More Judgements

Home

More Judgements

2026-VIL-1777-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Demand on the Basis of Form 26AS and Income Tax Returns and Invocation of Extended Period - Appellant, a registered person providing repair and maintenance services and goods transport agency service and filing returns, was issued a show cause notice for the extended period based on the mismatch between Form 26AS, Income Tax Returns and Service Tax Returns - Commissioner (Appeals) went through the factual details and reduced the demand substantially, and the Revenue did not appeal against the portion dropped - Appellant contended that suppression cannot be alleged against a registered person filing returns - Whether the demand confirmed on third party data without corroborative evidence and the invocation of the extended period are sustainable - HELD - The Department issued the initial notice without proper verification and investigation, purely on Form 26AS details. Mere entries in Income Tax Returns or Form 26AS cannot by themselves establish liability under the Finance Act, 1994 unless corroborated by evidence demonstrating rendition of taxable service. Mechanical reliance on income tax data without verification of the nature of receipts is impermissible - Form 26AS is maintained on a cash basis for income tax while service tax is chargeable on accrual basis. The extended period is not invokable on the basis of such data - The balance demand for the extended period is set aside, and the Appellant is to pay service tax, if any, with interest for the normal period after proper quantification - The appeal is partly allowed - Service Tax - Confirmation of Demand for Part of the Year by Proportionate Allocation of Income Not Proposed in Show Cause Notice - Commissioner (Appeals) confirmed demand for the first three months of the financial year by proportionately allocating the income, when the show cause notice had not proposed such a procedure - Whether the demand quantified by proportionate allocation without proper data can be sustained - HELD - The Commissioner (Appeals) calculated the liability without any proper data for the three months, and such a procedure was not proposed in the show cause notice - The service tax liability so confirmed is set aside, and the appeal is partly allowed [Read less]

2026-VIL-1776-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Revenue Neutrality as a Defence to Reverse Charge Liability on Manpower Recruitment or Supply Agency Service under Notification No. 30/2012-ST - Appellant, a body corporate, paid various individual service providers for manpower recruitment or supply agency services and did not pay service tax under reverse charge - Commissioner (Appeals) upheld the demand in part with interest, and Appellant contended that the demand is revenue neutral since it was entitled to Cenvat credit of the tax demanded - Revenue contended that non-payment was a loss to the exchequer and that revenue neutrality cannot excuse non-payment, as otherwise the credit chain would be obsolete - Whether the Appellant is liable to pay service tax under reverse charge notwithstanding its eligibility to Cenvat credit - HELD - Liability to service tax under Section 66A arises on the provider's taxable event and is not contingent on the recipient's entitlement to credit. Credit of tax paid under Section 68(2) arises under Rule 3(1)(vii) of the Cenvat Credit Rules, 2004 only upon payment, and Rule 4(7) read with Rule 9 makes payment the condition precedent. Credit is a concession subject to the Rules and not an accrued right. The duty liability therefore does not get extinguished because the Appellant was eligible to avail Cenvat credit. No distinction can be placed between the service receiver and the service provider for the purpose of the charging Section once responsibility is fixed under reverse charge - The Appellant is liable to pay service tax under reverse charge as recipient of the services - Extended Period of Limitation and Penalty under Section 78 of Finance Act, 1994 where Recipient Liable under Reverse Charge is Eligible to Cenvat Credit - Non-payment of tax was noticed during audit, the transactions were recorded in the books and paid through banking channel, and Appellant contended that it acted under a bona fide belief and was entitled to Cenvat credit of the tax demanded - Revenue contended that the Appellant failed to assess its liability, did not reflect correct information in the returns and suppressed material facts with intent to evade duty - Whether the extended period was validly invoked and the penalty under Section 78 is sustainable - HELD - It is a settled position of law that if the recipient of the service is liable to pay service tax and is simultaneously eligible to avail Cenvat credit of the tax paid, the extended period cannot be invoked - The invocation of the extended period is not correct and the penalty under Section 78 is set aside, while the demand for the normal period, if any, is upheld along with the penalty under Section 77, and the appeal is allowed to that extent. [Read less]

2026-VIL-1774-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs - Re-assessment of Classification and Value under Section 17(5) of Customs Act, 1962 without Speaking Order - Respondent self-assessed imported ice making machinery under CTH 8438 80 90, the proper officer re-assessed it under CTH 8418 69 90 and enhanced the value, and Respondent paid the revised duty under protest to avoid demurrage - No order was passed under Section 17(5) and no opportunity was given to Respondent to submit documentary evidence - Commissioner (Appeals) set aside the revised classification and valuation, and Revenue contended in appeal that payment of duty amounted to acceptance of the re-assessment - Whether the re-classification and enhancement of value are sustainable in the absence of a speaking order under Section 17(5) - HELD - Section 17(5) requires the proper officer to pass a speaking order within fifteen days where re-assessment is contrary to the self-assessment, except where the importer confirms acceptance in writing. Admittedly, no order was passed under Section 17(5). Importers pay the revised duty to cut down demurrage and other charges, and this cannot be taken as confirmation of acceptance. Respondent paid under protest by a letter and filed appeals against the Bills of Entry, so there was never any confirmation of acceptance in writing. The re-assessment is to be set aside where no speaking order is passed - Non-issuance of an order under Section 17(5) proves fatal to the Revenue's case, and the revised classification and enhancement of value are set aside – The appeal is dismissed - Classification of Imported Ice Making Machinery under CTH 8438 80 90 or CTH 8418 69 90 - Respondent classified the imported ice cream making machines under CTH 8438 80 90, Revenue re-classified them under CTH 8418 69 90 relying on the Explanatory Notes to Chapter 84 and an Advance Ruling, and Commissioner (Appeals) upheld the classification under CTH 8438 - Revenue itself had classified such goods under CTH 8438 in a review order of 2008 and in Orders-in-Appeal of 2012 and 2025, which it did not agitate further, and the later clearance of the same goods of the same importer was allowed under CTH 8438 - Whether the re-classification of the goods under CTH 8418 is sustainable - HELD - There is some force in the point made by Revenue on the Explanatory Notes. However, in spite of the Explanatory Notes, Revenue itself was classifying the machines under CTH 8438, and the classification arrived at in the two Orders-in-Appeal stands accepted. The change in classification was not supported by any order under Section 17(5), which would have enabled Respondent to put forth its defence. Revenue cannot pick and choose the course of filing appeals in respect of the same goods by not filing appeals in some cases citing the National Litigation Policy and filing them in others. Total confusion prevails in the classification of the goods, as Revenue classified them under CTH 8438 in 2008, 2012, 2018 and 2025 and under CTH 8418 in the present imports, and the benefit of such confusion goes to Respondent - Re-classification under CTH 8418 is legally not sustainable, the correct classification is CTH 8438, and the classification arrived at by Revenue is set aside - Enhancement of Declared Value of Imported Goods without Evidence or Following Customs Valuation Rules, 2007 - Value of the imported goods was enhanced by the assessing officer consequent to the change in classification, Respondent paid duty on the enhanced value under protest, and Commissioner (Appeals) set aside the enhancement as made without evidence - No order under Section 17(5) stated the method adopted for arriving at the revised value - Whether the enhancement of the declared value can be sustained - HELD - Where no order under Section 17(5) is passed stating the method or procedure adopted for arriving at the revised value, the enhanced value gets set aside on that ground itself. No reasons were given for rejection of the transaction value, no corroborative evidence such as comparable goods or NIDB data was brought forth, and no opportunity was given to justify the declared value. The invoice raised by the manufacturer should not be doubted unless found to be fake or not genuine, and the transaction value cannot be rejected without clear and cogent evidence. Mere acceptance of the enhanced value by the importer does not preclude it from appealing against an arbitrary enhancement. Revenue has not brought in any evidence as to the basis of the enhanced value, and the case laws cited by it are a toothless defence to cover up its shortcomings at the initial stage - The findings of the Commissioner (Appeals) on valuation are concurred with, the enhancement of value is rightly set aside, and the appeals filed by Revenue are dismissed. [Read less]

2026-VIL-1772-CESTAT-MUM-CU | CESTAT CUSTOMS

Customs - Computation of IGST on Imported Goods under Section 3(7) and 3(8) of Customs Tariff Act, 1975 where Basic Customs Duty is Exempted under Notification No. 19/2015-Customs for Imports against DFIA - Appellant imported polyester viscose fabrics against a valid DFIA claiming exemption from basic customs duty, and the customs system captured basic customs duty at the tariff rate for computing IGST although the duty claimed was zero - Appellant paid the IGST as computed since the system did not permit amendment and appealed against the assessed Bills of Entry, and Commissioner (Appeals) rejected the appeals holding tha... [Read more]

2026-VIL-1773-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs - Penalty on Chartered Engineers for Valuation of Second Hand Machinery Where the Demand Against the Importers is Set Aside - Appellants, Chartered Engineers, were engaged by the importers under the Board's Circular dated 19.11.1987 to examine and value imported old and used offset printing machinery, and the goods were released on payment of duty on that valuation - Investigation alleged undervaluation by the importers, and penalty was imposed on each Appellant on the allegation that they omitted to ascertain the correct present value independently, rendering the machines liable to confiscation - Appellants contended that they applied reverse indexation on the wholesale price index and depreciation as per the Board's circular, and that their valuation was only a proposal which the proper officer was not bound to accept - Revenue contended that the certificates were issued without proper verification and inspection - Whether penalty on the Chartered Engineers is sustainable when the demand, penalty and confiscation against the importers are set aside - HELD - In the appeals of the main importers decided earlier by the same Bench, the allegation of undervaluation was not corroborated by documentary evidence, and the opinion of the experts of the printing institute was full of discrepancies and could not be used as evidence to enhance the value. The method adopted by the Chartered Engineer was the logical and scientific method, which the Revenue discarded while implicating the Chartered Engineers to prove its case. The entire demand was also held time barred, and the demand, penalty and confiscation against the importers and the penalties on their directors were set aside. Since the confirmed demand, interest and penalties against the main appellants are legally not sustainable, the penalties on the present Appellants also do not survive - The penalties imposed on the Appellants are set aside, and the appeals are allowed with consequential relief, if any, as per law. [Read less]

2026-VIL-1769-CESTAT-CHE-CE | CESTAT CENTRAL EXCISE

Central Excise - Scope of Exclusion in Clause (A) of Rule 2(l) of CENVAT Credit Rules, 2004 for Contractor Services - Appellant, a cement manufacturer, took credit of service tax on services of contractors engaged for setting up a captive thermal power plant and for expansion, upgradation, repair and maintenance work in the cement plant - Audit alleged that the services involved construction of a civil structure or building and laying of foundation or structures for support of capital goods and were excluded from the definition of input service with effect from 01.04.2011 - Adjudicating Authority confirmed the entire demand, though it had itself found part of the credit to be in order, and the Commissioner (Appeals) upheld the denial for six contractors on the basis of a few sample bills - Whether the services of the contractors fall within clause (A) of the exclusion in Rule 2(l) and what test governs that inquiry - HELD - The main limb of the definition is wide and the inclusive limb expressly covers services used in relation to modernisation, renovation or repairs of a factory. Once a service is caught by the exclusion, its nexus with manufacture cannot rescue it. The exclusion is not engaged merely because a service is rendered in the course of a project, or because it involves steel, fabrication or a works contract. The service must be one of the specified services, and it must be used for construction of a building or a civil structure or a part thereof, or for laying of foundation or making of structures for support of capital goods. Erection, installation and commissioning of machinery, its repair and maintenance, and the hire of equipment such as a crane are not by themselves any of these purposes. This is a question of fact to be answered from the work order and the invoice, transaction by transaction - Rule 9(6) places the burden of proving admissibility on the manufacturer, which is discharged in the first instance by producing the invoices and work orders and explaining how the service was used. Rule 9(6) neither permits a blanket assumption that everything done by a contractor on a project site is construction nor allows an authority to call upon the assessee to prove a negative. The order in original disposed of five contractors in a single sentence without reference to any work order or invoice. The order in appeal rested on sample bills and bare conclusions. For the next period the Department itself found the work of the largest contractor to be repair and maintenance of factory machinery, and that finding must be taken into account - The denial of credit on merits cannot be sustained, and eligibility is to be examined afresh only for the credit that is not time barred - The appeal is partly allowed on limitation - Extended Period of Limitation under Section 11A(4) of Central Excise Act, 1944 for Recovery of CENVAT Credit - Show cause notice invoked the extended period on the allegations that details of the credit were not shown in the ER-1 returns, that invoices and work orders were not furnished before the audit, and that the matter would not have come to light but for the audit, while acknowledging that all the transactions were available in the records of the Appellant - Audit had examined the invoices and issued its report long before the notice, and the Appellant had described the scope of work of each contractor to the Range officer, yet the notice was issued after a considerable delay without explanation - Whether the extended period under Section 11A(4) was validly invoked - HELD - When the notice was issued, the normal period was one year, and the later enlargement to two years cannot revive a demand already barred. Section 11A(4) extends the period to five years only where duty has escaped by reason of fraud, collusion, wilful misstatement, suppression of facts or contravention with intent to evade payment of duty - Where the facts are known to both parties, omission by one to do what he might have done is not suppression. The burden of proving suppression lies on the Revenue - The extended period was not available, the demand for credit beyond one year before the date of the notice is barred by limitation and set aside together with interest, and the credit within the normal period is remitted to the Adjudicating Authority to quantify and decide its eligibility afresh - Interest under Section 11AA and Penalty under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944 on Credit Denied to Contractor Services - Penalty equal to the credit was imposed on the finding of wilful intention, and the notice proposed penalty only under Rule 15(2) on the footing of suppression - Extended period had been held not invocable and part of the demand was remitted for fresh decision - Whether interest and the penalty under Rule 15(2) read with Section 11AC can be sustained - HELD - The penalty rests on the very allegation of suppression with intent to evade, which stands unproved, and it cannot stand for any part of the period. The Adjudicating Authority cannot on remand impose a penalty on a footing not proposed in the notice, since adjudication cannot travel beyond the show cause notice. The dispute is in any event one of interpretation, and no penalty is therefore imposable. Interest under Rule 14 read with Section 11AA follows only on such credit within the normal period as is found on remand to be ineligible and to have been utilised - The penalty is set aside in its entirety, interest on the time barred demand is set aside, and the appeal is partly allowed on limitation. [Read less]

2026-VIL-1771-CESTAT-DEL-CE | CESTAT CENTRAL EXCISE

Central Excise - Claim of Interest at 12% per annum on Refund of Amount Deposited during Investigation as Compensation - Appellant deposited amounts during investigation and before the first show cause notice, the demand was confirmed and the deposits appropriated, and the Tribunal later set aside the order of the Commissioner - Refund was sanctioned without interest, and Appellant claimed interest at 12% from the date of payment, relying on decisions following Sandvik Asia Ltd. v. Commissioner of Income Tax - Whether interest can be granted at 12% per annum as compensation on the amount wrongly withheld - HELD - The decisions relied upon by the Appellant followed Sandvik Asia, which was referred to a larger bench in Commissioner of Income Tax, Gujarat v. Gujarat Fluoro Chemicals. The larger bench clarified that Sandvik Asia was passed on the peculiar facts of that case and that an assessee can claim only the interest provided under the statute. Those decisions did not have the benefit of Gujarat Fluoro Chemicals. The Act prescribes the rate and period of interest in sections 11AA, 11BB and 35FF, and the rate is notified by the Central Government within the range by delegated legislation. Courts and Tribunals cannot fix the rate, and interest can be paid only at the rate and from the date as per the law and not on a view of fairness or equity - The claim of interest at 12% is rejected, and interest can be granted only under the statutory provision applicable - Nature of Amount Deposited during Investigation and Interest under Section 11BB or Section 35FF of Central Excise Act, 1944 on its Refund - Appellant deposited amounts through cheques and a debit entry in the CENVAT account at the behest of investigating officers before any assessment, the amounts were credited to the excise duty head of account, and they were appropriated in the adjudication order which was set aside by the Tribunal - Revenue contended that the refund was one of duty under Section 11B, accepted by the Appellant, so that interest under Section 11BB was not payable since the refund was sanctioned within three months of the application - Whether the amount deposited during investigation is duty, and whether interest is payable under Section 11BB or Section 35FF - HELD - For an amount to be tax or duty, it must be deposited under that head, paid against an assessment or modification of an assessment, and be due at that time. At the time of deposit there was neither assessed duty nor a confirmed demand, so the amount was only a deposit akin to the balance in the erstwhile Personal Ledger Account or the electronic cash ledger under GST. The Act empowers no officer to compel an assessee to pay any amount in anticipation of liability that may arise after investigation, and the assessee can seek refund immediately without proving duress. The amount was not due even after the adjudication order since the Appellant had filed an appeal, and the Commissioner should not have appropriated it. The Appellant did not apply under Section 11B, and even if it had, the nature of the amount would not change. Where the amount deposited during investigation exceeds the mandatory pre-deposit and has not been refunded, the entire amount is to be treated as pre-deposit. The Tribunal admitted the appeal treating the entire amount as pre-deposit, so Section 35FF applies - The amount deposited during investigation is treated as deposit under Section 35F, interest is payable under Section 35FF at the applicable rate from the date of deposit till the date of refund, and the appeal is partly allowed [Read less]

2026-VIL-1768-CESTAT-CHE-CE | CESTAT CENTRAL EXCISE

Central Excise – CENVAT Credit – Refund under Rule 5 of CENVAT Credit Rules, 2004 of Unutilised Credit on Clearances to 100% Export Oriented Unit as Deemed Export – Appellant, a manufacturer of hydraulic motor parts, cleared the final products to a 100% Export Oriented Unit without payment of duty under the notification, and also cleared them to customers in the Domestic Tariff Area – Refund of CENVAT credit on inputs used in the manufacture was sanctioned by the original authority, but the Commissioner (Appeals) allowed the Revenue's appeals, and the recovery of the refunds sanctioned was confirmed in the protective show cause notices – Appellant contended that clearances to a 100% EOU are deemed export and that Explanation (1A) to Rule 5 was inserted only with effect from 01.03.2015, after the period in dispute – Revenue contended that clearance to an EOU is only a legal fiction and not export for Rule 5, and relied on the decision of the jurisdictional High Court in BAPL Industries Ltd. v. Union of India – Whether the authorities below were justified in rejecting the refund claims under Rule 5 of CENVAT Credit Rules, 2004 – HELD – The issue is no more res integra. In JBM Auto Limited v. CCE Noida, the coordinate Bench followed the decision of the Allahabad High Court in the assessee's own case and the decision of the Gujarat High Court in Commissioner of Central Excise and Customs v. NBM Industries, and held that clearance to a 100% EOU is deemed export entitling the assessee to refund of unutilised CENVAT credit under Rule 5. The Gujarat High Court decision, followed in E.I. Dupont India Pvt. Ltd. v. Union of India, had not been challenged further and is conclusive and final. A sale to a 100% EOU is virtually in the nature of export, since such a unit cannot sell its products in the local market and is obliged to export its entire production. Export takes into its fold deemed export as well, and no distinction can be drawn between export and deemed export. BAPL Industries Ltd. examined the vires of the CBEC Circular vis-a-vis export and deemed export in the context of the EXIM Policy. That is an altogether different dispute from the present one, and the decision was distinguished by both the Allahabad and Gujarat High Courts – Denial of refund as upheld in the impugned common order cannot be sustained, the same is set aside, and the appeals are allowed with consequential benefits, if any, as per law [Read less]

2026-VIL-1770-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Includibility of 99% VAT Retained under State Industrial Incentive Scheme in Transaction Value under Section 4(3)(d) of Central Excise Act, 1944 - Appellant, a manufacturer of water storage tanks and MS pipes, was granted benefit under the Industrial and Investment Policy of Assam, 2008 and the Assam Industries (Tax Exemption) Scheme, 2009, under which 99% of the tax payable for each return period was allowed as partial exemption or remission and 1% was deposited - Revenue held the VAT retained to be includable in the assessable value relying on Super Synotex Ltd., and confirmed the duty demand with interest and equal penalty under Section 11AC - Whether the 99% VAT retained under the incentive scheme forms part of the price or consideration received from the buyer and is includable in the transaction value - HELD - Eligibility under the scheme depended upon investment and commencement of commercial production, and the benefit was limited by the fixed capital investment and the entitlement period. The assessment mechanism first quantified the tax payable and thereafter allowed the statutory benefit. The retained amount was not an additional amount paid by the buyer by reason of or in connection with the sale and is therefore not includible in the transaction value under Section 4(3)(d). Super Synotex Ltd. case is distinguishable, since the amount retained was not the Appellant's income but a subsidy given by the State Government under its industrial policy. A time bound and investment linked 99% VAT retention granted to an eligible industrial unit is a State incentive and not sale consideration, though those matters arose under the earlier 2003 policy and 2005 scheme - The remission of 99% VAT is a subsidy given by the State Government and is not includable in the assessable value - The demand of duty with interest and penalty is not sustainable - Extended Period of Limitation and Penalty under Section 11AC of Central Excise Act, 1944 on Valuation Dispute Arising from Audit - Demand was raised on the basis of an audit of the Appellant's unit, the audit had already noticed the retention of the 99% VAT benefit, and the Department sought particulars by letters to which the Appellant replied before the show cause notice was issued - Whether the extended period was validly invoked and the equal penalty under Section 11AC is sustainable - HELD - The retention of the 99% VAT benefit was known to the Department, and the Appellant furnished the particulars sought before the issuance of the show cause notice. The Appellant has not suppressed any information, and the extended period cannot be invoked. The CBEC Circular No. 1063/2/2018-CX has also recognised that the extended period is unavailable on this valuation controversy. Suppression of facts with intention to evade duty is not established, and the equal penalty under Section 11AC is therefore not sustainable - The demand cannot be confirmed by invoking the extended period, the penalty is set aside, and the appeal is allowed [Read less]

