PJ/Case Laws/2010-11/25
CASE LAWS
Prepared By:
Sukhvinder Kaur, LLB [FYIC],
CA Rajani Thanvi and
Manish Mehta
Central Excise Section:
Case: Commissioner of Central Excise,
Citation: 2010 (256) E.L.T. 679 (SC)
Issue: - Whether benefit of exemption Notification no. 6/2000-CE can be availed when factory is bifurcated into two units and the question of law does not exists.
Brief Facts: - The assessee was engaged in the manufacture of paper of two different varieties. In the year 2000 the factory was divided into two parts with adding some machinery. During the search of the factory by the Departmental officers the fact of factory divide in two parts was revealed. In their sight the old unit was bifurcated into 2 units only with a view to avail the benefit of Notification no. 6/2000-CE dated 01.03.2000 even though the two units were not running separately. On considering the reply of the respondent, the Commissioner dropped the proceedings. It was held that the respondent was fulfilling the conditions of the Notification No. 6/2000-CE and therefore, they were entitled to the benefit of exemption for the first clearances of 3500 Metric Tonnes of paper under the said Notification.
Against this, Revenue filed appeal before the Tribunal which was dismissed. Hence, Revenue is before the
Reasoning of the Judgment: - The
Decision: - Appeal dismissed.
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Case: Commissioner of Central Excise, Bangalore-III v/s Kirloskar Electric Company Ltd.
Citation: 2010 (256) E.L.T. 734 (KAR.)
Issue: - Claim of refund in case of return goods well within the time limit, question of law arise or not.
Brief Facts: - Respondent-assessee is engaged in manufacturing of motors and transformers. Respondent sold certain manufactured goods to Indian Railway, Chittaranjan Locomotive Works, Chittaranjan vide invoice dated 31-12-1998 valuing goods Rs. 1445000/- and paid duty @ 13%. The goods were returned by the Indian Railway. Accordingly, respondent requested to the Department for refund of duty paid initially on the sale of transformer. Department denied the refund contending that it is a time barred case and respondent was not eligible for refund because goods were received back. After hearing the respondent the Deputy Commissioner allowed the refund claim. Against this order Department filed an appeal with the Commissioner (Appeals) which was dismissed. Further appeal before the Tribunal the order of the lower Authorities was confirmed. Hence, Department is before the High Court.
Petitioner’s Contention: - Department contended that refund claim was time barred and provisions of Section 11B of the CEA have not been considered.
Reasoning of the Judgment: - The High Court considering the order passed by all the authorities held that lower Authorities had consistently held that the refund application was filed by the respondent was well within time and the claim was made only after receiving the goods sold to the Indian Railways. Thus, it is held that the application was not barred by time. No substantial question of law arises.
Decision: - Appeal dismissed.
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Case: Bajaj Tempo Ltd. v/s Commissioner of C. Ex. and Custom, Pune
Citation: 1999 (106) E.L.T. 145 (Tribunal)
Issue: - The issue involved in this case is that whether cenvat credit can be denied if:-
Ø invoice of registered dealer does not contains the particulars of original manufacturer, and
Ø merely because of some technical descriptions in invoice, and
Ø for technical or procedural objections when all substantive conditions have been fulfilled, and
Ø for technical deficiencies in certificates issued by Range Superintendent, and
Ø if there is rubber stamp of duplicate for transporter on the documents on which cenvat is taken.
Brief Facts: - Appellate is engaged in manufacturing motor vehicle parts & I. C. engines. They availed credit of steel shot as input under Rule 57A. Department issued show-cause notice to the appellant on the ground that the invoices of the supplier of goods to the manufactured did not contain the details as prescribed by the Rules like the Invoices did not bear printed serial numbers, the dealer’s invoices were not in the Pink colour and not authenticated by the Range Jurisdictional Superintendent under Notification No. 23/95-CE(N.T), Date and time of issue of invoices as well as the date and time of removal of goods not mentioned in the invoices etc.
The Adjudicating Authority held that the credit was not admissible and confirmed the demand. Against this the appellant is in appeal before the Tribunal.
Appellant’s Contentions: - Appellant submitted that they were main manufacturer and had paid correct duty under the documents and this was accepted by the Department. Reference was made to Rule 52A of the Central Excise Rules, 2002 and submitted that jurisdictional Central Excise Officers of the supplier of inputs have cleared the goods on correct documents, who has more responsibility in this regard, than the Jurisdictional Central Excise Officers of the appellant.
