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2023-TIOL-1477-HC-AHM-VAT
Planet Automotive Pvt Ltd Vs State of Gujarat
Whether merely because the intimation generated online has erroneously stated that the amount paid by the assessee is not correct cannot be a ground for rejecting the application of the assessee under the 'Vera Samadhan Yojana-2019' - YES: HC
- Assessee's appeal allowed: GUJARAT HIGH COURT
2023-TIOL-1476-HC-AHM-VAT
Vinayaka Enterprise Vs State of Gujarat
Whether the Tribunal has not given any reason as to why the assesse was a fit case to be considered while determining the amount of pre-deposit - YES: HC
- Assessee's appeals partly allowed: GUJARAT HIGH COURT
2023-TIOL-991-CESTAT-DEL
Bright Metal India Pvt Ltd Vs CC, CE & CGST
Cus - The importer-appellant had imported Brass Scrap "Pallu" for its business vide Bill of Entry filed at ICD Jaipur under provisions of Section 46 of the Customs Act, 1962 - Their assessable value was determined at about Rs 90.23 Lakhs, being tariff value for all grades of Brass Scrap under CTH 7404 0022 as per Notification No. 95/2021-Customs (N.T.), dated 30.11.2021 and classification of the same was made under CTH (Customs Tariff Heading) 74040022 and duty was self-assessed BCD(Basic Customs duty) @ 2.5% + SWS (Social Welfare Surcharge) @ 10% + IGST @ 18% - The importer-appellant uploaded documents regarding its Bill of Entry filed for a consignment declared to be type of scrap - unshredded and which was imported from UAE and which had also been inspected at Sharjah - During first check conducted by the Faceless Assessment Officer, it it was noticed that the container tracking on Pakistani International Container Terminal revealed that the container had actually originated from Pakistan as the seal numbers mentioned for the container on Pakistani International Container Terminal matched with those mentioned in the Indian Customs EDI (Electronic Data Interface) Systems (ICES) - The importer submitted that it had imported the goods from the UAE and that it had complete documents to establish the purchase, and that it had no knowledge of the goods having any connection with Pakistan - The importers also claimed to never have contacted any person in Pakistan for importing Brass Scrap or another commodity and that the same was always imported througha middle-man (Indenter) and that the goods covered under the specific Bill of Entry had been imported through a middle-man (Indenter) based in Surat - Nevertheless, the Customs officers rejected these contentions and seized the goods in question - Since the Customs Department alleged that the goods originated from Pakistan and not the UAE, the importer filed application seeking cancellation of Bill of Entry as per Section 149 of the Customs Act and sougth permission to re-export the goods back to the UAE to avoid demurrage charges - Meanwhile, the Customs Department examined past consignments imported by the appellant-importer and alleged that the same modus operandi of importing Pakistani-origin goods and showing their origin as being the UAE, had been adopted - The premises of the Surat-based Indenter were searched and statements of the Indenter were recorded - As the Importer Company was found to have mis-declared the country of origin as UAE instead of Pakistan with intent to evade customs duty and mis-classified the goods under CTH 74040022 instead of 98060000, the goods imported were seized by the Customs officers under Section 110 of the Customs Act, 1962 - On adjudication, the Adjudicating Authority passed order confiscating the goods under Section 111(m) of the Act, with option to redeem on payment of redemption fine under Section 125 of the Act - Penalty under Section 112(a)(ii) and Section 114AA was imposed on the importer-Appellant - On appeal, the Commissioner (Appeals) not only sustained the findings of the Adjudicating Authority but also enhanced the penalty imposed under Section 112(a)(ii) and Section 114AA of the Act - Hence the present cross-appeals.
