Bikas @ Vikas Sarawgi Vs State Of Odisha

GST - Search and inspection conducted by the State GST authorities have revealed that no business was actually being conducted at the declared place of business; multiple entities have been shown to be functioning from same premises; there are no transport documents or lorry receipts to show the actual supply of goods; there were no warehouses to stock the purported goods; and no equipment to measure or weigh the same were available in the premises - Prosecution report states that Vikas Sarawgi in individual capacity and in collusion with others has created eleven fictitious firms, conducted fictitious purchase of goods worth Rs.195.53 crores, fictitious sales of goods worth Rs.280.53 crores, availed bogus ITC worth Rs.46.10 crores and passed on bogus ITC worth 50.29 crores to the recipients totalling to Rs.96.39 crores in the name of the said non-existent fictitious firms in the name of fake invoices without physical receipts and supply of goods - P resent petitioner, who is in custody, has filed the instant bail application under Section 439 of the Cr.P.C - Petitioner herein and in collusion with Ankit Agrawal and Pramod Kumar Sahoo, are stated to have created several dummy and non-existent entities to avail bogus Input Tax Credit (ITC) for the purpose of defrauding the revenue.

Held:  The manner in which the accused, in collusion with other accused, have been operating would suggest that there are certain inherent flaws in the GST system, which is prone to such abuse - Furthermore, the fraudsters are taking advantage of the inadequacy of electronic trails of all transactions by employing ingenious methods - Once the charge-sheet has been filed, unless antecedents to the contrary can be demonstrated, the presence of the accused may not be required to take the prosecution to its logical conclusion - The object of the law in question is to act as a deterrent in blocking loopholes in an otherwise nascent law which concerns itself with the collection of revenue for the State -   It may be noted that the present proceedings are still at a teething stage and may, if the parties choose, be subject to the rigours of law as prescribed under the Statute i.e. assessment, appeal and revision etc. - Till such time the guilt of the accused person would not have crystallised and it would difficult to pre-judge at the stage of hearing an application for bail what the ultimate punishment imposed would be - In such circumstances, keeping an accused in custody, might not ultimately achieve the ends of justice -  When the Court has been granted discretion in the matter of granting bail and when there is no statute prescribing a special treatment in the case of a particular offence, the Court cannot classify the cases and say that in particular classes bail may be granted but not in others - Not only in the case of economic offences but also in the case of other offences the Court will have to consider the larger interest of the public or the State - It cannot be said that bail should invariably be refused in cases involving serious economic offences - It is directed that the petitioner be released on bail on furnishing a bail bond of Rs.5,00,000/- with one surety for the like amount to the satisfaction of the trial court with conditions as mentioned - Clarified that the assessment of the tax liability of the petitioner and his firm shall be carried out strictly in accordance with the applicable provisions of law, uninfluenced by the observations - It is further stipulated that in such matters the adjudicating authority shall do well to expeditiously complete the assessment process: High Court [para 9, 10, 14]

- Application disposed of : ORISSA HIGH COURT

2020-TIOL-2252-HC-ALL-GST

Suraj Freight Carrier Pvt Ltd Vs State of UP

GST -  on 4.2.2019, respondents had issued a demand notice to the petitioner directing the petitioner to deposit a sum of Rs.21,10,032/- -  petitioner claims that it is on this date that the petitioner became aware of the said demand -  petitioner thereafter was informed that an ex parte order MOV-09 has been passed on 14.9.2018, whereby the demand has been quantified against the petitioner at Rs.21,10,032/- - Petitioner claims that since the said order was served upon the driver of the vehicle and not on the petitioner, the petitioner was not having any knowledge of the said order - Appeal filed against this order on 03.05.2019 was rejected on the ground of delay alone  by recording that it cannot be presumed that the service on the driver was not known to the appellant -  present writ petition has been filed challenging the said order dated 23.9.2019 as the Tribunal envisaged under the Act has not been constituted.

Held: A dmitted fact is that the order was served upon the driver of the vehicle, which is not included in any mode of service as prescribed under Section 169 of the Act -  Consequently, the order dated 23.9.2019 is held to be erroneous and is set aside accordingly - It is directed that the Appellate Authority shall hear the appeal of the petitioner in accordance with law and on merits, as expeditiously as possible - Allahabad High Court order dated 01.12.2020 in Singh Traders [ 2020-TIOL-2087-HC-ALL-GST ] relied upon - Petition allowed: High Court

- Petition allowed : ALLAHABAD HIGH COURT

GST - Tokyo Electric Power Company Service Limited (TEPSCO), a Japan based company in association with Tokyo Electric Power Company Holding Inc. (applicant), a Japan based company (collectively referred to as Consultants) has entered into an agreement dated 13 April 2018 with an Indian entity namely M/s Odisha Power Transmission Corporation Limited (OPTCL) whereby the Consultants have agreed to provide consultancy services to M/s Odisha Transmission System Improvement Project, Odisha, India -  Applicant seeks to know whether they are required to be registered under the Odisha Goods and Services Tax Act, 2017 and the CGST Act, 2017 for the Consultancy services rendered to M/s Odisha Power Transmission Corporation Limited (OPTCL).

Held:  It is seen that the applicant has entered into an agreement with M/s OPTCL to provide consulting services - Scope of the services is technology transfer for the outdoor GIS O&M and GOS Operation Manual preparation - In order to carry out the aforementioned tasks, applicant would depute the support staff and expert at the project site - OPTCL shall provide them access to the project site as it is required for the performance of the services - It is evident that the expert belonging maintains suitable structures in terms of human and technical resources at the sites of OPTCL - The applicant though its expert belonging, therefore, supplies the service at the sites from fixed establishments as defined u/s 2(7) of the IGST Act - The location of the supplier should, therefore, be in India in terms of s.2(15) of the IGST act - Authority, therefore, disagrees with the claim of the applicant that services supplied to OPTCL would be covered under the ambit of Entry no. 1 of 10/2017-ITR and shall be liable to tax under RCM - Supply of consulting services through sub-station Engineer/expert of the applicant to OPTCL is not, therefore, import of services within the meaning of s.2(11) of the IGST Act - Engineer/Expert belonging to the applicant should be treated as a supplier located in India and made liable to pay GST, the place of supply being determined in terms of s.12(2)(a) of the IGST Act - Since applicant is liable to GST, he is required to be registered under the Odisha Goods and Services Tax Act, 2017 and CGST Act, 2017 for the consultancy services provided to Odisha Power Transmission Corporation Limited : AAR

- AUTHORITY FOR ADVANCE RULING

GST - IIT, Bhubaneswar is a 'Government entity' - Works entrusted to the applicant by IIT, Bhubaneswar under contract/agreement dated 02.05.2016 cannot be termed as a composite supply - Therefore, entire work under the said contract is not entitled to concessional rate of tax in terms of notification 11/2017-CTR - However, the supply of goods and/or services or both which squarely fall within the ambit of scope of work entrusted to IIT, Bhubaneswar by Government of India shall be entitled for concessional rate under Sr. no. 3(vi) to 11/2017-CTR - Each and every supply under rate subject contract shall be treated separately for determining the rate of tax under the CGST Act, 2017 r/w the provisions of the GST Tariff an respective exemption notifications: AAR

GST - Construction of Director's Bungalow and construction of staff/faculty quarters is out of the purview of exemption provided under notification 11/2017-CTR and would attract GST @18% - Intention of legislature has been to allow concessional rate of tax to such work which has been entrusted to a Government entity for public interest, in general, but extrapolating and extending this concessional rate of tax to any or all of activities of IIT, Bhubaneswar will not only be unwarranted but also defeat the very purpose of concessional rate: AAR

GST - Works contract executed by applicant viz. Sewage disposal & construction of water works are covered under Sl. no. 3(iii)(c) to said notification and merits exemption where the applicable rate of tax is @12%: AAR

GST - Works entrusted to the applicant namely of construction of 800 seater/bedded boys hostel, 200 seater/bedded  girls hostel, construction of lecture hall complex, construction of student activity centre, dispensary, construction of 1000 seating capacity auditorium, construction of central research and instrumentation facilities, construction of Central workshop, playgrounds are within the purview sub-clause (b) of clause (vi) of Sl. no. 3 (heading 9954) of 11/2017-CTR and hence merit exemption where the applicable rate of tax is @121%: AAR

-Application disposed of :AUTHORITY FOR ADVANCE RULING

2020-TIOL-70-AAAR-GST

R S Development And Constructions Pvt Ltd

GST - AAR had held that Rate of 6% under Sl. no. 3(iii) or 3(vi) of  11/2017-CTR  is not applicable for the works contract services supplied by applicant to Kerala State Electricity Board Ltd. as the work awarded is in respect of civil works of a small hydro electric project in the existing dam of Pazhassi Irrigation project and hence cannot be considered as a civil work for canal, dam or other irrigation works - Moreover, supply of WCS in terms of the instant work order cannot be considered as meant predominantly for use other than for commerce, industry or any other business or profession inasmuch as KSEB Ltd. has been established for carrying out the business of generation, transmission and distribution of electricity in the state of Kerala on commercial principles as evident from provisions of s.61 and 62 of the Electricity Act, 2003 regarding tariff regulation and determination of tariff - Aggrieved, appeal filed before AAAR.

Held: AAR order is upheld and appeal is rejected: AAAR

- Appeal rejected : APPELLATE AUTHORITY FOR ADVANCE RULING

2020-TIOL-69-AAAR-GST

Telecommunications Consultants India Ltd

GST - Appellant had sought a ruling as to whether the services provided by them to the Government and government aided higher secondary schools under the ICT Project are covered under the scope of Entry no. 72 of Notification 12/2017-CTR - AAR had observed that the r ecipient of service is Odisha Knowledge Corporation Ltd. (OKCL) which is a body corporate and cannot be regarded as Government; that the supply undertaken is in the nature of composite supply which includes supply of goods and services which are not naturally bundled; that the services provided is not exclusively in the nature of training programme; that  though the source of funding for the service is the State government and Central government, yet as per the contract, the payment responsibility is vested on OKCL, therefore, activities of the applicant under the Information & Communication Technology (ICT) Project are not covered under Entry no. 72 of 12/2017-CTR so as to be entitled to the benefit of exemption under GST - Aggrieved, appeal filed before AAAR.

Held:  Appellant has failed to meet the primary requirement of the conditions of the notification 12/2017-CTR, Sr. no. 72, i.e., the supply has to be a supply of Service provided to the Central Government, State Government or Union Territory Administration - Inasmuch as  the consideration received by the Appellant in respect of provision of supply could not be treated as the consideration for only service rendered - Moreover, under Schedule II of Para 1(c) of the CGST Act, 2017/SGST Act, 2017, it is clearly defined that any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods - Order of AAR is upheld and the appeal is rejected: AAAR

- Appeal rejected : APPELLATE AUTHORITY FOR ADVANCE RULING

2020-TIOL-2251-HC-AP-VAT

PMJ Gems & Jewellers Pvt Ltd Vs State of Andhra Pradesh

A.P. VAT Act, 2005 - Section 37 - Assessee engaged in the business of manufacture and retail trade of Jewellery and Gems. In the month of January 2016, it had consigned Bullion, Specie, Platinum, Jewellery and precious Stones to Erode, Tirupathi, Nellore, Ongole, Guntur, Rajahmundry, Kakinada, Bhimavaram, Vizag and back to Hyderabad under six consignments with five Telangana e-way bills and one Andhra Pradesh e-way bill for the purpose of exhibition with a specific permission from the CTO and also a casual trader's license from the Sales Tax Authorities of Erode, Tamil Nadu State - A fter the completion of exhibition at Erode, the goods were moved from Erode to Tirupathi under Telangana way bill dated 15.01.2016 via Bangalore where the goods had to be kept with the petitioner company's logistics partner M/s Sequel Logistics Private Limited's vault due to holidays. Thereafter, goods were moved from Bangalore to reach Tirupathi for the purpose of display in the exhibition - While it being so, the Assistant Commercial Tax Officer, BCP, Cattle Farm, Palamaneru, Chittoor division, intercepted and checked the vehicle bearing No.TN 22 CM 7392 carrying the consignment at the border check post on 16.01.2016 - Revenue stated that CST e-way bill of AP is not produced though the petitioner company is registered with the Commercial Tax Officer. Declaration in Form 650 was also not produced as mandated at the time of check. The Appellate Deputy Commissioner had remitted the matter back to the CTO for passing fresh orders - After examining all the aspects, a show cause notice was issued on 01.06.2017 and the impugned orders were passed within the time limit prescribed under Section 37 of the Act - It is also stated in the counter affidavit that the said order was uploaded on 17.07.2019, though the orders were passed on 20.04.2019 - Assessee contends that the impugned order is passed beyond the period of limitation - Entire transaction is not purely for the purpose of exhibition and that it also involves sales and Section 45(3) (b)(2) of the Act and Rule 55(2) and 55(8) of the Rules stipulate that the goods vehicle carrying goods from outside the State of AP shall be accompanied by electronically generated e-way bill of the dealer who received goods in the State of Andhra Pradesh and transport declaration in Form 650 and they have to be submitted at the first check post, but admittedly same were not submitted. In the remand order, the Appellate Authority directed the assessing authority to examine the objections with reference to the documents and was asked to verify all the aspects and to pass fresh orders as per the provisions of the Act and Rules - though the orders were approved and passed on 20.04.2019 well within the time limit prescribed under the Act, due to ministerial delay the same could not be uploaded and served on the petitioner. To prove these disputed facts, filing of the Writ Petition under Article 226 of the Constitution of India is not the proper remedy and that the question as to whether the impugned order was passed beyond the period of limitation is a mixed question of fact and law. A plea of limitation cannot be decided as an abstract principle of law divorced from the facts, as in every case the starting point of limitation has to be ascertained which is entirely a question of fact and it requires to be established by adducing evidence - Appeal dismissed.

- Appeal dismissed : ANDHRA PRADESH HIGH COURT

2020-TIOL-1716-CESTAT-HYD

ST - The only issue to be decided is, whether the assessee is entitled to distribute Cenvat Credit including Education Cess and SHE cess taken on Research & Development services received to their manufacturing units in terms of Rule 7 of CCR, 2004 - Admittedly, there is no dispute as regards the facts in the appeal are concerned - Tribunal have also perused the impugned order and Final Order of this Bench in assessee's own case 2019-TIOL-3415-CESTAT-HYD - In view of the clear findings of this very Bench, same are equally applicable in all force to the present case as well and hence the demand cannot sustain, same is set aside: CESTAT

- Appeal allowed: HYDERABAD CESTAT

CX - Assessee is engaged in manufacture of different items of Iron & Steel - They are availing CENVAT Credit in respect of inputs used in manufacture of impugned goods - The issue involved is, whether the assessee had taken excess CENVAT credit as arrived by department, holding that it was paper transaction without or short receipt of raw materials and whether extended period of limitation can be invoked - The excess CENVAT credit has been computed based upon audit objection and the audit has worked out the excess CENVAT credit by arriving at value of raw material consumed from CENVAT credit taken and shown in ER-1 returns - The value so arrived was compared with the value of raw material consumed as shown in Balance Sheet of respective financial year - ER-1 return shows the amount of CENVAT credit taken on the quantity of raw material purchased and not on the quantity of raw material consumed - There is no provision for one to one correlation in CENVAT credit scheme - The assessee also received credit note on quantity discount from suppliers and also issued debit note in case of quality dispute due to inferior quality of raw material, a debit note was issued to supplier of billets and the assessee received a credit note from Steel Authority of India(SAIL) - Similarly, during the year 2016-17, assessee received credit note of Rs. 1,57,95,597/ from SAIL and for Rs.18,21,000/- from Zinc supplier - The said notes were on record before Adjudicating authority but the same are neither disputed nor commented upon in impugned order - There were different rates of duty prevailing during period under reference i.e. 12.36%, 12.50%, 6.18%, 14.42% - The Adjudicating Authority has considered rate of duty only at 12.36% or 12.50% - It is observed that there is no other evidence on record like investigation from supplier of raw material, transporter or evidence of cash flow back or any inculpatory statement to substantiate that excess CENVAT credit taken was based on paper transaction i.e. without or short receipt of raw material against invoices - There is also no reference to any statutory provisions to justify/ support the said computation of excess CENVAT credit demanded - Therefore, the entire demand of excess CENVAT credit in absence of any corroborative evidence is nothing but based on presumptions and is not permissible under law - The allegation of suppressing the facts from the department does not hold good in the event of periodic audit of assessee - As such extended period of limitation cannot be invoked: CESTAT

- Appeal allowed: KOLKATA CESTAT

Cus - The export cargo presented by assessee through two shipping bills were examined by Officers of Customs at Kanpur and on examination of goods, it was noticed that there was a mis-match in quantity declared in invoice and the quantity actually found in shipping bill - Samples were also drawn for a market opinion regarding the value of export goods and a panchnama was prepared on June 01, 2020 - The case of Department is that the goods had been over valued as the two shipping bills had been filed claiming the benefit of drawback, ROSL and MEIS - Further, according to the Department, the goods were deficient in quantity by 1872 pieces and both the consignments appeared to have been grossly overvalued because the value declared by assessee was in the range of Rs. 749 to Rs.1123 per piece, while the average price arrived at on the basis of opinion of local dealers ranged from Rs. 32 to Rs. 87 per piece - There is on record a separate inventory cum seizure memo dated June 3, 2020 bearing case number, which contains the inventory of goods seized and also gives reasons for seizure of goods - Once the officer had detected shortage of export goods and the market survey revealed that the goods were grossly overvalued, it cannot be said that the proper officer did not have 'reason to believe' that the goods were liable to confiscation under provisions of section 113(i) of Customs Act - Whether they are actually confiscated or not is a matter that can be determined only in accordance with procedure prescribed under section 124 of Customs Act by issuing a SCN to the exporter and also giving him a reasonable opportunity of making a representation in writing - All that was required to be considered for exercising power under section 110 (1) of Customs Act was whether there was a reason to believe that the goods are liable to confiscation - For both the issues relating to valuation of goods or shortage of 1872 pieces mentioned in seizure memo, the exporter will get ample opportunity to put forth his case when proceedings are initiated under section 124 of Customs Act and it is neither possible nor permissible at the stage of seizure to determine this issue - The Commissioner (A) therefore, committed an error in setting aside the seizure memo as a result of which the appeal filed by exporter was allowed - It also needs to be noticed that the appeal was filed by exporter before Commissioner (A) on June 08, 2010 and the appeal was allowed on June 10, 2010 - The issue as to whether the Department was required to be heard when an appeal is filed by any person aggrieved by any decision or order passed under Customs Act by an officer of Customs lower in rank than a Principal Commissioner or Commissioner of Customs has not been addressed in this decision for the reason that both the parties made elaborate arguments on merits - The issue as to whether an appeal could have been filed under section 128 of Customs Act when there was a remedy available to exporter for provisional release of goods under section 110(A) of Customs Act has also not been examined - Thus, the order dated June 10, 2020 passed by Commissioner (A) is set aside: CESTAT

- Appeal allowed: DELHI CESTAT