2021-TIOL-1586-HC-MAD-GST

SR And Sons Vs Asstt.Commissioner (ST)

GST - Petitioner has emphatically stated that he has no grievance against the order in original dated 11.11.2020 and his grievance is against the charging of interest under Section 50 of the Central Goods and Services Tax Act, 2017 and in respect of the said grievance, the petitioner submitted a representation to the first respondent on 03.11.2020, which is yet to be disposed of and such representation is entertainable under the provisions of the Act and the Authorities Competent is duty bound to dispose of the same on merits and in accordance with law.

Held: First respondent is directed to consider the representation submitted by the petitioner on 03.11.2020 and pass an order on merits and in accordance with law and by affording an opportunity to the writ petitioner, as expeditiously as possible, preferably within a period of twelve weeks - It is made clear that in respect of the circular No.94/13/2019 GST issued by the Board, if any grievance exists, the petitioner is at liberty to move the appropriate Court of Law after adjudication and passing an order by the Competent Authority - Writ petitions stand disposed of: High Court [para 10, 11]

- Petitions disposed of: MADRAS HIGH COURT

2021-TIOL-1585-HC-MAD-GST

Maya Appliances Pvt Ltd Vs Asstt.Commissioner

GST - Show cause notice dated 11.06.2021 asking the petitioner to submit their reply within 30 days is under challenge in the present Writ Petition - Petitioner submits that similar issues raised in the present Writ Petition are already pending and in one such Writ Petition, the Madras High Court set aside the order impugned and remanded the matter back to the authority for fresh consideration, therefore, the Writ Petition is to be admitted on similar lines; also cited interim orders of Andhra Pradesh High Court in this regard.

Held: Interim order granted by the Andhra Pradesh High Court cannot be followed as a precedent for the purpose of admitting the present Writ Petition - Petitioner has raised several grounds, both on merits as well as on the principles elaborately - However, this Court is not inclined to adjudicate all such issues on merits, in the present Writ Petition, as the relief sought for is to quash the show cause notice issued by the 1st respondent - All such factual issues are to be adjudicated by the competent authority with reference to the documents and evidences made available and High Court cannot adjudicate those issues on merits in a writ proceedings - Factual grounds or the mixed question of law and facts deserves complete adjudication at the hands of the competent authority and only if incompetency of the authority is established through statutory provisions, the writ may be entertained and not otherwise: High Court [para 4, 5]

GST - Power of judicial review is to scrutinise the processes through which the jurisdiction is taken by the competent authorities in consonance with the law, but not the decision itself - Thus, Courts always exercise restraint in entertaining a Writ Petition filed against the show cause notices - Court is of the considered opinion that the writ petitioner has not established any acceptable ground for the purpose of entertaining the Writ Petition and accordingly, the Writ Petition stands dismissed: High Court [para 7, 9]

- Petition dismissed: MADRAS HIGH COURT

DG of CGST Intelligence Vs Saurav Gupta

GST - Pre arrest protection / anticipatory bail - The applicant is 90% share holder of M/s Saurav Beverages Private Limited and was Incharge of business affairs of said firm - The firm M/s Saurav Beverages Private Limited has allegedly carried out the business activities with the firms (alleged to be fake and fictitious) to the tune of crores of rupees - The entire business appears to have been carried out merely on papers, without there being actual supply of goods - The documents, highlighted by applicant, seems to have been meticulously executed to cover up the trail of his illegal activities - Merely because GST number was assigned by department to the said firms or other legal requirements were complied with does not lead to an inference that no crime is committed and the business transaction between the applicant and the said firms were carried out in a legal manner and / or were actually transacted - The Proprietor/Director/Partner of said firms who has appeared so far are not even aware about their existence; and the entire so called business transactions appears to have been manipulated by the applicant himself on their behalf - Prima facie complicity of applicant/accused is evident from the records of the case - Only a sum of Rs. 56 odd crores is disputed out of Rs. 424 crores, may be a meagre amount for applicant/accused, but it is a substantial loss to government exchequer and the acts of applicant falls into category of a grave offence - The applicant has misused the concession granted to him by the Courts, by not coming clean on the board qua the facts of case, and is misleading and hampering the investigation and also influencing the witnesses, the custody of applicant is warranted - Accordingly, court is not inclined to grant relief of pre-arrest protection to the applicant /accused Saurav Gupta: HC

