2019-TIOL-1660-HC-KAR-GST

GST - Petitioner, a dealer, was entitled to claim the Input Tax Credit for the GST paid by the sub-contractors while filing its GST returns - Since some of the sub-contractors had not uploaded the invoices and filed their returns, ITC to which the petitioner was entitled to was not being tallied - The third respondent, Superintendent, addressed an e-mail seeking clarification of availments of ITC and it was alleged that there was an excess availment of ITC to the tune of Rs.2,62,48,383/- - The petitioner pointed out that the ITC differential credit is not pertaining to the petitioner, relating to the tax period in question - The petitioner has been levied tax on the unpaid tax without issuing Show Cause Notice and thereafter, the Demand Notice has been issued claiming the tax amount of Rs.13,63,864/- and interest amount of Rs.81,29,684/- payable by the petitioner - The third respondent vide its letter dated 07.05.2019 has sought for attachment of the bank account of the petitioner - In the said background, the petitioner is before the Karnataka High Court challenging the action of the respondents in quantifying the interest and attaching the bank account without issuing Show Cause Notice as contemplated under Section 73 of the Act.

Held: Issuance of Show Cause notice u/s 73 of the Act is sine qua non to proceed with the recovery of interest payable thereon under Section 50 of the Act and penalty leviable under the provisions of the Act or the Rules - Undisputedly, the interest payable under Section 50 of the Act has been determined by the third respondent without issuing Show Cause Notice, which is in breach of principles of natural justice - It is trite law that any order passed by the quasi-judicial authorities in contravention of the principles of natural justice, cannot be sustained - Similarly, after determination of the interest liable to be paid by the petitioner, no notice has been issued before attaching the bank account of the petitioner - There is a lapse on the part of the third respondent - The notion of the third respondent that Section 75(12) of the Act empowers the authorities to proceed with recovery without issuing Show Cause Notice is only misconceived - The said Section is applicable only to the self-assessment made by the assessee and not to quantification or determination made by the Authority - it is ex-facie apparent that action of the third respondent is perverse and illegal and the same deserves to be set aside - Orders dated dated 04.03.2019 as well as dated 07.05.2019 are quashed with liberty to the third respondent to proceed in accordance with law - Petition alowed: High Court [para 5 to 7]

- Petition allowed : KARNATAKA HIGH COURT

2019-TIOL-1659-HC-DEL-GST

GST - Resolution of issues raised by Petitioners - Respondents shall also place on record on the next date the data/logs which would show what is the broad nature of the complaints about the functioning of the GST system over the past three months and how they have been sought to be resolved - This would also give an idea whether the solutions suggested by the Respondent have been successful - Matter to be listed on 18.09.2019: High Court [para 3, 4]

- Matter listed : DELHI HIGH COURT

2019-TIOL-1658-HC-DEL-GST

GST - National Anti-Profiteering Authority ('NAA') has directed the Petitioner to pay Rs. 6,06,752/- - The case of the Petitioner is that it is a mere distributor of the products of M/s Patanjali Ayurveda Limited ('PAL') and it is PAL which has increased its base price over which Petitioner has no control - Court is of the view that the Petitioner has made out a prima facie case for grant of interim relief - Subject to the Petitioner paying Rs. 3 lacs i.e. Rs. 1.5 lakhs to the CGST fund and Rs. 1.5 lakhs to SGST fund within four weeks on or before 31st August, 2019, the impugned order shall remain stayed – Penalty proceedings may continue but the outcome would be subject to the result of this petition – Matter to be listed before Court on 3 rd February 2020: High Court [para 4, 5]

