2021-TIOL-1425-HC-MAD-VAT

Fancy Agency Vs DCST

Whether it is fit case for remand where assessment order is passed without considering relevant details pertaining to sales and purchases made by the assessee - YES: HC

- Writ petitions allowed: MADRAS HIGH COURT

2021-TIOL-1419-HC-MAD-VAT

Criticam Medical Systems Vs Addl.CTO

Whether aggrieved taxpayer should not approach for writ remedy under Article 226, without exhausting appeallate remedies as provided under provisions of PVAT Act - YES: HC

- Case disposed of: MADRAS HIGH COURT

2021-TIOL-1423-HC-MAD-GST

MMD Heavy Machinery India Pvt Ltd Vs Asstt. Commissioner

GST - Writ petition has been filed for a writ of mandamus to allow the petitioner to file Form GST ITC-02 to transfer the unutilized input tax credit of Rs.2,86,19,907/- and Rs.31,38,891/- from their Chennai registration to their Sri City, Andhra Pradesh GSTIN or in the alternative to direct the respondent to refund the amount of input tax credit of Rs.2,86,19,907/- and Rs. 31,38, 891/-.

Held:

+ Petitioner claims to have shifted its factory and office during the month of June-July 2016 to Sri City, in Andhra Pradesh. However, while, effecting such transfer, the petitioner did not opt for following the procedure under Rule 10 of the CENVAT Credit Rules, 2004. [para 25]

+ As per the monthly return filed for the month of June 2017, petitioner has claimed balance of unutilized input tax credit of Rs.31,38,891/-. This amount was transferred by the petitioner by filing Trans-1 under sub-section (4), (5) & (6) to Section 140 under Chapter XIV of the Tamil Nadu Goods And Service Tax Act, 2017 read with Tamil Nadu Goods and Service Tax Rules, 2017. [para 29]

+ There are no transactions within the State of Tamil Nadu after 2016. The petitioner had no scope for utilizing the same. Sub-clause (ii) to first proviso to Section 140 of the Tamil Nadu General and Service Tax Act, 2017 makes it clear that a registered person shall not be allowed to take credit where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date. [para 31]

+ The petitioner cannot further transfer such credit to its Sri City Unit in Andhra Pradesh in view of Section 18(3) of the Tamil Nadu Goods and Service Tax Act, 2017 . [para 33]

+ The credit would have survived for being transitioned under the Tamil Nadu Goods and Service Tax Act, 2017 provided the petitioner continued to have transactions in Tamil Nadu. It is confined to credit which was carried forward under any existing law or goods which were held in stock on the appointed date. Therefore, the aforesaid amount of input tax credit, even if it was lying unutilized as on 01.07.2017 cannot be transitioned to a new registration obtained after implementation of the respective Goods and Service Tax enactments to its Sri City Unit in Andhra Pradesh in the light of Section 25 (5) of the respective Goods and Service Tax Enactments. [para 34]

+ The petitioner's case also does not fall within the purview of Section 54 of the Tamil Nadu Goods and Service Tax Act, 2017 read with Chapter X of the Tamil Nadu Goods and Service Tax Rules, 2017. Refund of unutilized credit, it is permissible under Section 54(3) of the TNGST Act, 2017 , only if such credit is lying unutilized at the end of the tax period. [para 35]

+ Therefore, the prayer of the petitioner for either transfer or refund of such input tax which was credit lying utilized under TNVAT Act, 2006 does not arise. To that extent the writ petition is liable to be dismissed. [para 36]

+ It is not clear as to why the petitioner chose not to transfer the input tax credit under the aforesaid provision in June 2016 when it shifted its factory from Ambattur Industrial Estate to a new location in Sri City in the State of Andhra Pradesh. The petitioner also cannot feign ignorance of the aforesaid provisions of the CENVAT Credit Rules, 2004 as it was a seasoned central excise and service tax assessee. Even if it had shifted inputs and capital goods to its Andhra Pradesh unit, it would have raised appropriate central excise invoice under Rule 4 of the Central Excise Rule, 2002 by debiting the CENVAT credit to its Andhra Pradesh unit under Rule 3(5) of the CENVAT Credit Rules, 2004 read with Rule 4 and Rule 8(2) of the Central Excise Rules, 2002. [para 48]

