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2022 (9) TMI 252
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....cts namely "Juvederm Voluma with Licodaine, Juvederm Ultra Plus XC and Juvederm Ultra". The Applicant No.1 alleged that the Respondent increased the base prices of the subject goods in spite of GST rate reduction from 28% to 18 % vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 w.e.f. 15.11.2017, indicating that the benefit of reduction in the GST rate from 28% to 18% was not passed on to the recipients. 2. The above application was forwarded to the DGAP by the Standing Committee on 09.10.2019 along with the report of the preliminary enquiry conducted by the Screening Committee of Maharashtra. On scrutiny of the purchase invoices of the Respondent enclosed with the application, issued by the Respondent No. 2 it was observed by the Committee that the benefit of reduction in the GST rate was not passed on to the recipients by way of commensurate reduction in the price. 3. After receipt of the above reference from the Standing Committee, the DGAP initiated his investigation to collect evidence necessary to determine whether the benefit of GST rate reduction had been passed on by the Respondent No. 1 and No. 2 to the recipients in general and to the Applicant No.....
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.... emails dated 30.10.2019, 12.11.2019, 15.11.2019, 10.12.2019, 16.01.2020, and 27.01.2020, 05.08.2020, 01.09.2020 and 15.10.2020 and stated that the supplies of subject goods took place from the state of Maharashtra only. He further submitted that from Karnataka, only stock transfers and other supplies of the nature of scrap sales, sale of assets were effected to pay recoveries etc. Vide e-mail dated 15.10.2020, it has also been stated by the Respondent No. 2 that 02 goods namely "Juvederm Volbella and Juverderm Volift", were not sold in pre-rate reduction period as they were launched in the market in January, 2018. Thus, the said two goods did not form part of profiteering calculation. Vide the above submissions, the Respondent No. 2 has submitted the following documents:- i. GST registration confirmation for Maharashtra and Karnataka. ii. GSTR-1 and GSTR-3B for the period November-17 to September-19 for both GST registrations. iii. Price list of the subject goods. iv. Sample Invoices. v. Invoice wise details of outward taxable supplies for the period July, 2017 to September, 2019. f. The DGAP has further stated that he has care....
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....benefit of reduction in tax rate was not intended to be passed on to the recipients. vi. The DGAP, therefore, once again sent a letter dated 06.11.2020 to the Standing committee to inform the basis on which the DGAP was advised to investigate only against the manufacturer (Respondent No. 2) and not the dealer (Respondent No. 1). The Standing Committee, however, maintained his stand and replied vide letter dated 23.11.2020 that as per the attached invoices and report of the State Screening Committee, it appeared to them that the manufacturer had indulged in the profiteering rather that the dealer, therefore, investigation needed to be conducted on part of the manufacturer i.e. M/s. Allergan Healthcare Pvt. Ltd. (Respondent No. 2). g. In terms of Rule129 (4) of the CGST Rules, 2017 the DGAP might also issue Notices to such other persons as deemed fit for a fair enquiry into the matter. Therefore, initially, the DGAP decided to proceed with the investigation against both the Respondent No. 1 & 2 and notice dated 21.10.2019 was issued to both. Thereafter, the contention of the DGAP was substantiated by the scrutiny of invoices issued by the Respondent No. 1 during the....
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.... 34266.02 12. Excess amount charged or profiteering M=L-G 2677.42 13. Total Profiteering N= M*J 40161.30 On the basis of the above Table, it was clear that the Respondent No. 1 did not reduce the selling price of the "JUVEDERM VOLUMA WITH LIDOCAINE (2SYGX1ML) BOX", when the GST rate was reduced from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017 Central Tax (Rate) dated 14.11.2017 and hence profiteered an amount of Rs.40161.30/- on a particular Invoice No. R/2115/17-18 dated 23.11.2017 and thus the benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in the price, in terms of Section 171 of the CGST Act, 2017. On the basis of aforesaid calculation as illustrated in table A above, the DGAP has determined profiteering in case of all goods impacted by the GST rate reduction vide Notification No. 41/2017 Central Tax (Rate) dated 14.11.2017, supplied by the Respondent during the period 15.11.2017 to 30.09.2019. j. On the basis of aforesaid pre and post-reduction GST rates and the details of outward taxable supplies (other than zero rated, nil rated and exempted supplies) of t....
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....ic item i.e. "JUVEDERM ULTRA PLUS XC 1 mL" sold during the month of November, 2017 (pre-GST rate reduction has been illustrated by the DGAP. An average base price (after discount) was obtained on dividing the total taxable value by total quantity of this item sold during the period 01.11.2017 to 14.11.2017. The average base price of this item was compared with the actual selling price of same item sold during post-GST rate reduction i.e. on or after 15.11.2017. The same has been illustrated by the DGAP in the Table-B below:- Table-C (Amount in Rupees) SI.No. Description Factors Pre-Rate Reduction (From 01.11.2017 to 14.11.2017) Post Rate Reduction (From 15.11.2017 onwards) 1. Product Description A A JUVEDERM ULTRA PLUS XC 1 mL 2. Notification No. B 41/2017-Central Tax (Rate) dated 14.11.2017 3. Total quantity of item sold C 262 4. Total taxable value D 3643706.80 6. Average base price (without GST) E=D/C 13907.28 7. GST Rate F 28% 18% 8. Commensurate Selling price (post Rate reduction-with GST) G=E*1.18 16410.59 9. Invoice No. ....
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....ed on the increased base price. n. The place (State or Union Territory) of supply-wise break-up of the total profiteered amount of Rs. 28,50,72,358/- has been furnished by the DGAP in Table-D below:- Table-D S. No. State Code State Profiteered Amount (Rs.) 1. 01 Jammu & Kashmir 25808.54 2. 03 Punjab 2343330.77 3. 04 Chandigarh 8272319.06 4. 06 Haryana 33995036.53 5. 07 Delhi 88044014.81 6. 08 Rajasthan 3293020.40 7. 09 Uttar Pradesh 1273733.15 8. 10 Bihar 314179.91 9. 14 Manipur 210893.93 10. 18 Assam 3985319.38 11. 19 West Bengal 9767889.93 12. 21 Orissa 749348.28 13. 22 Chhattisgarh 400467.13 14. 23 Madhya Pradesh 1447987.59 15. 24 Gujarat 11126725.94 16. 27 Maharashtra 96436736.66 17. 29 Karnataka 19117062.62 18. 30 Goa 1576768.84 19. 32 Kerala 3375798.78 20. 33 Tamil Nadu 8880247.20 21 36 Telangana 20199944.37 22. 37 Andhra Pradesh (New) 235724.04 Grand Total 28,50,72,3....
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.... and did not recommend investigation against him. Despite clear reports and recommendations that no investigation needed to be taken up against him, the DGAP had proceeded to continue the investigation and issued his report recommending action against us which was in complete violation of the provisions of the CGST Act and the Rules. iii. The DGAP did not have suo-moto powers to initiate any investigation. Rule 128 conferred powers on the Standing committee to examine the evidence provided to determine whether there was a prima fade case to support the claim of the applicant. There was a two level examination by the Standing Committee and the State Level Screening Committee and only based on a prima facie finding that the supplier had not passed on the benefit of reduction in rate of tax, the matter was referred to the DGAP for detailed investigation. iv. The Respondent No. 1 has relied upon the decision of Hon'ble Supreme Court in the case of CIT VS Anjum, M.H Ghaswala (2002) I SCC 633, Competent Authority Vs Barangore Jute Factory (2005) 13 SCC 477 and The Privy Council in Nazir Ahmad Vs King Emperor AIR 1936 PC 253(2) in his support. v. Rule 129(4)....
