2021-TIOL-1794-HC-MUM-GST

Kasturba Health Society Vs UoI

GST - AAR had observed that the Applicant/appellant had entered into a joint project with the State and Central Governments to form a Medical college named Mahatma Gandhi Institute of Medical Sciences (MGIMS) and which is an entity different from that of the applicant, hence applicant/appellant cannot be said to be satisfying all the criteria of an "Educational Institution"; that it is MGIMS which appears to be engaged in imparting medical education and not the applicant, therefore, the applicant falls within the scope of sections 22 or 24 of the CGST Act and they are liable to obtain registration - In appeal, the AAAR noted that the documentary evidences relied upon by the appellant do not detract from the fact that it is MGIMS which is affiliated with the State Universities and monitored, controlled and regulated by the Medical Council of India and the role of the appellant society is merely as the caretaker of the said medical institute, that, therefore, the core functioning of providing medical education is carried out by MGIMS and not by the appellant society; that, therefore, the questions asked by the appellant cannot be answered/not maintainable in terms of clause (a) of section 95 of the CGST Act as they do not pertain to the appellant - appeal to High Court.

Held: Both the orders (of AAR & AAAR) do not answer the basic question raised by the petitioner-society - The question raised by the petitioner-society was as to whether or not, the petitioner-society, on its own strength and in its own right, could be said to be entitled to seek exemption, being an educational institution, from the requirement of registration and also discharge of Goods and Service Tax liability - This question, of course, has been answered by the first Authority as well as appellate Authority by saying that the petitioner-society could not claim itself to be an ‘educational society', but the reason given by both these authorities is not related to the activities or the business, the aims and objects of the petitioner-society - The reason given by both these authorities is that the petitioner-society is not an ‘educational institution' because the activity of imparting education is carried on not by the petitioner-society in actual terms, but by its Special Purpose Vehicle-MGIMS - This factual position is also not denied by the petitioner- society but, the contention of the petitioner-society is that it has been established primarily for the purpose of imparting of education and that it does so, through its Special Purpose Vehicle viz. MGIMS - This contention of the petitioner has neither been considered nor has it been answered specifically by these authorities - The authorities ought to have considered this contention independently of the activity of MGIMS - Such exercise having not been done by the authorities below and no findings on these lines having been rendered by both the Authorities, Bench is of the view that both the orders are erroneous and cannot stand the scrutiny of law - Impugned orders are quashed and set aside and petition is allowed - Matter is remanded to the AAR for expeditious disposal - Interim relief granted by the Court to the petitioner society by its order dated 6 th July 2020 shall continue till the decision is rendered by the authorities and also for further period of two weeks from the date of the decision, in case, the decision goes against the society: HC [para 12, 13]

- Matter remanded: BOMBAY HIGH COURT

2021-TIOL-1793-HC-PATNA-GST

Rambabu Singh Vs State Of Bihar

GST - Vide impugned order dated 28.12.2020 passed by the Respondent No. 2 namely the Additional Commissioner of State Tax (Appeal) the appeal of the petitioner against the order dated 05.03.2020 has been rejected merely on the grounds of being barred by limitation - Revenue counsel has no objection if the matter is remanded to the assessing authority for deciding the case afresh and that no coercive steps would be taken.

Held: Delay stands sufficiently explained on account of COVID restrictions - Bench is of the considered view that this Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie , it forms an opinion that the order is bad in law - This, the Bench holds for two reasons - (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee - The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences - As such, on this short ground alone, Bench disposes of the present writ petition on mutually agreeable terms - Impugned order quashed - Petitioner to appear before the assessing authority who will decide the case on merits expeditiously after complying with the principles of natural justice - defreezing/de-attaching of bank accounts ordered: High Court

- Petition disposed of: PATNA HIGH COURT

2021-TIOL-1790-HC-MUM-VAT

Greatship India Ltd Vs State Of Maharashtra

Whether the orders of the assessment were passed or signed by respondent No. 3 on 20.03.2020 as asserted by respondent No. 3 or on any date prior to 31.03.2020, were passed beyond the limitation period of 31.03.2020: YES : HC

Whether an order of assessment orders of assessment allegedly dated 20.03.2020 and the related notices of demand dated 20.03.2020 can be set aside and quashed.: YES : HC

- Assessee's petition allowed: BOMBAY HIGH COURT

2021-TIOL-1792-HC-MAD-CX

CCGST & CE Vs Sujana Metal Products Ltd

CX - Revenue is in appeal against the order dated 05.01.2016 - 2016-TIOL-848-CESTAT-MAD passed by the CESTAT - Appeals have been admitted on 12.04.2018 - Insofar as questions of law nos. 1 and 2 are concerned, both are interconnected and interlaced - Issue is whether the Tribunal was justified in interfering with the order-in-original and reducing the penalty levied by the adjudicating authority.

