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Showing 341 to 360 of 1564 Records
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2024 (8) TMI 1224
Classification of imported goods - oil contained in bunker tanks in engine room of vessel imported for breaking up - classifiable under CTH 8908 along with such vessel or not - HELD THAT:- Similar issue has been decided by Hon'ble Tribunal West Zonal Bench Ahmedabad of the Appellant in NAVYUG SHIP BREAKING CO., DHAN STEELS PRIVATE LIMITED. AND OTHERS VERSUS C.C., JAMNAGAR (PREV) [2022 (12) TMI 100 - CESTAT AHMEDABAD] on the similar issue in favour Ship Breakers of Alang allowing their appeal on the issue and set a siding the assessment of B/Es and OIA NO. OIA-JMN-CUSTM-000-APP-004- 072-18-19 dated 30.04.2019 issued by Commissioner (Appeal) Customs, Ahmedabad and with the common finding that oil contained in bunker tanks in engine room of vessel imported for breaking up is classifiable under CTH 8908 along with such vessel.
Appeal allowed.
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2024 (8) TMI 1223
Refund of SAD u/s 3(5) of Customs Tariff Act, 1975 - rejection of refund claims on the ground that there is discrepancy in description of the goods imported and goods sold - HELD THAT:- The issue relating to the rejection of the Special Additional Duty of Customs (SAD) refund claim alleging that there is discrepancy in in description of the goods imported and goods sold in the sales invoices when compared to the Bills of Entry is no longer res integra. The fact remains that the appellant has produced a Chartered Accountant’s Certificate along with the reconciliation statement as required by Boards Circular No. 6/2008, dated 28-4-2008. In such a case the decision to discard the certificate should be based on certain incriminating and reliable documents and the reasons for disbelieving the certificate should be clearly spelt out. In the absence of such action the claim cannot be rejected.
In CHOWGULE & COMPANY PVT LTD VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE [2014 (8) TMI 214 - CESTAT MUMBAI (LB)], a Larger Bench of this Tribunal examined a reference of a related matter as to ‘whether to avail the benefit of Notification No. 102/2007, the condition 2(b) of the Notification is mandatory for compliance being a trader who cleared the goods on the strength of commercial invoices.’ The judgment went on to examine the genesis and object of the levy and the role of the exemption notification, which is very useful in understanding the issue.
The Hon’ble Madras High Court in its judgment in PP PRODUCTS LTD. VERSUS COMMISSIONER OF CUSTOMS, CHENNAI SEAPORT COMMISSIONERATE-IV [2019 (5) TMI 830 - MADRAS HIGH COURT], examined whether the Tribunal, in the face of documentary evidence produced by the appellant, was correct in setting aside the order of the lower Appellate Authority, holding that there was no correction between the imports and subsequent sales? It is held that 'the goods imported and the goods sold are one and the same and are co-relatable. The lower authority has not issued any DM or PH to the appellants for making the deficiencies good or to make any submissions. The department has not proved that the goods sold are different from the goods imported. The lower authority has not disputed the fulfillment of the other substantive conditions of the notification by the appellants. Rejection of partial amount of refund on this flimsy ground is not sustainable.'
The impugned order rejecting the refund claim is not proper. The impugned order is hence set aside - Appeal allowed.
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2024 (8) TMI 1222
Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - violation of Regulations 10(d) and 10(n) of CBLR.
Violation of Regulation 10(d) ibid - appellants CB neither in contact with the exporter nor informed the inordinate delay in export consignment from Pune to JNCH, Nhava Sheva - HELD THAT:- In the instant case, mis-declaration of the description of the goods in the S/B as ‘Kraft paper’, for smuggling out of the country the prohibited ‘Red Sanders’, was submitted by the CB M/s Exim Management Services, by filing the same online from their office, as it is evident from the face of the shipping Bill. Thus, there is no possibility for the appellants CB to either know the actual content of the export goods and to bring to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC) about the mis-declaration of export goods or about the delay in transportation of such export goods. Thus, we are of the considered view that the violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable.
Violation of Regulation 10(n) ibid - allegation is that appellants had never met the exporter/IEC holder, and they were not careful and diligent in undertaking the KYC verification process about the background of exporter - HELD THAT:- It is found from the records, that the appellants CB had initially obtained the KYC documents from the exporter and once they were not handling the export consignment, they had sent it to other CB or persons concerned with such export at Pune. Thus, the appellants CB has no role to play in respect of export documents handled by one another CB at Pune.