With regard to taking credit on steel shots, the appellant relied upon the decision of the Larger Bench in the case of Shri Ramakrishna Steel Industries Ltd. v/s Collector of Central Excise, and Union Carbide India Ltd. v/s Collector of Central Excise.
It was further submitted that there is no dispute payment of duty, and the utilisation of the input received in the manufacture of the final product, and the maintenance of the accounts and the documents, which can be co-related. And intimation was given to the Assistant Collector regarding the maintenance of the documents. The substantive benefit cannot be denied in view of the above factors on a technical omission or violations. It was further clarified the definition of printing under Rule 52A on the invoices in the background of the dictionary meaning, as a mark, an expression, an indentation or mark left on the surface by the pressure, and impression something impressed with a print or firm in the mould, referring to the Oxford, Chambers, Collins, Webster, Dictionary. The appellant, being manufacturer of motor vehicles, received various inputs from diverse sources. The copy of the RG 23 entry is produced which was not considered in the impugned order. The final product is cleared on payment of duty, the inputs have reached the appellant factory and it is used in the manufacture thereof. Documents are counter-signed by the authorities. The acknowledgment of Assistant Collector is obtained. Therefore, the credit couldn’t be disallowed.
The Appellant has furnished the details regarding RG 23D Entry which was not considered in the impugned order. The invoice issued by register dealer covered the requirement of Rule 52A(6) and Rules 57GG and they were not by the manufacturers. To give credit, the supplier’s document are to be treated as valid documents, as done by the Jurisdictional officer of the supplier. The intention of the Government is very clear that the inputs must be a duty paid one to avail the Modvat credit. Misuse is possible even if the printing is also there.
Respondent’s Contentions: - Department contended that in Rule 57G and Rule 52A printing is not defined and meaning given to it is incomplete. It may amount writing in pen. The meaning of the word printing in the rules is to be understood as used in common parlance. Mould or machine printing on the invoices book is normally printed or machine used to stamp. Relaxation is only for computer prints.
It was further submitted that there is no dispute that the Modvat credit is available to steel shots as per the Larger Bench decision referred to by the appellant. Printing is essential to avoid the misuse, under Rule 52A(6) and Rule 57GG regarding the printing Sr. No. RG 23D entry was not available at the time of the impugned order, and now produced.
Reasoning of the Judgment: - The Tribunal considered the provisions of Rule 52A and Rules 57GG and held that Rule 57GG dealt with the accounting procedure for the persons issuing invoices under Rule 57G or Rule 57T, Clause (5) states that each invoice shall bear a printed serial No. running for the whole financial year beginning on the 1st April of each year. Only one invoice book shall be used by the registered person for removal of excisable goods at any one time unless otherwise substantially permitted by the Commissioner in writing. So from the above material it is cleared that the copy of the invoices shall be marked at the top in the bold capital letters as “The original copy as original for buyer” or “Duplicate copy as duplicate for transporter is to be used for taking credit under Rule 57G & T”.
The Tribunal also relied upon the judgments given in Ramakrishna Steel Industries Ltd. v. Collector of Central Excise,
With regard to RG 23 D entry/ Extract, the certificate obtained from M/s Hindustan Petroleum Corporation Limited giving the details of RG 23D entry numbers was considered and the disallowance of credit was set aside.
With regard to input steel shots, the Tribunal held that Modvat credit is admissible in view of the decision in Shivaji Works Ltd. v/s Collector of Central Excise, Aurangabad [1996 (88) E.L.T. 678 (Tribunal)].
With regard to the fact that invoice did not bear the printed serial no. it was held that it was a technical violation and not such as to dis-entitle the appellant for Modvat credit. In this regard reliance was placed on R.T. Packaging Ltd. v/s Collector of Central Excise,
With regard to the rubber stamping of the duplicate copy of the transporter, the Tribunal held that the Modvat credit allowed as it is a remediable defect and credit cannot be denied on the said basis. The colour of the invoice in respect of dealers (yellow instead of pink), because original duplicate etc. are rubber stamped cannot be disallowed. It was further observed that the evidential value of a rubber stamp is more than that of printed legend as a stamp would be affixed after looking at the paper, unlike printed legend which is used routinely. Reliance was placed on L & T Ltd. v/s Collector of Central Excise [1994 (72) E.L.T. 948 (T-ERB)]. Relying on Bombay Goods Transport Association v/s Union of India [1995 (77) E.L.T. 521] it was held that for the purpose of availing Modvat what is important is to prove the duty paid character of the inputs. It was held that if the copy is not clear as to whether original or duplicate (for transporter), the manufacturer availing credit cannot be penalised for the lapses on the part of the supplier. This was held in the case of Collector of Central Excise v. GEC Alsthom India Ltd. (T-SZB) [1998 (098) ELT 439]. Hand written description, hand-written vehicle number and serial number do not impute mala fide to the manufacturer and the credit cannot be denied for such reasons as per Nahar Spinning Mills Ltd. v. Collector of Central Excise [1998 (97) ELT 127].
