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2023-TIOL-1062-HC-MUM-GST
Globolive 3D Pvt Ltd Vs UoI
GST - Refund of unutilized ITC accumulated due to export of services - Question which falls for determination is as to whether the services rendered by the petitioner of providing Satellite derived 3D model services, would fall within the purview of "export of services" as defined under Section 2(6) of the IGST Act or would be categorized as Online Information Database Access or Retrieval services as defined under Section 2(17) of the IGST Act, in the context of Section 13 of the IGST Act.
Held : Agreement describes the petitioner to be engaged in the business of providing Satellite derived 3D model services and has considered skill, knowledge and experience in the field to perform such services and on such representation, the Emirates Defence Industries Co. PJSC had agreed to engage the petitioner to provide the services as defined in the Agreement to "EDIC and any of its Affiliates" designated by Emirates Defence Industries Co. PJSC - It is clear that supply of service was to be made to M/s. Emirates Defence Industries Co. which was not located in India - Also the place of supply of service was agreed to be outside India, as also the payment of such services was being received by the petitioner/supplier of service in convertible foreign exchange - Further, the establishment of the petitioner (supplier of service) and the recipient of service (Emirates Defence Industries Co.) were not establishments of distinct person under Explanation 1 below Section 8 - The petitioner had received consideration in convertible foreign exchange as seen from the copy of invoice as placed on record in regard to which there is no dispute - It is thus clear that the petitioner certainly qualified the requirement of Section 2(6) that it was dealing in “export of services” in relation to the Agreement in question - Service offered by the petitioner is far different from what is included in any of the electronic services as set out in clauses (i) to (vii) in the definition of OIDAR - If the interpretation to the Agreement in question as rendered by the respondents is to be accepted, it would lead to an absurdity inasmuch as any communication of information or providing of service through the medium of emails or any electronic transfer of data would be required to be held as OIDAR service, which is certainly not the purport and meaning an OIDAR service as defined under Section 2(17) of the Act - Merely because the petitioner has secured data from different source so as to create the services to be supplied to Emirates, it would not amount to the petitioner falling within the definition of Section 2(17) - None of the conditions as provided for in the exception to section 13(12) were satisfied for the appellate authority to come to a conclusion that the person receiving such services i.e. Emirates Defence Industries Co. PJSC, was deemed to be located within the taxable territory as none of the two contradictory conditions as set out in the exception, were satisfied - Supreme Court [in Bhopal Sugar Industries Ltd. Vs. Sales Tax Officer (AIR 1977 SC 1275) ] has held that it is well settled principle that the Court, while interpreting the terms of the agreement, would be required to look to the substance rather than the form of the agreement and that the true relationship of the parties has to be gathered from the nature of the contract and its terms and conditions - Meagre reasons as set out in the impugned order were certainly not sufficient for the Appellate Authority to reach to a conclusion that the services in question was not export of service so as to deny the petitioner's the referred claim - Petitioner is entitled to refund on account of export of services - Petition allowed: High Court [para 20, 21, 22, 24, 26, 28, 29, 30]
- Petition allowed: BOMBAY HIGH COURT
2023-TIOL-1061-HC-DEL-GST
Rajeev Chhatwal Vs CGST
GST - The petition has been filed, inter alia, praying that directions be issued to revenue to release Indian currency, which was seized by revenue during search - Revenue claimed that petitioner had made a voluntary statement on 29.02.2020 and admitted that he was involved in a racket of issuance of fake invoices along with other accused namely, Asif Khan and Arjun Sharma - It was claimed that said persons have issued invoices from various firms without supply of goods resulting in Income Tax Credit (ITC) of approximately Rs. 11 crores being availed - The petitioner was summoned on various dates - However, it is alleged that petitioner attempted to evade investigation but finally appeared before concerned officers on 29.02.2020 - The revenue states that investigation is not complete yet and therefore, no SCN has been issued - Petitioner claims that he had also signed various documents and statements under threat and coercion by concerned officers - He claims that he is not involved in making any supplies and is not a taxpayer and is not concerned with alleged fake ITC availed by any other entity as alleged - Petitioner has assailed seizure of Indian currency from its premises inter alia on the ground that Section 67(2) of CGST Act does not empower any such seizure - The petitioner has confined the petition to aforesaid issue - The aforesaid question is covered in favour of petitioner by recent decision in Deepak Khandelwal Proprietor M/s Shri Shyam Metal 2023-TIOL-1007-HC-DEL-GST - Revenue is directed to remit the amount seized to petitioner's bank account within a period of two weeks along with accrued interest - Revenue is not precluded from taking any such steps or measures as available in accordance with law: HC
- Petition disposed of: DELHI HIGH COURT
2023-TIOL-1060-HC-KOL-GST
Gopeshwar Iron And Steel Works Pvt Ltd Vs Supdt. CGST & CX
GST - The question arises would be as to whether the revenue authority can proceed further pursuant to notice dated 17.04.2023 purported to have been issued under Section 61 of CGST Act, 2017 - The appellants' case is that for the very same period, Audit Department had issued a notice and called for several documents which was submitted by appellants and after being satisfied the documents placed, the Audit Department has closed the case and has approved by proceeding - It is further submitted that for same period the DGGI has already issued summons and appellants have submitted documents and the matter is pending before DGGI - The Superintendent, CGST & Central Excise will have no jurisdiction to issue the notice dated 17.04.2023 which was impugned in petition - Further, appellants' case is that another question is jurisdiction of DGGI to call for appearance and they have submitted their jurisdiction and supplied all the documents called for and matter is pending - Furthermore, it is submitted that notice issued by Superintendent, Range 1 the documents which have been called for are identical and same settled by department which were called for by Audit Department which was furnished, considered and Audit Department has been approved and settled and therefore, it is the case for appellants that notice dated 17.04.2023 is without jurisdiction - Revenue submitted that directions have been received from Analytical Wing of Department and this has necessitated the Superintendent to issue the notice dated 17.04.2023 - In any event the legal issue which has been required to be considered is, whether a fresh notice would be issued by Range Officer - The scrutiny of return had been done by Audit Department and audit has been conducted which has resulted in an order under Section 65 of the Act - This being a jurisdictional issue, court is inclined to pass the order which will be in force till the writ petition is heard and disposed of - Notice issued by Superintendent, CGST & Central Excise shall remain stayed till the disposal of petition - The revenue is directed to file the affidavit-in-opposition in petition after which the writ petition will be heard and disposed of on merits and in accordance with law - Revenue places reliance on decision in matter of M/s. Suresh Kumar PP passed by Justice K Vinod Chandran and Justice T. R. Ravi and would submit that investigation can parallely proceed - The applicability of decision will be considered when petition is taken up for hearing: HC
- Appeal allowed: CALCUTTA HIGH COURT
2023-TIOL-1059-HC-MUM-ST UPL Ltd Vs UoI
ST - Petition filed under Section 226 against the lackadaisical approach of respondent no.2-Commissioner of Central Excise in not adjudicating the show cause notice issued 13 years back dated 21 October, 2010 – Petitioner prays for quashing and setting aside the SCN on the ground that the law would not permit such delayed adjudication of the show cause notice.
Held: There is no material whatsoever on record including in the affidavit that respondent no.2 which in any manner would justify such non-adjudication on the ground that it was not possible for respondent no.2 to adjudicate the show cause notice for justifiable reasons either within a reasonable period and more so, within a period as sub-section (4)(B) of Section 73 would manifest - Conduct of respondent no.2 was totally overlooking the mandate of such legal requirement - Even in absence of the provisions of sub-section (4)(B) of Section 73, respondent no.2 could not have acted oblivious to the settled principle of law, that a show cause notice would be required to be adjudicated within a reasonable time depending the facts of each case - Having perused the reply affidavit, Bench finds that no justification whatsoever is given by the Deputy Commissioner in Commissioner not adjudicating the show cause notice – Petition is required to be allowed - Copy of this order be forwarded to the Secretary, Minister of Finance, as also to the Central Board of Customs and Indirect Taxes: High Court [para 14, 16, 17, 18, 20]
- Petition allowed: BOMBAY HIGH COURT
2023-TIOL-1058-HC-MUM-CX
Pr.CCGST & CE Vs Larsen And Toubro Ltd
CX - Revenue is in appeal against order dated 28 August 2019 passed by CESTAT - Substantial question of law is Whether in the facts and circumstances of the case the CSTAT was right in holding that the amendment to Rule 6 of the CENVAT Credit Rules,2004 retrospectively amended by the Finance Act,2010, was applicable in the present case in the light of the provisions of Section 73 of the Finance Act,2010? - It is the Department's case that the respondent had manufactured dutiable excisable goods as well as exempted goods, consuming common CENVATED inputs and input services as also had maintained separate accounts in respect of raw materials i.e. inputs consumed in excisable and exempted goods, however, it had not maintained separate accounts in respect of input services used / consumed in or in relation to manufacture of excisable and exempted finished goods as required in terms of Rule 6(2) of Cenvat Credit Rules, 2004 as also that the respondent had not followed the procedure specified in sub-rule (3A) of Rule 6 of the CCR 2004 - It was contended by the respondent assessee that they were maintaining project wise record of purchases and input services and that they had reversed Cenvat credit in proportion of turnover of excisable and exempted goods - It is contended by the Department that Rule 6 of the CCR 2004 was retrospectively amended vide the Finance Act, 2010, and that the amended provisions were made applicable with effect from 10 September 2004 to 31 March 2008 (both days inclusive) only to such manufacturers in whose case the disputes were pending as on the day the Finance Bill, 2010 was enacted i.e. 8 May 2010 - It is submitted that in the present case, the Show Cause Notice was issued on 3 May 2011, therefore, the provisions of Section 73 of the Finance Bill, 2010 were not applicable to the assessee, as there was no dispute pending on the date of the enactment of the Finance Bill,2010 and for such reason the CESTAT was also not right in holding that the amendment to Rule 6 of CCR,2004 was applicable in the present case.
Held : The periods subject matter of the show cause notice dated 3 May 2011 in question are the periods beginning with 10 September 2004 till 31 March 2008 and the subsequent period post 1 April 2008 upto 31 December 2010 - Bench is not persuaded to accept contention (of Department) that the amendment as brought about to Rule 6 by the Finance Bill,2010 was applicable in the case where the show cause notice was issued and/or pending on the date on which it received assent by the President - Thus, what was imperative was not issuance of a show cause notice but the pendency of dispute relating to adjustment of credit of input used or exemption on final product relating to the period beginning from 10 September 2004 and ending on 31 March 2008 (both days inclusive), being the pending date on which the Finance Bill received assent of the President - The respondent-assessee, even if it had failed to maintain a separate account in view of the retrospective amendment, it was entitled to reverse proportionate Cenvat Credit - The option of paying an amount equal to 10% sale value of exempted goods, therefore, could not have been enforced on the assessee - It is rightly observed by the CESTAT that when for such period the dispute has arisen only in such event, a show cause notice was issued and hence, the case of the respondent for the period 2007-08 was covered by the amendment made by way of insertion of sub-rule (7) of Rule 6 of CCR,2004 by the 2010 Amendment - Question is answered in favour of the assessee and against the revenue - Revenue appeal dismissed: High Court [para 19, 26, 28, 30]
- Appeal dismissed: BOMBAY HIGH COURT
2023-TIOL-801-CESTAT-DEL
Essjay Ericsson Pvt Ltd Vs CCGST
ST - Maintenance and Repairing Servicesand Renting of Immovable Property Services - Pursuant to Tax Audit, the following objections were raised - Wrong availment of Cenvat credit on Employee Insurance (Rs.1,59,52,509/-); Non-reversal of Cenvat credit under Rule 6(3) of Cenvat Credit Rules, 2004 (Rs.1,18,66,102/-) and Non-payment of Service Tax under RCM on legal charges (Rs.35,203/-) - The adjudicating authority confirmed the demand along with penalty and interest, therefore, the present appeal.
Held: In the case of M/s. Rajratan Global Wire Ltd. ( 2021-TIOL-315-CESTAT-DEL ), it is held that once there is no evidence that the insurance service was obtained for the personal use of the employee of assessee, it is definitely an eligible input service for which the assessee is entitled to claim the Cenvat credit - Above all, department has conceded for this issue to be no more res integra and to have been decided in favour of the assessee -Bench holds that the Cenvat credit availed by the appellant on the various insurance policies taken for its employee were eligible for availment -Order of reversing/disallowing the same is, therefore, liable to be set aside- Coming to the objection about methodology adopted by the appellant under Rule 6 of CCR, 2004, Bench observes that the adjudication authority has held that appellant is required to reverse the Cenvat credit on common input services on the ground that the appellant has also provided non-taxable services in the State of Jammu & Kashmir - Since, there is no denial that appellant was providing taxable as well as non-taxable services, the proportionate reversal of Cenvat credit has to be done in accordance of Rule 6(3) of CCR, 2004 - Clause (i) further provides that if the amount so determined is not paid within the due date i.e. 30th June then in addition to the said amount, the assessee shall be able to pay interest @24% per annum to the due date till the date of payment - Thus, it is evident that the condition of filing the declaration is only directory and not mandatory - In case, a particular option is not opted by the output service provider, Bench is of the opinion that Revenue cannot insist assessee to a avail particular option - It is an admitted fact that the assessee herein have calculated the CENVAT Credit in terms of clause (c) read with clause (h) and have deposited the amount so determined, by 30th June in the succeeding financial year as prescribed - Rule 6 cannot be used as tool of oppression to extract the amount which is much beyond the remedial measure and what cannot be collected directly cannot be collected indirectly, as well - Held that in case of substantive compliance made by the assessee i.e. calculation of the amount of Cenvat credit proportionate reversal on annual basis and payment of the amount before the prescribed date, substantial benefit cannot be denied as it tantamount to not availing of input service credit on common inputs which are going into exempted services - Held, therefore, that reversal of Cenvat credit on common input services has wrongly been ordered by the adjudicating authority below - On legal services, service recipient who is located in the taxable territory is made liable to pay 100 per cent service tax - Apparently and admittedly, the liability on this count stands already discharged by the appellant, however,the adjudicating authority has still made appellant liable for payment of interest - There is no evidence on record about the discharge of said liability beyond the reasonable time hencethe question of payment of interest does not at all arise - Otherwise also, there is no evidence of any positive act on the part of the appellant proving that they had intention to evade the payment of duty - In these circumstances, the order of imposition of penalty is held unreasonable - Order confirming the demand based on alleged short comings is not sustainable - Impugned order is set aside and appeal stands allowed: CESTAT [para 11, 12, 14, 15, 16]
- Appeal allowed: DELHI CESTAT |
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