2021-TIOL-352-HC-MAD-VAT

Vishnu Cement Ltd Vs State of Tamil Naud

Whether in absence of any challenge to Original Order, it does not merge with Appellate Order in a case where Rectification Order is passed at instance of Assessee - YES: HC

- Assessee's application dismissed: MADRAS HIGH COURT

2021-TIOL-346-HC-MUM-CT

Starlog Enterprises Ltd Vs UoI

Sales Tax - Against an assessment order, petitioner had preferred an appeal before respondent no. 5 on 13.09.2013 - After almost seven years, impugned order dated 14.12.2020 came to be passed upholding the dues under the CST Act, 1956 of Rs.2,94,53,127/- and consequently rejecting the appeal - Petitioner submits that contrary to what has been recorded in the order, representative of the petitioner was very much present in the office of the respondent no.5 on 08.12.2020 and in fact, the respondent no.5 himself was not present; that the fact that the next date of hearing was fixed on 14.12.2020 was not made known to the petitioner and, therefore, they could not appear on 14.12.2020 - That, thereafter, the appeal was taken up by respondent no.5 on 14.12.2020 and was rejected with the observation that the petitioner is not interested in the legal remedy - Petitioner further submits that the respondents have now initiated recovery as well as prosecution proceedings and, therefore, the present petition.

Held: Bench is of the view that the appeals should be heard and decided on merit - Accordingly, order dated. 14.12.2020 is set aside and matter is remanded to the respondent no. 5 for taking up the appeal for hearing and deciding the same in accordance with law within a period of three months; that till disposal of the appeal, respondents shall not proceed further with recovery and prosecution relatable to the assessment order dated 28.06.2013/29.06.2013 - Writ petition is disposed of: High Court

- Petition disposed of: BOMBAY HIGH COURT

2021-TIOL-353-HC-AHM-GST

Western Enterprises Vs State of Gujarat

GST - As on the date of MOV-10, the picture that emerges is that M/s. M. M. Enterprise is not admitting the transaction with the writ applicant - From the statement recorded of partner of M/s. M.M. Enterprise, it is clear that the partner of M/s. M.M. Enterprise does not even know the petitioner - The department is also not in a position to trace the particular broker as it appears that although the name of one of the brokers did surface in the course of the inquiry, yet the broker seems to have kept his mobile switched off - Argument of Counsel for Revenue is that as M/s. M. M. Enterprise is not ready and willing to acknowledge the transaction, prima facie , it would indicate that the goods were to be disposed of in a grey market.

Held: Bench is not inclined to interfere at this stage - However, Bench is inclined to order provisional release of the goods pending the confiscation proceedings on the condition that the writ applicant shall deposit an amount of Rs. 18 Lakh with the respondent No. 2 towards the tax and penalty - For the balance amount towards fine of Rs. 52 Lakh, the writ applicant shall execute a bond to the satisfaction of the respondent No. 2 with an undertaking that ultimately, if the goods are held liable to be confiscated, he shall make good the entire payment towards fine in lieu of confiscation - This writ application is disposed of directing the respondent No. 2 to release the goods on payment of Rs. 18 Lakh and other conditions as imposed by this Court - writ application stands disposed of: High Court [para 5]

- Application disposed of: GUJARAT HIGH COURT

2021-TIOL-350-HC-DEL-GST

Lupita Saluja Vs DGGI

GST - Allegation of floating bogus export firms and fraudulent availment of ITC of Rs.45 crores on the strength of fake invoices - Petitioner seeks anticipatory bail in relation to the enquiry/investigation being conducted by respondent - Revenue counsel submits that from the investigation carried out and the incriminating evidence collected so far, it is clear that the applicant was not merely a housewife but she was actively involved in the affairs of the companies in question including financial affairs and was very well aware of all the misdeeds done by her in order to claim GST refund of Rs. 45 crores; that the applicant is not cooperating in the investigation and since the day of arrest of her husband, she is absconding and the investigation is being conducted under strict adherence of law and under relevant provisions of CGST Act.

