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Showing 501 to 520 of 1570 Records
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2024 (5) TMI 1070
Revision u/s 263 by CIT - Period of limitation - requisite action should been completed by which date? - HELD THAT:- In the instant case the assessee originally filed his return of income declaring total income which was assessed to tax u/s 143(3) vide order dt. 18/02/2014 wherein the addition was made towards interest on saving bank account and the assessed income determined at Rs. 3,69,540/- while passing the assessment order.
Therefore if any of the aforesaid issues which is found to be erroneously dealt with by the AO and therefore call for revisionary proceedings u/s 263 then the requisite action should been completed by 31/03/2016 i.e; within two years from the end of the financial Year in which the assessment order was passed which is F.Y. 2013-14.
Transfer expenses, CLU expenses and claim of deduction u/s 54F - As we find that the same are clearly emerging from the reassessment order passed u/s 143(3) r/w 147 of the Act and the impugned revisionary order so passed by the PCIT setting aside the reassessment order is thus not barred by limitation as the limitation period will start from passing of the reassessment order and not the original assessment order.
Sale of the land situated at District Solan the same is subject matter of original assessment proceedings and not the subject matter of reassessment proceedings and therefore, the period of limitation for passing the revisionary order under section 263 would run from the date of the original assessment order and not the reassessment order. Thus, to this extent of subject transaction of Rs 23.99 lacs, the present revisionary proceedings under Section 263 are barred by limitation and the findings of the Ld. PCIT are hereby set aside as not sustainable in the eyes of law.
Transfer expenses and CLU charges we find that the relevant material is available on the record and are admittedly part of the assessment records. Therefore the finding of the Ld. Pr. CIT that no documentary evidence is available on the record is not factually correct. Further, in absence of any adverse finding recorded by the Ld. Pr. CIT regarding contents of the material so available on record and which has apparently been considered by the AO while allowing the claim of the assessee, the order so passed by the AO cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue.
Quantum of deduction under Section 54F of the Act, as submitted by both the parties, we upheld the findings of the Ld. Pr. CIT and the claim of deduction under Section 54F should therefore be restricted to Rs. 30,49,998/- as so computed by the Ld. Pr. CIT and therefore to this extent, the order of the Ld. Pr. CIT is sustained.
Appeal of the Assessee is partly allowed.
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2024 (5) TMI 1069
Addition u/s 68 - Unexplained Cash Credit - loan taken from various parties - amount received during the earlier years and current year - Genuineness of loans and interest payments - HELD THAT:- We observe that except M/s.Frontline Diamond Pvt. Ltd., all other loans taken from other parties are continued from earlier assessment years. Therefore, the addition can be made only to the extent of loan taken by the assessee during the current assessment year.
Therefore, the other continuing loans which are brought forward from earlier assessment years has no relevance to the current assessment year considering the fact that the AO in those assessment years is already proceeded to make the additions in those assessment years. The assessee has to prove genuineness of the transactions u/s 68 only to the extent of credit recorded during the current assessment year.
New loans taken by the assessee during the current assessment year - When the assessee repays the loan which was taken from this party, therefore, this itself shows that assessee has demonstrated the genuineness of the transaction.
Assessee has submitted all the relevant documents relating to above transactions before the Tax Authorities and AO merely relying on the survey report and analyses the creditworthiness of the parties on the basis of earning capacity of the parties, the AO has made the above said additions.
Therefore, in our considered view the assessee has taken the loan from all the above said parties through banking channels and repaid the same as discussed above. The addition can be made during the current assessment year only to the extent of the loan taken by the assessee during the current assessment year can be considered for discussion.
Assessee has submitted the relevant documents and proved the genuineness of the transactions and repaid all the loans taken by the assessee partly during the current assessment year and balance in the subsequent assessment years. Therefore, the additions proposed by the AO is not proper - we direct the AO to delete the addition proposed in this case. Accordingly, Ground raised by the assessee is allowed.
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2024 (5) TMI 1068
Addition u/s 68 - bogus Share Application Money received from various paper companies - specific information was received from the Investigation Wing - CIT(A) deleted addition - HELD THAT:- CIT(A) on a very detailed examination was satisfied about identity, creditworthiness and genuineness of the investor companies and held that the assessee had discharged the primary onus to prove their identity, creditworthiness, and genuineness.
