Mahavir Traders Vs UoI

GST - SCN and the order of cancellation of registration are assailed in the writ petition - Petitioner submits that without fixing a date for hearing and without waiting for any reply to be filed by the petitioner, the cancellation order was passed on 31.07.2020 whereby registration of the petitioners with GST department was cancelled; that although the cancellation order refers to a reply submitted by the petitioner and also about a personal hearing, but according to the petitioner neither they had submitted any reply nor were afforded any opportunity of hearing.

Held: Upon perusal of the SCN dated 21.07.2020, Bench notes that to such show cause notice no response can be given by any assessee; that the SCN is as vague as possible and does not refer to any particular facts much less point out so as to enable the noticee to give his reply - Without entering into the merits of the impugned order, Bench is convinced that the show cause notice itself cannot be sustained for the reasons already recorded and, therefore, the cancellation of registration resulting from the said show-cause notice also cannot be sustained - The impugned show cause notice dated 21.07.2020 and the impugned cancellation order dated 31.07.2020 are hereby quashed - Writ petition succeeds and is allowed: High Court [para 2, 5, 6]

- Petition allowed: GUJARAT HIGH COURT

2020-TIOL-1667-HC-AHM-GST

Bell Granito Ceramica Ltd Vs UoI

GST - Applicant seeks extension of time limit for making payment of balance amount of Rs.44,77,778/- and also requests that the petitioner may be permitted to make payment in six monthly installments.

Held: Bench is inclined to take a very strict view of the matter because once an undertaking on oath is filed before the Court, it is expected of the person giving such undertaking to comply with the same as the non-compliance would entail the consequences of contempt - Bench could have not only rejected this Civil Application but, in the process, even the interim relief would have stood vacated - However, with a view to give one opportunity to the writ-applicant, Bench extends the time period by a further period of six weeks to enable the applicant to comply with the undertaking and deposit the amount as directed in the order dated 19th February 2020 - Furthermore, if within a period of six weeks if the requisite amount is deposited, then the interim relief granted by this Court in terms of paragraph 21E shall continue - However, if the requisite amount is not paid within a period of six weeks, then the interim relief granted earlier shall stand automatically vacated and it shall be open for the respondents to proceed further with the garnishee notices and the notice dated 3rd February 2020 - Civil Application stands disposed of: High Court

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-1666-HC-AHM-GST

Hindustan Trading Vs State Of Gujarat

GST - Writ applicant prays for an order directing respondents to forthwith release truck along with goods - It appears from the materials on record that the writ applicant has been served with a notice dated 28th August, 2020 issued in the Form GST MOV-10 calling upon the writ applicant to show-cause as to why the goods along with the vehicle seized under Section 129 of the Act should not be confiscated under Section 130 of the Act, 2017.

Held: Final order of confiscation in Form GST MOV-11 is yet to be passed - Bench expects the writ applicant to appear before the authority and make good his case that the goods and the vehicle is not liable to be confiscated under Section 130 of the Act - Ultimately, if the show-cause notice in the Form GST MOV-10 is discharged, then that would be the end of the matter - However, in the event if final order of confiscation in the Form GST MOV-11 is passed, then the writ applicant will have the remedy of filing a statutory appeal under Section 107 of the Act - As on date, Bench is considering a limited question whether the goods and the conveyance should be ordered to be released subject to certain terms and conditions pending the confiscation proceedings - Petitioner submits that they are ready and willing to deposit Rs.6,64,000/- towards the tax and penalty and is also ready and willing to furnish Bank Guarantee of the amount of Rs.18,44,634/- being 50% of the amount of fine in lieu of confiscation of goods - Bench, therefore, directs that if these two conditions are fulfilled, then the authority concerned shall immediately release the goods and the vehicle - Confiscation proceedings shall proceed further in accordance with law and the same shall be decided by the authority concerned on its own merits - writ application stands disposed of: High Court [para 4 to 7]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-57-AAAR-GST

