Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *   CBIC issues draft rules for Customs valuation *  Top Headlines: Threshold for Benami deals, green bond investors, and more *  Govt aims 1-hour clearance for goods at all ports *  Exporters Allowed To Use RoDTEP, RoSCTL Scrips To Pay Customs Duty, Transfer Them; Rules Amended *  Millions of labourers to be affected by brick producers’ strike over hike in GST, coal rates *  Inauguration of ‘kendriya GST parisar’ *  Transporter can seek Release of Conveyance alone, not Goods under GST Act: Madras HC *  GST: Quoting of DIN Mandatory for Responding to Notice, Govt Modifies Portal *  Firms can soon file claims for GST credits of ?400 cr *  CBIC issues modalities for filing transitional credit under GST. *  Mumbai: Man creates 36 fake GST firms, arrested for input tax credit fraud of Rs 23 cr *  Report to restructure Commerce Ministry under study; idea is to set up trade promotion body: Goyal *  Firms can soon file claims for GST credits of ?400 cr *  Gambling Alert! Govt May Levy Up To 28% GST; UP, Bengal Back Move *  EPFO backs raising retirement age to ease pressure on pension funds *  India Moving Up Power Scale, Set to Become Third Largest Economy By 2030 *  Airfares Get Expensive: What Changes for Flyers From Today? *  IRCTC Latest News: Passengers to Pay More For Cancelling Confirmed Rail Tickets Soon. *  IBC prevails over Customs Act, says Supreme Court. *  As GST enters sixth year, a time for evaluation and reassessment *  There’s GST on daily essentials as Centre needs money to buy MLAs: Arvind Kejriwal *  Now, GST on cancellation of confirmed train tickets, hotel bookings *  GST kitty for top States could rise 20% in FY23, says Crisil *  French customs officials seize another cargo vessel over Russia sanctions *  TradeLens builds on Asia momentum with Pakistan Customs deal *  Hike tax on tobacco, reduce affordability & increase revenue: Civil society organizations to GST council *  Bihar: ?10 crore tax evasion on tobacco products detected in raids *  Centre failed on GST, COVID; would it be anti-national? Rajan on Infosys row *  Service Tax not Chargeable on Income Tax TDS portion paid by recipient: CESTAT grants relief to TVS *  Foreign portfolio investors make net investment of Rs 7575cr in Sep so far
Subject News *  Run-up to Budget: Monetary threshold for GST offences may rise to Rs 25 cr *   GST (Tax) E-invoice Must For Businesses With Over Rs 5 Crore Annual Turnover *   Both Central GST and excise duty can be imposed on tobacco, rules Karnataka high court *   CBIC Issues Clarification On Extended Timelines For GST Compliance *   CBIC Issues Clarification On Extended Timelines For GST Compliance *  Budget 2023- 9.6 crore gas connections *  GST: Tamil Nadu Issues Instructions for Assessment and Adjudication Proceedings *  GST: CBIC Extends Last Date for filing of ITC *  GST collection in September surpasses Rs 1.4 lakh crore for straight seventh time *  Dollar smuggling case: Customs chargesheet names M Sivasankar as key conspirator. *  Hike in GST rates fuels inflation *  Assam: CBI arrests GST commissioner in Guwahati *  GST fraud worth ?824cr by 15 insurance Cos detected *  India proposes 15% customs duties on 22 items imported from UK *  Decriminalising certain offences under GST on cards *  Surge in GST collections more due to higher inflation: India Ratings *  MNRE Notifies BCD and Hike in GST Rates as ‘Change in Law’ Events But With a Condition | Mercom India *   Solar projects awarded before customs duty change allowed cost pass-through *  Rajasthan High Court Dismisses Writ Petitions Challenging Levy Of GST On Royalty *   GST revenue in September likely at Rs 1.45 lakh crore *  Govt working on decriminalising certain offences under GST, lower compounding charge *  Building an institution like GST Council takes time, trashing is easy: Sitharaman *  GST collections in Sept may touch ?1.5 lakh crore *  KTR asks Centre to withdraw GST on handlooms *  After Gameskraft, More Online Gaming Startups To Receive GST Tax Claims *  Madras HC: AAR Application Filed Under VAT Does Not Survive After GST Enactment *  Threshold for criminal offences under GST law may be raised *  Bengaluru: Gaming company faces biggest GST notice of Rs 21,000 crore *  CBIC clarifies Classification of Cranes for GST, Customs Duty *  Customs seize gold hidden in bicycle in Kerala airport  

Comments

Print   |    |  Comment

PJ/CASE LAW/2016-17/3036

Whether order of CESTAT is sustainable, when it is passed blindly without even looking at important documents?