Held: From the material available on record, it established that the suppliers have supplied goods to the Companies, which have been further exported by the Companies to the buyer - In addition to it, payments received by the Companies from their foreign buyers are further transferred to account of the suppliers via-online, therefore, it is wholly misconceived that the suppliers are non-existent - It is not in dispute that on the day the impugned order has been passed, the said Judge granted regular bail to the husband of the applicant after spending nearly 50 days in custody who is the person involved in day-to-day affairs of the company, however, dismissed the anticipatory bail of the applicant - It is not in dispute that the W.P. (C) 10013/2020 and W.P. (C) 10014/2020 and W.P. (C) 10015/2020 filed by the applicant, challenging the powers of seizure, arrest, etc. - However, the applicant was never called upon to join the investigation in about 1 year, but called first time i.e. after her husband and she had challenged the entire investigation before this Court in the abovementioned writ petitions - In view of above facts, Bench is of the view that custodial interrogation of the applicant is not required - Accordingly, the Arresting Officer is directed that in the event of arrest, the petitioner/applicant shall be released on her furnishing a personal bond in the sum Rs.25,000/- - petitioner shall cooperate with the investigation and make herself available for interrogation by police officer, as and when required - Petition is accordingly allowed: High Court [para 12, 14, 17, 18, 19, 20, 23]

- Petition allowed: DELHI HIGH COURT

2021-TIOL-349-HC-DEL-GST

Del Small Ice Cream Manufacturers Welfare's Association Vs UoI

GST - Composition Scheme - Petition impugns the decision dated 18th June, 2017 of the Goods and Services Tax Council (GST Council), in exercise of powers under Section 10(2)(e) of the Central Goods & Services Tax Act, 2017 , of exclusion of ice cream from the benefits of Composition Scheme under Section 10 of the Act - Contention of petitioner is that respondent no.2 GST Council, in exercise of powers under Section 10(2)(e) of the Act, has clubbed ice cream with pan masala and tobacco; that there is no reason for clubbing ice cream with sin goods like pan masala and tobacco; that pan masala and tobacco are sin goods and ice cream cannot be clubbed therewith - Petitioner contends that the reason which prevailed for excluding ice cream was that there is no Goods and Services Tax (GST) on milk, being a large constituent of ice cream and if small manufacturers of ice cream were to be given benefit of Section 10(1) of the Act, there would be large scale loss of revenue - It is the argument that ice cream comprises of a large number of other components which are assessable to GST and thus the reasoning emanating from the minutes of the impugned meeting of the respondent no.2 GST Council for excluding ice cream from the benefit of Section 10(1) of the Act, is fallacious - Counsel for Revenue submits that besides pan masala and tobacco, aerated water has also been excluded from the benefit of Section 10(1) of the CGST Act.

Held: [para 12, 13, 15, 20, 22, 23]

+ A reading of Section 10(2)(e) of the Act shows that no parameters, whatsoever, on the anvil of which, the respondent no.2 GST Council may recommend for notification, any goods from the benefit of Section 10(1) of the Act, have been prescribed.

+ The legislature has vested the Government with absolute discretion, to exempt whichsoever goods it may deem necessary, from the benefit of Section 10(1) of the Act. The only limitation placed on the Government is, to act on the recommendation of the GST Council, established under Article 279A of the Constitution of India. It is seen that the GST Council is a high powered constitutional entity.

+ In Rajeev Suri Vs. Delhi Development Authority MANU/SE/0001/2021 Supreme Court = 2021-TIOL-01-SC-MISC has reiterated that courts do not sit in appeal over the decisions of the Government, to do merit review of the subjective decision as such and that Government decisions concerning public resources have an intricate economic value attached with them and to elevate the standard of review on the basis of subjective understanding of the subject matter being extraordinary, would be de hors the review jurisdiction.

+ It was further reiterated that the courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision, as long as no law is violated and people's fundamental right are not transgressed upon and that the court cannot strike down a policy decision taken by the Government merely because it feels that another decision would have been fairer or more scientific or logical or wiser; the wisdom and advisability of the policies are ordinarily not amenable to judicial review.

+ In S.K. Dutta, Income Tax Officer Vs. Lawrence Singh Ingty (1968) 2 SCR 165 reiterated in Ravi Agrawal Vs. Union of India - 2019-TIOL-3-SC-IT-LB it was held that in deciding whether a taxation law is discriminatory or not it is necessary to bear in mind that the State has a wide discretion in selecting persons or objects it will tax and that a statute is not open to attack on the ground that it taxes some persons or objects and not others; it is only when within the range of its selection, the law operates unequally, and that cannot be justified on the basis of any valid classification, that it would be violative of Article 14.

+ Else it is well settled that a State does not have to tax everything in order to tax something and it is entitled to pick and choose, if it does so reasonably.

+ From the minutes of the two meetings placed before Bench, it does not appear so (that any study has been done by respondent no.2 GST council of the tax effect of extending benefit of s.10(1)).

