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Case Laws
Showing 201 to 220 of 1574 Records
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2024 (12) TMI 1374
Unexplained cash credits to bank u/s.68 r.w.s.115BBE - cash deposits made during the demonetization period maintained by Mulagumoodu Branch solely on the ground that the appellant could not bifurcate the deposits made in SBNs and non SBNs in the said branch - HELD THAT:-The assessee has demonstrated the source for such deposits emanating from the fees collected prior to 08.11.2016 as the total deposits made in SBNs in both the branches was only Rs. 16,92,000/-. It is also demonstrated by the assessee that the consistent cash deposits in all the months.
AO has not rejected the books of account maintained by the assessee. We are of considered view that in this case AO had not brought on record any concrete evidence to reject the explanation of the appellant. Hence, we delete the addition sustained by the ld.CIT(A). Decided in favour of assessee.
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2024 (12) TMI 1373
Unexplained asset u/s 69 - assessee filed return of income manually admitting an income u/s 44AE from running of lorries and agricultural income - HELD THAT:- When the income is offered on presumptive basis u/s 44AE, depreciation is deemed to be granted to the assessee whether it is claimed or not. Therefore, the same could not have been disallowed by Ld. AO. The assessee has admitted income on presumptive basis u/s 44AE from lorries and therefore, it is not required to maintain any books of accounts. In such a case, this income has to be accepted.
No adverse findings have been rendered for agricultural income. The assessee has offered agricultural income of Rs. 2.07 Lacs which is to be accepted. The claim of past savings of Rs. 5.50 Lacs cannot be rejected merely because the assessee has availed loan. Therefore, the same has to be accepted. Considering the entirety of facts of the case and with a view to settle the dispute, we direct Ld. AO to accept business income of Rs. 1.80 Lacs and also agricultural income of Rs. 2.07 Lacs. The addition for unexplained asset would stand restricted to Rs. 2 Lacs.
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2024 (12) TMI 1372
Seeking quashing of the preventive detention order - Smuggling of Gold - contravention of Sections 132, 135 (1) (a) and 135 (1) (b) of the Customs Act - substantial delay in the consideration of representation of the Petitioner - non-application of mind while passing the impugned detention order - violation of principles of natural justice.
Non-application of mind by the Detaining Authority - HELD THAT:- The observation made by the detaining authority to the extent that the Petitioner was likely to be released from judicial custody, is without any material. This is in view of the fact that the bail applications of the Petitioner had already been dismissed twice by the Hon’ble Rajasthan High Court by that time, and admittedly, no other application seeking bail was pending at that time when the impugned order was passed.
The Hon’ble Supreme Court in Binod Singh v. District Magistrate, Dhanbad [1986 (9) TMI 387 - SUPREME COURT], while setting aside the detention order against the Petitioner therein, who was already in jail at the time of service of the detention order, has observed and held that 'If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised. In the instant case when the actual order of detention was served upon the detenu, the detenu was in jail. There is no indication that this factor or the question that the said detenu might be released or that there was such a possibility of his release, was taken into consideration by the detaining authority properly and seriously before the service of the order. A bald statement is merely an ipse dixit of the officer. If there were cogent materials for thinking that the detenu might be released then these should have been made apparent.'
In the present case, apart from the impugned detention order, even in the counter affidavit dated 17th September, 2024 filed on behalf of the Respondent Nos. 1 and 2, it has not been demonstrated that there was a possibility of the Petitioner being released from the judicial custody to justify the impugned order of detention.
Substantial delay in the consideration of representation of the Petitioner - HELD THAT:- This Court need not examine the ground of delay which had allegedly occurred in placing and considering the representation moved by the Petitioner on 06th July 2024.
Conclusion - This Court is of the considered opinion that the impugned order of detention was passed mechanically without any due application of mind and is liable to be set aside. Accordingly, the present Petition is partly allowed and the impugned order of detention dated 12th April, 2024 and confirmation order dated 18th June 2024 are set aside.
Petition disposed off.
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2024 (12) TMI 1371
Confiscation of 3 Gold Bars found from the petitioner - HELD THAT:- It is difficult to understand as to how the respondent-authorities could have disposed of the gold in November, 2022 in breach of the interim-order passed by this Court which has continued to operate till date.
Instead of calling upon the respondents to give explanation for breach of the order of this Court, in the interest of justice, we hereby direct the respondent-Authorities to pay the market price, prevailing at the relevant time, of the goods which was sold in violation of the order passed by this Court in case the petitioner succeeds in appeal or in revision, if any.
Petition disposed off.
