Director General Of Anti-Profiteering Vs NY Cinemas LLP

GST - Anti-Profiteering - Applicant has alleged that the respondent has not passed on the benefit of reduction in GST rates on 'services by way of admission to exhibition of cinematograph films where price of admission ticket was above one hundred rupees' from 28% to 18% and 'Services by way of admission to exhibition of cinematograph films where price of admission ticket was one hundred rupees or less' from 18% to 12% w.e.f 01.01.2019 by notification 27/2018-CTR dated 31.12.2018 by way of commensurate reduction in prices and instead had increased the base prices to maintain the same cum-tax selling prices of the admission tickets - applicant had also submitted copies of invoices with 28% and 18% GST charged - DGAP in its report stated that the allegation stood established against the respondent inasmuch as the respondent had realised an excess amount of Rs.14/- from the applicant which included both the profiteered amount and the GST on the same; that the respondent had realised an excess amount of Rs.4,01,506/- from the other recipients and the applicant no. 1; that the other recipients were not identifiable and, therefore, the authority may consider ordering the deposit of the balance amount of Rs.4,01,506/- in the respective Consumer Welfare Funds ; that the supplies were made in the States of Punjab, Uttar Pradesh and Gujarat, however, the ambit of this investigation was limited to the theatre situated in the district of Hapur only - DGAP has in its supplementary report dated 22.01.2020 accepted the contention of the respondent and admitted that due to some error in calculation, few shows of the 3D movie 'Captain Marvel' were included in the amount of profiteering and an amount of Rs.11,248/- was wrongly included in the profiteered amount, which amount is required to be reduced.

Held: From the narration of the facts and the DGAP report it is evident that the respondent has indulged in profiteering in violation of provisions of s.171 of the Act and has not passed on the benefit of reduction in the rates of tax to his customers and, therefore, is liable for action under rule 133 of the Rules - accordingly, the profiteered amount is determined as Rs.3,90,272/- (Rs.4,01,520/- minus Rs.11,248/-) which includes an amount of Rs.14/- including GST which the respondent has profiteered in respect of applicant no.1 and Rs.3,90,258/- in respect of other recipients - accordingly, respondent is directed to reduce the sale prices of his admission tickets immediately commensurate to the reduction in the rate of tax - respondent is further directed to refund an amount of Rs.14/- to the Applicant no. 1 along with interest calculated @18% - respondent is also directed to deposit the balance amount of profiteering of Rs.1,95,129/- in the Central CWF and Rs.1,95,129/- in the Uttar Pradesh State CWF as per provisions of rule 133(3)(c) of the Rules along with interest @18% - amount to be deposited within three months - penalty imposable for contravention of s.171(1) in terms of s.171(3A) of the Act for which purpose SCN to be issued - Commissioners to submit compliance report within four months - Authority, as per provisions of rule 133(5)(a) of Rules directs DGAP to further investigate all the other screens being operated by the respondent for violation of s.171 of the Act: NAA

- Application disposed of: NAA

2020-TIOL-14-NAA-GST

Director General Of Anti-Profiteering Vs Le Reve Pvt Ltd

GST - Anti-Profiteering - Applicant alleges profiteering in respect of restaurant service supplied by respondent (a franchisee of M/s Subway Systems India P Ltd.) inasmuch as it is alleged that despite the reduction in the rate of GST from 18% to 5% w.e.f 15.11.2017, the respondent had not passed on the commensurate benefit since he had increased the base prices of his products - DGAP has reported that the analysis of the details of item-wise outward taxable supplies made during the period 15.11.2017 to 31.03.2019 revealed that the base prices of different items supplied as a part of restaurant services to make up for the denial of ITC post-GST rate reduction had been increased by the respondent; that on comparison of the pre and post-GST rate reduction prices of the items sold, it is established that the respondent had increased the base prices by more than 8.01% i.e. by more than what was required to offset the impact of denial of ITC in respect of 248 items sold during the same period and hence the commensurate benefit of reduction in rate of tax from 18% to 5% has not been passed on to the customers; that the profiteered amount came to Rs.8,24,260/- (including GST on the base profiteered amount); that the supplies were made in the State of Maharashtra only.

Held:  The profiteered amount has been correctly arrived at Rs.8,24,260/- by the DGAP - respondent is directed to reduce his prices commensurately in terms of rule 133(3)(a) of the CGST Rules - respondent is also directed to deposit an amount of Rs.8,24,260/- in two equal parts in the Central Consumer Welfare Fund and the Maharashtra State Government Consumer Welfare fund as per the provisions of rule 133(3)(c) of the Rules since the recipients are not identifiable and since the supplies were affected in the State of Maharashtra - above amounts to be deposited along with interest @18% within three months failing which it shall be recovered by the SGST Commissioner concerned - in view of the contravention of provisions of s.171(1) of the Act, penalty is imposable u/s 171(3A) of the Act and for which purpose SCN is to be issued - report on compliance to be submitted by the Commissioners CGST/SGST within four months - Authority also finds no reason to differ with the findings of the DGAP that there may be chances of profiteering by M/s SSIPL in respect of charging of royalty and advertisement charges on the increased value of net taxable sales, therefore, Authority directs the DGAP to further examine M/s SSIPL for possible violations of provisions of s.171 and submit report in terms of rule 133(5)(b) of the Rules: NAA

