GST -  Anti-Profiteering - S.171 of the CGST Act - Applicant alleged  that the respondent did not pass on the benefit of reduction in the GST rate applicable to “Detergents" from 28% to 18% w.e.f 15.11.2017 but increased the base prices so that there was no reduction in the prices to the recipients - Based on the report of the DGAP, the Authority held by order no. 02/2019 dt. 16.01.2019 [ 2019-TIOL-02-NAA-GST ] that the respondent had  profiteered by an amount of Rs.4,64,849.74 as computed by DGAP and the same was ordered to be deposited in the Consumer Welfare Fund along with interest - Contending that the respondent is liable to penalty under Rule 133 of the CGST Rules, 2017 for the offence committed u/s 122 of the Act, SCN dated 24.01.2019 was issued to respondent - Main submission of the respondent is that penalty could be imposed only when there is mens rea and deliberate attempt to violate the provisions of law and since there was no such attempt, penalty  should not be imposed.

Held: From a perusal of section 122(1)(i), it is clear that the violation of the provisions of s.171(1) is not covered under it as it does not provide penalty for not passing on the benefit of rate reduction and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made u/s 171 of the Act - It is further revealed that vide s.112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of s.171(1) which have come into force w.e.f 01.01.2020 by inserting s.171(3A) of the Act -  Since no penalty provisions were in existence between the period 15.11.2017 to 31.03.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed under sec.171(3A) cannot be imposed on the respondent retrospectively - Accordingly, the notice dated 24.01.2019 issued to the respondent for imposition of penalty u/s 122(1)(i) is hereby withdrawn and the present penalty proceedings are dropped: NAA

- Proceedings dropped : NATIONAL ANTI-PROFITEERING AUTHORITY

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Period 15.11.2017 to 31.03.2018 -  A complaint was filed stating that certain manufacturers of FMCG goods including the respondent were profiteering by not passing on the benefit of reduction in rate of duty on 'Garnier Nat Shade 3'; that by increasing the base price post-GST, the respondent had maintained the pre-GST rate & in doing so had denied benefit of rate reduction to the consumer - DGAP concluded that  the respondent had charged increased base prices & thus indulged in profiteering; that there is no evidence to show that the respondent corresponded with the manufacturer to decrease the base prices on account of GST rate reduction; that being a registered supplier, it was legally bound to pass on such benefit; that the respondent had profiteered by an amount of Rs.3,43,109/- and since the recipients were not identifiable the respondent was directed to deposit the profiteered amount to the Central/State Consumer Welfare Fund along with interest @18% - Order no. 25/2018 dated 27.12.2018 [ 2018-TIOL-26-NAA-GST ] was passed by the Authority accordingly - Notice dated 02.01.2019 proposing penalty was issued considering that the respondent issued incorrect tax invoices, which is a punishable offence u/s 122(1)(i) of the CGST Act - Respondent did not file any written submissions but the DGAP vide its submissions dated 05.03.2019 stated that the respondent had deposited Rs.3,43,109/- in the Consumer Welfare Fund.

Held: From a perusal of section 122(1)(i), it is clear that the violation of the provisions of s.171(1) is not covered under it as it does not provide penalty for not passing on the benefit of rate reduction and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made u/s 171 of the Act - It is further revealed that vide s.112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of s.171(1) which have come into force w.e.f 01.01.2020 by inserting s.171(3A) of the Act -  Since no penalty provisions were in existence between the period 15.11.2017 to 31.03.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed under sec.171(3A) cannot be imposed on the respondent retrospectively - Accordingly, the notice dated 02.01.2019 issued to the respondent for imposition of penalty u/s 122(1)(i) is hereby withdrawn and the present penalty proceedings are dropped: NAA

- Proceedings dropped : NATIONAL ANTI-PROFITEERING AUTHORITY

Director General Of Anti-Profiteering Vs Win Win Appliances

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant had complained that the respondent had not passed on the benefit of reduction in the rate of tax from 28% to 12% w.e.f 15.11.2017 in respect of “Matchless Plus TTWG Grinder” supplied to him - DGAP in its report had stated that the respondent had denied the benefit of rate reduction to the customers amounting to Rs. 1,20,194/- during the period 15.11.2017 to 31.07.2018 and had thus indulged in profiteering and violation of the provisions of s.171(1) of the Act -  DGAP vide his Report 21.12.2018, has submitted that the profiteered amount of Rs. 1,20,194/- was wrongly calculated and the correct amount of profiteering was Rs. 32,926.36 on account of increase in the base price of the product - Authority had accordingly passed an order no. 20/2019 dated 22.03.2019 [ 2019-TIOL-20-NAA-GST ]  determining  the profiteered amount as Rs.32,926.36 and had also issued a SCN dt. 28.03.2019 asking the respondent to explain as to why penalty mentioned in s.122 r/w rule 133(3)(d) of the Rules should not be imposed - Respondent replied that there are no wilful latches on their part but the said aberrations were not intentional and have happened due to ignorance, the GST being a new tax. 

