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Showing 481 to 500 of 420205 Records
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2024 (11) TMI 998
Dismissal of application filed by the appellant under Section 7 of the Code - Respondent miserably failed to meet its obligation - existence of debt and default - judicious application of mind by the Adjudicating Authority - Appellant assailed the conduct of the Respondent for taking several frivolous grounds including that the application of the Appellant under section 7 of the Code has been rejected earlier and by doctrine of res-judicata the same could not have been filed.
Whether there was a debt and default which could trigger Section 7 application filed by the Appellant? - HELD THAT:- There was outstanding debt and there was a clear default on the part of the Respondent in meeting its obligation which entitles the Appellant to take suitable remedy as per the Code and therefore, he correctly filed the Application under Section 7 of the Code - there are no meaningful and detailed discussion on this issue in the Adjudicating Authority decision in the Impugned Order, especially on issue of default which is against the spirit of the Code. In view of these discussions, the debt and default is established in favour of the Appellant.
Whether, ratio of Vidarbha Industries [2022 (7) TMI 581 - SUPREME COURT] was applicable in the present case based on which the Adjudicating Authority rejected the application of the Appellant filed under Section 7 of the Code? - Whether, there was judicious application of mind by the Adjudicating Authority as evident in the Impugned Order while rejecting the application of the Appellant under Section 7 of the Code? - HELD THAT:- In the present case, the total outstanding of all lenders was thousands of crores and debt claims of Appellant was itself Rs. 646.38 Crores, whereas the Respondent is now hopeful of Rs. 1271 Crores to be recovered from other telecom companies based on Arbitration etc., which are at present at different stages of being finalised, thus, perception of the Respondent looks far from finality. It is anybody’s guess as to when this money, if at all, will come to the Respondent’s account after all sort of claims, counter claims and litigations at various legal fora.
The Adjudicating Authority has not even discussed the nature of this repayment of Rs. 16915 Crores i.e., whether it was paid in cash component as per loan agreements or major chunk as deemed payable due to conversion of debt into equity as per CDR/ SDR in terms of RBI Guidelines, which Lenders/ Bank had to follow without any option. We note that both the CDR/SDR failed due to default of the Respondent. This could have been relevant factor to determine viability of the Corporate Debtor in terms of Vidarbha Industries - It would have been desirable for the Adjudicating Authority to go into details as what was the total outstanding claims all the lenders pre CDR/SDR as well as post CDR/SDR and what was the total payment made thereon. This would have given a clear picture in terms of total payment made by the Respondent on account of principals, interest and other ancillary charges like penal interest, if any, happened due to non payment on part of the Respondent to the Lenders. The Adjudicating Authority has not gone into any of these details, as such we are not in position to support the Impugned Order rejecting Section 7 application of the Appellant only on the ground of Vidarbha Industries.
The Adjudicating Authority has not applied the ratio of Vidarbha Industries correctly in the present case while rejecting the application of the Appellant, filed under Section 7 of the Code.
Whether the Adjudicating Authority ignored the acknowledgements of debt and default by the Respondent in its various statements, books of accounts, affidavit in reply and Written Submissions filed before the Adjudicating Authority? - HELD THAT:- There are several acknowledgements of debt and default on the part of the Corporate Debtor - there is a clear debt and default backed several acknowledgements by the Respondent which entitled the Appellant to file application under Section 7 of the Code before the Adjudicating Authority.
Whether the Appellant is permitted to raise any disputed issues of facts before this Appellate Tribunal through Rejoinder dated 11.04.2023 to the Affidavit in Reply and Additional Affidavit in reply and whether it is an impediment in the present appeal? - HELD THAT:- The Appellant pleaded that in the present case, the question as to the applicability of Vidarbha Industries is not a new plea set out by the Appellant. It has its basis in the pleadings of the Respondent as well as the Appellant before the Adjudicating Authority - it is already noted the relevant para of Vidarbha Industries [2022 (7) TMI 581 - SUPREME COURT], Innoventive Industries Ltd. [2017 (9) TMI 58 - SUPREME COURT], Vidarbha Review Order and it is already noted the various financial facts and figures regarding viability of the Corporate Debtor, as such the contentions raised by the Respondent does not hold good.
Even without considering the Rejoinder filed by the Appellant, the ratio and applicably of Vidarbha Industries is in the present appeal is required to be taken into consideration along with various financial facts which are found in the pleadings made as well as written submissions and which are based on the financial statements of the Corporate Debtor which are in public domain.
Whether, the Appellant was duty bound to agree with majority of the lenders to assign its debts to EARC? - HELD THAT:- The Appellant is not duty bound to agree with majority of the lenders to assign its debts to EARC - It is clear that it is the commercial wisdom of the lenders is paramount in deciding to assign its debts or to pursue other remedies including filing under Section 7 of the Code or otherwise and these can’t be any judicial intervention on this aspect by the Adjudicating Authority or this Appellate Tribunal.
The case is remanded back to the Adjudicating Authority to hear the original petition of the Appellant a fresh, taking into consideration all the relevant facts - Appeal allowed by way of remand.
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2024 (11) TMI 997
Seeking grant of regular bail - Money Laundering - conspiracy to fraudulently set up Vivo group of companies in India without revealing their true beneficial ownership and carried out mis-declarations before government bodies - concealment of Chinese ownership - Section 45 of the PMLA - HELD THAT:- Since the offence pertains to money laundering, apart from the usual considerations, it would have to be seen whether the twin conditions stipulated in Section 45 of the PMLA are met. A plain reading of Section 45 of the PMLA shows that the public prosecutor must be given an opportunity to oppose the application and the Court should have reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. The twin conditions though restricts the right of accused to be released on bail but do not impose absolute restraint and the discretion vests in the Court.
Section 45 of the PMLA while imposing additional conditions to be met for granting bail, does not create an absolute prohibition on the grant of bail. When there is no possibility of trial being concluded in a reasonable time and the accused is incarcerated for a long time, depending on the nature of allegations, the conditions under Section 45 of the PMLA would have to give way to the constitutional mandate of Article 21. What is a reasonable period for completion of trial would have to be seen in light of the minimum and maximum sentences provided for the offence, whether there are any stringent conditions which have been provided, etc. It would also have to be seen whether the delay in trial is attributable to the accused.
