Customs, Excise and Service Tax Appellate Tribunal

Lifestyle International Pvt Ltd. vs. Commissioner of Customs

MANU/CC/0207/2024

19.06.2024

Customs

Onus to prove that the declared price did not reflect the true transaction value is always on the Department

In facts of present case, Lifestyle International P. Ltd. filed Bill of Entry for clearance of full leather sofas and declared them as Bovine Leather Upholster Sofa. The adjudicating authority rejected the declared value under Rule 12 of the Valuation Rules and re-determined the value at USD 924/- for 3+2+1 sofas in terms of the Standing Order No. 40/2012-Gr. 6 dated 18th August, 2013.

Aggrieved by the adjudication order, the appellant preferred appeal before Commissioner of Customs (Appeals) who vide order impugned enhanced the value to USD 2112 per set as against USD 924 per set and directed the department to reassess the bills of entry accordingly for recovery for differential duty. The appellate authority also ordered for recovery of all their bills of entry for the past five years by invoking Section 28(4) of the Customs Act, 1962 for suppressing the correct values by the appellant. Aggrieved, the appellant is before this Tribunal.

The dispute involves the action of the learned Commissioner (Appeals) in revaluation by enhancement of the transaction value declared by the Appellant which was already enhanced by the Original Authority, for imported Full Leather Sofas as per Rule 9 of the Customs Valuation Rules, 2007 (valuation rules) read with Rule 12. It is ironic that, the appellant who approached the Commissioner (Appeals) for relief from the re-assessed transaction value by the Original Authority was left worse off after having approached the Commissioner Appeals, without any notice being given for enhancing the value. The general principles is that the Commissioner (Appeals) should not travel outside the record of the lower authority and make out a case which even Revenue did not canvas.

As per Section 14 of the Customs Act, 1962 as well as Customs Valuation Rules the transaction value is required to be accepted unless there are valid reasons for rejection of such value as provided in the said Act and Rules. Basing the value of impugned goods on a circular issued by the department or on the basis of a market survey is totally against the legal provisions.

It is settled law that, the onus to prove that the declared price did not reflect the true transaction value is always on the Department. It is also a settled law that, the Department is bound to accept the transaction value entered between the two parties unless they are able to disturb it by the application of law as set out in the Customs Act 1962 and the Rules framed there under. Present Tribunal find that taking recourse to extraneous evidence like instructions contained in Standing Order No. 40/2012-Group-6 dated 16.08.2012 is not permissible. The Department having failed to discharge its burden the impugned order is set aside on merits also.

Apex Court in The State of Jharkhand and others v. Brahmaputra Metallics Ltd and others held that a decision taken in an arbitrary manner contradicts the principle of legitimate expectation. An authority is under a legal obligation to exercise the power reasonably and in good faith to effectuate the purpose for which power stood conferred. Impugned order is set aside. Appeal disposed off accordingly.

Tags : Assessment Valuation Legality

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Customs, Excise and Service Tax Appellate Tribunal

Diamond Flush Doors P Ltd vs. Commissioner of GST & Central Excise

MANU/CC/0200/2024

19.06.2024

Service Tax

Mere reference to invoices raised without reference to specific provisions of a contract or working arrangement, will not indicate employer-employee relationship

The Appellant is a small-scale unit, manufacturing flush doors. On scrutiny of their records, it was found that they had raised labour charge invoices for door fixing and alteration, designing and carpentry work at customer's site. A Show Cause Notice was issued to the Appellant as the activity appeared to fall under the category of 'Manpower Recruitment of Supply Agency Service' as per the definition under Section 65(68) of the Finance Act, 1994 since the Appellant had failed to register, file statutory ST-3 Returns and pay service tax for the amount received towards such service rendered by them.

After due process of law, the Adjudicating Authority confirmed the demand along with appropriate interest under Section 75 and imposed penalty under Sections 76, 77 and 78 of the Act. Aggrieved by the said order, the appellant filed appeal before the Commissioner (Appeals) and the same was rejected. Hence the appellant is now before the Tribunal.

The question before present Tribunal is whether there is a relationship of employer and an employee between the appellant, who is the manufacturer of flush doors and the persons who fix the doors at the buyers' premises. The issue involves a mixed question of fact and law. Mere reference to invoices raised or payments made, without reference to the specific provisions of a contract or working arrangement, will not be indicative of employer-employee relationship.

