Sikka Motors Pvt Ltd Vs CCGST & ST

GST - The assessee-company claimed to have uploaded its claim for ITC on account of unsold stock as on June 30, 2017 in Form TRAN-1 - The assessee then claimed to have adjusted tax credit against its output tax liability in Form GSTR-3B for the relevant month - The assessee then received an email alleging that it had availed excess ITC and that the same was recoverable from the assessee with interest & penalty - The assessee then reversed the ITC claimed in the returns for the months of July & August 2018 - The assessee claimed to have later received an email mentioning that the issue had been resolved - However, the ITC claimed by the assessee was not reflected in the electronic credit ledger maintained by the Revenue - Hence the assessee made a representation to such end, but received no response - Hence the present writ.

Held - As pointed out in earlier orders of this court, there are technical errors or glitches in the GST system, which is in the 'trial and error' phase - There is merit in the assessee's contention that even if it is unable to connect with the server, then at the end of the Revenue, the fact of a failed attempt at filing return may not even be registered on the system - Besides, the assessee's eligibility to claim ITC is not disputed by the Revenue - It stands settled from several orders of this court that as the entire GST system is still in trial and error phase, it would be too much of a burden to place on the assessee by expecting them to comply with the requirements of law, more so where the assessee is unable to even connect with the system on account of network failures - Hence the Revenue is directed to immediately process the assessee's representation and then either reflect the assessee's ITC claim in the electronic credit ledger or communicate to the assessee the reasons for the inability to do so - The assessee is at liberty to seek legal remedies available to it, if it is aggrieved by any decision taken by the Revenue: HC

Writ petition disposed of: DELHI HIGH COURT

2019-TIOL-1902-HC-DEL-GST

Tyre Plaza Vs UoI

GST - The petitioner herein is a dealer, who was unable to claim transitional credit under the DVAT Act and ITC in Form TRAN-1 - The petitioner claimed that its eligibility to claim ITC was not in doubt, however, despite repeated attempts, it was unable to fule Form TRAN-1 claiming the tax credit - It was also stated that after Dec 27, 2017, the GSTN disallowed any request for online submission of Form TRAN-1 on the GST portal, owing to which some amount of ITC was still outstanding and TRAN-2 could not be submitted - The petitioner further stated that pursuant to certain decision of this court involving similar facts & circumstances, the petitioner too filed Form TRAN-1 manually, claiming an amount of ITC and also duly disclosed the same in the TRAN-1 form - The petitioner also carried forward some amount of ITC and disclosed the same in the TRAN-1 form.

Held - There are various kinds of technical errors or glitches in the GST system, which itself is still in the 'trial and error' phase - There is merit in the petitioner's contentions that it it was unable to even connect with the serverm, then at the Revenue's end, the fact of a failed attempt at filing a return may not even be registered on the system - Besides, the eligiblity of the petitioner to claim ITC is not disputed by the Revenue - Moreover, it has been held in many orders of this court that since the GST system is in a trial and error phase, it would be too much of a burden to place on the petitioner, the burden of complying with the requirement of law, when the petitioner is unable to even connect with the system on account of network failures - The Court urges the ITGRC to review the policy adopted in suchy cases and acknowledge instances such as those in the present case, where the petitioner is unable to connect with the portal, owing to which the fact of a technical glitch is not accounted for in the system - Hence the Revenue is directed to either open the portal to enable the petitioner to file form TRAN-1 again, failing which the Revenue would accept the Form TRAN-1 already filed manually by the petitioner: HC

- Writ petition disposed of: DELHI HIGH COURT

2019-TIOL-1900-HC-MUM-GST

Raymond UCO Denim Pvt Ltd Vs UoI

GST - Petitioner challenges the vires of Rule 89 (5) of the CGST Rules on the ground that it runs contrary to the provisions of Section 54 (3) of the Act, 2017 - Petitioner contends that sub-rule (5) of Rule 89 gives the formula for computation of refund of input tax credit and explanation (a) therein excludes input tax service credit from the definition of Net ITC, though it is shown under the turn over of inverted rated supply of goods and services therein.