- Application dismissed: DELHI HIGH COURT

2021-TIOL-1584-HC-KAR-CT

Asian Paints Industrial Coatings Ltd Vs State of Karnataka

CT -  The petitioner classifies 'powder coating materials' under Central Excise Tariff Heading (CTH) 3907.30.10 as 'Epoxy resin' or under 3907.99.90 as 'Polyester Resin' - State of Karnataka in terms of Entry 51 of 3rd Schedule of the Act have notified 'industrial inputs' and 'packing material' vide Notification dated 03.04.2005 - Sl.No.33 of the aforesaid Notification covers Chapter Heading 3907 - The petitioner had classified the powder coating material as industrial input and had discharged tax at the rate of 4% on the sale of goods - Deputy Commissioner of Commercial Taxes issued re-assessment notices dated 08.08.2011  u/s 39(1) of the Act r/w Section 9(2) of 1956 Act on the ground that the powder coating material is classifiable under residual entry under Section 4(1)(b)(ii) of the Act and is taxable at the rate of 12.5% per annum - Deputy Commissioner of Commercial Taxes passed an order dated 20.07.2012 and held that powder coating material cannot be classified under Entry 51 of 3rd Schedule of the Act, as vide Explanation II to Notification dated 30.04.2005, the powder coating material are not classifiable under Sl.No.133 - Tribunal, by an order dated 22.04.2016 affirmed the order passed by the Joint Commissioner of Commercial Taxes - In the aforesaid factual background, this revision has been filed u/s 65(1) of the Karnataka Value Added Tax Act, 2003.

Held: The description against Entry No.133 of the Notification matches fully with corresponding description in the Central Excise Tariff and, therefore, in terms of Explanation III to the Notification, all the commodities covered for the purpose of the said tariff heading will be covered under Entry No.133 of the Notification - Therefore, the product of the petitioner which falls under Chapter Heading No.3907, is classified as industrial input under Serial No.133 of the Notification dated 30.04.2005 - It is also relevant to mention that the classification of a commodity under a particular Chapter Tariff Head (CTH) under the Central Excise Tariff is not open for determination by the authorities under the provisions of the  Karnataka Value Added Tax Act, 2003 -  The product namely powder coating material is primarily composed of 'Epoxide Resins' or 'Polyester Resins' and additional items are merely additives - Therefore, in terms of Rule 3(b) of General Rules of Interpretation, the classification shall be determined on the basis of 'Epoxy Resin' or 'Polyester Resin' - Tribunal has decided the question of law erroneously - Impugned orders passed by the Tribunal as well as the Deputy Commissioner of Commercial Taxes are set aside - Petition is allowed: High Court  [para 7, 8]

- Petition allowed: KARNATAKA HIGH COURT

2021-TIOL-1587-HC-MAD-ST

Shriram Chits Tamil Nadu Pvt Ltd Vs Pr.CST

ST - Petitioner challenges the Order-in-Original and the SCNs passed/issued by the respondent - Petitioner claims certain benefits with reference to the judgment of the Supreme Court of India in the case of Margadarshi Chit Funds (P) Ltd = 2017-TIOL-240-SC-ST - Counsel for respondent states that the benefits conferred by the Supreme Court with reference to Foreman Commission has already been extended in favour of the writ petitioner and the writ petition filed by the very same petitioner in WP No.104 of 2017 was ordered by this Court on 21.12.2020 - That with reference to the other allegations in the impugned order in original and the show cause notice, the petitioner is bound to prefer an appeal for adjudication of the disputed facts.

