High Court of Calcutta

Shyam Bihari Makharia Vs. Commissioner Central Goods & Service Tax, Bolpur and Ors.

MANU/WB/0624/2018

23.07.2018

Excise

Principles of natural justice brings within its wake a right to cross-examine a witness produced in a proceeding

The Petitioner assails an order in original dated February 13, 2018. The Petitioner submits that, the impugned order stands vitiated by breach of principles of natural justice. The Petitioner was not allowed to cross-examine three material witnesses. Therefore, the impugned order is required to be set aside. Learned advocate for the Respondents submits that, the witnesses sought to be cross- examined by the Petitioner had given statements under Section 14 of the Central Excise Act, 1944. Such persons need not be allowed to be cross-examined.

The authorities had initiated a show-cause cum demand notice dated February 23, 2017 against the petitioner. It appears that, the authorities had received intelligence with regard to manufacture of different sizes of different materials. Upon such intelligence being received, various search and seizures were carried out in which incriminating records were confiscated. A show-cause cum demand notice was issued. The petitioner had participated in such proceedings. The petitioner wanted to cross-examine three witnesses. In the impugned order, the request for cross-examination of the three witnesses is dealt with by saying that, the statements made by such three witnesses were recorded under Section 14 of the Central Excise Act, 1944 and that, such persons did not retract from such statements.

Principles of natural justice bring within its wake a right to cross-examine a witness produced in a proceeding. In the present case, three witnesses have relied upon by the authorities. They have been made statements under Section 14 of the Central Excise Act, 1944.

The impugned order is appealable. However, existence of a statutory alternative remedy, is not a complete bar to the Writ Court exercising jurisdiction in the event, it is substantiated, there is a breach of fundamental right or that the impugned order suffers from breach of principles of natural justice or that the impugned order was passed without jurisdiction.

In the present case, the impugned order stands vitiated by breach of principles of natural justice. Three witnesses of the prosecution were not allowed to be cross-examined by the adjudicating authority. The impugned order is set aside. The adjudicating authority will afford a reasonable opportunity to cross-examine the three prosecution witnesses, to the Petitioner herein.

Tags : Natural justice Cross-examination Witness

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High Court of Jammu and Kashmir

Ghulam Ahmad Sofi Vs. State of J&K

MANU/JK/0548/2018

23.07.2018

Narcotics

No successive application for bail can be allowed/entertained unless and until there has been a change in circumstances of case

By order of the learned Principal Sessions Judge, an application for the grant of bail in favour of the Applicant came to be rejected. The order of the learned Principal Sessions Judge, is a sequel to the fact that, the accused is involved in the commission of offences under Sections 15 and 18 Narcotics and Psychotropic Substances Act (NDPS Act).

According to Section 37 of Act, no person can be enlarged on bail, if he is found to be in the possession of a commercial quantity of Narcotics and Psychotropic Substances Act or offences under Section 19 or Section 24 or Section 27-A Act, unless the Court comes to the conclusion that the accused is not guilty of such an offence. These restrictions are provided in addition to the checks and curbs imposed under the Code of Criminal Procedure or any other law governing the grant of bails. In the present case, the applicant has been found to be in the possession of 58 Kgs and 500 grams of poppy straw. On the basis of the recovery of such a huge quantity of poppy straw recovered from the residential house of the applicant, it can well be said that the Applicant is prima facie involved in the commission for the offences aforesaid and there is no reasonable ground to believe that, he is not guilty of such offences.

The contention of the learned counsel for the Petitioner that, the provisions of law under Sections 42, 43, 50, 55 and 57 NDPS Act, have been violated in the instant case has been rightly dealt with by the Trial Court in holding that, it cannot be taken into consideration at this stage, as apparently there is nothing on record to presume such violation. These circumstances would be explored only at trial. At this stage, evidence of the prosecution has to be taken on its face value and the probative value of the evidence cannot be gone into.

