2020-TIOL-64-SC-GST

UoI Vs Adfert Technologies Pvt Ltd

GST - Punjab & Haryana High Court had held that  nobody shall be denied to carry forward legitimate claim of CENVAT/ITC on the ground of non-filing of TRAN-1 by 27.12.2017 - Aggrieved, Revenue had filed a Special Leave Petition before the Supreme Court.

Held:  In the facts and circumstances of the case, Bench is not inclined to exercise its jurisdiction under Article 136 of the Constitution - SLP is dismissed: Supreme Court

- Appeal dismissed :SUPREME COURT OF INDIA

2020-TIOL-486-HC-KERALA-GST

Sutherland Mortgage Services Inc Vs Principal Commissioner

GST - Applicant had raised a question before the AAR as to whether the supply made would qualify as export of service as defined in Section 2(6) of the IGST  Act, 2017 - Authority held that question essentially involves the determination of 'place of supply' which is not included in Section 97(2) of the  CGST Act, 2017 as a question on which advance ruling can be sought; that the authority is a creature of statute and has to function within the legal boundary mandated by the Act; that as the 'place of supply' is not covered by Section 97(2) of the Acts, this authority is helpless to answer the question raised in the application, as it is lacking jurisdiction to decide the issues - Accordingly, the Application was rejected by the Authority for Advance Ruling - Applicant has filed a Writ petition before the Kerala High Court - It is submitted that section 100 of the CGST Act provides for a statutory appeal before the appellate authority concerned only if the advance ruling is rendered u/s 98(4) of the CGST Act and not against the order of rejection which has been purportedly issued u/s 98(2) of the Act wherein the plea for an advance ruling is rejected at the threshold stage - It is further submitted that the 'recipient of service' is a customer located outside India and that the petitioner India branch renders services to those customers outside India under the intra-company agreement entered into by the India branch with the principal company incorporated in USA and that, therefore, the services rendered by the petitioner India branch directly to the overseas customers and not to the principal company incorporated in USA; that the services are rendered by the petitioner India branch directly to the customers located outside India nd such services are thus consumed by such customers located outside India; that as the petitioner India branch is thus not directly rendering service to the principal company incorporated in USA (but directly to the customers located outside India) the restriction in clause (v) of Section 2(6) of the IGST Act read with Explanation 1 of Section 8 of the IGST Act cannot be pressed into service against the petitioner and that, therefore, the service in question would eminently and fully fulfil the definition of 'export of services' as defined in s.2(6) of the IGST Act.

Held:

++ It is common ground that if an order is passed u/s 98(2) of the CGST Act, then the same is not appealable in terms of s.100 of the Act as sub-section (1) of s.100 clearly provides that only if the applicant concerned is aggrieved by any advance ruling pronounced u/s 98(4) of the Act that an appeal would lie before the Appellate authority - Since the stand of the Advance Ruling Authority is that it has rendered its decision u/s 98(2) of the CGST Act, the present order cannot be the subject matter of an appeal u/s 100 of the Act - as the petitioner does not have any alternative statutory remedy, he can challenge the same mainly by way of judicial review in writ proceedings under Article 226 of the Constitution of India: High Court [para 18]

++ It is true that the issue relating to determination of place of supply is not expressly enumerated in any of the clauses as per clauses (a) to (g) of section 97(2) of the CGST Act, but there cannot be any two arguments that the said issue relating to determination of place of supply, which is one of the crucial issues to be determined as to whether or not it fulfils the definition of place of service, would also come within the ambit of the larger issue of 'determination of liability to pay tax on any goods or services or both' as envisaged in clause (e) of s.97(2) of the Act - The Advance Ruling authority has proceeded on a tangent and has missed the said crucial aspect of the matter and has taken a very hyper technical view that it does not have jurisdiction for the simple reason that the said issue is not expressly enumerated in s.97(2) - Court has no hesitation to hold that the said view taken by the AAR is legally wrong and faulty and, therefore, the matter requires interdiction in judicial review in the instant writ proceedings - it is ordered that the said rejection order of the AAR is quashed and the application will stand remitted to the Authority concerned for fresh consideration and decision in accordance with the law - the Advance ruling in terms of s.98(4) may be duly rendered by the AAR without much delay, preferably within a period of 3 to 4 months: High Court [para 23]

++ It has to be borne in mind that India is at the cusp of great global changes and there cannot be any two opinions for anyone, who cherishes the best interest for this country, that with extreme hard work and industry, we have to progress economically, socially and in all spheres of life - A foreign entity like the principal company in this case would like to have precision and certainty about tax liability so that they can accordingly modulate their future outlook and it goes without saying that the executive authorities concerned including the taxation authorities will have to take the correct perspective and in accordance with the legislative policy framed as per the wisdom of the Parliament and the State legislatures to ensure that there is certainty and precision in taxation liability etc. so that the domestic investors as well as foreign investors, will get more incentive to continue and increase their level of activities for the overall better development and growth of our economy: High Court [para 24]

