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2023-TIOL-148-SC-CX
CCE Vs Urmin Products Pvt Ltd
CX - M/S Urmin Products and Ors - The Revenue sought to challenge an order passed by the CESTAT whereunder the classification given by the Assessee was accepted as 'Flavored Chewing Tobacco' falling under CET SH 2403 9910 and not as 'zarda/jarda scented tobacco' falling under CET SH 2403 9930 of Central Excise Tariff Act 1985 - The Assessee had been issued a Show Cause Notice in July of 2007, stating that the Assessee had been manufacturing and clearing the product manufactured by it as 'zarda/jarda scented tobacco' under the guise of 'chewing tobacco' - During the visit to the assessee's factory by the Department's officers, they noticed the process of manufacturing 'zarda/jarda scented tobacco' - The statement of the production manager and also the statement of the factory in charge came to be recorded, based on which the Department concluded that there was a deliberate intention to evade payment of duty by misclassification and wilful misstatement of their product to enable them to pay lesser duty - Accordingly, by invoking the extended period of limitation as provided under proviso to Section 11A(1) of the Central Excise Act, the Department called upon the assessee to show cause as to why the product which had been classified as 'chewing tobacco' should not be classified as 'zarda/jarda scented tobacco' and why the said product should not be accordingly assessed to duty as per Section 4 of the Central Excise Act, for the period 01.03.2006 to 10.07.2006 - Further, the assessee was required to show cause as to why the penalty as a consequence of wilful misclassification should not be recovered - The said show cause notice came to be adjudicated and the show cause notice including the demand made thereunder, was upheld in OIO dated 28.01.2008 - This OIO was challenged and an appeal came to be filed before the CESTAT which came to be allowed - Moreover, the Show Cause Notice was also struck down on grounds of limitation - Hence the present appeal.
Held - Classification of the product as adjudicated by the authority deserves to be accepted and finding recorded by the tribunal deserves to be set aside and consequently allow these appeals. Thus, both the points formulated hereinabove in this group is answered in favour of the Revenue and against the asessee: SC
+ It is an admitted fact that till the filing of this letter, the assessee continued to classify the product as 'zarda/jarda scented tobacco' falling under CET SH 2403 9930. It is for this precise reason, that the adjudicating authority has observed, and rightly so that the letter dated 30.03.2006 had been cleverly drafted and it does not mention in detail the product which they were manufacturing at that material time namely 'zarda/jarda scented tobacco'. Though the classification in the letter shows entry CET SH 2403 9910 ('chewing tobacco'), it would depict a picture as though it is a new product. A plain reading of the letter would not indicate that the author of the said letter intended to reveal any details about the product that is being manufactured. However, the assessee cannot feign ignorance as to the necessity of furnishing such relevant details necessary for determination of payment of duty. The assessee having been in this industry for a long period was well aware of this statutory requirement. Upon a deeper examination of the said letter, the suppression becomes more apparent, namely the nonmentioning of change of the name and classification of the goods which they were currently manufacturing and which they ought to have disclosed. It would be apposite to note the judgment of this court in Continental Foundation Jt. Venture v. Commissioner of Central Excise (2007) 10 SCC 337 = 2007-TIOL-152-SC-CX that suppression means failure to disclose full information with intent to evade payment of duty; (P 42)
+ It is this hiding of the fact and not specifying the details in their letter that led to the issuance of the show cause notice and invocation of Section 11A and Section 11 AC of the CE Act, by the Department. It cannot be ignored that till filing of the letter dated 30.03.2006, the assessee itself was classifying the product as 'zarda/jarda scented tobacco' falling under CET SH 2403 9930 and being a large-scale manufacturer and paying large sums of amount as duty, to contend that it was unaware of the difference between these two products, or to contend that it had classified the product as 'zarda/jarda scented tobacco' by ignorance, is not a plausible justification on part of the assessee. However, on the issuance of Notification No.2 of 2006 dated 01.03.2006 under which 'zarda/jarda scented tobacco' was excluded or in other words not included in the said notification, the assessee changed the description of its product from 'zarda/jarda scented tobacco' to 'chewing tobacco'. The date of communication of the letter dated 30.03.2006 by the assessee also acquires significance in as much as the Notification No.2 of 2006 dated 01.03.2006 were to take effect from 01.04.2006 and just two days before the date of the said Notification No.2 of 2006 coming into effect, this communication dated 30.03.2006 has been forwarded to the Department by the assessee. The intention of springing up such a letter is evident from the fact that intention was to evade payment of duty payable under Section 4 of CE Act; despite knowing the fact that its product was not covered under relevant notification which provides for valuation under Section 4A, yet the assessee did so, only to pay duty on lower value as per Section 4A of CE Act, by claiming the product manufactured by it as 'chewing tobacco' rather than 'zarda/jarda scented tobacco' to avail benefit of MRP-based assessment which was lower than the value as prescribed under Section 4 of the CE Act;
