|
Advanced Search Options
Case Laws
Showing 401 to 420 of 1526 Records
-
2023 (10) TMI 1126
Valuation of imported goods - Brass Ceramic Cartridge (L) size ½” Parts for use in Sanitary ware - 2976 kg. weight of the consignment was found in excess than the declared weight - rejection of declared value - Confiscation - redemption fine - penalty - HELD THAT:- The basis of the order under challenge has been the market enquiry and the valuation in terms of Rule 7 of the Valuation Rules coupled with the acceptance of reassessed value by the appellant. The modus operandi for reassessment has been objected by the appellant - As per Section 14 of the Act, value of the imported goods shall be the transaction value of such goods, which means the price actually paid or payable for the goods when sold for export to India where the buyers and sellers are not related and the price fixed is the sole consideration for sale.
Proper officer can reject the declared transactional value based on ‘certain reasons to doubt the truth or accuracy’ of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression “grounds for doubting the truth or accuracy of the value declared” has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out above-mentioned conditions when the ‘reason to doubt’ exists. These instances are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of the value declared. The expression “reason to doubt” cannot be equated with the requirements of positive reasons to believe, for the word ‘doubt’ refers to un-certainty and irresolution reflecting suspicion and apprehension - It is therefore held that in the context of the proviso to Section 14 read with Rule 12 and clause (iii) of Explanation to the 2007 Rules, the doubt must be reasonable and based on ‘certain reasons’. The proper officer must record ‘certain reasons’ specified in Clause (a) to (f) Rule 12 or similar grounds in writing at the second stage before he proceeds to discard the declared value and decides to determine the same by proceeding sequentially in accordance with Rules 4 to 9 of the 2007 Rules.
Reverting to the facts of the present case, it is observed that the only reason to invoke Rule 12 of Valuation Rules was the difference in weight of the goods. It has been the apparent submission of appellant since the very first stage of interception of goods that the goods have been imported on piece basis and not on the basis of weight - there was no cogent reason to doubt the truth and accuracy of the value declared. Hence the transaction value mentioned in the Bills of Entry should have been accepted Rule 12 should not have been invoked.
Appellants have no reason to be concerned about the actual selling price of the impugned goods in the retail market. He also conveyed vide the said statement that their supplier i.e. manufacturer in China is not related to them except that they have continuous business relations with the said manufacturers. In the light of this statement, there are no convenience to accept the statement of the appellant made the very next day as a cogent admission - Since it is apparent that the Department has not followed the statutory procedure nor there was any mis-declaration of quantity as alleged, the mere acceptance of the re-assessed value and payment thereof will not be sufficient to confirm the allegations of under valuation. The burden was still on the Department to prove the allegations levelled. The said burden has not been discharged.
Appeal allowed.
-
2023 (10) TMI 1125
Levy of Anti-dumping duty - imported goods (live consignment) cleared by the appellant are mill edged or slit edged - goods assessed and cleared out of charge can be reopened by issuance of a notice and duty be demanded or not - the earlier consignments which are not available for examination can also be said to be mill edged coils which attracted antidumping duty or not - Confiscation - redemption fine - penalty.
HELD THAT:- The live consignment consisting of 31 coils was Mill edge and the allegation by the appellant that only one or two core coils have been inspected proved baseless in as much as the above report clearly shows that all coils were inspected and the report was submitted based on physical examination of the same. These goods are also tested by Shri R. Sreedhar, Chartered Engineer and his certificate where it was held that Based on these reports the goods are Mill edge and liable to payment of anti-dumping duty is beyond doubt therefore the demand for 31 coils is upheld.
Whether the Department was right in reopening the assessments for the past imports based on their investigations? - HELD THAT:- The Revenue can reopen the assessments after out of charge being given if investigations proved deliberate attempt to evade duty based on the incriminating documents if unearthed by the Revenue. The law laid down by the Hon’ble Court and maintained by the apex court in the case of VENUS ENTERPRISES VERSUS COMMISSIONER [2007 (1) TMI 564 - SC ORDER] relied by the learned Authorised Representative clearly allows the Revenue to reopen the assessments if on investigation and evidences surface subsequently to prove misdeclaration or undervaluation of already assessed and cleared goods.
Whether these reports can be extrapolated to the consignments already cleared and assessed to duty by the customs authorities? - HELD THAT:- The 13 consignments which were imported earlier were from the same supplier is not in dispute and the price quoted in the earlier consignments when compared to the present consignments are more or less the same. It is also not under dispute that the slit edge coils are more expensive when compared to the Mill edge coils because the Mill edge coils are trimmed and slit to size to arrive at a uniform width and contours - Appellants were aware of the fact that anti-dumping duty is to be paid if it is less than 1250 mm and the reply given by the appellant also suggest that they can buy coils of 1255 mm to avoid antidumping duty. This mail clearly suggests that the appellant was aware of the fact that if the coil was of 1260 mm they had to pay anti-dumping duty which is not under dispute.
In the present case, investigations have only proved that the appellant was aware of the fact that anti-dumping was leviable on mill edged coils and he had imported some of the consignments from other suppliers with the specifications regarding mill edged or slit edged. However, no incriminating documents were unearthed to prove the consignments cleared earlier were mill edged coils - Without any such evidences based on the examination report of live consignment, one cannot extrapolate the same to the past consignments.
