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In Re : M/s. Louis Dreyfus Company India Private Limited
GST
2018 (10) TMI 1145 – AUTHORITY FOR ADVANCE RULING, PUNJAB – 2018 (18) G. S. T. L. 377 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, PUNJAB – AAR
Dated:- 28-9-2018
AAR/GST/PB/001
GST
NAVDEEP BHINDER AND G.S. BAINS, MEMBER
Present for the Applicant: Sh. Abhishek Mishra, C.A. & Sh. Anand Aggarwal, C.A.
(Note: An Appeal against this order lies with the Appellate Authority in terms of Section 99 and Section 100 of the CGST Act, 2017 and Section 99 and Section 100 of the PGST Act, 2017 within a period of thirty days from the date of communication of this order.)
M/s. Louis Dreyfus Company India Private Limited, Ground Floor, House No. 378, Model Town, Phase-I, Bhatinda, 151001(Punjab) hereinafter referred to as 'applicant' had submitted an application for advance ruling in form GST ARA-01 vide his letter dated 07.06.2018 received on 20.06.2018 seeking “to determine the applicability of Goods and Services

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shra & Sh. Anand Aggarwal, Chartered Accountants appeared on behalf of the applicant with regard to advance ruling application and reiterated their submissions made in Annexure-1 & Annexure-2 of their advance ruling application dated 07-06-2018. They stated that the activity of M/s. Louis Dreyfus Company India Private Limited, Ground Floor, House No. 378, Model Town, Phase-I, Bhatinda, 151001 (Punjab) of signing forward contracts  for sale/purchase of Cotton wherein the contract is closed by settlement without supply of goods would not be covered under the term “Services” as defined under section 2(102) of the CGST Act, .2017, in as much as these above said activity would be covered under the term “Securities” which has been excluded from the scope of “Services”. They argued that the legal scope of “Services” would prevail over the scope of “Supply” as defined in section 7 of the CGST Act, 2017. They also stressed that the question raised by them in the present advance ruling appl

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ing on the question(s) on which advance ruling is required
Background
1. The Applicant is a Company incorporated under the Indian Companies Act, 1956, and is inter alia engaged in the business of purchase and sale of cotton, oil and grains. The Appellant, for the purposes of carrying on its business, is registered   under the provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the 'CGST Act') and State Goods and Services Tax Act, 2017 vide Goods and Services Tax Identification No. 03AAACL7361E1ZV.
Nature of activity proposed to be undertaken by the Applicant
2. In order to stay competitive in the trading of commodities and to ensure minimal profitability in highly volatile commodities market, the Company enters into customized Contracts which are an ensemble of “Supply” cum “Settlement” Contracts. Such Contracts culminate into and entail performance either by way of actual delivery of goods or settlement by payout of differential sum.
3

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ice tax, duties, cesses, local taxes and any other indirect taxes. Any additional tax burden, duties and cesses etc. at the time of invoicing shall be borne by the recipient.
L.
Incoterms
Ex-Gin/Warehouse, Gujarat (INCOTERMS 2010)
M.
HSN Code
5201
N.
Payment Terms
Margin Money at 10% value of goods (plus taxes) to be paid by recipient to supplier within 3 working days from the contract generation date. Balance payment as per last date of payment.
O.
Cash Discount
Cash discount for a maximum 15 days at the rate of 15% p.a. prorated for early payment before the last date of payment shall be given to recipient, on total contract value including taxes or received amount whichever is lower
P.
Interest on Margin Money
Not Applicable
Q.
Last Payment/ Carry Terms (Supplier's Exclusive Option and sole discretion)
On any unpaid Outstanding amount inclusive of taxes last date of payment (clause l) carry will be charged prorated as follows:
1. For rest of India except Punjab, Ha

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r the time period stipulated in the Contract at as and when demanded by the Supplier as the Contractual terms, or delays approval (clause 4 of the GTCs), Supplier has the exclusive right exercisable as its sole discretion to settle / close the Contract, and debit any loss and charges to Recipient's account.”
Purchase Contract
A.
PO generation date
09/12/2017
B.
Trade Date
08/12/2017
B.
TT no.
RS 17-18/0297
C.
Contract no.
PO/PB/2017-18/0043
E.
Quantity
110 (One Hundred Ten Only) Fully pressed Cotton Bales, Bales weight of 165 Kg. each. +/- 3.0% variation in weight allowed
F.
Specification
1 Growth
2. Station
3. Variety
4. Grade
5. Staple
6. Micronaire
7. Strength
8. Trash
9. Moisture
Indian raw cotton crop 2017-18 Crop Year Punjab (PB)
All Punjab
J-34-RJ-RG
Midding
28+ mm Minimum
4.0+ NCL
28 GPT Minimum
4 % (1:1 discount above 4%)
9% (Moisture will be checked on spot (at gin) with moisture meter before approval)
G.
Price
INR 4038 (Rupees Four Thou

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nd empty/loaded weights at time of receipt.
L.
HSN Code
5201
M.
Payment Terms
Payment will be made within 8 days from date of pressing but after lifting of goods by the Recipient from Supplier's designated gin/ warehouse.
N.
Cash Discount
Cash discount of 16.8% per 360 days for max 8 days pro-rated will be deducted by the Recipient for early payment on total Invoice value including taxes, if any. Bank charges, if any, to Recipient's account.
Clause 3 of the General Terms and Conditions applicable to Cotton Purchase Contracts / Agreements (“GTC”) –
“In case of non-delivery or failure to fulfill the contract by Suppliers per
Specification (Clause F of the contract), the contract will be settled as per CAI Rules and By-laws,
Supplier to give written intimation via Broker or directly to the Recipient if it cannot fulfill the delivery of the contracted quantity (Clause E of the contract) as per Specification (Clause F of the contract).
For Settlement/ Non-Delivery, average bal

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supply of predetermined quantity of cotton.
6. On the other hand, in case of “closure” or “washout” of aforesaid Contracts, the party to the Contract which opts for such “closure” or “washout” is required to pay to the other party a sum equivalent to difference between the Settlement rate and the rate of cotton at which the supply of the same is agreed upon.
7. The Settlement rate is enshrined in the Contract to be as follows:
Sale Contract – It is discretionary upon the Company to settle / close the Contract at the rate fixed by it. In this regard, the rate at which the Company settles is usually the market rate of cotton prevalent on the Commodities Exchange such as MCX on the day on which such settlement is made.
Purchase Contract – Market rate of cotton prevalent on Commodities Exchange such as MCX on the day on which such settlement is made.
The fixation of rate as per the Contract is binding on the other Party to the Contract without any room for aberration or further delibe

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ervices or both), made for consideration in course or furtherance of business such as sale, transfer, barter, exchange, license, rental, lease or disposal. Section 7(1) of the CGST Act reads as under:
“7. (1) For the purposes of this Act, the expression “supply” includes
(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
(b) import of services for a consideration whether or not in the course or furtherance of business;
(c) the activities specified in Schedule l, made or agreed to be made without a consideration; and
(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule ll.”
3. It is apparent that in case of “Settlement”, “Washout” or “Closure” of Contract, there is no supply of goods (i.e. Cotton in the instant case) and applicability of GST on supply of goo

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the GST Act is merely clarificatory in nature and in no manner tends to expand the ambit of transactions on which GST applies under the GST laws.
6. In the above backdrop, Serial No 5(e) of Schedule Il should be construed to mean that GST liability arises in the eventualities enlisted below as the same would be deemed to be supply of “services” under the GST law:
– agreeing to the obligation to refrain from an act;  
– agreeing to the obligation to tolerate an act or situation
– agreeing to the obligation to do an act
7. It is noteworthy that the aforesaid Entry in Schedule II is a combination of two activities on part of the deemed supplier of services, which are as follows:
– An overt act to agree to the obligation
– An activity which follows the agreement to the obligation i.e. to actually refrain from an act or to actually tolerate an act or situation
A combination of aforesaid two acts would result into rendering of “Service” in terms of Serial No. 5(e) of the Sched

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The second pre-requisite act of either “refrain from an act” or actually “tolerate an act or situation or to do an act is not fulfilled in the instant case as both the Parties to the Contract are bound by Contractual terms to settle the Contract financially. None of the Parties to the Contract perform an “act” or tolerate the same either in lieu of the transaction involving financial settlement. In simple words, the Party which faces the proposition of the other Party to “Washout” the Contract cannot do anything but accept the exclusive fall out of “Wash out” of Contract i.e. to accept the payment for settling the non-delivery financially. If either of the Parties do not follow the financial settlement as per the terms of the Contract, arbitration entails. In this regard, it would be too far-fetched to state that the Party which faces the “Washout” tolerated such act of the other Party to the Contract by not opting for arbitration and hence rendered a “Service” in terms of the GST Act

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y way of an example is apt as in such case one of the Parties agrees, out of his free will and discretion, to enter into non-compete agreement and also takes an “action” by not competing with the other Party to the Contract. Both the said ingredients of “agreeing to an obligation” and 'to refrain from and act or to tolerate an act or situation or to do an act” are being fulfilled and hence qualification of such “actions” in unison qualify as “Service” in terms of erstwhile Service tax law governed by Chapter V of the Finance Act, 1994. On the other hand, in the present factual matrix, neither following the exclusive mandate of the Contract is “agreeing to an obligation” nor not opting to take legal recourse i.e. to arbitrate can qualify as “refrain from and act or to tolerate an act or situation or to do an act”.
12. In light of the above argument, it emerges that payment of differential sum by the Party to the Contract for effecting “Washout” of the Contract can at best be constr

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to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged”
Section 2(102) defined services as 'anything other than goods, money and securities'.
15. “Securities” has been defined in Section 2(101) to read as under:
“Securities shall have the same meaning as assigned to it in clause (h) of Section 2 of the Securities Contracts (Regulation) Act, 1956.”
16. The definition of 'securities' as given in clause (h) of Section 2 of the Securities Contracts (Regulation) Act, 1956 (“SCRA”) is as follows:
“(h) “securities include-
(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;
(ia) derivative;
(ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes;
(ic) security rece

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ty derivatives” is defined as Section 2(bc) of SCRA, to read as follows:
“commodity derivative means a contract –
(i) for the delivery of such goods, as may be notified by the Central Government in the Official Gazette, and which is not a ready delivery contract; or
(ii) for differences, which derives its value from prices or indices of prices of such underlying goods or activities, services, rights, interests and events, as may be notified by the Central Government, in consultation with the Board, but does not include securities as referred to in sub-clauses (A) and (B) of clause (ac);]”
19. In this regard, reference is made to Entry No. 59 of Notification No. S.C. 3068(E) dated 27 September 2016 issued under Section 2(bc) of the SCRA which includes Cotton as follows:
“Cotton Complex (including Kapas, fibre, loose, half pressed, full pressed, yarn, pods, cloth)
20. Further, reference is made to Section 2(ea) of the SCRA which defines “Ready Delivery Contract” to mean as under:

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reading of the above provisions of SCRA, it emerges that Contract entered into for supply of cotton should qualify as “Commodity Derivative” in the  scenario where Contract is settled financially pursuant to which physical delivery of Cotton does not take place.
22. It is apparent that “Commodity Derivatives” are included in the definition of “Derivatives” and in turn the same is included in the definition of “Securities”. “Securities” are specifically excluded from the definition of “goods” and “services”
23. This is supported by Frequently Asked Questions (“FAQ”) no. 36 & 37 issued by GST authorities. The relevant extract if said FAQ is reproduced hereunder for easy of reference:
S.no.
Question
Answer
36
Would 'future contracts' be chargeable to GST?
Future contracts are in the nature of financial derivatives, the price of which is dependent on the value of underlying stocks or index of stocks or certain approved currencies and the settlement happens normally by way of

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ermined future date at a pre-determined price.
The settlement could be by way of actual delivery of underlying commodity/currency or by way of net settlement of differential of the forward rate over the prevailing market rate on the settlement date.
Where the settlement takes place by way of actual delivery of underlying commodity / currency, then such forward contracts would be treated as normal supply of goods and liable to GST.
Where the settlement takes place by way of net settlement of differential of the forward rate over the prevailing market rate on the settlement date, the same would be falling within the purview of 'securities' as defined in Section 2(101) of the CGST Act, 2017. As securities are neither 'goods' nor 'services' as defined in the CGST Act, 2017, future contracts are not chargeable to GST.
However, if some service charges or service fees or documentation fees or broking charges or such like fees or charges are charged, the same would

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we would first like to go through the legal structure under the CGST Act, 2017 (which should be hereinafter read to also mean Punjab GST Act, 2017, the provisions in both Acts being similar) imposing the tax. The charging Section i.e. Section 9 reads as follows:
“1) . . . . ……there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person”
Further, the scope of supply has been laid down in Section 7 of the CGST Act, 2017. Relevant portion of which reads as under:-
“7 (1) For the purposes of this Act, the expression “supply” includes all forms of supply of goods or services or both such as sale, tran

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disposal” mentioned in Section 7(1)(a) to see whether the situation of closure of the contract as per agreed terms, would be covered under these. While it is clear that this activity is not a sale transfer, barter, exchange, licence, rental or lease, it is also apparent that the situation of closure of contract which was related to supply of goods, would also not be covered under the term disposal. The term disposal carries a connotation that the goods physically leave the possession of the supplier, which is not the situation in the present case. Therefore, we reach the conclusion that the scenario of closure of contract by the applicant or its other contracting party would not amount to supply of goods and therefore, no goods and service tax would be applicable as far as supply of goods is concerned.
4. Now, it needs to be seen whether the activity of closure of contract by the applicant or the other contracting party would fall under the scope of the term 'service' or under the sc

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T Act, 2017 defines 'Securities' as “Securities shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);”. The definition of 'Securities' as given in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) (SCRA) is as follows:
“(h) securities include-
(i)………………
(ia) derivative;
………………”
From the above definition of 'securities', it is clear that securities include derivative.
4.2 Further, Section 2 (ac) of SCRA defines 'derivative' as:
“derivative”- includes
(A) …………………………………………..;
(B) …………………………………………..;
(C) commodity derivatives; and
(D) …………………………………………..;
The term “commodity derivatives” is defined as Section 2 (bc) of SCRA, to read as follows:
“commodity derivative means a contract –
(i) for delivery of such goods, as may be notified by

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od under such contract not being capable of extension by the mutual consent of the parties thereto or otherwise:
Provided that where any such contract is performed either wholly or in part:
(i) by realization of any sum of money being the difference between the contract rate and the settlement rate or clearing rate or the rate of any offsetting contract; or
(ii) by any other means whatsoever, and as a result of which the actual tendering of goods covered by the contract or payment of the full price therefor is dispensed with, then such contract shall not be deemed to be a ready delivery contract.”
4.3 While examining legal provisions to understand the meaning of the Term 'securities' under the SCRA, it becomes important to understand Section 18A of SCRA which lays down that:
“18A. Notwithstanding anything contained in any other law for the time being in force, contracts in derivative shall be legal and valid if such contracts are-
(a) traded on a recognised stock exc

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of purchase/sale of cotton contract by way of settlement between him and the other contracting party in terms of the contract, would be covered under the term 'securities' in the definition of 'services' in Section 2(102) of the CGST Act, 2017 and hence would not entail tax on services, does not seem to be valid.
5.Therefore, while it is forthcoming that legal provisions discussed above do not exclude the closure of purchase/sale of cotton contract by way of settlement between applicant and the other contracting party in terms of the contract from scope of services, and the applicant would therefore be liable to the provisions of Section 9 of the CGST Act, 2017, it is also noteworthy that executive instructions by way of answers to Frequently Asked Questions (FAQs) published under the FAQs on Financial Service on the Central Board  of Indirect Taxes and Customs (CBIC) website www.cbic.gov.in include settlement under forward contracts within the purview of 'se

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w of 'securities' as defined in Section 2(101) of the CGST Act, 2017. As securities are neither 'good” nor 'services' as defined in the CGST Act, 2017, future contracts are not chargeable to GST. However, if some service charges or service fees or documentation fees or broking charges or such like fees or charges are charged, the same would be a consideration for supply of service and chargeable to GST.
Therefore, it is evident that intention of the Government, evident from the answer to the above FAQ, is not to tax settlements under forward contracts where settlement takes place by way of net settlement of differential of the forward rate over the prevailing market rate on the settlement date. Therefore, we feel that if the executive instruction interprets legal provisions in a manner which provides relief to a taxpayer and publishes these on its website, such relief should flow to the taxpayer.
6. However, once such an executive decision passes on relief to a ta

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usually the market rate of cotton prevalent on the Commodities Exchange such as MCX on the day on which such settlement is made. ”
Purchase Contract- Market rate of cotton prevalent on Commodities Exchange such as MCX on the day on which such settlement is made”
7. It is seen that the settlement rate described by the applicant in sale contract is at variance from the settlement considered to be falling within the purview of securities as defined in Section 2(101) of the CGST Act, 2017 in the answer to FAQ No. 37. In the answer to FAQ No. 37, the settlement was described as differential of the forward rate over the prevailing market rate on the settlement date, while in the sale contract of the applicant, he has discretion to settle/ close the Contract at the rate fixed by him which may vary from sale price of cotton on commodity market on the day of settlement. The terms of purchase contract mentioned by the applicant are however in line with the settlement envisaged in answer to F

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ties to refrain from bringing in arbitration, which is also built in the contract, if the contract is settled by payment of agreed amount of monies. Therefore, this activity can clearly be considered as supply of service by 'agreeing to the obligation to refrain from an act', and would therefore by subject to applicable tax. The present activity is also a toleration of the act of not providing the other party to the contract, the agreed quantity of goods at agreed prices at the agreed date, on payment of agreed amount of monies to settle the contract. Therefore, this would be liable for consideration as supply of service by way of agreeing to the obligation to tolerate an act or a situation. It is also clear that the applicant and the other contracting party are agreeing to the obligation of doing an act viz. settling the contract by payment of agreed amount of monies if goods are not delivered in terms of the contract, and therefore this activity of theirs, by this measure too

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, it was a service and liable to taxation, The jurisdictional officer also relied upon an Advance Ruling passed by the Maharashtra Authority for Advance Ruling in support  of his view. Perusal of the definition of Service in Section 2(102) shows that the specific inclusions which follow the specific exclusions, have to be read completely and not in piecemeal. We feel that the words 'use of money' cannot be read in isolation as has been done by the jurisdictional officer while interpretation of the legal definition of Services. The Advance Ruling passed by the Maharashtra Authority for Advance Ruling was on completely different facts and had nothing in common with the specific question raised by the applicant. Therefore, we feel that the comments of the jurisdictional officer do not address the questions raised by the applicant in the present Advance Ruling application and therefore are not relevant while deciding the present application.
10. In view of the above discussio

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s Dreyfus Company India Pvt. Ltd. with the other party to the contract by way of payment of the differential of forward rate and rate fixed by the applicant using his discretion, such rate being different than the market price of cotton on the date of settlement, the same would not be falling within the purview of 'securities' as defined in Section 2(101) of the CGST Act, 2017 and would therefore be chargeable to GST.
(iii) In the forward contracts in cotton purchase being settled by M/s. Louis Dreyfus Company India Pvt. Ltd. with the other party to the contract by way of payment of the differential of forward rate and prevailing market rate on the settlement date, the same would be falling within the purview of 'securities' as defined in Section 2(101) of the CGST Act, 2017and would therefore not be chargeable to GST.
(Note: It may be noted that this Advance Ruling is based on the contract conditions conveyed by the applicant in his Advance Ruling Application and may

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M/s. Janoschka Graphic Services India Pvt. Ltd. Versus CCGST – III, Mumbai
Service Tax
2018 (10) TMI 1279 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 28-9-2018
Appeal No. ST/87664/2018 – A/87455/2018
Service Tax
Dr. Suvendu Kumar Pati, Member (Judicial)
Ms. Pritha Sarkar, CA for the appellant
Shri O.M. Shivadikar, AC (AR) for the respondent
ORDER
Denial of cenvat credit of Rs. 2,64,298/- pertaining to two quarters ending on December 2013 and March 2014 by the appellant EOU is under challenge in this appeal.
2. Factual backdrop of the case is that appellant is an 100% EOU service provider who commenced its operation in October 2013 and for the above referred two quarters cenvat credit amounting to Rs. 2,64,298/- was denied to the appellant vide order-in-original no. Refund/RKS/52/2015 dated 16.06.2015 that ultimately attained confirmity in the Order-in-Appeal. The Grounds of rejection are different in both orders. Order-in-originals indicates that app

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t for were produced before the original adjudicating authority along with bank statement in compliance to the deficiency memo but copy of service agreement with foreign client could not be produced by then as not available with them, but the adjudicating authority vide his order-in-original dated 16.06.2015 gave his finding that constitution certificate of the appellant and the foreign company, who was the recipient of the service, were not produced before him for which he rejected the claim of appellant, besides other grounds referred in order-in- original, though requirement of production of Constitution certificate was not found mentioned in the deficiency note. He further submitted that all those documents were produced before the Commissioner (Appeals), who rejected the appeal on narrow technical ground that reversal of cenvat credit for the corresponding period could not be ascertained from the ST-3 returns. In submitting Chartered Accountant report on bifurcation of cenvat credi

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ing the claim, and the same was not done by the appellant for which the appeal filed by them is liable to be rejected.
5. Heard at length from both sides and gone through the case records. Before giving any finding on the penalty it is pertinent to reproduce the finding of the Commissioner (Appeals) made at para 6 & 6.1 of his order which reads as follows:-
“6. I have carefully gone through the facts of the case on record, grounds of appeal in the Appeal memorandum and submissions made by the appellant. I find that the entire claim was rejected by the adjudicating authority on the ground of non-submission of the documents. I also find that during the personal hearing before the adjudicating authority, the appellant had declared that there is no agreement between the foreign client and the assessee, as both are group companies and all the service orders are received online. During the personal hearing before the adjudicating authority, the appellant failed to produce the evidences reg

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g to which “service” means any activity carried out by a person for another for consideration, and includes a declared service. Therefore, I find that the appellant entered in to agreement with M/s Janoschka Kippenhelm GmbH, Germany for Design Service which is to be treated as export of service under Rule 6A of the Service Tax Rules, 1994 as the service receiver is located outside the India. The department vide OIO no. Refund/RKS/146/2015 dated 26.08.2015 has also held that the appellant is exporting Design Service other than Interior decoration and Fashion designing.”
6. From his finding referred above, it is apparently clear that –
i) Service orders were received by the appellant company online from the foreign client;
ii) Copy of agreement between the receiver and provider of service and order-in-original in the subsequent period were filed by the appellant before him
iii) Service of the appellant is covered under 65(b)(4) of the Finance Act, 1994;
iv) Service of designing for

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s own.
7. It is pertinent to mention here that agreement for sale need not be necessarily a written one in a pre-defined format. It can be through oral agreement or written request made in letter correspondence. It can also be offer and acceptance communicated through emails. Therefore, rejection of refund claim on the ground that agreement copy has not been submitted is improper. Further Commissioner (Appeals) being empowered by Rule 35C of the Central Excise Act, which is equally applicable to service tax matter, is also empowered to make further enquiry and form an independent opinion and is not necessarily required to confine his views only on the order-in-original [MIL India Ltd. vs. CCE 2007 (260) ELT 188 (SC)]. He had apparently exercised that power and even accepted the copy of the agreement executed between the appellant and the overseas service recipient. Further, going by the order-in-original dated 25.08.2015 and 13.01.2015, in which refund claim amount has been referred i

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M/s Fertin Pharma Research & Development India Pvt. Ltd. Versus Commissioner of CGST, Navi Mumbai
Service Tax
2018 (10) TMI 1373 – CESTAT MUMBAI – 2020 (38) G. S. T. L. 33 (Tri. – Mumbai)
CESTAT MUMBAI – AT
Dated:- 28-9-2018
Appeal No. ST/86041 to 86045 & 86319/2018 – A/87552-87557/2018
Service Tax
DR. D.M. MISRA, MEMBER (JUDICIAL)
Shri D.H. Nadkarni, Advocate for Appellant
Shri M.P. Damle, AC (AR) for Respondent
ORDER
Per: Dr. D.M. Misra
These appeals are filed against Order-in-Appeal No. MKK/327-332/RGD/APP/2017 dated 14.12.2017 passed by the Commissioner of Central Excise & Service Tax (Appeals), Raigad.
2. Briefly stated facts of the case are that the appellants have been registered for providing taxable output service under the category of “Technical Testing and Analysis Service/Scientific and Technical Consultancy Service”. The appellant had claimed to have exported the said services to one M/s Fertin Pharma, Denmark. The inputs/raw materials on whi

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ch credit was availed do not fall within the scope of 'input service' as prescribed under Rule 2(l) of the CENVAT Credit Rules, 2004. Aggrieved by the said order, they filed appeal before the learned Commissioner (Appeals), who on the first count held that the research and development services provided by the appellant cannot be treated as an 'export service'; and on the issue of applicability of the definition of 'input service', he has observed that except in relation to two services, there has been nexus between the other input services and output services and accordingly the said services satisfied the definition as prescribed under Rule 2(l) of the CENVAT Credit Rules, 2004. Hence, the present appeals.
3. The learned Advocate Shri D.H. Nadkarni for the appellant submits that they had provided services outside India in relation to technical testing and analysis service. It is his contention that as per clause (d) of Rule 6A of Service Tax Rules, 1994, the place of the provision of

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s. As per CBEC Guidance on service tax vide TRU Circular dated 20.6.2012, note 5 of clarifies that it is essential that to cover under Rule 4, the goods should temporarily come under the physical possession or control of the service provider and without such effect, the service cannot be termed as rendered in India. In the present case, since the goods have been purchased from their Denmark company, hence provision of Rule 4(a) of the Place of Provision of Services Rules, 2012 will not be applicable. Further, he has submitted that period from April, 2013 to June, 2013, in similar facts in their own case, this Tribunal decided the issue in their favour reported as Fertin Pharma Research & Development Pvt. Ltd. – 2017 (6) GST 475 (T). Also, this Tribunal in the case of Commissioner of Central Excise, Pune-I Vs. Sai Life Sciences Ltd. – 2016 (42) STR 882 (Tri- Mum)&Principal Commissioner of Central Excise, Pune-I Vs. Advinus Therapeutics Ltd. – 2017 (51) STR 296 (Tri-Mum) held that undert

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f provisions of Service Rules, 2012 since the period involved in the said judgment relates to the period before 2005 and the matter was decided in favour of the assessee on the ground that export of service is always tax free. Therefore, the said ratio cannot be applicable after enactment of Place of Provisions of Service Rules, 2012. Further, he has submitted that judgment in Advinus Therapeutic's case, which was passed following the ratio in Sai Life Sciences Ltd. case, also cannot be considered to be a good law. The learned AR for the Revenue referred to the judgments of this Tribunal in support of their case namely, Crompton Greaves Ltd. – 2015-TIOL-2724-CESTAT-MUM, and Roha Dyechme Ltd. Vs. CCE, Raigad – 2017-TIOL-3448- CESTAT-MUM and submitted that The present facts are identical mirror image of the facts of the aforesaid judgments and hence, the services are since performed in India, therefore, Rule 6A of Service Tax rules, 1994 is not satisfied, consequently, the appellant are

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ature of export service and hence eligible to cash refund of accumulated CENVAT Credit. Also, in the case of Advinus Therapeutics Ltd. (supra), this Tribunal more or less under similar circumstances discussing all aspects of the issue held that scientific or technical consultancy service provided for the development of drugs to the overseas recipient of service was held to be 'export service'. This Tribunal observed as follows: –
“13. In the context of a catena of judgments and decisions that exports are not taxable and, with the most palpable manifestation of export of invisibles being the receipt of convertible foreign exchange from a recipient of service located outside the country, that services are taxable at the destination, the scope of Rule 4 must necessarily be scrutinized to ascertain if there was, indeed, legislative intent to deny acknowledgement as exporter to a certain category of service providers that were so privileged tell them. There is no dispute that the recipient

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on activities that would otherwise be performed by the recipient for itself. The new industry of hiving out or outsourcing of what was, conceivably, being done within the enterprise was intended to be subject to the new levy. In the matter of service rendered by respondent, this activity could, but for commercial viability, will be executed by the recipient within its own organization or the territory in which it exists. The satisfaction of the customer occurs upon an outcome which is possessed by the recipient. Hence, even if some of the activities are carried out in India, by no stretch can it be asserted that the fulfilment of the activity is in India. Therefore, the inescapable conclusion is that the location of the actual performance of the service is outside India and, even with the special and specific provision of Rule 4 of Place of Provision of Services Rules, 2012, the performance of service being rendered outside India would render it to be an export.
14. In this context,

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t, is that any service that is obtained by a person who has a fixed place of business in India is liable to tax for services availed by him in a foreign country. By way of an example, learned Counsel for the petitioner has cited that if such a person in India goes abroad, and has a haircut, he would be liable to pay service tax in India on the basis of Section 66A of the Act.
5. We are not at all convinced by this argument of learned Counsel for the petitioner. The rules that have been framed by the Central Government make it absolutely clear that taxable service provided from outside India is liable to service-tax. In the example given by the learned Counsel for the petitioner, there is no question on the service of haircut having been received in India.'
The intent in Rule 4 to remedy out some specific situations that would, otherwise, have enabled escapement from tax or leviability to tax where Rule 3 of Place of Provision of Services Rules, 2012 may not serve to confer jurisdict

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ich would, by default, be predicated by the intent in Rule 3. Consequently, a recipient in India would be liable to tax on such temporary imports for repairs while service to a recipient located abroad would not be taxable. This is in consonance with the privilege of exemption afforded to export of services. The special and distinct role of Rule 4 becomes clearer.
16. Not intended to tax the activity of altering goods supplied by the recipient of service or for repairs on goods, Rule 4(1) of Place of Provision of Services Rules, 2012 would appear, by elimination of possibilities, to relate to goods that require some activity to be performed without altering its form. The exemplification in the Education Guide referred supra renders it pellucid. Certification is an important facet of trade and such certification, if undertaken in India, will not be able to escape tax by reference to location of the entity which entrusted the activity to the service provider in India. This is merely one

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Rule 4(1) are not attracted and, in terms of Rule 6A of Service Tax Rules, 1994, the definition of export of services is applicable thus entitling the appellant to eligibility under Rule 5 of Cenvat Credit Rules, 2004.”
8. I do not find merit in the contention of the learned AR for the revenue that the ratio laid down by the Hon'ble Bombay High Court in M/s SGS India Ltd.'s case(supra) cannot be made applicable to the facts of the present case on the ground that in the said case, the Place of Provision of Service Rules,2012 was not considered. This Tribunal while interpreting the provisions of new Rules, that is, Place of Provision of Service Rules, 2012 followed the ratio laid down in the said case in reiterating the basic principle of levy of service tax and observed that it is a consumption-based levy, accordingly, the technical and consultancy service, commences from the stage of undertaking the test on the goods procured and the service is completed on delivery of the test repor

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Formation of New Helpdesk for IGST Refund
28/2018 Dated:- 28-9-2018 Trade Notice
Customs
OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS
CUSTOMS HOUSE, NAVARANGPURA, AHMEDABAD, 380009.
F. No. VIII/48-21/Cus/Sys/2017-18
PUBLIC NOTICE No. 28/2018
Dated 28-09-2018
Sub.: Formation of New Helpdesk for IGST Refund
Attention of all trade Associations/Chamber of Commerce and members of Customs House Agents' Association and Public is invited to the Public Notice No. 02/2018 Dated 11.01.2018 and Public Notice No. 03/2018 dated 12.01.2018 issued vide F.No. VIII/48-21/Cus/Sys/2017-18 vide which information regarding formation of Helpdesk for IGST refund was publicized.
On account of Annual General Transfer, 2018, officers in harge o

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Naval Armament Depot Mumbai Versus Commissioner of CGST & ST Raigad
Service Tax
2018 (11) TMI 1519 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 28-9-2018
Appeal No. ST/86922/2018 – A/87658/2018
Service Tax
Mr. S.K. Mohanty, Member (Judicial)
Shri S.C. Dey, Representative for appellant
Shri O.M. Shivdikar, Asst. Commr (AR) for respondent
ORDER
Per: S.K. Mohanty
Heard both sides and perused the records.
2. Feeling aggrieved with the impugned order dated 08.02.2018, passed by the Commissioner (Appeals), the appellant has preferred this appeal before this Tribunal.
3. The appeal filed before the learned Commissioner (Appeals) was dismissed on the ground that the requirement of Section 35F of the Central Excis

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demand confirmed by the adjudicating authority.
5. In view of the submissions made by both the sides, I am of the considered opinion that the requirement of Section 35F of the Act, have been complied with, for entertaining the appeal of the appellant. However, since the learned Commissioner (Appeals) has dismissed the appeal solely on the ground of noncompliance of the requirement of Section 35F of the Act, and no findings have been recorded with regard to the merits of the case, I am of the view that the matter should be remanded to the learned Commissioner (Appeals) for deciding the issue afresh on the basis of the available records and the submissions to be made by the appellant.
6. Therefore, after setting aside the impugned order, I

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Foreign Trade Policy 2015-2020: IGST and Compensation Cess Exemptions Extended for Advance Authorisation, EPCG, EOU Until March 2019.
Notifications
DGFT
Amendments to Foreign Trade Policy 201

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Mandatory TDS Under GST: Government & Notified Entities Must Deduct Tax for Supplier Payments to Ensure Compliance.
Circulars
GST
Implementation of Tax Deduction at Source (TDS) under GST

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GST Imposed on Marg Sudharan Shulk for Forest Road Maintenance Used by Private and Commercial Mining Vehicles.
Case-Laws
GST
Levy of GST – Marg Sudharan Shulk – charged and collected by appli

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Applicant Can Claim ITC for Infrastructure Related to Fiber Cables u/s 16(1) of CGST/SGST Act 2017.
Case-Laws
GST
Input Tax Credit (ITC) for providing leasing services – goods and services used for erection of infrastructure to which fibre cables are connected – The infrastructure provided by the applicant is different from “Telecommunication Tower” and accordingly applicant can avail ITC on GST paid on the goods & services in terms of section 16(1) of CGST/SGST Act, 2017, consumed

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No Input Tax Credit for GST on Works Contract Services for Building Maintenance u/s 17(5)(d) of GST Act 2017.
Case-Laws
GST
ITC of GST paid on Works Contract Service received by the Applicant

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GST ITC Denied for Mall Maintenance Goods u/s 17(5)(c) of GST Act 2017.
Case-Laws
GST
ITC of GST paid on goods purchased for the purpose of maintenance of Mall such as Vitrified Tiles, Marble, Granite, ACP Sheets, Steel Plates, TMT Tor (Saria), Bricks, Cement, Paint, Chemicals, Sanitary Items like wash basin, urinal pots and toilet accessories shall not be admissible to the Applicant in terms of clause (c) of Section 17(5) of the GST Act 2017.
TMI Updates – Highlights, quick notes,

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Entity Profiteering Violation: Maybelline Fails to Pass CGST Section 171 Tax Cut Benefits to Consumers on FIT Me Foundation.
Case-Laws
GST
Profiteering – contravention of the provisions of Section 171 of the CGST Act, 2017 – Benefit of reduction in the rate of tax by lowering the price of “Maybelline FIT Me foundation” not passed on to recipients – by no stretch of imagination he can pocket this reduction to the detriment of the ordinary consumer.
TMI Updates – Highlights, quick

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GST Refunds: Approved Claims to Be Paid in Cash, Regardless of Origin from Cenvat or Current Account.
Case-Laws
Central Excise
Refund claim – Once the GST regime is in force, the pending refu

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waste & scrap supplied by Job Worker
Query (Issue) Started By: – Vinod Maheswari Dated:- 27-9-2018 Last Reply Date:- 30-10-2018 Goods and Services Tax – GST
Got 6 Replies
GST
I have a query regarding section 143(5) which says
"Notwithstanding anything contained in sub-sections (1) and (2), any waste and scrap generated during the job work may be supplied by the job worker directly from his place of business on payment of tax, if such job worker is registered, or by the principal, if the job worker is not registered"
Now if Job worker is registered and if he is paying some consideration to principal for that waste and scrap than whether Principal is exempt from raising invoice to Job worker and can ask Job worker to

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(1) and (2)" and circular 38 says regarding supply as per section 143 (1) and 143(2) . As section 143(5) overwrite these sub section power so how can we say Principal has to compulsory raise invoice for waste & Scrap.
Please comments
Reply By Adarsh Gupta:
The Reply:
Refer para 9.4 (ii) & 9.4 (iii) of circular..it is clear, I don't see any ambiguity.
Reply By Vinod Maheswari:
The Reply:
Sir in case of supply of Input or capital goods from place of jobworker there is no doubt that principal has to issue invoice but in case of waste & scrap generated during process of such input & capital goods law is providing special section 143(5) which overwrite power of section 143(1) and (2) which talks only about of supply of input or ca

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RCM on Transportation charges paid of EXEMPT goods where no consignment note issued by Transporter
Query (Issue) Started By: – ashok dalmia Dated:- 27-9-2018 Last Reply Date:- 26-10-2018 Goods and Services Tax – GST
Got 3 Replies
GST
My client is trading in EXEMPT goods. The transportation charges are paid to TRANSPORTER directly and many a times to the GTA who is arranging the Trucks. But in all cases the TRANSPORT vehicle papers copy, PAN details of owner of truck, drivers driving licence . and declaration from owner of less than 10 trucks, is supplied to us by the GTA / transporter.
Would like to know, the Status of RCM paid on supply of those EXEMPT goods.??
whether leviable though no consignment note is given by GTA or T

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of GTA services.. under GST regime.
I think i could not present my point properly. My main emphasis was that CONSIGNMENT NOTE IS NOT ISSUED BY GTA SERVICE PROVIDER OR OWNER TRANSPORTER AND what would be the status of THOSE expenses booked.
Whether those will be treated as GTA services provided.
There are two ways in payment is made.
one the in account of GTA service provider amount is deposited for onward payment to truckowner… no consignment note or any document provided by GTA.. he only provides the vehicle ownership papers, pan number of vehicle owner and driver driving licence number etc.
second is direct deposit in account of vehicle owner.. and same documents..
The goods are exempt or taxable… does have materiality aspect in

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TDS provisions under GST
By: – Tarun Agarwalla
Goods and Services Tax – GST
Dated:- 27-9-2018

At the advent of Not. No. 50/2018 – Central Tax Dated 13.09.2018, the following exposition has been drawn out to present a comprehensive picture in regards to the law and the practice of deducting tax at source in so far as the Goods and Services Tax.
The exposition has been divided into two parts:
1. The Law surrounding TDS
2. The practice to be followed for necessary compliance with the Law
The above has been elaborated as follows:
1. The Law surrounding TDS:
A. Background:-The provisions of tax deduction at source is contained under section 51 of the CGST Act, 2017. The same was held in abeyance and not brought into force. As of 13.09.2018 the Notification No. 50/2018 – Central Tax notified the 1stday of October 2018 to be the day sec. 51 of the CGST Act, 2017 assumes legal force. Section 51 comes under the Chapter X 'Payment of Tax' which deals with the manner of pay

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Government, and having fifty-one per cent or more participation by way of equity or control, to carry out any function.
e. Society established by the Central Government or State Government or local authority under the Societies Registration Act, 1860
f. Public sector undertakings.
C. Manner and quantum of deduction:-The above-mentioned persons are, hereinafter referred to as deductor, are required to deduct tax at the rate of 1% CGST and 1% SGST on the taxable value of goods or services or both.
a. At the time of payment made or credited to the supplier (deductee) of taxable goods or services or both,
b. Where the total value of supply, under a single contract, exceeds two lakh fifty thousand rupees, the deduction is to be made. i. e. Single contract value above ₹ 2.5 Lakh and above.
c. Value for the purpose would be basic taxable value, i. e. excluding CGST, SGST, IGST, UTGST and cess charged.
d. Only when the supplier (deductee) is registered in the concerned state an

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educted.
E. Some key points: –
a. Where the value of supply credited prior to 01.10.2018 but payment made on or after 01.10.2018, or vice versa, it seems that in both the cases TDS to be deducted.
b. The supply must be taxable under the law. i. e. exempted supplies does not attract TDS.
c. From the law, it seems that IGST transactions are beyond the preview of current compliances.
d. In case the supplier is not registered, it seems that the TDS may not be made.
e. The single contract value of greater than ₹ 2.5 Lakh would be considered, even though the contract period may extend to different tax periods and year. TDS would be deducted at the time of each invoice or payment.
f. Further, it can be reasonably derived that once the TDS made on credit basis, no TDS at the tie of respective payment. However, when a particular payment could not be linked to a single invoice, suitable co-relation to be maintained to safeguard the correctness of time of deduction.
g. Mr A of Del

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er officer shall issue a certificate in form GST REG-06 within three days of application.
Step: 2
Deduct GST @ 1% CGST & 1% SGST (i.e. as correctly charged by the inward supplier in his Tax Invoice) from the Basic Value of the Bill. The rate of TDS is to be computed on the value of supply excluding the GST amount.
The deduction is to be at the time of payment to the supplier or crediting his account.
However, two broad conditions for deductions are:
a. The supply should be a taxable supply of goods or services or both.
b. The total value of the contract exceeds ₹ 2,50,000/-
Step: 3
The amount that has been so deducted is to be deposited with the respective Government within 10 days from the end of the month in which such deduction is made. Such payment to the Govt. shall be made by debiting the electronic cash ledger. Further, the deductor is required to furnish a return in form GSTR-7 electronically along with all necessary details. The return cannot be filed w

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Deleted……

M/s. SCORPIO ENERPRISE THROUGH DEVANG HARSHADBHAI PATHAK S/O. HARSHADBHAI PATHAK Versus UNION OF INDIA
GST
2018 (9) TMI 1766 – GUJARAT HIGH COURT – TMI
GUJARAT HIGH COURT – HC
Dated:- 27-9-2018
R/SPECIAL CIVIL APPLICATION No. 14980 of 2018
GST
MR AKIL KURESHI AND MR B.N. KARIA, JJ.
For The Respondent (s) : Ms. Oza, Advocate for M/s. Wadia Ghandy And Co (5679)
ORAL ORDER
(PER : HONOURABLE Mr. JUSTICE AKIL KURESHI)
Petitioner has challenged the vires of amended subrule

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M/s Rajavat Steels And Another Versus State Of U.P. And 3 Others
GST
2018 (9) TMI 1767 – ALLAHABAD HIGH COURT – 2018 (18) G. S. T. L. 814 (All.) , [2019] 60 G S.T.R. 6 (All)
ALLAHABAD HIGH COURT – HC
Dated:- 27-9-2018
Writ Tax No. – 1300 of 2018
GST
Ashok Kumar, J.
For the Petitioner : Rahul Agarwal
For the Respondent : C.S.C.
ORDER
Ashok Kumar, J.
Heard learned counsel for the petitioners and learned Standing Counsel for the State.
This writ petition is filed with prayer to quash the notice dated 18.09.2018 passed by respondent no.3 and further to release the goods and the vehicle.
Prima facie, this Court finds that on totally frivolous grounds the goods in question are seized by the Mobile Squad-9, Kanpur.
Th

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ant case, the proceedings under Section 129 of the CGST Act read with Section 20 of the IGST Act are initiated while the goods were proceeded from Kanpur and were to be delivered at the purchaser, who situates at Udhamnagar, Uttrakhand and immediately after proceeding from the business place of the petitioner, the respondent no.4, Mobile Squad Authority has detained the truck and goods at Kalyanpur and initiated the seizure proceeding and has passed the seizure order.
The ground for seizing the goods is that in the invoice, E-way bill and weigh slip the Truck number was mentioned being U.P.-78-DN 7983 instead of U.P.-78-DN 7938.
Learned counsel for the petitioner contended that the said mistake was due to inadvertent human error by the pe

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In Re: GKB LENS PVT. LTD. (Assistant Commissioner, CGST & CX, Tollygunge Division, Kolkata South Commissionerate)
GST
2018 (9) TMI 1768 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2018 (17) G. S. T. L. 698 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL – AAAR
Dated:- 27-9-2018
05/WBAAAR/Appeal/2018
GST
MR. RAKESH KUMAR SHARMA, AND MR. RANDHIR KUMAR, MEMBER
Present for the Appellant: None
Present for the Respondent: Mr. Sandeep Kothari, Chartered Accountant, Authorised Representative
This Appeal has been filed by the Assistant Commissioner, CGST & CX, Tollygunge Division, Kolkata South Commissionerate (hereinafter referred to as the “Appellant”), on 06.07.2018 against the Advance Ruling No. 07/WBAAR2018-19 dated 30.05.2018 = 2018 (6) TMI 72 – AUTHORITY FOR ADVANCE RULING – WEST BENGAL pronounced by the West Bengal Authority for Advance Ruling.
2. M/s. GKB Lens Pvt. Ltd., holding GSTN No. 19AACCG3446M1ZA, re-seller and im

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of Rule 28 and is eligible to value these goods by applying the terms of the Second Proviso to Rule 28 of GST Act.
The expression “where the recipient is eligible for full input tax credit”, as used in the Second Proviso to Rule 28 of CGST Rules, 2017 means that the recipient will be eligible to take full input tax credit of the amount of tax paid by the supplier as mentioned in the respective invoice or any other document valid under Section 16(2)(a) of GST Act.”
3. The Appellant has filed an Appeal against the above Advance Ruling regarding the availability of Input Tax Credit on stock transfer from the Head Office of M/s. GKB Lens Pvt. Ltd. to its branches in other States at Zero Value.
According to the Appellant “the wordings of the Ruling dated 30.05.2018 has created an impression that the recipient would be eligible for Input tax Credit if the supplier paid the tax.” Instead of those wordings the WBAAR should have declared in no uncertain terms that no input tax credit woul

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at if the value declared in such invoice is zero no input tax credit is available to the recipient.
6. It is seen that the question raised by M/s. GKB Lens Pvt. Ltd. was correctly answered by the Authority of Advance Ruling. However, it may be clarified that no input tax credit is available to the recipient of goods/service if the value declared by the supplier in the invoice/debit note is zero.
In the facts and circumstances discussed above the Ruling of the West Bengal Authority of Advance Ruling is modified to the extent that at the end of the second paragraph of the said ruling the following sentence will be added:
“No input tax credit, however, would be available for supply of goods / services at Zero Value.”
The Advance Ruling No. 07/WBAAW2018-19 dated 30.05.2018, = 2018 (6) TMI 72 – AUTHORITY FOR ADVANCE RULING – WEST BENGAL pronounced by the West Bengal Authority for Advance Ruling is modified accordingly and the Appeal stands disposed of.
A copy of this Order may be sent

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Essel Propack Ltd. Versus Commissioner of GST & CX, Thane Rural
Central Excise
2018 (10) TMI 81 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 27-9-2018
E/85319/2018 – A/87452/2018
Central Excise
Dr. Suvendu Kumar Pati, Member (Judicial)
For the Appellant : Shri Prasad Paranjape, Advocate
For the Respondent : Shri D.S. Chavan, Supdt. (AR)
ORDER
The dispute relating to availment of cenvat credit of service tax paid on five items by the appellant manufacturing company has given rise to this appeal after denial of cenvat credit to the tune of Rs. 15,03,613/- was adjudicated by way of order-in-original allowing a major portion and disallowing Rs. 4,61,048/- that was again challenged and resulted in confirmation of duty demand of Rs. 4,29,853/- against inadmissible credit, interest and penalty of equivalent amount invoking extended period.
2. Factual backdrop of the case, as revealed from the appeal memo and the submissions of the ld. Counsel for the appellant is

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envat credit for the entire amount of Rs. 31,195/- availed against gardening services and confirmed the duty demand etc. in respect of rest of services.
3. During the course of hearing of appeal, ld. Counsel for the appellant submitted a compilation of case laws in respect of each cenvat credit availed by them and sample invoice copies concerning shifting of machinery from their Washind factory to Goa to justify the labour charge incurred by them along with copies of purchase order marked as exhibit A-1 to A-3 annexed to the appeal memo concerning services availed from M/s. Voltas Material Handling Pvt. Ltd., M/s. Lanes Mechatronics and Vodafone. He argued that in view of decision reported in 2013 (30) STR 3 (Guj.), 2016 (45) STR 383 (Tri-Mumbai), 2016 (44) STR 654 (Tri-Chan.), AC fitted in guesthouse and shop floor required periodic maintenance and such services availed by maintenance of AC are admissible credits. He further submitted that in view of decision reported in 2017 (3) GST

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tion, the ld. AR contended that such irregularity was sought to be purposefully remediated in raising ISD challan after the irregularity was pointed by the department. Raising strong objection to the contention of the appellant in respect of copies of two bills and concerning labour charges of shifting of machine, which should not have been produced before the appellate Tribunal and admitted as evidence without an express permission as contemplated under Rule 23 of the CESTAT Procedure, he pointed out that fraud had been practised in converting a transportation bill to labour charge bill. Pointing out the insertion of the words “labour charges” made in the bill subsequent to its preparation, the ld. AR submitted that those copies should be disbelieved since not considered to have been raised against labour charges. Moreover, he reiterated the Commissioner (Appeals)'s observation that outward transportation mentioned in the definition of input service was in respect of final product and

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nd signature can be done by a court but even such requirement would not arise in the instant case since to a man of ordinary prudence, two different handwriting are visible in those two bills and it appears that labour charges have been purposefully inserted in the bills to cover the services availed under the Cenvat Credit Rules. Likewise, Exhibit A series did not reveal that those purchase orders were actually handed over to the vendors since in its right side margin, an endorsement is available that the same is a test print not (meant) for vendor. Appellant has produced those only to indicate that vendors were requested to shift the consignment to the factory address at Washind and not to its Head office but going by the conduct of the appellant the same cannot be taken as an affirmation of appellant's contention. On the other hand, it should be considered as misstatement or fraud being practiced by the appellant, since it is not a copy of the original purchase order and manufacture

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tion to say that a person, whose case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation.” (highlighted to emphasis)
9. In Indian Bank Vs. Satyam Fibres (India) Pvt. Ltd. (1996) 5 SCC 550 it was held by the Hon'ble Supreme Court as follows:-
“since fraud affects the solemnity irregularity and orderly base of the proceedings of the Court and also amounts to the abuse of the process of court, the courts have been held to have an inherent power to set aside an order obtained by fraud practice upon that court. Similarly where the court is misled by the party or the court itself counts the mistake which prejudice the party the court has inherent power to recall its order.”
10. Though the above pronouncements were held in respect of civil disputes, it has a bearing on the case in hand for the reason that documentary evidence produced before the Court have no connection on the actual transactions made by the appella

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Shlok Media Pvt. Ltd. Versus Commissioner of GST & Central Excise Mumbai West
Service Tax
2018 (10) TMI 97 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 27-9-2018
ST/87354/2018 – A/87453/2018
Service Tax
Dr. Suvendu Kumar Pati, Member (Judicial)
For the Applicant : Shri Devendra Jain, C.A.
For the Respondent : Shri Dilip Shinde, Assistant Commissioner (AR)
ORDER
Disposal of two appeals filed by the appellant before the Commissioner (Appeals III), GST & CX, Mumbai against adjudication orders confirming duty demand, interests and penalties solely on the ground of belated filing and non-payment of pre deposit is the subject matter of the appeal before this Tribunal.
2. Contention of the appellant, as submitted by Learned C.A. Shri Devendra Jain, is that Appellant could not file the said appeal before the Commissioner (Appeals) within two months of receipt of the order but filed the same within 30 days thereafter with a prayer for condonation of delay explainin

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15.06.2017 for which the Commissioner had rightly given his finding. Further he disputed the contention of the appellant that substantial portion of the duty liability was discharged. Since both the OIOs and OIA revealed that duty demand of Rs. 7,69,009/- and Rs. 73,28,013/- were confirmed by those orders along with interests and penalties, Section 35F bars the appeal bereft of pre deposit for which interference by this appellate court is uncalled for.
4. Perused the case record including the OIA. It is found from paragraph 18 of the OIA that OIOs were received admittedly by the appellant on 15.06.2017 that is after 9 months 14 days of the orders passed on 30/31.08.2016. It was also recorded by the Commissioner appeals that no documentary evidence was furnished by the appellant concerning the receipt of OIOs. At the same time he had brought it on record that the Punjab National Bank had taken possession of the immovable property of the appellant on 22.08.2016 that was just a week bef

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s on record and OIA, it is apparently clear that acknowledgment of receipt of orders in original by the appellant vide exhibit E contains the date of receipt as 15.06.2017. The ground of rejection of delay condonation petition by the Commissioner (Appeals) indicates that appellant had applied to the Department in writing on 24.08.2017 i.e. after two weeks of filling of appeal, as held by Commissioner, but no finding is forthcoming as to if any previous proof of delivery of OIOs on the appellant was established. Therefore the date refered in the acknowledgment vide Exhibit E has to be accepted as the date of delivery of OIOs on the appellant. The Commissioner has relied upon the decision of the Hon'ble Supreme Court pronounced in respect of Singh Enterprises Vs. Commissioner of C. Ex., Jamshedpur 2008 (221) E.L.T. 163 (S.C.) and given his finding that appeal before the Commissioner has to be filed within two months or at the maximum within the condonable delay period of further 30 days.

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ion that delay was occasioned deliberately.
6. In another decision, reported in (2001) 9 SCC 106, Hon'ble Supreme Court has observed that where the delay is of a few days, the court should adopt a liberal approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of few days. Whether the delay is inordinate, the consideration of prejudice to the opposite party will be a relevant factor calling for a more cautious approach, but in the latter case where the delay is of few days, no such consideration may arise, and such a case deserves a liberal approach. The Hon'ble Supreme Court also observed that in exercise of discretion on the facts of each case, keeping in mind that in construing the expression “sufficient cause”, the principle of advancing substantial justice is of prime importance.
7. In respect of nonpayment of statutory pre deposit amount for filing of appeal, appellant contention that 80 per cent of duty liability has been

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rit of the decision is to be assessed by the Appellate Tribunal. In the instant case, as found from the order of the Commissioner (Appeals), no merit concerning tax liability of the appellant has been discussed and the appeal filed by him was rejected as not maintainable as hit by the period of limitation.
9. Section 35B (b) empowers the Appellate Tribunal to entertain appeal against an order passed by the Commissioner (Appeals) under Section 35A and in view of Sub-Section 4 to Section 35A, such order of the Commissioner (Appeals), at the time of disposal of appeal before him, shall state the points for determination, the decision thereon and the reasons for such decisions. Hon'ble Supreme Court in Saheli Leasing & Industry Ltd. – 2010 (253) ELT 705 (SC) also proposed a guideline to be followed by quasi judicial authority. In the instant case such a decision with reason on the merit of the appeal is not forthcoming.
10. Since this Appellate Tribunal cannot go beyond the order of the

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M/s. East Coast Constructions & Industries Ltd. Versus The State of Tamil Nadu, Assistant Commissioner (Commercial Taxes)
VAT and Sales Tax
2018 (10) TMI 347 – MADRAS HIGH COURT – TMI
MADRAS HIGH COURT – HC
Dated:- 27-9-2018
W.P.No.29447 of 2008 And MP No.1 of 2008
CST, VAT & Sales Tax
Mr. K. Ravichandrabaabu J.
For the Petitioner : Mr.Joseph Prabakar
For the Respondents : Mr.M.Hariharan Additional Government Pleader (T)
ORDER
The petitioner is aggrieved against the order dated 03.11.2008, revising the assessment in respect of assessment year 2004-05.
2. The petitioner is a Limited Company engaged in the business of Civil construction and a registered dealer under the second respondent. The assessment for the year 2004-05 under TNGST was completed and an order of assessment was passed by the second respondent on 15.11.2006, wherein the second respondent had allowed exemption of Rs. 1,80,16,025/-, representing value of building materials purchased in the cours

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he petitioner, when the notice of proposal dated 11.06.2008 was issued to the petitioner.
Therefore, he contended that the impugned order was based on reasons extraneous to notice of proposal. On merits, the learned counsel contended that the petitioner is entitled to such exemption under Section 3B(2)(b) of the TNGST Act, 1959 and the Assessing Officer has dealt with in detail with regard to the eligibility of the petitioner to get such exemption, in his original order of assessment dated 15.11.2006. Therefore, he submitted that without there being any valid reason, such conclusion arrived by the Assessing Officer cannot be changed or altered by way of revision.
4.On the other hand, the learned Additional Government Pleader appearing for the respondents submitted that when the petitioner was not entitled to exemption in respect of purchases of building materials effected through interstate sale, the Authority is entitled to revise the order of assessment granting such exemption.
He

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ilding materials for Rs. 1,80,16,025/- and Iron and Steel (Declared Goods) for Rs. 14,19,34,312/- were verified with relevant documents and found admissible. Having found so, the Assessing Officer has chosen to revise the assessment by issuing the notice of proposal dated 11.06.2008.
7. A careful perusal of the said notice would indicate that the same does not reveal any material details or particulars as to how the Assessing Officer proposed to disallow the exemption already granted in respect of purchases made through interstate sale to the tune of Rs. 1,80,16,025/-. Except stating that on examination of assessement on records, it is seen that turnover of Rs. 1,80,16,025/-, being the interest purchase of building materials, were wrongly allowed exemption, the said notice does not disclose as to what materials found in the assessment records had driven the Assessing Officer to make such proposal for disallowing the exemption.
8. Needless to state that the assessee will be in a posit

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TC 204) is not applicable from the year 2002-03. The goods in question are general in nature and are readily available to any buyer and can be used by any dealer. It cannot be established that the goods are usable only to a particular contract and will not be fit for other works.”
9. Perusal of the above said findings rendered by the Assessing Officer would show that such reasonings were not referred in the form of proposal, when notice was issued on 11.06.2008. Needless to say that a reasoning in the order of assessment should emerge from the related grounds raised in the notice of proposal and not to be stated as the first time, while passing the order of assessment. In other words, the assessee cannot be put to surprise with certain reasons in the assessment order, when crux of such reasons, in the form of grounds, is not stated in the notice of proposal. At the same time, at this stage, this Court is not expressing any view on the correctness or otherwise of the reasons assigned b

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Extension of time limit for submitting declaration in FORM GST TRAN-1 under rule 117(1A) of the Maharashtra Goods and Services Tax Rules, 2017 in certain cases.
Order No. 04/2018-MGST Dated:- 27-9-2018 Maharashtra SGST
GST – States
Maharashtra SGST
Maharashtra SGST
COMMISSIONER OF STATE TAX, MAHARASHTRA STATE
GST Bhavan, Mazgaon, Mumbai 400 010,
dated the 27th September 2019.
ORDER
Order No. 04/2018-MGST
No. JC(HQ)-1/GST/2017/Order/19/ADM-8
Subject: Extension of time limit f

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In Re: M/s. Saro Enterprises
GST
2018 (10) TMI 1048 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – 2018 (18) G. S. T. L. 362 (A. A. R. – GST), [2019] 69 G S.T.R. 40 (AAR)
AUTHORITY FOR ADVANCE RULING, TAMILNADU – AAR
Dated:- 27-9-2018
ORDER No. 16/AAR/2018
GST
MS. MANASA GANGOTRI KATA AND S. VIJAYAKUMAR, MEMBER
Note : Any appeal against the advance ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to

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s'. They market the trays to the end users, basically farmers as well as small dealers who further make the sale of these trays to farmers. 'Agricultural Seedling Trays' are used manually for preparing seedling and it is neither a part of any machine nor it is used with any machine/ electronically driven.
2.2 Under TNVAT the goods were exempted as 'Agricultural Implements' as per advance ruling obtained by them. Under GST, they state that the goods are agricultural implements under Chapter 8201 which is exempted as per Sl.No. 137 of Notification No 2/2017-Central Tax dt 28.06.2017 as amended.
3.1 The Authorized Representative of the Applicant was heard in the matter. They have produced profile of Company, write-up, pamphlets of the product. The goods are made up of recycled or pure poly- propylene. They have stated that the items are Agricultural implements classifiable under 8201 and used as seedling trays by farmers for transplanting seedlings. In VAT regime they are exempt as agri

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of explanation (iii) and (iv) to Notification No. 1/2017 – Central Tax (Rate) dt. 28-06-2017, tariff heading, sub-heading, heading and chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall be applied for the interpretation and classification of goods.
4.2 The Applicant claims that the goods are to be classifiable under Tariff heading 8201 Chapter 82 falls under Section XV of Customs Tariff which covers “Base Metals an articles of Base Metals”.
Section Note 3 states:
3. Throughout this Schedule, the expression “base metals” means : iron and steel, copper, nickel, aluminium, lead, zinc, tin, tungsten (wolfram), molybdenum, tantalum, magnesium, cobalt, bismuth, cadmium, titanium, zirconium, antimony, man

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base metal, of metal carbides or of cermets.
A combined reading of section and chapter notes and description of goods covered under Tariff heading 8201 reveals that the goods covered under this Section XV have to be made of base metals or should be articles of base metals. 'Base metals as per Section Note above do not include plastics'. Further, chapter 82 covering 'Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal' should necessarily have a blade, working edge, working surface or other working part of base metal or others as above.
The product in question is Seedling Trays made of fully of plastic i.e. polypropylene and hence it cannot be classified under chapter 82 or anywhere under Section XV and accordingly it cannot be classified under 8201 as Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears,

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These trays are also compatible to various rice transplantation machinery in terms of the dimension of the seedlings mat grown, spacing between each seedling etc. The trays help in growing and transporting the seedlings in an organized, labor-saving manner so that the seedling mats grown can be fed into the machines or planted as such by hand. However, the tray itself is not a part of any machine or used with any machine or electronically driven nor is it an accessory of any agricultural machinery. Rice planting machinery do not need these seedling trays to function and hence cannot be classified as parts or accessories of agricultural machinery.
The goods are trays made of polypropylene of certain dimensions.
Chapter 39 covers Plastics and articles thereof
Chapter 3926 covers
Other articles of plastics and articles of other materials of headings 3901 to 3914
Tariff Heading 39269099 covers other articles not specified
HSN Explanatory Notes to Chapter heading 3926 states
Thi

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