TaxTMI 
TaxTMI 
2019 (5) TMI 785
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....nt while he had purchased Flat No. T4-2B in the Anand Vilas Project, Sector-81, Faridabad, Haryana-121006 launched by the Respondent. Initially Sh. Dinesh Kumar Madan, H. No. 86/L, Ward No. 10, New Colony, Palwal, Haryana and Shri Ravi Kumar were jointly allotted this flat which was transferred to the Applicant No. 1, however, the Respondent had not allegedly passed on the benefit of Input Tax Credit (ITC) to the above Applicant although he had charged GST @ 12% w.e.f. 01.07.2017. 2. The DGAP has stated in his Report that the above Applicant had booked the flat on 09.05.2017 before the GST had come in to force and following demands had been raised on him by the Respondent as per the Table-'A' given below:- Table-"A" (Amounts in Rs.) Particulars BSP DEV Service Tax & VAT GST@12% Total Agreement Value 72,75,000 8,73,000 4,39,410 - 85,87,410 Paid in Pre-GST era B 43,65,000 5,23,800 2,63,646 - 51,52,446 Balance to be paid Post GST (C) = (A)-(B) 29,10,000 3,49,200 1,75,773 - 34,34,973 Demanded by the Respondent (D) 29,10,000 3,49,200 - 3,91,104 36,50,304 Excess Demand by the Respondent (E)= (D)-(C) 2,15,331 3. The DGAP has also stated th....
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....sfied with the clarification given by the Respondent he had no grievance left and therefore, his complaint should be treated to have been withdrawn. The DGAP has also submitted that the present investigation had been conducted from 01.07.2017 to 30.06.2018 and the period for completing the investigation was extended upto 27.08.2018 by this Authority, vide its order dated 15.05.2018, as per the provisions of Rule 129 (6) of the CGST Rules, 2017. 7. The DGAP has further submitted that the Respondent had filed replies to the Notice vide his letters dated 28.03.2018, 12.04.2018, 27.04.2018, 07.05.2018, 17.05.2018, 29.05.2018, 07.06.2018, 12.06.2018, 20.07.2018, 25.07.2018, 31.07.2018, 03.08.2018, 09.08.2018 and 13.08.2018. The contents of the replies given by the Respondent have been given in brief by the DGAP as under:- I. That the Respondent had intimated his buyers that he intended to compute the benefit of additional ITC at the time of handing over the possession so that correct amount of benefit could be passed on as it was not certain that the customers would take possession or leave the project or transfer the booking after availing benefit of additional ITC or they would pay....
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.... Copies of all demand letters and sale agreement/contract issued in the name of Applicant No 1 (g) Tax rates - pre-GST and post-GST (h) Copy of Cost Audit report for the FY 2016-17 (i) Details of cost indices and cost escalation. (j) Abridged Cost Statement along with pre-GST impact of input tax credit on cost. (k) Copy of Electronic Credit Ledger for 01.07.2017 to 25.07.2018 (l) CENVAT/Input Tax Credit register for April, 2016 to June, 2018 (m) List of home buyers in the project "Anand Vilas" 9. The DGAP after investigation has stated that the main issues for determination was whether there were benefits of reduction in the rate of tax or additional ITC on the supply of construction service provided by the Respondent after coming in to force of the GST w.e.f. 01.07.2017 and whether the Respondent had passed on the above benefits to the recipients in terms of Section 171 of the CGST Act, 2017. The DGAP has also stated that the Respondent vide his letter dated 12.04.2018, had furnished copy of the agreement executed by him with the above Applicant for the purchase of one flat measuring 1940 square feet at the basic sale price of Rs. 3750 per square feet, copies of t....
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....iability of passing on the benefit of ITC to the Applicant No. 1, the DGAP has stated. 11. The DGAP has also intimated that another claim made by the Respondent was that the above Applicant had withdrawn his complaint and hence, the investigation should be closed, however, he has submitted that although the proceedings must flow from an application but there was no legal provision under which it could be withdrawn. He has further intimated that as per the provisions of Rule 129 of the CGST Rules, 2017, he was legally bound to complete the investigation in case of any reference having been received from the Standing Committee on Anti-profiteering and hence withdrawal of an application could legally not be a valid reason for closing the investigation. 12. The DGAP has found that before coming in to force of the GST w.e.f. 01.07.2017, the Respondent was entitled to avail CENVAT credit of Service Tax paid on input services, credit of VAT paid on purchases of the inputs and credit of VAT (WCT) charged by the civil contractor on sub-contracts but the CENVAT credit of Excise Duty paid on inputs was not available. He has further found that post-GST, the Respondent had become entitled to ....
