Author: admin_gst

M/s Piccadily Holiday Resorts Limited Versus Union of India and others
GST
2018 (7) TMI 1637 – PUNJAB AND HARYANA HIGH COURT – TMI
PUNJAB AND HARYANA HIGH COURT – HC
Dated:- 19-7-2018
CWP-25719-2017
GST
MR. SURYA KANT AND MR. SUDIP AHLUWALIA, JJ.
For The Petitioner : Mr.Jagmohan Bansal, Advocate
For The Respondent : Mr. Sunish Bindlish, Advocate
ORDER
SURYA KANT, J.(ORAL)
The petitioner is primarily aggrieved by the order dated 12.09.2017 passed by the Additional Commissioner, GST & Central Excise Commissionerate, Chandigarh. Vide the aforesaid order, the levy of service tax amounting to Rs. 1,61,53,949/- under Section 73 read with Section 174(2) of the CGST Act, 2017 has been confirmed . In addition, a penalty

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M/s. Miraj Drymix (P) Ltd., Shri Ashok N Mehta, Director, Shri Sanjay Mahagaonkar, AVP (Tech), Shri Raj Kumar Yadav Versus Commissioner of CGST CC & CE, Alwar
Central Excise
2018 (8) TMI 162 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 19-7-2018
Excise Appeal No. 51653 – 51656 of 2017 – Final Order No. 52571-52574/2018
Central Excise
Hon'ble Mr. Anil Choudhary, Member ( Judicial ) And Hon'ble Mr. C L Mahar, Member ( Technical )
Shri V Lakshmikumaran, Shri Rahul Tangri, Consultant for the Appellants
Shri R K Mishra, AR for the Respondent
ORDER
Per Anil Choudhary
The issue in these appeals is, whether the valuation of wall putty manufactured and cleared by the appellant – M/s. Miraj Drymix Pvt. Ltd., has been rightly done for the purpose of levy of duty; and whether the extended period of limitation has been rightly invoked. The other appellants are the Director and officers of M/s. Miraj Drymix Pvt. Ltd. who have been imposed penalty under Rule 26 of

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of the agreement, the activity of the appellant is more in the nature of a job worker. Further, as the various activities of the appellants, like approval of source of raw material, quality control measures, audit by the said Asian Paints Ltd. from time to time in the plant of the appellant, 100% of the output under the brand name of Asian Paints Ltd. to be cleared to Asian Paints only or as per its directions, it appeared to Revenue that the transaction is not at arms length and accordingly, instead of valuation under Section 4(1)(a) of the Act, the valuation is to be done under Section 4(1)(b) of the Act read with Rule 10 A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (hereinafter called as Valuation Rules 2000).
4. The admitted facts are that, the Revenue's internal Audit team issued audit note/letter dated 15.02.2014 observing that appellant was paying lesser duty on the package of 30 Kg and 40 Kg than the duty paid on the package of 20

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of raw material, production and clearance of finished goods. The company is engaged in the manufacture of wall putty only for Asian Paints Ltd. under their brand name ( Asian Wall Putty ) as per the specification and formulation. The goods were cleared in various packings including the packing up to 25 Kgs assessed under MRP based assessment. The wall putty of packaging of more than 25 Kgs were cleared on transaction value. Their unit was frequently audited by the authorized signatory of Asian Paints. The main raw material is “in premix compound” containing Dolomite and White Cement. The 'premix compound' was supplied by another unit of the appellant company situated at Vadodara. The finished goods – wall putty was cleared to the various depots of Asian Paints as per their despatch directions.
6. Some documents were also resumed.
7. In the statement of Shri Sanjay Mahagoankar, he inter-alia stated that the premix compound – input was proprietary of Asian Paints formulation of which w

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e only amount retained by them was the margin which they added after mutual consent with Asian Paints Ltd. The appellants also provided the product price at depots, detail of sales/clearances for the period 2011 – 2012 to 2015 – 2016, packing in bags having the quantity of 25 Kgs remuneration.
9. Mr Sanjay Mahagoanker, the AVP (Technical), further stated that the premix compound was manufactured at their Vadodara unit as per the formulation given by Asian Paints Ltd. He also stated that the ratio of raw material provided by Asian Paints Ltd. cannot be changed by them unilaterally.
10. Shri Rohit Gupta, Manager Taxation of Asian Paints Ltd., was also summoned and his statement recorded. He inter alia stated that, the finished goods, namely, Asian wall putty, can be procured from any of the location of the appellant and, in the same way, such goods can be sold through any of the depots. Accordingly, the Department was given the details of the sale value of the goods procured from the a

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time nearest to the time of removal of said goods from the factory of job worker. Further, in terms of explanation to Rule 10 ibid, 'job worker' means, a person engaged in the manufacture or production of goods on behalf of a principal manufacturer from any inputs or goods supplied by the said principal manufacturer or by any other person authorised by him. Thus, there appeared to be two main ingredients in this definition of 'job worker' : –
“goods have to be produced on behalf of principal manufacturer from any inputs/goods supplied by the principal manufacturer or any person authorised by him.”
12. On perusal of the agreement dated 15/07/2011 between the appellant and Asian Paints Ltd., the following clauses were taken notice of: –
Clause D of the agreement read as under:
“D. The Seller has further offered to manufacture and sell finished products as more fully set out in Annexure I ( hereinafter referred to as “the Products”) to the Purchaser and the Purchaser has accepted t

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ver the Products or perform the services in full conformance with the warranties under this Agreement, above within the time specified.
Clause 3 (c ) of the agreement dated 15.2.2011
The Seller shall be responsible for monitoring their manufacturing processes, performance and conducting sufficient process control, inspection, testing, proactive and preventive measures in order to ensure that all Products delivered to the Purchaser are in full compliance to the specifications. Statistical sampling is strongly encouraged to ensure that the manufacturing processes are in statistical control. Seller shall share all related information of the Product to the purchaser at any point of time. Regardless, the Seller is responsible for each part confirming to specifications.
Clause 10(e) of the agreement dated 15.2.2011
It has the necessary skills, knowledge, experience, expertise, equipments, required capital and net worth to perform its obligation in accordance with the terms of this Ag

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g material of desired quality as per specification given by Purchaser for manufacturing the Products. Seller will test these raw and packing materials as per instruction from purchaser at its own expense. Specifications and Testing methodology for Raw material, packing material and the Products are given in Annexure 2 and Annexure 3 respectively.
Clause 4(f) of the agreement dated 15.2.2011
The Seller shall ensure that the raw and packing material purchased comply with specifications as given by the Purchaser. Such procurement by the Seller with the specified vendors would be on principal to principal basis. The Seller agrees to share information on Commercial negotiations.
Clause 6(a) of the agreement dated 15.2.2011
The Purchaser has consented to purchase the Products from the Seller at a price which will be as mutually agreed between the parties as more fully described in next clause Excise duty and VAT / Sales Tax as applicable on Products will be paid by Purchaser.
13. Fr

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raw material and their specifications/quality to the appellant. As the goods were cleared from the appellant's factory to the depots of Asian Paints, therefore, the goods were not sold by the principal manufacturer at the time of removal of the goods from the factory of the job worker – appellant, but were transferred to some other place from where the said goods were sold after their clearance from the factory of the job worker. The price of the finished goods, so cleared, was determined as per agreement/purchase order and thus appellant was not aware of the price at which Asian Paints Ltd. further sold from the depots. In other words, the product under the brand name 'Asian wall putty', was cleared to the principal manufacturer depots without taking into account the depot price of the principal manufacturer which is in violation of Rule 10 A (ii) of the Valuation Rules, 2000. It further appeared that the appellant failed to determine the correct value of the excisable goods for

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Director, was also imposed to the tune of Rs. 75 lakh under Rule 26 and further Rs. 25 lakh under Rule 26 was imposed on Shri Sanjay Mahagoankar, the Assistant Vice President (Technical) and further, penalty was also imposed on Shri Raj Kumar Yadav, the authorised signatory under Rule 26 of Central Excise Rules. Being aggrieved, the appellants are in appeal before this Tribunal.
15. The learned Counsel for the appellant, Mr V Lakshmikumaran, urges that the provisions of Rule 10 A of the Valuation Rules 2000 are attracted only in case of job work, where there is supply of raw material / semi-finished goods by the principal manufacturer. In the facts of the present case, there was no supply of raw materials and consequently the findings in the impugned order that the contract was of job work nature is erroneous and legally unsustainable. It is further submitted that, in terms of Section 4(1)(a), the assessable value, for the purposes of excise duty, is the transaction value where the fo

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wo conditions before manufacturing activity can be called as job work; firstly, the raw material is to be supplied by the manufacturer, and secondly, the manufacture must be done on behalf of the principal manufacturer.
17. It is apparently clear from the factual matrix of the present case that there was no supply of raw material at all by Asian Paints Ltd. to the appellant for the manufacture of final product. Thus, the appellant have correctly discharged the duty on the transaction value in terms of Section 4(1)(a) of the Central Excise Act.
18. The learned Commissioner has observed in the impugned order that, the Appellant received the formulation of the pre-mix from APL, which was the major input used in the manufacture of the final product. Thus, it appears that the Commissioner has treated the supply of such formulations as supply of inputs by APL in the capacity of principal manufacturer. It is submitted that, only supply of tangible inputs which are used as raw materials are

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e of control and indirect supply of raw material. However, it has been unanimously held in all such cases that the transaction is not of job work but that of normal commercial sales.
20. The Hon'ble Supreme Court in the case of Prestige Engineering (India) Ltd. vs. CCE, Meerut, 1994 (73) ELT 497 (SC) held that, the contract of job-work is largely and substantially that of labour and skill of the job-worker done with the help of their tools, gadgets or machineries. When the job-worker contributes its own raw materials in significant quantities to the articles supplied by the customers to manufacture the final goods, then it does not amount to job-work.
21. In CCE vs. Innocorp Ltd. [2012-TIOL-956-CESTAT-Bang] the Department had sought to raise a duty demand on similar grounds as in the case in hand. The Department alleged in the above case, that stringent quality standards, including the right to inspect the goods and reject them when they are deficient in quality, would make the manuf

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om the specified vendor, can it be held that the  activities   were
carried on job-work basis.
* Receiving advance money for payment towards the purchases of raw materials is within normal commercial terms.
* The fact that the compensation was based on the material cost along with specific profits cannot be used alone to uphold that there was job work manufacture.
* Since no inputs were provided by the principal manufactures therefore, the activity was not job-work.
2.
Abhishri Packaging Pvt. Ltd. [2013- TIOL-772-
* The purchaser had employed its own employees at the factory of Appellant
* Inasmuch as final products were manufactured  by procuring raw material
 
CESTAT- AHM
for supervision and monitoring.
* Moulds used for the manufacture, which were essential to the manufacture were supplied by the Purchaser.
independently, the Appellant was  an independent manufacturer.
* There was no dispute that moulds were being supplied, and

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14
(304) ELT 711 (T)
* Prices were mutually agreed.
* Specifications for manufacture were provided.
Held that monitoring of inputs used etc. were all irrelevant considerations, since it was undisputed that the seller/
manufacturer paid for the raw material.
 
23. It is submitted that under the agreement dated 15.2.2011, APL had right to reject the goods, if found to be of inferior grade. It is humbly submitted that such a right exposes the fallacy in the contention of the Department that the Appellant was undertaking job work manufacture. The said stance is pressed because, had the APL supplied raw material for the manufacture of the final product, then it would naturally not have any right to reject the final products since the Appellants were only applying their labour / skill to manufacture from the raw material received by APL. In other words, if APL were supplying the raw material free of cost, then they would to accept all the goods manufactured by the Appellant

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upposes free of cost supply of raw materials as a mandatory test in case of job work transactions.
25. It is humbly submitted by the learned advocate appearing for the appellant that the impugned order-in-original is founded on assumptions and presumptions and is self contradictory. The impugned order has confirmed all the allegations made by the SCN, without proper application of mind. The learned Commissioner has held that the relationship between APL and the appellants is that of a principal manufacture and job worker. It appears from the finding of the ld. Commissioner, that the transaction shall be termed as principal-to-principal basis if the seller decides supplies of inputs, quantity of inputs, take responsibility of payment to suppliers, plan its own production, etc. It is submitted that, all these activities in the present case are being undertaken by the Appellant only and are in consonance with the finding of the Commissioner himself, therefore, the issue stands covered in

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is that, the manufacture of the final product was undertaken 'for' APL, and not 'on behalf of' APL. It is pertinent to note here, that the definition of “job-worker” as contained in Explanation to Rule 10A provides that the job-worker manufactures goods 'on behalf of the principal manufacturer, from any inputs or goods supplied by the said principal manufacturer or by any other person authorized by him'.
28. It is more than perspicuous from the above definition that only those manufacturing activities which are undertaken 'on behalf of' the principal manufacturer are covered within the definition of 'job- work'. It is to be noted that the definition does not cover within its ambit those manufactures which are undertaken 'for' the principal manufacturer. It is extremely pertinent to note that the Ld. Commissioner in the impugned OIO agreed with the same proposition and observed as under:
“44. I also find that the assessee manufactured the finished goods from the raw materials procure

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phasis Supplied]
29. It is humbly submitted that the Ld. Commissioner has recorded a finding that the manufacture by the Appellants was 'for' and not 'on behalf of' APL. Despite recording such an observation, the Ld. Commissioner went on to hold that the manufacturing activities were in the nature 'job-work' and thus, is contradictory.
30. It is further submitted that extended period is not invokable; Penalty not imposable and interest not recoverable. Without prejudice to the above, it is also submitted that the Appellant had no intention to act dishonestly and had acted in accordance with the legislative provisions inasmuch as every relevant fact on record and has not engaged into any suppression, willful mis-statement etc. with intent to evade duty. Further, the audit of the appellant's unit took place in December 2012 and December 2013, for the period upto September 2013. All the documents and records pertaining to the unit were before the departmental auditors. Inasmuch as the A

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e, since the demand is not legally unsustainable; the issue is contentious; there is no evidence that these persons dealt with the goods with the knowledge that the same are liable for confiscation. Thus, the penalties imposed on the aforesaid individuals/ personnel is also not legally sustainable.
34. In view of above, the Appellant humbly prays that the impugned order is liable to be set aside and present appeal be allowed.
35. The learned Counsel for the appellant have also relied on the ruling of this Tribunal in the case of Pawan Biscuit Company (P) Ltd. vs collector of Central Excise [1991 (53) ELT 595 Tribunal) as regards the relationship of principal and agent, and further relied on the rulings in the case of Siddho Sons vs. Union of India and others 1986 (26) ELT 881 (SC).
36. The learned AR for Revenue Mr. R K Mishra has supported the findings in the impugned order. He states that the supply of goods by the principal to the job worker can be both tangible and /or intangibl

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dia was required to undertake manufacture making use of the technical knowhow and specifications of the goods as supplied by M/s. Zydus Wellness Ltd. The process was subject to quality control and supervision of the M/s. Zydus Wellness Ltd. and goods were to be cleared exclusively, bearing the trade name of M/s. Zydus Wellness Ltd. Further, as per the agreement, the raw materials were to be procured by Hershey India only from the suppliers identified by M/s. Zydus Wellness Ltd. The sale price of the goods was agreed to between the two parties, as specified in the agreement. The goods were cleared to the said M/s. Zydus Wellness Ltd. on payment of excise duty on the transaction value. The Department was of the view that the inputs were manufactured by the appellant on job work basis for M/s. Zydus Wellness Ltd. and hence, the valuation of the goods for the purposes of charging duty was to be done in terms of Rule 10 A of the Valuation Rules, 2000. This Tribunal taking note of the terms

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between the parties. Accordingly, it is concluded that Hershey India was in fact a job worker of the M/s. Zydus Wellness Ltd. and the M/s. Zydus Wellness Ltd. and Rule 10 A of the Valuation Rules becomes applicable and the goods are required to be valued on the basis of price at which M/s. Zydus Wellness Ltd. sell the product/goods from the deport.
37. Accordingly, the learned AR for the Revenue prays for dismissing the appeal and confirming the impugned order.
38. In rejoinder, Shri V Lakshmikumaran states that this Tribunal should treat the preceding judgment in the case of Hershey India Ltd as per incuriam, firstly because Rule 6, which is applicable Rule, has not been considered. Secondly, in the final order of Hershey India Private Ltd. (supra), it has not considered the precedent judgements of this Tribunal in the case of CCE Hyderabad vs Innocorp Ltd. (supra), Prestige Engineereing (India) Ltd. versus CCE Meerut 1994 (73) ELE 497 (SC) and other judgements as noticed herein ab

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manufacture the products as per the latter's specifications and to sell the goods to TUPPERWARE, (b) that TUPPERWARE was liable to pay to the assessee the price of the goods invoiced by the latter as per the settled cost quotations for the product, (c) that the raw materials and packing materials required for the manufacture of the goods were to be sourced by the assessee from suppliers named by TUPPERWARE, (d) that none of the suppliers was authorized by TUPPERWARE to supply the raw materials or packing materials to the assessee, (e) that the moulds supplied by TUPPERWARE to the assessee for manufacture of the goods were returned after use (without availing Cenvat credit), (f) that the brand name of TUPPERWARE was affixed on the products by the assessee as required by the buyer, (g) that the assessee indemnified TUPPERWARE against any losses, damages, liabilities etc. which might arise from the former's negligence or wilful misconduct in manufacturing, assembling, handling, storing or

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noted in para (7.1) was, therefore, not satisfied in this case.
7.4 It is true that stringent quality standards were prescribed by TUPPERWARE to be strictly maintained by the manufacturers at every stage of the manufacture. TUPPERWARE could inspect the process of manufacture to ensure that the specified quality standards for the products were being maintained. They also had the liberty to reject the finished goods which did not conform to the specified standards. These things are part of normal commercial practice in respect of business houses who insist on the quality of their merchandise. These cannot be considerations to hold that the manufacturing activities of the assessees were under extensive control of TUPPERWARE reducing the status of the manufacturers to job workers. That the brand name of TUPPERWARE was affixed on the finished goods by the assessees is also immaterial. In this context, in our view, the learned Commissioner is justified in having claimed support from the de

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In Re : Spentex Industries Ltd.
GST
2018 (8) TMI 285 – AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH – 2018 (16) G. S. T. L. 160 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH – AAR
Dated:- 19-7-2018
AAR NO. 06/2018/AAR/R-28/26
GST
Shri Rajeev Agrawal, Joint Commissioner, And Commissioner CGST And Central Excies And Shri Manoj Kumar Choubey, Joint Commissioner of State Tax, Commircial Tax Division
RULING
1. BRIEF FACTS OF THE CASE:
1.1 M/s. Spentex Industries Ltd. (hereinafter referred to as 'the Applicant'), having its registered office at 51-A, B & C, Sector-Ill, Industrial Area, Pithampur Distt.Dhar (M.P.), are engaged in the manufacture of Textile Yarn. The Applicant are registered with the GSTN holding GSTIN 23AADCK3039P2ZC.
1.2 The Applicant, are having Advance Authorisation issued by the DGFT and invalidated for procurement of goods from indigenous supplier, Their supplier is having EPCG licence and supplying the goods under deemed expo

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T.
1.5 In view of the above, the applicant has posed following two questions before the Authority seeking Advance Ruling on the same:
2. QUESTIONS RAISED BEFORE THE AUTHORITY:
The following questions have been posed before the Authority, with reference to the activity undertaken by the Applicant:
2.1 Please specify the complete procedure for S.No.l & Explanation 1 of the Notification 48/2017-Central Tax dtd.18.10.2017 for supplies by DTA to Advance Auth orisa tion Holder ?;
2.2 Please specify the applicability of Foreign Trade Policy 2015-2020 Mid Term Review and specify procedure for procuring goods from DTA against Advance Authorisation?
3. DEAPRTMENT'S VIEWPOINT:
The Concerned Officer of MPGST department has opined that the question raised in the instant application relate to implementation and applicability of Foreign Trade Policy 2015-2020 Mid Term Review, which do not fall under the ambit of Section 97(2) (a) to (g) of the CGST Act 2017/MPGST Act 2017.
4. RECORD OF PERSON

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ng can be sought. The same is reproduced hereunder
Section 97(2) The questions on which the advance ruling is sought under this Act, shall be in respect of, –
(a) Classification of any goods or services or both;
(b) Applicability of a notification under the provisions of this Act;
(c) Determination of time and value of supply of goods or services or both;
(d) Admissibility of input tax credit of tax paid or deemed to have been paid;
(e) Determination of the liability to pay tax on any goods or services or both;
(f) Whether applicant is required to be registered;
(g) Whether any particular thing done by the applicant with respect to any goods or services or both amount to or results in a supply of goods or services or both, within the meaning of that term.
5.3 Thus, Section 97(2) clearly and vividly defines the nature and scope of questions on which Advance Ruling can be sought. We find that the questions posed before the Authority in the instant case, do not classify un

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posed in the instant Application.
5.4 Now, coming to Question No.2, the Applicant has sought to '…specify the applicability of Foreign Trade Policy 2015-2020 Mid Term Review and specify procedure for procuring goods from DTA against Advance Authorisation'. Here again we find that the question is beyond the ambit of Section 97(2), as it relates to applicability of Foreign Trade Policy 2015-2020 Mid Term Review and the related procedure. Obviously, the Applicant has sought a ruling for applicability of Foreign Trade Policy which is clearly beyond the ambit of Authority for Advance Ruling constituted under CGST Act 2017/MPGST Act 2017. We thus do not find the application worthy of admission.
5.5 In view of the discussions foregoing, the application filed by the applicants, being beyond the scope of Section 97(2), merits rejection at the stage of admission itself, without going into the merits of the case in terms of Section 98(2) of the CGST Act 2017/MPGST Act 2017.
RULING
6. The A

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M/s. Amar Pratap Steels (P) Ltd. Versus CGST & CE, Jaipur I
Central Excise
2018 (9) TMI 123 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 19-7-2018
Excise Appeal No. 50716 of 2018 – A/52610/2018-EX[DB]
Central Excise
Mr. C L Mahar, Member (Technical) And Ms. Rachna Gupta, Member (Judicial)
Shri Himanshu Bansal, Advocate for the Appellants
Ms Tamana Aalam, AR for the Respondent
ORDER
Per: C L Mahar:
The present appeal has been filed against order-in-appeal No. 391(SM) CE/JPR/2017 dated 31.10.2017.
2. The brief facts of the case are that the appellant has established his factory in the State of Rajasthan and was operating under Rajasthan Investment Promotion Scheme which was notified by the Government of Rajasthan with the objective of facilitating investment in the establishment of new enterprises under the various schemes of Rajasthan Government. The appellant (assessee) was eligible for subsidies as per the various schemes applicable to the asses

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rd, it appears that the identical issue has come up before the Tribunal in the case of Shree Cements Ltd. V/s CCE, Alwar 2018- TIOL-748-CESTAT-DEL where it was observed that:-
“7. We have heard both sides at length and perused the appeal record. As out lined above, the appellants are covered by the Investment Promotion Schemes of the Rajasthan Government. In terms of the various schemes of the Rajasthan Government, the appellants are required to discharge their VAT liability by making payment of the same. Out of such VAT credited to the Government, a certain portion is disbursed back to them in the form of subsidies. Such disbursement happens in the form of VAT 37 B, challan which can be utilized in subsequent periods to discharge VAT liability. The crux of the dispute in the present case is whether such subsidy amounts are required to be included in the assessable value of the goods manufactured by the appellants, in terms of Section 4 of the Central Excise Act. As per the concept of

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he included in the transaction value.
9. In the present case we know that for the initial period the assessees are required to remit the VAT recovered by them at the time of sale of the goods manufactured. A part of such VAT is given back to them in the form of subsidy in Challan 37 B. Such Challans are as good as cash but can be used only for payment of VAT in the subsequent period. In terms of the scheme of the Government of Rajasthan payment of VAT using such Challan are considered legal payments of tax. In view of the above, Revenue is not correct in taking the view that VAT liability discharged by utilizing such subsidy challans cannot be taken as VAT actually paid.
10. It is pertinent to reproduce the observations of the Tribunal in the Welspun Corporation Ltd. case
“5.1 The Respondent company opted for “Remission of Tax Scheme” and was thus eligible for the Capital subsidy in the form of remission of Sales Tax subject to the conditions to be fulfilled…. The subsidy in t

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M/s. Kochar Properties P. Ltd. Versus Commissioner of GST & Central Excise Chennai South Commissionerate
Service Tax
2018 (9) TMI 828 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 19-7-2018
ST/Misc. 41660/2017 and ST/404 & 405/2012 – Final Order Nos. 42042-42043/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri V. S. Manoj, Advocate for the Appellant
Shri A. Cletus, Addl. Commissioner (AR) for the Respondent
ORDER
Per Bench
After hearing both sides, we find that the issue pertains to inclusibility of value of taxable services of interest accrued on security deposit paid in connection with renting of immovable property.
2. We find that the ld.

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interest that would have accrued on such security deposit therefore cannot be made part of the value for taxable service. Hence those portions of the impugned orders which have decided to the contrary cannot be sustained and are set aside. So ordered.
3. However, no interference is made with regard to the remaining service tax amounts that may have been demanded in these orders.
4. At the same time, we also find that all the disputes being only interpretational, there cannot be any penalty and hence the penalties imposed in the impugned order under the Finance Act, 1994 are set aside.
5. The impugned orders are modified to the above extent and the appeals partly allowed.
6. The miscellaneous application filed by Revenue for change of ca

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Commissioner, Hosur Municipality, Commissioner, Ranipet Municipality, Commissioner, Krishnagiri Municipality, Commissioner, Thiruvannamalai Municipality Versus Commissioner of GST & Central Excise, Chennai – III, Commissioner of GST & Central Excise, Puducherry
Service Tax
2018 (9) TMI 1142 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 19-7-2018
ST/41845/2014, ST/41976/2015, ST/41985/2015, ST/42343/2015 – Final Order Nos. 42132-42135/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri G. Natarajan, Advocate for the Appellants
Shri A. Cletus, Addl. Commissioner (AR) and Shri K. Veerabhadra Reddy, JC (AR) for Respondents
ORDER
Per Bench
The common dispute in all these appeals concern taxability on amounts received by the appellants towards renting of immovable properties such as commercial complex, shops, lands etc. to various parties. The lower authorities in these cases have confirmed the

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should await the decision of the said nine Judge Bench. He also points out that the judgment of the Hon'ble Delhi High Court in Home Solutions Retails India Ltd. Vs. Union of India – 2011 (24) STR 129 (Del.) which had upheld the constitutional validity of levy of service tax of renting of immovable property has been appealed against and is pending before the Hon'ble Supreme Court as reported in 2012 (26) STR J118 (SC). So also, another judgment of the Hon'ble Delhi High Court in Ritika Pvt. Ltd. dated 23.9.2011 which had held that service tax imposed under section 65(105)(zzzz) of the Act could not be held as unconstitutional has also been appealed against and admitted by the Hon'ble Supreme Court as reported in 2017 (52) STR J204 (SC). The ld. Counsel prays that in view of these developments, the decisions in all these appeals may be deferred till the final decision of the Hon'ble Supreme Court.
3. On the other hand, ld. ARs Shri A. Cletus, and Shri K. Veerabhadra Reddy submitted tha

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velopment, vide their order dated 5.4.2018 in the matter relating to UTV News Ltd. and others (supra) relied by the ld. Counsel, the Hon'ble Supreme Court has gone into the question whether levy of service tax under section 65(105)(zzzz) ibid is within the legislative competence of Parliament or otherwise. The relevant portion of the said order of the Hon'ble Supreme Court is reproduced as under:-
“We have heard the Learned Counsels for the parties at some length.
2. The question arising is whether “Service Tax” under Section 65(105)(zzzz) of the Finance Act, 1994 on renting of immovable property or any other service in relation to such renting, for use in the course of or, for furtherance of, business or commerce is within the legislative competence of the Union Parliament.
3. The above question is directly relatable to the scope and ambit of Entry 49 of List II of the Seventh Schedule to the Constitution of India dealing with “Taxes on lands and buildings”. If the impost/levy is d

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e considered by a Bench of nine Judges. The questions of law to be decided by the larger Bench are as follows:
1. Whether “royalty” determined under Sections 9/15(3) of the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957, as amended) is in the nature of tax?
2. Can the State Legislature while levying a tax on land under List II Entry 49 of the Seventh Schedule of the Constitution adopt a measure of tax based on the value of the produce of land? If yes, then would the constitutional position be any different insofar as the tax on land is imposed on mining land on account of List II Entry 50 and its interrelation with List I Entry 54?
3. What is the meaning of the expression “Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development” within the meaning of Schedule VII List II Entry 50 of the Constitution of India? Does the Mines and Minerals (Development and Regulation) Act, 1957 contain any provision which op

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ent by law relating to mineral development” in List II Entry 50 refers to the subject-matter in List I Entry 54 of the Seventh Schedule to the Constitution?
9. Whether List II Entry 50 read with List I Entry 54 of the Seventh Schedule to the Constitution constitute an exception to the general scheme of entries relating to taxation being distinct from other entries in all the three Lists of the Seventh Schedule to the Constitution as enunciated in M.P.V. Sundararamier & Co. v. State of A.P. [AIR 1958 SC 468: 1958 SCR 1422] [AIR p. 494 : SCR at p. 1481 (bottom)]?
10. Whether in view of the declaration under Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 made in terms of List I Entry 54 of the Seventh Schedule to the Constitution and the provisions of the said Act, the State Legislature is denuded of its power under List II Entry 23 and/or List II Entry 50?
11. What is the effect of the expression “… subject to any limitations imposed by Parliament by law

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ecision has been delivered by a Bench of five Judges of this Court and the decision delivered by a seven-judge Bench of this Court in India Cement Ltd. v. State of T.N. [(1990) 1 SCC 12], reference to the Bench of nine Judges is requested. The office is directed to place the matter on the administrative side before the Chief Justice for appropriate orders.”
4. In view of the above, we are of the opinion that these matters should await the decision of the nine judges Bench whereafter the hearing of these matters will be taken up once again in the course of which it will be open for the parties to urge such additional points as may be considered relevant. The matter is accordingly deferred until disposal of the issues pending before the nine judges Bench in Mineral Area Development Authority and Others (supra).”
5.3 Discernibly, the Hon'ble Supreme Court has found it proper to defer decisions in these matters awaiting the judgment of the nine Judge Bench in Mineral Area Development Aut

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Commissioner, Idappadi Municipality, Commissioner, Gobi Chettipalayam Municipality, Commissioner, Dharmapuri Municipality Versus Commissioner of GST & Central Excise, Salem
Service Tax
2018 (9) TMI 1143 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 19-7-2018
ST/40994/2015, ST/41008/2015, ST/41538/2015, ST/40254/2016 – Final Order Nos. 42125-42128/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri S. Kannappan, Advocate for the Appellants
Shri K. Veerabhadra Reddy, JC (AR) for Respondents
ORDER
Per Bench
The common dispute in all these appeals concern taxability on amounts received by the appellants towards renting of immovable properties such as commercial complex, shops, lands etc. to various parties. The lower authorities in these cases have confirmed the demands of service tax with interest on such amounts under the head Renting of Immovable Property as defined in Section 65(105)(zzzz) o

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lutions Retails India Ltd. Vs. Union of India – 2011 (24) STR 129 (Del.) which had upheld the constitutional validity of levy of service tax of renting of immovable property has been appealed against and is pending before the Hon'ble Supreme Court as reported in 2012 (26) STR J118 (SC). So also, another judgment of the Hon'ble Delhi High Court in Ritika Pvt. Ltd. dated 23.9.2011 which had held that service tax imposed under section 65(105)(zzzz) of the Act could not be held as unconstitutional has also been appealed against and admitted by the Hon'ble Supreme Court as reported in 2017 (52) STR J204 (SC). The ld. Counsel prays that in view of these developments, the decisions in all these appeals may be deferred till the final decision of the Hon'ble Supreme Court.
3. On the other hand, ld. AR Shri K. Veerabhadra Reddy submitted that the judgments of the Hon'ble High Court of Delhi in Home Solutions (supra) as well as Ritika Pvt. Ltd. (supra) have not been stayed by the Hon'ble Supreme

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as gone into the question whether levy of service tax under section 65(105)(zzzz) ibid is within the legislative competence of Parliament or otherwise. The relevant portion of the said order of the Hon'ble Supreme Court is reproduced as under:-
“We have heard the Learned Counsels for the parties at some length.
2. The question arising is whether “Service Tax” under Section 65(105)(zzzz) of the Finance Act, 1994 on renting of immovable property or any other service in relation to such renting, for use in the course of or, for furtherance of, business or commerce is within the legislative competence of the Union Parliament.
3. The above question is directly relatable to the scope and ambit of Entry 49 of List II of the Seventh Schedule to the Constitution of India dealing with “Taxes on lands and buildings”. If the impost/levy is directly relatable to the lands/buildings contemplated in Entry 49 of List II of the Seventh Schedule to the Constitution of India we would have had no hesit

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ons 9/15(3) of the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957, as amended) is in the nature of tax?
2. Can the State Legislature while levying a tax on land under List II Entry 49 of the Seventh Schedule of the Constitution adopt a measure of tax based on the value of the produce of land? If yes, then would the constitutional position be any different insofar as the tax on land is imposed on mining land on account of List II Entry 50 and its interrelation with List I Entry 54?
3. What is the meaning of the expression “Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development” within the meaning of Schedule VII List II Entry 50 of the Constitution of India? Does the Mines and Minerals (Development and Regulation) Act, 1957 contain any provision which operates as a limitation on the field of legislation prescribed in List II Entry 50 of the Seventh Schedule of the Constitution of India? In particular, whet

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?
9. Whether List II Entry 50 read with List I Entry 54 of the Seventh Schedule to the Constitution constitute an exception to the general scheme of entries relating to taxation being distinct from other entries in all the three Lists of the Seventh Schedule to the Constitution as enunciated in M.P.V. Sundararamier & Co. v. State of A.P. [AIR 1958 SC 468: 1958 SCR 1422] [AIR p. 494: SCR at p. 1481 (bottom)]?
10. Whether in view of the declaration under Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 made in terms of List I Entry 54 of the Seventh Schedule to the Constitution and the provisions of the said Act, the State Legislature is denuded of its power under List II Entry 23 and/or List II Entry 50?
11. What is the effect of the expression “… subject to any limitations imposed by Parliament by law relating to mineral development” on the taxing power of the State Legislature in List II Entry 50, particularly in view of its uniqueness in the sense that

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tate of T.N. [(1990) 1 SCC 12], reference to the Bench of nine Judges is requested. The office is directed to place the matter on the administrative side before the Chief Justice for appropriate orders.”
4. In view of the above, we are of the opinion that these matters should await the decision of the nine judges Bench where after the hearing of these matters will be taken up once again in the course of which it will be open for the parties to urge such additional points as may be considered relevant. The matter is accordingly deferred until disposal of the issues pending before the nine judges Bench in Mineral Area Development Authority and Others (supra).”
5.3 Discernibly, the Hon'ble Supreme Court has found it proper to defer decisions in these matters awaiting the judgment of the nine Judge Bench in Mineral Area Development Authority and Others (supra). Viewed in this light, we are of the considered opinion, that in the interests of justice, all these appeals should be kept in ab

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In Re : A2Z Infra Engineering Ltd.
GST
2018 (11) TMI 1505 – AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – 2018 (18) G. S. T. L 760 (A. A. R. GST)
AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – AAR
Dated:- 19-7-2018
STC/AAR/03/2018
GST
Shri S.K. Buxy, Member (State Tax) and Rajesh Kumar Singh, Member (Central Tax)
ORDER
Proceedings : The applicant M/s. A2Z Infra Engineering Ltd., B-18, Amrapali Society Raipur, GSTIN 22AAECA1203A1ZX has filed the application U/s 97 of the Chhattisgarh Goods & Services Tax Act, 2017 requesting advance ruling as regards levy of CGST & SGST @ 6% each instead of 9% each on the composite supply of work contract services provided to Chhattisgarh State Power Distribution Company Ltd. (CSPDCL) by A2Z Infra Engineering Ltd., Raipur.
2. Facts of the case :-
I. M/s. A2Z Infra Engineering Ltd., Raipur (hereinafter referred to as 'A2Z' or the company') is a fully integrated Electrical Business Group in India engaged in providing m

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arh.
IV. CSPDCL had floated a tender to award the aforesaid specified scope of work and after successful bidding M/s. A2Z has been awarded the work contract services from CSPDCL.
3. Contention of the Applicant :
(i)   that, since the services provided by it are in the nature of composite supply of work contract involving supply of goods and services therefore the services provided will be subjected to GST @ 12%  instead of 18% in terms of Notification No. 24/2017-Central Tax (Rate), dated 13-10-2017. This Notification provides that the services provided to the Central Government, State Government, Union Territory, a local authority, a Government Authority or a Government Entity by way of construction, erection, commissioning, installation completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession will be subje

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ity, they should have been procured by the said entity in relation to a work entrusted to it by the Central  Government, State Government, Union territory or local authority, as the case may be.
(iii)   that, CSPDCL is a Government entity which came into existence w.e.f. 1-1-2009 as one of the company when erstwhile Chhattisgarh State Electricity Board (CSEB) was reorganized into 5 companies by Government of Chhattisgarh in accordance with the provisions contained in Sections 131-134 of Electricity Act, 2003. CSPDCL is the electricity   generation company of Government of Chhattisgarh in India and was formed by issuance of notification in official gazette  dated 31-12-2008, Thus, condition No. 1 is satisfied that  CSPDCL is a Government entity. Further 100% holding is of Chhattisgarh Sate Government.
(iv)   that, CSPDCL is implementing this work on behalf of Government of Chhattisgarh. This IPDS scheme has been sanctioned by Ministry of po

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rning any profit or gain but for the benefit of India as a whole so that electricity reaches each and every corner of India. 
(vi)   Thus on the basis of above, the Applicant contends that the said work contract services involving the supply of goods and services to CSPDCL is liable for GST @ reduced rate of 12% instead of 18%.
4.   Personal Hearing :-
In keeping with the established principles of natural justice, personal hearing in the matter was extended to the authorized person of the Applicant and accordingly, Shri Malvinder Singh Bhatia (Advocate) along with Shri Mohit Gupta (CA Intern), appeared before us for hearing on 22-6-2018 and reiterated their contention. They also furnished a written submission dated 22-6-2018, which has been taken on record.
5.   Thus we find that A2Z, the Applicant is seeking clarity as regards the applicable rates for payment of GST on the aforesaid services rendered by them to CSPDCL„ viz. whether the appl

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lation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be.
The Applicant is thus seeking advance ruling on the issue, as according to them the services provided by them are in the nature of composite supply involving supply of goods and services, therefore, they should charge GST at the reduced rate of 12% instead of 18% as per provisions of Notification No. 24/2017-CentraI Tax (Rate), dated 21-9-2017 and Notification No. 31/2017-Central Tax (Rate), dated 13-10-2017.
6.   The legal position, Analysis and Discussion :-
6.1   The provisions for implementing the CGST Act and CGGST Act 2017 are similar. Now we sequentially discuss the provisions that are applicable in the present case.
6.2   The primary issue that needs decision here so as to arrive at applicability or otherwise of the benefit of the conditional exemption Notification referred to above, in the context of the advance

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3-10-2017.
6.4   Now, moving on to the second aspect regarding the nature of activities being under taken by the applicant i.e. whether the same can be treated as the work predominantly for use other than for commerce, industry or any other business of profession or not, it is seen that :
(i)   As per, Section 2(119) of Chhattisgarh Goods and Services Tax Act 2017, Work Contract means a contract for building, construction fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.
(ii)   Notification No. 24/2017-State Tax (Rate), dated 23-9-2017 and thereafter Notification No. 31/2017-State Tax (Rate), dated 13-10-2017 amended Notification No. 11/2017-State Tax (Rate), dated the 28th June, 2017, Of Chhattisgarh St

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fication, in the Table, against serial number 3, for item (vi) in column (3) and the entries relating thereto, in columns (3), (4) and (5), the following shall be substituted namely :-
(3)
4
5
“(vi) Services provided to the Central Government; State Government Union Territory, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair. Maintenance, renovation, or alteration of –
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession :
(b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; or
(c) a residential complex predominantly meant for selfuse or the use of their employees or other persons specified in paragraph 3 of the Schedule Ill of the Central Goods and Services Tax Act, 2017 –
6
–
(vii) Construction services other tha

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duced tax rate, it is of paramount importance that the services under taken/work done by the Applicant for CSPDCL must necessarily for use which is non-commercial in nature.
(v)   Now to ascertain the constitution of CSPDCL i.e. whether it has been incorporated for commercial aim or otherwise, it is seen that  CSPDCL is a company incorporated under the Companies Act 1956, earlier known as Mahanadi Power Development Company Limited (Company Registration No. 1015822, dated 19-5-2003) and is a company limited by share. Further it is also in public domain that the main Objects of CSPDCL, as enumerated in its Memorandum of Association are as under : –
MEMORANDUM OF ASSOCIATION OF CHHAITISGARH STATE POWER DISTRIBUTION COMPANY LIMITED
MAIN OBJECTS
A. Main Objects to be pursued by the company on its incorporation
2. Manufacture, trading, coordination
To carry on the business of purchasing, importing, exporting, producing, trading, manufacturing or otherwise dealing in Ele

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companies
– To carry on the business of purchasing, selling, importing, exporting, wheeling and trading of power including finalization of tariff, billing and collection thereof.
   – To execute Power Purchase Agreements with Transmission Companies, Generating Companies, Central and State generating stations. Regional Electricity Boards, other State, Companies and Persons.
– To execute agreements for sale of Power of other distribution or trading companies and other persons and to coordinate, aid and advise on the activities of other companies and concerns, including subsidiaries, associates and affiliates engaged in generation, transmission, distribution, supply and wheeling of electrical energy.
B. Objects incidental or ancillary to the attainment of the main objects :
4. Borrowing power
Subjects to the provision of Section 58A of the Companies Act, 1956 and the rules framed thereunder to borrow money or to receive money or deposits for the purpose of financing the bu

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f electrical and electronic equipment's etc.
To carry on the business of manufacturing, assembling, repairing, servicing, selling, purchasing importing, exporting, of electrical and electronics equipments like, transformers, motors, switch gears, pumps, threshers, starters, electric fans coolers, air conditioners, televisions, telephones, epabx, audio and video equipments used in factories, homes, mills, workshop business offices, hotels, and other type of electrical, electronics, solar equipments and machineries of Domestics, Industrial, Communication. Defence, Research applications. To carry on the business of repairing, renovating, conditioning, altering, of the above machineries and equipments on Job-work basis.
(vi)   Thus on going through the main/ancillary objectives as enumerated  in Memorandum of Association of CSPDCL, there hardly remains any doubt regarding the principal/primary and foremost aim of CSPDCL being predominantly commercial in nature and tha

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Refund Of IGST on export Of Goods on payment Of duty-setting up Of Help-Desks
PUBLIC NOTICE NO. 98/2018 Dated:- 19-7-2018 Trade Notice
Customs
OFFICE OF COMMISSIONER OF CUSTOMS (Export)
NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAI-400 001
F. No. S/26-Misc-05/2018
Date: 19.07.2018
PUBLIC NOTICE NO. 98/2018
Subject: reg.
Attention of the Exporters, Custom Broker and Traders Is invited to Board's Circular No. 21/2018 – Customs issued vide F. No. 450/ 1 19/2017 – Cus IV dated 18.07.2018. Various representations have been received in the Board wherein micro small and medium enterprise exporters have informed that their IGST refunds are held up and that they are unable to approach Customs port of exports due to factors like distan

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ANG. The ICEGATE email ID of the officer(s) deputed at the Help Desk may immediately be informed to TeamICES@icegatc.gov.in. to enable access to the data. The officers deputed at Help Desks would use this data to inform the exporters about the documents required, if any, and guide them to resolve the errors. The exporters can provide details related to any port of export at the Help Desk near their location. The Help Desk shall act as an extended office of the Port of export and collect documents/ information on behalf of the port of export. The details provided by the exporters to the Help Desk shall be transmitted by ICEGATE e-mail to the nodal officers at the port of export. The ICEGATE. e-mail ID or the nodal officer or each port of exp

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Sanction of IGST refunds pending sanction due to error code SB005 and SB006
F.No. S23/210/2017-AP(IGSTR)Vol. II Dated:- 19-7-2018 Trade Notice
Customs
OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS
CUSTOM HOUSE: PORT AREA: VISAKHAPATNAM – 530035
PHONE: (0891) 2564552 FAX: (0891) 2562613
F.No. S23/210/2017-AP(IGSTR)Vol. II
Date: 19.07.2018
NOTE/URGENT
Sub: Sanction of IGST refunds pending sanction due to error code SB005 and SB006
Attention of all the Exporters/ Customs Brokers

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Refund of IGST on export of Goods on payment of Duty- clarification in case of SB003 errors and extension of date in SB005 & other cases using officer Interface for rectification of errors
PUBLIC NOTICE NO. 27/2018 Dated:- 19-7-2018 Trade Notice
Customs
GOVERNMENT OF INDIA
MINISTRY OF FINANCE, DEPARTMENT OF REVENUE
OFFICE THE PRINCIPAL COMMISSIONER OF CUSTOMS (AIR CARGO),
CHENNAI-VII COMMISSIONERATE,
NEW CUSTOM HOUSE, MEENAMBAKKAM, CHENNAI – 600027.
F. No.: S.Misc.230/2018-EXP(Air)
Dated: 19.07.2018
PUBLIC NOTICE NO. 27/2018
Sub: reg.
********
It may be recalled that in Circular 15/2018 – Customs date 06.06.2018 CBIC has provided for resolution of SB003 error in certain cases through the utility developed by the Direct

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s dated 06.06.2018 wherein an alternative mechanism with an officer interface to resolve invoice mismatches (SB005 error) was provided for the shipping bills filed till 30.04.2018. Despite wide publicity and outreach programmes to make exporters aware about the need to have identical details in invoices given in shipping bills and GST returns, it has been observed that a few exporters continue to commit such errors. Therefore, in view of the ongoing Refund Fortnight (from 16th July 2018 to 31st July 2018) giving high priority to the interest of exporters, it has been decided by the Board to extend the rectification facility to Shipping Bills filed up to 30.06.2018.
4. Further, the facility of rectification through Officer Interface is also

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Measures to Expedite refund of GST to Exporters
GST
Dated:- 18-7-2018

In order to sort out the problems being faced by the exporters for refund claims of GST two 'Special Drive Refund Fortnight' were organized from 15.3.2018 to 29.3.2018 and from 31.5.2018 to 16.6.2018.
As a result, most of the claims filed till 30.04.2018 have been sanctioned. IGST refunds amounting to ₹ 21,142 crore and RFD-01A refunds totalling ₹ 16,920 crore has been sanctioned by CBIC and State Governments as on 16.06.2018.
Government has also taken other measures to expedite the refund of GST to exporters which include certain common errors hindering disbursal of Integrated Goods and Services Tax (IGST) refund and solutions thereof, permit

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Grievance Redressal Officers for processing the complaints/information under e-way Bill System
GST
Dated:- 18-7-2018

As per the decision of the GST Council, e-way bill system has been rolled-out in a staggered manner across the country. E-way bills are getting generated successfully and till 17th July, 2018, more than Thirteen Crore and Fifty Lakh e-way bills have been generated which includes Six Crore and Fifty Lakh E-way bills for Intra-State movement of goods.
Grievance Redres

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Tax Payment Pre GST inivoice
Query (Issue) Started By: – AKSHAY NAIK Dated:- 18-7-2018 Last Reply Date:- 3-8-2018 Goods and Services Tax – GST
Got 5 Replies
GST
Dear Sirs,
There is a Pre-GST Transporters (GTA) invoice which is required to be paid (late payment). The payment if made now will Service Tax be liable (RCM Basis) ? If Yes the, How the payment will have to be done of the tax?
Thanks & Regards.
Reply By Rajagopalan Ranganathan:
The Reply:
Sir,
Access ACES Portel. Pay t

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Penalty Confirmed for Not Filing Part-B of E-Way Bill in Compliance with Rule 138 & Section 68 of GST Acts.
Case-Laws
GST
Non-filing of part B of E-way bill – Inter and Intra State Supply of Goods or Services – Rule 138 and Section 68 of Central Goods and Service Tax Act, 2017 and M. P. Goods and Service Tax Act, 2017 – it is mandatory for the petitioner to file the Part-B of the e-way bill giving all the details – levy of penalty confirmed.
TMI Updates – Highlights, quick notes, ma

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Unutilized Input Tax Credit in case of Exports of services without payment of IGST
By: – Pooja Sheth
Goods and Services Tax – GST
Dated:- 18-7-2018

* Introduction:
Exports has always been considered as apple of GST's eye. It has always been considered the area of focus whenever any government policy has to be framed. Hence, person exporting should not be burdened by domestic taxes.
Section 16 of IGST Act, 2017 deals with the concept of Zero rated supply. According to this provision zero rated supply means export of goods or services or both or supplying goods or services or both to a Special Economic Zone unit.
The concept of export of services has been broadly borrowed from the provisions of the erstwhile Service Tax Law. Under the GST regime, export of service will be treated as 'zero-rated supplies'. Section 2(6) of IGST Act, 2017 defines the term “export of services” as under: –
Export of services means the supply of any service when, –
* The supplier of

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x under bond or letter of undertaking in accordance with the provisions of sub section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), refund of input tax credit shall be granted as per the following formula-
Refund amount = Turnover of Zero rated supply of Services x Net ITC
Adjusted Total Turnover
* “Refund amount” means the maximum refund that is admissible;
“Net ITC” means the input tax credit availed on inputs and input services during the relevant period other than the input tax credit availed for which refund is claimed under sub rule (4A) or (4B) or both;
“Turnover of Zero rated supply of services” means value of
* Payment received during the period for the invoices raised in earlier period or invoices raised in current period
* Add: Invoices raised in current period for advances received in earlier period
* Less: Advances received in current period whose supply is not completed in the current period
“Adjusted Total Turnover”

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Month
Domestic Turnover (Invoices Raised) (a)
Export Turnover (Invoices Raised) (b)
Payment received in Foreign Currency equivalent INR (c)
Turnover of Zero-Rated supply of Services (d)
Adjusted Total turnover
(e) = a + b
Net ITC (CGST+ SGST+ IGST) (f)
Eligible Refund Amount (g)=d*f/e
July
200
700
700
700
900
180
140
Aug
300
800
1000
800
1100
220
160
Sept
250
750
600
750
1000
200
150
Oct
200
700
1200
700
900
180
140
Nov
250
750
–
550
1000
200
110
Dec
100
800
1000
1000
900
180*
200
Total
1400
4500
4500
–
–
1160
900
*Refer eligible refund amount note below
Clarification of above working: –
* Turnover of Zero Rated Supply of Services
* July: All the payments have been received against the invoices raised in the month of July itself and hence payment received during the month will be considered as turnover of Zero rated supply of services.
* August: We have received ₹ 1000 lakhs against which invoices raised

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n earlier month are ₹ 550 lakhs. Hence applying the above formula turnover of zero rated supply will be 0+550-0=550 lakhs Rs
* December: We have received ₹ 1000 lakhs against invoices of ₹ 800 crores. Hence applying the above formula turnover of zero rated supply will be 1000+0-0=1000 lakhs Rs.
* Adjusted Total Turnover
Adjusted total turnover in GST has to be considered as defined under clause (112) of section 2 which is sum total of domestic as well as zero rated supplies and excludes taxes and exempt supplies. Zero rated supply here has to be considered as defined under clause (112) of section 2 which is invoice raised. Here it slightly differs from erstwhile service Tax law.
* Net Input Tax Credit
As per Definition of Input Tax which is defined under clause (62) of section 2 of CGST Act, 2017 includes all the three taxes that is integrated tax, central tax and state tax hence calculation has to be done on aggregate basis and not on individual basis.
*

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information so filled by clicking the option "Validate & Calculate"
* After successful validation creating JSON file by clicking the option "Create File to Upload".
* Uploading the JSON File so created in the form GST RFD – 01A on common portal.
* Submitting the statement uploaded.
* Select the bank account number where refund is to be credited.
* After completing the above steps form GST RFD – 01A is to be filed on common portal by attaching DSC
* On successful submission Acknowledgement will be generated.
Documents required for filing Refund Application
List of documents required for submission of manual refund application:
* Copy of Form GST RFD – 01A filed on common portal and acknowledgement generated.
* Electronic credit ledger copy with the amount of refund debited
* Copy of filed GSTR 3B
* Copy of filed GSTR 1
* Copy of Export Invoices
* Copy of Statement 3 of FORM RFD-01A.
* Invoices w.r.t. input and input services.
* BRC or

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Furnishing of Bond or Letter of Undertaking for export of goods or services
Prior to the export
Other Clarifications
* Debit entry shall be made in electronic credit ledger at the time of filing a refund application
* Acknowledgement in Form GST RFD 02 will be issued if the application is found complete in all respect
* Bank Account details should be as per the registration data. Any change in Bank details shall first be amended in registration particulars before quoting in the application
* BRC or FIRC details will be mandatory where refund is claimed against export of services.
* The minimum amount of refund payable should be ₹ 1000/- or more then only application has to be done.
* Provisional refund of 90% shall be granted within 7 days from the date of RFD – 02
* 6% interest can be claimed if the RFD-06 has not been received within 60 days from the date of receipt of GST RFD – 01A
Reply By ATK 49 as =
In your example you have clamied ITC on a monthly basis

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GIST OF RECENT PRONOUNCEMENTS ON GST (PART-XIV)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 18-7-2018

Goods and Services Tax (GST), introduced from July 1, 2017 is more than one year old now but has resulted in operational and implementation disruptions affecting all stakeholders. GST law, as drafted and legislated, is not free from the interpretational hassles. GST Council his however, making regular changes to fix the anomalies and hardships faced by taxpayers.
Taxpayers have already challenged various provisions of GST laws and rules framed thereunder with about 200 writs being filed in different courts. High courts and Supreme court have taken a liberal stand so far in view of the fact that law is new and is yet evolving. However, CBIC may move to Supreme court where the verdict is against the Government. Recently, CBIC has issued directions to be officers to defend the writs. Further, we have now rulings from Authority for Advance Ruling and Ant

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f tax. Chapter VIII of Kerala State CST Act refers to maintenance of accounts and other records. Chapter IX refers to returns. The very purpose of these provisions is to ensure a complete assessment, as required under Chapter XII. The powers conferred upon the officials under Chapter XIV for inspection, search, seizure and arrest is to detect and prevent evasion of tax under the Kerala State CST Act. The Rules insisted to be complied will have to be interpreted keeping in mind the purpose for which it were formulated. Chapter VII of Kerala State CST Rules refers to maintenance of accounts by registered persons. Rules as above are framed under Chapter VII under the head "Accounts and Records". The Rules refers to the maintenance of records by a registered person. Thus, it can be seen that rules are framed for a fair and complete assessment of the goods or services provided by the assessee. In regard to Rule 56(19) of the Kerala State CST Rules, in the writ petition itself, the

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such cases, breach would come into existence only after the enquiry.
Non-compliance of maintaining records as referred in sub-rule 19(9) & (i) of Rule 56 of the Kerala State CST Rules can be subject matter of enquiry in assessment proceedings or in other proceedings and cannot be a reason to prevent the petitioners from engaging sale of lotteries in the State. The petitioners also cannot be prevented from engaging in the sale of lottery for not furnishing details regarding unsold ticket particulars within 48 hours. Explanation of the petitioners in each of such occasions, have to be considered by the officials. Similarly, the petitioners also cannot directed to file information in return to Annexure in regard to the percentage commission they receive. The petitioners are having every right to withhold such information. No action can be initiated for non-furnishing of such details regarding percentage of commission received. Percentage of commission has no nexus to the levy of tax to

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f such payment is produced, that will also be auto-credited/refunded in their cash ledger by the CSTN within a period of one week from the date the payment is made. The ASG was advised to appraise the Commissioners of these grievances and, thereafter, ensure that they are followed up either with the Council or with the appropriate Authority in the Ministry. The court further observed that it expected the competent authority in the Ministry, particularly at the State and the Central level, to coordinate and resolve the issues which are raised in this petition on or before 24th April, 2018.
* In Anguvilas M.V. Muthaiah Pillai Firm v. CCE, Trichy 2018 (2) TMI 1659 (Cestat, Chennai), where an appeal of 2006 was pending in Cestat, Chennai and there was a stay in operation granted by the Madras High Court to the effect that appeal not to be proceeded with till disposal of writ petition. Ahead of the transition of indirect taxes to GST, Tribunal was given mandate by Ministry of Finance to d

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Key 30 suggestions on Proposed Amendments in the GST Law
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 18-7-2018

To iron out the practical hindrances and issues being faced by the Industry Inc since the implementation of GST, the GST Council on July 9, 2018 had unveiled the draft of 46 proposed changes in GST law as a major step towards facilitating trade and ease of doing business.
After detailed analysis of various amendments, following suggestions were compiled by Mr. Bimal Jain, Chairman, Indirect Tax Committee, PHD Chamber of Commerce which have been submitted to the Government for their kind consideration:
I Definition of 'supply'
The term 'supply' is proposed to be amended to exclude activities/ transactions listed in Schedule II to ensure that the activities/ transactions as per Schedule II is to decide only whether the same is supply of goods or services. Hence, activities/ transactions listed in Schedule II (as supply of service or supply of goods)

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nt Circular No. 47/21/2018 – GST dated 08.06.2018 wherein while discussing servicing of car issue, it was clarified that where a supply involves supply of both goods and services, values of which are shown separately, the goods and services would be liable to tax at their respective rates. Hence, it is suggested that the concept of composite and mixed supply should be dealt and clarified as legislator intended while framing the section 8 of the CGST Act and should be more emphasized and explained by way of an example in the respective section of the CGST Ac and dominant/ principal supply concept would be determining factor for arriving at the composite supply irrespective of the fact of portion of material & services involved in the contract.
* Clarifying the meaning of term 'immovable property' under Para 6(a) of Schedule II – Meaning of term 'immovable property' must be clarified to avoid disputes whether particular activity is 'works contract' or not.
II Schedule III
The scope o

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HR, Management carried out from the Central Head Office for all branches etc.
* Inclusion of export duty credit scrips in Schedule III – Duty credit scrips viz. MEIS/ SEIS, issued on export of goods/ services are presently treated as exempted goods and therefore are subject to reversal of credit provisions of Section 42/Section 43 of the CGST Act on inputs/input services/Capital goods. As an encouragement to exporters, this Duty credit scrips should be included here as neither as supply of goods nor services.
III Reverse Charge under Section 9(4) of the CGST Act
GST Council has proposed to omit existing Section 9(4) of the CGST Act and instead, granting an enabling power for the Govt. to notify a class of registered persons who would be liable to pay tax on reverse charge basis in case of receipt of taxable goods or services from an unregistered supplier. The details of such specified persons are to be notified in future.
Suggestion(s):
* Similar changes are also required in Se

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* Uncertainty on inclusion of clause (b) – Draft amendment states “that a person who opts to pay tax under clause (a), clause (b) or clause (c) may supply services of value not exceeding ten percent of turnover in the preceding financial year in a State or Union territory or five lakh rupees, whichever is higher”
Clause (b) mentions about composite rate of tax on restaurant service providers. There seems no essence to include this clause while allowing supply of services upto specified amount to manufacturers and traders. Else, it may be clarified that that for clause (b), this limit shall apply for services supplied other than restaurant service providers.
* Restricting value of ₹ 5 Lakh to only taxable supply – It should be clarified that this amount of ₹ 5 Lakhs should only be the taxable value of services – Order no. 01/2017 dated 13.10.2017 already clarifies that person supplying exempt services along with goods or restaurant services are not ineligible for compos

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true sense.
V Input Tax Credit – No interest on reversal of ITC for non-payment to supplier
It is proposed to delete interest applicability when GST ITC is reversed for non-payment of invoice amount after 6 months from date of invoice
Suggestion(s):
* Retrospective effect – This provision should be made applicable retrospectively from 01.07.2017 and payment of interest already made in intervening period should be refunded/ reinstated.
VI Input Tax Credit – Blocked credit
It is proposed to prune down blocked credit list in Section 17(5) of the CGST Act. ITC shall be available in case of motor vehicles having approved capacity of not more than 13 persons (including the driver) only in case it is used for specified purposes. It is also proposed that ITC in respect of food and beverages, health services, renting or hiring of motor vehicles, vessels and aircraft, travel benefits to employees etc., can be availed where the provision of such goods or services is obligatory for an emplo

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ar pharmaceuticals/ medicinal industries where medicines cannot be sold without providing test samples. Here, the intention of the registered person is to promote their business i.e. it is a promotional or advertising activity. The company itself understand the same and such advertising cost is generally taken into account while finalizing pricing of other items manufactured. Hence, denial of credit on goods supplied as free samples is not justified.
* Clarification that term 'gift' shall not include promotional items – It may be clarified that supply of promotional items along with supply of goods as a combo supply (undertaken as a part of business promotional activity), shall not be covered under the ambit of 'gift' for reversal of ITC.
* Allow ITC on 'gifts' when tax is paid on outward supply – In terms of Para 2 of Schedule I, supply of goods and services between related persons, shall be treated as supply even if made without consideration. However, gifts not exceeding INR 50,

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ept of seamless flow of credit.
* Any other civil structure not to be excluded from Plant and machinery – Explanation in Section 17 for the purposes of Chapter V (Input Tax Credit) and Chapter VI (Registration) provides that the 'Plant and Machinery' means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes –
* land, building or any other civil structures;
* telecommunication towers; and
* pipelines laid outside the factory premises
It is therefore suggested that the words “other civil structures” be removed from the said Explanation. Inclusion of the term “Other civil structures” may lead to numerous disputes on the eligibility of credit on various plant and machineries as various plant and machineries require civil works to support their operation.
* Pipe line used outside the factory should be covered un

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(78) of the CGST Act]. Like, supply of five specified petroleum products and alcoholic liquor for human consumption may be termed as non-taxable supply. Then, what constitutes non-GST supply? Whether Schedule III items are being taken as non-GST supply? Clarity in this regard is required.
* Clarification on meaning of 'non-taxable supply' – A concrete list of activities constituting non-taxable supplies in GST be provided to avoid any confusion as to its inclusion in aggregate turnover and reversal of common credit.
VIII Registration
It is proposed to insert the provisions of separate registration for multiple units in an SEZ.
Suggestion: Word 'shall' be replaced with 'may' – It should not be made mandatory for the existing SEZ units which is having a single registration if located in the same SEZ. This will create confusion and additional work for the existing units. This should be an optional facility only.
Further, the proposed amendment in Section 25(2) of the CGST Act allo

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posed Section 43A makes supplier and the recipient jointly and severally liable to pay tax or to reverse the input tax credit availed against such tax, for which the details have been furnished by the supplier but the return in respect thereof has not been furnished and tax has not been paid.
It is advisable that the supplier shall be made primarily responsible to pay taxes and the recipient shall not be made liable to reverse ITC availed against such taxes already paid by the recipient to the supplier. Only on failure of recovery of taxes from supplier under exceptional circumstances, as affirmed by the GST Council in their 27th GST Council meeting, the recipient could be approached for discharge of liability or reversal of ITC, as the case may be. In this regard, strict safeguards must be ensured so that GST authorities cannot deny ITC if the supplier has not paid the taxes as a first recourse. Further, appropriate provisions must be inserted/ amended in the GST ITC provisions also

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bility shall be adjusted in such manner as may be prescribed, should be done away as there are lot many situation viz. quantity discounts/ trade discounts, etc., when DN/CN to be issued nearly at the end of next FY, following the end of relevant financial year in which such supply was made
* Issuance of DN/CN without GST may also be allowed as an option to deal with financial adjustments wherein no adjustment of the tax liability is required in the hands of the supplier and corresponding reversal of ITC in the hands of recipient.
XI GST Refund
Amendments are proposed under Section 54(3) of the CGST Act to file refund claim for the unutilized ITC on Inputs & Input Services by due date for furnishing of returns under Section 39 for the period for which the claim for refund of ITC arises, which is presently the end of the financial year.
Suggestion(s):
* Facility on GSTN portal should be enabled to allow monthly and/ or quarterly refund – As of now Form RFD – 01A allows only monthl

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ount to be deposited to file appeal from the appellate authority to appellate tribunal is 20% of the disputed tax amount along with the amount deposited u/s 107(6) subject to maximum of ₹ 50 crores.
Suggestion(s):
* Maximum ceiling should be 10 crores – Under Excise and Service tax, pre-deposit @ 7.5% of tax in dispute at first level and 2.5% at second level was applicable subject to maximum of ₹ 10 Crores. Keeping such high pre-deposit amount of 10%/20% with maximum ceiling as high as ₹ 25 crores/ 50 crores will cause undue hardship on innocent assesses having genuine case and not easing business for SME/ MSME Sectors.
It is suggested that, pre-deposit amount under GST also should be 7.5% at first level of appeal and 2.5% at second level, totalling together 10% of disputed tax amount subject to maximum of ₹ 10 Crores.
XIII Recovery of Tax
It is proposed to provide that recovery may be made from distinct persons present in different States / UTs in order t

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f the enactment without interest or penalty implication.
Other changes to be considered:
I Definition of 'composite supply'
Section 2(30) of the CGST Act defines Composite supply as a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.
Suggestion(s):
* Clarification as to separate consideration – It is suggested that suitable clarification be provided that if separate considerations are charged for various goods and services supplied in conjunction with each other in ordinary course of business, the same shall also amount to composite supply.
* Suitable clarification be issued to provide certainty for determining whether a bundle of supply is a composite supply and also to determine principal supply therein.
II Time of supply
Section 14 of

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l goods or plant and machinery reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher:
Provided that where refractory bricks, moulds and dies, jigs and fixtures are supplied as scrap, the taxable person may pay tax on the transaction value of such goods determined under section 15.
Suggestion(s):
* Words 'plant and machinery' be deleted – The use of word plant and machinery is not required as they are already covered under the meaning of capital goods.
* Clarification on no reversal of ITC in case of renting of capital goods – Section 18(6) uses the term 'supply' which includes even renting of those capital goods or plant and machinery, on which ITC has been taken i.e. to say in case such capital goods/ plant or machinery are rented out, Section 18(6) triggers and there would be reversal of ITC which is not the intention. Suitable proviso be inserted

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n(s):
* Two crores limit must be computed per registration wise – Anomaly of word 'turnover' in Section 35(5) viz-a-viz word 'aggregate turnover' in Rule 80(3) be removed. Further, clarity must be provided that two crores limit for GST audit shall be determined per State wise turnover rather than taking aggregate turnover on PAN India basis of an assessee. Considering aggregate turnover of an assessee will create a situation where one unit of such assessee having only ₹ 1,00,000 (assumed) turnover shall be required to conduct GST Audit just because its other units are crossing two crore limit.
V Centralised Authority for Advance Ruling
Considering the contrary rulings coming from different States' Advance Ruling Authorities, necessary provision for establishing centralised Authority for Advance Ruling or Appellate Authority for Advance Ruling be inserted. The issue has been identified as a concern by the GST Council also and hence necessary amendments in this regard be initia

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Non appearance of supplier invoice of 1 supplier in July GSTR2A return
Query (Issue) Started By: – Ashish Gupta Dated:- 18-7-2018 Last Reply Date:- 3-8-2018 Goods and Services Tax – GST
Got 6 Replies
GST
For July 2017 Invoices of 1 supplier are not appearing in GSTR 2A. The supplier had filed his GSTR1 late somewhere in November. We had already shown his invoices in GSTR 2 under missing invoices before then. I think it is a systems related issue. I have logged into his online GST account and have seen that he has uploaded the invoices in his GSTR1.
What documents or confirmations do I need to take or correspondence to be done to show to GST audit in future? I already have his confirmation and GST tax paid challans.
Reply By A

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Refund of IGST on export of Goods on payment of duty-Setting up of Help Desks -reg.
21/2018 Dated:- 18-7-2018 Circular
Customs
Circular 21/2018-Customs
F. No: 450/119/2017-CusIV
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Indirect Taxes and Customs)
*****
Room No. 227B, North Block,
New Delhi dated 18th July, 2018
To,
All Principal Chief Commissioner/Chief Commissioner of Customs/ Customs & Central Tax / Customs (Preventive)
All Principal Commissioner/Commissioner of Customs/ Customs& Central Tax / Customs (Preventive)
All Director Generals under CBIC.
Subject: Refund of IGST on export of Goods on payment of duty-Setting up of Help Desks -reg.
Sir/ Madam,
Various representations ha

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abin Space etc. would be made available to the officers by FIEO/AEPC.
3. The Directorate of Systems shall provide the status of each pending IGST refund claim with specific error due to which it is being held up, on Antarang. The icegate email ID of the officer(s) deputed at the Help Desk may immediately be informed to Team.ICES@icegate.gov.in to enable access to the data. The officers deputed at Help Desks would use this data to inform the exporters about the documents required, if any, and guide them to resolve the errors. The exporters can provide details related to any port of export at the Help Desk near their location. The Help Desk shall act as an extended office of the Port of export and collect documents/ information on behalf of

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Refund of IGST on export of goods on payment of duty-Clarification in case of SB003 errors and extension of date in SB005 & other cases using officer Interface for rectification of errors-reg.
22/2018 Dated:- 18-7-2018 Circular
Customs
Circular No. 22/2018-Customs
F. No: 450/119/2017-CusIV
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Indirect Taxes and Customs)
*****
Room No.227-B, North Block,
New Delhi dated 18th July, 2018
To,
All Principal Chief Commissioner/Chief Commissioner of Customs/ Customs& Central Tax / Customs (Preventive)
All Principal Commissioner/Commissioner of Customs/ Customs & Central Tax / Customs (Preventive)
All Director Generals under CBIC.
Subject: Refund of I

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xamined. As PAN is embedded in the GSTIN, CBIC has decided to accord similar treatment to such cases also as are already covered under Para 2 of Circular 15/2018-Customs. The conditions prescribed in para 2 of the said circular shall apply mutatis mutandis.
3. CBIC has issued circulars 05/2018-Customs dated 23.02.2018, 08/2018-Customs dated 23.03.2018 and 15/2018-Customs dated 06.06.2018 wherein an alternative mechanism with an officer interface to resolve invoice mismatches (SB005 error) was provided for the shipping bills filed till 30.04.2018. Despite wide publicity and outreach programmes to make exporters aware about the need to have identical details in invoices given in shipping Bills and GST returns, it has been observed that a few

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Southern Erectors (P) Ltd. Versus Commissioner of Service Tax [sought to be changed as CGST & Central Excise, Chennai South Commissionerate Chennai]
Service Tax
2018 (7) TMI 1219 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 18-7-2018
Application No. ST/Misc[CT]/41703/2017 & Appeal No. ST/515/2011 – FINAL ORDER No. 42029 / 2018
Service Tax
Hon'ble Ms. Sulekha Beevi, C.S., Member (Judicial) And Hon'ble Shri Madhu Mohan Damodhar, Member (Technical)
Shri M. Karthikeyan, Advocate For the Appellant
Shri A. Cletus, ADC (AR) For the Respondent
ORDER
Per Bench
The appellants are engaged in providing service under “Erection, Commissioning or Installation Services”. During the course of audit, it was found that during the period 2007-08, the appellants had realized labour charges covering the period from 12/06 to 5/07 during 4/07 July/2007 towards erection, commissioning or installation services rendered to their clients, but had not discharged service tax on such

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eceived by them were barely enough to pay staff / workers and their salaries. Despite this financial crunch, appellant had taken all efforts to realize the payments but could not succeed. When the payments were received, the appellants remitted the same along with interest. The delay in making the payment of service tax was only due to the delay in receiving payments. He points out that the amount of service tax along with interest was paid much before issuance of show cause notice. Only the differential amount as calculated by the department due to change in the rate of service tax from 12.24 % to 12.36% was to be paid. The same was paid within one month after issuance of SCN i.e. 15.11.2008. Thus, appellant had paid the entire service tax liability along with interest before passing of the OIO dt. 13.3.2009. Apart from the allegation that appellant has suppressed facts, there is no evidence to establish that appellant suppressed facts with intention to evade payment of tax. There was

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7) STR 343 (Tri.-Bang.) and argued that penalty is unwarranted when there is mere delay in payment of service tax. The facts put forward before us as well as the records would show that other than delay in payment of service tax, there is no evidence to show that appellant has suppressed facts with intention to evade payment of tax. The figures required for quantification of the demand of service tax has been taken from the accounts maintained by the appellant and there is nothing unearthed by the department to show that there was any positive act of suppression on the part of the assessee. We therefore find this is a fit case for invoking Section 80 of the Finance Act, 1994 as the appellant has put forward reasonable cause for non-payment of service tax during the disputed period. We therefore hold that the penalty imposed under Section 78 is unwarranted and requires to be set aside. The impugned order is modified to the extent of setting aside penalty imposed under Section 78 of the

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Commissioner of Service Tax, Chennai [sought to be changed as CGST & Central Excise, Chennai South Commissionerate Chennai] Versus Vasanth & Co.
Service Tax
2018 (7) TMI 1220 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 18-7-2018
Application No. ST/Misc [CT]/41475/2017 & Appeal No. ST/524/2011 – Final Order No. 42030 / 2018
Service Tax
Hon'ble Ms. Sulekha Beevi, C.S., Member ( Judicial ) And Hon'ble Shri Madhu Mohan Damodhar, Member ( Technical )
Shri B. Balamurugan, AC (AR) For the Appellant
Shri K. A. Parthasarathy, Advocate For the Respondent
ORDER
Per Bench
The facts of the case are that M/s.Vasanth & Co., the respondents herein, are engaged in the business of trading in consumer durables like TV, Refrigerators, Washing Machines etc. in the show rooms. Pursuant to investigations carried out by the Directorate General of Central Excise Intelligence (DGCEI), it appeared that respondents had tie up with various financial institutions like GE Countrywide

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ority by an order dt. 08.09.2010 confirmed the proposals regarding tax demand in the SCN with interest, and also imposed penalties of Rs. 2000/- under Section 77 and equal penalty of Rs. 35,23,936/- under section 78 ibid. In appeal, the Commissioner (Appeals) vide impugned order dt. 17.06.2011, the Commissioner (Appeals) set aside the order of original authority and allowed the appeal. Aggrieved, Revenue is before this forum.
2. Today when the matter came up for hearing, on behalf of the Revenue Ld. A.R Shri B. Balamurugan reiterates the grounds of appeal and also made the following submissions :
i) The issue in question has been decided against the respondents in the Larger Bench of the Tribunal decision in Pagariya Auto Center Vs CCE Aurangabad – 2014 (33) STR 506 (Tri.-LB).
ii) The customers of respondents were directed to approach only such banks / financial institutions who have tie up with them and not to others.
iii) The representative of income by financial institutions

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siness Auxiliary Service'. Being an restricted activity, the Tribunal also held that for concluding that BAS has been provided, the transactional documents and other evidence on record should indicate the substantial activities falling within the contours of any of the integers of the definition of “Business Auxiliary Service'.
ii) However, in the instant case, no transactional documents have been relied upon by the original authority as well as by Commissioner (Appeals) and only statement of Shri S. Jeyaraj, Accounts Manager has been relied upon.
iii) All that the respondents did was to direct prospective customers to representatives of banks / financial institutions operated from the place of business of the respondents.
iv) The Department has sought various particulars on 1.10.2007 to which they had given reply on 10.10.2007 along with copies of General Ledger for the years 2003-04, 2004-05 and 2005-06. Further in response to summons dt. 15.11.2007 they had submitted a letter dt.