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2024 (12) TMI 1370
Levy of personal penalty u/s 114AA of the Customs Act, 1962 - Jurisdiction of the Commissioner of Customs (Preventive) Jodhpur in issuing the SCN - what is the meaning of the expression ‘liable to penalty’? - HELD THAT:- The term ‘liable’ could either mean that one is responsible by law to do something or that one is likely to experience something undesirable. If one is liable to pay interest, for instance, it means one has an obligation to pay interest. However, if one is liable to penalty, it can only mean that one may be penalised. Thus, as per Section 114AA of the Customs Act, one who knowingly makes, signs, uses or causes to be made, signed or used a false declaration may be penalised. Nothing in this section says that such a person shall be penalised. The expression ‘liable to’ is used in several sections of the Customs Act and its scope was interpreted in the context of confiscation by the Delhi High Court in Jain Exports (P) Ltd. vs. Union of India & Others [1988 (5) TMI 50 - SUPREME COURT]. The High Court held that not only does the adjudicating authority have the discretion to decide whether or not to confiscate goods which are liable to confiscation, but it has to exercise this discretion judicially and not arbitrarily.
The meaning of the expression ‘shall be liable to’ confiscation or penalty in the Customs Act is that a penalty may be imposed on the person who falls under the section or, as the case may be, the goods which fall under the section may be confiscated. The adjudicating authority not only has the discretion but also an obligation to judiciously exercise it and decide whether to impose penalty or not or, as the case may be, confiscate or not confiscate the goods.
The mis-declaration of the year of manufacture of the capital goods was discovered only on investigation. Since the EPCG licence was obtained through mis-declaration, the machinery so imported was not eligible for exemption from duty and therefore, duty is recoverable along with interest and penalties - The allegation is that in the application made to the DGFT for EPCG scheme [under the Foreign Trade (Development & Regulation) Act, 1992 read with the Foreign Trade Policy 2009-2014], the manufacturers had mis-declared the year of manufacture of the machinery to be imported. Insofar as M/s. Nimbark Textile Mills of which the appellant is the proprietor is concerned, this matter is before the Commissioner to decide in the remand proceedings.
Even if the case is decided against M/s. Nimbark Textile Mills, the appellant herein can still not be penalised under Section 114AA of the Customs Act because this section renders one liable to penalty only in case of mis-declaration with knowledge or intent in any proceeding under the Customs Act which is not even the allegation. Any mis-declaration before DGFT to obtain a licence is not a declaration in a proceeding under the Customs Act but a proceeding under Foreign Trade Policy framed under the Foreign Trade (Development & Regulation) Act, 1992.
The impugned order cannot be sustained insofar as the penalty imposed on the appellant under section 114AA of the Customs Act is concerned - Appeal allowed.
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2024 (12) TMI 1369
Levy of penalty u/s 112(a), 112(b) and 114AA of Customs Act. 1962 - mis-declaration of goods and manipulation of import documents - reliability of statement of Proprietor of M/s Dhairya International (Importer) and other co-accused - HELD THAT:- The proceeding only on the basis of statement of co-accused is not sufficient to hold the Appellant guilty of mis-declaration of goods and manipulated import documents in absence of any search and recovery of corroborative evidence from him or his place. The alleged statement of the co-accused cannot be relied upon to implicate a person on charges of mis-declaration of goods and manipulation of import documents. Therefore, it was incumbent on the Investigating Officer, to have searched and recorded statement of the Appellant and to further prosecute him in the matter on the basis of its finding. Therefore, the proceedings against Appellant on the basis of the statements of the co-accused is not sufficient to hold him guilty of disputed imported goods. It is a settled law that no person shall be implicated in a crime merely on the basis of an allegation levelled by a co-accused, without any corroborative evidence.
The role of the appellant in the present matter was argued by the department was to arrange finance and to purchase disputed goods from China and export to India. Ld. Consultant has opposed this argument on the ground that no evidences provided by the revenue in this regards. There are force in argument of Ld. Consultant. It is also noticed that no physical act of the appellant in relation to the goods in question has been brought out to justify the penalty on the appellant under the above sections.
Penalty u/s 112 of CA - HELD THAT:- The entire case of the Revenue against the appellant is based upon the statements of the co noticees. It is well-established law that the statements of the co-noticees, unless corroborated in material particulars by independent evidence, do not constitute the legal evidence. There is nothing on record to establish by the revenue with documentary evidence that Appellant had abetted in the relation to disputed imported goods for purpose of imposition of penalty under Section 112(a) and/or 112(b) of the Customs Act, 1962.
Imposition of penalty under Section 114AA of Customs Act, 1962 - HELD THAT:- In the present disputed matter all the declaration related to import of goods is signed and filed by Shri Guarav Patel. In fact Appellant has not made any declaration to the Custom Authorities as required under the Customs Act, 1962. No document etc., which has been produced by the revenue which was signed by the Appellant. It is also found that in the present matter revenue in support of allegation that Appellant is guilty of providing manipulated import documents i.e invoice, packing list, phytosanitary certificate etc. from China by showing description of goods as Bamboo Sticks for making Agarbattie not produced any single documentary evidence. As the ingredients for invocation of provisions of Section 114AA are absent in the present case penalty under the said section is not justified.
