2021-TIOL-994-HC-TRIPURA-GST

Sarvasiddhi Agrotech Pvt Ltd Vs UoI

GST -  According to the petitioner, the company supplies Non-Basmati un-branded rice - However, the State GST Authorities, on a prior intelligence that the petitioner is dealing in branded rice, carried out a raid at the godown and other premises of the petitioner- company - This resulted into seizure of certain documents and stock of rice lying in the godowns - Eventually, the adjudicating authority i.e. the Assistant Commissioner of GST issued a Demand cum Show Cause Notice dated 11.03.2019 to the petitioner in which it was conveyed that on a prior intelligence that the petitioner was engaged in manufacturing, packaging and supply of branded rice in 25 kilogram bags having product names "Aahar Normal", "Aahar Gold" and "Aahar Premium" without payment of GST, enforcement officers of the department visited the factory premises of the petitioner on 17.07.2018 and found that the petitioner was supplying branded packaged rice in unit containers without payment of GST; that the assessee was liable to pay CGST as well as SGST at prescribed rates on the taxable value of its sales for the period in question [01.07.2017 to 17.07.2018] which was assessed at Rs.1,03,35,028/-- The Assistant Commissioner of GST did not accept the defences of the petitioner and passed the impugned order dated 03.07.2020 confirming the demand and imposing penalty and interest - The appellate authority by its order dated 27.01.2021 dismissed the appeal - Since the Tribunal where a further appeal could be made is not yet constituted, the present petition has been filed before the High Court - Petitioner submits that they were not supplying branded packaged rice and, therefore, the supply was exempt from GST levies; that the brands Aahar Normal, Aahar Gold and Aahar Premium were not registered brands and, therefore, would not come within the purview of taxable supplies;  that the seized quantity of rice was only meant for internal use and not for sale and in any case, no demand of GST can arise unless and until the goods are supplied.

Held: Bench does not find any error in the view of the lower authorities - Firstly, the conclusions of these authorities are based on assessment of materials on record - Secondly, the seizure of sizeable quantity of packaged branded rice was an indication of the petitioner dealing in such product - Thirdly, the tax is not demanded on rice stored and seized but on the quantity of rice already supplied which was assessed from the bill books and invoices seized from the premises of the petitioner-company - Further, the petitioner's defence that the quantity of rice lying in the godowns was merely for internal use was also not backed by any evidence - Close to three thousand bags of rice were found lying in the godown - Therefore, the petitioner's bare contention that it was not meant for supply but only for internal purposes of grading the rice or part of the stock was lying because of quality disputes, was not backed by any evidence and was, therefore, correctly not accepted by the authorities - Lastly, the petitioner's contention that the brand was not a registered brand and, therefore, the petitioner had no liability to pay tax also was rightly not accepted - As per the amendment to Notification 1/2017-CTR by Notification 27/2017-CTR dated 22.09.2017, for the original expression of "put up in unit container and bearing a registered brand name" what is now substituted is that it should be put in unit container and may be bearing a registered brand name or bearing a brand name on which an actionable claim or enforceable right in a court of law is available - Thus, from the previous requirement of supply of goods in unit container and bearing a registered brand name, the expanded requirement is of the same, either bearing of registered brand name or bearing a brand name on which actionable claim or enforceable right in a court of law is available - Thus, the requirement of the brand name being registered is no longer necessary - This Notification itself, however, provides that the exemption could be availed where such actionable claim or enforceable right in respect of such brand name has been voluntarily forgone subject to the conditions specified in the Notification - The brand names under which the petitioner was selling the rice may not have been registered, nevertheless it could lead to an actionable claim in a court of law - In order to avoid inviting liability of tax, the petitioner had to forgo such actionable claim which also the authorities found the petitioner had not done - Petition is, therefore, dismissed: High Court  [para 9 to 12] 

