2021-TIOL-1463-HC-DEL-GST

IRCTC Ltd Vs Deepak And Company

GST -  Arbitration -  Sole arbitrator passed the impugned award dated 15 December 2020, allowing two claims of the respondent Deepak & Co. (DC), the claimant in the arbitration proceedings - viz. (i) payment with respect to welcome drink and (ii) reimbursement of GST on production charges w.e.f 01st July 2017 - Arbitrator has held, inter alia , that since welcome drink did not form part of the tender document, IRCTC could not have made any deductions with respect to provisioning of said service; further held that IRCTC is to reimburse the GST deposited by Deepak & Co. with the authorities as the same was not included in the rates determined in Annexure-F of the tender document - IRCTC had filed an objection against the impugned award before the District Judge at Patiala House Court Complex, Delhi, however, as the claim calculated by IRCTC exceeded its pecuniary jurisdiction as per provision of s.12(2) of the Commercial Courts Act, 2015, the present petition is filed u/s 34 of the Arbitration and Conciliation Act, 1996.

Held:

+ It has been held in umpteen number of decisions of the Apex Court as well as this court, that an arbitral award can be assailed only on the grounds enumerated under the Act, as interpreted and explained by way of judicial pronouncements. The ground of patent illegality argued by IRCTC is no doubt one of the grounds available for setting aside an award, however, it is attracted only if the decision of the arbitrator is found to be perverse, or so irrational that no reasonable person would have arrived at the same. With respect to the other ground urged by IRCTC pertaining to Section 28(3) of the Act, alleging that the Impugned Award is contrary to the express provisions of the contract between the parties, the legal position is no longer res integra . An award can be held to be perverse only if the construction of the contract is such that no reasonable person would take such a view, or if the view of the arbitrator is by no means a possible view.

+ Unless the Court comes to a conclusion that the perversity of an arbitral award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award, interference is not warranted. Thus, it emerges that if two views are possible, the court would not interfere, and the view taken by the Arbitral Tribunal would prevail so long as it is supported by reasoning.

+ Whether welcome drink formed a part of initial period of contract?

+ Annexure-E of the tender document, which lists out sector-wise services that were required to be provided by a service provider under the tender for a given train, nowhere mentions either that a welcome drink is required to be served by the service provider, or that it is complimentary. [para 11.3]

+ The policy decision issued vide letter dated 7th February, 2017, was a fresh decision taken by IRCTC after the commencement of the licence period, and not a clarification. It determined, for the first time, the items that were required to be served to the passengers in the form of welcome drink. It inter alia states that, “It has been decided that onboard service provider will provide the welcome drink as was being done during departmental operation. No extra charge payable to the service provider.” (emphasis supplied). No document was placed on record by IRCTC to show the earlier position so that it could be inferred what was being done during the departmental operation, prior to unbundling. Even the regional offices of DC were not clear as to what was to be done in this regard. Therefore, it cannot be said for certain that it was the service provider's duty to supply the welcome drink as was being done earlier when the catering services were being operated by the Railways. The approval for brands of welcome drink was on a temporary basis, which showed that there was a presumption that the supply of welcome drink was the responsibility of IRCTC, before the above policy decision was implemented. The policy decision also refers to the exercise to implement the Railway Board Budget announcement (2016-17) regarding unbundling of catering services. This indicates that it was a fresh policy decision altogether and the same was implemented after the license came into force. [para 11.4]

+ There is no express provision in the tender document or in the Letter of Award dated 6th October, 2016 that welcome drink to the passengers is to be supplied by DC. While the rates for specified services (meals) were called for, but rates for welcome drink were not invited, and thus DC did not bid  for the same. It cannot be assumed that welcome drink was part of the service to be provided by DC. Even if it is presumed that the policy decision of 07th February, 2017 was part of the tender document, it would not make any difference. The policy does not specifically mention that the items for which the rates have been called for, would include the welcome drink. The obligation to provide the welcome drink foisted through the afore-noted policy decision is an after-thought. It is highly unreasonable conduct on the part of IRCTC to enforce the provision of welcome drink without offering any compensation. [para 11.5]

+ DC, when agreeing to supply the welcome drink vide letter dated 13th February, 2017, specifically informed and insisted that it will claim the charges for provision of welcome drink in its bills. Therefore, IRCTC cannot claim that DC had given its consent to the policy decision dated 07th February, 2017 unconditionally. [para 11.6]