We, therefore, concur with the finding of the CIT(A) that the AO has made an addition under section 68 of the Act without any basis. CIT(A) has analyzed the transaction with each share holder and assigned reasons as to why the share capital have to be treated as genuine and has rightly deleted the addition.
There is no reason to interfere in this finding of fact particularly since nothing has been shown by the department to conclude that the finding of fact was perverse in any manner whatsoever. We hold that the impugned order it did not suffer from any legal infirmity or perversity to the facts on record.
We hold that the CIT(A) has been legally justified in deleting the addition made by the AO u/s 68 - Accordingly, the decision of the CIT(A) on the first issue of deleting addition of share capital is sustained. Thus, the 1st ground of appeal of the department is rejected.
Commission expenses paid for bogus share application money - The share application money received by the assessee is genuine. Therefore, payment of brokerage/commission does not arise. Hence, the disallowance made by the AO, on account of payment of brokerage/commission is uncalled for and needs to be deleted.
Validity of reassessment proceedings - CIT(A) did not adjudicate this ground by holding that since the addition made by the AO have already been deleted, this ground has become academic in nature - HELD THAT:- Hon’ble Madras High Court in case of CIT Vs. India Cements Ltd. [2019 (8) TMI 1485 - MADRAS HIGH COURT] has held that issue of validity of reassessment raised by assessee before CIT(A), taken note of by CIT(A) and not decided by him in view of decision on merits should be taken to have been decided against the assessee. Though assessee did not file an appeal against the order of CIT(A) could support the order on that issue in appeal filed by the department in light of Rule 27 of ITAT Rules and thus Tribunal was right in permitting the assessee to argue on the issue relating to the validity of reassessment proceedings.
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2024 (5) TMI 1067
TDS u/s 195 - FTS payments - non deduction of TDS - disallowance u/s 40(a)(i) - Interpretation of 'Make Available' clause - demand u/s 201(1) and 201(1A) - as argued source of payment being located in India, the payer being in India, India being following source rule, the exception to Section 9(1)(vii)(b) of the Act is not attracted - HELD THAT:- We notice that for the Assessment Years 2011-12 to 2017-18, the Tribunal, vide its consolidated order [2020 (3) TMI 1438 - ITAT BANGALORE] had decided the issue in favour of the assessee. The Tribunal had examined in detail the agreement entered into by the assessee with its payee and the nature of services rendered, etc. Thereafter, it was concluded by ITAT that the payments cannot be attributed as FTS and assessee cannot be made liable under section 201 of the Act.
In light of the above orders of the Tribunal which was confirmed by the Hon’ble High Court [2023 (3) TMI 422 - KARNATAKA HIGH COURT] in assessee’s own case for Assessment Years 2011-12 to 2017-18, we reject the contentions raised by the Department.
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2024 (5) TMI 1066
Seeking permission to file Review Petition - Condonation of delay - HELD THAT:- Application for condonation of delay of 331 days’ in filing Review Petition is dismissed. Application for permission to file Review Petition is rejected.
However, having carefully gone through the Review Petition, we are satisfied that there is no error apparent on the face of the record or any merit in the Review Petition, warranting reconsideration of the order impugned.
The Review Petition is, accordingly, dismissed.
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2024 (5) TMI 1065
Undervaluation - Imports timber from various countries - contemporaneous imports - Burden of proof - duty demand - penalty and interest - third-party documents and statements - HELD THAT:- In the case of Beena Sales Corporation [2019 (3) TMI 982 - CESTAT AHMEDABAD], it can be seen that all the documents and evidences are common which have been relied upon in the present cases also, therefore, the above decision in Beena Sales Corporation, is directly applicable in the present appeals also. Moreover, the decision of Beena Sales Corporation has been upheld by the Hon’ble Supreme Court.
Thus, following the Beena Sales Corporation decision, the impugned orders are not sustainable. Accordingly, the impugned orders are set aside. All the appeals are allowed with consequential relief.
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2024 (5) TMI 1064
Revocation of Customs Broker license - non-existent - forfeiture of security deposit - levy of penalty - involvement in fraudulent IGST refunds, who were not traceable, along with the details Customs Brokers involved in the clearance of the alleged risky consignments - violation of Regulation 10(n) of CBLR, 2018 - HELD THAT:- Following the decision of this Tribuanl in Mauli Worldwide Logistics [2022 (7) TMI 368 - CESTAT NEW DELHI], we are of the view that revocation of the customs broker licence is not justified. The appellant had verified the antecedents and correctness of IEC, KYC documents, GST and other documents of their clients from the Government’s official website (DGFT, GST and Income Tax Department) before the clearance of the goods. As noted by the Tribunal there cannot be more reliable data than the official government website. Consequently, there was no reason for the appellant to have suspected the genuineness of the documents when the contents thereof matched with the details available on the official government website.
