Ashok Kumar Bhatia Vs State Of UP

GST - Petitioners are truck owners and challenge the individual notices issued to them u/s 130 of the UPGST Act on the ground that they are only vehicle owners and are not doing any business in respect of sale and purchase of the goods.

Held:

++ Though the petitioner has taken the plea that he is not doing any "business" as contemplated in Section 2 sub section (17) and is not a "supplier" as defined in Section 2 sub section (105) and is not a "registered person" as defined in Section 2 sub section (94) of the Act, 2017 or that he is not a "taxable person" as defined in Section 2 sub section (107) of the Act, 2017 but so far as the provisions of Section 122 relating to penalty for certain offences are concerned he would fall within the definition of 'any person' who "in any way concerns himself" in transporting, removing, ... and he would be liable for payment of penalty to the extent of Rs.25,000/-, if he is found guilty of the offence.

++ If 'any person' transports any goods or stores any goods while they are "in transit" in contravention of the provisions of the Act or Rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure shall be released on conditions as laid down in sub clauses (a), (b) and (c) of Sub Section (1) of Section 129 of Act, 2017.

++ For the application of Sections 129 and 130 of the Act, 2017 it is immaterial that the person proceeded against is not a registered person or a supplier or a taxable person or is not doing any business as provided in any of the sub sections of Section 2 of the Act, 2017. It is enough that he is a 'transporter' of goods and that the goods are being transported and have been seized in transit and if the charge is made out against the transporter, the respondents can proceed to seize such goods including the conveyance.

++ In the present case, a show cause notice has been issued to the petitioner on 17.12.2018 and it is always open for the petitioner to file a reply to the same.

++ The contention of the petitioner that he is not doing any business in respect of sale or purchase of the goods or is not concerned with the goods as he is a mere transporter and is only providing vehicles for transporting and, therefore, the impugned notice is bad, is without any substance and is rejected.

++ Petitioner has submitted that under section 129 of the Act, on payment of penalty of Rs.25,000/- the conveyance is liable to be released. Since the vehicle along with goods have been seized and an F.I.R. has also been lodged in this regard, it is always open for the petitioner to apply to the trial court for release of the conveyance and beyond this, no further observations are required.

- Petition dismissed: ALLAHABAD HIGH COURT

2019-TIOL-678-HC-RAJ-GST

Bharat Raj Punj Vs CCGST

GST - Petitioners seek quashing and setting aside of summons issued and a further prayer that the authorities be directed not to take any coercive action against the Petitioners - Case of the department is that the company had fraudulently availed ITC of Rs.40.53 crores by issuance of fictitious sale invoices and sister concerns had availed such fraudulent ITC of Rs.328 crores - Senior officials of the company were arrested on 19.01.2019 - Petitioner submits that he was residing in USA and was appointed as Managing Director of the Company on 30.05.2018 after the demise of his father; that he apprehends that if he appears in response to the summons, he too would be arrested; that they have already deposited GST of Rs.7.15 crores from 18 January 2019 to 02 February 2019 evidencing that they are law abiding citizen and that if any coercive action is taken, the same would seriously hamper his reputation. Reliance placed inter alia on the decisions in Makemytrip- 2016-TIOL-1957-HC-DEL-ST   as affirmed by the apex court - 2019-TIOL-65-SC-ST and also the decision in Meghraj Moolchand Burad vs. Directorate General of GST (Intelligence), Pune and Anr. that procedure cannot be bypassed before going ahead with the arrest; that as the tax has not been determined in accordance with sections 73 & 74 of the Act, the department does not have the right to arrest the petitioner u/s 69 of the Act .

