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Showing 461 to 480 of 1445 Records
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2024 (3) TMI 985
Levy of service tax - Business Auxiliary Service - arranging the transportation for delivery of goods manufactured by them to their clients/buyers so as to facilitate those buyers, have generated some income by retaining some part of the freight charges as were received from their buyers while making payments to the transporters - HELD THAT:- SCN alleged the said amount to be a consideration for rendering a Business Auxiliary Service. The order under challenge has held the said amount to be a brokerage or commission. This particular perusal is sufficient to hold that Commissioner (Appeals) has gone beyond the scope of show cause notice which is not at all permissible. Confirming a demand on a different count which was not brought to the notice of the assessee/appellant before confirmation of the service tax amounts to confirmation of tax under new categories and the same is not legally permissible as it was held by this Tribunal in the case of M/S BALAJI CONTRACTOR VERSUS COMMISSIONER OF CENTRAL EXCISE JAIPUR-II [2017 (3) TMI 181 - CESTAT NEW DELHI]. Hon’ble Supreme Court also in the case of COMMISSIONER OF CUSTOMS, MUMBAI VERSUS TOYO ENGINEERING INDIA LIMITED [2006 (8) TMI 184 - SUPREME COURT] has held that the department cannot travel beyond the scope of show cause notice. These observations are sufficient to set aside the order under challenge.
The buyer of goods manufactured by appellant cannot be held to be the service recipient, he being the party to contract of sale/purchase order. There is no contract between appellant and the transporter. No question of later being the service recipient at all arises. Thus there is no activity of appellant which may be called as Business Auxiliary Service. No question arises of providing Business Auxiliary Service as is alleged in show cause notice by the appellant to the said buyer.
The mere activity of sale cannot be called as taxable service. Earning profit in the said arrangement therefore cannot come under the service tax net. Thus, the findings of Commissioner are otherwise not sustainable. The transaction in question is between principal manufacturer to principal buyer. The freight charges are in addition to the value of the goods. The surplus is earned by the appellant by not acting as a service provider to the transporter nor to the buyer.
The order under challenge is hereby set aside - Appeal allowed.
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2024 (3) TMI 984
Short payment of service tax - Works Contract Service - composition scheme - cost of materials was not taken into account for payment of the service tax, which is primary condition of works contract - HELD THAT:- In view of the reasoning noted by the Adjudicating Authority that there is a standard practice that the Departmental Audit is conducted for a specified period, which has been clearly mentioned in IAR as April, 2006 to September, 2009 in Col.-9 in Part-I and the appellant has not shown anything that the period specified was extended by the proper officer, there is no merit in the submission of the learned Counsel that IAR No.07/2010 dated 20.04.2010 covered the period from October – December, 2009.
It is found from the order of the Adjudicating Authority that the appellant though had the opportunity to substantiate their claim and present documentary evidence in their support, however, they have only presented IAR No.07/2010, which is based on the documents produced by the appellant but the short payment of service tax was calculated only for the period under audit, i.e. April, 2006 to September, 2009 as per serial no.9 of IAR No.07/2010.
In absence of any documents placed by the appellant, both the Adjudicating Authority and the Appellate Authority have not found favour with the appellant and hence, confirmed the demand. In the interest of justice that the appellant may be granted an opportunity to place on record the requisite documents, as mentioned above before the Adjudicating Authority as the stand taken by the appellant is that the bills of VAT/Sales Tax on materials used in the ‘Works Contract Service’ have already been provided by the appellant to the Superintendent, Service Tax.
From the records of the case, it is found that the ST-3 Returns were filed by the appellant on 24.04.2010 for the period October, 2009 to March, 2010 and the Audit Report No.1192/2010 was dispatched to them on 3.5.2011. Subsequently, the jurisdictional Range Officer sent letters dated 18.05.2011, 13.06.2011, 25.04.2012, 27.04.2012 and 08.01.2013 calling upon them to submit information and documents etc. However, the appellant, after two years of filing the periodical ST-3 Returns submitted that the value of the taxable services in the said returns has been wrongly given. The submission of the appellant was found to be noncorroborative without any documentary evidence and was found to be of no merit. On this aspect also, the learned Counsel for the appellant was required to substantiate his case with the supporting documents, which he failed to do so.
The reliance placed by the appellant on the earlier Audit has been found to be distinguishable by the Adjudicating Authority as according to it, the preceding Audit team must have prepared the audit on the basis of the information presented by the assessee themselves. All these facts and submissions can be made by the appellant before the Adjudicating Authority once again along with the necessary and corroborative documents in that regard.
