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Custom, Excise & Service Tax Tribunal

South Zonal Bench At Bangalore vs Unknown on 13 August, 2013

        

 
IN THE CUSTOMS, EXCISE AND SERVICE TAX 
APPELLATE TRIBUNAL, BANGALORE

SOUTH ZONAL BENCH AT BANGALORE
COURT - I
S.No.
Stay Nos.  & Appeal Nos.
APPELLANTS
RESPONDENTS

OIA

1. C/Stay/26276/2013 C/25975/2013 CC, Mangalore M/s. Royal Timbers No.189 to 238/2012 dated 2.1.2013

2. C/Stay/26277/2013 C/25976/2013 CC, Mangalore M/s. Ganesh Saw Mills (p) Ltd

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3. C/Stay/26278/2013 C/25977/2013 CC, Mangalore M/s. Gautham Impex Pvt. Ltd

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4. C/Stay/26279/2013 C/25978/2013 CC, Mangalore M/s. V. S. Export & Import

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5. C/Stay/26280/2013 C/25979/2013 CC, Mangalore M/s. Vijayalaxmi Timber Depot

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6. C/Stay/26281/2013 C/25980/2013 CC, Mangalore M/s. Neelu Timber Traders

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7. C/Stay/26282/2013 C/25981/2013 CC, Mangalore M/s. A. K. Veneers Pvt. Ltd

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8. C/Stay/26283/2013 C/25982/2013 CC, Mangalore M/s. Balaji Timbers

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9. C/Stay/26284/2013 C/25983/2013 CC, Mangalore M/s. ICE Wood

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10. C/Stay/26285/2013 C/25985/2013 CC, Mangalore M/s. Usha Timbers

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11. C/Stay/26286/2013 C/25984/2013 CC, Mangalore M/s. Gautam Impex Pvt Ltd

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12. C/Stay/26287/2013 C/25987/2013 CC, Mangalore M/s. Kalpana Timber Depot

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13. C/Stay/26288/2013 C/25986/2013 CC, Mangalore M/s. Simla Trading Est

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14. C/Stay/26289/2013 C/25988/2013 CC, Mangalore M/s. V. S. Timbers Private Ltd.

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15. C/Stay/26290/2013 C/25989/2013 CC, Mangalore M/s. Sharp Enterprises

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16. C/Stay/26291/2013 C/25990/2013 CC, Mangalore M/s. Sri Bhagawan Timbers

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17. C/Stay/26292/2013 C/25991/2013 CC, Mangalore M/s. PMJ Timber & Furniture

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18. C/Stay/26293/2013 C/25992/2013 CC, Mangalore M/s. Gayatri Saw Mill

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19. C/Stay/26294/2013 C/25993/2013 CC, Mangalore M/s. Royel Impex

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20. C/Stay/26295/2013 C/25994/2013 CC, Mangalore M/s. Hillwood Furniture Private Limited

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21. C/Stay/26296/2013 C/25995/2013 CC, Mangalore M/s. Shiva Shakthi Saw Mill

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22. C/Stay/26297/2013 C/25996/2013 CC, Mangalore M/s. M. A. Board Products Pvt. Ltd.

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23. C/Stay/26298/2013 C/25997/2013 CC, Mangalore M/s. Hillwood Furniture (P) Ltd

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24. C/Stay/26299/2013 C/25998/2013 CC, Mangalore M/s. Megha Overseas

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25. C/Stay/26300/2013 C/25999/2013 CC, Mangalore M/s. Sha Shambhulal Nathala & Co

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26. C/Stay/26301/2013 C/26001/2013 CC, Mangalore M/s. Sri Bhagawan Timbers

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27. C/Stay/26302/2013 C/26000/2013 CC, Mangalore M/s. Hillwood Furniture Pvt Ltd

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28. C/Stay/26303/2013 C/26002/2013 CC, Mangalore M/s. Southern Indus Timbers

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29. C/Stay/26304/2013 C/26003/2013 CC, Mangalore M/s. Sri Krishna Saw Mill & Wood Works

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30. C/Stay/26305/2013 C/26004/2013 CC, Mangalore M/s. V. S. Timber Industries

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31. C/Stay/26306/2013 C/26005/2013 CC, Mangalore M/s. V. U.S. Timbers

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32. C/Stay/26307/2013 C/26006/2013 CC, Mangalore M/s. Gujarat Saw Mill

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33. C/Stay/26308/2013 C/26007/2013 CC, Mangalore M/s. Gurudev Corporation

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34. C/Stay/26309/2013 C/26008/2013 CC, Mangalore M/s. Kaveri Timber

