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2023-TIOL-911-CESTAT-KOL Bagadiya Brothers Pvt Ltd Vs CC
Cus - The issue under dispute is, whether for deciding the classification and rate of duty payable, Fe % of Iron Ore Fines is to be determined on Dry Metric Ton (DMT) basis or Wet Metric Ton (WMT) basis - The issue stands decided as early as 1997 by Supreme Court in case of Gangadhar Narsingdas Aggarwal and subsequent CBEC Circular 4/2012- Cus which was issued for adoption of uniform Customs procedure in all Customs Houses - In said Circular, it was stipulated that for purpose of charging of export duty the assessment of Iron ore, determination of Fe contents is required to be made on Wet Metric Ton (WMT) basis which in other words mean deducting the weight of all impurities (inclusive of moisture) out of total weight/Gross Weight to arrive at Net Fe contents - The rate of duty was being fixed, then and also now, on the basis of percentage of iron(Fe) in the ore - The higher is percentage, more the rate of duty - In WMT the percentage of iron is taken from material as it has been presented for exports, which contain all types of impurities-Moisture, Sulphur, Phosphorus, Aluminium trioxide - The percentage of impurities is substantial - If percentage of Fe is taken after deducting all quantity of impurities, percentage of Fe will be lower - Therefore, the rate of duty will be lower - The Supreme Court directed that "the percentage of Fe" will be taken out of total material presented for export after deducting all impurities including moisture - While finalizing the assessment of subject S/B, the assessing officers have overlooked the most important aspect of assessment, namely, determination of Fe content for purpose of classification/rate of duty applicable - The Commissioner (A) have only focussed on valuation of Iron Ore Fines - Here, classification of Iron Ore Fines exported and how the Fe % is to be determined (as the classification is based on Fe content), is the question which the Commissioner (A) have not addressed in their Orders - Meanwhile, with effect from 1.5.2022, by a Supplementary Note to Chapter 26, inserted in Indian Customs Tariff, it has been stipulated that in relation to the products under the heading 2601 the percentage of Fe (Iron) content wherever specified shall be calculated on dry metric ton basis - It means that, only after 1.5.2022 for determination of Tariff heading the Fe content shall be calculated on DMT basis - And prior to 1.5.2022, the calculation of Fe content shall be on WMT basis - Assessing Officer for impugned Shipping Bills have adopted Test Report of Griffith India Pvt. Ltd. as it provides details of all types of impurities including moisture, even though they said report is arrived at on DMT basis - Assessing officers are directed to determine Fe content on WMT basis by deducting the moisture given in test reports of NABL accredited government approved Private Laboratory; convert the % of Fe on DMT basis to % of Fe on WMT basis by applying the universally recognised formula for determination of classification of IOF exported; finalise the assessments accordingly - Accordingly, the impugned orders are set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
2023-TIOL-910-CESTAT-HYD
Caravel Logistics Pvt Ltd Vs CC
Cus - The appellant has filed IGM in normal course based on documents available with him, wherein description has been mentioned as 'assorted chappals' - In the month of July 2023, this consignment was opened for inspection and it was found that the imported goods contained mobile spare parts/mobile accessories - Subsequently, they have got amendment done only on the basis of instructions received from proprietor of M/s Great Overseas, Mr M.A. Mujahid which is also confirmed by him in his recorded statements - Therefore, there cannot be ulterior motive on their part to have filed the IGM and amendment request letter - However, this is a case of negligence on their part to specifically not to pose any query the importer as to why description in invoices is different from description given earlier in Bill of Lading, while agreeing with appellant that there is no ulterior motive in entire passage, act of appellant has been negligent - Penalty imposed under section 112(b) is set aside - The penalty imposed under section 114AA is reduced to Rs. 50,000/-: CESTAT
- Appeal disposed of: HYDERABAD CESTAT
2023-TIOL-909-CESTAT-DEL
BSBK Pvt Ltd Vs CCGST & CE
ST - Demand of service tax as was confirmed against assessee stands set aside by final order of Tribunal - Apparently and admittedly, amount of Rs. 62,12,944/- (inclusive of amount of interest of Rs. 7,28,366/-) was deposited during investigations/ adjudication - Amount in question was no more the liability of assessee - This issue is no more res integra that any amount deposited during investigation and/or pending litigation is ipso facto an amount of pre-deposit, which is to be refunded to assessee alongwith interest as is available to such assessee - The issue stands clarified by decision of Apex Court in case of Sandvic Asia Ltd. = 2006-TIOL-07-SC-IT followed by Tribunal in case of Parle Agro Pvt. Ltd. = 2021-TIOL-306-CESTAT-ALL - Since the entire amount has obtained character of pre-deposit, it was highly unjustified on the part of Commissioner (A) to bifurcate said amount into amount of pre-deposit and amount of interest - The issue with respect to amount deposited as interest during investigation stands clarified by Department's Circular 111/05/2009 wherein it has been clarified that tax and interest collected without authority of law has to be refunded where tax which no longer remain the tax cannot continue to retain the character of interest - Commissioner (A) has rightly granted interest on the amount of Rs. 54,84,578/- however has wrongly rejected the balance claim by bifurcating the amount of Rs. 7,28,366/- as interest - The order to that extent is hereby set aside - Assessee is held entitled for refund of Rs. 7,28,366/- alongwith interest at the rate of 12% from date of order of Tribunal: CESTAT
- Appeal allowed: DELHI CESTAT
2023-TIOL-908-CESTAT-ALL
Kisan Sahakari Chini Mills Ltd Vs CCE
CX - The Assessee was subjected to Audit proceedings for the relevant period, whereupon it was observed that the Assessee had availed Cenvat Credit on input services like Insurance Services (Vehicle Insurance & Life Insurance) and Civil Work to the tune of Rs. 67,022/- during the period from April 2010 to October 2012 - The Revenue opined that Cenvat credit in respect of these services was not admissible to the Assessee - Such Order-in-Original denying Cenvat credit to the Assessee was sustained by the Commissioner (Appeals).
