PV Ramana Reddy Vs UoI

GST - The petitioner had approached the High Court, challenging summons issued by the Superintendent (Anti Evasion) u/s 70 of the CGST Act as well as invokation of penal provisions u/s 69 of the Act - In a plea akin to one seeking anticipatory bail, the petitioner and others sought that directions be issued to the Revenue to not arrest them through exercise of powers u/s 69(1) of the Act - The main allegation of the Revenue was that the petitioners were guilty of circular trading by claiming ITC on materials never purchased & that the petitioners passed on such ITC to companies to whom the goods were never sold - The High Court observed that to say that prosecution could be launched only after completing assessment would run contrary to provisions of Section 132 - The list of offences u/s 132 are not co-related to assessment - It was also noted that issuing invoices or bills without supplying goods & availing ITC by using such invoices were made offences u/s 132(1)(b) & (c) & that the prosecution for these offences was not dependent upon completion of assessment - The High Court also rejected the petitioner's contention of there being no necessity to arrest a person for an alleged offence which is compoundable - All technical objections raised by the petitioners were rejected - The High Court then observed that despite the petitions being maintainable & that protection u/s 41 & 41A of CrPC being available to the persons who are said to have committed cognizable & non-bailable offences & despite the findings of incongruities within Section 69 & 132 of the Act, it was not inclined to grant relief to the petitioners.

Held - No intervention is warranted in this case - The SLP and pending interlocutory applications stand dismissed - In respect of Diary No. 15477/2019, SLP(Crl.) Nos. 4322- 4324/2019, SLP(Crl.) No. 4571/2019 and SLP(Crl.) No. 4546/2019, the matter be listed on May 29, 2019: SC

- Special Leave to Petition dismissed: SUPREME COURT OF INDIA

2019-TIOL-1139-HC-DEL-GST

Gsi Products Vs UoI

GST - The present petitions were filed on account of the Revenue's failure to grant refund - On an earlier occasion, the court was informed that the refund had been sanctioned but other issues such as interest were yet to be considered - The Court had been informed that a Refund Approval Committee was set up and that the refund would be processed in the following days - The matter was adjourned, with directions to the effect that if there was no definite decision taken in respect of refund application, then provisional refund u/r 91 of CGST Rules & Delhi GST Rules be sanctioned - In the present proceedings, it was seen that the RAC did not take a call in respect of the refund application or even grant provisional refund.

Held - While the Revenue's counsel claimed that the officer concerned who was responsible for passing the refund order, was away on election duty, on account of which the RAC had directed that the matter be put up for disposal after the elections - No refund order was passed or provisional refund sanctioned - The same is clearly disobedience of the High Court's order passed earlier - If the officer concerned had to go on election duty, another officer could have been deputed to appear before the RAC - On its part, the RAC ought to have scrupulously complied with the court's order - Hence notices are issued to certain members of the RAC who had appeared before the Court on the earlier date of hearing, to show cause why proceedings should not be commenced against them for wilful disobedience of the court's orders - Besides, it is seen that though the RAC had been re-constituted, the new team also included 2 officers who were on leave or on election duty at that time - Hence the new RAC was unable to function despite being re-constituted - Hence notice be issued to the VAT Commissioner concerned who re-constituted the RAC, for disobedience with this court's orders - Such breach of statutory provisions has been observed in many cases - Apparently, the constitution of RAC worsened matters instead of improving compliance - Matter be listed on May 29, 2019: HC

- Case deferred : DELHI HIGH COURT

SERVICE TAX

2019-TIOL-1521-CESTAT-MAD

Counter Point Management Plus Vs CGST & CE

ST - The appellant-company has a Technical Business Services & Marketing Agreement with one M/s Crest Com International Ltd., USA for distributing the latter's management programmes - The appellant also has the right to appoint other distributors for marketing and implementing the training programme - The agreement defines the person who conducts the management training programme as an Active Distributor - As per the agreement, the proceeds from the initial franchise fee paid by the new distributor is to be divided between the appellants & the USA company - The distributors also pay 35.5% of their gross revenue as royalty to be shared between the producer & master distributor - The Revenue opined that the amounts shared with the USA producer was royalty, on which service tax was payable - Duty demand was raised with interest & penalties u/s 77 & 78 of the Finance Act 1994 - Hence the present appeal.