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35. C/Stay/26310/2013 C/26009/2013 CC, Mangalore M/s. Sri Vinayaka Timbers

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36. C/Stay/26311/2013 C/26010/2013 CC, Mangalore M/s. Sri Umiya Saw Mill

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37. C/Stay/26312/2013 C/26011/2013 CC, Mangalore M/s. V. U. S. Timbers

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38. C/Stay/26313/2013 C/26012/2013 CC, Mangalore M/s. Hindustan Saw Mill

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39. C/Stay/26314/2013 C/26013/2013 CC, Mangalore M/s. Sharp Enterprises

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40. C/Stay/26315/2013 C/26014/2013 CC, Mangalore M/s. Golden Timbers

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41. C/Stay/26316/2013 C/26015/2013 CC, Mangalore M/s. Gurudev Corporation

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42. C/Stay/26317/2013 C/26016/2013 CC, Mangalore M/s. Sri Ganesh Timber Traders

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43. C/Stay/26318/2013 C/26017/2013 CC, Mangalore M/s. V. S. Timber Industries

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44. C/Stay/26319/2013 C/26018/2013 CC, Mangalore M/s. Gurudev Corporation

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45. C/Stay/26320/2013 C/26019/2013 CC, Mangalore M/s. U. K. Monu Timbers

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46. C/Stay/26321/2013 C/26020/2013 CC, Mangalore M/s. Hindusthan Saw Mills

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47. C/Stay/26322/2013 C/26021/2013 CC, Mangalore M/s. Sharp Enterprises

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48. C/Stay/26323/2013 C/26022/2013 CC, Mangalore M/s. Kalpana Timber Depot

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49. C/Stay/26324/2013 C/26023/2013 CC, Mangalore M/s. U. K. Monu Timbers

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50. C/Stay/26325/2013 C/26024/2013 CC, Mangalore M/s. Hillwood Furniture (P) Ltd

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51. C/Stay/26947/2013 C/26606/2013 CC, Mangalore M/s. Umiya Wood Industries No.75-160/2013 dt. 4.3.2013

52. C/Stay/26948/2013 C/26607/2013 CC, Mangalore M/s. Shree Raghuvanshi Timbers

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53. C/Stay/26949/2013 C/26608/2013 CC, Mangalore M/s. U. K. Monu Timbers

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54. C/Stay/26950/2013 C/26609/2013 CC, Mangalore M/s. Kalpana Timber Depot

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55. C/Stay/26951/2013 C/26610/2013 CC, Mangalore M/s. PE EL Asia Trading Pvt. Ltd

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56. C/Stay/26988/2013 C/26648/2013 CC, Mangalore M/s. Neelu Timber Traders

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57. C/Stay/26989/2013 C/26649/2013 CC, Mangalore M/s. Sharada Imports & Exports Corporation

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58. C/Stay/26990/2013 C/26650/2013 CC, Mangalore M/s. Simla Agencies

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59. C/Stay/26991/2013 C/26651/2013 CC, Mangalore M/s. Usha Timbers

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60. C/Stay/26992/2013 C/26652/2013 CC, Mangalore M/s. Sharp Enterprises

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61. C/Stay/26993/2013 C/26653/2013 CC, Mangalore M/s. IBNA Plywoods And Doors

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62. C/Stay/26994/2013 C/26654/2013 CC, Mangalore M/s. Gurudev Corporation

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63. C/Stay/26995/2013 C/26655/2013 CC, Mangalore M/s. Simla Trading Est.,

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64. C/Stay/26996/2013 C/26656/2013 CC, Mangalore M/s. Simla Trading Est.

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65. C/Stay/26997/2013 C/26657/2013 CC, Mangalore M/s. PMJ Wood Industries

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66. C/Stay/26998/2013 C/26658/2013 CC, Mangalore M/s. Mahalakshmi Timber & Saw Mills

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67. C/Stay/26999/2013 C/26659/2013 CC, Mangalore M/s. V. U. S. Timbers

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68. C/Stay/27000/2013 C/26661/2013 CC, Mangalore M/s. Sharp Enterprises Grain Market

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69. C/Stay/27001/2013 C/26660/2013 CC, Mangalore M/s. Hillwood Furniture Pvt Ltd

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70. C/Stay/27002/2013 C/26663/2013 CC, Mangalore M/s. Surani Enterprises

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71. C/Stay/27003/2013 C/26662/2013 CC, Mangalore M/s. Hindustan Saw Mill

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72. C/Stay/27004/2013 C/26664/2013 CC, Mangalore M/s. Farouk Sodagar Darversh & Co Pvt Ltd

