Damu And Sons Sales Corporation Vs ASTO

GST - Validity of the e-way bill that accompanied the transportation of the goods had expired by the time of detention, therefore, noticing the said defect the respondent had issued a series of notifices u/s 129(3) of the Act – Petitioner submits that cargo carried in the instant case fell under the description of 'multimodal shipment in which at least one leg involves transport by ship', therefore, they must get the benefit of the time permitted in serial number 3 in the table under Rule 138(10) of the CGST Rules, 2017 for the purposes of computing the validity period of the e-way bill; alternate contention is that as per the 3rd proviso to Rule 138(10), the validity of an e-way bill can be extended within eight hours from the time of its expiry and hence in the instant case the petitioner had time till 8 am on 06.11.2020 for extending the validity of the e-way bill, whereas the detention was at 1.30 am on 06.11.2020; that since there was no valid ground for detention, the goods ought to be released without further delay.

Held:

+ Classification in the table under Rule 138(10) is essentially between 'over dimensional cargo' and 'other cargo' – Bench cannot accept the contention of the petitioner that, irrespective of whether his cargo can be categorised as over dimensional cargo or otherwise, he must get the benefit of the more beneficial provision so long as the mode of shipment is multimodal and in which at least one leg involves transport by ship - To interpret the provision as suggested would do violence to its clear language: High Court [para 4]

+ As regards the contention based on the 3rd proviso to R.138(10), while it may be a fact that the validity of the e-way bill could have been extended within eight hours from the time of its expiry, it is not in dispute that the petitioner did not choose to do so, and there is no merit in the contention that he did not extend the validity of the e-way bill because by that time the goods had already been detained by the respondent - mere fact that the respondent had detained the goods did not, in any manner, prevent the petitioner from extending the validity period of the e-way bill, and producing a copy of the extended e-way bill before the authority for the purposes of seeking a clearance of the goods - detention of the goods and the vehicle in the instant case cannot be said to be unjustified – However, the petitioner is permitted to clear the goods and the vehicle on furnishing a bank guarantee for the amount demanded in the impugned notices: High Court [para 5, 6]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-1954-HC-KERALA-GST

Softouch Health Care Pvt Ltd Vs STO

GST - It was the case of the petitioner that inasmuch as he had not been served with a copy of the assessment orders immediately after they were passed, and he came to know of the same only much later, at the time of service of the demand notices, the returns that he had filed within the period of 30 days from the date of receipt of the said demand notices ought to be taken as filed within the time permitted for such filing of returns for the purposes of Section 62 of the GST Act, and a consequential withdrawal effected, of the assessment orders passed thereunder - In the absence of any reason to disbelieve or contradict the averments of the respondent that the assessment orders had, in fact, been communicated to the petitioner through uploading the same on the common web portal as statutorily permitted under Section 169(1)(d) of the GST Act, Court accepted the same and found against the petitioner on the issue of filing of returns within the time stipulated under Section 62 of the Act – Review petition was also dismissed as being bereft of merits – however, the Bench posted the review petition again to remedy the wrong that was occasioned to the petitioner through dismissal of the writ petition – Inasmuch as during the course of hearing of another writ petition, where the same issue came up for consideration, this court had occasion to interact with the officers of the GST department of the State, who were familiar with the technical aspects of uploading orders of the State authorities on the common web portal and it became apparent that the assessment orders were not being simultaneously uploaded on the common web portal and that the statements made before this court on the earlier occasion were as regards uploading of the assessment orders on the back-end web portal maintained by the State Government and not to the common web portal maintained by the GST Network – since the factual basis for taking the decision in WP 15297/2020 = 2020-TIOL-1654-HC-KERALA-GST was erroneous, the same needs to be corrected in the larger interest of rendering justice to the petitioner – Therefore, suo motu the order is recalled and the review petition is allowed: High Court [para 4, 5]

