Customs, Excise and Service Tax Appellate Tribunal

Panama Petrochem Ltd vs. Commissioner of C.E. & S.T.

MANU/CS/0140/2024

05.04.2024

Excise

Freight/insurance amount is not includable in assessable value of goods for charging excise duty

In present matter, the Appellant entered in contract with IOCL, HPCL. As per the contract the appellant is responsible for delivery of goods to the destination of different location as mentioned in contract. The case of the department is that the freight/insurance charges collected by the appellant in addition to the price of the goods are includible in the transaction value and excise duty is chargeable on such freight/ insurance charges. Accordingly, two show cause notices were issued to the appellant and subsequently demand was confirmed by the Original Adjudicating Authority vide Order-in-Original. Being aggrieved by the impugned Order, appellant is before this Tribunal.

The issue involved in the present case is that whether the freight/insurance charged separately in the sale invoices of excisable goods is includible in the assessable value of such excisable goods.

Freight/insurance have been charged separately and received separately. We also take notice that the buyers of the goods Indian Oil Corporation Ltd. and Hindustan Petroleum Corp. Ltd. have issued purchase order specifying the price for the goods separately and also specifying the transportation cost for the supply of goods. Accordingly, appellant have supplied the goods and raised invoices for the price of goods and the transportation. Thus, it amounts to showing the cost of transport separately in the invoices.

The place of removal is factory gate, however the goods were delivered at customer place. Therefore, goods were sold for delivery not at the place of removal (i.e. factory gate) but at other place i.e. customer door step. Present Tribunal have perused copies of the purchase contract placed by the Indian Oil Corporation Ltd and Hindustan Petroleum Corp. Ltd. and invoices issued by the Appellant. From the invoices, it is seen that the freight/insurance shown in the invoices is in addition to basic price of the goods.

It is clear from the terms of the purchase contract that basic price and other components have to be indicated separately. Therefore, there is no dispute that basic price and the freight/insurance components are clearly indicated separately in the invoices and therefore criterion i.e. cost of transportation should be in addition to the basic price of the goods stand fulfilled.

No valid reason for disallowing the deduction for the freight/insurance paid inasmuch as the sales are FOR destination. A coordinate Bench of CESTAT in the case of Sterlite Optical Technologies Ltd. v. CCE & C, Aurangabad has taken a view in identical facts that freight/insurance will be allowable as a deduction from the composite price. Thus, the contention of the Department to include the freight/insurance amount in the assessable value does not meet the test of law and hence not legally sustainable. Hence, there is no merit in order passed by the appellate authority. Freight/insurance amount is not includable in the assessable value of the goods for charging excise duty. Accordingly, the impugned order is set aside. Appeal allowed.

Tags : Demand Confirmation Legality

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Customs, Excise and Service Tax Appellate Tribunal

Pradhin Ltd vs. Commissioner of Customs (Port-Export), Chennai

MANU/CC/0111/2024

04.04.2024

Customs

When documents established that goods imported co-relates with the invoices, refund should not be denied on some minor variation in describing goods

In facts of present case, the Appellant filed refund claim for refund of Special Additional Duty paid by them at the time of import of goods as under Notification No.102/2007 as amended. The original authorities rejected the refund claim observing that the description of the goods in the bill of entry does not match with the description of goods in the sales invoices. The Appellant preferred appeal before the Commissioner (Appeals) who upheld the order passed by the adjudicating authority. Hence, present appeal.

The refund claim has been rejected observing that, the description of the goods in the bills of entry does not corelate with the description mentioned in the sales invoices. Present Tribunal have perused the description given in the bills of entry as well as the sales invoices. The description of goods in the bills of entry is shown as 'HR Plates'. The description given in some of the sales invoices are 'MS Plates and HR Plates'. The description given in the bill of entry is on the basis of classification of the goods for payment of duty. The Appellant has described the goods as 'MS Plates' and 'HR Sheets' for the reason that they are known as such in the market on the basis of variation in thickness. Present Tribunal is convinced with the explanation put forward for the variation in the description and is satisfactory.

Further, the Appellant had produced Chartered Accountant certificate as well as the correlation statements along with the refund claim. In such circumstances, the original authority ought not to have denied the refund claim. The Tribunal in the case of Ganesha Impex Vs. Commissioner of Customs (Sea-Import)held that, when the documents established that goods imported co-relates with the invoices, the refund should not be denied on some minor variation in describing the goods.

