NSS Karayogam Vs CIT

Whether if any error occurs in the computation of penalty, it is open to the assessee to seek rectification in that respect before the original authority – YES: HC

- Assessee’s appeal dismissed: KERALA HIGH COURT

2020-TIOL-466-ITAT-KOL

2020-TIOL-465-ITAT-JAIPUR

Rajendra Agarwal Vs ITO

Director General Of Anti-Profittering Vs Reckitt Benckiser India Pvt Ltd (Dated: March 19, 2020)

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges that the respondent had resorted to profiteering in respect of supply of ‘Dettol HW Liquid Original 900ml' inasmuch as they had not passed on the benefit of reduction in GST rate from 28% to 18% w.e.f 15.11.2017 and instead increased the base price of the aforementioned product; that the respondent had supplied ‘Dettol HW Liquid Original 900ml' to M/s Big Bazar, Inderlok on 07.11.2017 under Purchase Order with the MRP of Rs.189/- per unit, on 21.12.2017, under PO with MRP of Rs.209/- and on 20.06.2018 under PO with MRP of Rs.192/- and thus he had not reduced the price of the above product commensurately - respondent no. 2 M/s Big Bazar was also made a co-noticee in the proceedings already initiated to collect evidence necessary to determine whether the benefit of reduction in the rate of GST from 28% to 18% has been passed on by the respondents 1 and 2 to their recipients w.e.f 15.11.2017 - DGAP in its report dated 19.09.2019 has stated that whereas respondent no. 1 has profiteered by an amount of Rs.63,14,901/-, respondent no. 2 has profiteered by an amount of Rs.2,33,456/-.

Held:  It cannot be accepted that the costs had suddenly increased on the intervening night of 14.11.2017/15.11.2017 when the rate reduction had occurred and which had forced him to increase his prices exactly equal to the reduction in the rate of the tax - such an uncanny coincidence is unheard of and hence there is no doubt that the respondent has increased his price for appropriating the benefit of tax reduction with the intention of denying the above benefit (of rate reduction) to the consumers - Respondent no. 1 & 2 has not only collected excess base price from customers which they were not required to pay due to the reduction in the rate of tax but has also compelled them to pay additional GST on the excess base price which they should not have paid - by doing so, the respondents no. 1 & 2 have defeated the very purpose of both the Central and State governments which aimed to provide the benefit of rate reduction to the general public - therefore, they have not only violated the provisions of the Act, 2017 but also acted in contravention of the provisions of s.171(1) of the Act as they have denied the benefit of tax reduction to their buyers by charging excess GST - Quantification of the profiteered amounts by DGAP is found to be correct - contention of the respondents that they have passed on the benefit of rate reduction by way of increasing the grammage to the recipients is not backed by any evidence on record, hence contention is not maintainable - Benefits mentioned in s.171(1) have to be passed on by way of commensurate reduction in prices only and the said section does not provide for any other method of passing on the benefit - respondents are directed to deposit the amounts in the CWF of the Central and State governments as the recipients are not identifiable, as per the provisions of rule 133(3)(c) of the Rules along with interest @18% - amounts to be deposited within three months failing which they shall be recovered by the CGST/SGST Commissioners concerned - penalty is imposable u/s 171(3A) of the Act for which purpose SCN is required to be issued - Commissioners to monitor this order under supervision of the DGAP and report compliance within a period of four months: NAA

- Application disposed of: NAA

2020-TIOL-18-NAA-GST

Director General Of Anti-Profittering Vs Cilantro Diners Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleged profiteering in respect of restaurant service supplied by respondent (a franchisee of Subway Systems India P Ltd.) inasmuch it is alleged that despite reduction in the rate of GST from 18% to 5% w.e.f 15.11.2017, respondent had increased the base prices of his products and had not passed on the commensurate benefit of reduction in GST rate - DGAP in its report dated 13.09.2019 has computed the profiteered amount as Rs.20,80,087/-.

