Indirect Tax Weekly Flashback for the period 29 December 2024 to 04 January 2025.
Table of Contents
Delhi High Court
Delhi High Court Quashes Show Cause Notice Demanding Service Tax Worth Rs. 6.90 Crores Citing 9 Years Delay
Case Title: Ms L. R. Sharma And Co Versus Union Of India & Ors.
The Delhi High Court has quashed the show cause notice demanding service tax worth Rs. 6.90 crores citing 9 years delay.
The bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma has observed that there is no reason for the delay caused in concluding the hearing qua the show cause notice dated 21.04.2015 within the stipulated time period, and for issuing the hearing notice after a period of nine years.
Jammu & Kashmir and Ladakh High Court
Dept. Can’t Take Action Solely Based On Commissionerate Investigation: Jammu & Kashmir And Ladakh High Court
Case Title: Commissioner of Central GST and Central Excise, Jammu and Kashmir Jammu Versus Narbada Industries
The Jammu & Kashmir and Ladakh High Court has held that the action of the department, based solely on the investigation conducted by the Commissionerate, was not sustainable in law.
The bench of Justice Sanjeev Kumar and Justice Puneet Gupta has observed that an in-depth investigation is required to be conducted by the jurisdictional Authority by providing the respondent-assessee with a fair opportunity to explain and put up its defence. The report of the Commissionerate may form the basis for suspecting malpractices indulged in by the respondent but cannot be the sole basis for taking action. The investigation conducted by the Commissionerate could, at the most, be taken as a prima facie material to initiate action against the respondent.
CBI
Disproportionate Assets Case: CBI Court Sentences Assistant Commissioner Of Central Excise & Customs And His Wife To 03 Years’ Imprisonment With Total Fine Of Rs 2 Lakh
The court of Central Bureau of Investigation (CBI) has sentenced two accused including then Assistant Commissioner of Central Excise & Customs (retired IRS officer) and his wife to 03 years’ Imprisonment with total fine of Rs 2 lakh in a Disproportionate Assets case.
CBI Registers Case Against 2 Inspectors Of Customs & Central Excise
The Central Bureau of Investigation (CBI) has registered a case against 3 accused including 02 Inspectors of Customs & Central Excise and a Canara Bank Officer posted at RGIA (Hyderabad) and conducts searches.
CESTAT
Recovery Of Liquidated Damages/Penalty Not ‘Consideration’; No Service Tax Payable : CESTAT
Case Title: Madhya Pradesh Poorva Kshetra Vidyut Vitaran Co. Ltd. Versus Commissioner, Central Excise & CGST, Jabalpur
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that recovery of liquidated damages/penalty is not ‘consideration’ and no service tax is payable.
The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the activity of receiving such an amount of penalty is wrongly alleged to be an amount towards rendering the declared services. The act of receiving such an amount/liquidated damages is otherwise covered under Section 73 and 74 of the Contract Act.
Section 37C Of Central Excise Act | Order Sent Via Speed Post Can’t Be Assumed To Be Delivered Just Because It Did Not Returned : CESTAT
Case Title: M/s. Bridge & Roof Co. (India) Ltd. Versus Commissioner of Central GST & Central Excise, Jodhpur
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the order was sent by speed post and under the amended section 37C of Central Excise Act, there should be proof of delivery also. However there was no proof of delivery since what has been stated by the Assistant Commissioner in his comments is that the speed post which was sent to the appellant containing the order in original did not return to the office.
Show Cause Notice Is Foundation Without Which No Proceedings Shall Commence: CESTAT
Case Title: M/s.Rasi Seeds Private Limited Versus The Commissioner of GST & Central Excise
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the show cause notice (SCN) is the foundation without which no proceedings shall commence.
The Bench of P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that the non-issuance of SCN is a serious issue; the same is required to be issued when the Revenue does not propose to entertain the refund claim of the claimant. It’s a different matter altogether if the application for refund is accepted and refund is granted, in which event, no such SCN is required.
6% Excise Duty Payable On Railway Diesel Locomotive: CESTAT
Case Title: M/s. Shakthi Tech Manufacturing India Pvt. Ltd. Versus Commissioner of GST and Central Excise
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that 6% excise duty is payable on railway diesel locomotives.