The High Court in the case of P.P. Products Ltd., Vs. Commissioner of Customs, Chennai, held that when the CA certificate is produced the same cannot be brushed aside without proper reason. In the present case, the adjudicating authority has not put forward any finding as to disregard the CA certificate. In such circumstances, the refund claim ought to be allowed. The Appellant is eligible for refund. The impugned order is set aside. Appeal allowed.

Tags : Refund claim Denial Legality

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Supreme Court

Bharti Airtel Limited Vs. A.S. Raghavendra (Neutral Citation: 2024 INSC 265)

MANU/SC/0268/2024

02.04.2024

Service

There must be a level of infirmity greater than ordinary in a Tribunal's order to justify interference of High Court under Articles 226 and 227 of Constitution

The present appeal arises out of the final judgment passed by High Court by which the High Court dismissed the appeal filed by the Appellant. The moot issue is whether the Respondent would or would not come within the definitional stipulation of a "workman" as laid out under Section 2(s) of Industrial Disputes Act, 1947 (ID Act).

With regard to the power of the High Court to re-appraise the facts, it cannot be said that the same is completely impermissible under Articles 226 and 227 of the Constitution, 1950. However, there must be a level of infirmity greater than ordinary in a Tribunal's order, which is facing judicial scrutiny before the High Court, to justify interference. Present Court do not think such a situation prevailed in the present facts.

There is no direct allegation of any bias against or victimisation of the Respondent as he himself has stated as also written to various persons venting his grievances. Only because things did not turn out the way the Respondent wanted them to, or for that his grievances were not adequately or appropriately addressed, cannot lead to the presumption that the resignation was forced upon him by the Company. One way to label the Respondent's resignation as "forced" would be to attribute the compulsion to the Respondent, rather than factors relating to the Company and/or its management. It can be termed a result of feeling suffocated due to lack of proper appreciation and not being given his rightful due that led to the chain of events, rather than by way of any arbitrariness or high-handedness on the part of the Appellant. Bearing due regard to the nature of duties performed by the Respondent, present Court is satisfied that the same do not entail him being placed under the cover of Section 2(s) of ID Act.

The impugned judgment as well as the judgment rendered by the learned Single Judge are set aside. The judgment of the Labour Court is revived and restored. It is held and declared that the Respondent is not a "workman" and thus, reference to the Labour Court under the ID Act against the Appellant would not be maintainable. Appeal allowed.

Tags : Reference Powers High Court

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Supreme Court

Ballu and Ors. Vs. The State of Madhya Pradesh (Neutral Citation: 2024 INSC 258)

MANU/SC/0255/2024

02.04.2024

Criminal

Unless the finding of acquittal is found to be perverse or impossible, interference with the same would not be warranted

The present appeal challenges the judgment passed by the High Court, thereby allowing the appeal of the Respondent-State. The High Court, reversing the judgment of the learned Trial Judge, had convicted the Appellants.

It is necessary for the prosecution that, the circumstances from which the conclusion of the guilt is to be drawn should be fully established. It is a primary principle that the Accused 'must be' and not merely 'may be' proved guilty before a court can convict the Accused. The facts so established should be consistent only with the guilt of the Accused, that is to say, they should not be explainable on any other hypothesis except that the Accused is guilty. It has further been held that, the circumstances should be such that they exclude every possible hypothesis except the one to be proved. There must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the Accused and must show that, in all human probabilities the act must have been done by the Accused.

It is settled law that, the suspicion, however strong it may be, cannot take the place of proof beyond reasonable doubt. An Accused cannot be convicted on the ground of suspicion, no matter how strong it is. An Accused is presumed to be innocent unless proved guilty beyond a reasonable doubt.

The present case is a case of reversal of acquittal. The law with regard to interference by the Appellate Court is very well crystallized. Unless the finding of acquittal is found to be perverse or impossible, interference with the same would not be warranted. It is not in dispute that, the death of the deceased is a homicidal death and as such, it will not be necessary to refer to the medical evidence.

The High Court could have interfered in the criminal appeal only if it came to the conclusion that, the findings of the trial Judge were either perverse or impossible. No perversity or impossibility could be found in the approach adopted by the learned Trial Judge.

In any case, even if two views are possible and the trial Judge found the other view to be more probable, interference would not have been warranted by the High Court, unless the view taken by the learned Trial Judge was a perverse or impossible view. In that view of the matter, the judgment passed by the High Court is totally unsustainable in law. The impugned judgment passed by the High Court is quashed. Appeal allowed.