Therefore, we do not find any violation of the obligation in terms of Regulation 10(n) by the appellant. The impugned order revoking the Customs Brokers Licence, forfeiting the amount of security deposit and imposition of penalty needs to be set aside.
The appeal is, accordingly, allowed.
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2024 (5) TMI 1063
Exemption of Additional Duty under Notification No.12/2012-CE - Whether ‘Grid-Tied Solar Inverter’ can be considered as “Solar Power Generating System” for claiming the benefit of exemption - HELD THAT:- The "Solar Power Generating System" primarily consists of (1) Solar Photovoltaic Module (2) Mounting Structure for Solar Photovoltaic Module (fixed tilt or tracking type) and (3) Solar Inverter. Undoubtedly, the item imported item ‘Grid Tied Solar Inverter’ is used to convert solar DC power to AC power and forms part of a solar system but cannot be construed to be the Solar System itself. The respondent had imported the product vide Bill of Entry No.6067001 and claimed exemption from Additional duty of customs under the amended Notification No. 12/2012 which clearly allows parts of the solar system only if condition 2 is satisfied and since, the respondent had not satisfied the condition laid down in the Notification, the question of extending the benefit of the notification did not arise.
The Commissioner (Appeals)’s view that the exemption Notification should be liberally interpretated and the burden of prove that the Respondent is not eligible for the benefit lies on the Revenue falls flat in view of the above observations of the Hon’ble Supreme court in the case of Dilip Kumar and Company [2018 (7) TMI 1826 - SUPREME COURT]. The impugned order is set aside and the appeal is allowed.
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2024 (5) TMI 1062
Investigation under Section 212 (1) (c) of the Companies Act, 2013 - scope of judicial review - whether the Central Government has applied its mind and formed an opinion and whether there exist material and circumstances to form such opinion are open to judicial review? - HELD THAT:- Once the liquidator and the authorities have taken action against the company for the alleged transactions covered under section 66 of the IBC, there is no question of SFIO carrying out investigation with respect to the same transactions and same cause of action, more particularly on the ground of public interest, which will otherwise amount to double jeopardy. In the present case the Application under section 66 is pending therefore investigation by the SFIO pursuant to sanction under section 212 would amount to double jeopardy.
There is no element of public interest involved in the present case. Factual Existence of public purpose and interest is by the language of section 212 (1) (c) a condition precedent to order investigation - it is abundantly clear that there did not exist requisite material and circumstances based on which the Respondent No. 1 could have ordered investigation at the behest of SFIO.
The commencement of investigation under section 212 of the Companies Act has far fetched impact on the functioning of a Company. Mere commencement of investigation by SFIO may cause serious injury as soon as it is made and such injury may not be capable of being entirely erased. These powers cannot be used ordinarily or in normal circumstances or in a mechanical way - there is no opinion formed by the Central Government as contemplated and mandated under section 212 of the Companies Act. Merely ordering investigation in a routinely fashion and in a mechanical way, as is done in the present case, would not qualify as forming of opinion for the purposes of Section 212 of the Companies Act.
In the present case, the functions of the Company have come to stand still since its admission under the CIRP by order passed by the NCLT Mumbai dated 03.03.2020 and is pending liquidation, further there is an Application under section 66 of the IBC for recovery of monies which will be decided on its own fate, therefore, in our opinion there is no public interest involved or even a prima-facie case made out for initiation of investigation under section 212 of the Companies Act, even assuming the material and circumstances available with the Central Government at the time of passing the impugned sanction to be true and correct.
An order of sanction under Section 212 of the Companies Act, 2013 needs to be a reasoned order, there needs to be existence of opinion formed by the Central Government on the basis of material facts and circumstances warranting such investigation and in compliance with principles of natural justice - the impugned sanction dated 30.11.021 fails on all counts.
The sanction dated 30.11.2021 under Section 212 (1) (c) of the Companies Act, 2013 is arbitrary, illegal and bad in law and ought to be set aside. Any steps taken in furtherance of the sanction dated 30.11.2021 deserves to be quashed and set aside - Petition allowed.