It was further held that under Rule 52A of the Central Excise Rules under Clause (3) the copies of the invoices shall only be marked at the top in capital letters as mentioned therein. So, as contended by the appellant, the question of printing does not arise, marking can be made in any manner.
Regarding the tick marking of the duplicate copy of the invoices, it was held that there is a rubber stamp of duplicate for transporters, and the invoices contained all the particulars as cleared by the Jurisdictional Excise Officer of the supplier and therefore eligible for Modvat credit to the appellant. Further it was held that regarding the credit availed on Rocker Arm Pad Blank, capital goods is carbide wear parts fixed by induction brazing on top surface of the carbide tip comes in contact with Camshaft, Cam Lobes and bottom surface of the Rocker Arm comes in contact with Valve Stem and Dome Nut. This carbide is selected for longer life of the Rocker Arm. The inputs are used in a Rocker Arm Lever, which is part of OM616 Engine, and which in turn is a part of motor vehicle. So, the Modvat credit is admissible on these inputs.
Further it was held that the certificate issued by the jurisdictional Excise Authority of the consignee of goods clearly showed that the impugned invoices were cleared by them. The differential duty paid by the supplier on the inputs supplied to the appellant is admissible for Modvat credit. The substantive benefit cannot be denied mainly on the ground of procedural deficiency. The important concern is the fact of payment of appropriate duty on the goods in question, which is evidenced by the documents with which the goods have been received. This could be checked by the Jurisdictional Central Excise Officers of the appellant.
It was held that when the goods are received by the appellant with the duty paying documents after clearance from the Jurisdictional Central Excise Officers of the supplier, the appellant can take the Modvat credit on the basis of the said duty paying documents on the inputs received along with them. Accordingly, credit was held to be admissible to the appellant. Impugned order was set aside.
Decision: - Appeal Allowed with consequential relief.
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Case: M/s G L Metallica Pvt Ltd & Ors v/s CCE, Jaipur-I
Citation: 2010-TIOL-1282-CESTAT-DEL
Issue: - Whether credit is allowed to manufacturer when the same is passed on by the dealer is irregular and penalty can be imposable if act is bonafide.
Brief Facts: - M/s Sulabh Impex Incorporation (SII) was a proprietary firm having Import and Export number engaged in import business. Shri Alok Jain (AJ) was doing the business of broker of metal scrap on commission basis. The appellant is a manufacturer of copper ingots and copper alloys. In investigation, it was found that the proprietor of SII had issued invoices in favour of the registered dealers but no goods were supplied by SII. The broker AJ had arranged for the goods through other sources. The registered dealers claimed to have received the goods and invoices by bill of entry through the broker AJ and they subsequently sold the goods to the appellant. Appellant took credit of the duty paid on the inputs based in the invoices issued by the 2 dealers.
The proprietor of SII admitted to have issued invoices only and for producing the fake bills of entry as if the goods were imported and as if duty was paid on such imports. It was also admitted that the payment was received by him. Same facts admitted by the broker AJ also.
Revenue issued show cause notice to the registered dealers alleging that they were not empowered to pass on any credit and to the appellant alleging that it was not entitled to take credit. They were also accused of intentionally involved in the conspiracy. Accordingly, the Adjudicating Authority confirmed the demand of duty under Rule 14 of CCR, 2004 r/w Section 11A, with interest and equal penalty was also imposed under Rule 15(1) and Rule 15(2). Additional Penalty was also imposed on the registered dealers. The Commissioner (A) upheld the impugned order. Hence, the appellant is before the Tribunal.