In the light of the non-examination of the true nature of relationship between the parties a conclusion of the appellant being the employer of the workers cannot be fastened by assumptions and presumptions. Revenue has not proved its case regarding the true nature of the disputed activity provided by workmen to the appellants customers. Hence, the question of examining the correctness of the extended period invoked or imposition of penalty does not arise. The impugned order is set aside. Appeal allowed.

Tags : Demand Confirmation Legality

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Income Tax Appellate Tribunal

Alang Metal Exim Pvt. Limited. Vs. ACIT

MANU/IB/0242/2024

19.06.2024

Direct Taxation

Ad-hoc disallowance cannot be made in absence of any specific defect or irregularity

Present appeal is filed by the Assessee against the order passed by the Learned Commissioner of Income Tax (Appeals), in confirming the addition of Rs.7,00,00,000 under Section 68 of the Income Tax Act, 1961 and disallowance of Rs.3,30,000 out of loading and unloading charges made by the Assessing Officer ("AO") in his assessment order passed under Section 143(3) of the Act for the Assessment Year (AY) 2012-13.

The assessee has duly discharged the initial burden of proving the identity, genuineness, and creditworthiness of the share applicants by furnishing the necessary documentary evidence. The AO and the Learned CIT(A) did not make any adverse comments in the remand report regarding this evidence. Suspicion, however strong, cannot replace evidence, and the Learned CIT(A) should not have confirmed the addition merely based on suspicion. He was required to conduct the detailed inquiry and pass a reasoned order. The learned CIT(A) in his order has relied on some judicial pronouncements which are required to be distinguished on the basis of additional evidence produced by the assessee before the Learned CIT(A).

In the case of Tin Box Company vs. CIT, the Hon'ble Supreme Court has held that when the appellate authority has not decided the case on merits and additional evidence is submitted, the matter should be remanded back to the appellate authority for reconsideration.

Regarding the disallowance of loading and unloading Charges, the expenses were part of the duly audited books of accounts with no defects pointed out by the auditor. Neither the AO nor the Learned CIT(A) identified any specific defect in the claim of these expenses.

The ad-hoc disallowance is not justified in the absence of any specific defect or irregularity. Therefore, the disallowance of Rs.3,30,000 out of loading and unloading charges is deleted. Hence,

The matter restored back to the file of the Learned CIT(A) with a direction to decide the matter afresh on the basis of additional evidence submitted by the assessee. The Learned CIT(A) is directed to provide a fair opportunity of being heard to the assessee and to pass a reasoned order considering all the evidences on record. Appeal of the assessee partly allowed.

Tags : Assessment Addition Legality

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High Court of Bombay

Ramesh Narsingh Hire vs. State Of Maharashtra (Neutral Citation: 2024:BHC-AUG:11097)

MANU/MH/3594/2024

19.06.2024

Criminal

Mere bald allegations without narrating details, would not be sufficient to gravitate charge under Section 498A of IPC

Appellant is challenging the judgment and order of conviction recorded by trial Court, thereby convicting for offence punishable under Sections 498A and 306 of Indian Penal Code (IPC).Appellant pointed out that, there was apparently false implication. Prosecution has failed to establish the charges by leading cogent and reliable evidence.

General and omnibus allegations by using the term ill treatment are levelled. What was the exact mental and physical cruelty inflicted is not elaborated by any of the witnesses and even no specific instances are quoted by any of them. Therefore, mere bald allegations without narrating details, would not be itself sufficient to gravitate charge of 498A of IPC. Cruelty as contemplated under law is not met in the evidence.

Accused is convicted for offence under Section 306 of IPC i.e. abetment to commit suicide. For bringing home the said charge, it is duty of prosecution to prove that there was abetment to commit suicide. Accused persons should intent that deceased should end up her life. With that object in mind, if they deliberately create circumstances, which are of such nature, that deceased is left with no other alternative but to end up her life, only then charge of abetment to commit suicide can be said to be successfully brought home. Abetment is equally an essential factor to be proved by prosecution.

Spot panchanamagoes to show that, episode of burn has taken place near earthen chulha. Burnt pieces of clothes are said to be lying near the cooking place. On the strength of such material, inference can definitely be drawn that, burns were suffered while cooking activity.