+ Yet another factor which cannot go unnoticed is the statement of the production manager and factory in-charge and manager recorded at the time of the inspection of the units/factory of the assessee, whereunder they have clearly admitted in their statement dated 21.06.2007 recorded under Section 14 of the CE Act, wherein they confirmed that in the E.R. 1 returns filed for the month of April 2006 onwards, they have revised the classification of their final product from CET SH 2403 9930 to CET SH 2403 9910 and started describing their product as 'chewing tobacco' instead of 'zarda/jarda scented tobacco' and by virtue of such declaration they continued to pay duty as per MRP-based assessment under the relevant Notification No.2 of 2006 dated 01.03.2006 though 'zarda/jarda scented tobacco' was not covered under MRP-based assessment during the period 01.03.2006 to 10.07.2006 till the tariff entry i.e., CET SH 2403 9930 being brought within the ambit of Section 4A of CE Act by issuance of Notification 16 of 2006 dated 11.07.2006. It is for this precise reason that the act of the assessee was held to be a deliberate and accordingly wilful misstatement was alleged on part of the assessee, with an intention to evade duty payable under Section 4 of the CE Act, which would attract the extended period of limitation, namely proviso to Section 11A (1) being invoked. The adjudicating authority has examined the issue of invoking an extended period of limitation, in the background of the communication dated 30.03.2006 which has been very heavily relied upon by the assessee to stave off the allegation of misrepresentation or wilful misstatement of facts;
+ However, the tribunal has proceeded to hold that limitation would apply and show cause notice should not have been issued beyond one year in view of the fact that the assessee intimated their intention to change - vide Paragraph 22 of the impugned order, without addressing the aforesaid issues which has been dealt in detail hereinabove. In other words, the tribunal by cryptic order has negatived the contentions of the Revenue and held that the invocation of the extended period of limitation was not warranted. This finding, not being in consonance with the facts obtained on the hand, we are unable to subscribe our views to the judgment of the tribunal. In that view of the matter, we are of the considered view that Question No.1 is to be answered against the assessee and in favour of the Revenue and affirm the finding of the adjudicating authority and reverse and/or set aside the finding recorded by the tribunal which has been observed at the initial stage herein given that it is not only contrary to the facts but also contrary to law as noticed hereinabove. It is for these precise reasons the Adjudicating Authority was of the clear view that there has been a deliberate intention to avoid payment of duty by the assessee by misclassification and willful misstatement of its product and hence it was justified in invoking the extended period as provided in the proviso to Section 11A(1) of CE Act, 1944; + At the cost of repetition it requires to be noticed that the Notification No. 2 of 2006 dated 01.03.2006 was issued in supersession of Notification 13 of 2002 dated 01.03.2002 specifying the goods covered under Section 4A of the CE Act, for MRP based assessment. The said notification did not specify the goods falling under CET SH 2403 9930, i.e., 'zarda/jarda scented tobacco', but it covers the goods falling under CET SH 2403 9910 i.e., 'chewing tobacco'. Thus zarda/jarda scented tobacco not having been specified under MRPbased assessment under Section 4A of the CE Act, the goods had to be necessarily assessed under Section 4 of the CE Act. The assessee being aware that there being no change in the nature of the products, its ingredients and also the manufacturing process had changed and misclassified the product as 'chewing tobacco' from 'zarda/jarda scented' tobacco. Had the assessee continued its classification as 'zarda/jarda scented tobacco', the duty payable as per transaction value under Section 4 of the CE Act would have been much more than the determination under Section 4A of CE Act after 50 % abatement. It is for this precise reason for avoiding and evading payment of the higher duty, the classification was deliberately changed from 'zarda/jarda scented tobacco' to 'chewing tobacco'.
