Cus - Imported goods sold at higher MRP after clearance by altering RSP - whether demand can be made of differential CVD or CE duty by treating activity as manufacture - Difference in Opinion: CESTAT

Income tax Act being beneficial piece of legislation, any levy or surcharge brought under Statute by insertion of new provision, calls for prospective application: HC

2018-TIOL-120-AAR-GST

Facts: Application seeking an advance ruling as to whether their product "Modelling dough" is covered under Chapter 34 or Chapter 95 of the Customs Tariff Act, 1975.

Held: Heading 9503 is for 'toys' - 'Modelling dough', a mixture of maida and other chemicals is used for amusement of children and is correctly classifiable under CTH 3407 of the CTA, 1975: AAR

2018-TIOL-119-AAR-GST

Facts: Applicant is engaged in the activity of providing services in the nature of warehousing, wherein they allow clients to store material or goods on specific compensation allowed under Bombay Warehousing Act, for which state license is provided - applicant seeks ruling as to whether exemption provided in Sr.no.54 of Notification 12/2017-CT(R) is applicable to them.

Held: Goods being stored in the applicant's godown are not ‘agricultural produce' as defined in Notfn. 12/2017-CT(R) and as reiterated by Board Circular 16/16/2017-GST, therefore, the exemption is not admissible to the applicant: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

2018-TIOL-118-AAR-GST

Facts: Applicant seeking ruling on whether Rate of tax on Pure services (excluding WCS or other composite supplies involving supply of any goods) received by them is Nil as per Entry no. 3 of Notfn. 12/2017-CT(R).

Held: Applicant is recipient of service and not service provider and also that the subject services are not under reverse charge mechanism - notification referred is applicable to provider of service and not a recipient of service - applicant is not the proper person to make the application for advance ruling - application rejected in terms of sub-section 2 of section 98 of the CGST Act, 2017: AAR

- Application rejected : AUTHORITY FOR ADVANCE RULING

2018-TIOL-99-HC-MAD-GST

Erbis Engineering Company Ltd Vs CC

IGST - the petitioner imported some goods and filed bills of entry for them - It was aggrieved by the assessment wherein the Department classified the goods under a heading different from the one under which the goods had been classified by the petitioner - The Department also claimed that while the bills of entry were assessed under the same heading favored by the petitioner, a demand for IGST had been raised under Sl No 453 of Schedule III to Notfn No 01/2017.

Held - the classification dispute cannot be adjudicated in a writ petition & so the petitioner must seek appropriate remedy under the Customs Act - Nonetheless, considering the Department's instruction that while the classification favored by the petitioner had been adopted, the demand raised for IGST is untenable as the petitioner merits a chance to contest such decision - Hence the Department must issue an SCN to the petitioner & follow it up with grant of personal hearing - Considering the high-value nature of the imported goods, the entire process be expedited: HC (Para 2,3,4,5)

- Writ petition disposed of : MADRAS HIGH COURT

2018-TIOL-98-HC-MAD-GST

Jai Laxmi Venkatesh Granites Pvt Ltd Vs Assistant Commissioner of Commercial Taxes (SGST)

GST - the petitioner company is engaged in the manufacture & resale of Granite - It is registered under VAT and Central Sales Tax - When the petitioner attempted to migrate to GST, it received a communication to the effect that the functionality enabling migration through Form GST REG-26 had been closed - Resultantly, it would have to obtain fresh registration under GST - The petitioner invoked the writ jurisdiction of the High Court, which directed that the petitioner be treated as an unregistered dealer & granted interim relief from any action - The matter was then adjourned.

Held - After introduction of GST & during the process of migration into CGST, it appeared that some mistake or short fall of information had crept in - Also the petitioner made no efforts to rectify the same during on-line migration - Nonetheless, the petitioner is directed to approach the Nodal Officer concerned - Such lapse on the petitioner's part be considered by the Nodal officer - Interim protection granted by High Court to be in effect till Nodal Officer passes an order: HC (Para 2,6)