- Application disposed of: NAA

ST - The assessee-company is engaged in the business of health care services for the establishment, promotion and maintenance of hospitals, multi-speciality health hospitals, ICCU's health care centres for treatment, prevention, detection and cure of diseases, ailments etc., both in India and abroad - It is also involved in establishing, promoting or otherwise carrying on the business of running of nursing homes, hospitals, ICCU, nature-cure centre, clinics for treatment, prevention, detection and cure of diseases and ailments of all kinds - In the normal course of activities, the assessee had availed taxable services in the nature of renting of health care infrastructure and management consultancy services from MHSPL on which applicable service tax was charged by MHSPL from the assessee and was duly paid to the government until March 2016 - Thereafter the MHSPL proposed to enter into a Scheme of Arrangement with the MHEPL for the transfer of their "Core Health Care Business" sector comprising of undertakings, business activities and operations to the appellant/MHEPL) - Subsequently MHSPL and MSEPL merged and the same was sanctioned by the High Court - The amalgamated entity filed a refund claim which was rejected by the Revenue on grounds of it being barred by limitation and on grounds that CA certificate was not filed and that proof of not passing on burden of duty, had not been presented - On adjudication, the refund claim was sanctioned - On appeal, the Commr.(A) set aside the O-i-O - Hence the appeal.

Held: Perusal of the various clauses of the Scheme Of Arrangement clearly show that all the present assets or receivables of the demerged undertaking on or after the appointed date shall be the assets and receivables of the resultant company and the treatment of the taxes, levies, cess etc., paid by the demerged company with regard to the demerged undertaking shall, after appointed date but prior to the effective date be treated and deemed as the tax paid by the resultant company. Further, we find that the conduct of the business with effect from the appointed date until the effective date by demerged company will be in trust for the resultant company - Further, upon the Scheme of Arrangement becoming operative, the resulting company would constitute a single identity in law - Subsequent to the sanction of the scheme, formalities of filling the certified copies of the order before the Registrar of the company, allotment of shares etc may take some time but the date of amalgamation would be the date as presented in the scheme - Hence the O-i-A is not sustainable in light of the Apex Court's decision in Marshall Sons & Co. (India) ltd. Vs. Income Tax Officer and so the same is set aside: CESTAT

- Assessee's appeal allowed: BANGALORE CESTAT

CENTRAL EXCISE

Lalitbhai Mafatlal Shah Vs CCE & ST

CX - Allegation is that CENVAT Credit has been availed on the strength of duty paid invoices issued by registered dealers namely, M/s. Pranav Metal Mart, Nadiad without receipt of goods covered in the said invoices - demand confirmed and upheld by Commissioner(A) - appeal before CESTAT.

Held: Only evidence found in the DGCEI investigation was that the truck by which the goods were transported from Delhi to Nadiad were carrying some other goods - However, otherwise the movement of vehicle from Delhi to Nadiad is not much in dispute - The appellant have purchased the goods from M/s. Pranav Metal Mart, Nadiad - DGCEI did not enquire anything from the appellant and they have not disputed the receipt of goods in their factory, recording the same in the books of accounts and excise records - The use of such goods and the manufacture of final product out of the said input and clearances thereof on payment of duty is also not disputed - Entire case was based on the investigation between Delhi importers and the registered dealer i.e. M/s. Pranav Metal Mart - no sufficient, tangible and cogent evidences were gathered to establish that the appellant have not received the inputs in their factory and fraudulently availed the Cenvat Credit only on the basis of invoice - no basis for denial of Cenvat Credit to the appellant - impugned order set aside and appeal allowed - penalties on co-appellants also set aside: CESTAT [para 5, 5.1, 6, 7]

- Appeals allowed: AHMEDABAD CESTAT

CX - Supreme Court has in the case of Ultratech Cement Ltd. - 2018-TIOL-42-SC-CX laid down that Cenvat credit is not admissible on Goods Transport Agency services used for transportation of goods from the place of removal to the buyer's premises in view of the amendment made in 2008 in the definition of input service in Rule 2(l) of the Cenvat Credit Rules, 2004 whereby the term 'from place of removal' has been replaced by 'up to place of removal': CESTAT [para 5, 6]

CX - Limitation - CENVAT - Issue about GTA service can be said to be settled only after the decision of the Supreme Court in Ultratech Cement and before that there were divergent views of different High Courts as well as of the Tribunal about GTA service concerning Rule 2(l) ibid after its amendment in the year 2008 - The issue was interpretation of statutory provision regarding availment of input service tax credit for GTA services on outward supply in cases of FOR supplies and such issues of interpretation cannot be a ground for invoking extended period - in the facts of the case and also in the light of the fact that the appellant is a Government of India Enterprise, there is no suppression of facts nor any willful default with intention to evade duty or to avail excess Cenvat credit - Accordingly, the extended period was not invocable and the demand for the period April, 2008 to May, 2010 is barred by limitation - For the period June, 2010 to October, 2010, demand is upheld - no penalty is imposable in the facts of the case - Matter remanded for computing the demand for the normal period: CESTAT [para 5, 6]

- Appeal disposed of: MUMBAI CESTAT