+ The findings noted above have been arrived at by the learned Arbitrator based on evidence, and by taking into consideration the contractual terms placed before him. The reasoning is sound, credible and comprehensive. [para 12]

+ Under these circumstances, DC cannot be barred from charging IRCTC for the provision of welcome drink during the period of 05th March, 2017 to 18th June, 2017. On the same principle, IRCTC cannot claim reimbursement for provision of welcome drink by adjusting bills received from DC between 19th December, 2016 to 04th March, 2017. [para 13]

+ T hus, the interpretation of the contract, as done by the Arbitrator, is based on the conduct of the parties, the contractual stipulations, as well as the evidence on record. This court finds reasoning supporting such interpretation to be rational, balanced, and germane, and sees no reason to disagree with the same, especially when construction of contract falls within the realm of an arbitrator's jurisdiction. For the aforesaid reasons, the court finds no merit in this ground of challenge. [para 15]

Regarding GST

+ GST regime has been introduced by the Central Government and is applicable to the services being provided by DC and is not in lieu of VAT, which has since been abolished. Therefore, the payment of GST on production charges is admissible to DC, which is to be reimbursed upon furnishing proof of deposit of the same with the concerned authorities. [para 16.4]

+ The quotes for supply/production of food in terms of Annexure-F were inclusive of taxes. There was no GST on production of food, neither on the date of tender nor on the date of award of licence. It was introduced much later, with effect from 1st July 2017. [para 17]

+ On this issue, Clause 5.1 & 5.2 of CC No. 32/14, dealing with applicability of taxes, are relevant.   On a plain reading of the above, it is clear that clause 5.1 provides that Service Tax was to be paid separately, subject to proof of payment. Clause 5.2 on the other hand deals with future taxes. [para 18, 19]

+ The GST laws has replaced the erstwhile indirect taxation regime. This value added tax subsumed  several indirect taxes, including VAT, which was an indirect tax, levied state-wise. Earlier, VAT was levied on production, in accordance with State-specific VAT Acts, which was being borne by DC. DC has explained that since the trains were moving through several states and each state had a different rate of tax under State VAT laws, it was not feasible to account for the same, therefore, production charges were paid inclusive of taxes. Besides, no Input Tax Credit was available to IRCTC for VAT. However, the position underwent a change with the introduction of GST laws. GST is available as Input Tax Credit for paying the outgoing tax liability. With restructuring of indirect tax system, railways introduced CC No. 44/17 which specifically provides for GST on catering services in the subject trains. The bifurcation of production charges was done under the afore-noted circular and it was advised that GST is to be reimbursed to the service provider on submission of proof of deposit. Para 3 of the said circular specifies the revised catering apportionment charges for the trains in question where catering charges are built-in to the ticket fare. The table thereunder shows ‘catering charges disbursed to the service provider' both with and without 18% GST in separate columns. [para 20]

+ The Arbitrator has based his findings by relying upon the Circulars issued by the Railway Board which, as per the contractual scheme, are binding on IRCTC. The contention of IRCTC that the production charges being ‘inclusive of taxes' would also encompass GST and/or restrict inclusion of any other tax is thus not in consonance with the terms of the contract. [para 21]

+ Although service tax has been subsumed in it, GST is nevertheless a new tax. Applicability of service tax on production charges is a different plea intertwined with determination of factual position of whether there is an incidence of service in the activity of production or if the nature of service could be held as a composite supply. [para 22]

+  There can be no quarrel on the legal proposition canvassed by IRCTC that, while interpreting the contract, the document(s) forming the contract have to be read as a whole; and that the Arbitrator cannot travel outside the bounds of the contract. In the opinion of the court, the interpretation of the terms of the contract by the Arbitrator is fair and reasonable, and none of the grounds for interference provided under the Act are attracted. Upholding the claim for payment of GST is not stepping out of the confines of the terms agreed upon by the parties. The  Arbitrator has decided the dispute within the four corners of the contractual provisions, in light of the change in tax regime brought about by the introduction of GST laws. It cannot be held that his findings are unfair or suffer from perversity. Therefore, the court cannot hold the reasoning to be wholly unsustainable, in the absence whereof, it is impermissible for the court to interfere. [para 27]

