2021-TIOL-1534-HC-KERALA-GST

UoI Vs Merchem India Pvt Ltd

GST - TRAN-1 - Revenue is aggrieved by the direction of the Single Judge to the IT Redressal Committee of the GST Council to consider petitioner's request for the transition of un-availed input tax credit in accordance with law.

Held:

+ It is significant to note that the statute does not provide for any provision for lapsing of unutilized input tax credit for non-filing of TRAN-1. The input tax credit is required by law to be credited to the electronic credit ledger of an assessee. Failure to credit the input tax credit is an infraction of section 140(1) and to Rule 117(3) of the GST Rules. Input tax credit is an asset in the hands of the dealer. A registered dealer had a statutory right under the VAT regime to get refund. Unutilized input tax credit of the erstwhile regime can be denied from being credited to the electronic credit ledger only under the contingencies mentioned in the proviso to section 140(1). On all other situations, this statutory right cannot be defeated by any procedural rules under the GST regime. [para 8]

+ It is axiomatic that computer literacy has not reached its pinnacle in our country. Technical glitches at the transition stage of GST should not affect above said statutory right of dealers. Attempt must always be made not to deprive a dealer from a bonafide claim, through technicalities. In such instances, the department should have, while assisting the assessees, acted with alacrity and promptness rather than deny bonafide claims. [para 9]

+ The issue raised in this writ appeal being technical in nature, it is only in the interest of all that such technical issues do not stand in the way of rendering justice. The impugned judgment does not reflect any error of law warranting an interference by this Court in appeal. In fact, the impugned judgment of the Single Judge being an innocuous one, Bench is constrained to observe that the respondents ought not to have pursued the same in appeal, wasting judicial time and energy. [para 10]

- Appeal dismissed: KERALA HIGH COURT

2021-TIOL-1533-HC-KERALA-GST

Merchem India Pvt Ltd Vs UoI

GST - Petitioner filed GST TRAN-01 Form on 26.09.2017, however, on the common portal, received a note 'processed with error' - GST Helpdesk was contacted and even email was sent, but did not yield any result - Petitioner also communicated the inaction through complaint to 6th respondent i.e., Deputy Commissioner, Nodal Officer, Central Tax and Central Excise, Kochi but of no avail, therefore, the writ petition.

Held: Without commenting on the merit of the matter, writ petition is disposed of with a direction to the IT Redressal Committee of GST Council to take a call on the petitioner's request for transition input tax credit in accordance with law, after affording an opportunity of hearing, by taking into consideration the provisions of Section 140 of the Central Goods and Service Tax Act, 2017 , within a period of forty five (45) days - It is also made clear that if the complaint had been submitted inadvertently to an authority having no jurisdiction, it is required to be forwarded to the Grievance Cell who shall take a call in the aforesaid manner: High Court [para 5, 6]

- Petition disposed of: KERALA HIGH COURT

2021-TIOL-23-AAAR-GST

Eco Wood Pvt Ltd

GST - AAR had held that PVC Tufted Coir Mats / Mattings / Floor coverings manufactured by the process of embedding coir yarn into PVC cannot be considered as textile floor coverings of coir covered under HSN 5702 or 5705 attracting GST @5%; that the process undertaken is a tufting process and  is appropriately classifiable under HSN 5703 90 90  and is liable to GST at the rate of 12% as per Entry at Sl No. 144 Schedule II of Notification No.   01/2017 Central Tax (Rate) - Aggrieved, appeal filed before the Appellate authority. 

Held: Delay of 18 days in filing appeal is condoned - I mpugned products being backed by PVC etc. cannot be treated as simple “coir mats, matting, floor covering” as covered under heading 5705 as claimed by the appellant -  HSN explanatory note to chapter heading 5703 provides that this heading covers tufted carpets or floor covering produced on tufting machine - Impugned products is classifiable under heading 5703 9090 as tufted PVC backed coir carpet/mats and is leviable to GST @ 12% as per Sl.No. 144 of Schedule II of the notification 1/2017-CTR - Decision of AAR is upheld and Appeal is rejected: AAAR 

- Appeal rejected: AAAR

2021-TIOL-1542-HC-KAR-VAT

Mangalore Refinery And Petrochemicals Ltd Vs State of Karnataka

VAT - Question is whether the expression 'or' used in Section 12(2) of the Karnataka Value Added Tax Act, 2003 is not conjunctive but is disjunctive.