- Petition disposed of/Matter remanded: KERALA HIGH COURT

2020-TIOL-483-HC-AHM-GST

Krishna Oleo Chemical India Ltd Vs UoI

GST - It is the case of the petitioners that after the period for submitting TRAN 1 was extended upto 27th December 2017, the petitioners tried to log in form TRAN-1 on 14th November 2017, 20th December 2017 and 25th December 2017, but the petitioners could not upload TRAN-1 due to technical glitch on the online portal - Furthermore, whenever petitioner No.2 tried to upload form TRAN-1, a message was received from the portal of the respondents that the filing of declaration in form TRAN-1 is not available as the due date was over - petitioner No.2, therefore, sent complaint on 3rd December 2018 to the Nodal Officer of the respondents and a reminder dated 30th January 2019 along with manual submission of form TRAN-1 but petitioners were however not granted the credit of CENVAT under the CGST Act, 2017 - According to the petitioners, the Nodal Officer, Office of the Commissioner of CGST Audit, gave final audit report on 19 th June 2019 for the audit period for financial year 2014-15 to 2017-18 (upto June 2017), under which only an amount of Rs.61,605/- was to be paid by the petitioners and, therefore, they paid such amount; that the petitioners are, therefore, entitled to CENVAT credit as per register ER-1 - Counsel for respondent Revenue submitted that it is true that the petitioners could not upload form TRAN-1, however, necessary directions may be given to the respondents to permit the petitioners to upload the declaration in form TRAN-1 in view of aforesaid order dated 7th February 2020 issued by the CBIC extending time period to upload form TRAN-1 till 31 st March 2020.

Held: Only question which arises is whether the petitioners are entitled to carry forward CENVAT Credit balance as on 30th June 2017 under Section 140 of the CGST Act, 2017 in absence of uploading form TRAN-1 due to technical glitches - This question is no more res integra in view of decision of Coordinate Bench in case of Siddharth Enterprises ( 2019-TIOL-2068-HC-AHM-GST ) as well as order passed in review applications [ 2020-TIOL-454-HC-AHM-GST ] - Thus, dictum of law as declared in above decision would be applicable to the facts of this case also as the petitioners are not be able to upload form TRAN-1 due to technical glitches - respondents are directed to permit the petitioners to upload the declaration in form TRAN-1 and as per order dated 7th February 2020 passed by the CBIC, the petitioners will be entitled to upload Form TRAN-1 before 31st March 2020 to claim credit of CENVAT under Section 140(3) of the CGST Act, 2017 - Such exercise is to be completed within two weeks: High Court [para 15 to 18]

- Petition disposed of: GUJARAT HIGH COURT

SERVICE TAX

2020-TIOL-482-HC-AHM-ST

Deendayal Port Trust Vs UoI

Service Tax/GST - Petitioner is a body corporate notified under the Major Port Trust Act, 1963 established for developing, operating and managing a major port in Kandla - They follow the cash system of accounting and had filed return of service tax in Form ST-3 for the period from 1st April, 2017 to 30th June, 2017 on 14.08.2017 - It is the case of the petitioner that after filing of such return, it was realized that there were certain invoices pertaining to the said period which remained unaccounted and consequently, Input Tax Credit involved in such invoices could not be claimed in the return of service tax in Form ST-3 - Petitioner, therefore, used online facility available on the Automation of Central Excise and Service Tax ( "ACES") and filed revised Form ST-3 on 17.09.2017, wherein ITC of Rs.6,94,19,228/- was claimed - There were some more invoices which remained unaccounted and ITC involved therein amounting to Rs.99,46,810/- was left out even in the revised return in Form ST-3 - However, when the petitioner again tried to file second revise return so as to claim correct amount of ITC, ACES did not permit the same and consequently they could not claim the ITC to the tune of Rs.99,46,810/- The petitioner made an application on 09.11.2017 requesting the Assistant Commissioner, Gandhidham to consider this additional claim of ITC - upon introduction of GST, the petitioner filed Form No.Tran-1 online, wherein the amount of ITC entered included the amount of Rs.99,46,810/- thus claiming a total ITC of Rs.7,93,66,038/- - Respondent informed the petitioner that the actual closing balance of ITC in last service tax Form No.ST-3 filed by the petitioner was Rs.6,94,19,228/- and, therefore, the excess amount of Rs.99,46,810/- was directed to be reversed - in response to the assessees letter dated 27.12.2018, the respondent no.2, vide notice dated 31.12.2018, informed the petitioner that as per Rule 7B of the Service Tax Rules, 1994, an assessee was allowed to file a revised return in Form ST-3 within a period of 90 days from the date of submission of original return in Form ST-3; that when the original return is revised, no other option for second revision of the return is permitted as per Rules, 1994 - Petitioner has, therefore, filed the present petition for appropriate direction to the respondents to permit the petitioner to avail ITC of Rs.99,46,810/- under CGST Act-2017.