Held: Notice to be issued to the respondents for final disposal of the matter, returnable on 09.10.2019: High Court [para 4, 5]

- Notice issued: BOMBAY HIGH COURT

SERVICE TAX

ST - Issue arises for consideration is; whether the Tribunal was justified in declining to condone the delay when the Excise and Customs Department had failed to establish that the Appellate order was tendered to assessee by registered post as mandated under Section 37(1)(a) of the Act of 1944 - The stipulation "or by speed post with proof of delivery or by courier approved by CBEC constituted under Central Boards of Revenue Act, 1963" which appears in Sub-clause (a) was inserted by Act No.17 of 2013, Section 100(i) w.e.f. 10/05/2013 - Thus, before said amendment/insertion, imperative it was for the department to have sent/tendered the decision dated 06/02/2012 by registered post with acknowledgment due - Various correspondence on record entered into between the assessee with the Postal Department and also the findings arrived at by Tribunal reveals that the order dated 06/02/2012 was tendered through speed post which apparently was not the mode of service prior to 10/05/2013 - In view whereof, the Tribunal ought to have considered the fact that the copy of final order was delivered vide letter dated 17/02/2014 and not on 24/02/2012 - The Tribunal having glossed over the same, the impugned order cannot be given the stamp of approval - Consequently, it is set aside and the matter is relegated to the Tribunal for its decision on merit: HC

2019-TIOL-2394-CESTAT-KOL

BSNL Vs CCE

ST - The dispute pertains to the period from 01.12.1997 to 31.03.2002 - M/s B.S.N.L. consisted of several Secondary Switching Area's (SSAs) - All the SSAs were separately registered for payment of service tax and were making payment to Department of Telecom (DOT) through cheque from the office of Chief General Manager, Guwahati - The Departmental Officers have undertaken verification of correctness of service tax paid by BSNL, Assam Circle, Guwahati for the disputed period - Service tax dues were discharged at the relevant time - But the Department noticed that if the total gross receipts in the Books of Account of BSNL is considered and the service tax is worked out at the applicable rate of 5%, the total service tax liability appeared more than the service tax already paid - During the relevant time, service tax was payable on the basis of actual receipts - It has been explained on behalf of BSNL that certain receipts, though accounted in Books of Account, are not liable for payment of service tax - To support their calculation arriving at the amounts deductible from the gross receipts, BSNL has also submitted a Certificate from an independent Chartered Accountant - From perusal of said Certificate, it is seen that the Chartered Accountant has attested to the correctness of calculation put together by BSNL team from their relevant accounts - Out of the total gross receipts, the amounts, which are not liable to service tax are to be excluded - After said deduction, BSNL during relevant time, had short paid service tax to the extent of about Rs.52.88 lakhs - However, it is also seen that BSNL has suo-motu made payment of such differential service tax of Rs.74.20 lakhs - As such, no more service tax is required to be paid - Revenue has filed the present appeal challenging the amount of service tax dropped by the adjudicating authority - On the basis of recalculation of service tax dues and submission of a Certificate from the independent Chartered Accountant, the correct service tax liability has been arrived at and settled by BSNL - The impugned order is not sustainable, same is set aside: CESTAT

- Assessee's appeal allowed: KOLKATA CESTAT

2019-TIOL-2393-CESTAT-DEL

Mewar Palace Organisation Vs CCE & ST

ST - The assessee filed a refund claim as they had paid service tax erroneously on the services which were not liable for service tax - However, a SCN was issued proposing the rejection of said claim - The only controversy to be adjudicated is as to whether the Department is liable to pay interest on the amount of refund sanctioned - For the purpose, the relevant section is 11B and 11BB of Central Excise Act - This has been appreciated in case of Ranbaxy Laboratories 2011-TIOL-105-SC-CX and Gurjat State Fertilizers and Chemical Ltd. 2018-TIOL-485-CESTAT-AHM - The Apex Court has also clarified that the Board's own Notfn dated 1/10/2002 has given a clear direction to the Department in case claims of non payment of interest in refund/rebate cases clarifying that the authority has not to wait for any order specifically payment of interest - The moment department becomes liable under Section 11 BB the consequence of payment of interest shall follow - The said adjudication is very much binding on Tribunal - The Explanation to Section 11 BB further clarifies the controversy which says that where any order of refund is made by Commissioner (A), Appellate Tribunal, National Tax Tribunal or any Court against an order of Assistance Commissioner of Central Excise under sub-Section 2 of Section 11 B, the order passed by the Assistant Commissioner (A), Appellate Tribunal or as the case may be shall be deemed to be an order passed under the sub-section 2 of the sub-Section B for the purposes of this Section - It stands absolutely clear that the application as has been referred in Section 11 B sub-Section 1 only has to be considered for the purposes of Section 11BB - In the present case, the order of Tribunal dated 4th August 2017, in view of the said explanation, reverts back to stage of order of Assistant Commissioner - Accordingly the application reverts to the stage of initial order - The refund is much beyond 3 months of the date of initial order - The Department is liable to pay the interest - The Department has once sanctioned it but later denied while reviewing - The order of appeal is therefore held bad in law and is therefore set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2019-TIOL-2392-CESTAT-DEL

Clinic Dermatech Vs CST

ST - The demand of service tax stands confirmed against assessee under two categories - A part of the demand is under category Renting of immovable property services, whereas the major part of the demand relates to Beauty Parlour Services.

Held: Admittedly proprietary concern and Proprietor are one and the same person in the eyes of law - If Shri Varun Ratra has already deposited service tax liability, no further liability can be fastened against the Proprietary unit - However, the fact whether the rented premises were the same and one in respect of which Shri Varun Ratra has already discharged service tax liability is required to be verified - For the said purpose, the impugned order is set aside and matter is remanded to the Commissioner for denovo adjudication - The type of activities undertaken by assessee is the essential character to classify their services either under Beauty Parlour Services or Cosmetic or Plastic Surgery Services - The invoices raised by them indicating the type of services are required to be examined and verified - Similarly, the assessee's stand that they are working under the medical doctors and the Dermatologists is also required to be examined - Their activities have to be classified in the light of declaration of law by the Tribunal - Inasmuch as matter is already remanded the matter in respect of renting of immovable property services, the said part also relatable to Beauty Parlour services also remanded to the adjudicating authority for fresh examination: CESTAT

- Matter remanded: DELHI CESTAT

CENTRAL EXCISE

2019-TIOL-1901-HC-MUM-CX

CCE, C & ST Vs Hindustan Unilever Ltd

CX - CENVAT - Respondents received 'Shrink Sleeves' as Inputs from M/s. Paper Products Pvt. Ltd. and who had classified the same under CSH 3920.19 and paid CE duty thereon - Revenue disputed this classification and were of the view that the product ‘Shrink Sleeves' are correctly classifiable as product of the Printing industry under CSH 4901.90 and attract Nil rate of duty and, therefore, the CENVAT credit taken by the respondent was incorrect - Tribunal had allowed the appeal of the respondent by taking note of the order of its co-ordinate bench in the case of  M/s. Paper Products Ltd.  -  2005-TIOL-890-CESTAT-MUM  wherein it is held that the ‘Shrink Sleeves' are rightly classifiable under CSH 3920.19 - Counsel for the Revenue fairly states that the issue raised by the Revenue herein would no longer survive as the Revenue appeal has been dismissed by the Apex Court -  2015-TIOL-230-SC-CX  upholding the classification of the inputs under Chapter 39 as claimed by M/s. Paper Products Ltd., and not under Chapter 49 as alleged by the Revenue - In view of the the decision of the Supreme Court, there is no question, much less any substantial question of law, which remains to be resolved - Revenue appeal is dismissed: High Court [para 5, 6]

- Appeal dismissed: BOMBAY HIGH COURT

2019-TIOL-2399-CESTAT-MAD

Indigra Exports Pvt Ltd Vs Commissioner of GST & CE

CX - Granite slabs - Issue is Demand of duty for the goods that have been damaged en route and in transit while they were taken out for export.

Held: The Tribunal in the case of Tab India Granites (P) Ltd. had occasion to consider the very same issue and followed the decision of the Larger Bench of the Tribunal in the case of Honest Bio Vet Pvt. Ltd. - 2014-TIOL-2286-CESTAT-AHM-LB where it is held that when the goods are destroyed before export, the same having been destroyed before removal in terms of the above rules, no duty can be demanded and remission is permissible - following the same, the demand cannot sustain - impugned orders are set aside and the appeals are allowed : CESTAT [para 5, 6]

- Appeals allowed: CHENNAI CESTAT

2019-TIOL-2398-CESTAT-HYD

Badami Foods Vs CC, CE & ST

CX - Appellants are engaged in the manufacture of biscuits - they were also manufacturing sugar syrup which was captively used in the manufacture of both dutiable and exempted biscuits - department was of the view that sugar syrup which was captively consumed by the appellants, being an intermediary product the appellants are liable to pay duty on the same and the exemption provided as per notification 67/1995-CE dated 16.3.1995 was not available to the appellants - SCN issued proposing to demand CE duty on this sugar syrup captively consumed for manufacture of exempted biscuits - demand confirmed along with interest, equal penalty imposed - appeal to CESTAT.