Appellant’s Contentions: - Appellant submitted that there was no evidence that the registered dealers were aware of fake nature of bills of entry produced by the imported. The manufacturer is not required to question the transaction between the importer and the registered dealers. The credit was taken by the appellant on the basis of documents given by the registered dealers alongwith the goods. Reliance has been placed on Board Circular No. 766/82/2003-CX dated 15.12.2003 and submitted that non-payment of duty at the end of supplier was no justification to deny the credit on bonafide purchasers.
Reliance was placed on the case of CCE, Chandigarh v/s Shakti Roll Cold Strips Pvt Ltd [2008 (229) ELT 661 (P & H)], Ajay Industrial Coporation v/s CCE, Delhi III [2009 (237) ELT 175 (Tri-Del)], CCE, Ludhiana v/s Malerkotla Steels & Alloys Pvt Ltd [2009 (244) ELT 48 (P&H)] and Vikram Knittex Pvt Ltd v/s CCE, Surat I [2008 (230) ELT 190 (Tri-Ahmd)].
Respondent’s Contentions: - Revenue contended that the goods have never been imported and the bills of entry based on which the Importer supplied the goods to the registered dealers are fake and since fraud was clearly involved, the question of passing on of credit based on such fake bill of entry did not arise. Since the registered dealers have made payments and since the goods have been shown to have been received by them under transport documents in the name of importer, the registered dealers were also involved. Reliance was placed on VK Enterprises v/s CCE, Panchkula [2010 (249) ELT 462 (Tri-Del)].
Reasoning of the Judgment: - The Tribunal held that the investigation revealed the involvement of importer and the broker supplying the goods but the involvement of registered dealers was not revealed. Even their statements were not taken. Neither the statement of appellant was recorded. Thus the fraud committed by passing on fake bill of entry as duty paying documents to the registered dealer has been proved. No duty has been paid on the goods received by the registered dealers as the bills of entry which were produced were fake. The registered dealers did not have any right to pass on the credit relying upon the said fake bill of entry as fraud vitiates any transaction. Thus, the question of validity of credit taken by the manufacturer does not arise. Guidelines of the Board dated 15.12.03 was held to be not applicable in this case. Decision relied upon by the parties were also held to be not applicable. Accordingly, it was held that the credit taken by the appellant-manufacturer was not legal and proper. It was held that as involvement of dealers and appellant was not proved and they had acted bona fidely, penalties imposed on them were not sustainable.
Decision: - Appeals allowed accordingly.
Service Tax Section
Case: Commissioner of Central Excise,
Citation: 2008 (010) STR 0609 (Tri. - Mumbai)
Issue: - Whether cenvat credit can be taken and utilized when services are covered under rule 6(5), of Cenvat credit rules, 2004.
Brief Facts: - Respondent-assessee used certain services for exempted as well as non-exempted categories and did not maintain separate records for utilizing the service tax on the said services. Department contended that provisions of Rule 6 (3) of the CCR, 2004 were applicable and sought to deny the credit taken and utilised by the respondent. The Adjudicating Authority denied the credit and confirmed the demand. In appeal before the Commissioner (Appeal) held that the provisions of Rule 6(3) were not applicable but the provisions of Rule 6 (5) were applicable. It was held that Rule 6(5) started with the word “notwithstanding” and the very use of this word meant that Rule 6(3) was not applicable for the input services mentioned under Rule 6(5). It was found that the services used by the respondent were covered under the 17 services listed in Rule 6(5). It was also the Rule 6 (5) does not talk about taking or utilization, so the credit is allowed to both taken and utilized. Accordingly, the impugned order was set aside and credit was held to be admissible to the appellant.
Against this order, Revenue is in appeal before the Tribunal.
Appellant’s Contention: - Revenue contended that the provisions of Rule 6(3)(c) were applicable and the respondent was entitled to utilize only 20% of the amount of credit that is available to him as a credit.
It was further submitted that the respondent could only take the credit but not utilise the same.
Respondent’s Contention: - Respondent contended that the provisions as appreciated by the Commissioner (Appeals) are correct and submitted that the order interprets the law as is in the Rule books. It is submitted that the credit of Service Tax paid on the services availed as mentioned in sub - Rule 6(5) by them.
Reasoning of the Judgment: - The Tribunal perused the order passed by the Commissioner (Appeal) and held that it was rightly concluded by the Commissioner (Appeal) that credit of the service tax paid on the services as enumerated under Rule 6(5) of the Cenvat Credit Rules 2004 are to be allowed.