Held: Welfare of the consumers who are voiceless, unorganised and scattered is the soul of the anti-profiteering provisions contained in s.171 of the Act - Authority has been working in the interest of the consumers as the trade is bound to pass on the benefit of tax reduction and ITC which becomes available to it due to revenue sacrificed by the Government - Authority does not, in any manner, interfere in the business decisions of the respondent and hence the functioning of the authority and the anti-profiteering machinery is within the confines of the four walls of the provisions of s.171 of the Act and in no way violates the tenets of Article 19(1)(g) of the Constitution - It is revealed from the DGAP's report that the ITC which was available to the respondent during the period July 2017 to October 2017 is 9.05% of the net taxable turnover of restaurant services supplied during the same period - with effect from 15.11.2017, when the GST rate on restaurant service was reduced from 18% to 5%, the ITC was not available to the respondent - in fact, the DGAP in its report has stated that the respondent had increased the base prices of different items by more than 9.05% i.e. by more than what was required to offset the impact of denial of ITC, supplied as a part of restaurant services to make up for the denial of ITC post-GST rate reduction - quantum of profiteering has been correctly computed as Rs.20,80,087/- in the DGAP report - respondent is directed to deposit the profiteered amount in two equal parts in the CWFs of the Central and State Government of Maharashtra, since recipients are not identifiable, along with interest @18% within a period of three months - SCN to be issued directing respondent to explain as to why penalty u/s 171(3A) read with rule 133(3)(d) of the Rules, 2017 should not be imposed - compliance report to be submitted within a period of four months by the SGST Commissioner concerned: NAA

- Application disposed of: NAA

2020-TIOL-17-NAA-GST

Director General Of Anti-Profittering Vs Bonne Sante

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleged profiteering in respect of restaurant service supplied by respondent (a franchisee of Subway Systems India P Ltd.) inasmuch it is alleged that despite reduction in the rate of GST from 18% to 5% w.e.f 15.11.2017, respondent had increased the base prices of his products and had not passed on the commensurate benefit of reduction in GST rate - DGAP in its report dated 13.09.2019 has computed the profiteered amount as  Rs.7,33,043/-.

Held: Welfare of the consumers who are voiceless, unorganised and scattered is the soul of the anti-profiteering provisions contained in s.171 of the Act - Authority has been working in the interest of the consumers as the trade is bound to pass on the benefit of tax reduction and ITC which becomes available to it due to revenue sacrificed by the Government - Authority does not, in any manner, interfere in the business decisions of the respondent and hence the functioning of the authority and the anti-profiteering machinery is within the confines of the four walls of the provisions of s.171 of the Act and in no way violates the tenets of Article 19(1)(g) of the Constitution - It is revealed from the DGAP's report that the ITC which was available to the respondent during the period July 2017 to October 2017 is 7.39% of the net taxable turnover of restaurant services supplied during the same period - with effect from 15.11.2017, when the GST rate on restaurant service was reduced from 18% to 5%, the ITC was not available to the respondent - in fact, the DGAP in its report has stated that the respondent had increased the base prices of different items by more than 7.39% i.e. by more than what was required to offset the impact of denial of ITC, supplied as a part of restaurant services to make up for the denial of ITC post-GST rate reduction - quantum of profiteering has been correctly computed as Rs.7,33,043/- in the DGAP report - respondent is directed to deposit the profiteered amount in the CWFs of the Central and State Government of Maharashtra - compliance report to be submitted within a period of four months by the SGST Commissioner concerned: NAA

- Application disposed of: NAA

Reliance Industries Ltd Vs State Of Gujarat

Whether where unlimited time period is available to the Revenue for assessment, reassessment or revision in any case based on a decision rendered in the case of any other dealer, the same would lead to an irreparable situation - YES: HC

Whether therefore, in such circumstances, newly inserted Section 84A merits being struck down where it allows unlimited time for carrying out revision or re-assessment & so comes across as manifestly arbitrary and unreasonable - YES: HC

Whether a law can be struck down merely because its provisions are harsh in nature, where the legislature which passed such law had the competence to do so & its provisions do not violate those of the Constitution - NO: HC

Whether a law declared void by a court is not erased from the Statute Book & it can be revived & revitalized if Constitutional limitations are removed by Constitutional amendment or by re-enactment by legislature - YES: HC

Whether when probing the validity of a legislation, a court must examine if the Act is a law with respect to a topic assigned to the particular legislature which passed it, whether its operation extends beyond that State's boundaries & also whether any part of the Constitution fetters the legislative powers of the State - YES: HC