There has been absolutely no change in the circumstances of the case from the date of the order of the Trial Court till such time that, the bail application has been moved before present Court. It is well settled law that, no successive application for bail can be allowed/entertained unless and until there has been a change in the circumstances of the case. No doubt, the principle of res-judicata does not have its application to the bail applications but the Court has to peep deep to see whether there has been any perceptible change in the circumstances of the case and in case it is not found to be so, the filing of a successive application will lead to a bad precedent. An order rejecting an application of bail would not per se-close the doors of the Applicant in moving another application on a subsequent occasion but the condition precedent is that there should be some fresh material and further developments in the case as will impel and actuate the Court to consider the successive application for bail.

There is no legal bar in entertaining the subsequent application if it is pointed out that there has been a change of substantial nature in the facts and circumstances of the case since the date of passing the earlier order. Nothing to substantiate so has been stated in the application on hand. There is no merit and substance in the application of the applicant. The same is dismissed. Application dismissed.

Tags : Bail Rejection Validity

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Customs, Excise and Service Tax Appellate Tribunal

Hardev Singh and Ors. Vs. C.C.E. & S.T., Indore

MANU/CE/0358/2018

23.07.2018

Service Tax

When adopting a particular process, if a transformation takes place, which makes the changes in the character and usage of the product, the process would amount to "manufacture"

The Appellants herein are the house labour contractors of Larsen & Toubro Ltd. (L & T) who is the principal manufacturer of transmission towers and is getting one or the other job work for the purpose from all the appellants. On an intelligence being gathered by the Department, the Regional Unit of Indore, it was alleged that the appellants are performing such activities for the L & T which falls under the definition of Business Auxiliary Services against the charges received for the purpose. However, they are not paying the due Service Tax on the gross amount received by them from L & T. They deliberately have not got registered themselves with the Service Tax Department. Resultantly, show cause notices were served upon them.

The demand was confirmed denying the activity of the Appellants to be the activity of manufacture rather holding it to be the one under clause 5 of Section 65(19) of Finance Act, 1944. The Adjudicating authority denied the benefit of exemption Notification No. 6/2005 : MANU/EXCR/0009/2005
dated 1st March, 2005.

In Brakes India Limited vs. Superintendent of Central Excise and Others, it was held by the Hon'ble Supreme Court that if by a process, a change is effected in a product, which was not there previously, and which change facilitates the utility of the product for which it is meant, then the process is not a simple process, but a process ancillary to the completion of a manufactured product. When adopting a particular process, if a transformation takes place, which makes the product have a character and use of its own, which it did not bear earlier, then the process would amount to "manufacture".

The final product here is a transmission tower, which is to be removed from the premises of L & T in CKD condition only i.e. all such parts as processed by the appellants herein shall be cleared from L & T premises in unassembled form, though together, to be finally assembled at the site of the client in the form of a transmission tower. Thus, the processes undertaken by the Appellants on the raw-material provided to them by L & T in L & T's own premises are nothing but the processes to convert the said raw-material into a customized part of the whole transmission tower and as such, the activity of the Appellants is incidental/ancillary to the completion of the manufactured product and thus, falls under Section 2f(i) of Central Excise Act, 1944. The activities of the Appellants are the activities of manufacture. Resultantly, the findings of order under challenge holding the activities of the Appellants to be the business auxiliary activities and confirming the demands in response thereof is held to be a wrong observation.

The exemption Notification No. 6/2005 prescribes the exemption to taxable services upto the aggregate value of Rs. 8,00,000 during the year 2007-08 and Rs. 10,00,000 w.e.f. 1st April 2008 to the service provider. Vide the Order-in-Original, it was observed that, no evidence has been produced by the Appellants about the aggregate value of taxable services. Resultantly, the benefit of this Notification was denied and the same findings are confirmed by Commissioner (Appeals). It is an admitted fact that, L & T had been performing further manufacturing activities on the semi finished goods processed by the Appellants and has been clearing those goods on payment of duty as well as under the exemption Notification without payment of duty. The Appellants have failed to provide the gross aggregate value received by them from L & T even before the first Appellate Authority. Resultantly, the authority has rightly denied the benefit of exemption Notification No. 06/05 : MANU/EXCR/0009/2005
to the Appellants. Appeal partly allowed.

Relevant

Brakes India Limited vs. Superintendent of Central Excise and Others MANU/SC/1609/1997
: 1997 (10) SCC 717

Tags : Demand Confirmation Validity

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High Court of Gauhati

Baikuntha Das Vs. The State of Assam and Ors.