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..... No. Particulars Pre-GST Post- GST 1 Period A April, 2016 to June, 2017 July, 2017 to June, 2018 2 Output tax rate % B 5.50% 12.00% 3 Total input tax credit availed (Rs.) C 371,10,647 616,64,604 4 Taxable turnover (Rs.) D 5370,46,198 4501,24,622 5 Ratio of input tax credit to taxable turnover (%) E=C/D 6.91% 13.70% 6 Increase in tax rate post-GST (%) F=GST Rate less pre-GST Tax rate - 6.50% 7 Increase in input tax credit availed post-GST (%) G - 6.79% 8 Analysis of Increase in input tax credit: 9 Basic Price Pre-GST (per square feet) (Rs.) H 3,750.00 10 Service Tax 4.5% (Rs.) I=H*4.5% 168.75 11 VAT @1% (Rs.) J=H*1% 37.50 12 Total per square feet price pre-GST (Rs.) K=H+I+J 3,956.25 13 Recalibrated Basic Price after considering additional input tax credit of 6.79% in GST (Rs.) L=H*(100-G)/100 3,495.38 14 GST 12% on recalibrated Basic Price (Rs.) M=L*12% 419.45 15 Commensurate price post-GST (Rs.) N=L+M 3,914.82 14. The DGAP has also contended that the additional ITC of 6.79% of the taxable turnover, should result in commensurate reduct....
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....uring the period from 01.07.2017 to 30.06.2018, had not been passed on to him and the Respondent had collected an additional amount of Rs.l,65,975/- from the Applicant No. 1 which included both the profiteered amount @6.79% of the taxable amount and the GST on the said profiteered amount @12%. The DGAP has further stated that the Respondent had also realized an additional amount of Rs. 3,40,65,102/- including profiteered amount @6.79% of the taxable amount and GST on the profiteered amount @12% from the other home buyers who were not applicants in the present investigation. He has also intimated that all such buyers were identifiable as per the documents received form the Respondent in which their names and addresses along with unit nos. allotted to them had been mentioned. 17. The above Report was considered by the Authority in its meeting held on 28.08.2018 and it was decided that the Applicants and the Respondent be asked to appear before the Authority on 13.09.2018. Since, the Respondent had asked for adjournment of the hearing scheduled on 13.09.2018, it was decided to grant next hearing on 28.09.2018. During the course of the hearing the Applicant No. 1 did not appear, the D....
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....ection 17 (2) of the CGST Act in case the goods or services or both were used by the registered person partly for effecting taxable supplies and partly for effecting exempt supplies the amount of credit shall be restricted to so much of the input tax as was attributable to the taxable supplies. He has further contended that the value of the exempt supply included sale of land and subject to clause (b) of paragraph 5 of Schedule II, sale of building and therefore, the sale of building post completion was considered as exempt supply wherein the Respondent would be required to reverse the ITC. He has also stated that the Respondent was constructing flats under the project 'Anand Vilas', the total saleable area of which was 11,54,550 square feet, out of which he had been able to sell only 6,67,065 square feet which accounted for only 58% of the total saleable area. The Respondent has also mentioned that the above project was started in the year 2013 and was likely to be completed by March 2019 and during the last 4 years he had sold only 58% of the total saleable area and no flat had been sold since July 18 and hence at this point of time he was not in a position to determine h....
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....fficult to compute the benefit/ loss merely for the impugned period. 22. The Respondent has further claimed that the rate of GST had been changed on various goods/ services during the last one year of its implementation and the Government had reduced rates on over 200 products on 15th Nov 2017 and about 50 products on 27th Jul 2017 and therefore, in case there was any reduction in the tax rate in future, ITC would also be reduced and hence accurate computation of the benefit would be possible only when the project was completed. 23. The Respondent has also submitted that he was not in agreement with the computation of the profiteered amount of Rs. 3,42,31,077/-calculated by the DGAP as it included the GST of Rs. 36,67,615/- in the above amount which he had already paid to the Government and hence it should be excluded for the purpose of computation of the benefit. The Respondent has further submitted that a mere difference in the ITC availed in the pre and the post GST era could not be said to be the profit which had accrued to the Respondent and there were a number of factors which were required to be taken in to account for calculating the benefit. The Respondent has also claim....
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....turns and he had not violated any provisions of the law and had never denied to pass on the benefit, however the accurate computation of the same was required as he would not be able to recover the wrongly passed on benefit and therefore, he had been requesting to allow him to pass it on the completion of the project. He has further pleaded that in view of his submissions the imposition of penalty was not warranted. The Respondent also prayed that he was in the process of computing the actual benefit/loss which had accrued to him with the reasonable assumption for the unsold area which required reversal of ITC and would submit the same to the Authority and requested for grant of 15 days time for quantifying the benefit and submit the same. The Respondent further prayed that personal hearing be granted to him before any decision was taken in this matter with liberty to produce relevant evidence. 26. The Respondent vide his submissions dated 28.09.2018 reiterated the submissions which were made by him on 11.09.2018 and additionally submitted that the DGAP had mentioned in his Report that the Respondent had not denied his liability to transfer the benefit. However, the same could not....
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....common law usage. The true translation is criminal intention or recklessness. Words typically imposing a mens rea requirement include wilfully, maliciously, fraudulently, recklessly, negligently, corruptly: feloniously and wantomly. The fundamental principle pertaining to mens rea is based on the maxim actus non facit reum nisi mens sit rea. (the intent and act must both concur to constitute the crime). Meaning thereby an act does not make a man guilty without guilty intention to do the guilty act which is made penal by the statute or common law..." Based on the above judgements the Respondent has argued that the penalty proposed to be imposed by the impugned notice under Section 29 and 122-127 of the CGST Act read with Rule 133 of CGST Rules, was not justifiable and hence it might not be imposed. 27. The Respondent has also requested to take into account the amount of reversal of ITC due to unsold flats and allow him to pass on the benefit at the time of completion of the project so that correct amount of benefit could be passed on and no penalty should be imposed on him on this account. He has further requested that since the beneficiaries/ buyers were identifiable it would ....
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....t accruing to him was due to the ITC which pertained to all the buyers as the construction was being undertaken in respect of all the units and the inputs were also being used for all of them whether the instalment was due/paid by the buyer post introduction of GST or not. He has further mentioned that the benefit computed by the DGAP was based on the instalments received which was accruing only to the buyers who had paid instalment(s) post introduction of GST however, he had also computed the benefit to be passed on the basis of the instalment(s) received. He has also claimed that the amount of benefit was Rs. 11,97,77,709/- as per Annexure-5, after considering reversals on account of the unsold flats. He has further claimed that each buyer should be entitled to benefit, however, had he computed the same on the basis of the instalment(s) received, no benefit would be passed on to those buyers who had not purchased flats post GST. Therefore, he has submitted that the benefit should be given on the basis of the area sold which would be more correct and rational mechanism for passing on the benefit. The Respondent has also prayed to consider the amount of reversal of credit due to un....
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....roduced in the law and in the absence of any mechanism/timeline, the Authority ought to act leniently in respect of imposition of penalty. He has also claimed that the Government and the GST Council through this clause wanted to ensure that the rate rationalization benefit was passed on to the society at large in the shape of reduced prices. He has also quoted the then Finance Secretary to the Government of India stating that this Authority would investigate only those cases which had mass impact and not small cases and therefore, he has pleaded that no penalty should be imposed on him. He has also contended that the Government of India was laying great stress on the ease of doing business and was promoting business activities for employment generation and hence, the imposition of penalty in the absence of mens rea or wrong doing, would be detrimental to the business. He has further contended that the CGST Act did not provide for imposition of penalty in the cases of profiteering as it was not covered under Section 122-127 of the CGST Act read with Rule 133 of the CGST Rules. It was also submitted that none of the said provisions of the CGST Act contemplated levy of penalty in the ....
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....nst him and the above Sections were not attracted in his case except for Section 125 which was general in nature. It was further submitted that it was obligatory to point out the allegation specifically in order to enable the Respondent to make appropriate submissions in his defence and since the notice was general it was bad in law for being vague and arbitrary and the penalty proceedings were required to be dropped. He has also cited the judgement recorded by the Hon'ble Apex Court in the case of Kaur & Singh v. CCE, New Delhi, 1997 (94) ELT 289 (SC), wherein the Hon'ble Court has held as under:- "2. The assessee was issued a notice dated 10th December, 1981, to show cause why a penalty should not be imposed upon it under Rule 9 (2) of the Central Excise Rules, 1944, and why Central Excise duty should not be collected from it on goods cleared without payment of the same during the year 1980-81. The notice, it is common ground, was issued after the expiration of the period of six months. It could, therefore, have been issued only upon the basis that the assessee was guilty of fraud or of collusion or of wilful mis-statement or suppression of facts or of contravention of ....
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....vade the payment of duty. The Additional Collector did not specifically deal with this contention of the assessee but merely drew the inference that since the classification list did not make any mention in regard to this waste product it could be inferred that the assessee had apparently tried to evade the payment of excise duty." The Respondent has therefore, argued that in the absence of invocation of specific provision with respect to imposition of penalty, the entire notice regarding levy of penalty deserved to be dropped. 36. The Respondent has also submitted that the methodology of computation of profiteered amount applied by the DGAP was arbitrary as there was no acceptable methodology to demonstrate the absence of 'profiteering' as neither the CGST Act nor the CGST Rules provided the guidelines/methodology for ascertaining the quantum of 'profiteering' by the supplier and the same methodology could not be applied in all the cases due to different business models, tax structure and production cycle etc. The Respondent has further submitted that the DGAP had assessed the profiteered amount by merely computing the difference in the ratio of ITC to the taxabl....
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....17 to 30-06-2018 from the buyers of 130 flats however, it could not be stated that the inputs and the input services had not been obtained for the flats purchased by these buyers. Therefore, he has claimed that the computation made by the DGAP had not considered the various factors which would have impacted the profiteered amount. 38. The Respondent has also argued that this Authority had travelled beyond its power by increasing the scope of investigation. He has further argued that in the present case the DGAP had started investigation in respect of a single unit of Anand Vilas Project launched by the Respondent however, the complaint was withdrawn by the Applicant No. 1 and the report submitted by DGAP also pertained to the above project and the proceedings before the Authority were initially restricted to the scope of the above however, during the course of the proceedings, the Authority had asked the Respondent about his other projects also. He has further argued that as per Rule 133 (4) if the Authority was of the view that further investigation was required in the matter after the DGAP's investigation, it could for reasons to be recorded in writing, refer the matter to t....
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....t all the issues raised by the Respondent pertained to the Authority and hence, no Report was being filed. The DGAP was again asked to file a comprehensive reply on 20.11.2018 on the issues raised by the Respondent. The DGAP has accordingly submitted revised investigation Report dated 28.12.2018, the brief facts of which are as follows:- a. On the issue of details of all the projects and the benefit passed on in respect of all the on-going projects by the Respondent: The DGAP has stated that as per the provisions of Rule 129 (1) of the CGST Rules, 2017, if the Standing Committee on Anti-profiteering was of the view that there was prima facie evidence to come to the conclusion that a supplier had not passed on the benefit of reduction in the rate of tax on the supply of goods or services or the benefit of ITC to his recipients by way of commensurate reduction in the prices, it should forward the case to the DGAP for a detailed investigation and hence he could investigate the complaint only when the above Committee had referred the matter to him. He has also stated that accordingly, he had confined the scope of investigation to only that project on the basis of the RERA registratio....
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....nse, the Respondent had submitted further documents on 11.12.2018 & 18.12.2018. The DGAP has also stated that in view of the various submissions made by the Respondent before the Authority and him he had re-examined the Report dated 27.08.2018 filed by him and after taking in to account the revised details of the area sold by the Respondent as per the home-buyer's list, the ITC availed and the Respondent's taxable turnover during the period from April, 2016 to June, 2017 (i.e. pre-GST) and during the period from July, 2017 to June, 2018 (i.e. post-CST), the ratio of CENVAT/Input Tax Credit and the taxable turnover, pre-GST & post-GST, was as per the details furnished in Table-E below:- Table-"E" (Amount in Rs.) S. No. Particulars April, 2016 to March, 2017 April, 2017 to June, 2017 Total (Pre-GST) July 2017 to June, 2018 (Post-GST) 1 CENVAT of Service Tax Paid on Input Services (A) 1,67,90,834 39,87,427 2,07,78,261 - 2 Input Tax Credit of VAT Paid on Purchase of Inputs (B) 21,27,046 8,23,223 29,50,269 - 4 Total CENVAT/Input Tax Credit Available (C) = (A+B) 1,89,17,880 48,10,650 2,37,28,530 - 5 Input Tax Credit of GST Availed (D) - - - 6,16,....
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....GST @ 18% P=O*18% 1,01,25,518 18 Commensurate demand price Q=M+N+O+P 55,45,17,433 19 Excess Collection of Demand or Profiteering Amount R=L-Q 1,01,06,773 43. The DGAP has also argued that the additional ITC of 1.79% of the taxable turnover should result in commensurate reduction in the base prices of the flats and hence as per the provisions of Section 171 of the CGST Act, 2017, the benefit of the additional ITC which had become available to the Respondent, was required to be passed on to the flat buyers. He has also re-computed the profiteered amount after taking in to account the CENVAT/ITC availability pre and post-GST and the details of the instalments received by the Respondent from the Applicant No. 1 and the other home buyers during the period from 01.07.2017 to 30.06.2018 and stated that the amount of benefit of ITC which had not been passed on by the Respondent to his customers or the profiteered amount came to Rs. 1,01,06,773/- which included GST (@ 12% or 18%) on the base profiteered amount of Rs. 89,68,979/- and which also included an amount of Rs. 49,169/- (including GST on the base amount of Rs. 43,655/-) which was profiteered by t....
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....cant 127 2,85,845 - - 79,55,638 (79,55,638) No Consideration Paid Post-GST, However, Respondent passed on benefit. List Attached as Annex-26 5 Other Than Applicant 3 5,820 - - 79,55,638 (79,55,638) No Consideration Paid Post-GST & No benefit passed. List Attached as Annex-26 6 Other Than Applicant 3 8,120 86,78,966 - 2,25,996 (2,25,996) Cancelled Units. List Attached as Annex-26 7 Other Than Applicant 18 41,235 - - 11,47,653 (11,47,653) Disputed Units as per Respondent's Submission dated 18.12.2018. List Attached as Annex-27 8 Other Than Applicant 206 4,38,130 - - - - Unsold Units Total 512 11,54,550 50,97,39,249 1,01,06,773 1,97,77,419 (9670,646) 45. The DGAP has also contended that the benefit claimed to have been passed on by the Respondent was less than what he should have passed on in respect of 92 cases (Sr. 2 of the above table) amounting to Rs. 15,90,239/- and the benefit claimed to have been passed on by the Respondent was higher compared to what he should passed on in respect of the 63 recipients of the flats including the Applicant No. 1 (Sr. 1 & 3 of above table) amounting to Rs. 19,31,599/-. He has ....
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.... DGAP, he had already passed on the benefit of ITC to all the buyers although he had not received consideration from all of them post GST. He has also submitted that the benefit if any, had accrued to him due to ITC which pertained to all the buyers as the construction was under progress in respect of all the units and the inputs were also being used for all of them irrespective of the fact whether the instalment was due/paid by the buyer post introduction of GST or not. He has also attached details of the benefit passed as per Annexure-A. ii. The Respondent has also claimed that vide 'Table B' of the reply of the DGAP the GST realised from the buyers had been considered as the profiteered amount, which was not correct as it had been paid to the Government. The Respondent has further claimed that the GST amount of Rs. 11,37,794/- collected on the increased sale consideration had been deposited with the Government even if it was collected in excess and the same should not be included in the profiteered amount and therefore, the revised profiteered amount should be taken as Rs. 89,68,938/- (79,43,655+10,25,279). He has also contended that the additional benefit to be passed....
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....t the exact quantum of benefit of ITC to be passed on could be ascertained only after the project was completed when there would be no further accrual of ITC to the Respondent. Therefore, he has suggested that the present proceedings based on his Report dated 27.08.2018 and subsequent Report dated 21.12.2018 should be finalised and the Respondent should be asked to pass on the balance benefit to the flat buyers after completion of the project, based on the area sold after 30.06.2018, consideration received after 30.06.2018 and the ITC availed after 30.06.2018. b. The DGAP has also submitted that no Report was being filed on the details of the OCs issued in respect of other completed projects which were not part of the present investigation. 49. The Respondent vide his submissions dated 11.02.2019 has also stated that he had already submitted the details of the instalments received post GST till 31.12.2018 and also the status and the OCs of the completed projects. He has further stated that the DGAP by comparative analysis of the period from April 2016 till June 2017 and July 2017 till June 2018 had filed his Report on 27.8.2018, wherein the profiteered amount had been calculated....
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....GST period this ratio was 13.70% as per the Table C mentioned above and therefore, the Respondent had benefited from the additional ITC to the tune of 6.79% (13.70%-6.91%) of the total turnover which he was required to pass on to the flat buyers of this project. He has also stated that the additional ITC of 6.79% of the taxable turnover, should result in commensurate reduction of cum-tax price from Rs. 3,956.25 per square feet to Rs. 3,914.82 per square feet as per Table D of his Report however, the Respondent had not reduced the basic prices of his flats by 6.79% due to additional benefit of ITC and by charging GST at the increased rate of 12% on the pre-GST basic price, he had contravened the provisions of Section 171 of the of the CGST Act, 2017. The DGAP has further submitted that the amount of benefit of ITC which had not been passed on by the Respondent or the profiteered amount came to Rs. 3,42,31,077/which included 12% GST on the basic profiteered amount of Rs. 3,05,63,462/-. The DGAP has also intimated that the above amount was inclusive of Rs. 1,65,975/- (including 12% GST over the basic amount of Rs. 1,48,192/-) which the Respondent had profiteered from the Applicant No.....
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....as required to pay to the flat buyers. The Respondent can not be allowed to enrich himself at the cost of the buyers and keep them waiting till the project was completed and hence he is legally bound to pass on the benefit periodically to them by computing the same on the basis of the ITC availed as well the instalments paid by them. Any reversal of ITC due to unsold flats could have been factored by him during the course of calculation of the benefit and had any of the buyers surrendered his allotment after availing the benefit of ITC the same could also have been taken in to consideration while selling the flat to the subsequent buyer. The contention of the Respondent that he had not got any benefit of additional ITC after coming in to force of the GST w.e.f. 01.07.2017 as he was already availing this benefit during the pre GST regime is also not borne out from the record as he has got benefit of 1.79% of additional ITC after coming in to force of the GST as is apprent from the perusal of Table E mentioned above. The Respondent has also claimed that he had no malafide intention of not paying the benefit of ITC to the flat buyers is also not borne out from the record as he had not....
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....nefit of 1.79% ITC which was required to be passed on by him to the flat buyers and hence the argument advanced by the Respondent in this behalf is without any merit. 57. The Respondent has also contended that he was not in agreement with the computation of the profiteered amount by the DGAP as it included the GST which had been deposited by him in the Govt. account. The plea taken by the Respondent on this ground is fallacious as by forcing the flat buyers to pay more price by not releasing the benefit of additional ITC and by collecting tax @12% on this additional realisation he has denied the benefit of additional ITC to them by not reducing the prices of the flats commensurately. Had he not collected additional GST the buyers would have paid less price and by doing so he has denied them the benefit of additional ITC which amounts to violation of Section 171 of the above Act. Both the Central as well as the State Government had no intention of collecting the additional GST as they had forfeited their revenue in favour of the flat buyers to provide them accommodation at affordable prices and by compelling the buyers to pay the same the Respondent has not only defeated the intent....
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....d under it. 60. The Respondent has also raised objection on the methodology followed by the DGAP while calculating the profiteered amount however, it is not maintainable as profiteering in each case has to be determined on the basis of the facts of each case and no straight jacket formula can be fixed for calculating the same as the facts of each case differ. The methodology applied in the case where the rate of tax has been reduced and ITC disallowed cannot be applied in the case where the rate of tax has been reduced and ITC allowed. Similarly the methodology applied in the case of Fast Moving Consumer Goods (FMCGs) cannot be applied in the case of construction services. Even the methodology applied in two cases of construction service may vary on account of the period taken for execution of the project, the area sold and the turnover realised. The Respondent has himself admitted that the same methodology could not be applied in each case and hence he should have no objection on the methodology which had been adopted in his case based on the ITC availed, area sold and the instalments received after 01.07.2017. Further the Authority under Rule 126 of the CGST Rules, 2017 has alre....
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.... him as per the provisions of the above Sections and the Rule. However, rest of the contents of the above show cause notice will continue to operate. 62. The Respondent has also cited the following cases in his support on the issue of imposition of penalty which are being relied upon and the show cause notice issued for imposition of penalty is being ordered to be withdrawn. However, the rest of the cases cited by the Respondent are not relevant to the facts of the present case at this stage and hence they are not being followed:- 1. Shubh Enterprises v. Union of India; W. P. (C) NO. 41 of 2013 decided on 14.10.2015. 2. B. Narasimhalu Chettiar and others v. Government of Tamil Nadu 89 LW 55. 3. Kaur & Singh v. Collector of Central Excise, New Delhi, 1997 (94) ELT 289 (SC). 4. Collector of Central Excise v. HMM Ltd., 1995 (76) ELT 497 (SC). 63. The Respondent has also argued that this Authority had travelled beyond its jurisdiction by increasing the scope of investigation by including the projects which were not investigated by the DGAP. However, perusal of the record shows that the Respondent had himself come forward and furnished details of his other projects and claimed....
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.... 1,01,06,773/- which included GST (@ 12% or 18%) on the base profiteered amount of Rs. 89,68,979/and which also included an amount of Rs. 49,169/- (including GST on the base amount of Rs. 43,655/-) which was profiteered by the Respondent from the above Applicant. The details of the home buyers and the unit no. wise breakup of the amount of Rs. 89,68,979/- has been furnished by the DGAP vide Annexure-22 (revised) against which no objection has been raised by the Respondent and hence the same can be relied upon. On the basis of the aforesaid facts the amount of benefit of ITC which has not been passed on by the Respondent to the recipients or in other words, the profiteered amount as per the provisions of Rule 133 (1) of the CGST Rules, 2017 is determined as Rs. 1,01,06,773/- which includes GST 12% or 18%) on the base profiteered amount of Rs. 89,68,979/-. This amount is also inclusive of Rs. 49,169/- (including GST on the base amount of Rs. 43,655/-) which is the profiteered amount in respect of the Applicant No. 1. 66. The DGAP has also mentioned that the above computation of the profiteered amount was in respect of the 155 flat buyers whereas, the Respondent had booked 303 flats ....
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....nd after careful perusal of Table G mentioned above appear to be accurate. 68. The DGAP has also found that the additional ITC benefit of 1.79% of the taxable turnover which had accrued to the Respondent was required to be passed on to the Applicant No. 1 and the other recipients and therefore, the provisions of Section 171 of the CGST Act, 2017 had been violated by the Respondent as the additional benefit of ITC @1.79% of the base price received by the Respondent during the period from 01.07.2017 to 30.06.2018 had not been passed on to the Applicant No. 1 and the other buyers and the Respondent had realized an additional amount of Rs. 49,169/- from the Applicant No. 1 which included both the profiteered amount @1.79% of the taxable amount (base price) and the GST on the said profiteered amount. He has also claimed that the investigation had revealed that the Respondent had realized an additional amount of Rs. 15,90,239/- which included both the profiteered amount @1.79% of the taxable amount (base price) and the GST on the said profiteered amount from 92 other recipients who were not Applicants in the present proceedings and since they were identifiable as per the documents furni....
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....rough his submissions dated 11.10.2018 and 05.11.2018 which comprise of the details of suo moto payments made by him through various modes are taken on record. 72. It is also evident from the above narration of facts that the Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his Anand Vilas Project in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus realized more price from them than what he was entitled to collect and has also compelled them to pay more GST on the additional realisation than what they were required to pay by issuing incorrect tax invoices and hence he has committed an offence under section 122 (1) (i) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty under the provisions of the above Section. Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 122 of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him. The above act of the Respondent appears to be deliberate, contumacious and conscious violation of the provisions of the CGST Act, 2017. Since a specific all....