Central Excise
Rule 8(3A) of CER - It is a well settled principle of law that no provision of law should be read in such manner so as to make it ineffective or otiose - since appellant has defaulted in payment of duty for period more than 30 days, appellant is not entitled to utilize CENVAT Credit for payment of duty liability - Pre-deposit ordered of Rs.7.37 Crores: CESTAT
DURING the period from April 2011 to March 2012 the appellant consistently defaulted in payment of Central Excise duty. The amount of defaulted duty during this period amounted to Rs.1,44,83,942/-. Therefore, a SCN was issued to the appellant on 16/05/2012 invoking the provisions of Rule 8(3A) of the CER, 2002 wherein it was proposed to deny the benefit of CENVAT Credit for payment of duty inasmuch as the default persisted more than 30 days.
Accordingly, a demand of duty of Rs.8,88,02,216/- was confirmed against the appellant for the period June 2011 to March 2012 which was appropriated from the payments made subsequently by the appellant. CENVAT Credit of Rs.7,36,74,043/ was sought to be denied during the impugned period and the adjudicating authority confirmed this duty demand. However, he allowed the appellant to take credit of the same in case this amount of Rs.7,36,64,043/- is paid in cash. In addition, interest is demanded and a penalty of Rs.35 lakhs was imposed under Rule 25 of CER, 2002.
 |
Commission paid to an agent for services rendered abroad and payment by way of reimbursement of expenses are not taxable in India
The assessee paid remuneration to the artists, to the agent and reimbursed the expenses in connection with the visit and performance of the artists in India. The assessee deducted tax at source on fees paid to the international artists in India. Tax was deducted at source on the payment made to artists for performance in India but it was not deducted at source on the commission paid to Mr. Colin Davie who acted as an agent between the assessee and the artists performed in India. Under Article 18 of the India-UK DTAA, the payment made to the artists and by way of reimbursement has been completely misconstrued inasmuch as the agreements with the artists and the understanding with Mr. Colin Davie would indicate that the payment of commission to him is not covered by Article 18. Mr. Colin Davie never took part in the event organised. He did not exercise any personal activities in India. Mr. Colin Davie did not act as a performing artist or entertainer, all that he was concerned are the services which were rendered outside India. He contacted the artists and negotiated with them for performance in India in terms of the authority given by the assessee. The CIT(A) and Tribunal rightly arrived at the conclusion that Mr.Colin Davie did not perform any services in India, but they were rendered outside India. Therefore, commission income to the agent is not liable to tax in India and there was no obligation on the part of the assessee to deduct the tax at source at the time of making of payment. In so far as payment or reimbursement of expenses in connection with the visit and performance of the artists in India, the amount reimbursed to them was towards air travel and was supported by documents. On that tax need not be deducted.
Related Judgements
|
Tax implications of employee secondment contracts explained
The High Court had to consider whether the consideration for secondment of employees by British Gas Trading Ltd, UK, ("BSTL") and Director Energy Marketing Limited, Canada ("DEML") to Centrica, India, for providing "business support services" constitutes "fees for technical/ included services" under Articles 12 & 13 of the India-Canada and India-UK DTAAs and whether the presence of the seconded employees created a "service PE" in India for the foreign employers. HELD by the High Court:
(i) The overseas entities required the Indian subsidiary, CIOP, to ensure quality control and management of their vendors of outsourced activity. For this activity to be carried out, CIOP required personnel with the necessary technical knowledge and expertise in the field, and thus, the secondment agreement was signed since CIOP did not have the necessary human resource. The secondees are not only providing services to CIOP, but rather tiding CIOP through the initial period, and ensuring that going forward, the skill set of CIOP's other employees is built and these services may be continued by them without assistance. In essence, the secondees are imparting their technical expertise and know-how onto the other regular employees of CIOP. Indeed, it is admitted by CIOP that the reason for the secondment agreement was to provide support for the initial years of operation, till the necessary skill-set is acquired by the resident employee group. The activity of the secondees is thus to transfer their technical ability to ensure quality control vis-à-vis the Indian vendors, or in other words, "make available‟ their know-how of the field to CIOP for future consumption. The secondment, if viewed from this angle, actually leads to a benefit that transmits the knowledge possessed by the secondees to the regular employees. Indeed, any other reading would unduly restrict the Article 12 of the DTAA, which contemplates not only a formal transfer of intellectual property, but also other techniques and skills ("soft" intellectual property) required for the operation of a business. The skills and knowledge required to ensure that the task entrusted to CIOP – quality control – is carried on diligently certainly falls within the broad ambit of Article 12;