+ In view of the foregoing, no ground for interference in the Impugned Award is made out. [para 28]

- Petition dismissed: DELHI HIGH COURT

2021-TIOL-20-AAAR-GST

Ce Chem Pharmaceuticals Pvt Ltd

GST -   Applicant had sought a ruling as to whether Isopropyl rubbing alcohol IP and Chlorhexidine Gluconate and Isopropyl Alcohol solution are to be classified under Chapter Heading 3004 attracting 12 % GST, and if not, what would be the appropriate classification and justification for such classification - Applicant had submitted that they obtained permission from the  Additional Drugs Controller & Licensing Authority  to manufacture the products mentioned (supra) as there is considerable requirement for hand sanitisers due to the present pandemic of covid-19 - Relying upon the  Apex Court decision in the case of  Ciens Laboratories - 2013-TIOL-38-SC-CX wherein it is held that if a product's primary function is care and not cure then it is not a medicament, AAR had observed that in the present case, sanitisers are primarily used as care rather than as cure for COVID-19; that people buy hand sanitisers as an alternative to soap and for disinfecting purpose; that the alcohol-based hand sanitisers, as the name itself suggests is to sanitise the hands and disinfect them and hence cannot be covered under Medicaments - AAR had accordingly held that Isopropyl rubbing alcohol IP and Chlorhexidine Gluconate & Isopropyl Alcohol solution merit classification under Chapter Heading 3808 & attract 18 % GST, in terms of entry no. 87 of Schedule III of Notification No. 01/2017 - Central Tax (Rate) - Aggrieved, appeal filed by assessee before the Appellate Authority.

Held: Delay of 14 days in filing appeal is condoned - Use of an alcohol-based hand sanitiser neither controls the diseases caused by the viruses/bacteria nor does it develop preventive characteristics inside the human body to fight the disease caused by the viruses/bacteria - It is merely a product recommended for use in hand hygiene practices, therefore, AAAR holds that the alcohol-based hand sanitiser cannot be considered as a 'medicament' classifiable under Chapter Heading 3004 - Insofar as issuance of licence under the Drugs and Cosmetics Act, 1940 is concerned for manufacture and sale of 'alcohol-based hand sanitiser', it is observed that regulation under the Drugs Act does not  ipso facto  mean that the product automatically becomes medicine - Term 'drug' is defined in s.3(b) of the Act, 1940 and includes not only medicines but also any substance which is used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals; that while all medicines are drugs, all drugs are not medicines - Hand sanitiser manufactured by the appellant contains the drug Isopropyl alcohol in a concentration of 70% v/v and 2.5% v/v Chlorhexidine Gluconate solution, which is within the standard prescribed by the Indian Pharmacopoeia, however, the presence of a drug by itself will not make the impugned product a medicament - Applying the test of common parlance [coupled with the questionnaire survey conducted and published in the International Journal of Current Research and Review on the 'Knowledge and awareness on the role of hand sanitiser in prevention of COVID-19' which showed that almost 79% of people were aware that hand sanitiser is used for maintaining good hand hygiene and to prevent the spread of the disease during the pandemic] and the fact that the impugned product does not have any therapeutic or prophylactic properties, the alcohol-based hand sanitiser cannot be classified as a medicament under CH 3004 as claimed - AAAR agrees with the ruling given by the AAR that Alcohol-based hand sanitiser is used to disinfect externally and hence would fall within the meaning and ambit of 'Disinfectant' classifiable under heading 3808.94 - However, AAAR disagrees with the lower authority's observation that Hand Sanitiser is an alternative to  soap - Insofar as placing reliance on the DGFT notification dated 06.05.2020 which prohibits the export of Alcohol-based hand sanitisers falling under ITC HS 3004, 3401, 3402 and 3808.94, Authority observes that DGFT notification is not an authority for determining the classification of goods given in the first Schedule to Customs Tariff Act r/w relevant Section/Chapter Notes - Moreover, conditions and restrictions contemplated by one statute having a different object and purpose should not be mechanically imported and applied to a fiscal statute; that the reference to the ITC HS Code for alcohol-based hand sanitisers which has been made in the DGFT notification dated 06.05.2020 is not a standard for interpreting the classification of goods as per the Customs Tariff Act - Rate of tax on Isopropyl Rubbing Alcohol and Chlorhexidine Gluconate and Isopropyl alcohol solution falling under Chapter heading 3808 is 18% in terms of Sl. no. 87 of Schedule III of 11/2017-CTR but w.e.f 14 June 2021 to 30 September 2021, the  rate of tax has been reduced to 5% GST vide notification 5/2021-CTR dt. 14.06.2021: AAAR

- Appeal dismissed: AAAR

2021-TIOL-155-AAR-GST

Airbus Group India Pvt Ltd

2021-TIOL-1464-HC-DEL-MISC

UoI Vs Vikram Bhasin

Misc - Writ petition has been filed challenging the Order dated 11th May 2021 passed by the Central Administrative Tribunal - On 03rd June, 2019, the respondent was placed under suspension in contemplation of the disciplinary proceedings - Respondent states that his suspension was initially for a period of ninety days and thereafter, it was extended from time to time in the spells of one hundred and eighty days – Petitioner states that in the impugned order, the Tribunal has directed that the suspension of the applicant/respondent shall not be continued, once the present extension of time expires; that the applicant/respondent be reinstated in service soon thereafter - Petitioner submits that the Tribunal erred in holding that the suspension was resorted to in contemplation of disciplinary proceedings and that there was no reference to any criminal case, much less, to the factum of arrest; that the Directorate of Revenue Intelligence vide letter dated 14th June, 2021 has informed the petitioner that that the final investigation report shall be submitted to the jurisdictional Commissionerate for further action within two months.

Held : Court finds that despite the lapse of two years, neither any charge-sheet has been filed nor any charge memo has been issued to the applicant/respondent - As far as the issue of suspension of the petitioner and extension thereof, this Court is of the view that the Investigating Authorities have had more than sufficient time to conclude the investigation - For any delay in investigation, the applicant/respondent cannot be penalised - Court is also in agreement with the reasoning of the Tribunal that since the applicant/applicant has now to be paid subsistence allowance equivalent to his salary, it would serve no purpose not to utilise his services – Petitioner states that the impugned order shall be complied with within fifteen days - Court finds no ground to interfere with the impugned order - Writ petition along with pending applications is dismissed: High Court [para 7, 8]

- Petition dismissed: DELHI HIGH COURT

2021-TIOL-1466-HC-MUM-CUS

Minal Gems Vs UoI

Cus - Petitioner submits that notwithstanding the pendency of proceedings under section 124 of the Act, there is nothing in the Act that precludes consideration of an application for provisional release of goods under section 110A - On the other hand, counsel for Revenue submits that once proceedings under section 124 of the Act have been initiated, question of considering an application for provisional release of the seized goods does not arise.

Held : Bench is tasked to decide the short question as to whether during the pendency of proceedings under section 124 of the Act, consideration of an application for provisional release is barred - Legal position emerging from a bare reading of the statutory provisions (s.110) is that in default of issuance of notice under section 124 of the Act within six months of seizure, the person from whose possession the goods are seized can claim, as a matter of right, return of the seized goods; and in such a case, in view of the second proviso to sub-section (2) of section 110, the specified period of six months to issue a notice would not apply, meaning thereby that a notice could follow even thereafter - Words "pending the order of the adjudicating authority" (in s.110A inserted with effect from July 13, 2006) are important for the purpose of deciding the question formulated above - Notwithstanding the pendency of proceedings initiated by issuance of a show-cause notice under clause (a) of section 124 of the Act, the adjudicating authority may, in its discretion, allow a provisional release on such conditions as he may require fit to impose - No provision has been shown by the Counsel for Revenue which expressly, or even by necessary implication, bars a provisional release once proceedings under section 124 are initiated; on the contrary, the legislative intent in section 110A, introduced by way of an amendment, is clear that even during pendency of proceedings before the adjudicating authority, such authority is conferred the discretionary power to allow provisional release - Bench disposes of all these writ petitions granting liberty to the adjudicating authority to carry forward the proceedings initiated under section 124 of the Act in accordance with law - Bench also observes that notwithstanding the pendency of the proceedings under section 124 of the Act, the adjudicating authority ought to consider the prayers for provisional release of the seized goods made by the petitioners by representations dated February 2, 2021 and May 20, 2021 and pass orders within three weeks in accordance with law: High Court [para 8, 9, 11, 12]