The Hon’ble High Court of Delhi has held in the case of KUNAL TRAVELS (CARGO) VERSUS COMMISSIONER OF CUSTOMS (IMPORT & GENERAL) NEW CUSTOMS HOUSE, IGI AIRPORT, NEW DELHI [2017 (3) TMI 1494 - DELHI HIGH COURT], that the appellants CB is not an officer of Customs who would have an expertise to identify mis-declaration of goods.
Thus, when the appellants CB was not handling the export consignment, it cannot be said that they had violated Regulation 10(n) ibid. Further, it is not the case that the appellants CB is the customs broker, who had handled the export consignment - It is an undisputed fact that the appellants CB had no role to play in the export transaction and it is only M/s. Exim Management Services, Pune holding CB license No. CHA.PNR – 54 is the CB in the case. Thus, the impugned order holding violation of Regulation 10(d) and 10(n) ibid on the appellants CB is not legally sustainable.
There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revocation of the CB license of the appellants; for forfeiture of security deposit and for imposition of penalty, inasmuch as there is no violation of regulations 10(d) and 10(n) ibid, and the findings in the impugned order is contrary to the facts on record.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 1221
Denial of request for conversion of shipping bills from drawback scheme to advance license scheme - denial on the ground of time limitation - HELD THAT:- It is found that the Hon’ble Gujarat High Court in the case of THE PRINCIPAL COMMISSIONER OF CUSTOMS, MUNDRA VERSUS M/S LYKIS LIMITED [2021 (2) TMI 261 - GUJARAT HIGH COURT] has examined the issue and held that there is no time-limit prescribed under Section 149 of the Customs Act, 1962 and therefore, conversion of shipping bills from drawback scheme to DFIA scheme cannot be rejected on the ground of time bar.
As the issue has already been decided that if an amended in the shipping bill is filed under Section 149 of the Customs Act, 1962, there is no time-limit prescribed under the Act for conversion of shipping bill from one scheme to another scheme.
Thus, the application for conversion of shipping bills from drawback to advance licence was filed by the appellant in time - the impugned order is set aside - matter remanded to the adjudicating authority to consider the request for conversion from drawback scheme to advance licence, on merit.
Appeal disposed off by way of remand.
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2024 (8) TMI 1220
Application for conversion of shipping bills under NFEI scheme to drawback scheme and to the consequent duty drawback under the provisions of sec. 74 of the Customs Act, 1962 read with Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 - re-export of “style steel Cord S311, Steel Spools B80, Plastic Pallets, Plastic Separators” - HELD THAT:- There is no doubt that the formation of opinion by the Competent Authority is a purely subjective process founded on existent circumstances. The dispute here pertains to the discretionary jurisdiction of the Commissioner of Customs under the impugned section of the CA, 1962. However, there are no allegations made by the appellant that the discretion has been exercised in an illegal manner or on wholly untenable grounds or is arbitrary or perverse.
Shipping Bills are eligible for conversion into drawback shipping bills under Section 149 of the CA 1962 or not - HELD THAT:- A discretionary power to allow also carries with it the power not to allow, based on the facts and circumstances of the issue at hand. It is to be stated that the power under Section 149 of CA 1962 involves exercise of discretion, the scope of review during appeal in such a case is to examine if the discretion has been rightly exercised and that it is not based on irrelevant materials and is fair and reasonable in the circumstances. The Hon’ble Supreme Court in its judgment in the case of STATE OF ORISSA & ORS. VERSUS MD. ILLIYAS [2005 (11) TMI 469 - SUPREME COURT] held that a decision is a precedent on its own facts. It is not everything said in a judgment that constitutes a precedent. The enunciation of the reason or principle on which a question before a Court has been decided is alone binding as a precedent.
Section 149 is a discretionary provision which gives the power to the proper officer to authorise any document, after it has been presented in the custom house to be amended, under certain restrictions and conditions, if he so deems fit. It is not an exclusive provision for the conversion of one type of SB into another. Amendment from one SB type to another cannot be claimed as a matter of right. Further no formal request for an amendment of the SB’s under section 149 of CA 1962, as is being pleaded now, appears to have been made. That technicality however need not detain us as a disqualification, but is useful in understanding the action that followed.
Whether the subject goods were the same goods that were re-exported vide the impugned Shipping Bills, are not relevant for permitting the conversion of the impugned Shipping Bills? - HELD THAT:- Section 149 of CA 1962 is not a section specific to the conversion of one SB type to another. When a specific request is made by an exporter for a particular amendment in the SB which has monetary implications on the exchequer any prudent officer would have to take a holistic view of the amendment being sought. This discretion has to be tempered by the mandate of section 74 which permits the payment of drawback only if the goods are identified to the satisfaction of the AC / DC of Customs as the goods which were imported. Hence the proper officer feeling that the request for amendment of the SB and to reassess it for drawback under section 74 of CA 1962 requires examining the identity of the goods, cannot be faulted.
