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Bombay Sales Tax Rules, 1959 - Rule 41D, set-off of furnace oil – Interpretation of sub-rule 3(a) of Rule 41D of the Bombay Sales Tax Rules, 1959 - Whether full set-off is available on purchase of furnace oil used in the manufacture of goods partly sold locally and partly transferred to branches outside the State or the set-off is available after reducing 6% of the purchase price under sub-rule 3(a) - HELD - From the clear language of Rule 41D(3)(a) read with sub-rule 2(iii), the set-off on purchase of furnace oil used in the manufacture of goods partly sold locally and partly transferred to branches outside the State is... [Read more]

Bombay Sales Tax Rules, 1959 - Rule 41D, set-off of furnace oil – Interpretation of sub-rule 3(a) of Rule 41D of the Bombay Sales Tax Rules, 1959 - Whether full set-off is available on purchase of furnace oil used in the manufacture of goods partly sold locally and partly transferred to branches outside the State or the set-off is available after reducing 6% of the purchase price under sub-rule 3(a) - HELD - From the clear language of Rule 41D(3)(a) read with sub-rule 2(iii), the set-off on purchase of furnace oil used in the manufacture of goods partly sold locally and partly transferred to branches outside the State is available after reducing 6% of the purchase price, as provided in sub-rule 3(a) – The Larger Bench of the Sales Tax Tribunal in M/s. Pudumjee Pulp and Paper Mills Ltd. v. State of Maharashtra, interpreted the provisions of Rule 41D(3)(a) and held that furnace oil, being a consumable used in the manufacturing process, has a nexus with the goods dispatched to the branches, and hence the 6% reduction under sub-rule 3(a) is applicable. The expression "goods which are dispatched" in Sub-Rule 3(a) has to be read in the context of Sub-Rule 2(iii) which includes branch transfers - The Court rejected the assessee's contention that furnace oil cannot be equated with "goods which are dispatched" under the Rule, and also found no merit in the arguments regarding the impossibility of apportionment, as the Assessing Officer had already undertaken the pro-rata apportionment between local sales and branch transfers. The Larger Bench decision correctly interpreted the Rule 41D(3)(a) in a strict and contextual manner, in line with the settled principles of statutory interpretation - The questions referred are answered in favor of the Revenue and against the assessee - The reference is answered accordingly [Read less]

Central Excise - Corporate Insolvency Resolution Process, Abatement of appeals before CESTAT, Jurisdiction of Tribunal to adjudicate the issue – Challenge to final order passed by the CESTAT, holding the appeals to have abated consequent upon the Corporate Insolvency of the petitioner's erstwhile entity – Disallowance of CENVAT credit on steel structures, parts and accessories as well as cement – Petitioner’s case that notwithstanding the abatement of the appeals, the amount deposited by the erstwhile entity by way of reversal of CENVAT credit is required to be refunded as the said amount was in nature of security ... [Read more]

Central Excise - Corporate Insolvency Resolution Process, Abatement of appeals before CESTAT, Jurisdiction of Tribunal to adjudicate the issue – Challenge to final order passed by the CESTAT, holding the appeals to have abated consequent upon the Corporate Insolvency of the petitioner's erstwhile entity – Disallowance of CENVAT credit on steel structures, parts and accessories as well as cement – Petitioner’s case that notwithstanding the abatement of the appeals, the amount deposited by the erstwhile entity by way of reversal of CENVAT credit is required to be refunded as the said amount was in nature of security deposit – HELD – The CESTAT did not act irregularly or failed to have exercised jurisdiction in not adjudicating whether the payments made in relation to the adjudication orders which formed subject matter of challenge in the appeals could constitute a claim by the operational creditor, especially when the appeals were heard on the basis of orders which waived payment of the pre deposits – Further, the Tribunal being creature of the statute in absence of any express provision could not have adjudicated as to whether the voluntary deposit made by the petitioner prior to filing of the appeals would constitute a security deposit, once, the appeals had abated. Once the appeals abated, the Tribunal's jurisdiction over the matter ceased, and Tribunal became functus officio – Further, the petitioner's argument that the voluntarily reversed CENVAT credit was a pre-deposit was untenable because BSL had explicitly sought and been granted a waiver of the pre-deposit requirement, making the reversal a voluntary act and not a deposit to maintain the appeal. Since the appeals themselves ceased to exist due to abatement, the Tribunal could not adjudicate upon a consequential claim for a refund arising from those very appeals. The Tribunal's refusal to examine the effect of the resolution plan on the reversed amount was not a failure to exercise jurisdiction but a recognition of the legal consequence of abatement - The CESTAT did not act irregularly, illegally, or in violation of principles of natural justice, and thus, no jurisdictional error was identified that would warrant interference - The writ petitions are dismissed [Read less]

Central Excise - Excess consumption of vinegar over Standard Input-Output Norms (SION) – Permissibility of excess consumption of vinegar by the EOU in the manufacture of "gherkins in vinegar" is permissible - whether customs/excise duty can be demanded on such excess – HELD - the appellant-EOU had consumed vinegar within the SION norms when the total quantity of gherkins exported, including "gherkins in brine" is taken into account. The SION norms do not distinguish between "gherkins in vinegar" and "gherkins in brine", and vinegar is used in both. The Tribunal also noted that there was no allegation of misuse or diver... [Read more]

Central Excise - Excess consumption of vinegar over Standard Input-Output Norms (SION) – Permissibility of excess consumption of vinegar by the EOU in the manufacture of "gherkins in vinegar" is permissible - whether customs/excise duty can be demanded on such excess – HELD - the appellant-EOU had consumed vinegar within the SION norms when the total quantity of gherkins exported, including "gherkins in brine" is taken into account. The SION norms do not distinguish between "gherkins in vinegar" and "gherkins in brine", and vinegar is used in both. The Tribunal also noted that there was no allegation of misuse or diversion of the excess vinegar, and the details of consumption were declared in the EOU's monthly ER-2 returns. Accordingly, the demand of customs and excise duty on the excess consumption of vinegar is set aside but demand of duty on crate trolleys on depreciated value and on HDPE barrels is confirmed - The appeal is allowed partially [Read less]

Service Tax - Cenvat Credit on Manpower Supply Service, Repair and Maintenance of Motor Vehicles, Commission Paid to Post Offices, and Capital Goods (DG Set) - HELD - The Tribunal held that the appellant is entitled to avail Cenvat credit on Manpower Supply Service, Commission Paid to Post Offices, and Capital Goods, based on the judicial precedents relied upon by the appellant. However, denial of Cenvat credit on Repair and Maintenance of Motor Vehicles is sustained, as the vehicles were used only for transporting staff, which is not an eligible service for availing credit - The appeal is partly allowed - Cenvat Credit on... [Read more]

Service Tax - Cenvat Credit on Manpower Supply Service, Repair and Maintenance of Motor Vehicles, Commission Paid to Post Offices, and Capital Goods (DG Set) - HELD - The Tribunal held that the appellant is entitled to avail Cenvat credit on Manpower Supply Service, Commission Paid to Post Offices, and Capital Goods, based on the judicial precedents relied upon by the appellant. However, denial of Cenvat credit on Repair and Maintenance of Motor Vehicles is sustained, as the vehicles were used only for transporting staff, which is not an eligible service for availing credit - The appeal is partly allowed - Cenvat Credit on DG Set – The Cenvat credits on capital goods which are undisputedly going to be put to use directly or indirectly by the assessee for providing their output service, cannot be denied only on the grounds that the impugned equipments have been imported by their head office who in turn have distributed the Cenvat credit by way of a M.R.O - The Cenvat credit on the capital goods (DG Set) is allowed [Read less]

Service Tax - Cost Sharing Among Group Companies - The appellant reimbursed expenses to its foreign group company for their share of expenses for events/conferences held outside India – Demand of service tax under Business support services on the reimbursement - Whether the sharing of expenses among group companies amounts to provision of service under BSS - HELD - The appellant had reimbursed expenses to its group company abroad for their share of the expenses for various events held outside India and the said expenses have been shared on cost-to-cost basis. In the present case, the expenses are shared for common benefi... [Read more]

Service Tax - Cost Sharing Among Group Companies - The appellant reimbursed expenses to its foreign group company for their share of expenses for events/conferences held outside India – Demand of service tax under Business support services on the reimbursement - Whether the sharing of expenses among group companies amounts to provision of service under BSS - HELD - The appellant had reimbursed expenses to its group company abroad for their share of the expenses for various events held outside India and the said expenses have been shared on cost-to-cost basis. In the present case, the expenses are shared for common benefit of all and no service has been provided by one entity to another entity. There is no provision of service at all in this arrangement, therefore, the same are not liable to service tax - The sharing of expenses between group companies does not result into provision of any service and hence no service tax is payable - The demand of service tax on the cost sharing among group companies is set aside and the appeal is allowed - Reimbursement of Expenses - The appellant reimbursed the expenses to its foreign group company - Whether the reimbursement of expenses can be considered as a 'consideration' for providing the service - HELD - The reimbursement made by the appellant cannot be regarded as consideration flowing from the appellant towards the foreign entities, rather the same is towards the reimbursement of cost incurred for organizing the events. Such reimbursement by the appellant is not a consideration in lieu of receiving any service from its associated enterprises. The confirmation of demand by including reimbursable expenses in taxable value is not sustainable - Business Support Services - The scope of Business Support Services was clarified vide Circular No. 334/4/2006-TRU dated 28.02.2006 which clarified that the purpose behind the business support service was to tax all such outsourced services that are required by business entities in their business or commerce. In the present case, there is no outsourcing of any services, therefore, the demand under business support service is not sustainable. The department failed to establish how the arrangement between the appellant and the foreign entities falls within the meaning of "operational or administrative assistance in any manner" - The appellant did not receive any services in the form of BSS till 30.06.2012 - Revenue Neutral - The entire exercise is revenue neutral because even if the appellant is liable to pay service tax, it would be entitled to avail the cenvat credit of service tax paid and can utilize the same for paying service tax on the taxable output services provided by the appellant - Invocation of Extended Period - When the demand is proposed on the basis of an audit, the extended period of limitation cannot be invoked as the department had all the facts in its knowledge. [Read less]

