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Showing 241 to 260 of 1482 Records
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2023 (6) TMI 1242
Recovery of dis-allowed CENVAT Credit - contravention of Rule 8(3A) ibid restricting utilization of Cenvat credit during the period of default - HELD THAT:- Hon’ble Gujarat High Court in the case of INDSUR GLOBAL LTD. VERSUS UNION OF INDIA & 2 [2014 (12) TMI 585 - GUJARAT HIGH COURT] has declared the words “without utilizing Cenvat Credit” under Rule 8(3A) as ultra vires which means that the assessee can discharge duty by utilizing Cenvat Credit which is what exactly has been done in the instant case by the Appellant.
The said judgment has been followed by the Hon’ble Calcutta High Court in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA & OTHERS [2017 (8) TMI 1515 - CALCUTTA HIGH COURT] which is not stayed by the Hon’ble Supreme Court. The Hon’ble Calcutta High Court in the said case, has declared the provisions of Rule 8(3A) ibid as invalid and further has held that the Revenue cannot take a different stand and parity has to be extended to the assessee.
The demand in the instant case has been raised for contravention of Rule 8(3A) ibid restricting utilization of Cenvat credit during the period of default which provision has been declared ultra vires/invalid by Court, hence the demand cannot be sustained and the Appeal, thus, succeed on this count.
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2023 (6) TMI 1241
Clandestine Removal - Kamdhenu brand of the iron and steel products - evasion of service tax on royalty received from various franchisees - admissible evidences - HELD THAT:- In the present case the departments case doesn’t have any merits as the report itself being in dispute, no reliance can be made on the same to confirm the demand on the Respondent herein - no attempt has been made by the revenue to counter the findings of the adjudicating authority and thus the view taken by the Ld. Adjudicating authority cannot be accepted.
Further, the deficient quantity of 20.798 MT of MS Ingot cannot be considered as concrete Circumstantial evidence in regard to allegation of huge evasion of Central Excise duty by resorting to clandestine manufacture and sale of 35948.0799 MT of MS Bars & Rods by the Respondent. It is a settled proposition that demand cannot be raised on assumptions and presumptions in cases of clandestine removal.
There are no infirmities in the impunged order and hence the same is sustained - appeal dismissed.
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2023 (6) TMI 1240
Method of Valuation - Lead Acid Battery falling under sub heading 85071000 of the Central Excise Tariff Act, 1985 - to be valued under Section 4 of the Central Excise Act, 1944 or Section 4A of the Central Excise Act, 1944? - suppression of facts - extended period of limitation - HELD THAT:- The entire defence of the appellant is on the basis of the affidavit which was filed belatedly that the Lead Acid Batteries cleared by the appellant which is used for automobiles were correctly valued under Section 4A on the ground that they had supplied the uncharged batteries and the charging was carried out at the dealers’ place which activity amounts to manufacture. Therefore, any goods cleared which is subjected to further manufacture should be valued under Section 4 and not 4 A - It is found that other than affidavit there is no documentary evidence produced by the appellant to establish the claim of the appellant that the battery was cleared uncharged and at the dealers’ place the batteries were charged before selling to the customers.
From the finding of the Adjudicating Authority it is clear that except affidavit there is no other evidence to show that the battery cleared by the appellant was uncharged Lead Battery. Therefore, there is no difference in the nature of the clearance made to individual customer wherein the valuation was admittedly done by the appellant under Section 4 A and the nature of clearance made to the dealers. Therefore, the clearance made to dealers is also to be valued under Section 4 A of Central Excise Act, 1944.
Extended period of limitation - Suppression of facts - HELD THAT:- The appellant have not disclosed that whether the battery was cleared charged or uncharged. Moreover, the affidavit was also filed belatedly, this fact was not declared during statement of the director recorded at the time of investigation - the appellant have suppressed the vital fact from the department about the nature of clearance. In this fact, the extended period was rightly invoked in the present appeal.
There are no infirmity in the impugned order - appeal dismissed.
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2023 (6) TMI 1239
Refund of Cenvat credit - Sugar cess - rejection on the only ground that the matter is pending and has not attained finality - HELD THAT:- The appellant has produced records, to show that the appeal filed by the revenue against the Tribunal’s order dated 07.08.2019 is pending before the Hon’ble High Court at Calcutta in CEXA 9/2020 and there has been no orders passed by the Hon’ble High Court granting stay of operation of the said order of the Tribunal.
The revenue department has not been able to produce any document to show that the order has been stayed by any higher authority. Under this factual background, both the lower authorities were not correct in rejecting the refund claim of the appellant on the ground of pendency of proceedings when no stay has been given by any higher court in the earlier order regarding eligibility of Cenvat credit.
It is further noted that the Ld. Commissioner (Appeals) had also passed orders on various other grounds which was never alleged while issuance of the show cause notice and thus the appellate order to that extent goes beyond the allegations raised in the SCN and cannot be sustained on this ground also.
Appeal allowed.
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2023 (6) TMI 1238
Imposition of penalty under Rule 26(2) of the Central Excise Rules, 2002 - Appellant has paid duty of equivalent amount to the government and also filed its ER 1 return timely disclosing all transactions - HELD THAT:- The said rule would be applicable in case wherein ineligible Cenvat credit has been passed to recipients in cases without supply of goods and such related transactions - The present case is a case wherein there is no allegation by the department that the appellant has issued invoices without supply of goods. Infact all the transactions have been recorded in ER 1 returns and disclosed by the appellant to the department. Hence, it cannot be understood as to how the penalty under Rule 26(2) of the CER, 2002 can be imposed in such bonafide cases.
Further, neither the SCN nor the OIO has brought out any evidence of connivance between the appellant and TIL in the stated transactions.
The entire demand of penalty set aside - appeal allowed.
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2023 (6) TMI 1237
Rejection of rectification of assessment order - admission of Appeal without any pre-deposit - case of petitioner is that impugned orders are passed without giving opportunity of hearing insofar as, disallowance of input tax credit qua all the parties is concerned - violation of principles of natural justice - HELD THAT:- The Petitioner has approached this Court under Article 226 of the Constitution of India, in order to bypass the mandatory provision under the MVAT Act, 2002 which required pre-deposit of 10% of the tax for entertaining the appeal. In the facts of the present case, this approach of the Petitioner cannot be accepted moreso because against order rejecting the rectification, it had filed an appeal because according to the Petitioner against such rejection of rectification order no pre-deposit is required to be made. [This clearly shows that the present petition is filed to bypass the mandatory pre-deposit provision in entertaining the appeal].
The issue raised in the assessment order interalia qua circular trading requires factual determination which this Court cannot go into in exercise of its jurisdiction under Article 226 of the Constitution of India. It is also important to observe that by various show cause notices, the Petitioner was called upon to file all the evidences in support of its return of income and furthermore order sheet annexed to the Petition records that the Petitioner’s accountant refused to sign the proceedings sheet in relation to the circular transaction query raised by Respondent No. 2. Therefore, prima facie, the contention of the Petitioner that opportunity of hearing was not given may not be correct.
The decision of the Supreme Court in the case of State of Tripura Vs. Manoranjan Chakraborty & Ors. [2000 (11) TMI 1079 - SUPREME COURT] relied upon by the Petitioner does not assist the case of the present Petitioner in the facts of the present case. The decision of the Supreme Court was in connection where there is a high ended assessment and gross injustice done. Therefore, the decision of the Supreme Court is not applicable to the facts of the present case.
The issue raised in the present petition qua opportunity of hearing would require examination of the factual matrix in the complexion of the proceedings as they stand, which can be effectively adjudicated more appropriately by the Appellate Authority - the Petitioner relegated to avail the alternative remedy of an appeal - petition disposed off.
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2023 (6) TMI 1236
Calling for the records pertaining to the Petitioner’s case and after going into the validity and legality thereof to quash and set aside the impugned Order - direction to Respondents themselves, their officers and subordinates to withdraw and/or cancel the impugned Order dated 11.12.2018 passed by the Respondent No. 2; and to refrain from taking any steps or proceedings in pursuance of and/or in furtherance of and/or in implementation of impugned Order dated 11.12.2018 passed by the Respondent No. 2 - benefits of the exemption granted vide Notification No. DNH/CST/4-1/99/4 dated 31.12.1999 and Notification No. ADM/LAW/CSR/2/84 dated 04.01.1984 without the production of C Forms.
HELD THAT:- The petitioner has drawn our attention to the judgment and order dated 30 August, 2012 passed by a co-ordinate bench of this PRISM CEMENT LTD & AKSHAY RAHEJA VERSUS STATE OF MAHARASHTRA, FINANCE DEPARTMENT & OTHS. MUMBAI [2013 (7) TMI 668 - BOMBAY HIGH COURT] to the order passed on Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors.) dated 03 September, 2012, as also to another order of even date in case of Universal Comfort Products Pvt. Ltd. & Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa & Ors. to contend that the issue as arising in the present petitions is squarely covered by the decision in Prism Cement Ltd. & Anr. Vs. State of Maharashtra and Ors. as also in cases of Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors. and Universal Comfort Products Pvt. Ltd. & Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa & Ors.
The orders passed by the Division Bench in Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors. by which the Division Bench disposed of the said case following the decision in case of Prism Cement Ltd. & Anr. Vs. State of Maharashtra and Ors held that the petitioners have challenged the validity of the Circulars at Exhibits S, U, V & W to the petition. Counsel for the parties state that this Court in the case of Prism Cements Ltd. V/s. State of Maharashtra & Ors. has quashed similar circulars issued by the Commissioner of Sales Tax, State of Maharashtra.
Petition allowed.
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2023 (6) TMI 1235
Sale of High Speed Diesel (for short ‘HSD’) to various private industries of three States viz. Gujarat, Maharastra and Madhya Pradesh at concessional rates of sales tax without complying with the mandatory requisite permission from the Ministry of Petroleum & Natural Gas - diversion thereof has caused huge revenue loss to the Government and wrongful gain to the concerned - whether C.B.I. had any case to even lodge a prosecution?
HELD THAT:- Admittedly CVC too had not found any case against the accused to grant sanction.
The compilation and circulation by OCC on 08.07.1991, of the Guidelines for Release of Petroleum Products and Lubricants to Direct Consumers have not been denied, which suggests that the same was in force and all oil companies were following the guidelines since 1991. The charge-sheet has been filed for period between 1997-2000. The guidelines of OCC dated 08.07.1991 had not found any change. Mr. Shastri had referred in his Fax message of no change in the guidelines for allocation of HSD to processors. According to him, HSD allocation to the processors is approved by the MoP&NG based on the certification and recommendation of the TEC of the Oil Companies. The guidelines referred and relied upon does not reflect any certification and recommendation of the TEC to the oil companies, and, when a clarification was sought by P. Sudarsnam by a letter dated 23.08.1999, Mr. Shastri states before the C.B.I. that there was no change in the allocation policy and requested P.Sudarsnam of IOC not to make HSD supplies to the processors without the Ministry’s allocation / Linkage, and, since clarification was sought by the E.D., IOC from OCC, reply was sent by OCC, which stated by Mr. Shastri, according to the existing guidelines available, the directions were to be followed by the oil companies necessarily, and according to him the clarification was in accordance with the existing guidelines of the Ministry, and, in the present case, to his clarification on behalf of OCC, Ministry did not issue any such amendment, which implies, concurrence of the MoP&NG on the particular issue, upon which the Oil Companies were required to act accordingly.
It is required to be noted that TEC was dissolved with effect from 01.04.2002; the non-requirement of the TEC had been noted in the letter dated 27.03.2002.
The C.B.I. while filing the F.I.R. has failed to take a clarification from the authorized person of the Ministry as to why the Circular dated 02.01.1981 was only addressed to IOCL for the utilization of HSD from Koyali Refinery and not for any other oil companies. While the guidelines of the OCC does not refer to the requirement of TEC recommendation for uplifting HSD from any other oil companies. All the letters/circulars referred earlier hereinabove with the communication starting from 1988-1996 require TEC evaluation only for supplying LSHF-HSD/High Flash-HSD, LDO and Crude Sludge to processors for the manufacture of petroleum specialities - All the companies were clear on the fact that in the year 1991, the MoP&NG had issued the instruction vide letter/circular dated 2/6.1.1981 for instituting a procedure for utilization of HSD from Koyali Refinery and not from any other refineries, and the Ministry had addressed by Circular dated 17.03.1988 to all the oil companies regarding the constitution of TEC on supply of feed-stock for the production of petroleum specialities, by making a reference to the Ministry’s letter dated 02.01.1981, for reconstitution of the TEC; it was clarified that it would initially look into the supply of LSHF-HSD, LDO and Crude Sludge for the manufacture of petroleum specialities. There was no reference with regard to the supply of regular HSD.
There was no reason for the C.B.I. to file charge-sheet against any of the accused. None of the communications of the Ministry, except of 02.01.1981, for the utilization of HSD from Koyali Refinery, required any TEC recommendation for lifting of HSD from any other companies. The C.B.I. failed to take into account that the Ministry had never called for any clarification from any other company during the period between 1997 – 2000 in connection with the alleged facts noted in the F.I.R., the officers, who were working in the company, would go by the understanding of the Circulars.
The learned Special Judge observed that as per the record, four oil companies are of Gujarat, Maharashtra and Madhya Pradesh and there is no evidence to show that the officers of the oil companies had gathered, or met sales tax officers or staff or purchasers with an intention to commit the alleged offence - For the offence under the P.C. Act, the learned Special Judge found that there is no prima facie evidence to show that the applicants had accepted any gratification from any person as a motive or reward, and the applicants accused had followed all the instructions issued by the MoP & NG and acted in discharge of the duties; no sanction has been brought on record by the C.B.I., while sanction has been refused against the officers of the oil companies and against refusal C.B.I. had written to Central Vigilance Committee, but the said committee to confirm the order of non-issuance of sanction against the officers of the oil companies and therefore, no summons were issued against those accused persons.
The Petroleum Rules, 2002 came into force on 13.03.2002. A technical body being Oil Industry Safety Directorates Standards (OISD) had been formed for assisting the safety council constituted under the MoP&NG. The rules deals with restrictions of delivery and dispatch of petroleum in all classes A, B and C, the requirement of the licence for the import of petroleum, and the dispute with regard to the HSD would have to be resolved by the Board, which is governed by the Petroleum and Natural Gas Regulatory Board Act, 2006. The legal provision of the Petroleum Act and rules thereunder become relevant in this case, since chargesheet came to be filed on 25.03.2009.
This Court finds that the Special Judge has not committed any error in discharging the accused. No sanction has been granted for prosecuting the officers of the oil companies. The assessment made by the Special Judge discharging the accused is consistent with the record - the orders passed by the learned Special Judge discharging the accused – respondents herein are just and correct, the findings are in accordance to the documents on record, the accused are rightly discharged, as there are no sufficient grounds for proceedings against them.
All the present revision applications fail merits and are dismissed as rejected.
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2023 (6) TMI 1234
Condonation of delay of 10 days in filing appeal - Validity of assessment order - time limitation for filing of appeal - HELD THAT:- In the present case, the appeals have, admittedly, been filed within 10 days after the statutory period of 120 days. In such circumstances, there is nothing untoward in the return of the appeals under Rc 344/2023/A1 dated 26.04.2023 from the office of the Deputy Commissioner (ST), GST-Appeal, Chennai -II citing delay beyond the condonable period.
Thus, an explanation has been given to the effect that the petitioner was unaware of the orders having been issued as it had been sent to the Consultant's email id and also to the effect that the sole proprietor was unwell at the relevant point in time.
The challenge to the orders of assessment rejected - the request for condonation of delay of 10 days is allowed - petition disposed off.
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2023 (6) TMI 1233
Reimbursement of the GST from the recipient of goods i.e. Indian Railways - differential amount of price variation on steel - whether the Petitioner would be entitled to claim refund of the input tax credit availed on the purchase of steel which was used to pay the output tax while affecting the outward supply of steel to the Railway Authorities? - HELD THAT:- The GST legislation came into existence within the purview of a modern economy as a destination based tax. The idea which permeates GST legislation globally is to impose a multi-stage tax under which each point in supply chain is potentially taxed. As a result, the suppliers are entitled to avail credit of the tax paid at an anterior stage. In other words, GST fulfils the description of a tax which is based on value addition. The value addition is intended to achieve fiscal neutrality and to obviate a cascading effect of taxation which traditional tax regimes were liable to perpetuate. Therefore, the purpose of the tax on value addition is not dependent on the distribution or manufacturing model. The tax which is paid at an anterior stage of the supply chain is adjusted. The object therefore is to achieve both neutrality and equivalence by the grant of seamless credit of the duties paid at an anterior stage of the supply chain.
It is seen from a perusal of Section 16(1) that every registered person, shall subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49 be entitled to take credit of the input tax charged on any supply of goods or service or both to him which are used or intended to be used in the course of furtherance of his business and the said amount will be credited in the electronic ledger of such person - Taxes on goods and services are identifiable but upon credit to the electronic ledger, they form a common pool for utilization. Section 16(1) indicates the manner in which input tax credit can be utilized is spelt out in Section 49.
Whether the Petitioner would be entitled to the refund of the Input Tax Credit availed upon purchasing of steel which was used for the purpose of payment of the Output Tax in effecting the outward supply of steel to the Railways? - HELD THAT:- This question has arisen in view of the specific and categorical submission of the learned counsel for the Respondents inasmuch as, it was submitted that as the Petitioner is getting the benefit of the Input Tax Credit, the question of reimbursement of Input Tax Credit availed do not arise. It was submitted that the Petitioner would get double benefit, inasmuch as on one hand the Petitioner would get the benefit of Input Tax Credit and on the other hand would get the benefit of GST neutralization and as such hit by Section 171 of the CGST Act, 2017.
In the previous segments of the instant judgment, this Court categorically observed the object and the frame work behind the Input Tax Credit. The GST legislation as observed earlier is a destination based tax meaning thereby GST is a consumption based tax and would effectively tax the consumer of such goods or services or both at the destination thereof or as the case may be at the point of consumption. The supply of steel by the Petitioner to the Railways makes the Railways the end user and therefore the Railways are required to bear the brunt of the final tax amount upon the supply of steel - It is relevant to note that the input tax credit is credited to the Petitioner’s electronic credit ledger as the Petitioner had paid from its resources the input tax. Merely because the Petitioner uses the input tax credit which is credited to his electronic credit ledger for payment of the output tax, which is a permissible mode of payment as per Section 49, it would be completely contrary to the frame work of the GST Act to accept the contention of the Railways that the Petitioner would not be entitled to the reimbursement of the Input Tax Credit which the Petitioner used for payment of the Output Tax Credit.
This Court is therefore of the opinion that the Petitioner herein would be entitled to his PVC claim in terms with the contract and GST paid by the Petitioner from its electronic credit ledger has to be taken into consideration while computing the PVC Claims of the Petitioner. The Petitioner would be well advised therefore to take steps in terms with the JPO dated 29/1/2021 for making its PVC claims, if not already done and the Respondent Railways shall pay the PVC claims on the basis of the contract. It is yet again reiterated that on the ground that the Petitioner had paid the output tax through its electronic credit ledger by using its input tax credit, the same shall not be a ground to deny the entitlement of the Petitioner to the reimbursement of the GST. The said exercise of the PVC Bills of the Petitioner be completed within one month from the date a certified copy of this judgment is served upon the Respondent No. 7.
Petition disposed off.
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2023 (6) TMI 1232
Cancellation of GST registration of petitioner - undue delay in submission of reply to SCN - non-speaking order - principles of violation of natural justice - HELD THAT:- This Court is really not required to look into this question since, quite apart from the fact that the basis of show-cause notice is well known to the petitioner as may be seen from reply dated 29.05.2023, the petitioner has admittedly not appeared before officer on 22.05.2023 despite receipt of the notice well in time. Thus, the petitioner has not cooperated in the proceedings leading to suspension of registration. This is a critical aspect of the matter which militates against the petitioner's prayer for intervention under Article 226 of the Constitution of India.
The petitioner appears to be suggesting that the very fact of filing of a reply should be construed as an act of grace on its part and that the reply ought to have been taken note of by the assessing authority, and that this fact deserves intervention by the Court, since the order was passed subsequent to receipt of the order - In the present case, the petitioner has neither appeared for personal hearing nor has filed reply within the timeline as stipulated by the officer. The mere fact that the reply has been filed at the will and pleasure of the petitioner, beyond the period granted by this officer would not entitle the petitioner to the relief sought.
Petition dismissed.
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2023 (6) TMI 1231
Levy of 200% penalty - only mistake committed by the appellants is on not renewing the e-Way Bill which expired on 18.03.2022 - HELD THAT:- The appellants should have done since the goods were sold in transit. Therefore, there is a violation had committed by the appellants but the violation is not as grave enough to call for imposition of penalty at the rate of 200%. Since on the date when the vehicle was intercepted the goods were covered by a valid e- Way Bill which satisfies the requirement under Section 129 of the Act. However, that the mistake committed by the appellants in not renewing the earlier e-Way Bill which expired on 18.03.2022 the appellants should be put on terms.
The appeal as well as the writ petition are allowed and the order of penalty passed by the adjudicating authority as affirmed by the appellate authority are set aside and modified with the direction to the appellants to pay a penalty of Rs.50,000/- which will include both CGST and WBGST instead of 200% penalty as imposed by the authorities.
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2023 (6) TMI 1230
Issuance of Suspension proceedings - Action on enquiry report - petitioner were put under suspension without any basis and without following the procedure prescribed under the A.P. Civil Services (Classification, Control and Appeal) Rules, 1991 - HELD THAT:- It is manifest that the respondent authorities already conducted detailed enquiries on two occasions i.e., on 16.04.2021 and 19.12.2022, and by relying the said enquiry reports and without observing the principles of natural justice and without providing any opportunity to the petitioner to submit an explanation, the present impugned orders came to be passed by de horsing the procedure as contemplated under Rules 21 and 22 (1) of the CCA Rules, 1991.
On a perusal of the Rule 8 (1), this Court is of the opinion that Rule 8(1) is not applicable, since the enquiry was already completed twice in the present case and the enquiry reports were submitted by the Inquiry Officers on 16.04.2021 and 19.12.2022.
As per service jurisprudence, as stated by the respondents, that the notice is contemplated under Rule 8(1) of CCA Rules before issuing impugned proceedings is misconception, but in the given facts and circumstances and also as per the circular issued by the Central Vigilance Commission (CVC), if any enquiry or anyaction is proceeded by the disciplinary authority basing upon anonymous letters/complaints by third parties or news reports, the authority under obligation to issue prior notice to concerned delinquents before any enquiry/action. The detailed enquiries were already conducted and basing upon the enquiry reports, the present impugned orders were passed.
As seen from the impugned order, it is crystal clear that no show cause notice and no charge memo were issued to the petitioner to submit his explanation and no opportunity was given to him to participate in the enquiries said to have been conducted by the respondents. The fact remains that the enquiries were not conducted as per the CCA Rules, 1991 without complying the procedure as contemplated under Rule 20 of CCA Rules, 1991 - It is also settled principle of law that, basing upon anonymous letter or complaint from the public and news reports, neither the disciplinary proceedings nor punishment can be proceeded/imposed/awarded.
The enquiry reports dated 16.04.2021 and 19.12.2022 cannot be relied upon. Therefore, the power of suspension is only to be used to achieve the object to keep the delinquent away from the records and witnesses at the time of enquiry, but here enquiry was already completed, and the power cannot be used as a means of punishment. In fact, the present impugned proceedings does not speak any administrative exigencies, but due to the enquiry reports which are unknown to the petitioner, the impugned proceedings were issued for other reasons particularly as punitive measure only.
The respondents did not follow due process of law before issuing the impugned orders, which would attract the principle of malice in law as the impugned order was not based on any real factor germane and it was based upon the allegations made against a unit of Department in a news item published in a Telugu Newspaper on 04.04.2021. Admittedly, the petitioner never discharged his duties at the subject unit and his duties do not at all relate to collection of tax as alleged - Petition allowed.
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2023 (6) TMI 1229
Scope of assessment under GST Act, 2017 - contract completed during the Pre-GST period and demand based on the completed contract can be brought to assessment under GST Act, 2017 or not - liquidated damages, without any supply of materials and labor - arbitral award, in the nature of compensation, payable for delay in completion of the contract and agreed to be payable by the Applicant to DGAL without any supply of goods or services - ITC on the GST amount if any levied on the mutually agreed arbitral award amount received from the Applicant - taxability under GST on Interest payable on the liquidated damages?'
Whether a mutually agreed amount for settling a dispute arising out of breach of contract constitute a supply within the scope of Entry 5(e) of Schedule-II to the CGST Act, 2017 and hence taxable?
HELD THAT:- Circular No. 178/10/2022-GST dated 03-08-2022 discusses the taxability of an activity on a transaction as supply of service of agreeing to the obligations to refrain from an act or to tolerate an act or a situation, or to do an act under the GST. This includes applicability of GST on payments in the nature of liquidated damage, compensation, penalty, cancellation charges, late payment surcharge, etc., arising out of breach of contract or otherwise and scope of entry at para-5(e) of schedule-II of Central Goods & Service Tax Act, 2017.
The flow of consideration in the instant case fall under para-7.1.3 and para-7.1.4 of circular No. 178/10/2022, dated: 03-08-2022, therefore such consideration as stipulated in the said circular are not taxable as there is no supply of service under entry-5(e) of Schedule-II of the CGST Act, 2017.
In the instant case, as no supply has happened during the GST regime as per Section 142(10) of the act ibid no GST shall be payable. Further the additional payment received by way of compensation through award by Hon’ble Tribunal for Arbitration is not falling under Section 142(2)(a) and hence not chargeable to GST.
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2023 (6) TMI 1228
Exemption from CGST and UPGST - supply of education and training services to commercial pilots in accordance with the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of aircraft type ratings on their existing licenses - to be covered under Si. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 and Si. No. 66 (a) of the Notification No. A.NI-2-843/X1-9(47)/ 17- U.P. Act-1-2017-Order- (10) -2017 dated 30.6.2017 or not? - HELD THAT:- The applicant is engaged in the business of facilitating the training of commercial pilots on the Aircraft Simulators installed at its training facilities. Such training is provided in accordance with the training curriculum approved by the Directorate General of Civil Aviation (hereinafter referred to as “DGCA”) for obtaining the extension of aircraft type ratings on their existing licenses.
Whether the supply of education and training services to commercial pilots in accordance with the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of aircraft type ratings on their existing licenses would be covered under Si. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017? - HELD THAT:- The applicant does not provide any licence to the pilots as they are not the competent authority. Issuance and granting of commercial pilot licenses falls under the exclusive domain of DGCA. The applicant is only conducting training courses which helps the trainees to increase/accumulate ratings for flying specific aircrafts. Moreover, the trainees will have to undergo skill test when they complete simulator training at the institute. It is based on the results of these tests and examination and after fulfillment of other parameters that the DGCA would endorse the type ratings of aircraft in the licenses of trainee pilots. Therefore merely conducting a course or its completion is not a qualification which is recognized by law. The fact that such a completion of course may be taken into account by the DGCA for the purpose of evaluating the experience and content of training, will not make it statutory in character.
The applicant, during the course of personal hearing, accepted that they do not provide any licence, degree or diploma certificate to the trainees. It is just the completion of training course which is mentioned. It is observed that there is no statutory requirement for the course completion certificate which enables the trainee pilots to apply to DGCA for appearing in the examination conducted by it. It is the examination conducted by the DGCA which is the statutory requirement and not any examination by the applicant. The applicant is merely preparing the trainees for such Type Rating Examinations - Hence, it cannot be construed that the applicant is an educational institute which provides services by way of education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force.
The applicant has declared that the training course conducted by them enables the pilots to get employment in the commercial airlines. This view of the applicant is not supported by the facts. Because the trainees after undergoing type rating training courses with the applicant will not be able to get employment with the airlines directly. As per Rule 6A of the Aircraft Rules, no person shall fly as pilot of an aircraft which is not included or entered in the Aircraft rating of the licence. Meaning thereby, a trainee can fly an aircraft and consequently seek employment with an airlines only after his or her licence has been endorsed with the aircraft rating for the specified aircraft by the DGCA - a commercial pilots licence holder cannot seek the job of flying an aircraft for which he has undergone Type Rating Training unless an endorsement to that effect is made in the licence of the CPL holder by the DGCA. It is the endorsement which makes him eligible to obtain employment with Airlines to fly the aircrafts for which he has been type rated and not the fact of having completed the training with the institute.
The supply of education and training services to commercial pilots in accordance with the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of aircraft type ratings on their existing licenses is not exempted under Si. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017.
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2023 (6) TMI 1227
Seeking grant of anticipatory bail - territorial jurisdiction of this court for entertaining the present application - HELD THAT:- Similar question arose in Pritam Singh Vs. State of Punjab [1980 (12) TMI 201 - DELHI HIGH COURT], it was held that cognizable offence was alleged to have been committed in the State of Punjab whereas the anticipatory bail was applied before the Delhi High Court as the accused had reasonable apprehension of arrest in Delhi - In that context, it was observed that there is nothing in Section 438 CrPC which restricts the jurisdiction of High Court or Court of Session. “One need not mix up the jurisdiction relating to cognizance of an offence with that of granting of bails. Bails are against arrest and detention. Therefore, an appropriate court within whose jurisdiction the arrest takes place or is apprehended or is contemplated will also have jurisdiction to grant bail to the person concerned.”
This court has territorial jurisdiction to entertain the present application - Application disposed off.
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2023 (6) TMI 1226
Deduction u/s 10A in respect of provisions written back towards link charges and annual day expenses and the said claim was not derived by an undertaking from the export of article or thing or computer software - HELD THAT:- This Court is of the opinion that no interference is called for in the impugned judgment and order of the High Court [2021 (1) TMI 168 - MADRAS HIGH COURT]
The question of law will be considered on its own merits in the pending CA No. 9175 of 2018 (appeal from CIT v. HEWLETT PACKARD GLOBAL SOFT LTD. 2017 (11) TMI 205 - KARNATAKA HIGH COURT.
SLP is dismissed in the above terms.
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2023 (6) TMI 1225
Nature of subsidy receipt - value of the MILIEV grant given by the Dutch government as a subsidy for purchase of wind turbine generator - transfer of right by the assessee to another company, no offset credit and electricity charges paid to Wescare as deduction - HC confirmed ITAT orders - HELD THAT:- Delay condoned.
In view of the order passed by this Court in [2023 (6) TMI 1171 - SC ORDER] no case for interference under Article 136 of the Constitution is made out.
Special Leave Petition is dismissed.
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2023 (6) TMI 1224
Reopening of assessment u/s 147 - notice after a period of four years - disallowance of CSR expenditure - HELD THAT:- Explanation 1 will not be applicable as CSR expenditure was incurred as required by section 135 of the Companies Act, 2013 and its proposed disallowance would not constitute an offense.
It appears that there was no tangible material available on record to conclude that income had escaped assessment. The Apex Court in case of M.M. Aqua Technologies Ltd. [2021 (8) TMI 520 - SUPREME COURT] has held that a provision in the Act, which is “for removal of doubts” cannot be presumed to be retrospective even where such language is used, if it alters the law as it earlier stood; and even if it is assumed that the said amendment is retrospective, it cannot give rise to a failure on the part of the Petitioner to disclose fully and truly material facts as held by this Court in the case of Voltas Ltd. [2013 (4) TMI 116 - BOMBAY HIGH COURT]
AO has acted in excess of the limit of his jurisdiction to reopen the assessment in the exercise of powers under section 147 read with section 148 of the Act. Accordingly the Petitioner would be entitled to succeed.
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2023 (6) TMI 1223
Addition u/s 14A - Expenditure incurred in relation to income not includible in total income - Mandation of recording satisfaction - AO should record his dis-satisfaction with the correctness of the claim of the assessee in respect of the expenditure and to arrive at such dis-satisfaction he should give cogent reasons - HELD THAT:- AO does not say he is not satisfied and why he was not satisfied. There are no reasons given.
AO has relied upon some discussions and findings of some original assessment order passed, but the first assessment order ever to have been passed is the impugned order dated 28th March 2013 where the Assessing Officer has reduced the disallowance. Therefore, it only indicates clear non-application of mind by the Assessing Officer.
We would agree with the submissions of Ms Jain since CIT(A) in his order dated 9th December 2014 records “Though not mentioned in assessment order, admittedly a notice u/s 143(2) was issued and assessment proceedings were pending on the date of search which came to be abated. In response to notice u/s 153A dated 24.10.2011 appellant filed return of income on 29.1.2011 declaring Total income of Rs. 317,47,69,697/- and Book Profit u/s 115JB Rs. 666,76,27,404/- In the assessment order dated 28.3.2013 passed u/s 153A r.w.s. 143(3), the Assessing Officer has made certain additions/disallowance which are subject matter of this appeal”. Assessment order dated 28th March 2013 is the order that was impugned before the CIT(A). Therefore it clearly indicates that the AO’s finding in paragraph 5.2 of the assessment order is based relying upon a non-existent assessment order and that indicates clear non-application of mind.
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