- Interim relief granted : DELHI HIGH COURT

SERVICE TAX

2019-TIOL-1654-HC-P&H-ST

CST Vs Ernest And Young Associates LLP

ST - Revenue is in appeal against impugned order of Tribunal dismissing appeal filed by it challenging the O-I-A whereby the appeal filed by respondent was allowed on the ground that since no proceedings were initiated against the respondent for denial of cenvat credit on Professional Indemnity Insurance (PII), therefore at the stage of filing refund claim of un-utilized cenvat credit in their cenvat credit account could not be challenged - At the time of hearing, it is admitted that in view of instructions dated 11.7.2018, the instant appeal is not maintainable before this Court, the monetary limit being below Rs.50,00,000/- - Appeal dismissed as withdrawn: HC

- Appeal dismissed: PUNJAB AND HARYANA HIGH COURT

2019-TIOL-1653-HC-SIKKIM-ST

Singbel Gpu Construction Co-Operative Society Ltd Vs CC, CE & ST

ST - The petition for condonation of delay reflects a lackadaisical approach on the part of petitioner and as already pointed out no efforts were made to explain the delay from 15.08.2015 to 07.10.2016 - The law of limitation is sufficiently elastic to allow and enable the concerned Authorities to apply it for substantial justice, but at the same time it may be mentioned that merely because a non-pedantic approach should be adopted to an application for condonation of delay it is not essential that every delay including those in which the drafting has been done in a haphazard manner and with nary a care to detail or explanation pertaining to the delay with dates thereof be condoned - In Esha Bhattacharjee, it was held inter alia that an application for condonation of delay should be drafted with careful concern and not in a haphazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system - Since the Petitioner has not explained the delay after 14.08.2015 which extended to more than one year, no error arises in the consequent order of rejection of the said Authority - The merits of the matter cannot be looked into and the Writ Petition stands dismissed: HC

- Writ Petition dismissed: SIKKIM HIGH COURT

2019-TIOL-2182-CESTAT-HYD

KVR Rail Infra Projects Pvt Ltd Vs CCT

ST - The assessee is providing various taxable services in nature of Consultancy Services, Construction of railway sidings, Maintenance of Railway tracks, Site Formation services and Supervision of Site Formation & Loading of the materials to various private companies namely Grasim, ACC Ltd. and Madras Cement Limited - They did not discharge service tax on these services and also had not deposited to Government the service tax collected by them - SCN was issued proposing to demand short paid service tax along with interest and also for imposing penalties - The first issue is with regard to demand of service tax under Commercial or Industrial Construction Service and Works Contract Service for construction of railway sidings/tracks - The period involved under Commercial or Industrial Construction service is from October 2004 to June 2007 - The said services are in the nature of composite contracts which involve both supply of material and rendition of services - Hence the decision of Apex Court in case of Larsen & Toubro - 2015-TIOL-187-SC-ST would apply and the demand cannot sustain - The demand under Works Contract Service has been raised for period from August 2007 to October 2009 for the very same activity - The assessee has submitted that the said demand cannot sustain for the reason that construction works related to railways is excluded by the definition - The issue whether the construction activities of railway sidings/tracks for non governmental railway or private railway is subject to service tax has been analysed by Tribunal in the case of Afcons Infrastructure Limited - 2013-TIOL-1225-CESTAT-MUM - In case of International Metro Civil Contractors - 2019-TIOL-34-CESTAT-DEL, the Tribunal has observed that the works of civil engineering contraction, mechanical and electrical installation, tunnel ventilation and station air conditioning had been in relation to the construction of Delhi Metro Rail Corporation, was not liable to tax - The demand of service tax under Commercial or Industrial Construction Service or Works Contract Service for the period from October 2004 to June 2007 and August 2007 to October 2009 respectively for construction of railway sidings/tracks cannot sustain - On perusal of the definition of Consulting Engineer Service and Maintenance or Repair Service, no exclusion for services rendered in respect of railways found - The confirmation of demand under these two heads are therefore legal and proper - In the absence of any statutory provision, the demand of interest cannot sustain - Thus, the demand of interest in respect of the amounts collected under Commercial or Industrial Construction Service/Works Contract Service and Site Formation and Clearance Service cannot sustain - The next issue to be addressed is with regard to the penalties imposed - The demands under Consulting Engineer Service and Maintenance or Repair Services have been upheld - The assessee has submitted that they were under much confusion as to whether the services are subject to levy of service tax for the reason that these services were rendered in relation to their activities of construction of Railway sidings - They entertained a bonafide belief that the services are not taxable - Taking into consideration that the assessee has put forward the reasonable cause for failure to pay service tax, it is a fit case to invoke Section 80 of the Act ibid and the penalties imposed under these two categories are set aside: CESTAT