Held: Rule 7B of the STR, 1994, permits the assessee to file revised return in form ST-3, in triplicate, to correct a mistake or omission, within a period of ninety days from the date of submission of return under Rule 7 - As per rule 7B, it appears that the assessee can revise the return filed under Rule 7 within a period of 90 days from the date of submission of the original return under Rule 7 of the Rules, 1994 - Rule 7B only permits the assessee to revise the mistake or omission in the return filed under Rule 7 within a period of 90 days - If the assessee finds any mistake in the form ST-3 file under Rule 7 of the Rules 1994, he can revise the same in multiple documents within prescribed period - The intention of the framing of the Rule is to revise return Form ST-3 filed under Rule 7 of the Rules, 1994 - Therefore, the stand taken by the respondents that once option is exercised to revise the original return, then the assessee cannot file revised return again within prescribed time period under Rule 7B of the Rules, 1994 is not tenable - ACES portal not allowing the petitioner to revise the Form ST-3 for the second time within prescribed period resulting into technical glitches is contrary to the provisions of Rule 7B of Rules, 1994 - In the opinion of the the Court, the respondents have failed to consider the aspect of technical glitches to reject the claim of the petitioner on the ground that the petitioner has no option to revise the return in Form ST-3 once the original return is revised by the petitioner - Respondents are directed to consider the claim of the petitioner for the amount of ITC of Rs.99,46,810/- manually under Rule 7B of the Rules, 1994, so as to enable the petitioner to take advantage of the order dated 07.02.2020 to revise the Form Tran-1 to be filed online on or before 31.03.2020 - Such exercise shall be completed by the respondents on verification of the claim of the petitioner for the differential amount of the ITC of Rs.99,46,810/- within a period of two weeks from the date of receipt of copy of this order - Petition disposed of: High Court [para 10 to 14]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-382-CESTAT-HYD

ECIL Rapiscan Ltd Vs CCE, C & ST

ST - Rule 2(e) of CCR, 2004 as it stood during the relevant period squarely covered within the ambit of 'exempted service' any service rendered in J&K - Bench is not aware of any ruling on the vires of this Rule or even its challenge - The case laws relied upon by appellant do not indicate what the definition of 'exempted service' during the relevant periods was and why the services rendered in J&K do not fall under the definition - Bench, therefore, is of the considered view that the services rendered by the appellant in J&K are exempted services and must be treated as such while computing the ineligible/reversible CENVAT credit under Rule 6(3) of CCR, 2004 - Relevant period in this case is prior to 1-4-2011 when the definition of 'exempted service' under Rule 2(e) of CENVAT Credit Rules, 2004 included any service on which no service tax could be levied under the provisions of Chapter V of the Finance Act, 1994 - Since no service tax could be levied on any service rendered in Jammu and Kashmir under this Act, it squarely falls under the definition of 'exempted service' - services rendered by the appellant in J&K are exempted services and must be treated as such while computing the ineligible/reversible CENVAT credit under Rule 6 (3) of CCR, 2004 - matter is remanded with directions to the original authority to re-determine the amount of cenvat credit which needs to be disallowed, the interest thereon and the appropriate penalty: CESTAT [para 21, 22, 23, 24]

ST - CENVAT - appellant is not entitled to cenvat credit on the agency commission paid for procuring order either for selling the goods or for procuring orders for AMC - Gujarat High Court decision in the case of Cadilla Healthcare Ltd. - 2013-TIOL-12-HC-AHM-ST followed: CESTAT [para 13]

ST - CENVAT - On the question of the trading activity being an exempted service only post 01.04.2011 Bench finds that this issue has been settled by the High Court of Madras in the case of Ruchika Global Interlinks - 2017- TIOL-1235-HC-MAD-ST and FL Smidth - 2014- TIOL-2186-HC-MAD-CX that either before 01.04.2011 or after this date, trading activity is an exempted service: CESTAT [para 14]

- Matter remanded: HYDERABAD CESTAT

2020-TIOL-381-CESTAT-DEL

CC & CE Vs National Project Construction Corporation Ltd

ST - The assessee is a PSU engaged in providing construction services to M/s NTPC Ltd - The Revenue opined that the assessee failed to furnish Form ST-3 returns and evaded payment of tax - In compliance with queries raised, the assessee supplied the requisite site-wise details of payment received against constructuon of off-site works and balance road work - SCN was issued invoking extended period of limitation and calculating tax liability u/s 72 based on best judgment assessment - Duty demand was raised along with demand for cess - Penalty was imposed too - On adjudication, the proposals in the SCN were confirmed in part, along with interest and penalty u/s 77 & 78 of the Finance Act - On appeal, the Commr.(A) held that the matter was settled in the assessee's own case and so remanded the matter for reexamination of relevant contract documents - Hence the Revenue's appeal against such findings.