2026-VIL-1775-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax - Extended Period of Limitation under Section 73 of Finance Act, 1994 for Non-Deposit of Service Tax Collected from Flat Buyers - Appellant, a builder of residential complexes, obtained registration late and filed no returns until investigation began, collected service tax from flat buyers without depositing it, and made a declaration under VCES which excluded the landowners' share and was not accepted - First show cause notice invoked the extended period on the grounds of non-payment, belated registration and suppression, while Appellant contended that the particulars were in its books and the VCES declaration showed bona fides - Whether the extended period was validly invoked and the entire demand is time barred - HELD - Suppression contemplates deliberate withholding of material facts, ordinarily with intent to evade tax, and mere inadvertence or bona fide interpretation is not suppression. Having collected service tax from buyers, the Appellant was bound by Section 73A to deposit it forthwith and to disclose the transactions and tax collected in its returns. Failure to do so is not a neutral omission but concealment of material particulars. Maintenance of books does not discharge the separate obligation to disclose in returns, and subsequent access to records during investigation does not cure the earlier non-disclosure. Nizam Sugar Factory does not apply to a first show cause notice. VCES is a voluntary disclosure scheme and not a certificate of compliance. Financial hardship is untenable since the Appellant was only required to remit tax already collected, and under Section 80 a bald plea cannot discharge the burden of proving reasonable cause. A contention that tax was not leviable before 01.07.2010 is a mixed question of fact and law not raised before the original authority - The plea that the first show cause notice is wholly time barred is prima facie not sustained, and the matter is remanded for fresh determination of taxability, valuation and limitation on evidence, with verification of challan payments - Taxability and Valuation of Landowners' Share under Joint Development Agreements - Appellant constructed residential complexes under agreements with landowners, under which the constructed area was shared between the developer and the landowners - Appellant contended that no monetary consideration was paid, that the parties were co-developers, and that tax on the landowners' share would amount to double taxation - Respondent contended that land or development rights were transferred against constructed flats as non-monetary consideration, to be valued with reference to the price of similar flats - Whether the landowners' share is liable to service tax and how it is to be valued - HELD - The agreements were not produced, and the nature of the transaction is to be determined from the contractual terms, the rights and obligations of the parties and the consideration flowing between them, and not from nomenclature - A genuine joint venture is distinct from a collaboration agreement under which a builder constructs in return for land or development rights. Absence of monetary consideration does not exclude a transaction from Section 67. Where the arrangement is a taxable construction service, the value is determined under Section 67 and Rule 3 of the Service Tax (Determination of Value) Rules, 2006. Valuation arises only after taxability is established and cannot override an applicable exclusion - The landowners' share cannot be excluded merely because the consideration is non-monetary, but its taxability and value are to be determined by the adjudicating authority from the agreements, the applicable period and the comparable flats, after verifying duplication of taxable value - Construction of Residential Complex Service or Works Contract Service in Developer's Share and Taxability of Builder Services before 01.07.2010 - Appellant contended that its construction activity was a composite works contract, that builder services before 01.07.2010 were not taxable under the Board's circulars, and that the show cause notice cited Section 66E(b) instead of Section 66E(h) - Respondent contended that the Appellant was registered under construction of complex service, produced no contracts, and that classification is immaterial in the negative-list regime - Whether the activity is taxable as construction of residential complex service or is a works contract, and whether the notice is defective - HELD - The law on construction services by a builder or developer before 01.07.2010 has been settled in favour of builders by Circular No. 108/2/2009-ST, Circular No. 151/1/2012-ST and various Tribunal decisions. Jain Housing does not establish a blanket exemption for every joint development agreement, and the provisions applicable from 01.07.2010 are to be examined separately. Larsen & Toubro Ltd. distinguishes a composite works contract involving transfer of property in goods from a contract for service simpliciter, and registration under a particular category does not establish the correct classification. Following Real Value Promoters Pvt. Ltd., an indivisible composite contract cannot be taxed as construction of complex service. Classification does not cease to be material from 01.07.2012, since the declared service of works contract in Section 66E(h) remains relevant. The abatement granted towards material costs does not establish a works contract, and the Appellant must show from the contracts that property in goods is transferred. Mere citation of an incorrect statutory provision does not invalidate the notice where the authority was competent and the demand is otherwise sustainable, as held in J.K. Steel Ltd. v. Union of India. The admission of the Managing Director establishes collection and non-payment of tax but cannot determine classification - The developer's share is to be examined from the agreements to determine whether it is service simpliciter or a composite works contract, and the liability is to be quantified under the provision applicable to the relevant period - Reverse Charge Liability on Goods Transport Agency Service - Demand was based on ledger entries of transport payments and the statement of the Managing Director, while Appellant contended that no consignment notes were produced and the transporter was not identified as a goods transport agency - Respondent relied on M.L. Agro Products Ltd. and Bharathi Soap Works for the proposition that a document accompanying the goods can be a consignment note - Whether the Appellant is liable to pay service tax under reverse charge on goods transport agency service - HELD - The statutory definition of goods transport agency during the relevant period required a person providing service in relation to transport of goods by road and issuing a consignment note, by whatever name called. The existence of a consignment note or a document satisfying the statutory requirement is a relevant jurisdictional fact. The Revenue cannot substitute the statutory requirement by observing that freight must necessarily have been paid against some document - The demand is set aside and remanded for re-examination of whether the transporter was a goods transport agency and whether the service fell within the reverse-charge notification - Reverse Charge Liability on Security, Manpower Supply and Legal Services - Appellant contended that security services were received from agencies which had been paid including service tax, that workers were directly employed and paid wages under its supervision, and that the recipient of legal service was not shown to be a legal professional - Respondent relied on ledger entries and the statement of the Managing Director - Whether the Appellant is liable under reverse charge on security, manpower supply and legal services - HELD - On security service, the adjudicating authority must determine whether the providers fell within the class specified in Notificatio [Read less]

2026-VIL-106-SC | Supreme Court VAT

Limitation Act, 1963 - Insolvency and Bankruptcy Code, 2016 - Limitation for appeal to the Supreme Court under Section 62 of IBC, 2016 - Commencement of limitation from pronouncement or from receipt of certified copy - Appellant filed the appeal under Section 62 of the IBC against the judgment of the NCLAT, which confirmed the Resolution Plan approved by the NCLT, and the Appeal was filed on the 111th day from the date of pronouncement - Respondent raised a preliminary objection on limitation - Whether the Appeal is within the period of limitation under Section 62 of the IBC - HELD - The IBC is an exhaustive, self-contained code, and Section 238-A applies the Limitation Act, 1963 only as far as may be. The Section 62 provides a limitation period of 45 days extendable by a discretionary condonable period of up to 15 days, which creates an absolute outer ceiling of 60 days. The expression from the date of receipt of the order in Section 62(1) cannot be read as the date on which a party chooses to apply for and collect a certified copy. Such a reading would make the limitation period fluctuating and indefinite and would render Section 12(2) of the Limitation Act redundant - For an appeal under Section 62 of the IBC, the Supreme Court Rules, 2013 impose an affirmative obligation on the Appellant to apply for and produce a certified copy. Under Rule 91 of the NCLAT Rules, 2016, limitation commences on the date of pronouncement. Under Section 12(2) only the time requisite for obtaining the certified copy is excluded, and under the Explanation to Section 12 the period of inaction before applying for the copy cannot be excluded. The Appellant applied for the certified copy on the 35th day, and the time requisite for obtaining it stands excluded. After receipt of the copy, the Appellant took a further 41 days to file, so the actionable period totalled 76 days against the absolute ceiling of 60 days. The Appeal was thus filed 16 days beyond the outer limit within which delay can be condoned - The preliminary objection is sustained. The appeal is dismissed as barred by limitation [Read less]

2026-VIL-1193-CAL | High Court SGST

GST - Denial of Input Tax Credit for belated filing of returns - Eligibility to Input Tax Credit under Section 16(5) of the CGST Act, 2017 for Financial Year 2019-20 where returns are filed up to 30.11.2021 - During the pendency of the writ petition, the Electronic Credit Ledger of the Petitioner was blocked, and an amount was debited towards recovery of the disputed demand without prior intimation or an opportunity of being heard - Whether the Petitioner can be denied the benefit of sub-section (5) of Section 16 inserted retrospectively from 1st July, 2017 and is eligible to input tax credit where the returns were filed u... [Read more]

2026-VIL-1191-CAL | High Court SGST

GST - Validity of ex parte adjudication order confirming demand despite reply filed to show cause notice - Petitioner challenged the show cause notice and the consequential order confirming the demand of tax and penalty, contending that despite filing a reply uploaded on the common portal, the Adjudicating Authority observed that no reply was filed and found that ample opportunities of personal hearing were given - Whether the order confirming the demand, passed ex parte on the finding that no reply was filed, can be sustained - HELD - The reply to the notice was filed and uploaded on the common portal, as evident from the record. The Adjudicating Authority arrived at an erroneous finding that no reply was filed and passed an ex parte order confirming the demand without considering the reply - The impugned order is quashed and set aside, the Respondent is directed to revisit the issue by considering the reply and to pass a reasoned and speaking order after affording personal hearing - The writ petition is disposed of - Negative blocking of Electronic Credit Ledger and cancellation of registration for non-filing of returns - Registration of the Petitioner was cancelled for non-filing of returns for six months, and the Electronic Credit Ledger was made inoperative on the basis of an investigation for availment of inadmissible ITC, though no order for negative blocking was passed - Whether the blocking of the Electronic Credit Ledger and the cancellation of registration can be sustained - HELD - The decision of the authority, including blocking the Electronic Credit Ledger negatively, is dehors the mandate of the settled principles of law. The Supreme Court in Deputy Director, Directorate General of GST Intelligence v. Kings Security Guard Services Pvt. Ltd. observed that the Electronic Credit Ledger cannot be negatively blocked for wrongful availment of ITC – The Rule 86A(1) of the CGST Rules does not contemplate an order requiring a taxpayer to replenish the Electronic Credit Ledger to the extent of ITC used in the past, as it would amount to an order for recovery of tax - The Adjudicating Authority is directed to consider the non-filing of returns and the negative blocking in the light of these judgments, and upon being satisfied to revoke the cancellation and unlock the Electronic Credit Ledger, without debarring action in accordance with law if the Petitioner is found to have committed the offence - The writ petition is disposed of. [Read less]

2026-VIL-209-GSTAT-DEL-PB | Tribunal SGST

GST - Refund of Unutilised Input Tax Credit on Export of Services - Services Rendered to Foreign Group Entity as Sub-Contractor not Intermediary Services under Section 2(13) of IGST Act, 2017 - Appellant, an Indian subsidiary, provided marketing support services and IT enabled services to its Australian parent under a Master Services Agreement on a cost-plus basis, receiving consideration in convertible foreign exchange - Refund claims for several periods under Section 54 of the CGST Act read with Section 16 of the IGST Act were rejected on the ground that the services were intermediary services - Whether the services rendered by the Appellant qualify as export of services under Section 2(6) of the IGST Act or fall within intermediary services under Section 2(13) - HELD - An intermediary requires a minimum of three parties and two distinct supplies, namely the main supply and an ancillary supply of arranging or facilitating it. The Appellant is not a broker or agent, has no authority to bind the principal, and the expression any other person by whatever name called must be read on the principle of ejusdem generis - The agreements expressly provide that the Appellant is an independent contractor and not an agent, and it has no contract with the partner universities or the advisors. A person who supplies services on his own account is excluded from the definition, and as per Circular No. 159/15/2021-GST sub-contracting for a service is not an intermediary service - The Appellant supplies the main service to its principal on a principal-to-principal basis. This view is consistent with the various High Court judgments. The rulings of Advance Ruling Authorities relied on by the Revenue are not binding as they are not courts of record, and the High Court judgments are followed - The services therefore qualify as export of services under Section 2(6) of the IGST Act - The orders of the First Appellate Authority are set aside, and the Respondent is directed to refund the unutilised input tax credit along with interest – Ordered accordingly - Power of First Appellate Authority to annul order and direct reconsideration - Bar on Remand under Section 107(11) of CGST Act, 2017 - The Revenue appealed against an order of the FAA which held the refund order incorrect but, instead of allowing the appeal, annulled the order of the proper officer and directed him to reconsider the matter in light of High Court orders - Revenue contended that this was a remand in violation of Section 107(11) of the CGST Act - Whether the order annulling the Order-in-Original and asking the officer to reconsider is in fact a remand order prohibited by law - HELD - Section 107(11) empowers the Appellate Authority to pass such order as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against, but expressly provides that it shall not refer the case back to the adjudicating authority that passed the order. A plain reading shows that the Appellate Authority has jurisdiction to annul an order but cannot direct reconsideration by the authorised officer. Where a specific type of order is expressly prohibited by statute, the Appellate Authority cannot circumvent the bar by a choice of words and pass an order which in substance is a remand order - The Revenue appeal is allowed to that extent, and the matter is remanded to the FAA to decide it on merits in accordance with the principles laid down by the Tribunal. [Read less]

2026-VIL-212-GSTAT-PYG | Tribunal SGST

GST - Demand on Mismatch between GSTR-2A and GSTR-3B - Availment in Subsequent Year of Input Tax Credit Omitted in Previous Financial Year under Section 16(4) read with Section 39(9) of CGST Act, 2017 - Appellant claimed input tax credit in GSTR-3B for April 2019 that exceeded the credit auto-populated in GSTR-2A for that month, and the proper officer raised a demand with interest and penalty under Section 73 - Whether the credit pertaining to inward supplies of the previous financial year was available and could be availed in GSTR-3B for April 2019 - HELD - The Appellant furnished the details of each supply along with tax invoices, e-way bills, bilty and GSTR-2A extracts, the inward supplies were genuine, were received in the previous financial year and that the total credit was correct. A minor error in describing the month of one supply could be reconciled from the documents and does not justify denial of credit. The Appellant held excess unutilised credit in the previous year, which corroborates the claim - Section 39(9) permits rectification of omissions before the due date of the September return of the following financial year, provided the omission was not discovered through scrutiny, audit, inspection or enforcement, and the claim was made before any such activity. Under Section 16(4) the credit was claimed before the due date for the September return. GSTR-2A is a facilitation document that does not impact the ability to avail credit on self-assessment under Section 16, and the condition in Section 16(2)(aa) was inserted with effect from 01.01.2022 and does not apply to the disputed period. A mismatch between GSTR-3B and GSTR-2A cannot by itself be a ground for reversal of credit when the claim is fully verified. A later notice under Section 61 on the same mismatch was also dropped as the reply was found satisfactory - The Appellant was legally entitled to avail and utilise the credit in GSTR-3B for April 2019, and the demand is struck off – The appeal is allowed - Violation of Principles of Natural Justice in Adjudication and Appeal - Notices Uploaded in Additional Notices and Orders Tab, No Date of Hearing under Section 75(4), Order Passed on Undisclosed Date and Non-Speaking Order under Section 107(12) of CGST Act, 2017 - Notice under Section 73 and its reminder were uploaded in the Additional Notices and Orders tab of the portal, with the columns for date, time and venue of hearing marked NA - Appellant did not reply or appear, and the proper officer passed the order on the date fixed for reply - First Appellate Authority dismissed the appeal on a later date, observing that the Appellant was absent and the order had no infirmity - Whether the Order-in-Original and the Order-in-Appeal are vitiated by violation of principles of natural justice - HELD - The Revenue did not dispute that a primary tab for Notices and Orders existed, and no material supported the contention that taxpayers were aware of the practice of uploading notices in the secondary tab – The service of notices at both stages was not proper, and this amounted to denial of opportunity of hearing. Section 75(4) requires a hearing where any adverse decision is contemplated, and it prescribes two independent requirements, one of a written reply and the other of an oral hearing. Failure to avail one does not lead to denial of the other. The proper officer was therefore obliged to fix a date of hearing, which was not done. Both authorities proceeded ex parte and passed orders on later dates that were neither fixed nor communicated - The authority must either pass the order on the date fixed or fix and communicate another date, failing which the ex parte nature is forced on the taxpayer and natural justice is breached - Both the Order-in-Original and the Order-in-Appeal are set aside, the demand with interest and penalty is struck off. [Read less]

2026-VIL-210-GSTAT-VSK | Tribunal SGST

GST - Refund of unutilised ITC distributed through Input Service Distributor to SEZ unit making zero-rated exports – Appellant-SEZ unit exporting goods without payment of integrated tax, received ITC distributed through an Input Service Distributor which remained unutilised - Refund claims were rejected on the ground that, being the recipient of supplies to an SEZ unit, only the supplier could claim refund under Rule 89 of the CGST Rules - Whether an SEZ unit making zero-rated exports is entitled to refund of unutilised ITC distributed through an Input Service Distributor - HELD - The claim of the Appellant is not founded merely on its status as recipient of supplies to an SEZ unit but arises from unutilised ITC validly distributed through the Input Service Distributor and attributable to its own zero-rated exports. Section 16(1) of the IGST Act treats exports and supplies to an SEZ unit as distinct categories of zero-rated supply, and Section 54(3) of the CGST Act read with Rule 89(4) provides the framework for refund of unutilised ITC on zero-rated supplies made without payment of tax. The second proviso to Rule 89(1) addresses direct supplies to an SEZ unit or developer and cannot be extended to every claim of an SEZ unit, as a procedural rule cannot be applied mechanically to defeat substantive entitlement - The Revenue failed to show any provision extinguishing the entitlement or that the suppliers could claim refund of credit already distributed through the Input Service Distributor. The principle in Britannia Industries Ltd. v. Union of India, SE Forge Ltd. v. Union of India and Wipro Ltd. v. Assistant Commissioner applies squarely. The refund remains subject to verification of eligible ITC and statutory conditions - The impugned orders are set aside, the matters are remitted to the proper officer for quantifying and sanctioning the admissible refund - The appeals are allowed - GST - Rejection of refund on unsubstantiated allegation of prior refund to suppliers and violation of natural justice - First Appellate Authority observed, on the basis of departmental back-office records, that the suppliers had already received refund, though the allegation was not put to the Appellant and the Revenue admitted before the Tribunal that no evidence was available on record - Whether the finding can be sustained as a ground for rejecting the refund claims - HELD - A finding adverse to the entitlement of a taxpayer to refund must be founded on relevant material and reached after a reasonable opportunity to rebut. A reference to back-office records, without disclosure of the underlying material, cannot establish that a corresponding refund was sanctioned. The mere filing of a refund application by a supplier does not prove that the refund was sanctioned or related to the very credit in dispute. The possibility of double refund and proof of double refund are different matters, as the former may justify verification while the latter requires evidence - The doctrine of audi alteram partem requires notice with an opportunity of hearing and a reasoned order - The finding is unsustainable and cannot be a ground for rejection, though double refund is not permitted, and any proposed exclusion must be supported by cogent documentary evidence after giving the Appellant a reasonable opportunity to respond - The appeals are allowed. [Read less]

2026-VIL-211-GSTAT-VSK | Tribunal SGST

GST - Refund of interest paid on tax discharged through electronic credit ledger in view of retrospective amendment to Section 50(1) of the CGST Act - Appellant filed returns belatedly, discharged tax partly through the electronic credit ledger and partly through the electronic cash ledger, and paid interest on the entire tax liability – The refund claim of excess interest was rejected as premature since no notification bringing the amendment into force was available - Whether the Appellant is entitled to refund of interest paid on the portion of tax discharged through the electronic credit ledger after the substituted proviso to Section 50(1) - HELD - Section 112 of the Finance Act, 2021 substituted the proviso to Section 50(1) and expressly declared that it shall be deemed to have been substituted with effect from 1st July, 2017. The amendment operates retrospectively and not merely from the date of its notification, and interest is leviable only on that portion of tax which is paid by debiting the electronic cash ledger, subject to the conditions in the proviso. The Notification merely appointed the date of commencement and did not alter the retrospective declaration by Parliament. The earlier voluntary payment of interest cannot validate an amount not legally payable, and the reasoning that the claim could not be considered for want of a notification is unsustainable, particularly in view of the administrative instructions of the Board to recover interest only on the net cash tax liability - The Appellant is entitled to have its claim considered in accordance with the retrospective amendment, the competent authority shall verify the interest paid and the portion attributable to tax discharged through the electronic credit ledger - The appeal is allowed - Rejection of refund claim on a fresh ground of limitation under Section 54 without notice and without considering exclusion of period under Notification No. 13/2022-Central Tax - First Appellate Authority dismissed the appeals on the ground of limitation, though this was not the ground of rejection by the original authority, and the Appellant was neither put to notice nor given an opportunity to make submissions - Whether the finding on limitation can be sustained, and whether the matter should be remanded - HELD - When an appellate authority proposes to decide a matter on a ground not put to the affected party, reasonable notice and an effective opportunity to meet that ground must be afforded - The doctrine of audi alteram partem requires notice with an opportunity of hearing and a reasoned order - The Authorised Representative of the Respondent admitted that no notice on limitation was issued. Notification No. 13/2022-Central Tax issued under Section 168A excludes the period from 1st March, 2020 to 28th February, 2022 for computing limitation for refund applications under Section 54 or 55, and limitation must be freshly worked out after this exclusion - The notification does not dispense with the requirement of satisfying limitation, and an open-ended remand is not warranted as the controversy can be determined on the statutory provisions and the record - The finding on limitation is unsustainable and the impugned order is set aside, the competent authority shall recompute limitation after giving effect to the exclusion and quantify the eligible refund after affording the Appellant a reasonable opportunity of being heard - The appeal is allowed. [Read less]

2026-VIL-213-GSTAT-KLK | Tribunal SGST

GST - Refund of Accumulated Input Tax Credit on Export of Goods without Payment of Tax under Section 54(3)(i) of the CGST Act, 2017 - Treatment of Credit Notes Issued under Section 34 in Adjusted Total Turnover under Rule 89(4) of CGST Rules, 2017 - Respondent exporting tea without payment of tax claimed refund of accumulated input tax credit for six months - The original authority sanctioned a part of the claim and rejected the rest - The First Appellate Authority allowed the Respondent's appeal after excluding credit notes issued during the period from the turnover for refund calculation - Whether credit notes issued und... [Read more]

2026-VIL-1759-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Taxability of Royalty received by partners from partnership firm for use of trade mark - Appellants were partners of a partnership firm engaged in manufacture of Biri and co-owners of the registered trade mark used by the firm, and the Royalty was accounted as expenditure in the Profit and Loss account with the net profit shared in the same proportion - Show Cause Notice alleged that the profit sharing of Royalty amounts to Intellectual Property Service, and the demand was confirmed by the Adjudicating authority and upheld by the Commissioner (Appeals) - Whether Royalty received by the partners from the partnership firm for use of the trade mark owned by them is liable to service tax - HELD - The trade mark is an individual asset of each of the partners, which they have deployed to generate profit for the business. This is not a case where a third party holding the trade mark has lent the same and has charged Royalty for the same. When the partner allows his assets to be used by the partnership firm, there arises no case of client - service provider relationship, and the same amounts to self-service by the partner for the partnership firm. Whatever a partner does for the furtherance of the business of the partnership, he does so only for advancing his own interest, and no consideration is fixed as a quid pro quo for any particular service. Applying the ratio of the decision of the Mumbai Bench, which echoes the Apex Court's decision that a partnership firm is only a compendium of its partners, there is complete absence of service provider vis-à-vis service receiver relationship - The impugned order is set aside and the appeals are allowed.rnrn^Invocation of extended period of limitation on Royalty received by partners from partnership firm - Royalty was properly reflected in the Profit and Loss account, and the demand was confirmed for the extended period - Whether the extended period of limitation is invocable against the Appellants in the absence of suppression - HELD - The Appellants would have carried a bonafide belief that since they were recovering Royalty charges from the partnership firm, there is absence of service provider - client relationship, and the Revenue has failed to make out any case of suppression. Further, if service tax was payable by the Appellants individually, the same would accrue to the partnership firm itself as Cenvat Credit for payment of Excise Duty on its finished goods, and hence there cannot be any intent to evade service tax payment - The confirmed demand for the extended period is legally not sustainable and is set aside on account of time bar also. [Read less]

