2023-TIOL-1606-HC-KERALA-CT
Venugopal C Vs State of Kerala
Whether penalty can be imposed on the Appellant for non payment of tax on account of being a partner in a partnership firm, where the Department was aware of the Appellant having retired from the firm during the relevant period - NO: HC
- Writ appeal dismissed: KERALA HIGH COURT 2023-TIOL-1600-HC-DEL-GST
Vaidhe Stainless Steel Vs UoI
GST - Petitioner is aggrieved by the order dated 18.08.2022, whereby the petitioner's GST registration was cancelled with retrospective effect from 15.06.2021 - The petitioner has filed an application seeking revocation of cancellation of its GST registration, however, the same has not been processed - Counsel for Respondent submits that the petitioner's application for revocation of the order cancelling its GST registration would be processed within a period of two weeks.
Held : In view of the submission of Respondent, no further orders are required to be passed - Insofar as provisional attachment of bank accounts is concerned, in terms of Section 83(2) of the CGST Act, any order passed under Section 83(1) of the CGST Act would be inoperative after expiry of a period of one year from the date of the said order - Since the orders are dated 04.08.2022 and 24.08.2022, they are no longer operative - Banks are, therefore, directed not to interdict the operation of the aforesaid bank accounts on the basis of the impugned orders dated 04.08.2022 and 24.08.2022 - Petition disposed of: High Court [para 6, 9, 11]
- Petition disposed of: DELHI HIGH COURT
2023-TIOL-1599-HC-DEL-GST
Bedi And Bedi Associates Vs CCGST Delhi Audit-1
GST - Petitioner had availed of exemption from payment of tax in respect of outward supplies made to a Polytechnic (Vocational Institution) in terms of Notification No. 12/2017-Central Tax (Rate) - On 07.06.2023, Final Audit observations (ADT-02) was issued by the respondents contending that supplies made to a Polytechnic could not be considered as supplies to an educational institution; that the benefit of exemption is not available - According to the observations approved by the Monitoring Committee, GST of the sum amounting to Rs. 49,16,111/- alongwith interest and penalty was payable by the petitioner - Thereafter, two corrigenda were issued and the demand raised was amended; then SCN dated 11.09.2023 was issued alleging that a sum of Rs. 1,79,56,485/- was recoverable from the petitioner for wrongfully availing the exemption along with interest and penalty - Petition is premised on the basis that the impugned corrigenda were not approved by the Monitoring Committee.
Held: The impugned corrigenda only purported to correct the quantification of the tax recoverable on the aforesaid basis - Any alteration in the amount of tax on account of a computational error may not require specific approval of the Monitoring Committee - Prima facie , the impugned corrigenda or the impugned SCN are not liable to be set aside on the aforesaid ground - Counsel for respondent Revenue submits that the impugned corrigenda were placed before the Monitoring Committee at a meeting held on 17.08.2023 and were specifically approved - Therefore, the premise on which the present petition is founded, does not hold good - Petition is dismissed: High Court [para 10, 12, 13]
- Petition dismissed: DELHI HIGH COURT
2023-TIOL-1598-HC-DEL-GST
AB Enterprises Vs Commissioner of Delhi GST
GST - Petitioner impugns the communication (Form GST RFD-03) dated 06.04.2022 informing him regarding deficiencies in its application for refund of unutilized ITC - The deficiencies noted are viz. Relevant supporting documents not attached; Supporting documents attached are incomplete.
Held: It is apparent from the above that the impugned communication is bereft on any specific details - It neither sets out the relevant documents that have not been provided nor indicates the documents that are supposedly incomplete - It is important to note that the implication of the impugned communication is that the petitioner would be required to file a fresh application for refund in terms of Rule 90(3) of the CGST Rules - Indisputably, the petitioner's application for refund cannot be termed as deficient if it is in accordance with Rule 89(2) of the CGST Rules and is accompanied with the documents specified therein - Impugned communication is set aside and officer concerned is directed to issue the acknowledgement in terms of Rule 90 of the CGST Rules and process the petitioner's application for refund in accordance with law: High Court [para 5, 8, 11]
- Petition disposed of: DELHI HIGH COURT 2023-TIOL-1038-CESTAT-CHD
Gillette India Ltd Vs CCE
CX - The Assessee-company is engaged in manufacture and clearance of twin type shaving system razor, twin type shaving system cartridge, razor for double edge blades and razor blades (double edge) - The Assessee supplied goods from its factory to the various depots availing exemption under Notification No. 50/2003-CE dated 10.06.2003 having filed a declaration dated 21.11.2006 - The goods were sold to the customers from the said depots - Meanwhile Notification No. 50/2003 was amended by Notification No. 01/2008-CE dated 18.01.2008 to provide that the exemption contained shall not apply to such goods which have been subjected to only one or more of the processes viz., preservation during storage, cleaning operations, packing or re-packing of such goods in unit container or labelling/ re-labelling of container, sorting, declaration or alteration of RSP and have not been subjected to any other process or processes - Pursuant to the amendment, the Assessee registered themselves on 08.02.2008 and cleared the goods, on payment of duty under Section 4A of the Central Excise Act, 1944, under Protest, to their depots - The Assessee issued commercial invoices to customers on further clearance from depots - There was no change in the MRP after or prior to January 2008 to March 2008 or after that - Meanwhile, the Assessee vide Writ Petition No. 589/2008 challenged the validity of the Notification No.01/2008 on the grounds that the said notification was arbitrary and the Assessee was eligible for exemption under Notification No. 50/2003 - The High Court of Himachal Pradesh, Shimla allowed the said Writ Petition - Accordingly, the Assessee filed refund claim of Rs. 1,40,33,307/- of the Excise duty paid under Protest during January 2008 to March 2008 - The Assessee submitted various documents including the Cost Accountant Certificate and balance sheet for the year 2007-2008 - A show-cause notice dated 08.01.2010 seeking rejection of the refund claim - Adjudicating authority vide O-I-O dated 11.02.2011 upheld the SCN on the ground that the refund is hit by unjust enrichment - On appeal filed by the Assessee, the Appellate Authority upheld the O-I-O - Hence the present appeal.
Held - The Revenue has lost sight of the fact that the said MRP was fixed by the appellants during the no-duty regime - Therefore, the very fact of non-upgrading the MRP when the taxes were paid would in itself constitute evidence that the incidence of duty has not been passed on - This being so, Department cannot come to the conclusion on the basis of the invoices issued from factory to their own depot - It cannot be said that they have recovered duty from themselves - The ultimate test of passing on the incidence of duty lies in the transaction of the appellants with the ultimate customers i.e. in the transaction between their depot and the customers - The MRP being constant as discussed above, the test of presumption, that duty must have been inbuilt in MRP and must have been passed on, fails the test of reasonable fairness - In addition to the appellant's claim that their prices were constant, they have submitted that the said duty paid by them has been accounted as receivables in their records - The Cost Accountant in his certificate dated 13.08.2009 has been categorical in his assertion that this amount has been accounted under the head " receivables " and the duty paid by them has not been recovered from their customers - We find that neither the O-I-O nor the impugned order have contradicted the certificate given by the Cost Accountant - It is not open for Revenue to arrive at a conclusion in disregard of the certificate without challenging or controverting the same with cogent evidence and reasoning - The order-in-original in question merits being set aside: CESTAT
+ The brief issue for consideration in the instant case is whether the refund claim filed by the appellants is hit by the bar of unjust enrichment. The appellants have succeeded before the Hon'ble High Court of Himachal Pradesh, in Writ Petition No. 589 of 2008, regarding the applicability of amendment to the Notification No. 50/2003-CE dated 10.06.2003, by virtue of Notification No.01/2008-CE dated 18.01.2008. Hon'ble High Court held that the amending Notification is prospective and affects those industrial units involved in the manufacturing process of packing, re-packing, labelling, re-labelling etc., referred to therein, which came into operation on and after the date of its issue and not the industrial units, like that of the petitioners, which came into operation before the date of issuance i.e., 18.01.2008.Accordingly, they filed the impugned refund claim for Rs.1,40,33,307/- of the duty paid, under Protest, by them, during the period January to March 2008. Revenue vide letter dated 01.06.2009 requested the appellant to justify their claim that the incidence of duties has been borne by them and not passed on to the buyers. The appellant vide reply dated 21.08.2009 submitted copies of sample invoices of prior/ post period and claimed that the sale price of goods manufactured from their factory remained the same throughout the period and it is evident from the same that Excise duties were not passed on to the buyers; the show-cause notice dated 08.01.2010 issued seeks to reject the refund claim on the ground that the same is hit by the doctrine of unjust enrichment. (P8)
