Author: admin_gst

GST – 59/2018 – Dated:- 26-10-2018 – Superseded vide Notification No. 78/2018-Central Tax dated 31-12-2018 MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS) NOTIFICATION No. 59/2018 – Central Tax New Delhi, the 26th October, 2018 G.S.R. 1071(E).- In pursuance of section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) and sub-rule (3) of rule 45 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules),

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GST – 69/43/2018 – Dated:- 26-10-2018 – Circular No. 69/43/2018-GST F. No. CBEC/20/16/04/2017-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing New Delhi, Dated the 26th October, 2018 To, The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/ Commissioners of Central Tax (All) The Principal Directors General/Directors General (All) Madam/Sir, Subject: Processing of Applications for Cancellation of Registration submitted in FORM GST REG-16 – Reg. The Board is in receipt of representations seeking clarifications on various issues in relation to processing of the applications for cancellation of registration filed by taxpayers in FORM GST REG-16. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017

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event warranting the cancellation‟. It might be difficult in some cases to exactly identify or pinpoint the day on which such an event occurs. For instance, a business may be transferred/disposed over a period of time in a piece meal fashion. In such cases, the 30-day deadline may be liberally interpreted and the taxpayers‟ application for cancellation of registration may not be rejected because of the possible violation of the deadline. 4. While initiating the application for cancellation of registration in FORM GST REG-16, the Common portal captures the following information which has to be mandatorily filled in by the applicant: a) Address for future correspondence with mobile number and email address; b) Reason for cancellation; c) Date from which cancellation is sought; d) Details of the value and the input tax/tax payable on the stock of inputs, inputs contained in semi-finished goods, inputs contained in finished goods, stock of capital goods/plant and machinery; e)

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ntity in which the applicant proposes to amalgamate or merge has not got registered with the tax authority before submission of the application for cancellation. In all cases other than those listed at (a) and (b) above, the application for cancellation of registration should be immediately accepted by the proper officer and the order for cancellation should be issued in FORM GST REG-19 with the effective date of cancellation being the same as the date from which the applicant has sought cancellation in FORM GST REG-16. In any case the effective date cannot be a date earlier to the date of application for the same. 6. In situations referred to in (a) or (b) in para 5 above, the proper officer shall inform the applicant in writing about the nature of the discrepancy and give a time period of seven working days to the taxpayer, from the date of receipt of the said letter, to reply. If no reply is received within the specified period of seven working days, the proper officer may reject th

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n has been cancelled, to file a final return in FORM GSTR-10, within three months of the effective date of cancellation or the date of order of cancellation, whichever is later. The purpose of the final return is to ensure that the taxpayer discharges any liability that he/she may have incurred under sub-section (5) of the section 29 of the CGST Act. It may be noted that the last date for furnishing of FORM GSTR-10 by those taxpayers whose registration has been cancelled on or before 30.09.2018 has been extended till 31.12.2018 vide notification No. 58/2018 – Central Tax dated the 26th October, 2018. 8. Further, sub-section (5) of section 29 of the CGST Act, read with rule 20 of the CGST Rules states that the taxpayer seeking cancellation of registration shall have to pay, by way of debiting either the electronic credit or cash ledger, the input tax contained in the stock of inputs, semi-finished goods, finished goods and capital goods or the output tax payable on such goods, whichever

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it ledger is automatically met. In case it is later determined that the output tax liability of the taxpayer, as determined under sub-section (5) of section 29 of the CGST Act, was greater than the amount of input tax credit available, then the difference shall be paid by him/her in cash. It is reiterated that, as stated in sub-section (3) of section 29 of the CGST Act, the cancellation of registration does not, in any way, affect the liability of the taxpayer to pay any dues under the GST law, irrespective of whether such dues have been determined before or after the date of cancellation. 9. In case the final return in FORM GSTR-10 is not filed within the stipulated date, then notice in FORM GSTR-3A has to be issued to the taxpayer. If the taxpayer still fails to file the final return within 15 days of the receipt of notice in FORM GSTR-3A, then an assessment order in FORM GST ASMT-13 under section 62 of the CGST Act read with rule 100 of the CGST Rules shall have to be issued to dete

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ffect. 11.1[It is pertinent to mention here that section 29 of the CGST Act has been amended by the CGST (Amendment) Act, 2018 to provide for Suspension of registration. The intent of the said amendment is to ensure that a taxpayer is freed from the routine compliances, including filing returns, under GST Act during the pendency of the proceedings related to cancellation. Accordingly, the field formations may not issue notices for non- filing of return for taxpayers who have already filed an application for cancellation of registration under section 29 of the CGST Act. Further, the requirement of filing a final return, as under section 45 of the CGST Act, remains unchanged.] 12. It may be noted that the information in table in FORM GST REG-19 shall be taken from the liability ledger and the difference between the amounts in Table 10 and Table 11 of FORM GST REG-16. 13. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 14. Difficulty,

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Goods and Services Tax – 70/44/2018 – Dated:- 26-10-2018 – Circular No. 70/44/2018 -GST F. No. CBEC/20/16/04/2017-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing New Delhi, Dated the 26th October, 2018 To, The Principal Chief Commissioners/ Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All)/ The Principal Directors General / Directors General (All) The Principal CCA, CBIC Madam/Sir, Subject: Clarification on certain issues related to refund – Reg. The Board is in receipt of representations seeking clarification on certain issues relating to refund. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act ), hereby clarifies the issues as detailed he

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by using FORM GST RFD-01B and the taxpayer is expected to file a fresh application for refund. 2.2 The issue has been re-examined and it has been observed that presently the common portal does not allow a taxpayer to file a fresh application for refund once a deficiency memo has been issued against an earlier refund application for the same period. Therefore, it is clarified that till the time such facility is developed, taxpayers would be required to submit the rectified refund application under the earlier Application Reference Number (ARN) only. Thus, it is reiterated that when a deficiency memo in FORM GST RFD-03 is issued to taxpayers, re-credit in the electronic credit ledger (using FORM GST RFD-01B) is not required to be carried out and the rectified refund application would be accepted by the jurisdictional tax authorities with the earlier ARN itself. It is further clarified that a suitable clarification would be issued separately for cases in which such re-credit has already b