Held: It is well settled rule of statutory interpretation in relation to the taxing statute that the subject is not to be taxed unless the words of the taxing statute unambiguously impose tax on him - The proper course in construing revenue Acts is to give a fair and reasonable construction to their language without leaning to one side or the other but keeping in mind that no tax can be imposed without words clearly showing an intention to lay the burden and that equitable construction of the words is not permissible - It is equally well settled legal proposition that the word 'or' is normally disjunctive and the word 'and' is normally conjunctive - It is well settled rule of statutory interpretation that where the provision is clear unambiguous, the word 'or' cannot be read as 'and' and the expression 'or' is disjunctive. ( Ind-Swift Laboratories = 2011-TIOL-21-SC-CX relied upon) - Section 12(2) provides that deduction of input tax shall be allowed only after commencement of commercial production or sale of taxable goods or sale of any goods in course of export out of territory of India or registered dealer - Thus, the deduction of input tax has to be allowed on fulfilment of one of the conditions namely (1) after commencement of commercial production, (2) sale of taxable goods and (3) sale of any goods in the course of export out of the territory of India by the registered dealer - In the instant case, the petitioner was effecting sale of taxable goods on payment of VAT / CST as applicable and was effecting sale of goods in the course of export out of the territory of India - Therefore, the petitioner had satisfied the conditions laid down in Section 12(2) of the Act namely sale of taxable goods / sale of goods in the course of export out of the territory of India and was eligible to avail of the credit under Section 12(2) of the Act - The finding recorded by the Joint Commissioner of Commercial Taxes as well as by the Tribunal that the petitioner, after expansion of Phase III, was eligible to claim input tax credit only after commencing of production or sale of goods from the expansion Unit III of the petitioner, cannot be sustained in the eye of law as the expression 'or' used in Section 12(2) of the Act is not conjunctive but is disjunctive - Since the petitioner had fulfilled the conditions prescribed in Section 12(2) of the Act, therefore, the petitioner was eligible to avail of the benefit of input tax credit - There is no element of any mens rea that the petitioner had the intention to evade tax - The petitioner had paid taxes according to the information furnished in the return and, therefore, it should not have been penalized subsequently after the assessment proceedings are finalized and the amount of tax is determined - Impugned order dated 24.05.2017 passed by the Tribunal and order dated 27.09.2013 passed by the Joint Commissioner of Commercial Taxes cannot be sustained in the eye of law and the same are accordingly quashed - The appellant is held entitled to refund of interest paid under protest - Petition is allowed: High Court [para 7, 9, 10, 12]

Penalty - It is well settled in law that penalty cannot be imposed merely because it is lawful to do so [ Hindustan Steel P. Ltd. = 2002-TIOL-148-SC-CT-LB relied upon] - Since the petitioner was entitled to benefit of input tax credit, therefore, the question of levy of penalty and interest does not apply - It is also pertinent to mention that the petitioner has deposited the amount of interest and penalty under protest and, therefore, they are entitled to refund of the aforesaid amount: High Court [para 10]

- Petition allowed: KARNATAKA HIGH COURT

2021-TIOL-1541-HC-KERALA-CUS

CC Vs Seahorse Ship Agencies Pvt Ltd

Cus - Lighthouse Act, 1927 - Petitioner was forced to make dual payment due to the failure of the web portal system to generate a receipt, when the petitioner made the first payment through the web portal - Refund claimed of the excess payment was rejected by the lower authorities, hence the petition - Single Judge, while allowing the petition, observed that the dual payment made by the petitioner in this writ petition cannot be described as excess payment, in the sense contemplated by Section 19 of the Lighthouse Act, 1927 ; that since Section 19 does not apply to the dual payment made by the petitioner, then there is no question of a period of limitation under the Customs Act for making an application for refund of the dual payment; that the State is not expected to get itself unduly enriched by erroneous or forced or inadvertent payments of money made by its citizens; that the State is not expected to bring in defence of limitation in respect of such payments resulting in unjust enrichment; that the State and its authorities are not expected to act in a Shylockian manner and squeeze money from its citizens; that the Levy of any tax/dues should have the authority of law; that the refund is to be granted within a period of one month - Against this order, Writ appeal has been filed by the Commissioner of Customs, Cochin.

