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2023-TIOL-1323-HC-MAD-CUS
DCW Ltd Vs Pr.Commissioner And Ex-Officio
Cus - Petitioner seeks quashing of the impugned order dated 03.02.2020 passed by Principal Commissioner, Mumbai - Government of India had set aside the Appellate Authority order dated 17.05.2013 and classified the product under 2614 0020 and denied duty drawback vide common order dated 03.02.2020 and served on 12.02.2020, therefore, the present petition.
Held : Based on the aforesaid order dated 03.02.2020, for the subsequent exports also the product was classified under the Customs Tariff Item No.2614 0020 and an Order-in-Appeal was passed - In the matter of appeals filed, Tribunal had considered both the appeals filed by the Department and the Assessee and vide order dated 28.06.2023 [ 2023-TIOL-941-CESTAT-MAD ] had dismissed the appeal filed by the Department and allowed the appeal filed by the assessee - The Tribunal has held in favour of the petitioner and classified the product under 2823 0090 - This order was accepted by the Commissioner of Customs followed by the Chief Commissioner of Customs, Trichy vide letter F.No . CCO/LGL/MISC/ 211/2023-LGL dated 02.09.2023 - Therefore, this Court is confirming the order passed by the Tribunal - Hence, the impugned order is quashed; the product "Upgraded Beneficiated Ilmenite" will fall under 2823 0090 under the Customs of Tariff Act - Consequently the petitioner is entitled to drawback and the same shall be granted to the petitioner - Petition is allowed: High Court [para 6, 7]
- Petition allowed: MADRAS HIGH COURT
2023-TIOL-1322-HC-MAD-GST
Veeram Natural Products Vs CGST & CE
GST - Petitioner is engaged in the manufacture and supply of Aluminium Foil Container / Aluminium Foil in Roll Form and Plastic Articles - Prior to GST regime, the said product was taxable under Central Excise Law and the product was classified as Aluminium Foil Container under Chapter heading 7607 and levied duty @ 12.5% - Subsequent to the GST regime, the petitioner classified under 7615 with 12% tax, however, the revenue is claiming the product would be appropriately classifiable under 7607 with 18% tax, therefore, petitions have been filed to quash the impugned order passed by the 2nd respondent and consequently to direct to the 2nd respondent to pass orders on merits duly following "Judicial Discipline".
Held : Issue is considered by the Supreme Court in the case of Commissioner of Central Excise Vs. Hindalco Industries Limited vide judgment dated 08.02.2023 in Civil Appeal No.7561 of 2009 - It is held that the said product is classifiable under 7615 - Since the issue raised by the petitioner is settled by the Supreme Court in favour of the petitioner and against revenue, therefore, this Court is of the considered opinion that the product Aluminium Foil Container is classifiable under 7615 with GST 12% - Writ petitions are allowed: High Court [para 7, 8, 10]
- Writ petitions are allowed: MADRAS HIGH COURT
2023-TIOL-1321-HC-ALL-GST
Vivo Mobile India Pvt Ltd Vs UoI
GST - Primary relief being sought by the petitioner is against the order dated 7.4.2021 passed by the Deputy Commissioner wherein he has opined that the petitioner had availed/utilised excess Input Tax Credit (ITC), Rs.110,06,90,100.31, for the months of February 2020 to August 2020 - Construing the same to be a violation of Rule 36(4) of the CGST Rules, 2017, it has been directed to be reversed and added to the output tax liability of the petitioner, with consequent interest obligation - Also, an equal amount of penalty referable to Section 74 has been imposed - Petitioner had self-deposited Rs.11,00,69,010/- (provisionally, pending this writ petition) being 10% of the disputed demand of tax - Meanwhile, the respondents recovered the entire amount of tax viz. Rs.110,06,90,100.31 and equal amount of penalty, excluding interest - By order dated 21.9.2022, interim protection was granted from further coercive action against the petitioner - Primarily, the defence being set up by the revenue authorities is - they had recovered the disputed amount of tax, penalty, and interest as there was no stay order operating in favour of the petitioner. Held : Legislature has created a substantive right in favour of the recipient - to claim ITC - That is a substantive right created by the Act - It may be availed, even pending reconciliation and final payment of tax - By virtue of sub-Section (2) to Section 41, that ITC claim remains subject to reversal together with interest, where the due tax remains from being paid by the supplier - By way of conditions of eligibility to ITC, Section 16 of the Act has made it necessary