2026-VIL-1185-GUJ | High Court SGST

GST - Services provided by Head Office to branch offices as distinct persons - Non-adoption of cross-charging - Valuation under Rule 28 of the CGST Rules, 2017 where no invoice is issued – Petitioner held ISD registration for its Head Office and separate registrations for branches outside the State. It incurred common corporate expenses and salaries at the Head Office without allocating them to branches by cross-charging, and all expenses were recorded in its books of account - Revenue demanded IGST under Section 74 of the CGST Act on the footing that the services were supplied to distinct persons under Section 25(4) - Whether tax is payable on common expenditure and salaries incurred at the Head Office merely because cross-charging to branches was not adopted, when no tax invoice was issued - HELD - Under Section 25(4) and (5), entities with different registrations are distinct persons, and Entry 2 of Schedule I read with Rule 28 brings supplies between distinct persons into the net of GST. However, the Circulars dated 17.07.2023 and 26.06.2024 clarify that where full input tax credit is available to the branch and the Head Office has not issued a tax invoice, the value of such services may be deemed to be declared as 'Nil' and treated as open market value under the second proviso to Rule 28. Since it was not disputed that no tax invoices were issued, the value of the services is required to be treated as 'Nil' and no tax liability arises - The adjudicating authority referred to the Circulars cursorily and brushed them aside, which shows non-application of mind. The authorities cannot determine the value on a proportionate basis merely because cross-charging was not adopted. The services are input services and the tax paid by the Head Office would be available as credit to the branches under Section 16(1) - The demand is not sustainable on this ground. The petition is allowedrnrn rnrnIssue 2: Invocation of extended period under Section 74 - Requirement of fraud, wilful misstatement or suppression of facts - The extended period was invoked against the Petitioner on the basis of an investigation by the Directorate, on the allegation that without the investigation the facts relating to evasion would not have been known and that the Petitioner deliberately did not adopt cross-charging - Whether Section 74 could be invoked against the Petitioner for not adopting cross-charging - HELD - Except for the observation based on the investigation, nothing was recorded in the show-cause notice or the order-in-original to satisfy the ingredients of Section 74 - Mere exhuming of information by the Directorate without forming any opinion cannot attract Section 74. Even if cross-charging had been adopted, the tax could have been paid by utilising the credit available at the Head Office and the same would have been available as credit to the branches, so the situation would be revenue-neutral. Since the expenditure was recorded in the books, the authorities were aware of the functioning of the Petitioner. Mere failure to adopt cross-charging does not lead to the conclusion of wilful or fraudulent evasion or suppression with intent to evade tax - Section 74 was mechanically invoked without non-application of mind being excluded, the order-in-original is quashed and set aside. [Read less]

2026-VIL-206-GSTAT-BLR | Tribunal SGST

GST - Amendment of registration - Addition of godown as additional place of business - Pending civil dispute on title - Appellant applied under Section 28 of CGST Act read with Rule 19 of CGST Rules to add a rented godown as an additional place of business. The Proper Officer rejected the application only because the ownership of the premises - The constitution of the lessor firm, were the subject of civil suits pending between other persons, and the first Appellate Authority dismissed the appeal - Whether the Proper Officer may reject an application to add an additional place of business only because title to the premises or the constitution of the lessor firm is the subject of a pending civil dispute - HELD - Section 2(85) defines place of business by what is done at a place, such as carrying on business, storing goods or maintaining books, and it says nothing about who owns the place. Rule 19(2) permits rejection only where the amendment is not warranted or the documents furnished are incomplete or incorrect. An amendment is not 'not warranted' merely because persons other than the applicant are litigating about ownership of the building. A registration certificate has no effect on title, and the Proper Officer has no machinery to decide title, so making the outcome of a title suit a condition for recording a place of business adds a condition which Rule 19 does not contain. If a pending dispute were sufficient, a tenant could never record a godown for years, although the goods would still be stored there, which is the reverse of what Section 28 and Rule 19 are meant to secure. An admission that litigation exists is not an admission of the case of the other side - The Proper Officer cannot reject the application only because title is under civil dispute or undecided. The orders below are set aside and the application is remitted for fresh decision.rnrn rnrnIssue 2: Documents required for adding rented premises as additional place of business - Appellant uploaded a lease deed executed by the present partners of the lessor firm and an electricity bill of the lessor. The authorities below demanded conclusive documents of legal ownership, and the Proper Officer relied on pendency of civil suits without examining the documents - What documents the law requires for adding rented premises as an additional place of business, and whether the authorities below decided the application on those requirements - HELD - For rented premises, Form GST REG-01 requires a valid rent or lease agreement with any one document in support of the lessor's ownership, such as a property tax receipt, municipal khata copy or electricity bill, and where the agreement is not registered, the identity proof of the lessor. The list does not require proof of the lessor's title against all comers, and no documents beyond the list may be sought. The Proper Officer must decide on the face of the deed and the law whether it is a valid lease agreement, and cannot discard it as provisional only because the civil suit is pending. The original of the deed lying in the custody of the civil court cannot be insisted upon, and a certified copy will serve the purpose of verification. Whether the electricity bill relates to the godown is a question of fact for the Proper Officer to verify. Neither authority below decided the application on these requirements, and the order of rejection must stand or fall on the grounds mentioned in it - The matter is for the Proper Officer to decide afresh on the statutory requirements, the prescribed documents and verification of the place.rnrn rnrnIssue 3: Third party complaints, pending civil suits and decision of High Court on rival claimants - Rejection of amendment of registration - The Proper Officer relied on complaints by a person claiming joint ownership, pendency of two civil suits and a decision of the High Court holding that registration should not be granted where premises are in dispute between rival claimants - Whether the complaints, the pending suits and the said decision justify rejection of the application - HELD - The Proper Officer is entitled to receive information from any person and to verify it, but information is a reason to verify and not a reason to reject. The verification found only that title is in dispute in the civil courts, which is not a ground under Rule 19. The pendency of the suits is not a reason to refuse to record where the Appellant stores its goods, as the civil courts will decide their effect and the registration will have to follow that decision. The decision relied upon by the Revenue concerned two persons each claiming the right to run the same business from the same premises, and the authority was asked to choose between them. Here no one other than the Appellant seeks registration for the godown or claims to trade from it, so the decision does not govern these facts. Any third party representation relied upon must be put to the Appellant with an opportunity to answer it - The complaints and pending suits do not justify rejection. The Proper Officer shall not reject the application on the ground of pendency of any proceeding.rnrn rnrnIssue 4: Order of first Appellate Authority - Reliance on material not put to the party and failure to give reasons - The FAA relied upon a letter received from a third party after the hearing, without giving a copy to the Appellant - The order was headed 'Interim Order' though it finally dismissed the appeal. The Appellant prayed for a direction to approve the amendment - Whether the order is a reasoned order in keeping with the principles of natural justice, and what relief should follow - HELD - An authority must not use material against a party without giving that party an opportunity to rebut it, and a quasi-judicial authority must record reasons showing a rational nexus between the facts considered and the conclusions reached - The order held that GST authorities cannot decide ownership, yet made a decision on ownership the condition of registration. It also ignored the material contentions and documents of the Appellant, and repeated material from earlier proceedings without noticing that the partners had appeared and a written reply had been filed in the present proceedings. The heading 'Interim Order' is a slip which does not by itself vitiate an order, as the substance is looked at - The Tribunal cannot direct approval, since Rule 19(1) entrusts due verification to the Proper Officer, who has not carried it out, and the record raises questions of fact which only he can verify. Under Section 113(1), the remand is to be limited to the statutory requirements and not at large - The orders below are set aside and the application is remitted to the Proper Officer for a fresh speaking decision within the time fixed, with no finding on title or on the merits of the civil proceedings. [Read less]

2026-VIL-198-GSTAT-KLK | Tribunal SGST

GST - Refund of accumulated Input Tax Credit under inverted tax structure where principal input and output fall under same HSN - Respondent was engaged in manufacture of crushed stone and stone aggregates from boulders and river bed material, and both the principal input and the final output fell under the same HSN attracting the same rate of tax - Respondent also used other inputs such as screening plant spare parts, crusher plant spare parts, vehicle parts, tyres and lubricants, which attracted higher rates of tax. The original authority sanctioned the refund under Section 54(3)(ii) of the CGST Act and the first Appellate Authority rejected the Revenue's appeal - Whether the Respondent is entitled to refund of accumulated ITC under Section 54(3)(ii) of the CGST Act when the principal input and the output are classified under the same HSN and attract the same rate of tax - HELD - Section 54(3)(ii) permits refund where credit has accumulated because the rate of tax on inputs is higher than the rate of tax on output supplies. The legislature consciously used the expression 'inputs' in plural and made no distinction between principal input and ancillary inputs, so reading such a restriction into the statute would not meet the ends of justice - The term 'input' under Section 2(59) has a broad meaning and includes all goods, other than capital goods, used in the course or furtherance of business. The principal input and the output may appear similar, but they are fundamentally different in nature as the final product undergoes a complex transformation involving several stages, processes and resources. Since the Respondent also utilised various other inputs attracting a higher rate of tax than the output, the principal input cannot be compared with the principal output alone - The Revenue's argument that input and output are the same has no force, the Respondent is eligible for refund under inverted tax structure – The Revenue's appeal is dismissedrnrn rnrnIssue 2: Applicability of CBIC Circulars on refund of accumulated ITC where input and output are the same - Refund of accumulated ITC under inverted tax structure was sanctioned to the Respondent, and the Revenue (Appellant) relied on para 3.2 of the Circular dated 31.03.2020 and on the later Circular clarifying it, to contend that refund is barred where input and output supplies are the same - Whether the said Circulars are applicable to the facts of the case and can deny the refund under Section 54(3)(ii) of the CGST Act - HELD - Para 3 of the first Circular is headed 'Refund of accumulated input tax credit on account of reduction in GST Rate', and the words 'though attracting different tax rates at different points in time' show that it applies only where the same goods attract different rates of tax at different points of time - In the present case, the raw material and the processed product attract the same rate of tax, so the issue is entirely different and the Circular is not applicable. Further, the Board's power under Section 168(1) is confined to issuing directions for uniformity in implementation of the Act. The Board can neither add to the provisions of the Act nor curtail the import of any part of the enactment, and a refund admissible under the Act cannot be denied by virtue of a circular. The later Circular is clarificatory in nature and applies to supplies made under a concessional notification, so once the principal Circular is not applicable, the clarificatory Circular is also not applicable - The Revenue's reliance on the Circulars is incorrect, the order of the first Appellate Authority is not interfered - The appeal is dismissed [Read less]

2026-VIL-206-GSTAT-BLR | Tribunal SGST

2026-VIL-1192-KAR | High Court SGST

GST - Adjudication order passed in the absence of the Petitioner - Another opportunity to respond to the Show Cause Notice - Petitioner contended that the communications were issued to e-mail addresses of the staff of its auditor that changed from time to time and therefore had no effective knowledge of the proceedings - Whether the Petitioner must be given another opportunity before there can be a demand in terms of the impugned adjudication order - HELD - The reasons assigned for non-participation and the Petitioner's case on merits persuade the Court that the Petitioner must have another opportunity before there can be ... [Read more]

2026-VIL-1190-DEL | High Court SGST

GST - Pre-deposit for maintaining appeal under Section 107(6) of the CGST Act, 2017 - Demand towards penalty alone - Show Cause Notice issued prior to the amendment effective from 01.10.2025 - Petitioner assailed the Show Cause Notice, the Order-in-Original and the rectification order for the Financial Year 2018-2019, which culminated in the imposition of penalty - Whether the Petitioner is entitled to the benefit of Gaurav Jain in relation to the requirement of pre-deposit under Section 107(6) - HELD - Having regard to the nature of the liability imposed upon the Petitioner, namely a demand towards penalty alone, and the fact that the SCN was issued prior to the amendment which came into effect on 01.10.2025, the Petitioner is entitled to the benefit of the judgment in Gaurav Jain. The requirement of pre-deposit for maintaining the statutory appeal shall accordingly be governed by the principles laid down in the said judgment. The finding is confined to Section 107(6) of the CGST Act - The Writ Petition is disposed of - Service of adjudication order and limitation for filing appeal - Relegation to statutory appellate remedy - Petitioner contended that it acquired knowledge of the Order-in-Original only on a later date upon accessing the GST portal - Whether the validity of service, the date of communication and the computation of limitation can be examined in the writ petition despite the availability of a statutory remedy of appeal - HELD - It is not in dispute that a statutory remedy of appeal is available. The rival contentions on the modes of service, the material in support of service, the date of knowledge, the effect of uploading the omitted pages and the computation of limitation can appropriately be examined by the competent Appellate Authority. The applicability of Luxmi Traders would have to be considered in the context of the actual mode of service adopted, in view of the specific assertion of the Respondents that the order was sent through the GST portal as well as by e-mail and Speed Post. No conclusive finding is returned on these questions, and the Petitioner is at liberty to raise all legally available grounds, the Appellate Authority shall consider it in accordance with law - The Writ Petition is disposed of [Read less]

2026-VIL-208-GSTAT-AGR | Tribunal SGST

GST - Penalty on Undeclared Goods Found in Transit - Applicability of Maruti Enterprises to goods claimed to be destined outside the State - Physical verification revealed a substantial quantity of makeup accessories and other goods for which no invoice, bilty or e-way bill was produced - Notice in Form MOV-07 was issued, and about a week later an advocate produced additional bilties and invoices claiming that the goods were moving from Delhi to Gwalior - The Mobile Squad Officer declined the documents because neither the buyers nor the sellers appeared, and no registration particulars or other evidence of identity or genuineness was furnished - Appellant contended that the second bundle of documents was inadvertently not produced at interception, and that the transit State officer had no jurisdiction in view of Maruti Enterprises v. State of U.P. - Whether the additional invoices and bilties produced long after interception established the genuineness of transportation, and whether the principle laid down in Maruti Enterprises applies to the facts of the case - HELD - The mere assertion that documents were available in a separate bundle does not establish that the goods found during physical verification were covered by those documents – Further, the absence of buyers and sellers by itself may not invariably be sufficient to reject a transaction. However, when it is considered together with non-production of documents at interception, delayed submission of additional documents, failure to establish identity and business credentials, discrepancies in multiple invoices of small individual values and absence of any person claiming ownership, the circumstances collectively cast serious doubt on the explanation offered - Appellant failed to establish a reliable documentary link between the additional documents and the goods found undeclared. Maruti Enterprises case, which holds that officers of a transit State are empowered only to intercept and verify goods and to intimate the origin or destination State, is distinguishable. In that case the relevant documents were available at the time of transportation, the buyers and sellers were registered dealers who acknowledged the transactions, and the destination outside the State was identifiable. In the present case, the goods were totally undeclared, and transportation of undeclared goods through a transit State may cause a tax effect in that State - Appellant cannot claim the benefit of an out-of-State destination without first establishing the factual basis of that claim bona fide - The second appeal is dismissed and the order of the FAA affirming the penalty is upheld [Read less]

2026-VIL-1744-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs - Provisional release under Section 110A of Customs Act - Quantum of Bond and Bank Guarantee - Appellant imported areca nut from Bangladesh and claimed duty exemption under Notification No.99/2011-CUS on the strength of a SAFTA Certificate of Origin - On a DRI alert and suspicion that the goods were of Indonesia/Thailand origin routed through Bangladesh, the goods were seized - Principal Commissioner permitted provisional release subject to a Bond and a Bank Guarantee, the latter fixed by adding duty, equivalent penalty and fine - Whether the amounts of Bond and Bank Guarantee imposed are justified - HELD - Since the Tariff value provisions come into play, the assessable value of the consignment is determined on that basis, and the Bond directed for that value is in order. Once a Bond is executed, the importer is bound to honour the amount specified therein. Penalty and fine would become recoverable only after investigations prove the Revenue's case after litigation at various stages - It is premature to quantify the likely penalty and fine before any steps have been taken for verifying the authenticity of the Certificate of Origin. A consignment imported earlier from the same exporter on the basis of the Certificate of Origin was allowed to be cleared with SAFTA benefit after final assessment. Ends of justice would be met with adequate revenue protection if the amount of the Bond is increased to the figure fixed earlier as Bank Guarantee and the Bank Guarantee is substantially reduced - The Bond is enhanced and the Bank Guarantee is reduced, and upon fulfilment of these conditions the Appellant is eligible for provisional release of the consignment - Customs - Waiver of demurrage and detention charges on goods seized and provisionally released - Regulation 6(1) of the Handling of Cargo in Customs Areas Regulations, 2009 - Appellant imported goods which were seized on suspicion regarding the country of origin and permitted to be released provisionally, and sought waiver of demurrage and detention charges - Whether demurrage and other charges are to be waived in respect of the detained consignment - HELD - Regulation 6(1) of the Handling of Cargo in Customs Areas Regulations, 2009 provides that, subject to any other law for the time being in force, the Customs Cargo Service Provider shall not charge any rent or demurrage on the goods seized or detained or confiscated by the proper officer. Since the confiscated goods are being released on provisional basis, the Revenue officials are directed to issue a complete waiver order towards demurrage and other charges in respect of the detained consignment. The Appellant may also be allowed to carry out the fumigation exercise at its own cost, under the supervision of Customs Officials, so as to avoid further deterioration of the consignment - The Revenue is directed to waive demurrage and other charges. [Read less]

2026-VIL-1749-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs - Competence of officer issuing Show Cause Notice - Corrigendum making the notice answerable to the Principal Commissioner - Appellant imported electric two-wheeler components in CKD condition and claimed the concessional rate under Notification No.50/2017-Cus - SCN issued by an Assistant Commissioner culminated in confirmation of duty, confiscation under Section 111(m) and penalty under Section 112 - Appellant contended that the demand exceeded the monetary limits of the Assistant Commissioner, that a corrigendum cannot validate a notice void ab initio, and that the proceedings were without jurisdiction - Whether the issue of the SCN by the Assistant Commissioner followed by a corrigendum vitiates the proceedings - HELD - A corrigendum is valid where it corrects, clarifies or supplements the Show Cause Notice, with no prejudice to the noticee, before adjudication. Apart from making the notice answerable to the Principal Commissioner, no prejudice was caused to the Appellant. The expression proper officer is function specific and not officer specific, and an Assistant Commissioner who has been designated as an officer of Customs under Section 2(34) of the Customs Act is the proper officer - A corrigendum is nothing but a correction and relates back to the notice itself, and a change in the answerable to clause does not alter the nature of the notice - The contention that the Assistant Commissioner had no power to issue the notice is rejected, and the issue of a corrigendum does not vitiate the adjudication proceedings - Pre-notice consultation before issue of Show Cause Notice - Appellant contended that the consultative letter relied on in the impugned order was never received, that pre-consultation is a substantive safeguard and not an empty formality, and that there was no effective consultation before the Show Cause Notice was issued - Whether the Show Cause Notice is vitiated for want of pre-notice consultation - HELD - The impugned order notes that the Appellant itself referred to the receipt of the pre-consultative letter in its reply to the Show Cause Notice, and the Revenue pointed out that the reply admitted the receipt of such letter. Having admitted the receipt, the Appellant cannot now take up the plea of non-receipt or of the nature of the letter - The contention of lack of pre-consultation is rejected - Maintainability of demand under Section 28 of the Customs Act, 1962 where Bills of Entry were self-assessed and not challenged - Appellant contended that the Bills of Entry attained finality and the Revenue could not proceed without challenging the self-assessment - Whether the Revenue can issue a Show Cause Notice under Section 28 for differential duty without challenging the self-assessment - HELD - The Apex Court in the case relied on by the Appellant was concerned with a claim of refund under Section 27, where re-assessment is not permitted nor can conditions of exemption be adjudicated - Non-payment of duty during self-assessment is governed by Section 28, which deals with recovery of duties not levied or not paid and is entirely different from the refund provisions under Section 27 - Section 28(1) enables recovery where exemption has been wrongly availed. The coordinate Bench has held that a clearance order cannot debar the issue of a show cause notice. There is no bar in the issuance of a Show Cause Notice under Section 28 for demanding differential customs duty without challenging the self-assessment of goods - The contention of the Appellant is rejected - Classification of electric two-wheeler imported in CKD condition without battery pack and charger - Rule 2(a) of the General Rules for the Interpretation - Appellant declared the goods as e-Bike in CKD condition with all pre-assembled essential parts and components under CTH 87116020, whereas the Adjudicating Authority held that the goods retained the essential character of a complete vehicle - Whether the goods imported without certain components possess the essential character of a complete vehicle and are classifiable accordingly - HELD - Rule 2(a) is an expansion rule and prevents classification from being defeated merely because an article arrives incomplete, unfinished or knocked down, provided the conditions are met at the time and in the condition in which the goods are presented to Customs. The decisive inquiry is the identity and character of the goods as presented for assessment - The HSN Explanatory Notes for Chapter 87 state that an incomplete or unfinished vehicle is classified as the corresponding complete vehicle provided it has the essential character of the latter, as for example a motor vehicle not yet fitted with wheels, tyres and battery. Battery pack and charger, even though not imported, are precisely the components cited in the HSN Notes which do not affect the essential character of the imported goods. The Appellant itself declared the goods as e-Bike in CKD condition and not as parts - The goods possess the essential characteristics of a complete vehicle and satisfy Rule 2(a), and the classification under CTH 87116020 is upheld - Eligibility for concessional rate under Sl. No. 531A(1) of Notification No.50/2017-Cus and alternative claim under Sl. No. 531A(2) - Appellant imported electric two-wheeler kits in knocked down condition and claimed the concessional rate, but the battery pack, charger and electric compressor were not imported - Whether the Appellant is eligible for the benefit of the Notification and the alternative entry - HELD - The exemption is available to electrically operated motor cycles imported in knocked down condition containing all the necessary components, and it is an admitted fact that the battery pack, charger and electric compressor were not imported. The benefit under the Notification cannot therefore be extended to the Appellant - The alternative exemption under Sl. No. 531A(2) was not claimed at the time of import, and a notification benefit not claimed at the time of filing of the Bill of Entry cannot be entertained later, as held by the Tribunal on identical facts - The Appellant is not entitled to the benefit of the Notification, and the demand is upheld - Confiscation under Section 111(m) and penalty under Section 112(a)(ii) of the Customs Act, 1962 where no redemption fine was imposed - Appellant contended that since the goods were duly declared, there was no mismatch with the entry made, and that penalty falls if confiscation is set aside as no redemption fine was imposed - Whether the penalty imposed can be set aside on the ground that no redemption fine was imposed - HELD - Confiscation and redemption fine are separate actions and are legally distinct outcomes. The Tribunal has upheld the Order-in-Original in an identical case of confiscation without imposition of redemption fine. There is no reason to differ from those findings - The confiscation and penalty are upheld, and the appeal is dismissed. [Read less]

2026-VIL-1748-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Taxability of tender fee collected by a State corporation for tender documents - Appellant collected tender cost/fee from bidders, which the Commissioner (Appeals) treated as part of service covered by Section 65B(44) of the Finance Act, 1994 - Appellant contended that the amount was recovery towards sale of tender documents, being printed material containing details of work, formats of agreement, terms and conditions and bid dates, which amounts to trading of goods and not service - Whether the tender fee collected by the Appellant is exigible to service tax - HELD - Service tax is required to be paid for a ... [Read more]

2026-VIL-1747-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Liability of sub-contractor when main contractor has paid service tax – Invocation of extended period of limitation - Appellant, a sub-contractor providing works contract services for painting of residential and public buildings, did not pay service tax, and the demand for the extended period was confirmed along with interest and penalties - Appellant contended that it entertained a bona fide belief that it was not liable to pay tax when the main contractor had paid the tax, as several Tribunal decisions held so, and that such a view would otherwise amount to double taxation - Whether the demand for the ext... [Read more]

2026-VIL-1746-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax - Invocation of extended period of limitation - Audit by Internal Audit Group noticed that the Appellant, rendering Testing, Calibration and Certification Services, had not discharged service tax liability for a part of the period - Show Cause Notice invoking the proviso to Section 73(1) of the Finance Act, 1994 was issued - Appellant contended that the demand was worked out from its own books of account and there was no suppression - Whether the Revenue was justified in alleging suppression and invoking the extended period of limitation and whether the tax demand is in order - HELD - A SCN that is wholly time-... [Read more]

2026-VIL-1741-CESTAT-DEL-CE | CESTAT CENTRAL EXCISE

Central Excise – Clubbing of clearances of two firms and demand on the basis of statements of suppliers – Respondent, a proprietary concern claiming SSI exemption, was alleged to have purchased raw material and cleared goods clandestinely, and the Revenue clubbed the clearances of another firm owned by the father of the proprietor, relying on the statements of the suppliers that orders and payments for both firms were made by the proprietor of the Respondent, and the Commissioner (Appeals) dropped the demand, interest, penalty and redemption fine and reduced the penalty on confiscation - Whether the clearances of the o... [Read more]

2026-VIL-1743-CESTAT-AHM-CE | CESTAT CENTRAL EXCISE

Central Excise – Eligibility of sewage pumps and drainage pumps to concessional rate of duty under Sr. No. 235 of Notification No. 12/2012-CE - Appellant manufactured power driven pumps and, from April 2016, availed the concessional rate of duty on sewage pumps and drainage pumps, after paying duty at the full rate earlier, and the Respondent denied the benefit and demanded differential duty with interest - Whether sewage pumps and drainage pumps are power driven pumps primarily designed for handling water within the entry - HELD - An exemption notification is to be interpreted strictly and the burden of proving that the goods fall within its four corners is on the assessee. Words of a fiscal statute not defined therein are to be understood in the sense in which they are understood in the trade and in common parlance. The term water is not defined in the Central Excise Tariff and, as per dictionary meaning and common parlance, refers to clean water and not to sewage or drainage water. The Appellant itself, in reply to the audit objection, contended that the design and manufacturing process of pumps for handling water differ from pumps for sludge or muddy sewage water. The certificate of the Chartered Engineer only states that the pumps can also be used for clean water and does not comment on the similarity of design. The decision relied upon by the Appellant is distinguishable as the notification covers pumps primarily designed for handling water - The benefit of the entry is available only to power driven pumps primarily designed for handling clean water, the Appellant is not entitled to the concessional rate on sewage pumps and drainage pumps, and the differential duty with interest is upheld - Central Excise – Plea of res judicata and change of departmental stand on the basis of audit objection - Appellant contended that the Respondent, having accepted through the audit memo that concessional duty was inadmissible and later that it was payable, could not take a different stand and demand full duty - Whether the Respondent is barred from taking a different stand on the rate of duty applicable to the pumps - HELD - Res judicata does not apply to tax matters for different periods as the cause of action for each period is distinct. The Appellant contested the audit para at that time, and the audit observation was neither pursued by the Respondent nor implemented by the Appellant, and no show cause notice was issued. A decision not followed by either side cannot be pleaded for implementation on the ground of res judicata. The Respondent is not barred from taking a different stand where there is just cause or public interest - The plea is devoid of merit and is rejected - Central Excise – Penalty under Rule 25(1) of the Central Excise Rules, 2002 read with Section 11AC(1)(a) - Appellant initially paid duty at the full rate, started claiming the concessional rate after the audit objection, and the Respondent then demanded differential duty, and the Commissioner (Appeals) imposed penalty at a percentage of the duty - Whether penalty is imposable on the Appellant - HELD - The Appellant was initially paying the full rate of duty and began claiming the concessional rate subsequent to the objection raised by the Audit, after which the Respondent took a U-turn and demanded differential duty. There is no evidence against the Appellant which could warrant imposition of penalty - The penalty is set aside, the impugned order is upheld with this modification, and the appeal is partly allowed. [Read less]

2026-VIL-1734-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax – Taxability of cancellation fee, refund fee and no show fee collected by an airline as Declared Service under Section 66E(e) of the Finance Act, 1994 - Appellant, an airline carrying passengers by air, collected cancellation, refund and no show charges from passengers and paid service tax on the abated value of these charges as part of its transport service – Dept-Respondent treated them as a distinct service of tolerating an act, demanded service tax on the full amount without abatement along with interest by invoking the extended period, and imposed penalties - Whether the cancellation charges collected from passengers are consideration for a declared service under Section 66E(e) chargeable to service tax on the full amount - HELD - The promise of the airline to carry the passenger and the promise of the passenger to pay the fare form the consideration for each other. Where the contract itself fixes the amount payable on default, such amount is liquidated damages, and the intention of the parties at the time of buying the ticket is that the passenger would fly and not that the ticket be cancelled so that the airline gets some money. The cancellation charges are intended to compensate the airline to some extent for the failure of the contract. They are in the form of compensation for failure of the contract and are not consideration, and there is no separate agreement with an intent that the passenger would default so that the airline would get compensation. The contention of the Respondent that passengers were aware at the time of booking that a cancellation fee could be charged and that it is an integral part of the agreement does not alter this position. Section 66E(e) can be invoked only if the purpose of the agreement itself is to tolerate an act, and it does not apply where the agreement is to do an act and compensation is charged for default by one of the parties. This interpretation of the expression tolerating an act has also been accepted by the Board in its Circular with respect to GST. Even though the Appellant wrongly paid service tax on the compensation after availing abatement, once there is no charge of service tax at all, it is irrelevant whether abatement was availed or not - The demand of service tax on the cancellation fees cannot be sustained, the impugned order is set aside, and the appeals are allowed [Read less]

2026-VIL-1733-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax – Limitation for refund of accumulated CENVAT credit on export of services under Rule 5 of the CENVAT Credit Rules, 2004 - Appellant, engaged in providing Business Auxiliary Service and Business Support Service, filed a refund claim for a quarter under Rule 5 read with Notification No. 27/2012-CE (NT), part of which was rejected as time-barred by reckoning the relevant date as the date of the export invoice - Whether the refund claim of accumulated CENVAT credit attributable to export of services is partly barred by limitation - HELD - The issue of limitation is governed by Rule 5 read with Notification No. 27/2012-CE (NT). The Madras High Court has held that the limitation under Section 11B of the Central Excise Act, 1944 applies to refund claims under Rule 5. However, the relevant date in the case of export of services requires separate consideration, as Section 11B does not specifically prescribe a relevant date for such exports. The Larger Bench of the Tribunal held that the limitation of one year is to be reckoned from the last day of the quarter in which the foreign exchange is received. The Larger Bench did not dispense with the application of Section 11B but determined the relevant date for export of services in the context of Rule 5 and the applicable notification. The Respondent's contention that limitation must invariably be reckoned from the date of the export invoice cannot be accepted. The plea that the subsequent amending Notification is prospective does not, by itself, displace the principle laid down by the Larger Bench regarding determination of the relevant date - The issue is decided in favour of the Appellant and the impugned order is set aside to that extent - Service Tax – Refund of CENVAT credit attributable to invoices of unregistered premises - Respondent rejected part of the refund claim on the ground that the invoices pertained to unregistered premises, contending that registration is a mandatory condition under Notification No. 27/2012-CE (NT) - Whether the refund can be denied solely on the ground that the invoices pertain to unregistered premises - HELD - The issue is covered by the judgment of the jurisdictional High Court, which held that Rule 5 of the CENVAT Credit Rules, 2004 does not prescribe registration of the premises as a prerequisite for claiming refund of unutilised CENVAT credit attributable to exported services. The requirement concerning the jurisdiction of the authority to which the refund application is to be made cannot be construed as a prohibition against refund merely because the premises from which the services were exported were unregistered. The Tribunal decision relied upon by the Respondent cannot prevail over the binding decision of the jurisdictional High Court - The rejection of refund merely on the ground of non-registration of the premises is set aside, the Appellant is eligible for consequential relief as per law, and the appeal is disposed of accordingly. [Read less]

2026-VIL-1737-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax - Construction of Residential Complex Service - Sections 65(91a) and 65(105)(zzzh) of the Finance Act, 1994 - Builder or developer - Period prior to 01.07.2010 - Composite works contract - Appellant, engaged in construction of residential complexes, was alleged to have constructed a residential complex of more than the sanctioned number of units without payment of service tax, and the demand was confirmed with interest and penalties and upheld in appeal - Appellant contended that the additional units were created by buyers converting common rooms, that a developer was not liable before the Explanation to Section 65(105)(zzzh) was inserted with effect from 01.07.2010, and that the construction was a composite contract of goods and services - Whether the demand under Construction of Residential Complex Service is sustainable - HELD - The description of the Appellant as a developer or contractor is not conclusive, and the Department must establish that the activity answers the statutory description of the taxable service. The number of units was a factual dispute to be resolved on the basis of the sanctioned plan, building records and agreements. Alterations by purchasers cannot be attributed to the Appellant without evidence, and Revenue failed to discharge its burden. The Explanation inserted with effect from 01.07.2010 expanded the scope of the taxable service and cannot be applied retrospectively. Composite works contracts could not be taxed under the construction service categories prior to 01.06.2007, and for the subsequent period they could not be taxed under Construction of Residential Complex Service, which covers only services simpliciter. The sale of undivided shares of land and non-payment of VAT do not establish that the contracts were service contracts simpliciter. Strong suspicion and grave doubts cannot take the place of legal proof - Demand is not sustainable and is set aside - Service Tax - Sub-contract and petty job receipts - Construction of Residential Complex Service - Burden of proof - Receipts were treated as consideration for construction services on the ground that the Appellant did not produce documents showing that they related to activities distinct from the residential complex - Whether the demand on such receipts is sustainable - HELD - The absence of supporting documents does not dispense with the Department's obligation to establish the nature of the taxable service and the legal basis for the demand. The Department had not shown that specific documents were called for under summons and not produced. Composite works contracts cannot be taxed under the construction service categories merely by allowing an abatement. The impugned order does not establish that the receipts represented consideration for services simpliciter - Demand is set aside - Service Tax - Renting of Immovable Property Service - Section 65(105)(zzzz) of the Finance Act, 1994 - Small service provider exemption - Revenue contended that the property was let out for commercial purposes, whereas the Appellant contended that the rental income for the earlier year was below the threshold and that service tax was paid from December 2009 onwards - Whether the demand is sustainable - HELD - The mere fact that the property was let out for commercial purposes does not conclude the amount of tax payable. The eligibility for the exemption, the year-wise receipts and the tax paid required verification, and the Adjudicating Authority neither considered the contentions of the Appellant nor rebutted them with cogent reasons. In the absence of sufficient evidence, the benefit must enure to the Appellant. Considering the small duty and that the events occurred more than a decade ago, remand would impose a disproportionate burden - Demand is set aside - Service Tax - Extended period of limitation and penalties - Sections 73(1), 77 and 78 of the Finance Act, 1994 - Whether limitation requires separate determination and whether penalties survive - HELD - Since the demands are unsustainable on merits, limitation need not be separately determined and the penalties under Sections 77 and 78 cannot survive - Impugned order is set aside and the appeal is disposed of with consequential relief, if any. [Read less]

2026-VIL-204-GSTAT-RPR | Tribunal SGST

GST - Requirement of e-way bill for intra-State movement - Rule 138(14)(d) - State Notification - Appellant, a manufacturer of beverages, moved goods from one district to another by road on a tax invoice and the transporter's builty without an e-way bill - Appellant pleaded that the movement was intra-State, that it attempted to generate the e-way bill but could not because of a technical issue with the portal, and that dispatch was urgent - Whether an e-way bill was legally required for the movement - HELD - The movement is not outside the e-way bill regime merely because it is intra-State. The State Notification exempted intra-State movement generally but retained the requirement for specified goods, including beverages, moving from one district to another where the consignment value exceeded the prescribed threshold. The notification continued to operate on the date of movement, and prima facie generation of an e-way bill was required. The plea was one of complete non-generation and not of a minor clerical defect. The record contained no contemporaneous portal error, help-desk ticket or complaint, and no material supporting the claimed urgency. The interval of thirty minutes between invoice preparation and removal called for scrutiny but did not itself disprove the claim - The movement was prima facie subject to the e-way bill requirement and the pleaded technical failure and urgency were not established on the record, but the proceedings are not annulled on the footing that no contravention could arise - The appeal stands disposed ofrnrn rnrnIssue 2: Section 129(3) and (4) - Validity of adjudication - Opportunity of hearing and reasoned order - Effect of payment through DRC-03 - MOV-07 allowed seven days to show cause, yet MOV-09 was passed the next day, the copy of MOV-09 carried unselected alternatives and drafting placeholders in the part meant for reasons - Appellant had paid the penalty to secure release of goods and conveyance - Whether the penalty can be sustained on the adjudication actually undertaken under Section 129 - HELD - Section 129(4) prohibits determination of penalty under sub-section (3) without an opportunity of being heard, and the requirement is substantive, not ritualistic. The Supreme Court in ASP Traders held that even where the amount is paid and goods are released, the proper officer must pass a reasoned final order in MOV-09 after granting the hearing and upload the summary in DRC-07, and that payment cannot be treated as waiver. An authority exercising quasi-judicial functions must record clear and explicit reasons. MOV-09 did not disclose a clear consideration of the explanation, the documents said to have accompanied the goods or the basis of the final determination, and could not be treated as a completed speaking adjudication. The non-appearance of the Appellant before the Appellate Authority did not convert a non-speaking adjudication into a valid one, as the appellate authority was still required to examine the grounds. The payment cannot be treated as conclusive admission of legal liability - The penalty cannot be sustained on the adjudication actually undertaken, and the order in appeal and MOV-09 are set aside.rnrn rnrnIssue 3: Remand under Section 113(1) of CGST Act - Scope of remand in Section 129 proceedings - Defects in the adjudication related to hearing and reasons, while MOV-07 disclosed an intelligible allegation of movement of goods without an e-way bill - Whether the Tribunal should confirm the penalty, annul the proceedings, or remit the matter, and to which authority - HELD - It would not be appropriate to confirm the penalty solely because non-generation is admitted, or to grant final exoneration without a valid adjudication of the explanation and surrounding facts. Section 113(1) empowers the Tribunal to refer the case back to the original adjudicating authority with directions for fresh adjudication, after taking additional evidence if necessary. As the infirmity originates in the original determination and the matters are primarily factual and adjudicatory, remand to the original adjudicating authority is the appropriate course, since remand to the First Appellate Authority would not cure the foundational defect. The remand is confined to the allegation in MOV-07, with no new factual foundation or charge. The officer shall verify the documents actually produced at interception, examine the timing of the alleged portal attempts and the claimed urgency, and pass a fresh speaking order after an effective personal hearing, with DRC-07 as applicable. The amount paid shall abide by the fresh adjudication and is not a waiver of the right to contest the levy - The matter is remitted to the original adjudicating authority for fresh adjudication within the scope of that notice, with all contentions on merits kept open - The appeal stands disposed of [Read less]

2026-VIL-1183-TEL | High Court SGST

GST - Jurisdiction of officer to issue show-cause notice and adjudicate penalty proceedings under Section 122 - Proper officer for imposing penalties - Section 160 of CGST Act - Petitioner was subjected to investigation for issuing invoices without actual supply of goods. A show-cause notice was issued by the Additional Director of the investigating Directorate, and the Joint Commissioner passed the order-in-original imposing penalties under Sections 122 and 125. Both were issued prior to the Board's Circular assigning the functions of proper officer under Section 122 - Petitioner contended that no proper officer was assig... [Read more]

2026-VIL-199-GSTAT-KLK | Tribunal SGST

GST - Transitional credit under Section 140(1) of CGST Act, 2017 - Excess credit claimed in Table 5(a) of TRAN-1 over the closing balance in the last return under the existing law - Taxpayer explained that input service credit was inadvertently not reported and that the revised return was not accepted by the portal - Adjudicating Authority held the excess credit ineligible - The first appellate authority allowed the appeal on the footing of a procedural lapse - Whether the difference in transitional credit requires verification and the first appellate order can be sustained - HELD - It was undisputed that the credit shown in Table 5(a) of TRAN-1 exceeded the closing balance of CENVAT credit as per the ER-1 and ST-3 returns filed under the existing law. The difference requires thorough verification by the authorities concerned. The Respondent is directed to produce all relevant records without delay - The case is remanded to the Proper Officer/Adjudicating Authority only for this limited purpose, to pass a reasoned order on the basis of the verification.rnrn rnrnGST - Section 74(1) of CGST Act - Invocation of extended period on allegation of wilful mis-statement or suppression of facts - Taxpayer filed the TRAN-1 return more than once and informed the department of the mistake later - Adjudicating Authority held that the taxpayer wilfully suppressed information with mala fide intention to evade payment of tax - Whether notice under Section 74(1) is sustainable - HELD - Mere wrong or incorrect information does not, ipso facto, establish charges of wilful mis-statement. Section 74(1) can be invoked only where there is fraud or wilful mis-statement or suppression of facts to evade tax, as stated in Instruction No. 05/2023-GST. Such evidence should also be made a part of the show cause notice. Suppression of facts must be construed strictly and cannot be equated with ordinary non-declaration. It does not mean any omission, and the act must be deliberate and wilful to evade payment. Applying the ratio of the Tribunal's earlier decision in Power Tech Global, the charges of wilful mis-statement or suppression of facts were not established - The notice issued under Section 74(1) is not sustainable. [Read less]

2026-VIL-203-GSTAT-RPR | Tribunal SGST

GST - Section 129 of CGST Act, 2017 - Plea of non-service of MOV-07 - Appellant challenged the order imposing tax and penalty under Section 129 for goods carried without an e-way bill and submitted at the final hearing that MOV-07 was not served - Appellant had submitted a written representation seeking rejection of the notice and release of the vehicle - MOV-05 recorded service of MOV-07 on the person in charge - Whether the plea of non-service of MOV-07 is sustainable in view of Section 160(2) - HELD - The appeal papers acknowledged issuance of a notice preceding the demand and described the Appellant's letter as a reply seeking rejection of that notice. MOV-05 recorded service of MOV-07 on the person in charge, and MOV-09 also recorded the date of service. These recitals, corroborated by the Appellant's own pleading and its contemporaneous letter, establish issuance of the original notice and that the Appellant acted upon it - Absence of MOV-07 from the appellate record does not outweigh that cumulative evidence. Section 160(2) bars questioning service where the recipient has already acted upon the notice. The finding rests on the notice recitals and the admitted response, not merely on participation, payment for release or a presumed withdrawal. Section 160(2) is not used to supply a notice that never existed. The finding does not affirm the demand or dispense with consideration of the defence and the hearing required by Section 129(4) - The plea of non-service of MOV-07 is rejected and the issue stands concludedrnrn rnrnIssue 2: Detention of goods in transit under Section 129 - Movement without e-way bill - Claim of intra-district movement and subsequent diversion - Supplier issued an invoice to the Appellant for TMT bars giving the destination only as the State, and no e-way bill was generated for that leg - Appellant issued two further invoices to buyers in another State and generated e-way bills for the same vehicle - Vehicle was intercepted before the onward e-way bills were generated - Whether the dispute can be decided finally on the appellate record or calls for a confined remand, and whether intention to evade tax is required for Section 129 - HELD - Rule 138 requires the e-way bill to be generated before commencement of the movement for which it is required, and generation after commencement does not confer retrospective compliance. Delivery on the direction of a third person under Section 10(1)(b) of the IGST Act does not alter an existing transport instruction or dispense with the e-way bill for the subsequent movement. The place, time and route of interception, the original destination and the stage at which any diversion took effect could not be determined on the record. The original goods receipt was substantially unfilled, the time entry in MOV-09 was altered, and the order in appeal recorded a wrong date, vehicle and section. The first appellate conclusion therefore cannot be affirmed as a concurrent factual finding - Section 129(1) predicates detention on transport in contravention, whereas Sections 130(1)(i) and (iv) expressly refer to intention to evade. The explanation and the nature and seriousness of the breach must still be adjudicated, as penalty is not automatic. Section 107(11) does not authorise the first appellate authority to remand, whereas Section 113(1) empowers the Tribunal to refer the matter to the original adjudicating authority - The order in appeal and MOV-09 are set aside. The matter is remanded to the original adjudicating authority to resume from consideration of the Appellant's representation, on the existing MOV-07 and within the original allegation, without any new allegation or enhanced demand - Appeal partly allowedrnrn rnrnIssue 3: Payment made to secure release of goods under Section 129 - Treatment of amount paid - Appellant paid the tax and penalty demanded after its written representation to obtain release of the goods and conveyance, and thereafter challenged the order in appeal - Whether the payment made for release extinguishes the challenge or amounts to final determination of liability - HELD - Subsequent return filing supports disclosure of the onward invoices but does not erase a transit contravention, if established. Relying on the Supreme Court in ASP Traders, payment to obtain release following written objections neither extinguishes the challenge nor dispenses with a reasoned decision under Section 129(3). The amount paid is not a waiver or final determination of liability. It must be verified and reconciled against the fresh determination without duplication - The amount paid shall be credited against the fresh determination, with consequential adjustment or refund in accordance with law if the demand does not survive. [Read less]

2026-VIL-202-GSTAT-RPR | Tribunal SGST

GST - Section 129(1) of CGST Act, 2017 - Whether intention to evade tax is a pre-condition - Appellant purchased scrap from a supplier in another State and, while the goods were in transit, issued an onward invoice to a buyer for the same goods and vehicle - Vehicle was intercepted and penalty under Section 129(1)(a) was imposed and affirmed in first appeal - Appellant contended that the discrepancies were procedural lapses without intention to evade tax - Whether intention to evade tax is a jurisdictional pre-condition for action under Section 129(1) - HELD - Section 129(1) applies where goods are transported or stored while in transit in contravention of the Act or Rules - Mens rea need not be independently proved for this civil statutory penalty. Penalty is not automatic, because the authority must, consistently with Sections 129(3) and (4), consider the explanation actually offered and give reasons for accepting or rejecting it. Section 126(6) excludes the general penalty disciplines where the Act fixes a sum or percentage - Whether the discrepancy is substantive enough to attract Section 129 must still be decided on the facts and after considering the defence - Intention to evade tax is not an independent jurisdictional pre-condition under Section 129(1), and the alleged contravention must be assessed on its facts.rnrn rnrnIssue 2: Sale of goods during transit - E-way bill requirements under Rules 138 and 138A - Supplier's first e-way bill declared the Appellant's place as the destination and remained valid in time - Appellant issued an onward invoice for direct delivery and generated a second e-way bill showing its own place as the dispatch point although the goods had not reached that place - The second e-way bill had expired before interception, and no extension was shown - Vehicle was intercepted at a location on a different road, and no time-stamped tracking evidence of the route was produced - Whether the first e-way bill covered the diverted movement, whether the second e-way bill corresponded to the actual movement, and whether the defects were merely technical - HELD - Section 10(1)(b) of IGST Act, 2017 permits an intermediate purchaser to effect an onward supply without first taking physical delivery. It does not deem the destination in an existing e-way bill to have changed or dispense with Rules 138 and 138A. Once the actual destination had changed, the first e-way bill, though alive in time, no longer truthfully represented the destination of the movement being undertaken. The second e-way bill declared a physical dispatch which admittedly did not occur and had expired before interception, and no attempt at extension under Rule 138(10) was shown - An alternative map and the plea of more than one route did not displace the recorded place of interception. Matching goods, quantity and vehicle particulars do not establish continuity of journey without reliable transport evidence. Circular No. 64/38/2018-GST does not treat an expired e-way bill coupled with a materially incorrect dispatch point as a minor discrepancy - The discrepancies, considered cumulatively, are neither isolated nor merely technical and constitute substantive contravention attracting Section 129(1) - Penalty under Section 129(1)(a) is sustained and the appeal is dismissedrnrn rnrnIssue 3: Payment of penalty through DRC-03 to secure release under Section 129(5) - Appellant paid the penalty through DRC-03 so that the goods and vehicle were released and thereafter challenged the order - Whether payment for release amounts to a conclusive admission - HELD - Payment through DRC-03 to secure release does not waive the statutory appeal or constitute a conclusive admission. Section 129(5) deems proceedings in respect of the notice concluded upon payment. As explained by the Supreme Court in ASP Traders, that consequence does not foreclose a reasoned determination or appellate scrutiny where payment secures release while liability remains contested - The appeal is decided only on whether, at interception, the goods were being transported under a valid e-way bill truthfully corresponding to the actual movement. The order was examined on merits and called for no interference. The amount paid shall be credited against the liability without double recovery. [Read less]

2026-VIL-34-AAAR | AAAR SGST

GST – West Bengal AAAR - Scope of appellate jurisdiction under Sections 100 and 101 of the CGST Act, 2017 - Appeal cannot be decided on a materially altered factual matrix introduced at the appellate stage - Appellant, a manufacturer of soap bars weighing less than 500 grams marketed as laundry soap, sought a ruling on the applicability of the 5% rate under Sl. No. 251 of Schedule I. The AAR classified the product as laundry soap under tariff item 3401 19 42 and held it taxable at 18% GST under Sl. No. 66 of Schedule II - In the appeal, the Appellant produced a fresh test report obtained after the ruling, relating to a sample described merely as a brand soap, along with another soap bar in newly introduced packaging bearing the expressions Wash and Bath and Transparent Soap and no longer bearing the words Laundry Soap - Whether the appeal can be decided on the subsequently produced soap, its revised packaging and the fresh test report - HELD - The differences between the two products are not confined to the wrapper but are also discernible in description, labelling and physical appearance. The record contains no batch records, manufacturing formulae, raw-material particulars, specifications or comparative test results to establish that the composition and essential characteristics remained unchanged - The test report does not mention the batch number, the date of manufacture, the description on the wrapper or any other identifying particulars. In the absence of a documented link between the tested sample and the original product, the report cannot establish the identity or equivalence of the two products. An appeal under Section 100 lies against the Advance Ruling pronounced under Section 98(4), and under Section 101(1) the Appellate Authority may pass such order as it thinks fit, confirming or modifying the ruling appealed against. The jurisdiction relates to the ruling actually pronounced and the factual foundation on which it was rendered, and it does not contemplate the exercise of original jurisdiction over a materially different product - The subsequently produced soap, its revised packaging and the fresh test report introduce a materially altered factual matrix, and the classification and rate of tax applicable to that product do not fall for determination in the appeal. The Appellant may pursue such remedy as is available under law on the basis of a complete and consistent disclosure - The Appellate Authority refrained from examining the impugned ruling on merits. The appeal is rejected [Read less]

2026-VIL-1174-BOM | High Court SGST

GST - Rejection of appeal for shortfall in pre-deposit without notice - Principles of natural justice - The Petitioner challenged the order of the Commissioner (Appeals) rejecting its appeal against the demand of tax under reverse charge mechanism - Whether the Appellate Authority can dismiss an appeal for shortfall in pre-deposit without a defect memo, notice or opportunity of hearing, and without considering the amount already deposited - HELD - It was not in dispute that no defect memo, notice or opportunity was granted before dismissing the appeal. The amount deposited during investigation far exceeded the statutory am... [Read more]

2026-VIL-190-GSTAT-RPR | Tribunal SGST

GST - Duplicate e-way bills against same invoice - The Department noticed two e-way bills generated on different dates against each of two invoices and alleged that the later e-way bill in each pair represented another movement on which tax was not paid. The Appellant contended that there was one continuous movement and that the later e-way bills were generated only because the earlier ones expired during transit owing to delay, change of vehicle and trans-shipment - Whether the later e-way bills evidence separate consignments and additional outward supplies, and whether the Appellant discharged the evidentiary burden of showing continuity of the same consignment - HELD - A second e-way bill does not by itself create a presumption of a second taxable supply, and the burden of establishing short payment under Section 73 of the CGST Act, 2017 remains on the Department. However, it is a separate contemporaneous declaration of movement with its own number, validity and vehicle particulars. Facts about actual movement, trans-shipment and the reason for the later e-way bill are especially within the knowledge of the Appellant and its transporter, and the explanation must be tested against the transport record and the e-way bill history - Rule 138 provided for Part-B updating on change of conveyance and for extension of validity in exceptional circumstances including trans-shipment. For one invoice, the original e-way bill expired without extension and a fresh e-way bill showing the same dispatch place was generated after expiry. For the other invoice, the original e-way bill itself showed repeated vehicle updates and an extension, yet a new e-way bill declared a new vehicle, a fresh validity period and the full original distance, with changing GR dates and a pleaded route unreconciled with the declared distance. No delivery acknowledgment, transporter continuity statement, toll or GPS record or recipient confirmation was produced to establish that the same goods moved. The Appellant also failed to show that the tax on these supplies was reported and paid in the returns - The later e-way bills evidence separate consignments, and the demand of IGST under Section 73 is upheld – The appeal is dismissed - Interest and penalty on demand under Section 73 - Plea of absence of fraud or intention to evade - HELD - Section 73 applies to tax not paid or short-paid for reasons other than fraud, wilful misstatement or suppression, so absence of fraudulent intent does not neutralise a liability established under it. Interest is attracted under Section 50(1) - Penalty under Section 73(9) of ten per cent of the tax determined or the prescribed minimum, whichever is higher, does not call for interference, and the adjudicating authority confined the tax to less than proposed in the notice - The interest and penalty are upheld, the appeal is dismissed. [Read less]

2026-VIL-1745-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax - Exemption under Notification No.25/2012-ST to works contract services provided to local authority or governmental authority - Appellant executed composite turnkey works contracts for construction of water treatment and effluent treatment plants for a Public Health Engineering Department and Municipal Corporations and discharged service tax under the Works Contract (Composition Scheme) Rules, 2007, but continued to pay at the old composition rate after it was increased - Demands raised for three different periods were confirmed by the Adjudicating Authority and upheld by the Commissioner (Appeals), who ignored the plea of exemption under Sl. Nos. 12 and 13 of Notification No.25/2012-ST dated 20.06.2012 - Whether the Appellant is eligible for exemption in terms of Notification No.25/2012-ST - HELD - The Notification specifies that services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation or completion of a civil structure meant predominantly for use other than commerce, and of a pollution control or sewage treatment plant, are exempt from service tax. It is not the case of the Revenue that the Appellant's claim is incorrect, nor has the Revenue denied that the Appellant executed the works contracts for construction of water and effluent treatment plants for local authorities and governmental authorities. The replies to the Show Cause Notices and the Statement of Demand categorically stated that the Appellant was engaged in composite turnkey works contracts for such bodies, and these facts were never denied by the Department. The Commissioner (Appeals) very conveniently ignored this plea. The reference of a similar issue to the Larger Bench in another case need not be gone into, as the Appellant there had not undertaken works contracts for civic bodies. By virtue of the Mega Exemption Notification, the service tax liability on works contracts executed for local bodies and governmental authorities becomes exempt - The demands upheld in the impugned Order-in-Appeal cannot sustain and the appeals are allowed [Read less]

2026-VIL-1751-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - De novo adjudication on remand - Evidentiary value of Chartered Accountant's certificate and balance sheet – Appellant-society was alleged to have rendered Business Exhibition Service without payment of service tax - Earlier Tribunal order set aside the demand under Club and Association Services and remanded the matter only to verify the difference between the revenue sharing certified by the organiser and the receipts shown in the balance sheets, including grants received directly from the Government of India - On remand, the demand for earlier periods was dropped, but the demand for the period covered by the Show Cause Notice was confirmed on the differential amount, on the ground that the Chartered Accountant's certificate was not cogent evidence - Whether the Adjudicating Authority travelled beyond the remand order - HELD - The only direction in the remand order was to ascertain the difference between the revenue sharing certified by the organiser and the amount shown as receipt from the exhibition in the balance sheet. The observation of the Adjudicating Authority that a CA certificate is not conclusive evidence is cannot be accepted. It is settled law that books of account, balance sheets and Chartered Accountant's certificates are admissible documents for proof of their contents. The difference in the amount recorded in the books and in the income certificate was explained by the Appellant as arising from the accrual method of accounting, whereas taxes were paid on the actual amount received, and the Adjudicating Authority was silent on this submission. The impugned order was also silent on the earlier observation that service tax liability had been fully discharged by the organiser and the same amount cannot be charged twice. Sole reliance on balance sheet figures is not acceptable in the absence of any supporting evidence - The Adjudicating Authority travelled beyond the terms of the remand order and failed to observe judicial discipline. The order under challenge is set aside and the appeal is allowed [Read less]

2026-VIL-1750-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax - Goods Transport Agency services - Exemption for transportation of agricultural produce, services of hiring vehicles to other Goods Transport Agencies and reverse charge mechanism - Appellant-GTA issuing consignment notes, was served a Show Cause Notice for a financial year, and the demand, modified by the Commissioner (Appeals), was confirmed on the entire amount shown in the Income Tax Return - Whether the receipts of the Appellant are exempt or are liable to service tax in the hands of the Appellant - HELD - The Appellant received amounts against transportation of potato, which is an agricultural produce. Transportation of agricultural produce is exempt under Entry No.21(a) of Notification No.25/2012-ST dated 20.06.2012 - The amount received for giving vehicles on hire to other Goods Transport Agencies is distinctly covered and specifically exempted under Entry No.22 of the same Notification. The Appellate Authority confirmed the demand on the entire amount shown in the Income Tax Return without appreciating that the Appellant was engaged in transportation of goods - As per Notification No.30/2012-ST, the liability to pay service tax on GTA services provided to specified recipients, including a body corporate, is solely on the service recipient under the RCM - The Form-26AS indicating the names of the recipients is enough to prove that such recipients are body corporates. The Appellant, being the service provider, has no statutory liability to pay the tax on such services, and confirming the demand on it is contrary to the specified legal mandate - The receipts against agricultural produce and hire of vehicles are exempt and the confirmation of demand on the entire amount cannot be sustained on this ground - Service Tax - Computation of liability of Goods Transport Agency - Abatement under Notification No.26/2012-ST, threshold exemption under Notification No.33/2012-ST and penalties under Sections 77 and 78 of the Finance Act, 1994 - Appellant contended that, after excluding exempted receipts, the balance was eligible for abatement and threshold exemption, and submitted a calculation of the liability payable - Whether the demand is to be re-determined after abatement and threshold exemption and whether the penalties are sustainable - HELD - Under Notification No.26/2012-ST and its amendments, in the case of transportation of goods by a GTA, abatement is allowed on the amount received and service tax is leviable only on the remaining portion. The proceedings initiated for the preceding financial year were dropped by the Adjudicating Authority, and accordingly the Appellant is eligible for the threshold exemption from the aggregate value of services provided during the relevant financial year under Section 66B in terms of Notification No.33/2012-ST - Applying the exemptions, the threshold exemption and the abatement to the total receipts yields a substantially reduced taxable value, and the figures submitted by the Appellant may be verified and the demand along with applicable interest appropriated from the amount of pre-deposit - The penalties imposed under Sections 78, 77(1)(a), 77(1)(c) and 77(2) are set aside, the demand is modified subject to verification, and the appeal is partly allowed. [Read less]

2026-VIL-1732-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax – Show cause notice – Specification of statutory category – Outdoor Catering Service under Section 65(105)(zzt) of the Finance Act, 1994 – Appellant, registered for providing outdoor caterer's service, operated an on-site mess at the premises of the service recipient and did not pay service tax claiming exemption under Notification No. 22/2006-ST, which was alleged in audit to be ineligible, and the demand was confirmed with interest and penalties and upheld in appeal – Appellant contended that the show cause notices failed to specify the statutory category and that the lower appellate authority expanded the scope of the dispute by referring to a canteen – Whether the show cause notices were vitiated – HELD – The test is whether the notice disclosed the essential factual and legal foundation of the charge so that the assessee could reasonably defend itself. The Appellant was registered for providing outdoor caterer's service, and the charge was that it did not pay tax claiming the benefit of an ineligible exemption notification. The notice disclosed the foundation of the charge. The word canteen occurred only in the analysis of the submissions and did not expand the scope of the dispute – Contention rejected - Service Tax – Outdoor Catering Service – Sections 65(24), 65(76a) and 65(105)(zzt) of the Finance Act, 1994 – Continuous operation of mess at premises of service recipient – Appellant supplied food and beverages at the Staff College under an agreement, with consideration comprising collections from trainees and employees and subsidy from the service recipient – Appellant contended that continuous supply is not for a purpose or occasion, that the premises became its own place of business, that the trainees and employees were the recipients, and that the amount was the sale value of food – Whether the activity constitutes outdoor catering service – HELD – An outdoor caterer provides catering services at a place other than his own. Continuous operation of the mess does not make the premises the Appellant's own, as they continued to belong to and be provided by the Staff College. The contract was entered into with the Staff College, which provided the premises and subsidised the food, so that the Appellant was the service provider and the Staff College was the service recipient. The trainees and employees were merely the ultimate beneficiaries. The consideration cannot, merely because it was referable to food supplied, be treated as sale of goods, and service tax on outdoor catering is distinct from VAT on sale of food and beverages – The activity is taxable as outdoor catering service - Service Tax – Exemption – Notification No. 22/2006-ST – Services provided to the Reserve Bank of India – Appellant claimed exemption for outdoor catering services and relied on a certificate issued by the Staff College – Whether the benefit of the notification is available – HELD – The notification exempted services provided to the Reserve Bank of India only where it was liable to pay the service tax under Section 68(2) of the Finance Act, 1994 read with Rule 2 of the Service Tax Rules, 1994. Outdoor catering was not a service in respect of which the Reserve Bank of India was made liable under Section 68(2), so the condition was not satisfied. Rendering service to its establishment or payment of subsidies cannot dispense with the express condition, and the certificate cannot confer an exemption contrary to the statutory conditions – Denial of the benefit of the notification is upheld - Service Tax – Extended period of limitation – Proviso to Section 73(1) of the Finance Act, 1994 – Bona fide belief of non-taxability based on exemption notification and certificate – First show cause notice invoked the extended period, whereas the subsequent notice was issued within the normal period – Department alleged that the Appellant did not disclose its claim of exemption and the non-payment came to light only during audit – Whether the extended period can be invoked – HELD – Where taxability admits of two plausible views, extended limitation cannot be invoked in the absence of a positive and blameworthy act evidencing intent to evade. The bona fide belief of the Appellant, founded on the notification and the certificate, was not without basis, and the divergent views of the High Court and the Tribunal establish the interpretative nature of the issue. As no suppression or intention to evade is established, the demand is confined to the normal period – Demand beyond the normal period is set aside and the demand for the normal period is sustained - Service Tax – Penalty – Sections 76, 77 and 78 of the Finance Act, 1994 – Whether penalties are sustainable when the allegation of misdeclaration and the circumstances for invoking the extended period are not established – HELD – As these are not established, the requisite ingredients for penalty under Sections 76, 77 and 78 are absent – Penalties set aside - Service Tax – Interest and valuation – Section 75 and Section 67(2) of the Finance Act, 1994 – Appellant contended that gross receipts should be treated as cum-tax and that, absent principal liability, no interest arises – Whether interest is payable and cum-tax benefit is admissible – HELD – Once the liability for the normal period is sustained, interest under Section 75 follows as a statutory consequence of delayed payment. The Appellant is entitled to the benefit of Section 67(2) where the gross amount charged is inclusive of service tax, and the duty needs to be re-worked out – Interest is upheld on the surviving liability, the matter is remanded to the original authority only to re-quantify the demand and interest within 90 days, and the appeal is partly allowed. [Read less]

2026-VIL-200-GSTAT-RPR | Tribunal SGST

GST - Bill-to/Ship-to transaction - Section 10(1)(b) of IGST Act, 2017 - Rule 138(2) of CGST Rules, 2017 - Person responsible for generating e-way bill - Appellant supplied TMT bars from one State to another, and the invoices were issued to an intermediate purchaser as the "Bill-to" party and to the consignee as the "Ship-to" party - The consignee, who arranged the transport, generated the e-way bills before interception on invoices raised by the intermediary - The Tax Officer detained the vehicle on the ground that the actual seller had neither issued the invoice nor generated the e-way bill - Whether the transaction is a Bill-to/Ship-to transaction and whether the e-way bills generated by the consignee are valid - HELD - Section 10(1)(b) involves three persons, the consignor, the intermediate person and the consignee. In a Bill-to/Ship-to transaction the intermediate person directs the supplier to dispatch the goods directly to the ultimate recipient and thereafter raises a separate invoice for the onward supply. It is a recognised commercial practice and, by itself, not a contravention, provided the transactions are genuine, duly documented, appropriately accounted for and the tax liability is discharged - Under Rule 138(2), the consignor or the consignee who causes the movement is required to generate the e-way bill. The invoices recorded the party responsible for transport, and the consignee generated the e-way bills before interception. The intermediary may retain the original invoice and issue a separate invoice without disclosing the original supplier. All four invoices were e-invoices available on the portal and capable of verification by the department. The email correspondence and factory-gate records, which showed departure shortly before interception near the factory, supported the genuine movement - The transaction is held to be a Bill-to/Ship-to transaction, and the allegation that the actual supplier failed to generate the invoice and e-way bill is not sustainable – The appeal is allowedrnrn rnrn^Penalty under Section 129(1)(a) - Goods accompanied by invoices and e-way bills in Bill-to/Ship-to transaction - Appellant's reply to the department was not considered by the Assessing Officer or the Appellate Authority - Appellant contended that goods were accompanied by valid invoices and e-way bills, that penalty was imposed without following the procedure, and that intent to evade tax was not proved - Whether penalty under Section 129(1)(a) is maintainable - HELD - Since the case of the Appellant is covered by the Bill-to/Ship-to transaction and all necessary requirements were complied with, Section 129 is not applied. The vehicle was intercepted a short time after leaving the factory and at a short distance from it, which supports the genuine movement of the goods. The point regarding proof of intent to evade tax was not considered in detail - The impugned action is not sustainable in law, and the appeal is allowed. [Read less]

2026-VIL-1184-BOM | High Court SGST

GST - Limitation for appeal under Section 107(1) of the CGST Act, 2017 - Communication of adjudication order uploaded under 'Additional Notices and Orders' tab of GST portal - Adjudication order was uploaded on the portal under the 'Additional Notices and Orders' section instead of the 'View Notices and Orders' section, the Petitioner claimed to have become aware of it only later - The appeal filed thereafter was rejected by the first Appellate Authority as time-barred -Whether upload of the order under the 'Additional Notices and Orders' tab amounts to communication for the purpose of Section 107(1) - HELD - Section 107(1... [Read more]

2026-VIL-201-GSTAT-RPR | Tribunal SGST

GST - Section 129(1)(a) of CGST Act - Whether proof of intent to evade tax is required for penalty - Vehicles carrying goods under e-way bills were intercepted by the State Tax Officer after the e-way bills had expired, and penalty equal to twice the tax was imposed and paid for release - Appellant contended that penalty cannot be imposed in the absence of any finding of evasion of tax - Whether facts, circumstances or material showing intent to evade tax must be on record for invoking Section 129(1)(a) and imposing penalty - HELD - A taxing statute is to be strictly construed, and its intention must be gathered from the words used. Section 129(1) does not mention intent to evade tax as mandatory, unlike Section 130(1). Mens rea is not essential for imposing penalty for breach of civil obligations. Following the Calcutta High Court in Asian Switchgear, intent to evade tax is not necessary for imposing penalty under this section, as it is a civil liability - Proof of or facts, circumstances or material showing intent to evade tax are not required for invoking Section 129(1) or imposing penalty - The question of law is decided in favour of the Respondent-Deptrnrn rnrnIssue 2: Transportation of goods on expired e-way bills - Interstate stock transfer - Rule 138(10) - Circular No. 64/38/2018-GST - E-way bills were valid up to a date, and the vehicles were intercepted six days after their expiry, about a short distance from the destination - Appellant claimed that the vehicles had broken down and that the movement was a stock transfer between its own units - Whether the penalty under Section 129(1)(a) is sustainable - HELD - The validity of an e-way bill may be extended within eight hours from the time of its expiry. The Appellant produced no repair bills or other evidence of the alleged breakdown, though the vehicles belonged to its own unit. Neither the supplier, the recipient nor the transporter attempted to amend or extend the e-way bills in the six days, and the driver's lack of knowledge was no answer as the amendment could be made by those persons. The vehicles were intercepted only a short distance from the destination, which was a matter of hours. Stock transfer between distinct registrations gives no blanket permission for non-amendment of e-way bills. The Circular does not provide that no proceeding under Section 129 be initiated where an e-way bill has expired, because its exceptions apply where a valid e-way bill accompanies the goods. An adverse inference was drawn against the Appellant for not producing evidence which could have been produced - No satisfactory explanation for non-validation of the e-way bills within the prescribed period was found, and the penalty is sustained.rnrn rnrnIssue 3: Section 129(3) and (4) - Alleged non-compliance with notice, hearing and Circular No. 41/15/2018-GST - Appellant contended that MOV-01 and the order were passed on the same date, that no notice under Section 129(3) was given, that no opportunity of hearing under Section 129(4) was provided, and that copies of the forms were not supplied - Whether the alleged procedural lapses vitiate the penalty - HELD - The Appellant had full opportunity before the Tribunal to produce its explanation and documentary evidence for non-amending of the e-way bills. The Tribunal, being the final fact-finding authority, can consider the explanation. The Appellant offered no satisfactory explanation, and the procedural grounds therefore did not assist it - Both the appeals are rejected. [Read less]

2026-VIL-1754-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Cenvat credit of service tax paid on sales commission - Appellant sent goods to its depots on stock transfer basis under agreements with commission agents who procured orders, arranged dispatch and collected payments, and the Head Office distributed the credit of service tax on commission as Input Service Distributor - The Department alleged that services used beyond the stage of manufacture and clearance from the factory are not input services - Whether service tax paid on commission to agents for sale of goods through depots qualifies as input service and whether the credit distributed by the Input Servi... [Read more]

2026-VIL-193-GSTAT-PYG | Tribunal SGST

GST - Penalty under Section 129(3) for transport of goods without e-way bill, Requirement of intent to evade tax - Appellant was transporting motorcycles accompanied by a valid e-invoice carrying the invoice reference number, QR code and the engine and chassis number of each unit, but no e-way bill was produced - First Appellate Authority upheld the demand holding that Section 129 creates strict liability irrespective of intent - Whether penalty can be sustained for the sole omission of an e-way bill where the transaction is accompanied by a genuine e-invoice and there is no evidence of tax evasion - HELD - The question is to be answered by reference to the statute as it stood on the date of interception. Before its amendment with effect from 01.01.2022, Section 129(6) provided that where tax and penalty were not paid, further proceedings shall be initiated in accordance with Section 130, which confines confiscation and penalty to goods dealt with intent to evade payment of tax. Section 129 as it then stood was therefore the first step of a process leading into a section built around intent - The Allahabad High Court, interpreting the same unamended provision, has consistently held that intent to evade tax is a necessary condition. The decision of the Supreme Court applied to a differently worded sales tax statute with no such link and involved a deliberate scheme, and is distinguishable - The motorcycles were uniquely identifiable by engine and chassis numbers, their sale required registration with the transport authorities – Further, the e-invoice matched the returns, tax had already been paid at the time of purchase, physical verification found no mismatch. There is nothing on record suggesting concealment of the goods, their value or destination, while the explanation for the lapse was specific and verifiable - The First Appellate Authority erred in relying on the later amended version of Section 129, which treats the provision as one of strict liability and did not apply to the transaction - Intent to evade tax was a necessary condition for imposing penalty under Section 129 for the transaction, and the penalty for the sole omission of the e-way bill cannot be sustained and set aside – The appeal is allowed - Passing of the penalty order within a short time of the show cause notice and demand of tax a second time on the same consignment - Violation of Section 75(4) and principles of natural justice - Show cause notice and detention order were served on the Appellant, who deposited the demanded amount under protest, and the final order under Section 129(3) was passed within less than an hour of the notice - Whether passing the penalty order within such a short time after the show cause notice is a fatal defect - HELD - Though Section 129(3) as it then stood did not prescribe any time limit, the word "shall" in Section 75(4) makes it mandatory to grant an opportunity of hearing where an adverse decision is contemplated. Effectively no time was afforded to respond to the notice, and it was neither physically nor legally possible for the adjudicating authority to have applied its mind to the explanation of the Appellant or the traceability of the motorcycles within that time. The failure to provide a reasonable opportunity of hearing is a fatal defect, and the haste renders the order a jurisdictional nullity - Demanding tax a second time under Section 129(1)(a) on the same consignment, when the tax had been discharged through returns, amounts in substance to double taxation, and levy of an additional penalty is contrary to the statutory scheme - The orders of the FAA and the Adjudicating Authority are set aside and the appeal is allowed. [Read less]

2026-VIL-192-GSTAT-RPR | Tribunal SGST

GST - Maintainability of appeal under Section 112(1) against an order-in-original passed under Section 73(9) while the first appeal under Section 107 remains pending - Appellant filed an appeal in Form GST APL-05 challenging the original adjudication order, while its first appeal in Form GST APL-01 against the same order was still pending before the Appellate Authority - Whether an appeal under Section 112(1) is maintainable directly against an order-in-original when an appeal under Section 107 against that order remains pending and no appellate or revisional order is challenged - HELD - Section 107(1) provides the first appeal against an order of the adjudicating authority, while Section 112(1) permits an appeal to the Tribunal only against an order passed under Section 107 or Section 108. The statutory sequence places original adjudication before the Appellate Authority and an appellate or revisional order before the Tribunal. The right of appeal is statutory and requires clear authority of law, and want of jurisdiction cannot be cured by consent - The officer who passed the impugned decision acted as an adjudicating authority and not as an appellate or revisional authority. Neither the filing nor the pendency of the first appeal converts the original decision into an order under Section 107 - The procedural power under Rule 24(4) of the GSTAT (Procedure) Rules, 2025 cannot enlarge the category of appealable orders prescribed by Section 112(1). The defect is jurisdictional and not a defect of presentation, so rectification of the description of the respondent, uploading of missing documents or proof of deposit cannot make an original adjudication order directly appealable - The request for protection against recovery cannot confer appellate jurisdiction on the Tribunal. The question whether the deposit satisfies Section 107(6) and the extent of protection under Section 107(7) are for the competent authority - The filing is rejected as not maintainable and registration as a regular Tribunal appeal is declined [Read less]

2026-VIL-1756-CESTAT-AHM-CU | CESTAT CUSTOMS

Customs – Larger Bench - Binding effect of the judgment of the High Court on the Larger Bench and maintainability of the reference - Advance Authorisation, Non-compliance of pre-import - Interest, confiscation, redemption fine and penalty on non/delayed payment of IGST under Section 3(7) read with Section 3(12) of the Customs Tariff Act, 1975 for the period prior to the amendment effective from 16.08.2024 - Appellants imported goods under an Advance Authorisation claiming exemption from integrated tax and compensation cess, subject to the pre-import condition - Appellants deposited the tax along with interest and obtaine... [Read more]

2026-VIL-1758-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs – Valuation of old and used machinery – Redetermination on overseas enquiries and expert opinion – Appellant imported old and used printing machines, which were examined, valued by Chartered Engineers and cleared on payment of duty on enhanced assessable values, and the Respondent later rejected the values and redetermined them under the Customs Valuation Rules on the basis of values received through COIN offices and the report of two experts of an Institute – Appellant contended that the redetermination was arbitrary and that its request for cross-examination of the experts was ignored – Whether the redetermination of value and the consequent differential duty on the seized machines, the machines cleared earlier and the machine cleared provisionally are sustainable – HELD – Of the enquiries claimed with several COIN offices, only a single letter was produced, which had no reference to the Bill of Entry or the details of the machines and no documentary back up, so its evidentiary value is nil - The expert report did not show the qualification of the experts or the authority of the Institute to determine the price of second-hand machines, and gave an approximate value directly without the original value, usage, present value or method adopted, which makes it a hollow report devoid of any technicality - Ignoring the request for cross-examination of the experts is a blatant disrespect of the principles of natural justice - The re-valuation is arbitrary and without corroborative and cogent documentary evidence, and the differential duty on all the machines is set aside - The machine cleared on provisional assessment was also subjected to a demand without finalising the assessment, and no case of enhancement of value was made out - The appeals are allowed - Customs – Confiscation and redemption fine – Sections 111(m), 124 and 125 of the Customs Act, 1962 – Seized machines released provisionally and machines cleared earlier in the normal course – Respondent confiscated the machines and imposed redemption fine on the ground of undervaluation, though a notice under Section 28 alone had been issued – Whether confiscation and redemption fine can be sustained without a notice under Section 124 and for machines not available for confiscation – HELD – Where goods are seized and released provisionally, confiscation requires a notice under Section 124, which serves a purpose distinct from a notice under Section 28 for recovery of duty. No such notice was issued for the machines provisionally released, and confiscation was also based on the undervaluation which stands discarded - The machines cleared earlier after assessment were not available for confiscation and were not shown to be cleared under bond, so no redemption fine can be imposed under Section 125, as held by the Larger Bench - The confiscation and the redemption fine are set aside - Customs – Extended period of limitation – Section 28 of the Customs Act, 1962 – Suppression alleged on the basis of subsequent undervaluation of machines assessed by Customs – Show cause notice invoked the extended period for machines which were examined and assessed by Customs officers with Chartered Engineer's certificates on record, and some Bills of Entry were beyond five years from the date of notice – Whether the extended period was available to the Respondent – HELD – The goods were released after the Bills of Entry were assessed by Customs officials on the basis of Chartered Engineer's certificates which were considered, and hence no suppression can be alleged, particularly as the undervaluation has gone uncorroborated - Where all material particulars are disclosed and within the knowledge of the assessing authority, the extended period cannot be invoked, as it is an exception to the normal rule and cannot compensate for the delay on the part of the Department - The demand under the extended period is time barred and is set aside - Customs – Penalty – Sections 112 and 114A of the Customs Act, 1962 – Penalty on importer and on the Directors, alleged to be concerned in undervaluation – Whether penalties survive where the demand and confiscation have been set aside – HELD – Since the confirmed demands and confiscation are not sustainable, the question of imposing penalty on the importer does not arise, and as the case against the importer does not survive, the penalties on the Directors under Section 112(a) and (b) also do not survive - The penalties and the impugned order are set aside, and the appeals are allowed with consequential relief as per law. [Read less]

2026-VIL-1739-CESTAT-ALH-CU | CESTAT CUSTOMS

Customs – Challenge to enhancement of declared value accepted by the importer through a letter of acceptance - Appellant imported polyester knitted fabrics under Bills of Entry, and the Respondent rejected the declared value under Rule 12 of the Customs Valuation Rules, 2007 on the basis of contemporaneous import data, whereupon the Appellant, whose requests for provisional clearance were not acted upon, submitted letters of acceptance, and the Commissioner (Appeals) rejected the appeals holding that no speaking order under Section 17(5) of the Customs Act, 1962 was required - Whether the appeals were correctly rejected on the ground that the Appellant accepted the enhancement of value in writing at the time of clearance - HELD - Rule 12(2) mandates that the proper officer must intimate to the importer in writing the grounds for doubting the truth or accuracy of the declared value, and this mandate cannot be ignored or waived. Formation of opinion regarding reasonable doubt and communication of the grounds is mandatory, and a subterfuge to bypass the statutory mandate is unacceptable. The facts are similar to the case before the Supreme Court where repeated requests for provisional assessment were ignored and the importer was forced to submit a letter of acceptance. The letters of acceptance do not mention any details of the alleged contemporaneous import data, and there is a wide gap which has not been bridged by the Respondent, so their contents cannot be taken at face value. Under Section 17(5), the waiver is confined to the speaking order which the proper officer is obliged to pass, and it does not deprive the importer of the statutory right to question the correctness of the decision of the proper officer, whether on the formation of opinion or on merits. A valuation addition based solely on NIDB data is unwarranted and any reassessment must be supported by independent and cogent evidence. The Commissioner (Appeals) failed to take into account the ratio of the Supreme Court judgment in its entirety, and the issue is squarely covered by the judgment of the Delhi High Court - The impugned orders are not sustainable in law, and all the appeals are allowed [Read less]

2026-VIL-195-GSTAT-CTT | Tribunal SGST

GST - Section 16(2)(c) read with Sections 41 and 42 of the CGST Act - Eligibility of input tax credit not reflected in GSTR-2A, Condition of payment of tax by the supplier - Credit availed in GSTR-3B exceeded the credit available in GSTR-2A - Show cause notice under Section 73 led to a confirmed demand - First Appellate Authority admitted additional credit on the basis of the reconciliation statement and updated GSTR-2A and sustained the balance - Appellant contended that non-population of invoices in GSTR-2A does not imply non-payment of tax by suppliers - Whether credit on invoices not populated in GSTR-2A can be denied under Section 16(2)(c) when the Appellant has not shown payment of tax by the suppliers - HELD - Section 16(2) lays down cumulative mandatory conditions, and clause (c) makes payment of the tax charged on the supply a condition for entitlement, subject to Section 41. Credit taken under Section 41 is merely provisional and not absolute and remains subject to the statutory conditions and restrictions. Section 42 allows the recipient to reduce the liability when the supplier subsequently declares the invoice - Though non-population of invoice details is not conclusive proof of non-payment of tax, the statute recognises non-disclosure as non-payment and disclosure as payment, so non-disclosure of invoice details in the prescribed manner means that tax has not been paid - The burden of proving eligibility lies on the claimant under Section 155. The Appellant admitted in its reconciliation statement that the invoices had not been uploaded by the suppliers and did not make any credible effort to prove payment of tax at the adjudication stage, the first appeal stage or before the Tribunal, so remand for a further opportunity is not justified - The communication of the discrepancy through scrutiny under Section 61 substantially met the requirement of communicating the unmatched credit. Omission of Section 42 does not alter the scheme, as the amended Section 41 provides for reversal and reclaim of credit with interest, and the earlier provision applies to the year in dispute - The demand of tax upheld in the order of the FAA is confirmed – The appeal is disposed of - Computation of interest on ineligible credit and levy of interest based on Rule 36(4) not proposed in the show cause notice - Interest was computed in the order of the FAA on the tax demand confirmed on unmatched credit and also on provisional credit availed in excess of the limit in Rule 36(4) - Appellant contended that Rule 36(4) has no legal backing in view of Section 41 and that the levy of interest was not indicated in the show cause notice, relying on Section 75(7) - Whether interest can be levied by applying Rule 36(4) and how the interest liability is to be computed - HELD - Rule 36(4) only places a limit on availing provisional credit in excess of the credit available in GSTR-2A and does not make the provisional credit absolute. Credit remains reversible in the event of non-payment of tax by the supplier, and interest is due from the date the credit is availed ineligibly to the date it is refunded by way of addition to the output liability or otherwise - Levy of interest on the amount of provisional credit availed in excess of the limit in Rule 36(4) was not contemplated in the show cause notice, and is outside the scope of the original adjudication - Interest under Section 42(8) is mandatory and incidental to recovery of ineligible credit, so Section 75(7) does not prevent its levy even if it was not proposed in the notice. Interest on the confirmed tax demand was not computed strictly as per Section 42(8), which requires invoice-level matching to specify the invoices not populated, the date of receipt and the input tax involved - The order relating to interest is set aside and remanded to the Adjudicating Officer for fresh computation strictly as per Section 42(8) after identifying the invoices not populated, the interest levied on the basis of Rule 36(4) is deleted. [Read less]

2026-VIL-194-GSTAT-AGR | Tribunal SGST

GST - Validity of proceedings under Section 130 for unaccounted goods found during inspection - Adjudicating Officer imposed penalty and fine in lieu of confiscation under Section 130(2) of the CGST Act - FAA set aside the orders holding that seizure and confiscation cannot be made for unaccounted goods and that proceedings under Section 73/74 should be launched - Revenue filed appeals against the setting aside of tax, penalty and fine - Whether the FAA rightly set aside the tax, penalty and fine imposed under Section 130(2) - HELD - Section 35(1) requires registered persons to keep true and correct accounts, and Section 3... [Read more]

2026-VIL-1752-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - CENVAT Credit on capital goods, inputs and input services where both dutiable and exempted goods are manufactured - Appellant, a manufacturer of biscuits valued under Section 4A, where biscuits below a specified retail price are fully exempt under Notification No.03/2006-C.E. , was issued a Show Cause Notice for reversal of CENVAT Credit on the ground that it manufactured both dutiable and exempted goods and had irregularly taken credit on capital goods, inputs and input services - Appellant contended that credit on capital goods cannot be denied unless the goods are exclusively used in the manufacture of exempted goods, and that credit on inputs and input services was taken only in proportion to dutiable goods - Whether the demand for reversal of CENVAT Credit is sustainable - HELD - As per Rule 6(4) of the CENVAT Credit Rules, 2004, CENVAT Credit is not allowable on capital goods only when they are exclusively used in the manufacture of exempted finished goods. The Appellant has admittedly been manufacturing dutiable as well as exempted goods, and the Department has failed to come out with any documentary evidence that the Appellant was in fact not manufacturing dutiable goods. The demand on capital goods therefore stands set aside on merits. As regards inputs and input services, the credit availed is a very small amount when compared with the huge turnover of the Appellant, and this itself shows that it represents only the proportionate credit taken in respect of dutiable goods. There is no reason to uphold the confirmed demand even in respect of inputs and input services - The demand is set aside on merits - Extended period of limitation for demand of CENVAT Credit - Suppression of facts - Appellant took CENVAT Credit at fifty percent in the year of receipt and the balance in the next financial year, and contended that all details were recorded in the RG-23C Register and disclosed in the monthly Returns filed with the Department, so that the Department was aware of the credit taken - Whether the extended period could be invoked for the demand of CENVAT Credit - HELD - The Appellant has disclosed all the details of the credit taken in its RG-23C Register as well as in the ER-1 Returns. A perusal of the ER-1 Return filed for one of the months shows that credit has been taken on inputs and capital goods during the said period and that the utilization has also been shown. No case of suppression of facts or wilful mis-statement is made out against the Appellant - The confirmed demand for the extended period is set aside on account of time bar, and the appeal is allowed [Read less]

2026-VIL-1757-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs - Re-export of goods re-imported for repair - Substitution of freshly manufactured goods for re-imported goods - Appellant exported goods which were received in damaged condition by the foreign buyer and sent back to India for rework, and cleared the re-imported goods without payment of duty under an exemption Notification on executing a bond and bank guarantee, on the condition that the goods would be re-exported after repairs - Instead of re-exporting the reworked goods, Appellant exported freshly manufactured goods of the same quality in view of the urgent requirement of the overseas buyer, and the shipping bill made no mention that the goods were being re-exported - Whether the Appellant, by exporting freshly manufactured goods in place of the re-imported goods, fulfilled the condition of the Notification so as to escape the demand - HELD - The Notification No. 158/95 CUS dated 14-11-1995 requires the importer to execute a bond undertaking to export the goods after repairs or reconditioning within the specified period and to pay on demand on failure to comply, which makes it clear that the goods to be re-exported are the very goods re-imported into India for which permission was granted to take up repair work and to re-export within the specified time. Nothing in the Notification permits normally manufactured goods to be substituted for the re-imported goods and exported against them - The shipping bill did not mention that the goods dispatched were the re-imported goods after rework, and had this fact been disclosed, the Assistant Commissioner at the Port would have caused necessary verification as to whether the goods being re-exported were the same ones repaired and reconditioned at the factory of the Appellant. This factual evidence could not be verified since the Appellant failed to mention it in the shipping bill - The decision relied upon by the Appellant concerned drawback on re-exports of scrap and was on a completely different issue, while the other decision turned on different facts and was not applicable - The Appellant did not fulfil the requisite condition of the Notification - The appeal is dismissed [Read less]

2026-VIL-1753-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Classification, Point of taxation - Tax payable on receipt basis and not on accrual - Show Cause Notice issued under Commercial or Industrial Construction Service - Plea that the services rendered were Works Contract Service - Demand for the period 2006-07 to 2008-09 under Commercial or Industrial Construction Service - Appellant contended that many of its contracts were completed much before the period and should not have been included in arriving at the demand, and that the SCN was time barred for most of the period - Whether the demand was correctly quantified, having regard to the amounts actually receive... [Read more]

2026-VIL-1755-CESTAT-MUM-ST | CESTAT SERVICE TAX

Service Tax - Refund of tax paid on services to educational institutions: limitation and maintainability without challenging self-assessment - Exemption for auxiliary educational services under Sl. No. 9 of Notification No.25/2012-ST – Refund claim of service tax paid on housekeeping and canteen/outdoor catering services provided to educational institutions – Appellant filed refund claims on the ground that the services were exempt as auxiliary educational services, after the Board by a Circular clarified the position on a representation made by the Appellant - The Commissioner (Appeals) counted the period of one year from the date of the Board's clarification and held the claims within time, against which the Revenue appealed, whereas the Appellant contended that the tax was paid under protest and that limitation could not bar the claims - Whether the refund claims are barred by limitation and are maintainable - HELD - The Notification No.25/2012-ST was effective from 01.07.2012, the Appellant continued to collect and pay service tax and file ST-3 returns, and raised no contest until the representation to the Board. A Circular can clarify but cannot modify an assessment, and the Board is not the prescribed appellate authority against a self-assessment - It is settled law by the Apex Court that even a self-assessment is an assessment order, and no refund claim is maintainable until it is set aside in appellate proceedings, and this law applies to service tax refunds as well. A refund proceeding is not an appeal and the authority cannot sit in appeal over the assessment - The decisions relied upon by the Appellant on limitation were rendered much before this settled law and dealt only with limitation where duty was paid under a mistaken belief of law. The representation to the Board and the clarification issued cannot be equated with appellate proceedings, and the refund claims were not even maintainable - The submissions on limitation are rejected, the appeals filed by the Appellant are dismissed, and the appeals filed by the Revenue are allowed - Service Tax - Bar of unjust enrichment under Section 11B of the Central Excise Act, 1944 as made applicable to service tax - Credit notes issued to service recipients - Rule 6 of the Service Tax Rules, 1994 - Appellant claimed refund of service tax collected on housekeeping and canteen/outdoor catering services to educational institutions, and contended that the issue of credit notes for the tax collected showed that the incidence of tax was borne by it - Commissioner (Appeals) held that in canteen/outdoor catering the real consumers were the students and faculty members, the educational institutions refused to share fee and pricing information, and the Appellant failed to prove that the incidence of tax was not passed on, and therefore ordered the amount to be credited to the Consumer Welfare Fund - Whether the bar of unjust enrichment applies and whether the issue of credit notes or Rule 6 takes the claims outside it - HELD - The sine qua non for a refund under Section 11B is that the claimant establishes that the incidence of tax has not been passed on to any other person, and the burden lies on the claimant. The buyer in clause (e) of the proviso to Section 11B(2) is not restricted to the first buyer and can be a buyer downstream. A credit note issued after the payment of tax and clearance, and relied upon to show that the burden was not passed on, raises a doubt and cannot be accepted as a reliable document - The argument that Rule 6 of the Service Tax Rules, 1994 takes refunds of service tax outside the bar of unjust enrichment has been answered by the High Court, which held that post-clearance adjustments such as credit notes do not help the assessee to get over the bar under Section 11B - The Appellant failed to prove that the incidence of service tax was not passed on to the students and faculty members who ultimately bore the burden - The bar of unjust enrichment applies, the appeals filed by the Appellant are dismissed, and the appeals filed by the Revenue are allowed. [Read less]

2026-VIL-1735-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax – Taxability of amount realised from transporters for short delivery and damage of cement as Declared Service under Section 66E(e) of the Finance Act, 1994 - Appellant realised amounts from transporters for failure to deliver the actual quantity of cement or in good condition as per the agreement, and the Respondent treated the recovery as Declared Service, being an obligation to refrain from an act or tolerate an act or a situation, and demanded service tax with interest and penalties - Whether the amount realised from the transporters as compensation or liquidated damages is chargeable to service tax as Declared Service under Section 66E(e) - HELD - The realisation of a small amount for loss suffered by the Appellant on account of failure of the transporters to deliver the actual quantity of cement is in the form of liquidated damages and cannot be considered as consideration for rendering any service. The freight and the amount realised relate to services by way of transportation of goods and not to tolerating an act of the transporter. Services by way of transportation of goods by road, other than those of a goods transportation agency or a courier agency, fall under the negative list under Section 66D(p), and once a service falls under the negative list, the activity cannot be classified as a Declared Service. The Appellant had already paid service tax on the freight paid to the transporters under Section 68(2) read with Rule 2(d)(i)(B), and the amount realised forms part of the value on which tax was paid, so tax cannot be demanded again on the same amount. Amounts collected as penalty or liquidated damages for breach of contract are not consideration for any service, and the contention that such compensation is synonymous with tolerating an act or situation is not acceptable. Under the Explanation to Section 67(1), only the amount payable for a taxable service is consideration - The decisions relied upon by the Appellant are squarely applicable, the demand of service tax with interest under the category of Declared Service is not sustainable and is set aside - Service Tax – Penalties under Sections 78, 77(1)(a) and 77(2) of the Finance Act, 1994 - Respondent imposed penalty under Section 78 on the demand, and penalties under Section 77(1)(a) and Section 77(2) for violation of provisions of Section 70 - Whether the penalties are imposable on the Appellant - HELD - As the demand is not sustainable and the allegation of non-payment of service tax is not sustained, no penalty is imposable under Section 78. The penalty under Section 77(1)(a) is upheld. The penalty under Section 77(2) is also upheld as it has been imposed for violation of provisions of Section 70 - The penalty under Section 78 is set aside, the penalties under Sections 77(1)(a) and 77(2) are upheld. [Read less]

2026-VIL-1761-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Liability to pay service tax on transportation of goods by road under reverse charge - Appellant rendered transportation of goods by road service to four body corporates, and the consignment notes and bills specifically mentioned that the service tax was to be paid by the recipients, who also gave declarations that they had discharged service tax on RCM basis - Principal Commissioner confirmed the demand under GTA service on the Appellant - Whether the Appellant is liable to pay service tax on the transportation service when the recipients paid the freight and fall within the categories mentioned in the Notification - HELD - As per the Notification No. 30/2012-ST, dated 20.06.2012, in respect of transportation of goods by road, the liability to pay service tax is on the person who pays the freight, if the receiver falls within any of the categories mentioned therein including a body corporate. The recipients paid the freight and are body corporates, and therefore they are liable to pay service tax on RCM basis. Demanding service tax from the Appellant again would amount to double taxation on the same amount - The demand of service tax along with interest is set aside.rnrn^Validity of demand based on ITR data received from Income Tax Department - Show Cause Notice was issued on the entire amount shown in the ITR data without mentioning any particular service provided by the Appellant, and without any investigation carried out by the Department - Whether service tax can be charged on the turnover shown in the ITR without verifying the nature of service rendered - HELD - The notice alleged non-payment of service tax on the entire amount shown in ITR irrespective of the nature and character of services. Service tax cannot be charged on the turnover shown in the ITR without verifying whether the Appellant has rendered any taxable service or not. There must be a specific allegation with reference to the nature of service rendered - The demand based on the ITR data is not sustainable.rnrn^Invocation of extended period of limitation where demand is raised on the basis of ITR data - Appellant was registered under the Finance Act, 1994, and the demand was raised on the basis of ITR data received from the Income Tax Department - Whether the extended period of limitation is invocable in the absence of suppression - HELD - As the demand was raised on the basis of ITR received from the Income Tax Department, there cannot be any allegation of suppression of any fact by the Appellant with intent to evade payment of service tax - The demand of service tax confirmed by invoking the extended period of limitation is not sustainable.rnrn^Non-compliance with pre-show cause notice consultation - Board instruction made pre-show cause notice consultation mandatory by the Principal Commissioner or Commissioner prior to issue of show cause notice in cases involving demands above the specified threshold, except preventive or offence related notices - Show Cause Notice was issued without such consultation - Whether the order is liable to be set aside for non-compliance with the instruction - HELD - The instruction for conducting consultation by the adjudicating authority with the assessee prior to issue of the notice is mandatory, and the case of the Appellant does not fall within the exclusion provided in the instruction. This is an important step towards trade facilitation and promoting voluntary compliance and to reduce the necessity of issuing show cause notice. Since the notice was issued without pre-consultation, the impugned order is liable to be set aside on this ground also, as held by the High Court.rnrn^Imposition of penalties under Sections 77 and 78 of the Finance Act, 1994 - Penalty was imposed under Section 78 along with a penalty under Section 77 for violation of provisions under Section 70 - Whether penalty is imposable when the demand of service tax is not sustained and no suppression is established - HELD - As the demand of service tax is not sustained and no suppression of fact is established, no penalty is imposable on the Appellant under Section 78 - The penalty under Section 78 is set aside, while the penalty imposed under Section 77 for violation of provisions under Section 70 is upheld and the appeal is disposed of accordingly. [Read less]

2026-VIL-1177-MAD | High Court VAT

Tamil Nadu Value Added Tax Act, 2006 – Classification of Dupatta - Pre-assessment notices were issued and assessments were framed classifying the goods as taxable. The Assessing Authority rejected the Petitioner's claim of exemption under Entries 3 to 10 of Part A of the IV Schedule and did not quote any rival entry. The first appellate authority and the Tribunal confirmed the levy on the basis that a dupatta is worn only along with the main garment and cannot be sold separately, and classified it under Entry 49 of Part B of Schedule I relating to fibres - Whether the dupatta is classifiable under Entry 49 of Part B of S... [Read more]

2026-VIL-189-GSTAT-LCK | Tribunal SGST

GST - Road restoration charges paid to Public Works Department - Whether consideration for supply of service under Sections 2(31) and 7(1) of CGST Act, 2017 - The Appellant, engaged in supply of natural gas through a pipeline network, received permission from the Public Works Department to lay the pipeline, subject to payment of charges for road restoration. The Appellant paid tax under reverse charge mechanism on these charges and applied for refund under Section 54, which was rejected - Appellant contended that the charges are compensatory in nature, like liquidated damages for damage to public property, and lack the contractual reciprocity required for a supply - Whether road restoration charges paid to the PWD constitute consideration for a supply of service under Sections 2(31) and 7(1) of the CGST Act, 2017 - HELD - Section 2(31) defines consideration broadly to include any payment made in respect of, in response to, or for the inducement of, the supply of services. The transaction is distinct from a unilateral wrongful act or an award of post-injury civil damages. The Appellant entered a planned administrative arrangement and voluntarily applied for permission to cut open constructed public roads. The Public Works Department performs a distinct physical asset repair service to return the dug-up roads to their baseline state, and the fee is calculated on the structural volume of the work required. This establishes bilateral transactional reciprocity. The payment is not passive compensation for breach of contract under Circular No. 178/10/2022-GST but a direct fee for service - The case laws on unilateral wrongful acts, breach of contract or court-awarded damages and Circular No. 178/10/2022-GST on liquidated damages are distinguishable, as there is no breach of contract and the payment is a direct fee for service - The charges are consideration for supply of service and on this ground, the contention of the Appellant is rejected and the appeal is dismissed - GST - Exemption for services in relation to functions under Articles 243G and 243W of the Constitution - Notification Nos. 12/2017-Central Tax (Rate) and 14/2017-Central Tax (Rate) - Road restoration charges paid by a business entity - Whether the services are treated as neither a supply under Section 7(2) nor exempt - HELD - Routine upkeep of public roads is a function of local government. However, Notification No. 14/2017 excludes activities only where the government acts as a public authority performing sovereign duties for the collective populace. Where the Public Works Department executes request-driven repairs connected to the pipeline rollout of a commercial entity, it steps out of its generic sovereign capacity. Entry 6 of Notification No. 12/2017 excludes in clause (d) any service provided by the Government or local authority to business entities - An exemption notification must be construed strictly according to its text, and the expression "in relation to" cannot be stretched to override the explicit proviso. Taxability is governed by the nature of the recipient and the transactional context, and not by whether the work is original construction or restoration. The GST law differentiates between services to common citizens and services to commercial entities, and the request of a business entity for the work does not alter this - The services are not covered by Notification No. 12/2017 or 14/2017 and the claim of exemption is rejected - GST - Reverse charge on services supplied by Government or local authority to business entity - Notification No. 13/2017-Central Tax (Rate) - Plea of dual tax incidence and revenue neutrality - Refund under Section 54 of tax paid under reverse charge - HELD - Under Notification No. 13/2017, any taxable service supplied by the Government or a local authority to a business entity located in the taxable territory must be taxed under reverse charge by the recipient. There was no clear proof on record that the Public Works Department raised a tax invoice under forward charge or deposited tax for this permit. The statutory framework cannot be bypassed by abstract claims of revenue neutrality or double tax incidence. Tax paid by the Appellant under reverse charge was a valid statutory payment, and the First Appellate Authority committed no error in confirming the rejection of refund - The Appellant is liable to pay tax under reverse charge and the refund is not admissible - GST - Validity of Show Cause Notice and Order-in-Original - Absence of Document Identification Number - Vagueness of notice and breach of natural justice - The Appellant contended that the notice and order were issued without a DIN, that the notice was vague and travelled beyond its scope, and that natural justice was violated - HELD - The notice clearly detailed the factual and legal grounds on non-applicability of Notification No. 14/2017 to request-driven commercial road cutting. The Appellant understood the inquiry, as shown by its exhaustive point-wise reply, leaving no room for a plea of surprise or prejudice. The entire refund and dispute workflow, including application, notice, reply, processing and final order, was processed through the authenticated electronic GST portal. There is no doubt regarding the identity, source, integrity or authenticity of the documents issued by the proper officer. The mere absence of a physical DIN does not invalidate the adjudication, violate natural justice, or extinguish the tax liability - The contentions on DIN, vagueness of notice and natural justice are rejected - GST - Refund sanctioned in other States on identical facts - Binding effect - The Appellant contended that its registrations in other States were granted refunds under identical facts and that the department cannot take an inconsistent approach - Whether such refund orders bind the Tribunal - HELD - A refund sanction order passed by a proper officer in one State jurisdiction does not operate as a binding precedent or res judicata over an independent proceeding before the Appellate Authority of another State. If the officer allowed refund overlooking the restrictive criteria of Entry 6 of Notification No. 12/2017, such an erroneous order has no binding value, as the Tribunal is bound to apply the law as enacted - The reliance on refund orders of other States is rejected, the appeal is dismissed and the Order-in-Appeal is upheld. [Read less]

2026-VIL-188-GSTAT-SRT | Tribunal SGST

GST - Assignment of leasehold rights of industrial plot allotted by GIDC - Taxability as supply of service - The Respondent assigned the leasehold rights in a plot allotted by the industrial development corporation to a third party. Show Cause Notice alleged that the transaction was supply of service classifiable as "Other Miscellaneous Services" taxable under Sr. No. 35 of Notification No. 11/2017-CT (Rate) - First Appellate Authority set aside the demand following the jurisdictional High Court - Whether GST is leviable on assignment of leasehold rights of a plot allotted by the industrial development corporation - HELD -... [Read more]

2026-VIL-1175-RAJ | High Court VAT

Central Sales Tax – Concessional rate of tax on inter-State sales for Micro and Small Enterprise under notification issued under Section 8(5) of the Central Sales Tax Act, 1956 - Respondent-assessee established an industrial unit and, a few years later, another unit at a different place more than 500 kms away, both registered as small enterprises under the MSMED Act, 2006, and the assessing authority clubbed the investment in plant and machinery of both units, held that the limit was exceeded, denied the concessional rate under the notification, and levied differential tax, interest and penalty, which the Tax Board set aside - Whether the unit set up at a different place would be a different enterprise so as not to club its investment in plant and machinery for determining the status of Micro and Small Enterprise - HELD - The Explanation inserted in the notification by the amendment provides that, for ascertaining the status of Micro and Small Enterprise, the investment made in plant and machinery in different enterprises set up under the same ownership shall not be clubbed. The Industries Department had also clarified that the MSMED Act does not provide for clubbing of investments of different enterprises set up by the same person or company for classification as micro, small and medium enterprises, and the provisions for clubbing of investment of units had been withdrawn. Unless mutual dependence between two units is established, they cannot be clubbed together, and the absence of common funding and financial flow-back makes clubbing unjustified. An exemption notification should be liberally construed once the entrepreneur fulfils the eligibility criteria, and no condition should be read into it when there is none. The Petitioner failed to establish that the two units had common interest in the business of each other or common funding and financial flow-back, and mere ownership by the same assessee does not establish mutuality of business interest - The investments in the two enterprises are to be treated as separate, and since neither enterprise exceeded the prescribed investment limit, the assessment orders denying the concessional rate are legally unsustainable - The order of the Tax Board suffers from no illegality, perversity or jurisdictional error, and the revision petitions are dismissed [Read less]

2026-VIL-187-GSTAT-CHE | Tribunal SGST

GST - Pre-deposit for appeal before Tribunal - Section 112(8)(b) of CGST Act, 2017 - Adjustment of excess pre-deposit made under Section 107(6) - The Appellant had deposited ten per cent of the entire demand while filing the first appeal. The FAA remanded a part of the demand and upheld the rest. The Registry raised a defect for non-payment of pre-deposit under Section 112(8). The Respondent contended that a further ten per cent of the remaining tax in dispute must be paid separately "in addition to the amount paid under sub-section (6) of section 107" - Whether a further deposit is required when the amount deposited under Section 107(6) exceeds the cumulative pre-deposit under Sections 107(6) and 112(8) computed on the tax surviving in dispute - HELD - The measure under Section 112(8)(b) is the tax in dispute "arising from the said order" and "in relation to which the appeal has been filed". The words "in addition to the amount paid under sub-section (6) of section 107" fix a cumulative quantum, being ten per cent at the first stage plus a further ten per cent at the second stage on the tax in dispute in the present appeal. The Act does not require a fresh challan, nor does it bar reckoning an amount already lying with the Revenue against the same demand - Pre-deposit is not a separate levy but a portion of the disputed tax itself, and the requirements under Sections 107(6) and 112(8) are not watertight compartments - The Respondent's construction would require the Revenue to refund the excess with interest and the Appellant to re-deposit the same money, a circular exercise that serves no revenue purpose. This view is supported by the decisions of the High Courts and the GSTAT, and by CBIC Circular No. 224/18/2024-GST, which allows adjustment of advance payments towards pre-deposit under Sections 107 and 112 and binds departmental officers - The pre-deposit requirement stands satisfied and the defect is cured. The proper officer shall map the appropriated amount against the demand, the First Appellate Authority shall generate FORM GST APL-04 and the Registry shall admit the appeal after compliance – Ordered accordingly [Read less]

2026-VIL-197-GSTAT-BLR | Tribunal SGST

GST - Input tax credit under Section 16(2)(c) of the CGST Act, 2017 - Demand under Section 73(9) on the sole ground that the suppliers had not paid the tax to the Government - Appellant contended that a bona fide purchaser cannot be denied credit for the default of the supplier, relying on decisions of the Calcutta High Court and the jurisdictional High Court reading down Section 16(2)(c) - Whether, after the decision of the Supreme Court dismissing the special leave petitions against the judgment upholding Section 16(2)(c), the provision can be read down in favour of a bona fide purchaser - HELD - Section 16(1) confers the entitlement to credit and Section 16(2) conditions it, with cumulative conditions opening with a non obstante clause. The Supreme Court, with reasons, held that the Delhi VAT Act and the CGST Act rest on different statutory schemes, that Sections 41, 73 and 74 provide a framework under which a purchaser may re-avail credit once the supplier discharges the tax, and that there is no ground to hold Section 16(2)(c) unconstitutional or to read it down - Where the Supreme Court gives reasons, the law stated in those reasons is a declaration under Article 141 and binds all courts and Tribunals - The jurisdictional High Court rendered its judgment before the Supreme Court pronounced on the question, and the Tribunal is bound to apply Section 16(2)(c) as enacted and upheld - An honest purchaser is not without remedy, as Circular No. 183/15/2022-GST enables the purchaser to establish the supplier's payment by a certificate for 2017-18 and 2018-19, and the proviso to Section 41(2) permits re-availing the credit once the supplier pays the tax - Section 16(2)(c) applies as enacted and cannot be read down, and payment of tax to the supplier, however well proved, does not by itself satisfy the clause. The Appellant must prove that the suppliers paid the tax to the Government - The appeal is disposed of - Burden of proving payment of tax by the suppliers for the year 2018-19 and Circular No. 183/15/2022-GST - Notice for the mismatch - First Appellate Authority held that a certificate from the supplier was required as the difference per supplier was below the prescribed limit and none was produced - Appellant contended that the demand rested on a mere comparison of GSTR-3B with GSTR-2A and that the Adjudicating Authority did not apply the Circular - Whether the Appellant has proved, as Section 155 requires, that the suppliers paid the tax - HELD - A shortfall in GSTR-2A does not by itself establish that the supplier failed to pay the tax, as GSTR-2A is a facilitator for self-assessment and not an instrument of assessment, and neither Section 16(2)(aa) nor Rule 36(4) was in force during that year - The Circular does not dispense with Section 16(2)(c) and does not shift to the Department the burden placed by Section 155 on the claimant, but prescribes the manner of discharging that burden. The Appellant produced no certificate from either supplier or an accountant, no return of the supplier and no letter to the supplier, and nothing explains why a supplier paid in full through the bank could not be approached - Mere production of invoices or payment through the bank is not enough, and Section 155 states the same principle in express terms – However, the contention that the adjudication was mechanical has substance since the Circular binds the Department and a demand on a bare comparison of the returns without following it is liable to be set aside - The First Appellate Authority applied the Circular and informed the Appellant what was required, the Appellant still produced nothing before the Tribunal. A party complaining of a procedural lapse must show real prejudice, which is not shown - The condition in Section 16(2)(c) is not satisfied, and this finding by itself sustains the demand - Plea of genuine purchase and evidence of movement and receipt of goods - Whether the Appellant has established its plea that the goods actually moved from the supplier and were received by it - HELD - The plea must be established by the party raising it. An e-way bill was mandatory for the inter-State movement above the prescribed value, and it is the contemporaneous record connecting the invoice with a vehicle carrying the goods to a stated destination. Physical movement is to be proved by details of the vehicle, payment of freight charges and acknowledgement of taking delivery. The e-way bill was within the reach of the Appellant, and its unexplained non-production weighs against the claim that the goods moved as the invoice states. The subsequent movement of the goods to the place of export is equally unrecorded. The export documents, in the absence of any record linking them with the supplier's invoice and without explanation of the difference in description, classification and rate of tax, do not establish the link - Even if receipt were proved, it would go only to Section 16(2)(b) and cannot establish that the supplier paid the tax. The finding does not confirm the demand on a new ground barred by Section 75(7), as the demand rests on Section 16(2)(c) and the finding only answers the plea of the Appellant - Absence of an e-way bill does not defeat credit in every case, but where a recipient relies on the genuineness of an inter-State purchase above the threshold value, the e-way bill is the primary evidence of movement, and if it is not produced and its absence is not explained, movement must be proved by other reliable contemporaneous evidence - The plea of genuine purchase fails - Confirmation of tax, interest under Section 50(3) read with Rule 88B(3) and penalty under Sections 73(9) and 122(2)(a) - Adjudicating Authority directed recovery of interest at applicable rates without any working or finding on utilisation, and imposed penalty at the statutory minimum under each enactment - Whether the tax, interest and penalty are payable - HELD - Tax is sustained for the reasons recorded on the failure to prove payment by the suppliers, including the portion relating to the supplier for which no material was produced. Interest is compensatory and follows the tax, and Section 50(3) levies interest on credit wrongly availed and utilised, with Rule 88B(3) prescribing that interest runs from the date of utilisation to the date of reversal or payment and that credit is treated as utilised when the balance in the electronic credit ledger falls below the amount wrongly availed. The liability to interest is upheld, but the grievance about computation is well founded as the order records no working and no finding on utilisation - Penalty under Section 73(9) is mandatory at ten per cent of the tax or the prescribed minimum, whichever is higher, and does not depend on fraud or intent to evade, which are the province of Section 74, so the absence of such a finding does not assist the Appellant - The demand of tax and the penalty are upheld, and interest is payable on the credit wrongly availed and utilised - The appeal is dismissed. [Read less]

2026-VIL-196-GSTAT-LCK | Tribunal SGST

GST – Rejection of appeal on account of non-appearance - Demand on input tax credit confirmed ex parte on the basis of mismatch between GSTR-3B and GSTR-2A - The First Appellate Authority rejected the appeal as the Appellant did not appear due to medical issues - Whether the order of the First Appellate Authority is sustainable when the substantive dispute on the credit was not examined - HELD - The non-appearance before the adjudicating or appellate authority cannot, in the peculiar facts of the case, be treated as sufficient to conclude the proceedings without consideration of the substantive dispute. Sufficient cause has to be considered in the context in which the party was proceeded against, which is the material date on which the appeal was disposed of - The medical certificate is accepted. The order of the First Appellate Authority does not adequately address the issue, does not reveal that the details of the case were examined on merit and does not record reasons on the material having a bearing on the tax liability - The case is decided on its merits on the facts presented before the Tribunal - Mismatch of GSTR-3B and GSTR-2A for the year 2017-18 - Verification procedure under the CBIC Circular dated 27.12.2022 - Appellant relied on a Chartered Accountant certificate issued during the pendency of the appeal, which the Respondent opposed because it was issued after the appeal was filed - Whether the alleged mismatch required examination in accordance with the verification procedure under the Circular and whether the certificate issued later can be considered - HELD - The difference between GSTR-3B and GSTR-2B or GSTR-2A requires examination, but it cannot in isolation be conclusive proof that credit was wrongly availed. It has to be appreciated in the context of the invoices, books of account, supplier particulars, payment records and other material forming part of the transaction - Since the dispute pertains to 2017-18, the verification approach under the Circular is relevant, as it facilitates examination of discrepancies by reference to the underlying transaction and supplier-side records instead of treating the numerical difference as determinative. The Circular requires a certificate where the difference exceeds the prescribed limit, and applies to cases where adjudication or appeal proceedings are still pending. The certificate is admissible as corroborative material because its subsequent date does not by itself render it inadmissible, particularly when the matters certified can be correlated with the books, invoices, returns and other contemporaneous records - The matter cannot be allowed to linger indefinitely for want of a proactive and responsive approach of the Respondent - The orders of the First Appellate Authority and the Adjudicating Authority are set aside to the extent challenged, and the consequential demand of tax, interest and penalty is set aside - The appeal is allowed by way of remand. [Read less]

2026-VIL-191-GSTAT-RJK | Tribunal SGST

GST - Confiscation under Section 130 of the CGST Act - Order passed on the same day as the notice - Breach of natural justice - Goods were intercepted in transit without the Appellant's invoice and e-way bill, and were detained under Section 129(1). The adjudicating authority issued a notice under Section 130 allowing seven days to show cause and directing appearance at a fixed time on the same date, and passed the confiscation order on that very date, recording that no objections were filed - Whether an order of confiscation passed on the same day as the notice, which itself allowed seven days for reply, satisfies Section... [Read more]

2026-VIL-1740-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs – Absolute confiscation of gold seized in a town seizure under Sections 111(b), 111(d) and 111(p) of the Customs Act, 1962 - Gold bars were recovered from a person intercepted at a railway station, who stated that he was acting on the directions of the Appellant and that the gold was smuggled, while the Appellant claimed ownership and produced the purchase invoice reflected in the GSTR-2A of the Appellant, with the gold being sent for manufacture of jewellery, and the Respondent ordered absolute confiscation and imposed penalties, which were set aside by the Commissioner (Appeals) in view of the demise of the App... [Read more]

2026-VIL-1738-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs – Liability of Power of Attorney holders of a deceased sole proprietor for duty, interest, penalty and fine - Appellant was a proprietorship concern whose sole proprietor expired before issuance of the Show Cause Notice, which was served on the sons of the proprietor who held Power of Attorney and managed the business - Whether the authorised signatories of the deceased sole proprietor can be held liable to pay duty, interest, penalty and fine - HELD - Section 2(26) of the Customs Act, 1962 defines importer to include any owner, beneficial owner or any person holding himself out to be the importer. Beneficial owner under Section 2(3A) means any person who exercises effective control over the goods being imported. The son of the proprietor, in his statement under Section 108, acknowledged that he exercised effective control of the business as Power of Attorney holder and is therefore the beneficial owner. The objection to admissibility of the statements is not sustainable as the documentary evidence recording both sons as Power of Attorney holders prevails over oral testimony, and the Appellant could not falsify it - The authorised signatories holding Power of Attorney can be held liable for imports effected during the lifetime of the proprietor through them, and the issue is decided against the Appellant - Customs – Rejection of declared transaction value on the basis of NIDB data – Respondent rejected the declared value of imported watch movements under Rule 12 of the Customs Valuation Rules relying on NIDB data and a single foreign invoice, while the Appellant had mis-declared the quantity imported - Whether the rejection of declared value and enhancement of assessable value by referring to NIDB data is correct in law - HELD - Section 14 of the Customs Act, 1962, as amended, provides that the value of imported goods shall be the transaction value, that is the price actually paid or payable, which can be discarded only in the circumstances stipulated therein. The Respondent produced no evidence that the transaction value differed from the declared value or that the NIDB value pertained to similar products. The single foreign invoice relied upon was not part of the record and reliance on it violates the Valuation Rules. Mere NIDB data cannot form the basis of rejection of transaction value, and the burden was upon the Respondent to prove that the price paid or payable was at the enhanced rate - The declared value was wrongly rejected and enhanced. However, as the Appellant acknowledged the incorrect declaration of quantity, duty is payable on the undeclared quantity at the declared value per piece - Customs – Enhancement of value of past consignments on the basis of rejection of value of live consignments - Respondent enhanced the value of past Bills of Entry on the basis of the rejection of declared value in the live consignments - Whether the rejection of declared value of live consignments can form the basis of enhancement of value of the past consignments - HELD - The value per piece was rightly declared by the Appellant and the Respondent could not produce better evidence to reject it. The enhancement of value of the past Bills of Entry was founded only on the observations with respect to the live Bills of Entry, and once those findings are set aside, the enhancement is not sustainable - The order enhancing the value of past Bills of Entry is set aside in favour of the Appellant - Customs – Confiscation of goods of live and past consignments – Goods covered by past Bills of Entry had already been cleared - Whether the imported goods of live as well as past consignments are liable to confiscation - HELD - The confiscation of goods of past Bills of Entry was confirmed only because of the observations with respect to the live Bills of Entry, and since those findings are set aside, the confiscation is also liable to be set aside. The goods of past consignments were already cleared, and the order of confiscation of such goods has no legs to stand upon - The confiscation is set aside in favour of the Appellant - Customs – Penalty under Sections 112(a)(ii), 114A and 114AA of the Customs Act, 1962 – Appellant mis-declared the quantity of goods imported, which was an acknowledged fact - Whether the penalties are imposable under Sections 114A and 114AA of the Customs Act - HELD - As the admitted difference in quantity is huge, it is difficult to believe any bona fide. Penalty under Section 112(a)(ii) is not imposable as the present is not a case of confiscation. The penalty under Section 114AA is upheld on account of the admitted mis-declaration. Since the conclusion on valuation does not warrant penalty on the differential duty, the remaining penalty is not sustainable - The penalty under Section 114AA is upheld, the remaining penalty is set aside, and the appeal is partially allowed. [Read less]

2026-VIL-1742-CESTAT-DEL-CE | CESTAT CENTRAL EXCISE

Central Excise - Manufacture - Body building activity on fully built motor vehicles - Admissibility of exemption under Notification No. 12/2012-CE (S. No. 276 read with Condition No. 27) - Appellant engaged in body building on motor vehicles, received fully built motor vehicles, carried out certain modifications such as mounting tipper bodies and fixing side panels, doors and windows, and cleared them to customers claiming exemption treating the activity as body building on chassis - Adjudicating authority held that the activity amounted to manufacture of body of motor vehicle or parts and accessories, denied the exemption, confirmed the duty demand and imposed penalties - Whether the activities undertaken on fully built motor vehicles amount to manufacture under Section 2(f) of the CEA, 1944 read with the Chapter Note to Chapter 87, and whether the exemption is admissible - HELD - Goods are to be assessed to central excise duty in the form in which they are cleared. The documents of clearance themselves described the items as fully built motor vehicles - Mere addition of value is not sufficient to conclude that manufacture has taken place. If the fully built motor vehicles were cleared after modification, it must be established that the Appellant started with something other than a fully built motor vehicle before the activity can be treated as manufacture. Otherwise the Appellant has only refined or remade the existing motor vehicles, and whether such activity amounts to manufacture under Section 2(f) is the first point of determination. The impugned order does not determine whether the activities qualify as manufacture. Even if the activities amount to manufacture by virtue of the Chapter Note to Chapter 87, the starting point of manufacture must be the building of body on the chassis in the form it was received. If the activities were not in relation to building body on chassis, it needs to be determined whether the Chapter Note applies and whether the activities constitute manufacture at all. In the absence of any consideration of the issue of manufacture and excisability of the goods in the form in which they were cleared, the matter requires reconsideration along with the admissibility of the exemption notification – The appeal is allowed by remand - Central Excise - Extended period of limitation - Section 11A of the Central Excise Act, 1944 - Invocation for demand on clearances of body built motor vehicles under claim of exemption - Appellant 1 was registered with the department for a long time, regularly paid duty, filed returns and was subjected to departmental assessment, scrutiny and audit - Department invoked the extended period on the allegation of intent to evade payment of duty for the period beyond the normal period and the demand was confirmed - Whether the extended period of limitation could be invoked for making the demand - HELD - It is not the case of the Revenue that something was actively suppressed by the Appellant. The Appellant was registered, filed returns as prescribed and its records were audited from time to time. The Appellant was clearing the same or similar goods after undertaking these processes in the past also, without any objection by the Revenue authorities. Merely because the authorities changed their opinion in respect of the clearances, the Appellant cannot be said to be suppressing facts with intention to evade payment of duty. The Appellant undisputedly entertained a bonafide belief that the goods cleared were exempt from payment of duty for the long period. In the absence of fraud, collusion, wilful misstatement or suppression of facts with intent to evade payment of duty, invocation of the extended period is unwarranted, in light of the pronouncement of the Hon'ble Supreme Court. The decisions relied upon in the impugned order are distinguishable - Extended period of limitation could not have been invoked and the demand, if any, should be limited to the normal period of limitation under Section 11A of the Central Excise Act, 1944 - Central Excise - Penalty under Section 11AC of the Central Excise Act, 1944 - Imposition on Appellant 1 for short payment of duty on clearances of body built motor vehicles - Penalty equal to the confirmed duty was imposed on Appellant 1 under Section 11AC on the ground of suppression with intent to evade duty - Whether the penalty under Section 11AC is sustainable where the charge of suppression and intent to evade payment of duty is not upheld - HELD - The penalty under Section 11AC is attracted only where the short payment or non-payment of duty is by reason of fraud, collusion, wilful misstatement or suppression of facts with intent to evade payment of duty. As the charge of suppression, misstatement etc. with intent to evade payment of duty cannot be upheld for invoking the extended period of limitation, the penalty imposed on Appellant 1 in terms of Section 11AC cannot be upheld, as clarified by the Hon'ble Supreme Court distinguishing the issues of recovery, interest and penalty arising under Sections 11A, 11AA, 11AB and 11AC - Penalty imposed on Appellant 1 under Section 11AC set aside - Central Excise - Penalty under Rule 26 of the Central Excise Rules, 2002 - Imposition on Appellant 2, the Executive Director of Appellant 1, for acts of commission and omission leading to short payment of duty - Penalty was imposed on Appellant 2 under Rule 26 and was challenged in appeal as not legal and not sustainable - Whether the penalty on Appellant 2 under Rule 26 is sustainable - HELD - No case is made out against Appellant 2 for imposition of penalty under Rule 26, specifically when it is not found that duty was being evaded by resorting to fraud, collusion, suppression or misstatement with the intent to evade payment of duty - Penalty imposed on Appellant 2 under Rule 26 set aside and the appeal of Appellant 2 is allowed. [Read less]

2026-VIL-1736-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax – Demand for period up to 30.06.2012 – Non-classification of service under sub-clauses of clause (105) of Section 65 of the Finance Act, 1994 – Appellant carrying on business as mechanical, civil and refractory contractor, was registered for three taxable services and filed ST-3 Returns - Department compared gross receipts in audited Balance Sheets and Form 26AS with the taxable value declared in the returns, treated the entire difference as suppressed value and issued a show cause notice, which was confirmed in adjudication along with interest and penalties – Whether a demand raised without classifying the service under a specific sub-clause of Section 65 is sustainable – HELD – In the positive list regime existing up to 30.06.2012, it is mandatory to classify the service under the specific sub-clauses of clause (105) of Section 65. The annexure to the notice merely aggregates job contract bills, labour contract and machine hire charges appearing in the Balance Sheet, deducts the value declared in the ST-3 Returns and taxes the difference, without classifying the service rendered under a particular sub-clause. In the absence of classification, the Appellant is denied the opportunity of demonstrating whether it is liable to service tax at all. A notice which does not disclose the charge and the correct classification of the service is not a notice in the eye of law. The issue is no longer res integra, as it has been held that where the notice and the adjudication order are vague as to the taxable service, the demand is not sustainable and no demand can be confirmed unless the person concerned is put on notice of the exact liability – Demand of service tax confirmed for the period prior to 30.06.2012 is not sustainable and is set aside - Service Tax – Demand for period from 01.07.2012 – Negative list regime – Non-invocation of Section 66B of the Finance Act, 1994 – Show cause notice issued after introduction of the negative list described the demand by reference to the erstwhile positive list categories and invoked only Sections 66, 67, 68, 69 and 70, with the impugned order also confirming violation of Sections 66, 67, 68 and 70 – Whether a demand for the period after 01.07.2012 is sustainable when the charging provision, Section 66B, has not been invoked in the notice – HELD – With effect from 01.07.2012, service tax is leviable on the basis of the negative list, and Section 66B became the charging section for levying service tax on the value of all services other than those specified in the negative list. The provisions of Section 66B must therefore be invoked for such a demand, which has not been done in the notice. A demand cannot be sustained upon repealed or inapplicable provisions, and the notice did not put the Appellant on notice of the provisions applicable for the period after 01.07.2012. Findings traversing beyond the scope of the show cause notice are unsustainable. A defective show cause notice cannot be cured by giving a finding in the impugned order by the adjudicating authority. As the notice has not specified the category for the period prior to 30.06.2012 and has not invoked Section 66B for the period after 01.07.2012, the entire demand is legally unsustainable on this ground itself, and there is no need to go into the merits of the demands – Demand for the period after 01.07.2012 is not sustainable and the order is set aside - Service Tax – Extended period of limitation – Proviso to Section 73(1) of the Finance Act, 1994 – Demand founded solely on the difference between value declared in ST-3 Returns and gross receipts in Balance Sheets and Form 26AS – Notice invoking the extended period was issued against the Appellant, a registered assessee who filed ST-3 Returns throughout the period and paid service tax, without any enquiry from service recipients or examination of work orders, invoices or agreements – Whether the extended period of limitation can be invoked where the demand rests only on a comparison of returns with Balance Sheets and Form 26AS – HELD – Audited Balance Sheets are statutory documents and Form 26AS is generated from the records of the Department's own sister wing, and nothing was concealed. The Appellant was a registered assessee, filed ST-3 Returns and paid service tax during the period. The impugned order records no evidence of intent to evade at all. Where the demand is raised on the basis of Form 26AS or third-party income tax data without investigation at the Appellant's end or independent verification, the demand is unsustainable and the extended period of limitation is not invocable, as consistently held by the Tribunal – Demand of service tax confirmed by invoking the extended period of limitation is not sustainable - Service Tax – Interest and penalty – Sections 75, 77 and 78 of the Finance Act, 1994 and late fee under Rule 7C of the Service Tax Rules, 1994 – Confirmation of interest, penalties and late fee along with the demand of service tax – Whether interest and penalties survive when the demand of service tax is not sustained – HELD – As the demand of service tax is not sustained, the question of demanding interest or imposing penalty does not arise – Interest and penalties are set aside, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law. [Read less]

2026-VIL-33-AAAR | AAAR SGST

GST – Telangana AAAR - Exemption under Sl. No. 3 and Sl. No. 3A of Notification No. 12/2017-Central Tax (Rate) - Recipient condition - Sub-contractor supplying manpower to Principal Contractor – Appellant-sub-contractor engaged for operation and maintenance of water supply projects awarded by the State Government to the Principal Contractor, contended that its supply is a pure service exempt under Sl. No. 3 or a composite supply with goods not exceeding 25% of value exempt under Sl. No. 3A - Whether the services supplied by the Appellant to the Principal Contractor are covered by Sl. No. 3 or Sl. No. 3A of the Notification No. 12/2017-Central Tax (Rate) - HELD - The exemption is conditional, and all the prescribed conditions have to be satisfied. The expression provided to the Central Government, State Government or Union territory or local authority links the exemption to the recipient of the supply. The immediate recipient of the services under the sub-contract is the Principal Contractor and not the State Government or a local authority - The fact that the ultimate project is a Government project does not by itself change the identity of the recipient. The work order shows that manpower was engaged for twelve months with rates quoted per man day excluding GST, and payment was to be released against GST invoice. The supply under the sub-contract is therefore a separate taxable supply, and the Principal Contractor, being a private company, does not fall within the specified class of recipients. Sl. No. 3A likewise requires the composite supply to be provided to the specified recipients, and the basic recipient condition is not satisfied. The description of the activity as pure services or manpower supply does not by itself confer exemption. Even assuming that the supply is a pure service in relation to a function covered by Article 243W or 243G, or a composite supply with goods not exceeding 25%, the recipient condition remains unsatisfied - The supply is not covered by Sl. No. 3 or 3A and is liable to GST at 18%, - The ruling of the lower authority is upheld and the appeal is dismissed - Reliance on a Service Tax circular and judicial precedents to claim exemption for sub-contractor - Express conditions of exemption notification - Appellant relied on Circular No. 147/16/2011-ST issued under the erstwhile Service Tax regime, on State of Andhra Pradesh v. Larsen and Toubro Ltd., and on State of Karnataka v. Taghar Vasudeva Ambrish, which adopted a purposive interpretation of an exemption entry - HELD - The Circular and Larsen and Toubro pertain to the earlier indirect tax regime or to the transfer of property in goods. They cannot override the express conditions of the exemption notification under the GST law. Taghar Vasudeva Ambrish is distinguishable, as it concerned the interpretation of the expression use as a residence in the exemption relating to renting of a residential dwelling, which did not contain a recipient-specific condition - Entries 3 and 3A, in contrast, expressly restrict the exemption to specified services supplied to specified recipients, so the identity and status of the recipient is an essential condition. Following Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company, an exemption notification should be interpreted strictly. Where the words are clear, plain and unambiguous, the said meaning has to be given effect to irrespective of consequences. The Appellant must independently establish that its supply satisfies all the conditions of the relevant entry - The ratio of these decisions cannot dispense with the recipient condition, and the appeal is rejected [Read less]

2026-VIL-1189-DEL-CU | High Court CUSTOMS

Customs - Appointment of Common Adjudicating Authority for all Show Cause Notices arising from a single investigation - Petitioner challenged the Notification appointing a Common Adjudicating Authority in respect of only one of three Show Cause Notices issued pursuant to the investigation by the DRI and sought appointment of a single authority for all three - Whether the Petitioner is entitled to a direction for appointment of a Common Adjudicating Authority for all three Show Cause Notices - HELD - The request for common adjudication is not without basis as there is substantial overlap in the material relied upon, but the three Show Cause Notices have distinct subject matters and arise at different stages, one concerning live consignments intercepted at import, another concerning Bills of Entry of cleared consignments under Section 28(4), and the third concerning equipment found at data centres without import documentation. The principle in Star Delta Exim (P) Ltd. recognises the utility of common adjudication to avoid inconsistent findings, but cannot mean that every notice emanating from a common investigation must be adjudicated by one authority irrespective of the allegations and reliefs proposed. Since two of the three notices were subsequently adjudicated while the petition was pending and the validity of that adjudication is itself under challenge, a direction for common adjudication would displace the adjudication already undertaken and serve no useful purpose - The prayer is declined at this stage without expressing any opinion on the merits of the allegations - The writ petition is dismissed - Adjudication of Show Cause Notices during pendency of writ petition and interim order - Respondent adjudicated two Show Cause Notices at New Delhi while the writ petition for a Common Adjudicating Authority was pending, and the Petitioner contended that this violated the interim order which recorded a prima facie view against multiplicity of adjudication and directed adjournment of the personal hearing before the Commissioner of Customs, Mumbai, and that it had brought this order to the notice of the adjudicating authority seeking deferment - Whether adjudication of the two Show Cause Notices was impermissible on account of the pendency of the writ petition and the interim order - HELD - The observations in the interim order were prima facie observations at an interlocutory stage, and the operative direction was confined to adjourning the personal hearing before the Commissioner of Customs, Mumbai, which did not involve the two notices adjudicated at New Delhi. The order did not expressly stay or restrain their adjudication. The communication of the Petitioner seeking deferment was a circumstance requiring consideration but did not amount to an order of the Court restraining the adjudicating authority - The pendency of the writ petition and the interim order did not render the adjudication without jurisdiction - The writ petition is dismissed - Maintainability of writ petition against consolidated Order-in-Original alleging denial of effective opportunity of hearing in presence of alternative remedy under Section 128 - Whether the Court should entertain the challenge under Article 226 notwithstanding the statutory appellate remedy - HELD - The alternative remedy is not an absolute bar - As the impugned order is a consolidated adjudication against several noticees, setting it aside qua individual petitioners would not be appropriate. The principle that a real and effective opportunity of hearing must be afforded remains undisputed, but its application depends on the factual record, and the objection on limitation requires examination of the notice, transactions and material dates - The challenge is not entertained in writ jurisdiction, the Petitioners are at liberty to avail the statutory appellate remedy and urge all objections including limitation, non-consideration of reply and non-service of hearing notices, without any opinion on merits - The writ petitions are dismissed. [Read less]

More Judgements Home More Judgements

2026-VIL-1777-CESTAT-KOL-ST | CESTAT SERVICE TAX

2026-VIL-1776-CESTAT-DEL-ST | CESTAT SERVICE TAX

2026-VIL-1774-CESTAT-KOL-CU | CESTAT CUSTOMS

2026-VIL-1772-CESTAT-MUM-CU | CESTAT CUSTOMS

2026-VIL-1773-CESTAT-KOL-CU | CESTAT CUSTOMS

2026-VIL-1769-CESTAT-CHE-CE | CESTAT CENTRAL EXCISE

2026-VIL-1771-CESTAT-DEL-CE | CESTAT CENTRAL EXCISE

2026-VIL-1768-CESTAT-CHE-CE | CESTAT CENTRAL EXCISE

2026-VIL-1770-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

2026-VIL-1775-CESTAT-CHE-ST | CESTAT SERVICE TAX

2026-VIL-106-SC | Supreme Court VAT

2026-VIL-1193-CAL | High Court SGST

2026-VIL-1191-CAL | High Court SGST

2026-VIL-209-GSTAT-DEL-PB | Tribunal SGST

2026-VIL-212-GSTAT-PYG | Tribunal SGST

2026-VIL-210-GSTAT-VSK | Tribunal SGST

2026-VIL-211-GSTAT-VSK | Tribunal SGST

2026-VIL-213-GSTAT-KLK | Tribunal SGST

2026-VIL-1759-CESTAT-KOL-ST | CESTAT SERVICE TAX

2026-VIL-1185-GUJ | High Court SGST

2026-VIL-206-GSTAT-BLR | Tribunal SGST

2026-VIL-198-GSTAT-KLK | Tribunal SGST

2026-VIL-206-GSTAT-BLR | Tribunal SGST

2026-VIL-1192-KAR | High Court SGST

2026-VIL-1190-DEL | High Court SGST

2026-VIL-208-GSTAT-AGR | Tribunal SGST

2026-VIL-1744-CESTAT-KOL-CU | CESTAT CUSTOMS

2026-VIL-1749-CESTAT-DEL-CU | CESTAT CUSTOMS

2026-VIL-1748-CESTAT-DEL-ST | CESTAT SERVICE TAX

2026-VIL-1747-CESTAT-DEL-ST | CESTAT SERVICE TAX

2026-VIL-1746-CESTAT-CHE-ST | CESTAT SERVICE TAX

2026-VIL-1741-CESTAT-DEL-CE | CESTAT CENTRAL EXCISE

2026-VIL-1743-CESTAT-AHM-CE | CESTAT CENTRAL EXCISE

2026-VIL-1734-CESTAT-DEL-ST | CESTAT SERVICE TAX

2026-VIL-1733-CESTAT-CHE-ST | CESTAT SERVICE TAX

2026-VIL-1737-CESTAT-CHE-ST | CESTAT SERVICE TAX

2026-VIL-204-GSTAT-RPR | Tribunal SGST

2026-VIL-1183-TEL | High Court SGST

2026-VIL-199-GSTAT-KLK | Tribunal SGST

2026-VIL-203-GSTAT-RPR | Tribunal SGST

2026-VIL-202-GSTAT-RPR | Tribunal SGST

2026-VIL-34-AAAR | AAAR SGST

2026-VIL-1174-BOM | High Court SGST

2026-VIL-190-GSTAT-RPR | Tribunal SGST

2026-VIL-1745-CESTAT-CHE-ST | CESTAT SERVICE TAX

2026-VIL-1751-CESTAT-DEL-ST | CESTAT SERVICE TAX

2026-VIL-1750-CESTAT-ALH-ST | CESTAT SERVICE TAX

2026-VIL-1732-CESTAT-CHE-ST | CESTAT SERVICE TAX

2026-VIL-200-GSTAT-RPR | Tribunal SGST

2026-VIL-1184-BOM | High Court SGST

2026-VIL-201-GSTAT-RPR | Tribunal SGST

2026-VIL-1754-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

2026-VIL-193-GSTAT-PYG | Tribunal SGST

2026-VIL-192-GSTAT-RPR | Tribunal SGST

2026-VIL-1756-CESTAT-AHM-CU | CESTAT CUSTOMS

2026-VIL-1758-CESTAT-KOL-CU | CESTAT CUSTOMS

2026-VIL-1739-CESTAT-ALH-CU | CESTAT CUSTOMS

2026-VIL-195-GSTAT-CTT | Tribunal SGST

2026-VIL-194-GSTAT-AGR | Tribunal SGST

2026-VIL-1752-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

2026-VIL-1757-CESTAT-KOL-CU | CESTAT CUSTOMS

2026-VIL-1753-CESTAT-KOL-ST | CESTAT SERVICE TAX

2026-VIL-1755-CESTAT-MUM-ST | CESTAT SERVICE TAX

2026-VIL-1735-CESTAT-KOL-ST | CESTAT SERVICE TAX

2026-VIL-1761-CESTAT-KOL-ST | CESTAT SERVICE TAX

2026-VIL-1177-MAD | High Court VAT

2026-VIL-189-GSTAT-LCK | Tribunal SGST

2026-VIL-188-GSTAT-SRT | Tribunal SGST

2026-VIL-1175-RAJ | High Court VAT

2026-VIL-187-GSTAT-CHE | Tribunal SGST

2026-VIL-197-GSTAT-BLR | Tribunal SGST

2026-VIL-196-GSTAT-LCK | Tribunal SGST

2026-VIL-191-GSTAT-RJK | Tribunal SGST

2026-VIL-1740-CESTAT-KOL-CU | CESTAT CUSTOMS

2026-VIL-1738-CESTAT-DEL-CU | CESTAT CUSTOMS

2026-VIL-1742-CESTAT-DEL-CE | CESTAT CENTRAL EXCISE

2026-VIL-1736-CESTAT-KOL-ST | CESTAT SERVICE TAX

2026-VIL-33-AAAR | AAAR SGST

2026-VIL-1189-DEL-CU | High Court CUSTOMS

More Judgements

Home

More Judgements