Held: It is seen that all the payments made to Crest Com International Ltd USA were paid only after payment of service tax in India - However, the Commr.(A) also dismissed the appellant's prayer on grounds that onus is on the appellant to prove its contention that royalty paid to foreign service provider already suffered service tax & was paid - The adjudicating authority as well as the Commr.(A) chose to disregard this argument of the appellant, on grounds that the same is not backed by necessary documents - The appellant also claimed to have submitted the requisite documents before the authorities, but the same had been disregarded by both - In such circumstances, the matter warrants remand to the adjudicating authority for verification of this aspect - Considering the same, the penalty imposed u/s 78 of the Finance Act 1994 is an over-kill and warrants being set aside: CESTAT (Para 1,2,4.2)

- Assessee's appeal partly allowed: CHENNAI CESTAT

CENTRAL EXCISE

2019-TIOL-1523-CESTAT-HYD

Andhra Organics Ltd Vs CCT

CX - The assessee sought to avail credit on Tour Operator Service availed for transporting workers and staff to and from the factory - On adjudication, credit was denied on grounds of it having no relation to the manufacture of final products - Hence the assessee's appeal.

Held: There is no reason to deviate from such findings: CESTAT

- Assessee's appeal dismissed: HYDERABAD CESTAT

2019-TIOL-1522-CESTAT-DEL

Euro American Plastic Product Pvt Ltd Vs CCE

CX - On adjudication for the relevant period, an amount of Cenvat credit was disallowed to the assessee - Duty demand was raised with interest for its recovery & penalty was imposed - The same was sustained by the Commr.(A) - Hence the present appeal.

Held: The statute debars the Revenue from imposing penalty in case the entire duty demanded with interest is paid by the assessee either before issuing of SCN or within 30 days of the same being issued - This is not so in the present case - In the order being challenged, the Commr.(A) very specifically observed that the assessee repeatedly & continuously availed irregular credit for over 5 years - This cannot be said to have no intention to evade payment of duty - Besides, the wrong availment of credit was noticed only after audit of records - The assessee is an established unit existing for years - Yet the wrong availment of credit for a continuous period of more than 5 years is a deliberate act of non-payment of duty - The fact remains that the assessee did not reverse the wrongful credit within the stipulated time or even disclose the same despite the regime of self-assessment - Hence the O-i-A in challenge is sustained: CESTAT

- Assessee's appeal dismissed: DELHI CESTAT

CUSTOMS

2019-TIOL-1138-HC-DEL-CUS

Future Express Vs UoI

Cus - Commissioner of Customs (General) had revoked the Authorized Courier Licence granted to the petitioner and also directed forfeiture of the security amount of Rs.10 lakhs and imposed penalty of Rs.5 lakhs under regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 - appeal against this order was rejected by the Chief Commissioner of Customs and, therefore, petitioner is before the High Court - principal allegation against the petitioner is that he is not performing functions of a courier but is merely acting as a Custom Clearing Agent; that the Petitioner does not fall within the definition of an Authorized Courier under the 1998 Regulations and the 2010 Regulations - petitioner disputes the same and states that all non-core functions relating to pick-up or local delivery of export/import courier packages/ shipments and housekeeping activities are not necessarily required to be performed by an Authorized Courier and the same can be outsourced; that outsourcing of such activities does not render the petitioner ineligible for being considered as an Authorized Courier.