In Senthil [2024 (9) TMI 1497 - SUPREME COURT], the Supreme Court while reiterating the ratio enunciated in Union of India v. K.A. Najeeb (Three Judge bench) [2021 (2) TMI 1212 - SUPREME COURT], also held that if the Constitutional Court comes to the conclusion that the trial would not be able to be completed in a reasonable time, the power of granting bail could be exercised on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions.
The issue of long incarceration and right of speedy trial also cropped up in Manish Sisodia v Directorate of Enforcement, Manish Sisodia v Directorate of Enforcement, [2024 (8) TMI 614 - SUPREME COURT] wherein it has been held by the Supreme Court that the right to bail in cases of delay in trial, coupled with long period of incarceration would have to be read into the Section 439 CrPC as well as Section 45 of PMLA while interpreting the said provisions.
Prem Prakash v. Union of India through the Directorate of Enforcement, Prem Prakash v. Union of India through the Directorate of Enforcement, [2024 (8) TMI 1412 - SUPREME COURT]is another recent decision where it has been reiterated that the fundamental right enshrined under Article 21 cannot be arbitrarily subjugated to the statutory bar in Section 45 of the Act and the constitutional mandate being the higher law, the right to speedy trial must be ensured and if the trial is being delayed for reasons not attributable to the accused, his incarceration should not be prolonged on that account.
The right to speedy trial was also upheld and other special legislations where provisions akin to Section 45 PMLA exist.
It is noted that the investigation was initiated in the year 2022 and the Prosecution Complaint has named 48 accused persons and cited 527 witnesses. There are 80,000 pages of documents which need to be analysed. A supplementary Prosecution Complaint dated 19 - In a situation such as the present case, where there are multiple accused persons, thousands of pages of evidence to assess, scores of witnesses to be examined and the trial is not expected to end anytime in the near future and the delay is not attributable to the accused, keeping the accused in custody by using Section 45 PMLA a tool for incarceration or as a shackle is not permissible - The accused in a money laundering case cannot be equated with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, etc.
As held in the catena of judgements discussed herein above, Constitutional Courts have the power to grant bails on the grounds of violation of Part III of the Constitution and Section 45 does not act as a hindrance to the same. The sacrosanct right to liberty and fair trial is to be protected even in cases of stringent provisions present in special legislations - The applicant has been in custody since 10.10.2023 and the trial is at the stage supply of documents under Section 207 Cr.P.C. and charges are yet to be framed. Out of the 7 accused persons who were arrested, arrest of 3 persons was declared illegal by the Trial Court vide order dated 30.12.2023 and the other three, as noted above, have already been released on bail.
The fact that the twin conditions under Section 45 of PMLA stand satisfied, the fact that the all the other accused persons who were arrested are out on bail, the period of custody undergone, the trial is at nascent stage of supply of documents under Section 207 Cr.P.C., keeping in mind the import of the catena of decisions of Supreme Court discussed herein above, it is directed that the applicant be released on regular bail subject to him furnishing personal bond in the sum of Rs.1,00,000/- with one surety of the like amount each to the satisfaction of the concerned Jail Superintendent/Trial Court/Duty J.M./link J.M. and subject to fulfilment of further conditions imposed - The bail application is disposed of.
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2024 (11) TMI 996
Money Laundering - scheduled offence - proceeds of crime - whether the properties purchased prior to the alleged commission of offence would not fall under the definition of "proceeds of crime"? - HELD THAT:- In view of the fact that 'proceeds of crime' has been set out in the complaint impugned in the present petition and the identification of proceeds of crime also has been set out, the grounds raised by the petitioner deserves no merit consideration and all other grounds raised on merits or regarding appreciation of materials would be considered only by the Trial Court. However, the Trial Court while proceeding with the trial, has to consider the materials available on record independently and uninfluenced by the findings recorded by this Court in this petition relating to facts.
This Criminal Original Petition stands dismissed.
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2024 (11) TMI 995
Money Laundering - sale proceeds of lottery tickets - challenge to closure report - offences punishable under Sections 294N, Section 420 and 120B of Indian Penal Code - HELD THAT:- A legislation when brought into force with a legislative intent does not stay in the same shape, as it was intended to be. Evolution of the legislation is inevitable in a growing country. The operation and implementation of the law decides that the legislation is taken forward in its intended spirit and force. Once the legislation is applied and tested, the consequences of such application determine the character and fate of the legislation.
The objects of the PMLA as intended is crystal clear from the day of its inception. Economic interest of our great nation is the soul object. The consequent implementation of the law should be in tandem with the legislative intent. Any misuse or abuse of the law will fracture the bones of PMLA, thereby rendering it wholly ineffective. Legislation of such nature must be handled with caution and must not injure any vital organs of Part III of the Constitution of India.
To remind that facts of the present case at this juncture, the seizure of huge amount of cash of Rs. 7.20/- crores was on 12.03.2012. The sale agreement is said to have been entered into on 02.03.2012. The stamp paper has been released by the State Government only on 09.03.2012 and it was sold by the stamp vendor to one Smt.Vimala on 13.02.2012. It is a clear case of cheating by amassing money by sale of illegally printed lottery tickets attracting Section 420 of IPC, creation of a false document in the form of a sale agreement attracting the provisions of Sections 467, 468 and 471 of IPC and hence prima facie materials are available for both the predicate offence and the offence under PMLA. But the PMLA proceedings are sought to be scuttled by closing the proceedings in the predicate offence.
In the present case, the State Investigating Agency registered the predicate offence, conducted investigation and against the dismissal of quash petition filed SLP before the Hon'ble Supreme Court and the criminal case was restored by the order of the Apex Court. When the prima facie case regarding a predicate offence has been upheld by the Hon'ble Supreme Court by restoring the criminal case in the predicate offence, filing closure report thereafter by the very same State Agency is undoubtedly suspicious and doubtful.
The State Agency has made an attempt to bury the predicate offence against the accused persons in a suspicious manner and on extraneous considerations, which are visible through their actions including the closure report filed by the State police - The State Investigating Agency and the Enforcement Directorate are directed to proceed with the case in tandem, so as to ensure that the criminal case instituted is proceeded in accordance with law. However, the trial must go on uninfluenced by the observations, if any made relating to facts in the present case.
