|
Advanced Search Options
Case Laws
Showing 301 to 320 of 1354 Records
-
2024 (3) TMI 1054
Refund of export duty paid in excess consequent to the issuance of duty reduction Notification No.62/2007 dated 03.05.2007 - conclusive evidence to discharge the burden of unjust enrichment - whether the incidence of duty has been passed on to the buyer? - HELD THAT:- Clause 4 of the Contract dated 26.04.2007 between the buyer and the seller clearly stated that all Indian taxes on cargo will be borne by the seller is not under dispute. The Bank Realization Certificate, invoice, the bill amount in foreign exchange and dispatch amount due to the exporter was less than the FOB value shown in the shipping bill, are also facts that are not disputed. The learned Commissioner (Appeals) in the impugned order relies on the financial records to state that it is not shown as ‘receivables’ and relying on the Board Circular dated 28.05.2008, without disputing the above facts rejects the refund claim without any justification for rejection. The fact that all the documents have been placed by the appellant justify that the export duty paid by them has not been passed on to the buyer brushing them aside without any reasoning is not sustainable.
The seller has borne the incidence of duty. The undertaking by the buyer also is on record which states that the incidence of export duty for the impugned shipment was not passed on to them. In view of the above documents, there are no reason to sustain the impugned order.
Appeal allowed.
-
2024 (3) TMI 1053
Undervaluation of imported goods - Patchouli Oil - insured value of the goods was higher than the invoice value declared for clearance of the goods - ascertainment of value of contemporaneous imports of Patchouli Oil of Singapore origin - assessable value declared by the appellant in the said two Bills of Entry were rejected on the ground that the insured value of the product was higher than the value declared in the invoice - period from 2005-06 - HELD THAT:- It is observed that the value declared by the appellant for insurance purpose has no relevance for the purpose of assessment of customs duty. There is no evidence on record produced by the investigating officers to the effect that the appellant had actually paid the insured value for the purpose of importation of the impugned goods. Thus, there was no basis for rejection of the declared value by the Department.
The quality of Patchouli Oil depends on different chemical factors including alcohol contents. The imports imported by the appellant has been assessed and customs duty has been demanded at the time of importation of the goods. The assessments have not been challenged and they became final. Subsequent to its clearance, factors such as higher value adopted for insurance cannot be a reason for rejection of the assessable value declared - After rejecting the declared assessable value, the Department has adopted the price of contemporaneous import of similar goods to enhance the value declared, without adducing any evidence to the effect that the goods are comparable. There is no evidence available on record to indicate that the Patchouli Oil imported by the appellant and the contemporaneous imports whose price has been adopted by the Department are similar in all respects.
The demand of differential duty along with interest confirmed in the impugned order is not sustainable and accordingly, we set aside the same. Since, the demand of duty is not sustainable, the question of imposing penalty on the appellant importer does not arise.
Imposition of personal penalty on Shri Subhas K Naik - HELD THAT:- There is no finding in the impugned order regarding the role played by the appellant in the alleged under valuation. It has been alleged that Shri Subhash Khandubhai Naik has visited the supplier and fixed the price over telephone and accordingly, the lower price was fixed due to his personal influence. In view of the discussions, the allegation of under valuation is not substantiated. Accordingly, penalty imposed against the Director of the appellant-importer cannot be sustained and the same is accordingly set aside.
The rejection of assessable value under the above two Bills-of-Entry is legally not sustainable. Accordingly, the differential duty along with interest and penalty confirmed in the impugned order set aside - the penalty imposed on the Director of the appellant-company set aside.
Appeal allowed.
-
2024 (3) TMI 1052
Smuggling - seizure of three cut pieces foreign origin gold totally weighing 1000 gms - Validity of Show cause notice issued - limitation - burden of prove - Confiscation - Penalty - HELD THAT:- Admittedly, it is the case of town seizure as the appellant was intercepted in the domestic terminal at Hyderabad. The only evidence brought on record by Revenue as to the smuggled nature of goods is firstly, that the three pieces of gold have got markings indicated their foreign origin and secondly, the statement of the appellant that he is aware that he has purchased gold at Hyderabad, which is of smuggled in nature and the same has been purchased without any invoice/bill/receipt.
From the tenor of the statement recorded from the appellant, its voluntary nature is doubtful as no person of ordinary prudence will state that the gold he is possessing is of smuggled in nature. I further find that it has been held by the Hon’ble Supreme Court in Vinod Solanki vs UOI [2008 (12) TMI 31 - SUPREME COURT] that where the accused/noticee disputes the voluntary nature of his statement, the onus is on Revenue to prove the voluntary nature of the statement recorded. Thus, the statement as recorded of the appellant on 01.02.2020 is not voluntary in nature.