It was held that Rule 6(5) starts with a non obstante clause "notwithstanding", which would indicate that the provisions of Rule 6(3) are not applicable for the provisions of Rule 6(5) of Cenvat Credit Rules, 2004. If it is undisputed that the service tax credit availed is on the services as mentioned in Rule 6(5), the credit of the entire/whole amount of service tax has to be allowed to the respondent.
Further it was held that if an assessee to takes eligible credit, he should be allowed to utilize the same, also there could no reason for allowing the credit and not permitting the utilization. This would go against the substantive legislation of the Cenvat Credit Rules, 2004. Therefore, the contention of the Revenue to distinguish the words taken and allowed is not acceptable. Impugned order upheld.
Decision: - Appeal rejected.
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Case: Commr of C. Ex., Ahmedabad v/s Ramdev Food Products Pvt Ltd
Citation: 2010 (19) STR 833 (Tri-Ahmd)
Issue: - Whether refund of service tax paid on the port services used for export of goods where the documentary evidence is not there to prove the authorization of port.
Brief Facts: - Respondent-exporter claimed refund of service tax paid on services used for export of goods. Refund was claimed of service tax paid on THC charges, REPO/BL charges, DDC & haulage charges, documentation charges by classifying the same under Port Service defined under Section 65(105)(zn). Refund claim was rejected on the ground that the respondent had not submitted any documentary evidence to prove that port has authorized the service provider to provide these services in relation to port service. No invoices and debit notes of service provider were furnished to show that the service provider had charged service tax on the said service.
Against this order, respondent went in appeal before the Commissioner (Appeal). The Commissioner (Appeal) held that Port services covered services provided “to any person, by a port or any person authorised by the port, in relation to port services, in any manner”. It was held that the respondent had produced debit notes issued by the service providers which clearly mentioned the service particulars. It was also observed that the service tax registration number was available on each invoice and the fact of payment of service tax was mentioned therein which was a clear cut evidence to prove that the service providers were registered service tax provider. It was also observed that the debit notes raised by the service providers clearly mentioned the shipping bill no. and name of the respondent. Accordingly, refund was held to be available to the respondent.
Against this order, Revenue is in appeal before the Tribunal.
Reasoning of the Judgment: - The Tribunal held that at the time of collecting service tax on the said services the same were considered as port services by the Revenue. Therefore, at the time of grant of refund, Revenue cannot say that the said services were not port services. In any case it was held that services involved were connected with port services. The said services were covered under the definition of port services. No infirmity in the order of the Commissioner (Appeal).
Decision: - Appeal rejected.
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Case: Angiplast Pvt Ltd v/s Commissioner of Central Excise, Ahmedabad
Citation: 2010 (19) STR 838 (Tri-Ahmd)
Issue: - What will be the date for refund claim for time limit purpose whether it will be the date on which refund claim is filled initially or the date on which subsequently filling in the proper form.
Brief Facts: - Appellant filed refund claim of service tax paid on services used for export of goods under Notification No. 41/2007-ST dated 06.10.2007 on 26.08.2008 which was received in the Divisional office on 29.08.2008. During the scrutiny of the claim, certain discrepancies were notice and therefore, the same was returned to the appellant vide letter dated 13.10.08 which was received by the appellant on 04.11.08.
Thereafter, appellant filed the refund claim with all the proper documents on 06.02.09 which was received in the Divisional office on 09.02.09. The said refund claim filed again was rejected as being time barred. In appeal, the Commissioner (Appeal) held that after return of the refund claim, the appellant had sufficient time to resubmit the refund claim by the end of December. However, the appellant had filed the claim after three months. This showed that the earlier claim of refund filed had discrepancies and the time taken by the appellant in again filing the claim indirectly proved that the earlier refund claim was incomplete claim.
Against this order, appellant is in appeal.
Reasoning of the Judgment: - The Tribunal relied upon the judgment given in the case of CCE, Delhi v/s Arya Exports and Industries [2005 (192) ELT 89 (Del)] wherein it was held that the date of filing claim is the date when the claim is filed initially and the subsequent date of filing in the proper form and with the asked for documents cannot be considered as the actual date of filing of refund claim. Accordingly, it was held that the initial claim having been filed well within time, the same is required to be considered within limitation. Impugned order set aside.
Decision: - Appeal allowed by way of remand.
