Mozart Global Furniture Vs STO

SGST - The petitioners have been served with notices under Section 74 read with Section 122 (1) of CGST/SGST Act proposing the demand of a tax/penalty from estimated turnover for the assessment years 2017-2018 and 2018-2019 - It is their case that they were not permitted to take copies of documents seized from their premises, or provided an opportunity to comment upon the same and that the respondents are now proposing to proceed with the adjudication proceedings pursuant to the notices served on them - Inasmuch as the adjudication proceedings pursuant to Ext.P1 notice have not commenced and a denial of the request of the petitioners for copies of the documents seized from their premises would tantamount to a violation of the rules of natural justice, it is directed that on the petitioners approaching the 1st respondent within a period of two weeks, the 1st respondent shall furnish to them copies of documents seized from their premises and reliance on which is placed in Ext.P1 notice, within a week from the date of the petitioners approaching the 1st respondent: HC

- Writ petition dispose of: KERALA HIGH COURT

2020-TIOL-40-HC-KERALA-GST

Abbott Healthcare Pvt Ltd Vs CST

GST - It is the case of the petitioner that as per the business model operated by it in the State of Kerala, it places its diagnostic instruments at the premises of unrelated hospitals, laboratories etc. for their use for a specified period without any consideration - The petitioner also enters into Reagent Supply and Instrument Use Agreements with various hospitals, laboratories etc, whereunder, the arrangement between the parties is for the supply of medical instruments to the hospital/laboratory concerned, for their use, without any consideration for a specified period and for the supply of specified quantities of reagents, calibrators, disposables etc. at the prices specified in the agreement, through its distributors on payment of applicable GST - It is stated that, as per the agreement, while the supply of instruments is by the petitioner, the supply of reagents, calibrators and disposables are effected by its distributor, who purchases the said products from the petitioner on principal to principal basis - When the distributor supplies the reagents, calibrators and disposables to the hospitals/laboratories concerned, the distributor discharges the applicable GST on the price charged for supply of the said products - In other words, there is no direct sale/supply of the reagents, calibrators and disposables by the petitioner to the hospitals/laboratories in question - When a consignment of instruments was being transported to a laboratory without any consideration, pursuant to the agreement entered into between the parties, the same was seized by the Assistant State Tax Officer, Kozhikode, on the ground that the goods were not accompanied with a tax invoice but were being transported under a delivery challan - Although the detained goods were subsequently released consequent to the petitioner furnishing a bank guarantee and a bond as provided under the CGST Act and Rules, the petitioner thought it appropriate to obtain an Advance Ruling from the Authority for Advance Ruling and which held that - 2018-TIOL-186-AAR-GST held that the placement of specified medical instruments to unrelated customers like hospitals, laboratories etc., for their use without any consideration, in the backdrop of an agreement containing minimum purchase obligation of products like reagents, calibrators, disposables etc. for a specified period constituted a "composite supply"; that the principal supply in the said composite supply was of the transfer of right to use goods for any purpose which was liable to GST under Sl.No.17(iii) – Heading 9973 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017; that supply of reagents, calibrators, disposables etc., became taxable at the rate of tax applicable to the instruments, namely, 18% [9% CGST + 9% SGST] – The appellate authority for Advance Ruling - 2019-TIOL-11-AAAR-GST upheld this order, hence the petitioner is before the High Court.

Held:

+ There was no occasion for the AAR to go into the issue of whether the supply effected was a composite supply or not and, therefore, its findings on the said issue are at any rate legally untenable - The concept of enhancement of utility of the instrument through the supply of reagents/calibrators/disposables, while relevant for the purposes of valuation of the supply of instruments, cannot be imported into the concept of composite supply under the GST Act - A distinction has to be drawn between the nature of a supply and the valuation thereof - While clubbing of two independent supplies may be resorted to for the purposes of valuation of each of those supplies, there is no scope of clubbing of two independent supplies so as to notionally alter the very nature of each of those supplies as they existed in fact, at the relevant point in time: High Court [para 8]

+ Transactions envisaged under the agreement entered into between the petitioner and its customer hospitals/laboratories militate against viewing them as a composite supply - Firstly, the supplies are made by two different taxable persons; the supply of instrument being by the petitioner and the supply of the reagents, calibrators and disposables being by his distributor, who purchases it from him on principal to principal basis - Although it could be argued that there is a relationship between the said persons that influences the valuation of the supply, the same does not take away from the fact that the supplies are, in reality, made by two different taxable persons - Secondly, the two supplies do not answer to the description of being "naturally bundled and supplied in conjunction with each other in the ordinary course of business" - In fact, the business model followed by the petitioner appears to have held the field for a considerable period of time and would show that in the ordinary course of business, the supplies are not bundled - a finding as regards composite supply must take into account supplies as effected at a given point in time on "as is where is" basis - where the same taxable person effects a continuous supply of services coupled with periodic supplies of goods/services to be used in conjunction therewith, one could possibly view the periodic supply of goods/services as composite supplies along with the service that is continuously supplied over a period of time - matters will have to be decided based on the facts in a given case and not in the abstract as was done by the AAR - matter remitted back to the AAR for a fresh decision on the query raised before it by the petitioner company - AAR shall pass fresh orders in the matter, after hearing the petitioner, within a period of six weeks: High Court [para 9, 10]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-39-HC-KAR-GST