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73. C/Stay/27005/2013 C/26665/2013 CC, Mangalore M/s. Bhagawati Enterprises

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74. C/Stay/27006/2013 C/26666/2013 CC, Mangalore M/s. Sri Ganesh Timber Traders

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75. C/Stay/27007/2013 C/26667/2013 CC, Mangalore M/s. Jawahar Saw Mills Pvt. Ltd

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76. C/Stay/27008/2013 C/26668/2013 CC, Mangalore M/s. V.U.S Timbers

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77. C/Stay/27009/2013 C/26669/2013 CC, Mangalore M/s. V. S. Export & Import

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78. C/Stay/27010/2013 C/26670/2013 CC, Mangalore M/s. Golden Timbers

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79. C/Stay/27011/2013 C/26671/2013 CC, Mangalore M/s. Umiya Wood Industries

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80. C/Stay/27012/2013 C/26673/2013 CC, Mangalore M/s. Kanachur Wood Industries

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81. C/Stay/27013/2013 C/26672/2013 CC, Mangalore M/s. Gurudev Corporation

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82. C/Stay/27014/2013 C/26674/2013 CC, Mangalore M/s. Wood Board

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83. C/Stay/27015/2013 C/26675/2013 CC, Mangalore M/s. Geetha Timbers

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84. C/Stay/27017/2013 C/26676/2013 CC, Mangalore M/s. Shree Shankar Vijay Saw Mill

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85. C/Stay/27059/2013 C/26730/2013 CC, Mangalore M/s. Sharp Enterprises

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86. C/Stay/27060/2013 C/26731/2013 CC, Mangalore M/s. Kalpana Timber Depot

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87. C/Stay/27061/2013 C/26732/2013 CC, Mangalore M/s. Southern India Timbers

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88. C/Stay/27062/2013 C/26733/2013 CC, Mangalore M/s. Hillwood Furniture Pvt. Ltd

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89. C/Stay/27063/2013 C/26734/2013 CC, Mangalore M/s. P M J Wood Industries

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90. C/Stay/27064/2013 C/26735/2013 CC, Mangalore M/s. V S Timber Industries

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91. C/Stay/27065/2013 C/26736/2013 CC, Mangalore M/s. Hillwood Imports & Exports (p) Ltd

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92. C/Stay/27066/2013 C/26737/2013 CC, Mangalore M/s. Gayatri Saw Mill

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93. C/Stay/27067/2013 C/26738/2013 CC, Mangalore M/s. Hillwood Furniture Pvt Ltd

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94. C/Stay/27068/2013 C/26739/2013 CC, Mangalore M/s. U K Monu Timbers

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95. C/Stay/27069/2013 C/26740/2013 CC, Mangalore M/s. Neelu Timber Traders

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96. C/Stay/27070/2013 C/26741/2013 CC, Mangalore M/s. Hillwood Furniture Pvt Ltd

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97. C/Stay/27071/2013 C/26742/2013 CC, Mangalore M/s. Sri Bhagawan Timbers

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98. C/Stay/27072/2013 C/26743/2013 CC, Mangalore M/s. Madhavji &Co.

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99. C/Stay/27073/2013 C/26744/2013 CC, Mangalore Vijayalaxmi Timber Depot

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100. C/Stay/27074/2013 C/26745/2013 CC, Mangalore M/s. Hindustan Saw Mill

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101

C/Stay/27075/2013 C/26746/2013 CC, Mangalore M/s. Hero Plywoods & Boards 102 C/Stay/27076/2013 C/26747/2013 CC, Mangalore M/s. Noble Ply

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103

C/Stay/27077/2013 C/26748/2013 CC, Mangalore M/s. Sri Krishna M/s. Saw Mill & Wood Works

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104. C/Stay/27078/2013 C/26749/2013 CC, Mangalore M/s. Simla Trading Est.

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105. C/Stay/27079/2013 C/26750/2013 CC, Mangalore M/s. Mega Overseas,

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106. C/Stay/27080/2013 C/26751/2013 CC, Mangalore M/s. Hillwood Furniture Pvt. Ltd.

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107. C/Stay/27081/2013 C/26752/2013 CC, Mangalore M/s. Simla Agencies

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108. C/Stay/27082/2013 C/26753/2013 CC, Mangalore M/s. Simla Trading Est.