The SCN is bad and hit by limitation as the same has been issued after more than six months from the date of seizure as required u/s 110(2) of the Act. In this view of the matter, the appeal is allowed and the impugned order is set aside.
Accordingly, the gold in question shall be released to the appellant forthwith, and if already sold, to return the sale proceeds, with interest as per Rules. The appeal is allowed in the aforementioned terms.
-
2024 (3) TMI 1051
Levy of penalty u/s 112(a) and Section 114AA of CA on Chartered Engineer - Issuance of Certificate under EPCG scheme without verification - issuance of Certificate based on documents so submitted for installation and use of such imported embroidery machine under EPCG without first verifying whether the machine in question were installed or not by Chartered Engineer - HELD THAT:- There is no dispute as regards the fact that the Appellant had issued such Certificate for installation and use of machinery which is a mandatory requirement under the EPCG Scheme without verifying the installation of machine in the premises of the factory of the importer. The purpose of such certificate issued by a Chartered Engineer is not only to facilitate installation of machinery as imported under the EPCG Scheme but the installed machine also acts as a precursor for the importer to avail benefit of EPCG exemption therefore to fulfill purpose of installation it is imperative that the presence of machinery on the premises be verified. To issue such Certificate without verification of the fact that machines are installed in the factory, the appellant has facilitated to evade custom duty by the importer which under the application of law is construed to be a serious offence on the part of the Appellant.
The Appellant is liable for penalty under Section 112(a) and Section 114 AA. However, considering the fact that the Appellant under bonafide belief relied on the documents to issue certificate due to which his registration was cancelled and his business suffered for three years, the Appellant deserves leniency as regards the quantum of penalty imposed.
The penalty under section 112(a) from Rs.1,00,000/- reduced to Rs. 50,000/- and that under section 114AA from Rs.10,000/- to Rs. 5,000/- - appeal allowed in part.
-
2024 (3) TMI 1050
Refund of SAD - time limitation - rejection on the ground that the claim was filed after more than one year from the date of payment of CVD - HELD THAT:- The Delhi High Court judgments in SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [2014 (4) TMI 870 - DELHI HIGH COURT] and COMMISSIONER OF CUSTOMS (IMPORT) VERSUS GULATI SALES CORPORATION [2017 (11) TMI 1300 - DELHI HIGH COURT] are in respect of refund claims filed prior to the amendment carried out vide Notification No. 93/2008-Cus dated 1.8.2008.
On the other hand, in the case of TRANASIA BIO-MEDICALS LTD. VERSUS COMMISSIONER OF CUS. (SEA) , CHENNAI [2019 (9) TMI 1563 - CESTAT CHENNAI] the period involved is December 2015 to April, 2016. Further, in this case the Tribunal has extensively cited the order of the Hon'ble Bombay High Court in the case of M/S. CMS INFO SYSTEMS LIMITED VERSUS THE UNION OF INDIA & OTHERS [2017 (1) TMI 786 - BOMBAY HIGH COURT].
The Tribunal has also considered the judgment of Hon'ble Supreme Court in the case of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT], wherein it has been held that if the assessee wishes to avail any exemption Notification, all the conditions set therein have to be fully complied with. In the present case, both the Bombay High Court judgment and Supreme Court judgment in the case of Dilip Kumar would be squarely applicable. If the appellant wishes to claim the refund of CVD, he is required to fulfill the condition of filing the refund claim within one year which is a mandatory condition under Notification No. 93/2008.
Therefore, following the ratio of Tranasia Bio-Medicals Ltd. Case law, the appeal filed by the Appellant is dismissed.
-
2024 (3) TMI 1049
Condonation of delay in filing appeal - time limitation - Power of Commissioner (Appeals) to condone the delay - appeal dismissed for the sole reason that not only was the appeal not filed within 60 days from the date of communication of the order to the appellant but was filed even beyond the extended period of 30 days, which period alone could have been condoned by the Commissioner (Appeals) - HELD THAT:- This issue was examined at length by the Supreme Court in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT]. Though the decision is in the context of section 35 of the Central Excise Act, 1944, but the provisions of section 128 of the Customs Act are pari materia with the provisions of section 35 of the Excise Act, as section 35 of the Central Excise Act also provides that an appeal can be filed before the Commissioner (Appeals) within 60 days from the date of communication of the decision or order, but the Commissioner (Appeals) can condone the delay of 30 days after the expiry of the period of 60 days, if he is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the stipulated period of 60 days. The Supreme Court held that as the period upto which the prayer for condonation can be accepted is statutorily provided, the contention that section 5 of the Limitation Act, 1963 could be invoked to condone further delay after the expiry of 30 days cannot be accepted. The Supreme Court also observed that the appellate authority had no power to allow the appeal to be presented beyond the period of 30 days as was clear from the provisions of section 35 of the Central Excise Act.
