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2023-TIOL-1236-HC-AHM-VAT
Chirag Cotton Company Vs State Of Gujarat
On appeal, the High Court directed that the Assessee deposit Rs. 5 Lakhs as pre-deposit for admission of appeal in the relevant AY. The Appellant was also directed to give an undertaking to give security by way of a immovable property. The other co-owners shall also file a similar undertaking before the respondent authority to the effect that the property shall not be transferred or alienated or sold in any manner without the permission of the respondent authority. The matter was thus remanded to the First Appellate authority for disposal of the appeal.
- Case remanded: GUJARAT HIGH COURT
2023-TIOL-889-CESTAT-DEL
Metal Alloys Industries Vs CCE & CGST
CX - The Assessee is a proprietorship concern owned by Shri Mohit Gupta and the excise and accounts work is looked after by Shri Aviraj Jain under the supervision of Shri Amit Gupta, who is brother of Shri Mohit Gupta - Sales and purchase of the firm is being looked after by Shri Aviraj Jain - The Assessee is engaged in the manufacture of copper rods, lead alloys, ingots, re-melted copper ingots, re-melted lead ingots falling under Chapter 74 and 78 of the First Schedule to the Central Excise Tariff Act, 1985 - The Assessee was registered in December, 2014 under the Central Excise Act and subsequently in July, 2015 for service tax with Registration No.AAGP6286J001 - Acting upon an intelligence that the Assessee was involved in fraudulently passing the cenvat credit through fake invoices without actually manufacturing the goods, the Unit was kept under surveillance by the Officers of Preventive Branch of Central Excise Division - During the visit of the factory premises on 14.03.2016 by the Officers, Preventive Branch, it was noticed that the Assessee was getting the raw materials mainly from Bawal and Sonepat and was selling it to Mumbai, Sonepat and Delhi - It was also found that the Unit was non-functional since its inception, yet two furnaces were installed in the Unit in July, 2015 - From the electricity bills, it was observed that there was no consumption of electricity in the manufacture of finished goods - The DG set found to be installed in the factory premises was installed on 19.02.2016 - On further verification of the premises, it was found that the Unit did not have the facility to manufacture the goods i.e. copper wire, rods and copper ingots though the Assessee has shown manufacture and clearance of copper rods, lead, alloys, ingots, etc - During the investigation, lead ingots weighing 1926 kgs. approximately valued at Rs. 2,31,120/- were found to be unaccounted for at the factory premises, which was kept there for clandestine removal - During the visit of the Unit, statements of Shri Ashok Kumar Bhagat, Guard at the factory premises and the Technical Operator, Shri Sonu were recorded - Subsequently, the statements of the Proprietor, Shri Mohit Gupta and Accountant, Shri Aviraj Jain were also recorded - Show Cause Notice was issued to the Assessee as to why the seized goods be not confiscated under Rule 25 of the Central Excise Rules, 2002 and why penal action under Section 11 AC (1)(c) of the Central Excise Act, 1944 be not initiated - Further, penalty was proposed on the Proprietor as well as on the Accountant - The Show Cause Notice directed the Assessee to produce all the evidences, on which they intent to rely upon in support of their defence - The Show Cause Notice was adjudicated by the Asstt. Commissioner - The Assessee had chosen not to participate in the proceedings - The Adjudicating Authority on considering the totality of the facts concluded that the Assessee indulged in fraudulently passing the cenvat credit through fake invoices without manufacturing the goods in contravention of the provisions of the Central Excise Rules and accordingly, confirmed the Show Cause Notice - The Assessee challenged the Order-in-Original before the Commissioner (Appeals) raising several grounds - The Commissioner (Appeals) modified the order-in-original to the extent that the penalty imposed on the Proprietor, Shri Mohit Gupta and the Accountant, Shri Aviraj Jain was set aside - However, the confiscation of the goods, imposition of fine on the goods and penalty upon the Assessee was affirmed.