ID Fresh Food India Pvt Ltd

GST - Applicant had sought a ruling as to whether the preparation of Whole Wheat parota and Malabar parota be classified under Chapter heading 1905 attracting GST @5% - AAR in its ruling dated 22.05.2020 [2020-TIOL-114-AAR-GST] had held that the product ‘Whole Wheat Parota, Malabar Parota' is neither khakhra, plain chapatti or roti; that the impugned products are not ready to eat food preparations like khakhra, plain chapatti or roti but require further processing for human consumption as admitted by applicant and, therefore, impugned products are classifiable under Chapter Heading 2106 @18% GST, not CH 1905 as claimed and is not covered under Entry no. 99A of Schedule I to 1/2017-CTR which entry attracts GST @5% - Aggrieved, the applicant/appellant had filed an appeal before the AAAR - The department's representative at the time of hearing submitted that the DGGI, Chennai had initiated an investigation against M/s ID Fresh Food (India) Pvt. Ltd. on the issue of misclassification of ‘Parotas' under HSN 1905 9090 instead of 2106 and consequently M/s ID Fresh Food (India) Pvt. Ltd. were paying GST at the lower rate of 5% instead of 18%; that the DGGI had issued summons dated 21.06.2019 and 09.07.2019 to the applicant/appellant and statements were recorded on 02.07.2019 and 09.07.2019; that during the pendency of the investigation the applicant/appellant had applied for an Advance Ruling on the same issue of classification of Parotas on 09.10.2019 and the authority had given a ruling on 22.05.2020 that the product is classifiable under heading 2106; that since the applicant/appellant had obtained the ruling by not revealing the fact of the ongoing investigation on the same subject matter and which is violative of section 98(2) of the CGST Act, 2017; therefore, the ruling given by the lower AAR has to be held as void ab initio in terms of section 104 of the Act inasmuch as the ruling has been obtained by suppressing the facts - the appellant submitted that the investigation initiated was clearly at a preliminary stage since no SCN was issued u/s 73 or 74 of the Act for any ‘proceeding' to have commenced or decided; that there is a gap of five months for the advance ruling to be issued since the application was filed and as such there was enough time for the Department to highlight the issue before the AAR and having not done so, it cannot now be alleged that the appellant had suppressed information from the AAR to obtain the ruling; that the issue of jurisdiction could not be raised at a belated stage before the appellate authority.

Held: Authority finds that the objection raised by the department points to the very maintainability of the advance ruling in question - the term ‘proceeding' is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right and hence it necessarily embraces the requisite steps by which a judicial action is invoked - the process of investigation in tax administration is such a step towards the action of issuing a SCN which culminates in a decision -Investigation is activated when there is enough predication to show that there is an alleged tax evasion - the essence of investigation is to carry out an in-depth review of the taxpayer's records and activities to ensure that the tax due to the government is not lost in evasion, therefore, commencement of investigation in terms of s.67 of the CGST Act can be said to be the start of a ‘proceeding' to safeguard government revenue - Therefore, the Appellate Authority is of the view that the usage of the words “any proceeding” in the proviso to s.98(2) of the CGST Act, 2017 will encompass within its fold the investigation launched by the agencies - From the records, it is clearly evident that the DGGI were conducting their investigation on the issue of classification of Parotas and the eligibility of the concessional rate of tax of 5% as per Entry no. 99A, therefore, Authority is not including to accept the argument of the appellant that the classification of the disputed products was not raised specifically by DGGI - It is well settled that reason to believe that the question on which an advance ruling was sought was not pending in any proceedings in the case of the appellant under the Act is a jurisdictional fact and only on its satisfaction the lower authority acquires jurisdiction to give a ruling on the question - An objection regarding jurisdiction can be raised at any time even in appeal proceedings and the mere fact that no objection was taken before the lower authority would not by itself bestow jurisdiction to the said authority - Supreme Court in the case of Kanwar Singh Saini [ CRIMINAL APPEAL NO. 1798 of 2009 Dated 23 September 2011] has held that it is a settled position that conferment of jurisdiction is a legislative function and cannot be conferred by the consent of the petitioner; that an issue of jurisdiction can be raised at any time even in appeal or execution - Argument by the appellant that in the absence of an appeal by the department the objection cannot entertained by the appellate authorities is not tenable since there is no provision in the statute [CGST Act] for a cross appeal/cross objection to be filed before the Appellate authority in the appeal against the advance ruling - Appellate authority is inclined to take cognisance of the fact that the advance ruling has been obtained by suppression of material facts - It is trite law that when one comes for justice, one should come with clean hands and which is not the case here - The appellant is indeed guilty of having not revealed the fact of an investigation pending against them by the DGGI, Chennai Zonal Unit on the issue of classification of Parota at the time of applying for an advance Ruling - Therefore, Appellate Authority invokes the provisions of s.104 of the CGST Act, 2017 and declares the advance ruling order dated 22nd May 2020 as void ab initio - Having held that the order of the lower authority is void ab initio , the question of addressing ‘Whether the preparation of Whole Wheat parota and Malabar parota be classified under Chapter heading 1905 attracting GST @5%' does not arise - Appeal dismissed: AAAR

- Appeal dismissed: AAAR

Hal Offshore Ltd Vs State Of Maharashtra

Whether movement of goods from a location within Maharashtra to an offshore oil platform can be treated as sale within the territory of Maharashtra - NO: HC