- Petitions disposed of: BOMBAY HIGH COURT

2021-TIOL-1465-HC-MUM-CUS

Nomura Services India Pvt Ltd Vs UoI

Cus - Petitioner filed an online application seeking a complete exit from the SEZ scheme vacating units No. 501 and 601 - However, an enquiry has been purportedly initiated against the Petitioner and the developer in respect of transfer of non-IT assets of unit No. 402 alleging violation of provisions of SEZ scheme and rules at the time of transfer while vacating unit No. 402 and no orders were being passed on application for exiting SEZ scheme vacating of units No. 501 and 601 - Petitioner has challenged the show cause notice and has also sought the relief viz. a writ of certiorari quashing and setting aside the Committee Report dated 21.10.2020 and impugned show cause notice dated 02.03.2021.

Held: The petitioner has been incurring expenditure approximately of Rs. 97,00,000/- per month as rental amount in addition to other expenses - This has put to inconvenience, the landlord as well, as he is not in a position to give the premises to other person - During pendency of present Writ Petition, the Petitioner has shown willingness to pay all the dues as assessed by the revenue department for exiting the SEZ scheme vacating units No. 501 and 601 - Applicable duty as on 30.06.2021 has been worked out to be approximately Rs. 91,00,000/- - Respondents would carry out necessary process for the No Dues Certificate and exit certificates referred to above vacating units No. 501 and 601 as early as possible preferably within a week and pass appropriate orders on fulfilment of the conditions - Petition is disposed of: High Court [para 8, 9]

- Petition disposed of: BOMBAY HIGH COURT

2021-TIOL-1454-HC-MAD-CUS

Mahalakshmi Traders Vs ACC

Cus - The SCN has been challenged primarily on the ground that the same has been issued on 14.05.2009 and is pending till date with finalization of proceedings as contemplate under Section 28 of Customs Act, 1962 - Section 28(9)(a) calls for a determination of duty of interest under the SCN within a period of six months from the date of notice - This date has long passed - Section 28(9)(b) imposes a time limit of one year and revenue argues that the aforesaid time limit was not operative at the time when SCN was issued - Section 28(9)(a) however, grants time of only six months for determination of the duty and interest where it is possible for the revenue to do so - The counter filed by revenue does not reveal any circumstances, which would justify the elapse of time from 2009 till date, of more than twelve years to keep the proceedings pending - The normal defence offered is that the issue has been transferred to the call book - The explanation offered, to the effect that there was a change in incumbent officer is hardly acceptable - The impugned SCN is quashed: HC

- Writ petition allowed: MADRAS HIGH COURT

2021-TIOL-1453-HC-AHM-CUS

Ultratech Nathdwara Cement Ltd Vs CC

Cus - The erstwhile M/s. Binani Cement Limited (hereinafter referred to as "the Corporate Debtor") came to be acquired by the Ultra Tech by way of an approved resolution plan dated 25th May, 2018 (hereafter referred to as "the Final Resolution Plan") submitted by it in the insolvency proceedings that were initiated against the Corporate Debtor before the National Company Law Tribunal Bench at Kolkata (hereinafter referred to as "the Adjudicating Authority") under the provisions of the insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code"). Pursuant to the aforesaid acquisition, the Ultra Tech took over the management of the Corporate Debtor with effect from 20th November, 2018 and the name of the Corporate Debtor was changed to the Ultra Tech Nathdwara Cement Limited, i.e , the applicant herein with effect from 13th December, 2018 - Tax Appeal No. 754 of 2007 arises from the order passed by the CESTAT dated 16th November, 2016 whereby the CESTAT remitted the matter to the Commissioner (Appeals) - The respondent Commissioner of Customs (Preventive) thought fit to prefer the tax appeal before this Court and the same came to be admitted on the following substantial question of law; "Whether in the facts and circumstances of the present case the Tribunal was justified in directing the Commissioner (Appeals) to ignore the orders of finalization of bills of entry of the Superintendent despite no appeal having been filed by assessee?" - It is the case of the applicant that a resolution plan, once approved, is binding on all the creditors and stakeholders including the Central Government by virtue of Section 31(1) of the Code - The respondent herein (original appellant) would be an operational creditor within the meaning of Section 5(20) read with Section 5(21) of the Code and its entitlement would stand restricted to the treatment accorded under the approved resolution plan.

