Director General Of Anti-Profiteering Central Board Of Indirect Taxes And Customs Vs Nani Resorts & Floriculture

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - DGAP has, after taking into account the benefit of credit available during pre-GST period (April 2016 to June 2017) to the taxable turnover received during the said period and comparing the same with the post-GST period (01.07.2017 to 30.09.2018) has arrived at the percentage of ITC and that is that there has been a net benefit of ITC of 3.84 percent - inasmuch as the additional input tax credit of 3.84% of the turnover should have resulted in commensurate reduction in the base price as well as cum-tax price - Authority is in agreement with the DGAP's calculations and based on the said facts the profiteered amount is determined as Rs.2,47,48,549/- which includes GST @12% or 8% as applicable on the base profiteered amount of Rs.2,28,05,373/- realised from all the 731 residential units during the period 01.07.2017 to 31.09.2018 - Profiteering does not have any co-relation with costing and as per s.171 of the Act, any additional input tax credit available on account of supply of goods or services used in construction of project, whether directly or indirectly, on account of GST shall have to be passed on to the recipients - Benefits arising out of GST implementation in form of additional input tax credit cannot be set off against any cost increase, once the agreement for sale with home buyers has been finalised - above profiteered amount have to be paid by the respondent to the applicants and the other eligible house buyers along with interest @18% from the date from which these amounts were realised from them till they are paid as per the provisions of rule 133(3)(b) of the CGST Rules - Authority also directs, in terms of rule 133(5)(a) of the Rules, the DGAP to investigate all the other projects of the respondent for violation of the provisions of s.171 of the Act and submit a report as there may be a possibility of profiteering w.r.t the other projects also - as respondent has denied the benefit of ITC to buyers of flats being constructed by him in contravention of the provisions of s.171(1) of the Act and has thus realised more price from them than he was entitled to collect, he is liable for imposition of penalty u/s 171(3A) of the Act and for which reason SCN is to be issued - Authority, in terms of rule 136 of the Rules directs the Commissioners of CGST/SGST Haryana to monitor this order by ensuring that the profiteered amount is passed on to all buyers: NAA

- Application allowed: NAA

2019-TIOL-2441-HC-DEL-GST

Lifestyle International Pvt Ltd Vs UoI

GST - Notice issued - Matter be listed on March 02, 2020 along with W.P.(C.) No. 12647/2018 - Meanwhile, the proceedings before the National Anti Profiteering Authority may continue - The Authority shall hear all the submissions including those of limitation and jurisdiction and would pass a detailed order after considering all such pleas - Such order if passed before the next date of hearing, be placed before this court - Moreover, there is no need to pass an interim order since the petitioner is already protected by the earlier order passed by this court: HC

- Writ petition disposed of: DELHI HIGH COURT

2019-TIOL-421-AAR-GST

Children of the World India Trust

GST - Applicant, a Trust, seeks a ruling as to whether the activities conducted by them are‘charitable activities' and exempted under 12/2017-CTR andconsequently receipt of the adoption fees paid under regulation 46 of the Adoption Regulations, 2017 by theprospectiveadoptive parents to the Trust is exempted from levy of GST.

Held: Question, whether or not, exemption notification 12/2017-CTR applies to the applicant's activities would be relevant only if it is considered that their activities attract GST - Oncareful consideration of the definition of‘business',‘supply' and‘consideration'contained in the CGST/SGAT Act, Authority is of the opinion that theapplicant, along with providing foradvancement of educational programmes orskill development relating to abandoned,orphaned or homeless children, is also providing a‘service of facilitating adoption'andreceiving consideration in the form of adoption fees for such facilitation servicesrendered by them, therefore, suchactivities are covered within the scopeof the Act - Activities conducted by theapplicant are clearly covered under Sr. no. 1 of 12/2017-CTR and the applicant being an entity registered u/s 12AA of the IncomeTax Act, 1961 is entitled for exemption under the said entry tothe notification - Insofar as the“Adoption fees” paid to them by the adopting parents under Regulation 46 of the Adoption Regulations, 2017, thesame is collected strictly in terms of the guidelinesfixed by the Adoption Regulations, 2017 issuedunder the Juvenile Justice (Careand Protection of Children) Act, 2015 - applicant, being a Specialised Adoption Agency (SAA) can charge a fee of Rs.40,000/- under the head Child Care Corpus from adopting parents and this fee is used for shelter, food,clothing,foster care,maintenance, medical treatment and primary eduction and providing basic computer skills to these abandoned children/orphans in their Bal Vikas Kendras till the time they are adopted - Activities of the applicant, including the activity of facilitating the adoption of children by the adoptive parents arein the nature of‘Charitable Activities' and is clearly covered by Sr. no. 1 of 12/2017-CTR and are exempted - Therefore, receipt ofAdoption fees by theapplicant from theprospective adoptive parents isexempted from the levy of Goods andServices Tax Act: AAR