It would be just and fair that the matter is remanded before the Adjudicating Authority, granting liberty to the appellant as well as to the Department to place on record the documents and the Adjudicating Authority may consider the same on merits - appeal is allowed by way of remand.
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2024 (3) TMI 983
Demand as proposed in the SCN on the basis of mismatch of ST-3 Returns and Balance Sheets/26AS - Invocation of Extended period of limitation - penalties - HELD THAT:- It has been held in a catena of decisions that only the amount received by the Appellant was liable to Service Tax, amounts reflected in Balance Sheets cannot be used to determine the Service Tax liability. The Hon’ble Madras High Court in FIRM FOUNDATIONS & HOUSING PVT. LTD. VERSUS PRINCIPAL COMMISSIONER, OFFICE OF THE PRINCIPAL COMMISSIONER OF SERVICE TAX [2018 (4) TMI 613 - MADRAS HIGH COURT] held that the reporting of income in the P & L is irrelevant for the purposes of determination of service tax payable and thus the basis of the impugned assessment is erroneous. Moreover, income reflected in the Balance Sheet is for Income Tax purposes, which cannot be used for the purpose of service tax without any corroboratory evidence as also supported by M/S LUIT DEVELOPERS PRIVATE LIMITED VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, DIBRUGARH [2022 (3) TMI 50 - CESTAT KOLKATA].
It is found that since the Appellant was filing ST-3 Returns regularly, the Department’s stand that it could examine the correct facts only on going through the Balance Sheets cannot be sustained as CBEC Circular No.113/7/2009-S.T., dated 23-4-2009 vide F.No.137/158/2008-CX. 4 and CBEC Circular No.185/4/2015-ST dated 30.6.2015 vide F.No137/314/2012 categorically puts duty on the assessing officer to effectively scrutinize the returns at the preliminary stage, as held in M/S. GANNON DUNKERLEY & CO. LTD. VERSUS COMMISSIONER (ADJUDICATION) OF SERVICE TAX, NEW DELHI [2020 (12) TMI 1096 - CESTAT NEW DELHI].
Extended period of limitation - HELD THAT:- Extended period of limitation cannot be invoked solely on audit queries and objections. It is observed that the Department has not adduced any positive evidence to show mala fide intention for evasion of service tax and therefore extended period is erroneously invoked. There are no ingredient of fraud or suppression with an intent to evade payment of tax - the demand raised is completely barred by limitation and accordingly the demand is set aside.
Penalty - HELD THAT:- Since there is no element of fraud or suppression, penalty under Section 78 is liable to be set aside.
Appeal allowed.
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2024 (3) TMI 982
Maintainability of appeal - requirement to make pre-deposit - HELD THAT:- The appellate authority could not have entertained the appeal without noting the compliance with the conditions as laid down as per this section. Since the appellant has failed to comply with the conditions as laid down under this section, Commissioner (Appeal) refused to entertain the appeal and dismissed the same without considering the same on merits.
Undisputedly appellant has now made the pre-deposit of 10% for filing this appeal before CESTAT, which is more than 7.5 % of disputed tax amount, which was required to be deposited as pre-deposit for the first appellate authority to entertain the appeal.
Taking note of the fact that no order has been passed in the matter on merits and the appeal was dismissed only for the requirement of pre-deposit, it is found that this matter is fit case for being remanded back to the Commissioner Appeals for consideration of the appeal before him on merits.
Appeal is allowed by way of remand to Commissioner (Appeals). Commissioner (Appeals) to decide the appeal in de-novo proceedings on merits within 90 days of the receipt of this order.
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2024 (3) TMI 981
Condonation of delay of 1191 days in filing this appeal - HELD THAT:- The belated manner in which the present appeal has been filed would not call for reiteration. Therefore, accepting the submissions of learned counsel for the respondent the appeal is dismissed on the ground of delay, leaving open the question of law, if any, which arises in this appeal to be agitated in any other appropriate appeal.
Application disposed off.
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2024 (3) TMI 980
Process amounting to manufacture or not - raw material fuller’s earth lumps were being subjected to undergo a process of getting crushed in job crusher and pulverized in pulveriser - manufacturing and selling of “Activated Bleaching Earth” and “Activated Carbon” - excisable goods or not - Whether this process and the resultant product can be classified as activated bleaching earth? - suppression of material facts or not - HELD THAT:- From the finding of fact given by the authority passing the Order-in-Original, what is established is that though fuller’s earth is the raw material which is subsequently converted into an “Activated Bleaching Earth” or an “Activated Carbon” through a mechanical process which includes a chemical treatment after crushing the fuller’s earth lumps altering the clay into powder and by increasing its bleaching potential. The very purpose of subjecting the fuller’s earth clay to chemical treatment in a mechanical manner is to alter the nature of the product. Further, the bleaching ability is enhanced by way of mechanical and chemical process and the filtration rate of the product also gets enhanced and becomes faster.
