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2023-TIOL-1151-CESTAT-KOL
Presidency Exports And Industries Ltd Vs CC
Cus - The appellant is in appeal against impugned order challenging rejection of refund claim filed by them - Appellant filed shipping bills at the time of export of goods and duty was to be paid on the basis of Dry Metric Tonne (DMT) instead of Wet Metric Tonne (WMT) - Adjudicating Authority without assigning any reason, demanded duty on the basis of WMT in terms of Section 17 (4) of Customs Act, 1962 - As per said provisions, where on verification or otherwise, it is found that the self assessment is not done correctly, the proper officer may, without prejudice to any other action, which may be taken under this Act, reassess the duty leviable on such goods - The assessments of shipping bills have been done under Section 17 (4) of Act and further Section 17 (5) mandates that if any order is passed under Section 17 (4) of the Act, the proper officer is duty bound to pass a speaking order of re-assessment within 15 days of order passed under Section 17 (4) of the Act - Admittedly, in case in hand, no order under Section 17 (5) of the Act has been passed - The re-assessment of shipping bill is not final, therefore, appellant has no reason to challenge the assessment of shipping bills - In that circumstances, the reasons for denying refund to appellant are not sustainable - Adjudicating authority/proper officer is directed to pass a speaking order under Section 17 (5) of the Act and thereafter, if any refund claim is maintainable, same is be decided in accordance with law: CESTAT
- Matter remanded: KOLKATA CESTAT
2023-TIOL-1150-CESTAT-MAD
National Synthetics Vs CC
Cus - The Appellant-companies filed separate applications for refund of Additional Duty of Customs (SAD) on 01.10.2012 and 06.11.2012 by both the appellants and as observed at paragraph 2 of the Orders-in-Original, the said refund applications were filed along with the documents specified thereunder - Orders-in-Original Nos. 784/ 2013 dated 01.04. 2013 , 785/ 2013 dated 01.04. 2013 , 786/ 2013 dated 01.04. 2013 and 787/ 2013 dated 01.04. 2013 were passed separately, though dated 01.04. 2013 , however, sanctioning the entire refund as claimed - It appears that feeling aggrieved by the non-sanctioning of interest on the refunds so granted, the Appellants preferred appeals before the first appellate authority and the first appellate authority vide common impugned Order-in-Appeal dated 16.07. 2013 and common impugned Order-in-Appeal dated 30.07. 2013 holds that the required documents were filed by the appellants only on 11.02. 2013 - The lower authority having sanctioned the refunds vide Orders-in-Original dated 01.04. 2013 , which was very much within the prescribed time-limit of three months as per the Board's Instruction in Circular No. 6/2008 dated 28.04.2008 and therefore, there was no question of any delay in passing the orders and hence, the question of interest as claimed did not arise at all. Held - There is no denial to the fact that the original refund applications were filed on 01.10.2012 and 06.11.2012 enclosing various documents - It appears that queries dated 20.12.2012 were raised by the Superintendent (Refunds) requiring the filing of the certificate issued by the VAT authority with official seal or signature, in response to which the Appellants submitted the documents as indicated vide its communication dated 11.01. 2013 - It appears that there was a further query vide communication dated 06.02. 2013 requiring even the VAT returns along with Annexure-II thereto, which was duly complied with by the Appellants - The lower appellate authority has clearly proceeded on the compliance date, which according to him is 11.02.2013, to hold that the refund orders have been passed within three months from that date, which, according to him, are very much within the prescribed period - That is not the correct position of law since Section 11BB of the Central Excise Act is clear as to the liability to pay interest from the date of expiry of three months from the date of receipt of application for refund - The effect of Section 11BB is that when any duty ordered to be refunded, is not refunded within three months from the date of receipt of application, then there shall be paid interest at the applicable rates from the date immediately after the expiry of three months from the date of receipt of application for refund until the date of refund of such duty - The liability of the Revenue to pay interest under Section 11BB has also been upheld by the Apex Court in the case of Union of India v. M/s. Hamdard (Waqf) Laboratories, the Apex Court, after referring to its earlier decisions in the cases of M/s. Ranbaxy Laboratories Ltd. v. Union of India and M/s. Mafatlal Industries Ltd. v. Union of India has also reiterated the above position - The Appellants are entitled to the interest on refund since the claim of the Appellants is relatable to the date of its applications, and not the date of compliance with the query raised by the Revenue - Going by the said dates of applications, the refund sanctioned vide Orders-in-Original dated 01.04. 2013 are clearly beyond the prescribed period of three months - Hence, there are no reasons to sustain the impugned orders of the first appellate authority, for which reason the impugned Order-in-Appeal Nos. 135 & 136/ 2013 dated 16.07. 2013 and Order-in-Appeal Nos. 141 & 142/ 2013 dated 30.07. 2013 are set aside: CESTAT
