2021-TIOL-99-SC-ST

Pr.CST Vs Mcdonalds India Pvt Ltd

ST - CESTAT had held that only such amount is subject to service tax which represents consideration for provision of service and any other amount which is not a consideration for provision of service cannot be subjected to service tax and, therefore, advertisement expenses incurred by franchisee is not liable to service tax; that the Principal Commissioner fell in error in concluding that some non-monetary consideration had been received by the appellant towards the advertisement made by franchisee, which non-monetary consideration was required to be determined under rule 5(1) of the Valuation Rules, 2006; that interest claim confirmed on late payment of service tax on franchisee fees to Mc Donald's USA is set aside on the ground that forward charge and reverse charge cannot be equated as these are governed by different set of rules - Aggrieved by the CESTAT order, Principal Commissioner of Service Tax, Delhi-I is in appeal before Supreme Court.

Held: After condoning the delay, notice issued - Counter affidavit to be filed within a period of four weeks - Civil Appeal to be listed on 17 th March 2021 for hearing and final disposal: Supreme Court [para 2, 3, 5]

- Matter listed : SUPREME COURT OF INDIA

2021-TIOL-320-HC-MUM-ST

Bhoomi Developers Vs UoI

ST - Issue raised in the present writ petition i.e. eligibility of the petitioner or maintainability of its declaration to avail the benefits of the scheme under the category of investigation, enquiry or audit on the ground that amount of the service tax dues of the petitioner for the related period was not quantified on or before 30th June, 2019 is no longer res-integra - It is evident from the decisions in Thought Blurb 2020-TIOL-1813-HC-MUM-ST , G.R.Palle Electricals 2020-TIOL-2031-HC-MUM-ST & Saksham Facility P Ltd. 2020-TIOL-2108-HC-MUM-ST that all that would be required for being eligible under the above category is a written communication which will include a letter intimating duty demand or duty liability admitted by the person concerned during inquiry, investigation or audit - Insofar as the present case is concerned, in the letter dated 24.06.2019 there is a clear acknowledgment by the petitioner that the total outstanding service tax dues was Rs. 20,88,947.00 which admission is prior to the cut-off date of 30.06.2019 - That being the position, it cannot be said that service tax dues were not quantified on or before 30.06.2019 (quantification as per the scheme) - Impugned order dated 15.02.2020 is set aside and matter is remanded back to respondent Nos. 3, 4 and 5 to consider the declaration of the petitioner dated 30.12.2019 in terms of the scheme as a valid declaration under the category of investigation, enquiry and audit and thereafter grant the consequential relief(s) to the petitioner - above exercise shall be carried out within a period of six weeks: High Court [para 12, 16, 17, 19]

- Petition allowed : BOMBAY HIGH COURT

2021-TIOL-319-HC-MUM-ST

Scot Protection Force Vs UoI

ST - Petitioner seeks quashing of order dated 12.02.2020 of the designated committee i.e., respondent No. 3 rejecting the declaration of the petitioner dated 02.12.2019 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and further seeks a direction to the respondents to reconsider the aforesaid declaration of the petitioner by granting relief to the petitioner under the scheme - In the final audit report bearing No. 138/2019-2020, it was mentioned that assessee (petitioner) vide letter dated 10.05.2019 had assured to discharge the balance liability of Rs. 42,11,330.00 along with interest on the amount of Rs. 64,72,543.00 on or before 10.06.2019 - When the scheme was introduced by the Central government through the Finance (No. 2) Act, 2019, petitioner submitted declaration thereunder on 02.12.2019 under the category of 'investigation, enquiry or audit' with sub-categorization of 'audit' - It was mentioned therein that the service tax dues of the petitioner for the related period was Rs. 66,12,543.00 and that pre-deposit of Rs. 34,01,213.00 was made, therefore, it was claimed that the tax dues after deduction of tax relief under the scheme would be nil - A personal hearing was granted to the petitioner on 31.12.2019 whereafter respondent No. 3 passed the order dated 12.02.2020 rejecting the declaration of the petitioner dated 02.12.2019 - It was mentioned that the tax dues were not quantified before 30.06.2019. Therefore, petitioner was ineligible to make the declaration.

Held: The question as to whether eligibility of the declarant for making a declaration under the category of 'investigation, enquiry or audit' or maintainability of such declaration on the ground that the amount of tax dues was not quantified on or before 30.06.2019 is no longer res integra - It is evident from the decisions in Thought Blurb 2020-TIOL-1813-HC-MUM-ST , G.R.Palle Electricals 2020-TIOL-2031-HC-MUM-ST & Saksham Facility P Ltd. 2020-TIOL-2108-HC-MUM-ST that all that would be required for being eligible under the above category is a written communication which will include a letter intimating duty demand or duty liability admitted by the person concerned during inquiry, investigation or audit - Bench finds that petitioner in its letter dated 10.05.2019 had clearly admitted service tax dues of Rs. 64,72,543.00 for the period under consideration - This acknowledgment or admission by the petitioner was before the cut-off date of 30.06.2019 - In fact, in the final audit report dated 07.11.2019, reference has been made to this letter dated 10.05.2019 wherein petitioner had admitted service tax liability of Rs. 64,72,543.00 - Though the final audit report may be post 30.06.2019, the admission of the petitioner was certainly prior to 30.06.2019 - In that view of the matter, rejection of the declaration of the petitioner dated 02.12.2019 by the designated committee on 12.02.2020 is not justified - Impugned order is set aside and matter is remanded back to respondent No. 3 to consider the declaration of the petitioner afresh in terms of the scheme as a valid declaration under the category of 'investigation, enquiry and audit' and grant the consequential relief(s) to the petitioner - above exercise shall be carried out within a period of eight weeks: High Court [para 17 to 19]

- Petition allowed : BOMBAY HIGH COURT

2021-TIOL-314-HC-DEL-CUS

Bridgestone India Pvt Ltd Vs Designated Authority

Cus - ADD - Anti-dumping investigation relating to import of New Pneumatic Radial Tyres of Rubber for Buses and Lorries - Petitioners in the present case have challenged the final findings dated 27th November, 2020 issued by the Respondent No. 1 - Designated Authority, Directorate General of Trade Remedies, Department of Commerce, Ministry of Commerce and Industry, Govt. of India.

Held: Final findings issued by the designated authority under Rule 17 of Anti-Dumping Rules, 1995 are submitted to the Central Government which 'may' impose anti-dumping duty under Rule 18 of the said rules - Unless and until the notification under Rule 18 is issued, the duty does not take effect - Accordingly, the writ petition is dismissed as being pre-mature, however leaving open the Petitioners right to avail its remedies: High Court [para 10, 11]

-Petition dismissed : DELHI HIGH COURT

2021-TIOL-313-HC-KAR-ST

Zeenath Transport Company Vs Pr Additional Director General Directorate General Of GST Intelligence

ST - Service Tax on Royalty - Petitioner has challenged the constitutional validity of s.174 of the CGST Act as being ultra vires the Constitution and has also sought quashing the SCN dt. 09.07.2020.

Held: Petitioner has made out ground for granting of interim order - It is ordered that until further orders, payment of service tax for grant of Mining Lease/Royalty shall remain stayed subject to petitioner filing an undertaking before this Court that in case, if the petitioner did not succeed in the petition, the petitioner would discharge the obligation for payment of service tax on the royalty: High Court

- Interim order passed : KARNATAKA HIGH COURT

2021-TIOL-312-HC-KERALA-CUS

M M Hassan Vs Superintendent Of Customs

Cus - Appeal is against the judgment of a Single Judge declining interference to the proceedings initiated pursuant to search and seizure and ex parte order extending the period for issuing a notice under Section 124.

Held:

+ The amendment made in section 110(2) in the year 2018 made a sea-change to the Proviso and required only recording of reasons in writing - The amended provision did not provide for a sufficient cause to be shown - The sea-change brought in was to ensure that, reasons for extension is shown in the order and the same communicated within the time specified i.e. the extended period - Since there is no hearing contemplated, Bench is of the opinion that the order of extension should be made within the initial period itself - Just as it was held that as per the pre-amended provision, the notice had to be issued within the initial period itself - As to the question of when service has to be effected after amendment, Bench is of the opinion that it need be only within the extended period; since even an order passed on the last day would be valid - This is the general purport of the specific words used in the amended Proviso too - The proviso specifically provides for an extension to a further period not exceeding six months and information to the person from whom the goods were seized 'before the expiry of the period so specified' - The 'period so specified' is that in the extension order and not the initial period of six months as provided in Section 110(2) - Amended Proviso under Section 110(2) does not require a hearing before the extension is effected and that the information of such extension should be served before the expiry of the extended period - The order of extension has to be made within six months from the date of seizure, but it is to be served only within the period specified therein, i.e., within the extended period: High Court [para 15]

