2023-TIOL-1409-HC-MAD-CUS
C Solomon Selvaraj Vs Pr.CC
Cus - Petitioner has challenged the impugned Order-in-Original No.76206/2020 dated 28.09.2020 inter alia confiscating the declared goods; holding the petitioner as the beneficial owner liable to pay the differential duty of Rs.4,56,00,374/-; imposing penalty of equivalent amount along with interest; imposing penalty of Rs.50 lakhs u/s 114AA of the Customs Act, 1962 etc. - Petitioner has challenged the order on two primary grounds, one, that the same is contrary to Section 28(9)(b) of the Customs Act, 1962 inasmuch as it has not been adjudicated within the timeline set in the Act and that he is not the ‘beneficial owner'.
Held:
++ Adjudication, whether time barred : Ordinarily, the said Show Cause Notice bearing Reference F.No. DRI/CZU/VIII/48/ENQ-1/INT-50/2017 dated 18.06.2018 ought to have adjudicated by the proper officer on or before 17.06.2019 in terms of Section 28(9)(b) of the Customs Act, 1962 - The approval for passing order beyond the period of one year under Section 28(9) of the Customs Act, 1962 was accorded on 26.06.2020 by the Chief Commissioner - The initial period of one year for passing the impugned Order-in-Original expired on 17.06.2019 - The extended period under proviso to Section 28(9) of the Customs Act, 1962 expired on 16.06.2020 - Meanwhile, lockdown was imposed from 24.03.2020 due to outbreak of Covid-19 pandemic - It is during the interregnum, the Principal Commissioner of Customs has given the approval for passing the order on 26.06.2020 by 30.09.2020 - Thus, the respondent has passed the impugned Order-in-Original No.76206/2020 dated 28.09.2020 - There is a saving of limitation under Chapter-V of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinance, 2020 - Section 6 of Chapter-V of the ordinance was extended for the period upto 30.09.2020 by Section 6 of The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, with effect from 29.09.2020 - Arguments of the petitioner that the impugned Order-in-Original No.76206/2020 dated 28.09.2020 is non est and is liable to be declared as a nullity under Section 28(9) of the Customs Act, 1962 cannot be countenanced and is, therefore, liable to be rejected: High Court [para 54, 62, 68, 69, 72, 80, 99]
++ Whether Petitioner is beneficial owner in terms of Section 2(26) read with 2(3A) of the Customs Act, 1962?: [para 101, 102, 105, 111, 112, 115, 116, 117, 118, 119, 120, 122, 123, 124, 126, 127]
+ It has been concluded that the petitioner Shri.C.Solomon Selvaraj, Proprietor of M/s. The Sea Shipping Forwarders is the "beneficial owner" as Shri.Ramesh Menon.R, Proprietor of M/s.R.M.Enterprises and other persons namely Shri.Vishal, Shri.Manikandan, Shri.Sunil Saran of M/s. Saran Enterprises were untraceable. No doubt that the petitioner acted in collusion with these persons, declared and suppressed facts about the undeclared goods and attempted to smuggle the goods in violation of legal provisions under the Customs Act, 1962 and Customs Tariff Act, 1975, it cannot be however concluded that the petitioner is the "beneficial owner" of the imported consignment of smuggled goods.
+ A reading of the Show Cause Notice and impugned Order-in-Original indicates that the Department has treated the petitioner as a "beneficial owner" within the meaning of Section 2(3A) of the Customs Act, 1962, on account of its inability to trace out and locate the importer in whose name the Bill of Entry was filed.
+ Whether the petitioner was indeed aware of the smuggling of 2,01,13,000 pieces of sewing machine needles of various sizes of Brand "Organ" and "Flying Tiger" and 70,200 pieces of "measuring tapes" of various sizes, is required to be decided by the authorities under the Customs Act, 1962. In case there was culpability, the person is liable to be prosecuted and imposed with fine / penalty.
+ There are, however, no records available to infer that the petitioner exercised effective control over the smuggled goods viz., needles and measuring tapes which were attempted to be smuggled along the goods declared in Bill of Entry No.4228874 dated 01.12.2017. Thus, the impugned order seeking to fasten the duty liability and penalty under various provisions on the petitioner is arbitrary.
+ The attempt of the Department as to fasten liability on the petitioner is only on account of the inability of the Department to locate Shri.Vishal, Shri.Manikandan, Shri.Sunil Saran of M/s.Saran Enterprises and Shri.Ramesh Menon.R, the Proprietor of M/s.R.M.Enterprises & I.E.Code holder whose I.E.Code was used in the Bill of Entry to smuggle the goods along with the declared goods in Bill of Entry No.4228874 dated 01.12.2017.
+ Consignment of needles and measuring tapes were attempted to be smuggled. A reading of the Show Cause Notice and the impugned Order-in-Original indicates that the petitioner played a small role in the attempt of the importer to smuggle the consignments of needles by filing Bill of Entry using the name and Import Export Code of the importer viz., M/s.R.M.Enterprises; that the petitioner is a petty offender who facilitated the above mentioned persons who remain behind the shrouds for clearance and smuggling of undeclared goods viz., needles and measuring tapes with a view to evade customs duty and anti-dumping duty, etc,.
+ In the Bill of Lading, names of other parties would have been there. Strangely, the respondents have failed to name them and implicate them in the Show Cause Notice dated 18.06.2018.
+ The Department's inability to trace out the real importer named in said Bill of Entry dated 01.12.2017 and others involved cannot be the basis to impose duty liability and penalty on the petitioner. Therefore, the petitioner cannot be treated as a "beneficial owner" of the smuggled goods. The impugned Order-in-Original which imposes the customs duty and anti-dumping duty on the petitioner by holding that the petitioner as the "beneficial owner" is unsustainable.
+ Penalty imposed on petitioner is disproportionate to the alleged role played by the petitioner. This would require re-consideration considering the role played by the petitioner as facilitator in the smuggling of the goods. The case therefore requires to be remanded back to the respondent to pass a fresh order denovo.
+ The Customs Department is not handicapped. It is open to the Customs Department to trace the location from where the payment of the amount was made and the person who made such payment to the petitioner.
+ It appears that there is either an attempt to shield the persons who were actually involved in the smuggling of the imported consignment of 2,01,13,000 pieces of sewing machine needles of various sizes of Brand "Organ" and "Flying Tiger" and 70,200 pieces of "measuring tapes" of various sizes or there is no will to trace out such a person. Therefore, the impugned order is unsustainable.
+ Further, there are no direct materials to infer that the petitioner was marketing or dealing in the smuggled goods. Therefore, the petitioner cannot be declared as the "beneficial owner" of the smuggled goods within the meaning of Section 2(3A) of the Customs Act, 1962. Unless, the petitioner himself imported the goods and exercised effective control over the smuggled imported goods, the petitioner cannot be called as the "beneficial owner".
+ Impugned Order-in-Original dated 28.09.2020 is liable to be set aside and the case is remitted back to the respondent to re-do the exercise for imposing penalty on the petitioner in proportion with the role played by the petitioner in the alleged attempt to smuggle 2,01,13,000 pieces of sewing machine needles of various sizes of Brand "Organ" and "Flying Tiger" and 70,200 pieces of "measuring tapes" of various sizes. This exercise shall be carried out by the respondent within a period of three months.
- Petition disposed of: MADRAS HIGH COURT
2023-TIOL-1408-HC-AHM-ST
Pr.Commissioner Vs Irfankhan Pathan
ST - Revenue is in appeal against the order passed by the CESTAT - The questions of law that arise for consideration are viz. Whether the Tribunal was correct in drawing the conclusion that "Business Support Service" does not specifically cover the activity done by assessee as per Section 65(104c) of the FA, 1994; Whether the Tribunal was correct in drawing the conclusion to the effect that the agreement create the relationship of "employer employee".
Held: In Tax Appeal No. 129 of 2023 [ 2023-TIOL-1361-HC-AHM-ST ], this Court has inter alia held that a dispute as to the classification of services does not fall within the jurisdiction of High Court under Section 35G of the Act; that an appeal lies before the Supreme Court in terms of s.35L of the Act - In light of the above, tax appeal is not maintainable - Revenue Appeal is accordingly dismissed: High Court [para 4, 5]
- Appeal dismissed: GUJARAT HIGH COURT
2023-TIOL-1407-HC-AHM-GST
M Group Vs Asstt. Commissioner of State Tax
GST - Petitioner has challenged the order dated 06.04.2022 passed by the competent authority under Section 73 of the GST Act - On 03.12.2021, a show-cause notice under Section 73 of the Act was issued to the petitioner inter alia stating that the petitioner had claimed excess input tax credit to the extent of Rs.46,85,584/- and on adjudication the impugned order was passed - Petitioner submits that though a show cause notice under Section 73 was issued on 03.12.2021 asking the petitioner to respond by 19.12.2021, apart from the fact that no date for personal hearing was suggested in the notice, in fact the petitioner could not respond to such notice as one of the persons was trying to secure anticipatory bail; that the order was passed in violation of principles of natural justice.