- Application disposed of: AAR

Bharat Petroleum Corporation Ltd Vs Go Airlines India Ltd

Miscellaneous - During the relevant period, the appellant and the respondent entered into an agreement wherein the former was to supply and sell Aviation Fuel to the former - Similar agreement was forged between the parties for a subsequent period - The appellant then issued a letter to the respondent along with statement giving details of invoices and requesting for immediate clearance of outstanding dues and interest amount - In reply, the respondent differed with the appellant in respect of the outstanding interest amount - As the payment was not made, the appellant put the respondent on Cash & Carry terms due to default in payment for fuel supplied and interest thereof - Thereafter, the parties opted to resolve the dispute through arbitration - The appellant raised a claim for an aggregate sum with interest - The respondent filed statement denying the appellant's claims and also raised two counter claims, seeking an award directing the appellant to issue Cenvat invoices in favor of the respondent in respect of the fuel supplied - It also demanded damages for the imposition of Cash & credit terms by the appellant - The appellant claimed there to be no dispute existing between the parties in respect of the obligation to supply Cenvat invoices prior to commencement of the arbitration and that the respondent never asked for Cenvat invoices before commencement of the arbitration, owing to which the same was an afterthought - The appellant also filed an application u/s 16 of the Arbitration & Conciliation Act, on grounds that the counter claim of the respondent was beyond the jurisdiction of the arbitrator - Later, the arbitrator held that the counter claim pertaining to Cenvat invoices is beyond the scope & jurisdiction of the arbitrator and rejected that part of the counter claim, while also upholding the counter claim for damages - When the respondent approached the writ court, the arbitrator's order was set aside on grounds that it had the juridiction to entertain the counter claim relating to non-furnishing of cenvat credit invoices - It also held that the arbitrator would be within rights to reject the counter claim only after the parties put forth their case & that rejection of counter claim at the threshold was unjustified - Hence the present appeal.

Held - Considering the relevant clause in the agreement, which deals with the arbitration clause, it is seen that the same provides for reference of dispute to an arbitrator nominated by mutual consent - Merely because the respondent did not specify the nature of claims against the appellant, that may not be a ground to reject the counter claim of Cenvat credit invoices at the threshold - Whether the counter claim regarding Cenvat invoices is outside the terms of arbitration agreement and whether is it arbitrable or outside the scope of reference to arbitration could only be sen after enquiry by the Arbitrator - It may be after the enquiry that the Arbitrator might reject the counter claim for Cenvat invoices as not arbitrable or that the same is beyond reference to abitration - But to reject the counter claim at threshold on grounds that the Arbitrator lacks jurisdiction, would be improper - Hence the High Court rightly set aside the order of the Arbitrator - The Arbitrator shall proceed with the matter on merits: SC Larger Bench

