2019-TIOL-441-AAR-GST

Travancore Cocotuft Pvt Ltd

GST - The applicant company manufactures and exports PVC Tufted Coir Mats and Mattings - The applicant approached the AAR seeking to know the classification of such items.

Held - PVC Tufted Coir Mats and Mattings cannot be considered to be textile of coir and fllor coverings covered under HSN 5702, 5703 and 5705 - If any, PVC or rubber or any other materials are stuffed on the textile of coir, which is used as floor mats or mattings, it will come under CTH 5703 90 90 and will be taxable @ 12% as per Entry No 144 of Schedule II of Notfn No 01/2017-CT(R): AAR

- Application disposed of: AAR

2019-TIOL-440-AAR-GST

Square One Homemade Treats

GST - The applicant company is engaged in reselling food products such as cakes, baked items like cookies, brownies, ready to eat homemade packed food, ready to eat snacks, hot & cold beverages through dispensing machines - All food items sold are pre-packed and no cooking is done at the premises - In the bakery premises, the applicant provided a table for customers who eat food procured from the counter - The applicant approached the AAR seeking to know whether resale of food & bakery products falls under restaurant services - It also sought to know whether of HSN and tax rates favored by the applicant would be correct.

Held - A restaurant is a place of business where food is prepared in the premises and served based on orders received from the customer - In the instant case, it is a bakery where ready to eat items are sold and merely a facility is provided to have it from the shop: AAR

- Application disposed of: AAR

2019-TIOL-439-AAR-GST

PM Sankaran

GST - The applicant manufactures traditional snack items from Kerala using ingredients such as Bananas, Potatoes, Tapioca, Nuts, Dhai, Sugar, Chillies, Spices, Wheat, Rice, Ghee & Coconut Oil - The applicant approached the AAR seeking to know the GST rate for Peanut Candy; Gingelly Candy, Uniappam, Neyyappam, Kinnathappam, Kalathappam, Rice Ball, Achappam, Kuzhalappam, Madakku, Pottiappam, Thatta.Thattavada, Murukku, Avil Vilayichatu & Baked Chips.

Held - The Peanut Candy and Gingelly candy are taxable @ 5% vide Entry No 92 of Schedule I to Notfn No 01/2017-CT(R) - Uniappam, Neyyappam, Kinnathappam, Kalathappam, Rice Ball and Avil Vilayichathu are taxable @ 5% - Achappam, Kuzhalappam, Madakku, Pottiappam, Thatta/Thattavada and Murukku are taxable @ 12% if sold at brand or trade name vide Entry No 46 of Schedule II - If sold in unit container with or without brand name on which any actionable claim or enforceable right in respect of such brand name are voluntarily forgone are taxable @ 5% vide Entry No 101A of the Schedule I of Notfn No 34/2017-CT(R) - Baked chips fall under HSN 2008 19 40 and are taxable @ 12% vide Entry 40 of Schedule II tp Notfn No 01/2017-CT(R): AAR

- Application disposed of: AAR

2019-TIOL-438-AAR-GST

Natural Fibre Tuft

GST - The applicant company manufactures and supplies PVC tufted coir mats and mattings - The applicant approached the AAR seeking the appropriate classification of PVC Tufted Coir Mats and Matting.

Held - PVC Tufted Coir Mats and Matting cannot be considered to be textile of coir and floor covering under HSN 5702, 5703 & 5705 - If any, PVC or rubber or any other materials are stuffed on the textile of the Coir, which is used as floor mats or mattings, it will come under CTH 5703 90 90 and will be taxable @ 12% as per Sr No 144 of Schedule II of Notfn No 01/2017-CT(R) - Moreover PVC Tufted Coir Mats and Matting cannot be classified under tariff item 5703 90 90 and floor coverings of Coir and will not attract 5% GST: AAR

- Application disposed of: AAR

2019-TIOL-437-AAR-GST

Geo Thomas And Company

GST - The applicant-company manufactures and supplies goods used by rubber farmers for agricultural operations such as tapping, collection and processing - The products include plastic cup, spout and cup holder for latex collection - In the pre-GST regime, such items were exempted from tax as they were agricultural implements - The applicant approached the AAR seeking to know the classification and tax rate applicable on such items.

Held - The items such as spout, cup holder and latex collection cup are agricultural implements exclusively used for rubber tapping and come under classification HSN 8201 90 00 as Other hand tools of the kind used in agricultural, horticulture or forest - Hence all these items are exempted from GST: AAR

- Application disposed of: AAR

2019-TIOL-436-AAR-GST

Excel Earthings

GST - The applicant company manufactures and supplies electrical earthing products - It approached the AAR seeking to know the classification of Bentonite Powder which is used for electrical (8 Kg & 6 Kg) as well as its effective tax rate - The applicant claimed that its competitors are selling Bentonite Powder @ 5% in electrical shops for earthing purposes and if such rate of tax is correct.