Held: Even if it is the contention of the petitioner that there was a violation of principles of natural justice inasmuch as an adverse order which was contemplated was passed without giving an opportunity of hearing, the petitioner, in fact, though had a remedy of filing an appeal has chosen not to do so - It will be open for the petitioner to file an appeal with an application for condonation of delay in filing such appeal explaining the circumstances which are available to suggest to the appellate authority that the petitioner was prevented by way of a sufficient cause in filing such an appeal - This, Bench is inclined to observe in light of the recommendations of the 52nd GST council which, so as to facilitate measures of trade, has opined that the time period for filing appeals under Section 107 will be allowed in case such appeals are filed against orders which have been passed on or before 31.03.2023 up to 31.01.2024 - Petition is disposed of: High Court [para 8.2, 9, 11]
- Petition disposed of: GUJARAT HIGH COURT
2023-TIOL-973-CESTAT-KOL
Vodafone Essar East Ltd Vs CCGST & CE
ST - The Assessee-company is a major telecom operator in India - The Assessee received certain services from one M/s Indus Towers Ltd and at the time of payment of advance, the former have taken cenvat credit on the advance payment - Later, invoices were raised to the Assessee and on the whole amount stated in the invoice, the Assessee availed Cenvat credit - On realising that it availed excessive amount of Cenvat credit on the advance amount paid, the Assessee adjusted the advance availment of cenvat credit with availment of other cenvat credit available to the Assessee - The Revenue opined that the Assessee took cenvat credit twice and also that the Assessee did not furnish any proof or evidence of having reversed the cenvat credit taken inadvertently - A Show Cause Notice was issued proposing to raise tax demand seeking reversal of Cenvat credit availed in excess - On adjudication, the an Order-in-Original came to be passed wherein the demands raised in the Show Cause Notice came to be sustained - Penalty was also imposed on the Assessee - Hence the present appeal.
Held - It is a fact on record that the Assessee availed cenvat credit on advance payment made by it and that cenvat credit was also taken on the full amount raised by the service provider, but later the Assessee availed less cenvat credit on the amount equivalent to the amount of cenvat credit pertaining to the advance paid - As this fact has not been disputed by either of the sides, therefore, it is concluded that the Assessee has reversed the excess cenvat credit and are not liable to reverse the cenvat credit again - Moreover, it is seen that there is ample Cenvat credit lying in the cenvat credit account and in light of the same, no payment of interest is required to be made by the Assessee in keeping with the judgment of the Karnataka High Court in Commissioner of Central Excise & Service Tax, LTU, Bangalore v. Bill Forge Private Limited - Therefore, no penalty is required to be imposed on the Assessee - Hence the order is quashed: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-972-CESTAT-AHM
Universal Medicap Ltd Vs CCE & ST
ST - The appellant are engaged in carrying out the process of sterilization process for it's clients for which they have kept an automatic system for conveying the product boxes in to the irradiation cell, exposing the boxes to the radiation filed for specified period and then taking them out of the cell - That disputed activity of "Sterilizing Services" is one wherein the duly packed product is exposed to gamma radiation in a closed plant with a predetermined dose as per the nature and timing requirement for the product - During this process, gamma radiation penetrates into the product and it breaks the DNA structure of bacteria/ microbes - As a result of the same, the product shelf life increases in case of agriculture or like items and in other cases like hospital items/ pharmaceutical items, it sterilizes the product - The material on which the process is carried out is obtained by the Appellant from the various persons under the job work challans. In cases where the goods are received from non-Excise registered manufacturers, the appellant duly charges service tax on their processing charges - However, in respect of the material so obtained from Excise registered manufacturers under Rule 4(5)(a) of Cenvat Credit Rules, 2004 read with Notification No.214/86-CE, the appellant carries out the radiation/process and returns the material with proper documents - Such returned goods are further cleared by the Principals on proper duty payment, for which there is no dispute - That no Service Tax is paid in respect of such job worked goods on which proper duty is eventually paid by the Principals - The case of the Department is that such job work could attract Service Tax therefore, the order seeks to demand tax on such transactions.
Held - The very same activity on job work basis, in the case of appellant itself for the period prior to 01.07.2012 was considered by this Tribunal in order dated 19.06.2023 - In the present case the Commissioner (Appeals) extended the benefit of Notification 25/2012-ST for the period after 01.07.2012 - However, for the previous period Notification 08/2005-ST was denied - Since, the issue relates to Notification 08/2005-ST has been considered in the aforesaid decision by this Tribunal, the issue is no longer res-integra - Hence, following the decision, the appellant is not liable to pay service Tax on the job work activity carried out by them - Therefore, the demand for the period prior to 01.07.2012 is also not sustainable: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2023-TIOL-971-CESTAT-HYD
Ayesha Begum Vs Pr.CCT
Cus - The golds were found on person of appellant, when she arrived from abroad and only on interception by Customs at the time of exiting through Green Channel - It was argued that the seized/confiscated goods namely gold in various forms, would not be in nature of baggage, it is relevant to analyse this aspect - The term "baggage" has not been defined in Baggage Rules 2016 and therefore definition under Customs Act has to be relied upon in terms of Rule 2(2) of said rules - Any goods brought by passenger from abroad is treated as import into India and leviable to applicable customs duty - The baggage may not be covered under Baggage Rules for purpose of relaxation/duty but it does not alter the fact that goods in accompanied or unaccompanied baggage or on person of passenger have been imported as "baggage" only by passenger - In this case the gold were imported by passenger in nature of baggage, and therefore the appeal is not maintainable before Tribunal - Appellant might have some bonafide belief that appeals were maintainable before Tribunal instead of Revisionary Authority, therefore, they may, if they so desire, prefer an appeal to Revisionary Authority against the order of Commissioner (A): CESTAT
- Appeal dismissed: HYDERABAD CESTAT |
