HL Promoters Pvt Ltd Vs UoI

GST - Petition has been filed seeking directions to respondent no. 4 - Chief Commissioner, Central Goods and Services Tax to extend the time for filing the revised TRAN-1 for the period April, 2017 - June, 2017 under Rule 120A through the GSTN system so as to allow the petitioner to avail credit of Rs. 4,56,30,842 or in the alternative, directions to respondent no.5 to accept the details of transitional credit under Section 140(1) of the CGST Act, 2017 manually and to update the electronic credit ledger at the back-end.

Held: Issue Notice - To await the judgment of the Supreme Court in Union of India Vs. Brand Equity Treaties Limited & Ors., SLP (C) 7425-7428/2020 = 2020-TIOL-115-SC-GST-LB - list on 14th December, 2020 : High Court [para 7]

- Matter listed: DELHI HIGH COURT

2020-TIOL-261-AAR-GST

Primarc Projects Pvt Ltd

GST – Applicant is the promoter of residential real estate project (RREP), supplying construction service in developing a residential housing project named "Akriti" in Burdwan - The applicant wants to know whether Entry No. 3(v)(da) of Notification 11/2017 Central Tax (Rate) dated 28/06/2017, as amended time to time, applies to the works contract service received from the contractors.

Held: Affordable housing has been defined in the affordable housing project (AHP) Notification as a housing project using at least 50% of Floor Area Ratio (FAR)/ Floor Space Index (FSI) for dwelling units with a carpet area of not more than 60 sqm - The term 'carpet area' has been assigned the same meaning as in section 2(k) of the Real Estate (Regulation and Development) Act, 2016 - It means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, balcony or veranda and open terrace, but includes the area covered by the internal partition walls of the apartment - According to the Project Plan submitted at the time of the hearing, FAR [FAR = CA / LA where CA = Constructed area or built-up area, and LA = Land area] for the entire project is 2.749 after deducting from the total built-up area the common areas like lift-lobby, stair area etc. - FAR for the affordable residential apartments in the project should, therefore, be at least 1.375 - The total plot size being 5627 sqm, the built-up area for affordable residential apartments should at least be 7734 sqm - The built-up area for the affordable residential apartments, as identified by the architect, under the RREP is 7885 sqm - The relevant FAR, therefore, comes out to be 1.401, which is 50.96% of the FAR for the project - The RREP, therefore, is an affordable housing project in terms of the AHP Notification - It is, therefore, concluded that the works contract service for the construction of those dwelling units in the RREP “Akriti” that are affordable residential apartments in terms of clause Explanation 4(xvi) of the Rate Notification are taxable under Entry No. 3(v)(da) of the said notification, provided the applicant does not opt for paying tax at the rate specified in (ie) or (if) of Entry No.3: AAR

- Application disposed of: AAR

2020-TIOL-56-AAAR-GST

Soma Mohite JV

GST - The appellant-company is engaged in the construction business - It is a Joint Venture (JV) company formed for construction of a tunnel and allied works for Nira-Bhima Link under the Krishna Bhima Stabilisation Project awarded by the Godavari Marathwada Irrigation Development Corporation, Aurangabad - The work order consists of earth work such as excavation for tunnel, removing excavated earth, providing steel support, rock bolting, reinforcement, fixing of chain link and cement concreting - The appellant had approached the AAR seeking to know whether the contract is covered under Sr No 3A, Chapter 99 as per Notfn No 02/2018-CT(R) dated 25.01.2018 - It also sought to know if the contract qualifies as Earth Work and so is covered under Chapter 9954 as per Notfn No 31/2017-CT(R) dated 13.10.2017 - Whether, if the preceding issue is answered in the affirmative, what would be the meaning of earthwork - AAR had observed that the contract at hand is not covered under Sr No 3A, Chapter 99 as per Notfn No 02/2018-CT(R) dated 25.01.2018 - Further, the contract is not covered under the term of Earth work so as to be covered under Chapter No 9954 as per Notfn No 31/2017-CT(R) dated 13.10.2017 and in light of the same, the issue seeking meaning of earth work, need not be answered - inasmuch as application was rejected - aggrieved with this order of the AAR, the applicant is in appeal before the AAAR.

