More Judgements

2021-VIL-319-CESTAT-MUM-CE  | CESTAT CENTRAL EXCISE

Central Excise – Recovery of duty and denial of Cenvat credit to the appellant based upon the investigation and adjudication of its suppliers and finding that the facilities for production did not exist – HELD - appellant had furnished the documents issued by transporters as evidence of receipt of inputs at their facility. However, in the impugned order the veracity, or lack thereof, of these had not been a determined - There is no doubt that claims of such transfer should have been subjected to scrutiny through the appropriate authorities - the adjudicating authority was influenced entirely by the finding of the Commi... [Read more]

Central Excise – Recovery of duty and denial of Cenvat credit to the appellant based upon the investigation and adjudication of its suppliers and finding that the facilities for production did not exist – HELD - appellant had furnished the documents issued by transporters as evidence of receipt of inputs at their facility. However, in the impugned order the veracity, or lack thereof, of these had not been a determined - There is no doubt that claims of such transfer should have been subjected to scrutiny through the appropriate authorities - the adjudicating authority was influenced entirely by the finding of the Commissioner of Central Excise with jurisdiction over the suppliers, of non-manufacture on the part of the supplying units - however, this finding ceases owing to nullification by the coordinate bench of the Tribunal – due to the non-consideration of several contentions put forth on behalf of the appellants, the impugned order does not commend itself to be legal and proper - the matter is remanded to the original authority for a fresh determination of the conclusions leading from the evidence available on record – appeal is allowed by remand [Read less]

High Court Judgement  | High Court SGST

The defect that the e-way bills did not mention temporary registration number duly certified by the State RTO is technical and in any case, later on rectified; pending further proceedings the vehicles must be released subject to certain conditions.

2021-VIL-541-DEL  | High Court SGST

GST - Joint Commissioner (AE) Gautam Budh Nagar/Noida sought assistance of respondents in carrying out physical verification of L2 category supplier of an entity, which was being investigated by his office – pursuant to such request search was conducted at the principal place of business of the petitioner - Search and seizure in exercise of power under Section 67(2) of the CGST Act - whether the ingredients which are prerequisites for the exercise of powers under Section 67(2) of the CGST Act were present to enable the respondents to conduct search and seizure and issue order of prohibition – HELD – it is clear from ... [Read more]

GST - Joint Commissioner (AE) Gautam Budh Nagar/Noida sought assistance of respondents in carrying out physical verification of L2 category supplier of an entity, which was being investigated by his office – pursuant to such request search was conducted at the principal place of business of the petitioner - Search and seizure in exercise of power under Section 67(2) of the CGST Act - whether the ingredients which are prerequisites for the exercise of powers under Section 67(2) of the CGST Act were present to enable the respondents to conduct search and seizure and issue order of prohibition – HELD – it is clear from provisions of sub-section (1) and (2) of Section 67 that the expression “reasons to believe” controls the exercise of powers under the said provisions. Therefore, unless the basic jurisdictional facts exist, the power conferred under sub-sections (1) and (2) of Section 67 cannot be exercised - it is well-established that the expression reason to believe does not carry the same connotation as say reason to suspect; the standard of belief is that of a reasonable and honest person and not one based on surmises and conjectures, or mere suspicion. It is open to the concerned authority to form a prima facie view based on evidence that may be direct or circumstantial. In other words, the belief of the concerned authority should be based on some actionable material that he has had an opportunity to peruse - in this case, the search and seizure at petitioner’s premises was not conducted pursuant to an inspection carried out under sub-section (1) of Section 67. The conduct of search and seizure appears to have been carried out under the cover of the omnibus term ‘otherwise’ provided in sub-section (2) of Section 67 - further, both the order of seizure of documents and the order of prohibition, simply replicate the language of sub-section (2) of Section 67 and the corresponding Rule. Thus, the very trigger for conducting the search basis authorization issued by the respondent was flawed and unsustainable in law - the power to search and seizure power is an intrusive power, which needs to be wielded with utmost care and caution. The legislature has, therefore, consciously ring-fenced this power by inserting the controlling provision, i.e., “reasons to believe” - Accordingly, the search and seizure conducted by respondent are declared unlawful - the orders of seizure and prohibition are set aside. The subject documents will be released to petitioner at the earliest – the writ petition is allowed - What was important for the respondents to ascertain is whether the goods, i.e., 190 cigarette cartons which were found in petitioner’s principal place of business, had been delivered there pursuant to a genuine purchase transaction. As is well-known, stock registers are not primary documents - The case set up by petitioner that primary documents evidencing the purchase transaction such as e-invoice, tax invoice, e-way bill and transporter challans, were made available, has gone unrebutted except, a vague plea that documents found were unrelated. Besides this, it has been correctly submitted that Section 35 on which reliance was placed by the respondents in support of their plea that maintenance of stock register was mandatory, states in no uncertain terms, in the second proviso, that the registered person may keep and maintain such accounts (which includes stock of goods) and other particulars in electronic form, in such manner, as may be prescribed. Petitioner claims, and there is no rebuttal qua this aspect, that details of stock were available, in electronic form - The Additional Commissioner, CGST Delhi North Commissionerate exercised his powers for according authorization to conduct search and seizure, at petitioner’s premises, even though the jurisdictional ingredients were absent. The request of Joint Commissioner (AE), Gautam Budh Nagar was only to ascertain as to whether petitioner, which was the L2 supplier of M/s Mridul Tobie Inc., was in existence. There was no independent application of mind by the Additional Commissioner, CGST Delhi North Commissionerate. [Read less]

2021-VIL-320-CESTAT-CHE-ST  | CESTAT SERVICE TAX

Service Tax - Denial of Refund of Cenvat Credit for the reason that FIRCs are addressed to unregistered premises and that the appellant did not have any CENVAT balance left at the time of filing the refund claim – since the appellants had waived the issue of show-cause notice and personal hearing, it is prayed by them that the matter may be remanded so that the appellants can bring out their case with necessary submissions and documents – HELD - the appellants have not been able to explain the required documents before the refund sanctioning authority. The ld. counsel has submitted that they would be able to produce an... [Read more]

Service Tax - Denial of Refund of Cenvat Credit for the reason that FIRCs are addressed to unregistered premises and that the appellant did not have any CENVAT balance left at the time of filing the refund claim – since the appellants had waived the issue of show-cause notice and personal hearing, it is prayed by them that the matter may be remanded so that the appellants can bring out their case with necessary submissions and documents – HELD - the appellants have not been able to explain the required documents before the refund sanctioning authority. The ld. counsel has submitted that they would be able to produce and also explain in regard to necessary documents if they are given further chance - the appeal is allowed by way of remand to the refund sanctioning authority [Read less]

2021-VIL-318-CESTAT-CHE-ST  | CESTAT SERVICE TAX

Service Tax - Refund on export of services - availment of Cenvat credit, omission in ST-3 Return – though availment of Cenvat credit was properly accounted by the appellant, they omitted to mention the same in their ST-3 returns - The department is of the view that since the said credit has not been shown in the ST-3 returns, the appellants are not eligible for refund of the same – appellant aggrieved by rejection of refund – HELD - It is not in dispute that the appellants are eligible for credit on the service tax paid under RCM on input services availed by them - The services having been exported, the service tax p... [Read more]

Service Tax - Refund on export of services - availment of Cenvat credit, omission in ST-3 Return – though availment of Cenvat credit was properly accounted by the appellant, they omitted to mention the same in their ST-3 returns - The department is of the view that since the said credit has not been shown in the ST-3 returns, the appellants are not eligible for refund of the same – appellant aggrieved by rejection of refund – HELD - It is not in dispute that the appellants are eligible for credit on the service tax paid under RCM on input services availed by them - The services having been exported, the service tax paid on the input services used for export of services should be refunded to the appellants as per Rule 5 of Cenvat Credit Rules, 2004. The appellants have properly accounted in their books of account. Not mentioning the credit availed in ST-3 returns is only a procedural lapse, which can be condoned - the appellants are eligible for refund as claimed by them. The impugned order is set aside and the appeal is allowed [Read less]

2021-VIL-542-DEL  | High Court SGST

GST - Since the impugned summons have been withdrawn and the inquiry proceedings have been closed, the issue sought to be adjudicated upon by the petitioner cannot be decided in a vacuum - the writ petition and application are disposed of leaving the aforesaid question of law open to be decided in the event a fresh proceeding is initiated or summons are issued to the petitioner

2021-VIL-313-CESTAT-CHE-CU  | CESTAT Case CUSTOMS

Customs - Appellant is a vessel operator - Imposition of penalty under Section 117 of the Customs Act for failure to file Export General Manifest – violation of Section 41 of the Customs Act, 1962 – HELD - though amended Section 41 states that the EGM has to be filed before departure of the conveyance from the Customs station, it was not so earlier. In practice it was usually also filed within 7 days from the date of sailing of the vessel - The shipping bills in all these appeals are prior to 14.06.2018. From the Public Notice No.39/2017 and Public Notice No.17/2018, it is seen that there was a sudden shift from the pr... [Read more]

Customs - Appellant is a vessel operator - Imposition of penalty under Section 117 of the Customs Act for failure to file Export General Manifest – violation of Section 41 of the Customs Act, 1962 – HELD - though amended Section 41 states that the EGM has to be filed before departure of the conveyance from the Customs station, it was not so earlier. In practice it was usually also filed within 7 days from the date of sailing of the vessel - The shipping bills in all these appeals are prior to 14.06.2018. From the Public Notice No.39/2017 and Public Notice No.17/2018, it is seen that there was a sudden shift from the practice of filing the EGM within seven days from the date of sailing of the vessel to the requirement of filing EGM before departure of the vessel. The period involved in these shipping bills are during this transition period – prior to introduction of Sea Cargo Manifest and Transhipment Regulations 2018 as well as after, there is provision to amend or supplement the EGM – as per sub-section (3) of Section 41 of the Customs Act, an incomplete EGM can be corrected - The law thus foresees that errors/omissions can occur while filing the EGM. The appellant in this case has rectified errors / omissions when pointed out by the department – Further, as per Rule 96 of the CGST Rules, 2017, the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax, once both EGM and valid return in Form GSTR-3/GSTRB are furnished by the applicant - If there was continued non-compliance even after the errors being pointed out by the department, the circumstances would have been different and penalty may be imposable - the amended Section 41 itself provides for penalty not exceeding Rs.50,000/- only if proper officer is satisfied that there is no sufficient cause for delay in filing EGM. This being so, the invocation of Section 117 is not legal or proper - the penalties imposed under Section 117 of Customs Act are unwarranted and cannot sustain – the impugned orders are set aside and appeals are allowed [Read less]

High Court Judgement  | High Court SGST

Under Sec. 129 of the CGST Act, the proper officer has no discretion to condone the procedural lapse or relax its rigour when the goods have been transported in contravention of the law. Petitioner must necessarily approach the appellate authority.

2021-VIL-315-CESTAT-DEL-CU  | CESTAT Case CUSTOMS

Customs – Seizure of goods – Provisional release - Appellants executed contracts with supplier for purchase of 100% Polyester Knitted Fabric – Department seized goods under Section 110 of the Act by alleging that goods appeared to be of higher quality than what was declared – Appellants filed writ petitions for provisional release of goods – High Court allowed petitions with a direction to Respondents to decide applications filed for provisional release of goods – Commissioner directed for provisional release of goods on execution of a bond and furnishing of security deposit – Hence, instant appeals - HELD ... [Read more]

Customs – Seizure of goods – Provisional release - Appellants executed contracts with supplier for purchase of 100% Polyester Knitted Fabric – Department seized goods under Section 110 of the Act by alleging that goods appeared to be of higher quality than what was declared – Appellants filed writ petitions for provisional release of goods – High Court allowed petitions with a direction to Respondents to decide applications filed for provisional release of goods – Commissioner directed for provisional release of goods on execution of a bond and furnishing of security deposit – Hence, instant appeals - HELD – the appellants had declared transaction value of impugned goods as per sales contract between supplier and Appellants – In impugned order, differential duty has been calculated solely on basis of DRI letter, which has not been provided to Appellants – While calculating differential duty, Commissioner has not considered benefit of Notification dated 30-6-2018, inspite of fact that Appellants are eligible for benefit of said Notification – Since orders impugned in appeals have been passed as a consequence order passed by High Court, it will not be appropriate to remand matter to adjudicating authority for passing a fresh order – Having considered the aforesaid factors, it would be appropriate to prima facie determine the value of goods at per transaction value – Such value will be determined finally by adjudicating authority in accordance with provisions of the Act and the Rules – Provisional release order is modified to effect that appellants shall execute a bond and furnish a bank guarantee/cash security – Upon execution of bond and furnishing of bank guarantee/cash security, the goods shall be released forthwith – the appeals are partly allowed [Read less]

2021-VIL-269-AAR  | Advance Ruling Authority SGST

GST - Karnataka AAR – Supply, Lease transaction, inter-branch transfer of asset, inter-State transaction of supply of service, leasing of equipment, distinct person, Valuation - applicant is a company involved in renting of movable property and is having registrations across many States – since the definition of supply contains lease within its ambit, whether there can be a lease transaction entered into between two different registrations of the same Company and accordingly taxable as supply of services in terms of Section 7 of the CGST Act – HELD - The assets and liabilities of the Company is held in common, the as... [Read more]

GST - Karnataka AAR – Supply, Lease transaction, inter-branch transfer of asset, inter-State transaction of supply of service, leasing of equipment, distinct person, Valuation - applicant is a company involved in renting of movable property and is having registrations across many States – since the definition of supply contains lease within its ambit, whether there can be a lease transaction entered into between two different registrations of the same Company and accordingly taxable as supply of services in terms of Section 7 of the CGST Act – HELD - The assets and liabilities of the Company is held in common, the assets of one branch do not have separate existence and cannot enter into a lease transaction or rental transaction with another branch of the same company as per the Companies Act or under the Income Tax Act, 1961 – However, under GST law all stock transfers from one State to another state are treated as supplies and covered under the term “transfer”. Since the registrations are state-specific, the transactions between the two entities of the same concern would be covered under deemed supplies between two deemed distinct persons - Hence the CIPL, Karnataka and CIPL, Kerala are to be treated as deemed distinct persons only for the purposes of the GST Law and not for any other Acts, unless such Acts also deem them as distinct persons - all supplies made in the course of business from CIPL, Karnataka to CIPL, Kerala would be covered under the scope of supplies under section 7(1) of the CGST Act as between deemed distinct persons as per Section 25(4) of the CGST Act, 2017 - since the transfer of goods are without any transfer of ownership of such goods, the same amounts to supply of service as per entry no. 1(b) of the Schedule II to the CGST Act - only for the purposes of the CGST Act the transfer of such goods on lease as per the agreement entered to between CIPL, Karnataka and CIPL, Kerala would amount to lease or renting of the goods for a consideration and hence would be a transaction of supply of services and the nature of such services is “lease”, as it is for a period of time - Value of supply - whether it should be lease charges or the value of equipment in terms of Section 15 of the CGST Act – Section 15(4), Rule 28 - HELD - the transaction value which is the price actually paid cannot be treated as the value of supply as the supplies are between the related persons, i.e. the branches of the same company - the recipient, CIPL, Kerala is eligible for full input tax credit on the transaction between the applicant and the CIPL, Kerala and hence the value declared in the invoice would be the value of supply of goods or services or both as per the second proviso to Rule 28 and hence would be treated as the value of such supply - Invoice, Time of supply, E-way Bill - What are the documents that should accompany the movement of goods from CIPL, Karnataka to CIPL, Kerala – HELD - as the goods are moving out of the State as a consequence of a lease transaction which is a service, the applicant has the option of issuing the tax invoice either before the provision of service or after the provision of service and in case the applicant opts to issue the tax invoice after the provision of service, the time limit in terms of Rule 47 is applicable, that is to say that, there is a possibility that the invoice may not be issued at the time of provision of service - the applicant is not supplying goods, but services which involve the movement of such goods given on lease/ rent and hence they are liable to issue a delivery note as per Rule 55 at the time of removal of such goods for the purposes of renting – applicant shall also generate an e-way bill for movement of such goods as per Section 138(1) based on the details of such delivery note before the movement of such goods and consignment value of the goods shall be the market value of such goods and not the value of supply of services involved in such transaction - Whether movement of equipment from CIPL, Kerala to CIPL, Tamil Nadu on the instruction of CIPL, Karnataka can be said to be mere movement of goods not amounting to a supply in terms of Section 7 of the CGST Act and thereby not liable to GST – HELD - Though the CIPL, Kerala is in possession of the goods, it is CIPL, Karnataka who is the owner of the goods - Once the CIPL, Karnataka issued instructions to CIPL, Kerala, the contract of lease entered between them in respect of the said goods ends and the goods now held by CIPL, Kerala as the bailee of CIPL, Karnataka. Hence CIPL, Kerala would be acting in two capacities, first as an independent entity under the CGST Act for the leased goods while the lease contract of the specific goods is in force and next as a bailee of CIPL, Karnataka - the goods in movement is a consequence of the lease contract between the CIPL, Karnataka and CIPL, Tamil Nadu which is a supply by CIPL, Karnataka. The transaction is nothing but the combination of the transaction of returning back the goods on lease by CIPL, Kerala to CIPL, Karnataka and again sending the same goods on a new lease contract by CIPL, Karnataka to CIPL, Tamil Nadu. It cannot be said that the goods are moving not as a result of supply under section 7 of the CGST Act, 2017. It cannot be termed as a mere movement without any involvement of supply and the said transaction of supply of goods on rental or lease basis by CIPL, Karnataka to CIPL, Tamil Nadu and is liable to tax in the hands of CIPL, Karnataka if the transaction is between CIPL, Karnataka and CIPL, Tamil Nadu. Further the services provided by CIPL, Kerala to CIPL, Karnataka in facilitating the transportation of goods to CIPL, Tamilnadu are exigible to GST - But it would be a supply of CIPL, Kerala, if it is the agreement between CIPL, Kerala and CIPL, Tamil Nadu which causes the movement of goods from CIPL, Kerala to CIPL, Tamil Nadu. Further the services of CIPL, Kerala to CIPL, Karnataka in facilitating the transportation of goods to CIPL, Tamilnadu are exigible to GST - The documents to be carried for the above movement is a delivery note and e-way bill issued by CIPL, Karnataka if the movement is as a result of supply by CIPL, Karnataka or a delivery note and e-way bill issued by CIPL, Kerala is the movement is as a result of supply by CIPL, Kerala [Read less]

2021-VIL-539-GUJ  | High Court VAT

Gujarat Value Added Tax Act, 2003 - Claim of interest under section 38(2) of the Gujarat VAT Act – petitioner case that the respondent sanctioned the additional refund payable, however, had failed to award statutory interest as per section 38(2) of the Act – rejection of rectification application preferred by the petitioner – HELD – the petitioner had not raised any objection with regard to the non-grant of interest on the additional refund amount, under section 38(2) of the GVAT Act after the appeals were disposed of - in the orders passed in revisions, the petitioner, taking advantage of the Amnesty Scheme, had m... [Read more]

Gujarat Value Added Tax Act, 2003 - Claim of interest under section 38(2) of the Gujarat VAT Act – petitioner case that the respondent sanctioned the additional refund payable, however, had failed to award statutory interest as per section 38(2) of the Act – rejection of rectification application preferred by the petitioner – HELD – the petitioner had not raised any objection with regard to the non-grant of interest on the additional refund amount, under section 38(2) of the GVAT Act after the appeals were disposed of - in the orders passed in revisions, the petitioner, taking advantage of the Amnesty Scheme, had made payment of the tax amount only and the petitioner was granted the remission for the interest amount - The order passed by the appellate authority having been revised by the revisional authority, the question of invoking the provisions contained in section 38(2) of the Act did not arise - by virtue of the orders passed in the revisions, the petitioner was not entitled to any amount of refund and on the contrary, was liable to pay additional amount of tax with interest. There being no order passed by the revisional authority for refund of any amount, nor any order passed by any other Court, invocation of sub-section (2) of section 38 of the Act is thoroughly misplaced - the petitions being devoid of merits, are dismissed [Read less]

2021-VIL-544-GAU  | High Court SGST

GST - Cancellation of GST registration - Non-payment of interest on delayed filing of Returns – non-restoration of GST registration on account of non-payment of interest amount – permission to pay interest liability in installment - HELD – the petitioner to approach the concerned authority along with an application to permit the petitioner to pay the interest liability in installment as a special case keeping in view the pandemic situation arising out of Covid-19 and on having submitted the said representation the same shall be disposed of within a period of outer limit of seven days from the date of receipt of the s... [Read more]

GST - Cancellation of GST registration - Non-payment of interest on delayed filing of Returns – non-restoration of GST registration on account of non-payment of interest amount – permission to pay interest liability in installment - HELD – the petitioner to approach the concerned authority along with an application to permit the petitioner to pay the interest liability in installment as a special case keeping in view the pandemic situation arising out of Covid-19 and on having submitted the said representation the same shall be disposed of within a period of outer limit of seven days from the date of receipt of the said representation. If all the dues are cleared as per the direction of the respondent, the registration of the petitioner shall be restored immediately - writ petition stands disposed of [Read less]

2021-VIL-543-MAD  | High Court SGST

GST – Wrongful claim of input tax credit, Reversal of input tax credit without utilisation - Levy of interest on voluntary reversal of erroneous input tax credit claimed but not utilised – Application of Section 42 of the CGST Act – HELD – the provisions of Section 42 are not relevant in this case insofar as the impugned order itself records that the assessee has, on receipt of intimation of the wrongful claim of input tax credit, accepted the error in claim and has reversed ITC through voluntary payment in Form GST DRC-03 - The provisions of Section 42 can only be invoked in a situation where the mismatch is on ac... [Read more]

GST – Wrongful claim of input tax credit, Reversal of input tax credit without utilisation - Levy of interest on voluntary reversal of erroneous input tax credit claimed but not utilised – Application of Section 42 of the CGST Act – HELD – the provisions of Section 42 are not relevant in this case insofar as the impugned order itself records that the assessee has, on receipt of intimation of the wrongful claim of input tax credit, accepted the error in claim and has reversed ITC through voluntary payment in Form GST DRC-03 - The provisions of Section 42 can only be invoked in a situation where the mismatch is on account of the error in the database of the revenue or a mistake that has been occasioned at the end of the revenue – when the claim of Input Tax Credit by an assessee is erroneous then the question of section 42 does not arise, since it is not the case of mismatch but one of wrongful claim of Input Tax Credit - As far as the levy of interest on belated cash remittance is concerned, it is compensatory and mandatory and the levy is upheld to this extent - The impugned order is modified to the extent and the writ petition is disposed of [Read less]

2021-VIL-316-CESTAT-CHD-ST  | CESTAT SERVICE TAX

Service Tax - the appellant is a cable operator proving cable services to its subscribers. From the charges for the cable services, some part of subscription is retained by the appellant and the remaining portion is remitted to MSO – confirmation of demand of service tax on gross amount of service charge by the appellant by denying the benefit of exemption Notification No.06/2005-ST dated 1.3.2005 alleging that the appellant is providing branded service, therefore, they are not entitled for SSI exemption – HELD – in the case of M/s. Blue Star Communication this Tribunal has decided the issue and remanded the matter f... [Read more]

Service Tax - the appellant is a cable operator proving cable services to its subscribers. From the charges for the cable services, some part of subscription is retained by the appellant and the remaining portion is remitted to MSO – confirmation of demand of service tax on gross amount of service charge by the appellant by denying the benefit of exemption Notification No.06/2005-ST dated 1.3.2005 alleging that the appellant is providing branded service, therefore, they are not entitled for SSI exemption – HELD – in the case of M/s. Blue Star Communication this Tribunal has decided the issue and remanded the matter for quantification of the demand, if any - The ld.AR also submits that the issue being dealt with by this Tribunal in the case of M/s. Blue Star Communication and this order has been accepted by the Department - Relying on the decision in the case of Blue Star Communication it is held that the appellants are entitled for exemption under Notification No. 6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012 - the appellants are liable to pay service tax on the gross value of services received by them and is entitled to avail cenvat credit of service tax paid on the amount remitted to the MSO - the extended period of limitation is not invokable. Consequently, no penalty is imposable on the appellants - The adjudicating authority shall quantify the demand for the period within the period of limitation – the appeal is allowed by way of remand [Read less]

2021-VIL-540-MAD-CE  | High Court CENTRAL EXCISE

Central Excise – Service of summon, Opportunity of personal hearing - The ld. counsel for the petitioner submits that the summons ought to have been sent to the counsel who was representing the case of the petitioner but the respondent sent summons to the petitioner directly – due to non-appearance of the ld. counsel the final order was passed without providing opportunity to the ld. counsel who represented the case of the petitioner – challenge to Order-in-Original passed by the respondent – HELD - in all cases, the parties aggrieved are bound to prefer an appeal before the appellate authority. However, in certain... [Read more]

Central Excise – Service of summon, Opportunity of personal hearing - The ld. counsel for the petitioner submits that the summons ought to have been sent to the counsel who was representing the case of the petitioner but the respondent sent summons to the petitioner directly – due to non-appearance of the ld. counsel the final order was passed without providing opportunity to the ld. counsel who represented the case of the petitioner – challenge to Order-in-Original passed by the respondent – HELD - in all cases, the parties aggrieved are bound to prefer an appeal before the appellate authority. However, in certain circumstances, the Courts are bound to consider whether the denial of opportunity caused prejudice to the interest of the person aggrieved. In the present case, the ld. counsel for the petitioner entered appearance in the proceedings before the respondent - there is a possibility that the petitioner would not have informed about the summons to their counsel regarding the personal hearing. Under those circumstances, the counsel was not aware of the date of personal hearing and the same resulted in passing of the final order without hearing the ld. counsel - the petitioner has to be provided with an opportunity of personal hearing for the purpose of submitting the judgments, documents and the grounds raised to defend their case - matter is remanded back to the respondent for fresh consideration after providing an opportunity to the ld. counsel who entered appearance on behalf of the petitioner and thereafter pass final orders on merits - writ petition stands disposed of [Read less]

2021-VIL-314-CESTAT-DEL-ST  | CESTAT SERVICE TAX

Service Tax - VCES declaration, calculation error, short payment of tax - Revenue in appeal against impugned order accepting the VCES declaration filed by the respondent-assessee – On scrutiny of the declaration made by assessee under VCES, the revenue took a view that the VCES declaration is substantially false declaration - respondent has discharged service tax liability under VCES after availing ‘Composition Scheme’ applicable to works contract – cross objections by the assessee against demand of service and interest relating to free of cost material supplied to the respondent-assessee by the Principal, in execu... [Read more]

Service Tax - VCES declaration, calculation error, short payment of tax - Revenue in appeal against impugned order accepting the VCES declaration filed by the respondent-assessee – On scrutiny of the declaration made by assessee under VCES, the revenue took a view that the VCES declaration is substantially false declaration - respondent has discharged service tax liability under VCES after availing ‘Composition Scheme’ applicable to works contract – cross objections by the assessee against demand of service and interest relating to free of cost material supplied to the respondent-assessee by the Principal, in execution of works contract – HELD - the calculation of tax short paid, as made in the impugned order, is not due to any mis-declaration or false declaration under VCES - Ld. Commissioner has categorically observed that difference in tax liability is mainly due to interpretation and change in calculation of service tax, therefore, the mistake of the respondent/assessee in the declaration is bona fide and there is no malafide on their part - in view of the decision of the Larger Bench in the case of Bhayana Builders, the respondent is not required to pay service tax on the receipt of materials supplied free of cost, received from the principal. Thus, the amount demanded in the impugned order is set aside. Hence, the respondent is only required to pay the differential duty - penalty under Section 78 is also set aside, there being no case of falsification or contumacious conduct and late fee under Rule 7C is reduced - the appeal of the Revenue is dismissed and the cross objections by the respondent-assessee are allowed [Read less]

2021-VIL-537-ALH  | High Court SGST

GST - seizure of the goods and vehicle on the ground that at the time of interception no e-way bill-01 was produced along, therefore, there is a presumption that the goods are transported with intention to evade payment of tax - HELD - Learned counsel for the petitioner has placed reliance on a judgement of this Court in the case of Harley Foods Pvt. Ltd. vs State of U.P. with regard to e-way bill in the State of Uttar Pradesh and it was held that the UPGST (4th Amendment) Rules, 2017 was introduced and made effective with effect from 01.02.2018 vide notification No.138 dated 30.01.2018, therefore, the initial notification... [Read more]

GST - seizure of the goods and vehicle on the ground that at the time of interception no e-way bill-01 was produced along, therefore, there is a presumption that the goods are transported with intention to evade payment of tax - HELD - Learned counsel for the petitioner has placed reliance on a judgement of this Court in the case of Harley Foods Pvt. Ltd. vs State of U.P. with regard to e-way bill in the State of Uttar Pradesh and it was held that the UPGST (4th Amendment) Rules, 2017 was introduced and made effective with effect from 01.02.2018 vide notification No.138 dated 30.01.2018, therefore, the initial notification no.1014 dated 21.07.2017 by which e-way bill-01, e-way bill-02, e-way bill-03 and TDF (Transit Declaration Form) was introduced stands rescinded - Learned Standing Counsel of respondent prays for and accorded three weeks time to file response in the matter – the matter is listed [Read less]

2021-VIL-317-CESTAT-CHE-CE  | CESTAT CENTRAL EXCISE

Central Excise - Penalty for availment of irregular Cenvat Credit on Works Contract Service and Man-power Supply Service - vide order impugned the penalty was reduced by 50%. Aggrieved by such order the appellant is in appeal – HELD - the appellant has reversed the credit availed on Works Contract Service and Man-power Supply Service immediately on being pointed out by the department - the credit was reversed along with applicable interest - The issue whether the credit is eligible or not is a legal issue. No positive evidence is brought to light that the appellant had any fraudulent intention to avail such credit. Thoug... [Read more]

Central Excise - Penalty for availment of irregular Cenvat Credit on Works Contract Service and Man-power Supply Service - vide order impugned the penalty was reduced by 50%. Aggrieved by such order the appellant is in appeal – HELD - the appellant has reversed the credit availed on Works Contract Service and Man-power Supply Service immediately on being pointed out by the department - the credit was reversed along with applicable interest - The issue whether the credit is eligible or not is a legal issue. No positive evidence is brought to light that the appellant had any fraudulent intention to avail such credit. Though the department alleges suppression of facts, it has to be stated that the said availment of credit came to light from the accounts maintained by the appellant. The strong inference would be that the appellant reflected the availment of credit in their accounts and the allegation of suppression fails - penalty under section 11AC of the CEA, 1944 cannot sustain - The impugned order is set aside and the appeal is allowed [Read less]

2021-VIL-321-CESTAT-DEL-CU  | CESTAT Case CUSTOMS

Customs - Import of food supplement, Rejection of declared value – Redetermination of value basis investigation and corroborative admission of alleged forgery, mis-representation, undervaluation of goods – confirmation of demand of duty along with interest and the proportionate penalties – appellant case that the show cause notice is barred by limitation and adjudication order after much delay – HELD - In the present case, no doubt arose on the basis of comparable quantities in comparable commercial transaction nor it was observed at the time of clearance at the port - the doubt arose on the basis of intelligence w... [Read more]

Customs - Import of food supplement, Rejection of declared value – Redetermination of value basis investigation and corroborative admission of alleged forgery, mis-representation, undervaluation of goods – confirmation of demand of duty along with interest and the proportionate penalties – appellant case that the show cause notice is barred by limitation and adjudication order after much delay – HELD - In the present case, no doubt arose on the basis of comparable quantities in comparable commercial transaction nor it was observed at the time of clearance at the port - the doubt arose on the basis of intelligence whereafter searches were conducted and recovery of documents and impugned imported food supplements got effected. Apparently, no data or evidence is collected by the department after the said intelligence and during investigation, but the importer has admitted the entire allegations of alleged manipulation / forgery in the invoices as far as the price of imported goods are concerned - the importer has specifically admitted paying significantly higher price than the amount as was declared at the time of filing of Bill of Entry. This admission is not made once but multiple times by the importer - corroborative admission with no single retraction thereof till date is the sufficient admission by the appellant for the guilt as alleged by the Department against the appellant - in such facts and circumstances there remains no need for Revenue to discharge its burden as that of collecting evidence in the form of contemporaneous imports or to produce any NIDB data or even any market survey report - at the stage of redetermination of value during investigation, the appellant himself had opted to pay the assessed differential duty. The voluntary payment is sufficient corroboration to his admitted manipulation for evading the duty. Such payment also amounts to the admission of appellant about re-determining value of the imported goods at lower prices - the order under challenge is upheld only about Shri Sunny Gujral the proprietor of M/s Jaskaran Enterprise. However, the order of demand and imposition of penalty on other importing firms and their respective proprietors is hereby set aside - the adjudicating authority has imposed penalty on the importing firm as well as the proprietor thereof, the same amounts to double jeopardy. The penalty cannot be imposed against the sole proprietor of proprietor ship firm along with the penalty upon said firm - the appeals stand partly allowed - Though there is no illegality in the order of the adjudicating authority below while confirming the allegations of under-invoicing the price of imported food supplement by manipulating the invoices against Shri Sunny Gujral based upon his admission. But we are of the opinion that in the absence of any document produced by the department to prove their allegation, as against other importers and proprietors either in the form of Bill of Entry or any invoices either of the foreign supplier or the fake invoices with respect to any of these importers and that admission of Sunny Gujral cannot be read against the other importer irrespective of the fact that these firms were managed and controlled by Sunny Gujral himself none else than Shri Sunny Gujral can be penalised. In such circumstances, the order under challenge confirming the demand of differential duty from the remaining importers other than M/s. Jaskaran Enterprises and imposition of penalty on other proprietors other than Shri Sunny Gujral is not sustainable in the eyes of law - the adjudicating authority has imposed penalty on the importing firm as well as the proprietor thereof, the same amounts to double jeopardy. The penalty cannot be imposed against the sole proprietor of proprietor ship firm along with the penalty upon said firm [Read less]

2021-VIL-33-AAAR  | AAAR SGST

GST - Kerala AAAR - Classification of PVC carpet mats – Reference to appellate authority for advance ruling on account of difference of opinion - Whether PVC carpet mats manufactured and supplied by the applicant will be classifiable under Tariff Item 5705.00.49 of CTA and attract a tax rate of 12% - HELD – the impugned product has non-woven material made up of PVC on surface, which is coated/laminated with plastics (PVC). Hence, by virtue of Section 1(h) to Section XI (Textiles and Textile articles), the same gets excluded from the scope of being Textile & Textile articles under Section XI i.e. Chapters 50-63 - the PV... [Read more]

GST - Kerala AAAR - Classification of PVC carpet mats – Reference to appellate authority for advance ruling on account of difference of opinion - Whether PVC carpet mats manufactured and supplied by the applicant will be classifiable under Tariff Item 5705.00.49 of CTA and attract a tax rate of 12% - HELD – the impugned product has non-woven material made up of PVC on surface, which is coated/laminated with plastics (PVC). Hence, by virtue of Section 1(h) to Section XI (Textiles and Textile articles), the same gets excluded from the scope of being Textile & Textile articles under Section XI i.e. Chapters 50-63 - the PVC Mats manufactured by the appellant are specifically covered under HSN 3918 as Floor Coverings of PVC in terms of Rule 1 of the Rules of Interpretation of Customs Tariff r/w Note 1(h) to Section XI and Note 1 to Chapter 57 and liable to 18% GST [Read less]

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