For all the past consignments is set aside and therefore, the order to the extent of confiscation and penalty also stands set aside. We uphold that the live consignment of 31 coils is mill edged and anti-dumping duty is liable to be paid on the same. The matter is remanded to the original authority to re-determine the demand only for the 31 coils for which the reports suggest they are mill edged coils.
The appeals are disposed of by way of remand.
-
2023 (10) TMI 1124
Valuation of imported goods - old and used Digital Multi Function Printer - restricted goods or not - applicability of Circular No.27/2011-Customs dated 04.07.2011 - confiscation - redemption fine - penalty - HELD THAT:- As the Bill of Lading is in this case is 06.02.2013, which was issued prior to 28.02.2013 and this Tribunal in the case of COMMISSIONER OF CUSTOMS (PORT) , KOLKATA VERSUS BHAWANI ENTERPRISES [2017 (11) TMI 974 - CESTAT KOLKATA], has observed We agree with Commissioner (Appeal)’s findings that (i) mere enhancement of value on the basis of C.E. certificate cannot be a ground for treating declared value as mis-declared unless there is other corroborative evidence. (ii) except enhancement on the basis of C.E.’s Certificate, there is no other material on record to inform that declared value was mis-declared.”
It is also held that the Bill of Lading is prior to 28.02.2013 for import of the identical goods as in the case of Bhawani Enterprises, wherein it has been held that there was no restriction on import of the subject goods, therefore, the appellant is not required to obtain any specific license for import of the impugned goods. The enhancement of value on the basis of Chartered Engineer’s certificate cannot be a ground for treating declared value as mis-declared unless there is other corroborative evidence.
As the issue is no more res integra, it is held that the value declared by the appellant is correct and no license is required by the appellant for import of the said goods.
The impugned order is set aside - Appeal allowed.
-
2023 (10) TMI 1123
Confiscation - redemption fine - penalty - import of Brass Scrap Pallu - mis-declaration of Country of Origin - Customs officials alleged that the goods originated from Pakistan instead of UAE - cancellation of bill of entry under Section 149 of the Customs Act, 1962
Country of Origin - HELD THAT:- On physical examination of the goods some worn and torn PP bags filled with brass scrap were found on which the words Karachi, Pakistan, Government of Punjab, Korangi Industrial Area etc. were found printed. Coupled with this, the tracking details also revealed the actual arrival date of the said container, i. e. the B/L from Karachi to JEBEL ALI was issued on 18.11.2021 at Karachi and B/L from JEBEL ALI to Nhava Sheva was issued on 28.11.2021 and the container was found to be intact with the same seal throughout from Pakistan to India. This only reflects that there could not have been any inspection at Sharjah, UAE as per the PSIC Certificate dated 13.11.2021 issued by PSIA and therefore the necessary corollary is that the PSIC was fake and forged. This also points to the fact that the container in question originated from Pakistan.
The department having found that the goods originated from Pakistan was not wrong in re-classifying the goods under CTH 98060000 as per Notification No. 5 /2019-Cus dated 16.2.2019. Nothing further was required to be done at the end of the department as pleaded by the importer company. The justification or non-justification of procuring the goods i. e., Brass scrap "Pallu" from Pakistan was on the importer company which they failed to substantiate by any valid supporting evidence. The burden was exclusively on the importer company and not on the revenue to place on record positive evidence in support of their submissions.
Responsibility of the Importer Company - HELD THAT:- Declaring the Country of Origin is an essential part of the Bill of Entry and the assessment, inter alia, depends on the Country of Origin. Duty could be exempted or increased (as in this case) depending on the Country of Origin. Restrictions on imports and exports could also depend on the Country of Origin. The Country of Origin Certificate also has to be obtained from the authorized agency of that country. Pre-shipment inspection certificates have to be obtained from the agency, which is authorized to issue such certificate in the country, where they are exported from. Thus, it is impossible that any importer would not know both the Country of Origin and the Country of Export of every single consignment - The appellant has attributed the burden of mis-declaration of the country of origin as UAE on the supplier or the indenter, however the same is not believable as the appellant is a regular importer of these goods and during the investigation of the live consignment the past imports were also unearthed which were also routed in similar fashion - the authorities below have rightly observed that in terms of Para 2.32 of FTP 2015-2020 read with para 2.54 of Handbook of Procedures, such PSI Certificate is not valid and no reliance can be placed thereon.
Confiscation of goods - HELD THAT:- The issue needs to be examined in the light of the provisions of section 46 under which the appellant had filed the bill of entry for home consumption as the provisions thereof makes it obligatory on the part of the importer to make a declaration as to the truth of the contents of such bill of entry and shall in support of the same produce to the proper officer the invoice relating to the goods under import. The appellant has submitted commercial invoices along with bill of lading etc showing the country of origin of the goods as UAE, country of origin of the goods herein is Pakistan. In that view, the goods are liable for confiscation under section 111 (m) of the Act, which categorically provides any goods which do not correspond in respect of value or ‘in any other particular’ with the entry made under this Act. Thus the order of confiscation passed by the authorities is held to be in accordance with law.
