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Service Tax - Utilization of CENVAT Credit exceeding 20% limit - The appellant utilized CENVAT Credit in excess of the 20% restriction prescribed under Rule 6(3)(c) of the CENVAT Credit Rules for certain months, but the total credit utilized was within the 20% limit for the entire financial year - Demand alleging excess utilisation of CENVAT Credit in excess of the restriction of 20% of the Service Tax payable on the taxable output services as prescribed under Rule 6(3)(c) of the CCR, 2004 – HELD - The demand on this count is not sustainable as there is no requirement under the Rules to calculate the 20% limit on a month... [Read more]

Service Tax - Utilization of CENVAT Credit exceeding 20% limit - The appellant utilized CENVAT Credit in excess of the 20% restriction prescribed under Rule 6(3)(c) of the CENVAT Credit Rules for certain months, but the total credit utilized was within the 20% limit for the entire financial year - Demand alleging excess utilisation of CENVAT Credit in excess of the restriction of 20% of the Service Tax payable on the taxable output services as prescribed under Rule 6(3)(c) of the CCR, 2004 – HELD - The demand on this count is not sustainable as there is no requirement under the Rules to calculate the 20% limit on a monthly basis. As the appellant has utilized the credit within the permissible limit for the Financial Years 2004-05 and 2005-06, the appellant has complied with the provisions of Rule 6(3)(c) of the CENVAT Credit Rules - The appellant has complied with the 20% limit for the financial year, hence the demand on this ground is set aside - The matter regarding quantification of proportionate CENVAT credit reversal under Rule 6(3A)(ii) is remanded to the adjudicating authority. The penalty imposed is also set aside – The appeal is partly allowed - Non-registration under "Input Service Distributor" category - The appellant's Head Office had obtained registration as Input Service Distributor in 2004 itself, not in 2008 as alleged by the department – HELD - The demand on this ground is not sustainable as the Head Office was validly registered as an Input Service Distributor, hence this demand is set aside - Demand for 8% of value of exempt services - The appellant had wrongly opted for the 8% payment option under Rule 6(3A)(i), whereas their intention was to avail the option under Rule 6(3A)(ii) i.e., reversal of proportionate CENVAT credit attributable to exempt services. HELD - There is no need to opt separately for making payment of 8% of the value of exempted services. A clerical error on their part would not automatically mean that they are required to avail option (i) alone and not option (ii). Accordingly, agree with the submission of the appellant that their intention was to avail the option of proportionate reversion of CENVAT Credit attributable to exempted services only. Accordingly, demand for payment of 8% of the value of exempted services confirmed in the impugned order for the Financial Year 2008-09 is legally not sustainable - The appellant is liable to reverse only the proportionate CENVAT credit attributable to exempt services as per Rule 6(3A)(ii), which is to be quantified by the adjudicating authority. [Read less]

Central Excise - Settlement of demand under SVLDR Scheme by main noticee and impact on penalties imposed on co-noticees - Whether the penalties imposed on the co-noticees can be sustained after the main noticee had settled the dispute under the SVLDR Scheme, 2019 – HELD - When the demand of duty is settled under the SVLDR Scheme, 2019 by the main noticee, the penalty against the co-noticees cannot be allowed to continue - Further, apart from the statements of the witnesses, which were retracted and whose cross-examination could not be conducted despite the Tribunal's direction, there was no other material available on re... [Read more]

Central Excise - Settlement of demand under SVLDR Scheme by main noticee and impact on penalties imposed on co-noticees - Whether the penalties imposed on the co-noticees can be sustained after the main noticee had settled the dispute under the SVLDR Scheme, 2019 – HELD - When the demand of duty is settled under the SVLDR Scheme, 2019 by the main noticee, the penalty against the co-noticees cannot be allowed to continue - Further, apart from the statements of the witnesses, which were retracted and whose cross-examination could not be conducted despite the Tribunal's direction, there was no other material available on record to implicate the co-noticees. No discrepancy was noticed from the statutory records or physical stock in the factory of the main noticee, and no excess raw material or finished goods were found – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Suspension of Customs Broker License – Violation of Regulations 10(d), 10(e), 10(f) and 10(n) of the Customs Brokers Licensing Regulations, 2018 - Appellant-Customs Broker failed to exercise due diligence in verifying the genuineness of the importer and ensuring full examination of the consignment despite red flags – HELD - the appellant failed to exercise due diligence in this case in verifying genuineness of the person dealing with them on behalf of the importer and then again, during examination process where only one bag was opened and examined inspite of instruction to have 100% examination and drawl of ... [Read more]

Customs - Suspension of Customs Broker License – Violation of Regulations 10(d), 10(e), 10(f) and 10(n) of the Customs Brokers Licensing Regulations, 2018 - Appellant-Customs Broker failed to exercise due diligence in verifying the genuineness of the importer and ensuring full examination of the consignment despite red flags – HELD - the appellant failed to exercise due diligence in this case in verifying genuineness of the person dealing with them on behalf of the importer and then again, during examination process where only one bag was opened and examined inspite of instruction to have 100% examination and drawl of samples - The appellant's actions showed lack of due diligence and allowed the illegal import of a large quantity of narcotics, which compromised national security and impacted the youth. Given the gravity of the matter, the suspension of the Customs Broker's license by the Commissioner of Customs is upheld. However, the Commissioner is directed to strictly adhere to the timelines provided under the Regulations for completing the inquiry proceedings - The appeal is dismissed [Read less]

GST - Legality of search and seizure under Section 67(2) of the CGST Act, 2017 - The petitioner challenged the search and seizure orders issued by the CGST Authorities on the grounds that the goods seized by the Authorities are still lying in their possession and the petitioner is not able to sell/supply them and the business is hampered because the respondents have seized all the necessary documents, computer ledgers etc. - Whether the search and seizure carried out by the authorities were legal and valid – HELD - The petitions were filed at a premature stage as a show cause notice had already been issued to the petitio... [Read more]

GST - Legality of search and seizure under Section 67(2) of the CGST Act, 2017 - The petitioner challenged the search and seizure orders issued by the CGST Authorities on the grounds that the goods seized by the Authorities are still lying in their possession and the petitioner is not able to sell/supply them and the business is hampered because the respondents have seized all the necessary documents, computer ledgers etc. - Whether the search and seizure carried out by the authorities were legal and valid – HELD - The petitions were filed at a premature stage as a show cause notice had already been issued to the petitioners under the provisions of Section 74(1) and Section 74(5)(a) of the CGST Act - It is not the function of the Court to act as a super-board or substitute its judgment for that of the administrative authorities. The sufficiency or inadequacy of the reasons to believe recorded by the authorities cannot be gone into while considering the validity of an act of authorization to conduct search and seizure - The respondents were ready to release the seized goods subject to the production of valid documents by the petitioners, but the petitioners had not produced any such documents. The petitioners had not been able to make out a case for the exercise of jurisdiction under Article 226 of the Constitution - The writ petitions are dismissed [Read less]

GST – Anti-profiteering - Reduction in effective tax incidence on DTH services post-GST implementation - The appellant-DGAP alleged that the respondent had not passed on the benefit of reduced tax incidence and additional input tax credit to the customers after the implementation of GST, thereby profiteering - Whether the subsumption of various indirect taxes like Service Tax, VAT, Entertainment Tax etc. into GST resulted in a reduction of the effective tax incidence on DTH subscription services, and whether the respondent was required to pass on this benefit to the consumers in terms of Section 171 of the CGST Act, 2017... [Read more]

