VN Mehta And Company Vs Assistant Commissioner

GST - The present writ challenges the proceedings initiated against the petitioner directing recovery of certain amount from the account maintained by the petitioner - Such recovery was ordered on account of tax, cess, interest & penalty payable by the petitioner as it had failed to pay the same - The petitioner claimed that the proceedings had been initiated straightaway, without framing assessment or initiating proceedings to determine the tax, cess, interest or penalty as claimed - It was claimed that Section 79 of the CGST Act cannot be invoked to recover the sum if such sum is an arrear payable by the petitioner - It was also claimed that though a statement had been obtained from the petitioner to the effect that it had availed ITC on the strength of invoices issued by fake units, such statement had later been retracted.

Held - It is seen that except issuing proceedings u/s 79, no other proceedings were ever initiated against the petitioner determining its tax liability as was sought to be recovered - Section 79 of the Act contemplates that any amount payable by a person to the Govt under any of the provisions of the Act and Rules made thereunder is not paid, the proper officer could recover the amount by one or more modes - Hence, it is evident that the term amount payable by a person is to mean that such liability arises only after determining such amount in a manner known to law - In this case, the relevant authority relied on the so-called admission made by the petitioner in its statement - Considering relevant excerpts from the petitioner's statement, it is seen that some parts of the statement contradict each other - Besides, the statement was retracted as well - Hence such statement which purports to be an admission is not available to the Revenue - It is also for the Revenue to determine the tax liability by resorting to procedures as per law rather than issuing the proceedings straightaway u/s 79, based on such statement later retracted - Hence the proceedings initiated u/s 79 is unsustainable - Moreover, provisional attachment u/s 83 can be resorted to only if proceedings are pending u/s 62, 63, 64, 67, 73 & 74 - No proceedings are pending under any such provisions - Hence Section 83 is of no avail to the Revenue - Thus the proceedings are not maintainable and merit being set aside: HC

- Writ petition allowed: MADRAS HIGH COURT

2019-TIOL-2593-HC-AHM-GST

Sarveshwar Shyambihari Mittal Vs State of Gujarat

GST - Vehicle in question has been released by the respondents and the petitioner is not interested in taking custody of the goods; that the vehicle since released, petitioner does not press the petition - Assistant Government Pleader has submitted that the respondents have no objection if the petition is disposed of as not pressed; that the goods are still lying in the custody of the respondents.

Held: Petition is disposed of as not pressed by clarifying that, it shall be open for the respondent authorities to take appropriate action in connection with the goods seized by them on 31.07.2019, since the owner of the goods has not come forward for release of the goods: High Court [para 4]

- Petition disposed of: GUJARAT HIGH COURT

2019-TIOL-2592-HC-AHM-GST

Vivan Steel Pvt Ltd Vs State of Gujarat

GST - Petitioner states that they are ready and willing to pay the amount of tax and penalty in terms of the impugned notice issued under section 130 of the CGST Act - respondents are, therefore, directed to forthwith release the Truck together with the goods contained therein upon the petitioner paying the tax and penalty as mentioned in the impugned notice issued under section 130 of the CGST Act – Matter posted for 28 th November 2019: High Court [para 2, 4]

- Matter posted: GUJARAT HIGH COURT

2019-TIOL-2591-HC-RAJ-GST

JODHPUR TRUCK PVT LTD Vs UoI

GST - Petitioner has sought a direction to the respondents to accept its GST TRAN-1 form offline or by opening portal - Counsel for respondent submits that the assessee is permitted to furnish offline GST TRAN-1 form, only if he had made an attempt to submit it electronically before 27.12.2017; that that in absence of any evidence or proof of uploading GST TRAN-1 form, evincing that the failure was a result of technical glitch, the petitioner cannot be given any indulgence/relief.