Held: It is the case of the department that the sugar syrup is marketable product and merits classification under 1702 9090 of CETA, 1985 - however, on going through the said Chapter heading, the sugar syrup ought to contain at least 50% by way of fructose - in the present case, the department having not conducted any tests to prove the fructose content of the sugar syrup, the decision in the case of Rishi Bakers Pvt. Ltd. [ 2015 (328) ELT 634 (Tri-Delhi) ] would apply to hold that the sugar syrup manufactured by appellants is not a marketable commodity - it is the burden of the department to establish the marketability as well as the excisability of a product while demanding duty - in the present case, the department has miserably failed to establish marketability or the classification of the said sugar syrup - in the decisions in the cases of Lucky Biscuits Company - 2017-TIOL-3841-CESTAT-KOL and Parle Biscuits Pvt. Ltd. - 2017-TIOL-4475-CESTAT-DEL , the Tribunals have analyzed very same point and held that demand of duty on intermediary product viz., sugar syrup cannot sustain - following the said decisions, the demand has no legal or factual basis and is required to be set aside - the impugned order is set aside - the appeal is allowed : CESTAT [para 7, 8, 9, 10]

- Appeal allowed: HYDERABAD CESTAT

2019-TIOL-2397-CESTAT-BANG

Hiranyakeshi SSK Niyamit Vs CCE

CX - SCNs issued on the electricity sold to power distribution companies during the period October 2012 to February 2015 - demands dropped - however, in para 24 of the impugned order, the Commissioner has observed that provisions of Rule 6 of the Cenvat Credit Rules, 2004 are attracted for the clearances of electricity for a consideration by the assessee w.e.f. 1.3.2015 - appeal against this observation.

Held: Commissioner has, without justification, recorded the above finding for the clearances w.e.f. 1.3.2015, which was not the period involved in the present case and there was no SCN for the period after the amendment - by following the ratio of the decisions [Hindustan Polymers Co. Ltd. - 2002-TIOL-822-SC-CX , Kandarp Dilipbhai Dholakia - 2014-TIOL-2719-HC-AHM-CX , Manjit Singh - 2013-TIOL-989-CESTAT-MUM , Hi-Tech Electronics Industries - 2010-TIOL-1274-CESTAT-DEL , DHL Logistics Pvt. Ltd. - 2014-TIOL-1386-CESTAT-MUM , ND Metal Industries Ltd. - 2013-TIOL-1017-CESTAT-AHM ], wherein it has been held that the adjudicating authority cannot go beyond the SCN, para 24 in the order portion is not sustainable in law and, therefore, set aside - appeal is accordingly allowed : CESTAT [para 6]

- Appeal allowed: BANGALORE CESTAT

2019-TIOL-2396-CESTAT-BANG

Jaglanks Industries Vs CCT & CE

CX - Appellant shifted his factory to a new location and also transferred the cenvat credit of Rs.2.76 lakh without following the procedure of rule 10 of Cenvat Credit Rules, 2004 [CCR] - SCN issued proposing to demand irregular cenvat credit of Rs.2.76 lakh along with interest and impose penalty under rule 15(1) of CCR - the Assistant Commissioner, vide O-i-O dated 30.12.2015 disallowed and ordered for recovery of irregularly transferred cenvat credit of Rs.2.76 lakh along with interest and imposed equal penalty under rule 15 of CCR - thereafter, a corrigendum to the O-i-O was issued on 24.3.2016 to read the O-i-O at para 14 and in order portion, with section 11A(4) instead of section 11A(5) of CEA and rule 15(2) of CCR, instead of rule 15(1) of CCR - on appeal, the Commissioner rejected the appeal, hence assessee before CESTAT.