Held: As per the facts and circumstances, the service rendered by the assessee is taxable only and the category of works contract service as per the law laid down by the Apex Court in Commissioner of Central Excise and Customs Vs. Larsen & Toubro Ltd - Besides, the work of road construction even in NTPC premises which may be termed as private road is exempt service as per the definition of works contract service which specifically exempts road service - There is no distinction made out by the legislature between public roads and private roads - Admittedly, the assessee paid service tax under Works Contract Composition Scheme along with interest - Hence the assessee is liable to pay tax under the same and once such liability is discharged, there is no further duty liabilit - Hence the Revenue's appeal merits being dismissed - The assessee is directed to submit a calculation of the discharge of the tax liability under the works contract composition scheme before the adjudicating authority - If any discrepancy is found, the same be pointed out to the assessee: CESTAT

- Revenue's appeal dismissed: DELHI CESTAT

CENTRAL EXCISE

2020-TIOL-380-CESTAT-BANG

Koso India Pvt Ltd Vs CCT & CE

CX - CENVAT - Initially the appellant set up Unit-II for manufacture of Control Valves but subsequently, found that the space is inadequate and, therefore, he set up another unit which is Unit-I adjacent to Unit-II and transferred some of the inputs and capital goods from Unit-II to Unit-I as per the advice given by the department - The appellant transferred the inputs and capital goods by raising invoice and debited duty in Unit-II and took credit of the same in Unit-I in terms of Rule 3(5) of the CCR - Both debit and credit entries made by both the units are reflected in the ER-1 returns and due intimation was given to the department by the appellant vide their letter dated 14.6.2010 - appellant had also applied for single registration for both the units as per Notification No. 36/2001-CE (NT) dated 26.6.2001 and the same was permitted by the Commissioner of Central Excise by issuing single registration on 10.11.2009 - It is a case of simply stock transfer, therefore, the restriction as provided in Rule 9(1)(b) of CCR is not applicable because the appellant has not availed credit on supplementary invoices - Appellant has paid the duty voluntarily in terms of Section 11A(2B) of the CEA on being pointed out by the Preventive Officers and took the credit of the same in Unit-I in terms of Rule 3 of the CCR, therefore, in view of the decision of the Karnataka High Court in the case of KSDL, it has been held that delayed payment of duty voluntarily paid on being pointed out by the department does not amount to suppression with intent to evade payment of duty and hence, credit cannot be denied by invoking provisions of Rule 9(1)(b) of CCR - also, the entire exercise of payment of central excise duty and availment of credit results into revenue neutral situation and, therefore, no suppression of fact with intent to evade payment of duty can be alleged - All the facts from the beginning were in the knowledge of the department and specific intimation was also given by the appellant vide its letter dated 14.6.2010 and therefore, invoking extended period of limitation to confirm the demand is not tenable in law - Therefore, the entire demand is also barred by limitation - impugned order is not sustainable on merit as well as on limitation - appeal allowed: CESTAT [para 6, 7]

- Appeal allowed: BANGALORE CESTAT

2020-TIOL-379-CESTAT-DEL

CCGST & CE Vs Genus Power Infrastructure Ltd

CX - CENVAT - When admittedly the inputs/ capital goods/ raw-material has been transferred from one unit to another by making endorsement on the invoices and these transferred goods are used by recipient unit in manufacture of final product, then such invoices can be taken as a valid document by said recipient unit for taking the Cenvat Credit irrespective of the fact that the invoice was issued in the name of transferring unit but has been endorsed in the name of recipient unit who is appellant in the present case: CESTAT [para 9]

CX - CENVAT - Allegation in the show cause notice are pointing merely to a procedural lapse - Supreme Court in case of Sambhaji vs. Gangabhai - 2009-TIOL-79-SC-MISC has held that all rules of procedures are handmaids of justice; that language employed by draftsman of procedural law may be liberal or stringent but object of prescribing procedure is to advance the cause of justice; that no party should ordinarily be denied opportunity of participating in process of justice dispensation in an adversarial system; that the procedural law is not to be a tyrant but a servant, not an obstruction but an aid to justice; that a procedural prescription is the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice - As the endorsed invoice otherwise qualifies the intent of the legislature in terms of proviso to Rule 9 (2) of CCR, there is no infirmity in the order of Commissioner (Appeals) allowing such credit - Reveue appeal dismissed: CESTAT [para 9]

- Appeal dismissed: DELHI CESTAT