2021-TIOL-1512-HC-DEL-GST

MS Koenig Solutions Pvt Ltd Vs UoI

GST - Writ petition has been filed challenging the constitutional validity under Section 2(6) of the Integrated Goods and Services Act, 2017 regarding 'export of services' - Petitioner also seeks a declaration that the amount received in convertible foreign exchange from foreign companies/citizen for its both onshore and offshore activities are in the course of export of services out of the territory of India and not subject to levy of tax under IGST Act - Notice issued and matter listed on 05th October, 2021: High Court

- Matter listed: DELHI HIGH COURT

2021-TIOL-165-AAR-GST

Magal Agencies

GST - Applicant has sought advance ruling in respect of the supplies undertaken by M/s. Mysore Stoneware Pipes and Potteries Private Limited and not with respect to the supplies undertaken by the applicant - Thus the application is not admissible and liable for rejection in terms of Section 98(2) of the CGST Act, 2017 - Application rejected: AAR

- Application rejected: AAR

2021-TIOL-164-AAR-GST

South Indian Federation of Fishermen Societies

GST -  Marine engine and its spare parts supplied for use in vessels falling under Customs Tariff Heading 8902 shall attract GST at the rate of 5% as per entry at Sl. No. 252 of Schedule I of Notification No.01/2017-CTR - If it is supplied for use other than as parts of fishing vessels as stated above GST at the rate applicable under the respective Customs Tariff Headings in which they are classified will apply: AAR GST - Supply of goods or services or both during warranty period without consideration in discharge of the warranty obligation is not liable to GST - However, if any additional consideration is received in respect of such supplies of goods or services or both it will be liable to GST at the rate applicable for the goods / services as per the rate schedule: AAR GST -  The supply of maintenance and repair service of fishing vessels is classifiable under SAC 998714 and is liable to GST at the rate of 18% as per Sl. No. 25 (ii) of the Notification No. 11/2017-CTR - However, where the contract of supply of repair or maintenance specifies that the spare parts and services are to be separately charged and the value of such spare parts and services supplied are shown separately the spare parts and the services shall attract GST respectively at the rates applicable to such spare parts and service as per the GST rate schedule - In such cases the spare parts being supplied for use as part of fishing vessels will attract GST at the rate of 5% as per entry at Sl. No. 252 of Schedule I of Notification No.01/2017-CTR and the services will be liable to GST at the rate of 18% as per Sl. No. 25 (ii) of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017: AAR  GST - Puff insulated iceboxes produced by SIFFS and used by traditional fishermen at their fishing vessels for the purpose of reducing fish spoilage and maintaining good hygiene falls under Customs Tariff Head 3923 and is liable to GST at the rate of 18% as per entry at Sl. No. 108 of Schedule III of Notification No. 01/2017-CTR: AAR   GST - Marine engine that falls under Customs Tariff Heading 8407 when supplied for use as part of vessels falling under Customs Tariff Heading 8906: Other vessels, including warships (which aptly covers vessels for Defence and other agencies used for patrol, relief and rescue operations) shall attract GST at the rate of 5% as per entry at Sl. No. 252 of Schedule I of Notification No.01/2017-CTR: AAR

- Application disposed of: AAR

2021-TIOL-163-AAR-GST

EVM Motors And Vehicles India Pvt Ltd

GST -  Applicant has started a new venture, a  resort  in Alapuzha District - As part of this venture, house boats are being acquired and furnished - These house boats are to be used for cruises, overnight cruises and for day trips - Meals are provided as part of a package - Alcohol provided, if any, is to be billed separately and KGST will be charged - The boarding point may or may not be the point of disembarkation - The boats procured are to be furnished with state-of-the-art bedrooms, dining rooms, halls and kitchens - The rate proposed to be charged by the applicant is an all-inclusive fare for transportation, accommodation, food services and other incidental services - Applicant seeks a ruling on the  following  questions viz. 1 (a) Whether the service rendered by the applicant falls under the Chapter 99, Heading 9964 and Service Code 996415? 1 (b) Whether the rate provided in Notification No.11/2017-Central Tax (Rate) and Notification No.8/2017-Integrated Tax (Rate) under heading 9964 and description in point (vii) having a GST rate of 18% is applicable for the service rendered by this applicant?;   (2) Whether the applicant is entitled to claim Input Tax Credit. Held:  + Chapter 99 - Heading - 9964 pertains to passenger transport services and 996415 pertains to local water transport services of passengers by ferries, cruises and the like. The Explanatory Notes to the Heading 996415 states that the service code includes inland water cruises that include transportation, accommodation, food and other incidental services in an all-inclusive fare. The services rendered by the applicant as detailed above squarely falls under the Heading 996415 in view of the explanatory note and hence the services are appropriately classifiable under SAC 996415.  + Services rendered by the applicant that are classifiable under Heading 996415 is covered by the entry Sr. no.8 in Notification No. 11/2017 Central Tax (Rate)  and is accordingly liable to GST at the rate of 18%.  + Applicant is eligible for the input tax credit in respect of the expenses incurred by them on refurbishing, furnishing, maintaining and repairing the vessel as the supplies are used for providing the taxable outward supply of passenger transport services specified in the exclusion clause in Section 17 (5) (aa) (i) (B) of the CGST Act. The applicant is also eligible for input tax credit on the supply of food during the cruise as the supply is an element of the outward taxable supply of passenger transport services and hence covered by the proviso to Section 17 (5) (b) (i) of the CGST Act.