+ Reasons stated in the order passed by the Commissioner under the proviso to Section 110(2) are that due to the ingenious modus operandi practiced to evade duty, failure of the person from whose custody the goods were recovered to give proper explanation/proof for illicit possession, the quantum involved and also the nature of the investigation which involves inter-State accomplices; the investigation had proceeded only half-way - The Commissioner has also noticed the specific ground raised by the Investigating Officer as to a number of individuals summoned having intimated their inability to appear before the Investigating Officer due to the prevailing Covid pandemic - Bench is of the opinion that the reasons cited are not in any manner arbitrary or perverse and are rational enough to amply support the extension as sought for and granted - sole reason of the spreading pandemic more than justifies the extension and that is not to say that the other reasons fall short; which too are perfectly in order: High Court [para 16]

+ Admittedly the seizure was conducted on 16.10.2019 and the six months period provided under Section 110(2) expired on 15.04.2020 - It is also pertinent that the Central Government had come out with the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, which provided by Chapter V that the time limits under certain Indirect Tax Laws, including the Customs Act, which falls during the period from 20.03.2020 to 29.06.2020 or any date after 29.06.2020 shall stand extended to 30.06.2020 or such date afterwards as the Central Government may specify - Hence, the proceedings in the present case, which would have normally expired on 15.04.2020, stood automatically extended to 30.06.2020, which may not be very relevant for our purposes since already there was an extension granted on 11.03.2020: High Court [para 18]

+ Refusal of the learned Single Judge to interfere with the impugned order is perfectly justified and in consonance with the provisions - Bench upholds the judgment of the Single Judge and rejects the appeal: High Court [para 21]

- Appeal rejected : KERALA HIGH COURT

2021-TIOL-311-HC-KAR-NDPS

Chemansab Vs State Of Karnataka

NDPS - Investigation Officer has admittedly not maintained a case diary, wherein such statements are required to be recorded which is a mandatory requirement of law under Section 161(3) of the Code - Such an irregularity seriously prejudices the case of the accused and if the order of conviction is required to be based on the evidence of these witnesses, it will result in miscarriage of justice - There is also total non-compliance of mandatory requirements of Section 42 of the NDPS Act and there is an unexplained delay in forwarding the samples to the FSL because of which foul play cannot be completely ruled out - Because of these serious infirmities, a serious doubt arises whether PW-10 had really accompanied the raiding squad or whether an attempt is made by prosecution to get over compliance of the mandatory requirement of Section 42 of the NDPS Act - The prosecution has failed to establish that the car and the house from where the contraband articles were seized either belonged to the accused or his wife - It has come on record that the car belonged to accused No. 2 and the prosecution has admitted that they have no record to prove that the house stands in the name of wife of the accused - The contraband articles were seized in the absence of the accused - A presumption under Section 54 of the NDPS Act can only be raised after the prosecution has established that the accused was found in possession of the contraband articles in a search conducted in accordance with the mandate of law and illegal search does not entitle the prosecution to raise such a presumption under Section 54 of the NDPS Act - The prosecution has neither conducted the raid in accordance with law nor have they proved the contraband articles were seized from the possession of the accused: High Court [para 46, 47]

NDPS - Court is of the considered opinion that the trial court was not justified in convicting the appellant for the offence under Section 8(c) which is punishable under Section 20(b)(ii)(C) of the Narcotic Drugs and Psychotropic Substances Act, 1985 - Suffice to say in view of the legal irregularities, infirmities and factual inconsistencies, the prosecution has not been able to prove the guilt of the accused beyond all reasonable doubt - In view of the same, the appeal has to be allowed and the judgment and order of conviction and sentence will have to be set aside - Appeal is allowed by setting aside the impugned judgment and order of conviction - Appellant is acquitted of the charges levelled against him - The bail bonds, if any, executed by the appellant shall stand cancelled and fine amount, if any, deposited by him shall be refunded to him after expiry of the appeal period: High Court [para 48, 49]

- Appeal allowed : KARNATAKA HIGH COURT