Whether the conversion of shipping bills under Section 149 cannot be rejected on the basis of Circular 36/2010-Cus dated 23.09.2010? - HELD THAT:- There is no reason why when goods are being returned by way of re-export involving a payout from the exchequer, a lesser standard of verification based on documents alone is to be held sufficient. In the case of the detection of a fraud such a decision could be held as irrational and perverse, at times with consequences for the officer causing the loss. The goods can best be identified satisfactorily by physical examination, unless the proper officer for reasons known to him arrives at his satisfaction otherwise. Hence no such direction can be given curtailing the discretion of the proper officer to confine his satisfaction to a verification of documents alone - In any case the Commissioner of Customs has not leaned too heavily on Circular No.36/2010 and the order is in conformity with the existing provisions of the Act and Rules.
Section 74 of the CA 1962 nowhere mentions the requirement of physical examination as the only basis on which the proper officer is satisfied regarding the goods exported - HELD THAT:- Whether the subjective satisfaction by the proper officer could have been achieved only by physical examination cannot be a matter of challenge so long as the use of discretion is not perverse etc. - No such allegation is made by the appellant whose main grouse is only the use of discretion by the proper officer resulted in him wanting to examine the goods. In the case of WB. ELECTRICITY REGULATORY COMMISSION VERSUS CESC. LTD. ETC. [2002 (10) TMI 772 - SUPREME COURT] the Hon’ble Apex Court has held that the rule of prudence in law is that the appellate power is not to be exercised for the purpose of substituting one subjective satisfaction with another, without there being any specific reason for such substitution.
Whether non-declaration of 'drawback' claim on the Shipping Bill as required under Rule 4 of Drawback Rules cannot be a basis for rejecting Appellant's request for conversion of Shipping Bills? - HELD THAT:- The object and purpose of the procedure laid down is to ensure that the Customs department is made aware that the SB involves the payment of drawback and the goods can be subject to checks as felt necessary. Since the object of the rule would be defeated by non-compliance causing a loss to the exchequer, hence the said rule has to be held as mandatory - It is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. Further when a statute uses the word “shall”, prima facie, it is mandatory, more so for the reason that non-compliance of the rule may result in excess / undue payment of drawback causing a loss to the exchequer.
It is found that the exercise of discretion by the original / proper authority is fair and reasonable. Neither has the appellant alleged or brought out any perversity or irrationality in the use of such a discretion. Hence the decision does not require any substitution just because the appellant feels that another view may be possible - the impugned order is upheld and the appeal is rejected.
Appeal disposed off.
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2024 (8) TMI 1219
Levy of penalty u/s 114(i) and 114(iii) of CA without evidence of abetment - export of red sanders - failure to obtain and verify the KYC of the exporter for which they were filing the subject shipping bill - failure to fulfill the obligation as envisaged under Regulation 11 of the CHALR 2004 by not advising their client to comply with the various Provision of Customs Act 1962 read with Regulation 2 of Shipping Bill of Export (Form) Regulations 1991 - HELD THAT:- From the observations in the Order in Original as well as in the impugned order, it is seen that they only relate to violation of various provisions of CHALR 2004. On the basis of the said violation, it has been alleged that the appellant had abetted the export of red sanders.
It is apparent that abetment can occur only if the person has knowledge about the wrong or illegal act. In the instant case, there is no admission of any knowledge by the appellant. None of the other co-noticees or witness has also indicated that the appellant had any knowledge about the red sanders. There is no evidence of the knowledge of appellants. In this background, the allegation of abetment solely based on violation of CHALR without any knowledge on the part of the appellant cannot be sustained.
The penalty under section 114 (i) and 114 (iii) cannot be sustained. The impugned order is, therefore, set aside - Appeal allowed.
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2024 (8) TMI 1218
Oppression and Mismanagement - lack of jurisdiction to adjudicate the issue of forgery of documents - whether the NCLT has the authority to examine documents allegedly to be forged and fabricated, which purportedly led to the changes in directorship of the company and the transfer of shares to the respondents? - HELD THAT:- In the case of CHANNEL FOODS PRIVATE LIMITED, MR. JALEEL HUSSAIN S/O. SHAMSUDHIN, A.K. MANSOOR, G. JOSEPH & ASSOCIATES VERSUS MR. A.K. NOWSHAD [2022 (11) TMI 1506 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, CHENNAI.], the appellate body, i.e. the NCLAT unequivocally held that the NCLT has very wide powers under the Companies Act and the NCLT Rules, 2016 to enquire into the allegation of oppression and mismanagement and sending disputed documents for forensic investigation is also part of this enquiry.