- Application disposed of: AAR

2021-TIOL-22-AAAR-GST

Erode Infrastructures Pvt Ltd

GST - Appellant had in his application seeking advance ruling sought to know as to whether the upfront lease amount paid to M/s Rail Land Development Authority (RLDA) for the development of multi-functional complex (operational building) at Erode railway junction for long term lease for 45 years is exempt under GST - AAR had observed that Advance ruling are decisions on questions specified in sub-section 97(2) of the CGST Act in relation to the supply of goods or services undertaken or proposed to be undertaken by the applicant seeking the same; that, therefore, supplies undertaken or proposed to be undertaken by the applicant alone are covered under the Advance Ruling as per s.95(a) of the Act; that in the instant case, applicant is not making the supply but it is by Rail Land Development Authority (RLDA) inasmuch as they are the recipient of supply and since the recipient cannot seek advance ruling under the Act, the Application is rejected - Appeal filed before the AAAR. Held: Provisions of s.103 categorically states that the ruling pronounced is binding only on the appellant - It automatically flows that if a recipient obtains a ruling on the taxability of his inward supply of goods or services, the supplier of such goods or services is not bound by that ruling and he is free to assess the supply according to his own determination, in which case, the ruling loses its relevance and applicability even - Any law provision has to be interpreted in a constructive and harmonious way keeping in mind the object of the purpose of the provision - All parts of it should be read in aid of and not in derogation of that purpose - Any interpretation, if it defeats the very purpose of the objective and purpose of the law provision, is not only incorrect but also improper and bad in law - On a conjoint reading of the provisions of s.95(a), s.97(2) and S.103, Authority is of the opinion that a supplier in the capacity of a recipient of his inward supplies only and not vice versa is only eligible to seek an advance ruling and not a mere recipient of goods or services in question even when he may, otherwise, be a supplier of his own goods or services - Order of the Advance Ruling Authority is confirmed: AAAR

- Appeal dismissed: AAAR

2021-TIOL-21-AAAR-GST

Hyt Sam India JV

GST - AAR held that the Works awarded to applicant by Integral Coach Factory (ICF), Chennai for modernisation of ICF for complete switch-over to Stainless steel coach manufacturing is a composite supply of services; supply in the agreement for erection, commissioning, installation of plant and machinery for a factory to manufacture Stainless Steel coaches covering Schedule I, II and III is a composite supply of works contract for original works and is taxable @6% CGST, notification 11/2017-CTR, Sl. No. 3(v)(a); supply in the agreement for wet leasing of Robotic spot welding machine and laser cutting and welding machine is not eligible for sl. No. 3(v)(a) of notification; agreement for comprehensive annual maintenance contract is also not eligible for sl. No. 3(v)(a) of notification - Aggrieved to the extent of ruling that Scope of works in Schedule V and VI is not covered under Sl. No. 3(v)(a), the appellant has filed the Appeal to AAAR.  Held: + Only supplies under Schedule-I, II and III are naturally bundled and supplied in conjunction with each other and is a composite supply of works contract. Therefore, Appellate authority holds that there is no merit in the claim of the appellant that the supplies based on the entire tender is a Composite supply of Works Contract and the benefit of entry S.No.3(v) of notification No.11/2017-C.T.(Rate) dated 28.06.2017 is not available for the entire tender. + The M&Ps are transferred to ICF at the, end of the lease period. Just because, there is a transfer of property in goods after the lease period, the activity is not a works contract. The activity of wet-Leasing is squarely classifiable under SAC 9973 - Leasing or rental services with or without operator as held by the Lower Authority and AAAR upholds the same. Therefore the benefit of entry at 3(v)(a) of Notification No.11/2017-C.T.(Rate) dated 28.06.2017 is not applicable in respect of Wet-Leasing of the M&Ps. + With respect to the Comprehensive Annual Maintenance Contract (CAMC), the activity being Maintenance, the same is not covered under entry 3(v) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 as amended, which is applicable only to works contract by way of construction, erection, commissioning or installation of original works pertaining to railways. + Insofar as benefit of notification Sr. no. 3(vi)(a) of 11/2017-CTR is concerned, the said entry is applicable in the case of composite supply of works contract of maintenance of a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession to the class of receivers specified. ICF is a 'Production unit' of Railways and belongs to 'Central Government' and manufacturing steel coaches is not an activity where the Government is engaged as public authorities. As per the Explanation to the said entry, it is evident that when the activity is not in the capacity of 'Public authority', then the activity is for 'business' only. ICF is putting up the said Plant to manufacture Stainless Steel coaches, which is not an activity undertaken as a 'Public Authority' and, therefore, the benefit of the above entry is not applicable to the appellant in respect of Comprehensive Annual Maintenance Contract (CAMC) as claimed by them. + No reason to interfere with the Order of the Advance Ruling Authority, hence the same is upheld and appeal is dismissed: AAAR

- Appeal dismissed: AAAR

2021-TIOL-1514-HC-MAD-VAT

PC Furniture Land Vs DC(ST)

Whether it is fit case for remand where assessment order is passed without giving reasonable opportunity of personal hearing to the assessee - YES: HC

- Writ petition allowed: MADRAS HIGH COURT

2021-TIOL-1510-HC-KAR-MISC

Creative Infotech Company Vs State Of Karnataka

IPC - If the FIR registered against the petitioners and two others is read, it appears that the second respondent wanted to purchase laptops from the first petitioner's business concern - The petitioners dispute offering of discount to the extent of 15% to 18% and claim to have supplied the entire quantity of laptops which is disputed by second respondent - On the allegations, FIR came to be registered against the petitioners - On 16.11.2018 itself, the second petitioner lodged an FIR against the second respondent, his wife Smt. H.G. Pranitha, Mrs. Kavitha Wagamore and Mrs. Vasudha Shenoy alleging that his employees colluded with the second respondent and his wife to run a parallel business and caused loss to him - In said FIR, he has in detail mentioned the manner in which there was collusion among the said four persons and how the sales from his business concern was being routed to his customers without his knowledge at a lesser price - Now if the allegations made by second respondent in his FIR are seen in the background of FIR registered by second petitioner, a doubt arises about the veracity of allegations in second respondent's FIR - In the FIR, it is stated that the alleged incident related to the period 16.10.2018 to 21.12.2018, that means what the second respondent has stated in his report to the police that he did not receive the invoices from August, 2018 onwards can be said to be false - According to the second respondent, the petitioners have to pay him an amount of Rs.4.95 crore towards the discount offered to him, which is disputed by the second petitioner - If really the petitioners had offered discount, it is a matter of contract to be proved by second respondent for recovering the amount said to be due to him - He has to file a suit for recovery of money against the petitioners - The petitioners have made allegations not only against the second respondent and his wife, but also against his two employees - If what he has stated in his FIR is true and the same is established in court, necessarily the accused in FIR may have to be punished for the offences invoked in charge sheet - If really the second respondent's grievance about cheating and forgery by petitioners is genuine, he should have made a report to the police much earlier - Initiation of criminal action against the petitioners appear to be frivolous and vindictive, it can be said that it is nothing but abuse of process of court: HC

- Petition allowed: KARNATAKA HIGH COURT

2021-TIOL-1513-HC-DEL-CUS

Ankit Kishan Jalan Vs Pr.CC

Cus - Petitioner had sought cross-examination of six witnesses, whose statements were relied upon while issuing the show cause notice - The Adjudicating Authority rejected the request of the Petitioner and aggrieved by the said order, Petitioner had filed an appeal before the Commissioner of Customs (Appeals), which was rejected by the impugned order and the order of the Adjudicating Authority was upheld - Petitioner is, therefore, before the High Court and submits that suffice would it be for the disposal of the writ petition that suitable direction is issued to the Adjudicating Authority to allow the Petitioner to cross-examine six witnesses whose names are referred to in the document annexed at page 119 to the present writ petition - Denial of opportunity to cross-examine the witnesses is violative of the principles of natural justice and in this regard, reliance is placed on a judgment dated 23.04.2019 = 2019-TIOL-976-HC-DEL-CUS .