Penalty under Section 112 (a)(ii) and 114AA of Customs Act - HELD THAT:- The quantum of penalty imposed by the impugned order is justifiable. Section 112 (a)(ii) provides for duty related penalty, i.e., penalty not exceeding ten percent of the duty sought to be evaded. Thus the outer limit or the maximum amount of penalty that could be levied could not be more than ten percent of the duty. Similarly, the penalty under section 114AA is value related, i.e., penalty not exceeding five times the value of goods - Here also the Commissioner has proportionally increased the penalty and we find no reason to interfere with the same. Normally, the principle in levying penalty by way of punishment has to commensurate in terms of the provisions providing the penalty. As against the penalty imposed by the adjudicating authority, the appellate authority has considerably increased the penalty amount on all counts both against the importer company and also its director which is not only sufficient to penalise them but would also act as a deterrent in future. Hence no interference is called here.
Re-export & Redemption Fine with Penalty - HELD THAT:- The exercise of discretion both by the adjudicating authority as well as by the appellate authority in not ordering absolute confiscation and allowing the importer to redeem the goods on payment of redemption fine and penalty with permission to re-export the goods is in consonance with the object and purpose with which the notification was issued, i.e. to dissuade commercial transactions with Pakistan byimposing extremely high penalty of 200%.
Notification No 05/ 2019 dated 16.2.2019 in simple words provides that the goods imported having country of origin as Islamic Republic of Pakistan shall be classified under the new entry CTH 9806 0000 and BCD @200% shall be applicable on them. It nowhere says that such goods shall not be allowed to be re-exported. It is a settled principle of law that the words of the notification has to be read as they are and the contents thereof cannot be added or expanded by way of implication. Since there is no express bar for re-export of such goods in the notification, we uphold the impugned order allowing the appellant to re-export the goods.
The country of origin of the containers in question is Pakistan and therefore, the same are classifiable under the Notification No.5/2019 as per CTH 980060000. Since the goods have been imported on the basis of fake PSIC, they are liable to be confiscated in terms of Section 111(m). - In the event of confiscation, the redemption fine under Section 125 has been rightly levied. As the importer company and its director are responsible for the import having been made in violation of the statutory provisions and FTP 2015-2020, they are liable to penalty both under Section 112 (a)(ii) and also under 114 AA.
There are no reason to interfere with the impugned order - appeal dismissed.
-
2023 (10) TMI 1122
Professional Misconduct - Chartered Accountant (CA) - Lapses in evaluation of writing-back of liabilities - Failure in evaluation and attendance at physical verification of Inventory - Inappropriate reporting of matters through KAM - Forming inappropriate Audit Opinion - Non-evaluation of utilisation of IPO proceeds - Non-evaluation of Related Parties Transactions - Non-implementation of Quality Control Measures - Failure on the part of audit firm - Penalties and sanctions.
Lapses in evaluation of writing-back of liabilities - HELD THAT:- It is expected that the Auditors would show a high level of professional skepticism and be alert to the possibility of mis-statement if restrained by the management from obtaining external confirmations, which is an essential component of independent audit. The Auditors should not only have re-assessed the risks posed by this restraint on their audit and performed alternative audit procedures to mitigate such risk (Para 8 of SA 505) but also considered this informing their audit opinion. Instead, it is found that the auditors have given unmodified opinion ignoring the restraint imposed by the management on their independent audit. The procedures referred to by the Auditors neither meet the requirements of alternate audit procedures, nor were appropriate or documented. Therefore, the Auditors responsible for carrying out the audit without due diligence and in a perfunctory manner.
Failure in evaluation and attendance at physical verification of Inventory - HELD THAT:- There are no audit documentation regarding the physical count of the inventory. It is noted that SA 501 mandates an auditor to attend physical count of the inventory (para 4) and if it is impracticable to attend the physical count and not possible to apply alternative audit procedures, then the auditor is required to modify the audit opinion (para 7). In the case of LGIL, inventory constituted 49.85% of the current assets in FY 2017-18, 65.10% in FY 2018-19 and 65.53% in FY 2019-20, making it a significantly material item for the Auditors to attend its physical count, but they failed to do the same. As per section 143 (9) of the Act, it is the statutory duty of the auditor to comply With the SAS and Para 18 of SA 200 also requires the auditor to comply with all the SAS relevant to the audit. Failure to attend the physical count of the inventory was a serious non-compliance of SA 501 and the provisions of the Act - the charge that the Auditors did not comply with the provisions of SA 200, 230, 315 and 501 to obtain sufficient appropriate audit evidence for the audit of the inventory, is established.
Inappropriate reporting of matters through KAM - HELD THAT:- When enquired by NFRA with the company, replied vide email dated 14.09.2023 that there was a failure on the part of the company as there was error on printer side while composing the Annual Report for better presentation. LGIL said that the error was unintentional and regretted the same. However, it is observed that this does not appear to be a printing error, as there were differences not only in the number of the KAMs issued, but also there were differences in the subject matter of KAMs - Para 13 of SA 720 requires an auditor to determine through discussion with the management, the documents that comprise the annual report; the entity's planning and timing of the issuance of such documents; make appropriate arrangements with the management to obtain the final version of the documents comprising the annual report in a timely manner and, if possible, prior to the date of the auditor's report. Therefore, the reply of the Auditors attributing the errors to the company also shows ignorance of SA 720 and its eventual non-compliance.
Forming inappropriate Audit Opinion - HELD THAT:- It is observed earlier that the accounting policy regarding unilateral extinguishment of liabilities and valuation of finished goods was not in accordance with the FRF, and the Auditors were restrained from obtaining external confirmation in respect of extinguishment of liabilities. Therefore, the Auditors could not conclude that they had obtained sufficient appropriate audit evidence to state that the FS were free from material misstatements and to issue unmodified opinion, which they did.