The period of limitation for filing the appeal before the Commissioner (Appeals) has to begin from 30.12.2018, on which date the appellant received the order dated 14.12.2018 passed by the Joint Commissioner. Though the letter dated 21.01.2019 said to have been sent by the Joint Commissioner to the learned counsel for the appellant has not been brought on record by the appellant, but what has been stated by the learned counsel for the appellant is that the said letter informed the learned counsel that any communication from the appellant received after 14.12.2018, on which date the Joint Commissioner passed the order, could not have been considered in the impugned order.
In any view of the matter, it is the order dated 14.12.2018 that was required to be assailed by the appellant before the Commissioner (Appeals) and indeed it was this order that was assailed. Exchange of communications between the learned counsel and the Joint Commissioner after the passing of the order cannot enure to the benefit of the appellant to claim that the period of limitation would commence from 22.02.2019, on which date the learned counsel for the appellant choose to file a reply to the letter dated 21.01.2019 sent by the Joint Commissioner - The appellant was clearly aware of the fact that it was the order dated 14.12.2018 that was required to be assailed before the Commissioner (Appeals) and this fact has also been stated by the appellant in the Memo of Appeal.
Thus, in view of the undisputed position that the appeal was filed by the appellant before the Commissioner (Appeals) on 22.04.2019, beyond the period contemplated under section 128(1) of the Customs Act, the Commissioner (Appeals) committed no illegality in dismissing the appeal as the appeal was filed before the Commissioner (Appeals) not only beyond the period of 60 days from the date the appellant received the order passed by the Joint Commissioner on 30.12.2018, but even beyond the extended period of 30 days, which period alone could have been condoned by the Commissioner (Appeals).
This appeal which has been filed to assail the order dated 09.01.2020 passed by the Commissioner (Appeals) is, therefore, without any merit. It is, accordingly, dismissed.
-
2024 (3) TMI 1048
Attachment of current account - seeking recall of the sanctioned resolution plan - Section 31 of the IBC - HELD THAT:- Once the resolution plan has been approved/sanctioned by the NCLT, it is binding on all the stakeholders.
Under Section 32 of the IBC, any appeal from an order approving the resolution plan by the NCLT, can be made in the manner and on the grounds laid down under Section 61 (3) of the IBC and such an appeal can be filed within 30 days before the National Company Law Appellate Tribunal (NCLAT). The NCLAT can allow further extension of time for sufficient cause but not beyond a period of 15 days. As on date and as also recorded by the NCLT order dated 16th January, 2024, no appeal has been filed by the Respondent and the period for filing the same has also long expired.
The Hon’ble Supreme Court in the case of Ghanshyam Mishra and sons private limited through the GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT] has observed that it is trite law that the resolution applicant cannot be fastened with the liabilities in relation to the period upto the date of the resolution plan in case the resolution plan is approved under Section 31 of the IBC.
There is no dispute that the resolution plan approved vide order dated 12th December, 2017 has attained finality and accordingly the claim of the creditors or statutory authorities has to be dealt with in accordance with the approved resolution plan. The principle of clean slate as propounded by the said decision requires that the corporate debtor viz. the Applicant herein cannot be fastened with any liability for a period upto the date of the approval viz. 12th December, 2017, even if such liability crystallizes after this date. That all liabilities payable to any creditor shall stand satisfied and discharged upon approval of the resolution plan, provided those sums are set aside against which all such liabilities are paid.
The warrant of attachment on the said current account be set aside - application disposed off.
-
2024 (3) TMI 1047
Non-admission of full claim by RP - Appellant’s case is that although possession were offered, but the Appellant did not take possession since Units were not complete - HELD THAT:- It is relevant to notice that the Resolution Plan of the SRA has already been approved by the Adjudicating Authority vide order dated 20.11.2023 and under the Resolution Plan, the SRA has provided to give 40% of the admitted claim as well as the Units, to which the Appellant is entitled as per the Plan. There is no dispute that Unit Nos. 1GF and 5GF with basement were allotted to the Appellant and the possession was offered on 30.09.2020, which was not taken by the Appellant. Partial Completion Certificate dated 14.10.2016, issued by the competent Authority has already been brought on the record. The Appellant although had not accepted possession on 30.09.2020, but allotment having not been disputed, the Appellant is entitled for the Units as well as the amount as per the Resolution Plan, which has been approved on 20.11.2023.
