2021-TIOL-1035-HC-MAD-GST

T Karthick Raja Vs Pr.CCGST & CE

GST - All the writ petitioners participated in the tender process and were successful in the tender and entered into an agreement with the Southern Railway, agreeing certain terms and conditions stipulated - All the writ petitioners are Contractors, who were granted license to run parking areas for vehicles in the Railway premises by the Southern Railway - The agreement for manning the vehicle parking stand in Railway Stations were admittedly signed by all the writ petitioners, who all are Contractors and all the writ petitioners could pay the license fee as per the terms and conditions - It is further admitted that the writ petitioners had agreed for the terms and conditions stipulated in the agreement and as per the said agreement, the licensee shall pay during the continuance of the license all cesses, rates, water charges, taxes and other charges or taxes in respect of the said premises - counsel appearing on behalf of the parties informed that the period of license already expired, except in few cases, in respect of all these writ petitions - However, in respect of expired license, the respondent-Southern Railways is not refunding the deposit amount and, therefore, they are constrained to move the present writ petitions - The deposits are not refunded on the ground that they are liable to pay CGST/SGST at 18% as per the terms and conditions of the agreement - Petitions filed questioning the demand made by the Southern Railway to pay 18% of GST in respect of the license fee granted to the Private Contractors to run parking of vehicles - As far as the present writ petitions are concerned, the respondents had admitted that they are treating 'Parking' as 'Renting of an immovable property', which is against the provisions of the GST Act; that as per the agreement, it is renting of an immovable property, which is not falling under the scope of the GST Act and, therefore, the writ petitioners are not liable to pay tax as demanded by the Southern Railways.

Held:

++ In other words, liability cannot be waived when the provisions of the Act is unambiguous.

++ Court is bound to go by the provisions of the CGST Act, which was implemented with effect from 01.07.2017.

++ Provisions of the CGST Act is crystal clear that the services rendered are liable for payment of service tax and more specifically, with reference to Section 7 r/w Schedule II, the services rendered by the Railways to the writ petitioners/contractors and the writ petitioners/contractors to the end users, are falling within the scope of Section 7 r/w Schedule II of the CGST Act and therefore, all the writ petitioners are liable to pay tax, as applicable and as demanded by the Southern Railways.

++ Writ petitioners have agreed to pay the taxes even during pre-contract, when the proposals were released and therefore, now they cannot turn around and seek exoneration from payment of service tax as applicable.

++ It is made very clear that the Southern Railways is liable to pay service tax for the license fee collected from the respective contractors and the respective contractors are liable to pay service tax for the collections made from the end users/customers in respect of the parking slot services. Such contractors are bound to register their name under the CGST Act, by following the procedures contemplated therein.

++ As far as the exempted services under the provisions of the Act, are concerned provided by the contractors to the customers/end users, in such an event, the contractors are not liable to pay tax to the GST Department. However in respect of the license fee, the Railway is liable to pay service tax to the GST by collecting from the contractors on the license fee. However, exemption would be applicable only in respect of the services provided by the contractors to the customers/end users and in such cases, the contractors are not liable to pay taxes directly to the GST Department.

++ This being the clarification only with reference to the exempted services under the provisions of the CGST Act, the non-exempted cases, cannot seek any exoneration. Whether such services rendered by the writ petitioners are exempted or not, is to be verified by the Competent Authorities of the GST Department and accordingly suitable orders may be passed.

++ There is no scope for entertaining the grounds as raised in the present writ petitions and consequently, all the writ petitions are devoid of merits and accordingly, they stand dismissed. [para 44 to 47, 50, 51, 52]

