Devrajbhai Vikrambhai Sambad Vs State of Gujarat

GST - The present petition was filed seeking the release of conveyance belonging to the petitioner, which had been confiscated during the relevant period - The petitioner claimed to be willing to pay an amount in lieu of confiscation.

Held: In light of the same, the Revenue authorities concerned are directed to release the conveyance in queston upon the petitioner depositing the amount in lieu - Such amount be treated as a deposit subject to final outcome of the proceedings u/s 130 of the CGST Act - The authorities then are to afford a reasonable opportunity of hearing - Petitioner is open to approach this court upon an adverse order being passed: HC

- Writ petition disposed of: GUJARAT HIGH COURT

2019-TIOL-2896-HC-P&H-GST

Asian Casts and Forgings Pvt Ltd Vs UoI

GST - The petitioner-company is engaged in manufacture and sale of cycle parts and is registered under the GST Act - Before introduction of GST, the petitioner was registered under the Central Excise Act 1944 and Punjab VAT Act - The petitioner claimed that it was unable to upload the details of unutilized ITC as per the accounts books to the electronically generated Form TRAN-1 which was needed under the GST regime for availing the benefit of the previous unutilized ITC.

Held: It is agreed by counsels for both sides that the issue at hand stands settled in the judgment in Adfert Technologies Pvt.Ltd. Versus Union of India and others - In view of the same, the petitioner is permitted to file/modify the Form TRAN-1 - Should the petitioner be hampered from availing the benefit of the judgment, due to non opening of the Portal by the Revenue, then the petitioner shall be permitted, in the alternative to claim the benefit of unutilized credit in their GST-3B Forms to be filed for the month of January 2020: HC

- Writ petition disposed of: PUNJAB AND HARYANA HIGH COURT

2019-TIOL-76-NAA-GST

Director General Of Anti-Profiteering Vs Adani M2K Projects Llp

GST - Anti Profiteering - During the relevant period, a complaint had been filed before the Haryana State Screening Committee on Anti Profiteering alleging profiteering by the respondent in respect of a flat purchased by the applicant in a project developed by the respondent - It was alleged that the respondent did not pass on benefit of ITC by way of commensurate reduction in price - The Screening Committee forwarded the matter to the Standing Committee on grounds that availability of ITC on the inputs had reduced the respondent's tax burden and that the same had to be passed on - The Standing Committee referred the matter to the DGAP - The DGAP considered the material furnished by the respondent and concluded that it benefitted from additional ITC to the tune of about Rs 1.51% of the turnover - The profiteered amount was determined at Rs 12,533,555/- - Hence the DGAP concluded that by not reducing the pre-GST basic price by 1.51% on account of additional benefit of ITC and charging GST @ 12% on the pre-GST basic price, the respondent had contravened the provisions of Section 171 of the CGST Act.

Held - The respondent claimed to have passed on benefit to eligible buyers is untenable, as the respondent submitted only sample copies of credit notes and did not submit any proof of having passed on the ITC benefit to other eligible buyers - Further, such credit notes were not furnished before the DGAP - Moreover, the ITC benefit to be passed on has been computed at Rs 1.25 crores based on data supplied by the respondent, who did not challenge the computation and agreed to pass on ITC benefit to the recipients - Hence the provisions of Section 171(1) of the CGST Act have been contravened - The respondent is directed to pay the profiteered amount to the home buyers with applicable interest - As the respondent contravened the provisions of Section 171(1), penalty is liable to be imposed on the respondent u/s 171(3A) of the Act - SCN be issued to the respondent in this regard: NAA

- Application disposed of: NAA

Director General Of Anti-Profiteering Vs Nirala Projects Pvt Ltd

GST - Anti Profiteering - The applicant booked a flat in the respondent's project - The applicant later alleged that the respondent had increased the price of the flat after introduction of GST and had not passed on the benefit of ITC through commensurate reduction in price - The UP State Screening Committee too concluded that the respondent had not passed on the benefit of ITC as the ITC available was to be apportioned against the instalments towards the price of the flat - The matter was referred to the Standing Committee which further referred the same to the DGAP, which proceeded to determine the profiteered amount at about Rs 2.88 crores - It was also held that additional ITC of about 5.42% of the taxable turnover should have resulted in commensurate reduction in base price as well as cum tax price and that as per mandate of Section 171 of the CGST Act, the benefit of additional ITC was required to be passed onto the customers - Thereafter the matter reached the NAA.