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109. C/Stay/27083/2013 C/26754/2013 CC, Mangalore M/s. Ashok Timber Trading Co

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110. C/Stay/27084/2013 C/26755/2013 CC, Mangalore M/s. Santosh Overseas

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111. C/Stay/27085/2013 C/26756/2013 CC, Mangalore M/s. Sri Umiya Saw Mill

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112. C/Stay/27086/2013 C/26757/2013 CC, Mangalore M/s. Sharp Enterprises

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113. C/Stay/27087/2013 C/26758/2013 CC, Mangalore M/s. Ashok Timber Trading Co

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114. C/Stay/27088/2013 C/26759/2013 CC, Mangalore M/s. Gurudev Corporation

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115. C/Stay/27089/2013 C/26760/2013 CC, Mangalore M/s. Balaji Timbers

116. C/Stay/27090/2013 C/26761/2013 CC, Mangalore M/s. Hillwood Imports & Exports Pvt. Ltd

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117. C/Stay/27091/2013 C/26762/2013 CC, Mangalore M/s. Simla Trading Est.

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118. C/Stay/27092/2013 C/26763/2013 CC, Mangalore M/s. Ganesh Saw Mills Pvt. Ltd

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119. C/Stay/27093/2013 C/26764/2013 CC, Mangalore M/s. Ramani Timber Mart

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120. C/Stay/27094/2013 C/26765/2013 CC, Mangalore M/s. Ashapura Traders

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121. C/Stay/27095/2013 C/26766/2013 CC, Mangalore M/s. Radhe International

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122. C/Stay/27103/2013 C/26776/2013 CC, Mangalore M/s. Gautam Impex Pvt Ltd

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123. C/Stay/27104/2013 C/26777/2013 CC, Mangalore M/s. Sri Vinayaka Timbers

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124. C/Stay/27105/2013 C/26778/2013 CC, Mangalore M/s. Ashapura Saw Mills

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125. C/Stay/27106/2013 C/26779/2013 CC, Mangalore M/s. U. K. Monu Timbers

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126. C/Stay/27107/2013 C/26780/2013 CC, Mangalore M/s. Usha Timbers

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127. C/Stay/27108/2013 C/26781/2013 CC, Mangalore M/s. Southern India Timbers

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128. C/Stay/27109/2013 C/26782/2013 CC, Mangalore M/s. Shanthi Timber Trading Co.

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129. C/Stay/27110/2013 C/26783/2013 CC, Mangalore M/s. Sri Vinayaka Timbers

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130. C/Stay/27111/2013 C/26785/2013 CC, Mangalore M/s. Vijayalaxmi Timber Depot

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131. C/Stay/27112/2013 C/26784/2013 CC, Mangalore M/s. Good Wood Products

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132. C/Stay/27113/2013 C/26786/2013 CC, Mangalore M/s. A. K. Panels

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133. C/Stay/27114/2013 C/26787/2013 CC, Mangalore M/s. Hillwood Furniture Pvt Ltd

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134. C/Stay/27115/2013 C/26788/2013 CC, Mangalore M/s. A. K .Boards & Doors

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135. C/Stay/27116/2013 C/26789/2013 CC, Mangalore M/s. Sri Laxmi Vijya Saw Mills

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136. C/Stay/27117/2013 C/26790/2013 CC, Mangalore M/s. Kaveri Timbers

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(Arising out of Order-in-Appeal No.189 to 238/2012 dated 2.1.2013 and Order-in-Appeal No.75-160/2013 dated 4.3.2013 both passed by the Commissioner of Customs (Appeals), Bangalore.) Appearance Mr. A.K. Nigam, AC, Mr. R. Gurunathan, AC, Mr. S. Teli, DC, Mr. N. Jagdish, Superintendent and Ms. Sabrina Cano, Superintendent (ARs) for the Revenue.

Mr. Pradhyumna G.H. Advocate for all the respondents.

CORAM SHRI B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) Date of Hearing: 13.08.2013 Date of decision: 13.08.2013 FINAL ORDER No. 26167  262302 / 2013 [Order per: B.S.V. Murthy]. The short issue involved in these 136 cases is whether the respondents are entitled to refund on the basis of conversion factor notified in Public Notice No.21/2012 dated 11.5.2012 in respect of timber imported and sold in India on which refund of SAD paid has been claimed. In all the appeals, the issue involved is common even though there are different orders and accordingly, all the stay applications are taken up together for disposal.

2. The Commissioner (Appeals) has taken a view that in respect of refund claims filed for the timber imported prior to 11.5.2012, the conversion factor for converting timber logs imported in terms of weight into timber logs sold in terms of cubic meter. The formula modified in the Public Notice on 11.5.2012 will be applicable only in respect of imports made after 11.5.2012. Revenue is seeking stay against these orders since the refunds according to the old formula adopted prior to the Public Notice will have to be paid if the orders are implemented.