GST – Non-consideration of reply to SCN, unreasoned order, non-application of mind - The appellate authority dismissed the petitioners' appeal without independent reasoning – HELD - The appellate authority had not applied its mind to the facts and arguments presented by the petitioners, and had simply dittoed the order of the adjudicating authority without any independent reasoning - The appellate order lacked the requisite reasoning to support its conclusion, as mandated under Section 74(12) of the CGST/WBGST Act, 2017 - the appellate order is set aside and matter is remanded back to the appellate authority for fresh ... [Read more]

GST – Non-consideration of reply to SCN, unreasoned order, non-application of mind - The appellate authority dismissed the petitioners' appeal without independent reasoning – HELD - The appellate authority had not applied its mind to the facts and arguments presented by the petitioners, and had simply dittoed the order of the adjudicating authority without any independent reasoning - The appellate order lacked the requisite reasoning to support its conclusion, as mandated under Section 74(12) of the CGST/WBGST Act, 2017 - the appellate order is set aside and matter is remanded back to the appellate authority for fresh consideration in accordance with law – The petition is disposed of [Read less]

Customs – Import of goods – Denial of benefit of concessional duty – Appellant imported goods declared as HDPE Granules and claimed concessional rate of duty under Customs Notification No.10/2008 – Adjudicating authority denied benefit of concessional duty provided under Notification No.10/2008-Cus to Appellant on ground that imported goods did not carry any marks to show Country of Origin and manufacturer details – Commissioner (Appeals) upheld order passed by Adjudicating authority – Whether customs authorities were justified in denying benefit of Notification No.10/2008-Cus claimed on ground that imported go... [Read more]

Customs – Import of goods – Denial of benefit of concessional duty – Appellant imported goods declared as HDPE Granules and claimed concessional rate of duty under Customs Notification No.10/2008 – Adjudicating authority denied benefit of concessional duty provided under Notification No.10/2008-Cus to Appellant on ground that imported goods did not carry any marks to show Country of Origin and manufacturer details – Commissioner (Appeals) upheld order passed by Adjudicating authority – Whether customs authorities were justified in denying benefit of Notification No.10/2008-Cus claimed on ground that imported goods are not co-relatable with Certificate of Origin accompanying them – HELD – Notification No.10/2008-Cus provided for exemption of duty of customs for goods of origin of Republic of Singapore. Certificate of country of origin had been issued by competent authority of Singapore Government after due satisfaction of issuing authority. In said certificate, manufacturer had made a declaration that goods were produced in Singapore. Issuing authority had taken all measures to ensure correctness of certificate of origin prior to export of goods from originating country. Said certificate had neither been recalled nor cancelled by issuing authority. There is no evidence that certificate of origin is forged or obtained fraudulently. Inspite of presence of valid certificate of origin issued by competent authority, customs authorities are not right in denying benefit of exemption notification. Order under challenge is set aside – Appeal allowed [Read less]

Customs – Regulation 20(1) of Customs Broker Licensing Regulations, 2013 – Contravention of provisions – Forfeiture of security deposit – Docks Intelligence Unit, in course of investigation into a case of attempted smuggling of Red Sanders in guise of Mild Steel Round Pipes, found that Appellant had acted as a customs broker for clearance of said export shipment – Licensing authority suspended customs broker licence issued to Appellant for contravention of provisions of the Regulations – Commissioner revoked order of suspension, but ordered for forfeiture of full amount of security deposit – Whether impugned ... [Read more]

Customs – Regulation 20(1) of Customs Broker Licensing Regulations, 2013 – Contravention of provisions – Forfeiture of security deposit – Docks Intelligence Unit, in course of investigation into a case of attempted smuggling of Red Sanders in guise of Mild Steel Round Pipes, found that Appellant had acted as a customs broker for clearance of said export shipment – Licensing authority suspended customs broker licence issued to Appellant for contravention of provisions of the Regulations – Commissioner revoked order of suspension, but ordered for forfeiture of full amount of security deposit – Whether impugned order forfeiting security deposit of Appellant is sustainable – HELD – Regulation 20(1) of the Regulations stipulates that Commissioner shall issue a notice in writing to Customs Broker within a period of ninety days from date of receipt of offence report, stating the grounds on which it is proposed to revoke licence or impose penalty. Time limit prescribed under Regulation 20(1) of the Regulations is mandatory. Show cause notice is not proven to be issued within period of limitation prescribed under Regulation 20(1) of the Regulations and hence, consequent proceedings are liable to be set aside to extent they have resulted in findings detrimental to Appellant/customs broker. Impugned order in original cannot be sustained to extent it forfeits security deposit of Appellant and it is liable to be set aside to that extent – Appeal allowed [Read less]

Customs – Section 28 of Customs Act, 1962 – Demand of differential duty – Bar of limitation – Appellant imported external and internal TV tuners by declaring them as computer accessories and classifying them under CTH 8473 3099 – After issuance of show cause notice by invoking extended period of limitation under Section 28 of the Act, Adjudicating Authority classified imported goods under Heading 8528 7100 (reception apparatus for television) and demanded differential duty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether invoking of extended period of limitation is justified ... [Read more]

Customs – Section 28 of Customs Act, 1962 – Demand of differential duty – Bar of limitation – Appellant imported external and internal TV tuners by declaring them as computer accessories and classifying them under CTH 8473 3099 – After issuance of show cause notice by invoking extended period of limitation under Section 28 of the Act, Adjudicating Authority classified imported goods under Heading 8528 7100 (reception apparatus for television) and demanded differential duty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – There was a lack of clarity even in department about correct classification of goods. In Appellants own case, Tribunal examined Appellant’s classification of External VGA Board under CTH 8473 3030 as against revenue’s classification under CTH 8529 9090 and held that classification under Chapter 84 is more appropriate than under Chapter 85. When there are genuine disputes over interpreting legal provisions, it is unjustified to apply an extended limitation period simply because assessee's position is considered not bona fide. Under such circumstances, charge of mis-declaration will not hold good and show cause notice could not have invoked extended period. Show cause notice in issue is barred by limitation of time. Once it is held that demand is time barred, there would be no occasion for Tribunal to enquire into merits of issues. Impugned order is set aside – Appeals disposed of [Read less]

Service Tax – Rendering of professional services, Reimbursement of travel ticket by clients - The assessee, a firm of chartered accountants, incurred expenses for travel of its partners and employees, which were reimbursed by clients - Whether reimbursements should be included in the taxable value of the service provided by the assessee – HELD – In view of the Supreme Court judgment in Intercontinental Consultants & Technocrats Pvt. Ltd. v. UoI, prior to the amendment of Section 67 of the Finance Act, 1994 with effect from 14.05.2015, the levy of Service Tax on the reimbursed expenses was not envisaged. The authoriti... [Read more]

Service Tax – Rendering of professional services, Reimbursement of travel ticket by clients - The assessee, a firm of chartered accountants, incurred expenses for travel of its partners and employees, which were reimbursed by clients - Whether reimbursements should be included in the taxable value of the service provided by the assessee – HELD – In view of the Supreme Court judgment in Intercontinental Consultants & Technocrats Pvt. Ltd. v. UoI, prior to the amendment of Section 67 of the Finance Act, 1994 with effect from 14.05.2015, the levy of Service Tax on the reimbursed expenses was not envisaged. The authorities below clearly erred in including the reimbursed expenditure in the taxable value of services for the period under dispute – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Section 65B(44) of Finance Act, 1994 – Rules 2(e) and 6 of Cenvat Credit Rules, 2004 – Construction of residential complex – Demand of reversal of credit – Sustainability – Appellant is carrying on activity of construction services of residential complex at New York City Project – Department opined that after issuance of completion certificate, Appellant was covered under provisions of Rule 6 of the Rules as amended vide Notification No.13/2016-CE and therefore, Appellant was liable to reverse credit of input services pertaining to unsold unit – Adjudicating Authority confirmed demand of rever... [Read more]

Service Tax – Section 65B(44) of Finance Act, 1994 – Rules 2(e) and 6 of Cenvat Credit Rules, 2004 – Construction of residential complex – Demand of reversal of credit – Sustainability – Appellant is carrying on activity of construction services of residential complex at New York City Project – Department opined that after issuance of completion certificate, Appellant was covered under provisions of Rule 6 of the Rules as amended vide Notification No.13/2016-CE and therefore, Appellant was liable to reverse credit of input services pertaining to unsold unit – Adjudicating Authority confirmed demand of reversal of credit – Whether Appellant is required to reverse CENVAT Credit on account of completion certificate with respect to units completed but not booked/unsold as on date of receipt of completion certificate – HELD – On date of completion certificate, 558 units were completed and remaining units were still under construction or had not commenced work. Appellant had availed only eligible credit after issuance of completion certificate. Appellant had placed on record the Chartered Accountant’s Certificate duly certifying that Appellant had reversed proportionate credit towards completed unsold units and availed credit only relating to taxable portion of project after completion date. Notification No.13/2016 inserted Explanation 3 that “exempted service? under Rule 2(e) of the Rules to include an activity which is not a service as defined under Section 65B(44) of the Act had been held to be prospective and therefore, no reversal was required to be made for period till 31-3-2016. No reversal of eligible past credits is permissible under Rule 6 of the Rules by reason of output services becoming non-taxable. Once it is held that reversal is not legally permissible, Appellant is consequently entitled to refund of amount which has been wrongly reversed by wrong interpretation placed by Department. Order under challenge is set aside – Appeals allowed [Read less]

Service Tax – Section 73 of Finance Act, 1994 – Providing of chartering service – Tax liability – Respondent arranged for shipping of goods by Public Sector Undertakings (PSUs) and Government departments and charged 1% of freight, demurrage, etc. as chartering charges for this service – Department issued show cause notice to Respondent by proposing demand of service tax on chartering service charges by invoking extended period of limitation – Principal Commissioner dropped proceedings initiated under show cause notice – Whether chartering service provided by Respondent is chargeable to service tax or not – ... [Read more]

Service Tax – Section 73 of Finance Act, 1994 – Providing of chartering service – Tax liability – Respondent arranged for shipping of goods by Public Sector Undertakings (PSUs) and Government departments and charged 1% of freight, demurrage, etc. as chartering charges for this service – Department issued show cause notice to Respondent by proposing demand of service tax on chartering service charges by invoking extended period of limitation – Principal Commissioner dropped proceedings initiated under show cause notice – Whether chartering service provided by Respondent is chargeable to service tax or not – HELD – Main contention of Revenue is that nature of service rendered by Respondent was not a sovereign function of Ministry of Shipping and it was rendered as per a contract and for a consideration of 1% of freight, demurrage, etc. Services rendered by Respondent were to support PSUs and others to charter space on ships for their exports for a commission of 1%. Mere fact that participating shipping lines would bear this cost will make no difference to taxability of activity. Chartering service rendered by Respondent was taxable – Appeal partly allowed - Invoking of extended period of limitation – Whether extended period of limitation can be invoked to raise demand – HELD – If service tax is not paid or short paid, show cause notice can be issued within one year as prescribed under Section 73 of the Act. If such non-payment or short payment is by reason of fraud, collusion, willful misstatement or suppression of facts with intent to evade payment of service tax, show cause notice can be issued within five years as per proviso to Section 73 of the Act. There is no evidence that Respondent had any intent to evade paying service tax. Respondent simply felt that service tax was not payable and hence did not pay service tax. There is no justification to invoke extended period of limitation. Demand can only be confirmed within normal period of limitation with consequential interest. [Read less]

Service Tax – Rule 2(l) of CENVAT Credit Rules, 2004 – Amendment of provisions – Prospective effect – During scrutiny of ST-3 returns filed by Appellant, department noticed that Appellant had availed ineligible CENVAT credit of Service Tax paid on vehicle repair bills issued by Authorised Service Stations (ASS) – Department issued show cause notice proposing demand of credit wrongly availed by Appellant – Adjudicating authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether amendment made to Rule 2(l) of the Rules vide Not... [Read more]

Service Tax – Rule 2(l) of CENVAT Credit Rules, 2004 – Amendment of provisions – Prospective effect – During scrutiny of ST-3 returns filed by Appellant, department noticed that Appellant had availed ineligible CENVAT credit of Service Tax paid on vehicle repair bills issued by Authorised Service Stations (ASS) – Department issued show cause notice proposing demand of credit wrongly availed by Appellant – Adjudicating authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether amendment made to Rule 2(l) of the Rules vide Notification No.3/2011-CE effective from 1-4-2011 operates retrospectively or prospectively – HELD – Pre-amended definition of input service was wide and inclusive, covering any service used directly or indirectly in or in relation to manufacture of final products or for providing output service, including activities relating to business. Effective from 1-4-2011, definition of input service under Rule 2(l) of the Rules was drastically changed to narrow its scope. Key change was deletion of phrase "activities relating to business". CBEC Circular No.943/4/2011 clarifies that amendment shall be applicable prospectively. Substitution of Rule 2(l) of the Rules by Notification No.3/2011-CE(NT) effective from 1-4-2011 is prospective in operation. Since services were delivered to Appellant on or before 31-3-2011, amended provisions will not apply in this case – Appeal allowed - Repair of vehicle – Payment of tax – Eligibility to avail credit – Whether Appellant is eligible to avail CENVAT credit of Service Tax paid on vehicle repair/claim bills issued by ASS – HELD – Service of repair of vehicle belonging to customer is an eligible input service as per Rule 2(l) of the Rules, using which, Appellant fulfils its obligation of providing insurance service to their clients. Appellant is eligible to avail credit of service tax paid on ASS services received by them. CENVAT Credit availed by Appellant is in order and disallowance of same in impugned order is not tenable and is set aside - Violation of principle of natural justice – Whether impugned order and order-in-original have traversed beyond allegations made in show cause notice – HELD – Order-in-Original had invoked exclusion clause to Rule 2(l) of the Rules to deny credit to Appellant. Show cause notice had not invoked said provision for fastening liability on Appellant. Adjudicating authority cannot make out a new case which was not put to notice of Appellant. Any finding or reasoning that travels beyond scope of show cause notice violates principles of natural justice, as assessee is deprived of an opportunity to meet those new allegations. Order-in-Original and Order-in-Appeal have traversed beyond scope of show cause notice. Such action is beyond jurisdiction and violates settled principles of natural justice. Impugned order is liable to be set aside. [Read less]

Service Tax – Use of services for exports – Payment of tax – Eligibility to claim refund – Appellant filed a rebate claim in terms of Notification No.41/2012-ST for rebate of service tax paid on specified services used by them for exports – Adjudicating authority rejected rebate claim filed by Appellant – Lower Appellate Authority rejected appeal filed by Appellant against Order-in-Original – Whether impugned services used by Appellant for exports are Specified Services or not – HELD – In Appellant’s own case, Tribunal held that taxable services used beyond factory for export of goods are specified serv... [Read more]

Service Tax – Use of services for exports – Payment of tax – Eligibility to claim refund – Appellant filed a rebate claim in terms of Notification No.41/2012-ST for rebate of service tax paid on specified services used by them for exports – Adjudicating authority rejected rebate claim filed by Appellant – Lower Appellate Authority rejected appeal filed by Appellant against Order-in-Original – Whether impugned services used by Appellant for exports are Specified Services or not – HELD – In Appellant’s own case, Tribunal held that taxable services used beyond factory for export of goods are specified services and are eligible for rebate under Notification No.41/2012-ST. Judicial discipline requires that said judgment of this Tribunal should be followed. Impugned services used by Appellant are specified services, in as much as, said services were used beyond factory of production or manufacture of Appellant’s export goods. Appellant is eligible for refund as claimed. Impugned Order-in-Appeal is ordered to be set aside – Appeal allowed [Read less]

Service Tax – Section 65(105)(zn) of Finance Act, 1994 – Receipt of despatch money – Tax liability – Appellant is engaged in manufacture of various products, for which, it imported raw materials on CIF contracts – Under agreements, Appellant was to unload the cargo from vessel in a particular period of time. If goods were unloaded faster than time provided for in contract, Appellant became entitle to receive despatch money – Department issued show cause notice proposing to subject this despatch money to service tax under category of Port Service – Commissioner confirmed demand as proposed in show cause notice... [Read more]

Service Tax – Section 65(105)(zn) of Finance Act, 1994 – Receipt of despatch money – Tax liability – Appellant is engaged in manufacture of various products, for which, it imported raw materials on CIF contracts – Under agreements, Appellant was to unload the cargo from vessel in a particular period of time. If goods were unloaded faster than time provided for in contract, Appellant became entitle to receive despatch money – Department issued show cause notice proposing to subject this despatch money to service tax under category of Port Service – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant has rendered any taxable service in respect of despatch money – HELD – Port Service under Section 65(82) of the Act means “any service rendered within a port or other port in any manner”. Word “service” occurring in Section 65(82) of the Act does not connote a taxable service, but merely a service. No party to agreement under consideration, that is, neither importer nor transporter performed any activity which would fall within meaning of word “service” as occurring in definition of term “Port Service” under Section 65(82) of the Act. Payment of demurrage or despatch money were not consideration for rendering a service, but represented only a condition to contract of purchase. Appellant would not be said to have rendered any taxable service in respect of both demurrage and despatch money. In view of these conclusions, levy does not survive for any part of tax periods for which the adjudication was made. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Mere non-payment or short payment of tax or evasion of tax by itself is not sufficient to invoke the extended period of limitation u/s 74. The presence of fraud, wilful misstatement or suppression of facts, is essential condition for invoking Sec.74.

Customs - Prohibition Order under CBLR, 2013 - The appellant, a customs broker, obtained a license and was operating in Mumbai Customs Commissionerate. Upon examination of goods imported through certain Bills of Entry, the Mumbai Customs noticed irregularities in description, quantity, and valuation, and passed a prohibition order prohibiting the appellant from working in all sections of Mumbai Customs Zones I, II and III for violation of various regulations under the CBLR, 2013 - Whether the prohibition order could stand independent of the inquiry proceedings under Regulation 20 of the CBLR, 2013, which were quashed by th... [Read more]

Customs - Prohibition Order under CBLR, 2013 - The appellant, a customs broker, obtained a license and was operating in Mumbai Customs Commissionerate. Upon examination of goods imported through certain Bills of Entry, the Mumbai Customs noticed irregularities in description, quantity, and valuation, and passed a prohibition order prohibiting the appellant from working in all sections of Mumbai Customs Zones I, II and III for violation of various regulations under the CBLR, 2013 - Whether the prohibition order could stand independent of the inquiry proceedings under Regulation 20 of the CBLR, 2013, which were quashed by the Madras High Court – HELD - The prohibition order can stand independent of the inquiry proceedings under Regulation 23 of the CBLR, 2013, which allows the Commissioner of Customs to prohibit a customs broker from working in one or more sections if satisfied that the broker has not fulfilled its obligations. Further, the appellant's registration with the Mumbai Customs Commissionerate had expired on 21.03.2024, and the appellant did not approach the Commissioner to continue its operations from Mumbai - The appeal is dismissed as infructuous upon expiry of the cause of action [Read less]

Customs - Waiver of cost recovery charges (CRC) - The appellant was functioning as a Custodian at ICD Dadri and had been paying CRC for the custom staff deployed at its CFS under CBEC Circular No. 52/97–CUS dated 17.10.1997. The appellant requested for exemption/waiver from payment of CRC and refund of the amount deposited by them during the period from April 2009 to November 2015 – HELD - The appellant is entitled to waiver of CRC retrospectively from the date of the application, based on the decision of the Gujarat High Court in Adani Ports & Special Economic Zone Ltd v. Union of India, which held that once the exemp... [Read more]

Customs - Waiver of cost recovery charges (CRC) - The appellant was functioning as a Custodian at ICD Dadri and had been paying CRC for the custom staff deployed at its CFS under CBEC Circular No. 52/97–CUS dated 17.10.1997. The appellant requested for exemption/waiver from payment of CRC and refund of the amount deposited by them during the period from April 2009 to November 2015 – HELD - The appellant is entitled to waiver of CRC retrospectively from the date of the application, based on the decision of the Gujarat High Court in Adani Ports & Special Economic Zone Ltd v. Union of India, which held that once the exemption is granted, it should be from the date of the application. Further, the Andhra Pradesh High Court in CBEC v. GMR Hyderabad International Airport Limited had held the Handling of Cargo in Customs Areas Regulations, 2009, under which the CRC was levied, to be ultra vires the Customs Act, 1962, as there was no express statutory provision conferring authority on the department to levy CRC. Consequently, the CRC ever collected from the appellant or any other custodian was without any authority of law. The impugned order is set aside and the appellant is entitled to the refund of CRC ever paid by them - The appeal is allowed [Read less]