The learned CLB had denied the adjudication of the dispute on the ground that the contention of the appellant regarding the alleged forgery was out of its jurisdiction - the Rule 43 of the NCLT rules, 2016 as well as the judicial dicta provides for powers to the NLCT to adjudicate such claims and direct expert examination of the alleged forgery.
This Court is of the view that the NCLT is well empowered to adjudicate the issues and give its findings on the basis of the contentions advanced by the respective counsel as well as the forensic report.
Matter remanded back to the NCLT for adjudication - appeal disposed off by way of remand.
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2024 (8) TMI 1217
Prayer for rectification in the Register of Members - controversy pertaining to the transfer of shares - section 154 of the NCLT Rules - HELD THAT:- What is being observed here is that in the light of relief granted by NCLT in the Principal Company Petitions to the Respondents herein, the cause for Appeal against such reliefs itself was subsisting only during the time when the Appellant No.1 i.e. the Company, having legal status, being a juristic person, was contesting the matter, but, upon its withdrawal, the Appellant No. 2 individually, will have no cause, as such, which could at all flowing from the Appellant No. 1.
In the absence of there being any plausible answer extended by the Learned Counsel for the Appellant No. 2, on the objection raised by the Learned Counsel for the Respondent / Petitioner, this bunch of Company Appeals, would stand dismissed, without prejudicing the rights of the Appellant No. 2, to resort to the appropriate remedies, as available to him, under Section 59 of the Companies Act, the reason behind it being that the relief prayed against the order of rectification of Register of Members of the First Appellant, by re-entering the names and the configuration of the Shares, held by the Shareholders, under the respective Folio, could have had been possible only when the Company was contesting the proceedings and in the event of Company itself having chosen not to contest the Company Appeal, no such relief can be pressed for by Appellant No. 2 in the absence of an effective contest by Appellant No. 1.
It will be open for the Appellant No. 2, to resort to the appropriate proceedings, under Section 59 (2) of the Companies Act, 2013, which would be decided, exclusively, in accordance with Law - Appeal dismissed.
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2024 (8) TMI 1216
Provisional attachment of properties under Section 5 of the PMLA Act - seeking release if attached property - third party rights/interests - HELD THAT:- The order in appeal dated 24th December, 2019 clearly protects the Appellant, insofar as attachment is concerned. No third-party rights and/or interests can be created in respect of all seven properties by the Respondent.
The direction for restoring the possession of the properties cannot be faulted with on merits. Moreover, even the order dated 24th December, 2019 directed that the Appellant/Department was restrained from taking the possession of the properties. The stand of the Appellant is that notices were issued on 18th December, 2019 and 19th December, 2019 and the time period as prescribed in the PMLA Rules were adhered to. These issues would have to be now resolved in the Appellate Tribunal.
The possession of all the seven properties shall now remain with the Respondent subject to the order of attachment in terms of paragraph 19 of the impugned order dated 17th January, 2020.
Appeal disposed off.
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2024 (8) TMI 1215
Seeking recall of the Judgment - petition has been dismissed without dealing with any of the grounds raised by the petitioner and without dealing with the submissions made in the written submissions which were placed on record - HELD THAT:- Reliance placed in the decision of the Apex Court in VIJAY BHATIA VERSUS UNION OF INDIA AND OTHERS [2023 (5) TMI 1375 - SUPREME COURT] has deprecated the practice of filing Writ Petitions challenging the validity of Section 50 of the Act despite its validity having been decided in VIJAY MADANLAL CHOUDHARY & ORS. VERSUS UNION OF INDIA & ORS. [2022 (7) TMI 1316 - SUPREME COURT].
It is observed that before concluding, that the prayer made in both the Writ Petitions was to challenge the constitutional validity of Section 50 PMLA. It paragraph 84 of the impugned Order, reference has been made to the case of Vijay Madanlal Choudhary vs. UOI wherein the Three Judge Bench of Apex Court has upheld the constitutional validity of Section 50 of PMLA. Therefore, the relief sought may have existed at the time when the petition was filed in 2019, but with the findings of the Apex Court as mentioned above, the relief stood answered and satisfied.
It is concluded that there were only typographical errors in the impugned Order which hereby stand rectified. There is no ground for recall of the impugned Order, as has also been conceded by Ld. Senior Advocate on behalf of the Petitioner.
Application disposed off.
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2024 (8) TMI 1214
CENVAT Credit of Central Excise Duty utilized by the assessee - barred by time limitation - HELD THAT:- It is not in dispute that the respondent Company had availed ineligible CENVAT Credit which was not permissible in terms of the provisions of CENVAT Credit Rules, 2004. It is also not in dispute that the total amount of ineligible CENVAT Credit which includes Service Tax, Education Cess, Secondary & Higher Education Cess comes to Rs. 1,30,84,835/-.