Held: The purpose of framing the 2008 Regulations and 2009 Regulations is to extend expeditious clearance facilities to couriers on the premise that couriers have an elaborate infrastructure for knowledge and information management and such courier companies used their in-house mechanism to guard against use of supply chain by unscrupulous elements - Plainly, if the petitioner was not in touch with the customers and was merely acting as a custom clearance agent, the question of extending expeditious clearance facilities on reliance of the petitioner's infrastructure and knowledge of its customers, does not arise - Petitioner had confined himself to custom clearance of shipments and had no operational responsibility for either interfacing with the customers or international partners - Thus, in view of this Court, there can be no doubt that the petitioner was not engaged in the business of acting as a courier as contemplated under the 1998 Regulations or the 2010 Regulations - contention that the petitioner had merely outsourced some of its non-core activities as a courier, is unmerited - Court finds no infirmity with the order dated 27.01.2017 passed by respondent no.2 and the impugned order passed by respondent no.3 - Petition is unmerited, hence dismissed: High Court [para 27, 28, 30, 31, 34]

Cus - Petitioner contends that he was not required to obtain permission as contemplated under Regulation 13(j) of the 1998 Regulations in view of the Circular 59 of 2016-Customs dated 02.12.2016 - From a reading of paragraphs 4 and 5 of the said Circular, it is, at once, clear that the import of the said Circular is to exempt courier agencies from seeking permission to outsource certain non-core activities and is not to enable a person carrying on the activity of custom clearance to masquerade as a courier - Outsourcing of activities, essentially means, that a person carrying on a business is not required to perform all activities himself - However, it is essential that the person outsourcing the activities maintains the integrity of the business - In the present case, it is difficult to accept that the petitioner was carrying on the business of a courier and had outsourced certain components of his business - The petitioner was merely involved in custom clearance; he had no interface with customers using courier services and was also not involved with other business activities - therefore, Circular dated 02.12.2016 is of little assistance to the petitioner: High Court [para 32, 33]

2019-TIOL-1520-CESTAT-AHM

KK Enterprise Vs CC

Cus - The assessee filed claim under Notfn No 102/2007-Cus for refund of Special Additional Duty paid at the time of clearance of goods under 5 bills of entry - Such claim was partly allowed on grounds of having been filed after one year from the date of payment of the SAD, as per Notfn No 93/2008-Cus - Hence the present appeal was filed by the assessee.

Held: If the entire notification is read harmoniously, there are many conditions such as that the goods be sold in the market & on which VAT or Sales Tax be paid - It is only then that the assesse is entitled for refund - There is no time limit prescribed that the goods are to be sold within one year from the date of payment of Excise duty - Though Customs duty is paid but unless the goods are sold, no refund can arise - Hence on one hand a time limit is prescribed, namely one year from date of payment of SAD - But on the other hand, the assessee can claim refund only when the goods are sold and VAT or Sales Tax is paid - In light of such contradictory provisions, one year must be reckoned from the date of sale of goods, in keeping with a harmonious interpretation of the Notfn - In such circumstances and also considering the mandate of relevant judgments in this regard, the refund claim cannot be denied on account of being time-barred: CESTAT

- Assessee's appeal allowed: AHMEDABAD CESTAT

TII

TP - Once forex gain/loss stands adjusted as operating cost not only from tested party but from comparables as well, then it would have no effect over working of PLI: ITAT

TP - Final assessment order passed by AO u/s 144C(13) after end of one month from date of receipt of directions of DRP, is time barred and hence, void ab initio: ITAT

TP - Simply because no appeal is pressed in quantum proceedings, is no basis to infer acceptance of Bright Line method and consequent transfer pricing adjustments: ITAT

COPRLAWS

Competition Act - Charges of abuse of dominant position or of formation of anti-competitive agreements are not sustainable if such charges are not backed with cogent facts or evidence: CCI

PMLA, 2002 - Where charge sheet of schedule offence is filed only after death, legal representative need not approach special court u/s 8(7) for release of attached properties : Tribunal