MANU/GH/0654/2018

20.07.2018

Criminal

In a criminal case, resting entirely on circumstantial evidence, all circumstances are required to be proved solidly beyond reasonable doubt

The Appellant was convicted by the Additional Sessions Judge, under Section 302 of Indian Penal Code, 1860 (IPC) in Sessions Case and was sentenced to imprisonment for life and a fine of Rs. 5,000 with default stipulation. Issue involved in present case is whether circumstances relied by the learned trial Court were proved solidly beyond doubt.

It is settled position of law that in a criminal case, resting entirely on circumstantial evidence, all the circumstances are required to be proved solidly beyond reasonable doubt and the chain of circumstances should be such, that there should not be any missing link and it should lead only and only to the conclusion, consistent with the guilt of the accused. The Apex Court in Hanumant v. State of Madhya Pradesh. observed that, " in cases where the evidence in of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established, and all the facts so established should be consistent only with the hypothesis of the guilt of the accused."

Learned Trial Court heavily relied on the oral testimony of PW 2, PW, 9, PW 10 and PW 11 that, the accused arrived at the police station with a dao in his hand and made a confession. The extra judicial confession of the accused in the police station, as deposed by PW 2, PW 9, PW 10 and PW 11 is inadmissible under Section 25 of the Evidence Act. Evidently, neither the dao allegedly seized from the accused, nor the seizure list was produced before the Magistrate, when the accused was produced. From Ext. 3, the seizure list transpires that the same was shown to Chief Judicial Magistrate after 22 days of the alleged seizure, though the law requires that such seizure shall be forthwith reported to the Magistrate having jurisdiction. Inordinate delay in sending the seizure list to the Magistrate, though accused was produced on the next day itself, creates a doubt as to the credibility of Ext. 3. Admittedly, the 'dao' allegedly seized from the accused was not sent for forensic examination.

Failure to get the weapon of offence chemically examined may not be always fatal, if there are other evidence to substantiate the charge. But when the case is based on circumstantial evidence and more particularly when the seizure of weapon is a vital circumstance, relied by the prosecution, such failure is fatal, as, without chemical examination, it may not be possible to connect weapon with the commission of offence.

Another circumstance relied by the trial Court is the relationship between the deceased and the wife of the accused. The wife of the accused was examined as PW 8. The testimony of PW 8 was to the effect that she heard someone shouting, but she did not come out. This witness was however, declared hostile. Testimony of a hostile witness does not get washed off, merely because of being declared hostile by the prosecution. If the evidence of such witness is otherwise found to be reliable and supporting, the testimony of other witnesses, there is no bar in relying on the testimony of hostile witness.

When there is no legal evidence brought on record, the statement recorded u/s. 164 or 161 Cr.P.C. alone cannot be acted upon as evidence. Apparently there was nothing in the evidence of PW 8 to show that she had any illicit relation with the deceased. Further, the dying declaration as deposed by PW 4 relied by the trial court was not at all worthy of trust to inspire confidence of the court, and as such, no credibility could be attached to the oral testimony of PW 4 as to dying declaration.

Circumstances sought to be relied by the prosecution were not proved beyond doubt. The conduct of the accused in appearing in the police station, even if assumed to be correct, that alone, is not sufficient to prove a charge of murder without anything more, and as such, prosecution evidence are found grossly inadequate to prove the charge against the appellant beyond reasonable doubt. Therefore, the prosecution failed to prove the guilt of the accused beyond reasonable doubt and as such, the conviction and sentence of the Appellant are set aside. The appeal allowed.

Relevant

Hanumant v. State of Madhya Pradesh reported in MANU/SC/0037/1952
: AIR 1953 (SC) 343 : 1953 Cr.L.J

Tags : Conviction Circumstantial evidence Credibility

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Customs, Excise and Service Tax Appellate Tribunal

Laxminarain Visambharnath (Unit-III) Vs. Commissioner of Central Excise & Service Tax, Kanpur

MANU/CN/0075/2018

20.07.2018

Excise

Substantial benefits cannot be denied because of procedural irregularity

In facts of present case, the Appellant, who is engaged in the manufacture of Textile Chemicals & Oil has two units that is unit number-III and unit number-II. Proceedings were initiated against the Appellant by way of Show Cause Notice on the ground that, a part of the service were also utilised by their unit number-II and as such the credit should have been proportionately distributed between unit number-III and unit number-II. Accordingly, notice proposed denial of Cenvat Credit as also for imposition of penalties.

The Original Adjudicating Authority confirmed the demand and imposed penalties. On an appeal filed against the said order Commissioner (Appeals) upheld the impugned order. However, Appellant authority set aside the demand of around Rs. 84,383.00 raised and confirmed by denying the Cenvat credit of service tax paid on the outward freight during the period from April 2010 to March 2014. Issue, which survives in the present appeal, is as to whether the Appellant could have taken the Cenvat credit of service tax paid on the services which were also utilised by their unit number-II.

It is a fact that, if the Appellant was registered as ISD, they could have distributed the credit to any of their units irrespective of the fact as whether the unit has utilized the services or not. Merely because the Appellant was not registered as ISD and only obtained the Centralise Registration, cannot result in denial of substantive benefit to the asseessee.

An identical issue was considered by the Tribunal in the case of Dynamic Cables Pvt. Ltd. V/s. CGST & CE, Jaipur, and reference was made to the Tribunal's decision in the case of Doshion Ltd. V/s. CCE, Ahmedabad, where in it was held that, distribution of the credit without taking registration as input service distributer cannot be held to be as irregular. The said decision stands confirmed by the Gujarat High Court. As per board's circular number 1063/2/2018-CX : MANU/EXCR/0002/2018
dated 16th of February, 2018, the said decision of the Gujarat High Court stands accepted by the board. In terms of the said decision, it was held that the substantial benefits cannot be denied because of procedural irregularity and the Cenvat credit availed by one unit whereas a part of a common services were utilised by the other unit cannot be defaulted.

Even as per the revenue the credit was available to unit number-II, who has discharged duty in cash during the relevant period. If the credit would have been availed by unit number-II, they could have utilised the same for payment of duty on their final product instead of paying the duty through PLA. As such the entire exercise is revenue neutral thus not resulting in any loss to the Revenue. There is no justifiable reason to deny the credit to the Appellant. Accordingly, the demand is set aside along with setting aside of penalty and the appeal is allowed.

Relevant

Doshion Ltd. vs. Commissioner of Central Excise MANU/SC/0335/2012

Tags : Cenvat credit Demand Validity

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Supreme Court

Hetchin Haokip Vs. State of Manipur and Ors.

MANU/SC/0755/2018

20.07.2018

Criminal

Detaining authority must furnish report of detention at the earliest possible and any delay in the same must be supported by unavoidable circumstances beyond the control of authority

Present proceedings have arisen from the judgment of a High Court. The Appellant's contention was that, the District Magistrate failed to report the detention to the State Government "forthwith," as provided under Section 3(4) of the National Security Act, 1980 . The question before the High Court was whether the provisions of Section 3(4) of the Act, 1980, requiring the detaining authority to report the detention to the State Government 'forthwith,' have been violated.

It is settled law that, a statute providing for preventive detention has to be construed strictly. While "forthwith" may be interpreted to mean within reasonable time and without undue delay, it certainly should not be laid down as a principle of law that as long as the report to the State Government is furnished within 12 days of detention, it will not prejudice the detenu. Under Section 3(4) of Act, the State Government is required to give its approval to an order of detention within twelve, or as the case may be, fifteen days.

The detaining authority must furnish the report at the earliest possible. Any delay between the date of detention and the date of submitting the report to the State Government, must be due to unavoidable circumstances beyond the control of the authority and not because of administrative laxity.

In the present case, the District Magistrate submitted the report to the State Government on the fifth day (17 July 2017), after the date of the detention order (12 July 2017). The reason for the delay of five days is neither mentioned in the State Government's order confirming the detention order, nor in the impugned judgment. It was for the District Magistrate to establish that, he had valid and justifiable reasons for submitting the report five days after passing the order of detention. Whether there were administrative exigencies which justify the delay in sending the reports must be explained by the detaining authority. In the present case, the District Magistrate offered no explanation. This would vitiate the order of detention. The impugned judgment and order of the High Court set aside. The appeal is accordingly allowed.

Tags : Detention Report Submission

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