Held - The goods have been established to be of Pakistani origin and they were falsely declared as having been imported from the UAE and the importer-Appellant fails to produce evidence to the contrary - The importer-Appellant also seems to be well aware that its own self is answerable for any violation of the statutory provisions, mis-declaration or any issues relating to the nature, quantum or valuation of the goods, factum of country of origin etc. and cannot plead ignorance thereof - As the goods were falsely declared as being imported from the UAE, but in fact had been imported from Pakistan, their confiscation u/s 111(m) of the Customs Act is sustained - The penalties imposed u/s 112(a) and u/s 114AA of the Act are justifiable both as punishment and as a future deterrent - Re-export of goods permitted on payment of redemption fine: CESTAT
+ Country of origin - Accordingly, the container No SVWU9892740/40 with seal No. 017410 relating to Bill of Entry No. 6601963 dated 9.12.2021 was verified from the website of Pakistan International Container Tracking Portal (PICT) https:/pict.com.pk/en/online-Tracking and it revealed that the seal No. affixed on the said container was the same as originated from Pakistan. Further, on physical examination of the goods some worn and torn PP bags filled with brass scrap were found on which the words Karachi, Pakistan, Government of Punjab, Korangi Industrial Area etc. were found printed. Coupled with this, the tracking details also revealed the actual arrival date of the said container, i. e. the B/L from Karachi to JEBEL ALI was issued on 18.11.2021 at Karachi and B/L from JEBEL ALI to Nhava Sheva was issued on 28.11.2021 and the container was found to be intact with the same seal throughout from Pakistan to India. This only reflects that there could not have been any inspection at Sharjah, UAE as per the PSIC Certificate dated 13.11.2021 issued by PSIA and therefore the necessary corollary is that the PSIC was fake and forged. This also points to the fact that the container in question originated from Pakistan; (P 14)
+ The aforesaid container wise chart details clearly show that the initial details pertain to Karachi and it is the later ones which relates to JEBEL ALI. This itself proves that the country of origin of the containers is Pakistan and not UAE where the containers have been shown to have arrived later on with the sole object of misleading the country of origin. This conclusion of ours gets further fortified by the earlier six imports managed by the importer company by following similar modus-operandi that the goods in question were loaded in these containers in Karachi Port and were then transported to JEBEL ALI and from there it was transported to Indian ports. The goods once loaded at Karachi were not unloaded from the containers at JEBEL ALI and only B/L date of these containers were changed and all other details, i.e., B/L No., description of the goods, quantity, container number and seal number remained the same. There is no reason to disprove and disregard the aforesaid modus-operandi mentioned in the statement of Shri Kailash Vitthal Mhatre recorded under section 108 of the Customs Act, 1962. The documents showing the movement of the container with goods from Karachi to JEBEL ALI, container wise sheet, container wise tracking details obtained from PICT website clearly indicated that the containers originated from Pakistan. We also do not agree with the reliance placed by the learned Counsel for the appellant on the decision of the Apex Court in Hewlett Packard (supra) which is clearly distinguishable from the facts of the present case. The department having found that the goods originated from Pakistan was not wrong in re-classifying the goods under CTH 98060000 as per Notification No. 5/2019-Cus dated 16.2.2019. Nothing further was required to be done at the end of the department as pleaded by the importer company. The justification or non-justification of procuring the goods i. e., Brass scrap "Pallu" from Pakistan was on the importer company which they failed to substantiate by any valid supporting evidence. The burden was exclusively on the importer company and not on the revenue to place on record positive evidence in support of their submissions; (P 15)
+ Responsibility of the Importer Company - Having determined the country of origin of the containers in question we would now examine the defence taken by the learned Counsel for the appellant that they had no knowledge about the country of origin being Pakistan and that they have no connection with the supplier in Pakistan and therefore they have neither mis-declared nor misled the department. In fact the importer company had gone to the extent of saying that they have no means to find out the country of origin of the goods as they do not directly deal with the suppliers rather there are intermediary agents / indenters who process the imports. We do not agree with the submissions of the appellant for the simple reason that the appellant claims to be a very reputed company in the business of manufacturing of brass and copper items for which they have been importing raw material namely, brass/copper scrap from different places outside India. The importer company on the one hand is claiming to be a 'one star export house' and on other hand is pleading ignorance of such basic facts. Declaring the Country of Origin is an essential part of the Bill of Entry and the assessment, inter alia, depends on the Country of Origin. Duty could be exempted or increased (as in this case) depending on the Country of Origin. Restrictions on imports and exports could also depend on the Country of