+ Counsel for the respondents Revenue contends that besides the tax effect, several other factors including socio political weigh and are taken into consideration in taking such decisions.

+ Bench is of the view that the only direction which can be issued in this petition is, to direct the respondent no.2 GST Council to reconsider the exclusion of small scale manufactures of ice cream from the benefit of Section 10(1) of the Act, including on the aforesaid two parameters i.e. the components used in the ice cream and the GST payable thereon and other similar goods having similar tax effect continuing to enjoy the benefit. Directed accordingly.

+ The respondent no.2 GST Council to take up the aforesaid aspect in its next meeting and to take a decision thereon at the earliest, keeping in view that the ice cream season has just begun, and preferably within three months of today.

- Petition disposed of: DELHI HIGH COURT

2021-TIOL-344-HC-MUM-GST

Prashi Pharma Pvt Ltd Vs UoI

GST -  Petitioner has questioned the vires of sub-rule (10) of Rule 96 of the Central Goods and Services Tax Rules, 2017 and the consequential communication dated 07.12.2020 calling upon the petitioner to clarify its stand as to which of the two benefits it is availing i.e. exemption from payment of Integrated Goods and Services Tax (IGST) on the goods imported under advance authorization or refund of IGST paid on goods imported under advance authorization - petitioner submits that it has already made payment of IGST and, therefore, question of refund of IGST paid on the goods imported under advance authorization does not arise; that the impugned provision can only have prospective operation and certainly not retrospective operation.

Held:  Petitioner to serve afresh respondent Nos.1 to 4 and 6 and thereafter file affidavit of service - it is hereby directed as an interim measure that no recovery of IGST already paid by the petitioner on the goods imported under advance authorization shall be made, till the next date - Stand over to 16.03.2021: High Court

- Interim relief granted: BOMBAY HIGH COURT

2021-TIOL-351-HC-DEL-NDPS

Rahul Vaid Vs UoI

NDPS - Though the old passport has been suspended and a new one has been issued there is no clarity as to whether the conditions imposed vide order dated 25th November 2019 continue to operate qua the Petitioner or not - This position deserves to be clarified according to the intervenor.

Held: Conditions contained in the order dated 25th November, 2019 shall continue to apply on the Petitioner - Accordingly, the Ministry of External Affairs and the Consulate General of India in Sydney shall ensure that the Petitioner strictly abides by the conditions contained in the order dated 25th November, 2019 upheld by this Court vide order dated 29th January, 2020 - Since the new passport has now been issued for a period of five years, the old passport which was suspended shall now be treated as cancelled - No further orders are called for in this matter - The petition and all pending applications are disposed of: High Court [para 6, 7]

- Petition disposed of: DELHI HIGH COURT

2021-TIOL-342-HC-DEL-NDPS

Ahmed Hassan Muhammed Vs Customs

NDPS - In the relevant period, secret information was received that some contraband goods would be imported from Addis Ababa in a packet of Green Tea - The information stated that in the guise of green tea leaves, the consignment contained Khat Leaves, which were listed as psychotropic substances - As the goods declared in the Bill of Entry matched the intelligence, the airline was immediately asked to provide copies of AWBs under the two bills of entry available with them along with the details of person collecting delivery order - The Airlines submitted the copies of three AWBs 071-33613576 dated 31.01.2019 and 071-33613403 dated 25.01.2019 and 071-33613414 dated 23.01.2019 - On examination of the aforesaid AWBs submitted by the Airlines, it was seen that the goods declared therein were also Dry Khat and they have been declared as dried green leaf and green tea respectively - Hence a preventive check was done on all the three shipments - Subsequently, the goods were seized - Subsequently, the petitioner who was ferrying the consignment, was arrested and placed in judicial custody.

Held - The petitioner is a Somalian national resident and his Refugee Certificate issued by UNHCR (United nation High Commissioner for refugees) was valid till 20/12/2019 - Hence the petitioner has a valid document to stay in India at the time of his arrest - The petitioner has been in judicial custody since 04.02.2019 - No doubt the recovered substance in the present case is of commercial quantity, however, the procedure prescribed is contrary to the dictum of this Court - The petitioner is stated to not be a habitual offender and is not likely to be involved in any other case during bail - Hence the petitioner has satisfied the twin conditions of Section 37 of the NDPS Act - Hence the petitioner deserves to be released on bail, conditional upon furnishment of Rs 25000/- as personal bond and one surety of like amount: HC