As per Section 73 of the Service Tax (Finance Act, 1994), where any service tax is not levied or paid, short-levied or short-paid or erroneously refunded, a show-cause notice is required to be served upon the person chargeable with the Service Tax within a period of 18(eighteen) months from the relevant date. However, where any Service Tax has not been levied or paid or has been short-levied or short paid or erroneously refunded by reason of fraud or collusion or willful misstatement or suppression of facts or contravention of any of the provisions of Chapter 5 of the Finance Act or of the Rules made thereunder with the intent to evade payment of Service Tax, then the limitation for serving notice upon the person chargeable with the Service Tax is extended upto 5 (five) years from the relevant date.
Whether the respondent Company, in its ST Return, had disclosed all the relevant information regarding availment of CENVAT Credit while submitting ST-3 Returns? - HELD THAT:- On looking into the show-cause notice, it is clear that the respondent Company had provided every details regarding availment of CENVAT Credit in the ST-3 Returns. In the show-cause notice, the details provided by the respondent in ST-3 Return, had been taken into consideration by the Commissioner, Central Excise & Service Tax. It is also to be noticed that in the said show-cause notice, it is nowhere mentioned that the respondent had misstated any fact with intent to evade the payment of Service Tax - The findings recorded by the Commissioner, Central Excise & Service Tax to the effect that there was an element of misstatement and contravention of Service Tax Rules with the intent to evade payment of Service Tax is perverse, as the said finding is not based on any material available before it.
The Hon’ble Supreme Court in various pronouncements has categorically held that the fact of willful misstatement or suppression should specifically be mentioned in the show-cause notice. In M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [2007 (8) TMI 11 - SUPREME COURT] the Hon’ble Supreme Court has defined the expression “suppression” and it was held that 'When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct.'
The respondent Company had disclosed all the details about availment of the CENVAT Credit in ST -3 Returns and there is no allegation by the Revenue of willful suppression and misstatement with intent to evade Service Tax in the show-cause notice, there are no illegality in the impugned order dated 04.12.2019 passed by the CESTAT. Hence, the substantial question, so framed in this appeal, is answered in the affirmative.
The instant excise appeal stands dismissed.
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2024 (8) TMI 1213
Classification of services - maintenance and repair services or not - warranty income - Liability to pay service tax on the warranty income - Compliance with Accounting Standards (AS) 29 in making provisions for warranty services - time limitation - HELD THAT:- The appellant is providing warranty services to the customers who have purchased the machines directly from HIl Germany. The appellant receives commission for such sale. The appellant has discharged service tax on the commission received and there is no dispute. From the amount received as commission they have made provision in their books of account to incur expenses that is required to provide warranty services. It is very much clear from the SCN itself that the appellant has not received any specific or separate consideration for providing repair and maintenance during the warranty services. The provisions made in their books of account as “warranty income” has been construed by the department as a consideration received by them for providing repair and maintenance during the warranty services.
Even after remand, the department has not been able to establish that any separate consideration is received by appellant over and above the commission income - From the SCN, it can be seen that the demand has been raised on the basis of entries made in the books of account of the appellant - AS 29 provides for making Provisions, Contingent Liabilities, Contingent Assets. As per 10.1 of this Accounting Standards, a provision is a liability which can be measured only by using a substantial degree of estimation.
On the provision made in the balance sheet as per Accounting Standards to meet future expenses that may be incurred for carrying out the obligation of warranty services the demand of service tax has been raised. The appellant has made such provision from the commission received from the parent company. They have already discharged service tax on the commission. Demand of service tax cannot be raised on mere book entries assuming such figures as consideration - the appellant has not received any separate consideration for providing maintenance and repair services during the warranty period.
The demand therefore cannot sustain and requires to be set aside - the impugned order is set aside - Appeal allowed.
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2024 (8) TMI 1212
Classification of services - Technical Inspection and Certification Services or Business Auxiliary Services - export of services under ‘Export of Service Rules, 2005’ or not - suppression of facts - invocation of extended period of limitation - penalty.
Whether the services rendered by the appellant fall ‘Technical Inspection and Certification Services’ or as ‘Business Auxiliary Services’? - HELD THAT:- Admittedly, the services rendered by the appellant are undertaken on behalf of the parent company and therefore, rightly classifiable under Business Auxiliary Service as claimed by the appellant. Moreover, Technical Inspection and Certification Service is complete only when the certificate is issued and in the instant case, admittedly, the certificate is issued by the parent company. Therefore, the question of classifying the same under ‘Technical Inspection and Certification Service’ is ruled out.