-Case deferred : BOMBAY HIGH COURT

SERVICE TAX

2020-TIOL-1665-HC-MUM-ST

Bank Of Maharashtra Vs Commissioner, CGST & CX (Dated: September 22, 2020)

ST -   Rule 2(l) of CCR, 2004 -  CESTAT by its order dated 12.02.2019 held that Premium paid on deposit insurance to DICGC is not an 'Input service'; that, therefore, Appellants are not eligible to avail CENVAT credit of the amount of service tax paid to DICGC for insuring the deposits of the customers involving the period post 01.04.2012 - That in the matter of appeal filed by State Bank of India the  Appellant had submitted that the issue is covered in their favour by the decisions in DCB Bank Ltd.   2017-TIOL-2849-CESTAT-MUM  and Punjab National Bank   2018-TIOL-1395-CESTAT-DEL ; that instead of taking a view that is contrary to the co-ordinate bench decision in the cited cases (supra), the Tribunal should have referred the issue to a Larger Bench; that in subsequent matters, the Tribunal has referred this very issue to the Larger Bench in Latur District Central Co-op Bank Ltd. - 2019-TIOL-2099-CESTAT-MUM and, therefore, the impugned order warrants being set aside and the appeal be listed along with the other matters referred to the Larger Bench for a fresh decision on merits - Counsel for Revenue also submitted that the impugned order of the Tribunal has been challenged by Revenue before the High Court to the extent it has not imposed any penalty upon the appellant; that the present appeal be heard along with Revenue's appeal and, therefore, the matter was listed on 13 September 2019 - that subsequently, in the other appeals, the Court was informed that the very issue had been referred to the Larger Bench of the Tribunal in the case of State Bank of Patiala and Latur District Central Co-op Bank Ltd. and, therefore, the matter was adjourned - When the appeals were taken up for consideration, the appellants informed that the Larger Bench of the CESTAT has answered the above issue in favour of the appellants i.e. the banks and, therefore, the appeals may be allowed by setting aside the impugned order.

Held: By the judgment and order dated 20.03.2020 - 2020-TIOL-861-CESTAT-BANG-LB ], the Larger Bench held that the view taken in State Bank of Bikaner and Jaipur is the correct view and the contrary view taken in ICICI Bank Limited is not acceptable; that the reference has been answered by holding that the insurance service provided by the Deposit Insurance Corporation to the banks is an ‘input service' and CENVAT credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering 'output services' - In view of the decision rendered by the Larger Bench of the CESTAT, the impugned order dated 12.02.2019 cannot be sustained and the same is accordingly set aside and quashed - All the appeals are remanded back to the CESTAT for fresh decision in conformity with the decision rendered by the Larger Bench - Appeals are allowed:  High Court [para 11.4, 12, 13]

-Appeals allowed : BOMBAY HIGH COURT

CENTRAL EXCISE

2020-TIOL-1663-HC-P&H-CX

Sobha Ltd Vs UoI

SVLDRS - The assessee was served four SCNs during the relevant period, proposing to raise duty demand - On adjudication, the duty demands were confirmed and on appeal, such demands were upheld - The assessee then filed appeal to the CESTAT - Meanwhile, the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was introduced and the assessee sought to avail benefit thereunder - The assessee filed application and reflected the tax dues admitted and also pre-deposited part of such dues - However, the assessee's application was rejected on grounds that the assessee should have filed four separate applications under this Scheme - Hence the present petition.

Held - It is seen that the four SCNs issued to the assessee were not pending - These had been adjudicated and one consolidated order had been passed in respect of all four of them, at the stage of adjudication as well as at the stage of appeal - This led to only one appeal being filed before the Tribunal - Hence the assessee's application under the SVLDRS cannot be rejected on hyper-technical grounds of four separate declarations not being filed - The court finds merit in the contention of the assessee's counsel that in such circumstances, Section 13 (2) of the General Clauses Act, 1897 can be invoked in terms of which the "words in the singular shall include the plural, and vice-versa - Moreover, the assessee agreed to pay an amount which is considerably higher than what the assessee would have had to pay if four separate applications had been filed - Hence the order in question is quashed and directions are issued to the authorities concerned to decide upon the assessee's application under the SVLDRS within 8 weeks' time: HC

