Bridge Hygiene Services Pvt Ltd Vs State Tax Officer

GST - Petitioners had sought quashing of the assessment orders on the ground that the impugned orders do not reflect details of the materials relied upon by the Assessing Officer to make the best judgment assessment, as contemplated under Section 62 (1) of the Act - Single Judge while dealing with the writ petitions found that the appellants have even failed to take advantage of the provisions contained in sub-section (2) of Section 62 of the Act, by furnishing valid returns within 30 days after receipt of the impugned orders of assessment, which if done could have saved them from the liability under the impugned orders - Opining that it may not be possible for the court to exercise the jurisdiction under Article 226 in order to extend the time limit stipulated under sub-section (2) of Section 62, for enabling the appellants to file the returns, beyond the period of 30 days stipulated, the Single Judge dismissed the writ petitions - it was also observed that prescription of 30 days from the date of receipt of the order of assessment passed under sub-section (1) of Section 62, stipulated under sub-section (2), has to be strictly construed, since it is a provision contained in a taxing statute which enables the assessee to get the order passed against him on best judgment assessment basis, set aside - Writ appeals filed against this order on the ground that the reliance placed by the Assessing Officer on the returns submitted for the previous periods, are not legally correct and is improper; that, while passing the impugned orders of assessment in the printed format, the Assessing Authority had failed to look into the available details contained in the returns filed for the previous periods - Counsel for Revenue submitted that against the impugned orders of assessment the appellants have got an effective remedy of appeal, as provided under Section 107 of the Act and that there existed no special circumstances warranting interference by the Court by invoking s.226 of the Constitution of India.

Held: Division Bench is not prima facie convinced that there exists any special circumstances warranting interference to hold that the impugned assessments are per se illegal or unsustainable - Bench take notes of the fact that against the impugned orders, the appellants have got an effective remedy by way of statutory appeal - Bench is, therefore, not persuaded to admit the above writ appeals and consequently the writ appeals are dismissed in limine - It is also made clear that the impugned judgments of the Single Judge or the present judgment will not stand in the way of the appellants availing alternative remedy against the impugned assessments: High Court [para 4 to 6]

- Writ Appeals dismissed: KERALA HIGH COURT

2019-TIOL-2449-HC-RAJ-GST

Rakesh Kumar Khandelwal Vs UoI

GST - Petitioner has filed bail application under Section 439 of Cr.P.C in the matter relating to offence under Section 132(1)(e) of CGST Act, 2017 regarding which bail application was rejected by Sessions Judge, Jaipur Metropolitan, Jaipur - petitioner is the Manager and Authorized signatory of Padmavati Industries - case of the department is that Rs. 7.12 Crore Input Tax Credit has been wrongly claimed by Padmavati Industries - Petitioner contends that all transactions were carried out through Bank transactions and the Industries from whom purchases were made were all active, as per the record of the Department; that an amount of Rs.3.33 Crore was deposited with the Department, thus bringing the total disputed tax credit amount to below Rs.5 Crore and if the tax credit amount is below five crores the offence is bailable; that the owners of Padmavati Industries have obtained a stay on their arrest from the Apex Court; that the Petitioner is in custody from 28.08.2019; that no determination has been done by the Authorities and in the reply filed by the Union of India, they have not mentioned that any fake invoices were prepared for claiming tax credit - Revenue counters the submision by highlighting that the annual turn over of Padmavati Industries was just to the tune of Rs.1 Crore which within a year rose to more than Rs.100 Crore; that a refund of Rs.23 Crore was claimed and a refund of Rs.18 Crore was granted; that seven entities from whom the firm claimed to have purchased material were not in existence and Input Tax to the tune of Rs.7.12 Crore was wrongly claimed; that petitioner is not merely a Manager but he is also having 40% share in the profit of the firm and his capacity is that of a partner; that merely because Rs.3.33 Crore was deposited, offence cannot be termed as a bailable offence.

Held: Petitioner has placed before the Court various Tax Invoices and e-Way Bills through which purchases have been made by the firm and the record of the Department from which it is revealed that Firms were in existence - taking note of the fact that the partners of the firm have been granted protection by the Apex Court and petitioner is in custody from 28.08.2019; the total amount which as per Department is wrongly claimed after deposit of Rs.3.33 Crores is less than Rs.5 Crore, Bench deems it proper to allow the bail application - Petitioner is directed to be released on bail upon furnishing a personal bond together with two sureties and requiring to deposit passport: High Court [para 14 to 17]

- Application allowed: RAJASTHAN HIGH COURT

2019-TIOL-2448-HC-KERALA-ST

VP Khader Vs CCE, ST & C

ST - The assessee is a contractor running a canteen in the premises of one M/s Hindustan Newsprint Ltd. - During the relevant period, duty demand was raised under Outdoor Catering Services - The assessee claimed that no outdoor catering was being carried on and that on a contract awarded for running a canteen for employees, the premises of M/s HNL was handed over to the assessee where he cooked food & served it to the employees - Five assessment orders were passed against the assessee, against which appeals had been filed - One of these appeals was not considered for reason of it being delayed - Against such findings, the assessee approached the Tribunal, which also rejected the appeal - Hence the present appeal.