- Appeals allowed: CHENNAI CESTAT
2023-TIOL-1149-CESTAT-MAD
Lotte Engineering And Construction India Pvt Ltd Vs CCE & ST
ST - The Assessee is engaged in the business of civil construction, it was awarded a contract for construction of factory building by M/s. Lotte Foods India Pvt. Ltd. for Rs. 178,53,39,880/- - The said contract was signed during the year 2008-09 - During the course of audit of the accounts of the assessee by the Internal Audit Group the audit team appears to have noticed the said agreement and the fact that the customer of the assessee was to make an advance payment of 25% of the contract price - It is the further case of the Revenue that from the financial statements like balance sheet and Profit Loss account for the year 2008-09, at Schedule 8 of the Balance Sheet an amount of Rs. 37,5576899/- was shown as current liabilities and provisions advances from customers - Entertaining a doubt that as per the balance sheet for the year under challenge and the Profit Loss account, the Assessee was liable to pay Service Tax on the amount received on accrual basis at the time of debiting crediting of transactions with the associated enterprise in the books of account, as per Explanation (to Section 67 of the Finance Act 1994, read with explanation to Rule 61 of the Service Tax Rules 1994, a Show Cause Notice dated 07.04.2010 came to be issued alleging as per the above and with a proposition to demand appropriate Service Tax applicable interest under Section 75 and penalty under Sections 76 and 78 of the Finance Act 1994 - In the said Show Cause Notice, the Revenue has by alleging suppression of the actual taxable income in their ST3 returns with an intention to evade payment of Service Tax invoked the extended period of limitation. Held - It is most relevant to refer to Rule 6 of the Service Tax Rules, 1994, as it stood during the period of dispute i.e., 2008-09 - The Rule lays down the time at which an assessee becomes liable to pay Service Tax - Before its amendment vide the Service Tax (Rules, 2011 with effect from 01.04.2011, as shown above, Service Tax was payable in relation to the calendar month in which "payments are received towards the value of taxable services" - Therefore, there is no doubt that Service Tax was payable upon receipt of the consideration - No other factor such as the time of accrual of the consideration was relevant - Hence, the advance of Rs. 37,55,76,899/ having already been received, would become taxable in the month in which the same was received by the appellant - This is of course subject to the qualification that if the appellant is able to establish that any portion of the advance so received was either refunded to its customer or no services were rendered in respect of any portion of the advance, then such portion would not be taxable - As per the Rule and keeping in mind the factual matrix, the unbilled revenue of Rs. 23,75,85,656/- cannot be brought to tax: CESTAT + the advances, to the extent they have been received in the tax period under consideration (i. 2008-09), would be taxable. The adjudicating authority is directed, accordingly, to bring so much of the advance to tax as has been received in this tax period, provided that there is nothing on the record to show that the advances so received were subsequently refunded. The appellant has also contended that these amounts have already suffered tax in the subsequent final tax period. If this is the case, then it would not be open to the Revenue to levy tax once again. Hence, the adjudicating authority is directed to examine whether the above contention of the appellant is correct so that there is no double taxation; and it would be open for the appellant to furnish all such evidences as is necessary in this regard, to substantiate this contention. Even if the appellant shows that tax has been paid on the above sums in a subsequent period, any shortfall in the tax so paid on account of changes in rates or any other reason may, however, be recovered along with interest, if any, in accordance with law; + The above reasoning would very well apply when we consider the next issue of unbilled revenue. Unbilled revenue represents amounts attributable to ser vices already performed, which have accrued but which have not fallen due for payment or invoicing in terms of the agreement between the parties. It therefore represents revenue which has not yet become recoverable from the customer of the appellant. The fact that these amounts continued at the end of the relevant tax period to appear as unbilled revenue demonstrates that no receipts had been made in that respect. Therefore, there is no question that the unbilled revenue did not represent consideration though which has been received by the appellant for services rendered they would be taxable only at the time of receipt in accordance with the provisions of Rule 6.
