Customs, Excise and Service Tax Appellate Tribunal

Cadila Healthcare Ltd. Vs. C.C.E. & S.T.-Vadodara-I

MANU/CS/0144/2022

24.06.2022

Excise

Empty packaging material of cenvatable input is not liable for payment either as excise duty or as cenvat credit

The issue involved in the present case is that whether the Appellant is required to pay an amount of 6% in terms of 6(3) of the Cenvat Credit Rules, 2004 on empty packaging drums of cenvatable input considering the same as non excisable goods.

The Appellant submits that, the adjudicating authority and Commissioner (Appeals) confirmed the demand considering the drum as non excisable goods. He further submits that the empty drums are not generated during the process of manufacture it is cleared after emptying the inputs therefore, the drums are cleared as such and the same is not liable for payment under Rule 6(3) of Rules.

The lower authorities have confirmed the demand only on the ground that empty drums of cenvatable input is a non excisable goods and therefore, the clearance there of will attract 6% reversal in terms of Rule 6(3) of Cenvat Credit Rules, 2004.

An identical case has been considered by the Hon‟ble Supreme Court in the case of WEST COAST INDUSTRIAL GASES LTD. wherein, it is held that, the empty packaging material wherein, the input was received, the removal of the same will not attract any duty. Empty packaging material of cenvatable input is not liable for payment either as excise duty or as cenvat credit under Rule 6(3) of Rules, 2004.

The Appellant is not liable to make any payment on clearance on empty drums. Hence, the impugned order is set aside. Appeal allowed.

Tags : Cenvatable input Payment Liability

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Customs, Excise and Service Tax Appellate Tribunal

Jee Pumps Pvt Ltd vs C.C.E.-Ahmedabad-I

MANU/CS/0145/2022

24.06.2022

Excise

An assessee should be given sufficient opportunity to explain their case particularly for invocation of penal provision

The Appellant have defaulted the regular payment of duty thereafter the department frozen the bank account of the Appellant and recovered the non paid duty, interest and penalty in terms of Rule 8(3A) of Central Excise Rules, 2002. In the present appeal, the Appellant challenged the imposition of penalty only.

The department has not followed the principle of natural justice as no SCN was issued. It is submitted that, there is no malafide on the part of the Appellant, non-payment of duty at the relevant time is due to the Financial Crisis. The entire duty were declared in the invoice, ER-1 return therefore, when the case is of only delayed payment of Excise duty, no malafide is attributed to the Appellant. Further, submission is that without issuance of SCN, the recovery of the amount is in violation of principle of natural justice.

The only challenge in present appeal is imposition of penalty under Rule 8 (3A) of Central Excise Rules, 2002. Though the rule clearly prescribes the penalty however, the Revenue has not followed the principle of natural justice as they have not issued any SCN and no opportunity was given to the Appellant to defend or explain their case. It is a settled law that, even though there is no explicit provision for issuance of SCN, as per the principle of natural justice, an assessee should be given sufficient opportunity to explain their case particularly for invocation of penal provision.

In the present case admittedly neither SCN was issued to the Appellant nor was any opportunity given. Therefore, the penalty is liable to be set aside only on the ground of principle of natural justice. Hence, the penalty is set aside. Appeal allowed.

Tags : Penalty Levy Validity

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Supreme Court

Saud Faisal vs. The State Of Uttar Pradesh

MANU/SC/0810/2022

21.06.2022

Criminal

Different statement given by the same prosecution witness in another case would not be a reason for recalling the witness

The Petitioner before present Court had challenged the order which has been passed in Sessions Trial before the High Court whereupon the impugned judgment and order was passed. By the said order, an application, moved by the accused/Petitioner before this Court, under Section 311 of the Code of Criminal Procedure, 1973 (CrPC), has been dismissed. The Petitioner who is one of the accused/Petitioner facing the trial for an offence related to Section 302 of Indian Penal Code, 1860 (IPC).

Prosecution witness no.1 gave a statement in his examination-in-chief stated that he had clearly identified the Petitioner/accused Saud Faisal as one of the assailants who was carrying a rifle. This particular witness (that is PW1) was also put to a lengthy cross-examination but it could not contradict his testimony.

Relating to the same incident, the Petitioner/accused was also facing a case under the Gangsters Act. The same witness (PW1- Nausad) was examined in that proceeding as PW1. He gave a statement that although he could identify the two other witnesses i.e. Shere and Rashid, the third assailant, that is the Petitioner/accused, could not be identified as he was wearing a cloth on his face. Now, on the basis of this statement given by PW1 in the gangster’s case in the year 2021 that is after he has given his statement as was also cross-examined at length in the present trial in the year 2014, an application was moved under Section 311 of CrPC for recalling this witness.

The trial court has rejected this application and in present Court’s view rightly so, for the reasons that merely because a different statement has been given by the same prosecution witness in another case could not be a reason for recalling the witness and that too, after a period of seven years. It is not a case where a contradictory statement was given by some other witnesses in the present trial. Under these circumstances, present Court is not inclined to interfere with the order impugned passed by the High Court. Petition dismissed.