- Appeal partly allowed: HYDERABAD CESTAT

CENTRAL EXCISE

2019-TIOL-1652-HC-P&H-CX  

Vishkarma Agriculture Industries Vs UoI

CX - The petitioner is engaged in the manufacture of paddy parboiling and paddy drying plants and made pre-deposit of 7.5% of duty as required under Section 35F of the Act well within normal period of limitation - The appeal was sent through Courier within limitation period, however, Courier Agency did not deliver appeal within limitation period rather returned the same to the Petitioner who had handed over appeal to Courier, as is evident from the affidavit dated 08.07.2016 - There is delay of 47 days and Commissioner (A) was competent to condone delay up to 30 days - Impugned order deserves to be set aside and Petitioner must be heard on merits - The demand is not prima facie sustainable whereas if present petition is dismissed, the Petitioner would be liable to pay duty, interest and penalty which otherwise is not payable but for the delay - This court cannot act as court of appeal against the order passed by Commissioner (A), however in the present case there is delay of 17 days beyond the competency of Commissioner (A) to condone which has occurred on account of lapse on the part of Courier Agency - Having regard to the fact that delay is minor coupled with the fact that pre-deposit was made within time, therefore, there is no lapse on the part of Petitioner and demand is not prima facie maintainable, the present petition is allowed: HC

- Writ petition allowed: PUNJAB AND HARYANA HIGH COURT

CCE Vs K Shankaran Iyer

CX - Revenue is in appeal against the order passed by Tribuna whereby appeal filed by respondent was allowed and O-I-O confirming demand equivalent to cenvat taken by respondent on inputs in stock, in process of inputs contained in their final products and required to have been paid before effecting clearance under Notfn 60/2003-CE; and ordering recovery of interest and imposing penalty; was set aside - At the time of hearing, appellant admits that in view of instructions dated 11.7.2018, the instant appeal is not maintainable before this Court, the monetary limit being below Rs.50,00,000/-: HC

- Appeal dismissed: PUNJAB AND HARYANA HIGH COURT

2019-TIOL-2181-CESTAT-MUM

Boc India Ltd Vs CCE

CX - Short issue involved is whether the appellant has correctly reversed proportionate CENVAT Credit attributable to the exempted products cleared during the relevant period - Whreas the appellant claimed that they have availed credit on common input services only from January, 2005, the Commissioner's finding is that they have availed credit from September, 2004 onwards - since the CA certificate has not been placed before the adjudicating authority, matter is remanded: CESTAT [para 6, 7]

- Matter remanded: MUMBAI CESTAT

CUSTOMS

NOTIFICATIONS

ctariffadd19_029

Seeks to rescind notification No.23/2018 - Customs(ADD) dated 23.03.2018 that provided for  provisional assessment of jute goods exported from Bangladesh or Nepal by M/s. Natural Jute Mill (Producer/Exporter) [Bangladesh] and M/s Kreation Global, LLC,USA (Exporter/ Trader) [Bangladesh] till the final findings  of New Shipper Review in this regard are recieved

ctariffadd19_030

Seeks to further amend notification No. 1/2017-Customs(ADD) dated 5th January, 2017 to prescribe ADD on exports from M/s. Natural Jute Mill (Producer/Exporter) [Bangladesh] and M/s Kreation Global, LLC,USA (Exporter/ Trader) [Bangladesh] on the basis of final findings of the Designated Authority in this regard

