Raveendra Reddy Vs MYK Laticrete India Pvt Ltd. (NAA)
1. The present report dated 264)2.2021 has been received from the Applicant No. 2 i.e the Director General of Anti-Profiteering (DGAP) after a detailed Investigation under Rule 129(6) of the CGST Rules. 2017 The brief facts of the present case are that the Applicant No. 1 had filed an application under Rule 128 of the CGST Rules. 2017 and alleged that the Respondent. i.e. M/s MYK Laticrete India Pvt, Ltd., had resorted to profiteering in respect of supply of the products manufactured and sold by the Respondent, where the applicable GST rate was @18% w.e.f. 01.07.2017 compared to total pre-GST tax rate applicable i.e. Excise duty @12.5% and VAT @14.5%. The Applicant No. 1 also alleged that the Respondent had not passed on the benefit of reduction of rate of lax to the consumers by way of commensurate reduction in base price of the products manufactured and sold by him as stipulated in Section 171 of the CGST Act, 2017.
2. In the DGAPS Report dated 26 02.2021. it was inter-alia submitted that:-
(i) On receipt of the reference from the Standing Committee on Anti-profiteering, a Notice under Rule 129 of the Rules was issued by the Director General of Anti-profiteering on 01 07.2020 calling upon the Respondent to reply as to whether he admitted that the benefit of rate reduction and additional ITC available. had not been passed on to the recipients by way of commensurate reduction In price and if so, Suo-moto determine the quantum thereof and indicate the same in his reply to the Notice as well as to furnish all documents in support of his reply. Vide the said Notice. the Respondent was also given an opportunity to inspect the non-confidential evidences/information which formed the basis of the said Notice, during the period 13 07.2020 to 15.07.2020. However, the Respondent did not avail of the said opportunity. The Authorised Representative of the Respondent requested to provide a copy of the complaint filed by the Applicant No. I. However, the same was not provided to the Respondent as details sought were held confidential by the Applicant No. 1
(ii) Vide letter dated 07 02 2021. the Respondent had submitted that the details being supplied by the Respondent must not be shared with any other party and kept confidential in terms of Rule 130 of the CGST Rules. 2017. The period covered by the current investigation was from 01.07 2017 to 30.06.2020.
(iii) The statutory time limit to complete the investigation was 02.12.2020, which was extended up to 31.03.2021 by virtue of Notification No. 35/2020-Central Tax dated 03.04.2020, Notification No, 55/2020-Central Tax dated 27.06.2020, Notification No. 65/2020-Central Tax dated 01.09.2020 and Notification No. 91/2020-Central Tax dated 14.12.2020 issued by Central Government under Section 168A of the COST Act. 2017, wherein, it was provided that any lime limit for completion or compliance of any action. by any authority, had been specified in, or prescribed or notified under section 171 of the said Act. which falls during the period from the 20th day of March. 2020 to the 30th day of March, 2021. and where completion or compliance of such action had not been made within such time. then, the time then for completion or compliance of such action, shall be extended up to the 31st day of March, 2021.’
(iv) In response to the Notice dated 01.07.2020 and various reminders and summons: the Respondent replied vide letters/0-mails dated 07.08.2020. 11.08.2020. 07.09.2020. 14.10,2020. 27,11.2020. 23.12 2020, 15.01.2021 and 16.02.2021. The reply of the Respondent was summed up as follows.–
(a) That he was engaged in manufacturing of various products related to tile and stone installation and maintenance industry, which included a wide range of adhesives, grouts. waterproofing, stone care products and wall putty. Manufacturing facilities of the. Respondent were located in Telangana (2). Tam4 Nadu (1) and Rajasthan (1). These products were sold by the Respondent through venous channels including dealers and distributors. Additionally. the Respondent was also engaged in trading of some goods the portion of which was very small as compared to manufacturing activity.
(b) That a list of products dealt by the Respondent pre-GST and post-GST as bifurcated into manufacturing and trading was tabulated in Table-1 below:
Table-1
(c) That on Me manufactured goats, the ITC available to the Respondent primarily was of Excise Duty. VAT and Service Tax in the pre-GST era. and the same was available in the post-GST period also. However, on traded goods CENVAT credit of Excise Duty was not allowed in the pre-GST era.
(d) That the details of tax rate applicable on 518 products was as tabulated in Table-2 below:
Table-2
