TMI Tax Updates - e-Newsletter
October 17, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. EMPLOYEES CONTRIBUTIONS TO FUNDS ground realities must be recognized by the Legislators, Judiciary , Governments and authorities to avoid un-necessary litigation.

   By: DEVKUMAR KOTHARI

2. EXEMPTION TO EDUCATION SERVICES PROVIDED BY IIM

   By: Dr. Sanjiv Agarwal

News

1. Finance Commission to visit Uttar Pradesh

2. Shri J.P.S. Chawla assumes charge as new Controller General of Accounts

3. Government of India committed to Safeguard IP content: Commerce Secretary

4. India’s Foreign Trade: September 2019

Notifications

Customs

1. 40/2019 - dated 15-10-2019 - ADD

Seeks to impose anti-dumping duty on imports of Flat rolled product of steel, plated or coated with alloy of Aluminium and Zinc originating in, or exported from China PR, Vietnam and Korea RP.

2. 56/2019-Customs (N.T./CAA/DRI) - dated 14-10-2019 - Cus (NT)

Appointment of CAA by DGRI

3. 03/2019 - dated 30-8-2019 - Cus (NT)

Territorial limits of the Customs area of "M/S The Thar Dry Port, A unit of Hasti Petrochemical & Shipping Limited" for Inland Container Depot

GST - States

4. GST-I/2019/5 - dated 10-10-2019 - Punjab SGST

Seeks to prescribe the due date for furnishing of return in FORM GSTR-1 for registered persons having aggregate turnover more than 1.5 crore rupees for the months of October, 2019 to March, 2020

5. GST-I/2019/4 - dated 10-10-2019 - Punjab SGST

Seeks to prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020

Income Tax

6. 80/2019 - dated 15-10-2019 - IT

Advisory - Full Fledged Money Changers (FFMC).

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/DOP/CIR/P/2019/110 - dated 15-10-2019

Cyber Security & Cyber Resilience framework for Qualified Registrars to an Issue / Share Transfer Agents

2. SEBI/HO/MIRSD/DOP/CIR/P/2019/111 - dated 15-10-2019

Cyber Security & Cyber Resilience framework for KYC Registration Agencies

3. SEBI/HO/MIRSD/DOP/CIR/P/2019/109 - dated 15-10-2019

Cyber Security & Cyber Resilience framework for Stock Brokers / Depository Participants - Clarifications

Customs

4. PUBLIC NOTICE NO. 93/2019 - dated 11-10-2019

Eligibility Criteria for availing of DPD Scheme by Importers

5. PUBLIC NOTICE NO. 92/2019 - dated 11-10-2019

Claim of refund amount on account of double-payment of Customs Duty

6. PUBLIC NOTICE NO. 17/2019 - dated 9-10-2019

Clarification regarding duty drawback allowed in cases of short realization of export proceeds due to bank charges deducted by foreign banks

7. PUBLIC NOTICE NO:- 86/2019 - dated 1-10-2019

Compliance regarding the proper declaration of description and valuation of Import of Chocolates

8. PUBLIC NOTICE: 24/2019 - dated 30-9-2019

Disposal of pending 4% SAD Refund Claims

9. PUBLIC NOTICE NO. 31/2019-cus - dated 26-9-2019

Clarification regarding duty drawback allowed in cases of short realisation of export proceeds due to bank charges deducted by foreign banks

10. Public Notice No. 81/2019 - dated 18-9-2019

Rectification of Invoice Mis-match (SB005), GSTN Number Mis-match (SB003) EGM errors (SB002 or SB006) and filing of claim for IGST Refund

Highlights / Catch Notes

GST

• Excluding Principal-Supplied Goods from GST Valuation in Job Work: Essential for Accurate Tax Calculations.

  Case-Laws - AAR : Job work - valuation - The value of the goods provided by the principal would not form the part of the value of the supply and must be excluded while valuing the supply.
  Visit to Get Source

  ---

• Company Supplying Surplus Energy Must Reverse Input Tax Credit for Exempted Goods per Tax Regulations.

  Case-Laws - AAR : Reversal of Input Tax Credit - in respect of the supply of surplus electric energy it is evident that the applicant is engaged in supply of exempted goods - The applicant company is required to reverse input tax credit on such supply.
  Visit to Get Source

  ---

• Co-operative Society Not Liable for GST TDS; Not Established by Government Despite Supervision Under 1959 Act.

  Case-Laws - AAR : Liability for deduction of GST TDS - the applicant has not been established by national, regional or local governments but is registered under Co-operative Society Act 1959, which mandates certain supervisory / participation from the relevant Department of Karnataka State Government - Not liable for TDS
  Visit to Get Source

  ---

• No ITC on Gifts: Section 17(5)(h) of CGST Act bars input tax credit for goods given as gifts or free samples.

  Case-Laws - AAR : Input tax credit (ITC) - Section 17(5)(h) of CGST Act 2017 does not allow credit on any goods disposed by way of gift or free samples, whether or not in the course or furtherance of business, It is an admitted fact that the applicant herein purchases the items to be disposed as gifts under various incentive schemes to dealers/ painters etc. Therefore the applicant is not entitled to avail ITC on such items.
  Visit to Get Source

  ---

• Agriculture Tree Climbing Apparatus-Unipole classified as manually operated implement, qualifies for tax exemption under agricultural tools.

  Case-Laws - AAR : Classification of goods - Agriculture Tree Climbing Apparatus-Unipole Manually operated - the product in question falls under manually operated agricultural implement and hence qualify to be a tool of a kind used in agriculture - Benefit of exemption available.
  Visit to Get Source

  ---

• Post-Sales Tech Support Services Classified Under IT Support Services, Service Code 998313 as per GST Rules.

  Case-Laws - AAR : Classification and nature of supply - post sales services - The Post-Sales Technical Support Services provided by the applicant is classified as Information Technology Support Services falling under Service Code 998313.
  Visit to Get Source

  ---

• Marketing & Pre-sales Support Services Classified as Intermediary Services u/s 2(13) of IGST Act, 2017.

  Case-Laws - AAR : Classification and nature of supply - The Marketing and Pre-sales Technical Support Services provided by the applicant will be classified as Intermediary services in terms of Section 2(13) of the Integrated Goods and Services Tax Act, 2017
  Visit to Get Source

  ---

• Applicant Classified as "Intermediary" for GST in India Under "Pre-sale and Marketing Services Agreement" Activities.

  Case-Laws - AAR : Nature and classification of supply - The activities carried out in India by the applicant so far as those activities mentioned in the “Pre-sale and Marketing Services Agreement” would render the applicant to qualify as an “intermediary”
  Visit to Get Source

  ---

• Transaction Not Zero-Rated Under GST: Classified as Domestic, Not Export of Services; Payment by Volvo Sweden Irrelevant.

  Case-Laws - AAR : Export of services - zero rated supply or not? - The transaction is a transaction within the country and is a composite supply of goods or services to the customers by the applicant and hence does not amount to export of services as M/s. Volvo Sweden is not the recipient of services provided by the applicant, but only pays the consideration to the provider of such services.
  Visit to Get Source

  ---

• GST Classification Dispute: Are Services Canteen or Outdoor Catering? Cash and Carry Model Assessed at 5% GST Rate.

  Case-Laws - AAR : Classification of services - levy of GST - canteen or outdoor catering services? - services rendered by the applicant under cash & carry model - sale of food items for consumption either in the premises or away from the premises. There is no condition in the entry that the premises should be own - supply is from the same place in which the food is prepared - liable to GST @5%
  Visit to Get Source

  ---

• Railway Coach Seats Taxed at 18% GST, Classified Under Heading 94018000.

  Case-Laws - AAR : Classification of goods - rate of GST - Seats even if they are meant to be fitted in railways coaches, would be covered under the heading 94018000 - liable to GST @18%
  Visit to Get Source

  ---

• Cattle and poultry feed manufacturing on a job work basis faces 5% GST as per supply rules.

  Case-Laws - AAR : Levy of GST - job work charges charged for manufacturing of Cattle Feed / Poultry Feed on job work basis - scope of supply - the activity is liable to GST @5%
  Visit to Get Source

  ---

• Relocation of Chief Commissioner's Office to Guwahati under GST jurisdiction is lawful and not arbitrary. Policy discretion upheld.

  Case-Laws - HC : Territorial Jurisdiction under GST - shifting of the Chief Commissioner’s Office from Shillong to Guwahati does not suffer from arbitrariness - it is a settled law that a policy decision will not be interfered in a routine manner unless the policy is contrary to the provisions of statutory rules or in violation of provisions of the Constitution. Unless the same is established, the said policy decision must be left to the Government to decide as to which policy should be adopted.
  Visit to Get Source

  ---

Income Tax

• New Tax Compliance Rules for Full Fledged Money Changers: Stay Updated to Avoid Penalties

  Notifications : Advisory - Full Fledged Money Changers (FFMC).
  Visit to Get Source

  ---

• High Court Rules Writ Petition Not Maintainable; Revision u/s 264 of Income Tax Act Available for Refund Dispute.

  Case-Laws - HC : Maintainability of wrt petition before HC where option for filing Revision u/s 264 is available - Rejection of Refund of excess amount paid as tax - There are no substance in the submission of the Petitioner that no revision would be available against the impugned order as it is not an order passed under the Act. Thus, remedy of revision u/s 264(1) would be available to the Petitioner.
  Visit to Get Source

  ---

• High Court Rules Against Retrospective Application of Black Money Act, 2015 u/ss 85 and 86.

  Case-Laws - SC : Section 55 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - whether the High Court was right in observing that while exercise of the powers under the provisions of Sections 85 and 86 of the Black Money Act, the Central Government has made the said Act retrospectively applicable from 01.07.2015 and passed a restraint order? - Held No
  Visit to Get Source

  ---

Customs

• Party Seeks Refund for Double Customs Duty Payment; Emphasizes Adhering to Prescribed Procedures for Efficient Refunds.

  Circulars : Claim of refund amount on account of double-payment of Customs Duty
  Visit to Get Source

  ---

• Importers Must Meet Eligibility Criteria for Direct Port Delivery Scheme: Clean Customs Record, Valid IEC, Timely Goods Clearance.

  Circulars : Eligibility Criteria for availing of DPD Scheme by Importers
  Visit to Get Source

  ---

• Commissioner (Appeals) Misclassifies Issue as Valuation Dispute; Original Classification Concern Unaddressed, Order Set Aside.

  Case-Laws - AT : Scope of SCN - The appeal before the Commissioner(Appeals) is also with regard to the classification issue but the Commissioner(Appeals) has wrongly converted the classification dispute into a valuation dispute and did not give any finding on the classification dispute as raised before him by the appellant - order set aside.
  Visit to Get Source

  ---

• Court Overturns Demand Due to Lack of Evidence on Party Relationship Influencing Goods Valuation in Sale Conditions.

  Case-Laws - AT : Valuation - substantial markup in the supply of goods - There are no evidence of the relationship having impacted the conditions of sale or that the relationship itself had been suppressed to mislead the assessing authority. - Demand set aside.
  Visit to Get Source

  ---

Service Tax

• Court Supports Cum Tax Assessment: Service Tax Based on TDS Statements Rejected; Gross Value Treated as Cum Tax.

  Case-Laws - HC : Rejection of “cum tax” claim - Demand of service tax on the basis of TDS statement - There seems no reason to deny benefit of cum tax value in view of the fact that price appearing in 26AS Forms was admittedly cum tax price and as per judgments cited by Petitioner gross value is considered as cum tax.
  Visit to Get Source

  ---

• Commissioner Faulted for Improper Service Tax Comparison; Entities Must Be Examined Before Tax Demand Justified.

  Case-Laws - AT : Broadcasting Service - Commissioner has proceeded to confirm the demand by comparing two un-comparables i.e. oranges with apples. Service tax being contract/ transaction based levy the terms of contracts between the parties to the contract need to be examined and finding recorded before any demand can be made.
  Visit to Get Source

  ---

Central Excise

• Debit Note Charges for Delayed Payments Excluded from Excise Valuation; Demand for Additional Recovery Overturned.

  Case-Laws - AT : Valuation - inclusion of charges recovered from the customer for the delayed payment by issuance of debit note - no recovery is made in excess of cash discount passed on as alleged by the Revenue other than recovery of the financial charges, for delay payment than the prescribed period - Demand set aside.
  Visit to Get Source

  ---

Case Laws:

• GST

• 2019 (10) TMI 572
  Maintainability of Advance Ruling application - scope of Section 97 (2) of the CGST Act 2017 - Levy of GST - Portfolio Management Services provided to Non-resident client, where the client pays fee in foreign currency from their overseas account to the account of the Portfolio manager - HELD THAT:- The question raised by the applicant on which advance ruling has been sought for does not fall under any of the category of Section 97 (2) of the CGST Act 2017 - Further it is an admitted fact that the applicant s question is related to place of supply and hence it is not a matter on which this authority is empowered to give a ruling. Therefore the instant application is liable for rejection and hence there are no need to go to merits of the case.

  ---

• 2019 (10) TMI 571
  Classification of services - job work or a composite supply of service and goods - Valuation - inclusion of value of free of cost supplies by the principal in the value of supply by the job worker - HELD THAT:- In terms of Section 2(68) of the CGST Act 2017, any treatment or process done on goods belonging to another person is job work and in the instant case the applicant is not just doing something on the critical components. The contract is to supply a manufactured product, some of the parts are supplied free of cost by the recipient of such supply and some other parts are to be procured by the applicant. Both these components are to be assembled together using the labour of the applicant to form the final product. No treatment or process is done on the components supplied by the applicant and in fact they are used as a part in the manufacture of a different component. The nature of supply done by the applicant is one composite supply consisting of two supplies i.e one relating to the manufacturing service on the physical inputs (goods) owned by others (Service Accounting Code 9988) and the other relating to supply of non-critical components, with the former being the principal supply. Hence the entire transaction is to be treated as the supply of manufacturing service on the physical inputs (goods) owned by others (Service Accounting Code 9988) and is taxable at the rate applicable to the same at 18%. The value of the goods provided by WIPL would not form the part of the value of the supply and must be excluded while valuing the supply. The value of the goods provided by WIPL would not form the part of the value of the supply and must be excluded while valuing the supply.

  ---

• 2019 (10) TMI 570
  Input tax credit - inputs/capital goods/input services -Section 16 and 17 of the CGST/ KGST/ IGST Act - whether the capital goods and. inputs constitute plant and machinery of the Applicant which are used in the business of Manufacturing Cement and hence not blocked input tax credit under section 17(5) of the CGST/ KGST/ IGST Act? - HELD THAT:- The applicant is entitled to credit of input tax charged on any supply of goods and/or services made to the applicant and used by the applicant in furtherance of his business. Here the electricity is produced by the solar power plant. Therefore the supplies of goods and/or services that go into the setting up of the solar power plant can be rightly construed as supplies made and used by the applicant in furtherance of his business. However this is subject to the conditions and restrictions as specified in Section 16(2) and Section 17 of the CGST Act, 2017. Input Tax Credit - items being used towards the electric energy generated from the captive power plant and transmitted to the cement manufacturing plants which are physically located at distinct locations within the State of Karnataka - section 17(1) and 17(2) of the CGST/KGST/IGST Act - permission for utilization of the credit for payment of output tax - HELD THAT:-The activity of production of electric energy is a supply to self as the electricity produced is captively used. In fact the production of electricity in a solar power plant geographically separated from the manufacturing site is an intermediate process in the manufacture of cement akin to the use of generators sets within the factory premises to produce electricity for consumption in the manufacturing process. The operation of generator sets within the factory would not constitute a separate supply. Similarly the operation of the solar power plant shall not constitute a separate supply warranting the application of Section 17(1) and /or 17(2) - the applicant shall be entitled to the eligible input credits in entirety provided the entire production is captively consumed. Reversal of Input Tax Credit - electric energy generated by it at its plant and banked with the KPTCL, GESCOM HESCOM and which is unutilized at the end of six months from the date of banking and is deemed to be consumed by KPTCL, GESCOM and HESCOM at the end of six months - HELD THAT:- Electrical energy is an exempted item in terms of CGST-Notification 2/2017-Central Tax (Rate) dated 28.06.2017 (Serial No. 104) KGST-Notification GD48 CSL 2017 dated 29.06.2017. The applicant also agrees to this, as per para 12 of Annexure 3 to their application. Therefore in respect of the supply of surplus electric energy it is evident that the applicant is engaged in supply of exempted goods - The applicant company is required to reverse input tax credit on the unutilized electric energy banked with KPTCL, GESCOM HESCOM and for which the applicant receives a consideration in terms of the Wheeling and banking agreement.

  ---

• 2019 (10) TMI 569
  Liability for deduction of GST TDS - payments made to suppliers - whether the applicant falls under any of the categories of the persons mandated to undertake TDS deduction, under Section 51(1) of the CGST Act 2017? HELD THAT:- The applicant entity was formed and registered under Co-operative Society Act 1959, where the District Co-operative Milk Unions are shareholders of the applicant organisation. Further applicant is a taxable person under the GST Acts and the entire shareholding is with the district milk unions and not with the State Government of any State or the Central Government or any local authority. Hence it is not a department or an establishment of Central Government/State Government/local authority. Therefore applicant is not covered under clause (a) (b) of Section 51(1) of the CGST Act, 2017. The applicant is a co-operative society registered under the Karnataka Co-operative Societies Act, 1959 and the applicant states that they are not registered under Societies Act, 1860. Hence the applicant is not a notified person under clause (d) of section 51(1). Clause (c) of the Section 51(1) of the CGST Act 2017 - whether the applicant is covered under Governmental Agency or not? - HELD THAT:- Governmental agency has not been defined under the CGST Act 2017 or any other notifications. Governmental Agencies are usually administrative units of government that are tasked with specific responsibilities - In the instant case the applicant has not been established by national, regional or local governments but is registered under Co-operative Society Act 1959, which mandates certain supervisory / participation from the relevant Department of Karnataka State Government. The applicant has not been tasked with any responsibilities by the Government of Karnataka. The Directors have been nominated only to safeguard the funds of the said society. Therefore the applicant is not covered under clause (c) of Section 51(1) of the CGST Act 2017. Thus, the applicant is not liable to deduct tax at source as per provisions of section 51 of CGST ACT towards payments made to suppliers of taxable goods or services or both, as they are not covered under any of the clauses of Section 51(1) of the CGST/ KGST Act 2017.

  ---

• 2019 (10) TMI 568
  Input tax credit (ITC) - credit on any goods disposed by way of gift or free samples - Input tax credit on the items purchased for furtherance of business - HELD THAT:- The goods and services so procured and disposed off/ distributed as incentives/ gifts are disposed without any consideration and hence do not qualify to be a supply in terms of Section 7 of the CGST Act. Further no GST is being paid on disposal of the said gift items. Section 17(5)(h) of CGST Act 2017 does not allow credit on any goods disposed by way of gift or free samples, whether or not in the course or furtherance of business, It is an admitted fact that the applicant herein purchases the items to be disposed as gifts under various incentive schemes to dealers/ painters etc. Therefore the applicant is not entitled to avail ITC on such items. Circular No.92/11/2019-GST dated 07.03.2019, issued by the CBIC, wherein, at para (A)(ii), it is clarified that input tax credit shall not be available to the supplier on the inputs, input services and capital goods to the extent they are used in relation to the gifts or free samples distributed without any consideration In the instant case the applicant offers free foreign / local trips, as incentives, to the dealers / painters etc., without any consideration. Therefore the input tax credit on the services procured (input services); for offering aforesaid services of free trips, is not available to the applicant. Thus, the applicant is not eligible to avail input tax credit on the inward supplies of goods and services which are attributable to the incentives provided in the form of gifts of goods and services to the painters and dealers and other persons under the CGST / SGST / IGST Act.

  ---

• 2019 (10) TMI 567
  Classification of goods - rate of tax - agricultural implement or not or not - Agriculture Tree Climbing Apparatus-Unipole Manually operated - Exemption under Entry No. 137 of N/N. 12/2017 - Central Tax (Rate) dated 28.06.2017 - HELD THAT:- In the instant case the goods in question Agricultural Tree Climbing apparatus-Unipole Manually operated is an agricultural implement and hence in common parlance it can be regarded as a tool, which is used by both hands and legs by human beings in agriculture specifically in relation to harvesting areca and pepper. Therefore the product in question merits classification as an agricultural implement / tool used in agriculture under Tariff Heading 8201 9000. Further the Jurisdiction Assistant Commissioner, LGSTO-265, Puttur, Karnataka has also furnished a report vide their letter dated 27.11.2018 confirming the usage of the said product only in agriculture - In the instant case the product in question falls under manually operated agricultural implement and hence qualify to be a tool of a kind used in agriculture. Therefore the aforesaid exemption is squarely applicable to the instant case. Thus, Agriculture Tree Climbing Apparatus-Unipole Manually operated Aluminium ladder is covered under Tariff Heading 820 land is covered under Entry No. 137 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 and hence is exempted.

  ---

• 2019 (10) TMI 566
  Classification and nature of supply - Intermediary services or not - Marketing Pre-Sales Technical Support Services provided by the applicant - Section 2(13) of the Integrated Goods and Services Tax Act, 2017 - classification of post sales services - Post- Sales Technical Support Services provided by the applicant - whether classified as Information Technology Support Services falling under HSN Code 998313 or not? HELD THAT:- The applicant is performing all the necessary pre-sale co-ordination work so that the parent company can make the supply of the relevant software. Performing the necessary work would amount to amount to facilitation of the supply, And as the applicant is facilitating the supply of goods or services or both by the parent company to other persons, and is not making the supply in its own account, he would be covered under the definition of an intermediary under the clause (13) of section 2 of the Integrated Goods and Services Tax Act, 2017 as far as the supply of marketing and pre-sales technical support services are concerned. The applicant is also of the same view that it would qualify as intermediary - Further, this supply of marketing and pre-sale technical support services is in the nature of selecting a customer, analyzing the requirements of the customers, showcasing the product, convincing of the features of the product which would meet the requirements of the customers, finalization of the product that is required by the customer, and after the order is placed on the overseas parent company, following it with the finalization of documentation and collection of invoice value - all amounts to the provision of Distributive trade services under Heading 996111, the description of which is Services provided for a fee or commission or on contract basis on wholesale trade . This is clear from the reason that the consideration for the above service is fixed as a percentage of the Sales Order Value of the respective customer. Classification of Post-Sales Technical Support Services - HELD THAT:- The nature of transaction is providing the persons who have purchased Ansys Software and using it, 24*7 customer support either through e-mail or through telephone or through Web-Support. The contract is between the end customers and the parent company in US and the applicant is providing the services to the end-customers on behalf of the parent company and charging the parent company for the services provided. The consideration is also fixed as a percentage of sales order value for the customer - For the services rendered by the applicant to the end-customer of Ansys US, the recipient of supply of services would be the person who is liable to pay that consideration, and as per the terms of the contract, the parent company makes the payment of consideration to the applicant for the services rendered to the end-customers by the applicant on behalf of the parent company. The services supplied is Information Technology Support Services covered under Service Code 998313 to the end-customer on behalf of the parent company by the applicant and by virtue of the clause (91) of section 2 of the CGST Act, the recipient of such service would be the parent company, as the consideration is receivable from the parent company. The manner of computing the value of supply is not changing the nature of services provided and hence there is no need to discuss the method of valuation of supply.

  ---

• 2019 (10) TMI 565
  Levy of GST - Intermediary services or not - section 2(13) of the IGST Act, 2017 - pre-sales marketing services provided by the applicant - HELD THAT:- Identical issue decided in the case of M/S GODADDY INDIA WEB SERVICES PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, DELHI-IV [ 2016 (3) TMI 355 - AUTHORITY FOR ADVANCE RULINGS] . Close examination of the nature of services rendered by GoDaddy India indicates that their role was purely of advisory in nature and the other entities in India were appointed and dealt with directly by GoDaddy US and GoDaddy India had no role in the matter. However the services rendered by the applicant are different in nature as compared to the GoDaddy India case in as much as the applicant acts as a facilitator to the entity located abroad, played the role of an interface between the customers in India and the principals located abroad - ln the case of GoDaddy India there was no third person with whom GoDaddy interacted in the taxable territory. In the instant case the applicant has a direct contact with the customers in India forming a triumvirate, an essential feature of an intermediary services. Needless to emphasise that the applicant has himself accepted that they do not carry out the main supply, the supply of goods. Thus, the activities carried out in India by the applicant so far as those activities mentioned in the Pre-sale and Marketing Services Agreement would render the applicant to qualify as an intermediary as defined under Section 2(13) of the Integrated Goods and Services Tax Act, 2017 and consequently be subject to the levy of GST.

  ---

• 2019 (10) TMI 564
  Classification of supply - supply of goods or services - selling Volvo branded trucks to Volvo Sweden - export of services - zero rated supply or not? - HELD THAT:- The applicant is not charging the customer any amount because of a clear commitment from M/s. Volvo Sweden that the amount spent for the parts and services involving the parts are going to be reimbursed by M/s. Volvo Sweden. In case of any parts or services which are provided to the customers which are not part of the warranty services, then such amounts are charged to the customers by the applicant or his dealers. Since the amount is paid M/s. Volvo Sweden, in monetary terms by issuing credit notes, the consideration covers this amount and it is immaterial who makes the payment. Hence there is a supply of parts and services to the customers for consideration and amounts to a supply transaction with the applicant being the supplier and the customer being the recipient of services, but the amount collectable from the customer is being paid by Volvo Sweden. This is clearly proved by the fact that M/s. Volvo Sweden is also issuing credit notes to the dealers of the applicant and not just to the applicant, if such service is provided by the dealers. The transaction is a transaction within the country and is a composite supply of goods or services to the customers by the applicant and hence does not amount to export of services as M/s. Volvo Sweden is not the recipient of services provided by the applicant, but only pays the consideration to the provider of such services. The applicant is providing composite supply of goods and services to the customers where in the principal supply is that of goods or services depending on the nature of individual case - The transaction is an intra-State or inter-State transaction (but not export transaction) depending on the place of supply - Since this transaction is not an export of services, the transaction is not a Zero-rated Supply under the IGST Act.

  ---

• 2019 (10) TMI 563
  Classification of goods - wood logs or any kind of wood in the rough/ timber - supply of debarked Eucalyptus, Acacia, Subabul, Casurina, Pine Pulpwood in billets of required size to paper mills based on their requirement - Eucalyptus De-barked pulp wood, and exclusively used to obtain pulp, which an important raw material in paper manufacturing - whether classified under HSN code 4403 or under HSN Code 4401? - HELD THAT:- Heading 4401 covers fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; wood in chips or particles; sawdust and wood waste and scrap, whether or not agglomerated in logs, briquettes, pellets or similar forms - Comparison of the specifications narrated by the applicant and the nature of goods covered under the heading clearly show that the instant goods would not be covered under the Heading 4401. Heading 4403 covers Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared - This clearly brings out that the quarter splits for pulping shall be covered under the Heading 4403. The applicant clearly expressed that supply of debarked Eucalyptus, Acacia, Subabul, Casurina, Pine Pulpwood in billets form of required size to paper mills. But it is not in the form of supply of debarked wood in pellet and briquettes form. Hence it comes under the heading of HSN 4403 of Wood in the rough, whether or not stripped of bark or sap wood or roughly square. A Circular was issued by the Government of India bearing Circular number 80/54/2018-GST dated 31-12-2018 stating that representation had been received seeking clarification on applicability of GST rate on wood log for pulping - Thus, it is clarified that wood logs or any kind of wood in the rough/ timber, including the wood in rough/ log/ timber used for pulping falls under heading 4403 and attract GST at the rate of 18%. The goods in question is verified and found that they are in the form of small logs (in the form of billets) and hence cannot be covered under HSN 4401. Hence they are squarely covered under the entry 4403 as clarified in the Circular No. 80/54/2018-GST dated 31-12-2018.

  ---

• 2019 (10) TMI 562
  Classification of services - levy of GST - canteen or outdoor catering services? - services rendered by the applicant under cash carry model - scope of supply - N/N. 11/2017 - Central Tax (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017] - whether taxable at the rate of 2.5% in terms of entry 7 (i) of the notification No. 11/2017CT (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017]? HELD THAT:- Under the cash and carry model, it is seen that the materials offered to the employees on the menu card are displayed and there is no binding on the part of the employee to purchase the same. Though the menu is decided in consultation with the employer, it has no bearing on the contract between the supplier (applicant) and the person receiving the service (employee). Since the employee is the person who pays the consideration, he becomes the recipient of the service and the service is rendered by the applicant to the employee. The recipient is not bound to purchase the items and only on his decision to purchase the food items available for sale, the contract of supply is entered and the consideration is as shown in the menu card. Hence it is a contract of supply between the applicant and the employee. The transactions relating to cash and carry model are examined and found that since the supply is neither event based nor occasional nature, the same does not get covered under the entry 7(v). Whether the applicant is a restaurant or eating joint for the purposes of this entry is the moot question. Here it is seen that the applicant is preparing the food items at the place and is selling the goods to the purchasers. Hence this amounts to sale of food items for consumption either in the premises or away from the premises. There is no condition in the entry that the premises should be own. It only mentions that the premises must be place where the services are supplied - The supply of services is happening in the premises of CISCO and the goods are prepared in the same premises and the services are provided there itself. Hence it would qualify as an eating joint (including mess, canteen) wherein the service is supplied. Explanation 1 is only clarificatory in nature and the applicant s activity of cash and carry does not fit in the transactions narrated in Explanation 1, but still gets covered under the main entry 7 (i) of the Notification. There is no condition as to the ownership of the premises in the said main entry and hence there is no need of going into the ownership of the premises or the contract. The rate of tax applicable on the above transaction is 2.5% CGST and 2.5% SGST subject to the proviso that credit of input tax charged on goods and services used in supplying the service has not been taken.

  ---

• 2019 (10) TMI 561
  Permission for withdrawal of Advance Ruling application - export of goods or not - sale of the Aircraft by the Official Liquidator to a buyer located outside - refund of the GST and the compensation cess paid - HELD THAT:- The application filed by the Applicant for advance ruling is disposed off as withdrawn.

  ---

• 2019 (10) TMI 560
  Classification of goods - rate of GST - Railway Seat Parts Thereof exclusively used by Railways - HELD THAT:- Central Board of Excise Customs has also vide Circular No. 15/90-CX.1 dated 07.05.1990 issued from F.NO. 13/2/90-CX.1, has Clarified that seats used in Railway Coaches are correctly classifiable under heading 9401. The applicant prior to GST regime were also classifying their product Seats for Railway Coaches under Heading 9401 and clearing the same to M/s. Railway Coach Factory. Further, the Heading 9401 Seats (Other Than those of Heading 9402), Whether or Not Convertible Into Beds, And Parts Thereof is exhaustive. Hence, Seats even if they are meant to be fitted in railways coaches, would be covered under this heading - Therefore, the product Seats for Railway Coaches would be covered in this heading only under 94018000.

  ---

• 2019 (10) TMI 559
  Permission for withdrawal of application - rate of tax on canteens inside business premises - HELD THAT:- The application of the applicant is disposed off as withdrawn under Section 98(2) of the CGST Act, 2017 and Section 98(2) of the Punjab GST Act, 2017.

  ---

• 2019 (10) TMI 558
  Levy of GST - job work charges charged for manufacturing of Cattle Feed / Poultry Feed on job work basis - scope of supply - HELD THAT:- In the present case. the applicant undertakes process on goods belonging to the principal. the same is in the nature of job work and the applicant is a job worker, the activity of manufacturing Cattle Feed / Poultry Feed by the applicant from the raw material supplied by the other registered person shall be considered as supply of services. The applicant, thus, undertakes this supply of services by way of processing the goods supplied by the principal for a consideration and the same is covered under the definition of Supply. The Crucial term which determines the issue in hand, is intermediate production process as job work in relation to rearing of all life forms of animals. From the facts of the case in hand, the activity of manufacturing of Cattle Feed / Poultry Feed by the applicant (on job work basis) is not an activity of carrying out an intermediate production process as job work in relation to Cultivation plants and/or rearing of all life forms of animals. Job Work is defined under Section 2(68) as any treatment or process undertaken by a person on goods belonging to another registered person. In the present case, the material received by the applicant from the principal manufacturer are subjected to certain processes and returned back to the Principal manufacturer. Thus. the activity carried out by the applicant falls under Heading 9988 and not under Heading 9986 as contended by the applicant. The applicant realizes job work charges on return of goods so manufactured by it. In such a scenario. the applicant (job worker) alone has the liability to pay any tax liable on the job work charges. Thus, the activity of job work being undertaken by the applicant Clearly falls under S.No. 26 (g) of the N/N. 11/2017- Central Tax (Rate) dated 28 06.217 (as amended) and thus attracts GST@ 5%.

  ---

• 2019 (10) TMI 557
  Release of the seized goods along with the truck - Betel Nuts (Supari) - HELD THAT:- The respondents had taken remedial measures and order of confiscation passed under Section 130 was quashed and order passed at the stage of Section 129 was modified. The said modified order dated 6.8.2019 admittedly, is an appealable order under the provisions of HGST Act and is concededly being challenged by the petitioner by filing an appeal before the Appellate Authority. It is also conceded position that the seized goods and truck have since been released in accordance with the provisions of HGST Rules. Petition dismissed as infructuous.

  ---

• 2019 (10) TMI 556
  Filing of TRAN-1 - reopening of GSTN portal - post GST regime - transitional credit - manual/electronic filing of return - HELD THAT:- It is beneficial to refer to the decision of the High Court of Delhi in UNINAV DEVELOPERS PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (8) TMI 85 - DELHI HIGH COURT ] wherein the facts are as follows: - On account of technical glitches, the petitioner therein was unable to claim CENVAT credit in Form TRAN-1; and, the petitioner could not file TRAN-1 electronically due to technical glitches of GST Portal; and, when the matter was placed before ITGRC, it concluded that the present case falls under the category of B2, that is, Cases in which TRAN-1 filing attempted for the first time or revision was attempted but no error/no valid error reported. Thus, in the absence of evidence, the re-filing of the form by the petitioner was not allowed. The petitioner therein contended that the petitioner was unable to connect to the portal to submit the return in the first place and that the portal reflected the message error occurred in submission . The petitioner s request merits consideration - the Writ Petition is disposed of directing the respondents to either open the Portal to enable the petitioner to again file the Form GST TRAN-1 electronically or in the alternative accept the Form GST TRAN-1 presented manually, on or before 30.09.2019.

  ---

• 2019 (10) TMI 555
  Territorial Jurisdiction - shifting of Office - shifting of the Chief Commissioner s Office from Shillong to Guwahati - HELD THAT:- The decision making process in arriving at the decision to shift the Chief Commissioner s Office from Shillong to Guwahati does not suffer from arbitrariness, nor can the same be said to have been done irrationally or unreasonably. The duty of the Courts in exercise of powers of judicial review over administrative action is to determine whether the action and to see that the same is not illegal, irrational or vitiated by procedural impropriety and that administrative action must be seen to have been done fairly, impartially and reasonably. In the instant case, the impugned action of the respondents cannot be said to meet any of the conditions, which would warrant interference by this Court and the decision making process cannot be faulted with. The stated position also being that the same being a policy decision, it is a settled law that a policy decision will not be interfered in a routine manner unless the policy is contrary to the provisions of statutory rules or in violation of provisions of the Constitution. Unless the same is established, the said policy decision must be left to the Government to decide as to which policy should be adopted. In the case of KAILASH MEGHWAL AND OTHERS VERSUS STATE OF RAJASTHAN AND OTHERS [ 1982 (11) TMI 180 - RAJASTHAN HIGH COURT] , the Hon ble High Court of Rajasthan has held that the establishment of circle office of PHED or its shifting from one district to another is neither a matter of prima facie judicial, nor legislature domain and none is concerned in such matters because it is neither legislative nor judicial. As executive or administrative decision simpliciter cannot be put to judicial review . With regard to the locus standi of the petitioners to challenge the shifting of the Chief Commissioner s Office from Shillong to Guwahati, this aspect need not be considered in view of the discussions made herein above on other issues. However, with regard to dislocation of the petitioners and other staff working in the Chief Commissioner s Office, on the basis of the submissions advanced by the respondents, it is directed that an option shall be given to the concerned staff to opt for Guwahati, or to be accommodated in other Central Excise and Customs Office in Shillong, to avoid any forced dislocation. There being no illegality or arbitrariness in the action of the respondents and the decisions arrived at being in pursuant to policy and in public interest, the writ petition being devoid of merit and is accordingly dismissed. Petition dismissed.

  ---

• Income Tax

• 2019 (10) TMI 554
  Stay of Recovery from the savings account of the petitioner towards a tax liability confirmed against the petitioner - assessment years 2011-2012 and 2012-2013 - HELD THAT:- It is not in dispute that as against the orders passed by the Appellate Authority/Assessing Authority, the petitioner defaulted in an amount of Rs. 8,54,509/-. It would normally follow, as a consequence, that on the default committed by the petitioner, he would lose the benefit of the stay order granted by the authority and the entire confirmed tax demand would become payable to the Department. Taking note of the plea of financial hardship urged by the learned counsel for the petitioner, and the fact that, had the petitioner effectively complied with the directions of the first Appellate Authority as also the assessing authority, he would have been obliged to pay only an amount of Rs. 8,54,509/- which he did not - If the petitioner pays an amount of Rs. 15,00,000/- in lieu of the balance Rs. 8,54,509/- that he was required to pay out of the amounts ordered by the Assessing Authority/Appellate Authority, as condition for the grant of stay of recovery of balance amount confirmed against him by the assessment orders, then the respondents shall promptly, and at any rate within two weeks from today, re-credit the balance amount from the amounts already recovered from the petitioner, to the respective Bank account - 2nd respondent Appellate Authority shall thereafter proceed to hear the petitioner and pass final orders in the Appeals Petition disposed off.

  ---

• 2019 (10) TMI 553
  Re-opening of assessment - escapement of assessment - change of opinion - On being satisfied that the transactions were genuine, the Assessing Officer in his order under Section 143(3) of the Act allowed the claim of the Petitioner even in respect of the earnings made on account of trading in shares of M/s. Banas Finance Ltd. - HELD THAT:- Prima facie, the impugned notice seems to be founded on change of opinion and, therefore, without jurisdiction. Besides, as the impugned notice has been issued beyond a period of four years from the end of the relevant Assessment Year, the requirement of the Petitioner having failed to disclose all material facts truly and fully, prima facie, are not satisfied. Thus, the impugned order appears to be without jurisdiction also on the ground of true and full disclosure of all material facts during the regular Assessment Proceedings, leading to order under Section 143(3) of the Act. The impugned notice dated 27th March, 2019 is stayed till the final disposal of the Petition.

  ---

• 2019 (10) TMI 552
  Maintainability of wrt petition before HC where option for filing Revision u/s 264 is available - Rejection of Refund of excess amount paid as tax - assessment year 2005-06 - no appeal under the Act from the impugned order is available to the Petitioner - whether revision under section 264 of the Act is available? - HELD THAT:- A revision would lie to the Commissioner of Income Tax from any order passed by the authority subordinate to him in respect of any proceeding under the Act. In the present case, the order has been passed by the officer subordinate to the Commissioner of Income Tax and the same has been passed in respect of proceeding initiated by the Petitioner seeking refund. The impugned order dated 9 April 2019 adjudicates a lis between the Revenue and the Petitioner. This requires an examination of facts for adjudication of the dispute. There are no substance in the submission of the Petitioner that no revision would be available against the impugned order as it is not an order passed under the Act. Thus, remedy of revision under section 264(1) of the Act would be available to the Petitioner. Petition dismissed.

  ---

• 2019 (10) TMI 551
  Rejection of stay application - dis-allowance of the commission paid - HELD THAT:- The present matter deserves to be remitted back to the learned Tribunal for passing a reasoned and a speaking order on the stay application filed by the Assessee. For arriving at the conclusion whether the Assessee has a prima facie case or not, at least, the case facts should have been discussed by the Tribunal in some detail. Whether such dis-allowance has been made for the earlier assessment years or not was a relevant fact, which appears to have escaped the notice of the Tribunal, though raised in the stay application filed before the learned Tribunal. Matter restored before the ITAT.

  ---

• 2019 (10) TMI 529
  Restraint on appellants from taking and/or continuing any action against the writ petitioner - Section 55 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - whether the High Court was right in observing that while exercise of the powers under the provisions of Sections 85 and 86 of the Black Money Act, the Central Government has made the said Act retrospectively applicable from 01.07.2015 and passed a restraint order? HELD THAT:- The scheme of the Black Money Act is to provide stringent measures for curbing the menace of black money. Various offences have been defined and stringent punishments have also been provided. However, the scheme of the Black Money Act also provided one time opportunity to make a declaration in respect of any undisclosed asset located outside India and acquired from income chargeable to tax under the Incometax Act. Section 59 of the Black Money Act provided that such a declaration was to be made on or after the date of commencement of the Black Money Act, but on or before a date notified by the Central Government in the Official Gazette. The date so notified for making a declaration is 30.09.2015 whereas, the date for payment of tax and penalty was notified to be 31.12.2015. In order to give the benefit to the assessee(s) and to remove the anomalies the date 01.07.2015 has been substituted in subsection (3) of Section 1 of the Black Money Act, in place of 01.04.2016. This is done, so as to enable the assessee desiring to take benefit of Section 59 of the Black Money Act. By doing so, the assessees, who desired to take the benefit of one time opportunity, could have made declaration prior to 30th September, 2015 and paid the tax and penalty prior to 31st December, 2015. In the factual scenario of the present case, it would reveal, that the assessment year in consideration was 2019-2020 and the previous year relevant to the assessment year was the year ending on 31.03.2019. The interim order passed by the High Court is not sustainable in law, the same is quashed and set aside.

  ---

• Customs

• 2019 (10) TMI 550
  Scope of SCN - Valuation of imported goods - whether the imported IQ/OQ documents should be included to the value of the equipment in terms of Rule 10(c) or not? - HELD THAT:- The Order-in-Original did not accept the classification of IQ and OQ document / manual and classified the same under CTH 9027 9090. Aggrieved by the Order-in-Original, the appellant filed appeal before the Commissioner(Appeals) and Commissioner(Appeals) vide the impugned order has travelled beyond the scope of the adjudication order. Further, we find that the Commissioner(Appeals) has converted classification dispute into a valuation dispute as recorded in para 6 of the impugned order. The appeal before the Commissioner(Appeals) is also with regard to the classification issue but the Commissioner(Appeals) has wrongly converted the classification dispute into a valuation dispute and did not give any finding on the classification dispute as raised before him by the appellant. The impugned order is set aside as the same has travelled beyond the Order-in-Original and remand the matter back to the Commissioner(Appeals) to decide the issue of classification - appeal allowed by way of remand.

  ---

• 2019 (10) TMI 549
  Valuation - substantial markup in the supply of these goods, as such, to their customers is a pre-arrangement with the supplier to enable undervaluation with intent to evade duties - HELD THAT:- It is an admitted fact that the shipper and the appellant are connected through a common holding company. That, however, does not suffice to accord approval to the rejection of the declared value. There are no evidence of the relationship having impacted the conditions of sale or that the relationship itself had been suppressed to mislead the assessing authority. There is no evidence of any comparable sales effected by the same supplier to other importers in India - no evidence of the relationship having impacted the conditions of sale or that the relationship itself had been suppressed to mislead the assessing authority. There is no evidence of any comparable sales effected by the same supplier to other importers in India. Appeal allowed - decided in favor of appellant.

  ---

• 2019 (10) TMI 548
  Maintainability of appeal - pendency of the appeal - non-prosecution of the case - HELD THAT:- The pendency of appeal cannot be allowed to be a ground for the appellant to avoid the illegality already noticed against him. Simultaneous absence of the Appellant for the day is sufficient to hold that he is not interested in pursuing the matter and is rather gaining time and the benefit of avoiding penalty already impressed upon him by keeping the appeal pending. The impugned appeal dismissed for intentional non-prosecution and also for the reason that appeal otherwise has no merits issue being already settled against assessee.

  ---

• 2019 (10) TMI 547
  Demand of short paid duty due to changes in rate of duty - Gold - enhancement of duty - HELD THAT:- The appellant filed the Bill of Entry on 21.01.2013 and paid the Customs Duty @4% as per the demand by the Customs Department. Further we find that the goods were cleared at 5.40 pm on the same day. We also find that on the same day Notification 01/2013 dated 21.01.2013 was issued enhancing the rate of duty from 4% to 6% but the said Notification was not published in the Gazette of India and in fact it was published on 01.02.2013 and thereafter offered to public for sale on 04.02.2013. Further we note that as per Section 25(1) of the Act, the said Notification would come into force only on 04.02.2013 when it was offered for sale to the public. On 21.01.2013 when the goods were cleared, the rate of Customs duty was 4% as per the unamended Notification 12/2012 dated 17.03.2012 and the appellant has correctly paid the Customs duty on the said goods. Appeal allowed - decided in favor of appellant.

  ---

• 2019 (10) TMI 546
  Applications for withdrawal of Appeals - HELD THAT:- The prayer of the Revenue is allowed and the appeals are dismissed as withdrawn.

  ---

• Corporate Laws

• 2019 (10) TMI 545
  Initiation of action against the petitioners for the alleged offences punishable under section 97(1) and read with Section 97(3) of Companies Act, 1956 - Petitioners have assailed the said action on the ground that proceedings initiated against them are barred by limitation - HELD THAT:- In terms of Section 97, the offence gets completed on expiry of 30 days from the date of passing the resolution or from the date of subsequent resolution. Since action has been initiated against the petitioner beyond the period of 30 days, prosecution launched against the petitioner is barred by limitation and therefore cannot be sustained. Proceedings initiated against the petitioners are quashed - Petition allowed.

  ---

• Insolvency & Bankruptcy

• 2019 (10) TMI 544
  Approval of Resolution plan - liquidation of Corporate debtor - fresh infusion of funds - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- This Adjudicating Authority is of the view that the contentions raised by MCGM cannot be accepted due to the conflicting and contradictory stands taken by it in the course of hearings. Further, the contention of MCGM relating to expiry of the period of 270 days is untenable and unacceptable for the reason that the Application by the Resolution Professional for the approval of the Resolution Plan has been made well before the expiry of the period of CIRP and the same is in accordance with the provisions of the Code. Therefore, the objections raised by the MCGM are hereby rejected. Further, though the Application for approval of the Resolution Plan was filed on 07.09.2018, but, due to multiple Interlocutory Applications being filed by one party or the other, and matter being contested before Hon ble NCLAT and Hon ble Supreme Court, the final hearing on IA 408 of 2018 could not be taken-up and concluded by this Adjudicating Authority. The Resolution Applicant to the satisfaction of this Adjudicating Authority regarding sources of funds for the implementation of the Resolution Plan, has stated that they have been adequately tied-up. In this regard, the Resolution Applicant has filed a copy of the Letter of Comfort issued by Yes Bank and copy of Addendum Facility Letter issued by Yes Bank. The Resolution Applicant has also submitted a Financial Guarantee issued by First Energy Bank BSC, Bahrain which has been accepted by the CoC. However, it is noticed by this Adjudicating Authority that the said bank guarantee is valid only upto 30th June, 2019. It is directed that the validity period of the bank guarantee be extended till the complete implementation of the Resolution Plan. The Resolution Plan is hereby approved, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan including Resolution Applicant - Moratorium declared.

  ---

• 2019 (10) TMI 543
  Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in repayment of loan - Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- The default of debts is well established which meets the requirement of Section 3(11) and (12) of the I Code to trigger the CIRP in respect of the Corporate Debtor company. It is well established that there is default of debts which comes to Rs. 7,93,88,633/- [Principle amount Rs. 6,55,00,000 + Interest Rs. 1,38,79,633/-], which is in excess of Rs. 1,00,000/. Hence, the present application is found complete as per the provisions of the I B Code. Application admitted - moratorium declared.

  ---

• 2019 (10) TMI 542
  Maintainability of petition - initiation of CIRP - Corporate Debtor committed default in paying the operational debt - section 9 of the Insolvency Bankruptcy Code, 2016 - HELD THAT:- The Liquidator pointed out the valuation report of the assets of the corporate debtor. It is seen that except these equity shares standing in the name of the promoters of the corporate debtor, corporate debtor does not have any assets. Hence, there was no question of sale of their assets to recover and pay the dues of the claimant or the creditor. Section 54 of I B Code allows this authority to pass order of dissolution of corporate debtor, if the authority comes to the conclusion that the corporate debtor does not own any assets which can be sold for resolving debt. The corporate debtor does not have the assets which could be sold for resolving its debts. Hence, the order of dissolution of the corporate debtor has to be passed - M/s. Upadan Commodities Private Ltd., the Corporate Debtor is dissolved from the date of this order.

  ---

• 2019 (10) TMI 541
  Admissibility of petition - Dissolution of the Company - Section 59(8) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Learned Liquidator has complied with all conditions and procedural requirements as specified under various provisions of Section 59 of the Insolvency 85 Bankruptcy Code, 2016, also as per clause 9 of Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017, before initiating Voluntary Liquidation Process of the Corporate Person. Therefore, the Petition/Application deserves to be allowed as prayed for. The Corporate Person, M/s. Zettata Technologies Private Limited dissolved with immediate effect - petition disposed off.

  ---

• Service Tax

• 2019 (10) TMI 540
  Rejection of cum tax claim of the Petitioner - services of Supply of Manpower - Petitioner during 2011-12 to 2014-15 collected Service Tax from its clients but deposited partial amount with Service Tax authorities - HELD THAT:- The Respondent considered value appearing in 26AS Form cum tax value and Settlement Commission on the basis of sample invoices found that Petitioner is entitled to benefit of cum tax value. The Settlement Commission has further noted that tax was collected but not deposited. The gross value was shown in the balance sheet as well Form 26AS. There seems no reason to deny benefit of cum tax value in view of the fact that price appearing in 26AS Forms was admittedly cum tax price and as per judgments cited by Petitioner gross value is considered as cum tax. The Settlement Commission has found that tax was collected but not deposited but there is nothing on record to show that tax was collected over and above value appearing in balance sheet rather value appearing in 26AS Form has been considered as cum tax price - there are no reason to deny benefit of cum tax value. Petition allowed.

  ---

• 2019 (10) TMI 539
  CENVAT credit - restriction on utilization of credit upto 20% - taxable as well as exempt services - appellant also providing and collecting charges on non-taxable services including rental from junction links, inter-connection link charges, port charges, infrastructure charges etc. - non-maintenance of separate accounts for input services for the taxable and exempted services - Rule 6(3)(c) of CCR, 2004 - HELD THAT:- It is not in dispute that the appellant has provided both taxable and exempted services and has availed CENVAT credit. The SCN alleges that they have not maintained separate accounts of inputs/input services for exempted and taxable services and hence should not have utilized CENVAT credit in excess of twenty per cent of the Service Tax payable what they did. Ld. Counsel agrees that they have not maintained separate records but asserts that the twenty per cent limit under Rule 6(3)(c) pertains only to the CENVAT credit on inputs/input services and not CENVAT credit on capital goods. The SCN has wrongly demand the total amount of CENVAT credit including that on the capital goods. It is the view of the Learned Commissioner that in the absence of any specific restriction, Rule 6(3) (c) applies to the entire CENVAT credit and not just to the CENVAT credit on inputs/input services. However, in the absence of specific details, we are unable to determine whether the appellant has exceeded the limit of twenty per cent of inputs/input services credit or not. Hence, we find that this is a fit case to be remanded to the original authority for the limited purpose of examining whether the appellant has exceeded the limit of twenty per cent of the inputs/input service credit from the relevant period - appeal allowed by way of remand.

  ---

• 2019 (10) TMI 538
  Non-payment of service tax - C F Agent services or not - appellant have been doing business of consignment commission agent - demand of service tax alongwith interest and penalty - Suppression of facts - extended period of limitation - HELD THAT:- The appellants have been appointed as selling commission agents and they sell the goods received from the principal under their name and their own invoices and are also paying the Sales Tax/CST on the same. Further, the appellant receives commission as a percentage of the sales done by them. The said activity carried out by the appellant does not fall in the definition of Clearing and Forwarding Agent because the appellants are not clearing and forwarding agency. A person to fall in the definition of Clearing and Forwarding Agent the assesse undertakes both clearing and forwarding operations whereas in the present case, it has not been established by the Revenue that the appellants are carrying both the operations and therefore in view of the decision relied upon by the appellant in the case of Carryfast Agencies Vs CCE [ 2017 (4) TMI 705 - CESTAT NEW DELHI ], the appellant did not fall in the definition of Clearing and Forwarding Agent Service . Time Limitation - HELD THAT:- The period in dispute is from 01.04.2002 to 31.03.2005 and the SCN was issued on 26.07.2006 and the Revenue has not brought anything on record to show that appellant indulge in any fraud, mis-statement, collusion or suppression of fact with intent to evade duty rather the appellant was under a bona fide belief that the activity undertaken was that of a selling commission agent on which no Service Tax is payable on the basis of certain decisions rendered by the Tribunal during the relevant period - Therefore, the extended period of limitation cannot be invoked in the present case and the entire demand is barred by time. The impugned order is not sustainable on merit as well as on limitation - Appeal allowed - decided in favor of appellant.

  ---

• 2019 (10) TMI 537
  CENVAT Credit - inputs - inputs used in construction related work - scope of amendment vide Notification No.3/2011-CE(NT) dated 01.03.2011 w.e.f 01.04.2011 - Appellants engaged in construction of a building and renting the same on completion - HELD THAT:- Learned Commissioner observed that in terms of amendment vide notification No.3/2011 CE(NT) dated 01.03.2011 with effective from 01.04.2011, credit was not admissible on the expenditure incurred for set up of the factory of manufacturer of premise of output service provider; the notification has only prospective effect; therefore credit cannot be denied prior to 01.03.2011, in terms of Rule 2(l) of Cenvat Credit Rules of 2004, they are inputs. Reliance placed in the case of COMMR. OF C. EX., VISAKHAPATNAM-II VERSUS SAI SAHMITA STORAGES (P) LTD. [ 2011 (2) TMI 400 - ANDHRA PRADESH HIGH COURT] where it was held that Cenvat Credit of duty paid on cement and steel used in construction of new jetties and other commercial buildings are entitled for input credit. Credit allowed - appeal dismissed - decided against Revenue.

  ---

• 2019 (10) TMI 536
  Classification of services - Manpower recruitment and supply of manpower services or not - contention of appellant is that the scheme of procurement of sugarcane by sugar factories involves state governments which prescribe the support price and the arrangement requiring sugarcane growers to deliver the harvested cane at the factory - HELD THAT:- The issue decided in the case of SATARA SAHAKARI SHETU AUDYOGIK OOS TODANI VAHTOOK SOCIETY VERSUS CCE., KOLHAPUR [ 2014 (12) TMI 42 - CESTAT MUMBAI] where it was held that the appellants do not undertake this work for anybody else except for the sugar factory concerned. In other words, they do not supply manpower to any customer who approaches them. Therefore, the impugned demands by classifying the activity under manpower supply service are not sustainable in law. The facts and circumstances of the present case are identical in that it is for, and on behalf of, the sugarcane growers that the sugar factory entered into an agreement as custodian of the dues payable to the farmers for the harvesting and transport to the factory is not manpower recruitment and supply agency services. Appeal allowed - decided in favor of appellant.

  ---

• 2019 (10) TMI 535
  Evasion of Service tax - non-payment of service tax on subscription fees collected from Multi System Operators and Cable Operators - demand alongwith interest and penalty - extended period of limitation - noticee s statutory liability to pay service tax on broadcasting service provided by them - failure to declare true and correct details in ST-3 returns - misdeclaration and suppression of material facts or not? Whether in respect of entire gamut of services received by the service recipients the service provider are appellants or in some case the appellants are the agent of service providers (i.e. MSMPL and DCI)? - HELD THAT:- For levy of service tax identification of service provider and service recipient is of prime importance before the liability to pay service tax can be assigned. In this case while the revenue contends that Appellant are the service provider whereas appellant contend that MSMPL and DCI are the service provider who have also discharged the service tax liability in respect of the services provided under the category of Broadcasting Services. Appellants have contended that they are acting as agents of the service provider namely MSMPL and DCI for various purposes in relation to provisioning of services under the category of Broadcasting Services to MSOs/ COs. For rendering such service which include the collection of subscription charge they receive commission from MSMPL and DCI on which they discharge Service Tax under the category of Business Auxiliary Services . Revenue also do not dispute that fact that appellants were discharging service tax on the commission received by them under the category of Business Auxiliary Service. The appellant is joint venture of MSMPL and Discovery Communications India (DCI). Appellants have entered into agreement with MSO s/ CO s to provide the channels being distributed by MSMPL, DCI, TV Today Network etc. The channels being offered by the appellant are either in ala carte form or as bouquet of channel to the subscribers. In respect of the channels subscribed by the MSO/ CO, they are paying the subscription fee in respect of all the channels subscribed by them. The finding recorded by the Commissioner has been recorded ignoring the fact that Appellants were paying service tax on the Commission received by them from their principals under the category of Business Auxiliary Services. The findings recorded by the Commissioner in this respect needs to be set aside and matter remanded back to him, to pass consider all the documents and arguments advanced by the appellants in this respect. Broadcasting Service - service tax in respect of the subscription charges collected in respect of the channels distributed by the TV Today Network paid - case of Revenue is that the demand made needs to be reconsidered specifically by referring to the business models adopted by the Appellants for extending the services to service recipients i.e. MSO s/ CO s - HELD THAT:- In absence of any finding recorded in this regards Commissioner has proceeded to confirm the demand by comparing two un-comparables i.e. oranges with apples. Service tax being contract/ transaction based levy the terms of contracts between the parties to the contract need to be examined and finding recorded before any demand can be made. In our view the matter needs to be remanded back to adjudicating authority for recording finding on this account also. Appeal allowed by way of remand.

  ---

• 2019 (10) TMI 534
  Levy of Service Tax - Work Contract Service or not - Appellants are undertaking fabrication, machining etc. of machinery parts / components on job work basis, out of raw material and with the infrastructure facilities provided in the factories of M/s Larsen Toubro Ltd and M/s Essar Ltd. - Rule 4 (5)(a) of CCR, 2004 read with N/N. 214/86-CE. - Time Limitation - HELD THAT:- The appellant has produced the contract of the job work, labour invoices, challans for movement of goods and certificate issued by Principal manufacturers that they have discharged the excise duty on their final product. So far as the activity of fabrication of parts and components, accessories are concerned, the same is not in dispute. The aforesaid services are covered under Business Auxiliary Service in terms of Section 65 (19) (v) of the Finance Act. The activity undertaken by the Appellant would not fall under the category of Works Contract Service as neither there is transfer of any property in this case is involved in the execution of such contract, which is liable to tax as sale of goods nor it is for the purpose specified in sub-clause (a) to (e) of clause (ii) of Explanation to Section 65 (105) (zzzza). In the present case admittedly the Appellant has received the goods under job work challan issued under Notification No. 214/86-CE and Rule 4 (5) (a) of CCR,2004. The principal manufacturer has paid duty on clearance of their final product. In such view of the facts, when the goods were received under cover of challans issued under N/N. 214/86 read with Rule 4 (5)(a) of CCR, 2004, the same is not liable for service tax as the activity undertaken by the Appellant is exempted in terms of N/N. 8/2005 ST dated 1.3.2005. Time Limitation - HELD THAT:- The demands are even time barred as the SCN was issued on 25.01.2012 for the period April 2008 to November 2011. The issue involved is of interpretation of statutory provisions and cannot be considered as wilful suppression of facts with an intend to evade payment of service tax. Even otherwise, if any service tax was payable by the appellant, the same was available to the customers as cenvat credit and thus the whole issue becomes revenue neutral. Appeal allowed - decided in favor of appellant.

  ---

• Central Excise

• 2019 (10) TMI 533
  Refund of education cess and higher education cess - denial on the ground that the same are not part of duty in terms of N/N. 56/2002-CE dated 14.11.2002 - HELD THAT:- The issue came up before the Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE GUWAHATI VERSUS M/S SRD NUTRIENTS PVT LTD [ 2018 (7) TMI 1655 - SC ORDER] wherein it has been held that the education cess and higher education cess is part of duty in terms of N/N. 56/2002-CE dated 14.11.2002. The appellants are entitled for refund claim of education cess and higher education cess in terms of N/N. 56/2002-CE dated 14.11.2002 - Appeal allowed - decided in favor of appellant.

  ---

• 2019 (10) TMI 532
  SSI exemption - use of brand name of others - manufacture and clearance of Printed Polyethylene Rolls/Sheets bearing brand names of various producers of milk - it is alleged that the packing material bears the brand name or trade name of another person - N/N. 8/2003-CE, dt.01.03.2003 - suppression of facts - extended period of limitation - HELD THAT:- The issue has been considered recently by the Hon ble Supreme Court in the case of RDB Textile Mills Vs CCE Kolkata-IV - 2018 (359) ELT 433 (SC). In the said case, the Assessee are manufacturer of jute bags, who supplied the said jute bags to various state agencies for packing of food grains, affixing the name, logo of the buyers viz. SCI and respective State Undertakings. The question was whether affixing the name of the buyers, who ultimately used the jute bags as packing material for packing the food grains be considered as affixing brand names of others, accordingly, fall out of the scope of exemption Notification. It was held in the case that the markings on the jute bags are not for the purpose of indicating a connection in the course of trade between the jute bag and some person using such name or mark. The markings are by compulsion of law only in order that Governmental authorities involved in the PDS may identify and segregate the aforesaid jute bags. This being the case, it is obvious that there is no brand name involved in the facts of the present cases. Revenue s appeal being de-void of merit, is accordingly rejected - appeal dismissed - decided against Revenue.

  ---

• 2019 (10) TMI 531
  Valuation - charges recovered from the customer for the delayed payment by issuance of debit note - inclusion in the assessable value - it is alleged that Appellant had allowed cash discounts from the price, but later recovered a part of this discount so passed on - nature of additional consideration or not - HELD THAT:- If the customers delay in making payment beyond specified period, interest is charged, which is the financial cost to the Company for late receipt of payment and accordingly debit notes were issued to the Appellant for recovery of said financial charges separately. This issue of inclusion of financial charges in the value has been considered by this Tribunal in the case of ARHAM SPINNING MILLS VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [ 2005 (9) TMI 463 - CESTAT, NEW DELHI] where it was held that there is no justification for including financial cost in the assessable value. The objection of the Revenue is that the Appellant had collected extra amount by not passing the cash discount and in the guise of financial charges, hence, being an additional consideration, hence to be included in the value of the goods. Rebutting the said argument, the Appellant had referred to their price policy, disclosing there under the slab-wise cash discount admissible on the sale price slab-wise; also in the said policy, they disclosed interest for delayed payment depending upon the number of days delay, for which rate of interest also varies. There are merit in the contention of the learned Advocate for the Appellant. It could be a coincidence that in certain cases the financial charges recovered from the customers may be equal to the cash discount, but reading their credit policy structure as a whole annexed to the appeal memo, it is clear that no recovery is made in excess of cash discount passed on as alleged by the Revenue other than recovery of the financial charges, for delay payment than the prescribed period. Appeal allowed - decided in favor of appellant.

  ---

• CST, VAT & Sales Tax

• 2019 (10) TMI 530
  Release of seized goods - readymade garments - export goods or inter-state sale - TNVAT ACT - HELD THAT:- Admittedly the goods in question, according to the appellant, had been emanated from their office at Calcutta and it was meant for export to Kuala Lumpur, Malaysia through Chennai port and on the way it has been kept for short while at the godown and therefore it was not meant for any local sale or interstate sale, therefore the goods in question are not liable to be taxed under the provisions of the TNVAT Act - However, prima facie the documents produced by the appellant would disclose the fact that, the address given by the appellant does not have any IE code or TIN number, as the appellant had not registered its office at West Bengal under the said State Taxation Law. Moreover, those documents such as Bill of lading, invoice and road challan produced by the appellant were found bogus by the Revenue. In order to rebut the same, there has been no documents from the side of the appellant and no plausible or acceptable arguments have been made on the side of the appellant. The appellant has not made out any case to release the goods in question either without paying the tax or with execution of bank guarantee alone - Appeal dismissed.

  ---