Held - Bentonite Powder used for electrical earthing is commercially known as Back Fill Compound and it consists of mixture of Bentonite Powder, Wood Charcoal powder, Graphite powder and Sodium Sulphate - This mixture is used as an agent for reducing surface tension - Hence it falls under Heading 3824.99.17 and is taxable @ 18% as per Sr No 97 of Schedule III of Notfn No 01/2017-CT(R) - Moreover, the mixture of Bentonite Powder used for earthing pupose is taxable @ 18%: AAR

- Application disposed of: AAR

2019-TIOL-435-AAR-GST

Dynamic Techno Medicals Pvt Ltd

GST - The applicant-company is a distributor of Cervical Pillow which is used for preventing or correcting Cervical Spondylitis or Cervical Sprain and for supporting or holding head & neck during such illness - It approached the AAR seeking to know whether Cervical Pillows fall under HSN tariff item 5021.10.00.

Held - Cervical Pillows fall under HSN 9404.10.00 and is taxable @ 18% as per Sr No 438 of Schedule III of Notfn No 01/2017-CT(R): AAR

- Application disposed of: AAR

2019-TIOL-434-AAR-GST

Dobersun Products Pvt Ltd

GST - The applicant manufactures traditional snack items from Kerala using ingredients such as Bananas, Potatoes, Tapioca, Nuts, Dhai, Sugar, Chillies, Spices, Wheat, Rice, Ghee & Coconut Oil - The applicant approached the AAR seeking to know the GST rate for Peanut Candy; Gingelly Candy, Uniappam, Neyyappam, Kinnathappam, Kalathappam, Rice Ball, Achappam, Kuzhalappam, Madakku, Pottiappam, Thatta.Thattavada, Murukku, Avil Vilayichatu & Baked Chips.

Held - The Peanut Candy and Gingelly candy are taxable @ 5% vide Entry No 92 of Schedule I to Notfn No 01/2017-CT(R) - Uniappam, Neyyappam, Kinnathappam, Kalathappam, Rice Ball and Avil Vilayichathu are taxable @ 5% - Achappam, Kuzhalappam, Madakku, Pottiappam, Thatta/Thattavada and Murukku are taxable @ 12% if sold at brand or trade name vide Entry No 46 of Schedule II - If sold in unit container with or without brand name on which any actionable claim or enforceable right in respect of such brand name are voluntarily forgone are taxable @ 5% vide Entry No 101A of the Schedule I of Notfn No 34/2017-CT(R) - Baked chips fall under HSN 2008 19 40 and are taxable @ 12% vide Entry 40 of Schedule II tp Notfn No 01/2017-CT(R): AAR

- Application disposed of: AAR

2019-TIOL-3123-CESTAT-MAD

Sasi Enterprises Vs Commissioner of GST & CCE

ST - The assessee is providing 'Manpower Recruitment/Supply Agency Services' - Entertaining a doubt that on preliminary verification of Third Party Data the assessee's total income did not tally with that declared in its Balance sheet, as declared in ST-3 Return and as per Form- 26AS, a SCN was issued thereby proposing the demand of service tax, interest under Section 75, penalty under Section 78 along with late fee under Section 70 of FA, 1994 - Same were confirmed - The adjudication authority has also charged late fee of Rs. 1,13,100/- under Section 70 as against the proposed late fee of Rs. 40,000/- only, in the SCN - The Commissioner (A) partly allowed and partly rejected the assessee's claim while sustaining the late fee charged under Section 70 of the FA, 1994 read with Rule 7C of STR, 1994 of Rs.1,13,100/- - The assessee submitted that the Commissioner (A) has deleted the tax liability on reimbursements following the decision of Supreme Court in case of Intercontinental Consultants and Technocrats Pvt. Ltd. but, however, there is no quantification of the final tax liability after excluding such reimbursements - No explanation by the lower authorities found that the final demand has gone beyond the SCN - It is the settled position of law that such an action is not sustainable and hence, the re-quantified interest liability over and above the interest demanded in the SCN is set aside - Consequently, the adjudicating authority has to see if the payments made towards the interest after re-quantifying in the light of the deletion of reimbursements by Commissioner (A) and then proceed to recover the balance, if any, after adjusting all such payments claimed to have been made by the assessee - The assessee has made out a case for exercising discretion under Section 80 of FA, 1994 and hence, the deletion of penalty under Section 78 of FA, 1994 is directed - The addition itself has been set aside by Commissioner (A) and hence, even on this count, there cannot be any scope for levying penalty under Section 78 of FA, 1994: CESTAT