- Petition dismissed : TRIPURA HIGH COURT

2021-TIOL-992-HC-TRIPURA-GST

Babul Nath Vs UoI

GST -   Superintendent of GST had issued a notice on 13th May, 2019 pointing out that there were discrepancies in the petitioner's declaration of outward supply for the financial years 2017-2018 in the declarations made in GSTR-1 and GSTR-3B -  explanation of the petitioner as given in his reply dt. 3rd July 2019 was that the outward supply of Rs. 4,57,92,600/- shown in GSTR-1 was inadvertently not shown in GSTR 3B - However, the same was later on rectified by showing it in GSTR 3B for the month of March, 2019 along with which the petitioner had also paid the tax of Rs.54,95,112/- -  Superintendent passed an order confirming the amount of tax along with penalty and interest - Appeal was dismissed by the appellate authority on the ground that the petitioner had failed to file a certified copy of the order passed by the adjudicating authority - Petitioner submits that they had filed a copy of the order as supplied to the petitioner and that the appeal could not have been dismissed on the ground that a defective copy had been filed. Held: When the Superintendent has proceeded on the basis that the petitioner had failed to reply to his show-cause notice when the petitioner had actually filed the reply,  the Superintendent should pass a fresh order after considering the reply of the petitioner - Orders passed by the lower authorities are set aside and the proceedings are placed back before the Superintendent for a fresh consideration - Petition is disposed of: High Court 

- Petition disposed of: TRIPURA HIGH COURT

2021-TIOL-131-AAR-GST

Bowring Institute

GST - Applicant is a club is and a non-profit organization established by the British as a literary and scientific society - Applicant has sought advance ruling on the following questions viz. (i) Whether amount collected as membership subscription fees paid by the members of the applicant towards facilities provided by the applicant are liable as supply of service under GST? (ii) Whether amount collected as infrastructure development fund for the development and maintenance of the facilities provided by the applicant are liable as supply of service under GST? 

Held:   Supreme Court judgment in the case of M/s. Calcutta Club Limited - 2019-TIOL-449-SC-ST-LB is fully applicable to the applicant - It is  held therein that the doctrine of mutuality applied and these clubs which are similar to that of the Applicant are not exigible to service tax - Finance Act, 2021 has overruled what the Courts have held till now and has countered the Principle of Mutuality by way of Explanation which states that the members or constituents of the club and the club are two separate entities and persons for the purpose of Section 7 of CGST Act, 2017 which defines Supply - However,  by virtue of Section 1(2)(b) of Finance Act, 2021, the amendment brought in Section 7 of CGST Act, 2017 by way of Section 108 of Finance Act, 2021, will come into effect only on the date when Central Govt notifies the same and then the same will be notified with the corresponding amendments passed by the respective States and Union territories in respective SGST/ UTGST Act - Therefore, AAR concludes that unless the amended Section 7 of CGST Act, 2017 is notified, the applicant is not liable to pay GST on subscription fees and Infrastructure development fund collected from the members as per the Supreme Court judgment in the case of M/s. Calcutta Club Ltd.: AAR

- Application disposed of :AAR

2021-TIOL-998-HC-DEL-CUS

Ericsson India Global Services Pvt Ltd Vs UoI

Cus - Petition has been filed challenging the instructions dated 22.05.2019, addressed by the respondent no. 4 to the respondent no. 3, advising that all services, whether Engineering Services (Network Engineering Services, Management and Operation of Network Services (Managed Services) in Telecom Sector or Management Consulting Services) in Telecom Sector, are ineligible for the benefit under the Service Exports from India Scheme (SEIS) announced by the Foreign Trade Policy 2015-20 - Petition further impugns the order(s) dated 11.06.2019 and 03.06.2019, whereby the respondent no. 3 has rejected the claim of the petitioner(s) for benefit under the SEIS for the financial years 2015-16, 2016-17 and 2017-18, respectively.