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....case might be on the package or on the label affixed thereto. xii. In the instant case, it was impossible to alter the MRP that was affixed by the manufacturer on the product and there was no special relaxation from the Ministry of Consumer Affairs at every point of time when there was a change in the rate of tax. It was a well-established principle that one could not be compelled to violate another law and the doctrine of impossibility would equally apply to the facts of the case. xiii. When there was no procedure laid down for alteration of prices and no relaxation was given for alteration or modification of an MRP fixed by the manufacturer and when there were special orders passed permitting such modifications, insisting on reduction in price and alleging violation under Section 171 was legally not permissible. xiv. The DGAP provided an arbitrary methodology to fix the price for the period prior to 15.11.2017 and for the period post 15.11.2017. The working provided in the table was not prescribed under the procedures and methodology issued under Rule 126. In fact, no methodology had been prescribed in Rule 126 covering specific situations. xv.....
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....already issued to the Respondent No. 1 on 21.10.2019, investigation was preceded against the Respondent No., 1. ii. The Standing Committee maintained his stand that as per the attached invoices and report of the State Screening Committee, it appeared to him that the manufacturer had indulged in profiteering rather than the dealer, and therefore investigation needed to be proceeded against the manufacturer. However, scrutiny of the impugned invoices of the Respondent during pre and post reduction period for the same product indicated that the Respondent No. 1had also indulged in profiteering. Therefore, investigation against the Respondent was carried out by the DGAP. Further the DGAP was empowered under Rule 129 (4) of the CGST Rules, 2017 to issue notices to such other persons as deemed fit for a fair inquiry into the matter. Therefore, initially it was decided to issue notice for Initiation of investigation to the Respondent No. 1 along-with the Respondent No. 2. Later, scrutiny of invoices issued by the Respondent No. 1 during pre and post rate reduction period indicated profiteering on part of the Respondent, as explained in para-13 (v) of the Report dated 28.....
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....nvoice no. R/2115/17-18 dated 23.11.2017. Hence, the question here was not of alteration of the price/MRP but of reducing the base price of the product when there was reduction in the rate of tax so the commensurate benefit was passed on to the recipients. viii. The "Methodology and Procedure" has been notified by this Authority vide its Notification dated 28.03.2018 under Rule 126 of the Rules and its main contours were enshrined in Section 171 (1) of the Act. The word "commensurate" mentioned in Section 171 gave the extent of benefit to be passed on by way of reduction in the prices which had to be computed in respect of each product based on the tax reduction as well as the existing base price of the product. The computation of commensurate reduction in the prices was purely a mathematical exercise based on certain parameters which would vary from product to product. Hence, no fix methodology can be prescribed to determine the amount of benefit required to be passed on to the recipients. Hence, a single formula, which fits all, could not be set. ix. Profiteering was not a tax but it was a benefit which had accrued to the Respondent on account of reduction in ta....
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....been determined, especially when a person was sought to be subjected to civil and penal consequences on failure to comply with the provisions of the law. Further, if it was the case of the DGAP, as it appeared from the Report dated 28.01.2021, that no uniform methodology or procedure could be prescribed for determination of the quantum of benefit to be passed on, would in itself show that the provisions as provided for in the law could not be implemented and the present proceedings are manifestly arbitrary and unreasonable. f) The DGAP had arrived at the alleged profiteering amount by comparing the average Allergan Selling Price (ASP) for the period 01.11.2017 to 14.11.2017 with the actual selling price for the period under review. In his view, the same was arbitrary on account of the following:- i. For the period 01 November 2017 to 14 November 2017, he had effected sales to certain distributors at a reduced/special price in the normal course of trade and this had led to consideration of Average ASP that was significantly lower than the actual average; ii. Further the DGAP had failed to appreciate the nuances of his business to arrive at the profiteered ....
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....ns only contemplate a broad co- relation between reduction of taxes and prices of products. It was submitted that the use of the term, commensurate' made it clear that the intent was to take overall facts and circumstances into consideration. The provision was in nature of anti-abuse provision for a business. A mere change in the rate of tax could not be considered as profit much less profiteering so as to lead to a reduction in price (without consideration of commensurate increase in cost and expenses including the purchase price of the product being sold) and the business of a registered dealer seen as a whole. j) The sale price should vary depending upon the period considered as well as the composition of units sold during such period and accordingly there could not be a mean or average price derived for a 15 day period and applied as had been done in the present case. The correct approach might have been for the DGAP to consider the actual MRP and reduction required from a rate change perspective and towards this, adopt the last prevailing MRP (where several MRPs were available for the same product at a product level). In any view of the matter there was no rationa....