The facts established and the legal position considered made us to arrive at an irresistible conclusion that the Closure Report filed by the 1st respondent dated 14.11.2022 accepted by the learned Judicial Magistrate-I, Alandur by order dated 17.11.2022 made in Crime No.304 of 2012 stands set aside - Accordingly, the Criminal Original Petition stands allowed.
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2024 (11) TMI 994
Service Tax demand under the category of rent a cab service, interest and imposition of penalty - invocation of extended period - HELD THAT:- We find that the issue involved in the instant case relates to the appellant’s understanding with respect of hiring of vehicles. The appellant was under the impression that hiring of vehicles does not fall under the category of renting of cab service, and therefore, the appellant was not discharging service tax in respect of vehicles hired by them.
We hold that while service provided by the appellant is taxable, the Notification of extended period of limitation cannot be sustained. The impugned order is therefore, set aside and matter remanded to the original adjudicating authority for decision in light of above findings.
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2024 (11) TMI 993
Service tax on handling charges collected by the appellant from their customers of motor vehicle - appellant being a car dealer of Maruti Suzuki Ltd. involved in the selling car on principle to principle basis - appellant submits that the handling charges was collected by the appellant which was subsequently considered as part of the sale price of the car and the appellant have discharged the VAT on such handling charges treating the same as part and parcel of sale price of the car, any amount which is part of the sale of the goods will not attract any service tax.
HELD THAT:- We find that this issue is no longer res-integra in as much as in various judgments, it was held that if the handling charges is included in the sale value of the car and VAT was paid then such handling charges being a part and parcel of the sale value will not be exigible to service tax. See Ganga Automobiles [2023 (10) TMI 355 - CESTAT AHMEDABAD]
It is not in dispute that once the handling charges is part and parcel of the sale price of car and sales tax/VAT thereon has been paid, the same became a part and parcel of the sale value hence will not attract any service tax.
Thus the service tax demand on the handling charges collected during the sale of the car as sale price of the car cannot be levied with service tax.
Whether the handling charges is a part and parcel of the sale value of the goods and VAT was paid? - From the VAT assessment order, it is clear that the handling charges and warranty amount which was not earlier included in the sale value was included for the purpose of VAT assessment and VAT has been paid and thereafter, no VAT amount tax remains to be paid. With the above it is clear that the appellant have paid the VAT amount on the handling charges.
Therefore, the above judgments which are on the facts that the handling charges is a part and parcel of the sale value and the same was suffered the VAT tax, directly applies in the facts of the present case as discussed above.
AR raised point that this VAT assessment order were not presented before the lower authority. Therefore, the same cannot be considered at this stage. In this regard, we are of the view that as per the settled legal position this Tribunal is a final fact finding authority, therefore, considering the VAT assessment order, the demand of service tax is not incorrect. Therefore, the objection of Ld. AR cannot be sustained.
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2024 (11) TMI 992
Classification of Services Provided - services as a steamer agent and a cargo handling agency - whether the services qualify as export of service? - since the service provided by the appellant is partly outside India, the same is covered by the definition of export of service - appellant is engaged in providing service of steamer agent in respect of vessels arriving at Kandla and other ports for discharging imported cargo and loading export cargo - appellant has got themselves registered under the category of steamer agent service covered u/s 65 (105) (i) of Finance Act, 1994, as also taken registration under the category of “Cargo Handling Agency” Service covered u/s 65(105) (zr) of Finance Act, 1994
HELD THAT:- We find that the appellant have carried out the job of segregation and internal shifting of timber logs on behalf of foreign based principals as part of their obligation but also the appellant have sent progress reports of segregation and internal shifting to the service recipient i.e. foreign based principals. Therefore, the progress report is also indeed a part of over all part of important service activity without which the service provided by the appellant would not complete.
From the above sub rule (ii) of Rule 3 of export of service rules, 2005 it is clear that the service falling under sub – clause (zn) and (zr) which are subject matter of the present case, if partly performed outside India it shall be considered as performed outside India. In the present case as discussed above, the progress report was sent to the foreign principals which is the part of the overall service. Hence, the service is partly performed outside India, therefore, it qualifies as export of service in terms of Rule 3 (ii) of Export of Service Rules, 2005.
In the identical facts where the service was performed in India but the reports of the sad service was sent to the foreign service recipient wherein it was held that performance of service not completed until progressive/analysis report delivered to the client. Delivery of report being essential part of service made outside India and used outside India. Such delivery of report to client outside India amounting to part of performance of taxable service outside India.
As relying on SGS India Pvt Ltd [2011 (2) TMI 54 - CESTAT MUMBAI] and B A Research India Ltd. [2009 (11) TMI 213 - CESTAT, AHMEDABAD] we find that since in the present case the service is complete only when the progress report is sent to the foreign service recipient. The service is partly performed outside India. Therefore, it clearly falls under the definition of export of service in terms of Rule 3 (ii) of Export of Service Rules, 2005. It is also not in dispute that against the service provided by the appellant to their foreign principals they have received the payment remittance in convertible foreign exchange. Therefore, there is no doubt that the appellant have provided the export of service. Accordingly, the demand is not sustainable.
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2024 (11) TMI 991
Denial of CENVAT credit - expenses incurred at unregistered branches - Appellant undertakes the services of the ‘Technical Testing & Analysis Service’ from the branches that are performed on the blood samples of the Volunteers obtained during the human trials - IP molecule which is administered to the Volunteers is sometimes mixed with ancillary products. Study of the samples are sent to the Ahmedabad office from where final report is prepared - appellant did not obtain centralised registration for three branches namely Mumbai, Nadiad and Mehsana, they fail to prove that the appellant was paying the Service Tax for the services at Ahmedabad for these branches
HELD THAT:- We find that though the appellant at Ahmedabad did not obtain the centralised registration but the overall business is accounted for at Ahmedabad and depending on the nature of the activity i.e. Technical Testing & Analysis Service, which were performed on the sample of the volunteers obtained during human trials. Since, this nature of activity has to be carried out at different places, but the same is carried out by the appellant at Ahmedabad only.