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2024 (5) TMI 1061
Classification of services - Business Support Service or not - Tribunal held that, the activity undertaken by the appellant is not classifiable under service tax category of the “Business Support Service‟ and therefore, not taxable - Appeal allowed - HELD THAT:- Delay condoned. In view of order passed by the Coordinate Bench of this Court in C.A. No. 1335 of 2022 titled as “Commissioner of Service Tax Vs. Inox Leisure Ltd.”, No case is made out to interfere with the impugned Order passed by the Customs, Excise and Service Tax Appellate Tribunal -
Appeal is disposed of.
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2024 (5) TMI 1060
Demand of service tax - Banking and Other Financial services (BOFS) - reverse charge mechanism - lending activity Or an activity in relation to lending - Applicability of service tax on corporate guarantee fees prior to and post 01.07.2012 - Invocation of the extended period for demand - HELD THAT:- We observe that the Show Cause Notice itself recites that the parent company of appellant has given the corporate guarantee. Though there is guarantee fee agreements dated 25.06.2009 & 30.06.2013 executed between appellant and the parent company by virtue of which appellant is paying guarantee fee. But since it is already held that providing corporate guarantee cannot be called as providing BOFS, prior to 01.07.2012, the amount in lieu thereof cannot qualify for the definition of ‘consideration’ as mentioned above. Apparently parent company of appellant is not in business of lending.
To our opinion the act of providing a corporate guarantee is a separate mechanism to secure the lending transaction and is not related to the lending activity. It stated that the definition of “Banking and Other Financial Services provided in Section 65(12)(a)(ix) of the Finance Act is restrictive and thus, the terms ‘lending succeeded by the term ‘namely’ has to be interpreted in a restrictive manner restricting the service only to lending activity. It further submitted that corporate guarantee is provided by a third party who is not privy or party to the loan or lending transaction. Therefore, the activity of the providing corporate guarantee is neither a lending activity nor an activity in relation to lending.
We draw our support from the case of Olam Agro India Ltd. V. Commissioner of Service Tax, [2013 (11) TMI 1503 - CESTAT NEW DELHI] wherein it was held that “a corporate guarantee does not fall within the ambit of “Banking and Other Financial Services” u/s 65(12) of the Finance Act”, as well as upon the case Sterlite Industries Ltd. vs. Commr. of Central Excise [2013 (8) TMI 452 - CESTAT CHENNAI], to hold that the providing of corporate guarantee does not fall within the ambit of lending activity in terms of Section 65(12)(a)(ix) of the Finance Act. Hence, we hold that question of the activity of extending corporate guarantee by the appellant to its associate companies cannot be called as service in terms of above provision in section 65 B (44) of the Act.
Hence we hold service tax cannot be demanded from the appellant under reverse charge mechanism for the period prior 01.07.2012.
Demand for the period post 01.07.2012 - Admittedly the tax liability on this amount stands already paid by the appellant along with the amount stands already paid by the appellant along with the amount of interest in May 2015 against the acknowledgment by the department for the same. Thus the liability was discharged prior to issue of the Order-in-Original. But the authorities below have not taken the payment into consideration since the payment stands already made, it cannot be demanded again.
We also observe that there is no evidence on record with respect to the observations of ld. Commissioner in Order-in-Original that the corporate guarantee given by the appellant has benefited the associate enterprises in two ways as quoted above. We further observe that issue is no more res-integra as has also been conceded on behalf of the department.
Invocation of extended period - We observe that appellant has claimed that there was a lack of clarity on the issue of service tax on Guarantee Fee before July 1, 2012, and that there was no intention to evade payment. Respondent has failed to prove any mala fide intention on the appellant’s part. Hence, it is held that extended period is wrongly been invoked.
Thus, it is held that for the entire period from financial year 2009-2010 to 1st July, 2012 the Act of receiving a corporate guarantee from parent company was not an act of receiving Banking and Financial Services. The demand confirmed for the said period is hereby set aside.
Hence, the order under challenge is hereby set aside. As a result thereof, the appeal in hand is allowed.
