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More Judgements

2020-VIL-95-CESTAT-ALH-ST  | CESTAT SERVICE TAX

Service Tax - The appellant had balance of Cenvat credit of the Service Tax, after the introduction of the GST regime since there was inverted tax structure, they were not eligible for refund of unutilized input tax credit – appellant filed refund claim of this unutilized Cenvat credit, which was rejected on the ground of time limitation – aggrieved assessee in appeal – HELD - Refund claim filed before Departmental authorities are governed by the time limit provided under the statute - the refund claim beyond the period of limitation provided under law is totally barred by limitation. Even the fact that the tax was p... [Read more]

Service Tax - The appellant had balance of Cenvat credit of the Service Tax, after the introduction of the GST regime since there was inverted tax structure, they were not eligible for refund of unutilized input tax credit – appellant filed refund claim of this unutilized Cenvat credit, which was rejected on the ground of time limitation – aggrieved assessee in appeal – HELD - Refund claim filed before Departmental authorities are governed by the time limit provided under the statute - the refund claim beyond the period of limitation provided under law is totally barred by limitation. Even the fact that the tax was paid under a mistake of law, cannot be adopted for grant of such refund - the appeal is rejected [Read less]

2020-VIL-16-NAA  | National Anti-Profiteering Authority SGST

GST - National Anti-Profiteering Authority – Respondents submission that constitution of the Standing Committee as well as the Screening Committees as per Rule 123 of the CGST Rules, 2017 was illegal and without the authority of law as the CGST Act, 2017 nowhere envisaged constitution of any such Committees – HELD - It has been observed over a period of time that a major chunk of the complaints made does not pertain to the violation of Section 171 of the CGST Act and hence both the above Committees have been found to have been very useful in screening the irrelevant complaints - record shows that only 40 complaints wer... [Read more]

GST - National Anti-Profiteering Authority – Respondents submission that constitution of the Standing Committee as well as the Screening Committees as per Rule 123 of the CGST Rules, 2017 was illegal and without the authority of law as the CGST Act, 2017 nowhere envisaged constitution of any such Committees – HELD - It has been observed over a period of time that a major chunk of the complaints made does not pertain to the violation of Section 171 of the CGST Act and hence both the above Committees have been found to have been very useful in screening the irrelevant complaints - record shows that only 40 complaints were found fit for further investigation by the DGAP whereas 117 complaints pertained to the evasion of GST or any other law but were not related to the passing on of the above benefits - both the above Committees are also assisting in avoiding unnecessary harassment of the suppliers as well saving precious time of the investigating agency as well as of this Authority. Therefore, the Respondent has no ground to challenge the constitution of both the above Committees and Rule 123 of the CGST Rule which has been correctly framed by the Central Government to carry out the objectives of Section 171 of the Act as they pose no threat to him unless he violates the provisions of the above Section – further, there is no doubt that the office of DGAP has legal sanction and hence the objection raised by the Respondent in this regard cannot be accepted - There appears to be no reasonable ground to doubt the recommendation of the Standing Committee keeping in view the fact that after detailed investigation it has been apparently found by the DGAP that both the Respondents have not passed on the benefit of rate reduction and have violated the provisions of Section 171 (1) of the CGST Act, although the final verdict on the culpability of the Respondents is required to be determined after they have been heard in detail on all the issues involved in the present proceedings - it is held that the reference made by the Standing Committee to the DGAP under Rule 129 (1) was legally correct and the investigation conducted by the DGAP on such reference is well within the ambit of Rule 129 of the CGST Rules - The final order in the present proceedings shall be passed separately after hearing the Respondents in detail [Read less]

2020-VIL-94-CESTAT-BLR-ST  | CESTAT SERVICE TAX

Service Tax - service received by a courier agency from a co-loader or another courier agencies - Service Tax demand on the input services received in India from the foreign service providers/co-loaders under the ‘Reverse charge mechanism’ – HELD – the services received by the courier agency from the co-loader is not liable to Service Tax - where such service is provide by a co-loader situated outside India, the said activity is beyond the territorial jurisdiction of Service Tax Law and on this account also not taxable - the issue is wholly revenue neutral, as the appellant courier agency is entitled to input servi... [Read more]

Service Tax - service received by a courier agency from a co-loader or another courier agencies - Service Tax demand on the input services received in India from the foreign service providers/co-loaders under the ‘Reverse charge mechanism’ – HELD – the services received by the courier agency from the co-loader is not liable to Service Tax - where such service is provide by a co-loader situated outside India, the said activity is beyond the territorial jurisdiction of Service Tax Law and on this account also not taxable - the issue is wholly revenue neutral, as the appellant courier agency is entitled to input service credit and moreover, they have admittedly paid tax on the gross amount, and on this score also, the part of the amount cannot be taxed again, which is incurred by them for payment to co-loader - the appeal is allowed [Read less]

2020-VIL-14-NAA  | National Anti-Profiteering Authority SGST

GST - National Anti-Profiteering Authority – Rule 128 & 129 – Supply of Sanitary Napkins - Respondents claim that the belated examination of the application/ complaint by the Standing Committee is barred by limitation of 2 months prescribed under Rule 128 (1) of the CGST Rules, 2017 and therefore, consequential investigation conducted by the DGAP were liable to be set aside on this ground alone – Respondent further claim that the Standing Committee did not have prima facie accurate and adequate evidence to forward the above complaint for investigation – HELD - Perusal of the record shows that the complaint was rece... [Read more]

