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2023-TIOL-1030-CESTAT-AHM
CC Vs Gamesa Renewable Pvt Ltd
Cus - The assessee has been regularly importing by violating the Minimum Import Price (MIP) condition prescribed by DGFT - Original authorities have been imposing redemption fine roughly equal to amount of differential duty demanded - However, Tribunal in earlier cases had reduced redemption fine and personal penalty by 90% - The impugned order has followed earlier order of Tribunal and reduced redemption fine and personal penalty by 90% relying on Tribunal order in assessee's own case - It is noticed from pattern of continuing violation that redemption fine and penalty imposed earlier are not discouraging the repeat of offence - It is seen that appellants continue to violate the import policy in respect of Minimum Import Price with impunity - The amount of redemption fine and penalty imposed in terms of earlier order of Tribunal does not seem to be discouraging to appellant from violating import policy provision - In this instant case this is sixth violation of policy by assessee - The severity of violation is also gradually increasing - The redemption fine imposed earlier has not deterred assessee from violating the policy - Merit found in appeal made by revenue - Impugned order is set aside and matter is remanded to original adjudicating authority to go into the facts of the case and come up with proper quantification of fine and penalty which is adequate to deter the assessee from repeating the offence: CESTAT
- Matter remanded: AHMEDABAD CESTAT
2023-TIOL-1029-CESTAT-KOL
Apeejay Shipping Ltd Vs CST
ST - The Assessee-company owns ships & is engaged n providing ships on hire basis, which in the common trade parlance, is known as 'Chartering of Ships' - The ships are given on hire either for a specific period of time or for a single voyage - The ships are given on hire by entering into contracts with the respective charterers/parties - In terms of the contractual arrangement, the charterers hire the ships and the Assessee allows a specified percentage of discounts from the freight/hire charge, which is commonly known as 'Address Commission' - The Assessee, for promoting their chartering business, also entered into contractual arrangements with various indigenous as well as foreign agents/companies for soliciting/promoting their chartering business - The agents are entitled to commission which is calculated on the basis of freight business generated by such agents, and in the common trade parlance, is known as 'Third Party Commission' - A Show Cause Notice dated 20.10.2010 was issued to the Assessee demanding service tax of Rs. 2,03,19.847/- including Education Cess, alleging that the Assessee has not paid service tax on the Address Commission paid to foreign companies as per Section 66A of the Finance Act - The Notice was adjudicated and the Commissioner Service Tax, Kolkata has confirmed the demand of service tax of Rs. 1,56,27,124/- along with interest and imposed equal amount of tax as penalty.
Held - In the chartering business as a normal trade practice, the charterer is allowed a discount from the hire charges payable by them and the net hire charges is received by the ship owner - Thus, for all practical purposes, the charter is given a discount by the owner on the hire charges and no remittance is being made by owner of the ship i.e. ASL to charters - As the Address Commission was not paid towards rendering of any taxable service, it is held that no service tax is payable on "Address Commission" as the same is in the nature of discount and not a payment for provision of any taxable service - It is a settled principle of law that service tax is leviable only on consideration received for provision of service - There is no merit in the contention of the Department that the discount deducted should have formed part of the value of consideration paid to the foreign companies and discharged service tax under the reverse charge mechanism - When there is no evidence to substantiate the allegation that the discount was offered towards rendering of any service, no service tax is payable on those discounts - Accordingly, the tax demand is not sustainable and must be set aside - As the demand itself is not sustainable, the question of charging interest or imposing penalty does not arise: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-1028-CESTAT-MUM
Honda Cars India Ltd Vs CCE
CX - The Appellant is also in the business of procurement of automobile parts - imported as well as domestic - which are 're-packed' for further sale after being subject to quality check - These goods covered by the Standards of Weights and Measures Act, 1976/ Legal Metrology Act, 2009 were required to be affixed with labels indicating the maximum 'retail selling price (RSP)' both at the time of import and on clearance after manufacture in the country - Consequently, after import of goods by appellant, and clearance on payment of duties of customs including additional duty on the declared 'retail selling price (RSP)', the Appellant undertakes 'deemed' manufacture by checks and repacking to render the goods excisable - Insofar as the imports after 18th March 2010 were concerned, the Appellant, on instructions from customs officials, had been discharging additional duty of customs by adopting value @ 2.5 times of FOB value, less permissible abatement, wherever the declared 'retail selling price (RSP)' in the bill of entry was less than such - It would appear that this practice was the 'happy place' for both customs officials and for the assessee with revenue collection thus enhanced for the customs formation and the importer entitled to take credit to the extent of additional duties of customs - 'sham' though such was for the exchequer. However, a worm was soon to reveal itself in the apple with Central Excise authorities insinuating themselves into this symbiotic equation, wherever such enhancement of 'retail selling price' occurred for assessment to additional duty, with their claim that Explanation 2(a) below section 4A of Central Excise Act, 1944 would apply for resort to the maximum of the different 'retail selling price (RSP)' for chargeability to duty under Central Excise Act, 1944.
Held - T he entire proceedings has been premised on a clear lack of appreciation of objectives of Standards of Weights and Measures Act, 1976, or its successor Legal Metrology Act, 2009, and its relationship with Central Excise Act, 1944 - Mandating the affixing of 'retail selling price (RSP)', on goods specified under these statutes was intended to protect customers from being overcharged at the retail stage on pain of penalties and detriments prescribed - Neither that law nor Central Excise Act, 1944 affords a mandate to customs officials, at the time of clearance of import, or central excise officials, at the time of clearance from factory, to determine the price at which the goods are sold - exclusively a decision of the manufacturer/importer - No such authority has been cited before us on behalf of the respondent either and central excise authorities are merely enabled, in terms of section 4A of Central Excise Act, 1944, to ride 'piggyback' on Standards of Weights and Measures Act, 1976/Legal Metrology Act, 2009, on the certainty that these laws preclude manufacturers/from clearing the goods at a particular price only to have those sold at a higher price subsequently - The goods imported by the Appellant are 'repacked' after clearance from customs control and such activity being manufacture erases the 'import' that had taken place earlier to be superimposed with production of excisable goods in the hands of the manufacturer and subject to valuation under section 4A of Central Excise Act, 1944 for assessment to duties of central excise - The affixing of 'retail selling price (RSP)' thereupon becomes the first, and final, declaration of price for assessment under Central Excise Act, 1944 - There are, thus, no two prices and, therefore, the Explanation 2(a) below section 4A of Central Excise Act, 1944 would not come into play - In the case of the Appellant for the earlier period, as noted supra, the issue has been decided by the Tribunal in their favour - Nothing remains in the demand confirmed in the impugned order which is set aside along with charging of interest and imposition of penalty: CESTAT
- Appeal allowed: MUMBAI CESTAT |
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