Director General Anti-Profiteering Vs S3 Infra Reality Pvt Ltd

GST - Anti-Profiteering - Applicant, in his complaint, alleges that the respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price after implementation of GST w.e.f 01.07.2017 and charged GST on full amount of installments - DGAP has in its report submitted that as per the documents submitted by the respondent, unlike other cases in which allegation of not passing on the benefit of ITC is generally contested, in the present case the respondent had suo motu admitted that there has been benefit of ITC post GST inasmuch as post GST the ITC is 6.49% as compared to 3.65% in pre-GST and he had passed on such benefit to the applicant by reducing the demand raised in the month of February 2018 by Rs.12,492/- which was 1.23% of the amount collected post GST; that the benefit of additional ITC of 2.84% of the taxable turnover which had accrued to the respondent was required to be passed on to the applicant and other recipients; that on this account the respondent had realized an additional amount of Rs.23,772/-, the profiteered amount, however, the respondent had suo motu passed on Rs.12,492/- to the applicant and the actual profiteered amount stands at Rs.11,280/-; that there were a total of 663 other recipients who were not applicants in present proceedings and the additional amount of Rs.57,65,329/- was required to be returned to the eligible recipients; that the period of investigation is from 01.07.2017 to 31.06.2018.

Held: Respondent submitted that they accept the report submitted by DGAP and were in the process of passing on the ITC benefits to all the recipients/buyers; that the major amount has already been passed along with interest @18% and the balance would be paid in due course; that cheques have been sent to all the buyers along with interest to buyers who have made full payment for their flat as on 31.08.2018; that in respect of all buyers whose instalments were pending, letters have been issued to the effect that the ITC as per DGAP's calculation is being credited into their ledgers - Since respondent has denied benefit of ITC to buyers in contravention of s.171 of the CGST Act, 2017 and has realized more price from them than he was entitled to collect and had compelled them to pay more GST than what they were required to pay, by issuing incorrect tax invoices, they have committed an offence u/s 122(1)(i) of the Act and are liable for imposition of penalty - SCN to be issued in this regard - Commissioners of CGST/SGST Haryana to monitor this order under supervision of DGAP by ensuring that the amount profiteered is passed on to all the buyers and a compliance report be submitted within a period of three months: NAPA

- Application disposed of: NAA

SERVICE TAX

2019-TIOL-683-CESTAT-HYD

Bhaskara Constructions Ltd Vs CCT

ST - The appellant company seeks condonation of 1786-days delay in filing appeal against an order passed by the Commr.(A) - The appellant's counsel claimed that to have been advised by its auditors and accountants that it was not required to pay any amount - It was also urged that the delay in filing appeal was attributable to certain advice so received.

Held - It is seen that the appellant received advice from its accountant as well as from auditors, it should not have waited for filing appeal, till receipt of notice from the Department for recovering tax arrears - Considering the inordinate delay, the explanation given is not sufficient - Hence the same cannot be condoned & thus the appeal merits being dismissed: CESTAT

- Assessee's appeal dismissed: HYDERABAD CESTAT

2019-TIOL-682-CESTAT-MAD

Emerson Process Management Chennai Pvt Ltd Vs Commissioner of GST CE

CX - The appellant-company, engaged in manufacturing Industrial Valves, Regulators & Actuators, availed Cenvat credit on input goods & services - Such credit was utilized towards payment of Central Excise duty - During the relevant period, the Department noted that the assessee availed credit of service tax paid on Courier Service, Business Support Service, Business Auxiliary Service, Labour Charges, Electrical Maintenance Charges, Testing Charges and Technical Inspection Charges, Payroll Processing outsourced to the external agency & Technical, Testing and Analysis Services - It was alleged that these services had no nexus with the process of manufacture & so were ineligible for credit - Hence duty demands were raised for recovery of credit with interest & imposition of penalty u/r 15 of CER - On appeal, the Commr.(A) dropped the demands on some services, while confirming disallowance of credit on Payroll Processing, Labour Charges and Testing Charges & Technical Inspection Charges - Hence the present appeal.

Held - Regarding denial of Credit on Payroll Processing, the issue at hand is covered in the assessee's own case for an earlier period - Following the decision in such case, the denial of credit is not sustainable - Regarding Labour Charges, Testing, Technical Inspection and Technical Analysis Service, the O-i-A observes that quality control is an eligible input service & is eligible for testing & inspection charges - However, the Commr.(A) nonetheless upheld denial of credit, citing lack of proof of nexus with manufacture of finished goods - There is no dispute on eligibility & credit was disallowed for want of certain documents, which have been duly furnished - Hence the matter warrants remand for examining the validity of these documents: CESTAT (Para 2.1,2.2,6.1,6.2,7.1)

- Assessee's appeal partly allowed: CHENNAI CESTAT

2019-TIOL-681-CESTAT-MAD

Golden Constructions Vs Commissioner of GST & CE

ST - The assessee procured land from owners & upon securing the requisite permissions, would enter into two separate agreements - One would be agreement for sale of undivided share of land & the other for construction of flats for each buyer - Admittedly, both agreements were executed simultaneously - After construction of flat, sale deeds for undivided share of land were registered with the authority concerned & possession of flats was handed over thereafter - Each sale deed executed did not include value of constructed flat - The Revenue issued SCNs proposing demand on gross amount received from customers for services provided in connection with construction of complexes, which is taxable u/s 65(105)(zzzh) r/w Section 65(91a) of the Finance Act 1994 - On adjudication, duty demand was raised with interest & penalties u/s 76, 77 & 78 of the Finance Act 1994 - A separate SCN was issued raising duty demand for a different period, with interest u/s 75 and penalty u/s 76 of the Act.