GST - National Anti-Profiteering Authority – Rule 128 & 129 – Supply of Sanitary Napkins - Respondents claim that the belated examination of the application/ complaint by the Standing Committee is barred by limitation of 2 months prescribed under Rule 128 (1) of the CGST Rules, 2017 and therefore, consequential investigation conducted by the DGAP were liable to be set aside on this ground alone – Respondent further claim that the Standing Committee did not have prima facie accurate and adequate evidence to forward the above complaint for investigation – HELD - Perusal of the record shows that the complaint was received by the Standing Committee on 23.01.2019 and was discussed and considered by it in its meeting held on 11.03.2019 and was referred for investigation to the DGAP which is well within the prescribed limitation of 2 months in terms of Rule 128 (1) of the CGST Rules, 2017. Therefore, the objection raised by the Respondent in this regard is incorrect and hence the same cannot be accepted - it is evident that the Respondent had increased the per unit price of Sanitary Napkins after the rate of tax was reduced w.e.f. 27.07.2018 and the benefit of such reduction had apparently not been passed on by him to the Applicant. Hence, there is no doubt that the Standing Committee prima facie had accurate and adequate evidence to examine whether the benefit of tax reduction had been passed on by the Respondent to the above Applicant by commensurate reduction in the price of the said product or not. Hence, the allegation made by the Respondent in this regard is wrong and is untenable - the preliminary objections raised by the Respondents have been found to be incorrect and untenable and hence the same cannot be accepted. However, these findings shall have no effect on the other merits of the present case which have not been considered in this order. The final order in these proceedings shall be passed after considering all the other pleadings relied upon by the Respondent and the Applicants [Read less]

2020-VIL-99-CESTAT-MUM-CE  | CESTAT CENTRAL EXCISE

Central Excise – Valuation of Motor Vehicles – whether cost of advertisement incurred by the dealers is includible in the transaction value of Motor Cars in the absence of enforcing provision in Letter of Intent/agreement – Revenue in appeal – HELD – a plain reading of the various clauses of the Reading of Letter of Intent/agreement does not lead to an inference that the same provides an enforceable right to the respondent in relation to advertisement and sales promotion by the dealers - the cost of the advertisement incurred by the dealers cannot be added to the transaction value - the impugned order is upheld a... [Read more]

Central Excise – Valuation of Motor Vehicles – whether cost of advertisement incurred by the dealers is includible in the transaction value of Motor Cars in the absence of enforcing provision in Letter of Intent/agreement – Revenue in appeal – HELD – a plain reading of the various clauses of the Reading of Letter of Intent/agreement does not lead to an inference that the same provides an enforceable right to the respondent in relation to advertisement and sales promotion by the dealers - the cost of the advertisement incurred by the dealers cannot be added to the transaction value - the impugned order is upheld and the Revenue’s appeal is dismissed [Read less]

2020-VIL-15-NAA  | National Anti-Profiteering Authority SGST

GST - National Anti-Profiteering Authority – the benefit of tax reduction has to be passed on at the level of each supply of Stock Keeping Unit (SKU) to each buyer of such SKU and in case it is not passed on the profiteered amount has to be calculated on each SKU. Therefore, the contention that the profiteered amount should be computed at the entity/group/company level is untenable. Further, the Section 171 (1) of the CGST Act, 2017 mentions “any supply” i.e. each taxable supply made to each recipient thereby clearly indicating that netting off of the benefit of tax reduction by any supplier is not allowed. A supplie... [Read more]

GST - National Anti-Profiteering Authority – the benefit of tax reduction has to be passed on at the level of each supply of Stock Keeping Unit (SKU) to each buyer of such SKU and in case it is not passed on the profiteered amount has to be calculated on each SKU. Therefore, the contention that the profiteered amount should be computed at the entity/group/company level is untenable. Further, the Section 171 (1) of the CGST Act, 2017 mentions “any supply” i.e. each taxable supply made to each recipient thereby clearly indicating that netting off of the benefit of tax reduction by any supplier is not allowed. A supplier cannot claim that he has passed on more benefit to one customer therefore he could pass less benefit to another customer than the benefit which is actually due to that customer. Each customer is entitled to receive the benefit of tax reduction on each product purchased by him. The word “commensurate” mentioned in the above Section gives the extent of benefit to be passed on by way of reduction in the prices which has to be computed in respect of each product based on the tax reduction as well as the existing base price of the product. The computation of commensurate reduction in prices is purely a mathematical exercise and hence it would vary from product to product and hence no fixed mathematical methodology can be prescribed to determine the amount of benefit which a supplier is required to pass on to a recipient or the profiteered amount - post-GST, the Respondent has been benefited from additional ITC to the tune of 0.92% of his turnover and the same was required to be passed on to the Applicant and the other flat buyers - the Respondent has denied benefit of ITC to his homebuyers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus committed an offence under Section 171 (3A) of the above Act, he is liable to be penalized under the provisions of the above Section [Read less]

2020-VIL-77-MAD-CE  | High Court CENTRAL EXCISE

Central Excise - Rule 4(3) of CCR 2004 - Cenvat credit in respect of the Capital goods - setting up of captive power plant in the premises of the Lessor - Whether the Tribunal was correct in holding that the availment of CENVAT credit by the respondent-M/s. SISCOL is correct, since all the three units, viz., M/s. JSWPL, M/s. JSWSL and M/s. SISCOL have been merged at a later date, though at the time of receipt of capital goods, all the three units were separate entities and the goods were received and owned by M/s. JSWPL – HELD - M/s. SISCOL had provided their land to M/s. JSWPL with a condition to set up a power plant an... [Read more]

