2022-TIOL-NEWS-243 Dated : Wednesday, October 17, 2022

2022-TIOL-1300-HC-MP-CX

Heavy Engineering Workshop Vs CC & CE

CX - Petitioner was awarded a turnkey contract relating to Hydroelectric Power Projects - Various duty paid iron and steel items were brought to the petitioner's workshop situated at Rewa and from the same, various gates and other items were being prepared - The dispute was with regard to the different iron and steel items such as plates, angles, channels, beams, etc., which were first brought to the petitioner's workshop and are then subjected in the said workshop for activities of cutting, bending, welding, drilling, etc., as per the requirement of the project - Thereafter, they are embedded into the said structure at the dam - None of the articles are sold in the open market or diverted for any other purpose - A letter dated 1st December, 2004 was addressed to the respondent No. 1/Commissioner, Customs and Central Excise requesting for confirmation that no Central Excise duty was payable by the petitioner on the said items - Yet another letter was addressed on 20th December, 2004 - Since there was no response, a writ petition was filed in 2005 seeking for order to restrain the respondents from levying or demanding any Central Excise duty on the iron and steel items cleared from the petitioner's workshop and other consequential reliefs - By the order dated 11.04.2005, the writ petition was disposed of - In pursuance to the said order, a representation was filed by the petitioner before respondent No. 1 - Thereafter, by the impugned order dated 15.12.2005 his representation was answered and the respondent No. 1 came to the conclusion that goods are liable to Central Excise duty and appropriately classifiable under Tariff Item 7308 90 90 to the Schedule to Central Excise Tariff Act, 1985 - Questioning the same, the instant writ petition is filed.

Held: What the department would have to show is that the goods that are being manufactured by the petitioner are goods that are capable of being sold in the open market or to any purchaser - Only going by the theoretical reference that goods are marketable is not sufficient - The nature and extent of the goods requires to be defined in order to show that anyone in the open market can purchase the same - In the instant case, there is no dispute that what the petitioner is fabricating or manufacturing are articles such as Spillway Raidal Gates, Spillway Stoplog Units, Intake Gates of Trash Racks, Sedimentation Chamber Gates, Flushing Conduit Gates - They would clearly indicate that these are articles that have been fabricated or manufactured for the particular requirements of the particular Hydroelectric Project - No two Hydroelectric Projects are one and the same inasmuch as they differ in size and vary in every single component, therefore, every component that has to go into a hydroelectric unit is definitely one of those which are designed only for that purpose - Therefore, it cannot be said, nor to be found from any material on record to indicate that all the goods that are being manufactured by the petitioners are goods which are said to be marketable - The order dated 15.12.2005 passed by respondent No. 1 is quashed - Petition is allowed: High Court [para 11, 12]

- Petition allowed: MADHYA PRADESH HIGH COURT

2022-TIOL-941-CESTAT-MAD

Shimla Fruit Agency Vs CC

Cus - Appellant filed bills of entry declaring the goods as 'unflavoured supari' to be classified under Tariff Item 2106 90 30 of Customs Tariff Act, 1975 claiming benefit of concessional rate of duty under Sl. No. (i) of Notification No. 96/2008 - After examination, it was found that the goods were areca nuts-split which are classifiable under Tariff Item 0802 80 00 ibid - Samples were drawn and sent for analysis to CRCL and it was reported that goods are in form of cut pieces of betel nuts - Appellant is not contesting classification or valuation of goods - Even prior to passing of impugned order, he had requested for permission to re-export the goods and adjudicating authority has allowed such request - However, redemption fine has been imposed - Enhanced valuation of goods has happened for difference in classification adopted by appellant - He has adopted classification under Chapter 21 ibid on the view that goods are in nature of betel nut products - Taking note of the fact that the goods are not cleared for home consumption and appellant has also incurred huge detention-cum-demurrage charges, redemption fine and penalty imposed by adjudicating authority is on higher side, same is reduced: CESTAT

- Appeal partly allowed: CHENNAI CESTAT

2022-TIOL-940-CESTAT-KOL

Rani Packaging Industries Vs CCGST & Excise

CX - The issue to be decided is, whether penalty under Section 11AC of Central Excise Act, 1944 is imposable on appellant when entire duty and interest was paid before issuance of SCN itself - In view of the decision of Tribunal in KUNNATH TEXTILES, 2012-TIOL-513-CESTAT-BANG , impugned orders are set aside to the extent of imposition of penalty: CESTAT

- Appeal partly allowed: KOLKATA CESTAT

2022-TIOL-939-CESTAT-AHM

Advance Computer Education Vs CCE & ST

ST - Issue involved is, whether appellant is liable to pay service tax under category of Commercial Training or Coaching Service for computer training provided by them to students - Appellant have claimed that they are eligible for small scale exemption under Notification No. 6/2005-S.T. as their total value is much below the threshold exemption limit of Rs. 10 Lakh per year - There is no dispute that appellant are franchisee of SITD and service was also provided to students by SITD, therefore appellant is providing service under brand name of another person - Appellant also raised a point that they are eligible for exemption on vocational training service - In this regard, Computer Education service has been excluded from Vocational Training service by Notification No. 19/2005-S.T. - Period involved is 21.06.2006 to 30.11.2009 therefore, appellant is not eligible for exemption under vocational training - As regards invocation of extended period, for period 21.06.2006 to 30.11.2009, SCN was issued on 03.06.2010 wherein extended period was invoked - Issue is a neat question of law involving interpretation whether same is falling under Commercial Training or Coaching Service and it is also observed that appellant had a bona fide belief being a very small service provider having taxable value of Rs. 1,26,200/- that too in four years, they are eligible for small scale exemption under Notification No. 6/2005-S.T. - Appellant have not hidden transaction which was retrieved from their record - Demand for extended period is not sustainable - Consequently, penalty under section 78 is also not imposable - Appellant is liable to service tax only for normal period and demand for extended period and entire penalty is set-aside: CESTAT

- Appeal partly allowed: AHMEDABAD CESTAT

2022-TIOL-1306-HC-MP-GST

Amir Halani Vs State of Madhya Pradesh

GST - Additional Commissioner GST and Central Excise wrote a letter to Cyber Crime Indore for lodging complaint with respect to fake/fraudulent document uploaded on GST Portal and on that basis obtaining online registration and defrauding government exchequer; that the miscreants have used the bank account details of some random persons on the GST portal to obtain GST registration and which were non-existent and based on the same generated invoices and passed on fake input tax credit to defraud the exchequer - Case registered against Applicant who is in jail since 06.06.2022 for commission of offence punishable under Section 419, 467, 468, 470, 471, 34 of IPC and 66-C, 66-D IT Act - Bail application filed.

Held: It is noticed that during investigation it has been found that fraudulent GST firm namely Shanti Impex, M/s A.N. Enterprises, M/s Kasyap Enterprises, M/s Rahul Enterprises has been operated by Suleman Karim Ali Meghani and present applicant Amir Halani , other co-accused persons are still absconding, therefore, there is strong apprehension that if applicant is released on bail, he may tamper with the prosecution evidence and he may also abscond - In view of the prima facie evidence available on record, this Court is not inclined to grant bail to applicant - Application dismissed: High Court

- Application dismissed: MADHYA PRADESH HIGH COURT

2022-TIOL-1305-HC-KOL-GST

R P Buildcon Pvt Ltd Vs Supdt. of CGST & CX

GST - Petition was inter alia filed for issuance of a writ of mandamus to declare that the scrutiny of returns under Section 61 of the CGST Act, 2017 cannot be done once an audit under Section 65 of the CGST Act, 2017 has been conducted by the department for the same tax period - Single Bench by the impugned order had dismissed the writ petition on the ground that the proceedings are in the nature of show cause notice - Aggrieved, the present appeal is filed.

Held: Bench is of the view that since the audit proceedings under Section 65 of the Act has already commenced, it is but appropriate that the proceedings should be taken to the logical end - The proceedings initiated by the Anti Evasion and Range Office for the very same period shall not be proceeded with any further - Appeal allowed by setting aside the order of the Single Judge - Bench directs the first and fourth respondents to issue show cause notice to the appellants within a period of six weeks - Second and third respondents are restrained from proceeding further against the appellants in respect of the very same period for which action has already been initiated by the first and fourth respondents, i.e. for the financial years 2017- 2018, 2018-2019 and 2019-2020: High Court [para 7 to 9]

- Appeal allowed: CALCUTTA HIGH COURT

2022-TIOL-1304-HC-P&H-GST

Gaurav Dhir Vs CGST

GST - Petitioner, a Chartered Accountant, seeks regular bail in a case registered u/s 132 of the Act, 2017 - Petitioner had been paid professional fees for uploading of the claim for refund of Input Tax credit - Case is that the petitioner and the co-accused are colleagues and as such the UDIN was borrowed by petitioner from him for uploading.

Held: In the present case, the investigation has been completed and the challan stands presented; petitioner is not involved in any other case; he is in custody since 17.5.2022; nothing is to be recovered from him; there are a total of 21 PWs; it is a Magisterial trial, which is yet to commence; thus, further incarceration of the petitioner behind bars would not serve any useful purpose and, therefore, the present petition for grant of regular bail deserves to be allowed - Keeping in view the the facts of present case and the judgments, particularly in the cases of Sanjay Chandra [2 011(4) RCR (Crl.) 898 ] and P. Chidambaram [(2020) 13 SCC 791], the instant petition is allowed - The petitioner is ordered to be released on regular bail, subject to his furnishing bail/surety bonds amounting to Rs. 10 lakhs to the satisfaction of trial Court/Duty Magistrate concerned and subject to him not being required in any other case - Petitioner shall abide by the further conditions as laid down: High Court

- Bail application allowed: PUNJAB AND HARYANA HIGH COURT

2022-TIOL-1303-HC-RAJ-GST

A H Marble Crafts Vs Commissioner Tax

GST - Erstwhile proprietor of the firm, father of the present proprietor, expired on 31.01.2018 whereupon, an intimation was forwarded to the respondent CGST Department through a letter in hard copy - The CGST Act provides a procedure for cancellation and thereafter, transfer of registration of the dealer pursuant to the death of the proprietor of the firm - However, such process is permissible if the information regarding death of the proprietor is uploaded on common portal in FORM GST REG-16 - It appears that the information regarding the death of the sole proprietor was not forwarded to the CGST Department electronically and in prescribed form and thus, further attempts made on behalf of the firm to file the GST returns were blocked - In the meantime, a fresh registration has been acquired by the petitioner - Being aggrieved by the inaction of the respondent in cancellation and transfer of the registration and in opening the portal so as to complete the tax liability, the present petition is filed - Petitioner submits that merely on the technical ground that the information regarding death of the proprietor was sent in a wrong pro-forma and as a hard copy, the respondents could not have avoided acting on the same - Reference is also made to the Circular No. 96/15/2019-GST, dated 28.03.2019, clause 3(b) of the same and it is requested that necessary directions be issued to the respondent to open the common portal so that the petitioner can upload the requisite information in form GST REG-16 and get the two accounts linked so as to facilitate clearing the tax liabilities and avoid anomalies.

Held: Hyper-technical ground cannot be considered valid so as to deny the petitioner from the opportunity to link the GSTIN of his father's firm with the new GSTIN number of the firm - As a matter of fact, the petitioner gave the intimation about the death of the proprietor of the firm which fact establishes his bona fides that he is desirous of removing the anomalies and clearing off the tax liability - Respondents are directed to activate the common portal and allow the petitioner to upload the appropriate information in FORM REG-16 within next 30 days - As soon as the information is provided, the GSTIN number of the transferee and the transferor shall be linked as per clause 3(b) of the Circular dated 28.03.2019 - Writ petition is allowed: High Court

- Petition allowed: RAJASTHAN HIGH COURT

2022-TIOL-1302-HC-MP-GST

Elora Tobacco Company Ltd Vs UoI

GST - Petition filed seeking quashing of panchanamas dated 15.06.2020, 17.06.2020, 04.07.2020 and 06.07.2020.

Held: Challenging the panchanamas after a lapse of two years is of no consequence when show cause notice has been issued to the petitioner - The petitioner may raise all the available grounds in reply to the show cause notice before the adjudicating authority - Petitioner has failed to point out any prejudice caused to the petitioner for the searches on various dates which have culminated into the issuance of show cause notice - Panchanamas are part of the search and investigation in the factory of the petitioner - The petitioner will have a complete opportunity to dispute the contents of the panchanamas in the adjudicating proceedings -The present petition is devoid of substance and merit, hence is dismissed: High Court [para 5, 6]

- Petition dismissed: MADHYA PRADESH HIGH COURT

2022-TIOL-1301-HC-KAR-GST

Ghodawat Packers LLP Vs UoI

GST/CX - Tobacco and tobacco products are being taxed under the provisions of CGST Act, 2017, since its inception in 2017 - By notification No.11/2017-CTR dated 30.06.2017, exemption from levy of excise duty was granted to tobacco and tobacco products - However, National Calamity Contingent Duty (NCCD) was continued to be levied on tobacco and tobacco products under Section 136 of the Finance Act, 2001 - Thereafter, by notification bearing No.3/2019 dated 06.07.2019, exc ise duty @ 0.5% has been sought to be levied on various tobacco and tobacco products - Petitioners have been assessed based upon the aforementioned taxes - Aggrieved by such taxation, petitioners have filed writ petitions - C ase of the petitioners is that the purpose of GST is to consolidate and levy indirect taxes insofar as it relates to the goods and services which are covered in it and tobacco and tobacco products being subjected to GST, the respondents ought not to have imposed excise duty or NCCD any more on tobacco and tobacco products - It is further contended that, even if excise duty is leviable upon tobacco and tobacco products, by virtue of notification No.11/2017-CTR, no excise duty was being levied on tobacco and tobacco products from 01.07.2017 till notification No.3/2019-CTR dated 06.07.2019 was passed and NCCD being a surcharge of excise duty could not have been levied - On the said ground it is prayed that the writ petitions be allowed - Respondents justify the levy of GST, excise duty and NCCD separately on tobacco and tobacco products and pray for dismissal of the writ petitions.

Held: Levy of excise duty on tobacco and tobacco products is a matter of public policy and this Court in exercise of writ jurisdiction would not interfere with the same - CGST Act, 2017 contemplates levy of Excise duty in respect of goods included in Entry 84 of the Union List of Seventh Schedule of the Constitution of India - With coming into force of the CGST Act, 2017, the CEA, 1944 has been amended with effect from 1.07.2017 and Fourth Schedule has been introduced to the CEA, 1944 wherein tobacco and tobacco products, were subjected to excise duty - The CGST Act itself contemplates levy of excise duty upon tobacco and tobacco products apart from they being taxed under the provisions of CGST and there is no error in the same - Thus, the respondents are entitled to levy CGST as well as excise duty on tobacco and tobacco products - NCCD is a surcharge of the excise duty - The case of the petitioners is that, when excise duty is not levied, NCCD cannot be levied and there was no excise duty on tobacco and tobacco products from 01.07.2017 to 06.07.2019 and NCCD could not have been levied during the said period - Surcharge is an additional charge or payment - Section 136 of the Finance Act, 2001 contemplates levying and collecting NCCD, which is considered as a surcharge, a duty of excise - Thus NCCD is not contemplated in Section 136 as a levy on the excise duty levied under the Central Excise Act, but a separate duty being levied on the value of the goods manufactured or produced and it is a type of excise duty - The Finance Act, 2001 sought to levy NCCD on the goods as described in the Seventh Schedule - Repealing of the Central Excise Act does not absolve the petitioners paying NCCD as determined under the Seventh Schedule - Thus, NCCD is a surcharge and a type of excise duty which can be levied independently of the excise duty as contemplated under the provisions of Fourth schedule to the Central Excise Act, 1944 - Thus levy of NCCD in the absence of levy of excise duty cannot be considered as bad in law - Writ petitions, being devoid of merit, are dismissed: High Court [para 13, 15, 16, 19, 20]

- Petitions dismissed: KARNATAKA HIGH COURT