Therefore, merely because of obtaining the blood samples of volunteers at different places such as Mumbai, Nadiad and Mehsana but the final study of the samples are carried out at Ahmedabad office, where the final analysis report is prepared. For all the activities, as regards the expenses, the Ahmedabad office only making the payment for those expenses. Therefore, all the activities carried out irrespective at different places such as Mumbai, Nadiad and Mehsana, but same are accounted for and carried out from Ahmedabad only. Therefore, there is no reason to deny the credit in the peculiar facts of the present case.
Centralized registration - Revenue's contention that the appellant have not obtained the centralised registration, for this reason Cenvat credit cannot be denied as held in catena of the judgments that for the purpose of availment of Cenvat credit registration is not prerequisite. The only criteria to allow the Cenvat credit on any input service is that the service should be used in or in relation to output service. The service should be tax paid. These criteria is not under dispute. The appellant have centralised accounting at Ahmedabad only. Therefore, even though the part of the activity are carried at different places but for all the activities of different places, the accounting is done at Ahmedabad office only. Therefore, in our considered view there seems to be no reason to deny the Cenvat credit.
This issue has been considered by this Tribunal in the case of Manipal Advertising Services Pvt Ltd [2009 (10) TMI 434 - CESTAT, BANGALORE] wherein the Tribunal held that if a person is discharging service tax liabilities from his registered premises, the benefits of Cenvat Credit on the service tax paid by the service providers cannot be denied to the assesse only on the ground that the said services are in the name of branch offices. There is no dispute that the branch offices are not registered with the Service Tax Authorities and they are not discharging service tax liabilities.
Since, the entire service tax liabilities is of Ahmedabad office, all the activities irrespective carried out at different places, are ultimately attributed to the Ahmedabad office only. Therefore, availment of Cenvat credit at Ahmedabad is absolutely in order and as per the law.
Even though there is no centralised registration at Ahmedabad office but on the fact that all the services even if received at branch offices for same is attributed to the final output service of Ahmedabad. Therefore, in our considered view the Cenvat credit is admissible to the appellant.
Demand on account of difference of taxable income as appearing in the profit and loss account, vis-a-vis taxable value declared in the half yearly ST-3 return - As we find that firstly, merely on the basis of difference between the ST-3 return and books of accounts, the confirmation of demand is not sustainable unless until the Revenue establish that the difference is on account of any service and the nature of service if any performed. Therefore, on this ground itself, the demand of Rs. 1,50,829/- is not sustainable. Further we find that the appellant have provided the reconciliation statement, according to which the appellant paid service tax on the excess amount coming after the reconciliation. Therefore, there is no short payment of service tax. We have perused the reconciliation statement as Annexed-2 of the appeal memo. Accordingly, on this count also demand is not sustainable.
We place reliance on the decision in the case of Chartered Logistics Ltd [2023 (7) TMI 770 - CESTAT AHMEDABAD] dealing with the situation where there is a demand on difference of value shown in books of accounts and ST-3 return.
Merely on the difference between the value mentioned in books of accounts and ST-3 returns, demand of service tax cannot be confirmed.
Demand on the premise of totaling mistake and short payment of service tax to that extent - We find that the appellant have provided the explanation before the first Appellate Authority and as per the statement in Annexed at page No. 19 of the appeal it clearly shows that the appellant have correctly paid service tax on the taxable service and there is no calculation mistake as alleged by the revenue. Therefore, on this ground also the demand is not sustainable.
Demand on the basis of debit notes issued by Wockhardt Ltd the allegation of the department is that the appellant could not provide the proof of payment of service tax to the Government Exchequer. We find that the appellant have submitted that they have paid the service tax during the year 2019 and produced the documents evidence in that respect.
We fail to understand that despite giving this documentary evidence which clearly show the payment of service tax, the Learned Commissioner (Appeals) for no reason discarded such documentary evidence, only on the basis that the same unsigned. It is the submission of the appellant that though they did not pay the service tax immediately upon issuance of debit notes in the month of July,2008. Since, the appellant have received money subsequently from Wockhardt Ltd., thereafter they paid the service tax with the department at the time of receipt of amount. I am convinced with the submission of the appellant which is supported by the documentary evidence. Therefore there was no reason for Learned Commissioner (Appeals) to uphold the demand. Hence, the same is not sustainable.
Invoking extented period of Limitation - We find that the period involved for the present matter is 2008-09 and the show cause notice has been issued on 22.10.2013. Hence, the entire demand is under extended period. In this regard we find that the appellant obtained service tax registration and the department had conducted various audits from the date of registration. The entire data on the basis of which the service tax demand was raised in the present case were retrieved from the existing books of accounts of the appellant. Therefore, there is no suppression of fact or any mala fide intention with intend to evade payment of duty on the part of the appellant. Therefore, in the facts of the present case also hold that the demand is not sustainable on the ground of limitation also.
The demands are not sustainable on merit as well as on limitation.
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2024 (11) TMI 990
Refund claim filled by service receiver - jurisdiction of Mumbai Service Tax authority or Kolkata Service Tax authority to deal with the refund application of the appellant - action of the Deputy Commissioner in returning the refund claimed filed by the Appellants, in terms of Section 103 of Finance Act 1994, as inserted by the Section 159 of the Finance Act, 2016 -
Difference of opinion among members of bench - difference of opinion between learned Member (Technical) and learned Member (Judicial) on the findings pertaining to jurisdiction of Mumbai Service Tax authority or Kolkata Service Tax authority to deal with the refund application of the appellant, filed in terms of Section 103 of the Finance Act, 1994.
Appellants have challenged this action, arguing that since the appellant was registered in the jurisdiction of Deputy Commissioner, Division 9, Service Tax VII, thus they had rightly filed the refund claim in the jurisdiction where they were registered for payment of service tax - Whether the Deputy Commissioner, Division-9, Service Tax-VII, action in returning the refund claim that has been upheld by the Commissioner (Appeals) is to be upheld by the CESTAT as opined by Member (Technical) or is to be set aside as opined by Member (Judicial)?
HELD THAT:- In the present case, due to non-obstante clause in Section 103 (1) of the Act of 1994, the charge of service tax itself and the assessment, if any, stands nullified by the legislated Act of the Parliament and thus, there is no need of ascertaining the fact, as to who would be considered as the jurisdictional proper officer for grant the refund of the service tax amount. In fact, Section 103(2) of the Act of 1994 mandates that refund shall be made of all such service tax, which has been collected, but which would have not been so collected, had sub-section (1) been in full force at all times.