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2024 (5) TMI 1059
Refund of service tax - ‘works contract services’ provided to government authorities - exempt by virtue of Notification No. 25/2012-ST - entitlement to refund in terms of section 102 of the Finance Act - Whether the contracts, on the basis of which the appellant rendered services, were executed prior to March 01, 2015 or not - HELD THAT:- From the record, it is clear that all the contracts were executed before March 01, 2015. The Assistant Commissioner recorded a categorical finding of fact, after examination of all the contracts, that they had been executed before March 01, 2015. It also transpires from the aforesaid chart that the agreements were executed prior to March 01, 2015 and the work orders were subsequently issued to the appellant on March 10, 2015. It also needs to be noted that the appellant had filed the refund claim within six months from the date of enactment of the Finance Bill i.e. May 14, 2016 along with copies of the contracts.
What is relevant for the purpose of section 102 of the Finance Act is the date on which the contracts were executed and not the date of the work orders. The Commissioner (Appeals) has considered the date of the work orders as the relevant date and, therefore, recorded a finding in the impugned order that the appellant would not be entitled to refund since the contracts under consideration were executed after March 01, 2015.
Thus, the order dated September 19, 2017 passed by the Commissioner (Appeals) cannot be sustained and is set aside. The appeal is, accordingly, allowed.
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2024 (5) TMI 1058
Levy of service tax - "Liquidated damages in the contracts" towards penalty/late delivery charges - section 66E (e) of the Finance Act, 1994 - applicability of circular issued by the Department of Revenue - appellant is a Central Government Public Sector Undertaking - HELD THAT:- Ld. Chartered Accountant further submitted that the Department of Revenue has recently issued Circular No. 178/10/2022-GST dated 3rd August 2022 in which they have clarified that there is no liability of payment of Service Tax/GST on liquidation damages charged by the company.
We find that identical issue in the appellant’s own case has been decided by various Benches of Tribunal and which has consistently held that liquidated damages collected by the appellant as penalty/late delivery charges cannot be subjected to service tax u/s 66E (e) of the Finance Act. In this regard, we may refer the Final Order [2023 (4) TMI 54 - CESTAT NEW DELHI] passed by the Principal Bench in the appellant’s own case where identical issue was involved.
Thus, we are of the considered view that the impugned order is not sustainable in law, therefore, we set aside the impugned order by allowing the appeal of the appellant with consequential relief, if any as per law.
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2024 (5) TMI 1057
Clandestine removal - shortage of stock found during joint stock taking conducted by the officers in the presence of the Director of the company - demand of duty and disallowance of credit - demand of duty confirmed on the alleged clandestine removal of goods, on the basis of the data recovered from the CPU - Penalties imposed on the Managing Director and Director.
Demand of Central Excise duty and the disallowance of CENVAT credit on the basis of the shortages noticed during the joint stock verification done - HELD THAT:- The verification of stock was done in the presence of the Director. The weighment sheet is prepared on the basis of weight of each article as provided by the Director multiplied by number of such articles. Counting numbers of the articles was noted down in the rough sheets at the time of stock taking which has been authenticated by the Director on the spot and he has confirmed the shortage in his statement dated 23.08.2008. Subsequent retraction of the statement and alleging that the stock taking was not done properly, seems to be an afterthought - the stock verification has been done properly and there is no reason to suspect the findings arrived at during the course of the stock verification by the officers - there are no infirmity in the findings of the Ld. Commissioner insofar as the demand based on the shortage of stock is concerned.
Demand on the alleged clandestine clearances - HELD THAT:- The demand has been confirmed for the financial years 2004-2005 and 2005-2006 whereas the search was conducted on 23.08.2008. The demand is confirmed based on the print out retrieved from the computer CPUs that was admittedly in the official use of the appellant-assessee - The pen drives recovered from the office premises of the appellant-assessee are floating devices. Many staff from the office would have used the pen drive to store data. Thus, it is required to identify the person who entered the data in the computer. It is also observed that the author of the computer printout recovered from the Appellant's office has not been established in this case. Without identifying the author who entered the data, the information available in the pen drive cannot be relied upon to demand duty - the investigation has not brought in any corroborative evidence to substantiate the allegation of clandestine removal - the charges of clandestine removal against the appellant assessee M/s. Mittal Iron Foundry Pvt. Ltd. in the impugned order is not sustainable.