Whether irrespective of classification these services can be considered as export of services under ‘Export of Service Rules, 2005’? - HELD THAT:- As per Export of Service Rules, 2005 under Rule 3 (1)(ii) proviso, it clearly reads as ‘Provided that where such taxable service is partly performed outside India, it shall be treated as performed outside India;’ therefore, in the instant case, a service is partly performed outside India and it has to be treated as performed outside India. Hence, as rightly claimed by the appellant, the services are to be treated as Export of Service. Similarly, in the case of COMMISSIONER OF SERVICE TAX, MUMBAI-III VERSUS M/S. SGS INDIA PVT. LTD. [2014 (5) TMI 105 - BOMBAY HIGH COURT] the Hon’ble High Court observed 'the Tribunal takes a view that if services were rendered to such foreign clients located abroad, then, the act can be termed as ‘export of service’. Such an act does not invite a Service Tax liability.'
Whether facts were misrepresented/suppressed so as to invoke extended period and impose penalty under various Sections of the Finance Act, 1994? - HELD THAT:- It is a fact that the appellant has been filing Service Tax returns regularly and has paid Service Tax on various services rendered within India; therefore, there being no mis-representation of facts, the said services being partly undertaken in India and partly abroad, the question of paying tax on export of services did not arise. Therefore, when there is no liability itself, the question of suppression of facts does not arise.
The impugned order is set aside and the appeal is allowed.
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2024 (8) TMI 1211
Time and manner of payment of service tax - construction of residential complexes - accrual basis or receipt basis - Service tax on Preferential Location Charges
Time and manner of payment of service tax - construction of residential complexes - HELD THAT:- From the impugned order it is evident that appellants are paying service tax on receipt basis and revenue has issued notice and confirmed the demand against the appellant demanding the tax on accrual basis relying on the provisions of Point of Taxation Rules, 2011. Indeed the scheme of levy of taxation of services was changed with the introduction of Point of Taxation Rules, 2011 and the service tax which was till then being paid on the basis of receipt basis was changed to accrual basis. Undisputedly, in India the accounts of the companies are based on the accrual basis and the Financial Statements are also prepared on the accrual basis.
There are no merits in the submissions made by the appellant to the extent that Rule 3 of the Point of Taxation Rules shall not apply and service tax should be paid by them on the receipt basis - the impugned order, recognizes the fact that appellant’s claim with regards to payment of service tax on the receipt basis and remands the matter back to the original authority for reconciliation of the payment of the service tax made by the appellant on receipt basis with the payment of service tax on accrual basis as per Rule 3.
There are no infirmity in the direction given for the reason that Point of Taxation Rules, only determine the time when the service tax becomes due for the payment and do not create additional liability to tax. In case by following the receipt basis or any other basis if the entire tax liability has been discharged then there can be no demand for the same. However in view of specific stipulation as per the said Rules, if the tax is paid later than the due date then there interest has to be paid for the period of delay.
Service tax on Preferential Location Charges - HELD THAT:- In case of Maharashtra Chamber Of Housing Industry [2012 (1) TMI 98 - BOMBAY HIGH COURT] Hon’ble Bombay High Court has held 'if no separate charge is levied, the liability to pay service tax does not arise and it is only where a particular service is separately charged for that the liability to pay service tax arises. The fact that the service is rendered in the context of a location, does not make it a tax on land within the meaning of Entry 49 of List II. The tax continues to be a tax on the rendering of a service by the builder to the buyer. There is no vagueness and uncertainty. The legislative prescription is clear. Hence, there is no excessive delegation.' - there are no merits in the submission made in respect of Preferential Location Charges.
There are no merits in this appeal - appeal dismissed.
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2024 (8) TMI 1210
Jurisdiction of the Department of Revenue to issue SCN - SCN did not establish that the appellant was providing any service to anybody which was leviable to service tax - time limitation - HELD THAT:- The SCN did not establish that the appellant was providing any service. It is also noted that the SCN was sent to some address in Navi Mumbai whereas the appellant is conducting his business at Dombivli, Thane which is a place different than Vashi, Navi Mumbai and, therefore, the appellant neither received the show cause notice nor the order-in-original till such time the appellant made a request to provide the same somewhere in November 2022. The activity carried out by the appellant was sale of fruits which is covered by entry (e) under Section 66D of Finance Act, 1994 which deals with negative list.
During the relevant period, Department of Revenue did not have any jurisdiction to issue any show cause notice demanding service tax from the appellant.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 1209
Condonation of delay of 528 days in filing SLP - HELD THAT:- The reasons assigned for seeking condonation of delay are neither satisfactory nor sufficient in law to be condoned - the applications seeking condonation of delay are dismissed - these Special Leave Petitions also stand dismissed.