Held : Short point for consideration is whether the Tax Appeal No. 754 of 2007 would survive in light of the sanctioning of the Final Resolution Plan dated 25.05.2018 – Bench is of the view that once a resolution plan is approved, all the claimants in respect of a corporate debtor are dealt with under such plan as held by the Supreme Court in the case of Committee of Creditors of Essar Steel India Ltd. vs. Satisk Kumar Gupta & Ors . = 2019-TIOLCORP-18-SC-IBC-LB - Judgment of the Jharkhand High Court in the case of Electrosteel Steels Limited = 2020-TIOL-915-HC-JHARKHAND-CT is of no avail to the Department - Supreme Court dismissed the Civil Appeals Nos. 630-634 respectively and thereby the challenge to the approved plan failed – Bench is of the view that it is not open to the Department to, once again, raise the issue by taking shelter of Electro Steel (Supra) - For all the foregoing reasons, the civil application succeeds and is hereby allowed, and consequently the Tax Appeal No. 754 of 2007 is disposed of accordingly: High Court [para 8, 11, 13, 14]

- Petition allowed: GUJARAT HIGH COURT

2021-TIOL-381-CESTAT-MAD

Pricol Ltd Vs CGST & CE

CX - The issue relates to the rejection of refund claim filed under section 11B of Central Excise Act, 1944 on the ground of excess payment of excise duty - It is the case of appellant that though they prepared two invoices but did not export the goods as per these invoices, so, these two invoices were cancelled by them and separate new invoices were raised showing the correct quantity of goods - While filing the returns, however, they paid duty on all the four invoices which resulted in excess payment of duty - The original authority has called for a verification report from the Range officer wherein it is mentioned that the appellant has not followed the procedure for cancellation of invoice and that there is no evidence for double payment - The department does not have a case that the quantities of goods mentioned in the cancelled invoices have been exported - Merely because, the procedure under Para 12 of Chapter 4 of CBEC Excise Manual of Supplementary Instructions, 2005 has not been followed cannot be a ground to deny the refund of excess duty paid - When the appeal came up for hearing on 04.03.2021, revenue raised a contention that sufficient evidence has not been produced to show that the appellant has not claimed rebate of duty in respect of these two invoices - The department has not produced any such details on their side - However, the appellant has furnished the entire details with regard to rebate claim and the summary of total exports made on payment of duty during the relevant period - These documents would sufficiently prove and establish that the appellant has paid excess duty and also the fact that they have not claimed rebate on these invoices - The rejection of refund is unjustified: CESTAT

- Appeal allowed: CHENNAI CESTAT

2021-TIOL-380-CESTAT-MAD

Indo Tech Transformers Ltd Vs CGST & CE

CX - The appellant is engaged in manufacture and sale of transformers and its parts and had obtained necessary Central Excise Registration for the same - They had made clearances under CT-1 Certificates for export between 04.07.2015 to 26.09.2015 - Not being in a position to use the credit, appellant filed refund claim under Rule 5 of Cenvat Credit Rules, 2004 on 22.09.2016 pertaining to the quarter July 2015 to September 2015 - Same was partly rejected - The appellant submitted that in terms of paragraph 3(b)(i) of Notification No. 27/2017-C.E. (N.T.) , the refund claim pertaining to a particular quarter has to be filed before the expiry of 'period' specified in Section 11B of Central Excise Act, 1944; that in terms of said Notfn, the period alone, i.e., one year, is made applicable for relevant quarter in respect of refunds filed under Rule 5 of Cenvat Credit Rules, 2004 and not the 'relevant date' - Accordingly, if the appellant filed the refund claim within one year from the end of the quarter, the same would be within limitation in terms of said Notfn - Admittedly, the appellant filed the refund claim within one year from the end of the quarter - The denial of refund of CENVAT Credit as time-barred is not acceptable - So, the impugned order and the denial stands set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