Origin. The Country of Origin Certificate also has to be obtained from the authorized agency of that country. Pre-shipment inspection certificates have to be obtained from the agency, which is authorized to issue such certificate in the country, where they are exported from. Thus, it is impossible that any importer would not know both the Country of Origin and the Country of Export of every single consignment. The appellant being an importer, who seems to be well versed with the import-export policy is responsible for the import and is answerable for any violation of the statutory provisions, mis-declaration or any issues relating to the nature, quantum or valuation of the goods, factum of country of origin etc. and cannot plead ignorance thereof. The appellant has attributed the burden of mis-declaration of the country of origin as UAE on the supplier or the indenter, however the same is not believable as the appellant is a regular importer of these goods and during the investigation of the live consignment the past imports were also unearthed which were also routed in similar fashion; (P 16)
+ Confiscation of Goods - We now come to the issue whether goods are liable to confiscation under section 111(m) of the Act. Having considered in extenso that the country of origin of the containers in question is Pakistan, the same are covered by the notification No. 05/2019, specifically issued to provide high rate of duty for all goods originating in or exported from the Islamic Republic of Pakistan. As discussed above, the PSI Certificate submitted by the appellant having been found to be fake, the import is violative of the Foreign Trade Policy and Rule 13 of the Rules which makes it mandatory to submit the pre shipment inspection certificate for clearance of the brass scrap, however in the present case there is no valid PSIC in respect of the imports in question. The issue needs to be examined in the light of the provisions of section 46 under which the appellant had filed the bill of entry for home consumption as the provisions thereof makes it obligatory on the part of the importer to make a declaration as to the truth of the contents of such bill of entry and shall in support of the same produce to the proper officer the invoice relating to the goods under import. The appellant has submitted commercial invoices along with bill of lading etc showing the country of origin of the goods as UAE, however as discussed above, country of origin of the goods herein is Pakistan. In that view, the goods are liable for confiscation under section 111 (m) of the Act, which categorically provides any goods which do not correspond in respect of value or 'in any other particular' with the entry made under this Act. Thus the order of confiscation passed by the authorities is held to be in accordance with law; (P 18)
+ Penalty under Section 112 (a)(ii) and 114AA - The quantum of penalty imposed by the impugned order is justifiable. Section 112 (a)(ii) provides for duty related penalty, i.e., penalty not exceeding ten percent of the duty sought to be evaded. Thus the outer limit or the maximum amount of penalty that could be levied could not be more than ten percent of the duty. Similarly, the penalty under section 114AA is value related, i.e., penalty not exceeding five times the value of goods. Here also the Commissioner has proportionally increased the penalty and we find no reason to interfere with the same. Normally, the principle in levying penalty by way of punishment has to commensurate in terms of the provisions providing the penalty. As against the penalty imposed by the adjudicating authority, the appellate authority has considerably increased the penalty amount on all counts both against the importer company and also its director which is not only sufficient to penalise them but would also act as a deterrent in future. Hence no interference is called for by us. The reliance placed by the Revenue on the decision of the Apex Court in CC, Mumbai Vs. Mansi Impex - is of no assistance in the present case, where the Court dealt with the levy of redemption fine and penalty without determination of the market price of the goods confiscated and therefore reduction of the same by the Tribunal was not interfered with; (P 19)
+ Absolute confiscation - the exercise of discretion both by the adjudicating authority as well as by the appellate authority in not ordering absolute confiscation and allowing the importer to redeem the goods on payment of redemption fine and penalty with permission to re-export the goods is in consonance with the object and purpose with which the notification was issued, i.e. to dissuade commercial transactions with Pakistan byimposing extremely high penalty of 200%; Suffice it to say, that Notification No 05/2019 dated 16.2.2019 in simple words provides that the goods imported having country of origin as Islamic Republic of Pakistan shall be classified under the new entry CTH 9806 0000 and BCD @200% shall be applicable on them. It nowhere says that such goods shall not be allowed to be re-exported. It is a settled principle of law that the words of the notification has to be read as they are and the contents thereof cannot be added or expanded by way of implication. Since there is no express bar for re-export of such goods in the notification, we uphold the impugned order allowing the appellant to re-export the goods. (P 30,31)
- Appeals dismissed: DELHI CESTAT
2023-TIOL-990-CESTAT-CHD
CCE & ST Vs Dakshin Haryana Bijli Vitran Nigam Vidyut Nagar