Held:

+ Foreign Trade Policy is clear and unambiguous inasmuch as it excludes the Telecom Service Providers from the benefit of the SEIS and not the Service Providers who provide services to such Telecom Service Providers. As noted herein above, the ambit of the term was clearly spelled out in S. No. 2(C) of Appendix-10 to HBPv1 to FTP 2009-14. No different intention regarding the same is discernible from the FTP 2015-20 . [para 51]

+ A reading of the provisions of the TRAI Act would clearly show that the 'Service Provider' is one who in terms of a license granted under Section 4 of the Indian Telegraph Act, 1885 provides Telecommunication Services as defined under Section 2(k) of the TRAI Act. I see no reasons to interpret 'Service Providers in Telecom Sector' in the FTP differently. [para 55]

+ It must, therefore, be held that exclusion of 'Service Providers in Telecom Sector' from benefit of SEIS is of a service provider providing telecom services. The Impugned Instructions dated 22.05.2019, therefore, sought to impose fresh restrictions on the eligibility of the service providers entitled to the benefit under SEIS, which amounted to amendment in the policy, and is therefore, ultra vires the Foreign Trade Policy. [para 57]

+ Impugned orders/communications dated 11.06.2019 and 03.06.2019, therefore, suffer from the same vice as the Instructions/Circular dated 22.05.2019 and are equally liable to be set aside by this Court. [para 61]

+ It is held that in the facts of the case, where the impugned Instructions/Circular dated 22.05.2019 has been issued under the instructions of the DGFT itself, the remedy of appeal under Section 15 of the Act would clearly be otiose and redundant.

+ As far as the remedy under Section 16 of the Act is concerned, once it is held that the Impugned Orders have been passed on basis of Instructions which are otherwise ultra vires the Act, the petitioner cannot be denied the benefit of an original adjudication on merits and the decision on an appeal under Section 15 of the Act in accordance with law, and be relegated only to a remedy of review. [para 66]

+ Impugned Instructions and Order(s) are set aside. The respondents are directed to consider the claims of the petitioner(s) under the SEIS afresh and in accordance with FTP 2015-20. [para 67]

+ As there has already been a delay in consideration of the claim of the petitioner(s), the respondents are directed to pass a reasoned order thereon, upon giving an opportunity of hearing to the petitioner(s), within a period of eight weeks. [para 68]

Maintainability of petition

The Impugned Letters have been premised on the Communication/Instructions of the DGFT dated 22.05.2019 - They are, in fact, communication of the instructions issued by the DGFT rather than an order passed by the Adjudicating Authority - In M/s Filterco (1986) 2 SCC 103 ), the Supreme Court observed that where the order is passed by a superior officer, the remedy of appeal would be a mere exercise in futility and that the High Court should have invoked its jurisdiction under Article 226 of the Constitution of India - Division Bench in Vistar Construction (P) Ltd. (2013 SCC OnLine Del 308) has held that where the Instructions/order are contrary to law, they are liable to be set aside and availability of alternate remedy would not bar the exercise of jurisdiction under Article 226 of the Constitution of India as otherwise such instructions/orders shall remain binding on the authorities under the Act and any appeal would be decided based thereon: High Court [para 62, 63, 64]

- Petitions are allowed: DELHI HIGH COURT

2021-TIOL-249-CESTAT-AHM

Huhtamaki PPL Ltd Vs CCE & ST

CX -  Due to shortage of storage space within the factory premises, the appellant outsourced storage facility from Akash Warehousing Corporation, Bhiwandi and Pioneer Logistics Kilwani which are outside the factory on rental basis for storing the imported inputs before bringing the same factory for further processing and manufacture of final product -  Service Tax paid on warehousing service was availed as CENVAT credit and the jurisdictional authorities were informed about the same - Alleging that the credit availed was irregular, SCN was issued and in adjudication proceedings the demand was confirmed and the appeal was dismissed - hence the appeal before CESTAT.