Tags : Acquittal Reversal Legality

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High Court of Bombay

Lalit Narayan Thakkar Vs. Narendra Gajanan Sharma (Neutral Citation: 2024:BHC-AUG:6882)

MANU/MH/2121/2024

01.04.2024

Criminal

A valid authorization is necessary to institute a complaint under the NI Act

In present case, judgment and order passed by trial Court acquitting Respondent from offence under Section 138 of the Negotiable Instruments Act (the NI Act) is assailed by original complainant by filing instant appeal.

Complainant is expected to prove beyond reasonable doubt essential ingredients like existence of legally enforceable debt, secondly issuance of cheque, thirdly, dishonour of cheque and fourthly, issuance of statutory demand notice. There is further requirement that repayment of cheque is to be made within stipulated period, failing which accused is exposed to the risk of initiation of proceedings under Section 138 of the NI Act.

Apparently, there is no valid authorization in favour of PW1 Lalit to institute complaint on behalf of complainant Co-operative Society i.e. Agresen Urban Co-operative Credit Society. Therefore, when PW1 Lalit was not legally authorized or equipped with effective Resolution to prosecute, prosecution itself fails for want of sanction and authorization.

There has to be a valid authorization with a person prosecuting the complaint under the NI Act. Cross-examination of PW1 Lalit categorical shows that, though Resolution has been passed, it has not been endorsed and confirmed by causing signature. Hence, no fault can be found in the conclusion drawn by the learned trial Court for dismissing the summary criminal case. No case being made out on merits. Appeal dismissed.

Tags : Complaint Dismissal Legality

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High Court of Delhi

Giesecke and Devrient India Pvt. Ltd. Vs. Deputy Commissioner of Income Tax and Ors. (Neutral Citation: 2024:DHC:2561-DB)

MANU/DE/2428/2024

01.04.2024

Direct Taxation

Assessing Officer has to calculate total income of assessee in conformity with Arm's Length Price determined by Transfer Pricing Officer

The present writ petition, at the instance of the assessee, seeks to assail the impugned order passed under Section 144C read with Sections 143(3) and 144B of the Income Tax Act, 1961 [IT Act], whereby, the Assessing Officer ["AO"] made an adjustment of INR 25,58,68,79,196, to the total income of the assessee. The short question is whether the AO can proceed to make transfer pricing adjustment beyond the Arm's Length Price (ALP) determination by the TPO in light of the mandate of Section 92CA of the Act.

As per Section 92CA of the IT Act, in order to compute the ALP of the international transactions, the AO "may" refer the matter to the office of the TPO, with prior permission of the Principal Commissioner of Income Tax ["PCIT"] or Commissioner of Income Tax ["CIT"]. Furthermore, the mandate of Section 92CA(4) of the Act would reflect that, the AO shall calculate the total income of the assessee in conformity with the ALP determined by the Transfer Pricing Officer (TPO). In cases, where certain international transactions may have a bearing on the computation of total income, the AO ought to refer the matter to the TPO in order to determine the ALP of the international transactions and the AO, while computing the total income of the assessee, shall proceed in conformity with the ALP determined by the TPO.

A bare perusal of the TPO order dated 31 January 2021 would suggest that the TPO never determined the ALP of the international transaction relating to the demerger of business and rather only determined an adjustment to the tune of INR 16,84,51,531. Though the TPO order reflects some discussion regarding the value of the demerger of the business, it nowhere held that the amount of INR 25,41,84,27,665 depicted the ALP of such an international transaction.

As per the legislative mandate behind Section 92CA of the Act, the ALP determination of any international transactions falls in the domain of the TPO. Moreover, the dictum laid down in CIT v. S.G. Asia Holdings noticeably elucidates that, the AO is not clothed with the powers to ascertain the ALP of any international transaction that is selected on the transfer pricing risk parameters. Furthermore, Section 92CA(4) of the Act evidently mandates that, the AO cannot deviate itself from the TPO order while computing the total income of the assessee.

In the present case, the TPO order solely reflects the transfer pricing adjustment to the tune of INR 16,84,51,531. However, the AO, without affording an opportunity of hearing to the assessee, proceeded to add an amount of INR 25,41,84,27,665 to the total income of the assessee, which addition was neither determined nor directed by the TPO, as the ALP of the international transaction related to the demerger of the business. The said course of action was not available to the AO and it is a clear case of excess.

Therefore, impugned order breaches the legislative mandate of Section 92CA of the IT Act.Thus, impugned order is set aside the impugned order and in the interest of justice, matter remanded back to the file of AO with a direction to proceed in accordance with law and extant regulations.Petition allowed.

Tags : Assessment Legislative mandate Breach

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