2023-TIOL-1137-HC-KERALA-VAT
Associated Pipe Industries Vs State of Kerala
Whether in the absence of a clear bifurcation in the accounts between the two streams of supply of PVC pipes, the Revenue rightly disallowed input tax credit proportionate to the quantity of PVC pipes that were stock transferred to outside the State - YES: HC
- Revision answered in favor of Revenue: KERALA HIGH COURT
2023-TIOL-832-CESTAT-DEL
HEG Ltd Vs Commissioner (Appeals) GST, C & CE
ST - The Assessee is engaged in manufacture of graphite electrodes falling under Chapter Heading 85451100 of the Central Excise Tariff Act, 1985 - The Assessee is registered both under Central Excise and service Tax for providing/receiving various taxable services such as Business Auxiliary service, Banking & Financial Service, Cargo Handling service, Consulting Engineers services, Legal service and Renting of Immovable property service, Goods transport agency service etc - The Assessee filed applications in Form EXP-1 declaring intention to avail exemption from Service Tax as per Notification No. 18/2019, in respect of Banking & Financial services, Goods Transport Agency service, Consulting Engineering service and Business Auxiliary services - The Assessee filed return in Form EXP-2 for transport of goods by Goods Transport Agency services - The Assessee filed letter claiming exemption from service tax under GTA Service to the tune of about Rs 37.89 Lakhs - The Department noted that the Form EXP-2 was not filed timely and in proper format - Hence it was held that the Assessee wrongly claimed exemption under Notfn No 18/2009-ST and Notfn No 31/2012-ST - Two SCNs were issued, proposing demand of about Rs 37.89 lakhs and Rs 16.82 lakhs under Section 73 of the Finance Act 1994, with interest under Section 75 of the Act and penalty under Sections 77, 77 & 78 of the Act - On adjudication, an O-i-O came to be passed confirming the demands raised, along with interest and penalty.
Held - Notification no. 31/2012 - Reading of the provisions in this Notification indicate that in order to avail the exemption enshrined in the said notifications, the appellant had to satisfy the condition of producing the consignment note and declaring the amount paid as commission or is payable - In the instant case, we note that the primary condition for seeking exemption for GTA, the requirement is to produce a consignment note, and for the commission agent, the amount is required to be indicated - There is neither any allegation in the Show Cause Notice nor any finding in the impugned order that the appellant did not export the goods or that there was no consignment note, or any other document in his name. Therefore, the essential condition for availing the benefit of the said exemption notification stands satisfied: CESTAT (p 23)
Held - One of the other conditions in the notification indicates that the exporter has to inform the jurisdictional Assistant Commissioner by filing the form EXP-1 before availing the exemption under the said notification - It is observed that the Assessee was very prompt in filing this intimation format before availing the exemption - The Assessee undertook to comply with all the conditions mentioned therein, including filing of half yearly returns within the specified period - However, when it came to the actual filing the said return for compliance verification by the Department, the appellant did not show the much-needed promptness - We find that the Department had issued several reminders for filing the said return, but the Assessee did not feel it necessary to respond to these letters - Attention was drawn to the earlier decision of this Tribunal in the Appellant's own case HEG Ltd vs Commissioner of Customs, Central Excise & Service Tax, Bhopal - The benefit of the exemption notification was extended to the appellant despite their delay in filing the required returns - The Tribunal opined that the mere procedural lapse which admittedly is on account of non availability of shipping bills due to delay on the part of Customs cannot be the ground to deny the substantial benefit of the notification - As has been observed previously, the Assessee was very prompt when seeking the exemption under the said notifications, but did not show similar promptness while filing returns - It is also seen that while filing the returns, the Assessee did not take due care to file the data/documents as required, despite having undertaken to file the same - The Assessee can be excused once for not having complied with the provisions of the notification for which the Tribunal has allowed the benefit - But it cannot be the case for the appellant to seek the indulgence of this Tribunal to overlook such lapses repeatedly: CESTAT (p 25)
Held - The Supreme Court in Commissioner of Customs(Imports), Mumbai vs Dilipkumar & Co categorically held that an exemption notification should be interpreted strictly and the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification - As already held above, we find that the Assessee has complied with the notification condition as enumerated in column 4 of the aforesaid table - In view of the same, we set aside the demand of duty and interest upheld in the impugned order: CESTAT
Held - Penalty - Penalty under section 78 is imposed when there is a willful intention to evade the payment of tax - The delay in filing of the return for claiming the exemption cannot be termed as willful intention to evade payment of duty - Therefore, we set aside the penalties imposed under section 78 of the Act - We now come to the penalties imposed under section 77 and 78 of the Finance Act on the appellant - As observed previously, the Assessee was very prompt when filing the intimation for seeking the exemption under the said notifications, but did not show similar promptness while filing returns - It is also seen that while filing the returns, the Assessee did not take due care to file the data/documents as required, despite having undertaken to file the same. Consequently, the penalty under section 77 is upheld for failure to file the returns in time: CESTAT
- Appeal partly allowed: DELHI CESTAT
2023-TIOL-831-CESTAT-DEL
Kafila Forge Ltd Vs Pr.CC
Cus - The issue at hand in the present appeal arose when the Appellant filed Bill of Entry for clearance of goods declared as U.J. Cross Part & U J Cross Cup part and classified the same under CTH 8483 60 90 of the Customs Tariff Act 1975 - Assessable value of the goods was about Rs. 31.63 Lakhs - On Assessment, the AO passed order classifying the goods under CTH 8708 - Such findings came to be sustained by the Commissioner (Appeals).
Held - The goods U.J. Cross Part & U J Cross Cup part are undisputedly used principally with the Transmission Shafts which may be further used in motor vehicles - Transmission Shafts are classifiable under CTH 8483 - The Department has also not disputed that the impugned goods are part of the transmission shaft, but the dispute is that these goods are to be used as the motor vehicle parts which fall under heading 8708 - Both sides have relied upon the Section Notes pertaining to Chapter 84 and 87 of the Custom Tariff Act - However, considering the General Rules for the Interpretation of Import Tariff, the position becomes clear that the heading which provides most specific description shall be preferred over a heading providing a more general description - On comparison of the both the Heading 8483 and 8708, the subject goods i.e. Universal Joints Parts to be used in transmission shaft, are more specifically covered under sub heading 8483 60 90 whereas nothing specific is found in respect of these goods under the heading 8708: CESTAT
Cus - Section Notes - Further, in accordance with the General Rules for the interpretation, the classification shall be determined according to the terms of the heading and relative Section or Chapter Notes - In view of the above Section Note 2, the parts which are goods included in any of the heading of chapter 84 are in all cases to be classified in their respective headings, except for the heading 8409, 8431, 8448, 8466, 8437, 8487 - The goods in question are included in heading 8483 of Chapter 84 - However, such classification of the parts in their respective headings is subject to Note 1 of this Section XVI, which excludes the "article of Section XVII" - Therefore, it is further inevitable to examine the Notes of Section XVII - In view of the above Section Note, the parts and accessories of Section XVII don't apply to article of heading 8483 (clause (e) of Section Note 2) - In view of the specific exclusion of 'articles of heading 8483' from the ambit of the Section XVII under which chapter 87 falls, the impugned goods will not fall under Chapter 87 - Hence the issue is settled in favor of the Assessee-importer: CESTAT
- Appeal allowed: DELHI CESTAT
2023-TIOL-830-CESTAT-BANG
Photofax Systems Vs CC
Cus - The Original Authority had redetermined the value of 128 units of used Digital Multifunction Printing and Copying Machine (MFDs) - He held that goods were liable for absolute confiscation and imposed 100% penalty equivalent to value of goods on imported goods - The Commissioner (A) in impugned order had held that goods are not liable for absolute confiscation but are to be released on payment of redemption fine - He further upheld 100% penalty equivalent to value of imported goods - Appellant is in appeal only to the extent of redemption fine and penalty since he has accepted the enhanced value as per Chartered Engineer's certificate - There have been number of orders issued by Tribunal and High Courts accepting the fact that impugned MFDs are not liable for absolute confiscation - Hence have taken a lenient view and released these goods on payment of redemption fine of 10% & penalty of 5% - From the Final Order in case of M/s Accord Digitech, it is clearly evident that the used Digital Multifunction Printing and Copying Machine were released on payment of redemption fine of 10% and penalty of 5% of enhanced value of imported goods - This was also followed by this Bench in case of M/s S.R. Enterprises = 2021-TIOL-639-CESTAT-BANG wherein the redemption fine and penalty was 10% and 5% respectively - The ratio of judgment of High Court of Kerala in matter of Office Devices is also squarely applicable - Keeping in view the said decisions, appeal is partially allowed by reducing redemption fine to 10% of enhanced value and penalty to 5% of enhanced value - Appellant is allowed to redeem the goods for home consumption: CESTAT
- Appeal partly allowed: BANGALORE CESTAT
2023-TIOL-829-CESTAT-BANG
Fowler Westrup India Pvt Ltd Vs CCT
CX - The short issue involved is classification of "Galvanized Silo Solution systems" which the Revenue proposed to classify under 9406 00 93 and the claim of appellant is under Chapter heading 8437 10 00 - Periodical SCNs were issued to appellant for demand of duty and confirmed the demands accordingly with interest and penalty - The Commissioner in impugned orders, analysing the functions and implications of relevant chapters of sub-heading, came to conclusion that it is classifiable under Chapter 94 and not Chapter 84 of CETA, 1985 - Also, discussing in impugned orders, the Commissioner also made a reference to order of Commissioner, Pune about classification of identical items by B.G. Shirke Construction Technology Pvt. Ltd. - The Pune Commissionerate also classified the items manufactured by M/s. B.G. Shirke Construction Technology Pvt. Ltd., under Chapter sub-heading 9406 00 99 and appeal was stated to be pending before Tribunal of Mumbai Bench - The Tribunal at Mumbai, after detailed discussion of Silos functions and HSN in its order concluded that classification of said Silos would be under Chapter 8437 10 00 but not under Chapter sub-heading 9406 00 99 of CETA, 1985 - No merit found in impugned orders, same are set aside: CESTAT
- Appeals allowed: BANGALORE CESTAT |