Whether it is an established principle of interpretation of statutes to consider the mischief sought to be remedied by the enactment of a particular statute - YES: HC

YCH Logistics India Pvt Ltd Vs CCE & CST

ST - During the course of verification of records, IAD noticed that the assessee had received the following services from abroad viz. Management service/advise, Data communication, use of Trademark etc. but had not paid service tax on the same under reverse charge mechanism as provided u/s 66A of FA, 1994 r/w rule 2(1)(d)(iv) of STR, 1994 - on being pointed out, the assessee accepted the contention and paid the service tax amount of Rs.1,31,70,733/- vide GAR-7 challan dated 02.02.2011 along with interest  of Rs.2,12,92,351/- vide challan dated 12.02.2011 - alleging that the assessee had deliberately and intentionally suppressed the material facts, a SCN was issued on 19.04.2011 and consequently the demand along with interest was confirmed and appropriated - penalty of Rs.1000/- was imposed u/s 77 of FA, 1994 and an equivalent penalty was imposed u/s 78 of the FA for wilfully suppressing the value of taxable service - appeal to CESTAT contesting imposition of penalty.

Held: Section 73(3) of the FA, 1994 is very clear as it says that if the tax is paid along with interest before issuance of a SCN, then in that case SCN shall not be issued - contention of the appellant that they bonafidely believed that they are not liable to pay service tax but when the Internal Audit party raised the objection, they immediately paid the same along with interest and which is admitted in the impugned order, is justified - except merely alleging suppression, department did not bring any material fact on record to prove that there was suppression and concealment of facts to evade payment of tax - Consequently, Bench is of the considered view that imposition of penalty u/ss 77 and 78 of FA, 1994 is not justified and is bad in law - Penalty imposed is set aside by allowing the appeal to the said extent: CESTAT [para 5]

- Appeal allowed: BANGALORE CESTAT

2020-TIOL-598-CESTAT-AHM

2020-TIOL-597-CESTAT-MUM

Goodyear South Asia Tyres Pvt Ltd Vs CCE

CCGST & CE Vs Philips Carbon Black Ltd

CX - The assessee-company operated a power plant and availed CENVAT credit in respect of inputs and input services used in its operation - Some of the electricity produced in the plant was also wheeled out to different units outside the factory premises - The Revenue denied the CENVAT credit to that extent as availed in respect of the electricity supplied to the other units - Subsequently, the Tribunal allowed such credit to the assessee - Hence the Revenue's appeal.

Held - It is seen that the Tribunal relied on its order passed in the assessee's own case when passing the subject order - It is also seen that the Revenue did not challenge such earlier order - Hence the present matter does not warrant any interference with - As it is, the issue at hand stands settled in favor of the assessee by this court's judgment in Commissioner of C.Ex & Customs, Vadodara-I Vs. Serling Gelatin wherein the assessee was found to have taken CENVAT credit only on that quantity of inputs which was intended for use in the manufacture of dutiable goods, in which case the provisions of Rule 6(2) of CCR could not be invoked - Besides, such decision of the High Court was later sustained by the Apex Court - Hence no substantial question of law arises for consideration: HC

- Revenue's appeal dismissed: GUJARAT HIGH COURT

2020-TIOL-596-CESTAT-DEL

Cimmco Ltd Vs CCGST & CE

2020-TIOL-595-CESTAT-MAD

Jay Multti Tech Vs CGST & CE

CUSTOMS

Cus - Export of cotton printed and dyed fabrics - allegation of overvaluation - Additional Commissioner of Customs (Export), Nhava Sheva assessed the Shipping Bills on the basis of the price mentioned in the market enquiry report and also imposed redemption fine and penalty on the appellant - In adjudication proceedings, original authority refused to take cognisance of the Cost sheet and other documents produced by the appellant on the ground that the said documents cannot be produced at the time of personal hearing - Commissioner(A) agreed with this order, hence appeal.

Held: Bank Realization Certificate submitted by the appellant proves the fact that the goods were exported and foreign currency to that extent was realized through the approved banking channel - Under such circumstances and in view of the specific fact that the department has not produced any tangible evidence to show overvaluation of the goods, Bench is of the considered view that the adjudged demands confirmed on the appellant cannot be sustained - impugned order set aside and appeal allowed: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT