their license - The appellants contend that the offence committed by the various exporters was extraneous to their (the appellant) functions as a Customs Brokers - The appellant's representation against the said findings and conclusions were dismissed, resulting in the impugned order, against which the appellants are aggrieved of.
Held: It is categorical to note that the Commissioner has recorded in his adjudication order that the Customs Broker is in possession of KYC documents, along with Authorisation Letters from each of the subject fifteen exporters - Despite aforesaid categorical assertion by the Adjudicating Authority, it is observed that for no wonton reason the Commissioner affixes the Customs Broker with the charge of failure of their duties, and responsibilities - Bench is deeply anguished by the impugned order passed by the Adjudicating Authority merely on surmises and conjectures - As far as revenue loss on account of IGST is concerned, nothing in the CBLR, even remotely suggests that it is the responsibility of the Customs Broker to ensure its realisation - The Customs Broker has no real role to play in availment or payment of IGST - To pass on this burden as a responsibility on the Customs Broker is simply hypothetical, wishful and beyond the parameters of law - Regulation 10(n) merely requires the Customs Broker to verify the correctness of Importer Exporter Code, (IEC) number, Goods and Service Tax Identification number at the declared address by using reliable independent authentic documents, data or information - Obviously, this responsibility does not extend to physically going to verify the premises of each of the exporters to ensure that they are functioning at the premises - When a Government Officer issues the certificate bearing registration number with an address, it is not for the Customs Broker to sit in judgement over such a certificate - The Customs Broker cannot be faulted for trusting the certificates issued by the various government bodies/department - It is a different matter, if the documents are not authentic and are forged by the Customs Broker or the Customs Broker had reason to believe that the said documents were not truthful and their veracity was in doubt - The Customs Broker is only a processing agent of documents with respect to a document submitted to him - The appellant has relied upon the registration certificate issued by the appropriate authority, it is an error of the authority issuing registration, if and when the firm does not exist - There is nothing on record to indicate the role of the Customs Brokers in getting the various certificates issued - It is particularly noteworthy that all the documents referred for substantiation of the KYC are all issued by government organisations - Unless, all the officers of various organisations who issued the registration and the necessary documents, either acted fraudulently or carelessly in connivance with the Customs Broker, the letter cannot be faulted upon - The Customs Broker is neither omniscient nor omnipotent - The Customs broker is not concerned with to ensure that the documents issued by the various organisations were issued correctly - If they were issued wrongly, the fault lies with the authorities issuing such certificate, and registrations, and not with the Custom Broker - It is not for the Custom Broker to needlessly doubt the government issued IDs and registration numbers and the broker cannot be faulted for believing in them - The Customer Broker in terms of regulation 10(n) of the CBLR, is obligated to verify the correctness of the IEC number, GSTIN, identity of his client and functioning of his client at the declared address by using reliable independent authentic documents, data or information - It merely cannot be pleaded that the IEC code which is issued by the DGFT, the GST number, the PAN which is issued by the Department of Revenue, CBIC & CBDT respectively, have all been done with collusion and for enabling the exports - The fault for any wrong doing revenue loss thus does not befall upon the Customs Broker - It may also be likely that all the authorities who issued the above documents had issued them correctly and thereafter, by the time of verification, situation may have changed - If so, it may be a ground for starting a fresh investigation but certainly not a ground to suspend/cancel the licence of the Customs Broker who processed the exports - It is not the responsibility of the Customs Broker to physically visit each exporter and verify the existence of each exporter at all locations, let alone, keeping a track of the exporter in case they move address - To a query from the Bench as to how the appellant Customs Broker can be faulted when they relied on the IEC, GST Registration and other documents, all issued by the Government and if the exporters did not exist at all of the premises how were the said documents issued by several Government officers, there were no clear answers emanating - If the officers are not mandated to ensure that the exporter(s) exist and are functioning from the known premises, the Customs Broker cannot be so mandated, in the least - Thus, in terms of Regulation 10(n), any of the three methods viz. document, data or information can be employed by the Customs Broker to establish the identity of their client - It is not necessary that the Customs Broker are required to collect information or launch an investigation - So long as there are documents which are independent, reliable and authentic to establish the identity of the client, this obligation is fulfilled - Documents such as GSTIN, IEC and PAN card are all such documents as prescribed - The responsibility of the Customs Broker, as held by judicial bodies, does not require then to maintain vigil and continuous surveillance on the client to ensure that they continue to operate from the address as given in the various KYC documents and in case of change, get the documents amended - Commissioner's Order cannot be sustained and is required to be set aside - Appeal allowed with consequential relief: CESTAT [para 16, 17, 20, 21, 22, 23, 25, 26, 27, 30]
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-796-CESTAT-KOL
Indian Oil Corporation Ltd Vs CCE
CX - Issue relates to determination of assessable value of stock-transferred petroleum products by appellant from their Refinery to Marketing Division - The dispute is with respect to liability to duty on "Terminalling Charges' shown in 'Stock-Transferred Invoices' when said goods were transferred from their Refinery to their Marketing Division - The Revenue's case is that duty is required to be paid on such 'Terminalling Charges', once it is shown in invoices while clearing the goods by Refinery to Marketing Division of Appellant Company - On the other hand, claim of appellant is that clearance of petroleum products from their Refinery to their Marketing Division was only a stock-transfer and not sale and since the sale was ultimately effected from their Marketing Division, the 'Terminalling Charges', are included in transaction value charged with their customers - There cannot be any sale or purchase between the depots/marketing Division and Refinery of same Division - The transaction between Refinery and Marketing Division was not a sale - Just because the 'Terminalling Charges' are shown separately in stock-transferred invoices, it does not mean that central excise duty is payable on that charges - The final sale took place at Marketing Division, on Transaction value, which includes all charges incurred upto the Marketing Division, including 'Terminalling Charges' - Hence, duty has been discharged by appellant on transaction value, which includes 'Terminalling Charges' also - No evidences has been brought on record by Revenue to rebut the claim of appellant that 'Terminalling Charges' were included in transaction value at which the petroleum products were sold by their Marketing Division - In absence of any such evidence, the allegation that duty has not been paid on 'Terminalling charges' is not sustainable - Accordingly, demand of duty along with interest confirmed in impugned order is not sustainable - Since, the duty itself is not sustainable the question of imposing penalties does not arise - Impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-795-CESTAT-KOL
Indian Oil Corporation Ltd Vs CCE
CX - The issue involved is valuation of SRGO (Straight Run Gas Oil)/DHDS (Diesel Hydrosulphurisation Feed) manufactured by Haldia Refinery of M/s. IOCL and cleared on stock transfer basis to M/s. IOCL Barauni - Contention of Department is that the said goods were either captively consumed within factory at Haldia or cleared to their own sister unit at Barauni, on stock transfer basis and hence Rule 8 of CEVR, 2000 is to be adopted for purpose of determining value of these goods - SRGO manufactured by IOCL Haldia refinery has not been sold to any independent buyers - In fact appellant stated that it is not a marketable product and no duty is payable - However, they have agreed to pay duty only to avoid litigation as entire exercise is revenue neutral - Part of SRGO/DHDS manufactured at Haldia Refinery were consumed captively for manufacture of HSD and the remaining were cleared to their sister unit at Barauni - They stated that it was not possible to work out the cost of product in petroleum industry, accordingly assessable value has been arrived at by adopting the method as mentioned in O-I-O - Appellant has partly consumed the goods captively and partly cleared the same to their sister unit - The Circular does not visualize this situation - For captive consumption Rule 8 would be applicable and for sale to their sister unit Rule 9 of the Valuation Rule 2000 would be applicable - Since none of the Valuation Rules from Rule 4 to 10A covers said situation, appellant stated that they have adopted Rule 11 Best Judgement Method - Method of valuation adopted by appellant under Rule 11 of Valuation Rules is appropriate method in this case because the situation of part sale to related person and part captive consumption is not covered by any of other Rules in Valuation Rules, 2000 - Even if CAS-4 is arrived at and the goods are valued as per Rule 8 of Valuation Rules, there is no loss of revenue because of duty paid will be available as credit and entire exercise would be revenue neutral - Issue of Revenue Neutrality is a very valid argument in this case as the sister Unit at Barauni would be eligible for credit of duty paid by Haldia Unit - The valuation adopted by appellant under Rule 11 of Valuation Rules, 2000 is proper and demand confirmed in impugned order is not sustainable and therefore set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
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