The Adjudicating Authority has noticed that claim of the Appellant having already been revised, there was no ground made out to interfere with the decision of the RP. The RP has applied his mind and passed a detailed and reasoned email regarding the claim, hence, no interference is called for. The Adjudicating Authority having taken a decision, not to interfere with the admission of the claim of the Appellant, there are no reason to interfere with the impugned order passed by the Adjudicating Authority rejecting the IA Nos.4229 and 4089 of 2023.
The Resolution Plan of the Corporate Debtor has already been approved on 20.11.2023, under which the SRA has undertaken to pay 40% of the amount admitted, i.e., 40% of the assured return - It is noted that although, possession of the Units offered to the Appellant on 30.09.2020, but the same was not taken by the Appellant. The Appellant having not taken possession of the Units and the Units having already been allotted to the Appellant, the Appellant is entitled for the Units.
The SRA is directed to execute the Conveyance Deed for Units 1GF (with basement) and 5GF (with basement) and handover the possession of the Units to the Appellant - appeal disposed off.
-
2024 (3) TMI 1046
Dismissal of Section 9 petition - initiation of CIRP - It is contended that the Appellant remained an employee of the Corporate Debtor all through until his resignation and hence the Corporate Debtor was liable to clear the operational dues - HELD THAT:- The Adjudicating Authority in the impugned order after noticing the full and final settlement document has observed that the same was executed between the Appellant and MNT and not between the Appellant and the Corporate Debtor. The Adjudicating Authority has thereafter concluded while passing the impugned order that the settlement agreement clearly shows that the Appellant rendered services to MNT which was a separate company from the Corporate Debtor. The Adjudicating Authority has further gone a step ahead to examine whether in such circumstances the Corporate Debtor can be said to owe any liability to the Appellant in the backdrop of their contention that the Corporate Debtor and the MNT shared the same the management.
The Adjudicating Authority after referring to the decision of the Hon’ble Supreme Court in the matter of VODAFONE INTERNATIONAL HOLDINGS BV. VERSUS UNION OF INDIA & ANR. [2012 (1) TMI 52 - SUPREME COURT] has relied thereon to hold that the holding company and subsidiary company are to be considered as separate legal entities and merely because their management was the same, raising of claims by the Appellant against the Corporate Debtor was not tenable.
The reliance placed upon the Vodafone judgment supra by the Adjudicating Authority in the present facts of the case does not suffer from any infirmity and is very much in order. In this judgement the Hon’ble Supreme Court has carved out the basic legal principle with regard to relationship between subsidiary company and holding company by holding that the legal relationship between a holding company and its subsidiary is that they are two distinct legal persons and the holding company does not own the assets of the subsidiary. The business of a subsidiary cannot therefore ordinarily be treated to be the business of the holding company.
A subsidiary is a separate legal entity for tax and liability purposes. A subsidiary being a distinct legal personality is also allowed to have decentralised management. Mere ownership, parental control, management of a subsidiary by the holding company therefore does not constitute sufficient and adequate ground to justify piercing the status of their relationship as has been urged by the Appellant in the present case. Further, wherever public interest necessitates lifting of the corporate veil in the interests of justice, there always has to be some specific proof and evidence of fraud, wilful breach of trust, or some sham at play leading to avoidance or limiting the liabilities of the subsidiary company - However, to hold the parent company liable, there is need of specific and detailed information, but no such credible information has been provided by the Appellant. In the present case, there are no sustainable grounds placed on record for holding the Corporate Debtor company liable for the acts of its subsidiary and hence we affirm the findings recorded by the Adjudicating Authority in the impugned order.
The present is not a case where there is an undisputed debt for which Corporate Debtor can be brought under the rigors of CIRP. Therefore, in the attendant circumstances, the ratio of the judgement of the Hon’ble Supreme Court in the case of Mobilox [2017 (9) TMI 1270 - SUPREME COURT] squarely applies to the facts of this case. When any Operational Creditor seeks to initiate insolvency process against a Corporate Debtor, it can only be done in clear cases where no real dispute exists between the two which is not so borne out from the present factual matrix.
The Adjudicating Authority did not commit any error in rejecting the Section 9 application. There are no reasons to disagree with the findings of the Adjudicating Authority - There is no merit in the Appeal - Appeal is dismissed.