Held: It is noteworthy that by way of the notification 48/2018-CT dated 10.9.2018 a new proviso sub-rule (1A) was introduced in rule 117 of CGST Rules, while the provision contained in sub-rule (1) remained unaltered - A careful reading of sub-rule (1A) shows that it is not an extension of time of furnishing return or GST TRAN-1; it is rather an enabling provision providing further opportunity to the registered person who could not submit the said declaration by the due date on account of technical difficulties on the common portal - A bare look at the above-quoted provisions leaves no room for ambiguity that an assessee can be permitted to furnish offline GST TRAN-1 form subject to fulfilling all the three conditions viz. (i) the assessee failed to upload his GST TRAN-1 form on account of technical glitches on the common portal; and (ii) such attempt was made during the currency of transitional period i.e., 27.12.2017 and (iii) the GST Council has made a recommendation for such extension, being satisfied about such failure - A perusal of the memo of petition shows that the petitioner has neither made any assertion about the date/point of time, when it made attempt to upload his GST TRAN-1 form, nor has it placed any documentary evidence to substantiate such position - The averments made in the writ petition, however indicate that the petitioner has made first such attempt on 23.8.2019; no such request to GST Council seems to have been made - in each of the cited cases, the respective High Courts have recorded a categorical finding, based on petitioners' assertion that a genuine effort was made by the petitioner for furnishing return and TRAN-1 form within the period prescribed under Rule 117 of the Rules of 2017 and that there was a technical flaw in the system for which the return & Form TRAN-1 could not be furnished/uploaded - such fact is conspicuous by its absence and has been specifically disputed by the respondents - judgments cited by the petitioner are, therefore, of little avail to him - present writ petition is, therefore, disposed of with the direction to the respondents to permit the petitioner to submit offline GST TRAN-1 form, subject to furnishing a proof that he had tried to upload GST TRAN-1 form prior to 27.12.2017 and such attempt failed due to technical fault/glitch on the common portal - Needless to mention that petitioner will be required to submit a certificate/recommendation issued by GST Council in this regard - In case all the three requirements enumerated above are met/satisfied, the petitioner's offline GST TRAN-1 form shall be accepted, of course, if it is filed by 31.12.2019 or extended period (if any) - application stands disposed of: High Court [para 10, 11, 12, 13, 15, 16, 17, 18]

- Petition disposed of: RAJASTHAN HIGH COURT

ST - The application has been filed with a prayer for issuance of a direction upon respondents to stay the initiation of recovery proceeding under Section 87 of Finance Act, in light of the Department's Circular dated 16.9.2014, wherein it is mentioned that no coercive measures for the recovery of the balance amount, i.e., an amount in access of 7.5% or 10% deposited in terms of Section 35 (F) of CEA, 1994 or Section 129 (E) of the Customs Act, shall be taken during the pendency of the appeal - Against the order passed by Additional Commissioner, the appeal was filed by petitioner before the Appellate Authority, which dismissed the appeal of petitioner, and thereafter the petitioner has preferred the appeal before Tribunal, Kolkata, which is pending - The petitioner has also deposited 10% of the amount as assessed, before the Appellate Tribunal - In the counter affidavit filed on behalf of Revenue, the notice issued under Section 87 of Finance Act, has been brought on record, and it is stated that the department shall not proceed further after the initial action of issuing notice under Section 87 of Finance Act, once it was known that the assesse had moved for appeal before the Commissioner (A) - In view of the specific statement made in the counter affidavit filed by Revenue, this writ application itself becomes infructuous - In any view of the matter, the reliefs prayed for by the petitioner can be made before the Tribunal, Kolkata, where the appeal of the petitioner is admittedly pending: HC

- Application disposed of: JHARKHAND HIGH COURT

ST - The assessee is in appeal against impugned order where they are contesting imposition of penalty under Section 78 of FA, 1994 and late fees imposed under Rule 7C of Service Tax Rules, 1994 - It is a fact on record that assessee availed service tax Registration on 08.10.2013, whereas investigation was started on February, 2014, as they started paying service tax of their own after obtaining registration - In that circumstances, extended period of limitation is not invokable, moreover, assessee has paid service tax along with interest before issuance of SCN - In terms of Section 73 (3) of the Act, no SCN was required to be issued to the assessee - Therefore, proceedings initiated against the assessee through the impugned SCN are set aside - In result, the appeal is allowed to the extent by dropping the penalty and fine imposed on the assessee in the impugned order: CESTAT

- Appeal disposed of: DELHI CESTAT

CX - The assessee-company manufactured Single Super Phosphate Fertilizer (SSP), the main raw material for which is Sulphuric Acid - The latter would be procured from the manufacturers without payment of duty and after following the procedure as per Chapter X in terms of Notfn No 7/94-CE - The assessee's factory was searched during the relevant period, whereupon the statements of the director were recorded, admitting that the Sulphuric Acid procured duty free would be sold in the open market and that they purchased spent sulphuric acid and used the same to manufacture SSP - The premises of the transporter were searched and statements were recorded admitting that the Sulphuric acid was indeed diverted to the open market - Hence, SCN was issued proposing duty demand in respect of the Sulphuric Acid procured - Such SCN culminated into an O-i-O confirming duty demand and imposing penalty on the assessee-company along with personal penalty on the director - Such findings were sustained by the Commr.(A) - Hence the present appeal.

Held - The entire case of Revenue is based on the statements of the director admitting that the Sulphuric Acid was procured without payment of duty as per Notfn No 7/94-CE & that the same was cleared in the open market - Such statement of the director was subsequently retracted - Apart from such statement, there is no evidence indicating the sale of sulphuric acid and the purchase of spent sulphuric acid - The Revenue did not investigate into who purchased the duty free sulphuric acid or as to from whom the assessee purchased the spent sulphuric acid - It is trite law that retracted statements cannot be made basis for drawing inferences against an assessee, unless the same are corroborated by independent and reliable evidence - Besides, in terms of the Chapter X procedure, the raw material procured by the assessee must be verified by the jurisdictional Central Excise officer inasmuch as they are received under AR-3 form and detailed procedure is prescribed - The assessee claimed that such consignment of duty free goods were verified by the jurisdictional Excise officers & no discrepancies were found - Moreover, the reasoning of the Commr.(A) prejudices the Revenue's own case - If the quality was not verified by the jurisdictional authority, it is not known as how the Revenue was aware that the quality of the consignment was not Sulphuric Acid but was spent Sulphuric Acid - Further, the raw materials are received under AR-3 Form and the name of the supplier is duly mentioned - The supplier in the present case was the manufacturer of Sulphuric Acid and not spent Sulphuric Acid - Hence the Revenue's case has no legs to stand on: CESTAT

- Assessees' appeals allowed: ALLAHABAD CESTAT

CX - The assessee-company manufactures Lead and Zinc concentrates, Zinc Cathode and Sulfuric Acid - The Revenue noted that the assessee availed credit of service tax paid on compensation granted to the service provider which provided services for building and bringing into commercial operations, services such as fabrication, installation, erection and commissioning services for various plants & machineries - The appellant was to provide certain space and facility to service provider for commencing and carrying out the work, but due to certain circumstances, the same could not be provided within the period prescribed - Hence the assessee paid some amount as compensation to the service provider who otherwise discharged its liability - The Revenue issued SCN proposing to recover the credit availed by the assessee with interest & penalty - Such demands were confirmed on adjudication - Hence the present appeal.

Held - It stands settled by the Tribunal in CCE, Delhi-II vs. Welspring Universal that once duty has been paid by supplier of goods or service provider in favor of the assessee, then cenvat credit cannot be denied - Besides, assessment cannot be reopened at the end of the recipient of such goods or service - The compensation herein is otherwise opined to be as good as the escalated price in the supplementary invoice - There is no apparent mens rea on part of the assessee to evade payment of duty and the fact remains that the duty is already paid - The credit thereof cannot be disallowed - In such circumstances, the SCN should not have been issued or should have been issued within one year of the fact being brought to the Revenue's notice - The Revenue invoked extended limitation alleging suppression or misrepresentation of facts by the assessee - As any mala fide intent is absent, the Revenue cannot invoke extended limitation - Hence the O-i-O cannot be sustained: CESTAT

- Assessee's appeal allowed: DELHI CESTAT