Held: Court is of the considered opinion that the benefits conferred by the Supreme Court is to be extended and in respect of all other allegations, an adjudication is to be entertained with reference to the findings made by the Original Authority/Appellate Authority - Such disputed facts cannot be adjudicated in writ proceedings, more specifically, with reference to the documents and evidences - Petitioner is at liberty to file an appeal within a period of four weeks from the date of receipt of a copy of this order - Appellate Authority, on receipt of any such appeal from the petitioner, shall condone the delay, if any and entertain the appeal and adjudicate the issues on merits and in accordance with law - Writ petitions stand disposed of: High Court [para 5, 6, 9]

- Petitions disposed of: MADRAS HIGH COURT

2021-TIOL-431-CESTAT-BANG

Microsoft India R And D Pvt Ltd Vs CCE & ST

CX - Appellant has been claiming refund of accumulated tax credit under Rule 5 of Cenvat Credit Rules, 2004 - The only issue involved is whether 'input services' in the nature of Event Management, Outdoor Catering, Mandap or Shamiana Service and Rent-a-Cab service qualify as eligible input services for the appellant to claim CENVAT credit during the relevant period - Appellant is a 100% EOU registered under STPI scheme and has been availing input services for rendering its output services - They had given full justification and established nexus between the input service and the output service - Once for the previous period such nexus has been accepted by department than there is no basis for denial of such nexus for the subsequent period - This proposition has been clarified by the Department in their C.B.E. & C. Circular No. 120/01/2010-ST - Further, in the case of Convergys India Services Pvt. Ltd. 2009-TIOL-888-CESTAT-DEL , it has been held that there cannot be two different yardsticks, one for allowing refund and another for deciding eligibility of CENVAT credit - The impugned order denying the CENVAT credit on impugned services is not sustainable in law more so when refund relating to the impugned services has already been granted to the appellant: CESTAT of CENVAT credit - The impugned order denying the CENVAT credit on impugned services is not sustainable in law more so when refund relating to the impugned services has already been granted to the appellant: CESTAT

- Appeal allowed: BANGALORE CESTAT

Electronics Technology Parks Vs CC, CX & ST

ST - Appellant is in appeal against impugned order wherein the Commissioner has confirmed the various demands of Service tax along with interest - As regards to demand of service tax under Support Services of Business or Commerce, as per appellant, they have rendered renting of immovable property service whereas as per the Department, appellant has rendered Support Services of Business and Commerce - appellant is a State Government company and has built up spaces in the buildings or modules for rent or lease to their clients for their business or commerce - Supply of electricity and water is incidental to renting of premises - The services rendered by appellant clearly satisfy the requirement of definition of 'Renting of Immovable Property Service' as provided under Section 65(105)(zzzz) of Finance Act, 1994 and taxable from 01.06.2007 - This issue has been considered by Tribunal in case of Mundra Port & Special Economic zone Ltd . wherein the Tribunal has held that in order to bring the appellant under the category of support services of business and commerce, it is necessary to show that they are providing services relatable to business of the client - Therefore, the services rendered by appellant fall under the category of 'Renting of Immovable Property service' and the applicable services tax on such rental or lease charges has been correctly paid - The impugned order for reclassification of service and demand of differential service tax is unsustainable. Whether amount received from Kerala State IT Infrastructure Ltd. (KSITIL) is towards rendering "Business Support Service" - Since KSITIL was a newly promoted company, the budgetary allocation and release of funds by State Government was delayed and therefore in the meantime, appellant incurred expenses which were entirely reversed by KSITIL when the State Government released funds to KSITIL - Further, the finding of Commissioner that KSITIL is an associated enterprise is not tenable in law because KSITIL is an independent company - Appellant has not provided any service to KSITIL for consideration - In the absence of any service, reimbursement of expenses incurred by appellant cannot be subjected to levy of service tax - Therefore, demand of service tax is without any basis. Whether notional interest on refundable deposits can be included in value of taxable supply for levy of service tax - There is no finding that the notional interest on refundable deposit has resulted in undervaluation of service of renting of immovable property and further there is no evidence of nexus between the two - This issue of inclusion of notional interest on refundable security deposit is settled issue now - High Court of Bombay has held in the case of J.K. Investors (Bombay) Ltd. 2003-TIOL-158-HC-MUM-IT that notional interest on security deposits should not be considered for the purpose of inclusion in actual rent - Notional interest on refundable deposit cannot be included in value of taxable service for the purpose of levy of service tax. As regards to taxability on sale of space or time for advertisement, the Commissioner has confirmed the demand of service tax for period from May 2006 to March 2007 under category of Business Support Service whereas sale of space or time for advertisement is classifiable independently as defined under Section 65(105)(zzzzm) of Finance Act, 1994 and not under Business Support Service as confirmed by Commissioner - Hence, demand of service tax under wrong classification of service is not sustainable in law - As regards to denial of CENVAT credit, same has been denied on the ground that there is a defect in credit claiming document as service tax registration was not printed and the same was written in hand - In this regard, appellant has submitted declarations from respective vendors confirming remittances of service tax by them under respective registration numbers and has also cited various decisions to buttress their argument that the services fall in definition of input service as provided in Rule 2(l) of CCR, 2004 - But the Commissioner has not examined the documents submitted by appellant - Therefore, matter is remanded back to the original authority for the purpose of verification of various documents. As regards to demand barred by limitation, the appellant's submission is that they have not concealed any information from the Department and the Department was aware of the activities of appellant - There have been series of correspondence between the appellant and the Department and the appellant have been supplying all the information asked by Department - The appellant is an entity promoted by Govt. of Kerala, therefore extended period of limitation cannot be invoked alleging suppression of facts or mala fide intention - As regards to demand of interest and penalties , when the demand itself is not sustainable, question of payment of interest does not arise and since there was no intention to evade service tax, penalties are also not imposable: CESTAT