Conclusion - Penalties are set aside, emphasizing that reliance solely on co-accused statements without corroborative evidence is inadequate for establishing guilt.
The impugned order is set aside to the extent it imposes penalties upon the present appellant - Appeal allowed.
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2024 (12) TMI 1368
Valuation of imported ‘Induction Cookers’ - Enhancement of values based on the best assessment method - case of appellant is that the respondent failed to follow the basic rule to discard the transaction value and enhanced the value without any admissible evidence - no speaking orders - violation of principles of natural justice - HELD THAT:- There is no justification to compare the goods imported by different importers, since the specifications and the features would be different for different brands and models which would have a bearing on the value. There is no admissible evidence forthcoming in the impugned order to reject the transaction value. The appellants stated that they have explained to Customs that the value declared was the correct value. It was also submitted that even as per the import documents, such as the import invoice and the letter of credit opened in favour of the beneficiary/foreign supplier, there was no extra remittance and the value declared needs to be accepted as the Transaction value. However, the respondent without formally rejecting the declared values, proceeded to discard the value without any basis. Merely by paying the duty as assessed by the adjudication authority due to compelling reasons like mounting demurrage charges and the delay in clearance cannot be considered as acceptance of the loaded value. Thus, the findings of the adjudication authority that the assessment order passed by the Department is based on the value and classification declared by the importer is factually incorrect.
Conclusion - In the absence of any justifiable reason, enhancement of the declared value is not tenable.
Appeal allowed.
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2024 (12) TMI 1367
Contravention of Section 5 of FEMA read with Rule 4 of FEMA (Current Account Transactions) Rules, 2000, for remitting royalty to overseas parties exceeding within the permissible limit of 5% on local sales - HELD THAT:- During the adjudication proceedings, the respondents have filed CST returns and respective State Level Sales Tax Returns in which they have disclosed the actual sale for the purpose of taxation. This has been duly taken into account by the learned Adjudicating Authority, which is also borne out in page 168 of the RUD filed by the respondents.
The above provisions clearly reflect that sale price only relates to the consideration of transferring of property in goods with no other abatement other than what is provided in the above provisions. The respondents have filed CST Returns and respective State Level Sales Tax Returns in which they have disclosed the actual sale price for the purpose of taxation and this has been duly taken in the account by the Ld. Adjudicating Authority and thereafter, he passed the detailed and well- reasoned adjudication order.
During the arguments Appellant ED also relied upon the judgment in case M/s Jhawar International Overseas Versus ITO [2010 (1) TMI 1277 - ITAT AHMEDABAD] wherein held that the commission was not deducted from the export invoices in an ad-hoc manner and it was clearly under an agreement between the buyer and the seller, as also between the buyer and the agent. Consequently, the assessee was under an obligation to deduct commission from the gross invoice values.
In the present case, there was a compulsion to deduct the commission from the export invoices which was clearly indicated in the confirmation letters of the agents, the ingredients which were necessary for such deduction of commission to be treated as diversion of income by overriding title was clearly present. Accordingly, he stressed that the commission of sales of Rs. 269,88,52,221/- needs to be deducted from the gross sale value, for calculating the percentage of royalty.
We are not convinced with the submission made by Ld. counsel for the Appellant ED, in view of my observations recorded in para no. 11, coupled with the fact that judgment relied upon by appellant ED pertains to for calculation for net income, but not the net sale price.
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2024 (12) TMI 1366
Seeking to quash the order of provisional attachment - order of provisional attachment of immovable properties of the petitioner is without jurisdiction or not.
Whether this writ petition is maintainable? - HELD THAT:- The scheme of section 5 (3) of the PML Act indicates that a person aggrieved by a provisional order of attachment cannot challenge such an order before any authority - In Santiago Martin v. Union of India [2023 (10) TMI 66 - KERALA HIGH COURT] it was observed that there is no appeal against a provisional attachment order. The statute contemplates a complaint to be filed by the Officer who issued the attachment order to prefer a complaint to the Adjudicating Authority under section 5 (2) of the PML Act. If the provisional attachment is found to be illegal, the Adjudicating Authority’s order will be effective only from such a date and not the date of the provisional order. Even if the attachment is wholly illegal, still, at least for the period during which the provisional attachment remained in force, the property would have the taint of a proceeds of crime - Thus, if an order of attachment of a property is without jurisdiction or a non est, the remedy under the statute may not be a completely efficacious and alternative mechanism. Hence, if the order of provisional attachment under section 5 of PML Act is without jurisdiction, a writ petition is maintainable and can even be entertained.
Whether the order of provisional attachment of immovable properties of the petitioner, dated 13-10-2023, is wholly without jurisdiction? - HELD THAT:- A perusal of Ext.P1 reveals that the authority who issued the said order had no case that any proceeds of the crime involving the petitioners had been taken out of the country. In such circumstances, the attachment of properties purchased by the petitioners prior to 2014, under the provisions of section 5(1) of PML Act is ex-facie null and void and wholly without jurisdiction - Since this Court is of the view that the provisional attachment of properties purchased prior to 2014 cannot be proceeded against under section 5 of PML Act, the said order of attachment to that extent is wholly without jurisdiction. Petitioners need not be relegated to pursue the alternative remedy for those three properties. Therefore the provisional order of attachment relating to the immovable properties purchased by the petitioners prior to 2014 is liable to be set aside.
Conclusion - The writ petition is maintainable if the provisional attachment order is without jurisdiction, despite the existence of statutory remedies - Properties acquired before the commission of an alleged offence cannot be attached as proceeds of crime under the PML Act.
This writ petition is allowed in part.
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2024 (12) TMI 1365
Valuation of service tax - requirement to include value for transportation of limestone in VCES 1 declaration - period 1-10-2007 to 31-12-2012 - HELD THAT:- In view of CBEC vide Circular F. No. 232/2/2006-CX.4 dated 12.11.2007, it appears that department entertained a view that transportation of minerals outside i.e. from mines to a factory premises was covered under “Goods Trasport by Road services” upto 31.05.2007 only, and thereafter was covered under the composite definition of mining services w.e.f. 01.06.2007. On such interpretation, appellant’s VCES application which was initially accepted with issuance of discharge certificate, was sought to be rejected and service tax relating to transportation services was demanded for the period 1-10-2007 to 31-12-2012 - It is seen from para 5 of the circular that activity of transportation of mineral is post-mining activity and is chargeable to service tax under the relevant taxable services i.e. “Goods Transport by Road. It is further noticed from the available records that transportation of limestone is treated as separate service by the appellant and SCL for which consideration is separately agreed between them which is separately charged by the appellant to SCL through its another proprietorship firm namely M/s. Harsidhi Transport.
Thus, mining and transportation services are separate services falling under separate specific heading of sub-clauses of sub section (105) of section 65, where transportation of goods by road is classifiable under clause (zzp) of clause (105) w.e.f. 01.01.2005 and the mining services provided in the mines are classifiable under clause (zzzy) of clause (105) of the Finance Act, 1994 and the same therefore cannot be considered as composite service.
Conclusion - The transportation services are not part of mining services for VCES purposes. The impugned Order of Commissioner cannot be sustained and is therefore set aside.
Appeal allowed.
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2024 (12) TMI 1364
Liability to pay service tax on SBM hiring charges, CHA charges, loading charges, GMB shipping fee in respect of user of Reliance SBM at Hazira by ONGCL for transportation of naphtha to OPAL SEZ unit at Dahej - demand confirmed on the ground of ONGCL not having followed the procedure under N/N.12/2013-ST for availing exemption from payment of service tax - HELD THAT:- Firstly, the service was provided by the reliance for use of their SBM and reliance has admittedly paid the service tax. The appellant have simply raised the invoice for the reimbursement of the actual amount paid by them to the reliance. Therefore, the appellant is not the service provider whereas they are the service recipient and therefore, they are not liable to pay service tax.
Secondly, the demand of service tax on service which has already suffered the service tax is demanded twice on the same service which is not permissible.
Thirdly, though the appellant have issued the invoices initially but the same were reversed subsequently, as contract with OPAL was amended retrospectively and consequently, the appellant did not receive any consideration for these so called services. In this position, as per the retrospective amendment in the contract, no consideration exist, therefore in absence of any consideration the service tax demand is absolutely illegal, unconstitutional and incorrect.
Levy of penalty - HELD THAT:- Since, the penalty is consequential to the demand which is non-existent as per this order, question of any penalty does not arise. Hence, the Revenue’s appeal is without any substance.
Service tax cannot be levied twice for the same service, and in the absence of consideration, a service tax demand is invalid - the demands made in the impugned order is not sustainable.
Appeal allowed.
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2024 (12) TMI 1363
Time limitation - suppression of facts or not - liability of sub-contractor to pay service tax - demand of service tax for the period July 2012 to March 2015 on the ground that the benefits and exemptions claimed by the appellant is not correct - HELD THAT:- It is found from the records and copy of ST-3 produced, that appellant had been filing the ST-3 returns regularly to their Jurisdictional Range Officers. It is on record that the appellant shown all the details in ST-3 Returns. Appellant has shown the details of exempted services in their all the ST-3 Returns and has also shown the fact that they were availing exemptions.
Appellant in the ST-3 Returns had disclosed the value of services and also disclosed the exempted services for the relevant period and said facts nowhere disputed by the Ld. Adjudicating authority therefore, the revenue could not urge that there was suppression of facts by the appellant with an intent to evade payment of service tax.
It is also found that it is admitted facts that Appellant acted as sub-contractor to M/s L & T. It also to be noted that at the relevant time there were conflicting decisions of the Tribunal regarding payment of service tax by a sub-contractor and it is only when the Larger Bench in the matter of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [2019 (6) TMI 518 - CESTAT NEW DELHI-LB] that it was settled that a sub-contractor would have to discharge the service tax liability even if the main contractor had discharged the service tax liability.
Conclusion - There is nothing on record to show that any suppression of facts or wilful misstatement were made on the part of the appellant who has filed periodical ST-3 return regularly and disclosed all necessary details as required. In these circumstances charge of suppression or willful misstatement with intention to evade Service Tax cannot be alleged against Appellant. For this reason no mala fide can be attributed to appellant. Hence longer period of demand cannot be invoked.
The demand being under the extended period is set aside and appeal is allowed.
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2024 (12) TMI 1362
Invocation of extended period of limitation - suppression of facts or not - levy of service tax - sponsorship services - inter company management/service expenses shared with parent company - Renting of Immovable Property - import of services availed from associate enterprises - software license and maintenance/support agreement produced by the appellant - interest on failure to remit the tax as per the Point of Taxation Rules, 2012.
Invocation of extended period of limitation - suppression of facts or not - HELD THAT:- As per the law laid down by Hon'ble Apex Court in the matter of M/s Anand Nishkawa Co Ltd Vs. CC Meerut [2005 (9) TMI 331 - SUPREME COURT] if correct information is not disclosed deliberately to evade payment of duty and when facts are known to both the parties, omission by one to do so be would not render suppression of facts. Mere failure to declare will not amounts to wilful suppression. There must be some positive act from the side of assessee to find wilful suppression as per Section 11A of the Central Excise Act, 1994. Thus, the impugned order confirming demand beyond the normal period of limitation is unsustainable.
Nonpayment of service tax of Rs. 1,01,6,502/- under 'sponsorship' services - HELD THAT:- The appellant produced sufficient evidence to prove that the consideration for demanding said amount under 'sponsorship; services has been arrived without considering the details of expenses as explained in ibid, paras. Since, the actual amount of sponsorship fee is only Rs. 2,15,55,828/- and considering the fact that the appellant had discharged their liability on the said amount on Reverse Charge basis, service tax of Rs. 1,01,6,502/- demanded as per the impugned order under 'Sponsorship' services is unsustainable.
Demand of Rs. 13,30,558/- on inter company management/service expenses shared with parent company - HELD THAT:- The appellant produced the challan evidencing payment of service tax of Rs. 2,23,79,555/- on a consideration of Rs.21,66,08,189/- against various services on inter company management/service expenses shared with the parent company. As regards demand of Rs. 13,30,558/-there are no details furnished by the Adjudication authority or as per the SCN to find out the category under which alleged short payment of Rs. 13,30,558/- was demanded. In the absence of any specific allegation, no finding can be made that there is a short payment as held in the impugned order. Thus, the said demand is also unsustainable.
Demand of interest of Rs.20,371/- alleging failure to remit the tax as per the Point of Taxation Rules, 2012 - HELD THAT:- Since the detail breakup of the amount is not specified in the SCN, Appellant could not produce any submission to that effect. Considering the fact that the Appellant were paying service tax continuously and discharged huge amount of service tax under different categories as and when they were liable to pay, demand of interest of Rs.20,371/- without specifying the detailed breakup of the amount is unsustainable.
Demand of Rs. 2,45,58,483/- under 'Renting of Immovable Property' - HELD THAT:- As per the evidence produced by the appellant including the certificate issued by Chartered Accountant, the total service tax liability is only Rs. 1,77,00,220/- and not Rs.2,46,02,902/- as alleged. Out of this, service tax of Rs. 58,28,607/- was already deposited by landlords and for Rs.10,74,075/-, the appellant claims that the amount represents rent less charged by landlords, who were not liable to register under the service tax registration, since their turnover during the impugned period was below the threshold limit prescribed in this regard. However, Adjudication Authority confirmed higher amount on the ground that during the course of audit the assessee could produce only two challans of Rs.41,00,483/- each dated 31.10.2011 and 28.12.2011 and the third challan of Rs.6,49,143/- dated 31.03.2012. But the assessee has failed to produce any challan for the payment of the remaining amount of Rs.34,29,130/-. Since the assessed has not fulfilled the Court's order, they are not eligible for the concession i.e. deposit of 50% of the service tax liability with the department. Hence Adjudication Authority confirmed Service Tax of Rs. 2,45,58,483/- under the above head - there is an omission on the part of appellant and as well as Adjudication Authority to appreciate the facts in right perception - The facts can be considered only by the adjudication Authority on the above directions after extending reasonable opportunity for adducing evidence regarding the payment of service tax.
Demand of Rs. 73,00,732/- on import of services availed from associate enterprises - HELD THAT:- There are strong force on the submission made by the appellant that the overall income is only attributed to trading activity and same cannot be considered as receipt of any commission. However, the details can be verified only after verifying the records produced by the appellant. Hence issue is remanded to adjudication authority for considering the documents /evidence relied by the appellant and to find out the demand for normal period, if any payable by the appellant.
Non-payment of service tax of Rs.2,80,40,921/- on software license fee - HELD THAT:- As per the software license and maintenance/support agreement produced by the appellant, no conclusion can be made that the onus for payment of license fee both for new licenses as well as for maintenance and support is on M/s Levi Strauss & Co., both in respect of company owned/operated stores as well as for franchises as held by Adjudication Authority. The issue can be settled only on careful consideration of the role of the appellant whether they acted as pure agent of the parent company as claimed by the appellant. Hence, Adjudication Authority is directed to verify the contract and the role played by the appellant in providing software license during the relevant period in the De-novo Adjudication.
Conclusion - The impugned order confirming demand beyond the normal period of limitation is unsustainable. Penalties imposed by adjudication authority are also set aside. Further the demand confirmed on 'Sponsorship' services under Reverse Charge Mechanism (RCM) is set aside. Regarding demand under renting of immovable services, service tax demand of Rs. 2,45,58,483/- is set aside,, appellant shall produce evidence regarding payment of remaining amount of Rs.34,29,130/- and in case the appellant fails to produce sufficient evidence regarding payment of entire amount, appellant is liable to pay balance amount with interest. As regarding other services, the demands as per impugned order is set aside and appeal is remanded to adjudication authority to conduct de-novo adjudication as per the above finding for the normal period.
Appeal disposed off.
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2024 (12) TMI 1361
Levy of service tax - Business Auxiliary Service - sales incentives received by the Appellant from M/s MSIL for achieving specified sale target - HELD THAT:- The issue is no more res integra as the issue is settled by the Tribunal in the matter of M/s Roshan Motors Ltd. [2022 (8) TMI 1254 - CESTAT NEW DELHI], wherein it is held that the dealers and manufactures work on principal to principal basis and it was further held that sale promotion activities are undertaken by the dealer is for mutual business of a dealer and manufacturer. Accordingly CESTAT, New Delhi held that such incentives cannot be treated as consideration for any service.
Conclusion - The incentives received by the Appellant cannot be considered as taxable service under the category of 'Business Auxiliary Service' as held by the Adjudication authority.
The impugned orders are set aside and appeals are allowed.
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2024 (12) TMI 1360
CENVAT Credit - inputs or not - bought-out items - denial on the ground that the bought-out items do not qualify as inputs under Rule 2(k) of the Credit Rules, as they are stored at the gate only and no manufacturing activity is carried out on them - scope of SCN - Inclusion of value of the accessories, on which CENVAT credit is availed, in the assessable value of the motor vehicles cleared by the respondents - suppression of facts or not - extended period of limitation.
Admissibility of CENVAT credit on certain bought out items purchased by the respondent and supplied along with the vehicles - HELD THAT:- It is found that learned Commissioner correctly finds that the only requirement for the entitlement to avail CENVAT credit is that the inputs are capital goods must be received in the factory of manufacture of final products; the receipt of the inputs in the factory is not disputed and therefore, credit is admissible. It is further found that relying on the decision of the Hon’ble Supreme Court in the case of Mehra Brothers Vs Joint Commercial Officer [1990 (11) TMI 144 - SUPREME COURT], learned Commissioner finds that the test as to verify whether an item is an accessory or part of the vehicle is whether the article or articles in question would be an adjunct or an accompaniment or an addition for the convenient use of another part of the vehicle or adds to the beauty, elegance or comfort for the use of the motor vehicle or as a supplementary or secondary to the main or primary importance and the other test may be whether a particular article or articles or parts can be said to be available for sale in an automobile market or shops or places of manufacture - the Commissioner applied this test and the provisions of the Rules and came to a conclusion that the items qualify to be “parts” or “accessories”.
Scope of SCN - HELD THAT:- The learned Commissioner rightly finds that the impugned items are either parts or accessories and therefore, credit is admissible before 01.03.2011 or after 01.03.2011. Authorized Representative for the Revenue tried to explain during the hearing on the basis of a sample invoice that the value of the impugned accessories is not included in the assessable value of the motor vehicles. It is found that this submission is beyond the scope of the show cause notice and the grounds of appeal. Revenue’s appeal is very clear that it is only on the grounds that learned Commissioner (Appeals) has not given any findings as to the impugned goods vis-à-vis their admissibility to CENVAT credit. Therefore, it is not open for the Revenue to set up a new case at this juncture.
Inclusion of value of the accessories, on which CENVAT credit is availed, in the assessable value of the motor vehicles cleared by the respondents - HELD THAT:- It is found that inclusion or otherwise of the value of the accessories, on which CENVAT credit is availed, in the assessable value of the motor vehicles cleared by the respondents, is not the subject matter of the grounds of appeal. In view of the assertions by the adjudicating authority that such value of the accessories is included in the assessable value of the motor vehicles; the argument of the learned Authorized Representative does not succeed. As the Department has accepted the OIO dated 25.11.2013 and no proceedings have been initiated for further period, it is not open for the Department to dispute the admissibility in the impugned case.
Hon’ble Apex Court in the case of S.S. Engineers [2023 (7) TMI 717 - SC ORDER] held that 'Having regard to the fact that for the subsequent period, the Department has taken a stand that the bought-out items are not entered in the factory and the Assessee has not claimed credit on them, there is no case for adding their value in the assessable value and hence no proceeding need be initiated in the form of a show cause notice, we find that for the previous period, in respect of which this appeal arises, the stand of the Department cannot be contrary to what has been stated above. Hence, we do not find any merit in the appeal.'
Conclusion - Revenue's appeal, upholding the Commissioner's order that allowed CENVAT credit on the disputed items, dismissed.
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2024 (12) TMI 1359
Refund of the excess duty paid on cement supplied to institutional buyers, specifically government and semi-government entities - principles of natural justice.
Refund of Excess duty - HELD THAT:- In view of the categorical finding in the impugned order that the appellants have not submitted records and in view of the data sheets submitted by the learned Consultant, there are reasons to believe that there are supplies to other than institutional customers. It is incumbent upon the appellants who are claiming refund to satisfy the authorities with evidence to substantiate the quantum and fact of their clearances to institutional customers.
Applicability of principles of natural justice - HELD THAT:- The Bench cannot sit in judgment over a record/ evidence to which the lower authorities were not privy to. Therefore, in the interest of justice, the issue must travel back to the original authority to verify the claim of the appellants both on the issues of merit and unjust enrichment.
Conclusion - In view of lack of clear evidence, the issue must travel back to the original authority to verify the claim of the appellants both on the issues of merit and unjust enrichment.
Appeal disposed off by way of remand.
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2024 (12) TMI 1358
Recovery of wrongfully availed CENVAT Credit - activity of trading - exempted service prior to 01.04.2011 or not - requirement to comply with Rule 6 of the Rules of 2004 - time limitation.
HELD THAT:- The Bangalore Bench of this Tribunal in the case of Commissioner of Central Excise, Bangalore Vs. Lenovo (India) Pvt. Ltd. [2021 (11) TMI 899 - CESTAT BANGALORE], had dealt with the present issue and also considered different views expressed by other Co-ordinate Benches. Since the appellants had bonafide belief that exempted service should not be considered as trading activity for the period prior to 01.04.2011, not entering the CENVAT particulars in the ER-1 return, even though reflected in the internal records, would not call for invocation of the extended period of limitation. In such circumstances, the show-cause notice was required to be issued within the normal period of one year i.e., from the date of taking the CENVAT Credit of the disputed service. Since the show-cause notices were issued beyond the normal period of one year, in our considered view, the same are barred by limitation of time insofar as proceedings were initiated for recovery of wrong availment of CENVAT Credit for the period upto 31.03.2011.
It is found that the learned adjudicating authority has not specifically discussed about this aspect of reversal of CENVAT Credit at the ISD stage, as claimed by the appellants. Therefore, the matter should go back to the original authority for ascertaining the fact as to whether, the appellants had reversed the common input services at the time of issuance of invoices by the ISD and that such credit was not distributed to the manufacturing unit located at Pune for availment of CENVAT Credit of Service Tax in respect of the common input services.
Conclusion - Since the appellants had bonafide belief that exempted service should not be considered as trading activity for the period prior to 01.04.2011, not entering the CENVAT particulars in the ER-1 return, even though reflected in the internal records, would not call for invocation of the extended period of limitation - For the period after 01.04.2011, the matter is remanded back to the original authority for ascertaining the fact as to whether, the appellants had reversed the CENVAT Credit at the ISD level and CENVAT Credit has not been distributed to the manufacturing unit located at Pune.
Appeal disposed off by way of remand.
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2024 (12) TMI 1357
Clandestine removal of polished vitrified tiles - evasion of duty - allegations primarily based upon the private documents/records recovered from the premises of M/s K.N. Brothers/ Shree Ambaji Enterprises, Shroff and office premises of Shri Pravin Shirvi, Morbi, Broker/middlemen - opprotunity of cross-examination not provided - reliability of statements - violation of principles of natural justice.
HELD THAT:- On going through the relied upon documents and documents scanned in impugned show cause notice it is found that in the said documents mentioned the words “PS” but in the table prepared by the DGGI, they have mentioned name of Shri Pravinbhai R. Shirvi and in total amount of cash paid to Shri Pravinbhai R. Shirvi aggregates to Rs. 18,21,600/- only whereas on the other hand vide show cause notice it is alleged that total amount of cash aggregating to Rs. 15,62,92,335/- was paid to the Authorized person of Appellant, the same is completely unbelievable. It is also found that in present matter to find out the truth, appellant requested the cross-examination of Shri Jayesh Mohanlal Solanki, Proprietor of M/s. K.N. Brothers, Rajkot, Shri Suresh Girdharbhai Gangwani, Proprietor of M/s. Shree Siddhnath Agency, Rajkot, Shri Lalit Ansumal Gangwani, actual owner of M/s KN Brother and also other persons. However despite such request, cross-examination was not afforded by the Ld. Lower Adjudicating Authority. When statement of a third party is relied upon against an assessee, the assessee has a right to cross-examine such witness otherwise, statement of the concerned person, and in any case, statement of a said persons, could not have been relied upon for holding anything against the appellant.
In the circumstances, it was incumbent upon adjudicating authority to follow the mandate of section 9D of the Act by way of examining the witness and thereafter giving opportunity to the appellant to cross-examine them. Having disregarded this mandate of section 9D, results is to giving up on the said statements for proving the truth contained therein.
It is well settled law that though the statements carry good persuasive value but such untested statements of third parties cannot be made stand-alone basis for arriving at an adverse conclusion against the assessee. Though an admission or a statement is extremely important piece of evidence but the same has to bear the test of veracity through the tool of cross examination - In the case of NU Trend Business Machine Pvt Ltd v. Commissioner of Central Excise, Chennai, [2001 (11) TMI 134 - CEGAT, CHENNAI], it was held that the demand based on the statements of persons who have not turned up for cross-examination, is unsustainable.
The entire evidence referred to by both the adjudicating authority in the present matter stand on a doubtful platform and cannot be made the basis for confirming huge demands on the ground of clandestine activity. Similarly, in the case of CCE, Chandigarh-1 v. Shingar Lamps Pvt. Limited [2010 (3) TMI 277 - PUNJAB & HARYANA HIGH COURT], the Hon’ble High Court held that the private records which have been discovered during the raid may not be sufficient for holding clandestine production and removal but there should be some positive evidence suggesting clandestine production and removal.
Conclusion - The allegations of clandestine removal are required to be established by production of positive and tangible evidences and should not be arrived at on the basis of assumptions and presumptions - Case of the Revenue in the present matter is only based upon the records of Shroff and Broker/middleman which even do not contain the name of the appellant and statements which are not supported by any independent corroborative evidence. The whole demand is theoretical.
The impugned order cannot be sustained and accordingly the same is set aside - Appeal allowed.
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2024 (12) TMI 1356
Grant of renewal of license L-10BB on account of the fact that premises, wherein business was being run in previous years in terms of form L-10BB stands upgraded to principal place of business - HELD THAT:- It is not in dispute that after the orders passed by this Court, the writ petitioner has in fact shifted his premises and had sought a licence, which was rejected by the appellant-department. Essentially, in the impugned order dated 16.4.2024, there is no mention as to in which premises, the business is being run by the writ petitioner, that was described and was the subject matter of the writ petition.
The appeal is dismissed as having been rendered infructuous.
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2024 (12) TMI 1355
Legality of seizure of the petitioner's vehicle - petitioner would contend that the iron and steel scrap was actually loaded in Autonagar at Vijayawada and not at the address of the office of the consignor - HELD THAT:- There are clear disputes of fact, in as much as, the petitioner contends that no notices and proceedings were initiated under Section 129 of the Act, while the 1st respondent contends that such notices were issued strictly within the ambit set out under Section 129 of the Act. Further, there is also a dispute as to the origin of the goods and whether the goods were loaded at Autonagar or they were said to have been loaded at the address of the consignor.
Keeping in view, the time lines under Section 129 of the Act, this Court deems it appropriate to dispose of this Writ Petition, with a direction to the 1st respondent to complete the proceedings, under Section 129 of the Act, expeditiously and preferably within a period of two (02) weeks from today.
Petition disposed off.
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