- Appeal dismissed/In favor of respondent: SUPREME COURT OF INDIA

2019-TIOL-3059-CESTAT-BANG

Bharat Sanchar Nigam Ltd Vs CCT & CE

ST - The assessee is a service tax registrant under service category of 'Telecommunication Service' to their subscribers - During audit, it was noticed that they have availed ineligible CENVAT credit of service tax of Rent-a-Cab service during period December 2013 to September 2014 - Accordingly, a SCN was issued to them demanding ineligible CENVAT credit availed along with interest and penalty - The Tribunal in case of Marvel Vinyls Ltd. - 2016-TIOL-3071-CESTAT-DEL has considered the issue after amendment in definition of input service after 1.4.2011 - The said decision has also been followed by Tribunal in M/s. Godawari Power and Ispat Ltd. - 2018-TIOL-456-CESTAT-DEL and M/s. Macurex Sensors Pvt. Ltd. - 2018-TIOL-1771-CESTAT-BANG and has allowed the CENVAT credit - Following the ratio of the said decisions, the impugned order is not sustainable in law and therefore, the same is set aside: CESTAT

- Appeals allowed: BANGALORE CESTAT

2019-TIOL-3058-CESTAT-MAD

Attur Agricultural Producers Co-Operative Marketing Society Ltd Vs CCE

ST - The assessee is an Agricultural Marketing Society - It has been alleged by department after investigation that they are rendering "Auctioneer's Service" and "Business Support Service" which are chargeable to service tax but have not discharged service tax liability - It is also the assertion of department that the assessee is engaged in the activity of sanctioning jewellery loan on interest to its Members and have been collecting charge of 3% on the amount of loan subject to maximum of Rs.100/- per loan is charged from the members which is chargeable to service tax under BSS - As far as Auctioneers' Service is concerned, it can be levied on the service of auctioning - Undisputedly, as recorded in the impugned order itself, the assessee is selling goods through tender and not through auctions - The Auctioneer's service does not cover the service of tender - As far as the demand under BSS is concerned, evidently, the cooperative society is engaged in the business of lending money to their members and have been collecting some charge towards appraising the value of the pledged jewels in the process - This is not service rendered to anybody at all - It is true that, in turn, the assessee has been borrowing money from their bank but it does not mean that the assessee is supporting service of the bank - They are borrowing money from the bank on their account and in turn lending it to their members - Demands on both these counts are not sustainable and are set aside - Consequently, the demand of interest and penalties are also set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-3057-CESTAT-DEL

Entertainment World Developers Pvt Ltd Vs CCE & ST

ST - The assessee is engaged in business of setting up and managing shopping centres, family entertainment centres and Malls - They got the shopping malls constructed by using the services of contractors and subsequently spaces in malls had been given by them to their various customers on lease and licence basis - Some spaces in the mall have also been given to advertisement companies for putting up their hoardings for advertisement - The issue to be decided is as to whether the assessee is eligible to avail Cenvat credit on services supplied to them by their job workers/contractors for which raw materials have been supplied by assessee - The demand in question is prior to the amendment of provisions of input services under Credit Rules i.e. prior to 2011 - The issue is no longer res integra in view of decision of Andhra Pradesh High Court in case of Sai Sahmita Storages (P) Ltd. which was subsequently followed by various other decisions - The issue was identical and it was held by various Tribunals/High Court that in such a situation, assessee would be entitled for the benefit of Cenvat credit prior to amendment - The impugned order is set aside - Revenue has placed reliance that the services were not directly provided by assessee, but was through their contractors - It is argued that these contractors were employed by assessee who were provided with the raw materials by assessee - Also the contractors have paid the service tax and billed to the assessee - Hence, assessee have rightly taken the Cenvat credit as per Credit Rules - It is of no relevance as to whether the construction has been done through the contractors or not as long as service tax is paid, the assessee is entitled for cenvat credit and subsequent utilisation thereof for payment of service tax - The request of ITPIL is accepted regarding the refund, if any, to the Treasure Island Private Lt d. on account of the fact that the pre-deposit has been made on behalf of assessee (EWDPL) by them (ITPIL) with due intimation to the department and the department has also accepted the same in writing - Therefore, it is directed that the pre-deposit should be refunded to the M/s Treasure Island Private Limited in place of assessee M/s EWDPL: CESTAT