-
2024 (3) TMI 1045
Classification of service - Business Auxiliary Service - Business Support Service - Intermediary - it was held by CESTAT that The appellant does not satisfy the conditions to be an ‘intermediary’ for his services and as such, the impugned order 08.07.2019 cannot sustain and is required to be set aside - HELD THAT:- The respondent-Company does not fall within the scope and ambit of any of the aforesaid definitions. This is having regard to the scope of its mandate to act on behalf of the principal namely primark.
Appeal dismissed.
-
2024 (3) TMI 1044
Classification of services - Clearing and Forwarding Agents or not - testing the quality of silk received from the reelers and stock it for being sold in open auction to various agencies like the appellant, Handloom Silk Weavers Cooperative Societies and Twisters - HELD THAT:- The facts of the present case are more or less akin to the facts of THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. THE SALEM STARCH & MANUFACTURERS SERVICE INDUSTRIAL CO-OPERATIVE SOCIETY LIMITED [2013 (8) TMI 296 - MADRAS HIGH COURT], wherein also the Hon'ble High Court has held that there is no question of clearing and forwarding agents service involved and consequently there was no liability to service tax under the said category.
The demand of service tax on the appellant under the category of ‘Clearing and Forwarding Agents’ Service is not sustainable, for which reason, the impugned order cannot sustain - the impugned order set aside - appeal allowed.
-
2024 (3) TMI 1043
Declared Service or not - agreement entered by the respondent-assessee with M/s. Syngenta India Limited for job work and were entitled to receive a variable costs and a fixed cost from M/s. Syngenta India Limited - falling under the categories of service “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act”, or not - clause (e) of Section 66E of the Finance Act, 1994 - HELD THAT:- On perusal of record as well as the agreement for job work, it is found that the agreement is primarily for undertaking job work for manufacturing various pesticides and the payment schedule for both, fixed as well as variable payment for manufacture of pesticides.
It can be seen from the schedule produced that payment for the job work for manufacturing of various kinds of pesticides has two components, firstly fixed charges per month of Rs. 16 Lacs and fixed charges up to 1500MT of per kg. basis at the rate of Rs. 5.7 per kg. for formulation and secondly for manufacturing of pesticides of above 1500MT variable rates has been given as provided - It can be seen that the agreement is primarily for manufacturing of pesticides by respondent-assessee on job work basis. The first category of the fixed charges which is at the rate of Rs. 16 Lacs per month is an integral part of the job work manufacturing charges i.e. primarily for the purpose of keeping the confidentiality of the formulation of the M/s. Syngenta India Limited and same cannot be considered separately from the job work agreement.
The fixed cost which are being paid to the respondent-assessee do not fall under Declared Service category as mentioned under Section 66E(e) and the amount which is paid to the respondent-assessee is primarily for manufacturing cost undertaken by them on job work basis.
It is an accepted legal position that the agreement has to be considered in its entirety for the purpose of levy of service tax since the agreement is primarily for undertaking job work for manufacturing various kinds of pesticides and therefore, even if the payment for the job work is made in two types namely one as fixed and another is at variable cost, this fact will not change the nature of the agreement and same is to be considered as job work manufacturing agreement - the department’s stand that fixed component of the payment for the job work category under the declared service under Section 66E is not sustainable.
The impugned order-in-original is legally sustainable - appeal is dismissed.
-
2024 (3) TMI 1042
Rejection of refund claim on the ground of unjust enrichment - amount has been rightly credited to the Consumer Welfare Fund or not - Section 11 B of the Central Excise Act, 1944 - HELD THAT:- The reasons for rejecting is that in terms of Section 11B of the Act, 1944, the appellant was required to submit such documentary or other evidences so as to establish that the amount of duty and interest, if any, and the incidence of such duty had not been passed on by him to any other person - Both, the Adjudicating Authority and the Appellate Authority had specifically noted that either the appellant had not produced the documents or had only submitted the photocopies of the Ledger Account and invoices.
The refund claim filed by the appellant includes the amount of Rs.7,24,463/- excess paid under the category of ‘Management, Maintenance & Repair Services’. As the refund claim is found to be hit by unjust enrichment clause for want of requisite documents, an opportunity may be granted to the appellant to produce the documents and other evidences proving that the incidence of duty has not been passed on either directly or indirectly to the service receiver.
The matter is remanded to the Adjudicating Authority, granting liberty to the appellant to substantiate that the claim is not hit by unjust enrichment in the light of the documents produced - Appeal allowed by way of remand.