Case:COMMISSIONER OF CUSTOMS & CENTRAL EXCISE Vs P.S.L. LTD.

Citation:2015 (325) E.L.T. 460 (S.C.)

Brief Facts: The respondent is the manufacturer of Spirally Welded MS Pipes and Cement guniting of said pipes falling under Chapter Heading 7305.90 of the Schedule to the Central Excise Tariff Act, 1985. They had executed the work order of M/s. L&T, Chennai in respect of their Water Supply Project to the Visakha Industries Water Supply Company Limited promoted by the A.P. Industrial Infrastructure Corporation Limited. For this purpose, M/s. L&T had supplied the Spirally Welded MS Pipes at the rate of Rs. 15,000/- per metric [ton] of pipes sold and paid excise duty declaring that value.
The Revenue found that M/s. L&T was buying the aforesaid product from Steel Authority of India Limited (SAIL) at a much higher prices, i.e., Rs. 18,992/- per metric [ton] of pipes rolled and it was the depressed value of Rs. 15,000/- which was shown in the invoices raised by M/s. L&T for supply of this product to the respondent. On that basis, show cause notice dated 2-12-2004 was issued demanding differential duty of Rs. 40,95,850/- towards supply of the aforesaid HR coils purportedly at reduced cost.
The contention of the respondent was not accepted by the adjudicating authority in his Order-in-Original. In the detailed order passed by the Additional Commissioner, while confirming the demand in the show cause notice, he also recorded that the transaction between M/s. L&T and the assessee did not appear to be a transaction at arm’s length and the price was suppressed. This order was confirmed in appeal by the Commissioner (Appeals). However, in the further appeal preferred by the respondent-assessee before the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as ‘CESTAT’), the appeal of the respondent was allowed vide impugned orders. The CESTAT has also relied upon the judgment of this Court in the case of ‘H.B.L. Aircraft Batteries Ltd. v. Commissioner of Central Excise, Hyderabad’ [2004 (5) SCC 664 = 2004 (167)E.L.T. 483 (S.C.)].

Appellant’s Contention:The CESTAT has not discussed the facts of the present case appropriately and has accepted the version of the respondent-assessee blindly without even going into the documents, more particularly, the so called forward contract entered into between M/s. L&T and the assessee which was not even produced by the assessee. The finding that the transaction was not at arm’s length which was arrived at on the basis of material on record after detailed discussion has not even been commented upon and is side-tracked. On these facts, the judgment of this court in H.B.L. Aircraft Batteries Ltd. could not have been mechanically applied.
 
Respondent’s Contention:  The respondent contended that there was a forward contract between the respondent and M/s. L&T for a fixed period and during this period, the price of Rs. 15,000/- was agreed  upon. The respondent also tried to disclose the basis of arriving at the aforesaid price. On this basis, it was contended that insofar as the respondent is concerned, the transaction value was Rs. 15,000/- and therefore, the duty was rightly paid thereupon.

Reasoning of Judgement:The Court has accepted the contention of the revenue. Tribunal erred in accepting version of assessee blindly without even looking at forward contract which was not even produced by assessee. Further, Tribunal’s side tracking, without making any comment, detailed findings in adjudication order of price not being at arms length. Tribunal’s order set aside and matter remanded for deciding issues afresh by dealing with aspects raised by Revenue.

Decision: Order Set aside and matter remanded.

Comment:The Case is related to valuation of goods. Assessee has sold the goods at 15,000 per metric ton as against purchase price of ` 18,992 per metric ton. Assessee contended that the price is being covered under a forward contract. Tribunal has allowed the appeal of assessee blindly without even looking at forward contract which was not even produced by assessee.
The Supreme Court has allowed the appeal of department and remanded back the matter to CESTAT as the order of CESTAT was passed without looking at the important documents of the matter.  
 
 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com