- Appeal partly allowed: CHENNAI CESTAT

2019-TIOL-3122-CESTAT-BANG

Samsung R And D Institute India Bangalore Pvt Ltd Vs CCE & CST

ST - The assessee-company is a 100% EoU registered with STPI - It is engaged in rendering R&D service in relation to Information Technology Software for Samsung Electronics Corporation Technology Solutions, Korea - The assessee consumes various input services and avails cenvat credit on the same - The assessee filed refund claim in respect of accumulated cenvat credit, as per Rule 5 of CCR 2004 r/w Notfn No 5/2006 CE (NT) - On adjudication, the credit in respect of certain input services was allowed while credit was disallowed on some, on grounds of lack of nexus with the service exported - On appeal, the Commr.(A) opined that no documentary evidence such as utilization certificate was submitted to prove that the services were used outside India - The Commr.(A) partly allowed the credit on grounds that certain services did not qualify as essential input service for provision of output service - Hence the present appeals were filed.

Held - Export of Service - Considering the contract between the assessee and its parent unit in Korea, it is apparent that the assessee's work involves designing, developing and testing the deliverables, which would be the sole patent of Samsung in Korea - Such software developed would be used by Samsung Korea - There is no doubt as to the nature of service rendered by the assessee - Besides, the assessee is an STPI unit and the STPI authorities validate the exports time to time - Hence the assessee exports service relating to Information Technology Software - The recipient is Samsung Korea, which is located outside India - The assessee received remuneration in forex - Hence the assessee's activities amount to export of service - While the Commr.(A) held there to be no documentary evidence such as utilization certificate, the assessee claimed there to be correlation between the FIRCs and export invoices - Such records cannot be brushed aside - The Revenue too did not dispute the issue in respect of all the claims - While the assessee claimed to have produced a declaration from Samsung Korea claiming that these services were used for business purposes in India, the Revenue claimed that the same was not produced before the Commr.(A) - Hence the matter warrants remand for appreciation of evidence: CESTAT

Held - Renting of Immovable Property service, Business Support Service & Management, Maintenance & Repair service - That these services are valid input services stands settled by way of several decisions - Regarding Information Technology Services, the assessee claimed that the dispute is about travel expenses incurred by the personnel of the input service provider which is reimbursed by the assessee - The entire issue of nexus between the input service and output service is already clarified by the CBIC Circular 120/01/2010-ST and various case laws - Hence the issue of examining the nexus between the input services must be examined in the light of such judgments - Hence the matter is remanded for this purpose: CESTAT

- Case remanded: BANGALORE CESTAT

2019-TIOL-3121-CESTAT-DEL

All Cargo Global Logistics Ltd Vs Commissioner of Central Goods and Service Tax

ST - The Internal Audit Branch observed from the financial record of assessee, that the assessee has shown the description of Rs. 39,65,750/- paid to the different transporters on account of the transportation of the goods on behalf of their clients and as such they were required to pay service tax for providing the taxable services of goods transport agency - The assesssee is not issuing any consignment note for providing all the transport service and only raising bills for the transportation charges for various trucks hired by them from the independent owners and use them for providing the services to their clients - Hence, they would not be covered under the GTA service - It is apparent that the issue of consignment note, by whatever name is pre-requisite for the transaction to be covered under 'Goods Transport Agency' - In the present case, service provider has not issued the consignment note to the assessee and hence the assessee is not liable to pay service tax under reverse charge mechanism and also do not fall under category of GTA as under Section 65 (5b) of FA, 1994: CESTAT

- Appeal allowed: DELHI CESTAT

 

 

2019-TIOL-3120-CESTAT-MUM

Pratibha Industries Vs CCE

CX - The assessee-company supplied 620mm OD pipe, 631 mm OD pipe and 1140 mm OD pipes for executing projects for shifting the Munirka and Vasant Kunj water mains as part of corridor improvement, on which the assessee had paid duty - Later, on being made aware of exemption Notfn No 6/2006-CE could have been availed on such projects, the assessee claimed refund of the duties so paid - On adjudication, the refund was denied on grounds that the notification is limited to supplies for initial setting up of water treatment plants - Later, the Commr.(A) held that the exemption was limited to pipes deployed for carrying water from the source to treatment plants and finally to storage facilities but not beyond - It was also held that the lack of copies of credit notes, debtor ledger and copies of the related invoice sufficed to reject the claim on grounds of not having borne the incidence of duty.