Held - While this court is dealing with an appeal as provided under the statute, the same does not turn this court into a creature of statute - The High Court exercising its extraordinary power could also look into the hardship caused especially in the context of the Appellate Authority having found the specific transaction to be not taxable and not coming within the ambit of a taxable service under the Finance Act, 1994 - There is no taxable transaction insofar as the transaction of the assessee having been held to fall outside the definition of Outdoor Catering Service on which along, the assessment was framed - Hence the AO could not have imposed tax, especially on the finding rendered by the Commr.(A), which is accepted by the Department - Hence the demand raised not be proceeded with, conditional upon the assessee pre-depositing a certain sum towards the Chief Minister's Relief Fund of the Kerala State: HC

- Appeal disposed of: KERALA HIGH COURT

2019-TIOL-3068-CESTAT-ALL

Gorakhpur Development Authority Vs CST

ST - The assessee is an organization created under provision of Uttar Pradesh Urban Planning Development Act, 1973 - They were in addition to other functions engaged in construction of new buildings during period from October, 2008 to March, 2013 - It appeared to Revenue that the said activity was covered by definition of 'Commercial and Industrial Construction Services' - The assessee is a Government organization and as held by this Tribunal in various cases, allegation of intention to evade payment of service tax cannot be leveled against Government organization - Therefore, the demand for extended period of limitation is not sustainable - For normal period of limitation, assessee was entitled for exemption under Notfn 26/2012 since they did not avail Cenvat credit since the assessee did not register themselves with the Service Tax Department - Therefore, matter remanded to Original Authority to re-compute service tax payable by assessee within the normal period of limitation after allowing the exemption of 75% to the assessee - The penalties imposed upon the assessee is set aside: CESTAT

- Matter remanded: ALLAHABAD CESTAT

2019-TIOL-3067-CESTAT-ALL

Pheonix Lamps Ltd Vs CCE

ST - Assessee is engaged in manufacture of Electrical Lamps - Two units are situated in SEZ, while one unit is situated outside SEZ - The contention of assessee is that in view of the provisions of Section 26 of 2005 Act, it was not liable to pay any service tax on the 'selling commission' paid by them on the authorized operation carried out in these SEZ - It is only when the Department pointed out, the assessee immediately deposited the amount of service tax as also interest and thereafter claimed refund - This refund was granted to assessee and the amount was also paid to them - These refund orders, as pointed out by assessee have attained finality - The refunds were granted since taxable services were provided by assessee to carry out authorized operation in SEZ - The Department, however, issued a demand-cum- notice under Section 73(1) of the Act - The extended period of limitation contemplated under the proviso to 73(1) of the Act was also invoked - The assessee had submitted a detailed reply to the SCN pointing out that they had bona fide reasons for not depositing the service tax and in any case when the Department brought to the notice of assessee the Notification dated 3 March, 2009, they deposited the entire service tax as also interest - The assessee cannot be said to have had any intention to evade payment of service tax, more particularly when the Notification dated 3 March, 2009 enabled the assessee to claim refund of any service tax paid by it in its entirety - It is plausible that the assessee may not have paid service tax because of ignorance of Notification dated 3 March, 2009 - The subsequent Notification dated 1 March, 2011, which superseded earlier Notification dated 3 March, 2009, is in similar terms and it also provides for exemption of payment of service tax by way of refund - It is true that ignorance of law is no excuse, but at the same time nonpayment has to be with an intention to evade payment of service tax - The reasoning given by Commissioner (A), therefore, cannot be accepted - The requirement that suppression has to be with an intent to evade payment of Service Tax has been emphasized by Delhi High Court in Bharat Hotels Ltd. - 2018-TIOL-178-HC-DEL-ST - The orders imposing penalty for the reason that the assessee had not deposited Service Tax cannot therefore be sustained - They are, accordingly, set aside: CESTAT

- Appeals allowed: ALLAHABAD CESTAT

2019-TIOL-3071-CESTAT-CHD

Neeru Enterprises Vs CCE

CX - M/s Abhay Chemicals is located in state of Jammu & Kashmir and is manufacturing Menthol, Menthol flakes and De-Mentholised Oil and availing benefit under Notfn 56/2002-CE - Further, M/s Siddhant Chemicals and M/s Neeru Enterprises are located in state of U. P. and procuring Menthol products manufactured by M/s Abhay Chemicals on payment of duty and availing cenvat credit - The sole allegation against the assessees are based on investigation conducted by Commissioner of Central Excise, Merrut, and as per the investigation, it is alleged that farmers from whom the inputs were purchased were non-existent - Therefore, commission agents never supplied inputs to the assessee and the assessee did not manufacture the goods - The investigation was not conducted at the end of assessees and whole case has been based on investigation conducted at Commissioner Central Excise, Merrut-II - Without investigation, it cannot be held that the assessee was not manufacturer during the impugned period - Moreover, the entries of vehicles at the toll barriers also certified the movements of raw material and finished goods - During the period of investigation itself, assessees were allowed to continue their activity by procuring inputs from UP based supplier and selling goods to their buyers - Therefore, it cannot be held that the assessees were not manufacturing the goods during impugned period - The similar issue on identical facts came up before Tribunal in case of Nanda Mint and Pine Chemicals Ltd. - 2019-TIOL-743-CESTAT-CHD - M/s Abhay Chemicals was the manufacturer during impugned period and paid the duty on the goods manufactured by them, therefore, duty cannot be demanded on the allegation that the assessee was not a manufacturer - Consequently, the cenvat credit can't be denied to the recipient of goods located in State of U.P i.e. M/s Siddhant Chemicals and M/s Neeru Enterprises - Therefore, no penalty is imposable on assessees: CESTAT