- Appeals allowed: NEW DELHI CESTAT

2019-TIOL-3056-CESTAT-AHM

Narmada Bio Chem Pvt Ltd Vs CCE & ST

CX - The assessee is engaged in manufacture of NPK Fertilizer, Organic Manure and Soil Conditioner - Soil Conditioner is being sold under the brand name "Power Gold" and Organic Manure is being cleared by them under the Brand name 'Bio Gold' - The products claiming to be having presence of Nitrogen, Phosphorus and Potassium and were in turn claimed to be Fertilizers i.e. the product Power Gold under CETSH 3103 9000 and Bio-Gold under CETSH 310290 90 - A SCN was issued to assessee wherein it was contended that the products Power Gold and Bio Gold do not contain Nitrogen (N), Potassium (K) or Phosphorus (K) and are therefore not phosphatic Fertilizer - The goods therefore were proposed to be classified as "Chemical products not elsewhere specified or included" under CETSH 38249090 and were also proposed to be liable for excise duty @ 10% (with cess) till 16.3.2012 and thereafter @ 12% with cess till 28.2.2015 and thereafter @ 12.5% - A bare perusal of both the entries under Chapter 31 and Chapter 38 when read with Chapter Note -3 to Chapter 31 would clearly reveal that Chapter 31 deals with Fertilizers whereas 3824 deals with miscellaneous chemical products - As per chemical examiner test report in case of NPK Fertilizer the composition of goods is Nitrogen 29.70%, Phosphorous (as P2O5) 11.60%, Potassium (as K20) 10.37, In Power Gold the composition is Calcium (Ca)-21.1%, Magnesium (Mg)-5.9%, Sulphur (S)20.9% and in Bio-Gold composition is Carbon-13.92%, Moisture-12%, Ash-76% - In case of Bio Gold the report also says that the sample is composed of carbon bearing material and small amount of Phosphorous, Potassium and nitrogen bearing inorganic compounds alongwith clay matter - However the test report does not give percentage of same - Coming to the constituents, as far as NPK Fertilizer is concerned there is no doubt about its classification based upon constituents - Even the SCN accepted its classification under CETSH 3101 but it is not known as to why the duty was demanded - Nor the impugned order discusses anything about its classification and hence there is no case of revenue for classification under any other chapter - In case of Power Gold, from test reports the constituents are apparent i.e. it consists of Single Super Phosphate (SSP), Gypsum and other inorganic substances, viz. calcium, magnesium, sulphur, mud, dolomite and bentonite and thus it clearly meets the requirement of Chapter Note-3 (a) (iii) (c) to cover it under CETSH 3103 - The adjudicating authority has held that presence of phosphorous pentoxide (P2O5) was found, which is not same as phosphates - The contention of adjudicating authority that Power Gold is a Soil Conditioner and therefore not a fertilizer is clearly untenable in law as CETSH 31.03 covers the phosphatic fertilizer whether mineral or chemical - There is no basis for holding that soil conditioner is not a fertilizer - The certificate issued by the Directorate of Agriculture, Gandhinagar clearly considers Power Gold as a Fertilizer - Since Power Gold is made from Superphosphate and is on test found to contain phosphorous, it will clearly fall under Heading 31.03 - As regard Bio Gold (organic manure), the same is made from poultry manure - On test, it is found to contain phosphorous, potassium and nitrogen - The test report of Bio Gold matched with specifications of organic manure given in Schedule IV (S.No. 4) of Fertilizer Control Order 1985 - The certificate issued by the Directorate of Agriculture, Gandhi Nagar also considers Bio Gold as fertilizer - In such view of facts that when the Directorate of Agriculture has considered the product as Fertilizer and even as per nature of the product, the products fall under Chapter 31.01, for both the above products, no reason found to classify the products under 38249090, which is a residuary entry for miscellaneous chemical products - The impugned goods i.e. Power Gold and Bio Gold merits classification under chapter sub heading 3103 and 3101 respectively and when falling under chapter 31 are eligible for exemption under Notfn 1/2011 - CE and Notfn 12/2012 during material period - As regard NPK Fertilizer, no dispute about its classification was raised in SCN - However in impugned order no reason has been assigned for duty demand and therefore the impugned order is devoid of any merit as far as demand of duty on NPK is concerned - Further, the issue involved is of classification and hence no case of suppression or intention to evade duty is made out - Thus, the impugned order is set aside: CESTAT