Held:   From a perusal of section 122(1)(i), it is clear that the violation of the provisions of s.171(1) is not covered under it as it does not provide penalty for not passing on the benefit of rate reduction and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made u/s 171 of the Act - It is further revealed that vide s.112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of s.171(1) which have come into force w.e.f 01.01.2020 by inserting s.171(3A) of the Act -  Since no penalty provisions were in existence between the period 15.11.2017 to 31.07.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed under sec.171(3A) cannot be imposed on the respondent retrospectively - Accordingly, the notice dated 28.03.2019 issued to the respondent for imposition of penalty u/s 122(1)(i) is hereby withdrawn and the present penalty proceedings are dropped: NAA

Arun Cards Vs CCT

Tamil Nadu Value Added Tax Act, 2006 - Section 27(2) - It is the case of the assessee that in the impugned assessment orders, no independent assessment has been made by the Assistant Commissioner (ST). According to the assessee, in all the impugned assessment orders, the Assistant Commissioner (ST) has mechanically accepted the report of the Enforcement Wing Officials of the Revenue based on their inspection in the assessee's business premises on 15.10.2014 - It is the contention of the Assessee that they are not doing any purchase from other States. However, according to him, the Assistant Commissioner (ST) has held that the Assessee has been doing other state purchases which has been suppressed in his monthly returns and therefore, the Assessee is liable to pay tax as well as penalty under the Tamil Nadu Value Added Tax Act, 2006. It is the contention of the Assessee that the lorry receipt dated 01.10.2015 never related to any purchase / sale transaction of the Assessee from other States. According to the Assessee, the said lorry receipt pertains only to the receipt of sample greeting cards by the Assessee from other States and according to him, no sale / purchase was effected from other States - the lorry receipt No.A713, dated 01.10.2014 of Tvl.Sharma Transports, Bangalore, which was recovered from the Assessee pertains only to the assessment year 2014-15. However, the same has been reflected in all the impugned assessment orders, which goes to show that mechanically the Assistant Commissioner (ST) has passed the impugned assessment orders and without applying his mind to the lorry receipt, dated 01.10.2014 (Receipt No.A713) which pertains only to the assessment year 2014-2015 - as seen from the impugned assessment orders, the Assistant Commissioner (ST) has observed that no document with regard to the purchase mentioned in the proposal made by the Revenue for revision of assessments on the Assessee, has been produced by the Assessee. This Court is of the considered view that the impugned assessment orders passed by the Assistant Commissioner (ST) are arbitrary and have been passed by total non application of mind - The Assistant Commissioner (ST) ought to have furnished the documents which they are relying upon for passing the impugned assessment orders to the Assessee, as the Assessee has discharged his burden, as per Section 17 of Tamil Nadu Value Added Tax Act, 2006. As seen from the impugned assessment orders, the Assistant Commissioner (ST) has passed the same only on the ground that no document has been furnished by the Assessee with regard to the proposal made by them for revision of assessments - It is settled law that there must be an independent assessment made by the Assistant Commissioner (ST), while passing the assessment orders under Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006. The Assistant Commissioner (ST) cannot mechanically accept the findings of the Enforcement Wing Officials in his report submitted to the Assistant Commissioner (ST) - Matter is remanded back for fresh adjudication.

- Assessee's Appeal allowed: MADRAS HIGH COURT

2021-TIOL-17-HC-MAD-VAT

Power House Vs Assistant Commissioner (ST)

Whether it is fit case for remand where an alternate prayer raised by an assessee is omitted to be considered, even though expressly noted in the assessment order - YES: HC

- Case remanded :MADRAS HIGH COURT

Govardhan Vigraham Vs UoI

NDPS - Property bearing no. 503, Fifth Floor, Sinchan Building, New Link Road Extension, Veera Desai Road, Mumbai (said property) has been sought to be forfeited on the ground that it was allegedly acquired from proceeds of illicit traffic in drugs by one Sh. Virendra Kumar Rai @ Virendra Rai son of Sh. Kamata Prasad Rai, resident of Birdopur , Varanasi - Petitioner impugns the order dated 12.03.2020 passed by the Competent Authority u/s 68U of the NDPS Act to the limited extent that it directs surrender of possession of the said property - Petitioner also impugns an order dated 11.03.2020, passed by the Competent Authority under Section 68-I(1) and (3) of the NDPS Act to the extent that it declares the said property as forfeited to the Central Government - Petitioner further claims that the impugned orders have been passed in ignorance of an order dated 17.01.1994 passed by the Competent Authority, Lucknow, whereby the Competent Authority had found that the petitioner's predecessor-in-interest, one Mr. Anand Kumar Bagla , was a bonafide purchaser of the said property - Consequently, the said property had been excluded from the application of Chapter V-A of the NDPS Act, which relates to forfeiture of illegally acquired property.