Held - Both Show Cause Notice and Order-in-Original seek to deny the CENVAT credit in respect of insurance services for the reason that these services are not used by the Assessee for or in relation to manufacture of the finished goods - It is also observed that no ground for denial of CENVAT Credit in respect of construction services has been indicated either in the Show Cause Notice or in the Order-in-Original - It is only in the order of the appellate authority that the ground for denial of CENVAT credit on the construction services is put forth, by stating that it falls within the exclusion clause - It cannot be made out as to what quantum of CENVAT Credit sought to be denied in respect of life insurance services and what is quantum in respect of construction services - The Assessee has also pointed out in his appeal that in the similar matter orders have been passed allowing the credit - Hence, no findings have been recorded by the Commissioner (Appeals) in respect of the submissions made by the Assessee and no justifiable reasons have been accorded for disallowing Cenvat credit to the Assessee: CESTAT
Held - Extended Limitation - Moreover, the Assessee has himself agreed to reversal of the Cenvat Credit and paid the amount of credit sought to be denied along with the interest that being so in terms of provisions of Section 11 A (2) - The Show Cause Notice should not have been issued to the Assessee - It is observed that after the lapse of a considerable time after the audit, the Revenue proceeded to issue this Show Cause Notice invoking suppression of facts - What is the reason for invoking suppression or other ingredients required for invoking an extended period in this case - It is the submission of the Assessee that they were constantly filing the relevant return in touch with the Department after the erroneous credit was pointed out to them - It is seen that no ground existed for invoking the extended period of limitation in the present case - Since the extended period could not have been invoked, the Show Cause Notice itself could not have been issued and the matter should have been settled on the basis of the amount reversed by the Assessee: CESTAT
Held - Penalty - Penalty has been imposed under Rule 15 of the CENVAT Credit Rules, 2004 read with section 11 AC of the Central Excise Act, 1944 - The O-i-A held in favour of the penalty imposed - There are no merits in the invocation of the extended period of limitation as per Section 11A (4) of the Central Excise Act, 1944, the penalty merits being set aside - Reliance is placed on the judgment of the Supreme Court has in the Rajasthan Spinning and Weaving Mills [2009 (238) ELT 03 (SC)] = 2009-TIOL-63-SC-CX - In absence of any concrete reasons to invoke extended period of limitation there is no reason why this subsection should have not been invoked by the revenue for not issuing any show cause notice to the Assessee: CESTAT
- Appeal allowed: ALLAHABAD CESTAT
2023-TIOL-907-CESTAT-AHM
Ferromatik Milacron India Pvt Ltd Vs CST
ST - The appellant have received ERP System for their use from their head office USA - In case of service tax liability and reverse charge mechanism, service tax is payable considering the service provided by service provider in present case head office USA is a service deemed to have been provided by service recipient, therefore, in case of procurement of ERP System, appellant's head office USA is a service provider of ERP system which is nothing but Information Technology Service, therefore, in hand of appellant, classification service must be same as IT Service - Demand was raised under BAS which admittedly excluded the IT Service, which is not in dispute for relevant period - However for subsequent period exclusion of IT Service from Business Auxiliary Service was removed and thereafter the appellant have classified very same service under IT Service and started paying service tax which has been accepted by Revenue, therefore, Revenue cannot take a stand that prior to amendment in Business Auxiliary Service, service tax shall not be classified under IT Service and thereafter the same service is rightly classified and accepted under IT Service, therefore, the service received by appellant is indeed Information Technology Service and during relevant period, same was not taxable in terms of exclusion from Business Auxiliary Service - It is settled that ERP Service is clearly an Information Technology Service - The same being excluded from Business Auxiliary Service cannot be charged to service tax under Business Auxiliary Service - If at all there is any service tax liability, appellant is entitled for cenvat credit of same and due to which entire exercise will amount to Revenue neutral - Wherever there is a revenue neutral situation, the malafide cannot be attributed to assessee - There is no mens rea or suppression of fact on the part of appellant, therefore, demand is not sustainable on the ground of time bar also - Impugned order is not sustainable, same is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2023-TIOL-906-CESTAT-MAD
Axon Drugs Pvt Ltd Vs CGST & CE
CX - Appellants are engaged in manufacture of P and P medicines - They filed a rebate claim for an amount pertaining to export of medicaments on payment of duty through CENVAT account - Adjudicating authority though sanctioned the refund claim has ordered to credit the amount to Consumer Welfare Fund observing that the amount is hit by principle of unjust enrichment - It is thus, held by authorities below that incidence of duty has been passed on to foreign buyer - Tribunal do not understand the logic of such view taken by adjudicating authority that the duty has been passed on to a buyer outside India; i.e., outside the jurisdiction of Central Excise Act - This apart it is brought out from records and also explained by appellant that Excise duty is paid on FOB value and export invoice reflected in shipping bill is on CIF value - The excise duty is paid only on FOB value and therefore appellant has not collected excise duty from foreign buyer - After verification of records and appreciating the evidence, Tribunal is convinced that incidence of duty has been borne by appellant - Order passed by authorities below directing to credit the sanctioned refund to Consumer Welfare Fund is not just and proper - Impugned order is modified to extent of sanctioning the refund of Rs.3,01,002/- and the appellant is eligible to receive refund of this amount: CESTAT
- Appeal allowed: CHENNAI CESTAT |
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