Penalties imposed on the Managing Director Shri Ramjilal Agarwal and the Director Shri Vijay Kumar Agarwal, under Rule 26 of the Central Excise Rules,2002 read with Rule 15 of the CENVAT Credit Rules, 2004 - HELD THAT:- It is observed that they were in charge of the day-to-day affairs of the company. They admitted the shortage noticed during the joint stock verification. Thus, they are liable for penalty for the shortages noticed during joint stock verification. However, the demand raised on clandestine removal is not substantiated. Accordingly, we hold that they are liable for penalty, but the penalty can be reduced commensurating with the offence. Since the demand is confirmed only relating to the shortages found, it is observed that the penalty of Rs. 10,00,000/- imposed on each can be reduced to Rs. 1,00,000/- each, to meet the ends of justice.
Appeal disposed off.
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2024 (5) TMI 1056
Recovery of the refund of service tax paid - vice of judicial discipline - services rendered to Electro Motive Diesel, Inc (EMD) - export of services or not - Whether the refund granted to the appellant pursuant to the Tribunal's order can be challenged by way of a show cause notice u/s 11A of the Central Excise Act. - HELD THAT:- There is no doubt that the issue has been considered in the earlier decisions passed in the case of the appellant themselves, where the Tribunal in NATIONAL ENGG. INDUSTRIES LTD. VERSUS COMMR. OF C. EX., JAIPUR [2007 (12) TMI 170 - CESTAT, NEW DELHI] dealt with the similar issue while allowing the appeal observed 'In the present case, it is revealed from contract that the appellant would be paid USD equipment (sic) (equivalent) to non-convertible Indian Rupee at the Rate of Exchange prevailing on the date of supply order. It is noted that the equivalent amount of foreign exchange payable to the appellant was not released to the Indian Railways, and therefore, the appellant complied with the provision of Rule 3(1)(b) of the Rules.'.
Similarly, in the final order in the case of the appellant in NATIONAL ENGINEERING INDUSTRIES LTD. VERSUS COMMR. OF C. EX., JAIPUR [2011 (9) TMI 759 - CESTAT, NEW DELHI], the issue decided in favour of the appellant was whether the service provider – appellant in India getting rupee value equivalent to commission amount of 5% US $ shall be liable to service tax on the allegation of nonfulfilment of condition of Rule 3(1)(3) of Export Service Rules, 2005.
Admittedly, neither the final order nor the consequential order of refund was challenged by the Revenue and had thereby attained finality. If the Revenue was agreed by the grant of the refund amount, the proper remedy was to approach the proper forum by way of appeal and not by issuing the show cause notice as they have done in the present case. May be, the matter was subjudiced before the Supreme Court, however, there was no stay of the impugned order and, therefore, the Revenue was bound to implement the order of the Tribunal as confirmed by the High Court of Rajasthan.
The authorities below have seriously erred in upholding the recovery of the refunded amount from the appellant. Once the issue has been decided by the Tribunal that the appellant is entitle to the refund, the authorities below have no jurisdiction to order for recovery of the said refunded amount unless the order of the Tribunal granting refund is stayed or set aside by a higher forum, which is not in the present case. Infact the lower authorities further exceeded the brief by commenting critics on the decision rendered by the Tribunal which is much superior in hierarchy. The impugned order is, therefore, set aside.
Appeal allowed.
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2024 (5) TMI 1055
Clandestine manufacture and surreptitious removal - demand based on statements of the buyers and the appellants recorded during the course of investigation - retraction of statements - HELD THAT:- The statements of the appellants have been retracted, but statements have not been tested in terms of section 9D of the Central Excise Act, 1944 to know the veracity of the statements by examination in chief and after examination in chief of all third party statements, cross-examination of the said statements is required to be done. All these aspects are missing in this case - From the investigation and facts, it is not coming out anywhere that the payment received in the bank account of M/s. Bharat Suppliers was sent to appellant No.1, 2 or 3 by any means and there is no admission to that extent by the appellants.
Admittedly, in the case in hand this Tribunal in the case of M/S ARYA FIBRES PVT. LTD., M/S NOVA PETROCHEMICALS LTD. AND OTHERS VERSUS CCE AHMEDABAD-II [2013 (11) TMI 626 - CESTAT AHMEDABAD] has laid down the certain parameters to establish clandestine removal of goods, the show cause notice is not in conformity with the criteria in the case of Arya Fibres Pvt.Ltd. The allegation of clandestine removal of goods is not sustainable.