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2024 (8) TMI 1208
Requirement to deduct entire excise duty while computing the amount, if value addition is in terms of para 6.5 of the Notification - freight and transit are part of the sale price as appellant’s sales are for destination sales or not.
Whether the entire excise duty is to be deducted while computing the amount, if value addition is in terms of para 6.5 of the Notification? - HELD THAT:- The issue decided in the case of KANGARO INDUSTRIES LIMITED VERSUS CCE, JAMMU [2017 (11) TMI 90 - CESTAT CHANDIGARH] where it was held that 'when an amount of duty is refunded to the assessee, under Notification No. 1/2002- C.E., the same has to be deducted from the excise duty paid by the appellant while arriving at actual value addition'.
Whether freight and transit are part of the sale price as appellant’s sales are for destination sales? - HELD THAT:- The issue decided in the case of KANGARO INDUSTRIES LIMITED VERSUS CCE, JAMMU [2017 (11) TMI 90 - CESTAT CHANDIGARH] where it was held that 'the freight outward is includible in the sale value.'
The impugned orders are not sustainable in law therefore, set aside - appeal allowed.
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2024 (8) TMI 1207
Valuation - inclusion of value of clearance of exports made by the appellant for which duty was not paid by availing exemption under N/N. 30/2004-CE dated 09.07.2004, while reversing the credit of inputs taken, as per Rule 6 of CCR 2004 - HELD THAT:- The issue stands covered by the decision in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS DRISH SHOES LTD. [2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT], wherein the Hon’ble High Court has analyzed the issue as to whether credit is eligible on the duty paid on inputs and input services used in the manufacture of exempted goods which are exported - it was held that even if the exempted goods are exported, credit is eligible.
Once the issue does not sustain on merits the question of examining the dispute relating to interest and penalty does not arise.
The demands cannot be sustained. The impugned orders are set aside - Appeal allowed.
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2024 (8) TMI 1206
Requirement of pre-deposit under Section 35F of Central Excise Act, 1944 - Invocation of Section 11D of Central Excise Act, 1944 for recovery of amount - It is submitted that the allegation in the SCN is that the appellant collected an amount of Rs.1 crore by raising supplementary invoices by representing the amount as excise duty only for the purpose of passing on the burden of predeposit so as to facilitate M/s.Renold to take the credit.
HELD THAT:- When the assessee fails to deposit with the Central Government the duties of excise or any amount collected representing excise duty has to deposit it to the Government. In other words, if an assessee collects excise duty or any amount representing excise duty cannot retain it. For eg:-- if an assessee wrongly collects central excise duty on exempted goods has to deposit the amount collected as duty with the Government. If not paid to Government, Section 11D can be invoked to recover such amount. In the instant case, the appellant has made predeposit of Rs.1 crore and later issued supplementary invoices passing on the burden of the duty paid by them as predeposit to M/s.Renold. The deposit made by them is still with the Government.
The appeal in which they had made the predeposit has attained finality wherein the demand, interest and penalties have been entirely set aside on merits as well as on issue of limitation. Consequently, the appellant would be eligible for refund of predeposit of Rs. 1 crore made by them. The appellant has not applied for refund and does not intend to claim refund of the predeposit made.
The intention of predeposit is to protect the revenue involved in the appeal and making the recovery of the demand easy and hassle free in case the demand is confirmed in favour of Revenue. The amount is deposited with the Central Government towards the demand impugned in the appeal. In case the demand is confirmed the deposit attains the character of duty / tax and is recovered / adjusted. There is no requirement of further recovery proceedings in regard to predeposit. On the contrary, when the demand is set aside, an assessee can obtain refund of the predeposit. The assessee need not take the course of Section 11B of Central Excise Act, 1944, to obtain refund of predeposit. A mere request letter would be sufficient. The restrictions of time bar and unjust enrichment are not applicable for refund of predeposit making it easy and hassle free. This is because the predeposit is just an amount deposited. It would thus appear that predeposit is of a flexible nature.
The demand raised in the SCN is invoking Section 11D and not invoking Rule 14 of Cenvat Credit Rules, 2004. The confirmation of demand under Section 11D cannot be on the allegation that the appellant has facilitated availment of ineligible cenvat credit. Section 11D will be applicable only when the Central Excise duty is collected but not deposited with the Government or any amount representing Central Excise is collected and not deposited with the Government.
The impugned order is set aside - The appeal is allowed.