GST – Anti-profiteering - Reduction in effective tax incidence on DTH services post-GST implementation - The appellant-DGAP alleged that the respondent had not passed on the benefit of reduced tax incidence and additional input tax credit to the customers after the implementation of GST, thereby profiteering - Whether the subsumption of various indirect taxes like Service Tax, VAT, Entertainment Tax etc. into GST resulted in a reduction of the effective tax incidence on DTH subscription services, and whether the respondent was required to pass on this benefit to the consumers in terms of Section 171 of the CGST Act, 2017 – HELD - The subsumption of various indirect taxes like Service Tax, VAT, Entertainment Tax etc. into GST did result in a reduction of the effective tax incidence on DTH subscription services. The elimination of multiple cascading levies like Entertainment Tax and VAT significantly reduced the overall tax burden on DTH services, despite the increase in the nominal tax rate from 15% Service Tax to 18% GST - The effective tax burden on DTH services reduced from 30% (15% Service Tax + 15% Entertainment Tax) or 35% (15% Service Tax + 20% Entertainment Tax) under the pre-GST regime to 18% under GST. Additionally, the availability of seamless ITC under GST eliminated the cascading effects that existed under the earlier regime - The benefit arising from such reduction in tax burden was required to be passed on to subscribers in terms of Section 171 of the CGST Act, 2017. The respondent's contention that it had absorbed the Entertainment Tax earlier and did not collect it from consumers is rejected, as the liability to pay tax arises from the statute itself and not from its collection from consumers. The respondent has contravened the provisions of Section 171 by not passing on the commensurate benefit of tax reduction to consumers - The respondent has profiteered an amount of Rs. 450.18 crores and it is directed to deposit the same in the Central and State Consumer Welfare Funds in the ratio of 50:50 within three months – Ordered accordingly - Maintainability of the complaint and proceedings - The respondent challenged the maintainability of the complaint and the proceedings on the grounds that the complainant, Ms. Sweety Agarwal, was not a subscriber of the respondent's services and therefore lacked the statutory right to invoke the anti-profiteering machinery - Whether the complaint filed by the person who was not a subscriber of the respondent's services, was maintainable under Section 171 of the CGST Act – HELD - The complainant's locus standi was not a requirement under Section 171. The Anti-profiteering framework empowers the authorities to initiate suo motu proceedings or act on a complaint, and the complainant's status as a recipient is not a prerequisite. The complaint filed by a person who was not a subscriber is maintainable, and the proceedings could not be invalidated on this ground - Compliance with statutory timelines - The respondent contended that the various stages of the statutory process were delayed beyond the prescribed periods under Rules 128 and 129 of the CGST Rules, rendering the investigation and the Report liable to be set aside as time-barred - Whether the delay in completing the various stages of the statutory process within the prescribed timelines under the CGST Rules would render the investigation and the Report invalid – HELD - The timelines prescribed under Rules 128 and 129 of the CGST Rules are directory and not mandatory. Neither Section 171 nor the Rules specify any consequence such as abatement, invalidation or termination of the proceedings for non-compliance with the timelines. The Delhi High Court in the batch of anti-profiteering cases held that the timelines are directory and not mandatory - The delay in completing the various stages of the statutory process within the prescribed timelines under the CGST Rules did not render the investigation and the Report invalid. [Read less]

Customs - Scope of Show Cause Notice, Substitution of ground in SCN - Denial of benefit of exemption under Notification No. 21/2002-Cus dated 01.03.2002 as amended by Notification No. 12/2012-Cus dated 17.03.2012 in respect of import of coal - Show Cause Notice (SCN) proposing to deny the benefit on the grounds that Mean Reflectance had not been ascertained by a departmental laboratory and that the load port survey reports were unreliable based on certain geological texts - Whether the adjudicating authority traveled beyond the scope of the Show Cause Notice by confirming a demand based on evidentiary material not disclose... [Read more]