Held - The facts of the case are that there is a factory where neither electricity was used nor was there any facility to manufacture the output goods, namely Copper Wire Rods and Copper Ingots, yet the Assessee claimed to have manufactured Lead Ingots - The installation of the two furnaces, which are not in use and similarly the D.G. set is only to give a deceptive picture of manufacturing activity - It is nothing but a camouflage with fraudulent intention to avail the Cenvat credit without accounting for the goods - The act of the Assessee and the modus operandi adopted was with intent to avail undue benefit, which was nothing but to defraud the Department - It is a settled principle of law that fraud vitiates all solemn acts - Reliance is placed on the judgment of the Supreme Court in the case of Meghmala & Ors. Vs. G. Navasimha Reddy & Ors. wherein it was held that dishonesty cannot be permitted to bear the fruit and benefit to the person who played fraud and in such circumstances - Reliance is also placed on the Supreme Court's judgment in Gowrishankar & Anr. Vs. Joshi Amba Shankar Family Trust wherein it was held that suppression of material document amounts to fraud - Regarding the Assessee's contention that statements were taken under threat or coercion, the same is liable to be rejected as the same appears to be an afterthought as this contention was never raised earlier: CESTAT
Held - Whether the Assessee is a manufacturer or a dealer - The Assessee claimed that as per the allegations in the SCN and findings of the Adjudicating Authorities that the Assessee is not a manufacturer and therefore qualifies as a dealer and hence t he goods seized are not liable to duty and cannot be confiscated under Rule 25 - Reliance is placed on the Tribunal's order in C. Ex, Chandigarh Vs. Surya Cotspin wherein it was held that the Revenue need not prove its case with mathematical precision squarely applies - Further, the observation that once the evidence gathered by the investigation brings out preponderance of probability and nexus between the modus operandi of the Revenue with the goods it dealt and movement of goods from origin to destination is possible to be comprehended, it cannot be ruled out that circumstantial evidence equally play a role, clearly governs the present case - The Assessees was registered with the Excise Department as a 'manufacturer' - It is not open to the Assessee to change his status now as a dealer, just to escape from the clutches of law: CESTAT
- Appeal dismissed: DELHI CESTAT
2023-TIOL-888-CESTAT-CHD
Prime Cyber Vs CCE
ST - The appellant have accepted duty liability and contested the imposition of penalties - They have, in fact, deposited total duty vide Challan dated 1st October, 2009 - Issue is no longer res integra having been decided by Tribunal in case of City Cable - Though the issue has been decided in favour of Revenue, appellant's contention on penalty need to be examined - The appellant being a small operator had no wherewithal to keep track of law and thus, applicability of Service Tax to him, more so looking into the fact that main cable operator M/s SIFY had discharged Service Tax on entire amount collected from customers, there are reasons to believe that there were sufficient reasons for appellant in not discharging applicable Service Tax - Looking into the conduct of appellants in depositing tax with interest and 25% penalty the provisions of Section 80 are invited and the benefits of Section 80 can be extended to appellants - Thus, penalties imposed are not sustainable: CESTAT
- Appeal partly allowed: CHANDIGARH CESTAT
2023-TIOL-887-CESTAT-AHM
Meghraj Chemicals And Agencies Vs CC
Cus - The issue at hand pertains to the classification of a product, which the importer claimed was Un-Coated Calcite Powder which is classifiable under Tariff Heading No. 25309030 - As against this Department, after test report by the chemical analysis found the product to be precipitated Calcium Carbonate - The report indicated that chemical examiner has come to analysis and finding that the sample was in the form of white powder and it is composed of precipitated Calcium Carbonate - Accordingly, the Department during adjudication as well as in the course of appeal, decided the classification to be under Tariff Heading No. 2836500 - During the course of hearing before the original Adjudicating Authority, the importer had waived SCN and the option of personal hearing and requested to finalize bill of entry and release the goods - It had also agreed to pay the penalty as Commissioner of Customs may fix to order release of the goods and also submitted that in view of their financial and commercial losses, they are seeking release of the subject goods at the earliest.
Held - Considering the findings recorded by the Commissioner (Appeals), they are well reasoned and are properly backed by opinion of the Chemical Analyst - Hence the Order-in-Appeal warrants no interference with: CESTAT
- Appeal dismissed/In favor of Revenue: AHMEDABAD CESTAT |
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