Held: [para 16, 18, 22, 24, 25]

+ There is no dispute that the petitioner is a bonafide purchaser and had purchased the said property for a valuable consideration. It is also averred in the present petition, which is not traversed by the respondent, that the petitioner had availed of a loan from HDFC for purchasing the said property and a No Objection Certificate (NOC) stating that the said property was not subject to any encumbrance or liability had been issued by Sinchan Cooperative Housing Society for the purpose of availing the said loan.

+ Admittedly, the said property had been purchased by Sh. Anand Kumar Bagla prior to issuance of notice under Section 68-H(1) of the NDPS Act. After securing a legal opinion, the Director, NCB had, by a letter dated 06.01.1994, duly informed that the said property had been incorrectly frozen and that the order had been passed inadvertently.

+ The Competent Authority had also accepted that the said property had been transferred to Smt. Krishna Devi Bagla and Sh. Anand Kumar Bagla in good faith and prior to passing the freezing orders under the NDPS Act. A letter to the aforesaid fact was issued on 17.01.1994 for accepting that the said property mentioned at Serial No.(XIII) of the schedule of properties, be excluded from the proceedings.

+ In the meanwhile, the appeal preferred against the forfeiture order was also allowed and the forfeiture order had been set aside.

+ In view of the above, the order passed by the Competent Authority under Section 68I of the NDPS Act to the extent that it forfeits the said property under Section 68-I of the NDPS Act, is without jurisdiction.

+ Considering that there is no controversy as to the essential facts and it is conceded that it was accepted that the said property was liable to be excluded from the schedule of the properties of the affected person/his relatives or associates, Court does not consider it apposite to relegate the petitioner to exhausting his statutory remedy.

+ More so, as the order passed by the Competent Authority to the extent that it seeks to forfeit the said property and requires its surrender, is without jurisdiction.

+ Impugned orders to the extent that it purports to declare the said property as forfeited to the Central Government and demands it's surrender, are set aside.

-Petition allowed :DELHI HIGH COURT

Metlife Global Operations Support Center Pvt Ltd Vs CST

ST - The appellant claims that during the period March, 2009 to June, 2010 it was engaged in 100 percent export of services from its SEZ unit and that it did not have any operations in the Domestic Tariff Area. It further claims that it was involved in the provision of Business Process Outsourcing services and other support services to customers located outside India and that theaforesaid services were authorised operationsin terms of the letter dated June 19, 2008.It needs to be noted that till March 2, 2009 the SEZ units were not required to pay any service tax on the input services consumed by them within SEZ in terms of a notification dated March 31, 2004.However, by a notification dated March 3, 2009, such exemption was granted by way of refund of service tax. The said notification was amended by a notification dated May 20, 2009. It provided unconditional exemption from payment of service tax on all the services consumed wholly within SEZ, but on services consumed partly or wholly outside the SEZ, the exemption was granted by way of refund. In order to claim refund, it was mandatory for all the SEZ units to get the input services, for which refund was claimed and used by them for performing the authorized operations approved by the Unit Approval Committee of the SEZ unit. Assistant Commissioner by order dated March 28, 2013 rejected the five refund applications filed by the appellant and this order was upheld by the Commissioner(A) by order dt. 29 March 2014, which impugned order is appealed before CESTAT. The grounds taken inter alia forrejection of the refund are Unit ApprovalCommittee has not approved input services namely Mandap Keeper services, Club of Association Services, Life Insurance Services, Cable Services, Courier Services, Air Travel Agent Services, Agent Services, and Outdoor Catering Services used outside the Zone as also used in authorized operations; as to why allthe claims in r/o Outdoor Catering service be not treated as used outside the zone and, therefore, be rejected inabsenceof bifurcation of Outdoor Catering Services used outside and inside the Zone; as to why therefund claim of service tax paid on services consumed wholly inside the SEZ after the amendment by notification 15/2009-ST should not be rejected.

