Judgments
Customs, Excise and Service Tax Appellate Tribunal
Gac Shipping India Pvt Ltd vs. Commissioner of GST & Central Excise
MANU/CC/0240/2024
12.07.2024
Service Tax
Mark up value in ocean freight is not liable for service tax under Steamer Agent Service
The Appellants are registered with the Service Tax Department under the category of 'Custom House Agents', 'Transport of Goods by Road' and 'Business Auxiliary Service'. During the scrutiny of accounts by the officers of Central Excise, it was found that the appellant had collected amount in excess in the guise of ocean freight charges from various clients for the relevant period for import/export of cargo and not paid service tax for the same under Steamer Agent Service.
Show Cause Notice was issued proposing to demand the service tax along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand of Rs.8,623 along with interest and imposed penalties under Sections 76 and 77 of the Finance Act, 1994. In appeal, Commissioner (Appeals) upheld the same. Hence the appellant is before this Tribunal.
The issue pertains to the appellant having added some markup value/ margin on the ocean freight charges and collected the same from their clients. Revenue is of the opinion that the mark up value in ocean freight is liable for service tax under Steamer Agent Service.
The issue is no longer res integra. It was clearly held in Indian Oxygen Ltd. v. Collector of Central Excise, that the duty of excise is a tax on the manufacturer and not a tax on the profits made by a dealer on transportation. In view of that decision, the view taken by the Tribunal cannot be sustained.
The above judgment of the Hon'ble Supreme Court and the judgments cited by the appellant, including those in their own case makes it clear that the profit made by the appellant by markup of transport charges which has nothing to do with the activity of Steamer Agent Service would not be liable to Service Tax by adding it to the value of the said taxable service. The impugned order is hence set aside. Appeal allowed.
Tags : Demand Confirmation Legality
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Supreme Court
Yogesh Goyanka Vs. Govind and Ors. (Neutral Citation: 2024 INSC 510)
MANU/SC/0597/2024
10.07.2024
Civil
Doctrine of lis pendens under Section 52 of the Transfer of Property Act, does not render all transfers pendente lite to be void
The present appeal arises out of judgment passed by the High Court whereby the writ petition preferred by the Appellant under Article 227 of the Constitution of India, 1950 was dismissed. The Appellant approached the High Court on being aggrieved by the dismissal of his impleadment application under Order 1 Rule 10, Code of Civil Procedure, 1908 (the 'CPC') vide order dated passed by the Learned Additional District Judge.
The fulcrum of the dispute concerns the impleadment of a transferee pendente lite who undisputedly had notice of the pending litigation. The doctrine of lis pendens as provided Under Section 52 of the Transfer of Property Act, 1882 does not render all transfers pendente lite to be void ab-initio, it merely renders rights arising from such transfers as subservient to the rights of the parties to the pending litigation and subject to any direction that the Court may pass thereunder.
Therefore, the mere fact that the Registered Sale Deed (RSD) was executed during the pendency of the Underlying Suit does not automatically render it null and void. On this ground alone, the Impugned Order to be wholly erroneous as it employs Section 52 of the Act to nullify the RSD and on that basis, concludes that the impleadment application is untenable. Contrary to this approach of the High Court, the law on impleadment of subsequent transferees, as established by this Court has evolved in a manner that liberally enables subsequent transferees to protect their interests in recognition of the possibility that the transferor pendente lite may not defend the title or may collude with the Plaintiff therein.
Appellant has a registered sale deed in his favor and has therefore seemingly acquired an interest in the Subject Land. Whether or not the consideration was paid, is a disputed question of fact that shall be determined by the Trial Court. Therefore, in the considered opinion of this Court, considering the totality of the circumstances in this case, including the fact that the trial has not progressed significantly, the Appellant, in the interest of justice, is entitled to impleadment in the Underlying Suit in order to protect his interests, in the Subject Land. The Impugned Order and the order of the ADJ are set aside and the Appellant is directed to be added as a party- Defendant in the Underlying Suit. Appeal allowed.
Tags : Impleadment Entitlement Doctrine
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Customs, Excise and Service Tax Appellate Tribunal
DHL Logistics Pvt Ltd vs. Commissioner of Customs
MANU/CB/0155/2024
10.07.2024
Customs
Show cause notice under the CHALR has to be issued within ninety days of the receipt of the offence report
The Appellant is challenging the proceedings initiated against them under the provisions of Customs House Agent Licensing Regulations, 1984. The Appellant is a Clearing agent (CHA) for the importer Procter & Gamble (P & G), who had imported 'Wood Pulp Cellulose Foley Fluffs' (wood pulp).
As per Regulation 22(1) of CHALR, 2004, the show cause notice under the CHALR has to be issued within 90days of the receipt of the offence report. Thus, it is mandatory for the department to issue an offence report as to where the offence is committed and period of limitation commences from the said date of offence report. In the present case, admittedly there is no offence report and the finding of Adjudication Authority that the Show Cause Notice issued by JNCH, Nhava Sheva can be considered as offence report is unsustainable. Once there is a specific provision in CHALR, 2004 to issue notice within 90days from the date of issue of offence report, offence report is mandatory and in the absence of the same, no presumption can be drawn that the Show Cause Notice would suffice.
There is no reason to conclude that, there is a deliberate omission on the part of the Appellant to mislead the Department and to proceed with export of prohibited goods, when the description of the goods in the shipping bill is same as that was mentioned in the import bill of entry. The goods imported by the Procter & Gamble (P&G) were in the Customs premises and they were exported from the very same Customs Premises with due permission from the concerned officer. Thus, in the absence of any admissible evidence regarding violation of any provision of CHALR, 2004 and considering the procedural lapse in issuing offence report, the impugned order is unsustainable. Appeal allowed.