Another fact which stands established is that the raw material fuller’s earth in itself cannot be used for those purposes which it is subsequently used after the mechanical chemical process is undertaken. Yet another fact which is established from the pleadings is that the use of the Activated Bleaching Earth cannot be achieved if fuller’s earth is used as it is without the chemical treatment and the mechanical process which includes the heating process etc. The mechanical process which fuller’s earth is subjected to is to increase its bleaching performance and filtration properties and the product is also tailor made as per the specifications required by the client as per use at their plants.
The bleaching earth has a set of advanced formula of different combinations and it is applied by the manufacturer by using the production technology to manufacture different grades of Activated Bleaching Earth. All these process put together alters the fuller’s earth clay into an Activated Bleaching Earth giving it the properties that increases its bleaching potential.
The finding so arrived at by respondent No. 2 which stands affirmed by yet another detailed reasoned order passed by respondent No. 1, both of which again subjected to test before the Tribunal and the Tribunal also giving specific reasons in the course of affirming the orders passed by respondent Nos. 1 and 2 - there are no substantial merit in the arguments advanced by the learned counsel for the appellant calling for an interference to the findings given by the Tribunal.
Appeal dismissed.
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2024 (3) TMI 979
Clandestine Removal - Manufacture of Tobacco taking place or not - FFS packing machine was found installed in the unregistered premises during the search on 24.01.2012.
Whether the evidences available on record indicate that one FFS packing machine installed in the unregistered premises was in working condition and used for manufacturing of Chewing Tobacco? - HELD THAT:- There is no finding in the impugned order against the claim of the appellant that two vital parts namely, ‘Disc’ and ‘Suit’ were not fitted with the machine and it cannot be used to pack Chewing Tobacco. The investigation has not brought in any other evidence such as purchase of raw material, purchase of packing material, excess consumption of power during the period, buyers of the clandestinely cleared material, statements from transporters, etc., to prove clandestine manufacture and clearance of Chewing Tobacco - Mere presence of the packing machine alone is not sufficient to establish manufacture and clandestine clearance of chewing tobacco. In the absence of any other evidence, we hold that the investigation has not established that the packing machine was in operating condition and used for clandestine manufacture and clearance of Chewing Tobacco - question is answered in negative.
Whether evidences available indicate that Rule 18(2) of the CTPM Rules is applicable in this case to demand duty in respect of one FFS packing machine, from 08th March, 2010 onwards, as provided in the said Rules? - HELD THAT:- The investigation has not brought in any other evidence such as purchase of raw material, purchase of packing material, excess consumption of power during the period, buyers of the clandestinely cleared material, statements from transporters, etc., to establish clandestine manufacture and clearance of Chewing Tobacco from the unregistered premises - the one FFS packing machine found in the unregistered premises has not been fixed with two vital parts, without which the machine cannot be operationalized. In such circumstances, the investigation must have probed further to establish the manufacture and clandestine clearance of Chewing Tobacco by means of other evidences. Instead, the investigation has relied solely on the mere presence of the machine in the unregistered premises to demand duty. There is no evidence available on record to disprove the claim of the Appellant that the machine was non-operational and not used for manufacture of Chewing Tobacco. Mere presence of the packing machine alone is not sufficient to establish manufacture and clandestine clearance of chewing tobacco - the provisions of Rule 18(2) cannot be invoked in this case to demand duty for the period from 08th March, 2010 to 31st January, 2012 - question answered in negative.
Whether penalty under Section 11AC of the Central Excise Act, 1944, is imposable in this case? - HELD THAT:- Penalty is imposable under Rule 18 of the CTPM Rules read with Section 11AC of the Central Excise Act, 1944, only when it is established that Chewing Tobacco was produced and clandestinely removed. In view of the above findings, it is held that the investigation has not established manufacture and clandestine clearance of Chewing Tobacco. Hence, the penalty provisions are not applicable in this case. Accordingly, the penalty imposed on the Appellant is liable to be set aside.
Thus, the demand of Central Excise Duty confirmed in the impugned order is not sustainable. As the duty demand of duty is not sustainable, the demands of interest and penalty are also not sustainable - appeal allowed.