Customs - Scope of Show Cause Notice, Substitution of ground in SCN - Denial of benefit of exemption under Notification No. 21/2002-Cus dated 01.03.2002 as amended by Notification No. 12/2012-Cus dated 17.03.2012 in respect of import of coal - Show Cause Notice (SCN) proposing to deny the benefit on the grounds that Mean Reflectance had not been ascertained by a departmental laboratory and that the load port survey reports were unreliable based on certain geological texts - Whether the adjudicating authority traveled beyond the scope of the Show Cause Notice by confirming a demand based on evidentiary material not disclosed in the original notice – HELD - The impugned order is legally unsustainable as it exceeded the jurisdiction defined by the Show Cause Notice. It is a settled proposition of law that the SCN constitutes the foundation of the proceedings and circumscribes the permissible scope of adjudication. The jurisdictional validity of any order must be tested strictly against the allegations and grounds contained in the notice - In this case, the decisive evidentiary foundation, the research institute's report, did not form part of the SCN and the notice did not allege that subsequent scientific testing demonstrated non-fulfillment of the notification's conditions. The adjudicating authority cannot retrospectively expand or substitute the foundation of the SCN with new grounds during adjudication - By substituting the original grounds in the SCN with reliance upon CIMFR reports, the adjudicating authority has travelled beyond the scope of the notice. The reliance on CIMFR test reports not referred to in the SCN renders the impugned order legally unsustainable - the impugned order is set aside to the extent it denies exemption and confirms demand in respect of the relevant Bill of Entry, along with the interest demand – The appeal is allowed - Customs Exemption - Coking Coal - Contemporaneous Evidence vs. Belated Testing - The importer claimed exemption for coal supported by load port certificates and a Customs House Chemical Examiner’s report showing both Mean Reflectance (MR) and Crucible Swelling Number (CSN) values above the required thresholds of 0.60 and 1 respectively - Department sought to deny the exemption based on a re-test of remnant samples conducted more than two years later which reported a CSN value below the threshold - Whether the imported coal satisfied the conditions of the exemption notification and whether a belated test report can override contemporaneous evidence of the goods' condition at the time of import – HELD - The imported coal satisfied the conditions for exemption as the contemporaneous evidence established compliance with the prescribed parameters. It is well-settled that the classification and assessment of goods must be determined based on their condition at the time of import. Technical literature and judicial precedents confirm that coal is a hygroscopic material subject to oxidation and weathering, which causes the deterioration of caking properties like CSN over time. A test conducted more than two years after the samples were drawn, without evidence of preservation in specialized conditions to prevent oxidation, cannot displace contemporaneous reports. Since the Chemical Examiner’s initial report and the load port certificates were not rejected on any cogent or scientific grounds, they remain valid evidence of the goods' state at import. The department's preference for a belated test report over contemporaneous evidence is arbitrary. As the duty demand is set aside, the consequential interest demand also cannot survive. [Read less]

Central Excise - Classification of Nimbu Fresh - Whether Nimbu Fresh containing a minimum of five percent of fruit juice should be classified under sub-heading 22029020 of the First Schedule of the Central Excise Tariff Act or under 22021020 – HELD - The larger bench of Tribunal in Brindavan Beverages case held that Nimbu Fresh containing a minimum of five percent of fruit juice is classifiable under 22029020 as a fruit juice based drink. This was based on the interpretation of the relevant Regulations under the Food Safety and Standards Act, 2006 which define "non carbonated ready to serve fruit beverages" and "carbonat... [Read more]

Central Excise - Classification of Nimbu Fresh - Whether Nimbu Fresh containing a minimum of five percent of fruit juice should be classified under sub-heading 22029020 of the First Schedule of the Central Excise Tariff Act or under 22021020 – HELD - The larger bench of Tribunal in Brindavan Beverages case held that Nimbu Fresh containing a minimum of five percent of fruit juice is classifiable under 22029020 as a fruit juice based drink. This was based on the interpretation of the relevant Regulations under the Food Safety and Standards Act, 2006 which define "non carbonated ready to serve fruit beverages" and "carbonated fruit beverages and fruit drinks". Even when lime juice is added, if the fruit content is not less than 5%, the product would be classified as a fruit juice based drink under 22029020. Therefore, the demand on this count cannot be sustained and set aside - The appeals are allowed by setting aside the impugned orders - Admissibility of CENVAT credit on services related to waste disposal – HELD - CENVAT credit on services for disposal of industrial waste and polluted water in compliance with Environmental laws is an input service used by the manufacturer indirectly in relation to the manufacture of final products. The compliance with the directions of the Pollution Control Board is mandatory, and non-compliance can result in prosecution. Therefore, the CENVAT credit on services related to waste disposal is admissible - Admissibility of CENVAT credit on services related to conducting survey for checking air pollution – HELD - The definition of input services, both before and after 01.04.2011, is wide and includes any services used by the manufacturer directly or indirectly in relation to the manufacture of final products. In this case, the survey of the surroundings for air pollution was a requirement of the principal company, Coca Cola India, to maintain the quality standards of the beverages. The activity is integrally connected to the manufacturing activity of the appellant and hence the CENVAT credit cannot be denied. [Read less]