Held: Petitioner in the present case has not disputed the factum of fraudulent availment of input tax on basis of fake invoices - It is clear case of the Department that the Petitioner and its sisters concerns have availed input tax credit to the tune of Rs.328,36,73,701/- on the basis of fake invoices, out of which Rs.40,53,58,772/- is the fraudulent input tax credit claimed by Petitioner No.2 of which Petitioner No.1 is the Managing Director. This fact is not controverted by the Petitioner, nor there is any pleading or counter pleadings on behalf of the Petitioner in the Writ Petition that a wrong allegation has been levelled by the Goods and Services Tax Department - Petitioners' Writ Petition is confined to technicalities as also to the fact that the Petitioner No.1 was residing abroad and was not involved in day to day affairs of the company - Court is not convinced by the arguments advanced by the counsel for the Petitioner for the very reason that Petitioner No.1 is the Director of the company since 08.08.2012 and has been receiving managerial remuneration from the company to the tune of about Rs.60 lakh per annum - Petitioner No.1 became the Managing Director of Petitioner No.2 on 30.05.2018, hence contention of counsel for the Petitioner that he was not involved in day to day affairs of the company, cannot be accepted - since the case of the department that the Petitioner has claimed input tax credit on fake invoices is not controverted by the Petitioner, Department has all rights to take any action permissible by law - contention that the tax is to be first determined under Section 73 & 74 of the Act does not have any force for the very reason that in an offence committed under Section 132 of the Act, determination of tax is not required and the Department can proceed straight away by issuing summons or if reasonable grounds are available, by arresting the offender - it is revealed that from July, 2017, company has not done any business and that fake sale purchase bills were prepared and only trading activities were shown - All the trading activities were conducted without any banking transaction or movement of goods - It was also revealed from the statements that input tax credit was wrongly claimed to the tune of more than Rs.40 crores and 53 lakhs by the Petitioner No.2 - Investigation also revealed that no manufacturing process was conducted at Bhiwadi and CR Sheet/Coils and Iron Sheets were not used in the manufacturing process at Bhiwadi - It was also revealed that M/s Fedders Electric and Engineering Ltd, M/s PSL Engineering Pvt. Ltd, M/s Air Serco Pvt. Ltd., M/s Perfect Radiators Pvt. Ltd. & M/s Punj Engineering are related companies to Petitioner No.2 and the total input credit wrongly claimed by the company and its sister concerns is to the tune of Rs.328 crores - judgment relied upon in the case of Make My Trip has no applicability to the facts of the present case as that case was of collection of the tax and its non-deposition with the Government, whereas in the present case, false input credit was claimed on fake invoices without conducting any trading activities - so also the decision in Meghraj Moolchand Burad is not applicable since it pertains to Anticipatory Bail and the facts are not relevant to present case - Since offence under Section 132 is made out and Senior Officials of Company are behind bars, Petitioner being Managing Director is responsible and Department has the right to proceed under Section 69 and 70 of the Act - no force in the Writ Petition, hence dismissed but with cost of Rs.1,00,000/- which is to be deposited with the Rajasthan High Court Legal Services Authority within four weeks - Stay application also stands disposed of: High Court

- Petition dismissed: RAJASTHAN HIGH COURT

SERVICE TAX

Thiru Arooran Sugars Ltd Vs CCE

ST - The assessee is manufacturer of sugar molasses, rectified spirit and denatured spirit - It was observed that assessee was allegedly supplying man power required by farmers namely Agriculturists registered with them, in consideration of charges received from them - Department took the view that assessees were therefore engaged in supply of man power and are required to discharge tax liability as a service provider - The matter is no longer res integra in view of decision in case of The Amaravathi Co-operative Sugar Mills Ltd. - 2018-TIOL-3522-CESTAT-MAD - The sugarcane farmers only have requested the assessee to arrange persons to cut sugarcane for mills and accepted the proposals for deducting the cost incurred towards labour charges payable - As per narration in para-4 of SCN, the factory supplied man power to the farmers based on their request - So also, in para-11 of the notice, it is mentioned that supply of Cane Harvest labourers by the factory is done only in cases where the farmers make a specific request for the same - In view thereof, the impugned order cannot then sustain: CESTAT

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-864-CESTAT-MAD

Vlcc Healthcare Ltd Vs CGST & CE

ST - The assessee is engaged in providing 'Beauty Treatment Service' and 'Health Club and Fitness Service' - They are also engaged in trading activity and selling their products mainly cosmetics, to their customers - Their trading activity was deemed to be an exempted service with effect from 01.04.2011 - The Department alleges that since the assessee have not maintained separate accounts, they have to pay an amount equal to 6% of value of their exempted clearances for the reason that they have not intimated the Department about exercising the option - Rule 6(3A) provides for intimating the Department by issuing a letter as to the exercise of option of reversal of proportionate Credit - The assessee have in fact issued a letter to jurisdictional Range Officer, explaining that they were availing only the proportionate Credit on the value of taxable services, which is also reflected in their balance sheet as well as their ST-3 returns - The Department cannot force the assessee to pay 5% or 6% of the value of exempted services when the assessee has exercised the option of reversing the proportionate Credit - The demand raised cannot sustain: CESTAT

- Appeals allowed: CHENNAI CESTAT

CENTRAL EXCISE

2019-TIOL-863-CESTAT-DEL

Vandana Global Ltd Vs CCE & ST

CX - The assessee is engaged in manufacture of iron and steel and is also availing Cenvat Credit on inputs, capital goods and input services under CCR, 2004 - The Department observed that the assessee had availed inadmissible input service credit on various services - It was alleged that these were not specified input services in view of Rule 2 (l) of CCR, 2004 for not being the service for manufacturing of final product of assessee - The Department also alleged that the credit has been availed on improper documents - The denial for want of invalid documents is mainly with respect to availment of cenvat credit by assessee qua the service of transportation of their final product received from railways - Apparently and admittedly, the period for receiving the service form railway is w.e.f. August 2011 to March, 2012 - The Notification as has been relied upon is the post requirement to the said period - The Notification not being beneficial to assessee and for want of any expressed retrospective effect thereof, cannot be applied retrospectively - Hence, disallowing the credit for want of such a document which was not statutorily required for the period in question is definitely a wrong finding - There is no allegation in SCN that the services have not been received by assessee nor that they have not been accounted in books of accounts of assessee - In such circumstances, the denial of cenvat credit for want of STTG Certificate is not sustainable - There is no allegation in SCN that services in question were not received or not utilized by Noticee - The documents placed on record as also been duly acknowledged by adjudicating authorities below are in the form of invoices - The perusal thereof makes it clear that the payments for receiving services mentioned therein i.e. of general insurance service, consultancy service, membership fee service are being made by company - Otherwise also the general insurance is statutory mandate - The club is the industrial association club - It cannot be ruled out that the services were obtained in relation to the business - Mere absence of contract or agreement, design/ drawings is highly insufficient to hold that the services were for the personal use of employees - The findings of Commissioner (A) while denying the cenvat credit qua the service in Annexure 'D' of SCN is also therefore not sustainable - As regards to the plea of limitation, the period in dispute is w.e.f. September, 2010 to July 2015 - The SCN is of 18.09.2015 - No doubt for the period w.e.f. September 2010 to July, 2014 demand is beyond the normal period of one year - There are admittedly no allegations of evasion of duty - Despite that the relevant information required vide those documents is otherwise apparent from the other documents submitted by assessee - The SCN for the demand beyond the normal period of one year is barred by time - For the demand of normal period of one year the same has already been held not sustainable: CESTAT

- Appeal allowed: DELHI CESTAT

2019-TIOL-862-CESTAT-AHM

CCE & ST Vs Indian Oil Corporation Ltd

CX - The appellant company is a leading manufacturer of Petroleum products falling under Chapter 27 of the CETA 1985 - During the relevant period, it filed refund claims on grounds that it had paid Customs duty in excess of what was payable, during provisional assessment of bills of entry - SCN was issued seeking to appropriate unpaid interest - On adjudication, the Asst. Commr. sanctioned the refund but appropriated an amount on account of unpaid interest - On appeal, the Commr.(A) gave relief to the appellant - Hence the Revenue's appeal.