Moreover, the statements which has been relied by the adjudicating authority in the impugned order, are not tested as per procedure prescribed under section 9D of the Central Excise Act, 1944 to find out the genuineness of the statements recorded during the course of investigation - the allegatoin of clandestine removal of goods by appellant No.1 is not sustainable against the appellants, the same has been alleged on assumption and presumption without corroborative evidences, therefore, no demand of duty is sustainable against the appellants alleging clandestine removal of goods, consequently, no penalty can be imposed on the appellants.
It is further noted that the Ld.Counsel for the appellant has taken the ground that they have paid the entire amount of duty along with interest and 25% penalty under protest, the same is required to be refunded to the appellant as the said amount has been paid by the appellant after adjudication of the case. Therefore, bar of unjust enrichment is not applicable to the facts of this case.
The amount of duty, interest and penalty paid by the appellant after adjudication and under protest for entertaining the appeals filed by the appellant is refundable to the appellant - Appeal disposed off.
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2024 (5) TMI 1054
Valuation - balance amount collected subsequent to installation of the bearings in the project - Amount received towards supply of goods or services? - Required to be added in the assessable value or not - Non-following of CAS- 4 valuation - extended period of limitation - HELD THAT:- In the present case, without any dispute, the Appellant has divided the contract into two parts and paid any Excise Duty on 70% of the value treating the same as the value of goods supplied. For the balance 30% value of the contract, they have not paid any Excise Duty. For the second portion of this contract value amounting to 30% realization by the Appellant would in fact should be termed as service and the Department should have demanded Service Tax on the same. Considering the fact that the main contractor HCC was awarded the contract under “Works Contract” and both materials and services are involved even in respect of the goods to be cleared by the Appellant, it is clear that designing, installation etc. form part of the services rendered by the Appellant. Therefore, the Revenue is in error in treating this as a valuation case by enhancing the value of manufactured goods to arrive at the quantified/confirmed demand.
Non-following of CAS- 4 valuation - HELD THAT:- Since this is not a case where the Appellant is supplying to their own unit and the goods are not cleared on stock transfer basis, they are not required to follow CAS-4 value. Even otherwise, irrespective of the value declared for the manufactured goods cleared, in the normal course on the balance 30% portion the appellant would have been liable to pay the Service Tax. However, the Department has failed to issue the Show Cause Notice demanding the Service Tax.
The confirmed demands are not sustainable on merits - the confirmed demand and penalty on the Appellant company is set aside.
Time Limitation - HELD THAT:- The SCN has been issued within one year from the date of Audit getting the reply from the appellant. But it is noted that the appellants are registered manufacturer. As such they have been filing their Monthly Returns showing the value adopted by them. Even under the self assessment regime, scrutiny of the ER-1 Returns are still to be taken up by the Range officials. There is nothing to indicate that the self-assessed ER-1 were taken up for scrutiny and any query was raised towards the assessable value adopted by the appellant for their clearances. Therefore, the confirmed demand for the extended period is set aside.
The confirmed demand is not sustainable against the Appellant company, the question of imposing penalty on the Director would not arise. Accordingly, the penalty imposed on him is also set aside.
Appeal allowed.
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2024 (5) TMI 1053
Penalty u/r 26 of the Central Excise Rules, 2002 imposed on the appellants as company - appellant failed to verify the payment of excise duty in the invoice - HELD THAT:- From plain reading of the legal provisions contained in Rule 26, it transpires that the penalty under this rule can be imposed in specified situations given therein. One such situation is, that a person who does any act in acquiring possession or who in any manner deals with, the excisable goods which he knows that these are liable to confiscation can be imposed with penalty. The second situation is in respect of person, who is liable to pay duty upon issue of excise invoices, but issues such invoice without delivery of goods or issues it wrongly to enable the recipient to claim undue benefit. Thus, these provisions make it essential that a person should have the knowledge of the fact that the subject goods are being liable to confiscation. As the acquisition of such knowledge is related to individual persons, it is apparent that such penalty under Rule 26 ibid is applicable on individual persons and not on legal person.
Further, in the present case, the appellants are not the person, who are issuing excisable invoices for the CDs/DVDs. The only allegation on the appellants is that they did not verify the payment of excise duty in the invoice. It is seen from the contract entered with M/s M/s KRCD (India) Pvt. Ltd., that the price is inclusive of all excise duty and other taxes. Inasmuch as the appellants have specifically indicated in contract that the price is inclusive of excise duty, there does not appear to be any ground for the appellants to believe that the DVDs or CDs have been supplied without payment of excise duty. Thus, on the above basis also, the imposition of penalty under Rule 26 is not sustainable.