Held: AAR has not dealt with the submission of the appellant regarding coverage under Sr. no. 3A of 12/2017-TR but has only discussed the submission concerning Sr. no. 3(vii) of 11/2017-CTR as amended - It must be mentioned that being an authority formed under the CGST Act and specially empowered to give ruling on questions put forth by applicants, the AAR should take due care that all the submissions of the applicant are dealt with properly and with reasons - It has, therefore, to be seen as to whether the Godavari Marathwada Irrigation Development Corporation is covered by the category of ‘Central government, State government or Union territory or local authority or a governmental authority or a government entity' - It is seen that the Godavari Marathwada Irrigation Development Corporation is a ‘government entity' as it is set up by an Act of the State legislature namely the Maharashtra Godavari Marathwada Irrigation Development Corporation Act, 1998 - Irrigation comes under Sr. no. 3 of Eleventh Schedule of Article 243G of the Constitution which covers ‘minor irrigation, water management and watershed development' and Sr. no. 5 of Twelfth Schedule of Article 243W of Constitution which covers ‘Water supply for domestic, industrial and commercial purpose' - It is clear that Earthwork includes excavation and as per the contract the earthwork constitutes more than 92.66% of the contract by value and thus all conditions of the entry 3(vii) are fulfilled - Services provided by the appellant in the impugned matter qualifies for inclusion under entry 3(vii) of 12/2017-CTR: AAAR

- Appeal allowed: AAAR

2020-TIOL-55-AAAR-GST

Liberty Translines

GST - Applicant issues consignment notes during execution of the service of transportation of goods and has opted for 5% GST payable by the recipient under reverse charge - sometimes, applicant functions as a mere transporter of goods for which consignment note is issued by some other party which acts as GTA for that transaction - there is a company named POSCO which provides GTA service and has opted for GST payable on forward charge basis @12% by claiming ITC - since POSCO does not have enough fleet of its own, it sub-contracts GTA service to applicant who provides the GTA service as a sub-contractor - applicant wants to issue a consignment note to POSCO who is also a GTA and the latter will, in turn, issue a second consignment note to final client for transportation of the goods by road happening in the same vehicle belonging to the applicant where e-way bill is prepared by POSCO only - applicant wishes to know whether he can also act as a GTA in terms of 20/2017-CTR and issue consignment note and charge GST @12% on forward charge basis - Applicant, therefore, approached the AAR for a ruling in the matter - AAR observed that a consignment note is a proof of the custody of goods during the movement and transportation of goods; that for a single transaction and the same movement of goods, there cannot be multiple consignment notes, hence there will be only one consignment note for movement of goods to a place, to be issued by POSCO; that in view thereof, applicant, in respect of the subject transaction cannot be treated as a GTA and, therefore, cannot charge GST @12% under forward charge mechanism as a GTA; that the question as to whether POSCO would be eligible to claim credit of the 12% GST charged by applicant in its invoice ought to have been raised by POSCO and not applicant, therefore, Authority refrains from answering this question; that the fourth question raised as to whether it is procedurally correct to have two GTA service providers and two consignment notes for the same movement of the goods is not answered as the same is not pertaining to any of the matters mentioned in s.97(2) of the Act - aggrieved, applicant is before the AAAR.