-
2024 (3) TMI 1041
Liability of service tax on the alleged differential amount - It appeared to Revenue that Appellant have declared income of Rs.1,07,38,534/- in the income tax return for the financial year 2015–16 whereas they have declared gross receipt of Rs.50,27,482/- in their half yearly service tax return - whether the Commissioner (Appeals) have rightly set aside the Adjudication Order by which the Adjudicating Authority have dropped the proposal of service tax in the show cause notice? - HELD THAT:- The grounds of appeal before the Commissioner (Appeals) raised by Revenue are wholly vague. No exact Rule is pointed out of the POPS Rules which have been violated - it is found that the allegation that the Adjudicating Authority did not examine the services provided to the other 3 foreign companies other than Mavensoft Technology as their names are not mentioned in the Adjudication Order in contrary to the finding of the Original Authority.
The Commissioner (Appeals) have just raised some doubts and without any categorical adverse finding, have been pleased to set aside the Adjudication order. It is found that the impugned order is cryptic and nonspeaking.
The impugned Order-in-Appeal is set aside - the Order-in-Original is restored - appeal allowed.
-
2024 (3) TMI 1040
CENVAT Credit - trading was exempted service - common input services used by the appellant towards manufacture of the goods, providing taxable service and also providing trading - HELD THAT:- It can be seen that mention of trading as exempted service appeared in Chapter V of Finance Act, 1994 for the first time with effect from 01.04.2011. The present demand is for the period prior to 01.04.2011. Therefore, the definition of exempted services with effect from 01.04.2011 is not applicable to the period of the present show cause notice. During the period of present show cause notice, there was no whisper of trading in Chapter V of Finance Act, 1994 which deals with the provisions of law related to levy of service tax.
There was no provision of law for disallowance of cenvat credit availed on service tax paid on input services which also were utilized for trading activity during the relevant period - part of the impugned order through which cenvat credit of Rs.1,97,62,992/- was disallowed is set aside. Once the said cenvat credit is held to be admissible, then there is no question of short payment of service tax as held in the impugned order.
The impugned order set aside - appeal allowed.
-
2024 (3) TMI 1039
CENVAT Credit - input service availed by the appellant at the depot level - nexus with the manufacture of the excisable goods either directly or indirectly in or in relation to the manufacture of the final product and clearance of the final product up to the place of removal - Rule 2 (L) of Cenvat Credit Rule, 2004 - time limitation - HELD THAT:- The appellant has appointed C & F agents for receiving the consignment of the goods manufactured by them and they were storing the goods on behalf of the appellant at various depots. The goods were further sold/distributed to their ultimate buyers as per the orders received by such C & F agent from the appellant - the contention made by the appellants that the ownership of the goods which were cleared from the factory has remained with them up to depot or the warehouse of the consignment agent (who was working on their behalf ) and actual sale of the goods have taken place from such depos, agreed upon.
It can be seen from the definition of the place of removal that if the goods are actually sold to an independent buyer from depot of the consignment agent, the place of removal of the excisable goods will be such premises of the consignment agent or depot of the manufacturer. Since all the cost incurred up to the place of removal will be integral part of the price and therefore, all the input and input services which are received up to the place of removal of the manufactured goods, the assesse becomes entitled for credit of the same as per the provisions of the CENVAT Credit Rules.
Thus, the appellant are entitled for input, input service credited up to the place of removal which is in this case is the depot or consignment agent premises.
Time Limitation - HELD THAT:- For the period July, 2010 to May, 2013 the impugned show cause notice has been issued on 20 July, 2015 invoking extended time proviso under Section 11A of Central Excise 1944 read with Rule 2014 of CENVAT Credit Rule, 2004. The fact that CENVAT Credit of Service Tax was availed by the appellant on the strength of proper duty paying documents and all the transaction have been mentioned in the statutory books of account maintained by the appellant, also noted. The Cenvat Credit of input services are reflected in the monthly return in the form of ER-1 of the appellant. In that circumstances there are no ground on the part of the department to allege suppression of facts or willful mis-statement and therefore the demand beyond normal period of limitation is certainly time barred.
The impugned order set aside - appeal allowed.
-
2024 (3) TMI 1038
CENVAT Credit - input services - Construction Service - Rent a cab Service - Outdoor Catering (Canteen) Service - Services used by the Head Office (ISD) - C&F and Cargo Handling Service - applicability of Notification No. 3/2011-CE dated 01.03.2011 - invocation of extended period of limitation.
Construction Service - Denial on account of lack of nexus between the construction services and manufacturing of the goods - HELD THAT:- The construction relates to the setting up of the factory which in turn, is directly used for manufacturing and is directly covers under the inclusive part of the definition of ‘input service’. Moreover, during the relevant period, construction service was included in the definition of ‘input service’ and it is only after 01.04.2011 that it has been specifically excluded from it - the construction service, during the relevant time, was within the definition of ‘input service’ and therefore, the appellant is entitled to Cenvat Credit of the same.
Rent a cab Service - Credit denied only on the ground that this service is not used in relation to the manufacture of the product and the cost of the same has been recovered from the employees - HELD THAT:- Rent a cab service has been mainly used for official purposes and the same relates to the business of the appellant. Here it is noted that a part of the cost of this service is recovered from the employees and as per the appellant, only 20% of it, is recovered from the employees and the same has been reversed along with interest and 80% is absorbed in the manufacturing cost. Accordingly, the appellant is entitled to avail 80% of the cost of this service and the Original Authority is directed to verify the quantum of Cenvat Credit reversed by the appellant as claimed by them. On principle, the appellant is entitled to avail Cenvat Credit on this service.
Outdoor Catering (Canteen) Service - credit denied on account of the fact that it is not related to the manufacture of the product and the same is recovered from the employees - HELD THAT:- It is a statutory requirement to provide this facility to the employees as required under the Factories Act and moreover, it enhances the productivity of the employees, which is indirectly related to the manufacture of the final products - As regards the submissions of the appellant that they have only recovered 30% of its cost from the employees and the same has been reversed along with interest, this fact of reversal needs to be verified by the Original Authority and for this purpose, the case is remanded back to the Adjudicating Authority to verify the same.
Services used by the Head Office (ISD) - HELD THAT:- Cenvat Credit in respect of courier service, mandap keeper service, event management, cargo handling and C&F service has been denied on the ground that the same is not in relation to manufacturing activities of the appellant and hence, the same is not admissible - the Tribunal in the case of M/S. ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE C.R. BANGALORE [2016 (8) TMI 8 - CESTAT BANGALORE] after following the decision of the Hon’ble Karnataka High Court in COMMISSIONER OF C. EX., BANGALORE-I VERSUS ECOF INDUSTRIES PVT. LTD. [2011 (2) TMI 1130 - KARNATAKA HIGH COURT], has held that the assessee is entitled to Cenvat Credit of service tax as distributed by the ISD - the appellant is entitled to Cenvat Credit with regard to these services.
C&F and Cargo Handling Service - HELD THAT:- The definition of ‘place of removal’ as provided under Section 4(3)(c) of the Act inter alia includes depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory. Further, C&F and Cargo services are used for the purpose of unloading, storing, accounting and thereafter dispatch of the goods to the specified dealers on ‘FOR’ basis. In this regard, the learned Counsel for the appellant also referred to certain invoices issued by the appellant to prove that all the goods were supplied ‘FOR’ upto the place of buyer’s premises, entire risk is borne by the appellant and therefore, all the expenses incurred by the C&F agent, on which service tax is charged, will fall within the definition of ‘input service’ - the appellant is entitled to Cenvat Credit of service tax regarding C&F expenses.
Invocation of extended period of limitation - HELD THAT:- The Revenue has not brought anything on record to satisfy the ingredient for invoking the extended period of limitation as the appellant was subjected to regular audit and the Department was aware of the fact that the appellant is availing Cenvat Credit of tax paid on input service and therefore, substantial demand in this case is barred by limitation.
The impugned order is not sustainable in law and therefore, the same is set aside - with regard to the services of ‘Rent a cab service’ and ‘Outdoor catering service’ the Original Authority will verify the quantum of reversal made by the appellant; and for this limited purpose, the matter is remanded back to the Original Authority - appeal allowed in part and part matter on remand.
-
2024 (3) TMI 1037
Clandestine manufacture and removal - 47658 M.T. of Pig Iron - demand worked out based on the details available in the computer print-out recovered from the premises of the Appellants office and premises associated with them and the statements recorded from the concerned persons - evidentiary value of the computer print-outs - admissible evidences or not - procedure as set out in Section 9D of the Central Excise Act, 1944 was followed in this case or not - reliability of statements recorded under Section 14 of the Central Excise Act, 1944 - penalty on the Appellant companies and it's Director, on the basis of the evidences available on record.
Whether the computer printouts taken from the pen drives recovered during the search can be relied upon as evidence to demand duty? - Whether the conditions mentioned in Section 36B has been followed in this case or not, to rely upon the computer printouts as evidence? - HELD THAT:- The procedure prescribed in Section 36B must be followed to rely on the computer sheets as evidence. It is observed that the department has not followed the procedure prescribed in Section 36B. The author of the entries made in the computer has not been identified. The certificate as prescribed under Section 36B(4) has not been obtained. Hence, the computer sheets recovered from the pen drives cannot be relied upon to arrive at clandestine clearance - As the department has not followed the mandate under section 36B, the data recovered from the print outs available in the computer sheets cannot be relied upon to work out the duty liability on the allegation of clandestine removal. Accordingly, the answer to the question are in the negative.