Held - It is seen that the pipes had been deployed in connection with providing water supply - It is also noted that the assessee initially paid duty and the present proceedings pertain to claim for refund of such duty - The certificates needed were issued by a responsible govt authority and incorporates details of the project - While the wording of the certificate could be amenable to a different interpretation, it is apparent that the objective of the notification leaves no room for ambiguity and the certificates furnished suffice as compliance - The assessee's counsel pled that the claim be subjected to the test of unjust enrichment - The Commr.(A) noted lack of certain documentation - Hence the matter warrants remand with directions to expedite the proceedings in relation to refund claim only on bar of unjust enrichment: CESTAT

- Case remanded: MUMBAI CESTAT

2019-TIOL-3119-CESTAT-DEL

Natani Rolling Mills Pvt Ltd Vs CE & CGST

CX - The assessee is engaged in manufacture of MS bars - Their factory was visited by Central Excise officers, who conducted various checks and verifications - Nothing incriminating was found - However, the residential premises of one of the Directors Shri Rajesh Natani was also put to search on the same day and certain loose documents, kacchi parchi, private ledgers as well as computer laptop, pen drives and broken data card were recovered - Revenue came to a conclusion that the assessee had indulged in clandestine activities and has evaded duty - The entire case of Revenue is based upon recovery of so called incriminating evidence from the residential premises of one of the Directors - They have not adduced any evidence to connect these documents with the activities of manufacturing unit - No further investigations stand made by them from the persons concerned with the production of goods in assessee's factory and their clearances - Further, there is no identification of transporters or recipient of goods, thus establishing that the assessee had actually cleared the goods in a clandestine manner - Though, Revenue is not expected to prove its case of clandestine activities to the hilt but the evidences produced by Revenue should be, at least, to an extent so as to inspire confidence in the prosecution's case - No further investigations except the recovery of certain incriminating documents from the residential premises of assessee's director read with his retracted statement, stand made - The findings of clandestine activities cannot be upheld on said documents, which were not even recovered from premises of manufacturing unit and as such has to be treated in nature of third party documents - The same required corroboration, which the Revenue has failed to do - No justification found in upholding the impugned order, same is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2019-TIOL-3118-CESTAT-MUM

Renuka Vs CCE

Cus - The appellant was intercepted at the Nagpur Airport, while on his way to Sharjah - Search of his baggage revealed massive amount of Indian currency - Such currency was seized by Customs and SCN was issued proposing to confiscate the same u/s 113(d) and 113(e) of the Customs Act r/w Regulation 3 of FEMA (Export & Import Currency) Regulation, 2007 - Penalty was imposed u/s 114 of the Customs Act on the appellant as well as on his spouse - Such proposals in the SCN were confirmed upon adjudication - Hence the present appeals.

Held - From the statements of the appellant, it is revealed that the Indian currency was carried in his baggage with the objective of taking the same outside India - Such facts were confirmed by the appellant's spouse, who mentioned that such amount of currency had been obtained by selling her jewellery - This establishes the appellant's intention to take the Indian currency to Sharjah - The next step was committed when the appellant took the curency to the Customs notified area of the airport for the journey onwards - While the appellant claimed to have turned back to obtain necessary permission for carrying Indian currency exceeding Rs 5000/-, there is merit in the Revenue's contention that the appellant was aware of the limits for carrying currency, as he was a frequent flyer and admitted to knowing about the limit of Indian currency which could be carried abroad - Hence the appellant's claim of having carried the currency in ignorance of law cannot be accepted - The evidence suggests that the stage of preparation had passed and the appellant attemptedto export the Indian currency - Moreover, as the goods were attempted to be exported and were brought within the limits of any Customs area for the purpose of being exported, the confiscation of the jewellery is justified - However, as the currency was not concealed in any special cavity and was not concealed in any manner so as to evade notice of the Customs authorities but had been kept in the baggage in a routine manner and easily submittred for screening, the invoking of Section 113(e) is incorrect - Besides, the penalty imposed u/s 114 is too harsh and considering the circumstances at hand, the quantum of such penalty merits being reduced - The penalty imposed on the appellant's spouse is liable to be quashed as she was in no way concerned with obtaining permission or with carrying the currency without seeking the requisite permission - Hence the O-i-O be modified accordingly: CESTAT

- Appeals partly allowed: MUMBAI CESTAT

TII

TP - If AE has performed additional functions & deployed higher assets on account of hiring of vessels and has assumed corresponding risks, then profit split method has to be considered for benchmarking: ITAT

TP - Rate of interest prevailing in country where loan has been advanced to/consumed by overseas AE, merits consideration for benchmarking such transaction: ITAT

TP - Consideration which applied for issuance of corporate guarantee are distinct from that of bank guarantee and hence commission charged cannot be called in question by TPO: ITAT

TIOL CORPLAWS

SEBI Act, 1992 - Trading done within nil time gap is concrete indication of meeting of minds between group of entities involved in synchronized trading : SAT

Competition Act, 2002 - Extra-territorial jurisdiction of Commission does not extend to anti-competitive agreements which does not have appreciable adverse effect on competition in India: CCI

Contracts Act - Employer cannot seek claim against ex-employees founded on unlawful interference with business under contract law or law of torts before the Courts of India: HC