More Judgements

2021-VIL-163-DEL  | High Court SGST

GST - Petitioner was compelled to deposit over Rs.19 crores with the respondents to save its business from coming to a standstill on account of attachment of the bank account - though the said amount was deposited as far back as on 1st July, 2020 and 31st August, 2020 but the respondents are merely retaining the said amount and have not taken any further action; the petitioner seeks refund thereof – HELD - the respondents were required to issue notices under Sections 73 and/or 74 of the Act to the petitioner and which the respondents have not done till now - prima facie it appears that the respondents, taking advantage o... [Read more]

GST - Petitioner was compelled to deposit over Rs.19 crores with the respondents to save its business from coming to a standstill on account of attachment of the bank account - though the said amount was deposited as far back as on 1st July, 2020 and 31st August, 2020 but the respondents are merely retaining the said amount and have not taken any further action; the petitioner seeks refund thereof – HELD - the respondents were required to issue notices under Sections 73 and/or 74 of the Act to the petitioner and which the respondents have not done till now - prima facie it appears that the respondents, taking advantage of the petitioner having been so compelled to make the deposit, albeit without prejudice to its rights and contentions, are not in a hurry - unless the respondents issue notice, within a time bound period, a direction needs to be issued for refund of the amounts so deposited by the petitioner; if the notices are issued, further remedy thereagainst would be available to the petitioner - List on 5th March, 2021 [Read less]

2021-VIL-80-CESTAT-AHM-CE  | CESTAT CENTRAL EXCISE

Central Excise - Demand based on sales register retrieved from the computer which does not stands reflected in the statutory records – Remand proceedings - HELD - the impugned order has once again confirmed the entire demand without following the direction in the first and also the second order of the tribunal - the finding of both the orders are very clear and precise leaving no scope for interpretation - if the Adjudicating Authority had any doubts regarding what was stated in the first tribunal order, the same was clarified in the second tribunal order - In case the commissioner was aggrieved by the observation of the... [Read more]

Central Excise - Demand based on sales register retrieved from the computer which does not stands reflected in the statutory records – Remand proceedings - HELD - the impugned order has once again confirmed the entire demand without following the direction in the first and also the second order of the tribunal - the finding of both the orders are very clear and precise leaving no scope for interpretation - if the Adjudicating Authority had any doubts regarding what was stated in the first tribunal order, the same was clarified in the second tribunal order - In case the commissioner was aggrieved by the observation of the Tribunal’s second order the right course of action was to take the matter to the higher forum and not to ignore the same - the impugned order passed directly in violation of Tribunal’s orders is bad in law and set aside. The matter remanded to the Adjudicating Authority for fresh adjudication following the directions made in earlier orders of the tribunal - Appeal is allowed by way of remand [Read less]

2021-VIL-152-BOM  | High Court SGST

Extension in time limit for filing of GSTR-9 - It is not that the time-limit has not been extended. Non-extension of the time-limit beyond 28.02.2021 would not lead to any extinguishment of right; The writ petition is dismissed: HC

2021-VIL-79-CESTAT-CHE-ST  | CESTAT SERVICE TAX

Service Tax - The appellants are cooperative society dealing with various agricultural commodities - Demand under Auctioneering Service, Business Support Service and Goods Transport Agency Service – HELD - Appellant are rendering is facilitation of tenders for sale of the products of their members through sealed tenders. Therefore, the term “auctioneer’s service” does not apply to appellant’s activity – Appellant are charging interest for lending money and for appraising the value of jewels brought by their members, they collect appraising charge - The appellant is not supporting any business entity - by no str... [Read more]

Service Tax - The appellants are cooperative society dealing with various agricultural commodities - Demand under Auctioneering Service, Business Support Service and Goods Transport Agency Service – HELD - Appellant are rendering is facilitation of tenders for sale of the products of their members through sealed tenders. Therefore, the term “auctioneer’s service” does not apply to appellant’s activity – Appellant are charging interest for lending money and for appraising the value of jewels brought by their members, they collect appraising charge - The appellant is not supporting any business entity - by no stretch of imagination can this be called “Business Support Service” - the demand under Auctioneering Service and Business Support Service cannot sustain and set aside - Demand under GTA Service - The appellant was carrying on the work of lifting and delivering the goods under the Public Distribution System. They were carrying goods in the nature of wheat, rice, pulses, sugar etc. An amendment by Notification No. 4/2010 dated 27.2.2010 was brought forth in Notification No. 33/2004 dated 3.12.2004 whereby the transportation of foods grains or pulses was also exempted from levy of service tax - as the issue was interpretational in nature and also for the reason that there were notifications exempting service tax for carrying food items which underwent amendment later, it cannot be said that the appellant has suppressed facts to evade payment of service tax - appellant were carrying food items as part of PDS. Such transportation would be clearly accounted with government and it cannot be said that appellant has willfully suppressed any facts - apart from a bald allegation that appellant has suppressed facts, there is no evidence of any positive act of suppression established by the department - the demand invoking extended period cannot sustain and the penalties imposed under section 76 and 78 of the Finance Act, 1994 is unwarranted - the appellant would be liable to pay service tax along with interest under GTA services for the normal period, if any. The demand under GTA services for the extended period alone is set aside [Read less]

2021-VIL-75-CESTAT-AHM-ST  | CESTAT SERVICE TAX

Service Tax - Liquidated damages - Compensation/penalty - “consideration” towards any service - Recovery of amount in the nature of liquidated damages towards poor quality of goods supplied - demand of service tax considering the activity under Section 66E (e) falling under “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act” – HELD - the appellant have taken the ground that the amount which they have received is in the form of “liquidated damage” and not in the form of “consideration” towards any service, however, this vital point raised by the appell... [Read more]

Service Tax - Liquidated damages - Compensation/penalty - “consideration” towards any service - Recovery of amount in the nature of liquidated damages towards poor quality of goods supplied - demand of service tax considering the activity under Section 66E (e) falling under “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act” – HELD - the appellant have taken the ground that the amount which they have received is in the form of “liquidated damage” and not in the form of “consideration” towards any service, however, this vital point raised by the appellant has not been considered either by the Adjudicating Authority or by the first appellate authority. Both the authorities also have not dealt with the distinction between the ‘liquidated damage’ as claimed to have received by the appellant and the ‘consideration’, which department want to impose. Both the terms have been defined legally separately in the Indian Contract Act, 1872 - the appellants have also relied upon various judgments on the identical issue which Adjudicating Authority and learned Commissioner (Appeals) had no occasion to consider - since the issues have not been dealt in a proper manner by both the lower authorities, the matter needs to be reconsidered as a whole - the impugned order is set aside and matter remanded to the Adjudicating Authority [Read less]

2021-VIL-158-MAD  | High Court VAT

Tamil Nadu VAT Act - Sales Tax Deferral Scheme – Turnover suppression - Demand of interest under Section 24(3) of TNVAT Act on the ground of turnover suppressions – demand of differential taxes arrived at on account of non-filing of prescribed declaration Forms, due to which appellant is held to be not entitled to avail IFST – Appellant remitted balance tax payable as per notice - Respondent levied penal interest under Section 24(3) of TNGST Act – Single Bench dismissed writ petition filed by appellant – assessee in appeal - HELD - Based on eligibility certificate granted by SIPCOT, Appellant was eligible for de... [Read more]

Tamil Nadu VAT Act - Sales Tax Deferral Scheme – Turnover suppression - Demand of interest under Section 24(3) of TNVAT Act on the ground of turnover suppressions – demand of differential taxes arrived at on account of non-filing of prescribed declaration Forms, due to which appellant is held to be not entitled to avail IFST – Appellant remitted balance tax payable as per notice - Respondent levied penal interest under Section 24(3) of TNGST Act – Single Bench dismissed writ petition filed by appellant – assessee in appeal - HELD - Based on eligibility certificate granted by SIPCOT, Appellant was eligible for deferral of sales tax under deferral scheme for nine years from month in which Appellant's unit commenced its commercial production – Condition to enter into an agreement with Respondent was complied with by Appellant – In terms of clause 12 of agreement, if there is a turnover suppression, Appellant would not be eligible for loan scheme – Turnover suppression has been defined to mean taxable turnover not shown or not declared as such in monthly returns filed by Appellant – If Respondent has to make out a case of turnover suppression, Respondent should establish that turnover has not been shown in monthly returns filed by appellant, whereas the appellant has filed monthly returns and has shown taxable turnover – Fact of assessee effecting transactions by use of Form C and Form H declarations cannot amount to suppression – Respondent has failed to address crucial issues in spite of Appellant raising objections and mechanically proceeded to issue notice demanding penal interest – Notice demanding penal interest issued by Respondent quashed – Matter remanded back to Respondent for fresh consideration in accordance with law with due opportunity to Appellant – the writ appeal is allowed [Read less]

2021-VIL-78-CESTAT-CHE-ST  | CESTAT SERVICE TAX

Service Tax – Validity of denial of Cenvat Credit at the recipient’s end - Availment of CENVAT Credit availed on the basis of invoices issued by dealers of motor vehicles – denial of Cenvat credit alleging that no service has been received by the appellant from the car dealers and invoices issued by dealers of motor vehicles contain description of services which were never provided – HELD - the case of the Department is that the payout paid by the appellant to the dealers on the Own Damage premium collected by the dealers from the customers is camouflaged as service provided by the dealers to the appellant, therefo... [Read more]

Service Tax – Validity of denial of Cenvat Credit at the recipient’s end - Availment of CENVAT Credit availed on the basis of invoices issued by dealers of motor vehicles – denial of Cenvat credit alleging that no service has been received by the appellant from the car dealers and invoices issued by dealers of motor vehicles contain description of services which were never provided – HELD - the case of the Department is that the payout paid by the appellant to the dealers on the Own Damage premium collected by the dealers from the customers is camouflaged as service provided by the dealers to the appellant, therefore, the services contained in the invoices have actually not been provided by the dealers to the appellant - the Department has no dispute with the Service Tax collected from the appellant by the dealer and remitted to the Government. The assessment of Service Tax paid at the dealer’s end has not been disturbed by the Department - the dealer has paid Service Tax on the services described in the invoices, if that be so, the denial of credit at the recipient’s end cannot be justified without reopening the assessment at the dealer’s end - unless and until the assessment made by the dealer is revised, the credit at the recipient’s end cannot be denied - following the decision of the Hon’ble Madras High Court in M/s. Modular Auto Ltd., the impugned order is set aside and the assessee appeal is allowed [Read less]

2021-VIL-156-KAR  | High Court SGST

GST - Zero-rated supply - Refund claim under Section 54 of the CGST Act – Rejection of refund – HELD - Authority had issued a show cause notice calling upon petitioner to furnish reply within 15 days from the date of service of notice - without waiting for the period of 15 days as was made available to reply to the show cause notice, refund application of the petitioner came to be rejected - In light of the admitted position that the orders have been passed within a period of 15 days contrary to such period being made available to the petitioner and that request for adjournment has not been considered by the authoritie... [Read more]

GST - Zero-rated supply - Refund claim under Section 54 of the CGST Act – Rejection of refund – HELD - Authority had issued a show cause notice calling upon petitioner to furnish reply within 15 days from the date of service of notice - without waiting for the period of 15 days as was made available to reply to the show cause notice, refund application of the petitioner came to be rejected - In light of the admitted position that the orders have been passed within a period of 15 days contrary to such period being made available to the petitioner and that request for adjournment has not been considered by the authorities, the orders of rejection of refund are set aside - in the interest of justice, it would be appropriate if the petitioner is afforded an opportunity of personal hearing – writ petition is disposed of [Read less]

2021-VIL-76-CESTAT-DEL-CU  | CESTAT Case CUSTOMS

Customs – Valuation - Mis-declaration or clerical error - Import of 1, 3-DIHYDROXYNAPHTHALENE - Difference between declared value as per information on the package and as per proforma Invoice - Confiscation under Section 111(m) of the Customs Act, 1962 and penalty under Section 114AA of the Customs Act, 1962 – HELD – it is the obligation of the authorised courier to file the ‘Courier Bill of Entry’ based on the information contained on the package. Evidently, it is a case of clerical mistake by the shipper, who has wrongly declared the lower value instead of the correct value - the appellant has at the very first... [Read more]

Customs – Valuation - Mis-declaration or clerical error - Import of 1, 3-DIHYDROXYNAPHTHALENE - Difference between declared value as per information on the package and as per proforma Invoice - Confiscation under Section 111(m) of the Customs Act, 1962 and penalty under Section 114AA of the Customs Act, 1962 – HELD – it is the obligation of the authorised courier to file the ‘Courier Bill of Entry’ based on the information contained on the package. Evidently, it is a case of clerical mistake by the shipper, who has wrongly declared the lower value instead of the correct value - the appellant has at the very first instance on query raised by the Department, have come forward with the correct value based on the proforma invoice. Further, the appellant has remitted the amount through authorised banking channel, and as such no case of any malafide is made out against the appellant. At best, it is the mistake of the authorised courier who was not vigilant at the time of booking of the courier parcel to ensure the correct declaration by the shipper - no case of any collusion is made out against the appellant-shipper and /or against the courier - penalty have been imposed mechanically without proper appreciation of the facts and the law applicable - the order of confiscation as well as the penalties imposed under section 112(a) and 114AA of the Customs Act are set aside and the appeal is allowed [Read less]

2021-VIL-162-DEL-ST  | High Court SERVICE TAX

SVLDRS - Issuance of second show cause notice post-Discharge Certificate on the ground that the first show cause notice did not pertain to “same matter” –petitioner contends that since the contracts were the subject matter of the first show cause notice, the second show cause notice with respect to “free of cost” supplies under the contract does not constitute a different matter but is the same matter - the respondents has contended that “free of cost” component is a different matter from the running account bills raised by the petitioner, which alone were the subject matter of the first show cause notice - T... [Read more]

SVLDRS - Issuance of second show cause notice post-Discharge Certificate on the ground that the first show cause notice did not pertain to “same matter” –petitioner contends that since the contracts were the subject matter of the first show cause notice, the second show cause notice with respect to “free of cost” supplies under the contract does not constitute a different matter but is the same matter - the respondents has contended that “free of cost” component is a different matter from the running account bills raised by the petitioner, which alone were the subject matter of the first show cause notice - The counsel for the respondents seeks time to show case law on, how the words ‘same matter’ or ‘different matter’ are to be interpreted in the context of the SVLDRS i.e. liberally or restrictively - List on 15th March, 2021 [Read less]

2021-VIL-155-ALH  | High Court SGST

GST - Parallel proceeding - Enforcement action - Petition contention that once the notice and summons had been issued by the Central Tax Authority, adjudication under Section 74 of the Act could not have been made by the State Authority – HELD - the summons had been issued while initiating inquiry under Section 70 of the CGST Act, 2017 which is a "judicial proceeding" within the meaning of Sections 193 and 228 of the Indian Penal Code, for providing punishment for furnishing false evidence and interruption to any public servant in discharge of his duties - Whereas for determination of tax and penalty, the proceeding had ... [Read more]

GST - Parallel proceeding - Enforcement action - Petition contention that once the notice and summons had been issued by the Central Tax Authority, adjudication under Section 74 of the Act could not have been made by the State Authority – HELD - the summons had been issued while initiating inquiry under Section 70 of the CGST Act, 2017 which is a "judicial proceeding" within the meaning of Sections 193 and 228 of the Indian Penal Code, for providing punishment for furnishing false evidence and interruption to any public servant in discharge of his duties - Whereas for determination of tax and penalty, the proceeding had been initiated in accordance with the procedure prescribed under 74 of the UPGST Act - As the proceedings for determination and levy of tax and penalty had been initiated by the State Tax Authority, the Court does not find substance in the challenge to the jurisdiction of State Tax Authority to pass order for determination of tax and penalty to levy the same upon the petitioner, in view of the circular dated 5.10.2018 - the initiation of the proceeding for imposition of tax and penalty was with the issuance of the notice under Section 74 of UPGST and the inquiry under Section 70 of the CGST Act was independent - The writ petition is dismissed [Read less]

2021-VIL-151-ALH  | High Court SGST

GST – Arrest – Application seeking relaxation of bail condition directing to deposit the entire disputed amount – applicant argues that under the CGST Act, there is no statutory provision for compelling the applicant to deposit the entire disputed amount without completing the investigation/enquiry or without launching prosecution by filing complaint or without initiating any recovery proceedings under section 73 or 74 of CGST Act – HELD - conditions for grant of bail ought not to be so strict as to be incapable of compliance, thereby making a grant of bail illusory. The conditions while granting bail should be rea... [Read more]

GST – Arrest – Application seeking relaxation of bail condition directing to deposit the entire disputed amount – applicant argues that under the CGST Act, there is no statutory provision for compelling the applicant to deposit the entire disputed amount without completing the investigation/enquiry or without launching prosecution by filing complaint or without initiating any recovery proceedings under section 73 or 74 of CGST Act – HELD - conditions for grant of bail ought not to be so strict as to be incapable of compliance, thereby making a grant of bail illusory. The conditions while granting bail should be reasonable, so that it may not frustrate the very object of granting bail. Discretion exercised by the Court while imposing conditions should not be arbitrary, but it should be keeping in mind to strike balance between the accused and prosecution - In the present case, out of the disputed amount of Rs.9.51 crore, the applicant has already deposited a sum of Rs.5 crore - Till date neither any criminal complaint has been filed nor any proceedings under section 73 or 74 of the CGST Act has been initiated against the applicant - The enquiry proceedings is still under process. The determination of input tax credit wrongly availed has not been finally made by the Department and no order under section 83 of the CGST Act for provisional attachment has been made – the condition imposed by lower court directing the applicant to deposit remaining amount of Input Tax Credit while granting bail to the applicant, is unsustainable, as it is too harsh and unreasonable – in the interest of justice, the condition of bail order is modified by directing the applicant to submit security equivalent to remaining disputed amount in other than cash and bank guarantee - the bail application is allowed [Read less]

2021-VIL-11-AAAR  | AAAR SGST

GST – Karnataka AAAR - Supply, Consideration - supply between related persons - Taxability of activities of Liaison Office - whether the activities of the Liaison Office will amount to supply in terms of the GST law and whether such liaison office is liable to be registered for payment of GST - whether the Appellant’s liaison office in India is a ‘person’ who is performing an activity ‘for a consideration’ which is in ‘the course or furtherance of business’ – HELD – The inward remittance in foreign exchange received by the liaison office from its head office for maintaining the office in India cannot be... [Read more]

GST – Karnataka AAAR - Supply, Consideration - supply between related persons - Taxability of activities of Liaison Office - whether the activities of the Liaison Office will amount to supply in terms of the GST law and whether such liaison office is liable to be registered for payment of GST - whether the Appellant’s liaison office in India is a ‘person’ who is performing an activity ‘for a consideration’ which is in ‘the course or furtherance of business’ – HELD – The inward remittance in foreign exchange received by the liaison office from its head office for maintaining the office in India cannot be termed as a consideration for the liaison activity. This removes the coverage of the activities of the liaison office from the scope of Section 7(1)(a) of the CGST Act - The Appellant’s Head office in Germany is no doubt a ‘person’ by virtue of clause (h) of Section 2(84) of the CGST Act. However, the liaison office is not recognised as a separate legal entity in India. Under the Companies Act, 2013, every foreign entity establishing its place of business in India by way of a liaison office shall be treated as a foreign company - The liaison office can at best be a geographical extension of the parent Company having the same legal identity as the parent company - the concept of related person arises only when there are two ‘persons’ in existence as per law. In this case, there is only one legal entity i.e. the company in Germany and the liaison office in India is only an extension of the foreign company having no separate identity in India – the lower Authority erred in ruling that the liaison office is an ‘artificial juridical person’ and that the business conducted by it comes within the purview of the definition of business stated in Section 2(17) of the CGST Act - the finding of the lower Authority that the parent Company in Germany and the Appellant liaison office in India are deemed to be related persons is not correct - The activities of the liaison office are not a ‘supply’ under Section 7(1)(a) of the CGST Act and will also not be covered under the ambit of clause 2 of Schedule I of the CGST Act – since there is no taxable supply, there is no requirement for obtaining a GST registration or payment of GST by the appellant – The Advance Authority Ruling is set aside and assessee appeal is allowed [Read less]

2021-VIL-28-SC-CU  | Supreme Court CUSTOMS

Customs – Exemption - Import of Micropore, Transpore and Tegaderm - eligibility to exemption under Notification No. 21/2002-Customs dated 01/03/2002 as amended - appellants contend that the products are rightfully eligible for the exemption under the description "Skin Barriers Micropore Surgical Tapes" - Tribunal Held - As per relevant headings of the notification it is seen that "Skin Barriers Micropore Surgical Tapes" is mentioned as a single heading whereas, the appellants would like to read it as "Skin Barriers", "Micropore Surgical Tapes" holding that there is no product known in the market as "Skin Barriers Micropo... [Read more]

Customs – Exemption - Import of Micropore, Transpore and Tegaderm - eligibility to exemption under Notification No. 21/2002-Customs dated 01/03/2002 as amended - appellants contend that the products are rightfully eligible for the exemption under the description "Skin Barriers Micropore Surgical Tapes" - Tribunal Held - As per relevant headings of the notification it is seen that "Skin Barriers Micropore Surgical Tapes" is mentioned as a single heading whereas, the appellants would like to read it as "Skin Barriers", "Micropore Surgical Tapes" holding that there is no product known in the market as "Skin Barriers Micropore Surgical Tapes" - the OIO has dealt this issue at length to establish the existence of products known as "Skin Barriers Micropore Surgical Tapes" - the department has established that a product named and known as "Skin Barriers Micropore Surgical Tapes" exists - the appellants contention that no product known as "Skin Barriers Micropore Surgical Tapes" exists and there should have been a comma (,) in between doesn't hold water. When such products are sold and used as such, it cannot be inferred that the notification was wrongly worded and therefore, it is to be interpreted to mean Skin Barriers, Micropore Surgical Tapes is not acceptable - the impugned order is correct as far as it holds that the items imported by the appellants are not eligible for the exemption contained in the notification No.21/2002-Cus dated 01.03.2002 - The fact that the appellants are importing from a long period is not disputed. Further, all the consignments were not cleared under self-assessment procedure. Therefore, the extended period is not invokable and penalties are not imposable - the appeal is partly allowed confirming demand of duty for normal period only and by setting aside penalties - SC: Assessee appeal - No reason to interfere with the final order passed by the Tribunal - assessee appeal is dismissed [Read less]

2021-VIL-29-SC-CE  | Supreme Court CENTRAL EXCISE

Central Excise - Admissibility of benefit of Notification No.108/95-CE dated 28.8.1995 amended by Notification No.13/2008 dated 1.3.2008 for the goods supplied to the projects funded/financed by the United Nations or an international organisation and approved by Government of India - Tribunal Held – There is no suppression of facts on the part of the appellants when the new Notification No.13/2008-CE dated 1.3.2008 was issued. After the issue of amended Notification No.13/2008-CE dated 1.3.2008 appellants approached the Department and informed that "they have effected clearances only after securing an undertaking that th... [Read more]

Central Excise - Admissibility of benefit of Notification No.108/95-CE dated 28.8.1995 amended by Notification No.13/2008 dated 1.3.2008 for the goods supplied to the projects funded/financed by the United Nations or an international organisation and approved by Government of India - Tribunal Held – There is no suppression of facts on the part of the appellants when the new Notification No.13/2008-CE dated 1.3.2008 was issued. After the issue of amended Notification No.13/2008-CE dated 1.3.2008 appellants approached the Department and informed that "they have effected clearances only after securing an undertaking that the goods would be retained within the project and not diverted" - the Revenue has not been able to prove any suppression or intention to evade payment of duty on the part of the appellants. Therefore, extended period of limitation against the appellants is not legally maintainable - amendment to the original Notification No.108/95-CE dated 28.8.1995 made by Notification No.13/2008-CE dated 1.3.2008 would have prospective operation and the demand against the appellants can be sustained only for one year period which is within the period of limitation and the penalty imposed by the impugned order are set aside – appeals are partly allowed by remand - SC: No interference is warranted since the clarificatory notification was issued on 1 March 2008 and the clearances were effected prior thereto - the Tribunal has observed that the demand against the assessee could be sustained for normal - no merit in the Revenue appeal and same is dismissed on the ground of delay as well as on merits [Read less]

2021-VIL-157-TRI  | High Court SGST

GST – Notice for cancellation of GST Registration - blocking of petitioner's Registration/GST Account on the GST portal – vague and imprecise show cause notice - HELD - The impugned notice has been issued only for cancellation of registration, that too without citing any particular reason - so far no order cancelling the petitioner’s GST registration has been passed - without resorting to the power of suspending the registration, the respondent surely cannot block the petitioner’s GST account on the official portal. Any such action would prevent the petitioner from carrying on his business in lawful manner. Such an... [Read more]

GST – Notice for cancellation of GST Registration - blocking of petitioner's Registration/GST Account on the GST portal – vague and imprecise show cause notice - HELD - The impugned notice has been issued only for cancellation of registration, that too without citing any particular reason - so far no order cancelling the petitioner’s GST registration has been passed - without resorting to the power of suspending the registration, the respondent surely cannot block the petitioner’s GST account on the official portal. Any such action would prevent the petitioner from carrying on his business in lawful manner. Such an action would have the effect of suspension of the petitioner’s registration - impugned show cause notice is quashed on the ground of being vague and imprecise - the respondents are directed to unblock the petitioner’s GST account on the GST portal – writ petition is disposed of [Read less]

2021-VIL-164-DEL-ST  | High Court SERVICE TAX

Service Tax - Legal services – the impugned final audit report recognized that the Petitioner is "engaged in providing legal services as partnership firm" - show-cause notice alleging that the petitioner is not providing legal service but intermediary services and is liable to pay service tax – HELD - It is directed that till further orders, no coercive steps shall be taken against the petitioner pursuant to the impugned show-cause notice. In case final order is passed pursuant thereto, the same shall be not be given effect to, till further orders - List on 12th April, 2021

2021-VIL-153-DEL  | High Court SGST

GST - Liquidated Damages - Supply of services - Compensation/penalty for short offtake of the coal - Challenge to levy of GST on penalty in the form of “liquidated damages” imposed for non-performance under a contract – Petitioner challenges the Constitutional validity of Clause 5(e) of Schedule II of the CGST Act as ultra-vires of Articles 14, 246A and 265 of the Constitution of India and Section 7 of the CGST Act – petitioner seeks declaration of the Exemption Notification and the FAQ issued by CBIC as ultra-vires to Constitution of India and Section 7 of the CGST Act – HELD - Prima facie it appears that the CG... [Read more]

GST - Liquidated Damages - Supply of services - Compensation/penalty for short offtake of the coal - Challenge to levy of GST on penalty in the form of “liquidated damages” imposed for non-performance under a contract – Petitioner challenges the Constitutional validity of Clause 5(e) of Schedule II of the CGST Act as ultra-vires of Articles 14, 246A and 265 of the Constitution of India and Section 7 of the CGST Act – petitioner seeks declaration of the Exemption Notification and the FAQ issued by CBIC as ultra-vires to Constitution of India and Section 7 of the CGST Act – HELD - Prima facie it appears that the CGST Act does not permit levy of GST on such 'compensation/penalty' and without any sale of goods having taken place – the respondent No.2 has drawn attention to the definition of 'supply' in Section 7 and to the definition of ‘supply of services’ in clause 5(e) of Schedule II to the CGST Act to contend that the agreement of payment of penalty constitutes an agreement to refrain from an act or to tolerate an act or a situation or to do an act – it is argued though the supply of coal by the respondent No.2 to the petitioner constitutes sale of goods but the penalty clause to prevent the cancellation of the agreement constitutes a supply of services and not sale of goods – the Court finds that in Schedule II, while defining 'sale of goods', no provision as in Clause 5(e) thereof for sale or services exists - from the termination clause in the agreement prima facie it appears that the payment of penalty is not relevant for termination - The matter requires consideration - Issue notice - List on 28th July, 2021 [Read less]

2021-VIL-160-MAD-CE  | High Court CENTRAL EXCISE

Central Excise - Refund of amount paid in excess – Time-barred - Non-payment of duty on goods captively consumed and availment of ineligible Modvat Credit - recovery of duty and wrongfully availed Modvat credit – dismissal of application by Settlement Commission – Petitioner challenged impugned order of Settlement Commission denying refund of amount paid by petitioner in excess – Petitioner submits that amount paid during investigation was nothing but a deposit and therefore, Settlement Commission was not justified in not ordering refund of amount paid in excess – HELD - Amount was paid by petitioner towards its ... [Read more]

Central Excise - Refund of amount paid in excess – Time-barred - Non-payment of duty on goods captively consumed and availment of ineligible Modvat Credit - recovery of duty and wrongfully availed Modvat credit – dismissal of application by Settlement Commission – Petitioner challenged impugned order of Settlement Commission denying refund of amount paid by petitioner in excess – Petitioner submits that amount paid during investigation was nothing but a deposit and therefore, Settlement Commission was not justified in not ordering refund of amount paid in excess – HELD - Amount was paid by petitioner towards its tax liability on captively consumed paper cone and bleach liquor on which Petitioner was liable to pay duty – Amounts paid by Petitioner are nothing but a deposit and liable to be adjusted or refunded subject to outcome of SCN – the Settlement Commission has granted a complete waiver from payment of interest and penalty to Petitioner and also immunity from prosecution to Petitioner – Having granted immunity and waiver from payment of penalty, amount paid in excess by petitioner cannot be retained by the Department on ground that refund claim was time barred – Question of invoking limitation prescribed under Section 11B of the CEA, 1944 is misplaced – Department cannot artificially impose a new period of limitation especially when proceedings were pending before it – Respondents are directed to refund of amount paid by Petitioner in excess of amounts due for period covered by SCN with interest at rates prescribed for refund of amount for pre-deposits made under Section 35FF of the Act – the writ petition is allowed [Read less]

2021-VIL-159-BOM  | High Court VAT

Maharashtra Value Added Tax Act - SARFAESI Act - Auction purchase – Arrears of sales tax - Petition challenge to action on part of District Industries Centre in refusing to transfer property in favour of Petitioner, unless liability of dues claimed by Sales Tax Department is cleared by Petitioner – Further relief is claimed against Bank to issue fresh sale certificate free from all encumbrances in favour of Petitioner – Whether Petitioner is liable to pay dues claimed by Sales Tax Department in order to obtain a clear and marketable title to property purchased in auction? – HELD – Section 37(1) of MVAT Act creat... [Read more]

Maharashtra Value Added Tax Act - SARFAESI Act - Auction purchase – Arrears of sales tax - Petition challenge to action on part of District Industries Centre in refusing to transfer property in favour of Petitioner, unless liability of dues claimed by Sales Tax Department is cleared by Petitioner – Further relief is claimed against Bank to issue fresh sale certificate free from all encumbrances in favour of Petitioner – Whether Petitioner is liable to pay dues claimed by Sales Tax Department in order to obtain a clear and marketable title to property purchased in auction? – HELD – Section 37(1) of MVAT Act creates a first charge on property of dealer for any amount of tax, penalty, interest, sum forfeited, fine or any other sum payable under the Act – Though dues of Bank as a secured creditor will have priority in light of language of Section 26-E of SARFAESI Act, that does not have effect of wiping out the dues payable under any Central/State/Local Act – When a statutory charge is created on property, same would go with property and would follow property in whosoever’s hands the property goes – Notice of such statutory charge on property is always presumed in law to one and all and none can claim ignorance of same – Since dues claimed by Sales Tax Department being a charge on property under Section 37(1) of MVAT Act, property stood attached by Sales Tax Department before auction – Petitioner would be liable to pay dues to Sales Tax Department in order to obtain a clear and marketable title to property, having purchased same on ‘As is where is and whatever there is basis’ – In case, Petitioner discharges dues of Sales Tax Department, it would be entitled to no dues certificate from Department – Petitioner is not entitled to reliefs as claimed in petition – the writ petition is dismissed [Read less]

2021-VIL-154-MAD  | High Court VAT

Central Sales Tax Act, 1956 - Purchase of SAP software at concessional rate of tax against C Form - Assessment - garnishee orders - Levy of penalty – Appeal against ld. Single Judge order dismissing the writ petitions on the ground that the Court could not exercise its writ jurisdiction under Article 226 of The Constitution of India – interpretation of Hon'ble Supreme Court decision in the case of ACCT, LTU, Kakinada Vs. Glaxo Smith Kline Consumer Healthcare Ltd – HELD - The ld. Single Judge placed reliance on the decision of the Hon'ble Supreme Court in the case of Glaxo Smith Kline Consumer Healthcare Ltd to hold t... [Read more]

Central Sales Tax Act, 1956 - Purchase of SAP software at concessional rate of tax against C Form - Assessment - garnishee orders - Levy of penalty – Appeal against ld. Single Judge order dismissing the writ petitions on the ground that the Court could not exercise its writ jurisdiction under Article 226 of The Constitution of India – interpretation of Hon'ble Supreme Court decision in the case of ACCT, LTU, Kakinada Vs. Glaxo Smith Kline Consumer Healthcare Ltd – HELD - The ld. Single Judge placed reliance on the decision of the Hon'ble Supreme Court in the case of Glaxo Smith Kline Consumer Healthcare Ltd to hold that the High Court, in exercise of power under Article 226 of the Constitution of India, ought not entertain the writ petition assailing the order passed by the Statutory Authority - the Hon'ble Supreme Court in the said decision has not held that a writ petition under Article 226 of the Constitution of India is an absolute bar - the Hon'ble Supreme Court held that although the power of the High Court under Article 226 of the Constitution is very wide, the Court must exercise self-imposed restraint and not entertain the writ petition. Further, the Hon'ble Supreme Court observed that the High Court may accede to such a challenge and can also non suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner. In addition, the Hon'ble Supreme Court held that when the High Court refuses to exercise the jurisdiction under Article 226 of The Constitution of India, it would be necessary for the Court to record that there was no case of violation of the principles of natural justice or non-compliance of statutory requirements in any manner - the observation of the learned Single Judge to the effect that there is absolute bar for entertaining a writ petition does not reflect the correct legal position - On the merit of the Case - the Assessing Officer had issued the notices proposing to levy penalty on the ground that the dealer purchased SAP software at concessional rate of tax against C Form Declarations without having included the same in the registration certificate issued under the CST Act. Hence, the Assessing Officer was of the prima facie view that the software was not capable of being used in manufacturing and therefore, had proposed to levy penalty under Section 10A(1) of the CST Act – HELD – the order levying penalty for the assessment year 2008-09 is dated 30.1.2014. Though the dealer's objections were received on 16.10.2012 - the Assessing Officer did not afford any opportunity of personal hearing to the appellant though more than one year had lapsed - the dealer has taken a specific stand that the software is being used in the manufacture. Furthermore, the dealer's case is that in their registration certificate issued under the CST Act, computer software is also one of the items mentioned in their certificate of registration. Had an opportunity of hearing been granted to the dealer, especially when the Assessing Officer took more than one year to complete the assessment, the dealer would have explained the same. That apart, the proposal to levy penalty was made by an officer, who was not the officer, who passed the order dated 30.1.2014, as there has been a transfer of the officer and the new officer took over charge. This is also one more aspect, which should have weighed in the mind of the Assessing Officer to afford an opportunity of personal hearing because the officer, who completed the assessment, was not the officer, who made the proposal to levy penalty - as the defect which has occurred by levying penalty without affording an opportunity of personal hearing would go to the root of the very levy itself, the Court is inclined to interfere with the impugned order, the assessment orders is set aside and the matter is remanded to the Assessing Officer for a fresh consideration – the writ appeal is allowed [Read less]

2021-VIL-161-MAD-CU  | High Court CUSTOMS

Customs – Import of Restricted Item – Confiscation of Goods – Imposition of Penalty - Import of Old/Used Analogue Photocopiers and Old/Used Digital Multi-functional (Print and Copying) Machines – rejection of declared value – Department case that item imported is a restricted item in terms of para 2.17 of Foreign Trade Policy – confiscation of goods under Section 111(d) of the Act r/w Section 3(3) of FTDR Act with an option to redeem same on payment of fine under Section 125 of the Act subject to payment of applicable rate of duty – Penalty under Section 112(a) of the Act – Appellant submitted that digital ... [Read more]

Customs – Import of Restricted Item – Confiscation of Goods – Imposition of Penalty - Import of Old/Used Analogue Photocopiers and Old/Used Digital Multi-functional (Print and Copying) Machines – rejection of declared value – Department case that item imported is a restricted item in terms of para 2.17 of Foreign Trade Policy – confiscation of goods under Section 111(d) of the Act r/w Section 3(3) of FTDR Act with an option to redeem same on payment of fine under Section 125 of the Act subject to payment of applicable rate of duty – Penalty under Section 112(a) of the Act – Appellant submitted that digital multifunction print and copying machine is not restricted for import and therefore, order passed by Tribunal is liable to be set aside – Whether Tribunal was right in holding that machineries imported by Appellant are restricted items in terms of para 2.17 of Foreign Trade Policy – HELD - Paragraph 2.17 of Foreign Trade Policy states that all second hand goods, except second hand capital goods, shall be restricted for import, it further states that second hand personal computers, photocopier machines, air conditioners, diesel generating sets will only be allowed against a license – Para 2.17 specifically states that second hand photocopier machines will only be allowed against a license – Machines imported by Appellant were second hand goods – By applying common parlance test, it was found that goods imported are restricted and cannot be freely imported without a license – Attempt of Appellant to state that goods imported by them are not photocopiers has to necessarily fail, because common parlance test will encompass functionality test of imported machinery and Tribunal after elaborately analysing the functionality found all features of a photocopier in imported machinery – Tribunal was right in holding that machineries imported by Appellant are restricted items in terms of para 2.17 of Foreign Trade Policy - the appeal fails and dismissed - Whether reason assigned by Tribunal for not following earlier decision of co-ordinate bench of Tribunal is justified – HELD - the decision of co-ordinate Bench of Tribunal in Shivam International appears to be not adhering to principle of judicial discipline in following earlier decision and taking a different view – Tribunal has given elaborate reasons as to why earlier decision of co-ordinate Bench of Tribunal in Shivam International would not be applicable – Reason assigned by Tribunal for not following earlier decision is perfect and justified – Tribunal rightly rejected case of Appellant [Read less]

2021-VIL-77-CESTAT-CHE-CE  | CESTAT CENTRAL EXCISE

Central Excise – Sec. 2(f) – Manufacture - Appellants were re-melting scrap of iron emerging from slitting and shearing of coils - SCN proposing to demand of duty on the waste and scrap arising out of cutting and slitting of steel coils, contending that it is an excisable commodity classifiable under Chapter 72 and is liable to Central Excise Duty – HELD - When the process of cutting and slitting itself does not amount to manufacture within the meaning of Section 2 (f) of the Central Excise Act, 1944, scrap arising out of such activity cannot be subjected to excise duty for the simple reason that the appellant has no... [Read more]

Central Excise – Sec. 2(f) – Manufacture - Appellants were re-melting scrap of iron emerging from slitting and shearing of coils - SCN proposing to demand of duty on the waste and scrap arising out of cutting and slitting of steel coils, contending that it is an excisable commodity classifiable under Chapter 72 and is liable to Central Excise Duty – HELD - When the process of cutting and slitting itself does not amount to manufacture within the meaning of Section 2 (f) of the Central Excise Act, 1944, scrap arising out of such activity cannot be subjected to excise duty for the simple reason that the appellant has not consciously manufactured any waste or scrap. Emergence of such waste and scrap of iron is incidental to the activity of slitting and cutting of bigger coils into smaller ones - the demand of duty cannot sustain and set aside – appeal is allowed [Read less]

2021-VIL-74-CESTAT-BLR-CE  | CESTAT CENTRAL EXCISE

Central Excise – Pre-deposit - Rebate Claim - Rejection the appeal by Commissioner (Appeals) for not depositing of mandatory pre-deposit under Section 35F of CEA, 1944 – pendency of appeal before the Revisionary Authority – Recovery of erroneously refunded amount – HELD - the question of pre-deposit does not arise for the fact that there is a Revision application pending against the Orders of Appeal passed by the Commissioner - Since the issue is pending before the Revisionary Authority, Government of India, it was incumbent on the original authority not to adjudicate the protective notices issued by them and shoul... [Read more]

Central Excise – Pre-deposit - Rebate Claim - Rejection the appeal by Commissioner (Appeals) for not depositing of mandatory pre-deposit under Section 35F of CEA, 1944 – pendency of appeal before the Revisionary Authority – Recovery of erroneously refunded amount – HELD - the question of pre-deposit does not arise for the fact that there is a Revision application pending against the Orders of Appeal passed by the Commissioner - Since the issue is pending before the Revisionary Authority, Government of India, it was incumbent on the original authority not to adjudicate the protective notices issued by them and should have waited till the decision of the Revisionary Authority - the impugned orders are liable to be set aside and matter remanded to the original authority with a direction to keep the whole matter in abeyance till the decision of the Revisionary Authority. Accordingly, all the appeals are disposed of by way of remand [Read less]

2021-VIL-73-CESTAT-DEL-CE  | CESTAT CENTRAL EXCISE

Central Excise – Manufacture – By-product - Demand under rule 6(3) of the Cenvat Credit Rules 2004 for clearance of sulphuric acid from the factory of the respondent-assessee - The respondent cleared the finished goods (zinc and lead) on payment of duty – respondent also cleared some quantity of sulphuric acid to fertilizer manufacturers claiming exemption from payment of duty - Department of the view that sulphuric acid cleared without payment of duty is an exempted product and hence the respondent is liable to pay an amount in terms of rule 6(3)(i) of the Credit Rules – HELD – sulphuric acid arises as a by-prod... [Read more]

Central Excise – Manufacture – By-product - Demand under rule 6(3) of the Cenvat Credit Rules 2004 for clearance of sulphuric acid from the factory of the respondent-assessee - The respondent cleared the finished goods (zinc and lead) on payment of duty – respondent also cleared some quantity of sulphuric acid to fertilizer manufacturers claiming exemption from payment of duty - Department of the view that sulphuric acid cleared without payment of duty is an exempted product and hence the respondent is liable to pay an amount in terms of rule 6(3)(i) of the Credit Rules – HELD – sulphuric acid arises as a by-product during the manufacture of zinc - rule 6(3) of the Credit rules is not applicable in case of a by-product/waste emerging during the manufacturing process; the issue raised in the SCN had been settled in favour of the respondent by the Supreme Court in its own case - for the demands raised under rule 6(3)(i) of the Credit Rules in respect of sulphuric acid for the earlier period, the Supreme Court held that sulphuric acid is a by-product and there is no necessity to maintain separate records for the zinc concentrate used in the production of sulphuric acid and that rule 57CC does not talk about emergence of final product and a by-product - The judgment of the Supreme Court was subsequently followed by the Tribunal in several cases - when the Tribunal rejected the contention of the Department regarding the distinction made between ‘input’ and ‘input service’, it is not possible to accept the submission of the Department that the judgement of the Supreme Court in Hindustan Zinc Ltd. would not be applicable to the present case since it relates to ‘input services’ and not ‘inputs’ - The appeal filed by the Department is dismissed [Read less]

2021-VIL-137-AAR  | Advance Ruling Authority SGST

Telephone services has no relation whatsoever to the functions listed under Article 243W of the Constitution; Telephone services provided by the applicant are not eligible for exemption under entry No. 3 of the Notif. No. 12/2017-CT(R): AAR

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