Held: [para 6 to 8]

+ According to the counsel for the appellant, sum of Rs.6,33,144/- collected offline has been deposited with the Office of the Director General of Lighthouses and Lightships, U.P.

+ Now that, the amount is stated to have been deposited with the office of the Director General of Lighthouses and Lightships, U.P., Bench is of the view that to resolve the dispute and to avoid further litigation, a direction to the Director General of Lighthouses and Lightships, U.P. is issued, to refund the sum of Rs.6,33,144/- to M/s. Seahorse Ship Agencies Private Limited, within a period of one month from the date of receipt of a copy of this judgment.

+ Though respondent No.1 was constrained to make double payment of Rs.6,33,144/- for some technical flaw in the web portal, considerable time has been spent in litigation.

+ It is sincerely hoped that the Director General of Lighthouses and Lightships, U.P., to implement the directions of this court and refund the amount within the time, as directed. Considering the facts on hand, any delay on the part of the respondents in implementing the directions would result in interest for the delayed refund.

- Writ appeal disposed of: KERALA HIGH COURT

2021-TIOL-1540-HC-KERALA-CUS

Cochin Air Cargo Clearing House Vs CC

Cus - Suspension of Customs Broker licence - Tribunal [ 2021-TIOL-120-CESTAT-BANG ] set aside the order dated 16.11.2020, however, called upon the appellant to apply afresh for CHA Licence - Petitioner is aggrieved with this portion of the order.

Held: After examining the chronology of events, implication of orders of the Appellate Tribunal made from time-to-time, Bench is of the view that the Tribunal, by observing as noted above, failed to exercise the jurisdiction conferred on it while disposing of the appeal filed by the appellant - The simple effect of the adjudication of CESTAT is that the orders of respondent, either placing the appellant under suspension or denying renewal or confirming the decisions taken, are all set aside - There is nothing against the appellant as on date warranting the appellant to apply afresh for CHA licence - These directions are inconsistent with final orders of the CESTAT - The appellant, therefore, is entitled for consideration of application made in Annexure-B for renewal - Aforesaid directions of CESTAT are set aside - Revenue counsel informed the Bench that needful will be done by the competent authority/the respondent within ten days - Appeal is allowed: High Court [para 6]

- Appeal allowed: KERALA HIGH COURT

2021-TIOL-1536-HC-MAD-CUS

BAPL Industries Ltd Vs UoI

Cus -  Petition filed to issue a Writ of Certiorarified Mandamus, calling for the records and to quash the impugned appellate order dated 21.09.2011 on the file of the first respondent and directing the first respondent to issue proper directions to consider the deemed exports made by the petitioner under para 9.10 of the policy also for the purpose of determining the petitioner's DTA entitlement - It is contended that the entire issue raised in the present Writ Petition is no more res integra and already decided by the Supreme Court of India in the case of Virlon Textile Mills Limited Vs. Commissioner of Central Excise, Mumbai - 2007-TIOL-69-SC-CX  - Petitioner further contended that the benefit granted to the physical export is to be extended to the deemed export also as per the policy and thus, the claim of the petitioner is to be allowed.