CASE LAWS

2019-TIOL-1650-HC-DEL-CUS

Muhammad Sayed Salim Chaiwala Vs UoI

Cus - These are two review petitions; one by Customs Department and the other by DRI seeking review of two orders - The first is the order dated 19th September, 2018 whereby it was directed that the goods should be released to petitioner and demurrage/ detention charges, shall be on account of Customs Department - The second is the order dated 29th October, 2018, directing the Customs Authorities and the DRI to deposit with the warehousing agent viz., Celeb a sum of Rs.50 lacs without prejudice to the rights and contentions of the parties - This Court's attention has been drawn to the judgment passed by Supreme Court in Mumbai Port Trust - 2017-TIOL-270-SC-CUS explaining the law in relation to payment of demurrage charges - It is submitted that the said decision has not been taken into account in determining, on the first date of hearing itself, that the demurrage/detention charges in the present case would have to be paid by the Customs Authorities - It does appear to the Court that the law as explained in Mumbai Port Trust v. Shri Lakshmi Steels would require to be examined as regards its applicability to the facts in the present case - Consequently, the orders dated 19th September, 2018 and 29th October, 2018 are hereby recalled: HC

- Petitions disposed of: DELHI HIGH COURT

Amiable Logistics India Pvt Ltd Vs CC

Cus - The appellant Company is functioning as a CHA - The Commissioner imposed a penalty under Section 129A of Rs. 20 lakhs upon the Private Limited Company and Rs.20 lakhs upon its Director under Section 112 (a) of the Act - This on the ground that the Appellants were persons responsible for diversion of goods imported which were charged with an obligation to be used in manufacture of goods to be exported, by organising the 'high sea sales' of the imported goods and transporting goods to Kalamboli, Navi Mumbai, where the supporting manufacturer does not have any premises - The appeals of appellants were heard by Tribunal along with other appeals on 28 September 2017 - The appellants could not remain present, nor they were represented at the time of the hearing - There has been no consideration whatsoever of the issues raised by the appellants in their appeals - In fact, the impugned order only records the submissions made on behalf of the Respondent Commissioner - It does not mention even a single ground/grievance urged by appellants in their memos of appeals before it - Nevertheless, it dismissed the appellants' appeals - It is relevant to note that in a parallel proceedings under CHALR with regard to the appellant Company, the Tribunal had, by its order 2012-TIOL-1719-CESTAT-MUM, cancelled the revocation of a Customs House Agents License on the same facts - The revocation of CHA Licence was on account of breach of obligation under CHALR - At the time of hearing, this was a relevant factor and even this was not pointed out by Revenue at the hearing before the Tribunal - Thus, the impugned order does not even indicate grievance of appellants before the Tribunal - In the absence of the grievance of the parties before it being considered the impugned order is a non speaking order - Both the substantial questions of law were answered in the negative i.e. against the Revenue and in favour of the appellants: HC

- Appeals disposed of: BOMBAY HIGH COURT

Aabhas Spinners Pvt Ltd Vs UoI

Cus - The petitioner is engaged in business of import of yarn - During period 2005 to 2007, it imported various types of yarn and blankets allegedly after following due procedure - The DRI received intelligence that the petitioner was indulging in evasion of Custom Duty by mis-declaring the value and description of yarn/incompletely declaring the description of yarn - Prayer in the present petition is to quash SCN; strike down the Customs (Amendment and Validation) Act, 2011 to the extent of inserting sub-section 11 to Section 28 of the Act, being invalid and bad in law; and to strike down Section 28(11) of the Act being violative of Article 14 of Constitution - At the time of hearing, it is stated by respondents that the impugned SCN already stands adjudicated and against said order, petitioner has already availed the remedy of appeal under the provisions of Customs Act in June 2019 - Petitioner does not dispute the fact that statutory appeal before Tribunal, Chandigarh already stands filed and therefore, two parallel proceedings cannot continue: HC

- Writ petition disposed of: PUNJAB AND HARYANA HIGH COURT