Central Excise - Rule 4(3) of CCR 2004 - Cenvat credit in respect of the Capital goods - setting up of captive power plant in the premises of the Lessor - Whether the Tribunal was correct in holding that the availment of CENVAT credit by the respondent-M/s. SISCOL is correct, since all the three units, viz., M/s. JSWPL, M/s. JSWSL and M/s. SISCOL have been merged at a later date, though at the time of receipt of capital goods, all the three units were separate entities and the goods were received and owned by M/s. JSWPL – HELD - M/s. SISCOL had provided their land to M/s. JSWPL with a condition to set up a power plant and the electricity generated would be consumed in manufacturing activities of M/s. SISCOL - the capital goods were purchased in the name of JSWPL with Consignee SISCOL. The takeover process had already begun in 2005 itself well before the setting up of CPP pursuant to the lease of land given by SISCOL to JSWPL - The actual merger of Jindal Group and SISCOL came into effect from 01.04.2007, if we lift the corporate veil, the reasonable conclusion would be that, the CPP was set up not for JSWPL or any other third party or entity, but only for SISCOL. Since the final product of SISCOL is iron and steel rod etc. and for the purpose of production of such final product, the power to be generated from the CPP since was fully utilised, as per the provisions of CENVAT Credit Rules, the SISCOL can very well take the credit for the capital goods purchased and utilised at the factory premises of SISCOL where the CPP was established - the ownership of the goods cannot be the criteria for denying the CENVAT credit assuming that the capital goods were purchased by JSWPL - the case of the Revenue that the Assessee i.e., original SISCOL who got merged with JSW Steel Ltd and JSW Power Ltd, did not have the authority or right to take the CENVAT credit during the relevant point of time for the capital goods used in the CPP set up in the factory premises or vicinity of the SISCOL cannot be accepted, as such stand taken by the Revenue, is unsustainable - Even if the CPP is located well away from the main factory of the manufacturer of final product, the capital goods purchased and utilised for such CPP even though not in the same factory premises, even then the manufacturer can take CENVAT credit - the order of the CESTAT is fully justifiable and sustainable – Revenue appeals are dismissed [Read less]

2020-VIL-93-CESTAT-AHM-CU  | CESTAT Case CUSTOMS

Customs - Undervaluation of goods i.e. various types of Aluminium scrap imported by them – demand under Rule 4 of the Customs Valuation Rules, 1988 by applying price band to LME prices as per Alert circular No. 14/2005 dated 16.12.2005 issued by the Director General of Valuation – HELD - the value of imported Aluminium scrap could not be re-determined on the basis of the DGOV Circular as the said circular takes the price of LME as the basis which deal with prime metal and the imported goods in dispute are admittedly Aluminium scrap and not prime metal. In view of the above, the impugned order redetermining the value of... [Read more]

Customs - Undervaluation of goods i.e. various types of Aluminium scrap imported by them – demand under Rule 4 of the Customs Valuation Rules, 1988 by applying price band to LME prices as per Alert circular No. 14/2005 dated 16.12.2005 issued by the Director General of Valuation – HELD - the value of imported Aluminium scrap could not be re-determined on the basis of the DGOV Circular as the said circular takes the price of LME as the basis which deal with prime metal and the imported goods in dispute are admittedly Aluminium scrap and not prime metal. In view of the above, the impugned order redetermining the value of imported aluminium scrap on the basis of DGOV Circular cannot be upheld and the value declared by the AMA, being similar to the contemporaneous import data has to be upheld – further, statements cannot be the sole reason to confirm the charge of undervaluation and the same has to be corroborated with documentary evidence. In the present case the documentary evidence in the form of contemporaneous import data, produced by the AMA, is contrary to the oral statements. It is settled law that in case of difference between documentary evidence and oral evidence the former should be given precedence and later should be ignored. In view of the settled law, the statements of co-appellants and other witnesses cannot be relied upon or the same cannot be the sole basis to confirm the charge of undervaluation as the same is contrary to documentary evidence which is in the form of contemporaneous import price - the demands confirmed against the appellant, confiscation of goods and penalties imposed is not sustainable. For the same reason the penalty imposed upon co-appellants is also not sustainable - the impugned order is set aside and appeal is allowed [Read less]

2020-VIL-83-GAU-ST  | High Court SERVICE TAX

Service Tax - Short payment of service tax - Whether the ld. Tribunal was correct in carrying out the re-conciliation of account of the assessee-respondent and determine the amount of service tax actually payable by it – jurisdiction of Appellate Tribunal to carryout assessment of the tax liability – HELD - by the impugned order the learned CESTAT had for the first time carried out assessment of the tax liability of the respondent on the basis of the documents and records made available before it - Section 35C of the CEA, 1944 does not confer any jurisdiction upon the learned Tribunal to carryout assessment of the tax ... [Read more]

Service Tax - Short payment of service tax - Whether the ld. Tribunal was correct in carrying out the re-conciliation of account of the assessee-respondent and determine the amount of service tax actually payable by it – jurisdiction of Appellate Tribunal to carryout assessment of the tax liability – HELD - by the impugned order the learned CESTAT had for the first time carried out assessment of the tax liability of the respondent on the basis of the documents and records made available before it - Section 35C of the CEA, 1944 does not confer any jurisdiction upon the learned Tribunal to carryout assessment of the tax liability and records its own conclusion on that behalf. Thus, a function which has to be left to the assessing authorities had been undertaken by the learned CESTAT in a manner which is impermissible in law - Although the impugned SCN suffers from certain vital deficiencies, yet ld. CESTAT was not correct in carrying out an independent assessment of the tax liability of the respondent and thereafter, recording a finding of fact by obtaining certificate from a Chartered Accountant - the impugned order is unsustainable and the same is set aside - it will be open for the appellant to issue fresh SCN raising demands for recovery of service tax as may be permissible under the law - the appeal is disposed of [Read less]

2020-VIL-91-CESTAT-DEL-CU  | CESTAT Case CUSTOMS

Customs - Anti-dumping investigation concerning imports of “non woven fabric made of polypropylene of GSM 25 or less” originating in or exported from Malaysia, Indonesia, Thailand, Saudi Arabia and China PR - challenge to the final finding issued by the Designated Authority – HELD - though Rule 16 does not prescribe any particular form for disclosure of essential facts but it does require that the Designated Authority should disclose those facts in such a manner that the interested parties are able to clearly understand what data the investigating authority has used and how this data and relevant facts were used to d... [Read more]

Customs - Anti-dumping investigation concerning imports of “non woven fabric made of polypropylene of GSM 25 or less” originating in or exported from Malaysia, Indonesia, Thailand, Saudi Arabia and China PR - challenge to the final finding issued by the Designated Authority – HELD - though Rule 16 does not prescribe any particular form for disclosure of essential facts but it does require that the Designated Authority should disclose those facts in such a manner that the interested parties are able to clearly understand what data the investigating authority has used and how this data and relevant facts were used to determine the margin of dumping - the conclusion arrived at by the Designated Authority in the disclosure statement clearly shows that their exists positive dumping material injury to the domestic industry and also a causal link between the dumped imports and the said material injury. Still the conclusions arrived at by the Designated Authority in the final findings are not only at variance with the disclosure statement but are also contrary to what was stated in the disclosure statement – further, failure to make available to material on which the decision is based is clearly violation of principles of natural justice - the final findings and the notification issued by the Central Government are set aside. The Designated Authority shall give final findings, where after the Central Government shall issue a fresh notification - the appeal is allowed [Read less]

2020-VIL-09-GSTAA  | Appellate Authority SGST

GST – Rule 138(10) – penalty for expired e-way bill – HELD - In the present case, the validity of the e-way bill expired on midnight of 20.11.2018 and the vehicle was inspected and detained by the respondent at early morning on 21.11.2018. The vehicle was stationary and parked by the road side and driver was called on telephonically and proceedings were initiated u/s 129(1) for expiry of validity of e-way bill. There was no discrepancies either with regard to other documents accompanied the consignment or with the quantity of goods being transported - Rule 138(10) says that validity of e-way bill may be extended with... [Read more]

GST – Rule 138(10) – penalty for expired e-way bill – HELD - In the present case, the validity of the e-way bill expired on midnight of 20.11.2018 and the vehicle was inspected and detained by the respondent at early morning on 21.11.2018. The vehicle was stationary and parked by the road side and driver was called on telephonically and proceedings were initiated u/s 129(1) for expiry of validity of e-way bill. There was no discrepancies either with regard to other documents accompanied the consignment or with the quantity of goods being transported - Rule 138(10) says that validity of e-way bill may be extended within 8 hours from the time of its expiry but in the instant cases the vehicle was practically apprehended in almost 08 to 09 hours of the expiry of the e-way bill, prima facie it appears that, the appellant has been not given reasonable opportunity to update the Part-A of e-way bill – the Part-B of the e-way bill was duly filled which puts to rest on any doubts about the intention of the appellant to evade tax – the e-way bill is invalid only if Part-B of E-way bill is not filled or a considerable time to update the Part-A of e-way bill has gone by. Consequently, imposition of tax/ penalty by the respondent is harsh and unsustainable - Since the appellant has made minor procedural lapse, a penalty of Rs. One thousand only is imposed - the impugned order is set aside and the appeal is allowed [Read less]

2020-VIL-90-CESTAT-BLR-ST  | CESTAT SERVICE TAX

Service Tax demand on Commission received by appellant from Money Exchange House abroad and service charges paid to foreign banks – extended period – HELD - as far as Commission received by appellant from Money Exchange House abroad is concerned, this issue is no more res integra and has been consistently held by the Tribunal as export of service and therefore, not liable to service tax under Finance Act, 1994 - the appellants are not liable to pay service tax as the service rendered by the appellant fall in the definition of export of service - service charges paid to foreign banks against the service received by the ... [Read more]

Service Tax demand on Commission received by appellant from Money Exchange House abroad and service charges paid to foreign banks – extended period – HELD - as far as Commission received by appellant from Money Exchange House abroad is concerned, this issue is no more res integra and has been consistently held by the Tribunal as export of service and therefore, not liable to service tax under Finance Act, 1994 - the appellants are not liable to pay service tax as the service rendered by the appellant fall in the definition of export of service - service charges paid to foreign banks against the service received by the appellant-bank and service charges paid to Master Card International are concerned, the said services fall in the definition of ‘Import of Service’ and the same was made liable to service tax on reverse charge basis with effect from 18.4.2006. Therefore, up to 18.4.2006, appellants are not liable to pay service tax on reverse charge basis - The essential condition for invoking the extended period of limitation is that there should be an intention to evade payment of service tax and the same is absent in the present case and therefore, the extended period of limitation cannot be invoked - the impugned order is set aside by allowing the appeal of the appellant [Read less]

