Indirect Tax Weekly Flashback for the period 24 November 2024 to 30 November 2024.
Kerala High Court
Interest U/S 28AA Not Payable On Remitting Amount Covered By Duty Credit Scrip When Assessee Ineligible For Service Exports from India Scheme Benefit: Kerala High Court
Case Title: Braddock Infotech Private Limited Versus Joint Director General Of Foreign Trade
The Kerala High Court has held that the interest under Section 28AA of the Customs Act is not payable on remitting amount covered by duty credit scrip when assessee is ineligible for Service Exports From India Scheme benefit.
The bench of Justice Gopinath P. has observed that the petitioner is not liable to pay interest under Section 28AA of the Customs Act, 1962 Act on the amounts repaid by the petitioner on the petitioner being found ineligible for the benefit of the Scheme introduced by the Foreign Trade Policy which was in force for the period from 01-04-2015 to 31-03-2020.
Delhi High Court
Customs Dept. Can’t Take Punitive Action Against Exporters In Absence Of DGFT’s Classification On Eligibility Of Exporters To Claim MEIS Benefits: Delhi High Court
Case Title: Designco Versus Union Of India & Ors.
The Delhi High Court has held that in the absence of the Directorate General Of Foreign Trade (DGFT) having ruled upon the issue of classification or having expressed any doubt with respect to the eligibility of the writ petitioners/exporters to claim benefits under the Merchandise Exports from India Scheme (MEIS Benefits), it would be wholly impermissible for the respondents/department to take punitive action against the writ petitioners.
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has directed the department to refund the amounts collected under duress and threat from the exporters being INR 5,47,000.
Reassessment Or Rejection Of Declared Value Can’t Merely Be Based On NIDB Data: Delhi High Court Grants Relief To Importers
Case Title: Niraj Silk Mills Versus Commissioner Of Customs (ICD)
In a major relief to importers, the Delhi High Court has held that a valuation addition based solely on National Import Database (NIDB) data would wholly unwarranted and that any such reassessment would have to be shored by independent and cogent evidence.
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that NIDB data alone would be insufficient for value reassessment without corroborative evidence or contemporaneous import comparisons. This decision underscored the importance of comprehensive evidence and procedural compliance in customs disputes, cautioning against arbitrary reliance on NIDB data.
Orissa High Court
Dept. Can’t Initiate Proceedings Based On Delayed Audit Report U/s 41(4) Of OVAT Act: Orissa High Court
Case Title: M/s. Aman Enterprises Versus State of Odisha and others
The Orissa High Court has held that the department cannot initiate the proceeding consequent to delayed audit report under section 41(4) of Orissa Value Added Tax Act, 2004.
The bench of Justice Arindam Sinha and Justice Sanjay Kumar Mishra relied on the decision of M/s. Bateman Engineering (India) Private Limited v. Commissioner of Sales Tax, Orissa and others in which it was held that the mandatory nature of the time limits set out in Section 41(4) of the OVAT Act that the report must be submitted within seven days of the conclusion of the audit visit.
Bombay High Court
191.60 Kgs Of Heroin Detected In Import Consignment: Bombay High Courts Bail To Customs Clearing Agent
Case Title: Kondiba Gunjal Versus The Union of India
The Bombay High Court has granted bail to the Customs Clearing Agent who has alleged involvement in importing 191.60 kgs of Heroin.
The bench of Justice Bharat P. Deshpande has observed that a huge commercial quantity of heroin was found in the container, but except statement under Section 67 of NDPS Act which is otherwise not admissible in evidence as far as admissions/confessions of the Applicant are concerned, there is hardly any corroborative evidence. Thus, the provisions of Section 37 of the NDPS Act would not be considered as an embargo in the present matter even though commercial quantity was detected and seized.
Residual Provision Of Section 117 Can’t Be Invoked Upon Realising That Penalties Can’t Be Imposed U/s 111 and 112 Of Customs Act: Bombay High Court
Case Title: Commissioner of Customs Versus Frigorifico Allana Private Ltd.
The Bombay High Court has held that residual provision of Section 117 of the Customs Act cannot be invoked upon realising that no fines or penalties could be imposed under Sections 111 and 112 of Customs Act,1962.