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Case: M/s Ramky Infrastructure Ltd v/s Commissioner of Customs & Central Excise,
Citation: 2010-TIOL-1253-CESTAT-BANG
Issue: - Whether the activity of excavating and digging of underground approach canal comprised minor percentage of the total cost can be classified under Site Formation and Clearance and Excavation and Earth Moving and Demolition service.
Brief Facts: - Appellants and WPIL JV (a joint venture) executed a turnkey/EPC project doing the work of constructing a canal and a pumping station intended for irrigation with the Government of Andhra Pradesh during the period from June 2007 to May 2008. Revenue contended that the said activity undertaken by the appellants would fall under works contract service and therefore, service tax will be payable on the same. The Original Authority held that impugned activity fell under works contract and service tax with interest was demanded from the appellants. It was also held that they had deliberately evaded payment of duty and imposed penalties under Section 77 and 78 of the Finance Act, 1994. In appeal, the Commissioner (Appeal) upheld the order passed by the Adjudicating Authority.
Against this, the appellant is in appeal before the Tribunal. Application is filed for waiver of pre-deposit and for grant of stay.
Appellate Contention: - Appellant contended that the activity involved was classified under Site Formation and Clearance and Excavation and Earth Moving and Demolition which excluded such services provided in relation to Agriculture, Irrigation and Watershed Development.
Alternatively, it was submitted that the services could be classified under Commercial or Industrial Construction service when the activity would be exempted as the structure built was not used for commerce or industry. Reliance was placed on Board Circular No. 116/10/2009-ST dated 15.09.2009, which had clarified that a canal system built by the Government or under Government Projects did not fall under commercial activity and was not chargeable to service tax.
It was submitted that in Daelim Industrial Co. v/s CCE, Vadodara [2003 (155) ELT 457], it was held that a works contract on turnkey basis could not be vivisected and a part subjected to tax. It was also contended that works contract was for carrying out ‘construction of a new building or a civil structure or a part thereof, or of pipeline or conduit, primarily for the purpose of commerce or industry’ of clause (b) of the explanation, and therefore, clause (e) would not cover the subject activity. It was submitted that in terms of Section 65(a), taxable service should be classified under the entry which gives the most specific description. The activity undertaken by them was in terms of construction of civil structure and therefore even if they had provided activity comprised of works contract, the same was not classifiable under clause (e) of the explanation to ‘works contract’ as turnkey projects including engineering, procurement and construction or commissioning (EPC) projects.
It was also submitted that the Tribunal in a similar case involving the same appellant had granted unconditional waiver of pre-deposit.
Reasoning of the Judgment: - The Tribunal held that prima facie the impugned activity was classifiable under Works contract service in the nature of turnkey projects including engineering, procurement and construction or commissioning (EPC) projects envisaged in clause (e) to Sl No. (ii) of the explanation to the entry under Section 65 (105) (zzzza) of the Act. It was found that the excavating and digging of underground approach canal comprised 15% of the cost. Therefore, the entire activity could not be classified under Site Formation and Clearance and Excavation and Earth Moving and Demolition service. The construction of canal accounted for 20% of the total cost. Therefore, the activity also was not classifiable as construction of a civil structure viz canal. The Tribunal took note of the fact that in a similar case full waiver of pre-deposit was granted. In that order it was held that the work executed by the appellant is in respect of the irrigation system for the Government of Andhra Pradesh and is not for any commerce or industry. As per clarification given in Board Circular dated 15.09.2009, infrastructure activities which are concerned with welfare activity, for the citizens of this country have been excluded from the liability of service tax.
Thus, it was held that prima facie, the appellant had made out a case for waiver of the pre-deposit of the amount demanded from them by impugned order. Stay granted.
Decision: - Application for stay and waiver of pre-deposit granted.
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Customs Section
Case: Cargill India Pvt Ltd v/s Commissioner of Customs,
Citation: 2010-TIOL-1270-CESTAT-BANG
Issue: - Whether conversion of free shipping bill into drawback shipping bill is allowed on the ground of ignorance of entitlement?
Brief Facts: - Appellant exported soya bean meal under free shipping bills during the period 08.11.2007 to 23.01.2008. Later, on 06.08.2008 they applied for conversion of free shipping bill into drawback shipping bill claiming All Industry Rate of drawback @ 1%.