- Appeals allowed: CHANDIGARH CESTAT

2019-TIOL-3070-CESTAT-BANG

Outshiny India Apparels Pvt Ltd Vs CCT

CX - The assessee is a company incorporated under provisions of Companies Act with Sh. Srikanth Thirunakara and Sh. Sridhar Thirunakara as Directors - They were engaged in the manufacture and clearance of excisable goods viz. Bags and Soft Luggage items - When the officers of DGCEI visited the premises of factory, they found 1806 Nos of bags which were not accounted for with intent to clear without payment of duty - Further, these bags were not seized from outside the factory premises or during transit and that were seized from the factory premises - Therefore, in view of Rule 4 of Central Excise Rules, duty is payable only at the time of clearance of goods from the factory and in this case, there was no clearance of the said goods from the factory addressing presumptions that they were not accounted with intent to clear without payment of duty is not tenable in law - In view of the judgment in case of Maghan Paper Mukks , it has been consistently held that in the absence of any evidence to show that the attempts were being made to clear the goods without payment of duty, duty on goods lying unaccounted cannot be demanded therefore the demand of duty to the extent of Rs.3,38,399/- is set aside - With regard to the demand of Rs.1,73,625/- on 1479 Nos of bags, assessee during the pendency of this appeal had paid the duty along with interest and the proof of payment is also produced on record - Therefore, assessee could not prove by cogent and convincing evidence that they were not clandestinely removing the said goods therefore the duty on 1479 Nos of bags amounting to Rs.1,73,625/- is confirmed and the assessee is also liable to pay equal penalty under Section 11AC of the Central Excise Act - As regard to the imposition of penalty on Directors is concerned, there is no evidence that the Directors in their individual capacity were guilty of any omissions and commissions mentioned in the Rule - Essentially, unintended lapses were there and hence the imposition of personal penalty on the Directors is not justified - In this regard, the decision in case of Vimlachal Print & Pack Pvt. Ltd wherein it was held that when specific role of the Director is not pointed out, there is no reason to impose penalty under Rule 26 of CER, 1944 - Therefore, penalty imposed on the Directors to the extent of Rs.50,000/- each is set aside: CESTAT

- Appeals partly allowed: BANGALORE CESTAT

2019-TIOL-3069-CESTAT-CHD

Satnam Overseas Ltd Vs CCE

CX - The assessee is engaged in manufacture of miscellaneous edible preparations such as ready to Eat Food Items - On the basis of intelligence, the factory of assessee was visited and it was informed by Shri Rakesh Wadhwa, Deputy Manager of assessee that the miscellaneous edible preparations such as ready to Eat Food Items are classifiable under sub heading 20049000 - The Revenue was of the view that said classification was incorrect and it is required to be classified under sub heading 21069099 - On being pointed out by Revenue, assessee classified their product under sub heading 21069099 and started paying duty thereon - Thereafter, a SCN was issued to assessee by invoking the extended period of limitation to classify the product under Chapter 21 - The product manufactured by assessee and its classification were informed to Revenue vide their letter dt.18.5.2004 as well as their ER-2 returns - Therefore, the fact of manufacturing of goods in question and its classification thereof was in the knowledge of the department - In that circumstance, the extended period of limitation is not invokable - The whole of the demand raised against assessee by invoking the extended period of limitation, is set aside - Neither duty can be demanded from the assessee nor can penalty be imposed on them: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

TII

TP - AMP expenses cannot be regarded as international transaction as per section 92B: ITAT

TP - RPM cannot be treated as MAM to benchmark international transactions, if both transactions qua sales & purchase of goods and resale are with AEs which are related parties: ITAT

TP - In case of debt free company, there is no requirement for making transfer pricing adjustment on account of interest on outstanding receivables: ITAT

TIOLCORPLAWS

IBC, 2016 - Inaction by Resolution Professional to properly dispose of valid claims of Lessor against corporate debtor merits monetary penalty: NCLT

Arbitration & Conciliation Act, 1996 - Technical findings of Arbitral Tribunal related to part performance of composite contract not amenable for substitution in section 34 petition: HC

Patent Act, 1970 - Notice issued to UOI to take immediate steps to ensure timely appointments of Technical Members in IPAB: HC