The bench of Justice M.S. Sonak and Justice Jitendra Jain while dismissing the customs department’ s appeal held that the respondents import goods discharged through high-pressure pipelines from the vessel directly into tanks in the gated complex in the port area. After obtaining the necessary permissions from the authorities, some of the material may have been stored in non-bonded tanks but within the same gated complex. This was done after obtaining permission.
Gauhati High Court
Application Challenging Place Of Posting By Central Excise Inspector To Be Made Within One Year: Gauhati High Court Allows CBEC’s Petition
Case Title: Union of India Versus Anil Kumar Sharma
The Gauhati High Court while allowing the petition of Central Board of Excise and Customs (CBEC) has held that the application challenging place of posting by central excise inspector to be made within one year.
The bench of Chief Justice Vijay Bishnoi and Justice N. Unni Krishnan Nair has held that though the respondent, central excise inspector was posted in Shillong Zone on the post of Inspector in the year 2004, he has never raised any grievance regarding allocation of zone till 2014, i.e. when Gyanesh Kumar was promoted to the post of Superintendent of Customs in Vadodara Zone.
CESTAT
Final Hearing Notice Not Received Is Not A Valid Ground: Cestat Dismisses Restoration Application
Case Title: Himachal Fashion Private Limited Versus Commissioner Of Customs
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) while dismissing the restoration application on the ground that 6 hearings have been offered appellant did not appear, 7th hearing Notice not received is not a valid ground.
The Bench of Ms.Binu Tamta, Member (Judicial) and Ms.Hemambika R. Priya, Member(Technical) has observed it was not a case where the appeal has been dismissed for want of presence or prosecution. The Final Order has been passed on merits after considering all the grounds of appeal and submissions of the appellant in the Appeal Memorandum and by considering the submissions of Revenue.
The bench has held that Restoration of Appeal (ROA) is not a matter of right of the appellants. It is not to be permitted in routine manner, and is permitted only in exceptional cases where it is inevitable and there are valid reasons for restoring the appeal.
Security Deposit Collected On Telephone, Internet Modem To Safeguard Future Revenue Loss: CESTAT Allows Cenvat Credit To BSNL
Case Title: Bharat Sanchar Nigam Ltd. Versus Commissioner of C.E. & S.T.-Surat-i
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the cenvat credit to BSNL on telephone instrument or internet modem on the ground that the security deposit collected on telephone, internet modem to safeguard future revenue loss.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the Telephone Instruments supplied by BSNL are Capital Goods”, not inputs and refundable security deposit has no relation with the supply of telephone instruments. The department has wrongly denied the Cenvat credit in respect of telephone instrument/ internet modem.
Baroda Cricket Association Not Liable To Pay Service Tax On Capital Equipment Received From BCCI: CESTAT
Case Title: Baroda Cricket Association Versus Commissioner of C.E. & S.T.-Vadodara-I
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Baroda Cricket Association is not liable to pay service tax on capital equipment received from the Board of Control for Cricket in India (BCCI).
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the appellant had received certain amounts from BCCI and on the same service tax liability has been discharged. The appellant had received certain equipment from BCCI and under the impression that the said equipment is in addition to the grant given by the BCCI, the appellant discharged service tax thereon. Later on, when the debit note was raised by the BCCI, the appellant released that the equipment received was part of the grant and not in addition to it and consequently corrected the situation by taking re-credit of the service tax paid on capital equipment.
CESTAT Quashes Order Imposing Penalty On Customs Superintendent For Allegedly Demanding Illegal Gratification For Goods Clearance
Case Title: Amit Das Versus Commissioner Of Customs – Mundra Customs
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the order imposing penalty on the customs superintendent for allegedly demanding illegal gratification for goods clearance.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the adjudicating Authority has not examined the persons who have given the statements which have been relied upon to implicate the appellant/customs officer. Also, no opportunity of cross-examination was given to the customs officer to question the basis on which the co-accused has implicated the appellant in this case. When the procedure set out in Section 138B is not followed, the statement of the co-accused has no evidentiary value.
CESTAT Quashes Central Excise Demand On Debonding Of 100% EOU Unit To DTA
Case Title: Bayer Vapi Pvt Limited Versus Commissioner of C.E. & S.T.-Vapi
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed central excise demand on debonding of 100% Export Oriented Units (EOU) to Domestic Tariff Area (DTA).
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) while remanding the matter directed the adjudicating authority to give the letter to the appellant well in advance and to grant an opportunity of hearing before passing reasoned order in the matter.