- Petitions dismissed: MADRAS HIGH COURT

2021-TIOL-1034-HC-MAD-CUS

Britto Timbers Pvt Ltd Vs Plant Protection Officer

Cus - Petitionershad imported four consignments of logs from Equatorial Guinea - All the consignments landed in Tuticorin Port in November-December 2018 - As per the Plant Quarantine (Regulation of Import into India) Order, 2003, the consignments should have been fumigated prior to export with Methyl bromide at certain conditions and the treatment should have been endorsed on the Phytosanitary Certificate issued at the country of export - Petitioner had produced such Phytosanitary Certificates which turned out to be invalid - The stand of the petitioner is that the exporter has cheated him whereasthe stand of the department is that the certificates are fake - It is true that this requirement could be relaxed - If the petitioner had committed violation for the first time, then, the plant protection officer himself can grant the relaxation - But for the second or subsequent cases of violation of requirements of import permit, the certificate should be forwarded to Joint Secretary (Plant Protection), Ministry of Agriculture & Farmers Welfare - There is no dispute that the petitioner had already obtained one such relaxation sometime in the year 2017 or 2018 -In the present case, the importer could not obtain any relaxation, therefore, the Customs authority auctioned the goods to M/s Vijayalakshmi Traders for a sum of Rs.9,10,555/- and on remittance of the said amount the goods were delivered on 27.02.2020 -Petitioner submits that they had informed the Customs authorities that they had sought a relaxation from production of the certificate and, therefore, the cargo should not be auctioned - However, the goods were auctioned and the successful bidder applied to the authority concerned and also obtained relaxation from the requirement to produce Phytosanitary Certificate and consequently the goods were delivered by the customs authorities to M/s Vijayalakshmi Traders - Inasmuch as the entire auction proceedings are challenged. Held: ++ Customs authorities cannot be expected to wait indefinitely - They are under a statutory mandate cast on them under Section 48 of the Act - It is not as if the cargo was disposed of behind the back of the importer - The importer was given notice on 28.03.2019 and again on 05.04.2019 - Even the auction proceedings took place only in October 2019 - As already pointed out, the goods had landed in India sometimes in November- December 2018 - The goods were disposed of by the customs authorities only in October 2019 - When the petitioner for full ten months could still not obtain relaxation in his favour, it would be unfair to expect the customs authorities to wait till the petitioner obtains an order in his favour - When the authorities had given reasonable time to the importer and within the reasonable time the importer could not obtain relaxation, the authorities were left with no other option but to auction -Auction proceedings are sustained - Since the goods have been cleared, the challenge to the order dated 25.02.2020 which was passed by the Plant Protection Officer has become infructuous -Petitioner would state that after collecting applicable duties, the customs authorities are bound to pass on the balance amount to the owner of the goods, namely, the importer -Since such a question has not been raised in the writ petition, it would not be appropriate on the part of the Bench to go into the issue - W.P.(MD)No.4472 of 2020 is thus disposed by upholding the auction proceedings but by permitting the petitioner to submit a formal application under Section 152 of the Customs Act before the authority concernedfor payment of the balance amount after deducting the applicable duties and statutory charges: High Court[para 7 to 9] ++ It is true that the importer cannot demand relaxation of the requirement of production of Phytosanitary Certificate as a matter of right - It is equally true that in matters such as this, the Court should be extremely cautious as there are environmental and ecological implications - It is equally true that the petitioner was found to have committed violation of the requirements of Plant Quarantine Regulation of Import in India Order, 2003 on one occasion earlier - It is true that the goods is question have been imported to India without having been fumigated by Methyl bromide at the country of export - The petitioner had imported as many as four consignments at one go - Assistant Solicitor General would contend that the consignment, which was purchased by Vijayalakshmi in the auction sale was fumigated and the plant quarantine authorities conducted an inspection with regard to presence of any pest or any other invasive substance and after being satisfied that their clearance will not have any adverse impact on Indian ecological and environment, the goods were allowed to be cleared - The remaining three consignments can also be similarly fumigated and a similar inspection also undertaken - If thereafter, the authorities are satisfied that the clearance of the said consignments will not be of any threat to Indian ecology and environment, the importer can be allowed to take the goods after paying the applicable duties: High Court[para 17] ++ Helping an individual importer to come out of the difficulties on certain terms and conditions, certainly advances public interest - The Father of Nation would say that one must have the small man in mind - Likewise, we must always keep the ordinary importer in mind - His interest is intrinsically linked to the nation's interest - It is like quantum entanglement - The petitioner had suffered a huge loss in respect of the first consignment [as value of the consignment that was the subject matter of W.P.(MD)No.4472 of 2020 was Rs. 41,62,600/- but they were sold in favour of Vijayalakshmi Traders only for a sum of Rs. 9,10,555/-.] - The petitioner through his counsel gives an undertaking before this Court that they would never ever again apply for relaxation - In other words, they would adhere to requirements of Plant Quarantine Regulation of Import in India Order, 2003 in letter and spirit -Obtaining such an undertaking takes care of the public interest - The petitioner knows that if tomorrow he imports another consignment without Phytosanitary Certificate, then his fate is doomed because such a consignment can never ever be cleared: High Court[para 18, 19]