Held - The issue at hand stands settled by the Tribunal in M/s Golden Ventures Vs. Commissioner of C.E. & S.T., Chennai wherein it was held regarding the activity of agreements forged by a builder/promoter/developer with prospective buyers for construction of residential units in a residential complex against payments being made by the prospective buyers in instalments during construction and in terms of which the possession of the residential unit & to be handed over to the customers on completion of the residential complex and full payment having been made, that during the relevant period, the Govt did not intend to tax such activity in terms as construction of residential units in a residential complex - Moreover, in the case of M/s. Larsen & Toubro Limited and Others v. State of Karnataka & Others the Apex Court held that such contracts were taxable as works contracts - Hence during the relevant period in such case, such contracts were not covered u/s 65(105)(zzzh) during period prior to 01.07.2010 - Following such findings, and also considering that there are two sets of agreements, the demands raised in the present case are quashed: CESTAT (Para 1,2.1,2.2,6.1)

- Assessee's appeals allowed: CHENNAI CESTAT

CENTRAL EXCISE

2019-TIOL-680-CESTAT-BANG

Mahamanav Ispat Pvt Ltd Vs CCT

CX - Revenue has entertained a view that assessee have wrongly availed CENVAT credit on goods such as MS angles, joists, channels and MS plates/sheets as inputs and capital goods used for fabrication of supporting structure for equipment - As per Revenue, resultant structures are not covered under definition of capital goods in terms of Rule 2(a) of CCR, 2004 - Accordingly, SCN was issued to all the assessees proposing to demand ineligible CENVAT credit in terms of Rule 14 of CCR along with applicable interest and penalty - It is essential to verify the usage of impugned goods and for that purpose, all these appeals remanded to original authority to verify the usage of impugned goods on the basis of Chartered Engineer certificate and other documents which the assessee may rely upon in order to prove the usage - The original authority will pass a reasoned order after complying with principles of natural justice and further, affording the opportunity of hearing and also opportunity of producing the documents which assessee may deem it fit to produce in support of their claims: CESTAT

- Matter remanded: BANGALORE CESTAT

2019-TIOL-679-CESTAT-BANG

Kddl Ltd Vs CC CE & ST

CX - The assessee is engaged in manufacture of excisable goods i.e. watch hands and are availing the facility of CENVAT credit on input and input services under CCR, 2004 - The allegations against assessee are that they have taken irregular CENVAT credit on Forwarding and Cargo Handling services and Repair and Maintenance of ETP - The first SCN was issued invoking extended period of limitation and other three SCNs were within the normal period of limitation - The CENVAT credit has been claimed for service tax paid to M/s. DHL and M/s. Fedex in respect of export cargo - The services rendered by M/s. DHL and M/s. Fedex are of composite nature and a single bill is raised for the services performed by them - In the case of export, it is settled law that the place of removal is port of export and not the customers' premises as claimed by assessee - No doubt as per the purchase order issued by customers, the property in goods will transfer at the customers' premises when the goods are delivered to the buyer - Therefore, place of removal is the port not the customers' premises as claimed by assessee and the Commissioner (A) has rightly held and demanded the service tax - As far as invoking the extended period of limitation is concerned, since the assessee has not concealed any facts from the department with an intent to evade payment of duty and they have regularly filed the ER-1 returns disclosing the availment of credit and the demand was raised on the basis of audit objection, the extended period cannot be invoked in such circumstances and therefore, the demand is confirmed for normal period of limitation of one year and the demand for the period June 2009 to May 2013 is barred by limitation - As far as denial of CENVAT credit on Repair and Maintenance is concerned, in view of the explanation given by assessee that the said credit has been availed on reverse charge basis and they have shown the payment vide monthly challan produced on record, therefore, denial of CENVAT credit is set aside - As far as interest is concerned, in view of the judgment of Karnataka High Court in case of Bill Forge 2011-TIOL-799-HC-KAR-CX , the assessee is not liable to pay interest and penalty - Appeal of assessee partly allowed and matter remanded back for proper computation of demand of CENVAT credit of service tax for normal period and interest and penalties are set aside: CESTAT

- Appeals partly allowed: BANGALORE CESTAT

CUSTOMS

2019-TIOL-678-CESTAT-ALL

CC Vs Ghulam Rasool Travel

Cus - Investigations were carried out and statements of various persons were recorded on the basis of which a SCN was issued proposing confiscation of seized foreign currency and seized Wagon-R vehicle along with imposition of penalties upon various noticees - The Appellate Authority has extended the benefit to assessee by observing that mere possession of foreign currency cannot result in application of provisions of Section 111 of Customs Act and the Revenue is under an onus to prove that said foreign currency was smuggled into the country - He also appreciated the assessee's stand that foreign currency is not one of the notified items under Section 123 of Customs Act and as such onus to prove their smuggled nature is on Revenue - In the absence of any evidences to that effect, he set aside the order of Original Adjudicating Authority - In their memo of appeal, Revenue has not advanced any evidence to show that the foreign currency, in question, was smuggled into the country - As such, Tribunal fully agree with the Commissioner (A) that in absence of such evidences, confiscation of same cannot be uphold, neither penalties can be imposed upon assessee - Accordingly, no infirmity found in impugned order: CESTAT

- Revenue's appeal rejected: ALLAHABAD CESTAT