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....lleged profiteered amount. The details of amount of credit notes issued by him for the period under review i.e. November 2017 to September 2019 has been furnished by him in the below mentioned table:- S. No. Particulars of goods Amount of credit notes 1. JUVEDERM ULTRA PLUS XC 5,76,42,251 2. JUVEDERM VOLUMA XC 11,89,45,845 3. JUVEDERM ULTRA XC 2,63,62,143 Total 20,29,50,239 n) On the basis of the above Table, the profiteered amount should have been reduced to the extent of such credit notes. Post giving effect to the same, the Respondent has tabulated the profiteering values in the Table mentioned below:- SI.No. Particulars of goods Alleged Profiteering amount Amount of credit notes Balance 1. JUVEDERM ULTRA PLUS XC 5,81,68,648 5,76,42,251 5,46,398 2. JUVEDERM VOLUMA XC 21,66,59,139 11,89,45,845 -1,61,37,573 3. JUVEDERM ULTRA XC 1,02,24,570 2,63,62,143 9,77,13,294 TOTAL 28,50,72,358 20,29,50,239 8,21,22,119 o) The report/ quantification shared by the DGAP seems to focus only on positive instances of a difference between the so called and alleged Averag....
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....i-profiteering law as provided under Section 171 of the CGST Act. 2017 and the Rules under Chapter XV of the CGST Rules, 2017 did not envisage any personal hearing by the DGAP. The mandate of the DGAP was to carry out a fair inquiry and investigation of any complaint/application referred by the Standing committee. The DGAP was not an adjudicating authority. After carrying out investigation, the DGAP submits its Report to the NM who calls for further submissions from the Respondent and also gives personal hearing. Hence, there was no question of violation of principles of natural justice on part of the DGAP. ii. The Report submitted by the DGAP was an internal document and not a public document. It was also not a final decision on the complaint made against the Respondent. The final decision on the matter was taken by the NAA by passing an order on the strength of the Report submitted by the DGAP and further submissions made by the Respondent before the Authority. In this case, the order which was a public document was yet to be passed. Therefore, it was not correct to assume that the investigation Report of the DGAP would have any civil consequences on him or affect his re....
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.... Average-to-Actual comparison Invoice No. Base declared on invoice price Average Base Price of product Invoice No. Base declared on invoice price Average Base Price of product 1 01 90 95 02 88 95 0 0 2 02 92 03 94 0 3 03 95 09 95 0 4 04 98 10 97 2 5 05 100 11 101 6 The comparison of average price of pre-rate reduction with average price of post-rate reduction, for computation of profiteering, would lead to a situation where a person/consumer who had paid Rs. 97/- or Rs. 101/- in post rate reduction would not be given any benefit of profiteering even though these recipients might have or might not have purchased goods in pre-rate reduction at a rate less than Rs. 95 even a new purchaser who purchased goods at Rs. 97/- in post-rate reduction would not get any benefit of profiteering. From the above it was observed that the method of computation of profiteering on average-to-average price fails to serve the purpose of extending the benefit to each consumer on each transaction as enshrined under Section 171 of the CGST Act, 2017, Thus, by....
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....price and the benefit in appropriated by the supplier, it amounts to profiteering. The act of profiteering had got nothing to do with the profit making or the loss-making status of the supplier. ix. As per practice, the period from 1.11.2017 to 14.11.2017 was taken for calculating average base price during pre-rate reduction period. However, when a product was not found sold during the above period, the sale data in respect of that product was taken going backward viz. October 2017 through July, 2017. x. The methodology adopted by the DGAP in such cases was uniform and in all such cases the pre-rate reduction average base price had been arrived at following the procedure described in sub-para above and the same was compared with the actual sale price during post-rate reduction period uniformly. xi. The details of the credit notes issued to the distributors was not submitted by the Respondent. A credit note could be issued for multiple purposes. It could be accepted or considered while calculating profiteering only if there was specific mention in the credit notes that the same had been issued to pass on the benefit of reduction in tax rate in terms of Sec....
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....efined the term 'commensurate' or 'benefit of ITC' nor has prescribed any methodology to determine the commensurate reduction of benefit of ITC to be passed on to the recipients and again placed reliance of several case laws mentioned in their earlier submissions dated 18.03.2021. c. As per Section 171, there has been no method provided for computation of profiteering. 11. The Respondent No. 2 has also filed his rejoinder dated 18.04.2022 on the clarifications dated 16.07.2021 vide which he has reiterated his submissions made earlier before this Authority and has inter-alia stated that:- a. Since a proper hearing or an opportunity to present the facts of the case has not been provided, the DGAP has not been able to appreciate the nuances of the case in hand. This has led to DGAP putting up the report before the NAA based on its own assumptions and presumptions and a pre-determined mind-set causing grave injustice to the Respondent 2. b. In case where the NAA confirms observations/findings made in the report of the DGAP then the same would cause grave civil consequences on him as any adverse report impacts the reputation and business of ....
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..... 1 was clearly duplication in as much as the very same profiteering amount was already included in the hands of the Respondent No. 2. e. Copies of the communication received from the Respondent No. 2 regarding the reduction of price to the end customers. 15. The Respondent No. 2 has also filed his written submissions dated 16.06.2022 vide which he has reiterated his submissions made earlier before this Authority and has submitted the following details/documents:- a. Allergan Holding Inc. USA and Allergan Inc. USA are the holding company for Allergan Healthcare Pvt. Ltd. b. He has submitted the transfer pricing reports for the FY 2016-17, 2017-18 and 2018-19 and the SVB Order. c. The pricing of the Respondent No. 2's products were in lines with the Transfer pricing mechanism, d. The Respondent No. 2 independently analyses the local markets and prices were set as per industry and competitive practices. e. He is the sole importer and distributor of the impugned products. f. He has obtained necessary permissions under the Drug License Authorities in India under Form 20B and Form 21B. g. Allergan Group owns ....
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....t passed on to the recipients. On scrutiny of the purchase invoices of the Respondent No. 1 issued by the Respondent No. 2 enclosed with the complaint, the DGAP has observed that the benefit of reduction in the rate of GST rate was not passed on to the recipients by way of commensurate reduction in the prices. 18. From the plain reading of Section 171 (1) of the CGST Act, 2017, it emerges that it deals with two situations:- one relating to the passing on the benefit of reduction in the rate of tax and the second about the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from record that there has been a reduction in the rate of tax from 28% to 18% w.e.f. 15.11.2017, on the above goods vide Notification No. 41/2017 - Central Tax (Rate) dated 14.11.2017. Therefore, the Respondent is liable to pass on the benefit of tax reduction to his customers in terms of Section 171 (1) of the above Act. It is also apparent that the present investigation has been carried out w.e.f. 15.11.2017 to 30.09.2019. 19. The Respondent No. 1 has vehemently argued that he was the distributor of the products manufactured by the Respondent No. 2 and thus, he is....
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....f the Respondent No. 1 is not maintainable and cannot be accepted. 21. It has also been contended by the Respondent No. 1 that the Standing Committee on Anti-profiteering has recommended enquiry only against the Respondent No. 2 i.e. the manufacturer/importer and not against him. However, the DGAP has suo-moto initiated investigation against him. He has relied upon the decision of Hon'ble Supreme Court in the case of CIT V5 Anjum. 111.H Ghaswala (2002) 1 5CC 633, Competent Authority Vs Barangore Jute Factory (2005) 13 5CC 477 and The Privy Council in Nazir Ahmad Vs King Emperor AIR 1936 PC 253(2) in his support. In this regard, we find that the DGAP while scrutinizing the invoices bearing Invoice no. R/1140/17-18 dated 21.07.2017 consigned to Dr. Rashmi Shetty for the product "Juvederm Voluma with Lidocaine (2x1 ml) and Invoice no. R/1782/18-19 dated 29.09.2018 consigned to the Applicant No. 1 issued by the Respondent No. 1, it was observed that the base price of the impugned product/products charged by the Respondent No. 1 to his customers was increased. Hence, it was clear that the benefit of reduction in the rate of tax has not been passed on by the Respondent No. 1 to hi....
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....of the CGST Rules, 2017 provide specific methodology for determining the profiteering. Hence, in the absence of the same the entire exercise would be in contradiction to Articles 14, 19 (1) (g), 265 and 246A of the Constitution of India. They have also relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. B.C. Srinivasa Shetty (1981) 128 ITR 294, Seshadri Vs. District Magistrate (AIR 1954 SC 747) & Steel Authority of India Vs. State of Orissa (2000) 3 SCC 200 and the decision of Hon'ble Delhi High Court in the case of Suresh Kumar Bansal Vs. Union of India (2016) 43 STR 3. The above contention of the Respondents is without substance as the 'Procedure and Methodology' for passing on the benefits of reduction in the rate of tax and ITC or for computation of the profiteered amount has been outlined in Section 171 (1) of the CGST Act, 2017 itself which provides that "any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices." The Authority finds that, it is clear from the plain reading of the above provision that it mentions "reducti....
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....eduction price of the product and quantum of reduction in the rate of tax from the date of its notification. Computation of commensurate reduction in prices is a mathematical exercise which is based upon the above parameters and hence it would vary from product to product or unit to unit or service to service and hence no fixed mathematical methodology can be prescribed to determine the amount of benefit which a supplier is required to pass on to a buyer. Similarly, computation of the profiteered amount is also a mathematical exercise which can be done by any person who has elementary knowledge of accounts and mathematics as per the Explanation attached to Section 171. 26. This Authority has been authorised to determine the `Procedure and Methodology', which has been done by it vide its Notification dated 28.03.2018 under Rule 126 of the CGST Rules, 2017. However, no fixed mathematical formula, in respect of all the Sectors or the products or the services, can be set for passing on the above benefits or for computation of the profiteered amount, as the facts of each case are different. The facts of the cases relating to the sectors of Fast Moving Consumer Goods (FMCG), resta....
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....iness of the entity. He has also made reference to the decision of the Hon'ble Supreme Court in the case of Rohtas Industries vs S.D. Agarwal and Anr AIR 1969 SC 707(1) and the decision of Hon'ble Delhi High Court in the case of Juggilal Kamlapat Cotton Spinning and Weaving Mills Co Ltd vs UOI ILR (1984) 2 783 (Delhi) relying on the Rohtas Industries (supra) and the decision of Hon'ble Bombay High Court in the case of Hardcastle Restaurants Private Limited vs Union of India W.P. (C) No 3492 of 2018 in support of his claim. In this regard it is mentioned that the DGAP being an investigating agency has no power to grant opportunity of hearing to the Respondent. However, it is apparent from the Report dated 28.01.2021 of the DGAP that the Respondent was duly issued notice dated 21.10.2019 under Rule 129 (3) by the DGAP putting him on notice that he would be investigated for not passing on the benefit of tax reduction. The Respondent has been granted sufficient opportunity by this Authority to counter the findings of the DGAP during the course of the present proceedings and hence he should have no grievance on this account. Therefore, the above cases relied upon by him are ....
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....rage base prices of the products have been arrived at by dividing the total quantity supplied with the total taxable value charged post discount. Therefore, the computation done by the DGAP is based on the transaction value as per the provisions of Section 15 of the CGST Act, 2017 which reads as under:- "The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply," Further, Section 15 (3) (a) of the above Act also provides that the value of the supply shall not include any discount which was given before or at the time of the supply if such discount had been duly recorded in the invoice issued in respect of such supply and thus, the GST was chargeable on the actual transaction value after excluding any discount (conditional as well as unconditional) and therefore, actual transaction value has been rightly considered by the DGAP for computation of profiteering. Discounted sales have no effect on the average base prices as has been claime....
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....0,29,50,239/- and thus, the same amount be reduced from the alleged profiteered amount. This Authority has observed that the above claim of the Respondent is not substantiated by any verifiable record so as to determine the veracity of such claim. Hence, such claim of the Respondent needs proper verifiable documentary evidence from each and every distributor that they have received the benefit of rate reduction from the Respondent in the form of credit notes and verification of the authenticity of such documents. Hence, in the absence of authentic acknowledgment receipts/ verifiable evidence/ documents from the distributors/customers, the Authority finds that it cannot be accepted that the Respondent No. 2 has passed on the benefit of GST rate reduction to his distributors/customers. 32. The Respondent No. 2 has further contended that the DGAP has ignored the negative values and resorted to 'zeroing' to compute higher profiteering. If these negative values be considered, the total profiteered amount would be reduced by Rs, 12,80,368/- The above contention of the Respondent is not correct as no netting off can be applied in the cases of profiteering as the benefit has to ....
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.... extent and therefore expanded the scope of the investigation of the products to include such other products that did not form part of any complaint. In this connection this Authority finds that under the provisions of Section 171 (2), the DGAP as investigating arm of this Authority has mandate to investigate all infringements of the above Section as per the provisions of Rule 129. Therefore, the DGAP is bound to investigate all the products on which the rate of tax has been reduced and therefore, there is no question of his expanding the investigation suo-moto. Hence, the above argument of the Respondent is not tenable. 34. The Respondent No. 2 has alleged that in respect of two products Juvederm Ultra Plus and Juvederm Ultra XC, the prices had been reduced w.e.f. 15 January 2019 and the said reduction was lower than the average selling price as calculated by the DGAP. Hence, the allegations should be set aside on the above ground. In this regard, we observe that while calculating the profiteered amount, the DGAP has considered only the reduced selling price wherever reduced. As per the Annexure-25 of the report of the DGAP, it is seen that during January, 2019 and afterwards, ....
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..... 61,16,566/- in two equal parts in the Central Consumer Welfare Fund and the concerned State Consumer Welfare Fund as per the provisions of Rule 133 (3) (c) of the CGST Rules 2017, along with interest payable @ 18% to be calculated from the dates on which the profiteered amount was realized by the Respondent No. 1 from his recipients till the date of its deposit in the particular Consumer Welfare Fund as prescribed and in accordance with the provisions of Rule 133 (3) (b) of the CGST Rules, 2017. The above amount of Rs. 61,54,833/- shall be deposited/returned/refunded, as specified above, within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioners. 38. The profiteered amount in the case of the Respondent No. 2 is determined as Rs. 28,50,72,358/- for the period from 15.11.2017 to 30.09.2019. Accordingly, the Respondent No. 2 is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. 39. The above amount profiteered by the Respondent No. 2 is inclusive of Rs. 61,54,833/-, the amount profiteered by the Respondent No. 1. Since the Respondent No. 1 is identifi....
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....rat 11126726 16. 27 Maharashtra 96436737 (-) 60,90,575=90346162*** 17. 29 Karnataka 19117063 18. 30 Goa 1576769 19. 32 Kerala 3375799 20. 33 Tamil Nadu 8880247 21. 36 Telangana 20199944 22. 37 Andhra Pradesh (New) 235724 Grand Total 27,89,17,525/- (*, **, ***):- These amounts have been arrived at by subtracting the state-wise profiteered amount determined in the case of the Respondent No. 1 from the state-wise profiteered amount in the case of the Respondent No. 2. 42. It is evident from the above narration of facts that the Respondents have denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, they have, committed an offence under section 171 (3A) of the CGST Act, 2017 and therefore, they are liable to penal action under the provisions of the above Section. However, since the provisions of Section 171 (3A) come have come into force w.e.f. 01.01.2020, whereas, the period during which violation has occurred is w.e.f 01.07.2017 to 30.09.2019, he....