+ The reliance placed by the assessee on Board's letter dated 23.06.1987, trade notice dated 15.07.1997 and Notification dated 16.03.1995, would have no impact or bearing on the facts of the present case/group, since they were issued during the era of 6-digit tariff classification being imposed. As noticed by us above, the tariff entry having been realigned to 8 digits and there being a specific sub-heading being provided and two competing products namely - 'chewing tobacco' and 'zarda/jarda scented tobacco' having been separately classified, the aforesaid circular/notifications relied upon by the assessee would not come to rescue of the assessee; (P 48)
+ It is trite law that when specific entry is found in a fiscal statute, the same would prevail over any general entry. If there are two or more sub-headings, the heading which provides the most specific description will have to be preferred to a heading providing a more general description; (P 49)
CX - M/S. FLAKES-N-FLAVOURZ - The assessee is the manufacturer of zarda, pan chatni and scented supari falling under the category of excisable goods under the CETA, and was clearing its product 'Gopal Zarda' under CET SH 2403 9910 as 'chewing tobacco' and paid excise duty based on retail sale price under section 4A of the CE Act - During the audit, it was found that the Assessee's product merits classification under CET SH 2403 9930 as 'Zarda/Jarda scented Tobacco' - On redetermination of value under section 4 of the CE Act it was found that the assessee has short-paid excise duty by Rs. 4,28,65,508/- and accordingly, a show cause notice came to be issued under section 11A of the Central Excise Act - The Commissioner of Central Excise, in his OIO dated 02.04.2008 confirmed the demand of duty, interest, penalty and held that the product manufactured by the respondent assessee falls under CET SH 2403 9930 as 'Zarda/Jarda scented tobacco' by concluding that assessment has to be made under section 4 of the Central Excise Act - An appeal was preferred against the said order before the CESTAT which came to be allowed and the OIO dated 02.04.2008 was set aside.
Held - Upon consideration of the facts, coupled with lack of cogent evidence for the purpose of determination of the classification entry with respect to the product manufactured by the assessee, we deem it necessary to not interfere with the findings of the tribunal in light of the settled judicial findings of this Court which directly have a bearing on the facts of the present case - It is further reiterated that the observations and findings recorded in this group are exclusive to the peculiar facts of this case only - Thus, appeal filed by the Revenue deserves to be dismissed: CESTAT
+ Given the circumstances in the present case, the Department has not provided any sufficient evidence before this Court determine the nature, characteristics, contents, and composition of the product in order to adjudicate the present dispute purely on the issue of classification and hence no attempt can be made to determine the appropriate entry of classification for the product manufactured by the assessee at the relevant period of time of the dispute. The Revenue has also not raised any specific grounds in relation to any wilful misstatement with an intention to evade duty on part of the assessee, as opposed to the case of Urmin wherein one of the main grounds urged was the intention to avoid payment of duty. It is pertinent to mention that there is a specific observation made by the Commissioner in his OIO dated 30.03.2007 that no wilful suppression is attributable to the assessee, and placing reliance on this very observation, the tribunal had also set-aside the penalty imposed upon the assesssee; (P 69)
+ Classification is a question relating to "chargeability". It is well settled law that insofar as chargeability is concerned, the burden of proof lies on the Revenue and not on the assessee. In the facts obtained in the present case, no evidence of whatsoever nature has been placed by the Revenue to raise any presumption. In fact, the entire proceedings are based upon "audit objection" and the Revenue attempts to rely upon the additives to the 'chewing tobacco' as the basis for arriving at a conclusion, that assessee had cleared the 'jarda/zarda scented tobacco' which is not even supported by the samples drawn or inquiry made from the traders or consumers or stockist, suppliers and buyers. In the absence of iota of material, the finding of the tribunal cannot be displaced. It would be of benefit to extract the finding recorded by the third member of the tribunal, who upheld the finding of the judicial member; (P 70)
CX - KAIPAN MASALA PVT. LTD. - In the case of this Assessee, w.e.f. 01.03.2015, the capacity of production per packing machine per month and rate of duty for 'chewing tobacco' and 'Zarda/jarda Scented Tobacco' was amended vide Notification No. 4/2015 and Notification No. 5/2015-C.E. (N.T.), respectively and the duty for 'chewing tobacco' was prescribed differently as compared to 'Zarda/Jarda scented tobacco' - The Assessee informed the jurisdictional competent authority that the product manufactured by them is only 'scented zarda/jarda tobacco' which is different from 'chewing tobacco - The Assessee also informed that the nomenclature of 'chewing tobacco' is being used as there was no difference in the capacity of production as well as the rate of duty before the budget of 2015-16 - In response to the said letter of the assessee, the Range Superintendent vide his letter dated 19.03.2015 requested the assessee to submit the manufacturing process of their product - Hence, the assessee vide its communication dated 24.03.2015 informed that 'chewing tobacco' and 'scented zarda/jarda tobacco', both contain the same ingredients - A Notification No. 25/2015-CE dated 30.04.2015 was brought with effect from 01.05.2015 whereby the rate of Central Excise Duty of 'zarda/jarda scented tobacco' came to be amended again but there was no change in the rate of duty on 'Chewing Tobacco' as compared to 'zarda/jarda scented tobacco' - The assesee vide communication dated 28.05.2015 intimated to the department that with effect from 01.06.2015, they would be manufacturing 'chewing tobacco' falling under CET SH 2403 9910 instead of 'scented zarda/jarda tobacco' falling under CET SH 2403 9930 and accordingly submitted a revised form to the competent officer - In the background of frequent changes made in the classification by the assessee and in order to ascertain the proper classification of goods, the officers of the department drew the samples of the products under panchnama dated 01.06.2015 and forwarded the same to the chemical examiner, CRCL, New Delhi and received the test report on 03.06.2015. It was found that the 'chewing tobacco' contains identical ingredients that are contained in 'scented zarda/jarda tobacco.' It was also noticed by the department that assessee through communication and declaration form filed prior to 28.05.2015 had mentioned their product as Pan masala and "scented zarda/jarda tobacco" - Thus, having found that the product manufactured by the assessee namely, contains the same ingredients as 'chewing tobacco' and 'scented zarda/jarda tobacco' and involves the same manufacturing process which was confirmed by the CRCL Report vide dated 03.06.2015 and the assessee had attempted to change their stand by filing convenient declarations, the claim of the assessee was not accepted - It appeared that the assessee deliberately and intentionally mis-declared and misclassified their products with an intention to evade central excise duty - Hence a series of five orders came to be passed, all of which raised tax demands - On appeal, the Commissioner (Appeals) sustained the demands - On further appeal, the CESTAT quashed the demands, thus leading to the present appeal.
Held - When the assessee itself vide a letter dated 18.03.2015 (has intimated that the product manufactured by it was 'zarda/jarda scented tobacco' - The stand or change of the nomenclature by the assessee contending that it is only 'chewing tobacco' is completely misplaced for three reasons namely: (1) there was no change in the manufacturing process of both the items and the product was claimed to be 'chewing tobacco' containing the same ingredients as that of 'zarda/jarda scented tobacco'; (2) The declaration was filed by assessee as 'scented zarda/jarda tobacco' up till 27.04.2015; (3) The duty payable had been determined on the basis of the deemed capacity of production under Rule 6(2) of the CTPM Rules - On omission of Compounded Levy Scheme vide Act No. 14 of 2001 Section 3A of the CE Act, was again inserted by Act 18 of 2008, hence 'chewing tobacco' was notified under Section 3A by Notification No. 10 of 2010 dated 27.02.2010. From time to time, several Notifications were issued increasing rate of duty for 'chewing tobacco', unmanufactured tobacco - Notification No. 4 of 2015 dated 01.03.2015 was issued notifying the deemed capacity of production per packing machine per month, on the same day on which Notification No. 5/2015 was issued - Subsequently, by Notification No. 25/2015 dated 30.04.2015 came to be issued under which the rate of duty per packing machine per month was notified which was based on packing speed - The differential duty between 'chewing tobacco' and 'zarda/jarda scented tobacco' was not only vast but also huge - Hence, the assessee who had taken a stand by its communication dated 18.03.2015 was manufacturing 'zarda/jarda scented tobacco' changed its version and started contending the product manufactured by it is 'chewing tobacco'. The assessee was changing the classification of its product, as the central excise duty on 'zarda/jarda scented tobacco' and 'chewing tobacco' was changing. The view taken by adjudicating authority is based on factual evaluation which derives its support from the CRCL Report which confirmed that the samples drawn has the same ingredients as that of 'zarda/jarda scented tobacco' and thereby rightly confirmed the duty demanded under the Show Cause Notice - The findings recorded by us in Group No. 1 in matter of M/s Urmin Products with regard to classification would squarely be applicable to the facts on hand and as such both these appeals deserved to be allowed by setting aside the impugned order of the tribunal: CESTAT
CX - M/S DHARAMPAL PREMCHAND LTD - The declarations filed by the assessee classifying their product as 'Chewing Tobacco' were approved by orders passed by the Deputy Commissioner upto 23.09.2015 though a higher rate had been prescribed for 'zarda/jarda scented tobacco' vide Notification No.25/2015 dated 30.04.2015 - The Deputy Commissioner thereafter vide Order dated 13.01.2016 amended assessee's declaration dated 08.01.2016, wherein assessee classified the product as CET SH 24039910 i.e., 'chewing tobacco', and Deputy Commissioner reclassified it to CET SH 2403 9930 - The Deputy Commissioner in his Order dated 13.01.2016 justified the reclassification on account of discovery of the fact that similar manufacturer i.e, M/s Dharampal Satyapal was manufacturing the same product with identical manufacturing process and classifying the product as 'zarda/jarda scented tobacco' - Subsequent order came to be passed on 17.02.2016 correcting the next declaration dated 11.02.2016 w.e.f. 18.02.2016, after affording a personal hearing - The Revenue had also issued two show cause notices pertaining to the goods manufactured at two different factories of the assessee - An Addendum dated 09.02.2016 was made to the show cause notices wherein reliance on CRCL reports were placed regarding the characteristics of the product - Under both the show cause notices, differential duty for the period May 2015 to January 2016 which was short paid on the ground of misdeclaration was demanded along with interest, and penalty - The reclassification and the demand proposed in the Notices were confirmed by the Commissioner by OIO on 28.11.2017 and 29.11.2017 respectively - These orders were challenged before the High Court of Allahabad in Writ Tax No. 232/2018 and Writ Tax No. 234/2018, which came to be dismissed on the ground that the petitioner has alternate remedy - The SLP No. 7369/2018 challenging the order dated 26.02.2018 passed in Writ Tax No. 232/2018 also came to be dismissed - Hence the assessee preferred Appeal No. 70437/2018 and 70438/2018 before CESTAT, which came to be rejected.
Held - the impugned orders of the tribunal would not be sustainable and the order of the adjudicating authority deserves to be upheld, consequently these appeals deserves to be allowed, except Civil Appeal arising out of Diary No. 3487 of 2020 which is directed against the order dated 06.11.2019 passed by the CESTAT in Excise Appeal No. 70242 of 2018., which stand on a different footing and hence the said appeal is taken up for consideration and disposed of by the following order: SC
+ There is a need to consider Rule 6 of the CTPM Rules, 2010 which cover zarda/jarda scented tobacco. A perusal of the above rule would indicate that the manufacturer of notified goods should immediately on coming into force of the Rules (08.03.2010) file a declaration in Form No.1 declaring the details of notified goods as prescribed or specified under sub-rule (i) to (x) and on receipt of such declaration the jurisdictional Deputy Commissioner or the Assistant Commissioner of Central Excise, namely, the Competent Authority, would approve the declaration and determine and pass orders concerning the annual capacity within three working days after making such inquiry as may be necessary including physical verification. The first proviso to Rule 6 of CTPM mandates that the authorised officer may direct modifications of the details as prescribed thereunder. The perusal of the second proviso would indicate that if the manufacturer does not receive the approval in respect of his declaration within the said period of 3 working days, the approval shall be deemed to have been granted subject to the modifications, if any, which the authorised officer as the case may communicate not later than 30 days of the filing of such declaration; + A holistic reading of Rule 6 would indicate that the details prescribed thereunder alone would be the subject matter of determination concerning the annual capacity of production of the factory. The second proviso to Rule 6 would clearly indicate that the Prescribed Authority is empowered to modify the declaration on the facts obtained from such declaration. While undertaking such exercise of determination and passing orders concerning the annual capacity of production of the factory as contemplated under sub-rule (2) of Rule 6, the Prescribed Authority would have to take into consideration the issue relating to the classification of the product. We say so for reasons more than one, firstly, the details required to be furnished as prescribed under clause (i) to (x) of sub-rule (1) of Rule 6 would indicate that apart from details mentioned therein, the declarant will have to specify the description of goods to be manufactured without specifying the classification entry to the Central Excise Tarif Act. On the basis of such declaration filed by the assessee, the duty for a particular month has to be calculated by application of the appropriate rate of duty specified in the notification as indicated under Rule 7. Necessarily to ascertain the duty payable, the issue of classification will have to be gone into in an inquiry held under sub-rule (2) of Rule 6, as otherwise the inquiry contemplated would become redundant or meaningless. Secondly, to calculate the duty of the product, the condition precedent is the capacity of the production. Thus, it becomes important to ascertain the capacity of production first, which can only be done when the concerned authority is acquainted with the product as described which would ultimately assist the Competent Authority to classify the product under the appropriate tariff head as provided under CETA. Thirdly, the rationale behind Rule 6(2) is that, unless there is proper classification of the product, the Competent Authority would not be in a position to ascertain the correct classification under the tariff head and consequently would not be able to determine the annual capacity of the production of the notified goods, which may lead to improper calculation; + This is more so, for every notified product may not possess similar ingredients as that of the other product. It is trite law that changes in the ingredient of a product can bring about change in the production capacity, namely, affect the manufacturing process. Thus, in the event of mis-description, wrong description or erroneous description or intentional improper classification of the product manufactured would not tie the hands of the Competent Authority from piercing the corporate veil to ascertain the true nature of the product and reclassify the same, necessarily after affording an opportunity of hearing which would be in compliance of the doctrine of natural justice. The object sought to be achieved by this Rule is to empower the Department to determine the annual capacity based on the declaration of the assessee and such declaration would not be required to be accepted in the event of there being an improper description of the goods or product in the declaration so filed. In fact, declaration Form No.1 itself would indicate that in column No.15A, the declarant has agreed to bind itself to pay any additional amount of excise duty on notified goods manufactured by it by such declaration, if found to be untrue or incorrect. This undertaking would reinforce the fact that even in case of acceptance of such declaration by the Competent Authority, it does not preclude them thereafter to demand the differential duty on account of short demand to recover such duty, and necessarily complying with the principles of natural justice; + In the