Held: It is to be seen whether the demand of inteest raised subsequent to finalization of the assessment of Bills of Entry, is correct & legal for delay in clearance of goods from the warehouse, u/s 61 - The demand was raised on grounds that the bill of entry had been finalized - However, it is seen that the demand for interest was set aside by the Tribunal in an earlier appeal, even against the provisional assessment of Bills of Entry - As such order was not challenged by the Department, the same attained finality - Since the SCN for the demand had already been issued & the same was held to be time barred, for the same demand a second SCN issued is bad in law - Consequently, the proceedings are illegal as well - Hence the O-i-A is upheld: CESTAT (Para 1,4)

- Revenue's appeal dismissed: AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-868-CESTAT-MUM + Case Story

Matrix Info Systems Pvt Ltd Vs CC

Cus - Assessee have filed a Bill of Entry for import/ clearance of Computer Parts and Memory Modules - On the Bill of Entry, shipper was shown as M/ Decimal General Trading LLC Dubai UAE - On examination, the goods were found to be grossly misdeclared in terms of description (brand/ make/ model), quantity and value - Also some items (Intel Microprocessors) in consignment were found to be old and used - Accordingly, the goods were seized under a seizure memo under section 110 (1) of Customs Act, 1962, as these goods were liable for confiscation under Section 111 for contravention section 46 - Assessee admitted that the goods have been mis-sent by their shipper in Dubai and the shipper has requested for the recall of goods - It is quite evident that the goods actually imported are not the same as those declared in Bill of Entry, but are entirely different set of goods - This clearly shows that assessee have misdeclared the goods on Bill of Entry and have sought clearance of undeclared and misdeclared goods - Assessee do not dispute that the goods found on examination were not the same goods as declared by them on the Bill of Entry - However, assessee have submitted that since the goods were mis-sent by the shipper they were not aware of the goods that were shipped and hence they should not be held responsible for the misdeclaration - Merely on the ground that department did not serve a communication to the importer after detention but before the receipt of request for re-export, it cannot be said proved that the importer was ignorant of fact of detention - It sounds too much of coincidence that the email from the supplier was also received after the detention of goods and not before it - It sounds to be too much of a coincidence that despite the contention of the importer regarding wrong good having been shipped, the weight of the consignment is exactly equal to the declared weight - Hence, the goods were misdeclared in terms of description, quantity and value - By mis-declaring the goods, assessee have sought to clear certain goods which were old and used - The clearance of such old and used goods for home consumption in India is not permitted under Export Import policy 2015-20 without proper authorization from DGFT - Accordingly, the charge of mis declaration of consignment in terms of description, quantity and value is well founded - There is no merit in the submission of assessee with regards to bonafides, which in any case is not established in this case - Since the assessee Company and its Director have by their acts of omission and commission have rendered the goods liable for confiscation penalty imposed on them under Section 112 is justified: CESTAT

- Appeal dismissed: MUMBAI CESTAT

2019-TIOL-867-CESTAT-HYD

CC Vs Khazana

Cus - Whether the assessee is entitled to refund of SAD at the rate of 4% paid at the time of import under Notfn 102/2007-CUS as amended by Notfn 93/2008- CUS - The simple point to be decided is whether the first appellate authority was correct in holding that the ratio of Sony India Pvt Ltd judgment of High Court of Delhi applies in a case where the imports were made post issue of amending notfn 93/2008-Cus - The apparently conflicting judgments of High Court of Delhi and Bombay were discussed in this bench's final order 30705/2017 and it is evident that the question of law formulated by High Court of Delhi in case of Sony India Pvt Ltd was specifically with respect to retrospective application of amending notfn 93/2008-Cus insofar as the period of limitation is concerned - Where such is not the case, this bench had followed the judgment of High Court of Bombay in case of CMS Info Systems - 2017-TIOL-79-HC-MUM-CUS and hold that the limitation of time specified in notification applies - No reason found to deviate from the said position and therefore the impugned order is unsustainable: CESTAT

- Appeal allowed: HYDERABAD CESTAT

2019-TIOL-866-CESTAT-ALL

CCE & ST Vs Capri International

Cus - The present appeal filed by the Revenue stands dismissed on account of the tax value involved being lower than the limits of Rs 20 lakhs, prescribed under the National Litigation Policy: CESTAT

- Revenue's appeal dismissed: ALLAHABAD CESTAT