K Ananthakrishna Shetty Vs Mangalore Mahanagara Palike

2020-TIOL-38-HC-RAJ-GST

Mohammed Yunus Vs State of Rajasthan

2020-TIOL-40-CESTAT-AHM

N J Devani Builders Pvt Ltd Vs CST

ST - The assessee-company provides taxable services falling under category of Commercial and Industrial Construction Service, Construction of Residential Complex Service and Transport of Goods by Road Service - The assessee obtained service tax registration and discharged service tax liability for the relevant period - The assessee also availed benefit under Notfn No 12/03-ST as amended - Such benefit of exemption was denied on grounds that the assessee had availed Cenvat credit in respect of goods sold during the disputed period - SCN was issued, raising duty demand with interest and imposing penalties - On adjudication, the proposals in the SCN were confirmed - Hence the present appeal.

Held - The fact of supply of goods for execution of construction activity is not disputed inasmuch as such fact is acknowledged in the O-i-O - Hence the construction activity undertaken by the assessee is a composite one, involving both supply and sale of goods and execution of the assigned task of accomplishing the purpose of the contract - As by nature it is a composite contract, the appropriate head for classification would be Works Contract Service, taxable w.e.f. 01.06.2007 - The Apex Court in Larsen & Toubro Ltd clarified that rrespective of the classification of service, if any service involves both provision of service and for supply of goods, then the same should be considered as composite service and will be eligible to service tax under the taxable category of Works Contract Service and not otherwise - Moreover, it is trite law that the composite contract should appropriately be classifiable under Works Contract Service and not under any of the other defined category of service - Hence there is no merit in the O-i-O: CESTAT

  - Assessee's appeal allowed : AHMEDABAD CESTAT

CENTRAL EXCISE

2020-TIOL-39-CESTAT-BANG

Load Controls India Pvt Ltd Vs CCT

CX - It has been consistently held by the Tribunal that if the amount is not voluntarily paid by the assessee and later on the case is decided in favour of the assessee, then he is entitled to interest from the date of deposit made by the assessee – impugned order set aside and appeal allowed: CESTAT [para 6, 6.1, 7]

2020-TIOL-38-CESTAT-MUM

Amit Weaving Mills Pvt Ltd Vs CCE

CX - Consequent to s pecific information, it was alleged that the assessee was involved in clandestine clearance - The information was duly supported by Delivery Challans cum Packing Slips - It was also stated that the grey fabric received against these documents have not been accounted for in statutory documents but was processed and removed from the factory of assessee without payment of duty - It appears that adjudicating authority has in the first instance allowed the request for cross examination and fixed the date for cross examination on 22.4.2008 - However since the cross examination did not happen on the appointed day he held the same to be irrelevant - Cross examination, in adjudication proceedings is not an empty formality which is fulfilled by issuing the notice of cross examination hearing to the persons to be proceeded against and witnesses to be cross examined, but an judicial process to establish the truth in statement to be relied in evidence in adjudication proceedings - No merits found in the findings recorded by adjudicating authority/ Commissioner (A) that the opportunity was extended and since cross examination was not done on appointed date, the bar of Section 9D has been successfully crossed - While making this observation, Tribunal is not observing that assessee could prolong the adjudication proceedings indefinitely by making the request for cross examination a then choosing not to appear on the day appointed for cross examination - The principles of law as laid down by Apex Court will apply to the cross examination to be undertaken in departmental adjudication proceedings - If adjudicating authority finds that noticee/ co-noticee, are using the cross examination for purpose of delaying the adjudication proceedings or for harassing the witnesses they should record so and proceed - After allowing the request for cross examination, adjudicating authority has proceeded to adjudicate the case without putting the assessee on notice just for the reason that hearing fixed for cross examination, did not happen on the appointed day - Thus, matter is remanded to adjudicating authority for considering the request for cross examination made by assessee, and only after recording reason for permitting or disallowing cross examination proceed with the adjudication proceedings - Assessee is also directed that when the matter is taken up in remand proceedings they should make themselves available to cross examine the witnesses on the appointed date - Since the matter is quite old, the matter should be adjudicated by adjudicating authority in remand proceedings within six months of receipt of this order: CESTAT