+ It does raise a serious question as to why the petitioner neither utilized the credit for payment of excise duty by debiting the input tax credit availed on input and input service on the goods exported and claim rebate under the scheme of the Central Excise Rules, 2002 or take steps for transferring the input tax credit under Rule 10 of the Cenvat Credit Rules, 2004 or file a refund claim under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012(ENT) dated 18.06.2012. [para 51]

+ There is also no question of transferring the aforesaid amount to the petitioner's Sri City Factory in the State of Andhra Pradesh for utilizing its tax liability as the petitioner failed to follow Rule 10(3) of the Cenvat Credit Rules, 2004. [para 54]

+ Strangely, the petitioner had not opted for any of the above while making export. The, fate of such input tax credit lying unutilized is to be examined in the light of the provisions of the Central Excise Act, 1944, Central Excise Rules, 2002, CENVAT Credit Rules, 2004 and the relevant notifications. It is assumed that the petitioner had opted neither to pay excise duty to claim rebate under Rule 18 of the Central Excise Rules, 2002 as it stood then nor in the alternative claimed refund under Rule 5 of the CENVAT Credit Rules, 2004. There is also no explanation forthcoming from the petitioner as to why the petitioner failed to opt for Rule 10(3) of the CENVAT Credit Rules, 2004. [para 60]

+ It is quite possible that the petitioner while removing the capital goods, work in progress and inputs had not discharged its liability under Rule 3(5) of the CENVAT Credit Rules, 2004. It would require for detailed examination by the concerned jurisdictional officer. Therefore, refund of input tax credit lying unutilized which has been transitioned by filing with Trans-1 after the implementation of Central Goods and Services Tax Act, 2017 under Section 54 of the Central Goods and Services Tax Act, 2017 as in the Section 54 of the Tamil Nadu Goods and Services Tax Act, 2017 cannot be considered. [para 61]

+ No merits in this Writ Petition for either transfer or refund of input tax Credit (CENVAT Credit) which was transitioned by the petitioner by filing Trans-1. Such credit has to be decided in the light of the provisions of the Central Excise Act, 1944 and Central Excise Rules, 2002 only. [para 63]

- Petition dismissed: MADRAS HIGH COURT

2021-TIOL-153-AAR-GST

Veena Madhukant

GST - Applicant seeks to know the rate of tax for HSN entries that is DRY COCONUT (EDIBLE) HSN 08011920 and COPRA (DRY COCONUT FOR MILLING), HSN 1203.

Held: Classification of the products and the applicable rate under GST has been decided vide proceedings under Section 60 of the Act, in the case of the applicant - Therefore, as per first Proviso to Section 98(2) of the Act, the present application seeking ruling on the applicable rate on the same products for which the classification and applicable rate stands decided, is not admissible - Application rejected: AAR

- Application rejected: AAR

2021-TIOL-152-AAR-GST

Unique Aqua Systems

GST - Supply provided by the applicant to the recipient i.e. The Greater Chennai Corporation based on the agreement to provide RO Plant and undertake O & M of the same, being not a "Pure service" but a composite supply of goods & Services, they are not eligible for benefit of exemption provided at Serial No. 3 of Notification No. 12/2017- Central Tax (Rate): AAR

- Application disposed of: AAR

2021-TIOL-1424-HC-MAD-ST

S Saravana Arul Vs Customs & Central Excise Settlement Commission

ST - Order dated 17.09.2014 passed by the Settlement Commission is under challenge in the present petition.

Held : Admittedly the application filed under Section 32E of the 1944 Act, for settling the issues, was entertained by the Settlement Commission - The Settlement Commission accepted the terms of reference and finally granted partial immunity from penalty to the applicant and further granted immunity from prosecution and the order was passed - Interest is chargeable based on certain admitted facts and circumstances placed before the Settlement Commission - If at all there is any error apparent in respect of such findings with reference to the original records, the petitioner is at liberty to approach the Settlement Commission for clarification or for rectification of any such error apparent regarding the facts admitted or pleaded - However, such an adjudication cannot be done by the High Court in a writ proceedings, which require examination of original records and the admission statements made by the parties before the Settlement Commission with reference to the application filed under Section 32E of the 1944 Act - Order passed by the Settlement Commission need not be interfered with - Writ Petition stands disposed of: High Court [para 8 to 11]