Tags : Conviction Evidence Credibility

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High Court of Himachal Pradesh

Nagender Pal Sharma Vs. Vidya Sharma

MANU/HP/0777/2022

20.06.2022

Criminal

Onus is on the husband to establish that there are sufficient grounds to show that he is unable to discharge his legal obligations for reasons beyond his control

By way of instant criminal revision petition filed under Section 397 of Code of Criminal Procedure, 1973 (CrPC), challenge has been laid to order passed by learned Sessions Judge, whereby criminal revision petition having been filed by the Petitioner came to be disposed of as compromised, whereby the Petitioner herein agreed to pay Rs. 10.00 Lakh to the Respondent as permanent alimony and Respondent also agreed to file a divorce petition in the competent Court of law within a period of three months, the Petitioner agreed to pay Rs. 5.00 Lakh on the date of filing of divorce petition and remaining Rs. 5.00 Lakh at the time of passing of final order. Most importantly, Petitioner stated before learned Court below that in case he fails to pay the aforesaid amount to the respondent, ex parte order passed by learned Additional Chief Judicial Magistrate, regarding monthly maintenance allowance shall come to force.

Though, in the case at hand, Petitioner has claimed that he was compelled/pressurized to enter into compromise but such plea is not substantiated by any material rather, order clearly reveals that during the pendency of the criminal revision filed by the Petitioner, parties of their own volition entered into compromise, whereby petitioner agreed to file petition under Section 13B of the Hindu Marriage Act, 1955 in the competent Court of law, seeking therein divorce by way of mutual consent.

Though, present court finds no illegality and infirmity in the order passed by learned Additional Chief Judicial Magistrate, awarding monthly maintenance to the tune of Rs. 10,000 to the Respondent, but having taken note of the fact that monthly income of the Petitioner is Rs. 21,000, amount of maintenance awarded by learned trial Court appears to be on higher side.

Hon'ble Apex Court in Rajnesh vs. Neha and Ors., has categorically held that the financial situation and liabilities of the non-applicant and higher obligations of Respondent are required to be taken into consideration, while awarding maintenance. No doubt, the onus is on the husband to establish with necessary material that there are sufficient grounds to show that he is unable to maintain the family, and discharge his legal obligations for reasons beyond his control. Since in the case at hand, there is no dispute that the monthly income of the petitioner is Rs. 21,000 and he has two families to support, by no stretch of imagination, order granting maintenance to the tune of Rs. 10,000 can be held to be justifiable.

The petition is disposed of by upholding the order passed by learned Sessions Judge, however, order passed by learned Additional Chief Judicial Magistrate, is modified to the extent that instead of Rs. 10,000, the Petitioner shall be liable to pay monthly maintenance to the respondent at the rate of Rs. 7,000 per month from the date of institution of the petition under Section 125 of CrPC.

Tags : Divorce Mutual consent Maintenance

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High Court of Kerala

C.A. Hydrose Vs. New India Assurance Co. Ltd. and Ors.

MANU/KE/1869/2022

20.06.2022

Insurance

Court cannot interfere with the discretion exercised by the Ombudsman in the award of interest and the date on which it is made payable

The Petitioner has preferred present writ petition being aggrieved by award passed by the Insurance Ombudsman, Kochi declining to grant interest on the award amount from the date of filing the petition. It is submitted that, the Ombudsman ought to have ordered interest on the award amount from 25th May, 1997, the date of preferring the claim petition.

In compliance with award, the Petitioner submitted letter of acceptance within the time stipulated therein. As per the award and the RPG Rules, the insurer shall comply with the award within 15 days of the receipt of acceptance letter and shall intimate the compliance to the Ombudsman.

There is no justification whatsoever on the part of the insurer in not complying with the award within 15 days of receipt of the acceptance letter. The acceptance letter was withdrawn by the petitioner only on 1st September, 2012, six months after sending the acceptance letter, that too, after letters calling upon the insurer to comply with award. The insurer cannot, now, take a stand that they need not comply with award since the letter of acceptance has been subsequently withdrawn by the Petitioner.

With regard to the claim of the Petitioner for interest from the date of the claim petition, it is to be noted that the Petitioner has accepted award by the letter of acceptance. As per Rule 16(5) of Insurance Ombudsman the Redressal of Public Grievances Rules, 1998, the complainant shall furnish to the insurer within a period of one month from the date of receipt of the award, a letter of acceptance that the award is in full and final settlement of his claim. The award includes interest and when a letter of acceptance is given in full and final settlement of the claim, the Petitioner cannot challenge the award to the extent it denied interest from the date of filing the claim petition.

It is trite that, grant of interest, even in the absence of specific provision for granting interest, is a matter left with the discretion of the Courts or Tribunals. This Court cannot, therefore, interfere with the discretion exercised by the Ombudsman in the award of interest and the date on which it is made payable.

The insurer cannot contend that since the letter of acceptance has been subsequently withdrawn, they shall not comply with the award. The parties cannot approbate and reprobate at the same time and when the insurer has taken the stand that the Petitioner has accepted the award in full and final settlement, they cannot contend that they will not comply with the award as the letter of acceptance was withdrawn. Accordingly, the writ petition is allowed in part with direction to Respondents 1 and 2 to comply with award within a period of two months.

Tags : Letter of acceptance Award Compliance

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High Court of Madras

K. Ilayarajalingam Vs. K. Karthikeyan

MANU/TN/4633/2022

20.06.2022

Criminal

Offence under Section 138 of Negotiable Instruments Act will get attracted, if the debt is legally enforceable

The revision Petitioner is the accused on the file of the Judicial Magistrate, in a private complaint initiated under Section 138 of Negotiable Instruments Act, 1881. The cheque dated 16th November, 2015 drawn by the Petitioner for a sum of Rs. 9 lakhs in favour of one K. Karthikeyan/Respondent is the subject matter of the complaint.

The trial Court held that, the complainant failed to prove the fundamental fact that the cheque was issued towards legally enforceable debt. The complainant preferred Appeal before the II Additional Sessions Court. The appellate Court held that, the accused failed to rebut the presumption under Section 139 of the Act. The capacity to advance loan of Rs. 9 lakhs need not be proved by the complainant and therefore, dismissal of the complaint by the trial Court is erroneous. The Appellate Court reversed the order of the acquittal and convicted the accused.

When a specific defence raised by the accused person at the inception itself even before filing the complaint, the complainant is bound to explain in his complaint regarding the source of income. Failure to explain his source of income is fatal to the complaint. The person capacity to advance loan of Rs. 9 lakhs is a very fundamental fact, when the capacity is questioned. To add, the complainant admits that he did not receive any other document for advancing loan of Rs. 9 lakhs, except the post-dated cheque given to him. In any transaction, when cheque is issued, it is presumed to be issued to discharge the existing debt.

Offence under Section 138 of Act will get attracted, if the said debt happens to be legally enforceable. Therefore, the existing debt pre-suppose a presumption. If the accused able to prove by preponderance of probabilities that there was no existing debt on the date on which the cheque bears, then the complainant under Section 138 of the Act cannot have the advantage of the statutory presumption under Section 139 of the Act.

As pointed out by the Hon'ble Supreme Court in Basalingappa v. Mudiasappa, when the capacity to advance loan or transaction for which the alleged cheque given is denied, the complainant cannot take advantage of Section 139 of the Act without discharging his burden of proving the fundamental fact regarding transaction, which has created an existing debt (or) his capacity to advance loan atleast equivalent to the amount found in the cheque. In present case, for the cheque amount is Rs. 9 lakhs, no other previous existing debt (or) transaction claimed in the complaint. No evidence was produced by the complainant to prove his financial capacity to advance a huge sum of Rs. 9 lakhs.

Taking into consideration his background admittedly a small time farmer holding 6 acres of land and not even a bank savings account claiming he advanced loan of Rs. 9 lakhs as against the post-dated cheque and no other document obtained for the money transaction, is bound to be suspected. Present Court holds that the appellate Court erred in reversing the trial Court judgment. The finding of the appellate Court is legally not sustainable. Present Criminal Revision Case is allowed.

Tags : Financial capacity Debt Proof

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Income Tax Appellate Tribunal

AIC Prestige Inspire Foundation Vs. CIT, Exemption, Bhopal

MANU/II/0027/2022

20.06.2022

Direct Taxation

Rejection of second-application for grant of registration under Section 12AA of the IT Act without mentioning substantial reason amounts to miscarriage of justice

The assessee is a company incorporated under Section 8 of the Companies Act, 2013, established for various objects set out in the Memorandum of Association (MOA) filed to the Registrar of Companies which are to set up and run Atal Incubation Centres in partnership with Atal Innovation Mission, Niti Ayog, Government of India; encourage entrepreneurship and innovations, etc. The assessee filed first-application to the Learned CIT(E) for grant of registration under Section 12AA of the Income Tax Act, 1961 (IT Act) but the Learned CIT(E) rejected application vide first-order.

The assessee amended its Memorandum of Association and Articles of Association under the Companies Act, 2013 and removed the objects for which the Learned CIT(E) had raised objection. Thereafter, the assessee filed second-application in Form No. 10A alongwith all required documents for grant of registration. However, vide second-order, the Learned CIT(E) has summarily rejected the second-application of the assessee. Feeling aggrieved by the aforesaid order of Learned CIT(E), the assessee has filed present appeal.

Although there were objections raised by Learned CIT(E) on the first-application of the assessee, yet the assessee has removed those objections before filing second-application. The Learned CIT(E) has rejected second-application of the assessee with the sole reason that there is no change in objects. Except this one reason, the Learned CIT(E) has not mentioned any other reason to reject the second-application.

The Learned AR has successfully submitted that the objectionable objects had already been removed before filing second-application and this submission of Learned AR has not been controverted by the Learned DR. The rejection of second-application for grant of registration under Section 12AA of the IT Act amounts to miscarriage of justice. Therefore, the assessee deserves registration under Section 12AA of the IT Act. Hence, the Learned CIT(E) is directed to grant the registration as applied for by the assessee. Appeal of assessee is allowed.

Tags : Application Registration Grant

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