The Commissioner rejected the request for conversion on the ground that appellants had not complied with the provisions of Rule 12 (1) (a) of the Drawback Rules, 1995. It was held that the appellants had not shown any satisfactory reason except stating that they could not file their drawback shipping bills at the time of export by oversight. Reliance was placed on Board Circular No. 04/2004-Cus dated 16.01.2004 which stated that no provision exists for permitting conversion of free shipping bills into drawback shipping bills. It was held that in appellant’s case, the exported goods were not physically examined. Therefore, there was no evidence to support the description, quantity and value of the goods exported. Reliance was placed on the judgment given in Freedom International v/s CC,
Against this order, appellant is before the Tribunal.
Appellate Contention: - Appellant submitted that as per Rule 12(1)(a) of Drawback Rules, the Commissioner of Customs may exempt an exporter from the provisions of Rule 12 (1) (a). Reliance was placed on the Board Circular No. 04/2004-Cus dated 16.01.2004 which empowered the Commissioner to consider individual requests on merits. Their drawback claim pertained to All Industry Rate of duty drawback. The appellant were under bona fide belief that they were not entitled for drawback for export of Soya beam meal as the same was am agricultural product. Therefore, they had not filed drawback shipping bill at the time of export. Their ignorance of their entitlement to drawback had led to their non-filing of drawback shipping bill and it was a reason beyond their control.
Reliance was placed on the judgments given in the case of Gokuldas Images Pvt Ltd v/s CCE [2008 (227) ELT 238 (Tri-Bang)], Hero Cycles Ltd v/s CC [2004 (171) ELT 342 (T)], Terai Overseas Ltd v/s CC [2002 (141) ELT 394 (T)], Nucleus Satellite Communications Pvt Ltd v/s CC [2007 (216) ELT 67 (Tri-Chennai)], Metallic Bellows (I) Pvt Ltd v/s CCE [2008 (228) ELT 479 (Tribunal-Mum)], Areva T & D India Ltd v/s CC, Mumbai [2009-TIOL-1271-CESTAT-MAD] and Kiran Pondy Chems Ltd v/s CC [2006 (203) ELT 588 (Tri-Chennai)].
Respondent’s Contention: - Revenue relied upon the decision given in Freedom International v/s CC, Amritsar [2002 (145) ELT 414 (Tri-Del)] wherein the Tribunal had upheld the rejection of request for conversion of DEEC shipping bill into DEEC-cum-Drawback shipping bill finding that the Commissioner could only exercise his power when the exporter could not claim drawback for ‘reasons beyond control’. But no such reason has been given by the Appellant.
Reasoning of the Judgment: - The Tribunal held that from the facts it is clear that the case of the appellant was covered by the provisions of Rules 12 (1) (a). The Commissioner erred in holding that its failure to file a drawback shipping bill owing to ignorance of its entitlement is not a reason beyond the control of the appellant-exporter.
Reliance was placed on the judgments given in Final Order dated 29.05.2006 referred to in Areva T & D India Ltd v/s CC, Mumbai, Kiran Pondy Chems Ltd v/s CC, Nucleus Satellite Communications Pvt Ltd v/s CC, Hero Cycles Ltd v/s CC and Terai Overseas Ltd v/s CC wherein the Tribunal had held that the exporter was entitled to seek conversion of shipping bill under Section 149 of the Customs Act, 1962.
Decision: - Appeal allowed.
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Case: Royal Recycling Industries v/s Commissioner of Customs
Citation: 2010 (257) ELT 489 (Guj)
Issue: - Whether penalty can be imposable when the major item is wrongly described.
Brief facts: - The goods imported were described as mixed zinc scrap. Both the lower Authorities gave finding of fact that the said scrap contained 70% by weight a costlier variety of aluminium scrap. Hence, the appellant is before the High Court for setting aside of penalties.
Reasoning of the Judgment: - The Tribunal held that the findings of the lower Authorities were findings of facts. It was also noticed by the lower Authorities that in terms of quantity and value the aluminium scrap was the major item and therefore the appropriate description should have been mixed aluminium scrap rather than mixed zinc scrap. It was held that on this basis penalty was imposed. No substantial question of law arises for consideration.
Decision: - Appeal dismissed.
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SOY P ITTY on 21 Apr, 2016 wrote:
hitesh on 03 Apr, 2016 wrote:
hitesh on 20 Mar, 2016 wrote:
visuiyer on 09 Mar, 2016 wrote:
hitesh on 06 Mar, 2016 wrote:
hitesh on 29 Feb, 2016 wrote:
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CA R P Vijay on 04 Jan, 2016 wrote:
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O V Srinivasan on 04 Jan, 2016 wrote: