Customs, Excise and Service Tax Appellate Tribunal

Gujarat Ambuja Exports Ltd Vs. Commissioner of C.E. & S.T Ahmedabad

MANU/CS/0279/2024

16.07.2024

Service Tax

Rule 5 of Cenvat Credit Rules, 2004 will be applicable for the export of services prior to 14th March 2006

The appellant filed refund claims under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 5/2006-CE (NT) dated March 14, 2006. These claims pertain to the unutilized balance of Cenvat Credit and the refund of Service tax on services used for exporting goods, in accordance with the provisions outlined in Notification No. 41/2007 dated October 6, 2007.

The said refund claims were rejected by the adjudicating authority. Aggrieved by this appellant filed an appeal against the said order. The Ld. Commissioner allowed the appeal with consequential relief and remanded the case back to the original adjudicating authority. The said order was challenged by the department before the CESTAT.

The CESTAT remanded back the matter to the Original Adjudication Authority for the issue pertaining to effective date of Notification No. 5/2006-CE (NT).

The issue in the present matter pertains to the eligibility for revenue benefit from input services used in manufacturing final products for export began on 14th March 2006, with the issuance of Notification No. 05/2006-CE (NT). According to revenue authorities, the provisions of Notification No. 5/2006-CE (NT) do not apply to cases before 14th March 2006.

It was observed that the issue is no more res integra. This issue was previously dealt with in the case of WNS Global Services (P) Ltd. v. CCE, Mumbai, 2008-TIOL-228-CESTAT-Mum, wherein it was held that Rule 5 of Cenvat Credit Rules, 2004 will be applicable for the export of services prior to 14th March 2006. The refund cannot be rejected as there was no condition in the notification or rules that such notification would apply only in respect of the exports made after 14th March 2006. Taking into consideration the above-stated judgment, it was observed refund claims applications under Rule 5 of Cenvat Credit Rules, 2004 in respect of the credit taken will be applicable even to the refunds relating to the period prior to 14th March 2006. In other words, if the application of refund claim is submitted under the amended rule in effect, then the refund cannot be refused solely because the refund pertains to an earlier period. Therefore, impugned orders are set aside. Appeal Allowed.

Tags : Cenvat Credit Refund Applicability

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL

The Board of Control for Cricket in India Vs. Think & Learn Private Limited

MANU/NC/3739/2024

16.07.2024

Insolvency

As the Corporate Debtor acknowledged the debt and planned a repayment schedule, condition of there being a ‘Debt’ and ‘Default’ for the purposes of Section 9 of IBC satisfied

The Operational Creditor (BCCI) and the Corporate Debtor entered a ‘Team Sponsor Agreement’ from 25th July 2019 till 31st March 2022. As per the agreement Corporate Debtor was provided with an exclusive right to be the team sponsor of the Indian cricket team and advertise its brand name on the kit worn by the Indian cricket team. As consideration, the Corporate Debtor was required to pay a fee to the Operational Creditor.

The term of the Agreement dated 25th July 2019 was till 31st March 2022; however, even after 31st March 2022, without the execution of formal document, the Corporate Debtor and Operational Creditor agreed to continue the arrangement in relation to Services. This team sponsor agreement was extended until 31st March 2023.

After 31st March 2022, Corporate Debtor has made payment in full only against one invoice for the year 2022-2023. However, the Corporate Debtor failed to make payments against the remaining invoices raised by the Operational Creditor for the financial year 2022-23.

Corporate Debtor had never disputed the fact that it was required to pay the agreed Fee as per the arrangement between the parties, as it kept requesting the Operational Creditor for extension of time for payment through emails.

Demand notice was sent by the Operational Creditor on 19thJuly 2023 under Rule 5 of the Insolvency & Bankruptcy (Application to Adjudicating Authority Rules), 2016 to the Corporate Debtor. In the reply, Corporate Debtor contented that no contract is in force and the claim did not constitute an ‘Operational Debt’.

One of the primary issues raised in the present case was whether the Corporate Debtor has defaulted as per Section 3(12) of the Insolvency Bankruptcy Code (IBC) 2006?

It was observed since the Corporate Debtor time and again acknowledged and duly planned a repayment schedule for the outstanding dues by sending several emails, the condition of there being a ‘Debt’ and a ‘Default’ for the purposes of Section 9 of the IBC is held to be satisfied.

Another issue that was raised in the present case was whether there was any contractual arrangement/ agreement between the parties, evidencing the existence of Operational Debt?

On this issue, the respondents contented that the agreement ended on 31st March 2022 and since there was no functioning agreement/contract between the parties, the said petition is void of maintainability.

It was observed that, even after the original agreement came to an end on 31st March 2022; BCCI and the Corporate Debtor exchanged correspondences to the effect that the arrangement was to continue pending the execution of the formal document. Therefore, the Corporate Debtor cannot contend the issue of lack of proper agreement, when the same was not raised during the time when such services were duly availed by the Respondent, and the benefits arising there from duly accrued to it.

Therefore, the petition to initiate CIRP against the Corporate Debtor is allowed since the existence of a debt and a default in the payment of debt is clearly established.

Tags : NCLT Debt Default

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High Court of Allahabad

Dinesh Prasad Vs. State of UP and Ors. (Neutral Citation: 2024:AHC:113149)

MANU/UP/2540/2024

16.07.2024

Service

Principle of 'no work-no pay' not applicable while considering the employees' entitlement of pay for the period for which they were not in service, if the order dismissing them is set aside

The petitioner is employed with U.P Police. Disciplinary proceedings were instituted against him for being absented from duty without any information and then, later joining hunger strike while refusing his mess duty. After inquiry, disciplinary authority vide his order dated 09.01.2020 dismissed the petitioner from service. The order was challenged and the petitioner was reinstated in service.

As per Rule 73 of the Financial Hand Book Volume-II Part II to IV A, government servant who remains absent after the end of his leave is entitled to no leave salary for the period of such absence. Therefore, the petitioner is denied payment of salary for the period between 09.01.2020 to 29.09.2020 as he was out of service on the ground that the acts of the petitioner for which he had been charged were acts of gross negligence and amounted to dereliction of duty and hence, the petitioner was not entitled to salary for the period he was out of service.

The main contention was that there was nothing in dismissal order dated 9.1.2020 as well as the order dated 11.2.2024 stating that the petitioner was any time under suspension during the pendency of disciplinary proceedings.

A reading of Rules 54(2) and 54(4) shows that, in Uttar Pradesh, the principle 'no work-no pay' is not applicable while considering the entitlement of State Government employees for pay and allowances for the period they were not in service if the order dismissing, removing or compulsory retiring them from service is set aside either in appeal or review and the government servant is reinstated in service and no further inquiry is proposed to be held. Rule 54 provides that if the government servant who has been reinstated in service after the order dismissing or removing him from service has been set aside in appeal or review and he has been fully exonerated of the charges, the government servant shall be entitled to full pay and allowances that he would have been entitled had he not been removed or dismissed from service and the period of absence from service shall be treated as period spent on duty for all purposes. However, where the government servant is not exonerated of the charges but is still reinstated in service or the order dismissing or removing a government servant is set aside in appeal or review solely on the ground of non-compliance with the requirements of Article 311(1) and (2) of the Constitution and no further enquiry is proposed to be held, the government servant shall not be entitled to full pay and allowances but will be entitled to be paid such amount (not being the whole) of the pay and allowances as the competent authority may decide after giving the employee notice of the quantum proposed and after considering his representation but it shall not be less than the subsistence allowance and other allowances admissible under Rule 53. It is apparent that, on his reinstatement after the order of dismissal or removal is set aside, a government servant cannot be denied his entire pay and allowances for the period he was out of service. The amount which the government servant would be entitled to get would depend on whether the case of the government servant is covered by Rule 54(2) or by Rule 54 (4).

The court observed that the petitioner has been fully exonerated vide order dated 04.09.2020, therefore, the case of the petitioner is covered by Rule 54(2). It is also not the case of the respondents that the petitioner was earning through any employment elsewhere for the period he was out of service. Thus, the petitioner cannot be denied his salary by invoking Rule 54(8). Thus, by virtue of Rules 54(2) and 54(3), the petitioner is entitled to full pay and allowances for the period between 9.1.2020 to 29.9.2020 and his absence from service during the said period has to be treated as a period spent on duty for all purposes.

Tags : Allahabad HC no work-no pay

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Supreme Court

Dr. Bhim Rao Ambedkar Vichar Manch Bihar, Patna vs. The State of Bihar and Ors. (Neutral Citation: 2024 INSC 528)

MANU/SC/0622/2024

15.07.2024

Constitution

State Government had no authority to tinker with the lists of Scheduled Castes published under Article 341 of the Constitution of India

The present appeal arises out of the Patna High Court Division Bench judgment where the court upheld the resolution dated 1st July, 2015 of the State government allowing the merger of the Tanti-Tantwa community with the caste 'Pan, Sawasi' mentioned at Entry 20 in the Schedule Caste list so that the benefits available to Schedule Castes could be extended to such persons.

The challenge was mainly on the ground that the State Government had no competence/ authority/power to add a caste or sub-caste to any entry in the Scheduled Castes list notified under the Presidential Order under Article 341 of the Constitution of India. Once the list under the Presidential Order is published, thereafter, any amendment, addition, deletion to the said list can be made only by law enacted by Parliament and not otherwise.

Before the Hon’ble Supreme Court, the State defended its move by arguing that the State Government's Resolution dated 01.07.2015 (2015 Resolution) was only clarificatory and that, going by socio-historical factors, both the “Tanti-Tantwa” be treated as synonymous with 'Pan, Sawasi' and the State has only acted on the recommendation of the State Commission for Extremely Backward Classes. However, the Court rejected this stance and observed that State may be justified in deleting 'Tanti-Tantwa' from the Extremely Backward Classes list on the recommendation of the State Backward Commission, but beyond that to merge 'Tanti-Tantwa' with 'Pan, Sawasi, Panr' under Entry 20 of the list of Scheduled Castes was patently illegal, erroneous as the State Government had no competence/ authority/power to tinker with the lists of Scheduled Castes published under Article 341 of the Constitution.

Also, Court expressed that the individual member of the “Tanti-Tantwa” community, who had secured jobs through the Scheduled Caste (SC) quota after the passage of the 2015 resolution shall not be terminated but all such posts of the Scheduled Castes reserved quota which have been extended to the members of the “Tanti-Tantwa” community be returned to the Scheduled Castes Quota and all such members of the “Tanti-Tantwa” community, who have been extended such benefit may be accommodated under their original category of Extremely Backward Classes.

Tags : Tanti-Tantwa community Scheduled Castes Constitution of India

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Supreme Court

State of Punjab and Ors. vs. Punjab Spintex Ltd. (Neutral Citation: 2024 INSC 526)

MANU/SC/0627/2024

15.07.2024

Civil

Market fees and Rural Development fees are distinct as there is no exemption from Rural Development fees mentioned in the Industrial Policy 2003, it only encompasses exemption from Market fees.

This special leave appeal assails the correctness of the judgment and orders passed by the Punjab & Haryana High Court where the matter pertains to exemption from payment of Market fee and Rural Development fee sought by the Respondent herein. The Respondent company was incorporated on 26.12.2006 and set up a spinning unit at Bathinda for manufacturing cotton yarn and applied to the Appellant for grant of exemption from paying Market fee and Rural Development fee in terms of the Industrial Policy, 2003 and claimed to be similarly situated as M/s. Partap Furane Pvt. Ltd., which is also engaged in the manufacturing of cotton yarn and was granted exemption from payment of Market fee.

The core issue which arose was whether the exemption from payment of Market fee granted under Clause (i) of the Industrial Policy 2003 (2003 Policy) of the Punjab Government can be said to include exemption from Rural Development fee as well or not.

Hon’ble Supreme Court observed that the preamble of Punjab Agricultural Produce Markets Act, 1961 (1961 Act) clearly stipulates that it is a statute to provide for law relating to better Regulation of purchase, sale, storage and processing of agricultural produce. Whereas the Punjab Rural Development Act, 1987 (1987 Act) was enacted for providing relief for the loss of agricultural produce, accelerating rural development, and improving facilities for purchasers of agricultural produce. The 2003 Policy does not specifically exempt Rural Development fees and therefore, such an argument by the Respondent is highly presumptive, far-fetched and a clear attempt at over-reaching the scope of the 2003 Policy. Accordingly, holding that the exemption from Market fees is inclusive of Rural Development fees shall be contrary to the statutory provisions and objective behind both the Acts and the 2003 Policy. Thereby, the two fees cannot be equated or assumed to be similar for exemption purposes.

Thus, while allowing the appeal of State of Punjab, Supreme Court ruled that Market fees and Rural Development fees are distinct and, there being no exemption from Rural Development fees mentioned in the 2003 Policy, it only encompasses exemption from Market fees in its ambit.

Tags : Industrial Policy 2003 Market fees and Rural Development fees Exemption

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High Court of Madras

Kajendran J. vs. Superintendent of Police

MANU/TN/3578/2024

15.07.2024

Law of Medicine

In case of medical termination of pregnancy, products of conception must be disposed in compliance with the procedure prescribed under guidelines

Petition is filed with a primary issue involving disposal of products of conception after Medical Termination of Pregnancy (MTP). The entire products of conception, after MTP of the foetus upto 24 weeks, are sent to the Forensic Science Lab (FSL). There are no guidelines as to what happens to the products of conception that are sent to FSL and how the same are treated after it is analyzed and report is prepared. Also, only FSL has the facility to preserve the products of conception, no such facility is available in the police stations or in the courts. Therefore, if the products of conception are not preserved properly, it will be of no use and even if any further analysis is to be made, the same cannot be done with unpreserved products of conception.

The court observed that once the analysis is completed and a report is submitted by the FSL, the sample that is sent to FSL shall be retained by the lab till the completion of the case. Thereafter, it shall be destroyed as per procedure. Under no circumstances, the samples that are sent to the laboratory for analysis shall be handed over to the investigation officer or to the Court, it shall be retained in the laboratory and it shall be destroyed after the completion of the case.

Secondary issue pertains to the challenge regarding maintaining confidentiality of identity of the minor, as if the same is not revealed to the police, it will become impossible to proceed further with the investigation. The concern is as to how the police is going to safeguard the identity and the personal details of the victim without disclosing it.

The court pertaining to this issue made the Superintendent of Police of the concerned District responsible if the identity or the personal details of the minor victim girl are revealed to the outside world. In the same manner, the Deputy Commissioner in the Metropolitan Cities will be made responsible if any such disclosure of the identity and personal details of a victim gets revealed to the outside world. The concerned officers will be made responsible for any violation of the direction issued by the Hon'ble Supreme Court.

Tags : Madras HC MTP

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