Held - The respondent claimed that the meaning of profiteering as per Black's Law Dictionary was making advantage of unusual or exceptional circumstances to make excessive profit - However, considering the definition of profiteered amount as per Section 171(3A) of the CGST Act, it is clear that the definition of profiteering as per the respondent is incorrect and the profiteered amount is to be calculated as per the Explanation to the sub-section (3A) - The respondent claimed to have passed on benefit of about Rs 1.96 crores to customers and that such amount be reduced from the total demand - However, from the invoices furnished by the respondent, it emerged that the additional benefit far exceeded the amount claimed to have been passed on by the respondent - Other sample invoices were not verified by the DGAP and the respondent produced no evidence to establish their genuineness - Hence such claim merits being rejected - The respondent also claimed that more benefit was passed onto customers whose flats were constructed post 01.07.2017 while less benefit was passed onto those whose flats were constructed before 30.06.2017 - It is worthwhile to state that the benefit be passed on for the entire project commensurate to the amount paid by a buyer in the post-GST period on the additional ITC availed by the respondenjt, which has no connection with the stage of construction - There is no equating of the benefit to all customers as the same would depend on the area and amount paid by each customer - Hence such contention does not hold water - The respondent - The respondent also objected to the methodology adopted by the DGAP while considering ITC period post GST and that the DGAP wrongly claimed there to be no correlation between VAT reported in his returns and the turnover collected from buyers - It is seen that the respondent did not collect VAT from buyers and paid VAT by adding 10% to the purchase value of inputs paid in cash - Hence the DGAP correctly did not take ITC of VAT into account while calculating the ratio of ITC to turnover in pre-GST period - Moreover, the ratio of -0.05% computed by the responmdent cannot be taken into account and it cannot be argued that the respondent did not avail the benefit of additional ITC post GST - Moreover, it is seen that reversal of cenvat credit is subject to the CCR 2004 and has no connection with calculating the ratio of ITC to turnover - Moreover, reversal depends on the area unsold and has no relation with the period - Hence it is clear that the respondent profiteered from not passing on benefit of ITC rate reduction to the customers which is in contravention of Section 171 of the Act - Moreover, SCN be issued proposing penalty u/s 171(3A) of the Act: NAA

- Application disposed of: NAA

2019-TIOL-3607-CESTAT-MUM

ST - The assessee is engaged in manufacture of chemical fertilizers and also receiving goods transport agent service for movement of the said fertilizers - They had discharged the service tax - However, they subsequently realised that in terms of provisions of notfn 25/12-S.T., the service tax on transportation of fertilisers was absolutely exempted - Accordingly, they filed refund of service tax paid during the period 05.05.2013 to 05.09.2015 - Same was partly rejected as barred by limitation - Admittedly, in terms of High Court decision, the tax paid under a mistake of law has been held to be refundable irrespective of the period of limitation - However, it has to be kept in mind that the High Court exercises vast jurisdiction in terms of writ petition under Article 226 of Constitution - The Tribunal, being a creature of law is bound by provisions of the Act and is expected to exercise its powers and jurisdiction within the four corners of the Act - In terms of the provisions of Section 11B, any refund, arising to an assessee, has to be filed within the period of limitation provided under the said section - The said section, nowhere makes any distinction between the refund of tax/duties having been filed under a mistaken belief or otherwise - Any duty or tax, which was not payable, but was paid by an assessee, is required to be refunded to the assessee - If such refund are allowed without considering limitation, the provisions of section 11B would become futile and otiose and nothing would remain in section 11B regarding limitation to be applied to such refund claims - It is well settled law that any interpretation which leads to rendering any provisions of law as futile has to be avoided - The said contentions are supported by Supreme Court in case of Porcelain Electrical Mfg. Co. wherein it was clearly held by Supreme Court that the excise authorities working under the Act are bound by provisions of the Act and cannot exercise jurisdiction which the High Court exercised in terms of their writ jurisdiction - As such, by applying the ratio of decision of Supreme Court, in the absence of any dispute to the fact that the refund claim stands made after a period of one year, no merits found in the appeal and the same is rejected: CESTAT