(ii) CIOP's arguments that it is not liable to deduct income tax u/s 195 on the ground that (i) there is no service PE, since CIOP is the economic employer, whilst the overseas entities are only the legal employers, (ii) the payment made by CIOP to the overseas entities is only by way of reimbursement, which does not form part of the income of those entities, and in any case, (iii) that payment is not the income of the overseas entities on account of the doctrine of "diversion of income by overriding title" are not acceptable;
(iii) The argument that there is no "service PE" is not acceptable because though CIOP has operational control over these persons in terms of the daily work, and is responsible (in terms of the agreement) for their failures, these are limited and sparse factors which cannot displace the larger and established context that the persons continue to be employees of the foreign parties (Morgan Stanley, OECD Commentary & referred);
(iv) The argument that the payment is a "reimbursement" on the ground that it is described as such in the secondment agreement and that there is no mark-up is not acceptable. It would lead to an absurd conclusion if, all else constant, the fact that no payment is demanded negates accrual of income to the overseas entity. Instead, the various factors concerning the determination of the real employment link continue to operate, and the consequent finding that provision of employees to CIOP was the provision of services to CIOP by the overseas entities triggers the DTAAs. The nomenclature or lesser-than-expected amount charged for such services cannot change the nature of the services. Once it is established that there was a provision of services, the payment made may indeed be payment for services – which may be deducted in accordance with law – or reimbursement for costs incurred. This, however, cannot be used to claim that the entire amount is in the nature of reimbursement, for which the tax liability is not triggered in the first place.
(v) The argument that there is a "diversion of income by overriding title" on the basis that the payment made to the overseas entity is not income that accrues to the overseas entity, but rather, money that it is obligated to pass on to the secondees is also not acceptable for two reasons. One, in view of the findings that: (a) the payment is not in the nature of reimbursement, but rather, payment for services rendered, (b) the employment relationship between the overseas entities and CIOP – from which the former's independent obligation to pay the secondees arises – continues to hold, no obligation to use money arising from the payment by CIOP to pay the secondees arises. The overseas entities' obligation to pay the secondees arises under a separate agreement, based on independent conditions, in relation to CIOP's obligation to pay the overseas entity. Assuming the agreement between CIOP and the overseas entity envisaged a certain payment for provision of services (and not styled as reimbursement). Surely no argument could be made that such payment is affected by the doctrine of diversion of income by overriding title. If that be the case, then the fact that the payment under the secondment agreement is styled as reimbursement, and limited on facts to that, without any additional charge for the service, cannot be hit by that doctrine either. The money paid by CIOP to the overseas entity accrues to the overseas entity, which may or may not apply it for payment to the secondees, based on its contractual relationship with them. This, at the very least, is independent of the relationship and payment between CIOP and the overseas entity.
The following important judgements are available for download at itatonline.org.
Centrica India Offshore Pvt. Ltd vs. CIT (Delhi High Court)
Tax implications of employee secondment contracts explained
(i) The overseas entities required the Indian subsidiary, CIOP, to ensure quality control and management of their vendors of outsourced activity. For this activity to be carried out, CIOP required personnel with the necessary technical knowledge and expertise in the field, and thus, the secondment agreement was signed since CIOP did not have the necessary human resource. The secondees are not only providing services to CIOP, but rather tiding CIOP through the initial period, and ensuring that going forward, the skill set of CIOP's other employees is built and these services may be continued by them without assistance. In essence, the secondees are imparting their technical expertise and know-how onto the other regular employees of CIOP. Indeed, it is admitted by CIOP that the reason for the secondment agreement was to provide support for the initial years of operation, till the necessary skill-set is acquired by the resident employee group. The activity of the secondees is thus to transfer their technical ability to ensure quality control vis-à-vis the Indian vendors, or in other words, "make available‟ their know-how of the field to CIOP for future consumption. The secondment, if viewed from this angle, actually leads to a benefit that transmits the knowledge possessed by the secondees to the regular employees. Indeed, any other reading would unduly restrict the Article 12 of the DTAA, which contemplates not only a formal transfer of intellectual property, but also other techniques and skills ("soft" intellectual property) required for the operation of a business. The skills and knowledge required to ensure that the task entrusted to CIOP – quality control – is carried on diligently certainly falls within the broad ambit of Article 12;
DIT vs. Wizcraft International Entertainment Pvt.Ltd (Bombay High Court)
Commission paid to an agent for services rendered abroad and payment by way of reimbursement of expenses are not taxable in India
The assessee paid remuneration to the artists, to the agent and reimbursed the expenses in connection with the visit and performance of the artists in India. The assessee deducted tax at source on fees paid to the international artists in India. Tax was deducted at source on the payment made to artists for performance in India but it was not deducted at source on the commission paid to Mr. Colin Davie who acted as an agent between the assessee and the artists performed in India. Under Article 18 of the India-UK DTAA, the payment made to the artists and by way of reimbursement has been completely misconstrued inasmuch as the agreements with the artists and the understanding with Mr. Colin Davie would indicate that the payment of commission to him is not covered by Article 18. Mr. Colin Davie never took part in the event organised. He did not exercise any personal activities in India. Mr. Colin Davie did not act as a performing artist or entertainer, all that he was concerned are the services which were rendered outside India. He contacted the artists and negotiated with them for performance in India in terms of the authority given by the assessee. The CIT(A) and Tribunal rightly arrived at the conclusion that Mr.Colin Davie did not perform any services in India, but they were rendered outside India. Therefore, commission income to the agent is not liable to tax in India and there was no obligation on the part of the assessee to deduct the tax at source at the time of making of payment. In so far as payment or reimbursement of expenses in connection with the visit and performance of the artists in India, the amount reimbursed to them was towards air travel and was supported by documents. On that tax need not be deducted.
Excise & Customs : Remission of Excise duty cannot be allowed in respect of storage loss of 895 quintals viz. 17 per cent of sugar; only storage loss upto 0.5 per cent is condonable
■■■
[2014] 44 taxmann.com 147 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner Of Central Excise
v.
U.P. State Sugar Corporation*
ASHOK BHUSHAN AND MAHESH CHANDRA TRIPATHI, JJ.
CENTRAL EXCISE APPEAL NO. 35 OF 2009†
JANUARY 6, 2014
Rule 21 of the Central Excise Rules, 2002 read with section 6 of the Central Excise Act, 1944 - Remission - Of excise duty on goods lost/destroyed or rendered unfit - Department found shortage of 895 quintals of sugar - Assessee claimed it to be storage loss of 895 quintals and sought remission of duty - Department denied remission and demanded duty - Tribunal set aside demand on ground that revenue could not show any non-accountal or illicit clearance of sugar and molasses obtained after reprocessing - HELD : In this case, storage loss was detected and assessee never informed about storage loss - On sufficient reasons, storage loss upto 0.5 per cent is condonable but, in this case, it was to extent of 17 percent i.e., beyond permissible limit of 0.5 per cent and, therefore, not condonable - Hence, remission of Central Excise duty could not have been allowed for storage loss of 895 quintals [Paras 9 to 11] [In favour of revenue]
CASE REVIEW
Kisan Sahkari Chinni Mills Ltd. v. CCE 2005 (191) ELT 696 (Delhi - Trib) (para 8) distinguished.
CASES REFERRED TO
Kisan Sahkari Chinni Mills Ltd. v. CCE 2005 (191) ELT 696 (Delhi-Trib) (para 7).
Subodh Kumar and S.P. Kesarwani for the Appellant. Sudhakar Singh for the Respondent.
ORDER
1. Heard Shri V.K. Raghuvanshi, learned counsel appearing for the appellant and Shri Sudhakar Singh, learned counsel appearing for respondent M/s. Indian Potas Limited.
2. This appeal has been filed by the Commissioner of Central Excise under Section 35G(1) of the Central Excise Act, 1944 against judgment and order dated 4.9.2008.
3. This appeal was earlier dismissed by a Division Bench of this Court vide judgment and order dated 30.3.09 against which order, the Department filed SLP No.3692 of 2009 (converted into Appeal No.7481 of 2011). The Hon'ble Apex Court vide judgment and order dated 26th August, 2011 set aside the order of the High Court dated 30.3.2009 and disposed of the matter directing the High Court to dispose of the appeal expeditiously as possible, preferably, within six months. This appeal has been listed before this Bench today and has been heard.
4. We have heard learned counsel for the parties and proceed to decide the appeal finally as agreed by the learned counsel for the parties.
5. The appeal has been preferred on the following two questions of law, which are as follows. :—
| "(A) | Whether the remission of Central Excise Duty can be allowed despite undisputed fact of shortage of 895 quintals? | |
| (B) | Whether there being no satisfactory reason for shortage of 895 quintals of BISS Sugar, the Tribunal is justified in remission of Central Excise Duty.?" |
6. A demand was raised by the Commissioner of Central Excise vide its order dated 18th March,2004 demanding the duty of 895 quintals of sugar, which was found as storage lost. The respondent made an application for condonation of storage loss and remission of excise duty leviable on 895 quintals of sugar. A show cause notice was issued to the respondent as to why the duty be not confirmed and the application dated 24.10.01 should not be rejected. The Commissioner by order dated 30.08.04 disallowed the claim of the respondent for remission of duty amount and the application was rejected.The duty already deposited by the party was confirmed.
7. The respondent filed an appeal before the Customs Excise and Tax Appellate Tribunal, which has been allowed by the impugned judgment dated 4.9.2008. The Tribunal, relying on the earlier judgment of Cestat Northern Bench, New Delhi Kisan Sahkari Chinni Mills Ltd. v. CCE 2005 (191) ELT 696 held that the Revenue could not show any non-accountal or illicit clearance of standard sugar and molasses obtained after reprocessing and that demand of duty is not sustainable. The finding of the Tribunal recorded in paragraph-4 is as follows:—
"4. On a careful consideration of the submissions made by both the sides, I find that BISS sugar which was reprocessed resulted in recovery of 11,029 Qtls. of standard sugard and 749 Qtls. of molasses. Revenue has not able to show that there has been any non-accountal or illicit clearance of standard sugar and molasses obtained after reprocessing. During reprocessing some loss of sugar is bound to take place which got converted into molasses. Therefore, there is no reason for demanding duty on the quantity of BISS sugar lost in reprocessing. I therefore, find merits in the appeal. Accordingly, the order of the Commissioner(Appeals) is set aside and the appeal is allowed."
8. The judgment of CESTAT, Delhi relied by the Tribunal does not have any application in the present case. In the case of Kisan Sahkari Chini Mills (supra), there was no case of storage loss nor any claim for remission of duty was raised before the Commissioner. In the said case the demand of duty was raised on the ground that quantity of sugar loss during reprocessing is chargeable to duty. It is useful to quote paragraph-2 of the judgment in Kisan Sahkari Chinni Mills Ltd. (supra) :—
"2. Shri V. Kackria, learned Advocate, pleaded that the appellants are manufacture of sugar. Due to storage of sugar for a long period, some sugar becomes not suitable for consumption and such sugar is called Below Indian Sugar Standard. Such Sugar is taken for reprocessing to convert it into standard sugar. In the present case, the appellants had taken 11,751 Qtls. of BISS sugar for reprocessing and obtained 11,029 Qtls. of reprocessed Indian sugar standard and 749 Qtls, of molasses which were cleared on payment of duty. The department has demanded duty on the ground that quantity of sugar lost during reprocessing is chargeable to duty. He pleaded that during reprocessing of BISS sugar, standard sugar and molasses are generated. They have paid duty and same are duly accounted for in RT-7C return. He pleaded that duty paid on the molasses was more than the duty leviable on the sugar. Thus, there is no reason for the department to raise demand as they have fully accounted for BISS sugar taken for reprocessing."
9. Present case is one where storage loss was detected. The respondent never informed about storage loss. It has been noted in the order that on sufficient reasons storage loss upto 0.5% is condonable. It has been further noted by the Commissioner that the storage loss of 598 quintals, which is to the extent of 17% beyond the permissible limit of 0.5 is not condonable.
10. We are of the view that remission of Central Excise duty could not have been allowed in view of non-disputed fact that storage loss was of 895 quintals.
11. The question No.1 & 2 both are answered in favour of the appellant. In view of above, the order of the Tribunal dated 4.9.08 is unsustainable and is hereby set aside.
The appeal is allowed.
VINEET*In favour of revenue.
†Arising out of order of Tribunal dated 4-9-2008.
Regards,
Pawan Singla , LLB
M. No. 9825829075 CST & VAT : Merely because Central Excise Department has issued a notice, evasion of excise duty and consequent evasion of VAT cannot be presumed and materials/evidences collected by Central Excise Department must be examined by VAT Department to come to an independent conclusion about evasion of VAT
■■■
[2014] 44 taxmann.com 145 (Gujarat)
HIGH COURT OF GUJARAT
Zirconia Ceratech Glazes
v.
State of Gujarat*
M.R. SHAH AND R.P. DHOLARIA, JJ.
SPECIAL CIVIL APPLICATION NO. 8110 OF 2013
NOVEMBER 13, 2013
Section 35 of the Gujarat Value Added Tax Act, 2003 - Assessment - Sales tax/VAT - Turnover escaping assessment - Department demand VAT on taxable turnover escaping assessment solely relying upon show-cause notice issued by Central Excise Department alleging illicit/clandestine removal of goods - HELD : VAT Department cannot make additions merely on basis of show-cause issued by Central Excise Department - Merely because Central Excise Department has issued a notice, evasion of excise duty and consequent evasion of VAT cannot be presumed and materials/ evidences collected by Central Excise Department must be examined by VAT authorities to come to an independent conclusion as to evasion - Hence, reassessment order was quashed and matter was remanded [Paras 5 to 6.1] [In favour of assessee]
CASE REVIEW
Futura Ceramics (P.) Ltd. v. State of Gujarat [2013] 42 GST 590/40 taxmann.com 404 (Guj.) (para 5)followed.
CASES REFERRED TO
Futura Ceramics (P.) Ltd. v. State of Gujarat [2013] 42 GST 590/40 taxmann.com 404 (Guj.) (para 3)
Devan Parikh and Nirav P. Shah for the Petitioner. Jaimin Gandhi for the Respondent.
JUDGMENT
M.R. Shah, J. - By way of this petition under article 226 of the Constitution of India, petitioner has prayed for an appropriate writ, direction and order quashing and setting aside the show-cause notice dated 14.03.2012 (Annexure C to the petition) as well as the impugned order dated 30.03.2013 passed by the Commercial Tax Officer-(4), Mehsana by which an order of reassessment has been passed by the Commercial Tax Officer directing the petitioner to pay an amount of Rs.21,52,832/- towards the balance tax under the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "VAT Act") and also directed to pay 150% penalty i.e. Rs.32,29,248/- and in all Rs.73,19,630/-.
2. Facts leading to the present special civil application in nut-shell are as follows:
2.1 That the petitioner is a dealer registered under the VAT Act. That the petitioner is excisable to tax on the basis of its turnover under the VAT Act. For the financial year 2006-07, the petitioner filed its return with the authorities under the Act. Such return was processed by the authorities and the order thereon was passed and accordingly the petitioner paid the value added tax of Rs.2,06,448/-.
2.2 A notice came to be issued on 14.03.2012 by the adjudicating authority indicating that for the period from 01.04.2007 to 31.03.2008, he has reason to believe that taxable turnover of the petitioner - assessee has escaped assessment. That petitioner was required to attend the officer on 31.03.2012. That the petitioner appeared before the Commercial Tax Officer - Assessing Officer and submitted that they have come to know that authority has received certain information from central excise i.e. DGCEI and on the basis of the show-cause notice issued by the Central Excise Department, adjudicating authority has intended to enhance the sales and also intended to reassess under section 35(1) of the VAT Act It was also submitted that except the show-cause notice issued by the Central Excise Department, there is no material to show that the petitioner had suppressed the sales and has evaded the tax liability. That solely on the basis of the show-cause notice issued by the Central Excise Department, the AO came to the conclusion that there was a sale of Rs.17,45,46,653/- and accordingly at the rate of 4%, the tax liability would be Rs.67,13,333/- against which the credit of Rs.43,54,053/- is adjusted. The petitioner is liable to pay the VAT of Rs.23,59,280/- and giving the credit of Rs.2,06,448/- paid by the petitioner towards the tax, the petitioner is liable to pay balance of Rs.21,52,832/- towards VAT. Consequently, by order dated 30.03.2013, the AO has passed the reassessment order directing the petitioner to pay the balance amount of Rs.21,52,832/- along with interest upto 31.03.2013 and has also imposed the penalty at the rate of 150% i.e. in all Rs.73,19,630/-.
Feeling aggrieved and dissatisfied with the impugned order, the petitioner the petitioner has preferred the present special civil application under Article 226 of the Constitution of India.
2.3 At the outset it is required to be noted that we are conscious of the fact that against the impugned order of reassessment the petitioner has a statutory remedy available by way of appeal however, considering the fact in the identical facts and circumstances earlier this Court has entertained the petition and has quashed and set aside the order of reassessment, in the facts and circumstances of the case, we have entertained the present petition.
2.4 The petitioner has challenged the impugned order passed in reassessment proceedings, which is passed solely on the basis of the show-cause notice issued by the excise department and the additions are made. Learned counsel appearing on behalf of the petitioners has vehemently submitted that this should be wholly impermissible.
3. Shri Parikh, learned advocate appearing on behalf of the petitioner has heavily relied upon the decision of this Court in the case of Futura Ceramics (P.) Ltd. v. State of Gujarat [2013] 42 GST 590/40 taxmann.com 404and relying upon the said decision, it is submitted that similar reassessment order passed by the AO solely on the basis of the show-cause notice issued by the Excise Department has been set aside by this Court. Therefore, it is requested to quash and set aside the impugned order passed by the AO.
4. Shri Jaimin Gandhi, learned AGP appearing on behalf of the respondent is not in a position to dispute the above. He is also not in a position to dispute that similar reassessment order has been set aside by this Court in the case of Futura Ceramics (P.) Ltd. (Supra). However, Shri Gandhi, learned AGP appearing on behalf of the respondent has requested to reserve the liberty in favour of the AO and/or appropriate authority to pass reassessment order afresh in accordance with law and on merits.
4.1 Shri Parikh, learned advocate appearing on behalf of the petitioner has submitted that it may be observed that fresh reassessment order can be passed in accordance with law and only if the same is permissible under the law.
5. Having heard Shri Parikh, learned advocate appearing on behalf of the petitioner and Shri Gandhi, learned AGP appearing on behalf of the respondents and having gone through the impugned order passed by the AO, it appears that the reassessment order has been passed by the AO solely on the basis of show-cause notice issued by the Excise Department. It can be seen that the assessment which was previously concluded was reopened on the premise that during the excise raid, it was revealed that the petitioner had clandestinely removed goods without payment of excise duty. The Sales Tax Department, therefore, formed a belief that value of the goods + excise duty evaded and formed part of turnover of the assessee for the purpose of tax under the VAT Act. Identical question came to be considered by this Court in the case of Futura Ceramics (P.) Ltd. (supra) and a similar reassessment order which was passed on the basis of the show-cause notice issued by the Excise Department has been set aside by the Division Bench of this Court by observing as under:
"It may be that the raid carried out by the Excise duty and the material collected during such proceedings culminating into issuance of a show cause notice for recovery of unpaid excise duty and penalty in a given case sufficient to re-open previously closed assessment. In this case, however, we are not called upon to judge this issue and would therefore not give any definite opinion. The question, however, is whether on a mere show cause issued by the Excise Department, the Sales tax Department can make additions for the purpose of collecting tax under the Gujarat Value Added Tax Act without any further inquiry. If the Assistant Commissioner of Commercial Tax has utilized the material collected by the Excise Department; including the statements of the petitioner and other relevant witnesses and had come to an independent opinion that there was in fact evasion of excise duty by clandestine removal of goods, he would have been justified in making additions for the purpose of VAT Act. In the present case, however, no such exercise was undertaken. All that the Assessing Officer did was to rely on the show cause notice issued by the Excise Department. Nowhere did he conclude that there was a case of clandestine removal of goods without payment of tax under the VAT Act. Merely because the Excise Department issued a show cause notice, that cannot be a ground to presume and conclude that there was evasion of excise duty implying thereby that there was also evasion of tax under the VAT Act. It is not even the case of the Department that such show cause notice proceedings has culminated into any final order against the petitioner. We wonder what would happen to the order of re-assessment, if ultimately the Excise Department were to drop the proceedings without levying any duty or penalty from the petitioner.
All in all, the Asstt. Commissioner has acted in a mechanical manner and passed final order of assessment merely on the premise that the Excise Department has issued a show cause notice alleging clandestine removal of the goods. Such order, therefore, cannot be sustained and is accordingly quashed. When the order is ex facie illegal and wholly untenable in law, mere availability of alternative remedy would not preclude us from interfering at this stage in a writ petition."
6. In view of the above decision of Division Bench of this Court, the impugned reassessment order deserves to be quashed and set aside. However liberty can be reserved in favour of the department to pass an order afresh in accordance with law and on merits after giving an opportunity to the petitioner and if permissible under the law now.
6.1 In view of the above and for the reasons stated above, petition succeeds. Impugned order passed by the Commissioner Tax Officer-(4), Mehsana (Annexure-E to the petition) dated 30.03.2013 is hereby quashed and set aside. However, it is observed that the same shall not affect the proceedings under the Central Excise Act for which the show-cause notice has been issued. A liberty is also reserved in favour of the department to pass reassessment order afresh in accordance with law and on merits and after giving fullest opportunity to the petitioner and if permissible under the law now. Rule is made absolute to the aforesaid extent. In the facts and circumstances of the case, there shall be no order as to costs.
VINEET__._,_.___
No comments:
Post a Comment