instant case, the declaration confined to 'chewing tobacco' falling under CET SH 2403 9910. However, during the course of such inquiry, the Competent Authority would be competent to examine as to whether the product would fall within the notified goods. In the instant case, 'zarda/jarda scented tobacco' was specified as notified goods under Section 3A by Notification No.17 of 2010 dated 13.04.2010 and the CTPM Rules also correspondingly had been amended on the same day i.e., 13.04.2010 by Notification No.18 of 2010. Thus, taking into within its sweep the said 'notified goods' as defined under Rule 2(c) of CTPM Rules for the purposes of classification and this exercise undertaken by the Competent Authority cannot be found fault with; + In the light of the findings recorded herein above, we are of the considered view that the impugned orders of the tribunal would not be sustainable and the order of the adjudicating authority deserves to be upheld, consequently these appeals deserves to be allowed, except Civil Appeal arising out of Diary No. 3487 of 2020 which is directed against the order dated 06.11.2019 passed by the CESTAT in Excise Appeal No. 70242 of 2018., which stand on a different footing and hence the said appeal is taken up for consideration and disposed of by the following order. The appellant-assessee filed an abatement claim amounting to Rs. 1,99,41,935/- before the Deputy/Assistant Commissioner, Central Excise, Division-II, Noida under Rule 10 of CTPM Rules. The said claim was adjudicated and by order dated 30.3.2016 was allowed. However, under the very same order the said amount which was allowed to be distributed to the assessee by cash was ordered to be appropriated under Rule 9 of CTPM Rules read with Section 11 of CE Act. CX - M/S TEJ RAM DHARAM PAUL - The period of dispute in this group is May 2015 to December 2015. The assessee claims the product to be classified under CET SH 2403 9910 i.e., 'chewing tobacco', whereas the Revenue contends that the product ought to have been classified under CET SH 2403 9930 i.e., 'zarda/jarda scented tobacco'. Coming to the facts of this appeal, the assessee submitted Form No.1 before the jurisdictional Central Excise Division declaring that they would manufacture 'Mahapasand Zarda/Jarda Scented Tobacco' and paid duty accordingly for the period from 10.03.2015 to 31.03.2015. Thereafter, Form No.2 was submitted by the assessee, and duty was paid on 'Zarda/Jarda Scented Tobacco' - sThe Revenue drew samples of the product on 13.03.2015 and forwarded the same to the CRCL who by its report dated 23.03.2015 classified the product as 'chewing tobacco' - Accordingly, the assessee was informed on 27.04.2015 that the product is to be classified as 'chewing tobacco' - Accordingly, the appellant-assessee submitted revised Form No.1 on 23.05.2015 and informed that they would manufacture 'chewing tobacco'. Notification No.25 of 2015 which came into effect from 30.04.2015 under which the rate of duty for packing machine per month was notified on 1.03.2015. Hence, the Department drew fresh samples under Panchnama dated 29.05.2015 and forwarded the same to CRCL for obtaining the report - The CRCL forwarded the report on 20.07.2015 without classifying the product - On being asked to classify the tariff entry by the Revenue, the Chemical Examiner vide communication dated 27.07.2015 refused to do so stating "assessing officers at various levels should not ask the Deputy Chief Chemist/Chemical Examiner to give the tariff classification", citing para 70 (B) and (C) of manual of the Revenue Laboratories - Thereafter, on 04.12.2015 Revenue visited the premises of the assessee again and took samples which came to be recorded in Panchnama and forwarded the same to CRCL for fresh reports - In the meanwhile, the Competent Authority passed the capacity determination order on 18.12.2015 under Rule 6(2) of CTPM Rules holding that the product manufactured by the appellant-assessee for the period from May 2015 to December 2015 is 'zarda/jarda scented tobacco'. On 21.12.2015 assessee was called upon to deposit differential duty along with interest and same was deposited under protest - The Assessee accordingly submitted revised Form No.1 on 23.05.2015 and informed that they would manufacture 'chewing tobacco'. Notification No.25 of 2015 which came into effect from 30.04.2015 under which the rate of duty for packing machine per month was notified on 1.03.2015 - Hence, the Department drew fresh samples under Panchnama dated 29.05.2015 and forwarded the same to CRCL for obtaining the report - The CRCL forwarded the report on 20.07.2015 without classifying the product - On being asked to classify the tariff entry by the Revenue, the Chemical Examiner vide communication dated 27.07.2015 refused to do so stating "assessing officers at various levels should not ask the Deputy Chief Chemist/Chemical Examiner to give the tariff classification", citing para 70 (B) and (C) of manual of the Revenue Laboratories - Thereafter, on 04.12.2015 Revenue visited the premises of the assessee again and took samples which came to be recorded in Panchnama and forwarded the same to CRCL for fresh reports - In the meanwhile, the Competent Authority passed the capacity determination order on 18.12.2015 under Rule 6(2) of CTPM Rules holding that the product manufactured by the appellant-assessee for the period from May 2015 to December 2015 is 'zarda/jarda scented tobacco' - On 21.12.2015 assessee was called upon to deposit differential duty along with interest and same was deposited under protest - On 01.07.2016 a show cause notice was issued demanding duty, interest, and penalty under Section 11A, 11AA, and 11AC read with relevant Rules which came to be adjudicated by OIO dated 18.03.2021 whereunder the demand made under the show cause notice was affirmed. In the interregnum, the assessee challenged the capacity determination order No.24 of 2015 dated 18.12.2015 before the Commissioner (Appeal-I) who dismissed the appeal on the ground that it was premature as the issue relating to the classification was pending since the show cause notice dated 01.07.2016 had already been issued and it was yet to be decided vide order dated 06.12.2016 - Aggrieved by the same an appeal was filed before the tribunal and tribunal held that issue of classification was open and it was to be decided by the adjudicating authority - Subsequently, OIO came to be passed on 18.03.2021, confirming the duty demand and further ordered for appropriation of the amount specified thereunder, apart from imposing of penalty - Being aggrieved by the same, appeal was filed before the tribunal which came to be allowed and the order dated 18.03.2021 was set aside - Hence, this appeal by the Revenue. Held - Th e order of the tribunal has taken into account the aforestated aspects to arrive at a conclusion that the declaration filed by the assessee is just and proper, which does not suffer from any infirmity either on facts or on law calling for our interference. Hence, the appeal filed by the Department deserves to be rejected: SC + Even the report of the Chemical Examiner clearly reflects that it is 'chewing tobacco'. In fact, it is the Revenue that has been taking consistently inconsistent stand. In the first instance when Form No.1 was filed by the assessee declaring the product 'Mahapasand zarda scented tobacco', the Department drew samples from the factory premises, obtained the CRCL Report, and called upon the assessee to reclassify its product as 'chewing tobacco' under CET SH 2403 9910 and accordingly the Form No.1 was filed by the assessee and duty paid in tune with the declaration filed. It is only after Notification No.25 of 2015 came to be issued revising the duty payable on 'zarda scented tobacco' that fresh samples were drawn, and the Revenue started singing a new tune, and thus called upon the assessee to declare the product manufactured by it as 'zarda scented tobacco'. In the light of communication dated 27.04.2015 by the Revenue addressed to the assessee and calling upon the assessee to classify its product as 'chewing tobacco' and the same having been complied by the assessee it is too late in the day for the Department to take a contrary stand. - Appeals partly allowed: SUPREME COURT OF INDIA
2023-TIOL-1343-HC-KOL-GST
Surajit Dey Vs State of West Bengal GST - Petitioner is praying for order or direction commanding the respondent nos. 1, 2 and 4 herein to direct the appropriate respondent to remit the amount of GST on works contract services provided on or before and after 1st July, 2017 and to forthwith recall, cancel or rescind the impugned DRC-01A dated 07.09.2023 and attached show cause notice dated 5th September, 2023 issued under Section 73 of GST Act for the period 2017-2018. Held: It appears the respondent authorities concerned have to bear the additional tax liability for execution of subsisting Government contract either awarded to the petitioner during pre-GST regime or in post-GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill for payment - Writ petition is disposed of by giving liberty to the petitioner to file appropriate representations stating all the facts and provision before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks and who shall take a final decision within four months from the date of receipt of such representations after consulting with all other relevant departments concerned - Till the final decision is taken by the Additional Chief Secretary, no coercive action shall be taken against the petitioner by the respondents concerned - Petition is disposed of: High Court [para 9, 10] - Petition disposed of: CALCUTTA HIGH COURT
2023-TIOL-1342-HC-KOL-GST
Murtaza B Kaukawala Vs State of West Bengal GST - Intra court appeal filed against the order of the Single Bench refusing to grant any interim order - Petitioner was aggrieved by the order of the appellate authority rejecting their appeal as time barred - The principal ground on which the appeal has filed before the appellate authority was on the ground of violation of principles of natural justice and that the assessee was not provided any opportunity; that only the summary of the show cause notice was furnished; that show cause notice was not communicated to the petitioner; that opportunity of personal hearing was not granted. Held: Considering the facts and circumstances of the case and the allegations which have been made against the appellant, Bench is of the view that the matter can be remanded back to the Assistant Commissioner to consider the case afresh after affording an opportunity to the appellant/writ petitioner - Fresh orders to be passed in accordance with law - Appeal and writ petition disposed of: High Court [para 6, 7] - Appeal disposed of: CALCUTTA HIGH COURT
2023-TIOL-1341-HC-KOL-GST