- Appeal partly allowed: CHENNAI CESTAT
2023-TIOL-1148-CESTAT-AHM
Advanced Sys Tek Pvt Ltd Vs CST
ST - Appellant had developed Smart Terminal Software (STM) for comprehensive terminal automation which they had supplied for operating equipment supplied by them - They had also occasionally supplied bought out standard software such as Oracle/ MS Windows to be installed on peripherals supplied as part of equipment supplied by them - The appellants have discharged CST/ VAT on sale of such software and no Service tax was paid there on - The principal argument of appellant is that software supplied by them construed goods and same do not attract levy of service tax - They have relied on Board Circular 644/35/2012 and also various decisions like Quick heal technologies Ltd. = 2022-TIOL-65-SC-ST , Wipro GE Medical Systems Pvt. Ltd. = 2008-TIOL-2476-CESTAT-BANG affirmed by Supreme Court and Black Box Limited - It has been pointed out in impugned order itself that the bought out softwares are supplied, installed in machines sold by appellant to their clients - It is noticed that all these software other than STM software, are in the nature of standalone software which are available off the shelf for sale - Appellants have clearly claimed that they have paid VAT on the value of these softwares sold by appellant duly installed in machines supplied by them - The Revenue made the demand of service tax on the entire value of AST-STM software - Appellant agreed with objection in so far as related to AST-STM software, however they paid the tax after excluding value of bought out software - Revenue was of the view that appellants are required to pay service tax on entire value including bought out softwares - Appellant had vide their letter conveyed their acceptance for partial agreement with audit objection - The current issue relates to includibility of value of bought out software in value for purpose of discharge of service tax - No separate order for bought out softwares was placed by clients and no separate invoice for bought out softwares was made by appellants - Appellants also claimed that Rule 5 of Service Tax (Determination of Value) Rules 2006 was declared ultravirus by an order of High Court of Delhi in case of Intecontinental Consultants & Technocrats P. Ltd.= 2012-TIOL-966-HC-DEL-ST , said order of High court was also approved by Apex Court in 2018-TIOL-76-SC-ST - Appellant had claimed that bought out items were in nature of reimbursable expenses and therefore, not includible in value for purpose of service tax - When such software is supplied (preloaded) in a medium like hardware, same cannot be treated as provision of service - The said supply would amount to sale of goods - Demand of service tax on value of bought out software by appellant cannot be sustained - The demand to that extent is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2023-TIOL-1147-CESTAT-MUM
Kanade Anand Udyog Pvt Ltd Vs CCE
CX - Appeal of assessee is concerned with denial of CENVAT credit of duty discharged on procurement/import of 'capital goods' on the ground of lack of evidence of having been received at designated factory of assessee to the extent Rs. 20,94,889 remaining in dispute after disposal of appeal - The recovery was initiated owing to lack of ascertainment at the time of audit visit, non-inclusion in return filed with income-tax, and production of certificate as well as furnishing of explanations only after commencement of adjudication during which verification had been conducted on behalf of original authority - First appellate authority had allowed the claim in relation to 'welding machines' on the basis of documents produced before, though overlooked by, adjudicating authority - Yet, the impugned order was not prepared to subject even statutory compliances to the test of ascertainment - The physical verification of imported machinery was undertaken after closure of factory - There is no reference in the orders of lower authorities to audit having included physical verification of these; in any case, their existence at sister units could well have been ascertained and failure to do so is dereliction on the part of adjudicating authority as central excise authority having jurisdiction over factory of appellant - Choosing to style alleged 'non-intimation of transfer' as sufficing to deny credit also demonstrates failure to cite the authority under which appellant was required to intimate such transfer - That the other 'capital goods' were spares, that may have been incorporated in machinery for which those were intended, or used consumables has not been controverted by lower authorities - Nor has any authority, under CCR, 2004, been cited as placing onus on a manufacturer to produce 'capital goods' for verification and, in absence thereto, liable to be proceeded against under rule 14 of CCR, 2004 - Under the scheme of CCR, 2004, taking of credit is permitted on receipt of goods in factory, subject to such variations as permitted therein and not to be denied if availed against proper documentations - Any allegation of non-receipt of such 'capital goods' at factory, in contradistinction with non-availability that may be justified with explanations subject to ascertainment, would, therefore, have to be based on, and also sustained on clear evidence of diversion - Tribunal also fail to find any compelling motive for diversion of imported and locally procured goods save that two establishments set to take credit - one on document and the other on availability of 'capital goods' which, in the absence of supporting evidences, defies logic as having occured - It would appear that entire exercise was half-hearted and relying entirely on presumptions which is a characteristic that is anathema to adjudicatory proceedings - Impugned order is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2023-TIOL-1146-CESTAT-MUM
Reliance Industrial Products Vs CCE
CX - The present cross appeals were filed against an order passed by the Appellate Commissioner - The appeal of Revenue contends that the first appellate authority was bereft of statutory empowerment to remand any proceedings and, therefore, should have decided the appeal on merits. M/s Reliance Industrial Products challenges the remand on the ground that the impugned order having been held to be void, the sole option available before the adjudicating authority was to set aside the order impugned - the issue in dispute pertains to the finalization of duty liability on 'plastic pipes and fittings', cleared by M/s Reliance Industrial Products in 2009-10, that had been provisionally assessed, at their request, owing to actual discount being known only at the end of the year. The appellant was required to furnish relevant documentation by 31st January 2010 but instead, by letter dated 22nd December 2010, sought extension of time up to 15th January 2011 and despite such permission not having been granted, further documents were provided only vide letter dated 23rd February 2011 following which notice came to be issued to them culminating in the finding of the original authority on differential duty of Rs. 54,75,941/- in accordance with rule 7(3) of Central Excise Rules, 2002 along with appropriate interest as provided in rule 7(4) of Central Excise Rules, 2002.
Held - The order of the first appellate authority has not gone into several of the submissions made on behalf of the appellant-assessee - The conclusion of the impugned order being void is bereft of any analysis to appreciate the correctness thereof - It would, therefore, appear that the impugned order is an inadequate exposition of the law and findings thereof warranting the matter to be decided afresh: CESTAT
- Appeal allowed: MUMBAI CESTAT |
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