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2023-TIOL-631-HC-MAD-GST
Hemasri Enterprises Vs Appellate Authority/Deputy Commissioner (ST)
GST - Second respondent passed an order dated 10.11.2021 cancelling the registration of the petitioner; that the writ petitioner chose to file a statutory appeal and which was filed on 29.09.2022; that the first respondent viz. Appellate authority dismissed the appeal as barred by limitation by the impugned order dated 20.10.2022, therefore, the present petition.
Held: I t is necessary to notice that a combined reading of sub-sections (1) and (4) of Section 107 of TN-GST Act make it clear that the prescribed period of limitation is three months from the date of communication of order and condonable period is a further period of one month - It is, therefore, to be noted that the unit of limitation qua prescribed period and condonable period have been set out in months and not in days - Reckoning date is 10.11.2021 being the date on which the impugned order was communicated to writ petitioner - This date falls within the exclusion period owing to Corona virus pandemic and consequent lockdown, which is collectively referred to as 'COVID 19 situation' wherein Hon'ble Supreme Court vide Suo Motu proceedings in Cognisance for extension of limitation [ 2022-TIOL-04-SC-MISC-LB ] excluded the period from 15.03.2020 to 28.02.2022 - In this order, Hon'ble Supreme Court made it clear that if the expiry of period of limitation falls within this period, irrespective of remaining available period, a litigant will have 90 days time from 01.03.2022 - This means that in the case on hand, computed from 01.03.2022, 90 days period elapsed on 30.05.2022 and further condonable period of one month elapsed on 30.06.2022 - Appeal was filed only on 29.09.2022, therefore, the order of the Supreme Court does not ensure to the benefit of the writ petitioner - Writ Court finds no ground to interfere with the impugned order - Writ Court is informed that it is open to writ petitioner to apply for GST registration afresh - If the writ petitioner chooses to do so, the application of writ petitioner shall be considered expeditiously as the business of authority concerned would permit albeit in accordance with law - Sequitur is captioned Writ Petition fails and the same is dismissed: High Court [para 7 to 10]
- Petition dismissed: MADRAS HIGH COURT
2023-TIOL-630-HC-KAR-CT
GE T And D India Ltd Vs State of Karnataka
Commercial Tax/Sales Tax- During the pendency of the appeal, in light of introduction of "CST Karasamadhana Scheme 2018" by the order dated 04.08.2018, which provided for waiver of penalty and interest subject to payment of tax, the petitioner had opted for relief under the said Scheme - For the purpose of availing benefit, the Scheme requires that the appeal is to be withdrawn and accordingly, the appeal filed by the petitioner pending before the Tribunal was withdrawn to enable the petitioner to avail benefit under the said Scheme - The petitioner submits that he was eligible for refund of Rs.26,25,948/- if benefit was extended under the Scheme and accordingly he has pursued the application filed under the Scheme - It is further submitted that the application has been rejected and which has been assailed in the present petition - Order of rejection by the Authority is on the ground of the assessee not being eligible for refund of any amount that may become excess as a result of adjustment of amount or the penalty or interest paid by him at the time of filing the appeal.
Held: In this case, the peculiar facts are that the petitioner has paid 30% of the amount due on 17.01.2013 - If that were to be so, the question that requires adjudication by the Authority is whether a subsequent recovery from the banker of the petitioner after the appeal was taken on record and payment was made is an amount that could be taken note of - In light of the same, the matter requires reconsideration at the hands of the Authority after hearing the petitioner - It is made clear that in the event, if the application is rejected, needless to state that the petitioner cannot be placed in a position worse off and the petitioner is entitled for restoration of his appeal and that would be a logical course of action - Authority to reconsider and pass fresh orders- Petition disposed of: High Court [para 12, 13, 14, 15]
- Matter remanded: KARNATAKA HIGH COURT
2023-TIOL-629-HC-AHM-CUS
Dorf Ketal Chemicals India Pvt Ltd Vs UoI
Cus - Grievance of the petitioner is that the respondents have denied them the legitimate export benefits in the nature of Merchandize Exports from India Scheme - They have, therefore, sought for directions to the respondents to grant the said benefits and also strike down para 3.04A inserted in Foreign Trade Policy vide Notification No.30/2015-22 dated 1st September, 2020 as ultra-vires; to sanction and pay to the petitioner interest at the rate of 9% on MEIS benefits accrued in the petitioner's favour, till actual payment of such MEIS benefits.
Held: It appears that the case of the petitioner could be considered for granting appropriate relief under para 2.58 of the Foreign Trade Policy - While relegating the petitioner to make representation to the competent authority, the aspects conspicuously noted are that the respondents have not disputed the entitlement of the petitioner of the benefit and secondly that not uploading of Let Export Orders in the electronic system of the respondents was not on account of fault, much less any culpable fault on the part of the petitioner, but since the EDI Electronic System was not operated during Covid-19 pandemic period, the Let Export Orders were manually made and received by the authorities, driving the petitioner out of the MEIS benefit - Petitioner may make representation to the competent authorities of the respondents within a period of three weeks and the representation be decided within a period of four weeks - Petition is disposed of: High Court [para 5.5, 5.6, 7]
- Petition disposed of: GUJARAT HIGH COURT
2023-TIOL-439-CESTAT-KOL
CC Vs Jitendra C Naviani
Cus - DRI was investigating a case of fraudulent import of high end cars - Respondent was summoned to produce import documents, who provided invoices, bill of lading, bank remittance advice, challan for payment of Customs duty along with car insurance policy and RTO registration certificate - It was proposed that as the vehicle was used, therefore, benefit of Notfn. 21/2002-Cus is not available - Accordingly, vehicle was liable for confiscation and redemption fine and penalty are imposable - Adjudicating authority has held that proposed value in SCN is not acceptable - Commissioner (A) has rightly held that value adopted by Adjudicating authority is not acceptable in absence of any other value of said goods available at that time - Therefore, declared value is to be accepted - No infirmity found in said observations - It is the fact that vehicle was manufactured in June 2007 as declared by manufacturer and registration was in August 2007, which was manufactured by assessee - In that circumstances, vehicle was registered only for the purposes of transportation for Port - Therefore, it cannot be held that vehicle was old and used - Commissioner (A) has rightly given the benefit of Notification No. 21/2002-Cus - Therefore, goods are not liable for confiscation as the facts are not controverted by any cogent evidence - Redemption fine and penalty are not imposable - Impugned order is upheld: CESTAT
- Appeal dismissed: KOLKATA CESTAT
2023-TIOL-438-CESTAT-KOL
Comet Technocom Pvt Ltd Vs CCE & ST
CX - The assessee sent materials to diverse job workers for manufacture of the final product - Only inspection of the finished goods was carried out at the premises of the assessee - If the job workers are proved to be the agents of the assessee who work under their supervision and control, then the assessee is the real manufacturer and not the job workers - Excise duty is payable by the assessee - On the other hand, if the job workers are proved to be independent contractors with little or no supervision by the assessee then they are the manufacturers and the liability of paying excise duty is with them. Held - The High Court of Calcutta in CEXA No. 57 of 2019, held that if the job workers are proved to be independent contractors with little or no supervision by the assessee then they are the manufacturers and the liability of paying excise duty is with them - From the above it would be evident that in the present case, the job workers of the assessee company were independent contractors/manufacturers and hence, the assessee company and/or its directors cannot be saddled with any liability of payment of excise duty and/or consequential penalty with respect to the goods so manufactured by the said job workers - Hence the appeals filed by the assessee are allowed: CESTAT
- Appeals allowed: KOLKATA CESTAT
2023-TIOL-437-CESTAT-DEL
Employees Provident Fund Organization Vs CST
ST - The assessee, M/s Employees Provident Fund Organisation has filed this appeal for setting aside the order dated 26.11.2015 passed by the Commissioner of Service Tax, Delhi-3 Commissionerate the Commissioner confirming the demand proposed in the four show cause notices dated 30.09.2010, 15.10.2012, 23.05.2014 and 17.04.2015 with interest and penalties - The period involved in the show cause notice dated 30.09.2010 is from 2009-2010; the show cause notice dated 15.10.2012 is from 2011-2012; the show cause notice dated 23.04.2014 is from 2012-2013, and the show cause notice dated 17.04.2015 is from 2013-2014 - The taxable category mentioned in the show cause notice for the period 01.04.2009 to 30.06.2012 is 'banking and other financial services' defined under section 65(105)(22k) of the Finance Act, 1994 the Finance Act - For the period commencing 01.07.2012 up to 31.03.2014 service tax has been proposed under section 65B(44) read with section 66B of the Finance Act - The Department alleged that the assessee provided services to the employers in relation to asset management of Employees Provident Fund, Employees Deposit Linked Insurance Scheme and Employees Pension Scheme - The Department also alleged that in lieu of providing the said services, the appellant received income under the aforesaid heads from the employers, which would be taxable under the category of 'banking and other financial services' for the period upto 30.06.2012 and leviable to service tax in terms of the provisions of section 65B(44) of the Finance Act, 1994 the Finance Act read with section 66B of the Finance Act for the period from 01.07.2012 to 31.03.2014 - Accordingly, four show cause notices were issued to the appellant demanding service tax under section 73(1) of the Finance Act with interest and penalties. Held - For the period from 01.07.2012 to 31.03.2014, the Commissioner, Siliguri by a detailed order dated 03.09.2019, in the case of the appellant for the period 01.07.2012 to 31.03.2014, discharged the show cause notice that was issued for demanding service tax on the amount collected by the appellant towards administrative charges and inspection charges - The consultant appearing for the appellant has submitted that this order passed by the Commissioner, Siliguri has attained finality as no appeal has been filed by the Department - The Commissioner, Delhi in the order dated 02.03.2023, while adjudicating the two show cause notices issued for the period 2014-2015 and 2015-2016, has also discharged the show cause notice after relying upon the decision of the Tribunal and the Board Circular dated 23.08.2007 - Hence the order passed by the Commissioner merits being set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2023-TIOL-436-CESTAT-MAD
Universal Power Systems Pvt Ltd Vs CST
ST - During the course of audit of accounts of the appellant by the Internal Audit Group, it appears that they had noticed the agreements entered into by the appellant with music directors/music companies' association for procuring ringtones and paid royalty charges at agreed rates per download - It appeared that there were separate agreements between the appellant and various mobile telecommunication operators to provide ringtones, pictures, etc., that could be downloaded by the customers from the mobile platform developed, installed and maintained by the appellant, for which the appellant was entitled for revenue sharing at agreed rates per download by those mobile operators - In addition to the above, it appears that the appellant also received the royalty amount payable/paid to the music directors/music companies from the said mobile operators. It further appeared to the Revenue that the appellant had paid Service Tax under business auxiliary service on the revenue share received, as above, and in certain cases, it appeared that the appellant had paid Service Tax on the gross amount received from the mobile telecommunication operators, which included the royalty charges payable/paid to the music directors/music companies.
Held - Duty demand and penalty cannot be sustained: CESTAT
+ It is also a matter of record that the differential Service Tax demanded was calculated based on the books of accounts/ST-3 returns maintained/filed by the appellant and no other material evidence was relied upon for invoking the extended period of limitation. In the background of the above discussion, when each and every fact was very much available with the Revenue, what is that which was "suppressed" is not clear. We say so because, the non-payment of Service Tax on royalty having been noticed during audits conducted since 2009 appears to have been pointed to the appellant and the appellant appears to have replied thereto. We, however, would not like to get into the merits or otherwise of such reply, but the fact remains that the Revenue was very much aware of these facts;
+ It is thus clear from the above proviso that the reason of fraud or collusion or suppression of facts, etc., "with intent to evade payment of service tax" is a necessary ingredient. However, the Revenue has only stated suppression of facts with an intention to evade payment of Service Tax when, clearly, the facts and figures were only collected from the books/ST-3 returns of the appellant. Further, we also note that the books of accounts and financial records were periodically audited by the Revenue authorities right from the year 2009 onwards and for the above reasons, it is very difficult for us to accede to the Revenue's stand that the appellant had suppressed facts with an intent to evade payment of Service Tax. It would have been a different matter altogether had the appellant even collected the Service Tax on the royalties as well and pocketed it, but it is not so here in the case on hand;
+ Be that as it may, the Show cause Notice proposed to demand the differential Service Tax alleging that they were liable to pay Service Tax on the gross amount including the expenditure incurred towards payment of royalty charges and thus, that the appellant had failed to satisfy the conditions under Explanation 1 to Rule 5(2) of the Valuation Rules. The Revenue has referred to Section 67(3) ibid., to say that the "gross amount" shall include any amount received towards taxable service and has also referred to Section 67(1) ibid., to say that the Service Tax chargeable with reference to its value shall be the gross amount charged;
+ The demands were proposed, as indicated above, by the lower authority, by holding that the payment of royalty was an expenditure incurred by the appellant on behalf of the service recipient. The differential tax has been arrived at as per Section 67 of the Finance Act, 1994 read with Rule 5 of the Rules. In view of the above decision of the Supreme Court, the Revenue could not have proposed and confirmed the demand under Section 67 of the Act read with Rule 5 ibid., since it is by virtue of the mode of computation provided here that the differential tax was arrived at and demanded and this runs counter to the ratio decidendi of the Apex Court in M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. . Hence, the demand cannot sustain on merits.
- Appeal allowed: CHENNAI CESTAT
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