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2024 (3) TMI 978
Classification of goods - Reusable Insulin Delivery Device bearing the brand name “All Star” - classifiable under Central Excise Tariff Heading 9018 3100 availing the benefit of concessional rate of duty as per Notification No. 12/2012-CE dated 17.03.2012 under Serial No. 310 or under Serial No. 309? - Department is of the view that appellant have wrongly availed Cenvat credit on the inputs and input service used in the manufacture of their finished products i.e. Reusable Insulin Delivery Device - HELD THAT:- It can be seen that Reusable Insulin Delivery Device is nothing but a ‘Syringe without needle’ and is rightly classifiable under Chapter sub-heading 9018 3100. So far as the availability of Notification No. 12/2012-CE is concerned, the entry at Serial No. 309 covers only parts and accessories of goods of heading 9018 and 9019 whereas we find more specific serial number for concessional rate of duty under the exemption Notification No. 12/2012-CE for the product will be under Serial No. 310 which reads as “All goods (other than parts and accessories thereof)”.
The impugned manufactured product is ‘Syringes without needle’ and the same cannot be classified as ‘parts and accessories’ of the goods of heading 9018. Therefore, the impugned product will be entitled for concessional rate of duty under Serial No. 310 of exemption Notification No. 12/2012-CE dated 17.03.2012. Accordingly, the appellant have rightly been paying excise duty at the concessional rate of 6% and they are entitled for Cenvat credit on the inputs and input services availed by them.
There are no merit in the impugned orders-in-appeal and the same are set-aside - appeal allowed.
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2024 (3) TMI 977
CENVAT Credit - credit denied on the ground that the appellant have taken credit on Aluminium ingots and thereafter it was removed without payment of duty as the same was not used in the manufacture - allegation solely based on the statements of transporter - transporter was not cross-examined - violation of principles of natural justice - Time limitation - Imposition of redemption fine - HELD THAT:- The allegation is solely based on the statements of transporter however, the transporter was not cross-examined and as per section 9D of Central Excise Act, 1944. It is mandatory on the part of the Adjudicating Authority to do examination in chief and thereafter allow the noticee for cross-examination for the witness which in the present case was not done by the Adjudicating Authority. Therefore, the statement of transporter cannot be relied upon. Moreover, the entire investigation and the witnesses were used for issuing show cause notice dated 30.08.2011 to Hiren Aluminium wherein the charge was that M/s. Hiren Aluminium has not received ingots sent by the appellant. Accordingly, the Cenvat credit availed by Hiren Aluminium on the same ingots was sought to be denied.
The entire chain, right from procurement of aluminium ingots from NALCO upto the delivery of aluminium conductors, the transaction was established and accepted by the Settlement Commission. This finding was given by Settlement Commission after considering the investigation and all the evidences which were also relied upon in the appellant’s present case. Therefore, once all those investigation and evidence have been appreciated and Settlement Commission has come to the conclusion as reproduced above, there is no scope for the Adjudicating Authority to rely upon the same evidences for taking contrary view to the findings given by the Settlement Commission and to confirm the demand of Cenvat credit. Therefore there is no material evidence with the department to establish their charge of clandestine removal of ingots on which the appellant has taken Cenvat credit.
Time Limitation - HELD THAT:- There is no dispute that the present case relates to period February 2008 to March 2008 and entire investigation was carried out in a case made out against Hiren Aluminium in the show cause notice dated 30.08.2011 for denial of Cenvat credit on standard wires wherein there was no allegation that the credit taken on ingots by the appellant was made. Thereafter the appellant was served a show cause notice dated 06.03.2013. In these facts, it is absolutely clear that entire information about the transaction were available with the department way back in October 2008 even then the department took five years to issue show cause notice to the appellant. Therefore, the demand is clearly time-barred.
Imposition of redemption fine - HELD THAT:- As it is held that the appellant have not cleared aluminium ingots clandestinely and demand on that count is not sustainable consequently, no confiscation can be made and no consequential redemption fine will sustain. Secondly, without prejudice, the goods on which redemption fine was imposed was not available for confiscation - It is settled legal position by the Larger Bench of this Tribunal in the case of SHIV KRIPA ISPAT PVT. LTD. VERSUS COMMISSIONER OF C. EX. & CUS., NASIK [2009 (1) TMI 124 - CESTAT MUMBAI] as well as in COMMISSIONER OF CUSTOMS, MUMBAI VERSUS RISHI SHIP BREAKERS [2008 (8) TMI 650 - CESTAT, MUMBAI] that in case goods are not available, no redemption fine can be imposed therefore, on both counts, redemption fine imposed on the appellant is not sustainable.
