|
2023-TIOL-1141-CESTAT-DEL
Singhal Premises Pvt Ltd Vs CCE
ST - The issue that arises for consideration is as to whether the Department could have charged service tax on notional interest towards security deposit taken by appellant against rental property - It is not in dispute that appellant has paid service tax on amount of rent received by appellant - The period involved in all the four appeal ranges from April, 2007 to September, 2012 - Appellant had rented out immovable properties and apart from the rent on which service tax was paid by them, appellant also collected interest fee security amount from tenants, which amount was required to be refunded when tenants vacated the property - Appellant has contended that advances received by them are in shape of interest free security deposit and has no impact on rental charges collected by appellant - Thus, amount of notional interest cannot be considered as a consideration - Appellant placed reliance upon provisions of section 67 of Finance Act as it stood at relevant time, wherein consideration was defined to include any amount that is payable for the taxable services provided or to be provided - Appellant also placed reliance upon a Division Bench decision of Tribunal in Murli Realtors Pvt Ltd = 2014-TIOL-1728-CESTAT-MUM - Since the consideration for leasing of property is rent, so what can be levied to service tax is only rent and notional interest on the security deposit cannot be subjected to levy of service tax - In view of said decision, it has to be held that service tax could not have been levied on notional interest calculated by department on interest fee security deposit collected by appellant from tenants - Such been the position, orders impugned in the four orders passed by Commissioner (A) that have been assailed in four appeals cannot be sustained and are set aside: CESTAT
- Appeals allowed: DELHI CESTAT
2023-TIOL-1140-CESTAT-AHM
Nayara Energy Ltd Vs CC
Cus - Assessee are having a Petroleum Oil Refinery at Vadinar, Jamnagar - The Assessee had filed Bill of Entry No. F- 42/2009-10 dtd. 19.08.2009 for import of two grades of Crude Petroleum Oil viz. (1) Deodorized Field Condensate Crude Oil and (2) Murban Crude Oil by classifying the same under Custom Tariff heading No. 27090000 and availing the benefit under Notification No. 21/2002-Cus dated 01.03.2002 (Sr. No. 487) as amended - The said Bill of Entry was assessed provisionally on 20.08.2009 for want of test result by granting exemption under Notification No. 21/2002-Cus dated 01.03.2002, as amended - The test report of the Chemical Examiner, Customs Revenue Chemical Laboratory, Kandla revealed the product to be "Other than Petroleum Crude Oil" - Thus it appeared that assessee had mis-declared the imported goods with an intention to evade Customs duty - Therefore, a show cause notice dated 18.08.2010 was issued to the assessee - In adjudication, the lower adjudicating authority decided the matter vide Order-In-Original dated 31.12.2014 wherein the classification made by the assessee under Bill of entry No. F-42 dated 19.08.2009 under CTH 2709000 for the product declared as "Deodorized Field Condensate Crude Oil" and "Murban Crude Oil" was rejected and the Lower adjudicating authority classified the same under CTH 27101990 rejecting the benefit of Notification No. 21/2002 -Cus dated 01.03.2002; confiscated 128280.721 Mts. Of "Processed Petroleum Product" (declared as "Deodorized Field Condensate Crude Oil and Murban Crude Oil") under Section 111(d) and (m) of Customs Act, 1962 imposing redemption fine under Section 125 of the Customs Act 1962; confirmed the demand of differential customs duty of Rs. 88,07,06,342/- under proviso to Section 28(1) of Customs Act, 1962 alongwith interest under Section 28AB of the Customs Act 1962; imposing penalty of Rs. 88,07,06,342/- under Section 114A of the Customs Act, 1962 ; and imposing penalty of Rs. 8 Lakh on Shri Nishant Chauhan under Section 112(a) of the Customs Act, 1962. The said order was challenged by the assessee and revenue before the lower appellate authority - The Department filed the appeal before Commissioner (Appeals) on the ground that the adjudicating authority ought to have imposed penalty under Section 114A "equal to duty and interest" - The Commissioner (Appeals) vide Order-in-Appeal dated 08.09.2015 upheld the classification of products "Deodorized Field Condensate Crude Oil" under CTH 27101990 and denied benefit under Notification No. 21/2002- Cus read with Notification No. 74/2008-Cus.; confirmed the demand of differential customs duty of Rs. 46,05,54,755/- alongwith interest; set aside the order of lower authority regarding classification of products "Murban Crude Oil" under CTH 27101990 and reclassified the same under CTH 27090000 with benefit of Notification No. 21/2002-Cus read with Notification No. 74/2008-Cus.; dropped the proceedings of confiscation of entire goods under Section 111(d) and (m) of the Customs Act, 1962; dropped the redemption fine imposed under Section 125 of the Customs Act, 1962; dropped the penalty imposed on Shri Nishant Chauhan under Section 112(a) of the Customs Act, 1962.