ST - The Assessee is engaged in istribution of electricity to the domestic, industrial and commercial consumers situated within the jurisdiction of Dakshin Haryana - The Assessee is not registered as a service provider under the Finance Act 1994, as the Assessee believed that it was not liable to pay service tax on its services - Later, the legislature of the State of Haryana, with a view to consolidate and amend the law relating to municipalities in the State of Haryana enacted the Haryana Municipal Act, 1973 - It is provided in section 70 of the said statute that subject to general or special orders of the State Government, a municipal committee may impose specified taxes, tolls and fees in whole or in any part of the municipality - One of the taxes specified in sub-clause (viii) of section 70(1) is tax on consumption of electricity at a rate of not more than 5 paise per unit of electricity consumed by any person located within the territorial limits of the municipality - Vide Sales Circular No. 60/2002 dated 21.11.2002 the Assessee decided to levy "collection charges" w.e.f. 01.04.2002 from the Municipal Committees @ 5% of municipal tax so collected as part of electricity bill - It was further specified that the account of collection of municipal tax and the collection charges of the realized amount of municipal tax shall be maintained in the operation Divisions/ Sub-Divisions of the Assessee - During the period April, 2004 to March, 2009 the Assessee retained collection charges of Rs.4,57,92,173/- in lieu of collecting municipal tax for and on behalf of various municipal committees - Further, the Department took a view that the collection charges, so retained by the Assessee, were liable to service tax under the category of "Business Auxiliary Service" as defined in section 65(19) of the Finance Act, 1994 - Accordingly, the Commissioner of Central Excise, Rohtak issued show cause notice demanding service tax of Rs. 53,72,088/- from the Assessee on collection charges retained by the Assessee on the ground that the Assessee are providing taxable service to the concerned municipal committees for collecting the municipal tax for and on behalf of the municipal committees - After following due process, the Commissioner held that the municipal committees for whom the Assessee collected the tax were not involved in any business or providing any services to their clients - The Commissioner also held that the Assessee is a statutory body constituted by law to perform certain functions of the State Govt. as a local Self Govt and hence the Commissioner dropped the demand - Hence the Department's appeal.
Held - On analysing the definition of Business Auxiliary Service found that the municipal committees are not engaged in sale of goods or services, hence, none of the clauses from (i) to (vi) of Business Auxiliary Service definition are applicable to the activity of collection of municipal tax by the Assessee - The Assessee was providing services to the municipal committee but not on behalf of the municipal committee - The incidental or auxiliary services referred to clause (vii) of BAS definition are applicable in relation to activities covered by clauses (i) to (vi) - Since none of these clauses are applicable in the case of Assessee, the question of taxability of incidental or auxiliary services such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts etc. does not arise in the hands of the Assessee - Moreover, the Assessee is collecting the municipal tax as levied by the municipal committees which are part of State Govt. of Haryana, even if it is assumed that the services of the Assessee are taxable services, even then the taxable services of collecting duties and taxes levied by the Central/State Govt. are fully exempted from service tax under the authority of Notification No. 13/2004-ST dated 10.09.2004 - Hence there is no infirmity in the impugned order warranting interference by this Tribunal: CESTAT
- Appeal dismissed: CHANDIGARH CESTAT
2023-TIOL-989-CESTAT-CHD
Ind Swift Labs Ltd Vs CCE
CX - The only issue involved is, whether the refund of education cess and secondary and higher education cess which was paid along with excise duty in terms of Notfn 56/2002-CE as amended is admissible - The appellants are registered in state of Jammu & Kashmir and were availing benefit of area based exemption under Notfn 56/2002-CE - The said notification provides mechanism to give effect to aforesaid exemption by way of refund of duty paid through PLA - As per procedure, manufacturer avails Cenvat Credit of duty/cess paid by them on inputs and utilises whole of CENVAT credit available with them on last day of month for payment of Central Excise duty and Cess - The balance amount of duty is paid in cash and on application of refund, the refund is granted for payment of Central Excise made in cash only - The refund is granted by way of cash or by way of self credit in PLA - Said issue is no more res-integra and stands finally decided by decision of Supreme Court in case of M/s Unicorn Industries 2019-TIOL-528-SC-CX-LB wherein the Apex Court, after considering provisions of Notfn 71/2003-CE has held that a notification has to be issued for providing exemption under said source of power and that in absence of notification containing an exemption to such additional duties in nature of education cess and secondary and higher education cess, they cannot be said to have been exempted - Further, provisions of Notfn 56/2002-CE are pari-materia to provisions of Notfn 71/2003-CE - By following the ratio of said decision, there is no infirmity in impugned order vide which refund of education cess and higher secondary education cess has been denied - Impugned orders upheld: CESTAT
- Appeals dismissed: CHANDIGARH CESTAT |
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