The impugned order is not sustainable hence, the same is set-aside - Appeal allowed.
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2024 (3) TMI 976
Area Based exemption in Kutch district - admissibility of exemptions for goods manufactured using plant and machinery installed after the cut-off date of 31.12.2005. - Wrongful availment of benefit of N/N. 39/2001-CE dated 31.07.2001 by availing re-credit/refund of duty paid on finished excisable goods manufactured by both the oil splitting units - Penalty on managing director.
HELD THAT:- It is pertinent to note that the exemption under the Notification was limited to twice the value of the investment, for each year, in cases where the original value of the plant and machinery installed in the factory was below Rupees 20 crores on the date of commencement of the commercial production and in cases where the original value of investment in plant and machinery was in excess of 20 crores, there was no limitation with respect to the extent of the exemption available under the Notification.
The Notification, as initially enacted, did not provide for any time period within which the commercial production had to commence, being the date relevant for reckoning the original value of investment in plant and machinery as also for reckoning the 5 year period for which the exemption was to be available. All that was required was that any civil construction work in the factory premises and any installation of plant and machinery therein commences only after 31st July 2001 but before the cut-off date.
It is impermissible to read in any condition or word into an exemption notification, especially a benevolent one which has been issued with the objective of encouraging investment in the earthquake ravaged region of Kutch. In our view there is neither any legal basis nor rationale for reading in the word 'ALL' in the exemption notification and with reference to the same construe that since some machinery was installed after the cut-off date, the benefit of the exemption would not be available, to goods manufactured using the said machinery.
This Tribunal has also in the case of M/S WELSPUN LTD. VERSUS C.C.E. & S.T. RAJKOT [2019 (1) TMI 371 - CESTAT AHMEDABAD] held that in the context of this very notification that there is no bar in installing Plant and Machinery post 31.12.2005 as long as the unit has commenced commercial production not later than 31.12.2005.
The reasoning of the adjudicating authority that under the Himachal/Uttarakhand exemption scheme, exemption was even extended to existing units, undertaking substantial expansion, which was missing in Kutch, would in our view make no difference, to the question whether any addition of plant and machinery after the cut-off date would dis-entitle the unit to the benefit of the exemption. The aspect regarding the unit commencing commercial production by a cut-off date equally applies to the Kutch as also the Himachal/Uttarakhand exemption notification - the clarification issued by the CBEC vide Circular No. 939/29/2010-CX dated 22.12.2010 to the effect that there is no bar or restriction on any addition/modification in the plant or machinery or on the production of new products by an eligible unit after the cut-off date and during the exemption period of ten years, would apply equally in the context of the Kutch notification.
The presumption of the adjudicating authority that this second splitting column was installed within 7 days of the same having been shipped by the manufacturer in October 2006, which does not seem to be logical and reasonable especially when viewed in light of the statement recorded under Section 14 of the installation agency, as per which the column was installed in March 2007.
The combined production achieved even after the installation of the second Splitter seems to be lesser than what could have been achieved by a single Splitter alone. Further the 200 TPD capacity as explained by the appellant is the output guaranteed by the supplier of technology at 99% degree of split. Obviously the production numbers clearly show that the daily production was higher than 200 TPD and that the plant was functioning operating at a lesser degree of Split and was able to achieve a production of around 15000 MT per month - the second Splitter was installed with a view to improve the quality of the output and not to increase the production, which fact seems to be vindicated by the production data. We are therefore of the view that, applying the TRU clarification dated 10.7.2008 the additional plant and machinery having been installed with a view to improve the quality of production and not with a view to increase the production, the benefit of exemption cannot be denied to goods manufactured using the second Splitting Column.
The imposition of penalty on the Managing Director, Mr.Rustom Joshi is also not sustainable.
The impugned order is set aside. The appeals are allowed.
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2024 (3) TMI 975
Manner of computation of proportionate reversal of credit determined under Rule 6(3A) of the Rules - Interpretation of statute - Rule 6(3A)(b)(ii) of CCR - Cenvat credit on inputs and input services used for manufacture of LPG & SKO - contention of the department is that for the purpose of reversal, the “Total Cenvat Credit Taken on Input and Input services” should be considered while the contention of the appellant is that “Total Cenvat credit taken on Input and Input services” should include only common Input and Input services used in exempted manufactured goods - HELD THAT:- It would be clear from a conjoint reading of sub-rules 6(1), (2) and (3) of Rule 6 that the total Cenvat credit for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input and input service and cannot include Cenvat credit on input and input service exclusively used for the manufacture of dutiable goods. If the interpretation of the Revenue is accepted, then the Cenvat credit of part of Input and Input service even though used in the manufacture of dutiable goods, shall stand disallowed, which is not provided under any of the Rule of Cenvat Credit Rules, 2004.