- Petition disposed of: MADRAS HIGH COURT

2021-TIOL-1422-HC-MAD-CUS

Southern Zone Timber Importers Association Vs Govt. of India

Cus - Issues raised by the petitioner involve certain disputed facts and circumstances - This Court cannot conduct an enquiry with reference to the documents and evidences, specifically, with reference to the provisions of the Regulations - Such an exercise cannot be done in a writ proceedings and, therefore, the authorities competent has to consider the facts, as well as the grounds raised by the petitioner with reference to the said regulations - 1st respondent is directed to consider the representation dated 06.10.2010 submitted by the petitioner on merits and dispose of the same as expeditiously as possible and preferably, in a period of twelve weeks - Petition disposed of: High Court [para 2, 3]

- Petition disposed of: MADRAS HIGH COURT

2021-TIOL-1421-HC-MAD-CUS

Al Qahir International Vs Tuticorin Customs House

Cus - Import of black pepper from Sri Lanka - Appellant is aggrieved by the conditions imposed by the Single Bench and is, therefore, in Writ Appeal before the Division Bench.

Held : There is no necessity for this Court to go into the aspect with regard to the investigation, which is being carried on by DRI, Tuticorin, because the issue involved in the writ petition is whether the goods imported by the appellant can be released by the Customs Authority, either by way of a release in total or by way of a provisional release - There is no formal request made to the Competent Authority, who is stated to be the Commissioner of Customs, Tuticorin, praying for provisional release of the cargo - Therefore, Bench is of the considered view that the prayer as couched in the writ petition is premature and no Writ of Mandamus could have been issued at the present stage - Writ Appeal is allowed and the interim direction issued in the writ petition is set aside - Consequently, the writ petition stands disposed of by directing the appellant to file a proper application for grant of provisional release of the cargo - After the conclusion of the personal hearing, the Commissioner of Customs, Tuticorin, shall pass orders on the application of provisional release within a period of ten days: High Court [para 5, 6, 15]

- Appeal allowed: MADRAS HIGH COURT

2021-TIOL-361-CESTAT-MAD

Dharani Wind Energy Pvt Ltd Vs CGST & CE

CX - In the relevant period, the assessee-company took over another company along with the latter's plant & machinery - The machinery was originally purchased by the erstwhile company & it had availed MODVAT credit thereon - After considerable usage, the assessee sold some of these capital goods to various parties under invoices during the relevant period, but the erstwhile company did not reverse the CENVAT credit on these capital goods - The assessee was issued SCN alleging that it was liable to pay an amount equal to the credit availed in respect of the relevant capital goods, in terms of Rule 3(5) of Cenvat Credit Rules, 2004 - On adjudication, the duty demand was confirmed of the entire credit initially taken by the erstwhile company - Equivalent amount of penalty was also imposed - On appeal, the Commissioner (Appeals) remanded the matter for re-quantification of the duty liability, directing that the demand be calculated on depreciated value of the capital goods.

Held - It is seen that the Commissioner (Appeals) has directed to calculate the depreciation by giving an overall limit of 70% - The appeal was only with regard to the question as to whether the straight line method or the written down value method has to be adopted for calculating the depreciation. In such circumstances, when both sides did not have any contentions as to the rate of 2.5% applied, the Commissioner (Appeals) ought not to have given any direction to calculate the depreciation by subjecting it to a cap of 70% - The duty has to be determined by applying 2.5% per quarter and calculating depreciation adopting the straight line method - For the limited purpose of quantification of duty, the matter is remanded to the Original Authority, who shall calculate the depreciation adopting the straight line method - The order to this extent is set aside & the rest of the subject order wherein the demand for the period up to December, 2006 was set aside as time-barred by the Commissioner (Appeals), is not disturbed: CESTAT

- Matter remanded: CHENNAI CESTAT

2021-TIOL-360-CESTAT-CHD

Sunrise Immigration Consultants Pvt Ltd Vs CCE & ST

ST - The appellant is an exporter of the services - A dispute between the appellant and the Revenue was going on whether they were liable to pay service tax on export of services for the period prior to 01.04.2014 - The appellant for abundant quotation paid service tax for the period 2014-15 also - Later on, the dispute was settled in favour of appellant holding that they are not liable to pay service tax for the earlier period on 16.03.2018 - In terms of the decision of Apex Court in case of Mafatlal Industries 2002-TIOL-54-SC-CX-CB , the appellant has filed refund claim within two months from the relevant date - Therefore, the refund claim filed by appellant is within time - No merit found in the impugned order, same is set-aside: CESTAT

- Appeal allowed: CHANDIGARH CESTAT