- Petition allowed: KERALA HIGH COURT

2020-TIOL-1951-HC-SIKKIM-GST

Sun Pharma Laboratories Ltd Vs UoI

GST - Petitioner has filed an application under Order VI Rule 17 read with section 151 of the Code of Civil Procedure, 1908 seeking to insert amendments in the Writ Petition - Petitioner has inter alia sought to insert amendments in the Writ petition inasmuch as they also seek to challenge the proviso to section 174(2)(c) of the Act, 2017 which provides that tax exemption granted as an incentive through a notification would not continue if such notification is rescinded; they also challenge notification 21/2017-CE vide which the exemption notifications (including 20/2007-CE) issued under the erstwhile regime were rescinded - Petitioner further submits that the proposed amendments do not change the nature and character of the writ petition and are being sought bona fide in the interest of justice; that, therefore, the proposed amendments be considered and allowed - Respondent submitted that the apex court has [VVF Ltd. & Ors.- 2020-TIOL-83-SC-CX-LB rejected the original petition of the petitioner wherein they had sought benefits on the ground of promissory estoppel and hence the present petition deserves no consideration; that the IA has been brought at a belated stage when the original WP has been heard in its entirety and the judgment in the matter was reserved and this indicates the mala fides of the petitioner; that with the Goods and Services Tax being rolled out a new scheme has been offered as a measure of goodwill; the instead of the 56% that was fixed earlier, the amount to be refunded is fixed at 58% giving the petitioner the benefit of an additional 2%; that the proposed amendments change the entire nature and character of the suit besides the fact that nothing remains for adjudication in view of the apex court judgment (supra) and hence the proposed amendments merit no consideration and the petition ought to be dismissed.

Held:

+ Order VI Rule 17 of the CPC clothes the Court with powers to allow either party to alter or amend their pleadings at any stage of the proceedings on such terms as may be just. It also requires that all such amendments shall be made as may be necessary for the purpose of determining the real question in controversy between the parties provided that no application for amendment should be allowed after the trial has commenced unless the Court comes to the conclusion that in spite of due diligence the party could not have raised the matter before the commencement of trial. Thus, the provisions in the first part is discretionary and in the second part is imperative inasmuch as amendments that are necessary for the purpose of determining the real question in controversy between the parties ought to be allowed.

+ The prayers in the writ petition are confined to enabling the petitioner to claim full refund of the CGST and 50% of the IGST paid through the electronic cash ledger - It cannot be said that the petitioner was unaware of the provision of the statute, the vires of which they now seek to assail, nor was it inserted at some point later in time to the filing of the writ petition - It, therefore, cannot be said that the amendments are necessary for determining the real question in controversy between the parties - proposed amendments if permitted would, in fact, change the very nature and character of the writ petition and introduce an entirely different cause of action, which is not permissible - Bench is, therefore, not inclined to exercise its discretion in favour of the petitioner - Petition stands rejected and dismissed: High Court [para 11, 12]

- Petition dismissed: SIKKIM HIGH COURT

2020-TIOL-71-NAA-GST

Director General Of Anti-Profiteering Vs Sattva Developers Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Project Laurel Heights - Period 01.07.2017 to 31.08.2018 - Applicant alleged that the respondent had not passed on the benefit of Input Tax Credit by way of commensurate reduction in the price of the flat on introduction of GST w.e.f 01.07.2017 - DGAP has computed the profiteered amount as Rs.99,20,246/- and which the Authority in its order dated 14.06.2019 [2019-TIOL-38-NAA-GST] held to be correct - It was also held that the respondent had, by not passing on the benefit of ITC committed an offence u/s 122(1)(i) of the Act and hence was liable for imposition of penalty - respondent was issued notice dated 18.06.2019 asking him to explain as to why the penalty mentioned in s.122 r/w rule 133(3)(d) should not be imposed - respondent replied on 17.08.2019 and also stated that they had filed a Writ Petition before the Delhi High Court and, therefore, the penalty proceedings should be kept in abeyance - however, it is seen that the High Court vide order dated 23.07.2019 [2019-TIOL-1603-HC-DEL-GST] ordered that penalty proceedings would continue - Matter heard by NAA.