Central Excise - Valuation of Demo Vehicles - The appellant, a motor finance company, offered discounts on the sale of demo vehicles to its dealers - Department disallowed these discounts and included them in the assessable value - Whether the discounts offered on demo vehicles are includible in the assessable value of the demo vehicle – HELD - The Tribunal in its earlier decisions in the cases of Ford India Pvt. Ltd. and Hyundai Motor India Ltd., held that there is no difference between a normal vehicle and a demo vehicle cleared by the manufacturer, and the discount offered on demo vehicles cannot be deducted from the ... [Read more]

Central Excise - Valuation of Demo Vehicles - The appellant, a motor finance company, offered discounts on the sale of demo vehicles to its dealers - Department disallowed these discounts and included them in the assessable value - Whether the discounts offered on demo vehicles are includible in the assessable value of the demo vehicle – HELD - The Tribunal in its earlier decisions in the cases of Ford India Pvt. Ltd. and Hyundai Motor India Ltd., held that there is no difference between a normal vehicle and a demo vehicle cleared by the manufacturer, and the discount offered on demo vehicles cannot be deducted from the assessable value - The demo vehicles, being used for test drives and publicity, cannot be considered as normal transactions at the time of removal from the factory, and the price charged for such demo vehicles should be determined based on the price of the normal vehicles cleared to the dealers - The appeals filed by the appellant are dismissed [Read less]

Central Excise - Input service credit for Business Support Services and Management or Business Consultant Services - Whether the denial of credit of service tax paid on 'BSS' and 'MBCS' is sustainable - HELD - The issue is no longer res integra as the same has been addressed in the appellant's own case for earlier periods - The definition of 'input service' under the Cenvat Credit Rules is wide enough to cover services related to the functioning of the business, and is not restricted only to services directly or indirectly related to the manufacture of final products. The definition of 'input service' cannot be restricted ... [Read more]

Central Excise - Input service credit for Business Support Services and Management or Business Consultant Services - Whether the denial of credit of service tax paid on 'BSS' and 'MBCS' is sustainable - HELD - The issue is no longer res integra as the same has been addressed in the appellant's own case for earlier periods - The definition of 'input service' under the Cenvat Credit Rules is wide enough to cover services related to the functioning of the business, and is not restricted only to services directly or indirectly related to the manufacture of final products. The definition of 'input service' cannot be restricted only to services related to the manufacture of final products - The impugned services constitute 'eligible services' and the availment of credit by the appellant is in order - The impugned order is set aside and the appeal is allowed [Read less]

GST - Taxability of "Notice Pay" and "Bond Money" - The appellants, engaged in the manufacture of motor vehicles and parts, recovered "notice pay" from employees who failed to give sufficient notice before leaving the organization, and "bond money" from employees who failed to serve the organization for the agreed period after being sent for training. The issue was whether such amounts received by the appellants are taxable under service tax - HELD - The issue is no longer res integra, as various High Courts and CESTAT Benches have consistently held that amounts received for non-performance of a contract do not fall under ... [Read more]

GST - Taxability of "Notice Pay" and "Bond Money" - The appellants, engaged in the manufacture of motor vehicles and parts, recovered "notice pay" from employees who failed to give sufficient notice before leaving the organization, and "bond money" from employees who failed to serve the organization for the agreed period after being sent for training. The issue was whether such amounts received by the appellants are taxable under service tax - HELD - The issue is no longer res integra, as various High Courts and CESTAT Benches have consistently held that amounts received for non-performance of a contract do not fall under the ambit of "agreeing to the obligation to refrain from an act or to tolerate an act or a situation or to do an act, as a declared service" under Section 66E(e) of the Finance Act, 1994 - The "notice pay" and "bond money" recovered from employees are in the nature of penalties to discourage and deter premature leaving of employment, and not consideration for a taxable service – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Manpower Supply Service, Test to determine the employer-employee relationship - Appellant engaged independent job workers for specific production processes within its factory premises, paid on item-rate/tonnage basis, under the contractors' control and supervision - Revenue classified this as Manpower Recruitment and Supply Service under the partial reverse charge mechanism – whether the contracts entered into by the appellants, under which specific works are executed on an output or piece-rate basis, with raw materials and equipment supplied by the appellants and work carried out under their supervision, c... [Read more]