Held: To examine the claim of the petitioner with reference to the Exim Policy as well as circulars issued by the Ministry of Commerce and Ministry of Finance and the business transactions as well as the nature of benefits claimed, involves an adjudication of technical points - Such technical points with reference to the business transactions cannot be adjudicated in a writ proceedings under Article 226 of the Constitution of India - It requires examination of certain records as well as the policy decisions, which all are prevailing during the relevant point of time, more specifically, for the purpose of extending the benefits - Thus, it would be preferable, such issues are decided by the 5th    respondent, Commissioner of Central Excise and the 4th   respondent, Tribunal, which all are the expert bodies in the field - The power of judicial review under Article 226 of the Constitution of India, need not be extended for the purpose of adjudication of such technical issues, more specifically, when the appeal is pending before the CESTAT and the appeal against the show cause notice is also pending before the 5 th respondent, Commissioner of Central Excise - However, it is made clear that the respondents 4 and 5 are bound to look into the principles laid down by the Supreme Court of India in Virlon's case (supra) and it's applicability with reference to the facts and circumstances placed by the petitioner regarding their business transactions - This being the factum established, the respondents 4 and 5 are directed to proceed with the proceedings which all are pending before them, after hearing parties and by affording opportunity to the petitioner and take a decision and pass orders, as expeditiously as possible - With these directions, the Writ Petition stands disposed of: High Court [para 7] 

- Matter remanded: MADRAS HIGH COURT

2021-TIOL-409-CESTAT-BANG

Phoenix Rubbers Vs CCT & CE

ST - The appellant filed refund claim which arose as a consequence of introduction of Section 104 of Finance Act, w.e.f. 31.03.2017 - Vide Section 104(1), exemption was provided from said services for the period from 01.06.2007 to 21.09.2016 and it was provided that the refund claim should be filed within a period of six months from the date from which Finance Act, 2017 is promulgated and come into force - The refund claim was within time and the only ground for rejection is that the appellant did not produce sufficient documents in the form of invoices/bills showing that they have paid service tax to KINFRA - During pendency of appeal, appellant filed various invoices/bills issued by KINFRA showing the payment of service tax by appellant for which the refund claim has been filed by appellant - KINFRA has also issued a certificate certifying that they have not availed any CENVAT credit on the service tax paid by appellant - These bills/invoices issued by KINFRA clearly show the payment of service tax by appellant to KINFRA and KINFRA in turn has paid the same to the Government - Though these invoices/bills were not produced before Original Authority but various Challans issued by KINFRA were produced along with worksheets showing the payment of service tax to KINFRA by appellant - In view of the facts that now the appellant have produced sufficient documents to prove the payment of service tax, no justification found for rejection of refund claim and hence, the impugned order is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

2021-TIOL-408-CESTAT-DEL

Super Iron And Steel Pvt Ltd Vs CCE & C

CX - The appellant is a manufacturer of iron and steel products viz. M.S. Ingot and TMT bars, which are dutiable - During stock verification, shortage of ingots was found - Accordingly, SCN was issued as it appeared to Revenue that shortage found in stock has not been properly explained - Further, no proper documents have been produced with respect to the reasons given of burning loss, beyond their calculation - It appeared to Revenue that the appellant have removed such shortage clandestinely without issue of proper invoices and accordingly, it was proposed to demand differential duty along with interest and further penalty was proposed under Section 11AC read with Rule 25 - Further, personal penalty was proposed on Director, Shri Gurpreet Singh Chandok under Rule 26 ibid - The burning loss in this type of industry varies from time to time depending upon quality of inputs, condition of furnace and climatic condition - The Director of appellant-company at the time of recording of his statement under Section 14 ibid gave a plausible explanation, that shortage is attributable to high burning loss depending upon the various factors and failure by them to record the actual burning loss, as the production is recorded on the estimate basis, whereas the sale of finished goods is recorded on actual weight basis - Further, appellant also manufactures M.S. Billets, for which M.S. Ingots is the raw materials, in such process also there is burning loss - Thus, the explanation given by appellant for the apparent shortage is held to be plausible, as the same has been rejected summarily by Department without reference to the books of accounts and other records maintained by the appellant - There is no other corroborative evidence brought on record with respect to the allegation of clandestine removal, which is a serious charge and has to be proved beyond doubt as held by High Court in the case of Continental Cement 2014-TIOL-1527-HC-ALL-CX and Anand Founders and Engineers 2015-TIOL-2655-HC-P&H-CX - Accordingly, the impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT