2021-TIOL-1624-HC-MAD-GST

Kuppan Gounder Vs DG OF GST Intelligence

GST - Petitioner is challenging the summons issued by the Senior Intelligence officer/respondent u/s 70 of the Act, 2017 - Petitioner relies on section 6(2)(b) of the Act and submits that notice for intimating discrepancies in the return after some scrutiny was issued by the State authorities to the petitioner on 17.12.2020 and the proceedings are in progress and, therefore, Central authorities are bound to wait till the conclusion of the proceedings initiated by the State officials under the State Goods and Services Tax Act and thus, the summons issued by the respondent is without jurisdiction.

Held:

+ By the impugned summons, the petitioner was directed to give evidences or produce documents or things of the following description in his possession or under his control - This being the nature of summon issued, this Court is of the considered opinion that authorities need not be restrained unnecessarily to conduct investigation or proceedings under the Statute - It is an opportunity for the petitioner to submit his documents, statements etc. - In the event of entertaining a writ petition, at this budding stage, the same would paralyze the entire proceedings, which would not be desirable and in such an event, the very purpose and object would be defeated - Thus, on merits, no adjudication needs to be undertaken as such an exercise is to be done by the competent authorities of the department based on the records, documents and evidences or statements available - Writ Court cannot entertain such an adjudication, more specifically, when summon itself is under challenge on the ground that the same lacks jurisdiction. [para 4, 5]

+ Court is of the considered opinion that the writ petitioner has approached this Court on every stage, which would reveal that he is attempting to prolong the proceedings, instead of defending his case by producing documents and evidences and establish his case or otherwise - Such a conduct of filing writ petition after writ petition, challenging the summons and proceedings intermittently cannot be appreciated by this Court. [ para 9]

+ The very purpose and object of the Statute is to ensure that the investigation and proceedings are conducted in the manner known to law and then only, the truth may be culled out and during the process, the persons aggrieved are bound to establish their innocence or otherwise by producing the documents, evidences etc., Contrarily, intervention during the intermittent period by the High Court at the stage of summon, undoubtedly, would paralyze the entire proceedings, which is not desirable and even in such cases, where there are certain factual similarities or otherwise, the same is to be established by the person aggrieved by producing all original documents, evidences, etc.. [para 10]

+ The very purpose and object of Section 6(2)(b) of the Act is to ensure that on the same subject, the parallel proceedings are to be avoided. Once, on a particular subject, the State authority has initiated action under the State Goods and Services Tax Act, then alone, the proper officer under the Central Goods and Services Tax Act are restrained to wait till the finalization of the proceedings initiated by the State authorities. However, in all circumstances, and in respect of various other proceedings, the benefit cannot be claimed by the assessees. [para 11]

+ It is to be established that subject matter is one and the same. Mere pendency of proceedings before the State authorities is not a ground to restrain the Central authorities from issuing summons and conduct investigation regarding certain allegations. Therefore, all these factors require an adjudication before the competent authority and if the summons are kept in abeyance at this stage, the same would paralyze the entire proceedings, which is not only desirable, but would cause prejudice to the interest of the Revenue in the present case. [para 12]

- Writ petition dismissed: MADRAS HIGH COURT

2021-TIOL-1618-HC-MAD-VAT

Vinoth Agencies Vs CTO

Whether High Courts can intervene at the SCN stage if only such notice is issued by an incompetent authority, has no jurisdiction or if an allegation of mala fide is levelled - YES: HC Whether High Courts cannot adjudicate the complex and disputed facts raised in the matter of assessment of turnovers and determination of documents & such an exercise is the prerogative of Departmental officers having the requisite technical knowledge & expertise - YES: HC

- Writ petitions disposed of: MADRAS HIGH COURT

2021-TIOL-1628-HC-MAD-CUS

Jindal Drugs Pvt Ltd Vs UoI

Cus - Registration of scrip and issue of Telegraphic Release Advise - Authorised officer informed the applicant petitioner that in terms of para 3.06 of the Foreign Trade Policy, which deals with the Ineligible categories under MEIS, it is clearly mentioned that the following exports categories/sectors shall be ineligible for Duty Credit scrip entitlement under MEIS viz. Sr.no. (i) Supplies made from DTA units to SEZ units & Sr.no. (vii) Exports made by units in FTWZ - Inasmuch as it was observed that Supplies have been made from M/s. Jindal Drugs P Ltd. a DTA unit to M/s. DHL Logistics P Ltd on A/c of M/s. Utexam Logistics Limited, Ireland a foreign client and the exports have been made by DHL Logistics (P) Ltd which is in the FTWZ, therefore, such exports were ineligible for Duty Credit scrip under MEIS and hence the Original scrip along with its enclosures were returned without being registered in the FTWZ - Petitioner is before the High Court praying for a direction to the Deputy Commissioner of Customs to register the scrips and issue Telegraphic Release advice (TRA) under paragraph 3.08 of Hand Book of Procedure.

Held:

+ Para 3.06 of the Scheme sets out seven categories of transactions/entities that would be ineligible for the benefits of MEIS. [para 17]

+ The first is, supplies effected by a Domestic Tariff Area (DTA) to a unit situated in a Special Economic Zone (SEZ), the second, export of imported goods covered under paragraph 2.46 of the Free Trade Policy, third, exports through trans-shipment, i.e ,. exports originating from elsewhere and routed to another destination through India, fourth, deemed exports, fifth, products of SEZ/EOU/EHTP/BTP/FTWZ exported through the DTA, sixth, exports which are subject to Minimum Export price or export duty and lastly, the seventh, exports made by units in SEZ. The first and last prohibitions are held against the petitioner. [para 18]

+ Supplies made by a DTA unit to a SEZ unit would be paid for by the SEZ unit. In this case, admittedly, the consideration received is from Ireland, in US dollars. The BRC dated 29.06.2018 evidences this position. [para 19]

+ Moreover, in this case, supply has been made by the petitioner to FTWZ [DHL logistics] for onward shipment at the behest of the purchaser, UTEXAM, to a location of its choice. This modus operandi is supported by the documentation placed on record by the petitioner. [para 20]

+ Thus, DHL logistics, the FTWZ, merely offers a facility to the petitioner to warehouse its consignments that are to be exported. The destination is decided by UTEXAM, which is the ultimate purchaser, which has paid the petitioner in USD for the consignment. The stipulation in Clause (vii) deals with exports made by a unit in the FTWZ. DHL, the FTWZ does not export the consignments but only facilitates such exports. The exports are thus, by the petitioner through DHL to a destination abroad. [para 21]

+ Petitioner explains stating that the consignments in question were purchases by UTEXAM on behalf of Colgate Palmolive for supply at any number of the units of the latter. As and when the destination is decided, DHL is intimated of the same and the consignments shipped to that destination. [para 22]

+ This would avoid the circuitous route of shipment to UTEXAM at Ireland, and then onward to a final destination accompanied by multiple transportation costs and logistical complications. The role of DHL in this transaction is that of a warehouse and nothing more. The concept of 'ship to' and 'bill to', as used in this case, has been recognised under the GST regime, as commercial compulsions dictate, that transactions are to be structured in the most economical and least cumbersome manner in terms of time, procedure and expense involved. [para 23]

+ Bench finds no statutory redress provided as against the impugned order though there is one provided as against an order cancelling the scrips under the FTDR Act had such order been passed, hence the petition is maintainable. [para 24]

+ Impugned order is set aside and Writ Petition allowed. Consequential direction to R3 to re-validate scrips and extend the same for the duration of the pendency of these Writ Petitions. The TRAs will be issued immediately thereafter and the aforesaid exercise will be carried out within a period of four weeks. [para 25, 26]

- Petition allowed: MADRAS HIGH COURT

2021-TIOL-1627-HC-P&H-CUS

Godrej And Boyce Manufacturing Company Ltd Vs UoI

Cus - Proper officer - legal issue in the present case stands concluded by the judgment of Supreme Court in the case of M/s Canon India Private Limited = 2021-TIOL-123-SC-CUS-LB and the Coordinate Bench of this Court in CWP-19871-2020 titled M/s Godrej & Boyce Manufacturing Co. Ltd. decided on 19.04.2021 - Counsel for respondent Revenue states that though the Department has filed a review application before the Hon'ble Supreme Court in the aforementioned case titled as M/s Canon India Private Limited (Supra), however, no stay has been granted and accepts that the Coordinate Bench had decided the same issue - Present writ petition is also stands disposed of in the same terms as passed in CWP-19871-2020: High Court

- Petition disposed of: PUNJAB AND HARYANA HIGH COURT

2021-TIOL-1626-HC-P&H-CUS

Godrej And Boyce Manufacturing Company Ltd Vs UoI  

Cus - Petition has been filed for quashing the impugned order-in- original dated 17.08.2020 passed by the Commissioner of Customs (Preventive), Amritsar by relying upon the apex court decision in M/s Canon India Private Limited Vs. Commissioner of Customs = 2021-TIOL-123-SC-CUS-LB - Counsel for Respondent Revenue accepted that he is not in a position to distinguish the facts of this case from the judgment mentioned above, though he has stated that the Board has made a request for adjournment.

Held: Once it cannot be denied that the judgment of the Supreme Court is applicable to the facts of the present case, no useful purpose would be served by adjourning the matter - Petition stands disposed of in terms of the decision of the Supreme Court (supra): High Court [para 4, 5]

- Petition disposed of: PUNJAB AND HARYANA HIGH COURT

2021-TIOL-1625-HC-MAD-CUS

KRV Traders Vs UoI

Cus - Petitioner was unable to fulfil the export obligations as there was a ban imposed on 15.10.2007, which was in existence till the year 2011 - Petitioner submits that they sent a representation to the respondents in the year 2013 itself, which was not considered - Order impugned, dated 24.01.2013, passed by the 2nd respondent is under challenge in the present Writ Petition.

Held: Court is of the considered opinion that the export obligations declared were agreed by the petitioner - When the export license was granted pursuant to the declaration and agreement, the petitioner is bound to fulfil the same and in the event of any difficulty or other grievances, he has to approach the competent authorities and the High Court cannot dilute or grant any relief with reference to the agreed export obligations - In view of the facts and on account of efflux of time, if any other grievances exist, the petitioner has to approach the competent authorities and this Court cannot consider the claim of the petitioner, as the petitioner has not established any acceptable ground for the purpose of interference - Accordingly, the Writ Petition stands dismissed: High Court [para 3, 6]

- Petition dismissed: MADRAS HIGH COURT

2021-TIOL-1623-HC-DEL-CUS

Khandwala Finstock Pvt Ltd Vs UoI

Cus - The Petitioner contends that the import of goods in question from South Korea took place prior to the Amendment by DGFT Notfn dated 25.08.2017, whereby import of gold from South Korea was placed under restrictions and therefore the Amendment will have no applicability to the import in question - It is also contended that the case of Petitioner is squarely covered by judgment of this Court in Khandwala Enterprise Private Limited 2019-TIOL-2742-HC-DEL-CUS - Petitioner has made out a prima facie case for grant of interim relief in its favour and the Balance of Convenience is also in favour of Petitioner - The court accordingly stay the operation, implementation and execution of impugned order as well as Recovery Notice: HC

- Stay granted: DELHI HIGH COURT

2021-TIOL-1617-HC-DEL-NDPS

Peter Wolledge Vs NCB

NDPS - The bail application has been filed seeking bail under Sections 20(B)(II)(C), 23 & 29 of NDPS Act, 1985 - As per NCB, the petitioner was found trafficking 2.7 Kgs. of Charas concealed in 3 Books and false cavity of base of Bag which were all found in the baggage and said trafficking of Charas from India to Bangkok was being done in conspiracy with his live-in partner & co-passenger Ms. Nympha De Jesus (Philippines National) who was also arrested and charged with the said offences - The documents pertaining to petitioner were also found from registered baggage - As per the Status Report, charges have already been framed and the same has not been challenged till date by the petitioner - Recovered quantity is a commercial quantity and rigours of Section 37 of NDPS Act applies - It cannot be said that there is no other material with NCB except the statement U/s 67 of NDPS Act - There are two panch witnesses, baggage of petitioner has been recovered and some documents relating to the petitioner have also been found in the baggage, therefore, no ground for bail is made out: HC

- Bail application dismissed: DELHI HIGH COURT

2021-TIOL-448-CESTAT-HYD

Pepsico India Holdings Pvt Ltd Vs CCT

ST - The issue arises is, whether the appellants are entitled to CENVAT Credit on input services used in setting up their plants at the industrial township after the definition of 'input service' under Rule 2(l) of Cenvat Credit Rules, 2004 has been amended w.e.f. 1-4-2011 - The appellants had entered into agreements to lease the land and to get various common facilities in private industrial township to set up their factories - The department wants to deny them the benefit of CENVAT credit on the ground that 'services related to setting up of a factory' which were specifically included prior to 1.4.2011 were no longer specifically included post 1.4.2011 - After 1.4.2011, services used for setting up the factory are neither in the inclusive part nor the exclusive part of definition - The main part of the definition includes "services used by a manufacturer, whether directly or indirectly, in or in relation to manufacture of final products and clearance of final products up to the place of removal" - Any service which is used not only in manufacture but also 'in relation to' manufacture will also qualify as input service - Although setting up the factory is not manufacture in itself, it is an activity directly in relation to manufacture - Without setting up the factory, there cannot be any manufacture - Services used in setting up the factory are, therefore, unambiguously covered as 'input services' under Rule 2(l)(ii) of Cenvat Credit Rules, 2004 as they stood during the relevant period (post 1.4.2011) - The mere fact that it is again not mentioned in the inclusive part of the definition makes no difference - Once it is covered in the main part of the definition of input service, unless it is specifically excluded under the exclusion part of definition, appellant is entitled to CENVAT credit on input services used - The impugned orders denying CENVAT credit and ordering its recovery along with interest and imposing penalties cannot be sustained: CESTAT

- Appeals allowed: HYDERABAD CESTAT

2021-TIOL-447-CESTAT-DE

Vidhya Cylinders Pvt Ltd Vs CCGST, CE & C

CX - The issue arises is, whether the appellant is entitled to interest under Section 35FF of Central Excise Act, 1944 for the amount deposited by way of pre-deposit as per the stay order of Tribunal on being successfully in appeal - The Commissioner (Appeals) have erred in making reference to Section 11BB ibid instead of the correct Section 35FF ibid, and have passed erroneous order - Thus, following the ruling of Supreme Court in Sandvik Asia Ltd. 2006-TIOL-07-SC-IT and ITC Ltd. 2004-TIOL-112-SC-CX-LB , it is held that the appellant is entitled to interest @ 12% per annum from the date of deposit till the date of refund - Adjudicating authority is directed to grant interest as directed within a period of 45 days: CESTAT

- Appeal allowed: DELHI CESTAT

2021-TIOL-446-CESTAT-MAD

Air Filter Systems Vs CC

Cus - The appellant had filed Bill-of-Entry for import of "N95 Respirator Mask" classifying the goods under Tariff Item 9020 00 00 of Customs Tariff Act, 1975 at 'Nil' rate of BCD and Social Welfare Surcharge and 12% IGST under Notification No. 01/2017-Integrated Tax (Rate) - It was later understood that the impugned goods were correctly classifiable under sub-heading 6307.90 at 5% IGST vide Sl. No. 224 of Notification No. 01/2017-I.T. (Rate) - Thereafter, the appellant approached the Deputy Commissioner (MEPZ-SEZ) for re-assessment of the subject two Bills-of-Entry for appropriate classification, who informed that unless the order of assessment is modified/revised by taking recourse to the appropriate proceedings under Section 128 of Customs Act, 1962, the claim for refund of excess paid IGST cannot be considered - There is no dispute as regards classification is concerned and it was based on the wrong classification of appellant that prompted it to seek re-assessment of Bills-of-Entry, which request, is very much correct - Therefore, the direction of Adjudicating Authority to get the original order modified by resorting to Section 128 ibid was uncalled for - However, even the Department agreed to the request of appellant for remanding the issue for re-assessment - The impugned order is set aside and the matter is remanded to the file of the Adjudicating Authority: CESTAT

- Matter remanded: CHENNAI CESTAT