The Government has substituted the sub-rule (3A). The legislators very consciously substituted the Rule with intention to give a clarificatory nature to the provision of sub-rule (3A) so as to make it applicable retrospectively. It was all along not the intention of the Government to deny Cenvat credit on the input/input service even though used in the dutiable goods. Keeping the said view in mind, the substitution in sub-rule (3A) of Rule 6 was made. Therefore, the substituted provision of sub-rule (3A) shall have retrospective effect being clarificatory. In the case of GOVERNMENT OF INDIA VERSUS INDIAN TOBACCO ASSOCIATION [2005 (8) TMI 113 - SUPREME COURT], the Hon’ble Supreme Court held that “the word “substitute” ordinarily would mean “to put (one) in place of another”; or “to replace” - As per the interpretation of the Hon’ble Supreme Court, the sub-rule (3A) being substitution shall have a retrospective effect and will be applicable for all time since when the Rule was enacted. Therefore, for this reason also, for the purpose of calculation of Cenvat credit reversal, in the formula, total Cenvat credit shall mean credit of only common input and input service and not of input and input service exclusively used for the manufacture of dutiable product on which the Cenvat credit is eligible to the appellant in its entirety.
Availment of Cenvat credit on inputs and input services used for manufacture of LPG & SKO - HELD THAT:- The issue is no more res integra in view of the Hon’ble High Court of Gujarat decision in the case of RELIANCE INDUSTRIES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI [2022 (11) TMI 923 - CESTAT MUMBAI], wherein the Hon’ble High Court has held that LPG is a by product generated in the process of refining and no reversal is required in this matter.
Since the issue decided in respect of above by-products in above terms, it is not required to deal with issues of what value to be considered for reversal.
The impugned order is set aside. Appeal is allowed.
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2024 (3) TMI 974
Principles of Estoppel against law - Classification of goods - handmade branded unmanufactured tobacco under the brand name of ‘Rajhans’ - classifiable under CETH 24039910 or not - demand confirmed on the ground that appellant had agreed to classification of the said products as manufactured product - purchase of certain perfumeries etc. for mixing the same - HELD THAT:- The finding of the Commissioner (Appeals) to the effect that appellant has admitted the product as manufactured tobacco cannot be the reason for holding against them. It is settled in law that there cannot be any estoppel against the law in the matter of classification.
Reliance placed in the case of ELSON MACHINES PVT. LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1988 (11) TMI 107 - SUPREME COURT] where it was held that Plainly there can be no estoppel against the law. The claim raised before us is a claim based on the legal effect of a provision of law and, therefore, this contention must be rejected.
No evidence has been brought on record either in the impugned order or in the Order-in-Original to show that the goods cleared by the appellant were classifiable under CETH 2403. What operation was undertaken, what was the nature of the products has not been examined and recorded. Nothing is available on record as to what made the finished goods cleared by the appellant during this period different from what was being cleared by them in past and post the brief period of February 2012 to August 2012. The impugned order itself hold that the products produced and cleared by the appellant during the entire period of demand was unmanufactured tobacco.
In the case of YOGESH ASSOCIATES VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT-II [2005 (9) TMI 173 - CESTAT, MUMBAI] Bombay Bench has held The explanatory notes to HSN especially when pari materia are binding to arrive at the classification and the law on this issue is well settled. We, therefore have no reason to take out the product impugned in these appeals, from the Heading 2401.10 as arrived by us and place it elsewhere under Chapter 24.
There are no merits in the impugned order to this extent - appeal allowed.
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2024 (3) TMI 973
Reduction of turnover - cement imported from outside the State of U.P. - Rule 9 of the Value Added Tax Rules - HELD THAT:- Upon perusal of the order of Tribunal it is patently clear that the goods were imported from outside the State of U.P. and were used in one project in the State of U.P. There does not appear to be any perversity in the finding of the Tribunal with regard to the above factum. Such being the case, Rule 9 (1)(e) of the Rules would definitely apply and the petitioner would be entitled to the benefit thereunder.
The general rule of law in taxing statutes is that in case of any doubt the benefit should be given to the assessee. However, in case of exemption and deduction to be given, a stricter approach may be followed, as per catena of judgments of the Supreme Court, to examine whether the assessee is eligible for such benefit. In the present case, there is no factual dispute of goods having been imported from outside the State of U.P. and, therefore, the assessee clearly qualifies for the said benefit.
The question of law is answered in favour of the assessee and against the Department - Application dismissed.
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2024 (3) TMI 972
Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the petitioner and is a cryptic order - HELD THAT:- The observation in the impugned order dated 23.12.2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply is not clear and unsatisfactory. He merely held that the reply is not clear and satisfactory which ex-facie shows that the Proper Officer has not applied his mind to the reply submitted by the petitioner.
Further, if the Proper Officer was of the view that reply was unsatisfactory and further details were required, the same could have been specifically sought from the petitioner. However, the record does not reflect that any such opportunity was given to the petitioner to clarify its reply or furnish further documents/details.
The order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 23.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication - the impugned order records that petitioner’s reply is not satisfactory. The Proper Officer is directed to intimate to the petitioner details/documents, as maybe required to be furnished by the petitioner.
Petition disposed off.
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2024 (3) TMI 971
Dishonour of Cheque - vicarious liability of director - petitioner argues that he had resigned and had ceased to be a Director of the accused company w.e.f. 10.08.2017 and thereafter, he had no concern with the day-to-day affairs and decisions of the company qua its business transactions - HELD THAT:- In the present case, one handwritten line has been added in the complaint i.e. “accused no. 2 to 4 are responsible of day to day affairs of accused no. 1”, and even the complete language of Section 141 of NI Act has not been reproduced, let alone any specific detail about any role played by either of the petitioner in issuance or dishonour of cheque in question or as to how were they-in-charge of or responsible for the day-to-day affairs of the accused company when the cheque in question had been issued or dishonoured. Even before the learned Trial Court, the complainant had submitted the copies of Articles of Association and Memorandum of Association of the accused company, in which the details of Directors, as they were at the time of formation of company in the year 2015, were mentioned, and the updated data of the company available in the records of Registrar of Companies or Ministry of Corporate Affairs website was not placed before the learned Trial Court.
The petitioners had resigned much prior to the issuance of cheque and the complainant has not disputed the factum of their resignations. The Director who had signed the cheque in question i.e. Nikhil Mehta (accused no. 3) continues to be the Director of the accused company till date, whereas the records show that the present petitioners had resigned in the year 2017 itself. Thus, the petitioners cannot be made liable under Section 138/141 of NI Act, in such facts and circumstances.
Petition allowed.
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2024 (3) TMI 970
Denial of benefit of the N/N. 52/2003-customs to input/raw material imported by EOU used - denial on the ground that appellant had consumed inputs and generated wastage beyond the norms fixed by norms committee - HELD THAT:- In the instant case for material consumed over and above the SION notification issued by the DGFT, Department views that duty or at least penalty is liable to be charged in case excess wastage comes into play. However, it is found that Hon’ble Gujarat High Court in the matter of COMMISSIONER, CUSTOMS (PREVENTIVE) VERSUS MONARCH OVERSEAS [2019 (1) TMI 1513 - GUJARAT HIGH COURT], while dealing with scope of Notification No. 52/2003–Cus. Dated 03.01.2003 31.03.2003 particularly clause (3) construed the non-obstante clause by interpreting that once the material procured are used for the purpose of manufacture of finished goods or services then even if, waste and scrap arises in course of production and manufacture over the norm then same is also exempt from the duty of custom leviable or the additional duty.
Appeal allowed.
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2024 (3) TMI 969
Determination of tax u/s 73(9) of the CGST/SGST Act - petitioner submits that the order is passed merely on the representation of the petitioner without giving any opportunity of oral hearing to the petitioner - violation of principles of natural justice - HELD THAT:- The petitioner is entitled for an opportunity of hearing before determination of any tax even under Section 73(9) of the CGST/SGST Act.
The impugned order dated 29.12.2023, is hereby set aside. The matter is remanded back to the appropriate authority to pass a fresh order after giving opportunity of personal hearing to the petitioner - Petition allowed by way of remand.
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2024 (3) TMI 968
Seeking grant of bail - fraudulent availment and passing of input tax credit of G.S.T, by preparing fake invoices without any actual supply of goods by several firms created, managed and run by the applicant - creation of a number of bogus firms for the purpose of issuing fake invoices - HELD THAT:- Perusal of the provisions contained under Section 73 and 74 of the CGST Act would reveal that a mechanism has been provided therein with regard to the determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilfull mis-statement or suppression of facts. Section 74 of the CGST Act provides for assessment of tax by the proper officer by issuing a notice to the assesee, however, sub-section 11 of Section 74 of the CGST Act would suggest that if the tax, which has been calculated along with the interest payable or the penalty is deposited, all proceedings in respect of the said notice shall be deemed to be concluded - it may be inferred that even if all the tax liability including penalty, etc. has been deposited, it would be only the 'notice' which would be discharged and the proceedings with regard to Section 132 of the CGST Act shall remain alive. Thus, there seems force in the submissions made by learned counsel for the Department that the process of prosecution and assessment may go on simultaneously.
The arrest of the applicant has not been done for his non cooperation in the investigation or for further investigation. Nowhere it is stated that the applicant while at liberty may hinder the smooth progress of investigation and in this order it has also not been mentioned as to why the applicant is being arrested, which was required to be stated.
The requirement under sub-section (1) of section 69 of CGST Act is reasons to believe that not only a person has committed any offence as specified but also as to why such person needs to be arrested. From a perusal of the reasons recorded by the Principal Additional Director General, it is reflected that no incident has been mentioned therein recording any act of the applicant or his conduct of threatening any witness or even of not co-operating with the investigation or of fleeing from investigation. It is true that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail, because such offences pose serious threat to the financial health of the country, but there has to be a sound reason or belief for curtailing the liberty of a person, specially in the offences punishable with up to seven years of imprisonment.
Keeping in view the fact that applicant has appeared before the department on 30, 31 January 2024 and on 01st February and his statements have been recorded on these days and he was arrested on 2nd February, 2024 and produced before the magistrate and no custody remand was sought by the department and it was after many days i.e. on 26.02.2024 the department has taken the permission from the Court concerned for interrogation of the applicant in jail and also that applicant has retracted his confessional statements and in the orders of arrest no reason has been mentioned as to why after recording of the statements of the applicant for many days his arrest is required and also keeping view that applicant is in jail in this case since 02.02.2024 and investigation appears to have reached an advanced statge and nothing has been shown before this Court which may justify the further detention of the applicant in prison and also considering that the alleged offence is punishable with up to 5 years maximum punishment and still no formal accusation in the form of FIR or complaint has been filed by the department and also keeping in view that in such circumstances continuing the detention of the petitioner may not at all be justified and it appears justified for this court to strike a fine balance between the need for further detention of the applicant when even custodial interrogation has not been claimed at all by the Department and considering the right of an accused to personal liberty, applicant may be released on bail, however subject to certain conditions.
Let the accused/applicant- Deepanshu Srivastava involved in above-mentioned case, be released on bail on his furnishing a personal bond with two sureties in the like amount to the satisfaction of the court concerned subject to fulfilment of conditions imposed - bail application allowed.
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2024 (3) TMI 967
Reversal of ITC - wrongful availment of Input Tax Credit (ITC) on purchase of Car - impugned order was issued in view of the respondent not being aware of the reversal in the GSTR 3B return - HELD THAT:- The petitioner has placed on record the GSTR 3B return for the month of April in the assessment year 2023-2024. Such return indicates the reversal of ITC to the extent of Rs. 73,690/- each towards CGST and SGST. On examining the impugned order, it is evident that such impugned order proceeds on the basis that ITC of Rs. 73,690/- each towards CGST and SGST was wrongly availed of. In other words, the said order proceeds on the basis that ITC was not reversed. In light of documents placed on record by the petitioner, the said order requires reconsideration.
The impugned order dated 11.07.2023 is quashed and the matter is remanded for reconsideration. The petitioner is permitted to file a reply to the show cause notice dated 19.04.2023 and to submit all relevant documents along with such reply.
Petition disposed off by way of remand.
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2024 (3) TMI 966
Validity of assessment order - fraudulent availment of Input Tax Credit (ITC) - documents produced by the petitioner were disregarded - issuance of fake invoices - HELD THAT:- The documents produced by the petitioner along with the reply to intimation and reply to show cause notice were disregarded and the assessing officer reproduced the statements from the show cause notice. Since there was no application of mind, the impugned assessment order is not sustainable.
The impugned assessment order dated 23.08.2023 is quashed and the matter is remanded for re-consideration. After providing a reasonable opportunity to the petitioner, including a personal hearing, the assessing officer is directed to issue a fresh assessment order within two months. The petitioner is granted leave to submit additional documents to establish that the availment of ITC was in order.
Petition disposed off.
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