Held - The limited issue to be decided in the present matter is whether the goods imported by the Assessee classifiable under CTH 27101990 or under CTH 27090000 and consequently, whether the goods imported are eligible for exemption under Notification No. 21/2002-Cus. dated 01.03.2002 read with Notification No. 74/2008-Cus. dated 04.06.2008 - In the present matter revenue claimed the classification of declared goods as 'Deodorized field Condensate Crude Oil' and 'Murban Crude Oil' under CTH 27101990, whereas the Assessee contends that it is properly classified under CTH 2709 and therefore they have rightly claimed the exemption notification - The orders are not sustainable to the extent of confirming classification of product "Deodorized Field Condensate Crude Oil' under CTH 2710 and denying benefit under Notification No. 21/2002-Cus read with Notification No. 74/2008-Cus - Hence, the same are set aside: CESTAT
+ it is clear that all petroleum Oils and Oils of CTH 27.09 are obtained from Bituminous minerals. On the other hand CTH 27.10 contained petroleum oils and oils obtained from bituminous minerals which are other than crude. In the present matter it is on records that as regard the Product "Murban Crude Oil CTH 2709000" Customs House, Vadinar vide letter No. VIII/48-15/VDR/Sample/2009-10 dtd. 13.05.2010 had sent sample for ascertaining whether the sample is 'Murban Crude Oil' or otherwise. The Chemical Examiner, Kandla vide his report dated 24.05.2010 specified the sample as " It has the characteristics of Petroleum Crude'' and on that basis Ld. Commissioner (Appeals) allowed the classification of import of Murban Crude Oil under CTH 27090000. We find that department not disputed the classification of said goods and accepted the same. However as regard the goods " Deodorized Field Condensate Crude Oil" Ld. Commissioner (Appeals) by relying the Chemical Examiner Report held that product " Deodorized Field Condensate Crude Oil" imported by the appellant - assessee under CTH 27090000 merit classification under CTH 27101990 and as such the benefit of exemption notification cannot be extended to appellant-assessee. Whereas appellant disputed the said Chemical examiner's report in respect of its products Deodorized Field Condensate Petroleum Crude Oil on the ground that the Chemical examiner has given the report on the basis of only 3 parameters and which are not sufficient parameters for determining whether the product in question is condensate or other petroleum products;
+ We find that appellant has produced Technical Literature before the Adjudicating Authority which indicates that the physio-chemical parameters of Crude Petroleum Oil, Petroleum Condensate and Petroleum Products of Chapter 27.10 are difficult to differentiate due to overlapping nature and that there is almost no practical way of distinguishing between the two groups of products. In the said event appellant was clearly justified is asking for the cross-examination of the Chemical Examiner which was rejected by the adjudicating authority. In the present proceedings, the report, opinion and statements of the Chemical examiner are the only evidence with the revenue to say that imported goods are required to be classified under CTH 2710. Therefore the adjudicating authority was not right in rejecting the cross-examination of the chemical examiner. We find that when the show cause notice itself relies upon the Chemical Examiner's report, there is no reason for the adjudicating authority to deny the cross- examination of the Chemical Examiner, which would be necessary for ascertaining the method of testing. We are of the view that serious miscarriage of the principles of natural justice has happened;
+ the Appellant in support of their classification of goods produced the sale contract dated 15.07.2009 issued by TASWEEQ describing the goods as Deodorized Field Condensate, Bill of Lading, Certificate of quality report issued by the producer i.e RAS GAS Ltd., Certificate of Origin issued by TASWEEQ Oil Marketing Co. wholly owned by the Government of Qatar, Certificate of Quality issued by TASWEEQ Oil Marketing CO., ASSAY report issued by SGS for Deodorized Field Condensate before the adjudicating authority. The above documents available on records prove beyond doubt that appellant-assessee had procured Petroleum Crude Oil classifiable under CTH 2709. There is no logical reason with the revenue not to accept the classification claimed by the appellant on the basis of the above documents.
- Appeals allowed: AHMEDABAD CESTAT
2023-TIOL-1139-CESTAT-AHM
Ambica Engineering Works Vs CCE & ST
CX - The appellant is engaged in manufacture of textile machinery - They are availing cenvat credit under CCR, 2004 and utilizing the same for payment of central excise duty on goods cleared by them - A SCN was issued to appellant on allegation that they had manufactured and cleared the machine namely relaxed drum @4% Central Excise duty during period October 2008 to December 2009 by availing Exemption Notfn 6/2022-CE which was superseded vide Notfn 6/2006-CE whereas appellant's machinery, namely, relaxed drum was not covered under Notification, therefore, appellant have wrongly availed Exemption Notification - The limited issue to be decided is that whether appellant was rightly imposed equal penalty under Rule 25 of CER, 2002 - It was a recurring issue and for previous period also in appelant's own case Tribunal vide order 2022-TIOL-546-CESTAT-AHM has taken a view that there is no malafide intention on the part of appellant and demand for the extended period was set aside - Since the issue being a recurring, subsequent SCN which is for a normal period, therefore, neither Rule 25 nor Section 11AC can be invoked as there is no suppression of fact - Since on the issue of merit, Tribunal has already taken a view that considering the nature of case, there is no malafide intention on the part of appellant, appellant cannot be liable for penalty under Rule 25 - Accordingly, penalty under Rule 25 of CER, 2002 is not imposable, hence the same is set aside - The duty demand is maintained - Accordingly, impugned order stands modified to said extent: CESTAT
- Appeal allowed: AHMEDABAD CESTAT |
|