3. After hearing the learned AR and going through the records, I find that in the Public Notice in paragraphs 5 & 6, the issue has been considered and therefore, I deem it appropriate that the same should be reproduced:

5. It is also found that the Forest Departments of different states follow different practices, while calculating the volume of the log. While the Karnataka State Forest Department appears to be using 1 Hoppus Ton = 1.416 CMB, the permits issued by the Gujarat Forest Department for movement of imported logs indicate the formula is 1 Hoppus Ton = 1.8027 CBM. However, from the Customs point of view, the main factor to be taken into account while considering refund claims of Special Additional Duty of Customs is whether the importer has accounted for the entire volume of logs declared on the Bill of Entry and the documentary evidence for the sale of same on payment of VAT is produced while claiming refund of SAD. This is especially so when the importer sells round logs per se without any change in form.
6. Accordingly, in compliance of the directions of the Honble High Court of Kerala at Ernakulam, in exercise of the power under Section 151A of the Customs Act, 1962, the Board hereby directed that when round timber logs are imported on payment of SAD whose refund is claimed subsequent to their sale on payment of VAT, the log volume based on conversion factor 1 Hoppus Ton = 1.8027 CBM may be adopted by the all the Customs formations to determine the quantity imported and quantity sold on payment of VAT. In other words, an importer would be entitled to refund of the full amount of SAD paid on the Bill of Entry only if he produces invoices indicating the sale of round Timber logs for the full quantity determined in Cubic Metre (CBM) based on this conversion factory. Pending cases shall be disposed of in this manner. From the above, it may be seen that no logic for adopting the formula of Karnataka Forest Department has been given in the Public Notice. There is also no indication as to whether there were different formulae of conversion in other states and there is no indication why they were not taken into account if they were there. There is also no logic as to why the ratio of Gujarat Forest Department preferred to the ratio of Karnataka Forest Department, except for the fact that if the formula of Gujarat Forest Department is adopted the quantum of refund payable would be less. In such a situation, it would be difficult to take a view that this will have a retrospective effect. Since the Honble High Court of Kerala had directed the Department to prescribe a formula so that there can be uniformity and the Public Notice has been issued to ensure uniformity and not to clarify the correct ratio for the earlier period, I do not consider that there is anything wrong in the impugned order passed by the Commissioner (A). Accordingly, no justification has been made for grant of stay and therefore, the stay applications are rejected.

4. At this juncture, the learned AR submits that the circular in question issued by the Board had come up for consideration before the Honble High Court of Madras in Writ Petition (MD) No.8383 of 2012 and Honble High Court of Madras in its judgment dated 31.10.2012 has upheld the validity of the circular. In that case, the circular was questioned by the importers on the ground that it will impinge on the powers of quasi-judicial authority and therefore should be quashed. The Honble High Court upheld the validity of the circular taking note of the fact that the Department had assured that what was issued was only guidelines. In these cases the issue is not validity of guidelines and the issue is whether such guideline will have retrospective effect. I find that in this case before the Honble High Court of Madras, it was the case of the department that the standing order is not binding but only in the nature of guidelines to streamline the functioning of the customs offices. If that is the situation, unless it is shown that there was something wrong with the assessment or the impugned orders, just because the assessing officers followed certain norms for arriving at the quantity, they cannot be found fault with so long as the same is not perverse or illogical. In these cases, the assessing officer has followed the standards prescribed by Karnataka Forest Department and Custom House is located in Karnataka and till guidelines were issued by the Board the assessments were being done on that basis only. Under these circumstances, the decision of the Honble High Court of Madras would be of no help to the Revenue.

5. In addition to the above, it was submitted that out of 136 cases, in respect of 130 cases the amount involved is less than Rs.5 lakhs and therefore the department should not have filed appeals at all. Instructions were issued by the Board in 2011 vide F. No.390/163/2010 dated 17.8.2011 and all these appeals have been filed subsequent to the circular and obviously the National Litigation Policy framed by the Board has been ignored by the field formations, which also is not proper.

6. Since the very same issue had come up before me on 30.7.2013 and at that time also instead of disposing of the stay applications, appeals themselves were disposed of since there was nothing left to be considered, I find appropriate that in these cases also the appeals themselves should be disposed of. Since I have already found that there is absolutely no merit in these appeals and there is nothing wrong in the orders passed by the Commissioner (Appeals), all the appeals are rejected.

(Pronounced and dictated in open Court) (B.S.V. MURTHY) Member (T) rv 2