The issue is no more in dispute as in a number of orders, the Tribunal has held that penalty under Rule 26 can be imposed only on individuals and not on company - in the case of Kakateeya Fabs (P) Ltd. [2017 (9) TMI 13 - CESTAT NEW DELHI], the Tribunal has held that that penalty under Rule 26 cannot be imposed on company firm or organization.
The impugned order to the extent it has imposed penalty under Rule 26 of Central Excise Rules, 2002, on the appellants is not legally sustainable - the impugned order set aside - appeal allowed.
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2024 (5) TMI 1052
Calculation of education cess and higher secondary education cess on the excise duty chargeable on the goods cleared by 100% export oriented unit into DTA - HELD THAT:- It is found that even though in the matter the issue in hand is pending before Hon’ble Supreme Court in case of SARLA PERFORMANCE FIBERS LTD. VERSUS COMMISSIONER OF C. EX., VAPI [2010 (2) TMI 335 - CESTAT, AHMEDABAD], there is no stay granted to the Revenue. Moreover, in the appellant’s own case MEGHMANI DYES & INTERMEDIATES LTD. VERSUS COMMR. OF C. EX., AHMEDABAD [2010 (4) TMI 1026 - CESTAT AHMEDABAD] following the decision of Sarla Performance Fibres Limited, this Tribunal has passed the order in their favour and the same was upheld by the Hon’ble Supreme Court in COMMISSIONER VERSUS MEGHMANI DYES & INTERMEDIATES LTD. [2014 (11) TMI 615 - SC ORDER].
The Tribunal in the case of M/s. Sarala Performance Pvt. Ltd. held that once the measure of Customs duty equivalent to Central Excise duty had been calculated, there was no need to levy Education Cess separately for clearances by 100% EOU to DTA.
In view of the above decision of the Tribunal which was upheld by the Hon’ble Supreme Court in the appellant’s own case, the present appeal does not survive - appeal of Revenue dismissed.
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2024 (5) TMI 1051
Clandestine removal - demand based on the finding that weight of physical stock of grey fabrics ( finished goods) less than the weight recorded - clandestinely removal of duty free raw material by manufacturing and clearing grey fabric (finish goods) showing the excess weight than the actual weight of grey fabrics - invocation of extended period of limitation - confiscation - levy of redemption fine and penalty - Cross-examination of witnesses - admissible evidences or not - violation of principles of natural justice.
Principles of natural justice - HELD THAT:- It is found that in this matter earlier the matter was remanded by this Tribunal vide order dated 26.11.2014 with a direction to comply with the principles of Natural Justice. In the remand proceedings the appellant have specifically requested for cross-examination of the witnesses who have given the statements including the 3 buyers of the alleged clandestinely purchased goods. However, Learned Adjudicating Authority has not granted the cross examination.
Cross-examination of witnesses - admissible evidences or not - HELD THAT:- From the statutory provision of Section 9D, it is settled that the statements which have not passed the test of examination-in-chief and/ or cross-examination of witnesses, are not admissible in evidence. Therefore, the case based on the statements will not stand. As regard other evidence that there is a difference in weight since, it is also based on statement, the allegation majority stand diluted on this account also.
Demand based on the finding that weight of physical stock of grey fabrics ( finished goods) less by 7156.720 Kgs since the recorded stock was 13257 Kgs admeasuring 66426 linear meters - HELD THAT:- It is admitted fact that there is no difference in the length of the fabrics. Moreover, the officer also found that even length in linear meter matching there is different recorded weight of 6100 Kgs. In this position, the allegation is clearly based on assumption that 7156.720 Kgs of raw material (PFY) used in these finished goods ( grey fabrics) was removed clandestinely - the weight of the finished goods (grey fabric) cannot be assumed or counted to be the same as the imported raw material PFY to allege such illicit removal of PFY. Admittedly the raw material used in manufacturing process would be much less than weight of finished goods. Hence mererly by taking statements which are not admissible, the clandestine removal is not established - there is no evidence that due to difference in weight as stated by these buyers whose statements have already been discarded, there is no financial flow on this account. This further reinforced that the buyer’s statements are not correct.
It is found that the department could not establish clandestinely removal of goods. Therefore, the entire demands including penalties are not sustainable - appeal allowed.
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