2018-TIOL-97-HC-MAD-GST

LRN Auto Agencies Pvt Ltd Vs Assistant Commissioner

- Writ petition disposed of : MADRAS HIGH COURT

2018-TIOL-2549-CESTAT-DEL

ST - The assessee has mentioned it to be partnership firm mainly engaged in commercial coaching activities to the students preparing for Engineering and Medical Entrance Examinations at Kota - Department during audit found assessee to have been wrongly availing and utilizing Cenvat Credit of Service Tax on inadmissible input service, i.e. service portion in execution of Works Contract and Construction Services during period w.e.f. October 2013 to March, 2015 - The moot question to be considered is as to whether the service of getting its premises painted is an input service as defined in Rule 2(l) of CCR, 2004 for which the assessee was entitled to take credit - The bare perusal of definition shows that any service which is not per se for construction of building but is merely for renovation/ modernisation/ maintenance works, the same is very much inclusive in definition of input services and as such are eligible for credit under this rule - Though the Department has alleged the impugned service of assessee as the one for Works Contract Service but law has been settled in case of Redhat India Pvt. Ltd. wherein it was held that even the Works Contract Services used for maintenance of office equipment and building are not excluded from definition of input service and hence the same is eligible for input service credit - The authorities below have taken the plea of lack of evidence but since the Department has come up with the plea of service of assessee as one being under the category of Work Service Contract, the entire burden was on the Department to prove the same - As discussed, maintenance is different from construction and is very much inclusive of definition of input service, assessee has rightly considered the same as input service and has rightly availed the credit thereof - The Adjudicating Authority is held to have miserably failed to appreciate the proper evidence on record - Not only this, they have also failed to properly interpret the provision of law - Impugned order set aside: CESTAT

- Appeal allowed : DELHI CESTAT

2018-TIOL-2548-CESTAT-BANG

City Co Operative Bank Ltd Vs CCE, C &ST

ST - Assessee is a provider of Banking and other Financial Services and filed a refund claim - Commissioner (A) vide his order dated 22.8.2014 has clearly held that the assessee is entitled to refund and he directed the lower authority to grant the refund along with interest and the original authority after following directions of Commissioner (A) has allowed refund along with interest - Further, this categorical finding by Commissioner (A) has not been challenged by Department and therefore, it has attained finality and on the basis of the said findings, if the lower authority has sanctioned the refund, there is no infirmity in sanctioning the refund - O-I-A dated 22.8.2014 has attained finality and as per the principles of re-judicata the same cannot be reopened when the refund is sanctioned without challenging the order on which the refund is sanctioned - In view of this legal position, impugned order is not sustainable in law and therefore, same is set aside: CESTAT

- Appeal allowed : BANGLORE CESTAT

CENTRAL EXCISE

2018-TIOL-2547-CESTAT-DEL

Ramniwas Ispat Pvt Ltd Vs CCE

CX - The Department formed a case against the assessee that there has been clandestine removal of goods from the premises of the assessee - These allegations were made on the basis of documents recovered during audit - Duty demand was raised and confirmed by the lower authorities.

Held - At the first stage, the assessee contended that there was no raid conducted in the premises of the appellant nor any documents got recovered from their premises - In addition, the charge of clandestine removal is a serious charge required to be proved by the Revenue by tangible and the sufficient evidence - It was clarified by the Allahabad HC in the case of Continental Cement Co. vs. Union of India that mere statements of buyers that too based on memories were not sufficient without support of any documentary evidence - Also, the statement of employees of assessee-company does not prove any of the allegations - The Revenue failed to establish its case of alleged clandestine removal against the assessee beyond reasonable doubts - The procedure prescribed in section 9D, sub-section (1) of CE Act has to be strictly followed by the Department just like adjudication proceedings in a criminal matter of prosecution - Moreover, the assessee was not given a chance to cross-examine - The statements recorded behind the back of the assessee cannot be relied upon in adjudication proceedings - During investigation, Director of assessee-company denied supplying non-duty paid nature of MS Ingots to third party - The burden to prove the allegations of clandestine removal is on the Department, which it has not done - Hence, the order challenged is set aside : CESTAT (Para 2, 7, 8, 9, 10, 11)

- Appeal allowed : DELHI CESTAT

2018-TIOL-2546-CESTAT-MAD

SSD Oil Mills Company Ltd Vs CCE

CX - Assessee is engaged in manufacture of Refined Palm Oil, Refined Cotton Seed and Sunflower Oil, Refined Rice Bran Oil, Vanaspathi and Bakery shortening/ Margarine in their units - During manufacture of said products, by products namely; fatty acid, soap stock, spent earth emerged which according to department was liable to excise duty and therefore the assessee is not eligible for SSI exemption benefit - The said issue was considered by Larger Bench of Tribunal in case of M/s Ricela Health Foods Ltd. & Others wherein the Tribunal has held that the process of manufacture is for refined oil and the waste which arises during the course of such manufacture cannot be considered as manufactured excisable goods - Thus, no duty can be demanded on such items like fatty acids, soap stock and spent earth, which arise during the course of manufacture of refined oils - Following the same, it is held that the demand cannot sustain: CESTAT

- Appeals allowed : CHENNAI CESTAT