Whether where the recovery proceedings are subject to the decision of apex court for preceding AYs, subsequent writ petition against the same issue arising in following tax year is not maintainable - YES: HC

- Assessee's writ petition dismissed: BOMBAY HIGH COURT

2019-TIOL-2498-HC-AHM-GST

AK Overseas Vs State Of Gujarat

GST - Respondent State Tax Officer had requested for an extension of time for conducting inspection of the goods and conveyance from the Joint Commissioner of State Tax, Division-4, Mehsana, pursuant to which, such period for conduct of inspection was extended for a further period of three days and which period expired on 10.10.2019 - Assistant Government Pleader either from the record of the case or upon instructions of the officer concerned is not in a position to point out that any report in Form GST MOV-4 has been prepared despite the fact that the time for inspection has been extended by the Joint Commissioner of State Tax - However, without any such report being prepared in Form GST MOV-4, the second respondent has proceeded to issue notice dated 10.10.2019 under section 130 of the Act.

Held: By way of interim relief, the respondent is directed to forthwith release the conveyance together with the goods contained therein, which shall be subject to the final outcome of the petition - petitioner directed to file an undertaking that in case he does not succeed in the petition, it will discharge its liability under the provisions of the Central Goods and Services Tax Act, 2017 - second respondent shall state on affidavit the reason as to why Form GST MOV-4 has not been prepared and the copy thereof has not been furnished to the petitioner - Issue Rule, returnable on 14th November, 2019: High Court [para 4 to 6]

- Interim relief granted: GUJARAT HIGH COURT

D.O. F.No. 267/78/19/CX-8

SVS - CBIC calls for launch of outreach programmes

2019-TIOL-3157-CESTAT-DEL

Petronet Lng Ltd Vs PR CST

ST - Business Auxiliary Service - Case of the Department, as set out in the demand cum show cause notice, is that the LNG received "free of cost" by the Appellant from the customers for regasification of LNG is a non-monetary consideration for providing a taxable service and so its value has to form part of the taxable value, but the Appellant did not include this value and did not pay service tax resulting in short payment of service tax - Principal Commissioner concluded that the Appellant retained part of LNG supplied to it by the customers for regasification in terms of the Agreement and, therefore, such quantity of LNG received "free of cost" would be a non monetary consideration for service of regasification, in addition to the amount charged for the actual quantity of RLNG delivered at the Delivery Point - Accordingly, the Principal Commissioner determined the value of such LNG under section 67 of the Act and Rule 3 of the Service Tax (Determination of Value) Rules 2006 - contention of the Appellant is that the concept of "allowed loss and consumption" contemplated under the Agreement cannot be considered as a non-monetary consideration for the regasification service - According to the Appellant, the "allowed loss and consumption" is effectively a remittance of the performance as agreed upon between the parties and is not in the nature of a "consideration" for the service of regasification - in the alternative, it is submitted that even if it is assumed that the customers provided LNG to the Appellant as "free of cost material" for the services of regasification, then too the "free of cost material" supply would not constitute "consideration" for the purpose of levy of service tax because the value of such LNG cannot be added to the amount charged by the Appellant for determining the taxable value of services in view of the decision of the Supreme Court in Bhayana Builders 2018-TIOL-66-SC-ST; that the "concept of allowed loss or consumption" in the Agreement is to take care of the inherent loss and uncertainties of the regasification process and that the concept of losses/ uncertainties in measurement is inherent in an industrial process and is well recognized under the indirect tax laws and accordingly, the losses and uncertainties cannot be subjected to service tax.

Held:

++ In view of the aforesaid decision of the Supreme Court in Bhayana Builders, "free of cost" LNG supplied by the customers to the Appellant cannot be included in the value of taxable service - It is also important to note that the stipulation "allowed loss and consumption" is a condition of the contract and cannot be treated as a consideration for the contract entered into between the Appellant and the customer - Such a distinction has been noticed in a Goods and Services Tax ruling rendered by the Australian Taxation Office GSTR 2001/06 relating to non-monetary consideration wherein it was observed that the recipient of a supply may provide or make things available for the supplier to use in making the supply and this thing may not necessarily form "consideration" - In this view of the matter also, the "allowed loss and consumption" will not form part of the "consideration" for the purpose of levy of service tax: CESTAT

++ Statements made by the Officers assume importance because it is the customers who would suffer if they were to ultimately receive lesser energy of LNG at the Delivery Point - It was, therefore, obligatory on the part of the Principal Commissioner to have considered all the aforesaid statements instead of merely relying upon an isolated statement of Sanjay Kumar that there are no losses during the process of regasification, more particularly when this statement was contrary to a specific clause in the Agreement - On a consideration of the aforesaid statements, it is clear that there are inherent losses when regasification of LNG takes place and it for this reason that the parties have included a clause in the Agreement relating to "allowed loss and consumption": CESTAT

++ In this view of the matter, the Commissioner was not justified in confirming the demand of service tax on the value of pre-determined quantum of LNG identified by the parties towards "allowed loss and consumption" since such "free of cost" supplies of LNG by the customers cannot form part of the "consideration" received by the Appellant - The value of such LNG cannot, therefore, be included in the taxable value for payment of service tax: CESTAT

++ It is not possible to sustain the order dated 26 July, 2016 passed by the Principal Commissioner confirming the demand of service tax upon the Appellant with interest and penalty.

++ Penalty of Rs. 1 Lakh imposed upon Pankaj Wadhwa as Vice President of the Appellant cannot also be sustained for the reason that the demand itself has been set aside. [para 18, 21, 22, 31, 37, 38, 43, 48 to 52]

- Appeals allowed: DELHI CESTAT

2019-TIOL-3137-CESTAT-ALL

CX - The assessee entered into a contract with M/s HPCL for providing services of maintenance and repair, for which paint was a requisite input - The dispute is related to availment of credit by assessee in respect of paints cleared by them to themselves only for the purpose of carrying out the services at the site of HPCL - Admittedly, paint is one of the requisite input on which the assessee is entitled to avail the credit - Merely because the assessee themselves are the paint manufacturers and raised invoices in their own name but for HPCL site, they cannot be denied the Cenvat credit of duty paid by them - The other objection of Revenue is that the credit so availed by them was not exclusively used for payment of service tax and a part of the same was also used for further payment of excise duty on the paints cleared by them - The contention of assessee is that once they are entitled to credit, which goes into the common pool maintained by them, no one to one co-relation is required and the credit availed by them can be used for any purpose - Admittedly, assessee was acting in dual capacity i.e. as manufacturer and also service provider - As a manufacturer, he had cleared the goods on payment of duty and as a service provider, he has availed the credit, which is available for further utilisation for payment of service tax or for payment of duty of excise - No merits found in Revenue's contention raised otherwise - The impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

CX - The assessee-company manufactures Excisable goods and obtains purchase orders from its buyers wherein the goods are to be delivered at the buyer's place on FOR basis - The assessee sold goods to buyers and the transportation cost was borne by the assessee and the goods were in its possession till delivered at the buyer's factory gate - The Revenue opined that in such cases, the place of removal is the factory gate and therefore after removal of the goods from the factory gate, the assessee is not entitled to avail cenvat credit of outward transportation service charges - Various SCNs were issued to the assessee to deny Cenvat credit - On adjudication, the proposals in the SCN were sustained - Hence the present appeals.

Held - The O-i-O was assailed before the Commr.(A), who did not follow the Tribunal's order in Rahul Bhandare Vs. Commissioner of Customs (Import), Mumbai and passed orders which run contrary to the directions of the Tribunal as laid down in this case - It had been held therein that the lower authorities were required to follow the order of higher forum, if such order was not appealed against - The assessee is entitled to avail Cenvat credit on outward transportation charges in case, the assessee has ownership of the goods till delivery of the goods to the buyers as per Notfn No 1065/04/2018-CX dated 08.06.2018, therefore, Cenvat credit is allowed - The assessee is entitled to avail Cenvat credit on outward transportation as it itself is the consignee of the goods till the goods reach the buyer's factory gate - The O-i-As in challenge merit being quashed: CESTAT

- Assessee's appeals allowed: CHANDIGARH CESTAT

2019-TIOL-3133-CESTAT-AHM

Sanjay Manjibhai Gadhesariya Vs CC