- Assessee's appeal partly allowed/Revenue's appeal dismissed: BANGALORE CESTAT

Interglobe Aviation Ltd Vs CC

Cus - The appellants imported 'aircraft engine' along with 'engine stand' as 'parts of aircraft' - They filed Bills of Entry claiming exemption under Sl. No. 346D of Notification No. 21/2002-Cus. and Sl. No. 454 of Notification No. 12/2012-Cus. classifying the goods under Tariff Item 8803 30 00 of Customs Tariff Act, 1975 - Revenue was of the opinion that the correct classification would be Tariff Items 8411 12 00 and 7326 19 90 ibid and the appellants are not eligible for benefit of exemption under said Notfns as the imported goods are not classifiable as 'parts of aircraft' by virtue of exclusion under Section Note 2(e) to Section XVII ibid - Coming to the issue as whether or not there is a reimport of impugned goods, it is the submission of appellants that the documents filed at New Delhi clearly indicated that the goods are being shipped to Bangalore; as there was no direct cargo flight from Delhi to Bangalore, the goods were loaded on aircraft which touched Germany in between - The argument taken by appellants does not stand the scrutiny of law - In order to avail the benefit under any notification, the appellants are required to establish the bona fides by following the proper procedure; there was no reason as to why the goods were not declared to be for re-import purposes at the time of loading in Delhi - Therefore, it is not open to the appellants to claim the same as an after-thought - The impugned goods are not eligible for exemption contained in terms of Notification No. 94/96-Cus. - As regards to the benefit of exemption under Notification Nos. 21/2002-Cus and 12/2012-Cus, the commissioner has correctly held that the impugned goods, i.e., 'aircraft engines' and 'engine stands' are not eligible for the benefit of said Customs Notfns for the purposes of SAD - Coming to the issue as to whether the issuance of notice under Section 28 of Customs Act, 1962 was correct as no appeals have been filed against the assessed bills of entry, in view of the provisions of Sections 17 and 28 of Customs Act, 1962, the demand issued is in order - The Commissioner has rightly relied upon the order of Madras High Court - Coming to the issue of limitation, it is found that the appellants have misdeclared the impugned goods and have wrongly availed the benefit of exemption which is not due to them - Extended period is correctly invoked. Coming to the various penalties imposed, as the duty is held to be payable, interest follows consequentially - The appellants have been giving various declarations about the impugned goods while making export from Delhi and while importing at Bangalore - Only after the issue of notification, they have raised the issue of interpretation of notification - Therefore, the appellant's contention is not valid - As the case is not of export, no penalty under Section 114AA of Customs Act, 1962 is imposable - The appellants have also relied upon the case of Bussa Overseas & Properties P. Ltd. and submitted that goods already cleared cannot be held to be confiscated - Tribunal uphold the view - However, Adjudicating Authority simply held that the goods are liable for confiscation; he did not confiscate the goods and he did not impose any fine in lieu of confiscation - Therefore, order of mere holding the goods liable for confiscation is of no consequence, need not be interfered with: CESTAT

- Appeal partly allowed: BANGALORE CESTAT