Held: The transaction in question is a Circular transaction - Four entities though have availed credit, did not utilize the credit to discharge any of their liability - It is no doubt true that the Tribunal has got discretionary power to interfere with the order of the adjudicating authority in the matter of reduction of the quantum of penalty which has been imposed by the adjudicating authority, however the exercise of discretion should be with sound reasons and cannot be arbitrary or whimsical - Bench observes that the Tribunal has not assigned any acceptable reasons as to why the penalty imposed on M/s. Endeavour Industries Limited should be reduced from Rs.50 lakhs to Rs.12.50 lakhs, on M/s. Future Tech Industries Limited should be reduced from Rs.50,00,000/- to Rs.12,50,000/-, on M/s. Victoria Steel Enterprises Limited should be reduced from Rs.80,00,000/- to Rs.20,00,000/- and on M/s. Sujana Steel Products Ltd., should be reduced from Rs.1 Crore to Rs.25,00,000/- - The only finding that the Tribunal has recorded in paragraph 9 of the impugned order is that apparently there is no revenue loss to the Department - Bench does not agree with the said submission - Availment of credit by the five entities was not authorized and illegal because this credit was based on invoices without actual movement of goods - It may be a fact that those five entities have not utilized the credit to discharge their duty burden in respect of other transaction but that cannot be the reason for reduction of the penalty, especially when the amount which was availed as credit remained with the five entities over a period of time until it was reversed - Apart from that, the Tribunal would say that there is no revenue loss because M/s. Sujana Metal Products Limited have reversed the credit, that can hardly be a mitigating factor for reduction of penalty on the five entities because those entities were well aware that the transaction was a 'circular transaction' and credit was availed on invoices without movement of goods - Therefore, the exercise of discretion by the Tribunal for reduction of penalty is perverse and unsustainable and accordingly, the same is set aside - Substantial questions of law nos. 1 and 2 are answered in favour of Revenue: High Court [para 6]

CX - CENVAT - With regard to the Substantial Question of law No.3 is concerned, the adjudicating authority has gone into the facts and has dropped the proposal for recovery of CENVAT credit from M/s. Sujana Metal Products Limited. - Correctness of this decision was tested by the Tribunal and it was observed that this circular chain of bill trading transaction initiated by SMPL by using/adopting actual credit balance of Rs.8,21,75,995/- available in their RG-23A and RG-23D account and created CENVATable invoices to three dealers mentioned above - The initial credit debited by SMPL is not under dispute and the department had admitted that appellant had sufficient balance of credit in their accounts which is clearly confirmed by the Superintendent's letter dated 17.11.2009 and 22.11.2009 - Though the appellants have created the documents by way of issuing documents and subsequently taking the credit without receipt of the goods, the appellants at the first instance have paid the duty by debiting the CENVAT account which was again taken back by above paper transaction - Factual position being that M/s. Sujana Metal Products Limited having already reversed the credit of Rs.8,21,75,955/-, once more to call upon them to reverse an equivalent amount would not be permissible in law - Thus, Bench confirms the finding rendered by the Tribunal - Consequently, Substantial Question of law No.3 is answered against the revenue: High Court [para 7, 8]

- Appeal disposed of: MADRAS HIGH COURT

2021-TIOL-547-CESTAT-CHD

Enexco Teknologies India Ltd Vs CST

ST - The appellants were during the financial year 2004-05 providing taxable services, i.e., Consulting Engineer Service, Erection, Commissioning & Installation and Maintenance & Repair - As appellants defaulted on payment of service tax due on these services, Revenue has issued SCN demanding service tax - Undisputedly, the services provided by appellant were contract services as the invoices are of supply of material alongwith services - The issue is squarely covered by decision of Supreme Court in case of Larsen & Toubro Ltd. 2015-TIOL-187-SC-ST - Following the same, appeal allowed in favour of appellant: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

2021-TIOL-546-CESTAT-KOL

Bengal Beverages Pvt Ltd Vs CCGST & Excise

CX - The appellant is engaged in manufacture of aerated water and fruit-based beverages - Demand confirmed on the ground that there are differences in quantity of consumption of preform as per ER-6 and form 3CD as filed by appellant by taking into account 100% conversion of preform into PET bottles - It is the case of department that the appellant has manufactured and cleared said excess PET bottles without payment of excise duty on the same and resorting to clandestine removal - Figures in reconciliation provided by appellant between 3CD and ER-6 clearly account for wastage during the manufacturing process which ranges from 0.40% to 1.60% in different years and the same is within the normal industry average of two percent as per the appellant's submission - Lower authority has not at all taken into account the plea of appellant as regards wastage of the preform during manufacturing process whereas the same has been clearly established by appellant in its reconciliation provided at all occasions - Hence, the finding of Adjudicating authority is devoid of any merits - No investigation has been conducted by department to prove the allegation of clandestine manufacture and removal of PET bottles and thus the recovery of excise duty merely based on differences in figures of consumption cannot be made by department - Further, demand has been raised for the period 2012-13 onwards in July 2018 whereas the spot memo was issued by Department in August 2014 itself - No explanation has been furthered by Department in respect of such gross delay in proceeding with the matter - Therefore, invocation of extended period of limitation is not justified - Demand of excise duty only on assumption and presumption without being substantiated by sufficient evidence, cannot be sustained on merits and is accordingly set aside - Since demand of excise duty is set aside, penalty and interest are also not sustainable: CESTAT

- Appeal alowed: KOLKATA CESTAT

2021-TIOL-545-CESTAT-CHD

Shahi Exports Ltd Vs CCE & ST

CX - The appellant is in appeal against impugned order wherein part interest has been granted for the amount paid by them during the investigation under protest as pre-deposit - it is an amount paid by appellant as service tax under protest during the course of investigation - This fact is not in dispute - When any amount paid under protest, it is neither pre-deposit nor service tax; it is only a deposit made by appellant and the said amount was retained by Revenue without any authority of law as held by Tribunal that the appellant was not liable to pay service tax - The order of this Tribunal has attained finality - Appellant is entitled to claim interest from the date of deposit till its realization - Therefore, impugned order is not sustainable in the eyes of law granting 10% of interest to the appellant considering it is a pre-deposit but the appellant is entitled to claim interest on the said amount as the said amount has been paid under protest from its payment till its realization @ 12 % p.a.: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

2021-TIOL-544-CESTAT-MAD

Hi Tec Corporation Vs CC

Cus - The Tribunal had remanded the matter to Adjudicating Authority - After de novo proceedings, the Commissioner vide impugned order held that the goods imported are correctly classifiable under Tariff Item 4811 90 99 of Customs Tariff Act, 1975 and rejected the classification adopted by appellant which is under Tariff Item 4911 99 90 ibid - The benefit of Notification No. 26/2000-Cus. was rejected and differential duty was confirmed with interest, besides imposing penalty - The issue on merits has been decided in appellant's own case in O-I-O dated 31.03.2016 - The classification adopted by appellant under Tariff Item 4911 99 90 ibid has been accepted by Department and the proceedings initiated vide SCN have been dropped - The appellant filed an RTI application seeking information as to whether any appeal has been filed by Department against such O-I-O or whether the same has been accepted by Department - The Department has accepted the decision passed by Commissioner holding that the subject goods are to be classified under Tariff Item 4911 99 90 ibid - When this classification has been accepted, the Department cannot allege misclassification for imports of same goods made during subsequent period - The correct classification of impugned goods would be under Tariff Item 4911 9990 ibid, as contended by appellant - The issue on merits is found in favour of appellant - The appellant has also raised a technical issue that the entire proceedings are vitiated as SCN issued by DRI is without jurisdiction - In M/s. Canon India Pvt. Ltd. 2021-TIOL-123-SC-CUS-LB , the Apex Court held that the DRI is not the Proper Officer for issuing SCN under Section 28(4) of Customs Act, 1962 - The impugned order cannot sustain: CESTAT

- Appeal allowed: CHENNAI CESTAT