+ In the instant case, as discussed above, the appellants claimed that the MRP was fixed when the duty was not expected to be paid and remained constant throughout before during and after payment of duty. Therefore, we are of the considered opinion that, looking into the facts of the case and other evidence produced by the appellants, the fact of MRP being constant goes in favour of the appellants. Revenue did not rebut this submission by documentary data or evidence, except making a general statement that all taxes and duties would have been considered while fixing the MRP. In the instant case, Revenue has lost sight of the fact that the said MRP was fixed by the appellants during the no-duty regime. Therefore, the very fact of non-upgrading the MRP when the taxes were paid would in itself constitute evidence that the incidence of duty has not been passed on. This being so, Department cannot come to the conclusion on the basis of the invoices issued from factory to their own depot. It cannot be said that they have recovered duty from themselves. The ultimate test of passing on the incidence of duty lies in the transaction of the appellants with the ultimate customers i.e. in the transaction between their depot and the customers. The MRP being constant as discussed above, the test of presumption, that duty must have been inbuilt in MRP and must have been passed on, fails the test of reasonable fairness; (P 19)
+ In addition to the appellant's claim that their prices were constant, they have submitted that the said duty paid by them has been accounted as receivables in their records. The Cost Accountant in his certificate dated 13.08.2009 has been categorical in his assertion that this amount has been accounted under the head " receivables " and the duty paid by them has not been recovered from their customers. We find that neither the OIO nor the impugned order have contradicted the certificate given by the Cost Accountant. It is not open for Revenue to arrive at a conclusion in disregard of the certificate without challenging or controverting the same with cogent evidence and reasoning. (P20)
+ As discussed in the instant case, Revenue has not even considered the Cost Accountant certificate leave alone countering the same with valid reasons. Cost Accountant has issued the certificate after going through the accounts of the appellants and after satisfying himself about the truthfulness of the same. A certificate given by a professional cannot be dis-regarded unless it is proved to be blatantly wrong and contrary to the facts and evidence available on the hand. Thus, the certificate given by the Cost Accountant has an evidentiary value and cannot be rejected in a half-handed manner. We find that there is merit in the argument of the appellants that the impugned order has not given any specific findings regarding the correctness and genuineness of the Cost Accountant Certificate; it is trite in law that the Cost Accountant Certificate is one of the sufficient conditions to substantiate that the incidence of duty has not been passed on to the customers; the onus to disprove the Cost Accountant Certificate is with the Department and the same has not been discharged. The impugned order having been issued despite the evidence in the form of the certificate and without giving reasons as to why the same has not been taken into account cannot be held to be legally sustainable; (P 23)
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-1037-CESTAT-KOL
Central Industrial Security Force Vs CCE
ST - The Appellant has paid 'Security Services' to Damodar Valley Corporation (PSU) - They were also paying Service Tax on the service charges being received from their client - For the reimbursement received on various headings, the Appellant was not paying Service Tax - The Department noticing that they have received Rs. 8,27,34,509/- from the clients during the year 2010-11, but they have declared taxable value of Rs. 5,12,27,708/- in the ST-3 Returns issued Show Cause Notice Notice for demanding the Service Tax on differential amount - After due process, the demand of Rs. 32,45,613/- and Rs. 1,29,671/- were confirmed.
Held - The Supreme Court in the case of Union of India v. Intercontinental Consultants and Technocrats Pvt.Ltd. wherein the Supreme Court has held that reimbursable amount is not part of the consideration received and hence is not liable for Service Tax payment - Even the Co-ordinate Benches of the Tribunal at Bangalore and Ahmedabad have held in the case of the same Appellant (CISF) that medical expenses and other reimbursable expenses are not liable for Service Tax - Therefore, we hold that the Appellant is not required to pay Service Tax Rs. 1,29,625/- on account of medical expenses reimbursement received in 2009-10 and Service Tax of Rs. 1,70,049/- on account of medical expenses reimbursement received in 2010-11 - It is seen that they have already paid these amounts on 07.12.2011 and they are not contesting the Service Tax paid for the amounts, but are only contesting the interest and penalty - Considering these facts, we set aside the interest and penalty on these two amounts - Coming to the balance confirmed Service Tax amount of around Rs. 30.00 Lakhs, the Appellant claims that they have taken the correct turnover while discharging the Service Tax, but due to some clerical and typographical error, the correct figures have not been reflected in the ST-3 Returns, which has resulted in confirmation of this amount in the Order-in-Original - This fact is required to be verified by the adjudicating authority - Hence the matter is remanded to the adjudicating authority for the limited purpose of getting this fact verified in respect of payments made by them vis-à-vis the turnover taken by the Department to confirm the demand in the impugned Order-in-Original - He is directed to follow the principles of natural justice and give opportunity to the Appellant to provide all the documentary evidences, Chartered Accountant Certificate etc. in support of their submissions: CESTAT
- Appeal partly allowed: KOLKATA CESTAT |