2021-TIOL-379-CESTAT-BANG

Jeans Knit Pvt Ltd Vs CC, CE & ST

CX - Appellant is in appeal against impugned order whereby their appeal was dismissed on the ground of non-compliance of manadatory pre-deposit under Section 35F of Finance Act, 1994 - The appellant has already paid entire duty by debiting the cenvat credit account and also paid the interest in cash - The Commissioner (Appeals) after hearing the matter on merits should not have dismissed the appeal for non-compliance of Section 35F - As per Section 140(1) read with Explanation 1 to Section 140(10) of CGST Act, 2017, education cess and secondary education cess is not allowed to be carried forward as eligible duty of cenvat credit - This position has also been clarified by CBIC vide circular 87/06/2019GST but both the authorities have failed to consider the provisions provided in Section 140 as well as CBIC Circular - Since there is no finding on the merit by Commissioner (Appeals), it will not be appropriate to decide the appeal on merits - The dismissal of the appeal for non-compliance of mandatory pre-deposit is not justified in law when the appellant has already paid the entire duty by debiting the cenvat credit account - Matter is remanded to the Commissioner (Appeals) for disposal of appeal on merits: CESTAT

- Matter remanded: BANGALORE CESTAT

2021-TIOL-378-CESTAT-BANG

Aravind Traders Vs CC

Cus - The appeal is directed against impugned order whereby the refund claim of appellant was rejected on the ground that they failed to fulfill the Condition of Notification No. 102/2007-Cus. - The appellant has imported Sappan Billets (Caesalpinea sappan) and has cut them into small pieces for the purpose of marketing locally but the said cutting into smaller pieces does not change the identity of goods and further no new product has come into existence - The identical issue has been considered by in the case of Agarwalla Timbers Pvt. Ltd. wherein it has been held that mere cutting of large pieces into small pieces for the purpose of trade will not amount to manufacture and refund of additional duty under Notification No. 102/2007-Cus. cannot be denied - The Gujarat High Court in the case of Variety Lumbers Pvt. Ltd. has also considered the identical issue - The impugned order holding that the appellant has violated the Condition D of Notification No. 102/2007-Cus. is not sustainable and therefore same is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

2021-TIOL-377-CESTAT-BANG

Convance Clinical Development Pvt Ltd Vs CCT

ST - The appellant availed input services for the purpose of rendering output service exporting to his foreign company for which he pays service tax and take cenvat credit - Since the appellant was unable to utilize cenvat credit for payment of its output liability, they filed a refund claim which was rejected on the ground that they had transitioned the input tax credit into TRAN-1 - As per Notification No. 27/2012, there is no requirement to debit in the service return, the only requirement is that the amount, i.e., claimed as refund under Rule 5 of said Rules shall be debited by claimant from his cenvat credit account at the time of making the claim and this condition has been followed by appellant before filing the claim of refund - Appellant by sheer inadvertent mistake has transitioned the cenvat credit into TRAN-1 during the GST regime - As soon as, he realized his bona fide and unintentional mistake, the reversal was done in GSTR-3B returns in May 2018 itself - The Commissioner (Appeals) should have taken a liberal view of a bona fide mistake committed by the appellant without any intention to claim unjustified refund - The act of inadvertent transition of refund amount to GST regime and voluntarily reversal of such amount made by the appellant has been submitted before the adjudicating authority by appellant vide his letter which is much before the issuance of adjudication order in October 2018 but the same was not considered by adjudicating authority - The transition of refund amount into GST regime was merely inadvertent error and the same was made good by appellant by reversing the credit into GSTR-3B filed in May 2018 - Appellant has not violated conditions of Notification No. 27/2012 - Hence, the impugned order is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

2021-TIOL-376-CESTAT-MAD

TVS Supply Chain Solutions Ltd Vs CGST & CE

ST - The appellant had paid both service tax as well as GST - This has occurred during the transition period to new tax regime of GST - As abundant caution they have made such claim of refund as paid by the earlier company as well as the Merged/new Company of TVS Logistics Services - The Commissioner (Appeals) in the impugned order has also been at confusion to resolve the issue and has remanded the matter to be kept pending till the appeals pending before CESTAT are decided - Without appointing a common authority for adjudication of the refund claims, the matter cannot be resolved since tax is paid under two different tax laws, i.e., Finance Act, 1994 and G.S.T. Act, 2017 - Taking note of this fact, the Principal Chief Commissioner of GST and Central Excise of Tamil Nadu are directed to nominate a common adjudicating authority for de novo -processing of all the refund claims: CESTAT

- Matter remanded: CHENNAI CESTAT