Therefore, as there is nothing to infer that only because of ill treatment and demand, deceased immolated herself, case so put-forth by prosecution cannot be straightaway accepted. Presence of accused is not marked or demonstrated at the time of alleged episode to hold him responsible for her burns. In fact, prosecution's own witness suggests that deceased suffered accidental burns. Resultantly, there is weak and fragile evidence regarding offence of Section 498A and 306 of IPC. Cruelty and abetment as contemplated under law has not been established. Apparently, there is improper appreciation of evidence. No satisfactory and sound reasons are assigned for accepting the case of prosecution. The conviction awarded to appellant for offence punishable under sections 498A and 306 of Indian Penal Code (IPC), stands quashed and set aside. Appeal allowed.

Tags : Conviction Evidence Legality

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High Court of Bombay

Rupesh vs. The State Of Maharashtra (Neutral Citation: 2024:BHC-NAG:6250)

MANU/MH/3725/2024

18.06.2024

Criminal

Police officer needs to record his reasons in writing while making the arrest

By present application, the applicant is seeking pre-arrest bail in connection with Crime registered with Police Station for the offence punishable under Section 420 of the Indian Penal Code, 1860 (IPC).Applicant submitted that the accusation against the present applicant is on the basis of report lodged by Suraj Subhashrao Chopade on an allegation that the applicant has obtained the amount from him for purchasing the Bajaj Electric Scooter and LG Television and on his demand, he has not paid the amount and thus he is duped by the present applicant. On the basis of said report, police have registered the crime against the present applicant.

In view of the guidelines issued by the Apex Court in Satender Kumar Antil Vs. Central Bureau of Investigation and another, the investigating officer is under obligation to issue the notice under Section 41. Section 41 under Chapter V of the Code of Criminal Procedure, 1973 (CrPC) deals with the arrest of persons. The Hon'ble Apex Court observed that even for a cognizable offence, an arrest is not mandatory as can be seen from the mandate of this provision. If the officer is satisfied that a person has committed a cognizable offence, punishable with imprisonment for a term which may be less than seven years, or which may extend to the said period, with or without fine, an arrest could only follow when he is satisfied that there is a reason to believe or suspect, that the said person has committed an offence, and there is a necessity for an arrest. Such necessity is drawn to prevent the committing of any further offence, for a proper investigation, and to prevent him/her from either disappearing or tampering with the evidence.

The provision mandates the police officer to record his reasons in writing while making the arrest. Thus, a police officer is duty-bound to record the reasons for arrest in writing. The consequence of non-compliance with Section 41 shall certainly inure to the benefit of the person suspected of the offence.

The nature of the dispute is of a prima facie civil nature. As far as the custodial interrogation is concerned, there is no satisfaction by the Investigating Officer why the arrest of the applicant is required. Application allowed by imposing certain conditions.

Tags : Pre-arrest bail Grant Condition

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High Court of Madhya Pradesh

Saranjit Singh vs. Indraraj Prajapati

MANU/MP/2223/2024

18.06.2024

Civil

Commission for inspection cannot be issued for ascertaining the boundaries of the suit land, unless all necessary parties are on record

Present second appeal has been filed by the appellant/plaintiff who has lost in both the Courts. It is submitted that both the Courts committed an error by not issuing Commission for inspection of the suit land under Order 26, Rule 9 of Code of Civil Procedure, 1908 (C.P.C.) The First Appellate Court did not allow the application under Order 41, Rule 27 of C.P.C.

On perusal of record, it is seen that the learned trial Court as well as learned First Appellate Court have considered all legal and factual position, it is seen that no Commission can be issued for ascertaining the boundaries of the suit land, unless all necessary parties are on record. In present case, it seems that all necessary parties required are not on record as the plaintiff/ appellant had purchased the suit land in the year 1968 whereas the suit was filed on 17th May, 2007, therefore, situation or ground must have definitely changed in the intervening period. It is not the law that trial Court or First Appellate Court are to issue Commission for inspection of the record automatically, even when all necessary parties are not on record or when no prayer in this regard is made by any party, therefore, this second appeal has no substantial question of law on which this appeal can be admitted.

The jurisdiction of this Court to interfere with the findings of fact is well defined by catena of decisions of Supreme Court. This Court in exercise of powers under Section 100 of the Code of Civil Procedure can interfere with the finding of fact only if the same is shown to be perverse or based on no evidence. No substantial question of law arises for consideration in this appeal. Appeal dismissed.

Tags : Inspection Suit land Commission

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