that the Tax Invoice or Debit Note must be issued by the supplier to the registered person to enable the latter to avail ITC - Also, he must have physically received the goods or services, on which ITC claim may arise - As to the requirement of payment of due tax to the Government, that stipulation has been made subject to the provisions of Section 41of the Act - Read together with Rule 36 of the Rules, the legislature first created a margin of time, obviously involving liability to interest for delays beyond the due date of filing of the monthly return by the supplier, in depositing the due tax with the Government -Scheme of the Act is to let ITC arise and be availed provisionally, in a continuously moving value addition chain, subject to other conditions including actual payment of tax being eventually proven and remaining undoubted - That provisional allowance would become absolute upon tax being paid not later than 180 days. There can be no lis as to the wisdom of the Parliament in incorporating that period of 180 days - If the law were to be read otherwise, i.e., that the ITC claim may never arise unless the tax is first paid then, the second proviso to section 16(2) itself would be rendered otiose -Therefore, the stipulations regarding furnishing of returns (together with their timelines) though mandatory, run parallel to the stipulations for claim, grant, and availing ITC - In view of the above, though the date of filing of the details by the supplier would remain fixed as the 10th day of the following month, at the same time by way of principle it is difficult to acknowledge that ITC could be availed only with reference to that event- Nature of Form GSTR-2A has been recognized to be that of a facilitator -Dispute falls into a very narrow compass - as to the meaning to be given to the first proviso to Rule 36(4) of the Rules - More precisely, it is to be seen if cumulative adjustment spoken of under the said proviso would refer to the figure of eligible ITC as it existed in the individual months - February 2020 to August 2020 or it would be the figure that would have existed on the date of filing of return for the period September 2020 -If the effort and intent of the legislature had only been to delay the computation of eligible ITC in terms of Rule 36(4), all that was required to be done was to extend the date of filing of return for the months of February 2020 to August 2020, to September 2020 -What the first proviso to Rule 36(4) of the Rules introduced was something different and new - Thus, for the tax period September 2020, the petitioner and all registered persons were permitted to file their monthly return in form GSTR-3B, with cumulative adjustment of ITC for the disputed period February 2020 to August 2020, by preserving to them the benefit arising under Rule 36(4) on the increased figure of eligible ITC, as it stood at the time of filing of return for the month of September 2020, on a cumulative basis -Once the legislature introduced such a provision, no inherent logic exists or arises to restrict the application of the first proviso to Rule 36(4) of the Rules to the principle contained in the pre-existing Rule - Therefore, while Rule 36(4) may have made a provision to necessarily apply the computation of eligible ITC on a month-to-month basis, at the same time, a conscious departure was caused by the first proviso thereto, for a fixed period February 2020 to August 2020 - It would defeat the very purpose of that proviso if it were to be read to only allow a mathematical computation of the amounts of eligible ITC as they existed on the last date of filing of GSTR-1 for the months of February 2020 to August 2020, individually -There is something in the period February 2020 to August 2020 for which the legislature relaxed the rigour of the law arising under Rule 36(4) - That appears to be the sole purpose to introduce the first proviso to Rule 36(4) - Therefore, the legislature relaxed the condition of the month-to-month reconciliation of the eligible ITC availed to a much longer period such that it allowed that period of one month to be practically enlarged to eight months -Though the requirement and date of filing the monthly returns etc., remained unaltered yet, for the purposes of computation of the ITC for those specified months, that period became (fictionally), a single block -Once the petitioner was permitted to claim a "cumulative adjustment" for prior period while filing the return for the later period, clearly it is the date of filing a return for a later period on which the cumulative effect would arise and be given effect to - Any other construction would contradict the plain language used by the legislature - Therefore, the method adopted by the revenue authorities in giving effect to Rule 36(4) is found to be faulty - The reliance placed by them on the Circular letter no. 123 dated 11.11.2019 is plainly misplaced -The pre-existing Circular conflicts with the amended statutory law - Therefore, though the Circular letter no. 123 dated 11.11.2019 was valid, it cannot be enforced contrary to the first proviso to Rule 36(4) - It lost its efficacy and force and to that extent its relevance, for a limited period of February 2020 to August 2020 -To the extent the Circular dated 11.11.2019 is contrary to the first proviso to Rule 36(4) of the Rules, it would remain unenforceable in law -Further, it has enabled the recipient to avail ITC provisionally - A Circular remains an administrative instruction issued to give effect to the statutory law - Jurisprudentially, it remains a document as may never seek to overreach a pre-existing statutory law whether enacted by the primary legislature or by its delegate - Only in a case where there is no enacted law, an administrative or executive instruction may enjoy a higher priority -No error on part of the revenue in recovering the disputed amount during pendency of the writ petitionestablished principle being, there is no implied stay of recovery unless granted by the Court - The fact that the assessee had pre-deposited 10% of the disputed amount during the pendency of the writ petition may not work in its favour - That principle being a statutory principle enacted in the context of the statutory appeal, it may never stand extended to a writ proceeding that arose under Article 226 of the Constitution of India - While it may have been open to the petitioner to rely on that provision and to bring to the knowledge of this Court that it had pre-deposited 10% of the disputed tax at the time of filing the writ petition, no automatic benefit accrued to the petitioner upon that deposit, in the absence of any interim order granted by this Court -It is wholly unacceptable that the revenue authorities chose to thereafter recover the entire disputed amount leading to recovery of 110% of the disputed amount - While effecting the recovery, the revenue authorities ought to have accounted for any amount that may have been pre-deposited by the petitioner against the disputed demand of tax and penalty - Impugned order is quashed - The entire amount recovered may be returned to the petitioner within a period of six weeks - At the same time, the petitioner would remain entitled to interest that we provide @ 6% on the amount of excess recovery of Rs.11,00,69,010/-, from the date of that excess recovery to the date of its actual refund - It is left open to the respondent State to recover up to 10% of that interest amount from the erring field officers and all superior/supervisory officers (who may have allowed such grossly illegal excess recovery to be made and withheld), in proportion to their complicity or negligence in allowing that excess recovery to arise and be withheld - Writ petition is allowed: High Court[para 44, 48 to 50, 56, 69, 70, 71, 75, 76, 80, 82, 87, 88, 89]
- Petition allowed: ALLAHABAD HIGH COURT
2023-TIOL-941-CESTAT-MAD
DCW Ltd Vs CC
Cus - Assessee is engaged in the manufacture of Titanium Dioxide (TiO2 which is exported as "Upgraded Beneficiated Ilmenite (Synthetic Rutile) TiO2 95% Min. Moisture 0.5% Max." - The same was declared under Tariff Item No. 2823 00 90 of the Customs Tariff - Revenue, however, is not accepting the above classification of these goods, sought to classify the same under CTH 2614 00 20 and, therefore, the present appeal. Held: Assessee has been manufacturing/exporting the very same product from 1986 by declaring/classifying the same under Chapter Heading 2823, both for their export and domestic clearances - This only establishes that the assessee has been consistent which was not disputed at all by the Revenue for more than 30 years and hence, to deviate from the practice in place for more than three decades, the Revenue has to come up with formidable defence to break the forte - But unfortunately, there has only been a half-hearted attempt, without any supporting evidence, whatsoever -It is well understood that the description is not the deciding factor, especially in an issue relating to classification that too when a part of the description of the export product is considered for deciding the classification - The description of the export product is "Upgraded Beneficiated Ilmenite (Synthetic Rutile) TiO2 95% Min. Moisture 0.5% Max." - The lower adjudicating authority appears to be considering only "Upgraded