2020-VIL-08-GSTAA  | Appellate Authority SGST

GST – Section 129, Rule 138 of CGST Act, 2017 – movement of capital goods for the purpose of repair – absence of e-way bill - applicants sent the disputed goods for repair on challan with photocopy of purchase invoice – interception of conveyance carrying the goods and imposition of tax and penalty under section 129 of CGST Act, 2019 for contravention of Rule 138 – assessee in appeal of ground of bonafide mistake – HELD - The appellant has accepted the fact that e-way bill is required in cases other than supply and pleaded that since there is no tax implication in this case and that they were sending capital go... [Read more]

GST – Section 129, Rule 138 of CGST Act, 2017 – movement of capital goods for the purpose of repair – absence of e-way bill - applicants sent the disputed goods for repair on challan with photocopy of purchase invoice – interception of conveyance carrying the goods and imposition of tax and penalty under section 129 of CGST Act, 2019 for contravention of Rule 138 – assessee in appeal of ground of bonafide mistake – HELD - The appellant has accepted the fact that e-way bill is required in cases other than supply and pleaded that since there is no tax implication in this case and that they were sending capital goods for repair only, thus no penalty can be imposed under section 129(1) – it is clearly mentioned on the challan that the goods are not for sale only for repair. Since the transaction has no tax implications, the proper office has taken into consideration the invoice value of nine months old purchase invoice for determining the tax and penalty under section 129(1) of the Act. The method used for valuation of transaction is not just and proper as the disputed goods were old and were dispatched for repair - As there is no doubt that the taxpayer has violated the provisions of the CGST/HPGST Act, 2017, so is liable to pay penalty - the impugned order is set aside. The tax and penalty deposited by the appellant under section 129(1) may be refunded and a penalty of Rs. Ten Thousand only is imposed on the taxpayer under section 122(1) of the Act - the appeal is allowed [Read less]

2020-VIL-81-DEL  | High Court SGST

GST - Challenge to National Anti-Profiteering Authority Order - interim order staying the recovery of the balance amount from the petitioner to continue - this interim order shall not come in the way of the National Anti-Profiteering Authority in cases where it has suo moto taken action - the limitation of period of six months provided in Rule 133 of the CGST Rules, 2017 within which the authority should make its order from the date of receipt of the report of the DGAP, appears to be directory in as much as no consequence of non-adherence of the said period of six months is prescribed either in the CGST Act or the rules fr... [Read more]

GST - Challenge to National Anti-Profiteering Authority Order - interim order staying the recovery of the balance amount from the petitioner to continue - this interim order shall not come in the way of the National Anti-Profiteering Authority in cases where it has suo moto taken action - the limitation of period of six months provided in Rule 133 of the CGST Rules, 2017 within which the authority should make its order from the date of receipt of the report of the DGAP, appears to be directory in as much as no consequence of non-adherence of the said period of six months is prescribed either in the CGST Act or the rules framed thereunder [Read less]

2020-VIL-76-MAD  | High Court VAT

Tamil Nadu VAT Act, 2006 – Section 19 & 51 - whether for the purpose of pre-deposit under Section 51 of the TNVAT Act, 2006 an assessee can utilise the input tax credit available to it provided, the said Input Tax Credit itself is not the subject matter of the dispute – whether Section 51 of the TNVAT Act, 2006 contemplates pre-deposit only in cash – HELD – As per Rule 10(10)(b) of the TNVAT Rules, 2007, in case where Input Tax Credit for a year, exceeds the tax liability for that year, it may be adjusted and the excess Input Tax Credit may be adjusted against any arrears of tax or any other amount due from him. If... [Read more]

Tamil Nadu VAT Act, 2006 – Section 19 & 51 - whether for the purpose of pre-deposit under Section 51 of the TNVAT Act, 2006 an assessee can utilise the input tax credit available to it provided, the said Input Tax Credit itself is not the subject matter of the dispute – whether Section 51 of the TNVAT Act, 2006 contemplates pre-deposit only in cash – HELD – As per Rule 10(10)(b) of the TNVAT Rules, 2007, in case where Input Tax Credit for a year, exceeds the tax liability for that year, it may be adjusted and the excess Input Tax Credit may be adjusted against any arrears of tax or any other amount due from him. If there are no arrears under the Act, or after adjustment there is still an excess of Input Tax Credit, Assessing Authority shall serve Form P upon such dealer. Thus, excess Input Tax Credit is to be refunded back if after adjustment there is balance available. Therefore, it is evident that if the amount of credit can be refunded, they can also be adjusted towards pre-deposit of the tax liability for the purpose of Section 51 of the TNVAT Act, 2006 – for the purpose of pre-deposit under Section 51 of the TNVAT Act, 2006 an assessee can utilise the excess Input Tax Credit provided, the aforesaid Input Tax Credit itself is not the subject matter of the dispute or where any notice has been issued to deny such tax credit. To deny such right would amount to improper denial of right of appeal to an assessee - the present Writ Petitions stand allowed [Read less]

2020-VIL-78-TRI  | High Court VAT

Tripura Value Added Tax Act, 2004 - reimbursement of VAT - Petitioner seeking for a direction to the respondents to issue appropriate notification giving effect to the provisions of Tripura Industrial Investment Promotion Incentive Scheme, 2007 granting reimbursement of VAT paid under the Tripura VAT Act, 2004 for the period from 2008-09 to 2013-14 – Respondent contents that since no such notification was issued by Government the petitioner cannot base its claim only on the incentive scheme - doctrine of promissory estoppel – HELD - Where a responsible authority such as the State Government formulates and publishes an ... [Read more]

Tripura Value Added Tax Act, 2004 - reimbursement of VAT - Petitioner seeking for a direction to the respondents to issue appropriate notification giving effect to the provisions of Tripura Industrial Investment Promotion Incentive Scheme, 2007 granting reimbursement of VAT paid under the Tripura VAT Act, 2004 for the period from 2008-09 to 2013-14 – Respondent contents that since no such notification was issued by Government the petitioner cannot base its claim only on the incentive scheme - doctrine of promissory estoppel – HELD - Where a responsible authority such as the State Government formulates and publishes an incentive scheme making detail provisions for attracting investment, it would be too late in the day for the Government thereafter to backtrack on such firm promise made only on the ground that necessary notification in this regard was not issued by the Finance Department. It would be a classical example of the Government going back on its promise held out to an industry on the basis of which entrepreneurs were persuaded to make investments in the State - withdrawing from such scheme only by way of inaction of issuance of notification, would lead to applicability of the principle of promissory estoppel - this is not a case where the Government had merely made up announcement of formation of a scheme which for whatever reason never saw light of the day. Here is the case where a detailed scheme was prepared, promulgated and published - the petitioner has made out a case for issuing appropriate directions - the respondents shall process the claims of the petitioner for reimbursement of the VAT and other taxes as per the Tripura Industrial Investment Promotion Incentive Scheme, 2007 and pay to the petitioner such sum as found admissible out of the claims of the petitioner for said assessment years – writ petition is allowed [Read less]

2020-VIL-84-GUJ  | High Court SGST

Customs/GST - EPCG Scheme - validity of the petitioner’s claim for exemption from payment of IGST in respect of capital goods imported under the EPCG Scheme prior to the issuance of Notification No.79/2017-Cus - petition challenging Notification No.26/2017-Customs dated 29.6.2017 to the extent it amends Notification No.16/2015-Customs dated 1.4.2015 - petitioner further challenges DGFT Trade Notice No. 11/2018 dated 30.6.2017 to the extent it is stated under Chapter 5 that importers would need to pay IGST – petitioner grievance that the respondent-DGFT did not allow the exemption of IGST on goods cleared for home consu... [Read more]

Customs/GST - EPCG Scheme - validity of the petitioner’s claim for exemption from payment of IGST in respect of capital goods imported under the EPCG Scheme prior to the issuance of Notification No.79/2017-Cus - petition challenging Notification No.26/2017-Customs dated 29.6.2017 to the extent it amends Notification No.16/2015-Customs dated 1.4.2015 - petitioner further challenges DGFT Trade Notice No. 11/2018 dated 30.6.2017 to the extent it is stated under Chapter 5 that importers would need to pay IGST – petitioner grievance that the respondent-DGFT did not allow the exemption of IGST on goods cleared for home consumption to the EPCG authorisation holders due to limited amendment in Notification No.16/2015-Cus dated 1.4.2015 by Notification No.26/2017 – whether the doctrine of promissory estoppel is attracted in the present case – HELD - on conjoint reading of the Chapter 5 of the Foreign Trade Policy and Notification No.16/2015-Cus dated 1st April, 2015, it is evident that though the notification is a statutory notification issued in exercise of powers under section 25 of the Customs Act, it is not an exemption notification simpliciter, but an exemption notification issued to give effect to the EPCG Scheme floated under the Foreign Trade Policy which is an incentive scheme. Thus, Notification No.16/2015-Cus dated 1st April, 2015 and the amending notifications cannot be equated with statutory notifications ordinarily issued under section 25 of the Customs Act, granting exemption from payment of customs duty – the import of capital goods under the EPCG Scheme was totally exempt from payment of customs duty and additional duty, except for the short period between the coming into force of the IGST Act till the amendment in the Foreign Trade Policy 2015-20 vide Notification No.33/2015- 2020 dated 13th October, 2017 - The intention of Central Government is, therefore, clear that total exemption from payment of additional duty was to be granted under the EPCG Scheme - when the authorisation under the EPCG Scheme was issued in favour of the petitioner, a promise was held out to the petitioner that it will not be liable to pay any additional duty under section 3 of the CTA on the import of such capital goods subject to fulfilling the export obligation. Thus, Notification No.26/2015-Cus dated 29th June, 2017, to the extent it limited the exemption from payment of additional duty under section 3 of the Customs Tariff Act to sub-sections (1), (3) and (5) thereof, is repugnant to the policy declared by the Central Government under Chapter 5 of the Foreign Trade Policy 2015-2020 - the action of the respondents in levying IGST and Compensation Cess on the import of capital goods by the petitioner under a valid authorisation under the EPCG Scheme, not being in consonance with the Foreign Trade Policy 2015-2020 cannot be sustained - Trade Notice 11/2018 dated 30.6.2017, to the extent it is stated therein that under Chapter 5 importers would need to pay IGST, is also rendered unsustainable - It is held that the amendment of Notification No.16/2015-Cus vide Serial No.1 of Notification No.79/2017 dated 13th October, 2017, would also apply to imports made during the period 1.7.2017 to 13.10.2017. Trade Notice 11/2018 dated 30.6.2017 to the extent it is stated therein that under Chapter 5 importers would need to pay IGST is quashed and set aside - the petition succeeds and is allowed [Read less]

2020-VIL-13-AAAR  | AAAR SGST

GST – Karnataka AAAR - whether the activity of printing and supply of ‘Access card’ by the appellant based on the contents provided by their customers is an activity of supply of goods or supply of service – HELD - the activity of printing brings into existence a specific new product known in trade and common parlance as “Access card”. Printing in this case is ancillary to the main activity of making “Access cards”. The printing is a service rendered by the Appellant to himself in order to execute the supply of “Access cards”. In other words, the principal supply in the case of the Appellant is not the ... [Read more]

GST – Karnataka AAAR - whether the activity of printing and supply of ‘Access card’ by the appellant based on the contents provided by their customers is an activity of supply of goods or supply of service – HELD - the activity of printing brings into existence a specific new product known in trade and common parlance as “Access card”. Printing in this case is ancillary to the main activity of making “Access cards”. The printing is a service rendered by the Appellant to himself in order to execute the supply of “Access cards”. In other words, the principal supply in the case of the Appellant is not the printing service but a supply of the Access cards which is a product emerging out of the printing activity. Therefore, the provisions of Para 5 of the CBIC Circular No 11/11/2017-GST dated 20.10.2017, will apply in this case and the printing and supply of Access cards by the Appellant is a supply of goods - The ‘Access Card’ printed and supplied by the Appellant based on the contents provided by their customers is a supply of goods and is rightly classifiable under HSN code 4901 10 20 under the description brochures, leaflets and similar printed matter whether or not in single sheet and attracts GST rate of 5% - the Ruling passed by the AAR is set aside and answered in favour of Appellant [Read less]

2020-VIL-92-CESTAT-BLR-CE  | CESTAT CENTRAL EXCISE

Central Excise - refund of pre-deposit made during the pendency of appeal - Appellant had reversed/paid the entire credit along with interest and 25% of penalty and filed an appeal challenging the order confirming such demand before the Commissioner (A) and hence the amount paid during the pendency of the appeal or at the time of filing of appeal should be treated as pre-deposit in terms of Section 35F of the Central Excise Act, 1944 - Consequent to the allowing of the appeal of the Appellate Authority, the mandatory pre-deposit made by the appellant in terms of Section 35F of the Central Excise Act was required to be refu... [Read more]

Central Excise - refund of pre-deposit made during the pendency of appeal - Appellant had reversed/paid the entire credit along with interest and 25% of penalty and filed an appeal challenging the order confirming such demand before the Commissioner (A) and hence the amount paid during the pendency of the appeal or at the time of filing of appeal should be treated as pre-deposit in terms of Section 35F of the Central Excise Act, 1944 - Consequent to the allowing of the appeal of the Appellate Authority, the mandatory pre-deposit made by the appellant in terms of Section 35F of the Central Excise Act was required to be refunded by the Department to the appellant and the said amount was not refunded - the impugned order rejecting the refund claim under Section 11B on limitation is not sustainable in law and the same is set aside by allowing the appeal of the appellant - the appellants are entitled to interest on the delayed refund immediately after the expiry of three months from the date of passing of the Order-in-Appeal till the date of actual payment to the appellant - the appeal is allowed [Read less]

2020-VIL-100-CESTAT-KOL-CE  | CESTAT CENTRAL EXCISE

Central Excise - Respondents-assessee is engaged in production of LPG and Solvex-GL have availed duty exemption under Notification No.33/99 dated 08.07.1999 as amended - Department case that Solvex-GL is a liquid and not gas, as such it is not covered under Sl.No.13(i) said exemption notification – interpretation of term “gas based products” – HELD - It is evident that the schedule under Notification No.33/99 not only refers to certain products but also to certain processes. The only inference one can get is that the products generated in the processes mentioned are covered by the entry and are eligible for exempti... [Read more]

Central Excise - Respondents-assessee is engaged in production of LPG and Solvex-GL have availed duty exemption under Notification No.33/99 dated 08.07.1999 as amended - Department case that Solvex-GL is a liquid and not gas, as such it is not covered under Sl.No.13(i) said exemption notification – interpretation of term “gas based products” – HELD - It is evident that the schedule under Notification No.33/99 not only refers to certain products but also to certain processes. The only inference one can get is that the products generated in the processes mentioned are covered by the entry and are eligible for exemption - The plea taken by the department that the exemption is applicable only to gas based products appears to be farfetched; the word ‘gas based intermediate products’ has to be understood to mean the products or the intermediate products generated during the exploration and production of ‘gas based products’ – an appropriate reading of the Notification would give an understanding that the main activity referred to therein is gas exploration and products which emerge as finally or intermediately in the process are eligible for exemption. As the wordings of the Notification are very clear no two interpretations are possible - the Notification squarely covers the impugned product and the benefit of the same is available to the respondents-assessee - the appeals filed by the department are rejected on merits [Read less]

2020-VIL-11-AAAR  | AAAR SGST

GST – Maharashtra AAAR – Supply – Section 7 – the entire subscription / membership amount collected by the Appellant from its members is utilized solely towards expenditures incurred in the meetings, communication and other administrative expenses - the Appellant is not providing any specific facility or benefits to its members against the membership subscription charged by it, as the entire subscription amount is spent towards meetings and administrative expenditures only. Thus, the Appellant is not doing any business as envisaged under section 2(17) of the CGST Act - once it has been established that the Appellan... [Read more]

GST – Maharashtra AAAR – Supply – Section 7 – the entire subscription / membership amount collected by the Appellant from its members is utilized solely towards expenditures incurred in the meetings, communication and other administrative expenses - the Appellant is not providing any specific facility or benefits to its members against the membership subscription charged by it, as the entire subscription amount is spent towards meetings and administrative expenditures only. Thus, the Appellant is not doing any business as envisaged under section 2(17) of the CGST Act - once it has been established that the Appellant is not doing any business in terms of section 2(17) of the CGST Act, 2017, it can be deduced that activities carried out by the Appellant would not come under the scope of supply as envisaged under section 7(1) of the CGST Act, 2017 – accordingly, the amount collected as membership subscription and admission fees from members is not liable to GST as supply of services – the rulings pronounced by AAR is set aside [Read less]

2020-VIL-12-AAAR  | AAAR SGST

Maharashtra AAAR - Determination of correct classification and applicable rate of GST on product ‘Prohance-D - Chocolate variant’ – whether 'Compound preparation for making non-alcoholic beverages' under Tariff Item No.2106 90 50 or 'Diabetic foods' covered under Tariff Item No. 2106 90 91 – HELD - the impugned product though generally contributes to the well-being of patient is specially formulated for diabetic patients as is evident from the fact that it contains certain sugar replacements which are not found in the normal Prohance. It is therefore specially directed for diabetics - it can be normally expected th... [Read more]

Maharashtra AAAR - Determination of correct classification and applicable rate of GST on product ‘Prohance-D - Chocolate variant’ – whether 'Compound preparation for making non-alcoholic beverages' under Tariff Item No.2106 90 50 or 'Diabetic foods' covered under Tariff Item No. 2106 90 91 – HELD - the impugned product though generally contributes to the well-being of patient is specially formulated for diabetic patients as is evident from the fact that it contains certain sugar replacements which are not found in the normal Prohance. It is therefore specially directed for diabetics - it can be normally expected that only a diabetic patient would go for the Prohance-D variant. This makes it very clear that that the product is formulated for diabetic patients -the subject product is targeted at that particular segment and therefore, can be termed as a 'diabetic food' - the Order of the AAR classifying the product Prohance-D (Chocolate) under heading 21069050 is set aside. The product would instead classify as a diabetic food covered under chapter heading 21069091 – The appeal is allowed [Read less]

2020-VIL-80-MP  | High Court VAT

Whether mosquito repellent is insecticide or not - appellant aggrieved by the action of the department in including mosquito repellent under the entry under Schedule II of the Madhya Pradesh Entry Tax Act, 1976 as insecticide – HELD - The mosquito repellent contains an insecticide and it not only repels the mosquito but also is capable of killing the mosquito, and therefore, is covered under the entry of insecticides and pesticides - there is no specific entry of mosquito repellent under the Madhya Pradesh Entry Tax Act, 1976, and therefore, as it contains an insecticide, it has to be treated within the ambit and meaning... [Read more]

Whether mosquito repellent is insecticide or not - appellant aggrieved by the action of the department in including mosquito repellent under the entry under Schedule II of the Madhya Pradesh Entry Tax Act, 1976 as insecticide – HELD - The mosquito repellent contains an insecticide and it not only repels the mosquito but also is capable of killing the mosquito, and therefore, is covered under the entry of insecticides and pesticides - there is no specific entry of mosquito repellent under the Madhya Pradesh Entry Tax Act, 1976, and therefore, as it contains an insecticide, it has to be treated within the ambit and meaning of Entry 20 i.e. insecticides and pesticides - the Appellate authority was justified in coming to the conclusion that the applicant was liable to be taxed on the entry of mosquito repellent under Schedule II of the Madhya Pradesh Entry Tax Act, 1976 within the meaning of Section 3 (1) b of the said Act - answered in favour of the department [Read less]

2020-VIL-98-CESTAT-AHM-CU  | CESTAT Case CUSTOMS

Customs - classification of imported goods namely rotors, stator, down case, top case and down rod etc. imported together. The appellant is seeking the classification under heading 85.03 whereas the Revenue seeks to classify the items under tariff heading 84.14 - Revenue argument that the items imported by them are fans in unassembled condition – HELD - whatever was imported by the appellant was specifically designed for ceiling fan - the Customs tariff headings include within purview the items incomplete, unfinished where presented unassembled or disassembled, if the said have the essential character of finished goods. ... [Read more]

Customs - classification of imported goods namely rotors, stator, down case, top case and down rod etc. imported together. The appellant is seeking the classification under heading 85.03 whereas the Revenue seeks to classify the items under tariff heading 84.14 - Revenue argument that the items imported by them are fans in unassembled condition – HELD - whatever was imported by the appellant was specifically designed for ceiling fan - the Customs tariff headings include within purview the items incomplete, unfinished where presented unassembled or disassembled, if the said have the essential character of finished goods. In the instant case, it is seen that all parts of the fan except the fan blades as a set. The packing also describes the goods as electric fan. The rotors and stators, down case, top case and down rod of motor are also designed specifically to be a part of the fan. In these circumstances, following Rule 2(a), the goods are classifiable under heading 84.14 as unassembled, incomplete fan – the correct classification of the product would be under tariff heading 84.14 and not under heading 85.03. duty demand on this count is upheld - The appellant had earlier sought classification under heading 85.03 and the matter can be a subject matter of opinion, in these circumstances, imposition of penalty and confiscation is not justified - The confiscation and redemption fine are set-aside and penalties are also set-aside – the appeals are partly allowed [Read less]

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