-Writ petitions allowed: PUNJAB AND HARYANA HIGH COURT

2020-TIOL-1468-CESTAT-CHD

Anu Products Ltd Vs CCE & ST

CX - The assessee is in appeal against impugned order wherein the credit has been denied to them on the premise that as per Notfn 02/14-CE (N.T) , they were not entitled to avail credit prior to the Notfn 02/14 (N.T) in terms of Notfn 01/10-CE - Without going into the merit of case, assessee is contesting only on limitation - There is no provision in law for the assessee to file invoices before the department in time - As the assessee was allowed credit by the adjudicating authority although the revenue has filed appeal against those orders before the Commissioner (A) - In that circumstances, when the adjudicating authorities are having a divergent views, the extended period of limitation is not invokable - Admittedly, the SCN has been issued by invoking extended period of limitation, therefore, the denial of credit is barred by limitation - The similar view was taken by this Tribunal in the case of Saraswati Agro Chemical (India) Pvt. Ltd. - Accordingly, the demand against the assessee is barred by limitation: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

CUSTOMS

2020-TIOL-1467-CESTAT-MUM

Eurotex Industries And Exports Ltd Vs CCE

Cus - Appellant, a 100% EOU is engaged in manufacture and clearance for export of Cotton Yarn, as per the extant Export Import Policy after availing the admissible exemption notifications issued under the Customs Act, 1962 and CEA, 1944 - They procured the raw material and consumables used for manufacture of their finished goods without payment of duty, by availing exemption as per notfn 1/95-CE and no. 22/03-CE pertaining to domestic procurement of raw materials and consumables and notfn 53/97-Cus and no. 52/03-Cus pertaining to imported raw materials and consumables - Appellant had cleared "Cotton Waste" arising during the course of manufacture, to DTA on payment of duty at "nil" rate - Proceedings were initiated against appellant for recovery of duty on the inputs raw materials and consumables used in manufacture of Cotton Waste, so cleared at "nil" rate of duty, by way of issuance of SCN - The issue for consideration is, whether payment of excise duty at nil rate on clearance of cotton waste to DTA in manner as prescribed by EXIM Policy, would be covered by phrase "on payment of appropriate duty of excise" used in these exemption notifications, making appellants entitled to the benefit of these exemption notifications - Admittedly, revenue had earlier issued a Circular in 1995 clarifying that "appropriate rate of duty" will include the "nil" rate of duty - Hence the view was that though Supreme Court had decided the issue, holding that "appropriate rate of duty" will not include the case of payment of duty at "nil" rate, but in view of Circular/ clarification issued, the interpretation made in circular will be binding on the revenue authorities - However this view was not concurred by Supreme Court and in case of Kalyani Packaging 2004-TIOL-82-SC-CX - The decision of Kalyani Packaging was affirmed by five member bench of Supreme Court in case of Rattan Wire and Melting 2008-TIOL-194-SC-CX-CB - In view of the decision of Apex Court in case of Sant Lal Gupta & Ors. and Bombay High Court in case of Mercedes Benz India (P) Ltd. 2010-TIOL-195-HC-MUM-CX the matter is referred to the President for constitution of a larger Bench for consideration of the issue: CESTAT

- Case deferred: MUMBAI CESTAT

Champion Photostat Industrial Corporation Vs CC

Cus - The issue arises for consideration is, whether the rejection of transaction value and enhancement of value of imported goods (old and used Digital Multifunctional Devices) on the basis of Chartered Engineer's Certificate, with further order of confiscation for non-submission of specific licence for importation from DGFT is justified - The Commissioner (A) has relied upon the CBEC Circular No.4/2008-Cus which deals with valuation of second hand machinery/capital goods and has upheld the enhancement of declared value based on the valuation done by Chartered Engineer at the instance of the Department - The said circular has relied upon the ruling of Supreme Court in Gajra Bevel Gears 2002-TIOL-09-SC-CUS-LB , wherein it has been held that the value of second hand machine, when new, based on the certificate produced by importer and scaling down that price by giving depreciation does not appear to be an arbitrary method of ascertaining its value - Further, Rule 3 read with Rules 12 requires that where the proper officer has reason to doubt the truth or accuracy of declared value in relation to the imported goods, he may ask the importer to furnish further information including the documents or other evidences - If after receiving such further information, or in the absence of the response of importer, the proper officer still have reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of Rule 3 (1) - In present case, no such exercise has been done by proper officer - Thus, rejection of transaction value is held to be arbitrary and thus, the same is set aside and the declared value for the purpose of assessment is restored - So far the confiscation is concerned, the same is upheld as the goods imported, admittedly, fall under the category of "restricted goods" under Import Policy of relevant period and the assessee, as required, failed to produce specific import licence from DGFT - However, following the precedent ruling of this Tribunal in case of Omex International 2015-TIOL-582-CESTAT-DEL , the redemption fine is reduced to 10% and penalty under Section 112 (a) is reduced to 5% of the assessable value: CESTAT

- Appeal partly allowed: DELHI CESTAT