Held: From the perusal of Section 122(1)(i) it is clear that the violation of the provisions of Section 171(1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act - It is further revealed that vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171(1) which have come in to force w.e.f. 01.01.2020, by inserting Section 171 (3A). Since, no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 31.01.2018 when the Respondent had violated the provisions of Section 171(1), the penalty prescribed under Section 171(3A) also cannot be imposed on the Respondent retrospectively - Accordingly, the notice dated 18.06.2019 issued to the Respondent for imposition of penalty under Section 122(1)(i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped: NAA

- Proceedings dropped: NAA

2020-TIOL-66-AAAR-GST

IZ Kartex

GST - Applicant/now appellant is the local branch of a Russian business entity by the same name ('Foreign Company'), which entered into a Maintenance and Repair Contract ("MARC") with Bharat Coking Coal Ltd ("BCCL") with respect to the machinery and equipment it had supplied - Applicant wanted to know whether the Maintenance and Repair Contract makes the supplier liable to pay GST - They, therefore, filed an application before the AAR - AAR observed that MARC holder maintains suitable structures in terms of human and technical resources at the sites of BCCL - It ensures supervision of the equipment, supply of spares and consumable and overheads for 5000 annual working hours for seventeen years, indicating sufficient degree of permanence to the human and technical resources employed at the sites - The MARC Holder, therefore, supplies the service at the sites from fixed establishments as defined under section 2(7) of the IGST Act - The location of the supplier should, therefore, be in India in terms of section 2(15) of the IGST Act - Consequently, supply of the MARC Holder to BCCL is not, therefore, import of service within the meaning of section 2(11) of the IGST Act - The MARC Holder should be treated as a supplier located in India triggering clause 9.2.2 of the MARC, and made liable to pay GST, the place of supply being determined in terms of section 12(2)(a) of the IGST Act - The applicant, being the registered branch of the Foreign Company, should be treated as the domestic MARC Holder in terms of clause 9.2.2 of the MARC and be liable to pay tax accordingly - recipient is, therefore, not liable to pay GST on reverse charge basis in terms of Notification No. 10/2017- Integrated Tax (Rate) dated 28/06/2017 - aggrieved, appeal filed before the AAAR.

Held: While going through the order of the AAR, it is seen that the AAR has not considered/discussed the various other terms of the agreement which says, inter alia, that the entire control of the activities would rest with the foreign entity, which had entered into an agreement with BCCL - AAR has observed that the service is ensured from the appellant's domestic entity for seventeen years of the contract, however, it has not taken into consideration the fact that the appellant is providing service to BCCL since 2015 whereas the domestic entity has come into existence in 2018 only - It is clear that the registered place of business cannot be termed a fixed establishment - since the domestic entity IZ-KARTEX is registered with the GST authorities, it cannot be termed a fixed establishment and in that sense the decision of the AAR does not hold good in legal terms - Also AAR has not adduced any finding to draw a conclusion that IZ-KARTEX as registered in India maintains suitable structures in terms of human and technical resources to provided the service for which the MARC has been entered into between the parties - From the facts of the case, it is seen that IZ-KARTEX named after Korobkov, the Russian company has entered into the MARC with BCCL and have deployed DDP-N, an Indian company as the sub-contractor; that DDP-N in turn, issues invoice to the Russian company and again the Russian company is raising bills on BCCL against supply of service - Hence, it is amply clear that the service is being provided by the appellant's foreign entity - Contrary to any material finding in the order of the AAR, it is clear beyond doubt that the conditions of import as mentioned/defined in s.2(11) of the IGST Act, 2017 are satisfied in the present case - Order of the AAR is modified to the extent that the supply of service by the appellant to BCCL qualifies as import of service as defined under section 2(11) of the IGST Act and GST is payable on such import of service by BCCL under reverse charge mechanism in terms of 10/2017-IT(R): AAAR

- Appeal allowed: AAAR

2020-TIOL-1953-HC-KERALA-ST

ST - SVLDRS, 2019 - Petitioner states that although the order-in-original passed by the assessing authority was against the petitioner, he did not choose to go in appeal against the said order but paid the entire tax amount confirmed against him with a view to putting a quietus to the matter - The revenue, however, preferred an appeal against the said order, within the time permitted under the statute, and it is against the non-intimation to him, of the fact of having preferred the appeal, that the petitioner is stated to be aggrieved - According to the petitioner, if he had been informed of the appeal having been preferred by the revenue, when the amnesty scheme was in vogue, he would have applied for the Amnesty scheme with a view to put the quietus to the matter and would not have had to contest the appeal preferred by the revenue.

Held: Petitioner has no statutory right to be informed of an appellate right exercised by the revenue, before a communication to that effect is sent to him by the appellate authority prior to the hearing of the appeal - The petitioner cannot also be seen as prejudiced in any manner merely because the intimation of the revenue appeal was received by him after the expiry of the amnesty scheme - Petitioner's option for the amnesty scheme was not dependent upon whether or not the revenue preferred an appeal against the order of the assessing authority - Petition fails and is accordingly dismissed: High Court [para 2]

- Petition dismissed: KERALA HIGH COURT

2020-TIOL-1952-HC-KERALA-CUS

Cus - Petitioner is before this Court impugning Ext.P9 order of the respondent that ordered the revocation of the license issued to him under the Customs Brokers Licensing Regulations, 2018, and imposed a penalty of Rs.50,000/- under the same Regulation - It is the case of the petitioner that, while in terms of the regulation the respondent had appointed an Enquiry Officer to look into the aspects contained in the notice issued to the petitioner and the Enquiry Officer had submitted a report before the respondent in favour of the petitioner, the respondent, thereafter, proceeded to disagree with the findings of the Enquiry Officer and pass an order adverse to the interests of the petitioner; that if the respondent wanted to disagree with the findings of the Enquiry Officer, then the notice issued to the petitioner in that regard should have clearly indicated that the respondent was proposing to disagree with the findings of the Enquiry Officer, and proceed against the petitioner in accordance with the proposal in the show cause notice initially issued to him.

Held: There is nothing in the counter affidavit that would suggest that the respondent had issued a notice to the petitioner proposing not to accept the findings of the Enquiry Officer and to proceed against the petitioner based on the allegations raised in the show cause notice issued to him - As there was no notice issued to the petitioner whereby the respondent indicated that he was not ready to accept the Enquiry Officers Report, the petitioner cannot be faulted for having assumed that the Enquiry Report that was in his favour would be accepted by the respondent - The respondent not having issued a notice on the lines indicated above, Bench is of the view that Ext.P9 order passed by the respondent has taken the petitioner by surprise and to that extent it is in gross violation of the rules of natural justice - Ext.P9 order is, therefore, quashed and the respondent is directed to pass a fresh order after issuing a notice to the petitioner giving the reasons as to why the respondent proposes not to accept the findings of the Enquiry Officer in Ext.P5 Report - fresh order is to be passed within three months: High Court [para 3]

- Matter remanded: KERALA HIGH COURT

2020-TIOL-1620-CESTAT-CHD

Sudhir Power Ltd Vs CCE & ST

CX - Appellant is engaged in the manufacture of DG sets and enclosures which are being sold by the appellant in open market and to various customers against the Duty Credit Scrips issued to them by DGFT under Served From India Scheme ('SFIS') in terms of Chapter 3 of the Foreign Trade Policy 2009-2014 ('FTP') - During Audit, it was found that the appellant has cleared DG sets without payment of excise duty under the Status Holder Incentive Scheme by availing the benefit of Notification No. 33/2012-CE dated 09.07.2012 and under SFIS by availing the benefit of Notification 34/2006-CE dated 14.06.2006 - CBEC Circular No. 973/07/2013-CX dated 04.09.2013 clarifies that the provisions of Rule 6(3) of the CCR, 2004 are not applicable for the goods cleared by availing the benefit of Notification No. 33/2012-CE, however, since there is no reference to notification 34/2006-CX, proceedings were initiated for recovery of credit under rule 6(3) of CCR - demands confirmed with penalty and interest, therefore, appellant is before CESTAT.