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2024 (8) TMI 1205
Denial of CENVAT credit - Input services - allegation that certain input services do not qualify to be input services under Rule 2 (l) of Cenvat Credit Rules 2004 - Rental charges for EOU - Confirmation of demand Rs.1,50,278/- alleging that certain input services which have been used commonly for DTA unit and EOU - Credit taken without documents - Time Limitation - penalties.
Input services - Period prior to 01.04.2011 - HELD THAT:- The period of dispute is prior to 01.04.2011 as well as after. The definition of input services prior to 01.04.2011 has already been reproduced above. The said definition uses the words “activities relating to business”. The definition was wide enough to include almost all services. The appellant is eligible for the credit availed on services like outdoor catering services, courier service, civil construction services, logistic services, custom house agent services, insurance services availed for the period prior to 01.04.2011. All these services fall in the inclusive part of the definition of input services. It is therefore found that the appellant is eligible for credit for all these services prior to 01.04.2011.
Input services - Period after 01.04.2011 - HELD THAT:- After 01.04.2011 the definition excludes services in the nature of outdoor catering services, insurance and civil construction services. The Ld. Counsel for appellant has submitted that they have reversed the credit for the period after 01.04.2011 with regard to these services. It is also submitted that the appellant is not contesting the issue on eligibility of credit on services like outdoor catering, civil construction, insurance (hospital) for the period after 01.04.2011. The demand confirmed for the period after 01.04.2011 on this issue is upheld.
Write off of obsolete items is set aside for the period prior to 01.03.2011 as well as for period after 01.03.2011 - HELD THAT:- The demand in respect of the issue on write off of obsolete items is set aside for the period prior to 01.03.2011. However, the demand for the period after 01.03.2011 is sustained. The appellant has reversed the credit of Rs.27,36,474/- being after 01.03.2011. They are liable to pay duty after 01.03.2011 only. The demand confirmed on this issue is Rs.72,36,340/-. The amount confirmed in excess of Rs.27,36,474/- along with interest is set aside. The penalty on this issue is set aside.
Rental charges for EOU - HELD THAT:- The amount has been reversed by the DTA unit and has been re-availed by the EOU. The appellant has submitted that they are not contesting this issue. For this reason, the demand in respect of rental charges is upheld.
Confirmation of demand Rs.1,50,278/- alleging that certain input services which have been used commonly for DTA unit and EOU - HELD THAT:- Applying the ratio laid in the decision in the case of Dashion Ltd., (supra) the demand cannot sustain - the demand cannot sustain and requires to be set aside.
Credit taken without documents - HELD THAT:- From the facts, it is seen that this allegation has been raised when the credit lying with debonded EOU was transferred to DTA unit - The department is of the view that since the unit had availed the credit as EOU unit, even though it has been debonded and become a DTA unit, the credit cannot be transferred. The same issue has been analyzed and decided by the Tribunal in the case of M/S. WIPRO LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2023 (6) TMI 237 - CESTAT CHENNAI], wherein it was held that the credit carried forward to the DTA unit after de-bonding cannot be denied - the denial of credit alleging that the transferred credit has been availed without documents cannot sustain and require to be set aside.
It also needs to be noted that part of this demand relates to credit availed in respect of inputs at the time of de-bonding. The adjudicating authority as well as the Tribunal denied the eligibility of credit on inputs availed by EOU consequent to de-bonding. The appellant preferred an appeal before the Hon’ble Jurisdictional High Court and the issue was held in favour of the appellant. Thus, the issue as to whether credit can be availed on inputs at the time of de-bonding stands settled in favor of appellant. The Hon’ble High Court in the appellant's own case M/S. AVO CARBON (INDIA) PVT. LTD. M/S. STANADYNE AMALGAMATIONS (P) LTD VERSUS CCE, CHENNAI-II [2017 (4) TMI 428 - CESTAT CHENNAI], Chennai considered the issue and held as under to conclude that the credit on inputs is eligible at the time of debonding.
Time Limitation - penalties - HELD THAT:- Show Cause Notice and Statement of demand are issued for the period 2009-10 to 2012-13. Part of the demand falls within the extended period. In the present case, the issues are mostly interpretational in nature - The issue with respect to credit on various input services is also interpretational in nature, as an amendment was introduced in the definition on inputs services w.e.f. 01.04.2011. Further, there is no positive act of suppression established against the appellant. Show cause notice has been issued based on the objections raised by the audit. As and when pointed out, the appellant has reversed the credit in respect of the issue of write off as well as ineligible input services post 01.04.2011 - there are no grounds for invoking the extended period. The issue of limitation is answered in favour of the assessee and against the Revenue. For the same reasons, the penalties imposed are also set aside.
Appeal allowed in part.
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