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nal authority was passed on 08.10.2010 and the impugned order of lower appellate authority was passed on 17.6.2011. Discernably, the lower authorities would obviously not have had the benefit of Larger Bench decision of the Tribunal Pagariya Auto Center Vs CCE Aurangabad – 2014 (33) STR 506 (Tri.-LB) which was passed only on 12.09.2013. In fact, the SCN has largely relied upon the single statement of Shri S. Jeyaraj, Accounts Manager of respondent to support the allegations made therein. There is no reference to any agreements or communications between the respondents and the financial institutions made in the body of the SCN. However, in the list of relied upon documents supplied along with SCN a reference has been made to sample copies of communications with ICICI Bank and GE Countrywide (Annexure-II) and also to worksheets containing details of payments received towards commission by respondents (Annexure-III). All the same, both the lower authorities have not done any analysis of t

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or financial institution would per se amount to BAS. The identification of the transaction and its appropriate classification as the taxable BAS or otherwise must clearly depend upon a careful analysis of the relevant transactional documents. Only such scrutiny and analysis would ensure rational classification of the transaction.
21. Where mere space is provided along with furniture for facilitating accommodation of representatives of financial institutions in the premises of an automobile dealer and consideration is received for that singular activity, such consideration may perhaps constitute a rent for the provision of space and associated amenities. Such restricted relationship/transaction may not amount to BAS. If on the other hand, the transactional documents and other evidence on record indicates a substantial activity falling within the contours of any of the integers of the definition of BAS, spelt out in Section 65(19), then it would be legitimate to conclude that BAS is

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ustice require that the matter should be remanded for de novo consideration by the original authority to apply the tests laid down by the Larger Bench of the Tribunal in Pagariya Auto Center Vs CCE Aurangabad (supra) as discussed above. So ordered.
8. At the same time, we find merit in the alternative contention of the Ld. Advocate that in a number of Tribunal decisions, which have applied the ratio laid down by Larger Bench in Pagariya Auto Center (supra), have consistently set aside penalties even while upholding the tax liability with interest. We find that this is the ratio adopted by the Tribunal in Sharya Motors Vs CST Mumbai – 2016 (43) STR 158 (Tri.-Mumbai) where it has been held as follows :
“6. In short, the appeal is disposed of by upholding the tax liability with interest, under the Business Auxiliary Services for commission received from the financial institution, while the tax demand on amount received as target incentive is set aside. Interest liability on the tax con

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es imposed under Sections 76, 77 and 78, we find that as per our above discussion on limitation, there is bona fide belief of the appellant for non payment of service tax, the appellant has been able to reasonable cause for invocation of Section 80. We are therefore of the view that considering the facts and circumstances as well as discussion made herein above with regard to the demand being time bar penalties under Sections 76, 77 and 78 require to be set aside invoking Section 80. As result we pass following order :
(a) Demand from July, 2003 to March, 2005 in respect of Business Auxiliary Services (service relate to HDFC bank) is set aside being time bar.
(b) Service tax demand for April and May-2005 require to be re-quantified as per our above discussion by the Adjudicating Authority.
(c) As regard the demand of Rs. 1,42,114/- relates to Business Auxiliary Service (Commission on sale of car) require to be re-considered applying the Notification No. 14/2004-S.T. by the Adj

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Jaypee Sidhi Cement Plant Versus CGST C.C & C. E-Jabalpur And Hindustan Zinc Ltd Versus CE & ST-Udaipur
Central Excise
2018 (7) TMI 1279 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 18-7-2018
Appeal No. E/50633/2018-SMC, Appeal No. E/51064/2018-SMC – Final Order No. 52540-52541/2018
Central Excise
Hon'ble Mr. V. Padmanabhan, Member (Technical)
Sh. Hemant Bajaj, Advocate for the appellant
Sh. P. Juneja, H.C. Saini & K. Poddar, DR for the respondent
ORDER
Per: V. Padmanabhan
1. The present appeals have been filed against the Order-in-Appeal No. 494/2017-18 dated 29/11/2017 (for appeal E/50633/2018) and Order-in-Appeal No. 323/2017 dated 07/02/2018 (Appeal No E/51064/2018). The issue involved in both the cases are identical and hence are being disposed through this common order.
2. The brief facts for purposes of the present appeals are that the appellants purchase coal from various subsidiary companies of M/s Coal India Ltd., like M/s South Eastern Co

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the Cenvat Credit availed on the basis of supplementary invoices issued by Coalfields. Aggrieved by the decisions the present two appeals have been field.
3. In the above background we heard Shri Hemant Bajaj, Ld. Counsel for the Appellants as well as Shri P. Juneja & Shri H.C. Saini, Ld. DRs for the Revenue.
4. The arguments advanced on behalf of the appellants by Ld. Advocate are summarized below:-
i. He contended that the case of the Department is that the differential duty paid by the Coal Companies was on account of fraud, suppression etc alleged against them and hence the prohibition contained in Rule 9(1)(b)) applies to the appellants. In this connection he submitted that proceedings against the coal companies have not attended finality and are subjudice before the Apex Court. The appeals filed by the coal companies before the Tribunal have been disposed off with a direction to approach the Tribunal again after the outcome of the decision of the Hon'ble Supreme Court in the

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turer on account of willful misstatement, suppression of facts etc. Proceedings against the coal companies have been initiated by the Revenue by alleging suppression and hence the supplementary invoices cannot be the basis for availing credit as has been held by the lower authorities. Hence it is prayed that the appeal may be dismissed.
6. Further he submitted that the case law in the case of Birla Corporation may not be applicable to the present case but the fact whether there is suppression on the part of the present appellant is required to be considered by Tribunal.
7. After hearing both sides and perusal of record I note that the issue involved in the present appeals is whether the appellants are entitled to Cenvat Credit on the basis of supplementary invoices issued by the coal companies. Such credit stands denied in terms of Rule 9 (1)(b) of the Cenvat Credit Rules which denies the credit if such supplementary invoices are issued for duties which became payable by the manufact

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M/s Incopac Parts Pvt. Ltd. Versus CCE & CGST, Jaipur
Central Excise
2018 (7) TMI 1366 – CESTAT NEW DELHI – 2018 (362) E.L.T. 904 (Tri. – Del.)
CESTAT NEW DELHI – AT
Dated:- 18-7-2018
Excise Appeal Nos. 51200 – 51201 of 2018 – Final Order No. 52538 – 52539/2018
Central Excise
Hon'ble Sh. V. Padmanabhan, Member ( Technical )
Sh. Somesh Arora, Advocate for the appellant
Sh. K. Poddar, AR for the respondent
ORDER
Per : V. Padmanabhan
The present appeals are challenging the Orders-in-Appeal Nos.32-33 (SJ)/CE/JPR/2018 dated 02.02.2018 passed by the Commissioner (Appeals), Central GST and Central Excise, Jaipur. The period of dispute is April to September, 2014.
2. The appellant is a 100% EOU. For manufacture of goods in the EOU, the appellant procured various inputs on payment of duty and availed cenvat credit of duty paid on such goods. The dispute pertains to the refund claims made by the appellant under Rule 5 of the Cenvat Credit Rules, 2004. Part of the ref

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arised below:
(i) Ld. Advocate submitted that the inputs were procured on payment of duty. The department is not justified in denying the cenvat credit of duty paid on such inputs for the reasons that the exemption notification which was available for procurement of such goods i.e. Notification No. 22/2003 dated 31.03.2003 is a conditional notification and the exemption in terms of such notification will be available only subject to fulfilment of such condition. In view of the conditions in the notification, he submitted that the provision of Section 5A(1) cannot be held against the appellant.
(ii) In this connection, he relied on the decision of the Karnataka High Court in the case of CCE, Bangalore-II vs. Federal Mogul TPR India Ltd. -2016 (334) ELT 476 (Kar.). In the above decision, he argued that the Hon'ble High Court has taken the view that Section 5A(1A) cannot be cited in the case of job work exemption under Notification No. 8/2005-ST.
4. Ld. AR appearing for the Revenue j

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iscussed the issue on merit and has rejected the refund claim and hence the appeal filed by the appellant on merits may be considered.
6. After hearing both sides and on perusal of record, I find that the crux of the dispute is whether the appellant is entitled to cenvat credit of duty paid on inputs procured by them for use in the manufacture of final product in the EOU. It is not in dispute that the inputs have been procured on payment of duty, even though the appellant could have procured the same without payment of duty in terms of Notification No. 22/2003 dated 31.03.2003. The concurrent finding of both the authorities below is that the cenvat credits are irregular and hence the refund of such credits under Rule 5 of the Cenvat Credit Rule will not be admissible.
7. The provision of Section 5A (1A) of the Central Excise Act is reproduced below:
“where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has

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on unconditionally. The appellant, being EOU was entitled to procure inputs without payment of duty under Notification No. 22/2003. A reference to this notification indicates that the exemption is granted subject to various conditions including the condition that the procedure contained in Central Excise (Removal of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 2001. The above clearly reveals that the exemption is conditional and is not absolute. In view of the above, it is to be concluded that provision of Section 5A(1A) as well as the Circular dated 26.11.2010 are not applicable for procurement of goods under Notification No. 22/2003. Consequently, there is no infirmity in the availment of credit by the appellant on duty paid. Further, the appellant will also be entitled to refund under Rule 5 of the Cenvat Credit Rules subject to satisfaction of conditions for claim of such refund.
10. Ld. AR has raised the ground that the impugned order has been pas

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