Whether the procedure as set out in Section 9D of the Central Excise Act, 1944 was followed in this case or not? - If not followed, then whether the statements recorded under Section 14 of the Central Excise Act, 1944 can be relied upon to demand duty? - HELD THAT:- The adjudicating authority has not followed the procedure prescribed under Section 9D, accordingly, the statements cannot be relied upon to confirm the demands. Thus, the answer to question is in the negative.
Whether the demands confirmed in the impugned order on clandestine clearance of finished goods is sustainable in the absence of any evidence of procurement of the major raw materials or sale of the finished goods clandestinely? - HELD THAT:- There is no evidence of clandestine removal, purchase and consumption of unaccounted raw materials, discrepancy between recorded stock and physical stock, seizure of any goods, consumption of excess electricity, actual clandestine removal of finished goods without payment of duty, mode of removal, evidence of transporters and buyers of the clandestinely removed goods and flow back of funds pertaining to clandestine removals have been brought on record in this case. Without having any such tangible evidence, clandestine manufacture and clearance of goods cannot be sustained on the basis of mere assumptions and presumptions. Accordingly, the demand confirmed in the impugned order is not sustainable. Thus, the answer to question is in the negative.
Whether penalty is imposable on the Appellant company and it's Director, on the basis of the evidences available on record? - HELD THAT:- The allegation of clandestine removal against the appellant-company is not sustainable. Accordingly, the role of Director of the appellant-company in the alleged clandestine clearance is not established. It is also observed that no benefit of the alleged illegal activities have accrued to the Director. Therefore, the penalty imposed on the Director of the appellant under Rule 26 of the Central Excise Rules, 2002 is not sustainable and the same is set aside. Thus, the answer is in the negative.
The demand of duty confirmed in the impugned order is not sustainable. The demand of interest and penalty imposed on the Appellants are also not sustainable - Appeal allowed.
-
2024 (3) TMI 1036
Time Limitation - classification of goods - Bio-fertilizers - Single Micronutrients - Multi-micronutrients/ Micronutrient mixtures and Plant Growth Regulators (PGR) - HELD THAT:- Having regard to the observations and submissions of the learned AR, as also the arguments made by the learned Advocate for the appellants, in the interest of justice, the issue of classification needs to be remanded back where the Original Authority will give them full opportunity to explain their case and also take into account the statutory provisions as well as the case laws cited by the appellant.
The dispute of classification with respect to all the four products to the Original Adjudicating Authority is remanded to reconsider the same. The Adjudicating Authority shall also provide crossexamination of the Chemical Examiner, if prayed by the Appellants. Further, after hearing the appellants and examining the evidences produced, the Adjudicating Authority shall pass a reasoned order in accordance with law for the normal period.
Penalties et aside - the Appeal is allowed in part and remanded in part.
-
2024 (3) TMI 1035
CENVAT Credit - exempt goods or not - zinc dross which emerged during the manufacture of final product of the appellant, due to the galvanizing process involved in the said manufacturing process - HELD THAT:- The issue is no more res-integra. It was initially taken up by High Court of Mumbai in the case of HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [2014 (12) TMI 657 - BOMBAY HIGH COURT] wherein it was held that the dross and skimming of aluminium, zinc or other non-ferrous metals since emerges as waste, that the zinc dross and zinc ash cannot be treated as excisable commodities. Subsequent to the said decision, the Hon’ble Supreme Court had again took up the issue in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] holding that the waste products (Baggasse in the said case) emerging during the manufacturing process of the final product are not the outcome of any process which can be termed as manufacture. Thus, such waste products cannot be categorized as exempted goods. Hence question of applicability of Cenvat Credit Rules does not at all arise.
Commissioner (Appeals) in the present case is observed to still have followed the said rescinded Circular dated 25.04.2016. The said act of the adjudicating authority not merely amounts to mis-interpretation of the provision, but it amounts to the violation of statutory principles, the circular dated 07.07.2022 being binding upon him. The ignorance of law laid down by the Hon’ble Supreme Court is a condemnable act of judicial indiscipline.
The order passed by the Commissioner (Appeals) is held not sustainable and the same is hereby set aside - Appeal allowed.
............
|
9911796707
