2021-TIOL-133-AAR-GST

Hadi Power Systems

GST - Applicant has sought a ruling as to whether concessional rate of GST shall apply to the sub-contractor who is sub-contracted from a sub-contractor of the main contractor, the main contractor being provider of works contract to a Government entity.

Held: Privity of contract is between the applicant and the M/s. Shaaz Electricals, however M/s. Shaaz Electricals is not covered under Central Government, State Government, Union Territory, a local authority or a Governmental Authority or a Government Entity and hence the supply made by the applicant is not covered entry no.3 (iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 - For the same reason, the activity of the applicant is also not covered under entry no. 3(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 - Applicant is not eligible to charge GST at a rate of 6% under CGST Act and 6% under the KGST Act but has to discharge tax rate CGST @9% and KGST @ 9% each under the provision of the GST Acts: AAR

- Application disposed of: AAR

2021-TIOL-132-AAR-GST

Sri Puttahalagaiah GH

GST - Applicant has rented his property to the Backward Classes Welfare Department, Government of Karnataka, who in turn are using the same for providing hostel facilities to the post matric girls of backward classes – Such service is in relation to the function entrusted to a panchayat under article 243G of the constitution which is covered by 27th entry of 11th schedule which says Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes - Since the applicant is providing to the State Government pure services by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution, the same is covered under the entry number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 and hence is exempted under the CGST Act, 2017: AAR

- Application disposed of: AAR

2021-TIOL-1110-HC-MAD-VAT

Muthuraman Enterprises Vs Assistant Commissioner (CT)

In writ, the High Court observes that the assessee also filed an application for rectification of the order, u/s 84 of the TNVAT Act. Hence the Court finds no reason to keep the present appeal pending. It directs the authorities concerned to pass appropriate order in respect of the assessee's application for rectification of assessment order.

- Writ petitions disposed of: MADRAS HIGH COURT

2021-TIOL-276-CESTAT-KOL

Ballavpur Paper Mfg Ltd Vs CCGST & Excise

ST - The appellant, who is engaged in manufacture of Kraft Paper in its paper manufacturing unit, effects delivery of same to its distributors/dealers by engagement of local transporters who lift the said goods from their factory on the basis of challans issued by them, duly acknowledged by said transporters - Audit objections were raised demanding payment of service tax on transport charges (outward freight) for the period 2009-10 to 2011-12 from the appellant on reverse charge basis on the ground that there was providing of GTA services by transporters - Except for bills or invoices and acknowledgments of receipt of goods by customers by endorsing the challans issued by appellant, no other document was submitted by transporters - There is nothing to evidence submission of a consignment note as envisaged in the "Explanation" to Rule 4B of Service Tax Rules, 1994 by any of the transporters - There is no evidence to dispute the correctness of contentions of appellant in this regard - The revenue has also not contested the correctness thereof - On the contrary, the fact that no consignment note has been issued as required under Rule 4B ibid stands confirmed from the findings of lower appellate authority in impugned order - Therein the Commissioner has sought to make the challans issued by appellant, which were returned back along with the endorsements of recipients proving delivery of goods by the transporters, taken together with the bills/invoices raised by them, as "consignment note" under Rule 4B - This is impermissible, there being no mandate in the Act or the Rules, including in the "Explanation" of Rule 4B of challans forming part of bills/invoices to form a "consignment note" as envisaged under Rule 4B ibid - The inference of Commissioner (Appeals) is therefore beyond the scope of Rule 4B ibid, contrary to settled principle of interpretation of a taxing statute's provisions and hence untenable - The acknowledgement by lower appellate authority in impugned order as regards the contents of bills/invoices raised by transporters, on the other hand, establishes that the bills/invoices raised by transporters are not consignment notes as per Rule 4B of the Rules - In the premises, as per legal principles decided by different Benches of Tribunal, delivery of the goods by transporters does not fall under GTA services in terms of Section 65(105)(zzp) of Finance Act, 1994 - Consequently, the said transporters cannot be said to be "Goods Transport Agency" within the meaning of Section 65(50b) of the Act - The impugned order of lower appellate authority is unsustainable - Hence the demand of service tax, interest and penalty confirmed by impugned order are erroneous and unsustainable: CESTAT

- Appeal allowed: KOLKATA CESTAT

2021-TIOL-275-CESTAT-KOL

Steel Authority of India Ltd Vs CCGST & CX

CX - The appellant, an integrated steel plant manufactures various iron, steel and allied products - During the process of conversion of coal into coke, at very high temperatures, Coke Oven Gas (CO gas), a very poisonous and harmful gas is generated - Issue arises is, whether wash oil, sulphuric acid, caustic soda, alum, hydrochloric acid, ion exchanger are inputs in or in relation to generation of ammonium sulphate and CO gas - This issue stands settled by decision of Apex Court in case of Hindustan Zinc Ltd. 2014-TIOL-55-SC-CX - In the case of Aarti Drugs Ltd. 2002-TIOL-424-CESTAT-MUM , which was affirmed by Bombay High Court and further affirmed by Supreme Court, it has been held that ammonium sulphate obtained from mother liquor is a by-product and the provisions of Rule 57CC(1) of erstwhile Central Excise Rules, 1944, equivalent to Rules 6(2) and 6(3) of Cenvat Credit Rules, 2004, is inapplicable and cenvat credit of inputs contained in such byproduct was permissible - The CO gas issue is settled by decision of Tribunal in case of Tata Steel Ltd. - Findings of Commissioner (Appeals) and the Adjudicating Authority on this issue are unsustainable - The next issue is, whether the demand in terms of Rule 6(3)(i) of Cenvat Credit Rules is appropriate as the appellant availed cenvat credit on common inputs which were used in or in relation to, either directly or indirectly in the manufacture and clearance of dutiable final products as well as exempted final products, namely ammonium sulphate and CO gas, where the appellant had exercised option to follow Rule 6(3)(ii) of Cenvat Credit Rules in terms of Rule 6(3A) and whether non-acceptance thereof by the Department was correct - There is no dispute nor denial in either the SCNs or in the adjudication orders that the appellant had exercised option in terms of Rule 6(3)(ii) of Cenvat Credit Rules - Once this fact, established from the materials on record, is not disputed, there can be no demand in terms of Rule 6(3)(i) of Cenvat Credit Rules - The finding that the appellant was required to pay much higher amount in terms of Rule 6(3) of Cenvat Credit Rules other than that actual reversed is also without any merit - The finding that the reversal of credit attributable to the inputs used in the manufacture of exempted products was insufficient in accordance to the demanded amount as calculated in SCNs is misconceived - Hence, the findings on this issue of both the Commissioner (Appeals) and the Adjudicating Authority are also unsustainable: CESTAT

- Appeals allowed: KOLKATA CESTAT