Section 103 of the Act of 1994 is a complete code in itself and it does not mandate for filing of the refund claim at any specified jurisdiction. Once it is admitted that the recipient of the service is eligible to file refund claim, it is beyond the mandate of the law to insist that such claim should be filed with the proper officer, having jurisdiction over the service provider. Section 103(3) of the Act of 1994 also starts with a non-obstante clause and puts only condition that the refund application should be filed within six months. Thus, there is no other condition imposed, as to the specific officer, before whom the refund claim should be filed with.
The appellants in the present case have filed their refund claim before their own jurisdictional Service Tax divisional office, where they used to file the service tax returns. Even Section 11B of the Act of 1944, which has been strongly relied upon in the Interim Order, also does not mandate that the claim should be filed before the service provider's jurisdictional officer alone.
In fact, the principle laid down in Canon India [2021 (3) TMI 384 - SUPREME COURT] would support the appellant's case inasmuch as in the event of any erroneous grant of refund, the proper officer to issue the show cause notice for recovery of such erroneously granted refund would be the jurisdictional officer at the appellant’s end, and not the jurisdictional officer at the service provider’s end.
Thus, as per the reasoning given by the Hon'ble Member (Technical), the jurisdictional officer of the service provider will not have even geographical jurisdiction to issue any show cause notice to the appellants herein. Therefore, the expression ‘the assessing officer’, in the present case, would mean the jurisdictional officer of the appellants, and not that of the service provider. In any case, the appellants would not have any locus standi to file their refund claim before the jurisdictional officer of the service provider, as they are not registered in that jurisdiction.
In the present case, interpretation of the provisions of Section 27 (supra) is not in question and there is no dispute that the appellants have filed the refund claim within 6 months of the Presidential assent to Section 103 of the Act of 1994 and as such, is within the schedule time frame. Thus, recourse cannot be had to the provisions of 1872 Act or the 1963 Act.
The appellant's right to seek refund arose out of an act of the Parliament, by way of granting retrospective exemption, which overrides all assessments and hence, there is no question or need for seeking any re-assessment.
In paragraph 4.32 of the Interim Order, learned Member (Technical) has observed that Section 103 of the Act of 1994 or Section 11B of the Act of 1944, did not permit for filing of the refund claim in multiple jurisdictions. In the present case, it is not the case of the appellants that they wanted to file the claim in multiple jurisdictions. The appellants have in fact, filed the refund claim application only with their jurisdictional officer.
Therefore, this finding is of no relevance in the present context. In fact at the end of this paragraph, it is stated that we have no hesitation in agreeing to the observations made by the Tribunal to the effect that both the jurisdictions cannot refuse to entertain the refund claim filed by the recipient of service. If this be so, then the appellants are correct in filing the claim with their own jurisdiction. It is also stated in the said paragraph that filing of claim in multiple jurisdictions, will amount to double benefit in respect of the same transaction. In the present case, the appellants have filed the claim only in one jurisdiction and in any case, it is not the case of Revenue or of the Adjudicating or First Appellate Authority that the appellants is taking double benefit. Such a remark is unwarranted in the present case.
Thus, in agreement with the learned Member (Judicial) that the impugned order is required to be set aside and the appellants should be entitled to get the refund at Mumbai.
In view of the majority opinion, the impugned order is set aside and the appeal is allowed in favour of the appellants.
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2024 (11) TMI 989
CENVAT Credit on the invoices issued by M/s. Rashmi Metaliks Ltd. and M/s. Neo Metaliks Ltd. - Evasion of Central Excise duty by way of willful suppression of material facts and intentional misuse of CENVAT Credit facility by adopting the modus operandi of non-receipt of their primary raw materials, namely Pig Iron in their factory and non- use of the same in the manufacture of final products - Levy of penalty - HELD THAT:- The whole of the case has been made out on the basis of the statement of appellant No.1 who stated that he is dealing with excise and VAT paid goods and not registered with the central excise department and clearing goods on their challans and no cenvat credit has been availed by the receiver of the goods as no excise paid challan or invoice has been issued by appellant No.1. During the course of investigation, statement of the Authorized Representative of the appellant No.3 was recorded and nowhere he has admitted that they are having any relation or have ever transacted with appellant No.1 and the goods which have been received by them have been used in manufacturing of their final product, which ultimately suffered duty. These facts are not in dispute.
In the absence of all the evidences it cannot be said that appellant No.3 has not received the goods. Moreover, the case against the appellant No.2 and 3 has been made on the basis of statement of appellant No.1. Demand cannot be raised on the basis of third party statement without any corroborative evidence thereon.
The cenvat credit in this case cannot be denied to the appellant No.3, therefore, no penalty can be imposed on the appellant No.2. Consequent to that, penalty on the appellant No.1 also cannot be imposed.
The impugned order is set aside - appeal allowed.
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2024 (11) TMI 988
CENVAT Credit on removal of waste and scrap as such - after use of plant and machinery removal of the same as used plant and machinery attract duty by deducting the depreciation as provided in Rule 3(5) of Cenvat Credit Rules or will be treated as removal of waste and scrap of capital goods attracting duty on transaction value in terms of Rule 3(5A) of Cenvat Credit Rules - denial of credit on the ground that M.S. Window Section cleared as such without any manufacturing process carried on such M.S. Window Section - shortage of 30.123 MT of Billets which was used in the furnace and subsequently dismantled and cleared in June, 2008.
Whether after use of plant and machinery removal of the same as used plant and machinery attract duty by deducting the depreciation as provided in Rule 3(5) of Cenvat Credit Rules or will be treated as removal of waste and scrap of capital goods attracting duty on transaction value in terms of Rule 3(5A) of Cenvat Credit Rules? - HELD THAT:- It is found that merely because the plant & machinery was sold in the Metric Ton and the buyer is the scrap dealer that alone cannot establish that the plant and machinery sold by the appellant is in the form of waste and scrap. As per the invoices raised by the appellant it is observed that in some of the invoices, the description clearly shown as old and used iron scrap. However, in some of the case it is declared as old and used machinery.
From the two sample invoices, it is observed that some of the goods were cleared as waste and scrap and some of the capital goods were cleared as old and used machinery without mentioning steel scrap. Therefore, the entire matter needs to be reconsidered after verification of facts on the basis of each invoice and wherever, the description of the capital goods is mentioned as waste and scrap, the same is liable to excise duty on the transaction value and in case of description mentioned as old and used capital goods the same shall be liable to duty after allowing the depreciation as prescribed in the Rules. The adjudicating authority shall also consider the submission of the appellant that at the relevant time there was no recovery proceeding which was brought in this statute only by Notification No.03/2013- C.E. (N.T.) dated 01.03.2013.
Whether this Cenvat Credit is liable to be denied on the ground that M.S. Window Section cleared as such without any manufacturing process carried on such M.S. Window Section? - HELD THAT:- It is the admitted fact that the appellant have cleared the M. S. Window Section involving Cenvat Credit of Rs.19,86,317/-on payment of duty amounting toRs.27,93,234/-, therefore, the amount of Cenvat Credit of Rs.19,86,317/-stands reversed/ paid by the appellant. On this ground the demand of Rs.19,86,317/- and consequent penalty and interest if any shall not sustain.
Whether demand of Cenvat Credit is correct on the ground of shortage of 30.123 MT of Billets which was used in the furnace and subsequently dismantled and cleared in June, 2008? - HELD THAT:- It is found that the stand of the appellant is that at the time of use of billets in the foundation of the furnace, they have reversed the Cenvat Credit. However, no evidence in respect of such reversal was brought here. Therefore, this factual aspect also needs to be verified by the adjudicating authority while passing denovo order.
The matter relates to the demand of Rs.54,38,305/- and Rs.Rs.1,04,249/-,it is remanded to the adjudicating authority and the demand of Rs.19,86,317/- on M.S. Window Section is set aside. The appeal is disposed of.
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2024 (11) TMI 987
Time Limitation - suppression of facts or not - concessional rate of duty - Interpretation of Notification No. 12/2012-CE and subsequent amendments regarding concessional rates of duty for goods falling under Chapter 85 - short payment of Central Excise duty due to misinterpretation of notification - HELD THAT:- The appellant had bonafide belief that goods attract 10% as per the rate prescribed under the Notification No.12/2012-CE dated 17.03.2012 even the notification was time bound wherein, the closure date was prescribed of31.12.2014. By amendment in the said notification, the appellant’s goods i.e. falling under85441190was excluded by Notification dated 11.07.2014. Since, the notification otherwise prescribed the time limit upto31.12.2014,the appellant had bonafide belief that 10% rate is effective till 31.12.2014. It is only because of the appellant was not aware of the notification, they continued to pay the duty at the rate of 10%. Appellant’s bonafide further get reinforced on the ground that the appellant have been declaring the goods with Chapter heading and the rate of duty, at the rate of 10% in their all ER-1 monthly return for the period July, 14 to December,14. The changes were brought by statutory amendment which is otherwise known to the department also. The department was also aware that the appellant prior to 11.07.2014 had been paying the duty at the rate of 10%.
The officers have verified those documents while processing the rebate claim and/ or the clearance is under bond. Therefore, all the facts were available on record before the department and nothing was prevented from the department to initiate the action for demanding the differential duty within the normal period. However, the show cause notice for the period July,14 to December, 2014 was issued only on 18.10.2017 by way of show cause notice. Therefore, the entire demand is within the extended period.
Since there is no suppression of fact on the part of the appellant, the demand for extended period shall not sustain. Accordingly, the demand of duty confirmed by the lower authorities is set aside on the ground of the time bar itself.
The appeal is allowed.
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2024 (11) TMI 986
Exemption from Excise Duty under N/N. 6/2006-CE dated 1.3.2006 - goods supplied against international competitive bidding - appellant contended that they were entitled to the benefit of Notification No. 6/2006-CE dated 1.3.2006, in view of the fact that there was no dispute with respect to the goods which were supplied against international competitive bidding - HELD THAT:- Considered the fact that the Tribunal in the appellant’s own case M/S WPIL LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-III [2023 (7) TMI 298 - CESTAT KOLKATA] has observed that 'the Appellant is eligible for the benefit of Notification No. 6/2006-CE dated 1.3.2006, as they have fulfilled all the conditions required to avail the said exemption. Accordingly, we hold that the demands made in the impugned order are not sustainable and the same is liable to be set aside.'
The appellant is entitled for the benefit of Notification No.6/2006-CE dated 01.03.2006, as they have fulfilled all the conditions required to avail Cenvat credit, therefore, no demand is sustainable against the appellant.
Appeal allowed.
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2024 (11) TMI 985
Clandestine removal - Gutkha pouches and related materials - retraction of statements - Confiscation of goods - 90 bundles containing 1872720 Gutkha pouches and related materials, three packaging machines - demand of duty with interest and penalty - HELD THAT:- Undisputed facts of the case are that Gutkha pouches brand-named “Raj Kolhapuri” along with other related materials, three packaging machines and one lorry were seized by the Banavasi Police on 03.11.2009 which was later, with the intervention of the Central Excise Department, on direction by the Hon’ble Principal JMFC was handed over to the Central Excise Department for further investigation. The said materials were again seized on 09.12.2009 and statements of persons were recorded again to ascertain the quantum of offence. From analysis of the statements, it revealed that the Gutkha and three packing machines were seized from the premises viz. House No.6, Plot No.21, Golikatta Village, Gudnapura – 581 318, Banavasi, Sirsi Taluk Uttara Kannada which was given on rent by the owner of the said premises Shri Dhananjaya Krishna Hegde for a period of one month to the appellant by an understanding recorded on 28.10.2009 was manufactured in the said premises and cleared without payment of duty.
The appellant from the very beginning expressed his ignorance about the said labourers and undertaking the manufacture of Gutkha in the said premises. However, no request for cross-examination of the witnesses was requested by the appellant before the adjudicating authority. Neither the appellant nor Mr. Dhananjaya Krishna Hegde, the owner of the said premises has claimed before the authorities that the Gutkha packed in the plastic pouches having mark of ‘Raj Kolhapuri Gutkha’ belongs to them or the seized machineries have been claimed to belong to them and requested for its release to them. On the other hand, both of them denied being involved in the manufacturing of Gutkha in the said premises.
Since duty paid character of the Gutkha has not been established and on the basis of the statements given by the labourers and lorry driver and retrieving the three machineries from the manufacturing premises, it is clear that the said Gutkha bearing name ‘Raj Kolhapuri’ manufactured in the said premises and cleared without following procedure and discharging duty payable on the same. Consequently, the Gutkha as well as the three packaging machines and other related materials seized by Police on 03.11.2009 and later by Central Excise Department on 09.12.2009 are liable for confiscation and hence the order of the Commissioner directing the confiscation of the same does not require any interference.
More or less, similar views expressed by the Tribunal in a series of cases, including the cases COMMR. OF C. EX., HYDERABAD VERSUS DHARIWAL INDUSTRIES LTD. [2010 (4) TMI 890 - CESTAT, BANGALORE]; GOYAL TOBACCO CO. PVT. LTD. SHRI RAJESH GOYAL, DIRECTOR VERSUS CCE & ST, JAIPUR-I [2017 (3) TMI 57 - CESTAT NEW DELHI], COMMISSIONER OF CENTRAL EXCISE, DELHI-I, M/S KUBER TOBACCO INDIA LTD, SHRI DHANPAT SINGHEE, DIRECTOR, SHRI CHATAR SINGH BAID, SHRI VIKAS MALU VERSUS M/S KUBER TOBACCO INDIA LTD, COMMISSIONER OF CENTRAL EXCISE, DELHI-I [2016 (4) TMI 622 - CESTAT NEW DELHI] Hence, the demand in absence of evidence of the nature narrated above being not adduced by the Department, hence cannot be sustained, only on the basis of the date of installation of electricity meter at the said premises. In these circumstances, the demand confirmed by the learned Commissioner is liable to be set aside. Accordingly, the same is set aside and consequently penalty imposed on the appellant under Section 11AC of the Central Excise Act, 1944 also set aside.
The impugned order is modified to the extent of upholding confiscation of the seized goods, three machines and related materials; however, confirmation of demand, interest and imposition of penalty on the appellant is set aside. Appeal is disposed of.
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2024 (11) TMI 984
Rejection of refund claim over and above the value addition - appropriation of pre-deposit made - HELD THAT:- The appellant has filed the refund claim of the pre-deposit along with interest on the basis of CESTAT Final Orders dated 23.03.2018 and 28.08.2018 but the Assistant Commissioner vide two Order-in-Original 512 and 514 sanctioned the refund along with interest but appropriated the said refund of Rs. 15,00,000/- and Rs. 32,77,590/- against the total demand of Rs.2,17,35,588/- on account of value addition confirmed for the period February 2012 to April 2012.
It is found that when the appeal against the Order-in-Original was pending before the Commissioner (Appeals), the appellant Voluntarily deposited the demand against all three OIOs relating to February 2012 to April 2012 and intimated the jurisdictional Deputy commissioner Jammu vide letters dated 14.08.21 duly acknowledged on 26.08.2021 and the copies of challans have also been produced showing the payment of the entire demand of Rs. 2,17,35,588/-. Further, it is found that the appellant has voluntarily deposited the entire demand amount and informed the Department but the Department did not acknowledge the same in spite of challans showing payments being attached.
Since, the appellant has voluntarily made the complete payment thereafter appropriation of the pre-deposit amount of refund sanctioned against the said demand is not legally sustainable - further it is found that the appellant specifically intimated to the department regarding the payment of the entire amount of Rs. 2,17,35,588/- and also produced the challans but in spite of that the Ld. Commissioner has upheld the Order-in-Original, appropriating the refund claim against the demand which has already been paid, when the department has collected the entire demand confirmed by the various orders thereafter, the Department is not justified to retain the sanctioned refund and appropriated the same.
The both impugned order dated 08.12.2022 are not sustainable in law and is set aside - appeal allowed.
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2024 (11) TMI 983
Refund claim under Rule 5 of Cenvat credit rules - input services - Rule 5 of Cenvat credit rules 2004 - it is alleged that input service involved in the refund claim has no nexus with the manufacture of export goods - HELD THAT:- It is found that it is undisputed that at any stage the revenue has not issued any show cause notice or adjudicated thereupon the issue of admissibility of input service in terms of rule 14 of Cenvat Credit Rules, 2004 therefore the allowance of the credit on the input service in question attained finality and when this be so then by filing the appeal against the sanctioned order of the refund dispute about admissibility of the service for purpose of allowing the Cenvat credit cannot be raised. The learned Commissioner (Appeals) on this very ground rejected the appeal of the revenue.
From the findings of the Commissioner (Appeals) it can be seen that the Commissioner (Appeals) rejected the appeal of the revenue on the threshold point that the department has not taken any action under rule 14 for disputing the admissibility of input service in question. The findings of the learned commissioner (Appeals) based on various judgments. Therefore, this issue is no longer res-integra. Without prejudice, it is also found that all the service which were questioned by revenue are admissible input service as held in various judgment as cited by the appellant in their synopsis.
It is further found that though the revenue in the appeal before the Commissioner (Appeals) as well as before this tribunal reiterated that the input services involved in present case have no nexus with the manufacture of the export goods, however, no reasoning is given that why these services are not essential in or relation to the manufacture of exports goods. For this reason also the revenue’s appeal is hollow and without any basis. As per the above discussion, there are no infirmity in both the orders passed by authorities below.
The impugned order is upheld - Revenue’s appeal is dismissed.
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2024 (11) TMI 982
Classification of goods - Biovita - to be classified under heading 3101 0099 or under Central Excise heading as 3105 of Central Excise Tariff? - HELD THAT:- A perusal of show cause notice shows that it relies on the CBEC Circular 1022/10/2016-CX dated 06.04.2016. The said circular prescribed that micronutrient could not be classified under Chapter 31 as ‘fertilizer’. It also relies on the fact that the appellants had in the month of July 2015 themselves classified the goods under Central Excise Tariff Heading 3808 and in the months of June, August, September-2015 classified the product under Central Excise Tariff Heading 3105 as per directions of M/S. P.I. INDUSTRIES LIMITED (FORMERLY M/S. ISAGRO (ASIA) AGROCHEMICALS PVT. LTD.) ; M/S. AGRO PACK; SHRI PARTH H. PATEL VERSUS COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, SURAT-II, SURAT [2024 (9) TMI 1655 - CESTAT AHMEDABAD (LB)] the principal manufacturer. It is noticed that subsequent to the impugned order, the issue regarding classification of goods between Chapter 31 and Chapter 38 was referred to the Larger Bench in the case of PI Industries (the Principal Manufacturer itself).
It is seen that while the products in the instant case are not identical but similar in nature, therefore, the principles laid down by Larger Bench of Tribunal in the case of PI Industries would equally apply to the product in the instant case.
In view of above, the impugned order is set aside and matter remanded to the original adjudicating authority for fresh decision in the light of observations made by Larger Bench in the case of PI Industries.
Appeal is allowed by way of remand.
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2024 (11) TMI 981
Allowing the claim of second sale exemption contrary to established facts that the so-called sellers were either non-existent or had not handled the goods - Deletion of consequential penalty under Section 12(5)(iii).
Whether the Tribunal was legally right in allowing the claim of second sale exemption despite the sellers being non-existent or not having handled the goods? - HELD THAT:- When the burden was on the dealer to prove the factum of second sale, the respondent had not discharged the burden of proving the actual first sale, for him to successfully claim the exemption on the ground of second sale. The Tribunal had erroneously shifted the burden from the dealer to the revenue, which is against Section 10 of the Act and had come to the conclusion that the revenue had not established by proving that the purchase of the respondent was a first sale.
Similar issue in M/S. MKR CASHEW EXPORTS VERSUS THE SECRETARY, TAMILNADU SALES TAX APPELLATE TRIBUNAL (MB) , CHENNAI, THE DEPUTY COMMERCIAL TAX OFFICER, PANRUTI (RURAL). [2024 (8) TMI 1485 - MADRAS HIGH COURT] where the dealer was not able to prove the factum of first sale to claim the exemption on the ground of second sale, as the burden of proof was on the assessee to prove the transaction.
Further, in A.S.Ganapathy Chettiar Vs. The State of Tamil Nadu [1976 (3) TMI 209 - MADRAS HIGH COURT], relied on by the learned Government Advocate for the appellant, the Division Bench of this Court has held that the burden of proving that there was an earlier taxable sale was on the assessee.
In view of the above decisions and the fact that the respondent dealer had failed to prove the transaction of the factum of first sale, the first question of law is answered in favour of the revenue and against the assessee.
Whether the deletion of the consequential penalty under Section 12(5)(iii) by the Tribunal is legally tenable? - HELD THAT:- In the instant case, the respondent had put forth a claim of second sales and further they submitted the documents, which on enquiry were found to be bogus and fictitious and the respondent had made no attempts to produce the documents through dealers before the authorities for confirmation of the alleged first sale. In view of our findings arrived at question No.1, the respondent, who is liable to pay tax had not filed any return for the assessment year 1982-83 and have wilfully suppressed taxable turnover and therefore, the Assessing Officer had rightly imposed the penalty under Section 12(5)(iii) of the Act - the decision of the Tribunal in deleting the penalty imposed by the Assessing Officer under Section 12(5)(iii) of the Act cannot be sustained. Under such circumstances, the second question of law is also answered in favour of the revenue and against the assessee.
The impugned order of the Tribunal is set aside and the assessment order as confirmed by the appellate authority stands restored - this Tax Case stands allowed.
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2024 (11) TMI 980
Jurisdiction of Micro and Small Enterprises Facilitation Council to refer the purported disputes obtaining between MRPL and Driplex for adjudication via arbitration - Validity of the "No Claim Certificate" issued by the supplier and its impact on the claims -
Jurisdiction of Micro and Small Enterprises Facilitation Council to refer the purported disputes obtaining between MRPL and Driplex for adjudication via arbitration - HELD THAT:- In the instant matter, MRPL and Driplex entered into an agreement on 01.12.2009. Driplex submitted a memorandum to register itself as a small enterprise under the 2006 Act on 09.12.2011. Concededly, Driplex completed its work and obtained a certificate from MRPL after registration under Section 8 of the 2006 Act i.e., only on 11.03.2013. Since Driplex had been awarded a turnkey contract, the work, quite naturally, would have continued even after it filed a memorandum i.e., obtained registration under the 2006 Act.
The judgment in Shanti conductors’ case [2019 (1) TMI 1906 - SUPREME COURT], which was rendered by a three-judge bench of the Supreme Court and concerned pari materia provisions contained in the 1993 Act tilts the balance in favour of Driplex as it, inter alia, holds that the applicability of the Act i.e., the 1993 Act would be determined on the date when the goods were supplied, and services were rendered and not the date when contract was entered into between the disputants.
It is noted that MRPL had filed a reply dated 20.02.2016 in which the jurisdictional issue appears to have been raised before the Council. This was clearly given up at the later stage as, concededly, this issue was not raised before the learned Single Judge - thus, the Council had the jurisdiction to refer the disputes under Section 18 of the 2006 Act to the arbitral tribunal.
Whether the present claims are tenable in the light of the No-Claim Certificate dated 25.09.2013 issued by the Claimant? - HELD THAT:- This area need not be delved upon since a petition preferred by MRPL under Section 34 of the Arbitration Act is pending adjudication.
Appeal disposed off.
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2024 (11) TMI 979
Levy of penalty for availing excess Input Tax credit - delay in filing the appeal by the petitioner - HELD THAT:- This Court allows the writ petition on the grounds that the delay in filing the appeal by the petitioner was due to an unavoidable personal circumstances, including the critical illness of her husband, which required extensive medical attention. The petitioner provided supporting medical documentation, but the Appellate Authority refused to condone the delay. This rigid approach fails to account for genuine extenuating circumstances, reflecting a lack of judicial empathy and an unreasonable interpretation of statutory time limits.
Given the petitioner's situation, this decision by the Appellate Authority to dismiss the appeal based solely on timing considerations was unduly harsh and legally unsound. Moreover, the petitioner’s right to further appeal has been obstructed by the non-formation of the GST Appellate Tribunal, effectively denying her a statutory right to a higher appeal.
In light of the procedural irregularities, the arbitrary nature of the actions and the statutory misapplication, this court finds the petitioner’s case to be meritorious. Accordingly, the writ petition is allowed, and the impugned orders dated May 24, 2024 is quashed. The petitioner’s rights under the WBGST Act, 2017, are restored, with all benefits that accompany this decision, without any adverse consequences arising from the annulled orders.
Application disposed off.
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