Held: Counsel for the Respondents, on instructions, submits that the Respondents are ready and willing to permit the petitioner to cross-examine the six witnesses, as sought for – Petition is, therefore, disposed of accordingly - Petitioner is directed to co-operate during the proceedings before the Adjudicating Authority and not seek unnecessary adjournment - Impugned order dated 30.09.2020 is hereby quashed and set aside – Petition allowed: High Court [para 4, 7]

- Petition allowed: DELHI HIGH COURT

2021-TIOL-402-CESTAT-DEL

Ruchi Soya Industries Ltd Vs CC, CGST & CE

ST - The issue arises is, whether the Machine Availability clause of agreement creates the service tax liability upon appellant - There is no denial on the part of department to the fact that the appellant/service recipient, has already suffered service tax on invoices raised by M/s. SGSL from time to time - The credit note issued by M/s SGSL, service provider is a refund of excessive amount paid by appellant on account of defined service to be provided by M/s SGSL - It does not represent any service rendered by appellant to M/s SGSL so as to attract any service liability of appellant - The basis of transaction between parties is the agreement - Perusal thereof makes it abundantly clear that the appellant is service recipient and M/s SGSL is service provider - Coming to the Machine Availability clause as has been taken as a basis by Department to fasten tax liability on appellant, said clause fixes the liability upon service provider M/s. SGSL to render annual average machine availability on 95.5% for Wind Turbine Generators (WTG) of appellant - The amount received by appellant in terms of Machine Availability clause, from the service provider with reference to maintenance of WTG due to shortcoming in said service is merely an amount to safeguard the loss of appellant - The said amount cannot be called as consideration for the tolerance of service provided and some lacunae thereof nor it makes the appellant the service provider - Infact once the appellant receives compensation for downfall in service quality, it is because he is not inclined to tolerate the loss as he may suffer on account of said downfall - The concept of 'Declared Services' has therefore been wrongly invoked by Department and the adjudicating authority below - Service recipient cannot be fastened with any liability to pay tax - Tribunal also rely upon the decision of Apex Court in case of Association of Leasing and Financial Service Companies 2010-TIOL-87-SC-ST-LB wherein it has been held that when no service has been rendered, service tax cannot be levied - The findings in order under challenge are not at all sustainable, same are held to be absolutely imaginary and assumptive in nature and thus are hereby set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2021-TIOL-401-CESTAT-CHD

Modern Insecticides Ltd Vs CCE & ST

CX - The assessee is availing the benefit of exemption Notification No. 1/2010-C.E. - They procured certain inputs and availed credit of duty paid on these inputs - Case of Revenue is that during the relevant period, i.e., 01.10.2012 to 19.01.2014, assessee is not entitled to avail credit against inputs issued by the units, who are availing exemption under Notification No. 1/2010-C.E. and after introduction of Notification No. 02/2014-C.E . (N.T.), the credit was available to assessee - Similarly placed assessee was allowed the credit although against those orders, the appeals have been filed by Revenue before the Commissioner (Appeals), in that circumstance, when the Revenue is having divergent views on the issue, the extended period of limitation is not applicable - Accordingly, the impugned order is set aside: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

2021-TIOL-400-CESTAT-AHM

Nayara Energy Ltd Vs CCE & ST

CX - The issue arises is, if Cenvat credit of capital goods namely pipeline used to connect the SBM with refinery is admissible under Cenvat Credit Rules or otherwise - The fundamental ground for denial of Cenvat credit is that the pipeline is located outside the factory premises and the Cenvat Credit Rules do not permit Cenvat Credit of such capital goods as are used outside the factory premises - The appellant had in the year 2006 sought to include the entire area including the SBM and the pipeline within the factory premises by trying to get this ground plan approved under Rule 9 of the Central Excise Rules - Their application was rejected by original adjudicating authority as well as first appellate authority - Subsequently, Tribunal remanded the matter back to the original adjudicating authority to decide if the area under SBM as well as the pipeline should be included in registration of appellant as factory premises or otherwise - The matter has not yet been decided by jurisdictional officer and therefore it cannot be said that dispute really exist or not - Unless the decision is taken on application of appellants with respect to their registration and inclusion of areas covering SBM as well as pipeline, it cannot be said if the appellants are using the pipelines within the factory of production or outside the factory of production - Thus, the impugned order is set aside and matter is remanded to original adjudicating authority to decide afresh, after a decision is taken on the issue of registration which has been remanded by Tribunal to the original Adjudicating Authority: CESTAT

- Matter remanded: AHMEDABAD CESTAT

2021-TIOL-399-CESTAT-MAD

CC Vs Sarvam Safety Equipments Pvt Ltd

Cus - Restoration of application - Section 129D(3) of Customs Act, 1962 prescribes a period of three months for the Review Committee to pass its order, which fact was duly taken note of in impugned order - The 'month' appearing in the statute, when applied to the case on hand, would commence from the date of communication, i.e., 11.03.2019 and the said three month period would expire on 11.06.2019 - Hence, the Review Order passed here in is clearly within the time limitation prescribed - This has given rise to an apparent mistake in the Final Order, which requires rectification - There is no discussion or finding on merits - Tribunal do not agree with the finding of First Appellate Authority on the issues of appeal being time-barred and hence, the impugned order is set aside and the appeal is restored to the file of First Appellate Authority: CESTAT

- Matter remanded: CHENNAI CESTAT