Non-evaluation of utilisation of IPO proceeds - HELD THAT:- The audit procedures mentioned by the Auditors in their reply to the SCN is not evidenced from the Audit File. Mere obtaining a certified copy from the management regarding utilisation of the IPO proceeds, does not relieve the Auditors from the responsibility of performing the required audit procedures. There is no evidence in the Audit File that the auditors had performed risk analysis of potential misstatements before the issuance of IPO (over statement of revenue / assets or understatement of expenses / liabilities to present rosy picture to the investors) and after realization of the IPO proceeds (misappropriation of the proceeds for purposes other than the declared purpose). The Auditors did not show the skepticism expected from them while reporting under CARO 2016 about proper utilization of money raised from the IPO, especially in light of the observed instances of artificial inflation of profits and reduction of liabilities by unilateral write-back of outstanding payables, and significant payments (44.29% of the IPO proceeds) to the related party from the IPO proceeds - the Auditors responsible for not performing the due audit procedures, for failure to obtain sufficient appropriate audit evidence for reporting under CARO 2016 about proper utilisation of IPO proceeds, and for their failure to comply With SA 315.
Non-evaluation of Related Parties Transactions - HELD THAT:- There are no audit documentation by the Auditors in respect of verification of the RPTs, except for obtaining the list of Related Parties and their transactions. It is also observed that the Auditors are frequently mentioning of keeping the data in the digital files, which could easily be made part of the audit files, but the same was not done. The Auditors while replying to the SCN submitted minutes of meeting of the Audit Committee for three FYs and price comparison statement of purchase of coal from the related party with the price from the other parties etc. as a token of their performance in accordance with SA 550. This is not evidenced from the audit files, and therefore is deemed an afterthought, as Para S and 1 4 of SA 230 requires the assembling of such documents in the audit file within 60 days after the date of the auditor's report, which the Auditors failed to do.
Non-implementation of Quality Control Measures - HELD THAT:- There are no audit documentation establishing that CA Ashok Holani was appointed as EQCR. Name of CA Ashok Holani has been referred at only one of the workpapers named 'Activity Log' at page no. 3.1 of the audit files, however it does not establish his appointment as EQCR. The EQCR is duty bound to document his work as per Para 25 of SA 220, however we did not find any working of EQCR in the audit files, establishing performance of his work during the audit. Therefore, the Auditors' failure in implementation of quality control measures and ensuring of independence is established.
Failure on the part of audit firm - HELD THAT:- M/S Ashok Holani & Co. was the statutory auditor of LGIL for the FYs 2017-18 to 2019-20 and, the Audit Firm and the EP have made departures from the SAS and the Companies Act, 2013 and have been grossly negligent in performing the audit of LGIL, by placing blind reliance on the assertions of the management in accounting of unilateral extinguishment of liabilities, valuation of inventory, verification of the utilisation of IPO proceeds and RPTs etc. The contention that they are a small audit firm, cannot be accepted as auditors are duty bound to comply with the requirements of the statutes to safeguard the interest of public. Therefore, in addition to the EP, we hold the Audit Firm also responsible for the lapses discussed.
Penalties and sanctions - HELD THAT:- Considering the fact that professional misconducts have been proved and considering the nature of violations and principles of proportionality, in exercise of powers under Section 132(4)(c) of the Companies Act, 2013, it is ordered:
i. Imposition of a monetary penalty of Rupees Ten Lakhs upon the Audit Firm M/S Ashok Holani & Co., the appointed Statutory Auditor
ii. Imposition of a monetary penalty of Rupees Five Lakhs upon CA Rahul Jangir, the Engagement Partner. In addition, CA Rahul Jangir is debarred for three years from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial Statements or internal audit of the functions and activities of any company or body corporate.
-
2023 (10) TMI 1121
CIRP - Distribution methodology as per categorisation of financial creditors based on the security structure - distribution of the amount of Rs. 351 Crores which has been deposited by the SRA - HELD THAT:- It is true that there was discussion regarding CoC expenses which was to reimburse from the amount as part of the upfront payment to the Financial Creditors but for the voting only two resolutions were put as noted above. The Resolution which received 74.41% vote and was approved was “Resolve that Resolution Plan shall be approved along with the distribution methodology which shall be as per categorisation of Financial Creditors based on the security structure and as discussed in 24th CoC Meeting”. The two discussion methodology was up for consideration that is one based on the share of voting of each financial creditor and other based on security structure of the Financial Creditor.
Even on accepting the argument saying that distribution methodology which was circulated by Process Advisor to all Members of CoC which was also discussed in the meeting it having not specifically approved in the minutes resolution can be read only to mean that distribution methodology based on security structure have been approved - it is clear that CoC expenses which is figured at 4.01 Crores was to be repaid by the members of the CoC which has contributed the COC expenses along with resolution proceeds which clearly indicates that said amount has to be deducted from Rs. 351 Crores Upfront amount.
The payment towards fee of Process Advisor to the CoC was to be contributed by the CoC which required to be reimbursed from the proceeds of the Resolution. The Respondents’ claim deduction of Rs. 4.01 Crores which is under heading COC Expense and Future Litigation Fund which is at page 18 of the Reply of Respondent No. 2 and 3, as held above COC expenses could have been very well deducted from the upfront payment but there is no requirement of deduction of future litigation fund. No Litigation Fund was required to be created nor for that said period any amount need to be deducted from the upfront payment - out of amount of Rs. 4.01 Crores only that much amount need to be deducted, which is COC expenses i.e. which is required to be reimbursed to the CoC as per their contribution.
The Adjudicating Authority ought not to have directed the Monitoring Agency to determine and appropriate the amount. The Adjudicating Authority itself could have considered the issue since there was divergent statement raised before the Adjudicating Authority which is reflected from the pleadings in the Application which was filed by the Respondent No. 1 i.e. I.A. No. 724/KB/2022 and detailed reply filed by the Appellant. The issue as to what is the correct amount to which the Appellant is entitled under the Resolution Plan was very much disputed and raised before the Adjudicating Authority and the Adjudicating Authority ought to have proceeded to determine and ought to have directed for issuance of NDC only after direction for payment of the Resolution Plan.
The Respondents are directed to make the payment of principal balance amount of Rs. 248,02,09,427/- along with accrued interest of Rs. 14,94,28,383/- (upto 10th July, 2024) along with further interest payable upto date of payment within one week from this order which amount shall be transferred in the account, details of which has already been communicated by the Appellant to the ex-RP - Out of Rs. 4.01 Crores which has been deducted towards COC expenses and Future Litigation Fund, only COC Expenses are required to be deducted and any amount towards Future Litigation Fund need not be deducted from the upfront payment. The Ex-RP shall recalculate the amount towards COC Expenses which need only to be deducted from the upfront payment and any amount kept under Future Litigation Fund need to be distributed to the Financial Creditors as per their Security Interest, which amount need to be paid to the Appellant as per its share of security interest and shall be paid by the Resolution Applicant - the Appellant shall issue a No Dues Certificate and execute the assignment agreement in terms of approved resolution plan and hand over title deeds of the corporate debtor within two weeks from the date of the receipt of the payment.
Appeal disposed off.
-
2023 (10) TMI 1120
Rejection of application seeking a direction to the Resolution Professional to convene a meeting of the CoC to comply with the provision of Regulation 39(3)(b) of the CIRP - HELD THAT:- The time for filing the Affidavit already extended by order dated 18.09.2023. Now the CoC having approved the Resolution Plan with voting share of 99.84%, Resolution Professional seeks liberty to file an application before the Adjudicating Authority for approval of the Resolution Plan - Considering the facts of the present case, the highest Resolution Plan having now received the majority of votes, the Resolution Professional may file an application before the Adjudicating Authority for approval of the plan which may be done within three weeks from today.
Nothing survives to be decided in this Appeal - Appeal disposed off.
-
2023 (10) TMI 1119
Violation of principles of natural justice - impugned order passed without perusing the law of the land (the Code) and also ignoring the precedent cases - Levy of penalty u/s 70 of IBC - HELD THAT:- It is concluded that clearly the Adjudicating Authority erred in passing the Impugned Order overlooking the law of the land (the Code) and also ignoring the precedent cases settled by this Appellate Tribunal.
The impugned order cannot be sustained - matter remanded back to the National Company Law Tribunal, New Delhi Bench, Court - III to have a fresh look of the case and decide in accordance with the law and pass suitable order.
-
2023 (10) TMI 1118
Proceedings initiated u/s 56 of FERA - non issue of SCN - Violation of principle of natural justice - HELD THAT:- No complaint can be filed unless the person accused of such offence has been given an opportunity of showing that he has such requisite permission. It is clear that from the facts of this case and also not disputed by Respondent that there is no such show cause notice which was issued and served on the fresh address of the petitioner at Gurugram. That apart, it is pertinent to note that though the notice issued under proviso to Clause (ii) of sub section (2) of Section 61 FERA was not served upon the petitioner, the demand notice dated 28.08.2020 was served upon the correct address. There is no explanation as to how and from where the ED obtained this correct address of the petitioner while issuing the demand notice.
So far as the judgments of State Bank of India [2023 (3) TMI 1205 - SUPREME COURT] and Oil and Natural Gas Corporation Limited [2014 (10) TMI 589 - SUPREME COURT] relied upon are concerned, they laid down the law in respect of what is trite by now that rule of Audi Alteram Partem is fundamental to the policy of Indian law and as such any order by any quasi-judicial authority or any administrative authority entailing drastic civil consequences cannot be sustained except after affording an opportunity to the person who would have to face such civil consequences. There is no doubt in the mind of this Court that there has been clear violation of principles of natural justice in the present case.
Since the respondent therein had failed to comply with the mandatory requirement of Section 61(2) of FERA, the Trial Court in that case clearly had erred in taking cognizance and on that basis, quashed and set aside the impugned order on charge.
This Court respectfully concurs with the observations and the ratio laid down in the case United India Airways Ltd. & Anr. [2018 (4) TMI 421 - DELHI HIGH COURT]
Proceedings being separate and not intertwined in respect of violation u/s 18(2) and (3) and Section 56 of the FERA - This Court is of the considered opinion that the substratum of violation of under Section 18(2) for becoming an offence u/s 56 has to be tested first by issuing show cause notice/opportunity notice so as to permit the petitioner to explain as to whether it got the requisite permission in accordance with law or not.
Since the show cause notice or opportunity notice was never served upon the petitioner, the consequent proceedings initiated u/s 56 FERA cannot be continued. It is for violation of Section 18(2) and Section 18(3) of the FERA that would entail action u/s 56 FERA, but the intervening threshold of issuance of show cause notice/opportunity notice and hearing the notice before passing the decision upon such mandatory application of principles of natural justice alone that the action u/s 56 could, at all, have been initiated. As such the submission of Respondent on that count are found to be untenable.
Present writ petition is allowed and as a consequence thereof, a writ of certiorari is issued quashing the exparte proceedings issued by the ED.
-
2023 (10) TMI 1117
Review of final order - correct interpretation of Section 128 of SVLDRS Scheme - HELD THAT:- After having gone through the order under review, it is obvious that this Court has considered the aspect in detail in para 5.1 and has taken a conscious decision against the petitioner which may be erroneous but cannot thus be termed as palpably erroneous.
As regards non consideration of the Bombay High Court Judgment in case of A.C. Nielsen Research Services Private Limited vs. Union of India [2022 (11) TMI 1094 - BOMBAY HIGH COURT] is concerned, the same fades into insignificance due to the fact that in para 5.1. of the order under review reliance has been placed on Apex Court decision to take the view against petitioner.
The remedy of the petitioner lies elsewhere in case the petitioner feels that the order under review is erroneous. Accordingly, no case for review is made out - Review petition stands dismissed.
-
2023 (10) TMI 1116
Levy of Service Tax - Club and association service - mutuality of interest - advance entrance/admission fee collected by the appellant from the applicants - period from April 2012 to June 2012 - amended scheme of Service Tax from July 2012 to March 2014 - scope of service - HELD THAT:- Though in the show-cause notice dated 22.5.2014, the applicability of definition of ‘service’ has not been raised, however, in the show-cause notice dated 10.4.2015 it is alleged that the advances collected by the appellant would fall under the scope of ‘service’ as defined under Section 65B(44) of the Finance Act, 1994; also it is alleged that the activity of the appellant does not fall under the Negative List of services contained in Section 66D of the Finance Act, 1994, hence leviable to service tax. The Ld. Commissioner in the impugned order by interpreting the definition of ‘Service” has confirmed the demands for the period after 01.7.2012.
The Hon’ble Supreme Court in STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE & ORS. VERSUS M/S. RANCHI CLUB LTD. [2019 (10) TMI 160 - SUPREME COURT] observed that ‘Doctrine of Mutuality of Interest’ is also applicable for the period after 01.7.2012; interpreting newly introduced definition of ‘person’ under Section 65B(37) and explanation 3(a) to Section 65B(44) of Finance Act,1994, Their Lordships observed as The expression “body of persons” may subsume within it persons who come together for a common purpose, but cannot possibly include a company or a registered cooperative society. Thus, Explanation 3(a) to Section 65B(44) does not apply to members’ clubs which are incorporated.
There are no merit in the impugned order and accordingly, set aside the same - appeal allowed.
-
2023 (10) TMI 1115
Levy of service tax - erection, commissioning and installation of railway signalling and telecommunication facilities - construction of Rail Over Bridges for companies other than Indian Railways - exemption from service tax as provided in Entry 14 (a) of N/N. 25/2012 - HELD THAT:- The appellant have done the work for railways, as is evident from the nature of work from the show cause notice. It is further found that the said works qualify for exemption under Sl.No.14(a) of Mega Exemption Notification No.25/2012- ST. This Tribunal has held in the precedent rulings that there is no distinction drawn by the statute with respect to public railways or private railways. It is further found that the work has been done and or the services provided to the Government companies like RITES, NTPC, IRCON, which are wholly owned by the Government of India and the management of these companies are controlled by the Ministry of Railways.
The impugned order set aside - appeal allowed.
-
2023 (10) TMI 1114
Taxability - supply of tangible goods service - appellant had supplied tangible goods namely “transit mixtures” to the clients - declared service or not - HELD THAT:- A perusal of the work order clearly shows that it is a work order for transportation of RMC in vehicles from the plant of the appellant at Jaipur and responsibility has been cast upon the appellant to ensure transportation and delivery of the material within the time specified. The appellant is also required to pay transportation charges at Rs. 114/- per CuM for actual quantity of RMC transported during a calendar month. Of course, the work order also requires the appellant to deploy a fleet of 6 MB capacity of vehicles mounted on suitable chassis in numbers adequate to transport 1490 MB of RMC.
Learned authorized representative of the department has, however, placed reliance upon the judgment of the Andhra Pradesh High Court in G.S. Lamba & Sons [2011 (1) TMI 1196 - ANDHRA PRADESH HIGH COURT] and the decision of the Tribunal in Ultratech Concrete [2018 (9) TMI 1204 - CESTAT CHENNAI] - These two decisions would not come to the aid of the department for the reason that the contracts involved in the two decisions, as is clear from a perusal of the decision, is for hiring of vehicles for transportation of transit mixtures and not for transportation of RMC.
The order dated 16.03.2018 passed by the Commissioner (Appeals), therefore, deserves to be set aside and is set aside - Appeal allowed.
-
2023 (10) TMI 1113
Rejection of refund in respect of input services - out of pocket expenses collected by the service provider - rent-a-cab service - convention service - rejection of refund claim also on the ground that in invoice issued by the service provider the item code does not tally with one mentioned in the enclosed gate pass.
Input services - out of pocket expenses collected by the service provider - rent-a-cab service - convention service - HELD THAT:- These services were received by the appellant even though outside the SEZ but these services are directly for use of the entire business activity of the appellant located in SEZ. It is not the case of the department that these services were used by any other person other than the appellant. Therefore, all these services were indeed used for the authorized operation of SEZ hence rightly eligible for refund under Notification No 09/2009-ST. Accordingly, the appellant is entitled for the refund in respect of these services.
Rejection of refund on the ground that the item code between the invoice and the enclosed gate pass does tally - HELD THAT:- It is finding of the Commissioner ( Appeals ) that the appellant have not made any explanation to this discrepancy in their appeal. Moreover, in the present appeal also, no ground is made on this issue therefore, in absence of any explanation by the appellant any benefit cannot be given on this count. Accordingly, the rejection of refund claim of Rs. 3090/- is maintained.
Appeal allowed in part.
-
2023 (10) TMI 1112
Invocation of extended period of limitation - applicability of proviso to Section 11A of the CE Act - Classification of goods - chewing tobacco - to be classified under the CET SH 2403 9910 as 'chewing tobacco' or to be classified under CET SH 2403 9930 as 'zarda/jarda scented tobacco' - product manufactured and cleared by the Assessee for the period 01.03.2006 to 10.07.2006 - penalty u/r 26.
Invocation of extended period of limitation - applicability of proviso to Section 11A of the CE Act - HELD THAT:- The tribunal has proceeded to hold that limitation would apply and show cause notice should not have been issued beyond one year in view of the fact that the Assessee intimated their intention to change, without addressing the various issues which has been raised. In other words, the tribunal by cryptic order has negatived the contentions of the Revenue and held that the invocation of the extended period of limitation was not warranted. This finding, not being in consonance with the facts obtained on the hand, we are unable to subscribe our views to the judgment of the tribunal.
The question is to be answered against the Assessee and in favour of the Revenue and affirm the finding of the adjudicating authority and reverse and/or set aside the finding recorded by the tribunal which has been observed at the initial stage herein given that it is not only contrary to the facts but also contrary to law as noticed hereinabove. It is for these precise reasons the Adjudicating Authority was of the clear view that there has been a deliberate intention to avoid payment of duty by the Assessee by misclassification and willful misstatement of its product and hence it was justified in invoking the extended period as provided in the proviso to Section 11A(1) of CE Act, 1944.
Classification of goods - HELD THAT:- The stand of the Assessee has been consistent to the effect that product manufactured by it is to be classified as 'zarda/jarda scented tobacco' and at the insistence of the jurisdictional Deputy Commissioner the Assessee was classifying the goods under CET SH 2403 9910 i.e., 'chewing tobacco', for which there was also an order of determination passed Under Rule 6(2) of CTPM rules. Whereas in the other matters, namely URMIN PRODUCTS P. LTD. VERSUS COMMR. OF C. EX., AHMEDABAD [2010 (3) TMI 461 - CESTAT, AHMEDABAD] and Flakes-n-Flavourz the facts were entirely different.
In Urmin Products the Assessee had declared the product as 'chewing tobacco' and then changed the classification to 'zarda/jarda scented tobacco' and again came back to the original position of declaring it or classifying it as 'chewing tobacco'. These classifications in Urmin Products were at the behest of the Assessee himself - In Flakes-n-Flavourz, the Assessee was alleged to be manufacturing 'zarda/jarda scented tobacco' and clearing it as 'chewing tobacco', and on facts it was found that there were additives added to the tobacco. In the said case this Court on facts held that there was no wilful suppression attributable to the assesssee and the Revenue had failed to establish the product as 'zarda scented tobaccot'.
In the instant case the Assessee had clearly declared his product as 'zarda/jarda scented tobacco' falling Under Sub-heading 2403 9930 in Form 1 filed and based on the said declaration, capacity determination order dated 04.03.2015 Under Rule 6(2) had been passed re-classifying the product as 'chewing tobacco'. Accordingly, for the period April 2015 in Form-1 the Assessee had described the product as 'Jayanti Zarda Scented- 2403 9910'. However, in the capacity determination order dated 05.05.2015, the Deputy Commissioner classified the goods as 'chewing tobacco'. As such, there was no misstatement or suppression of facts, collusion, or fraud in the instant case and hence on facts, the principles enunciated in Urmin's case is distinguishable.
Penalty u/r 26 of CER - HELD THAT:- There has been no penalty levied Under Rule 26 on the ground that there has been no intent to evade duty.
The findings of the tribunal warrant no interference by this Court and the appeal has to fail - Appeal dismissed.
-
2023 (10) TMI 1111
CENVAT Credit - machineries used in the co-generation/captive power plant - electricity - exempted product applying the terms of rule 6(4) of the CENVAT Credit Rules 2004 or not - Revenue had observed that the co-generation power plant is a turn-key project like power plants which are not excisable goods.
HELD THAT:- The show cause notices which are the subject matter of these writ petitions have been issued between the period 2009 to 2015 on the ground that the machineries/components which are used in the cogeneration plant is being used for generating electricity which is an exempted commodity and therefore the petitioners are not entitled to CENVAT Credit. This conclusion has been arrived at by applying the provisions of Rule 6(4) of the CENVAT Credit Rules 2004 which states that CENVAT Credit cannot be allowed on capital goods which are used exclusively in the manufacture of exempted goods other than the final products which are exempted from whole of duty of Excise duty leviable. Therefore, it is clearly seen that the respondents whose earlier show cause notices have reached finality are attempting to raise a new issue which was not pleaded earlier.
The issue of producing a User Test Certificate not having been demanded in the impugned Show Cause Notices and the order dated 28.06.2023 having been passed on the joint submissions of the counsel where once again there was no reference to the User Test Certificate, the Review petitions have to be allowed and since the question of CENVAT Credit having reached finality, and the impugned Show Cause Notices are issued on a new ground with reference to the subsequent periods of the writ petitions have to be allowed - the writ petitions/review petitions are allowed and the show cause notices subject matter of the writ petitions are quashed.
The writ petitions are allowed.
-
2023 (10) TMI 1110
Delay in issue of show cause notice under Section 11 A of the Central Excise Act, 1944 - taking almost full 9 years for adjudication of the show cause notice after the first remand order - not considering the judgements regarding grant of cross-examination and the interpretation of section 9D of the Central Excise Act, 1944 - remanding the case second time in August 2022 to the original adjudicating authority - HELD THAT:- The Tribunal by the impugned order has only remanded the matter directing the authority to decide the matter afresh.
There are no question of law muchless substantial question of law arising in the present appeal. Hence, the appeal is dismissed.
-
2023 (10) TMI 1109
Reversal of CENVAT Credit - demand on the ground that the Appellant has not followed the ISD procedure for passing of the Cenvat Credit when the Invoices were issued by the vendors in the name of the Head Office - HELD THAT:- There is no allegation in respect of goods on which Cenvat Credit has been taken by them. The utilization within the factory is also not in dispute. Admittedly, all the original documents have been produced by the Appellant before the Adjudicating Authority. Since the Appellant has clearly claimed that they have only one unit and there was no possibility of taking the Cenvat Credit in different units when the vendor has raised the invoice in the name of head office, there are no reason as to why the submission was not taken up for consideration by the Adjudicating Authority.
The Gujarat High Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS DASHION LTD [2016 (2) TMI 183 - GUJARAT HIGH COURT] has held that even in the absence of any ISD Challan in such cases, Cenvat Credit cannot be denied. The CBIC Circular No.1063/2/2018-CX dated 16/02//2018 has accepted the decision of the Hon’ble High Court of Gujarat.
The confirmed demand under OIO set aside - appeal allowed.
-
2023 (10) TMI 1108
CENVAT Credit - fake invoices - allegation is that the appellants have not received the materials and have taken the cenvat credit without receiving the goods - HELD THAT:- Appellants have produced the documents evidencing the transportation of goods to the factory premises from M/s Shree Ganesh Forging Company and the payment of transportation charges were also recorded in the books of accounts. In that circumstances merely alleging that without any evidence that the appellants have not received the goods, the cenvat credit cannot be denied. Moreover, the appellants have produced the documents for transportation of goods and the said goods have been used in their factory for manufacture of final product, which has suffered duty.
The cenvat credit on the invoices received in their factory against the invoices issued by M/s Shree Ganesh Forging Company, cannot be denied to them - CENVAT Credit allowed - appeal allowed.
The Appellants Nos.(2),(3),(4),(5), (6), (7) & (11) have failed to produce any evidence with regard to transportation of goods - the cenvat credit is denied to them, therefore, their appeals are dismissed.
-
2023 (10) TMI 1107
Recovery of short paid duty - job-work - rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- A method of valuation for goods entrusted to be manufactured by ‘job-worker’ was incorporated only with effect from 1st April 2007 in Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and. quite undubitably, to fill a necessary want in the context of transactions not fitting within the existing rules which provided alternatives to non-fitment within section 4(1) of Central Excise Act, 1944 owing to non-conformity with one or the other desiderata of ‘transaction value’ for assessment - The incorporation, insofar as ‘job-work’ is concerned, would have emerged from the imperative to handle a situation where the manufacturer, though a producer, is not the seller but does deliver to the buyer even though consideration for the goods is received by the seller. Essential to such framework arrangement is that ‘inputs’ should be supplied by the seller.
It is the imperative of a want in the ‘transaction value’ of the assessee that is contemplated, by the rules intended by section 4(1)(b) of Central Excise Act, 1944, to stand in as alternative in the design of each of the methods of valuation in Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Thus, in the absence of ‘sale’, rule 4 is applicable, rule 5 when sale occurs beyond place of removal, rule 6 when the excisable goods are sold at a price that is not the sole consideration, rule 7 when sale takes place beyond both time and place of removal, rule 8 when goods are captively consumed by the assessee and rule 9 and 10 when clearance is not to independent person. A common characteristic of all of these, except where there is no sale, is sale by assessee - It would, thus, appear that the several rules, as originally included, were intended to make up for deficiencies in sale by assessee. Rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is certainly intended for sale but by person other than assessee.
From a harmonious reading of section 4 of Central Excise Act, 1944 and of the attendant Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, it is abundantly clear that it is not the method of valuation that determines the applicability but that the method flows from the identification of the rule most apt for each transaction - ‘Job work’ existed before April 2007 and incorporation effected thereafter was not intended to cover every ‘job-worker’ as per common parlance but of specific situations contemplated in rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. That has not been demonstrated in the orders of the lower authorities.
Appeal allowed.
............
|
9911796707