Ilmenite" for the purpose of classification - Moreover, the departmental guidelines in the form of CTH or Explanatory Notes HSN clearly does not classify goods just based on the description - If description was sufficient, then there was no need to specify that those which undergo structural change after the process will fall under different classification - All such similar goods could have been just placed classified under a single CTH -There is also a categorical observation by the first appellate authority that the lower authority did not bring on record any chemical test report of the impugned goods to justify its classification under CTH 2614 - Held that the goods in question are Synthetic Rutile which merit classification only under CTH 2823 and hence, the stand of the assessee is accepted - Assessee appeal allowed &Revenue appeal dismissed: CESTAT[para 27, 28.2, 29.3, 30, 31]
- Assessee appeal allowed/Revenue appeal dismissed: CHENNAI CESTAT
2023-TIOL-940-CESTAT-AHM
ISGEC Unit Dahej Vs CCE & ST
ST - The issue involved is that whether Adjudicating Authority is correct in holding that an amount of Rs. 60,30,561/- paid by assessee to be deposited and appropriation of same in terms of Section 73A(2) of Finance Act, 1994, on the ground that appellant was not required to pay service tax on job work as per exemption Notfn 8/2005-ST, therefore the amount paid on such activity is not a service tax but deposited and appropriated under Section 73A of Finance Act, 1994 - In impugned order, Commissioner treated the amount of service tax paid by appellant as deposit and same was appropriated under Section 73A(2) of Finance Act, 1994 - There is no dispute that appellant have deposited service tax recovered from service recipient to central Government - Therefore, no further action is required - Without prejudice to above, entire case has been made out as appellant was not supposed to pay service tax in terms of Notfn 8/2005-ST - On this ground, it is not disputed that service provided by appellant is taxable service but by virtue of Notfn 8/2005-ST, since the said Notfn 8/2005-ST exempts but same is admittedly on certain conditions and is not absolutely exemption notification and in terms of Section 5A of Central Excise Act, 1944 which is applicable to service tax matters - It is option for appellant to avail or not to avail conditional exemption, therefore, appellant opted not to avail Notfn 08/2005-ST is not illegal or incorrect - For this reason also the entire proceedings against the appellant is not sustainable - Issuance of SCN and adjudication thereupon vide impugned order was not correct: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2023-TIOL-939-CESTAT-MAD
Ramco Cements Ltd Vs CCE
ST - It is the case of Revenue, through SCN, that during audit of accounts, assessee appeared to have engaged the services of various contractors for transportation of limestone from mines to their factory which was covered under category of Goods Transport Agency (GTA) - Assessee furnished the details of freight paid to various contractors for transportation of limestone vide their letter which, according to Revenue, had not been disclosed by assessee in its S.T.-3 returns filed and that the same came to light only during course of audit of assessee's accounts - SCN came to be issued for the period from 2006-07 to 2010-11, proposing, inter alia, to demand Service Tax along with applicable interest under Section 75 ibid. and penalties under Sections 76, 77 and 78 ibid. - The short point arises for consideration is, whether the payment of freight attracted Service Tax levy under GTA, as confirmed in impugned order - Assessee submits that the transportation of limestone was undertaken by transport operators who were actually the owners of such trucks, with whom they had directly entered into contract for transportation, such transport operators were not covered by definition of GTA and hence, assessee entertained a bona fide doubt that there was no liability to pay Service tax on freights that were paid directly to such transport operators/truck owners - The orders relied upon by assessee clearly confirm the view that essential requirement is issuance of consignment note in order to be covered under definition of GTA and in absence of same, the transporters/contractors rendering transport services in mines cannot be said to be GTA and therefore, their service cannot be made amenable to levy of Service Tax under category of ‘transportation of goods by road' service - Demand of Service Tax confirmed in impugned order cannot sustain: CESTAT
- Appeal allowed: CHENNAI CESTAT |
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