Tags : SCN Forfeiture Legality
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High Court of Delhi
Manas Vihar CGHS Ltd. Vs. Municipal Corporation of Delhi & Ors. (Neutral Citation: 2024:DHC:5132-DB)
MANU/DE/4561/2024
09.07.2024
Civil
MCD is empowered to remove any illegal and unauthorised construction even if it happens within the four corners of a house/flat
Present writ petition has been filed by the petitioner-cooperative society seeking a direction to the Respondent no.1/MCD to conduct a survey and inspection of the unauthorized encroachment and construction carried out by Respondent no.3/Bina Mathur and to demolish the same in accordance with law. Petitioner society seeks a direction to Respondent no.2/RCS to produce the records pertaining to orders dated 17th August 2023 and 27th October 2023 and quash the same.
Admittedly, during the pendency of the present petition, respondent no.1/MCD has booked unauthorized construction in 13 flats in the Petitioner's society and has also carried out partial demolition. This Court is of the view that Sections 70 and 71 of the Delhi Cooperative Societies Act, 2003 are not attracted to the facts of the present case as the demolition action has to be taken by the MCD and not by the Cooperative Society.
MCD under the Delhi Municipal Corporation Act is fully empowered to remove any illegal and unauthorised construction even if it happens within the four corners of a house/flat. In fact, the present writ petition, which has been filed to ensure that the MCD carries out its statutory duty, is maintainable.
It is settled law that, the penalty can only be enforced if the law imposes it. Accordingly, this Court is of the opinion that it is not open for the petitioner-society to impose any penalty as there is no statutory backing for the same.
Consequently, this Court disposes of the present writ petition with a direction to the MCD to take action in accordance with law as expeditiously as possible. The Delhi Police is directed to render all assistance to the MCD. If Respondent no.3 is aggrieved by any action of MCD, she shall be at liberty to take steps in accordance with law.
Tags : Statutory duty Powers MCD
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Supreme Court
The State of West Bengal represented through the Secretary and Ors. Vs. Rajpath Contractors and Engineers Ltd. (Neutral Citation: 2024 INSC 477)
MANU/SC/0561/2024
08.07.2024
Arbitration
Party challenging an arbitral award beyond the limitation period cannot avail the benefit of Section 4 of Limitation Act
The first Appellant - the State of West Bengal appointed the Respondent as a contractor for the construction of a bridge. As there was a dispute between the parties, the Respondent invoked the arbitration Clause in the contract, and a sole arbitrator was appointed. On 30th June 2022, the Arbitral Tribunal passed an award directing the Appellants to pay a sum of Rs. 2,11,67,054.00 to the Respondent with interest thereon, as directed. The counter- claim made by the Appellants was dismissed. The Appellants received a copy of the award on the same day.
The Appellants filed a petition Under Section 34 of the Arbitration and Conciliation Act, 1996 ('the Arbitration Act') to challenge the award. By the impugned order, the High Court dismissed the petition under Section 34 of the Arbitration Act filed by the Appellants on the ground of bar of limitation. The High Court held that, the period of limitation for filing a petition Under Section 34 expired on 30th September 2022. Therefore, the Appellants are not entitled to the benefit of Section 4 of the Limitation Act of 1963 ('the Limitation Act').
The facts are undisputed. The award made by the Arbitral Tribunal on 30th June 2022 was served upon the Appellant on the same day. Between 1st October 2022 and 30th October 2022 (both days inclusive), the High Court was closed for pooja vacation. The petition under Section 34 of the Arbitration Act was filed on 31st October 2022.
As per Section 12(1) of the Limitation Act, the day from which the limitation period is to be reckoned must be excluded. In the facts of the case in hand, the three months provided by way of limitation expired a day before the commencement of the pooja vacation, which commenced on 1st October 2022. Thus, the prescribed period within the meaning of Section 4 of the Limitation Act ended on 30th September 2022. Therefore, the Appellants were not entitled to take benefit of Section 4 of the Limitation Act. As per the proviso to Sub-section (3) of Section 34, the period of limitation could have been extended by a maximum period of 30 days. The maximum period of 30 days expired on 30th October 2022. The petition was filed on 31st October 2022.
Thus, the High Court was right in holding that the petition filed by the Appellants under Section 34 of the Arbitration Act was not filed within the period specified under Sub-section (3) of Section 34. Hence, there is no merit in the appeal, and it is, accordingly, dismissed.
Tags : Time period Bar Legality
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High Court of Delhi
Dalip Singh Vs. Jaswant Rai Garg (Neutral Citation: 2024:DHC:5048)
MANU/DE/4483/2024
08.07.2024
Arbitration
When the arbitration clause envisages a pre-arbitration protocol, the protocol has to be adhered to, before invoking arbitration
Present is a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for resolution of the disputes between the parties through arbitration.
Clause 22 envisages a specific pre-arbitration protocol. The parties are required to make an attempt to amicably resolve the dispute. It is only if the dispute cannot be resolved within 21 days or any extended period, that a Section 21 notice can be served invoking arbitration.
Appellant has not been able to show any document whereunder there was an attempt to amicably resolve the dispute in the terms envisaged by Clause 22. He referred to notice dated 16 May 2024. This, however, is a formal legal notice making allegations against the respondent and does not contain even a vestige of an attempt to settle the matter amicably.
It is well settled that where the arbitration clause envisages a pre-arbitration protocol, the protocol has to be adhered to, before invoking arbitration, unless emergent circumstances can be shown which render adherence to the protocol counter-productive.
Petition is premature, reserving liberty to the Petitioner to proceed in accordance with the protocol envisaged by Clause 22 of the Consultancy and Retainership Agreement. Petition disposed off accordingly.
Tags : Dispute Resolution Clause
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