Held:  It is an admitted position by both sides that the goods in question manufactured by the appellant are dutiable under Chapter 85 of the CETA, 1985 - Tribunal in the case of M/s Voltamp Transformers Ltd. - 2011-TIOL-1708-CESTAT-AHM has held that the goods supplied under Notification No. 34/2006-CE dated 14.06.2006 is not exempted, therefore, the provisions of Rule 6(3)(b) of CCR, 2004 are not applicable - Presumption by Revenue that since there is no mention of notification 34/2006-CE in the Circular No. 973/07/2013-CX dated 04.09.2013 then the provisions of Rule 6(3) is applicable is against the mandate of law as it is based on assumption & presumption - goods supplied under Notification No. 34/2006-CE dated 14.06.2006 under SFIS Scheme are held as dutiable and not exempted goods, therefore, the provisions of Rule 6 (3) of the CCR, 2004 are not applicable to the facts of this case - demand unsustainable and same is the case with interest and penalty - impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 8 to 11]

- Appeal allowed : CHANDIGARH CESTAT

2020-TIOL-1619-CESTAT-DEL

Golcha Properties Pvt Ltd Vs Pr CST

ST - Appellant, an owner of a cinema hall called ‘Golcha Cinema' and engaged in the business of exhibiting films in this theatre - A demand of service tax under “renting of immovable property” service with penalty and interest proposed in the two show cause notices dated April 17, 2014 and April 22, 2015 was confirmed against the appellant for the reason that the Appellant is providing service to the film Distributors by way of renting its theatre for screening the films - Demand is also confirmed for income under the heads “miscellaneous receipt”, “car parking hire”, “shorts and slides” and “rent receipt” shown in the balance sheet - appeal to CESTAT.

Held: Show cause notice April 17, 2014 makes reference to the agreement dated August 27, 2012, executed between M/s. A.A. Films and the Appellant for exhibiting the film title “Student of the Year” - A greement entered into between the Appellant and M/s. A.A Film clearly indicates that the film Distributor had granted theatrical exhibition rights to the Appellant and in return of transfer of such rights, the Appellant had agreed to pay share 50%/40% share of Net Box Office Collection with M/s. A.A Films, subject to a maximum theatre share of Rs.2,80,000/ - F or an activity to fall under ‘renting of immovable property' services, the nature of the activity should be that of renting or letting or leasing or licensing or other similar arrangements of immovable property, for use in the course or furtherance of business or commerce - In other words, where an immovable property is given for use by the service recipient or where there is a transfer of the right to enjoy property for a certain time for a consideration paid or promised or where there is granting of the right to use and occupy the immovable property by way of tenancy, lease, license, the transaction would be covered under the category of ‘renting of immovable property' services - In the instant case, the immovable property i.e. the theatre is used and occupied by the Appellant in its own right to screen the films and at no point of time, the theatre is used by the Distributor - A perusal of the agreement between the Appellant and the Distributor would also make it abundantly clear that it is the Appellant who makes payment to the Distributor for grant of theatrical rights - This clearly indicates the flow of service and the consideration - Thus, as it is the Appellant who pays a fixed consideration to the Distributor, no service tax can be levied on the Appellant - issue also came up for consideration before a Division Bench of the Tribunal in Moti Talkies [2020-TIOL-922-CESTAT-DEL] - It was held that the demand of service tax under ‘renting of immovable property' service was not justified for the reason that the Appellant had not provided any service to the Distributor, nor the Distributor had made any payment to the Appellant as a consideration for the alleged service - Finding recorded by the Principal Commissioner that ‘renting of immovable property' service had been rendered by the Appellant to the film distributors is not sustainable - Insofar as the demand on heads of ‘Car Parking Hire', ‘Shorts and Slides', ‘Rent Received' and ‘Miscellaneous Receipts' in its balance sheet under the category of renting of immovable property, for the period 2008-09 to 2013-20, the appellant has submitted that the demands are not sustainable as they are entitled for small scale exemption in terms of notification 6/2005-ST, 8/2008-ST, Sl. no. 24 of 25/2012-ST etc. - Confirmation of the demands in the impugned order, therefore, cannot be sustained and are set aside - Appeal is allowed by setting aside the impugned order dated 25 January 2016: CESTAT [para 11, 13, 14, 15, 17, 18, 20]

- Appeal allowed: DELHI CESTAT

2020-TIOL-1618-CESTAT-HYD

Sentini Technologies Pvt Ltd Vs CCE & ST

ST - The assessee, a 100% EOU has imported 'Netcool suite' from M/s Softential Inc, USA which they used in the services which they exported - They took CENVAT credit of the service tax paid by them under Section 66A on Netcool Suite imported by them - Thereafter, they filed a refund claim for Cenvat credit for period January to March, 2010 under rule 5 of CCR, 2004 r/w Notfn 5/2006-CE-NT - Same was rejected - From the documents presented including the agreement, the invoices, the FIRCs, the statement by the banker and the set off letter issued by the RBI, it is clear that what the assessee had imported is a software which they used to produce their export services - In fact, the service tax on imported input service was paid by assessee themselves under reverse charge mechanism under section 66A of FA, 1994 - After paying the service tax, assesee has taken Cenvat Credit of service tax paid treating the same as input service and showed it in their ST-3 returns - The Department has not objected to assessee's taking Cenvat Credit - No proceedings were initiated to deny and recover the Cenvat Credit so taken under Rule 14 of CCR, 2004 which is the provision for recovery of Cenvat Credit wrongly taken - Therefore, it is evident that the Department has accepted that the Cenvat Credit has been taken on the "input service" by assessee - It is now a well established principle that once Cenvat Credit is allowed on any goods or services as inputs or input service they do not cease to be so while processing a refund claim under Rule 5 of CCR, 2004 - There is no separate definition of input or input service either in Rule 5 or in Notfn 5/2006-CE - Therefore, the definition under Rule 2 of CCR, 2004 applies both to taking CENVAT credit and claiming its refund under Rule 5 - The assessee is entitled to refund claimed by them under Rule 5 of CCR, 2004 as claimed - These Rules do not provide for grant of interest - However, High Court of Gujarat, has, in the case of Reliance Industries Limited. 2010-TIOL-928-HC-AHM-CX held that refund of Cenvat Credit under Rule 5 of CCR, 2004 is also a refund under section 11B of CEA, 1944 and therefore, the provisions of interest under Section 11BB apply and this decision was upheld by Supreme Court by dismissing the SLP filed by the Revenue - Therefore, the assessee is also entitled to interest on refund under Rule 5 of Rules, 2004: CESTAT

- Appeal allowed: HYDERABAD CESTAT

2020-TIOL-1617-CESTAT-AHM

Kelvin Industries Vs CCE & ST

CX - The appeal is directed against impugned order whereby the matter was remanded by Commissioner (A) to the adjudicating authority to examine the correctness of entire duty amount of Rs. 11,22,927/- and penalty - On the plain reading of para 6 and 7, it is found that the Commissioner (A) has remanded the entire matter for re-verification and to examine the correctness of demand amounting to Rs. 11,22,927/- - However, as per para 5, Commissioner (A) has recorded that the assessee has not disputed clandestine removal of goods but their grievance is about confirmation of Central Excise duty on the entry as "opening balance" of Rs. 96,77,194/- appearing in duty calculation worksheet - Since, the Commissioner (A) has clearly held that the correctness of Rs. 11,22,927/- and verification of documents related them to be re-examined, therefore, stating that assessee has not disputed clandestine removal is clear contradictory - Therefore, the Commissioner (A)'s observation that assessee has not disputed the clandestine removal of goods, needs to be expunged and the remand made by Commissioner (A) has to be considered as open remand in respect of the total duty remand of Rs. 11,22,927/- - Accordingly, the appeal is allowed - The adjudicating authority should pass denovo adjudication order, as per the direction given by the Commissioner (A) in para 6 and 7 of the impugned order without getting influenced the observation made in para 5 of impugned order: CESTAT

- Appeal allowed: AHMEDABAD CESTAT