Service Provider Not Liable To Pay Service Tax When Already Paid By Service Recipient Under Reverse Charge Mechanism: CESTAT
Case Title: Utility Labour Suppliers Versus Commissioner Of C.E.-Ahmedabad-II
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service providers are not liable to pay service tax when already paid by service recipient under reverse charge mechanism.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that once the service tax on entire value has been discharged there cannot be double taxation. The service tax has been paid by the Pharma companies onAppellant’s activity.
Oral Statements Of Service Recipient Are Not Admissible Evidence: CESTAT
Case Title: Krish Corporation Versus Commissioner of C.E. & S.T.-Surat-i
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that oral statements of service recipients cannot be accepted as admissible piece of evidence.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that no cash receipts has been relied upon by the department, no financial flow back has been relied upon by the department for the collection of rent in cash, no rent agreement has been found by the department for the support of excess rent , no ledger entry in the books of accounts of the appellant found for so called excess collected rent.
Pre-Deposit By Appellant Not Payment Of Duty; CESTAT Directs Refund Along With 6% Interest
Case Title: M/s. Rishabh Laboratories Limited versus Commissioner of CGST & Central Excise
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the pre-deposit by appellant is not payment of duty but only a pre-deposit for availing the right of appeal and such amount is bound to be refunded when the appeal is allowed.
The bench of Binu Tamta (Judicial Member) has observed that once the appeal is decided in favour of the assessee, he shall be entitled to refund of the amount deposited along with interest at the prescribed rate from the date of making the deposit to the date of refund, irrespective whether the order of the Appellate Authority is proposed to be challenged by the Department or not.
No Service Tax Payable On Mandap Keeper Services: CESTAT
Case Title: Ahmedabad Municipal Corporation Versus C.S.T. Service Tax – Ahmedabad
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax payable on mandap keeper services.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the department has sought to classify the service in the nature of Mandap Keeper Service under the category of ‘support service’. From the definition of ‘support services’, it is clear that only the services which are in the nature of outsourced services i.e. the functions that entities carry out in ordinary course of operations themselves but may obtain as service by the outsourcing from others for any reason whatsoever. The services in the instant case do not qualify as ‘support services’ and therefore, the services provided by the appellant are covered under the negative list.
CESTAT Allows Shipping Bills Conversions From Drawback Scheme To Advance Authorization Scheme Beyond Three Months
Case Title: PCBL Ltd. Versus C.C. Mundra
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed shipping bills conversions from drawback scheme to advance authorization scheme beyond three months.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the limitation of three months was introduced by the Circular 36/2010 dated 23.09.2010. The High Court of Gujarat in the case of Messrs Mahalaxmi Rub Tech Limited has set aside the said requirement of filing the application for conversion within a period of three months as ultravirus, Article 14 and 19(1)(g) of Constitution of India as well as ultravirus section 149 of the Customs Act, 1962. The special leave petition filed by the Revenue against the said order before Hon’ble Apex Court has been rejected.
Penalty Can’t Be Imposed Without Recording Statement Of Accused: CESTAT
Case Title: Vibrant Decor India Pvt Ltd Versus C.C.E. & S.T.-Vadodara-i
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that a penalty cannot be imposed without recording statement of the accused.
The bench of Somesh Arora (Judicial Member) has observed that in the absence of a recorded statement of the alleged accused, penalty cannot be imposed, gets the approval of this Court. During investigation the department has also not brought on record anything indicating that the appellant as an employee in any manner benefitted from the transaction undertaken by the employer.
Penalty Under Rule 15A of CCR Does Not Apply To The Director Or General Manager: CESTAT
Case Title: Sh. Prem Jain Versus Commissioner Of Cgst & Central Excise-Udaipur
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that penalty under Rule 15A of CENVAT Credit Rules, 2004 (CCR) does not apply to the director or general manager.
The bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) has observed that Rule 15A of CCR, provides for penalty for violations of CCR not elsewhere specified. The CCR provide for availment of CENVAT credit by an assessee subject to some conditions and after following certain procedures. If there are violations of CCR, they can be violations by the assessee. There cannot be violations by the Director/ General Manager or any other functionary of the assessee because CCR do not place any obligation on these functionaries nor can these functionaries take any CENVAT credit.