- Bail application allowed: DELHI HIGH COURT

2021-TIOL-86-CESTAT-KOL

Tata Steel Ltd Vs CCE & ST

ST - The appellant, Tata Steel Ltd. (TSL) entered into a Brand Equity and Business Promotion Agreement ("BEBP") with its holding company, Tata Sons Ltd. - Under the agreement, Tata Sons Limited rendered service to TSL in the nature of 'Intellectual Property Services' - As consideration, TSL paid yearly subscription to Tata Sons Limited, which was based on percentage of annual turnover of TSL - Whether the said service rendered by Tata Sons Ltd. under BEBP agreement is eligible as "input service" and the service tax paid is available as cenvat credit to TSL under Cenvat Credit Rules, 2004 - The BEBP Agreement allows user by TSL of "Tata" brand name, on its products/goods manufactured at its factory in Jamshedpur - Such user of brand name enhances the marketability of said goods - Hence, the services have been used by TSL, the manufacturer, indirectly in relation to the manufacture of final dutiable products in its factory at Jamshedpur - This satisfies the requirement of main part of Rule 2(l) of Cenvat Credit Rules - Hence, the said service is "input service" on which TSL is eligible to avail cenvat credit, as held by Bombay High Court in Ultratech Cement Ltd. 2010-TIOL-745-HC-MUM-ST - Another issue arises is, whether TSL as ISD was entitled to distribute the credit of service tax paid as per BEBP Agreement between itself and Tata Sons Ltd. exclusively to its Steelworks at Jamshedpur and not to other units of TSL - TSL have rightly contended that there is no "Tata Steel Group Companies" - The company is Tata Steel Limited, which is incorporated and registered under Companies Act, 1956 as a public limited company - It has various divisions/units situated in various parts of the country - The registered and Head Office of the company, including of said divisions/units, is at Mumbai, the ISD in the instant case - No evidence to the contrary is disclosed in either the SCN or in the impugned order as well as in the instant proceedings - It is settled proposition of law that divisions and units of a company are not separate legal entities/persons - The TSL as ISD is entitled to distribute the credit of service tax paid in respect of service rendered under BEBP Agreement exclusively to its Jamshedpur Steelworks during the relevant period - Therefore, the cenvat credit amount involved has been correctly availed, distributed and utilised by appellants - The tax demanded and penalties imposed upon the appellants are thus unsustainable: CESTAT

- Appeals allowed: KOLKATA CESTAT

CC Vs Anutham Exim Pvt Ltd

Cus - The issue which falls for consideration in this appeal is, whether the goods imported by assessee such as Big Cola, Big Orange Cola, Big Lemon which they described as "carbonated beverage with fruit juice" are classifiable under CTH 22021090 and 22021020 as claimed by Revenue or are classifiable under 22029920 as claimed by assessee - The assessee is an importer of branded drinks namely Big Lemon with fruit juice, Big Kids Jeera with fruit juice, Big Kids Orange with fruit juice, Big Lemon Lime with fruit juice - They classified these products as "fruit pulp or fruit juice based drinks" under Customs Tariff heading 22029920 - Goods which are imported are chargeable to customs duty as per the Custom Tariff and are also chargeable to Integrated Goods and Services Tax (IGST) as is applicable to the corresponding goods sold in India - The rates of IGST are specified by Government by Notfn 1/2017 - Integrated Tax (rate) as amended from time to time - The question which falls for consideration is how to view the products in question; as carbonated beverages treating the fruit juice as a secondary character as the Revenue views them or; as fruit juice based drinks as the assessee views them - A decision on this could be made by examining how they are being sold - They are being sold as 'Carbonated beverages with fruit juice' neither as fruit juice based drinks nor as carbonated beverages although the fruit juice content is only 5% (or 2.5% in case of lime) - This gives the products their unique characteristic distinct from both carbonated beverages and fruit juices - The FSSAI regulation also conceives of such a category of products in the market - Thus, they form a separate specie of products known to the market and are recognised as such by FSSAI - The Customs Tariff, however, does not have a separate entry for such products - Both components are important - As carbonated beverages, they can be classified under 2202 10 20/ 22021090 - As fruit juice based drinks, they could as well be classified under 2202 99 20 - Neither carbonated beverage alone nor fruit juice alone gives the essential character of products in question; both contribute to its essential character - Respectfully following the decision of Supreme Court in case of Parle Agro 2017-TIOL-221-SC-VAT and the decision of Larger Bench of Tribunal in case of Brindavan Beverages , the products, in question, have been correctly classified under 22029920 by Commissioner (A) in the impugned order and the same calls for no interference: CESTAT

- Appeal rejected: KOLKATA CESTAT