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2023-TIOL-1469-HC-ALL-VAT
Simplex Infrastructures Ltd Vs Sr. Joint CCT
Whether since against the rejection of the appeal on the ground of non-deposit of the pre-deposit amount, the assessee had filed a revision application which was not entertained by the Department, the matter is remanded back - YES: HC
- Assessee's writ allowed: ALLAHABAD HIGH COURT
2023-TIOL-988-CESTAT-CHD
Cosmo Ferrites Ltd Vs CCE
CX - The appellant, M/s Cosmo Ferrites Limited, is engaged in the manufacture and export of soft ferrites powder and soft ferrites components - The appellant has filed various refund claims, with the Deputy/ Assistant Commissioner of the Central Excise Division, during the period October 2008 to March 2011 claiming refund of services used in the exports; Deputy/ Assistant Commissioner, while sanctioning the refunds, rejected the refund in respect of ARE-1/ Shipping bills wherein the refund amount was less than Rs.500/- - On an appeal filed by the appellants, Commissioner (Appeals) upheld the order of the lower authority. Held - The wordings in Notification No.17/2009 nowhere mandate that refund claims should be filed shipping bill-wise - Interpreting the Notification to say that refund claims shall be filed shipping bill-wise would lead to avoidable duplication of work and wastage of paper and would unnecessarily burden the appellants as well as the Department with the arduous task of filing numerous claims. Therefore, for a harmonious understanding of the Notification, provisions which are not spelt out need not be brought in by using an extraneous logic or reason: CESTAT
+ A harmonious reading of the Notification makes it very clear that there is no restriction that a refund claim must be filed for each shipping bill and that one refund claim can be filed for more than one shipping bill. For this reason, only, necessity of giving details of each shipping bill is stressed upon in the Notification. Moreover, the table in Form A-1 provides Column for details of shipping bill/ bill of export etc. and understandably, the same needs to be given for each of the shipping bills. If the Revenue's contention was correct, there was no need to mention that the details of the refund claim should be given separately for each shipping bill. Therefore, a conjoint reading of the Notification and the Form A-1 appended to the Notification, gives an unambiguous and the only understanding that there is no restriction on the number of shipping bills in a refund claim. The only condition mentioned at 2(h) being that no refund claim shall be allowed if the same is for an amount less than Rs.500/-. Therefore, the reasoning given in the impugned order is not in tune with the wordings of the Notification. Interpreting the Notification to say that refund claims shall be filed shipping bill-wise would lead to avoidable duplication of work and wastage of paper and would unnecessarily burden the appellants as well as the Department with the arduous task of filing numerous claims. Therefore, for a harmonious understanding of the Notification, provisions which are not spelt out need not be brought in by using an extraneous logic or reason; (P6)
+ Moreover, we find that the subject refund claims have been processed after obtaining a categorical report from the jurisdictional Range Officer that the refund is admissible as per law and technically correct and that all the documents are required under the Notification No.17/2009 dated 07.07.2009 have been submitted by the appellant. We find that, though, the impugned order records the report of the jurisdictional Range Officer, no findings are given controverting the report given by the jurisdictional Range Officer. The adjudicating authority proceeds on the basis his own interpretation of the provisions of Notification No.17/2009; (P7)
+ The issue has been considered by the Principal Bench of the Tribunal in the case of Lucid Colloids (supra). The Bench finds that the show-cause notice therein was issued in various grounds being (i) original invoices with certification not submitted, (ii) Bill of Lading charges, THC were not covered under the category of Port services; (iii) refund claim in respect of certain shipping bills is less than Rs. 500/-; (iv) in case of freight, service tax is to be paid by exporter etc. It is clear that the issue discussed in the impugned case was also deliberated by the Tribunal being mentioned at (iii) above. The Tribunal concluded that the objections raised in the show-cause notice are not correct. Tribunal allowed the appeal therein partially rejecting the appeal in so far as claims filed beyond the period of limitation. The Department has appealed against the above decision of the Tribunal before the Hon'ble High Court of Rajasthan. However, a perusal of the latest position indicates that the case has been dismissed on monetary limits. We find that despite this fact, in view of our discussion above, there is no prescription in the Notification that the refund claims should be filed shipping bill-wise and that the Condition No. 2(h) should be read to mean per shipping bill; (P8)
- Appeals allowed: CHANDIGARH CESTAT
2023-TIOL-987-CESTAT-CHD
Bal Mukund And Company Vs CCE & ST
ST - The present appeal seeks to assail an order passed by the Commissioner (Appeals) wherein the Commissioner exercised powers under Section 84 of the Finance Act 1994 and had disallowed refund on grounds of the same having been sanctioned erroneously by the Adjudicating Authority - The Appellant was directed to return the amount with interest - The Appellant was engaged in providing Rent-A-Cab service to M/s Nestle India Ltd - For the relevant period, SCN was issued proposing to raise tax demand - The tax amount was paid by the Appellant. after O-i-O was passed confirming the tax demand - The Appellant filed appeal before the Commissioner (Appeals), who accepted the Appellant's appeal - The Appellant filed claim for refund of the tax amount deposited and the refund amount was sanctioned by the Original Authority, after adjusting an amount against the arrears of penalty pending - Thereafter, the Commissioner (Appeals) issued an SCN alleging that the Original Authority omitted to consider the aspects of unjust enrichment while allowing the refund - Hence the present appeal. Held - The exercise of power of revision by the Commissioner under Section 84 after the expiry of more than one year and ten months from the date of sanctioning of refund is not justified - Moreover, issuance of show cause notice dated 28.12.2010 affording one opportunity on four dates mentioned in the said notice only amount to one opportunity - There is no reason to not grant a week's time to the Appellant to file reply to SCN - It appears from the Order-in-Appeal that the Commissioner was bent upon passing the impugned order without affording any opportunity of hearing to the Appellant - The Commissioner had also not declined the Appellant's request seeking more time, or even discussed the Appellant's request while passing the order - Besides, once M/s Nestle has issued the certificate dated 23.01.2009 certifying that during the period 01.01.2005 to 31.10.2006 the appellant has not claimed any service tax from them, therefore, the question of unjust enrichment does not arise, but in the impugned order Commissioner (Appeals) did not consider any evidence whatsoever to come to the conclusion that principle of unjust enrichment is applicable in the present case - Therefore, the O-i-A in question merits being quashed: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-986-CESTAT-AHM
Shirdi Steel Traders Vs CC
Cus - The Appellants M/s. Snow Drop Company Limited, Belgium (cash buyer) is in the business of purchasing shipping vessels on cash basis and through agents based in India namely M/s. Labdhi Shipping Agency Pvt. Limited, Bhavnagar (cash buyer's agent) - They have been selling the used vessels for the purpose of breaking of various steel/ iron traders of Bhavnagar - M/s. Snow Drop Company Limited has purchased vessel named M.V. Basil from M/s. Diva Maritime Company, Marshall Islands and same which was further sold by M/s. M/s. Snow Drop Company Limited to M/s. Shirdi Steel Traders in India - M/s. Snow Drop Company Limited's agent namely M/s. Labdhi Shipping Agency Pvt. Limited filed prior IGM on 29.10.2010 and submitted copies of MOA (memorandum of agreement) entered between the owners and cash buyers reflecting the purchase price USD 61,31,400 - The MoA entered between cash buyers namely M/s. Snow Drop Company Limited and M/s. Shirdi Steel Traders was also submitted to the Customs authorities - The Revenue received some information from a firm namely M/s. Croft Sales and Distribution Limited, Wickhams Cay I, British Islands wherein a copy of bill of sale dated 22.10.2010 issued by the owners in favour of cash buyer namely M/s. Snow Drop Company Limited were submitted - As per the bill of sale dated 20.10.2010 submitted by informer, the value of the vessel namely MV Basil was indicated at the rate of USD 63,68,295 - Upon receiving such information, the Department reconsidered the documents filed by the importer in respect of the said vessel along with prior IGM and the department found that the purchase price mentioned in the MOA dated 11.10.2010 was at the rate USD 61,31,400 which was not in conformity with the price which was mentioned on the bill of sale dated 22.10.2010 which was received from M/s. Croft Sales and Distribution Limited - Therefore, the Customs Department seized the vessel MV Basil under Section 110 of the Customs Act 1962, on charges that the value of the imported vessel had been mis-declared and in which case, the vessel was liable for confiscation as per Section 111 of the Customs Act 1962 - Later on request of the cash buyer, the seized vessel was provisionally released Held - There is no misdeclaration as regard the transaction value of imported vessel MV Basil - Hence the O-i-O in questions merits being quashed - As the charges of misdeclaration have not been established, the penalties imposed under Section 112(a) and 112(b) and Section 114AA of the Customs Act, are not sustainable: CESTAT
+ The only question which needs to be answered by us in this appeal is whether there is an element of mis-declaration on the part of the importer of the vessel with regard to transaction value of the vessel declared at the time of importation. The only evidence which has been the basis of confirmation of the charges in the order-in-original is the MOA dated 11.10.2010 wherein the price of the vessel has been indicated at the rate USD 63,68,295/-. This MOA is between M/s. Diva Meritime, Majuro, Marshall Island (owner of the vessel) and M/s. Snow Drop Company Limited, Belgium (cash buyer). The later party has further sold the vessel MV Basil to independent importer- appellant namely M/s. Shirdi Steel Traders. The transaction amount which has been declared in bills of entry by the importer is 61,31,400/- USD. The agreement which is dated 28.10.2010 between the seller of the vessel M/s. Snow Drop Company Limited and importer (independent buyer) M/s. Shirdi Steel Traders is for USD 61,73,271/-. The primary suspicion of under invoicing of the imported vessel by the department is only on the basis of difference between the two above mentioned agreements. We find from the record of appeal that another MOA which is between the same parties namely M/s. Diva Meritime (the owner of the vessel) and M/s. Snow Drop Company Limited (cash buyer) is also dated 10.10.2010 and wherein the price of the vessel indicated as USD 61,31,400/-; (P 9)
+ We also find that both the agreements are dated 11.10.2010 and same has been signed by the same persons. On perusal of above agreements, we are of the opinion that the MOA dated 10.10.2010 wherein the price indicated as USD 63,68,295/- some sort of a performa invoice rather than actual sale agreement. The basic evidence on which the Department has relied upon is this agreement wherein the price has been indicated as 63,68,295/- whereas we find that on the same date and by the same party another agreement has been signed wherein the price agreed between the owner and the cash buyer is USD 61,31,400 (CIF).
+ It can be seen from the above provisions that as per Section 14 of the Customs Act, 1962 that value of the imported goods for the purpose of levy of Customs duty shall be the transaction value of the imported goods which is paid at the time of importation. We find that transaction value is decided between the supplier of the goods and the buyer, which is importer in this case declared on the bills of entry for the purpose of assessment of the customs duty. The importer has opened a Letter of Credit in favour of the supplier of vessel which is for the amount indicated in MOA. The transaction value which have been declared on the bill of entry is the invoice value for which letter of credit through a recognized banking system has been opened. There is no evidence to suggest any extra payment to the supplier of the vessel except the invoice value. The price reflected in the MOA between the owner of vessel (who is not the supplier of vessel) and the foreign based cash buyer is of no consequence to allege misdeclaration of value. We also find that the evidence on which the Revenue has relied upon is the MOA dated 10.10.2010 herein the price of subject vessel has been shown as USD 63,68,295/- however, on the same date these parties have signed another MOA wherein the price of vessel MV Basil has been shown as USD 61,31,400/- therefore, we are of the view that this piece of evidence is not good enough to suspect and reject the declared transaction value. We therefore hold that the invoice value is the true transaction value in this case and there is no element of misdeclaration of value; (P 10)
- Appeals allowed: AHMEDABAD CESTAT |
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