- Appeal rejected: MUMBAI CESTAT

2019-TIOL-3606-CESTAT-BANG

ST - The assessee is a proprietary concern engaged in providing Security Agency service - On audit of the assessee's accounts, it was noticed that the assessee had shown liabilities towards service tax in its audited financial statement for the relevant periods - The amount of service tax collected had not been paid to the Department - The assessee paid the duty as pointed out by audit along with interest before issuing of SCN - Thereafter, SCN was issued proposing to raise duty demand with interest and proposing to impose penalty - Such demands were confirmed with interest upon adjudication - The duty already paid was appropriated and the penalty was imposed u/s 77 of the Finance Act 1994 - On appeal, the Commr.(A) allowed partial relief, by upholding dropping of penalty u/s 76 but also holding that dropping penalty u/s 78 was unsustainable - Hence the present appeal.

Held - It is seen that the assessee did not pay service tax and also did not file returns - Besides, short payment of service tax was detected by the Revenue upon audit of the assessee's books of accounts - It is also seen that soon as the same was detected, the assessee paid the duty with interest before issuing of SCN - The original authority confirmed duty with interest and also appropriated duty and interest paid, while also dropping the penalties u/s 76 & 78 of the Act on account of there being no mens rea on part of the assessee to not pay service tax - Penalty was also imposed u/s 77 of the Act for contravening various provisions of the Act - It is found that once the assessee reflected duty liability in its books of accounts, the same entails there to be no suppression of facts to evade payment of duty and that non-payment of duty was due to financial difficulties which were proven by the assessee through documentary evidence - Hence the penalty imposed u/s 78 is quashed - However, penalty imposed u/s 77 is sustained: CESTAT

- Assessee's appeal partly allowed: BANGALORE CESTAT

2019-TIOL-3603-CESTAT-MUM

Cus - The appellant-company claimed drawback against goods exported by them described as PV Suitings along with "woven fabrics of synthetic staple fibre containing 85% or more by weight of synthetic staple fibre - However, based on investigations, it was found that the goods exported had polyester and viscose in blend viz 65/35, 69/31 & 70/30, hence the drawback in respect of the said goods could have been claimed under S No 551502A of Drawback Schedule - It was alleged that the assessee misdeclared the goods on the export related documents to claim higher drawback than was admissible - The assessee demanded some amount of duty towards payment of excess drawback availed - SCN was issued proposing to disallow drawback, raise demand for recovery of the same and impose penalty and confiscation of imported goods - Such proposals were confirmed upon adjudication - Hence the present appeals.

Held - The Revenue has discharged the onus cast on them to establish that the goods under dispute were correctly classifiable under Sl No 551502A of the Drawback Schedule, as is seen from a reading of the relevant paragraphs of the SCN - Hence the appellant's challenge to the classification does not hold much merit - Besides, it is quite evident that the classification determined by the Revenue is not solely based upon the statement of the first appellant, but is based on material evidences and facts - Moreover, the reasonable time limit as laid down by the Apex Court in case of Citadel Fine Pharmaceuticals for exercising the right to recover the inadmissible drawback in terms of Rule 16, should in case of misdeclaration of the export goods should be at least five years from the date of disbursement of drawback to the appellants - As the appellants claimed the inadmissible drawback and the same was disbursed, the demand of interest in respect of the inadmissible amount of drawback from the date of disbursement to the date of payment is justified - Moreover, since the goods have been held liable for confiscation under Section 113(h)(i) of the Customs Act, penalty under Section 114 is justifiable - Perusal of Section 114 shows that penalty under the said section is impossible in respect of the goods held liable for confiscation and it has nothing to do with the actual confiscation of the goods - Hence the goods have been misdeclared by describing them in a manner to avail excess drawback, the goods were liable for confiscation and hence the appellants who were responsible for making such incorrect declaration liable to penalty - Hence the O-i-O is sustained, albeit while also setting aside the confiscation and redemption fine: CESTAT

- Assessee's appeal partly allowed: MUMBAI CESTAT