TaxTMI 
TaxTMI 
2019 (12) TMI 923
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.... 24.04.2019 and subsequent Reports dated 07.06.2019 and 19.06.2019 have been received from the Applicant No. 7 i.e. the Director General of Anti-Profiteering (DGAP) after detailed investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the case are that the Applicant No. 1 had booked a flat in the Respondent's project "Nirala Greenshire" situated at GH-03, Sector-02, Greater Noida West (Uttar Pradesh) and alleged that the Respondent had increased the price of the flat after introduction of GST w.e.f. 01.07.2017 and had not passed on the benefit of input tax credit by way of commensurate reduction in the price to him. The Uttar Pradesh State Screening Committee on Anti-profiteering on prima facie having satisfied itself that the Respondent had not passed on the commensurate benefit of input tax credit to the Applicant No. 1, as the input tax credit available to Respondent was to be apportioned against the instalments towards the price of the flat, had forwarded the said application with its recommendation, to the Standing Committee on Anti-profiteering on 28.07.2018 for further action, in terms of Rule 128 (2) of the above Rules. ....
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....ittee Annex-1A Remark 1. Shri Abhishek Singh G9-106, Nirala Greenshire, Gh-03, Sector-2, Greater Noida West, Uttar Pradesh-201306 G9-106 20.11.2018 2 Applicant No. 3 2. Shri Anil Singh G8, 1708 Nirala Greenshire, Gh-03, Sector-2, Greater Noida West, Uttar Pradesh-201306 G8-1708 24.11.2018 3 Applicant No. 4 3. Shri Lalit Kumar G8, 1903 Nirala Greenshire, Gh-03, Sector-2, Greater Noida West, Uttar Pradesh-201306 G8-1903 20.11.2018 8 Applicant No. 5 4. Shri Rishi Ranjan G8, 1508 Nirala Greenshire, Gh-03, Sector-2, Greater Noida West, Uttar Pradesh-201306 G8-1508 24.11.2018 9 Applicant No. 6 7. The DGAP upon receiving of the application of the Applicant No. 1 from the Standing Committee on Anti-profiteering on 25.10.2018, had issued a Notice dated 02.11.2018 under Rule 129 (3) of the CGST Rules, 2017, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of commensurate reduction in price and if so, to suo moto determine the quantum thereof and indicate the same in his reply to the Notice as well as furnish all t....
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....urther, the possession of flats was given 4/5 months after the issue of the part occupancy certificate. He also informed that there were many other common works pending for the society as a whole, which were partly provided from time to time like Common Society Park Partly provided in June, 2018), Car Parking (partly provided in September, 2018), Temporary Club (partly provided in August, 2018), external paint of building and finishing work (which was promised to be provided by December, 2018 but not provided till March, 2019), Main gate decoration/paint (partly provided in September, 2018) and Common Generator (purchased in September, 2018). It was also informed that the Respondent had not provided many major common amenities like Full Flash Club, Swimming Pool and Long Tennis Court etc. The Applicant No. 1 also submitted that an e-mail dated 30.06.2018 was received from the Respondent, vide which there was a confirmation that he had not provided all the facilities which were common and hence, the above Applicant requested for ITC benefit for the entire project instead of tower-wise benefit. 12. The DGAP had sought extension of time for completing the investigation which was ex....
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.... (g) Copy of Audited Balance Sheet (including all annexures and profit and loss account) for FY 2016-17 & FY 2017-18. (h) Copy of Electronic Credit Ledger for the period01.07.2017 to 31.12.2018. (i) CENVAT/Input Tax Credit register for the period April, 2016 to December, 2018. (j) Details of VAT, Service Tax, ITC of VAT, CENVAT credit for the period April, 2016 to June, 2017 and output GST and ITC of GST for the period July, 2017 to December, 2018 for the project "Nirala Greenshire". (k) List of home buyers in the project "Nirala Greenshire". (I) Project report submitted to the RERA along with RERA certificate. (m) Occupancy Certificate dated 21.12.2017 received from GNIDA. 15. The Respondent further requested that except the data which was readily available in public domain and on service portals, all other details/ information were to be treated as confidential, in terms of Rule 130 of the CGST Rules, 2017. 16. Based on the above mentioned documents filed by the Respondent, the DGAP submitted that the main issues for determination were whether there was any benefit of reduction in the rate of tax or input tax credit on....
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....r Rule 129 of the Rules. 19. The DGAP further clarified that the contention of the Respondent that benefit of ITC would be available only to those customers who had made their bookings before 01.07.2017 and their bookings were valid on implementation of GST, was also not correct and in fact, the benefit of ITC would be available on the amount paid/demanded post introduction of GST w.e.f. 01.07.2017, regardless of whether the booking was made in the pre-GST or the post-GST period. Therefore, new bookings made on or after 01.07.2017 (Post-GST regime) were also fully eligible for the benefit of input tax credit on the consideration paid post-GST. 20. The DGAP also observed that para 5 of Schedule-III of the Central Goods and Services Tax Act, 2017 which states as (Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services) reads as "Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building". Further, clause (b) of Paragraph 5 of Schedule II of the Central Goods and Services Tax Act, 2017 reads as "(b) construction of a complex, building, civil structure or a part thereof, including a complex or building i....
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....pondent. Further, from the demand letter dated 04.10.2017 (furnished as a part of Respondent's letter dated 16.11.2018), the Respondent had claimed that the Respondent had passed on the benefit of Rs. 41,838/- to the Applicant No. 1 which worked out to be 3% of the amount collected post-GST. However, the correctness of the amount of benefit so passed on by the Respondent had to be determined in terms of Rule 129 (6) of the Rules. Thus, the ITC available to the Respondent and the taxable amount received by him from the Applicants and other recipients post implementation of GST, had to be taken into account for determining the benefit of ITC required to be passed on. 22. The DGAP further observed that prior to 01.07.2017, the Respondent was eligible to avail CENVAT credit of Service Tax paid on input services and credit of VAT paid on the purchase of inputs. However, the CENVAT credit of Central Excise Duty paid on inputs was not admissible as per the CENVAT Credit Rules, 2004, which were in force at the material time and it was observed by the DGAP that the Respondent had not been collecting VAT from his customers and was discharging his output VAT liability on the deemed 10% val....
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....put Tax Credit to Turnover [(K)=(J)/(E)*100] 1.47% 6.89% The DGAP has thus stated from the above Table that the input tax credit as a percentage of the total turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 1.47% and during the post-GST period (July. 2017 to December, 2018), it was 6.89% which clearly confirmed that post-GST, the Respondent had benefited from additional input tax credit to the tune of 5.42% [6.89% (-) 1.47%] of the turnover. 23. The DGAP also observed that the Central Government, on the recommendation of the GST Council, had levied 18% GST (effective rate was 12% in view of 1/3rd abatement on value) on construction service, vide Notification No, 11/2017-Central Tax (Rate) dated 28.06.2017. Accordingly, the profiteering had been examined by comparing the applicable tax and input tax credit available for the pre-GST period (April, 2016 to June, 2017) when effective Service Tax @ 4.5% was payable on construction service with the post-GST period (July, 2017 to December, 2018) when the effective GST rate was 12% on construction service. On the basis of the above Table, the comparative....
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....and other home buyers during the period 01.07.2017 to 31.12.2018, the amount of benefit of input tax credit not passed on to the recipients or in other words, the profiteered amount had come out to be Rs. 2,88,43,422/- which included GST @ 12% on the base profiteered amount of Rs. 2,57,53,055/-. This amount was also inclusive of Rs. 7,76,266/- (including GST on the base amount of Rs. 6,93,094/-) which was the profiteered amount in respect of the Applicants and the details of the same had been given in Table "G" below:- Table-G (Amount in Rs.) SI.No. Name of Applicant Flat No. in Respondent's Project Sl.No. Annex-21 Amount Paid During, July, 2017 to December, 2018 Amount of benefit to be passed on 1. Shri Suresh Kumar Gupta G9-705 68 12,72,825 77,266 2. Sh. Shakti Anand G7-2003 520 28,89,600 1,75,410 3. Sh. Abhishek Kumar Singh G9,-106 609 19,58,600 1,18,895 4. Sh. Anil Kumar Singh G8-1708 642 20,05,578 1,24,747 5. Sh. Lalit Singh G8-1903 350 27,57,960 1,67,419 6. Sh. Rishi Ranjan G8,-1508 646 17,86,266 1,08,433 Total 1,26,70,829 7,69,170 26....
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.... allotted to such recipients. Therefore. this additional amount of Rs. 2,80,74,252/- was required to be returned to such eligible recipients. 29. The DGAP has further mentioned that the present investigation covered the period from 01.07.2017 to 31.12.2018 and profiteering, if any, for the period post December, 2018, had not been examined as the exact quantum of input tax credit that would be available to the Respondent in future could not be determined at this stage, when the construction of the project was yet to be completed. 30. The above Report was considered by this Authority in its meeting held on 29.04.2019 and it was decided to hear the Applicants and the Respondent on 17.05.2019. Accordingly, a Notice dated 01.05.2019 was issued to the Applicants and the Respondent. The Respondent was also issued show cause notice dated 01.05.2019 to explain why the above Report of the DGAP should not be accepted and his liability for violating the provisions of Section 171 of the CGST Act, 2017 should not be fixed along with imposition of penalty as per the provisions of Sections 122-127 of the above Act read with Rule 133 of the CGST Rules, 2017 and his registration under the abov....
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.... which had formed earlier part of the cost and had been increased leading to reduction in cost to the Supplier, such benefit of reduced cost should not have been pocketed by the supplier and should have been passed on to the buyer. 33. He further submitted that he had duly paid the benefit of Rs. 1,96,62,371/- to his customers during the period from 01.07.2017 to 31.12.2018 and thus, this amount needed to be reduced from the total profiteered amount. He also stated that the DGAP's report dated 24.04.2019 had not factored the benefit which has been passed on by him to his buyers. He also contended that benefit was given by way of reduction of basic price and then GST was charged on such reduced price. He also furnished sample invoices and sample copies of demand notices to prove that he had passed on the benefit of minimum 3% to the buyers. The Respondent further submitted that the benefit could not be given in equated percentage to all customers and the Authority should attribute the benefit of input tax credit to the limited extent of such Input tax credit as was attributable to tax payable in respect of such credits. Thus, the attribution of ITC if given equally as a percentag....
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....62 He further said that the above figures had been taken from the audited balance sheets and Service Tax and GST Returns. 36. The Respondent also submitted that the first booking of the project was made in January 2013 during which booking amount ranging between 5-10% was taken from a customer and then the customer was to make payments over a period of time as per his plan which may be construction linked or period linked. Some of the customers had even opted for making payment only at the time of booking and possession and thus, their amounts were received only during these two events. There were other customers who had got their flats cancelled and thus, their amounts were also returned from time to time. The Respondent also stated that the costs and receipts were not parallel as the costs always preceded the revenue. While the construction of the four towers (G-7, 8, 9, 10) was complete to the extent of 86% upto 30.06.2019, their demands were pending to the tune of 26.08% and thus, the demands pending were more as compared to his completion and thus, while, ITC was attributable to only 11% of its pending construction cost, the demands were to be raised for 26% of total con....
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....iled post-GST (%) D=6.89% less 2.64% - 4.25 5. Analysis of Increase in input tax credit: 6. Total Base Price excluding PLC & Other Charges raised during July, 2017 to December, 2018 E 47,51,48,619 7. GST raised @ 12% over Base Price F= E*12% 5,70,17,834 8. Total Demand raised G=E+F 53,21,66,453 9. Recalibrated Base Price H= E*(1-D) or 95.75% of E 45,49,54,803 10. GST @12% I = H*12% 5,45,94,576 11. Commensurate demand price J = H+I 50,95,49,379 12. Excess Collection of Demand or Profiteering Amount K=G-J 2,26,17,073 Thus, he has contended that the profiteered amount should be reduced to Rs. 2,26,17,073/- out of which the the benefit of Rs. 1,96,62,371/- on account of reduced cost had already been given to the buyers. Since the benefit was given to certain buyers at a higher rate (more than 6%), this deficiency shall also be passed on in the future. 39. The Respondent also submitted that the DGAP in his report dated 26.04.2019, had ignored the ITC of VAT as was availed by him in the....
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.... this table (H) 1,41,115 1,41,115 9. Net Saleable Area (I)=(G)-(H) 12,00,155 12,00,155 10. Area Sold relevant to Turnover as per Home Buyers List (J) 8,12,740 5,28,210 11. Relevant CENVAT/ Input Tax Credit to Turnover [(K)=[(E)*(J)/(I)] 7,90,07,040 3,27,21,871 12. Ratio of CENVAT/ Input Tax Credit to Taxable Turnover [(L)=(K)/(F)*100] 4.25% 6.89% 13. Increase/Decrease in input tax credit availed post-GST (%) (M) (M) =(6.89%-4.25%) 2.64% The Respondent from the above Table has submitted that it was evident that the net ITC benefit to be passed on to the buyers should have been 2.64%, while the Respondent had already passed on the benefit to the tune of minimum of 3% to all his customers and thus, no effective demand remained against the Respondent. 40. The Respondent also submitted that the DGAP's report had considered the ITC benefit ignoring the rise in prices post GST which had countered the benefit of profiteering to that extent. He also stated that the amount of ITC as was forming part of cost prior to GST and then made available as cost reduction ....
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....o Respondent 30.68 38.17 Increase in Cost 7.49 Net Benefit accruing to Respondent (7.49) Total Value of Steel Purchased(without ITC) 107,944,192 Net Benefit as available to Respondent (2,11,81,609) B. Cement Particular Before GST Post GST Average Purchase price 246.33 267.07 Rate of Tax 16.50 28.00 Tax credit as available to Respondent 34.89 58.42 Effective Cost to Respondent 211.44 208.65 Increase in Cost (2.80) Net Benefit accruing to Respondent 2.80 Total Value of Steel Purchased 1,90,93,994 Net Benefit as available to Respondent 2,00,184 C. RMC Particular Before GST Post GST Average Purchase price 5,257.26 5,028.85 Rate of Tax 14.00 18.00 Tax credit as available to Respondent 645.63 767.11 Effective Cost to Respondent 4,611.62 4,261.74 Increase in Cost (349.89) Net Benefit accruing to Respondent 349.89 Total Value of Steel Purchased 2,64,26.602 Net Benefit as available to Respondent 18,38,672 D. Sanitary Fittings Particular Before GST Post GST Average Rate of ITC available 14.5% 28% ....
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.... customer demands only, less ITC would have been attributed to the future customers or future demands of sold flats. He also suggested that the area to which ITC was being attributed should have been considered on a weighted average basis and not absolute area as the weighted average shall align the future liability against such credits. He has also submitted the following workings as an alternate considering the weighted average area, as is given below:- S.No. Particulars April, 2012 to June, 2017 (Pre- GST) July, 2017 to March, 2018 April, 2018 to December, 2018 Total (Post-GST) (1) (2) (3) (4) (5) (6)=(4)+(5) 1. CENVAT credit of Service Tax Paid on Input Services (A) 7,83,99,689 - - - 2. Input Tax Credit GST Availed (B) - 4,65,48,236 2,94,91,755 7,60,39,991 3. CENVAT Credit/Input Tax Credit Available (C)=(A) or (B) 7,83,99,689 4,65,48,236 2,94,91,755 7,60,39,991 4. Total Turnover as per Home Buyers List (D) 1,85,94,87,094 37,81,91,586 9,69,57,033 47,51,48,619 5. Total Saleable Area (in Sq.ft.)(E) 13,41,270 13,41,270 6. Weighted Area Sold relevan....
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....e, total benefit of ITC of Rs. 41837/-, was allowed to the Applicant No. 1. Thus, the claim of the Applicant No. 1 that no benefit of ITC had been passed to him was incorrect. He has also stated that similar claims made by other Applicants were also based on the wrong facts. 45. The Respondent also submitted that the Applicant No. 1 had already taken due benefits at the time of making final payment and he had again raised his demand without any basis. He further requested not to impose any penalty on him as there was no contravention of Section 171 of the CGST Act since he had advanced the benefit on the future instalments due from his customers. He also cited the judgement passed in the case of Godrej Foods Ltd v. Union of India 1993 (68) E.L.T. 28 (SC) = 1993 (5) TMI 33 - MADHYA PRADESH HIGH COURT, wherein it was held that if there was no material on record placed by the Department to establish that any material facts were suppressed by the petitioners or there was any misrepresentation on his part with the intention to evade duty, the extended period of limitation was clearly inapplicable. He also cited the judgement given in the case of Perfect Mechanical Industries Limited ....
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....d deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligations. Penalty will not be imposed merely because it is lawful to do so. Even if a minimum penalty is prescribed, the authority will be justified in refusing to impose penalty, when there is a technical or venial breach of the Act or where the breach follows from a bona fide belief that the offender is not liable to act in the manner prescribed by the Statute." 47. The Applicant No. 1 has also filed written submissions dated 17.05.2019 vide which he has submitted that he had received the GST benefit of 3% of the basic amount demanded by the Respondent in Nov-Dec. 2018. He further submitted that there was lot of balance work which was to be done by the Respondent at the time of handing over of the Flat to him. He also added that there were certain common facilities which were yet to be provided by the Respondent such as Club Building, Gym, Swimming Pool, Tennis Court and Painting for which the Applicant No. 1 had already paid and should have gotten the benefit of additional ITC. He also mentioned that the Respondent had given full GST benefit to only s....
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....e period from April 1, 2016 to June 30. 2017 and not for the entire five years. However, the Cenvat credit for the purpose of reversal in Sr. No. 3 was computed on the basis of five year credit figures and thus, the computation itself had considered two different periods for two figures and thus, the CENVAT Credit should also have been taken for the entire period prior to GST i.e. since 01.04.2012. He further stated that the PLC and other charges formed integral part of Sale consideration of flat and the same should have been taken in the sale consideration in Sr. No. 5 of Table E of the DGAP's Report dated 26.04.2019. 50. The Respondent further furnished the revised working incorporating the impact of the above mentioned issues:- Table (Total Taxable Turnover, With VAT Input and reversal of CENVAT as per DGGSTI) Period from Start of the Project (Taxable Turnover include PLC & Other Charges) (Amount in Rs.) S.No. Particulars April, 2012 to June, 2017 (Pre- GST) July, 2017 to March, 2018 April, 2018 to December, 2018 Total (Post-GST) (1) (2) (3) (4) (5) (6)=(4)+(5) 1. CENVAT credit of Service Tax Paid on Input Services (A) ....
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....e project and whose credit was attributable to the entire project had been divided only on the area of 8 towers of Phase I and thus, the attribution was in itself wrong which left no space of giving benefit of such ITC to the future flat buyers. He had also furnished the list of common facilities which had been given below:- Facilities Already Constructed in Phase-I Consisting of 8 Towers (Tower G6, G7, G8, G9, G10, G11, G12 & G14) Facilities to be Constructed in Phase-II (Which is yet to be launched) 1. STP 1. Tennis Court 2. Under Ground Water Tank 2. Club Building 3. Electric Sub-station including Transformer & DG Set 3. Swimming Pool 4. Electric Meter Room (NPCL) 4. Main Entry Gate 5. DG Exhaust Pipe Line 5. Water Feature Wall 6. Organic Waste Disposal Plant 7. Amphitheatre 8. Badminton Court 9. Kids Playing Area 10. Basket Ball Court (Half) 11. GYM Equipments with Indoor games in AC temp. Structure 13. Temp. AC Club & Community Hall ....
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.... 7,36,50,120 16.50 28.00 11.50 84,69,764 RMC 18,24,12,720 4,91,00,080 14.50 18.00 3.50 17,18,503 Bricks 9,12,06,360 2,45,50,040 5.00 5.00 - - Sand, Rodi etc. 7,98,05,565 4,29,62,570 5.00 5.00 - - Electrification (HS) (Electric Sub Station, Meter Room & DG Exhaust Pipe Line, generators, LT panel room) 5,70,03,975 2,28,01,590 14.50 18.00 3.50 7,98,056 Plumbing (HS) (Includes STP, Water Tank & Organic Waste Plant, sewarage drainage system) 3,42,02,385 1,14,00,795 14.50 18.00 3.50 3,99,028 Design & Development Charges 1,71,01,193 30,68,755 15.00 18.00 - - Landscaping & Facilities (Includes Badminton/ Basket Ball Court, Kids Playing Area, Amphitheatre, Temp. Club & Gym, Jogging Track, Gazebo, Entry Gate) 5,35,83,737 83,32,040 14.50 18.00 3.50 2,91,621 Lift 5,47,23,816 2,24,48,313 16.15 18.00 1.85 4,15,294 FINISHING WORKS Tiles 9,12,06,360 4,56,03,180 14.50 18.00....
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....een explained in his report dated 24.04.2019. 55. We have carefully considered all the Reports filed by the DGAP, submissions of the Respondent and the Applicant No. 1 and other material placed on record and find that the Applicant No.1 had booked Flat No. G-9 705 on 09.09.2013 with the Respondent in his "Nirala Greenshire" project located in Greater Noida West (Uttar Pradesh). It is also found that the Applicants No. 2 to 6 had also booked their flats bearing No. G7-2003, G9-106. G8-1708, G8-1903 and G-8-1508 respectively with the Respondent in the above project. It is also revealed from the record that the Applicant No. 1 vide his complaint dated 28.02.2018 had alleged that the Respondent had increased the price of the flat after introduction of GST w.e.f. 01.07.2017 and had not passed on the benefit of input tax credit by way of commensurate reduction in price. Applicant No. 2 to 6 had also filed complaints and had alleged that the Respondent had increased the prices of the flats after introduction of GST w.e.f. 01.07.2017 and had not passed on the benefit of input tax credit by way of commensurate reduction in prices. The above complaints were examined by the Screening....
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.... tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services or both." Therefore, it is clear that the definition of profiteering given by the Respondent is not correct and the profiteered amount has to be calculated as per the Explanation attached to the above Sub-Section. 57. The Respondent has further contended that he has duly passed on the benefit of minimum 3% which amounts to Rs. 1,96,62,371/- to his customers during the period from 01.07.2017 to 31.12.2018 and thus, this amount needs to be reduced from the total demand. He has also stated that the DGAP's Report dated 24.04.2019 had not factored the benefit which has been passed by him to his buyers. He has also claimed that the benefit was given by way of reduction of basic price and then GST was charged on such reduced price. The Respondent in this regard has submitted the sample invoices of the demands raised against the Applicant No. 1 to 6 vide his submissions dated 29.05.2019 which show that he has passed on the ITC benefit to the above Applicants. However, perusal of the sample invoices suggests that the DGA....
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....ndent has also submitted that there was no match between the cost incurred by him and the demands raised by him as per the Chart submitted by him. However, it is mentioned that there cannot be correlation between the demands raised and the costs incurred as both depend on different parameters. However, the benefit has to be passed on periodically by him on the basis of the additional ITC availed by the Respondent and the turnover received by him. The Respondent cannot ask the flat buyers to wait till the construction is completed. 60. The Respondent has also raised objection on the methodology followed by the DGAP while considering the ITC period post GST and he has himself computed three different ratios of additional input tax credit. While computing the ratio of additional benefit of ITC of 2.64% availed by him during the post GST period in the Table submitted by him the Respondent has claimed that the DGAP had wrongly claimed that there was no correlation between the VAT reported in his Returns and the amount of turnover collected from the buyers. In this connection it would be relevant to mention that the Respondent has not collected VAT from the buyers and has discharged h....
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....o of -0.05% computed by the Respondent cannot be taken in to account as by no stretch of imagination it can be argued that the Respondent has not availed benefit of additional ITC post GST implementation. 63. While computing the additional benefit of ITC for the post GST period the Respondent has arrived at the ratio of 2.14% on the ground that the DGAP in Table E of his Report dated 24.04.2019 had wrongly taken CENVAT Credit for the period from April 1, 2016 to June 30, 2017, whereas he should have taken it for the entire five years. However, the period considered by the DGAP for the pre-GST period matches with the period taken for the post GST period and in case the entire period of 5 years is taken then the above ratio would be distorted and hence the DGAP has rightly taken the above period for calculation of the additional benefit. Accordingly, the above ratio of 2.14% cannot be considered for passing on the benefit of ITC. 64. He has also stated that the CENVAT credit for the purpose of reversal in Sr. No. 3 of Table E was computed on the basis of five year credit figures and thus, the computation itself had considered two different periods and thus, the CENVAT Credit sh....
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....ied by any agency or the DGAP. Hence, his above claim is incorrect and cannot be accepted. 68. The Respondent vide his submissions dated 28.05.2019 has claimed that he has made provision of CENVAT Credit reversal to the tune of Rs. 60,13,8331-, however, his Service Tax liability was being scrutinised by the Director General GST (Intelligence) and the above mentioned reversal has been determined as Rs. 25,10,391/-. Therefore, the DGAP has wrongly considered the reversal as Rs. 60,13,833/-, against Sr. No. 3 of Table E and therefore the ratio of CENVAT/ITC to turnover computed for the pre GST period was incorrect. In this connection it would be appropriate to state that the reversal ordered by the DG GST (Intelligence) has not attained finality yet and in case the above amount is finally confirmed the Respondent can adjust it accordingly in the future while passing on the benefit of additional ITC. 69. The above Applicant has also contended that the Respondent has passed on benefit of ITC @3% of the turnover. He has further contended that the Respondent has not provided all the facilities which he was bound to provide as per the terms of sale agreement when he had handed over p....
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.... therefore, no set prescription can be laid while computing profiteering. It would be further relevant to mention that the power under Rule 126 has been granted to this Authority by the Central Govt., as per the provisions of Section 164 of the above Act which has approval of the Parliament. Rule 126 has further been framed on the recommendation of the GST Council which is a constitutional body created under the Constitution (One Hundred and First Amendment) Act, 2016. Therefore, the above power has both legislative sanction as well as incorporation in the CGST Act, 2017 and the CGST Rules, 2017. The delegation provided to this Authority under the above Rule is clear, precise, unambiguous and necessary and is well within the provisions of the Constitution and therefore it has been rightly conferred on this Authority. Hence, the objections raised by the Respondent in this regard are frivolous and without legal force. 71. The Respondent has also claimed that Australia and Malaysia have enacted legislation in which method for computing profiteering has been provided. In this connection it is submitted that both these countries have framed Acts to regulate prices however, the CGST A....
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....d. 2011 (264) E.L.T. 576 (Tri.-Mumbai) = 2010 (7) TMI 523 - CESTAT, MUMBAI, Satia & Company 2010 (262) E.L.T. 530 (Tri.-Ahmd.) = 2009 (9) TMI 861 - CESTAT AHMEDABAD, CCE, Chandigarh v. Krishi Rasyan Export Pvt. Ltd. 2009 (240) E.L.T. 468 (Tri.-DeI.) = 2009 (3) TMI 675 - CESTAT, NEW DELHI, CCE Ludhiana v. FAS Kusum Ispat (P) Ltd. 2009 (240) E.L.T. 13 (P & H) = 2009 (2) TMI 220 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH, Smitha Shetty v. CCE, 2004 (156) ELT 84 = 2003 (6) TMI 4 - CESTAT, BANGALORE, CCE v. Sunitha Shetty, 2004 (174) ELT 313 (SC) = 2004 (9) TMI 1 - KARNATAKA HIGH COURT and Hindustan Steel Ltd. v. State of Orissa = 1969 (8) TMI 31 - SUPREME COURT in his support but all these cases also do not come to the rescue of the Respondent since the present proceedings and the computation are strictly in accordance with the provisions of Section 171 (1) & (2) of the CGST Act, 2017 and facts of these cases are at variance with the instant case. Therefore, it is respectfully submitted that the above cases are not being followed. 78. We also observe that the provisions of Section 171 of the CGST Act, 2017 are aimed at ensuring that the recipient gets the commensurate benefit, i....