Held: Original authority has travelled beyond the SCN and proposed the recovery under one provision of the CEA whereas confirmed the demand under different provisions of law which is not permitted under law - further, the corrigendum issued to the appellant is also not sustainable in view of the Board Circular  502/68/99-CX dated 16.12.1999 - further, original authority has observed that appellant had not appeared before him and satisfied the authority regarding the procedure followed by them - in view of this, the impugned order is not sustainable in law and the same is set aside by allowing the appeal of the appellant by way of remand to the original authority who will pass a De novo order after affording an opportunity of hearing and after considering the findings recorded above - accordingly, the appeal is allowed by way of remand : CESTAT [para 5]

- Appeal allowed by way of remand: BANGALORE CESTAT

2019-TIOL-2395-CESTAT-ALL

Agrimas Chemicals Ltd Vs CCE

CX - The assessee is engaged in manufacture of Pesticides and Bio-Extracts - Their head office was engaged in trading of goods which is an exempted service and was availing credit of the common input services - According to Revenue, assessee was required to pay amount of 5/6% of the value of traded goods in terms of provisions of Rule 6(3) of CCR, 2004 - Assessee took a categorical stand that as the trading of goods is being done by their head office and the credit was availed by head office, they have reversed the proportionate credit alongwith interest - As such the requirement of payment of any amount in terms of provisions of Rule 6(3) cannot be determined against them - The Adjudicating Authority is not disputing the fact of reversal of Cenvat credit availed on common input services by the head office - The said reversal has been made by head office alongwith payment of interest - The effect of said reversal is as if no credit was availed by assessee in respect of common services which were utilized for trading of goods - In such a scenario, further demand of a particular percentage of the value of the traded goods in terms of Rule 6(3) is neither in accordance with the provisions of Cenvat Credit Rules nor with the settled principle of law - It stands held by various decisions of judicial and quasi-judicial authorities that in case of reversal of proportionate credit attributable to the exempted goods/services, further demand in terms of Rule 6(3) is unsustainable - As such, no reasons found to uphold the impugned order, same is accordingly set aside: CESTAT

- Appeal allowed: ALLAHABAD CESTAT

CUSTOMS

2019-TIOL-2391-CESTAT-DEL

Khaas Textiles Pvt Ltd Vs Additional Director General

Cus - The issue involved is regarding the utilisation of license which was issued by DGFT to M/s Nilesh International for an amount of Rs. 17,10,861, which was later on transferred to the assessee for consideration at premium of 97 % that is Rs. 16,59,525 on 19/12/11 - The amount of Rs. 16,59,525 was paid as consideration for purchasing of the said license from M/s Nilesh International through Cheque from Yes Bank - The said license was utilised by assessee towards the import of silk fabrics - It is not in dispute that this license has been obtained by M/s Nilesh International on the basis of fake export document and also the TRA verification from the port of Registration was also falsified - The Department has taken up the matter for cancellation of this FPS license with DGFT by DRI on 08.12.2016 - However, it appears that the license has not been cancelled by DGFT as yet - In other words, the above FPS license is a genuine licence in the record of DGFT even as of now - In so far as the assessee is concerned they have purchased the license in question from M/s Nilesh International on 26/12/11 on payment through banking channel- As per record the assessee was not involved in the fraud - The contention of the Department that the assessee has obtained the said license without verifying the existence of M/s Nilesh International before purchase thereof is not sustainable on account of the fact that the various licences issued by DGFT are being traded by Broker as trading commodities which is permitted under DGFT policy - It would be practically impossible for any buyer to verify as to whether the person to whom the licence has been issued has been existing or otherwise by conducting enquiries - At the best what buyers could do is to verify the existence of license issued from DGFT - In case at hand, even now the license has not been cancelled by the DGFT in spite of specific request being made by the DR - Assessee is correct in submitting that their case is squarely covered by the decision of P & H High Court in case of Pee Jay International 2016-TIOL-2136-HC-P&H-CUS - Accordingly, the assessee cannot be held responsible for payment of import duty and interest along with the imposition of penalty under the provisions of Customs Act as has been held in the impugned order - The SCN has invoked extended period for recovery of Customs Duty, for import which has been affected by utilisation the FPS licence in question - It is evident that the assessee has not suppressed any fact from the Department to the extent that the license which was submitted for clearance of import consignment is issued by DGFT, although the claimed to have been obtained fraudulently by the transferee and utilised on 06/12/11 on ICD Patparganj - The SCN has been issued in this case on 02/12/2016, that is after the lapse of normal period of raising demand under the provisions of Section 28 of Customs Act, 1962 - Therefore the demand is also time barred: CESTAT

- Appeal allowed: DELHI CESTAT