CUSTOMS

2020-TIOL-41-HC-MAD-CUS

J Sheikh Parith Vs CC

Cus - The petitioner challenged hearing notice fixing date of hearing, issued by the Appraiser of Customs, in respect of an SCN issued by the DRI - The allegations against the petitioner were that he used the IEC code of one M/s Majestic Impex and one M/s SSP Enterprises and had cleared several consignment of goods by resorting to mis-declaration in the value of imported goods - The SCN proposed to reject the classification adopted by the petitioner and to deny the exemption claimed by the petitioner - The SCN also proposed to reject the value of the goods as declared by the petitioner, and also raised demand for differential amount of duty and proposed to impose penalty - The petitioner, in his capacity as unauthorised AR of M/s SSP Enterprises requested 3 months time to file reply and called on the Revenue to furnish documents for preparing reply even though all RUDs were acknowledged as received by the petitioner in individual capacity - When the present writ was filed, the other noticee M/s Majestic Impex also filed writ petition claiming identical relief - The latter writ petition was filed by the petitioner herein in his capacity as AR of M/s Majestic Impex - Such petition was dismissed - The petitioner filed another petition seeking that certain RUDs be furnished by the Revenue as detailed by M/s SSP Enterprises - Such petition came to be dismissed - Another petition seeking access to RUDs was disposed off with directions to furnish the documents.

Held - No writ petition can be entertained to quash a notice of hearing as the same is not an order - However, it must also be remembered that the DRI as an investigative agency cannot retain seized documents - Once the investigation is completed and SCN is issued, the RUDs should be returned or their copies be given to their owner - Several correspondences were sent since the present writ was filed, to thwart the adjudication of the SCN issued by the Commr of Customs - Some of the correspondences are after filing of the present petition - As per Circular 207/09/2006-CX , the DRI was required to return the documents nor relied on, but failed to do so - Despite an earlier order being passed by this court, all the documents directed to be furnished were not supplied - As the DRI did not fully comply with the earlier order, it is directed to ensure strict compliance with the same in letter & spirit within 30 days of receipt: HC

- Writ petition disposed of: MADRAS HIGH COURT

2020-TIOL-37-CESTAT-MUM

Adarsha Textiles Vs CC

Cus - The goods imported under Bill of Entry are confiscated under section 111(m) of customs Act, 1962 - However, the importers are given an option to redeem the goods on payment of a fine under Section 125(1) of Customs Act, 1962 and on payment of appropriate duty on redetermined value - A penalty is imposed on importers under Section 112(a) of Customs Act, 1962 - As per the facts recorded in O-I-O, the excess weight found in consignment over declared weight as per Bill of Entry was not determined on the basis of actual weighment but on the basis of estimation - It is quite evident that for making the charge of misdeclaration of weight, revenue has adopted a novel, self contradictory method of estimation - When they themselves agree that the length of the rolls was not identical, then what was basis for determining the total length of the 130 rolls to multiply the same by weight per unit length - Tribunal is unable to determine what was the weight per unit length taken for estimation, and how the figure of 2.270 MT, arrived as short declared - It is not understood if Custom Officers were suspicious of misdeclaration of weight what prevented them from actually weighing the consignment as a whole and determining the actual weight of consignment - The Bill of Entry as amended and assessed is still showing the Gross Weight of 14950 kgs as declared by assessee - It is quite evident that in Bill of Entry filed by assessee, they have declared the gross weight of consignment as 14950 kgs and Net weight of 14560 Kgs as per the packing list issued by the foreign supplier - In the amended Bill of Entry, as per the order of Additional Commissioner, the Net Weight was amended to 16771 Kgs without changing the gross weight - This has created the situation wherein the Net Weight as per the assessed Bill of Entry is more than the Gross Weight of consignment - Entire case of undervaluation has been made against the assessee by not amending the declared value, but by enhancing the same to take into account the estimated undeclared weight - The impugned order is set aside: CESTAT

-Appeal allowed : MUMBAI CESTAT

TP - Failure to satisfy benefit test, is no basis to treat ALP of 'reimbursement of expenses between AEs' at NIL: ITAT

I-T - Where disposal of appeals has been stayed sine die, then applicant is entitled to grant of extension of stay from recovery of outstanding demand: ITAT

TP - Adjustment which does not hold test of legal sanctity as per provisions of Section 144C(10), is invalid: ITAT

TIOL CORPLAWS

Companies Act- Embargo contained u/s 212(6) does not bar regular bail if SFIO till discovery stage fails to establish live link between direct benefit & fraud: HC

IBC - Individual financial creditor's wisdom/decision cannot be elevated to level of collective wisdom of CoC so as to scuttle insolvency process: NCLAT

PMLA - Bank's money being public money, its right under SARFAESI to recover mortgaged property cannot be taken away by attachment order: Tribunal