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er to enable such exporters to avail the said facility notification No. 54/2018 – Central Tax dated the 9th October, 2018 has been issued to carry out the changes recommended by the GST Council. Alongside the amendment carried out in the said sub-rule through the notification No. 39/2018- Central Tax dated 4th September, 2018 has been rescinded vide notification No. 53/2018 – Central Tax dated the 9th October, 2018. 3.2 For removal of doubts, it is clarified that the net effect of these changes would be that any exporter who himself/herself imported any inputs/capital goods in terms of notification Nos. 78/2017-Customs and 79/2017-Customs both dated 13th October, 2017 shall be eligible to claim refund of the IGST paid on exports till the date of the issuance of the notification No. 54/2018 – Central Tax dated the 9th October, 2018 referred to above. 3.3 Further, after the issuance of notification No. 54/2018 – Central Tax dated the 9th October, 2018, exporters who are importing goods i

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Goods and Services Tax – 71/45/2018 – Dated:- 26-10-2018 – Circular No. 71/45/2018-GST F. No. 349/94/2017-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing New Delhi, Dated the 26th October, 2018 To, The Principal Chief Commissioners/ Chief Commissioners/Principal Commissioners/ Commissioners of Central Tax (All)/ The Principal Directors General/ Directors General (All) Madam/Sir, Subject: Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor – Reg. Representations have been received seeking clarification on certain issues under the GST laws. The same have been examine

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ld be calculated after considering the due eligible ITC which might be available to such taxable person. 2. As per section 27 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the said Act), period of operation by causal taxable person is ninety days with provision for extension of same by the proper officer for a further period not exceeding ninety days. Various representations have been received for further extension of the said period beyond the period of 180 days, as mandated in law. 1. It is clarified that in case of long running exhibitions (for a period more than 180 days), the taxable person cannot be treated as a CTP and thus such person would be required to obtain registration as a normal taxable person.

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ntion of the provisions contained in section 20 of the CGST Act resulting in excess distribution of credit to one or more recipients of credit, the excess credit so distributed shall be recovered from such recipients along with interest and penalty if any. 2. The recipient unit(s) who have received excess credit from ISD may deposit the said excess amount voluntarily along with interest if any by using FORM GST DRC-03. 3. If the said recipient unit(s) does not come forward voluntarily, necessary proceedings may be initiated against the said unit(s) under the provisions of section 73 or 74 of the CGST Act as the case may be. FORM GST DRC-07 can be used by the tax authorities in such cases. 4. It is further clarified that the ISD would also b

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Goods and Services Tax – 72/46/2018 – Dated:- 26-10-2018 – Circular No. 72/46/2018-GST F. No. CBEC/20/16/04/2017-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing New Delhi, Dated the 26th October, 2018 To, The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/ Commissioners of Central Tax (All) The Principal Directors General/Directors General (All) Madam/Sir, Subject: Circular to clarify the procedure in respect of return of time expired drugs or medicines – Reg. Various representations have been received seeking clarification on the procedure to be followed in respect of return of time expired drugs or medicines under the GST laws. The issues raised in the said representations have been examined and to ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the Central Goods and Services Ta

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osition taxpayer), he may, at his option, return the said goods by treating it is as a fresh supply and thereby issuing an invoice for the same (hereinafter referred to as the, return supply ). The value of the said goods as shown in the invoice on the basis of which the goods were supplied earlier may be taken as the value of such return supply. The wholesaler or manufacturer, as the case may be, who is the recipient of such return supply, shall be eligible to avail Input Tax Credit (hereinafter referred to as ITC ) of the tax levied on the said return supply subject to the fulfilment of the conditions specified in Section 16 of the CGST Act. b) In case the person returning the time expired goods is a composition taxpayer, he may return the said goods by issuing a bill of supply and pay tax at the rate applicable to a composition taxpayer. In this scenario there will not be any availability of ITC to the recipient of return supply. c) In case the person returning the time expired good

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he would be required to reverse ITC of ₹ 15/- and not of ₹ 10/-. (B) Return of time expired goods by issuing Credit Note: a) As per sub-section (1) of Section 34 of the CGST Act the supplier can issue a credit note where the goods are returned back by the recipient. Thus, the manufacturer or the wholesaler who has supplied the goods to the wholesaler or retailer, as the case may be, has the option to issue a credit note in relation to the time expired goods returned by the wholesaler or retailer, as the case may be. In such a scenario, the retailer or wholesaler may return the time expired goods by issuing a delivery challan. It may be noted that there is no time limit for the issuance of a credit note in the law except with regard to the adjustment of the tax liability in case of the credit notes issued prior to the month of September following the end of the financial year and those issued after it. b) It may further be noted that if the credit note is issued within the t

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y the retailer/wholesaler, are destroyed by the manufacturer, he/she is required to reverse the ITC attributable to the manufacture of such goods, in terms of the provisions of clause (h) of sub-section (5) of section 17 of the CGST Act. This has been illustrated in table below: Date of Supply of goods from manufacturer/ wholesaler to wholesaler/ retailer Date of return of time expired goods from retailer / wholesaler to wholesaler / manufacturer Treatment in terms of tax liability & credit note Case 1 1st July, 2017 20th September, 2018 Credit note will be issued by the supplier (manufacturer / wholesaler) and the same to be uploaded by him on the common portal. Subsequently, tax liability can be adjusted by such supplier provided the recipient (wholesaler / retailer) has either not availed the ITC or if availed has reversed the ITC. Case 2 1st July, 2017 20th October, 2018 Credit note will be issued by the supplier (manufacturer / wholesaler) but there is no requirement to upload

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GST – States – S.O. 266 – Dated:- 26-10-2018 – Commercial Tax Department Notification The 26th October 2018 S.O. 266, Dated 26th October 2018- In exercise of the powers conferred by section 148 of the Bihar Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act ), read with section 45 of the said Act and rule 81 of the Bihar Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), the Governor of Bihar, on the recommendat

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2018 (10) TMI 1454 – GUJARAT HIGH COURT – [2019] 61 G S.T.R. 141 (Guj) – Validity of provisional orders of attachment – attachment of petitioner's factory premises, stock and bank accounts – alleged large scale bogus billing activities – Held that:- At the prima facie stage, the department contends strongly that the petitioner has indulged into revenue defalcation. Possible tax and penalty liabilities are substantial. At the same time, it is not disputed that the petitioner is also involved in legitimate business activities. By freezing the petitioner's bank accounts and attaching the properties, the petitioner is temporarily rendered penalized. The petitioner cannot operate the business, cannot move the stock and cannot make payments.
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Provisional attachments suspended subject to fulfillment of certain conditions – petition disposed off. – R/SPECIAL CIVIL APPLICATION NO. 14566 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 14567 of 2018 Dated:- 26-10-2018 – MR AKIL KURESHI AND M

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the petitioner's possible tax and penalty liabilities under the Gujarat Goods & Service Tax Act and Central Goods & Service Tax Act at close to ₹ 45 crores. 2. Counsel for the petitioner submitted that the petitioner has been in business since several years. In the past, no such allegation had been made. Statements of the director of the petitioner and other persons were recorded under duress. The petitioner has not indulged any bogus billing activity. The department has attached the petitioner's bank accounts, premises and stock thereby making it impossible for the petitioner to operate its business. The goods attached are perishable in nature. On some reasonable conditions, attachment should be suspended. 3. On the other hand, learned AGP explained the modes operandi allegedly employed by the petitioner for defrauding the Government revenue. He submitted that there is reliable material on record to establish such allegation. Pending assessment, the competent au

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then, the petitioner's financial liabilities would not be crystallized; (iii) The petitioner's stock worth ₹ 1.2 crores (approximately) is seized which is perishable in nature; (iii) At the instance of the department, the petitioner has deposited a sum of ₹ 2 crores in the petitioner's ledger account in terms of section 49 of the Gujarat Goods & Service Tax Act. Such amount would be available with the department for recovery in case the liabilities of the petitioner are crystallized; (iv) The petitioner concedes that the factory premises with plant and machinery are not encumbered. The same would therefore be poor security for any possible tax collection. 6. Under the circumstances, we would permit the petitioner to carry on the legitimate business by suspending provisional attachments subject to fulfillment of following conditions: (i) The petitioner creates an undertaking to maintain a stock of the goods of a minimum of ₹ 5 crores. Such undertaking s

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GST – States – 58/2018-State Tax – Dated:- 26-10-2018 – NOTIFICATION FINANCE DEPARTMENT Sachivalaya, Gandhinagar Dated the 26th October, 2018 Notification No. 58/2018-State Tax No. (GHN-108)/GST-2018/S.148(10)TH:- In exercise of the powers conferred by section 148 of the Gujarat Goods and Services Tax Act, 2017 (Guj.25 of 2017) (hereafter in this notification referred to as the said Act ), read with section 45 of the said Act and rule 81 of the Gujarat Goods and Services Tax Rules, 2017 (herein

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GST – States – 58/2018–State Tax – Dated:- 26-10-2018 – FINANCE DEPARTMENT Madam Cama Marg, Hutatma Rajguru Chowk Mantralaya, Mumbai 400 032, dated the 26th October 2018 NOTIFICATION Notification No. 58/2018-State Tax MAHARASHTRA GOODS AND SERVICES TAX ACT, 2017. No. GST. 1018/C. R. 117/ Taxation-1.- In exercise of the powers conferred by section 148 of the Maharashtra Goods and Services Tax Act, 2017 (Mah. XLIII of 2017) (hereafter in this notification referred to as the said Act ), read with

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2018 (10) TMI 1561 – CESTAT MUMBAI – TMI – Rejection of Refund claim without issuing show cause notice – refund claimed on the ground that they have not provided any service to M/s Generic Partners, Australia but only provided documents to them – refund rejected on the ground of time limitation – section 11B of CEA – unjust enrichment – Waiver of SCN by the appellant- Principles of Natural Justice.
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Held that:- A consistent view taken by this Tribunal is that there has to be issuance of show cause notice, since it is mandatory and if the same has not been issued, then it is contrary to law and such proceedings have to be quashed. The lacunae of non issue of show cause notice is not curable and such proceedings are not sustainable. Even if a party has waived the show cause notice, it will not absolve the department’s statutory liability to issue show cause notice under the relevant provision. Mere presence of the appellant before the Adjudicating Authority during the course of hea

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bai. 2. Refund claim of service tax of ₹ 3,51,117/- was filed by the appellant on the ground that they have not provided any service to M/s Generic Partners, Australia but only provided documents to them, in respect of the products manufactured and supply to them, in order to enable them to apply and obtained marketing authorization from distribution and for providing the documents, the appellant has received the amount as per the Manufacture and Supply Agreement dated 05.02.2018 between M/s Generic Partners, Australia and the appellant. 3. According to the appellant, since the amount received by them from M/s Generic Partners, Australia is not towards any service provided by them, therefore they are eligible for refund of service tax paid on the said amount. 4. The said refund claim was rejected by the adjudicating authority while order-in-original dated 21.02.2015 being time barred under Section 11B. Aggrieved the appellant filed appeal before the Commissioner (Appeals-III) on

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nrichment is not applicable in the facts of the present case since the agreement between M/s Generic Partners, Australia and the appellant clearly stipulates that the consideration is exclusive of VAT and exclusive of other taxes if applicable; that even if the activity is treated as a provision of service, the same will fall under the definition of export of service and therefore, no service tax is payable. Learned Authorised Representative, on the other hand reiterated the findings recorded in the impugned order and submitted that the appeal filed by the appellant deserves to be dismissed. 6. Although, various grounds have been raised by the appellant, but firstly I will take up the ground of non-issuance of show cause notice to the appellant and if the appellant succeeded on this point then there is no need for me to go to the other grounds raised by the appellant. It has not been disputed by the Learned Authorised Representative that the refund claim of the appellant was rejected b

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levant provision. Mere presence of the appellant before the Adjudicating Authority during the course of hearing does not authorise the department to encroach upon the right of the appellant to have a fair the opportunity of placing his defence before the adjudicating authority. The presence of the appellant before the Adjudicating Authority, without issuance of show cause notice, cannot lead to the conclusion that the appellant had a fair opportunity to defend the case. Otherwise also principle of natural justice requires issuance of show cause notice before the adjudication proceedings. It is not open to the revenue to bypass such legal requirement. There is no doubt that the principle of natural justice has been violated in the present matter and therefore without going into other grounds raised by appellant, the impugned order is set aside and the appeal filed by the appellant is allowed with consequential relief, if any. (Pronounced in Court on 26/10/2018) – Case laws – Decisions

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GST – States – CCW/CS (2)/58/2017 – Dated:- 26-10-2018 – GOVERNMENT OF ANDHRA PRADESH COMMERCIAL TAXES DEPARTMENT CIRCULAR CCT s Ref. No.CCW/CS (2)/58/2017, Dt.26.10.2018 Sub: Ease of doing Business (EODB)- CT Department – GST Act 2017- GST Help Desk cum facilitation centres at Division/Circle level w.e.f.01.07.2017 -assist taxpayers for e-filing of returns and explain the procedures -Orders issued- Reg. **** After implementation of GST w.e.f 01.07.2017 in the state, department has initiated action for smooth transition into GST and established the Facilitation centres cum help desks at division and circle level to assist the taxpayers in filing returns and educate them on provisions and procedures of the AP GST Act 2017. The department al

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GST – States – 25/2018-C.T./GST-55/2018-State Tax – Dated:- 26-10-2018 – GOVERNMENT OF WEST BENGAL DIRECTORATE OF COMMERCIAL TAXES 14, BELIAGHATA ROAD, KOLKATA-700015 NOTIFICATION BY THE COMMISSIONER OF STATE TAX Notification No. 25/2018-C.T./GST Dated: 26.10.2018 Notification No. 55/2018-State Tax In exercise of the powers conferred by section 168 of the West Bengal Goods and Services Tax Act, 2017 (West Ben. Act XXVIII of 2017) read with sub-rule (5) of rule 61 of the West Bengal Goods and Se

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GST – States – (01-V/2018) No. KGST.CR.01/2017-18 – Dated:- 26-10-2018 – Office of the Commissioner of Commercial Taxes (Karnataka) Vanijya Therige Karyalaya, Gandhinagar, Bengaluru, NOTIFICATION (01-VI 2018) No. KGST.CR.01/17-18. Dated: 26.10.2018 In pursuance of section 168 of the Karnataka Goods and Services Tax Act, 2017 (Karnataka Act 27 of 2017) and sub-rule (3) of rule 45 of the Karnataka Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), and in supersession

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GST – States – F.12(56)FD/Tax/2017-Pt-III-126 – Dated:- 26-10-2018 – GOVERNMENT OF RAJASTHAN FINANCE DEPARTMENT (TAX DIVISION) NOTIFICATION Jaipur, dated: October 26, 2018 In exercise of the powers conferred by section 148 of the Rajasthan Goods and Services Tax Act, 2017 (Act No. 9 of 2017) (hereafter in this notification referred to as the said Act ), read with section 45 of the said Act and rule 81 of the Rajasthan Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules

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GST – States – G.O. Ms. No. 141 – Dated:- 26-10-2018 – NOTIFICATIONS BY GOVERNMENT COMMERCIAL TAXES AND REGISTRATION DEPARTMENT NOTIFICATIONS UNDER THE TAMIL NADU GOODS AND SERVICES TAX ACT, 2017. [G.O. Ms. No. 141, Commercial Taxes and Registration (B-1), 26th October 2018, Aippasi 9, Vilambi, Thiruvalluvar Aandu-2049.] No. II(2)/CTR/933(a)/2018. In exercise of the powers conferred by Section 148 of the Tamil Nadu Goods and Services Tax Act, 2017 (Tamil Nadu Act 19 of 2017) (hereinafter in thi

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GST – States – ERTS(T) 65/2017/Pt. II/29-58/2018-State Tax – Dated:- 26-10-2018 – GOVERNMENT OF MEGHALAYA EXCISE, REGISTRATION, TAXATION & STAMPS DEPARTMENT NOTIFICATION No. 58/2018-State Tax Dated Shillong, the 26th October, 2018. No. ERTS(T) 65/2017/Pt. II/29.- In exercise of the powers conferred by section 148 of the Meghalaya Goods and Services Tax Act, 2017 (Act 10 of 2017) (hereafter in this notification referred to as the said Act ), read with section 45 of the said Act and rule 81 o

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2018 (11) TMI 829 – CESTAT MUMBAI – TMI – Imposition of penalty – suppression of alleged availment of inadmissible credit even after subsequent reversal upon audit noting before issue of show cause – Held that:- Admittedly, appellant’s availment of Cenvat credit which was held by the audit party is inadmissible is not being questioned in this appeal about its legality. In his Order-in-Appeal the commissioner has distinguished the appellant’s case in respect of earlier decisions concerning the appellant on similar issue passed by the adjudicating authority and he hold that previous audit cannot be taken as a plea of non-suppression.
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Section 11AC which deals with penalty on short levy or non levy of duty clearly indicates under 1(C) that such suppression of fact must have been done with intend to evade payment of duty and the intention of the appellant is found absent in the sense that its availment of allegedly inadmissible credit was previously subjected to scrutiny by the audit

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AGM for appellant Shri S.J. Sahu, Assistant Commissioner (AR) respondent ORDER Imposition of penalty on ground of suppression of alleged availment of inadmissible credit even after subsequent reversal upon audit noting before issue of show cause is the subject matter of this appeal. 2. Brief fact of the appellant s case is that it is a large tax payer which is subjected to CERA and EA-2000 audits every year. During EA audit conducted in the month of June 2016 it was brought to the notice of appellant that certain inadmissible Cenvat Credits were availed by the appellant for the period between Oct-11 to Mar-15 amounting to ₹ 8,71,885/- and the same was immediately reversed on 30th June 2016 itself. But it was put to show cause vide notice dated 04.11.2016 to show reason as to why penalty under Section 11AC of Central Excise Act 1944 read with rule 15(2) of CENVAT Credit Rules, 2004 was not to be imposed for willful suppression of fact with intend to evade payment of duty as well

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ct of the appellant since entire allegedly erroneous credit is only 0.2% of the total availed of credit of ₹ 45,37,57,775/- covering 72,266 numbers of invoices and error might have occured in handling such huge volume of data. The Learned Counsel for the appellant Shri Jitendra Khare & Shri Kishore Ahjuja further submitted that in the previous occasions, on similar situations, favourable Order-in-Originals had been passed in favour of appellant and the same may be treated as judicial precedent in setting aside the order. 4. In response to such submissions of the appellant, the Learned AR for the Department Shri S.J. Sahu supported the order of the Commissioner (Appeals) and the rationality of his findings. Referring to the discussion made by the Commissioner (appeals) at Para 40, he submitted that appellant had misstated the description of services as manpower salary, wages but the expenditure covered was towards reimbursement of travelling expenses, hotel bill of staff debit

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g the appellant on similar issue passed by the adjudicating authority and he hold that previous audit cannot be taken as a plea of non-suppression. To him audit is nothing but vouching a document in a selective and comprehensive way but it is not a complete checking of each and every document for which it cannot be said that there was no suppression or non disclosure of fact since it was appellant s responsibility to bring facts of availment of credit which they failed to do. However, in order to find out the purpose of audit, reference is made by me to the Manual published by the Institute of Chartered Accountants of India in respect of EA audit and CERA audit. Under Chapter 17 it has been reflected that the idea behind such conduct of verification is to reasonably ensure that no amount, which under the central excise law is chargeable as duty, escapes taxation and the process of verification is always carried out in the presence of assessee. In the process, the auditor is required to

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he OIO and OIA, the credit was held to be inadmissible on the ground that after sale services credit should not go to the manufacture but nowhere it has been referred that sale was done by the third party other than the manufacturer itself but there is no point in discussing on the merit of admissibility of the credit since the same is accepted by the appellant and not challenged though there is a difference between acceptance of the direction of the executive authority and imposition of tax without compliance to Article 265 of the Constitution of India. 7. Appellant has placed heavy reliance on the case law reported in 2015-TIOL-223-SC-CX in the matter of Commissioner of Central Excise, Bangalore vs. Pragathi Concrete Products (P) Ltd. where in the Hon ble apex court in Para 3 has observed as follows: It is also found as a matter fact, that the unit of the respondent was audited during this period several times and there were physical inspection by the Department as well. Therefore, t

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2018 (11) TMI 842 – CESTAT MUMBAI – TMI – Rectification of mistake – section 35C(2) of Central Excise Act, 1944 – Held that:- The decision of the Government of India supra is neither binding on us nor should be so construed as to deny the present application which seeks a limited relief within the scope of section 35C(2) of Central Excise Act, 1944. That opinion was also not available to persuade the Tribunal in composing the final order, now sought to be rectified, that was rendered.
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Doubtlessy, numerosity adaptation effect should not influence judicial decisions but it would do well for the applicant Commissioner not to be oblivious of the congruity of cognition on 'duty free' supplies and to forbear from projecting any dissonance with the decision of the Tribunal as lapsus calami.
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There are no mistakes apparent in the record, as well as in the decision of the Tribunal, to warrant rectification – application dismissed. – APPLICATION NOS: ST/ROM/85493, 85498 to 85504/201

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Act, 1994. 2. Narrating the contours of the dispute as presented during the appeal proceeding, not warranting elaboration here, Learned Authorised Representative referred to paragraph 13 to 20 and to paragraph 26 of the final order of the Tribunal which, according to him, placed unwonted emphasis on 'taxable territory' to arrive at the conclusion that tax was collected from M/s Flemingo Duty Free Shops P Ltd without authority of law and thereby exceeded the scope of appeal which was limited to the determining of the activity of M/s Flemingo Duty Free Shops P Ltd as export of goods. He also pointed out that the present application, by relying upon the definition of 'India' in section 65B(27) of Finance Act, 1994 and section 2(27) of Customs Act, 1962, also sought rectification of that mistaken conclusion. Furthermore, according to him, the frontiers of taxable territory having been decided upon by the Hon'ble Supreme Court in Aban Loyd Chiles Offshore Ltd v. Union o

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e shops' are outside the 'taxable territory' should not, by any measure of propriety, be maintainable before us. We do not propose to dilate on that submission in the present application. 4. Rebutting the alleged mistakes enumerated in the present application, Learned Chartered Accountant representing the respondent adverted that it was Revenue which was at variance with the findings of the two lower authorities, who, with no trace of ambiguity, had held the transactions of 'duty free shops' in 'international airports' to be export of goods entitling the respondent to rebate of tax paid on services received by an exporter and used for export of goods, as envisaged in notification no. 41/2012-ST dated 29th January 2012, and that, in the face of such obdurate refusal to accept the logical reasoning adopted in the impugned order, the Tribunal was compelled to drive the point home in no uncertain terms even by indulgence in theoretical exercise. It was also poin

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pered by further repetition of these oft-reiterated submissions can hardly be labelled as manifest mistake. In confirming the orders of the lower authorities, the Tribunal has impliedly adopted the record of those proceedings as the submissions of Learned Authorized Representative were by no means novel. The cavil of the applicant-Commissioner that the written submissions were not detailed in the order of the Tribunal is borne out by the records but that these were not considered, or that an entirely different outcome may have emerged, is not so apparent. The order of the Tribunal has, with approval, referred to the findings of the lower authorities thus obviating the need for further demonstration of. the submissions having been considered. Needless to say, it is a fallacy to equate narration or assertion with acceptable disposal of submissions. 6. All that remains for disposal is the allegation of taint of mistake in the foray of the final order of the Tribunal into 'taxable terr

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nsequent upon the paradigm shift to 'negative list'-an imperative in the context of an intangible levy on that which, a metaphorical palimpsest, is sensible only in the recipient. Till then, the tax laws of the country did not ever require this crutch. It is, therefore, inappropriate on the part of Learned Authorized Representative to suggest that the Hon'ble Supreme Court in re Aban Lloyd Chiles Offshore Ltd, while resolving a dispute on the geographical jurisdiction for levy of tax on tangible goods, did draw the circle within which 'taxable territory' would lie. For the purposes of Finance Act, 1944, with effect from 1st July 2012, 'taxable territory' has a connotation and 'India' has a distinct definition; the equating of the two may well suit the applicant-Commissioner but inappropriate citing would not advance that cause. 8. As to whether that reasoning, if it did impact upon the confirmation of the orders of the two lower authorities, was corr

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urt in Hotel Ashoka v. The Assistant Commissioner of Commercial Taxes and Anr [(2012) 3 SCC 204] as well as section 2 (27) of Customs Act, 1962, goes on to state that 13 In view of aforementioned findings of the Hon'ble Supreme Court, the definition of Section 2 (27) of the Customs Act 1962 would not apply, when seen in the context of levy Customs duty (sic) or imposition of Taxes on any transaction effected at Duty Free shop located in the Customs Area beyond and outside the Customs Frontiers of India… 14. Therefore, the Central Government, in view of the above holds that the transactions effected at the Duty Free Shops at the arrival or departure of the International Airports in India, might have taken place within the geographic territory of India, but for the purposes of levy of Customs Duties or any other taxes, the area of Duty Free shops shall be deemed to be the area beyond the customs frontiers of India…. 9. The decision of the Government of India supra is neither

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2018 (11) TMI 857 – SUPREME COURT – TMI – Concessional rate of duty – import of components at concessional rate of duty for manufacture of mobile phone and LED/LCD televisions at their factory in Uttarakhand – Held that:- The appeal is admitted – Issue notice on the application for stay. – Civil Appeal Diary No(s). 35978/2018 Dated:- 26-10-2018 – HON'BLE MR. JUSTICE S.A. BOBDE And HON'BLE MR. JUSTICE L. NAGESWARA RAO For the Petitioner : Mr. Arvind P. Dattar, Sr. Adv.Mr. Aditya Bhattac

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GST – States – 45/2018-State Tax – Dated:- 26-10-2018 – GOVERNMENT OF ARUNACHAL PRADESH DEPARTMENT OF TAX & EXCISE ITANAGAR Notification No. 45/2018-State Tax The 26th October, 2018 No. GST/23/2017/Vol-I.-In exercise of the powers conferred by section 148 of the Arunachal Pradesh Goods and Services Tax Act, 2017 (7 of 2017) (hereafter in this notification referred to as the said Act ), read with section 45 of the said Act and rule 81 of the Arunachal Pradesh Goods and Services Tax Rules, 2

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GST – States – CIRCULAR No. 69/2018 – Dated:- 26-10-2018 – CIRCULAR Commissioner of State Tax, Gujarat State, Ahmedabad Dated 26th October, 2018 CIRCULAR No.69/2018 No. GSL/GST/B. 9 Subject: Processing of Applications for Cancellation of Registration submitted in FORM GST REG-16 Reg. The Board is in receipt of representations seeking clarifications on various issues in relation to processing of the applications for cancellation of registration filed by taxpayers in FORM GST REG-16. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the Commissioner of State Tax, in exercise of its powers conferred by section 168 (1) of the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the GGST Act ), hereby clarifies the issues as detailed hereunder: 2. Section 29 of the GGST Act, read with rule 20 of the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the GGST Rules ) provide

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h cases, the 30-day deadline may be liberally interpreted and the taxpayers application for cancellation of registration may not be rejected because of the possible violation of the deadline. 4. While initiating the application for cancellation of registration in FORM GST REG-16, the Common portal captures the following information which has to be mandatorily filled in by the applicant: a) Address for future correspondence with mobile number and email address; b) Reason for cancellation; c) Date from which cancellation is sought; d) Details of the value and the input tax/tax payable on the stock of inputs, inputs contained in semi-finished goods, inputs contained in finished goods, stock of capital goods/plant and machinery; e) In case of transfer, merger of business, etc., particulars of registration of the entity in which the existing unit has been merged, amalgamated, or transferred (including the copy of the order of the High Court / transfer deed); f) Details of the last return fi

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tration should be immediately accepted by the proper officer and the order for cancellation should be issued in FORM GST REG-19 with the effective date of cancellation being the same as the date from which the applicant has sought cancellation in FORM GST REG-16. In any case the effective date cannot be a date earlier to the date of application for the same. 6. In situations referred to in (a) or (b) in Para 5 above, the proper officer shall inform the applicant in writing about the nature of the discrepancy and give a time period of seven working days to the taxpayer, from the date of receipt of the said letter, to reply. If no reply is received within the specified period of seven working days, the proper officer may reject the application on the system, after giving the applicant an opportunity to be heard, recording reasons for rejection in the dialog box that opens once the Reject button is chosen. If reply to the query is received and the same on examination is found satisfactory

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have incurred under sub-section (5) of the section 29 of the GGST Act It may be noted that the last date for furnishing of FORM GSTR-10 by those taxpayers whose registration has been cancelled on or before 30.09.2018 has been extended till 31.12.2018 vide Government Notification, Finance Department No. (GHN-108)GST-2018/S.148(100-TH dated the 26th October, 201 8, Notification No. 58/2018-StateTax. 8. Further, sub-section (5) of section 29 of the GGST Act, read with rule 20 of the GGST Rules states that the taxpayer seeking cancellation of registration shall have to pay, by way of debiting either the electronic credit or cash ledger, the input tax contained in the stock of inputs, semi-finished goods, finished goods and capital goods or the output tax payable on such goods, whichever is higher. For the purpose of this calculation, the stock of inputs, semi-finished goods, finished goods and capital goods shall be taken as on the day immediately preceding the date with effect from which

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input tax credit available, then the difference shall be paid by him/her in cash. It is reiterated that, as stated in sub-section (3) of section 29 of the GGST Act, the cancellation of registration does not, in any way, affect the liability of the taxpayer to pay any dues under the GST law, irrespective of whether such dues have been determined before or after the date of cancellation. 9. In case the final return in FORM GSTR-10 is not filed within the stipulated date, then notice in FORM GSTR-3A has to be issued to the taxpayer. If the taxpayer still fails to file the final return within 15 days of the receipt of notice in FORM GSTR-3A, then an assessment order in FORM GST ASMT-13 under section 62 of the GGST Act read with rule 100 of the GGST Rules shall have to be issued to determine the liability of the taxpayer under sub-section (5) of section 29 on the basis of information available with the proper officer. If the taxpayer files the final return within 30 days of the date of serv

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sure that a taxpayer is freed from the routine compliances, including filing returns, under GST Act during the pendency of the proceedings related to cancellation. Although the provisions of GGST (Amendment) Act, 2018 have not yet been brought into force, it will be prudent for the field formations not to issue notices for non-filing of return for taxpayers who have already filed an application for cancellation of registration under section 29 of the GGST Act. However, the requirement of filing a final return, as under section 45 of the GGST Act, remains unchanged. 12. It may be noted that the information in table in FORM GST REG-19 shall be taken from the liability ledger and the difference between the amounts in Table 10 and Table 1 of FORM GST REG-16. 13. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Commissioner. (P D Vaghela) Commissioner of State Tax, Gujarat State, Ahmedabad – Circular – Trade Notice – Public Notice –

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GST – States – CIRCULAR No. 71/2018 – Dated:- 26-10-2018 – CIRCULAR Commissioner of State Tax, Gujarat State, Ahmedabad Dated 26th October, 2018 CIRCULAR No. 71/2018 No.GSL/GST/B.11 Subject: Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor. Representations have been received seeking clarification on certain issues under the GST laws. The same have been examined and the clarifications on the same are as below: S.No. Issue Clarification 1. Whether the amount required to be deposited as advance tax while taking registration as a casual taxable person (CTP) should be 100% of the estimated gross tax liability or the estimated tax liability pay

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vision for extension of same by the proper officer for a further period not exceeding ninety days. Various representations have been received for further extension of the said period beyond the period of 180 days, as mandated in law. 1. It is clarified that in case of long running exhibitions (for a period more than 180 days), the taxable person cannot be treated as a CT P and thus such person would be required to obtain registration as a normal taxable person. 2. While applying for normal registration the should upload a copy of the allotment letter granting him permission to use the premises for the exhibition and the allotment letter/consent letter shall be treated as the proper document as a proof for his place of business. 3. In such c

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ved excess credit from ISD may deposit the said excess amount voluntarily alongwith interest if any by using FORM GST DRC-03. 3. If the said recipient unit(s) does not come forward voluntarily, necessary proceedings may be initiated against the said unit(s) under the provisions of section 73 or 74 of the GGST Act as the case may be. FORM GST DRC-07 can be used by the tax authorities in such cases. 4. It is further clarified that the ISD would also be liable to a general penalty under the provision contained in section (122)(1)(ix) of the GGST Act. 2. Difficulty if any, in the implementation of this circular may be brought to the notice of the Commissioner. (PD Vaghela) Commissioner of State Tax Gujarat State, Ahemdabad – Circular – Trade No

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GST – States – (23/2018) No. FD 47 CSL 2017 – Dated:- 26-10-2018 – FINANCESECRETARIAT NOTIFICATION (23/2018) No. FD 47 CSL 2017, Bengaluru, dated 26/10/2018 In exercise of the powers conferred by Section 148 of the Karnataka Goods and Services Tax Act, 2017 (Karnataka Act 27of 2017) (hereafter in this notification referred to as the said Act ), read with Section 45 of the said Act and rule 81 of the Karnataka Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), the Go

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2018 (11) TMI 1465 – CESTAT CHENNAI – TMI – Commercial Construction services – eligibility for abatement of 67% of the taxable value – Department was of the view that cum-tax benefit has to be calculated first and then abatement should be taken on such value – present case is from April 2007 to March 2009 – Held that:- The contracts entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service.
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The Tribunal in the case of Real Value Promoters Ltd. [2018 (9) TMI 1149 – CESTAT CHENNAI] had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable o

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ame they are heard together and are disposed by this common order. 2. Brief facts of the case are that the appellants are paying service tax under the head commercial construction service. The period involved in the first appeal is from April 2007 to September 2007 and the period involved in the second appeal is from October 2007 to March 2009. They are eligible for abatement of 67% of the taxable value as per Notification No. 1/2006 dated 1.3.2006. The appellants are paying service tax taking the gross amount received from the clients as cum-tax value. Department was of the view that cum-tax benefit has to be calculated first and then abatement should be taken on such value. Show cause notices were issued proposing to demand service tax on construction services along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and penalties in the first appeal. In appeal, Commissioner (Appeals) upheld the same. However the a

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th sides, it is brought to light that the period involved in the present case is from April 2007 to March 2009. The demand has been raised in the show cause notice under construction of residential complex services. The contracts entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service. The Tribunal in the case of Real Value Promoters Ltd. (supra) had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts. Further, it was held that after 1.6.2007, demand in respect o

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service tax will be levied at only 2 per cent of the total value of the words contract . 7.10 The issue was analyzed by the Hon ble Apex Court in Larsen & Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of service tax only with effect from 1.6.2007 by introduction of Section 65(105)(zzzza) i.e. Works Contract Services. As pointed out by the ld. counsels for appellants, there is no change in the definition of CICS/CCS/RCS after 1.6.2007. Therefore only those contracts which were service simpliciter (not involving supply of goods) would be subject to levy of service tax under CICS / CCS / RCS prior to 1.6.2007 and after. Our view is supported by the fact that the method / scheme for discharging service tax on the service portion

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assification of aforesaid services would undergo a change in case of long term contracts even though part of the service was classified under the respective taxable service prior to 1-6-2007. This is because works contract describes the nature of the activity more specifically and, therefore, as per the provisions of Section 65A of the Finance Act, 1994, it would be the appropriate classification for the part of the service provided after that date. 7.12 Thus, for example, while construction of a new residential complex as a service simpliciter would find a place under section 65(105)(30b) of the Act, the same activity as a composite works contract will require to be brought under section 65(105)(zzzza) Explanation (c). For both these categories for the definition of residential complex, the definition given in section 65(105)(91a) will have to be adopted as discussed above will have to be taken into account. 7.13 We find sustenance in arriving at this conclusion by a number of decisio

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eal, the Revenue submitted that the respondent were engaged in construction services liable to tax under tax entry Section 65(105) (xxq). The grievance of the Revenue is with reference to commercial nature of the construction undertaken by the respondent and not on the correct classification of taxable activity. b. In the case of Skyway Infra Projects Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai – 2018-TIOL-360- CESTAT-MUM, in respect of identical issue for the period from 2005 to 2012, the Tribunal in para 7 has held as under:- 7. On careful consideration of the submissions made by both the sides, we find that the issue falls for consideration is whether the services rendered by the appellant in respect of 52 contracts entered with various Govt. authorities need to be taxed under MMRC/CICS/ECIS or otherwise. It is on record and undisputed that the adjudicating authority has specifically held that all the 52 contracts which has been executed by the appellants are with material. Le

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e and we do so. c. In the case of URC Construction (P) Ltd. Vs. Commissioner of Central Excise, Salem – 2017 (50) STR 147, the Tribunal in paragraphs 9, 10 and 11 has held as under:- 9. The Hon ble Supreme Court in re Larsen & Toubro & Ors. has decided thus 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines taxable service as any service provided . All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for su

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ct service . On the contrary, the submission of the appellant that they had been providing works contract service had been rejected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period from 1st June, 2007 to 30th September, 2008 the narrow confines of the show cause notices do not permit confirmation of demand of tax on any service other than commercial or industrial construction service . It is already established in the aforesaid judgment of the Hon ble Supreme Court that the entry under Section 65(105)(zzd) is liable to be invoked only for construction simpliciter. Therefore, there is no scope for vivisection to isolate the service component of the contract. d. In the case of Logos Construction Pvt. Ltd. Vs. Commissioner of Central Excise as reported in 2018 (6) TMI 1361, the Tribunal has held as under:- 5.1 The payment upto 01.06.2007 will get extinguished on account of the law that has been laid down by the Apex Court in the ca

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of around ₹ 82 lakhs under this category after the visit of the departmental officers and therefore an amount of ₹ 36,88,611/- demanded in the impugned order should be considered as having been discharged. We find merit in his argument and hence the demand of ₹ 26,88,611/- under works contract service for the period 01.04.2008 to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the officers. However, the interest liability if any that arise on this amount if not paid already will have to be discharged by the appellants. So ordered. 8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial constructio

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e or Construction of Complex Service, cannot therefore sustain. In respect of any contract which is a composite contract, service tax cannot be demanded under CICS / CCS for the periods also after 1.6.2007 for the periods in dispute in these appeals. For this very reason, the proceedings in all these appeals cannot sustain. 6. Following the above decision, we are of the considered opinion that the demand of service tax under commercial or industrial construction service (residential complex) cannot sustain after the period 1.6.2007. The levy of service tax prior to 1.6.2007 cannot also sustain by application of the decision of the Hon ble Supreme Court in the case of Larsen & Toubro Ltd. – 2015 (39) STR 913 (SC). 7. From the discussions made above, we hold that the impugned orders cannot sustain and are set aside. The appeals are allowed with consequential relief, if any. (Operative portion of the order was pronounced in open court) – Case laws – Decisions – Judgements – Orders –

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2018 (11) TMI 1466 – CESTAT CHENNAI – TMI – Commercial or industrial construction service – non-payment of service tax – case of appellant is that they fall under the category of works contract service involving execution of composite contracts and not liable to pay service tax – Held that:- The contract entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service.
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The Tribunal in the case of Real Value Promoters Ltd. [2018 (9) TMI 1149 – CESTAT CHENNAI] had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable only if the contracts are pure

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– 06 to 2008 – 09 under the category of commercial or industrial construction service, which is a taxable service. On the basis of intelligence gathered by the Central Excise officers that the appellant is not paying service tax under the said category, investigations were initiated against the appellant and show cause notice was issued proposing to recover service tax of ₹ 4,31,559/- along with interest and penalties. After due process of law, the original authority confirmed the demand under the category commercial or industrial construction service . In appeal, Commissioner (Appeals) set aside the demand prior to 1.6.2007 and upheld the demand along with interest and penalties for the remaining period under works contract service. Hence this appeal. 2. On behalf of the appellant, ld. counsel Shri M. Kannan appeared and argued the matter. He submitted that the period involved in this appeal is prior to March 2009. He submitted that the entire demand is unsustainable as the acti

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ract entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service. The Tribunal in the case of Real Value Promoters Ltd. (supra) had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts. Further, it was held that after 1.6.2007, demand in respect of composite contracts would fall under works contract service only. The relevant portion of the said decision is reproduced as under:- 7.8 On the contrary, being composite works contracts, they will necessarily fall within th

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tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of service tax only with effect from 1.6.2007 by introduction of Section 65(105)(zzzza) i.e. Works Contract Services. As pointed out by the ld. counsels for appellants, there is no change in the definition of CICS/CCS/RCS after 1.6.2007. Therefore only those contracts which were service simpliciter (not involving supply of goods) would be subject to levy of service tax under CICS / CCS / RCS prior to 1.6.2007 and after. Our view is supported by the fact that the method / scheme for discharging service tax on the service portion of composite contract was introduced only in 2007. 7.11 The ld. AR Shri A. Cletus has tried to counter this contention by stating that works contract service is service / activity which would be of a general nature whereas th

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scribes the nature of the activity more specifically and, therefore, as per the provisions of Section 65A of the Finance Act, 1994, it would be the appropriate classification for the part of the service provided after that date. 7.12 Thus, for example, while construction of a new residential complex as a service simpliciter would find a place under section 65(105)(30b) of the Act, the same activity as a composite works contract will require to be brought under section 65(105)(zzzza) Explanation (c). For both these categories for the definition of residential complex, the definition given in section 65(105)(91a) will have to be adopted as discussed above will have to be taken into account. 7.13 We find sustenance in arriving at this conclusion by a number of decisions of the Tribunal in which it has held as under:- a. In the case of Commissioner, Service Tax, New Delhi Vs. Swadeshi Construction Company – 2018-TIOL-1096-CESTAT-DEL, the Tribunal in para 7 has held as under:- 7. We note th

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undertaken by the respondent and not on the correct classification of taxable activity. b. In the case of Skyway Infra Projects Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai – 2018-TIOL-360-CESTAT-MUM, in respect of identical issue for the period from 2005 to 2012, the Tribunal in para 7 has held as under:- 7. On careful consideration of the submissions made by both the sides, we find that the issue falls for consideration is whether the services rendered by the appellant in respect of 52 contracts entered with various Govt. authorities need to be taxed under MMRC/CICS/ECIS or otherwise. It is on record and undisputed that the adjudicating authority has specifically held that all the 52 contracts which has been executed by the appellants are with material. Learned Counsel was correct in bringing to our notice that the said findings of the adjudicating authority that the appellant is eligible for abatement of 67% of the value of the goods is in itself the acceptance of the fact tha

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amp; Toubro & Ors. has decided thus 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines taxable service as any service provided . All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts

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r the period from 1st June, 2007 to 30th September, 2008 the narrow confines of the show cause notices do not permit confirmation of demand of tax on any service other than commercial or industrial construction service . It is already established in the aforesaid judgment of the Hon ble Supreme Court that the entry under Section 65(105)(zzd) is liable to be invoked only for construction simpliciter. Therefore, there is no scope for vivisection to isolate the service component of the contract. d. In the case of Logos Construction Pvt. Ltd. Vs. Commissioner of Central Excise as reported in 2018 (6) TMI 1361, the Tribunal has held as under:- 5.1 The payment upto 01.06.2007 will get extinguished on account of the law that has been laid down by the Apex Court in the case of Larsen & Toubro Ltd., (supra), relied upon by the Ld. Counsel. So ordered. 5.2 The Ld. Counsel has been at pains to point out that on-going projects which were only in the nature of works contract prior to 01.04.2007

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merit in his argument and hence the demand of ₹ 26,88,611/- under works contract service for the period 01.04.2008 to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the officers. However, the interest liability if any that arise on this amount if not paid already will have to be discharged by the appellants. So ordered. 8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service in the light of the Hon ble Supreme Court judgment in Larsen & Toubro (supra) upto 1.6.2007 b. For the period after 1.6.2007, service tax liability under category of commercial

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