- Petitions disposed of: MADRAS HIGH COURT

2021-TIOL-264-CESTAT-MAD

Blessings Cargo Care Pvt Ltd Vs CC

Cus - A SCN was issued to the appellant inter alia alleging wrong classification of goods imported by them and for imposing penalties - The Original Authority rejected the classification adopted by importer and confirmed the differential duty along with penalties - On appeal, the Commissioner (Appeals) rejected the same on the ground of limitation - Appellant has furnished the letter to establish that they have intimated their change of address to the Department - The Note given by Administrative Officer of Custom House also shows that there were instructions given for verification of new address of the appellant - There is nothing to disbelieve these documents - After intimating the change of address in July 2012, the Department has issued the O-I-O in February 2013 to the old address of the appellant - There is no actual 'service' or 'communication' of decision/order upon the appellant - Therefore, the date on which the appellant has come to know about O-I-O has to be considered for computing the period of limitation - When computed from such date, the appeal is filed within the time of sixty days - Thus, there is no delay in filing the appeal - Rejection of appeal on the ground of time-bar cannot sustain: CESTAT

- Matter remanded: CHENNAI CESTAT

Chennai Essential Oils and Aromatics Vs CGST & CE

CX - A SCN was issued alleging clandestine removal and thereby proposing a duty demand with applicable interest and penalty on the appellant - The appellant filed an application before Settlement Commission who settled the duty liability - The Settlement Commission settled the duty liability vide its Final order thereby granting 15 day's time to work out interest liability, if any, and to communicate the same to the appellant herein, which apparently has not at all been complied with - A writ petition was filed by Revenue and the High Court of Madras was pleased to pass ad-interim order which was thereafter made absolute, which order continued for nearly 11 years - These facts apparently have been side-lined in issuing SCN, O-I-O and also in the O-I-A - Even if relevant date is taken as the date of final order of Settlement Commission for purposes of computing period of limitation, as pointed out in SCN, one year would expire on 13.11.2007 by which date the Revenue had already obtained an absolute stay against order of refund from the High Court - Another point which is noteworthy, is that the Revenue's treatment of the appellant's first request for refund, whereby the appellant also requested for adjustment of interest from the refund due to it; refund having been worked out by Settlement Commission itself - This aspect has been ignored in SCN as well as in O-I-O, but however, even though the Commissioner (Appeals) in impugned order has observed the appellant's above letter, still no order has been made thereon - Both the authorities chose to act on the subsequent request of appellant, which is only a reminder of the refund legally due, to it - The appellant's rightful request for refund which is very much on the record of Revenue has not at all had been acted upon or rather ignored deliberately and nowhere do Tribunal found any denial by Revenue as to its existence - The refund claim of appellant is very much in order, within the prescribed time and therefore, the impugned order is set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

Fidelity Business Services India Pvt Ltd Vs CCT

ST - The appellant is engaged in providing Information Technology Software Services and Business Auxiliary Services - The appellant filed refund claims for different quarters under Notification No. 27/2012-C.E. r/w Rule 5 of Cenvat Credit Rules, 2004 and Service Tax Rules, 1994 for refund of unutilized CENVAT credit of Service Tax said to have been paid by them on the input services availed by them for providing output services which are exported during the relevant periods - Same was partly rejected - The Commissioner has mainly, rejected the CENVAT credit on the ground of lack of nexus of input service with the output service exported and secondly the Commissioner has held that the said input service has been excluded from definition of Input Service under Rule 2(l) of CCR, 2004 - Further, appellant has given full justification that the said services have been used for providing output service and it is found that the services have been specifically held to be input service by various decisions rendered by Tribunal and the High Court - As far as General Insurance Service, the appellant has not been able to bifurcate the Insurance Service availed on the assets of company and on the lives of persons working in the said company - Thus, the CENVAT credit on General Insurance Services is denied - In Club Membership Service, the Commissioner, though, has admitted that the said services is in relation to applying for the membership of the trade and association but still hold the same is for the benefit of the employees only - This finding is wrong because the membership of the club was used in relation to promoting the trade and hence it falls within the definition of Input Service - As far as Photography Service is concerned, said services were availed by appellant for capturing the business events which are necessary to keep record of events conducted as well as for future reference hence this service also falls within the definition of Input Service - Further, with regard to Credit Card and Debit Card Services, these services were used for booking official travels, meal cards and accommodation for the appellant's employees who had to travel within or outside India on official projects which directly contributes to the business operation and has a direct nexus to the output service - Hence, the said service also falls within the definition of Input Service - Except General Insurance Service, all the other input services fall in the definition of Input Service as provided under Rule 2(l) of CCR, 2004 and the appellants are entitled to CENVAT credit and the refund of the said amount under Notification No. 27/2017-C.E. r/w Rule 5 of CCR, 2004: CESTAT

- Appeals partly allowed: BANGALORE CESTAT