Held:

1. Refund in respect of certain input services not duly approved by Unit Approval Committee (UAC)

+ Conditions imposed by the notifications issued under the provisions of the Finance Act, 1994 are merely directory in nature.SEZ Act has an overriding effect in view of the provisions of section 51 of the SEZ Act over all other laws and, therefore, the ground for rejecting the refund claims was not tenable in law and even otherwise, approval from UAC was only procedural in nature and not a mandatory condition. - 2018-TIOL-3115-CESTAT-BANG Mast Global Business Services India P Ltd.] - Commissioner(A) not justified inrejecting the refund claims on this ground. [para 44, 45]

2. Availment of CENVAT Credit

+ Reversal of credit prior to its utilisation is as good as not availing CENVAT credit. Refund cannot be rejected if CENVAT credit had been reversed before the filing of the refund claim. CENVAT credit inadvertently taken had been reversed prior to the filingof the refund claim andsince reversal of credit before its utilisation is equivalent to non-availment of credit,the condition of non-availment of CENVAT credit stands fulfilled. This would mean thatthe requirement for claiming exemptioncontemplated under proviso (e) of thenotification dated 3rd March 2009 stands satisfied. Rejection of refund claim on this ground by Commissioner(A) is unjustified. [para 50 to 52]

3. Time limit for filing of refund

+ Refund claims have been filed within six months fromthe date of payment of service tax. The claims, therefore, could not have beenrejected on this ground. [para 56]

4. No documentaryevidence tosatisfy condition no. 2(a) of refund notification

+ It is seen that the primary objective of condition No. 2(a) of the notification dated March 3, 2009 is to provide exemption benefit to a SEZ unit and not to the service provider of SEZ unit and, therefore, the restriction is basically on the service provider and not the SEZ unit. In this connection, it would also be relevant to refer to section 68(2) of the Finance Act. It provides for payment of service tax under a reverse charge mechanism andsince the appellant has not made any payment under the reverse charge mechanism, the said condition would not be applicable. The rejection of the refund claim on this ground is, therefore, not sustainable. [para 60]

5. Nexus of input services with'authorized operations'

+ There is no evidence on the record which may indicate that any operation was carried out by the appellant from any unit outside the SEZ. Thus, all input services were used in relation to the authorized operations. Finding of Commissioner(A) cannot be sustained. [para 64]

6. Input service invoices are dated prior to the date of refundnotification

+ Submission that it is the date of payment of service tax that is relevant and since all the payments were made after the date of the notification, the time of rendering of service or date of invoice is not relevant for claiming the refund, deserves to be accepted. Commissioner(A) committed an error in rejecting the refundapplications since it is the date of making payments that is relevant. [para 68, 69]

7. Refund admissible only in cases where services not wholly consumed within SEZ

+ The substantive benefit of service tax exemption provided under section 26 of the SEZ Act read with rule 31 of the SEZ Rules cannot be denied on procedural grounds. It is not in dispute that the appellant was not required to deposit service tax under the notification dated May 20, 2009, but service tax was deposited. It cannot be urged that the appellant is not entitled to claim refund because of a mistake in depositing service tax even if it was not required to be deposited. [para 75]

+ It, therefore, follows that the appellant would be entitled to claim refund provided, of course, the appellant has deposited the service tax. Though, the appellant has placed documents to support the plea that service tax had been paid, but this factual aspect is required to be remitted to the Commissioner (Appeals) for a fresh decision in the light of the documents to be provided by the appellant. [para 77]

Conclusion:
++ Impugned order dated March 29, 2014 passed by the Commissioner (Appeals) is, accordingly, set aside and the matter is remitted to the Commissioner (Appeals) to decide whether theappellant had paid service tax on the services for which the appellant had claimed refund in the five applications submitted by the appellant. The appeal is allowed to the extent indicated. [para 77, 78]

-Appeal disposed of :DELHI CESTAT

2021-TIOL-09-CESTAT-CHD

JK Card Board Industry Vs CCE

CX - ROM applications are filed by Revenue on the ground that this Tribunal has not considered the arguments advanced by them - After going through the order passed by this Tribunal, it is found that this Tribunal has considered the arguments advanced by revenue and has given a finding thereon - Therefore, no merit found in the applications for ROM filed by Revenue - If any consideration is given to the same, the same shall be amount to review of own order which is not permissible in law: CESTAT

- Applications dismissed: CHANDIGARH CESTAT

Om Sai Trading Company Vs CC

Cus - Assessee is in appeal against impugned orders vide which the betel nuts seized by officers stand provisionally released to them on the condition of furnishing of bond and cash security of 25% of seized value - The seizure of betel nuts has taken place only on a belief that the same appears to be of foreign origin - On being questioned, revenue has agreed that there is no direct evidence of betel nuts being of foreign origin - In such a scenario, the allegation of nuts being smuggled cannot, prima facie, be upheld - There are umpteen number of cases laying down that inasmuch as the betel nuts are also indigenously grown items and the foreign origin and smuggled nature of the same cannot be sustained on mere visual examination - It may not be out of place to mention here that betel nuts are not notified items in terms of section 123 of Customs Act and as such, the onus to prove that the same are of foreign origin and their smuggled character lies heavily on the Revenue - In absence of the same, the provisional release subject to heavy condition of deposit of 25% of seized value cannot be held to be justified - Revenue is directed to release the betel nuts as soon as possible as the same are perishable item: CESTAT

- Appeal allowed: ALLAHABAD CESTAT