Held:  Only allegation in the Show cause notices is that since, the renting of immovable property service is not included in the definition of input service, the said service used by the appellant neither falls under scope definition of input service nor has nexus with manufacturing activity - However, in the adjudication order and order of Commissioner (Appeals), both the authorities have travelled beyond the scope of show cause notice - Inasmuch as the Cenvat credit was denied on the ground that the godown / warehouse where the input is stored is outside the factory premises and the appellant have not obtained the permission under Rule 8 of Cenvat Credit Rules, 2004 - Since the above reasoning is not flowing from the show cause notice, even without going into the legality of the above two issues, the orders of the both the authorities does not sustain, for the reason that any issue which were not raised in the show cause notice, cannot be imported into the adjudication order or Commissioner (Appeals) order - It is clear from a reading of rule 8 of CCR, 2004 that the appellant is required to obtain the permission for storage of inputs outside the factory premises, only in cases were the Cenvat Credit on such input has been availed - In the present case, there is no allegation that the appellant have availed the Cenvat Credit in respect of the inputs lying in warehouse outside the factory - Therefore, in the given facts Rule 8 is not applicable - Same issue of eligibility of CENVAT credit has been considered by the Bombay High Court in the case of Deepak Fertilizers & Petrochemicals Corpn. Ltd. - 2013-TIOL-212-HC-MUM-CX and credit has been allowed - Appellant out of the total CENVAT credit of Rs.5,57,384/- paid an amount of Rs.3,27,392/- along with interest and the same was not contested by them, therefore, the amount paid is maintained as not contested - However, the demand of Rs.2,29,992/- and entire penalty and corresponding interest are set aside - Appeal is allowed in above terms: CESTAT [para 4, 4.1, 4.2] 

- Appeal allowed: AHMEDABAD CESTAT

2021-TIOL-246-CESTAT-CHD

Periscope Printing And Packaging India Pvt Ltd Vs CCGST

ST - The appellant is in appeal against impugned order wherein their refund claim has been denied on the ground that while shifting to GST regime, they have not debited the refund amount from the Cenvat Credit account in terms of Notfn 27/2012-CE (NT) - The provisions of Notfn 27/2012-CE (NT) are very much clear that the appellant is required to debit the amount of refund claim in Cenvat credit account at the time of filing of refund claim - Therefore, the observations made by both the authorities below are contrary to said Notfn - As the appellant has complied with the conditions of said Notfn, no merit found in the impugned order rejecting refund claim filed by appellant, therefore, the same is set aside: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

2021-TIOL-245-CESTAT-KOL

Chowdhury Industries Corporation Pvt Ltd Vs CCE

CX - The appellant is a manufacturer of various excisable goods and making use of facility of Cenvat Credit - They failed to pay duty involving on goods removed for the months of November & December 2006 within due dates - Citing Rule 8(3A), SCN was issued proposing to demand Central Excise duty in cash, which was already debited from Cenvat Credit account - Same was confirmed along with interest - In addition, penalty of amount equal to the due demand was also ordered to be paid - The provisions of Rule 8 (3A) of CER, 2002, based on which the demand for duty has been raised by Department has been struck down by the various High Courts as ultra vires - In this connection, reference can be made for the decisions in Indsur global Ltd. 2014-TIOL-2115-HC-AHM-CX, Sandley Industries 2015-TIOL-2490-HC-P&H-CX, Malladi Drugs & Pharmaceuticals Ltd. 2015-TIOL-1262-HC-MAD-CX, Precision Fasteners Ltd. 2014-TIOL-2211-HC-AHM-CX and A.T.V. Projects India ltd. 2016-TIOL-2015-HC-ALL-CX - In view of the said decisions, there is no bar in making use of the accumulated Cenvat Credit for making payment of Central Excise Duty even during default period - The Impugned Order is set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT

2021-TIOL-244-CESTAT-BANG

Acc Ltd Vs CCT & CE

CX - The appellants are engaged in manufacture of Cement and clinker - It was noticed by Department that the appellant was availing cenvat credit of service tax paid on outward transportation of goods from the factory/bulk terminal/depot to their customer's premises - Department entertained the view that as per Rule 2(a)(ii) of CCR, 2004, appellant is entitled to avail cenvat credit on outward transportation only up to the place of removal and the appellant has availed cenvat credit up to the place of customer's place for which he was not eligible - Accordingly, a SCN was issued for the period from April 2008 to March 2009 demanding cenvat credit along with interest and proposal for imposition of penalty - On an identical issue, the Tribunal in the case of Bharat Fritz Werner 2019-TIOL-3492-CESTAT-BANG has remanded the case back to the original authority to pass a fresh order after examining various documents for disputed period - By relying on the ratio of said decision, the impugned order is set aside and the case is remanded back to the original authority to pass a fresh order: CESTAT

- Matter remanded: BANGALORE CESTAT