The bench of P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that parts of railway diesel locomotive are more appropriately classifiable under CETH 86079100.
No Excise Duty On Bagasse Emerged As Waste During Sugarcane Crushing: CESTAT
Case Title: M/s. Sakthi Sugars Ltd. Versus Commissioner of GST and Central Excise
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no excise duty is payable on bagasse that emerged as waste during sugarcane crushing.
The bench of Vasa Seshagiri Rao (Technical Member) and Ajayan T.V. (Judicial Member) has observed that bagasse generated from the crushing of sugarcane is not a manufactured final product but is only a residue/waste. Bagasse generated during the course of manufacture of sugar does not become a final product although the product is mentioned as an entry in the Schedule to CETA and therefore cannot be regarded as a final product, or an exempted product.
Customs Duty Exemption On Arms And Ammunitions Imported By National Rifle Association Of India For National/International Championship : CESTAT
Case Title: M/s National Rifle Association of India Versus Commissioner of Customs
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the customs duty exemption is available on arms and ammunition imported by National Rifle Association of India for national/international championship.
The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that when a National Sports Federation imports goods, it does not itself conduct all the championships and competitions directly. It will work through its constituent State and District bodies. There is nothing in the exemption notification which even remotely suggests that such use is not acceptable.
Excise Duty Exemption On Manufacturing Henna Paste From Henna Powder : CESTAT
Case Title: Prem Heena Pvt Ltd Vs Commissioner, Central Excise & Cgst-Jodhpur
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that excise duty exemption is available on manufacturing henna paste from henna powder.
The bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) has observed that predictability and certainty is an important hallmark of judicial jurisprudence developed in this country in last six decades and increase in the frequency of conflicting judgments of the superior judiciary will do incalculable harm to the system inasmuch as the courts at the grass root will not be able to decide as to which of the judgment lay down the correct law and which one should be followed.
Customs Dept. Can’t Question Discharge Certificate Issued By DGFT : CESTAT
Case Title: M/s. Super Cassettes Inds. Ltd. Versus Commissioner of Customs
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the custom authorities cannot question the discharge certificate issued by Directorate General of Foreign Trade (DGFT) in respect of the obligation to be fulfilled by the appellant under EPCG License.
The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the custom authorities could not have questioned the discharge of the export obligation given by DGFT to the appellant in respect of the EPCG License dated 29.12.1994 in the absence of any prior determination regarding the said License by the DGFT.
Mere Existence Of Pre-Existing Purchase Orders, Prior To Movement Of Goods, Does Not Imply Inter-State Sale : CESTAT
Case Title: State of Maharashtra Versus M/s. CMS Computers Ltd.
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that mere existence of pre-existing purchase orders, prior to movement of goods, does not automatically imply that the entire movement constitutes an inter-state sale.
The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the respondent, CMS Computers had to maintain ample stock at the branch office to fulfill the orders placed by the different customers. The Assessing Officer was obliged to evaluate each transaction involving the transfer of goods before deciding whether to allow or disallow the branch transfer.
No Legal Requirement For Customs Broker To Physically Verify Premises: CESTAT Quashes Customs Broker License Revocation
Case Title: M/s Jaiswal Import Cargo Services Limited Versus Commissioner of Customs, Airport & General, New Delhi
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed customs broker license revocation held that there is no legal requirement for customs brokers to physically verify premises.
The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the Regulation requires the Customs Broker to verify the identity of the client (i.e., importer firms) and in the facts of this case since the clients (i.e., importer firms) exist as is evident from the functionality of the Importer -Exporter Code (IEC), it is not possible to hold that there has been a blatant violation of this Regulation, which would justify the revocation of Customs Broker license.
No Customs Duty Payable By Havells On Import Of CMCPCB 6349 Unmounted Printed Circuit Board Used For Manufacturing LED Lamps: CESTAT
Case Title: Principal Commissioner, Customs -New Delhi(Prev) Versus Havells India Ltd
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no customs duty is applicable on the import of CMCPCB 6349 unmounted printed circuit board used for manufacturing LED lamps by Havells India.
The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that ‘MCPCB 6349 Prideplus New 20W 5.8X1127 MM (CELZLX0760) Unmounted printed Circuit Board for the manufacturing of LED Lamps’ is classifiable under CTH 85340000.