Held: Appellant is simply hiring out their transport vehicles to M/s POSCO ISDC P Ltd. for a consideration, hence their services would be classified under heading 9966 of 11/2017-CTR being the description ‘rental services of transport vehicles' - It is M/s POSCO ISDC P. Ltd. which is acting as a Goods Transport Agency (GTA) in the contract and not the appellant - Order of AAR upheld and appeal is dismissed: AAAR

- Appeal dismissed: AAAR

2020-TIOL-54-AAAR-GST

Micro Instruments

GST - AAR had held that commission received by applicant in convertible foreign exchange for rendering services as an 'Intermediary' between an exporter abroad receiving such services and an Indian importer of an equipment is NOT an export of service; that said supply will be treated as inter-state supply and IGST will be levied @18% - Aggrieved by this order, an Appeal was filed before AAAR and the AAAR while disposing of the appeal observed that in order to determine which levy, whether export, or CGST or IGST, will be imposed on the said supply of 'intermediate services' of the appellant, Authority will have to determine the 'place of supply' and only then can the Authority determine the nature of levy, as to whether the same qualifies as an ‘export'; that as per the law, s.97(2), the Authority does not have the jurisdiction to determine the 'place of supply of services or goods or both' and accordingly no ruling on this particular question can be passed by the Advance Ruling Authority; that such rationale also holds true in case of the second question asked i.e. whether the said supply could be treated as 'intra-state supply' u/s 8(1) of the IGST Act r/w s.2(65) of the CGST Act - AAAR concluded that AAR should not have passed any ruling on the above mentioned questions and since ruling has been passed by transcending its jurisdiction, Authority quashed the impugned ruling by the AAR - Appellant has now filed an application u/s 102 of the CGST Act, 2017 for rectification of the ruling of the AAAR.

Held: It is laid down by the Courts that mistake to be rectified must be one apparent from the record; that a decision on a debatable point of law or a disputed question of fact is not a mistake apparent from the record; that the plain meaning of the word ‘apparent' is that it must be something which appears to be so ex facie and it is incapable of argument or debate and, therefore, rectification of a mistake does not envisage rectification of an alleged error of judgment - It can be adequately inferred that since there is a dispute in the interpretation of the legal provisions of s.97(2)(e) of the Act, 2017, there is absolutely no question of any error apparent from the face of record - Application for rectification is, therefore, rejected: AAAR

- Application rejected: AAAR

2020-TIOL-53-AAAR-GST

Las Palmas Co-Operative Housing Society

GST - Replacement of existing lift/elevator by applicant, a CHS, paying GST on Maintenance charges collected from members - Applicant/appellant had sought a ruling from the AAR as to whether they are entitled to avail ITC of GST paid on such activity by vendor - AAR had observed that Lift, after erection and installation is an immovable property because it becomes a part of an immovable property i.e. a building; that in other words it is to be considered as an integral part of the building itself and it is not a separate part of the building; that, therefore, manufacture, supply, installation and commissioning of lifts/elevators is in the nature of Works Contract (WCS) activity which results in creation of an immovable property; that in view of Explanation to s.17 of the CGST Act, applicant is not entitled to ITC of GST paid on replacement of existing lift/elevator at its premises - Aggrieved, appellant is before the AAAR.

Held: No reason to interfere with the order of the AAR - Held, therefore, that the appellant will not be eligible to avail ITC in respect of the GST paid on lift installation charges paid to the lift contractor, in terms of s.16(2)(b) r/w s.17(5)(c) and s.17(5)(d) of the CGST Act, 2017 - Appeal is dismissed: AAAR

- Appeal dismissed: AAAR

SERVICE TAX

CENTRAL EXCISE

2020-TIOL-1454-CESTAT-MUM

Ceat Ltd Vs CCE

CX - The assessee had filed the application, claiming refund of excess central excise duty paid by it during course of provisional assessment of goods - Same was considered favourably by original authority - However, instead of paying the refund amount to the credit in assessee's account, the department had credited the same to the Consumer Welfare Fund, created under Section 11D of CEA, 1944 - On scrutiny of financial records, it is found that the amount in question, for which the refund claim was filed by assessee was all along been reflected "as claims receivable from the government authorities" - In absence of reflection of such amount as an element of expenditure in profit and loss account, the profitability of company has not suffered - Further, reflection of refund amount in the balance sheet under head of "loans and advances", clearly depicts that the incidence of excess paid duty amount has all along been borne by assessee - Therefore, it cannot be said that the element of excess paid duty had been transferred to the dealers and for that purpose, assessee should not be entitled for benefit of refund and the amount in question should be transferred to the Consumer Welfare Fund - In an identical situation, Tribunal in the case of assessee's other unit has remanded the matter to the original authority to examine the issue of crediting the amount of refund to the Consumer Welfare Fund - The refund in question instead of being credited to the Consumer Welfare Fund, should be eligible for refund to the assessee: CESTAT

- Appeal allowed: MUMBAI CESTAT

CUSTOMS

2020-TIOL-1643-HC-MUM-CUS

Jaymco Polymers Pvt Ltd Vs UoI

Cus - Petitioners inter alia seek quashing and setting aside of seizure memo, test report etc. - The goods in question have been seized under section 110 of the Customs Act - From a reading of sub-section (1) of section 110, it is evident that seizure of a good is not an end in itself - It is a means to an end - The end is confiscation, if justified and warranted - It is seen that the goods were put on hold and thereafter seized in the first week of January, 2020 - Considering that the goods in question, be it mineral hydrocarbon oil as claimed by the petitioner or kerosene / high speed diesel as claimed by the respondents, are highly inflammable and hazardous, a proceeding related thereto is required to be decided expeditiously - The adjudicating authority is required to decide whether goods are liable for confiscation or not; adjudication cannot be kept pending - He may also have to decide whether the goods should be sold or not having regard to the hazardous and inflammable nature of the goods – Directions issued – Petitions disposed of: High Court [para 31, 32, 34]

Petitions disposed of: BOMBAY HIGH COURT

2020-TIOL-1455-CESTAT-KOL

Biswajit Chakraborty Vs CC

Cus - Authorities below proceeded on the basis of assumption of recovery of gold from the possession of the appellant - The appellant wanted cross-examination of the witnesses named in the BSF Seizure Memo, which has not been granted - Before the Customs Authority, while giving statement under Section 108 of the Customs Act, 1962, the appellant in his statements dated 04-04-2016 and 05-04-2016 repeatedly stated that he is not involved in any illegal smuggling activity; that he did not know any person whose names are appearing in the BSF Seizure Memo; that he came to learn in the BSF Camp that the actual carrier of the gold fled away after throwing away a packet, which was recovered by the BSF Personnel and on the way the appellant was caught and has been implicated; that he is not the owner of the gold; that he cannot write but only can make his signature; that he was forcefully taken to the BSF Camp and has been booked in a smuggling case - There is no rebuttal evidence of his statement given before the Customs Authorities - The statement under Section 108 of the Customs Act, 1962 undisputedly is a substantive piece of evidence, which goes in favour of the appellant - This is further corroborated by the communication from the appellant to the Additional Commissioner that he had no objection in the pre-trial disposal of the gold since he was not the owner of the gold nor the claimant of the gold and the Customs Authorities can dispose the gold in any manner they deemed fit and proper – Bench finds that recovery of the gold from the appellant has not been proved and hence, he was not required to discharge the burden under Section 123 of the Customs Act, 1962 - As there is no claimant of the gold, the confiscation of gold handed over by the BSF Personnel to the Customs Authority is justified - Regarding seizure and confiscation of Mobile Phone and Indian currency, Bench finds that since the illegal importation of gold by the appellant has not been proved, the confiscation of the said old and used Mobile Phone valued at Rs.200/- and Indian currency of Rs.6,000/- cannot be made - Adjudicating Authority proceeded on the basis of probability that the Indian currency may be the advance received for smuggling of gold as the Commissioner did not give any finding on this point but upheld the confiscation – as there is no merit in the Order passed by the Commissioner (Appeals), same is set aside and the appeal of the appellant is allowed with consequential relief, if any: CESTAT [para 9]

- Appeal allowed: KOLKATA CESTAT