Customs - Undervaluation of imported goods – Appellant imported digital receiver sets components of Chinese origin – Dept rejected the declared value as the values were much lower than the prices at which other importers had imported similar goods during the relevant period. The Commissioner confirmed the demand of duty under the extended period of limitation, imposed interest, and also imposed penalty under Section 114A of the Customs Act, 1962 – HELD - The demand of duty cannot be sustained as the transaction values declared by the appellant were already enhanced by the proper officer at the time of assessment of t... [Read more]

Customs - Undervaluation of imported goods – Appellant imported digital receiver sets components of Chinese origin – Dept rejected the declared value as the values were much lower than the prices at which other importers had imported similar goods during the relevant period. The Commissioner confirmed the demand of duty under the extended period of limitation, imposed interest, and also imposed penalty under Section 114A of the Customs Act, 1962 – HELD - The demand of duty cannot be sustained as the transaction values declared by the appellant were already enhanced by the proper officer at the time of assessment of the Bills of Entry, and the Department did not provide any evidence or reasons as to why the values determined by the proper officer were not correct – The DRI has a view different from the views of the proper officer regarding the assessable value and the Commissioner agreed with the DRI. No reasons are available as to why the values at which the goods assessed by the proper officer were wrong - The demand of duty redetermining the assessable values in the Bills of Entry cannot be sustained in the absence of any evidence or reason as to why the values determined by the proper officer assessing the Bills of Entry were not correct - Further, the statements recorded under Section 108 of the Customs Act cannot be admitted as evidence as per Section 138B and therefore, cannot be relied upon to invoke the extended period of limitation under the proviso to Section 28(1) of the Act - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Classification of Micronutrient Fertilizers - Appellant manufacturer of Insecticides, Plant Growth Regulators, Bio-fertilizer cleared as Micronutrient Fertilizers (MNF) classifying it as fertilizer under CETH 3105 9090 – Department of the view that the product is appropriately classifiable under CETH 3808 as Micronutrients are not fertilizers hence cannot fall under Chapter 31 - HELD – The Tribunal has already examined this issue and held that the impugned goods cannot be considered as Plant Growth Regulator and would be treated as fertilizers only, keeping in view the Chapter Note 6 which provides tha... [Read more]

Central Excise - Classification of Micronutrient Fertilizers - Appellant manufacturer of Insecticides, Plant Growth Regulators, Bio-fertilizer cleared as Micronutrient Fertilizers (MNF) classifying it as fertilizer under CETH 3105 9090 – Department of the view that the product is appropriately classifiable under CETH 3808 as Micronutrients are not fertilizers hence cannot fall under Chapter 31 - HELD – The Tribunal has already examined this issue and held that the impugned goods cannot be considered as Plant Growth Regulator and would be treated as fertilizers only, keeping in view the Chapter Note 6 which provides that "for the purpose of Heading 3105, the term "other fertilizers" applies only to products of a kind used as fertilizers and containing, as an essential constituent, at least one of fertilizing elements nitrogen, phosphorous and potassium" – Nothing in the Chapter note 6 to Chapter 31 which says that Nitrogen, Phosphorous & Potassium cannot be part of chelating agents or the chelating agents are not essential ingredients. Since one of these elements is available, the classification of the goods under Chapter heading 3105 is clearly sustainable. The impugned goods cannot be considered as Plant Growth Regulator and would be treated as fertilizers only – The appeals are allowed [Read less]

Service Tax - The appellant is engaged in distributing the products of Amway India Enterprises Limited (Amway) and earning commission on sales - Whether the commission earned by the appellant on the sale of Amway products is liable to service tax as business auxiliary service – HELD - The SCN did not specify the relevant sub-clause of the definition of BAS under which the department intended to cover the appellant's activity. It is imperative for the Department to specify the precise service being provided in the show-cause notice, as the noticee should be aware of the exact liability under the statute. Further, the Comm... [Read more]

Service Tax - The appellant is engaged in distributing the products of Amway India Enterprises Limited (Amway) and earning commission on sales - Whether the commission earned by the appellant on the sale of Amway products is liable to service tax as business auxiliary service – HELD - The SCN did not specify the relevant sub-clause of the definition of BAS under which the department intended to cover the appellant's activity. It is imperative for the Department to specify the precise service being provided in the show-cause notice, as the noticee should be aware of the exact liability under the statute. Further, the Commissioner (Appeals) had relied on material downloaded from Amway's website, which was not part of the show-cause notice and not disclosed to the appellant, violating the principles of natural justice - On the merits, the Tribunal in Charanjit Singh Khanuja has held that the sale of goods by a distributor who had purchased the goods from the principal (Amway) cannot be treated as the sale of goods belonging to the principal, and hence, the commission earned by the distributor is not liable to service tax – Further, the extended period of limitation could not have been invoked as the appellant had a bona fide belief that his activity was not taxable, and the department failed to establish any positive act of suppression or willful misstatement with the intent to evade tax - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Classification of service – Appellant is constituent unit of the Council of Scientific and Industrial Research (CSIR), carried out various projects on earth sciences and research, survey and exploration into mineral resources, etc. – Dept of the view that the service provided by the appellant are covered under the category of Scientific or Technical Consultancy Service (STC) and not Survey and Map Making (SMM) service - HELD - Department is claiming that activities undertaken by Appellant would specifically covered under category of STC, whereas Appellant is submitting that it would fall within ambit of S... [Read more]

Service Tax - Classification of service – Appellant is constituent unit of the Council of Scientific and Industrial Research (CSIR), carried out various projects on earth sciences and research, survey and exploration into mineral resources, etc. – Dept of the view that the service provided by the appellant are covered under the category of Scientific or Technical Consultancy Service (STC) and not Survey and Map Making (SMM) service - HELD - Department is claiming that activities undertaken by Appellant would specifically covered under category of STC, whereas Appellant is submitting that it would fall within ambit of SMM - While the service of SMM is restricted to carrying out survey and making maps and presenting the plain result of the same, however, in the same context, if any specific expert view or definite opinion, etc., are given by an expert or technocrat of this field, then it would not be covered under SMM - If an activity has to fall under STC, there has to be some element of consultation, expert advice or technical assistance. Appellant is a scientific institution and service is being provided by scientists and technocrats to carryout various activities, keeping in view the scope of work awarded to them by their clients. There is no dispute that Appellant is an expert body and for giving any opinion or advice, they have to carry out various surveys, map making, data analysis, etc. - Where the survey is of prime importance, a survey report or a map based on such survey would not have any element of any expert opinion - In so far as merit of demand on classification is concerned, the quantification of demand has to be based on above findings. However, the final demand, if any, would be dependent on decision by the adjudicating authority on the issue of limitation - Appeal allowed partly by way of remand - Denovo proceedings – Non-compliance of order – Whether Adjudicating Authority has complied with order passed by Tribunal – HELD – Impugned order has been passed in remand proceedings in terms of order passed by Tribunal. No findings have been given by Adjudicating Authority in his denovo proceedings on issue of limitation, though demand has been confirmed under proviso to Section 73 of the Act. While adjudicating authority had complied with order of Tribunal in so far as substantive issue on merit was concerned, he has not given any findings on plea of limitation as directed by Tribunal. Matter is remanded to Adjudicating authority to quantify demand based on merit of case and examine the issue of limitation. [Read less]

GST – Interception of goods, non-generation of Part-B of e-Way Bill - The goods in question were intercepted and seized on the ground that Part B of the E-way bill accompanying the goods was not generated - Whether the penalty under Section 129(3) of the CGST Act is leviable for non-filling of Part B of the E-way bill, when there was no intention to evade payment of tax - HELD - The record shows that the stand of the petitioner was that due to technical glitch, Part - B of the e-way fill could not be filled, but there was no intention to evade payment of tax. The non-filling of E-way bill will not attract penalty under S... [Read more]

GST – Interception of goods, non-generation of Part-B of e-Way Bill - The goods in question were intercepted and seized on the ground that Part B of the E-way bill accompanying the goods was not generated - Whether the penalty under Section 129(3) of the CGST Act is leviable for non-filling of Part B of the E-way bill, when there was no intention to evade payment of tax - HELD - The record shows that the stand of the petitioner was that due to technical glitch, Part - B of the e-way fill could not be filled, but there was no intention to evade payment of tax. The non-filling of E-way bill will not attract penalty under Section 129(3) of the Act - In the absence of any finding by the authorities regarding an intention to evade tax, the penalty under Section 129(3) is not leviable - The impugned orders is quashed and the authorities are directed to refund any amount deposited by the petitioner in pursuance of the proceedings initiated against it - The writ petition is allowed [Read less]

Service Tax - Liability for Service Tax on Ocean Freight Charges - The appellant provided logistics services and charged ocean freight charges to customers. The department sought to include the ocean freight charges in the taxable value for the purpose of service tax – HELD - The appellant is not liable to pay service tax on the ocean freight charges based on the judgment of the Supreme Court in Intercontinental Consultants and Technocrats Pvt. Ltd. case, which had set aside the relevant rule. Further, in the appellant's own case for a later period, the Department had dropped the proceedings on the same issue, and this d... [Read more]

Service Tax - Liability for Service Tax on Ocean Freight Charges - The appellant provided logistics services and charged ocean freight charges to customers. The department sought to include the ocean freight charges in the taxable value for the purpose of service tax – HELD - The appellant is not liable to pay service tax on the ocean freight charges based on the judgment of the Supreme Court in Intercontinental Consultants and Technocrats Pvt. Ltd. case, which had set aside the relevant rule. Further, in the appellant's own case for a later period, the Department had dropped the proceedings on the same issue, and this decision had attained finality. The revenue cannot take contradictory stands, and since the final decision in the appellant's favor has not been challenged, it is binding on the revenue - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Agricultural Produce - The appellant paid commission to their foreign agents for sale of their black tea. The department contended that the commission paid attracts service tax - Whether 'black tea' is an 'agricultural produce' and the services provided by the Commission Agent would be covered under the Negative List in terms of Sec.65B(5) and 66D(vii) of the Finance Act, 1994 – HELD - The processes involved in converting "green tea" into "black tea" does not alter the basic character of the tea as such and the same could not be considered as a non-agricultural product. Further, as per the CBEC Circular, cl... [Read more]

Service Tax - Agricultural Produce - The appellant paid commission to their foreign agents for sale of their black tea. The department contended that the commission paid attracts service tax - Whether 'black tea' is an 'agricultural produce' and the services provided by the Commission Agent would be covered under the Negative List in terms of Sec.65B(5) and 66D(vii) of the Finance Act, 1994 – HELD - The processes involved in converting "green tea" into "black tea" does not alter the basic character of the tea as such and the same could not be considered as a non-agricultural product. Further, as per the CBEC Circular, client processing in which the essential characteristics of the agriculture produce is retained should be considered as covered by the expression 'in relation to agriculture'. Once the black tea is found to be agricultural produce, services provided by a commission agent for sale or purchase of agricultural produce is covered by the negative list as per Section 66D of the Finance Act, 1994 and is not exigible to Service Tax – Since the black tea is held to be an agricultural produce and the services provided by the commission agent are covered under the negative list, the issue of interest and penalties becomes redundant. Accordingly, the impugned order is set aside and the appeal is allowed - Export Commission - The appellant paid export commission to foreign commission agents for export of "black tea". The department contended that the export commission is liable for service tax under Reverse Charge Mechanism - Whether the export commission paid to foreign commission agent for export of "black tea' is liable for service tax under RCM – HELD - Since the black tea is held to be an agricultural produce and the services provided by the commission agent are covered under the negative list, the issue of export commission being liable for service tax under Reverse Charge Mechanism becomes redundant. [Read less]

Service Tax - Penalty under Section 78 of Finance Act 1994 and Rule 15(3) of Cenvat Credit Rules, 2004 - Appellant failed to pay service tax and wrongly availed Cenvat credit - Whether the penalty under Section 78 of Finance Act 1994 and Rule 15(3) of Cenvat Credit Rules, 2004 was rightly imposed on the appellant – HELD - The penalty cannot be imposed unless the party acted deliberately in defiance of law or was guilty of dishonest or unconscious disregard of its obligation. In the present case, the non-payment of tax and wrong availment of credit was due to an inadvertent omission and the appellant deposited the entire ... [Read more]

Service Tax - Penalty under Section 78 of Finance Act 1994 and Rule 15(3) of Cenvat Credit Rules, 2004 - Appellant failed to pay service tax and wrongly availed Cenvat credit - Whether the penalty under Section 78 of Finance Act 1994 and Rule 15(3) of Cenvat Credit Rules, 2004 was rightly imposed on the appellant – HELD - The penalty cannot be imposed unless the party acted deliberately in defiance of law or was guilty of dishonest or unconscious disregard of its obligation. In the present case, the non-payment of tax and wrong availment of credit was due to an inadvertent omission and the appellant deposited the entire amount with interest as soon as the discrepancy was brought to its notice. Further, the appellant being a governmental authority, the grave consequence of penalty was not warranted, especially in the absence of any evidence of deliberate suppression of facts by the appellant. Accordingly, the orders imposing penalty on the appellant is set aside. The appeal was disposed of by modifying the order under challenge to the extent of setting aside the penalty – Ordered accordingly [Read less]

Service Tax – Section 65(105)(zzzza) of Finance Act, 1994 – Providing of works contract service – Demand of tax – Dropping of proceedings – Respondent is engaged in providing works contract service to Bangalore Metropolitan Transport Corporation (BMTC) for construction of Traffic and Transit Management Centers (TTMC) – After investigation, department issued show cause notice to Respondent by proposing demand of service tax – Adjudicating authority dropped proceedings initiated under show cause notice – Whether impugned order dropping all proceedings initiated vide show cause notice is tenable – HELD – A... [Read more]

Service Tax – Section 65(105)(zzzza) of Finance Act, 1994 – Providing of works contract service – Demand of tax – Dropping of proceedings – Respondent is engaged in providing works contract service to Bangalore Metropolitan Transport Corporation (BMTC) for construction of Traffic and Transit Management Centers (TTMC) – After investigation, department issued show cause notice to Respondent by proposing demand of service tax – Adjudicating authority dropped proceedings initiated under show cause notice – Whether impugned order dropping all proceedings initiated vide show cause notice is tenable – HELD – As per definition of taxable service of Works Contract Service under Section 65(105)(zzzza) of the Act, works contract in respect of roads, airport, railways, transport terminals, bridges, tunnels and dams are specifically excluded from purview of taxable service. Construction of TTMCs for BMTC by Respondent falls within exclusion category of definition of taxable service of Works Contract Service and hence, said activity is not liable to service tax. Mere fact that TTMC contains commercial areas let out does not divest TTMC of its essential character of a transport terminal. Adjudicating authority had passed a well-reasoned order by dropping all proceedings initiated vide show cause notice that warrants no interference – Appeal dismissed [Read less]

Customs - Classification of "Petroleum Hydrocarbon Solvent Grade (125/240) - The respondent imported "Petroleum Hydrocarbon Solvent Grade (125/240)" and classified it under CTH 27101990. However, the Dept reclassified the goods under CTH 27101910 as Kerosene Oil based on the CRCL test reports - Whether the imported goods could be considered "most akin" to Kerosene Oil warranting reclassification - HELD - The test reports were inconclusive as they did not examine all the essential parameters required to determine if the goods were "most akin" to Kerosene Oil as per the Supreme Court's guidelines in Gastrade International v.... [Read more]

Customs - Classification of "Petroleum Hydrocarbon Solvent Grade (125/240) - The respondent imported "Petroleum Hydrocarbon Solvent Grade (125/240)" and classified it under CTH 27101990. However, the Dept reclassified the goods under CTH 27101910 as Kerosene Oil based on the CRCL test reports - Whether the imported goods could be considered "most akin" to Kerosene Oil warranting reclassification - HELD - The test reports were inconclusive as they did not examine all the essential parameters required to determine if the goods were "most akin" to Kerosene Oil as per the Supreme Court's guidelines in Gastrade International v. Commissioner of Customs - the benefit of the earlier decision of Gastrade International vs Commissioner of Customs-Kandla was not available to the Learned Appellate Authority while deciding this matter. Extensive guidelines have been laid down by the Hon’ble Supreme Court while dealing with the matter and how the test samples and reports are to be considered vis a vis the Section Notes, Chapter Notes and their statutory provisions - The Hon’ble Supreme Court has lay down the guideline for the test of those parameters which authorities consider are of essential character to satisfy the ‘Most Akin’ test even when all parameters were not available. The same needs to be understood with the help of expert opinion. The Hon’ble Supreme Court has also stated that the expression ‘most akin’ is different from the expression ‘preponderance of probability’. Therefore, where some doubt may persist as to whether the parameters which could not be tested were or were not relevant for testing ‘most akinness’ to the alleged product, the department needs to look into the same with the assistance of an expert opinion - The matter is remanded back to the Commissioner (Appeals) to decide the issue afresh after obtaining expert opinion on whether the tested parameters establish the "most akinness" of the goods to Kerosene Oil, and affording the respondent an opportunity to cross-examine the expert - The appeals were allowed by way of remand [Read less]

Customs - Self-assessment, High Sea Sale - Appellant imported non-coking coal in bulk through MMTC under a High Seas Sale agreement. While self-assessing the customs duty, appellant mistakenly added a notional High Sea sale charges to the CIF value instead of the actual as per the Purchase order – Appellant later filed refund claims for the excess duty paid, which were rejected by the authorities on the ground that the issue was not raised during the assessment - Whether the appellant can be allowed to amend the Bill of Entry under Section 149 of the Customs Act, 1962 to rectify the error in self-assessment - HELD - This... [Read more]

Customs - Self-assessment, High Sea Sale - Appellant imported non-coking coal in bulk through MMTC under a High Seas Sale agreement. While self-assessing the customs duty, appellant mistakenly added a notional High Sea sale charges to the CIF value instead of the actual as per the Purchase order – Appellant later filed refund claims for the excess duty paid, which were rejected by the authorities on the ground that the issue was not raised during the assessment - Whether the appellant can be allowed to amend the Bill of Entry under Section 149 of the Customs Act, 1962 to rectify the error in self-assessment - HELD - This is a case of self-assessment where the appellant subsequently claimed refund on the ground that they had mistakenly added a notional 2% as High Sea sale charges to the CIF value instead of the actual Rs.33 per MT as per the Purchase order which was also available to the department at the time of assessment - The actual high-seas-sale-contract price paid by the last buyer would constitute the transaction value under Rule 4 of Customs Valuation Rules, 1988 and inclusion of commission on notional basis may not be appropriate. However, the refund claimed by the appellant on the said ground was rejected as they had not challenged the self-assessment made. The appellant has now taken an additional plea before us to permit correction of an error in the BOE as per section 149 of Customs Act - The proper function of an appellate court is to correct an error in the judgment or proceedings of the authority below. Considering the facts and the legal principles, the order is set aside and the matter is remanded to the Original Authority to examine the request for amendment of the Bill of Entry under Section 149 of the Customs Act, with all issues remaining open - The appeal is disposed of [Read less]

Customs - Classification of Water Meter - Whether 'Ipearl DN 15 Water meter' imported by the appellant is classifiable under tariff item 9028 2000 of the First Schedule to the Customs Tariff Act, 1975 or under tariff item 9026 1090 - HELD – The heading 9028 acquires more significance in light of the exclusion from heading 9026. However, the lower authorities had not had the benefit of the Tribunal's previous decisions in Larsen & Toubro Limited and Anjali Enterprises, which had provided finality on the scope of heading 9028. In these circumstances, the impugned order is set aside and matter is remanded back to the adjudi... [Read more]

Customs - Classification of Water Meter - Whether 'Ipearl DN 15 Water meter' imported by the appellant is classifiable under tariff item 9028 2000 of the First Schedule to the Customs Tariff Act, 1975 or under tariff item 9026 1090 - HELD – The heading 9028 acquires more significance in light of the exclusion from heading 9026. However, the lower authorities had not had the benefit of the Tribunal's previous decisions in Larsen & Toubro Limited and Anjali Enterprises, which had provided finality on the scope of heading 9028. In these circumstances, the impugned order is set aside and matter is remanded back to the adjudicating authority for a fresh decision, considering the conformity of the descriptions of the goods in the earlier Tribunal decisions with the impugned goods - The appeal is allowed by way of remand [Read less]

GST - Show Cause Notice issued to wrong GSTIN/ID - Tax demand higher than proposed in the Show Cause Notice - HELD - The Show Cause Notice was issued with reference to GSTIN/ID 09AHZPA5029R1ZC (not belonging to the petitioner) and the Adjudication Order was passed with reference to yet another GSTIN/ID 09ABLFS0522M1ZV (also not referable to the petitioner) – Further, the Adjudication Order has created a tax demand much higher than the amount proposed in the SCN. Considering these glaring mistakes apparent on record, the impugned Adjudication Order and the Show Cause Notices are quashed - the Adjudicating Authority is gra... [Read more]

GST - Show Cause Notice issued to wrong GSTIN/ID - Tax demand higher than proposed in the Show Cause Notice - HELD - The Show Cause Notice was issued with reference to GSTIN/ID 09AHZPA5029R1ZC (not belonging to the petitioner) and the Adjudication Order was passed with reference to yet another GSTIN/ID 09ABLFS0522M1ZV (also not referable to the petitioner) – Further, the Adjudication Order has created a tax demand much higher than the amount proposed in the SCN. Considering these glaring mistakes apparent on record, the impugned Adjudication Order and the Show Cause Notices are quashed - the Adjudicating Authority is granted liberty to issue a fresh Show Cause Notice, if required, within a month from the date of the order – The writ petition is disposed of [Read less]

GST – Voluntary Payment or Payments under duress and coercion during inspection proceedings – Petitioner seeking refund of amount paid under duress during inspection proceedings by GST Intelligence and Anti-Evasion officers – Rejection of refund applications on the ground of deficiencies in the applications in so far as failure to submit any documents substantiating the claims that the payments have been made under coercion or under duress - Whether the payments made by the petitioner during the inspection proceedings can be considered as voluntary payments under Section 74(5) of the CGST Act, 2017 - HELD - The Refun... [Read more]

GST – Voluntary Payment or Payments under duress and coercion during inspection proceedings – Petitioner seeking refund of amount paid under duress during inspection proceedings by GST Intelligence and Anti-Evasion officers – Rejection of refund applications on the ground of deficiencies in the applications in so far as failure to submit any documents substantiating the claims that the payments have been made under coercion or under duress - Whether the payments made by the petitioner during the inspection proceedings can be considered as voluntary payments under Section 74(5) of the CGST Act, 2017 - HELD - The Refund applications submitted by the petitioner seeking refund were in tune with what is necessary as all the documents are placed on record by the petitioner. Therefore, the applications ought to have merited appropriate consideration at the hands of the respondents – Further, in the light of the judgments rendered by the Apex Court and different High Courts, the payments made by the petitioner cannot be construed as voluntary under Section 74(5) of the CGST Act - The recovery of taxes during investigation without adjudication was contrary to law and in violation of the Constitution. The petitioner had claimed the payments were made under duress and threat of adverse consequences. The respondents have failed to establish that the payments were voluntary self-ascertainment by the petitioner - The petitioner is entitled to a refund of the payments made as they were not voluntary under Section 74(5) of the Act - The deficiency memos issued by the respondents are quashed and the Respondents are directed to process the petitioner's refund applications in accordance with law – The writ petition is allowed [Read less]

Customs - Waiver of mandatory pre-deposit – Petitioner seeking a direction to CESTAT to not to insist on the pre-deposit amount and admit the appeal - Whether the High Court can waive the mandatory pre-deposit requirement under Section 129E of the Customs Act, 1962 - HELD - The pre-deposit requirement under Section 129E of the Customs Act, 1962 is mandatory and the CESTAT cannot entertain an appeal without the pre-deposit. While the High Court has the discretion under Article 226 of the Constitution to waive the pre-deposit requirement in rare and deserving cases where a clear justification is made out, the present case ... [Read more]

Customs - Waiver of mandatory pre-deposit – Petitioner seeking a direction to CESTAT to not to insist on the pre-deposit amount and admit the appeal - Whether the High Court can waive the mandatory pre-deposit requirement under Section 129E of the Customs Act, 1962 - HELD - The pre-deposit requirement under Section 129E of the Customs Act, 1962 is mandatory and the CESTAT cannot entertain an appeal without the pre-deposit. While the High Court has the discretion under Article 226 of the Constitution to waive the pre-deposit requirement in rare and deserving cases where a clear justification is made out, the present case of the financially robust petitioner does not warrant such an interference. The plea that the petitioner is in financial distress, and that the pre-deposit therefore deserves to be waived, is a contention that cannot be countenanced - The legislative mandate cannot be diluted to suit the convenience or inconvenience of the petitioner, and the pre-deposit requirement does not operate as a denial of access to justice but represents a statutory discipline that applies to all appellants - The High Court declines to entertain the technical contentions raised by the petitioner regarding the classification of goods and leave it to the appropriate authorities to decide the same in accordance with law - The writ petition filed by the petitioner is dismissed [Read less]

Service Tax - Shifting of manufacturing unit, surrender of registration, Transfer of credit - Appellant surrendered their registration in Delhi and shifted their manufacturing unit to Sahibabad, UP - The appellant requested to transfer the Cenvat credit to their Sahibabad unit. Denial of transfer of credit stating that the credit was not available to the appellant prior to the surrender of registration - Whether the appellant was eligible to avail the Cenvat credit on the input services received prior to the surrender of registration – HELD - The appellant was required to demonstrate that the credit in question was avail... [Read more]

Service Tax - Shifting of manufacturing unit, surrender of registration, Transfer of credit - Appellant surrendered their registration in Delhi and shifted their manufacturing unit to Sahibabad, UP - The appellant requested to transfer the Cenvat credit to their Sahibabad unit. Denial of transfer of credit stating that the credit was not available to the appellant prior to the surrender of registration - Whether the appellant was eligible to avail the Cenvat credit on the input services received prior to the surrender of registration – HELD - The appellant was required to demonstrate that the credit in question was available to them prior to the surrender of registration. The appellant submitted various invoices and documents to support their claim, but these documents are insufficient to show that the input services mentioned in the invoices were actually received and utilized by the appellant before the date of surrender of registration - The e-challans and ledger extracts provided by the appellant did not match the details of the invoices, and there is no evidence to show that the services were used in the manufacture of the appellant's final products - The documents filed before the adjudicating authorities below and before this Tribunal are insufficient to justify this claim of additional amount of Cenvat credit to the appellant. In the absence of adequate documentary evidence, the denial of the Cenvat credit claimed by the appellant is upheld - The appeal filed by the appellant is dismissed [Read less]

GST - Mismatch between actual stock and declared stock. Suppression of facts, Intention to evade tax, Proceedings under Section 74 - The business premises of the petitioner was surveyed and it was alleged that there was a mismatch between the actual stock and the declared stock - Proceedings under Section 74 of the CGST Act, 2017 alleging fraud, misstatement, and suppression of facts with the intention to evade payment of tax - Whether the proceedings under Section 74 are validly initiated against the petitioner in the absence of a specific finding of fraud, misstatement, or suppression of facts with the intention to evade... [Read more]

GST - Mismatch between actual stock and declared stock. Suppression of facts, Intention to evade tax, Proceedings under Section 74 - The business premises of the petitioner was surveyed and it was alleged that there was a mismatch between the actual stock and the declared stock - Proceedings under Section 74 of the CGST Act, 2017 alleging fraud, misstatement, and suppression of facts with the intention to evade payment of tax - Whether the proceedings under Section 74 are validly initiated against the petitioner in the absence of a specific finding of fraud, misstatement, or suppression of facts with the intention to evade payment of tax – HELD - For initiating proceedings under Section 74 it is essential that the authorities make a specific finding that the taxpayer has used input tax credit by reason of fraud, misstatement, or suppression of facts with the intention to evade payment of tax. In the present case, the authorities did not record any such finding against the petitioner. The manner in which the demand is raised and quantified is not in consonance with the mandate of Section 74 of the Act - The authorities to refund any amount deposited by the petitioner along with interest at the rate of 4% per annum from the date of deposit until the date of refund – The writ petition is allowed [Read less]

GST - E-way bill, Bill-to-ship transaction – While the goods were transported in a vehicle with the e-way bill and other documents, the journey was delayed due to the illness of the truck driver, causing the e-way bill to expire. The goods were intercepted, and penalty proceedings were initiated under Section 129 of the CGST Act, 2017 - Whether the intention to evade tax can be attributed to the petitioner solely on the ground that the e-way bill had expired - HELD - The mere expiry of the e-way bill does not automatically imply an intention to evade tax, as the movement of goods was duly covered by the tax invoice and e... [Read more]

GST - E-way bill, Bill-to-ship transaction – While the goods were transported in a vehicle with the e-way bill and other documents, the journey was delayed due to the illness of the truck driver, causing the e-way bill to expire. The goods were intercepted, and penalty proceedings were initiated under Section 129 of the CGST Act, 2017 - Whether the intention to evade tax can be attributed to the petitioner solely on the ground that the e-way bill had expired - HELD - The mere expiry of the e-way bill does not automatically imply an intention to evade tax, as the movement of goods was duly covered by the tax invoice and e-way bills. In the absence of any other material evidence against the dealer, the intention to evade tax cannot be attributed solely on the ground of the expiry of the e-way bill – Further, the petitioner had provided evidence of the driver's illness, which prevented the timely completion of the journey - The proceedings under Section 129 of the Act cannot be initiated solely on the ground of the expired e-way bill. The impugned orders are quashed and the writ petition is allowed [Read less]

Service Tax - Construction and renting of immovable property, Use of residential flats for commercial purposes, Demand under CICS - Appellant had constructed nine residential flats and sold six of them, while retaining three. The buyers subsequently used their flats for commercial purposes – Demand of service tax for 'Commercial or industrial construction services' for the period September 2004 to September 2006 and for 'renting of immovable property service' for the period June 2007 to March 2009 - HELD - The Department has not brought any evidence to indicate that the appellant's services were engaged or contracted by ... [Read more]

Service Tax - Construction and renting of immovable property, Use of residential flats for commercial purposes, Demand under CICS - Appellant had constructed nine residential flats and sold six of them, while retaining three. The buyers subsequently used their flats for commercial purposes – Demand of service tax for 'Commercial or industrial construction services' for the period September 2004 to September 2006 and for 'renting of immovable property service' for the period June 2007 to March 2009 - HELD - The Department has not brought any evidence to indicate that the appellant's services were engaged or contracted by the buyers to whom the six flats were sold, to construct the said building to be used for, or to be occupied primarily with, or engaged primarily in, commerce or industry or work intended for commerce or industry - The appellant had only constructed residential units as per the approved plan and the fact that the buyers subsequently used the flats for commercial purposes cannot be a reason to construe that the appellant had provided "commercial or industrial construction service" and foist the liability to service tax under the said service on the appellant - The appellant's activity was covered under works contract service, which was accepted by the appellate authority but rejected on the ground that the said service has come into force only after the relevant period. However, the period prior to 01.06.2007, the services provided by the appellant in respect of the projects executed by them being in the nature of composite works contract, cannot be brought within the fold of commercial or industrial construction service or construction of complex service – The impugned order is set aside and the appeal is allowed [Read less]

GST - Blocking of Electronic Credit Ledger under Rule 86A of the CGST Rules, 2017 – Validity of negative blocking of the Electronic Credit Ledger (ECL) - The petitioners argued that the respondents exceeded their power under Rule 86-A by blocking the ITC in excess of the credit available in Electronic Credit Ledger - Whether Rule 86-A of the CGST Rules permits the Revenue to block a taxpayer's ECL by an amount exceeding the credit available at the time of issuance of the order - HELD - The plain language of Rule 86-A of the CGST Rules clearly indicates that the power to block the ECL can only be exercised if the credit o... [Read more]

GST - Blocking of Electronic Credit Ledger under Rule 86A of the CGST Rules, 2017 – Validity of negative blocking of the Electronic Credit Ledger (ECL) - The petitioners argued that the respondents exceeded their power under Rule 86-A by blocking the ITC in excess of the credit available in Electronic Credit Ledger - Whether Rule 86-A of the CGST Rules permits the Revenue to block a taxpayer's ECL by an amount exceeding the credit available at the time of issuance of the order - HELD - The plain language of Rule 86-A of the CGST Rules clearly indicates that the power to block the ECL can only be exercised if the credit of input tax is available in the Electronic Credit Ledger. The Court agrees with the decisions of the Gujarat High Court and Delhi High Court, which held that the blocking of ECL under Rule 86-A is limited to the available balance or amount already present in the ECL. The Court respectfully disagree with the view and interpretation expressed by the High Courts of Calcutta, Allahabad and Andhra Pradesh - The impugned orders/entries are set aside to the extent that they disallowed debit from the respective ECLs of the petitioners in excess of the ITC available therein at the time of passing the decision. The respondents are at liberty to undertake and resort to remedies available for recovery in accordance with the law – The writ petitions are allowed [Read less]

GST – Gujarat AAR - Liquidated Damages, Payment of penalty for breach of Contract - As per the Concession Agreement the applicant is liable to pay liquidated damages for various material defaults, breaches or failures in performing its obligations under the agreement - Whether the liquidated damages paid by the applicant for various material defaults, breaches or non-performance of obligations under the Concession Agreement are subject to GST - HELD - The CBIC Circular No. 178/10/2022-GST dated 3-8-2022 clarified that where the amount paid as damages is only to compensate for injury, loss or damage suffered by the aggrie... [Read more]

GST – Gujarat AAR - Liquidated Damages, Payment of penalty for breach of Contract - As per the Concession Agreement the applicant is liable to pay liquidated damages for various material defaults, breaches or failures in performing its obligations under the agreement - Whether the liquidated damages paid by the applicant for various material defaults, breaches or non-performance of obligations under the Concession Agreement are subject to GST - HELD - The CBIC Circular No. 178/10/2022-GST dated 3-8-2022 clarified that where the amount paid as damages is only to compensate for injury, loss or damage suffered by the aggrieved party due to breach of the contract, and there is no agreement, express or implied, by the aggrieved party to refrain from or tolerate an act or to do anything for the party paying the liquidated damages, such payments do not constitute consideration for a supply and are not taxable - The Concession Agreement between the applicant and SSL clearly stipulates the liquidated damages as a genuine pre-estimated loss and damage likely to be suffered and incurred by SSL due to the applicant's breach of the contract. There is no evidence that SSL is tolerating any act of the applicant by recovering the damages. The damages are merely a compensation for the injury, loss or damage suffered by SSL due to the applicant's breach of the contract terms - The liquidated damages paid by the applicant to SSL for various material defaults, breaches or non-performance of obligations under the Concession Agreement are not liable to GST – Ordered accordingly [Read less]

GST – Gujarat AAR - Input Tax Credit on Lease rental, Construction of Immovable property Facts -Applicant entered into a lease agreement with the Government of Gujarat for a duration of 50 years to use a plot of land for the purpose of carrying out their business activities including industrial construction. The applicant would use the land for setting up a factory for manufacturing of battery cells for motor vehicles - Eligibility of ITC on the GST paid under reverse charge on the annual lease rental - Whether the applicant is eligible to ITC of the GST charged on the lease rental, where the factory building would be co... [Read more]

GST – Gujarat AAR - Input Tax Credit on Lease rental, Construction of Immovable property Facts -Applicant entered into a lease agreement with the Government of Gujarat for a duration of 50 years to use a plot of land for the purpose of carrying out their business activities including industrial construction. The applicant would use the land for setting up a factory for manufacturing of battery cells for motor vehicles - Eligibility of ITC on the GST paid under reverse charge on the annual lease rental - Whether the applicant is eligible to ITC of the GST charged on the lease rental, where the factory building would be constructed on the lease land - HELD - This authority in the cases of M/s Bayer Vapi Pvt Ltd. and M/s GACL-NALCO Alkalies and Chemicals Pvt Ltd. has held that the services received in the form of leasehold rights to land are used for the construction of immovable property, and hence, the ITC on such services is blocked under Section 17(5)(d) of the CGST Act - The AAR rejected the applicant's arguments that the term 'for' used in Section 17(5)(d) should be interpreted narrowly to cover only those services which have a direct nexus to construction, and not the services indirectly or remotely related to construction activities. The term 'for' has a wider connotation and includes all services required for the construction of immovable property, including the land lease services - The applicant is not eligible to avail the ITC of the GST charged on the lease rental – Ordered accordingly - Whether the ITC of GST charged on the lease rental paid would be available for the period prior to and after the construction of the factory building - HELD - The applicant would not be eligible for ITC of GST charged on the lease rental for the period prior to and after the construction of the factory building. The AAR noted that the land has been leased out specifically for the purpose of industrial construction, and hence, the services related to the land are blocked under Section 17(5)(d) irrespective of the stage of construction - The applicant is not eligible for ITC of GST charged on the lease rental for the period prior to and after the construction of the factory building - Whether ITC of GST paid on lease rental would be available when the repairs, maintenance, and renovation activities are undertaken on the factory building - HELD – The applicant would not be eligible for ITC of GST paid on lease rental for the repairs, maintenance, and renovation activities undertaken on the factory building. The expression 'construction' used in Section 17(5)(d) includes reconstruction, renovation, additions, or alterations or repairs to the extent of capitalization, and hence, the ITC on such services would also be blocked - The applicant is not eligible for ITC of GST paid on lease rental for the repairs, maintenance, and renovation activities undertaken on the factory building - Whether ITC of GST paid on lease rental would be available with respect to the area of the land on which no immovable property is constructed, i.e., the vacant portion of the land - HELD - The applicant would not be eligible for ITC of GST paid on lease rental with respect to the vacant portion of the land. The entire land has been leased out for industrial purposes, and any portion of the land, including the vacant portion, would be considered as used for the construction of immovable property, and hence, the ITC on the lease rental for such portion would also be blocked under Section 17(5)(d) - The applicant is not eligible for ITC of GST paid on lease rental with respect to the vacant portion of the land. [Read less]

GST - Blocking of Input Tax Credit, Reasons to believe, Recording of reasons in writing - Blocking of ITC basis alert notice received from the DGGI, Raipur Zonal Unit stating one of the suppliers of the petitioner is found to be non-operational and had passed on fraudulent ITC without any supply of goods - Whether the respondent had fulfilled the mandatory requirement under Rule 86A of the UPGST Rules, 2017 to record the 'reasons to believe' in writing before blocking the ITC of the petitioner - HELD - The respondent has not fulfilled the mandatory requirement of recording the 'reasons to believe' in writing as required un... [Read more]

GST - Blocking of Input Tax Credit, Reasons to believe, Recording of reasons in writing - Blocking of ITC basis alert notice received from the DGGI, Raipur Zonal Unit stating one of the suppliers of the petitioner is found to be non-operational and had passed on fraudulent ITC without any supply of goods - Whether the respondent had fulfilled the mandatory requirement under Rule 86A of the UPGST Rules, 2017 to record the 'reasons to believe' in writing before blocking the ITC of the petitioner - HELD - The respondent has not fulfilled the mandatory requirement of recording the 'reasons to believe' in writing as required under Rule 86A(1) of the UPGST Rules. The mere statement that the "supplier found non-functioning" did not reflect any application of mind or specific reasons for the belief that the petitioner's ITC was fraudulent. The communication from the DGGI, Raipur Zonal Unit also only reflected a generic conclusion about the supplier's transactions, and did not establish that the transactions between the petitioner and the supplier were bogus - The requirement to record the 'reasons to believe' in writing is a non-negotiable and mandatory condition and mere doubt or suspicion alone is not sufficient to block the ITC, as that would disrupt the entire value addition chain and tax payments. Therefore, the action taken by the respondent to block the petitioner's ITC is set aside and the blocked ITC is directed to be unblocked forthwith - The writ petition is allowed [Read less]

GST - Delivery of notices/intimations/orders in Junk folder, ex-parte order - Petitioner contended that it was not aware of the notices/intimations/orders as they were delivered under the Junk folder and not appearing in the inbox – HELD - The petitioner's assertion regarding its inability to submit replies and contest the proceedings due to bonafide reasons, unavoidable circumstances and sufficient cause is reasonable – The impugned order is set aside and matter remitted the matter back to the respondent for fresh consideration from the stage of the petitioner submitting a reply to the show-cause notice, providing the... [Read more]

GST - Delivery of notices/intimations/orders in Junk folder, ex-parte order - Petitioner contended that it was not aware of the notices/intimations/orders as they were delivered under the Junk folder and not appearing in the inbox – HELD - The petitioner's assertion regarding its inability to submit replies and contest the proceedings due to bonafide reasons, unavoidable circumstances and sufficient cause is reasonable – The impugned order is set aside and matter remitted the matter back to the respondent for fresh consideration from the stage of the petitioner submitting a reply to the show-cause notice, providing the petitioner with a reasonable opportunity to submit replies and documents and to be heard – The petition is allowed [Read less]

Central Sales Tax Act, 1956 - Exemption under Industrial and Investment Policy of Assam, 2008 - Petitioner was granted an Eligibility Certificate for claiming incentives under the policy, including exemption from tax under the Assam Industries (Tax Exemption) Scheme, 2009 – Rejection of claim for exemption for failure to submit C-Forms - Whether the petitioner is entitled to the tax exemption under the Industrial and Investment Policy of Assam, 2008 and the CST Act, 1956, even without fulfilling the requirement of submitting the C-Forms as per Section 8(4) of the Act - HELD - The submission of C-Forms as per Section 8(4)... [Read more]

Central Sales Tax Act, 1956 - Exemption under Industrial and Investment Policy of Assam, 2008 - Petitioner was granted an Eligibility Certificate for claiming incentives under the policy, including exemption from tax under the Assam Industries (Tax Exemption) Scheme, 2009 – Rejection of claim for exemption for failure to submit C-Forms - Whether the petitioner is entitled to the tax exemption under the Industrial and Investment Policy of Assam, 2008 and the CST Act, 1956, even without fulfilling the requirement of submitting the C-Forms as per Section 8(4) of the Act - HELD - The submission of C-Forms as per Section 8(4) of the Central Sales Tax Act, 1956 is a mandatory requirement to claim the exemption under Section 8(5) of the Act. Unless the conditions mentioned in Section 8(4) are fulfilled, there would be no application of the provisions of Section 8(5) - The Eligibility Certificate is merely with regard to the production, date, etc. and it is the fulfillment of the conditions which are necessary and mandatory to claim the rebate in accordance with the Policy - the tax statutes should be interpreted strictly, and the benefit of ambiguity must be in favor of the revenue. The petitioner is not entitled to the tax exemption as it had failed to fulfill the mandatory requirement of submitting the C-Forms - The writ petition is dismissed [Read less]

GST – Eligibility of Input Tax Credit, Delay in filing GSTR-3B Returns, Extension of Time Limit under Section 16(5) of CGST Act, 2017 - Denial of input tax credit for the FY 2018-2019 on the ground that the petitioner had failed to submit the GSTR-3B returns for the period from July 2018 to March 2019 within the time limit prescribed under Section 16(4) of the CGST Act - Whether the petitioner is entitled to claim the input tax credit under Section 16(5) of the CGST Act, despite the delay in filing the GSTR-3B returns beyond the time limit prescribed under Section 16(4) - HELD - The petitioner had filed the GSTR-3B retur... [Read more]

GST – Eligibility of Input Tax Credit, Delay in filing GSTR-3B Returns, Extension of Time Limit under Section 16(5) of CGST Act, 2017 - Denial of input tax credit for the FY 2018-2019 on the ground that the petitioner had failed to submit the GSTR-3B returns for the period from July 2018 to March 2019 within the time limit prescribed under Section 16(4) of the CGST Act - Whether the petitioner is entitled to claim the input tax credit under Section 16(5) of the CGST Act, despite the delay in filing the GSTR-3B returns beyond the time limit prescribed under Section 16(4) - HELD - The petitioner had filed the GSTR-3B returns for the relevant period within the extended time limit of 30.11.2021 as per the provisions of Section 16(5) of the CGST Act. The Section 16(5) contains a non-obstante clause against the time limit stipulated in Section 16(4) of the Act. Accordingly, the petitioner is entitled to the input tax credit, as the returns were filed within the extended time limit prescribed under Section 16(5) - The order denying the input tax credit is quashed and the assessing authority is directed to pass a fresh order, considering the provisions of Section 16(5) and granting the input tax credit if the petitioner is otherwise eligible - The writ petition is disposed of [Read less]

GST – Assessment, Bar of Limitation - Petitioner argued that the impugned proceedings were barred by limitation under Section 73(10) of the KGST Act, 2017 - Whether the impugned proceedings initiated pursuant to the show cause notice are barred by limitation under Section 73(10) of the KGST Act - HELD - The period of limitation was extended by the respondents through various notifications, such as Notification No. 13/2022 dated 05.07.2022, Notification Nos. 9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively. However, the validity of these notifications was pending adjudication before the Supreme Court. The imp... [Read more]

GST – Assessment, Bar of Limitation - Petitioner argued that the impugned proceedings were barred by limitation under Section 73(10) of the KGST Act, 2017 - Whether the impugned proceedings initiated pursuant to the show cause notice are barred by limitation under Section 73(10) of the KGST Act - HELD - The period of limitation was extended by the respondents through various notifications, such as Notification No. 13/2022 dated 05.07.2022, Notification Nos. 9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively. However, the validity of these notifications was pending adjudication before the Supreme Court. The impact and bearing of the Supreme Court's decision on the SLP would have a bearing on the impugned proceedings, and hence, it is appropriate to grant one more opportunity to the petitioner by setting aside the impugned orders and remitting the matter back to the respondent for reconsideration afresh in accordance with law after the disposal of the SLP by the Supreme Court – The petition is allowed by remand [Read less]

GST - Issue of Notices to Amalgamated entity - M/s. Harita Fehrer Limited was amalgamated with the petitioner – Respondent had issued several show cause notices to the erstwhile company – Petitioner seeking quashing of SCN contending that the notices were contrary to law and without jurisdiction since the company no longer existed after the amalgamation - Whether the show cause notices issued to the non-existent erstwhile company can be maintained against the petitioner after the amalgamation - HELD - Since M/s. Harita Fehrer Limited had ceased to exist after the amalgamation with the petitioner, the impugned show caus... [Read more]

GST - Issue of Notices to Amalgamated entity - M/s. Harita Fehrer Limited was amalgamated with the petitioner – Respondent had issued several show cause notices to the erstwhile company – Petitioner seeking quashing of SCN contending that the notices were contrary to law and without jurisdiction since the company no longer existed after the amalgamation - Whether the show cause notices issued to the non-existent erstwhile company can be maintained against the petitioner after the amalgamation - HELD - Since M/s. Harita Fehrer Limited had ceased to exist after the amalgamation with the petitioner, the impugned show cause notices issued to the erstwhile company are without jurisdiction. The respondent had also issued a subsequent notice to the petitioner, which the petitioner was at liberty to contest - the impugned SCNs are quashed and the petitioner is granted liberty to take recourse to available legal remedies against the subsequent notice – The petition is allowed [Read less]

Central Excise - Duty Assessment, Price List Approval - Appellant is a manufacturer of Medium Density Fibre Board (MDF) who filed price lists before the jurisdictional Assistant Collector of Central Excise. The Assistant Collector approved the appellant's price lists based on the ex-factory sale prices, even though a small percentage of the goods were cleared to third parties. The Department later issued a show cause notice demanding differential excise - Whether the Department was justified in demanding differential excise duty when the price lists had already been approved by the Assistant Collector – HELD - The Assist... [Read more]

Central Excise - Duty Assessment, Price List Approval - Appellant is a manufacturer of Medium Density Fibre Board (MDF) who filed price lists before the jurisdictional Assistant Collector of Central Excise. The Assistant Collector approved the appellant's price lists based on the ex-factory sale prices, even though a small percentage of the goods were cleared to third parties. The Department later issued a show cause notice demanding differential excise - Whether the Department was justified in demanding differential excise duty when the price lists had already been approved by the Assistant Collector – HELD - The Assistant Collector had given a detailed finding in his Order-in-Original that even if a small portion of the finished goods were cleared to third parties, the prices adopted in respect of such parties can be accepted for all the clearances. The issue of the correctness of the price lists had already reached finality as the Revenue did not appeal against the Assistant Collector's order approving the price lists - The Department had no basis to investigate the matter or demand differential duty for the period from 1988 to 1992, as the price list approval order had attained finality. Additionally, the show cause notice was time-barred, as it was issued beyond the five-year period from the last date of the dispute period. The impugned order is set aside on both merits and grounds of time-bar – The appeal is allowed [Read less]

Haryana General Sales Tax Act, 1973 – Solar Cells vs Dry Cells - Petitioner purchased solar cells and sold them within the State. The petitioner filed returns and made RD sales against Form ST-15 without charging any tax – Dept revised the assessment orders, holding that solar cells were taxable at the first stage under Entry 19 of the notification dated 30.12.1987 - Whether solar cells fall within the definition of 'dry cells/batteries' under Entry 19 of the notification dated 30.12.1987 issued under Section 18 of the HGST Act, 1973 - HELD – There is a fundamental and functional distinction between solar cells and d... [Read more]

Haryana General Sales Tax Act, 1973 – Solar Cells vs Dry Cells - Petitioner purchased solar cells and sold them within the State. The petitioner filed returns and made RD sales against Form ST-15 without charging any tax – Dept revised the assessment orders, holding that solar cells were taxable at the first stage under Entry 19 of the notification dated 30.12.1987 - Whether solar cells fall within the definition of 'dry cells/batteries' under Entry 19 of the notification dated 30.12.1987 issued under Section 18 of the HGST Act, 1973 - HELD – There is a fundamental and functional distinction between solar cells and dry cells. While dry cells store electricity, solar cells are used to generate electricity from sunlight. The common and business parlance also treats solar cells as a distinct commodity from dry cells. The expression 'all kinds of' in Entry 19 does not include solar cells, as the legislature has used the specific term 'dry cells/batteries' and not 'all kinds of cells' – Further, the fact that the State of Tamil Nadu has separately included 'solar cells of all kinds' in its notification, indicating that solar cells are distinct from dry cells. Therefore, the solar cells do not fall within the description of 'all kinds of dry cells' under Entry 19 of the notification - In the present case, the petitioner had furnished the Form ST-15 received from its customers, indicating that the buyers had accepted the liability to pay tax. The respondent authorities had created a demand against the first-stage dealer establishing that it was the responsibility of the first-stage dealer to pay the tax - The second-stage dealer cannot be held liable for the non-payment of tax by the first-stage dealer. Accordingly, the petitioner, being a second-stage dealer, was not liable to pay the tax - The orders of the Sales Tax Tribunal is set aside and the writ petition is allowed [Read less]