Paresh Nath Banerjee Vs State of West Bengal GST - Intra court appeal against order passed by Single Bench dismissing the writ petition on the ground of availability of alternative remedy. Held: Order passed by Single Bench is perfectly correct and does not call for any interference - Appellant is directed to avail the alternative remedy and if such an appeal is filed before the appellate authority within a period of 30 days, the appellate authority is required to entertain the same without any reference to limitation - Since the tax has already been recovered, the attachment of the appellant's cash credit account shall be lifted - Appeal disposed of: High Court [para 3, 4, 6] - Appeal disposed of: CALCUTTA HIGH COURT
2023-TIOL-1340-HC-KOL-GST
Paresh Nath Banerjee Vs State of West Bengal GST - Intra court appeal against order passed by Single Bench dismissing the writ petition on the ground of availability of alternative remedy. Held: Order passed by Single Bench is perfectly correct and does not call for any interference - Appellant is directed to avail the alternative remedy and if such an appeal is filed before the appellate authority within a period of 30 days, the appellate authority is required to entertain the same without any reference to limitation - Since the tax has already been recovered, the attachment of the appellant's cash credit account shall be lifted - Appeal disposed of: High Court [para 3, 4, 6] - Appeal disposed of: CALCUTTA HIGH COURT
2023-TIOL-1339-HC-KOL-GST
Bimal Roy Vs State of West Bengal GST - Petitioner is praying for order or direction commanding the respondent nos. 1, 4, 5, 6, 7, 8, 9, 10, 11 and 12 herein to remit the amount of GST on works contract services provided on or before and after 1st July, 2017 - Petitioner also challenges show cause notice dated 22 September, 2023 issued under Section 73 of GST Act for the period 2017-2018 & 2018-2019 and subsequent notices. Held: It appears the respondent authorities concerned have to bear the additional tax liability for execution of subsisting Government contract either awarded to the petitioner during pre-GST regime or in post-GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill for payment - Writ petition is disposed of by giving liberty to the petitioner to file appropriate representations stating all the facts and provision before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks and who shall take a final decision within four months from the date of receipt of such representations after consulting with all other relevant departments concerned - Till the final decision is taken by the Additional Chief Secretary, no coercive action shall be taken against the petitioner by the respondents concerned - Petition is disposed of: High Court [para 12, 13, 14] - Petition disposed of: CALCUTTA HIGH COURT
2023-TIOL-1338-HC-KOL-GST
Back Street Engineers Cooperative Society Ltd Vs State of West Bengal GST - Petitioner is praying for order or direction commanding the respondent nos. 1, 2 and 4 herein to direct the appropriate respondent to remit the amount of GST on works contract services provided on or before and after 1st July, 2017 and to forthwith recall, cancel or rescind the impugned DRC-01A dated 07.09.2023 and attached show cause notice dated 19 September, 2023 issued under Section 73 of GST Act for the period 2017-2018. Held: It appears the respondent authorities concerned have to bear the additional tax liability for execution of subsisting Government contract either awarded to the petitioner during pre-GST regime or in post-GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill for payment - Writ petition is disposed of by giving liberty to the petitioner to file appropriate representations stating all the facts and provision before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks and who shall take a final decision within four months from the date of receipt of such representations after consulting with all other relevant departments concerned - Till the final decision is taken by the Additional Chief Secretary, no coercive action shall be taken against the petitioner by the respondents concerned - Petition is disposed of: High Court [para 12, 13, 14] - Petition disposed of: CALCUTTA HIGH COURT
2023-TIOL-1337-HC-KOL-GST
Babun Rakshit Vs State of West Bengal GST - Petitioner is praying for order or direction commanding the respondent nos. 1, 2 and 4 herein to direct the appropriate respondent to remit the amount of GST on works contract services provided on or before and after 1st July, 2017 and to forthwith recall, cancel or rescind the impugned DRC-01A dated 07.09.2023 and attached show cause notice dated 5th September, 2023 issued under Section 73 of GST Act for the period 2017-2018. Held: It appears the respondent authorities concerned have to bear the additional tax liability for execution of subsisting Government contract either awarded to the petitioner during pre-GST regime or in post-GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill for payment - Writ petition is disposed of by giving liberty to the petitioner to file appropriate representations stating all the facts and provision before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks and who shall take a final decision within four months from the date of receipt of such representations after consulting with all other relevant departments concerned - Till the final decision is taken by the Additional Chief Secretary, no coercive action shall be taken against the petitioner by the respondents concerned - Petition is disposed of: High Court [para 11, 12]
- Petition disposed of: CALCUTTA HIGH COURT |
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