- Appeals allowed: AHMEDABAD CESTAT

CCE & ST Vs National Lamination Industries

CX - The assessee due to closure of unit has filed refund application under Rule 5 of CCR, 2004 for cenvat credit lying in balance - Same was rejected by adjudicating authority holding that the claimant failed to demonstrate that unutilised cenvat credit was in respect of inputs or input services used for manufacture of final products exported by them or intermediate products used for exports - On appeal, the Appellate Commissioner allowed the appeal relying upon the Tribunal Order in case of Slovak India Trading Co. - 2005-TIOL-1698-CESTAT-BANG as upheld by High Court of Karnataka in - 2006-TIOL-469-HC-KAR-CX - The main reason for accumulation of cenvat credit is that the assessee's final product were manufactured out of imported raw material on which cenvat credit was availed by them - Consequent to imposition of 4 % SAD which was also available as credit, the balance of credit increased - The Appellate Commissioner has discussed the reasons and costing of goods also - Also for the reason that the assessee has sufficient balance in their credit account, they were insisted to pay duty in cash from PLA which resulted into excess payment of Rs. 14.23 Cr. - Therefore the adjustment of credit was not possible - Once the factory was closed, there was no scope of utilising the credit so accumulated - The Gujarat High Court in case of Ishaan Copper Pvt. Ltd.- 2018-TIOL-1361-HC-AHHM-CX has allowed the refund of cenvat credit - In view of the Supreme Court judgment in case of Kamlakshi Finance Corporation Ltd - 2002-TIOL-484-SC-CX-LB, no reason found to interfere with the impugned order, same is upheld: CESTAT

- Appeal dismissed: AHMEDABAD CESTAT

Neptune Synthetics Vs CC, CE & ST

CX - Assessee is engaged in manufacture of HDPE/PP Woven Sacks - They had exported some of their products and claimed rebate under Rule 18 of CER, 2002 which was sanctioned to them - Thereafter, the matter was investigated and they were issued a SCN seeking to recover the erroneously sanctioned rebate - The assessee submits that the demand was raised based on investigations conducted by department which led to the conclusion that the documents were forged/incorrect and therefore the rebate was wrongly sanctioned to them - The investigation also included recording statements of various persons - These statements were relied upon in the adjudication proceedings without following the procedure prescribed under Section 9D of CEA, 1944 - The High Court of Punjab & Haryana in case of Jindal Drugs Pvt. Ltd. - 2016-TIOL-1230-HC-P&H-CX and G-Tech Industries - 2016-TIOL-2749-HC-P&H-CX has held that the statements recorded by Central Excise Officers are admissible in a Court of Law or any adjudication proceedings only if the procedure prescribed under section 9D has been followed - This is a fit case to be remanded to the original authority to enable them to follow the procedure under section 9D with respect to the statements and also consider any other additional evidence that may be produced by assessee - Therefore, without passing any remarks on the merits of the case and leaving all issues open, matter is remanded: CESTAT

- Matter remanded: HYDERABAD CESTAT

TII

TP - Huge brand value and presence of extra ordinary events renders such entity unfit for purposes of comparison: ITAT

TP - Functional dissimilarity backed by unavailability of segmental information, calls for exclusion of such concerns from list of comparables: ITAT

DTAA - Foreign firm which does not have any fixed base regularly in India and whose aggregate stay in India during relevant period does not exceed 90 days, is not liable to TDS: ITAT

TP - Dispute related to determination of ALP or objections against transfer pricing adjustments merits to be considered by DRP first, before approaching writ jurisdiction: HC

TIOL CORPLAWS

PMLA, 2002 - Bail to MLA DK Shivakumar cannot be denied without justifying the factors of flight risk, tampering evidences & influencing witnesses : HC

Arbitration & Conciliation Act, 1996 - Party autonomy cannot be questioned by courts which are not conferred with exclusive jurisdiction to try & entertain disputes: HC

Competition Act - Denial of market access by restricting entry of other players, warrants investigation, if such conduct favors a group entity & also is likely to adversely impact end consumers: CCI