Service Tax - Manpower Supply Service, Test to determine the employer-employee relationship - Appellant engaged independent job workers for specific production processes within its factory premises, paid on item-rate/tonnage basis, under the contractors' control and supervision - Revenue classified this as Manpower Recruitment and Supply Service under the partial reverse charge mechanism – whether the contracts entered into by the appellants, under which specific works are executed on an output or piece-rate basis, with raw materials and equipment supplied by the appellants and work carried out under their supervision, constitute “manpower supply services” liable to service tax under the partial RCM or whether the contractors are independent job workers rather than mere suppliers of contract labour - HELD - The contracts for execution of specified jobs, where consideration is linked to output or piece-rate basis and the workmen are not integrated into the hiring organisation, cannot be classified as manpower supply services. Applying the 'control test' and 'integration test' laid down by the Supreme Court in Achchey Lal, the workmen are job workers and not mere suppliers of contract labour - The degree of control rests predominantly with the contractor, and the workmen are neither integrated into nor directly remunerated by the appellant's organization. The consistent ratio emerging from judicial precedents is that such contracts do not constitute manpower supply services. In the absence of any distinguishing facts or contrary material, the impugned orders are set aside and the appeals are allowed [Read less]

GST - Grant of regular bail to the petitioner based on parity with co-accused - Arrest in a complaint case under Section 132(1)(b)(c)(f) and (I) of CGST Act, 2017 - Whether the petitioner is entitled to regular bail on the basis of parity with the co-accused, who was granted bail earlier by the High Court – HELD - The petitioner has been in custody for about 10 months and the case of the petitioner is at par with the co-accused, who has already been granted bail by the High Court. The petitioner has made out a case for grant of bail on the basis of parity with the co-accused – The petitioner granted regular bail subjec... [Read more]

GST - Grant of regular bail to the petitioner based on parity with co-accused - Arrest in a complaint case under Section 132(1)(b)(c)(f) and (I) of CGST Act, 2017 - Whether the petitioner is entitled to regular bail on the basis of parity with the co-accused, who was granted bail earlier by the High Court – HELD - The petitioner has been in custody for about 10 months and the case of the petitioner is at par with the co-accused, who has already been granted bail by the High Court. The petitioner has made out a case for grant of bail on the basis of parity with the co-accused – The petitioner granted regular bail subject to bail conditions – The petition is allowed [Read less]

Central Excise – Production-based Levy - Challenge to Notification No. 04/2025-Central Excise, Notification No. 04/2025-Central Excise (N.T.), and Notification No. 05/2025-Central Excise (N.T.) dated December 31, 2025 - Petitioners challenged said Notifications and “Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection Duty) Rules imposing a production-based levy on manufacturers of chewing tobacco, jarda scented tobacco and gutkha. The petitioners argued that the notifications and rules are ultra vires the parent statute and the Constitution as they fail to consider ... [Read more]

Central Excise – Production-based Levy - Challenge to Notification No. 04/2025-Central Excise, Notification No. 04/2025-Central Excise (N.T.), and Notification No. 05/2025-Central Excise (N.T.) dated December 31, 2025 - Petitioners challenged said Notifications and “Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection Duty) Rules imposing a production-based levy on manufacturers of chewing tobacco, jarda scented tobacco and gutkha. The petitioners argued that the notifications and rules are ultra vires the parent statute and the Constitution as they fail to consider various factors such as labour laws, machine capacity, work shifts etc. and result in excessive taxation – HELD - The Notifications and Rules are prima facie consistent with the provisions of Section 3A of Central Excise Act, 1944 which empowers the Central Government to impose capacity-based taxation to curb tax evasion - The Section 3A allows the Government to specify relevant factors for production and the manner of determining annual production capacity, which has been done through the impugned rules. The Court is not persuaded by the petitioners' arguments that the figures and formulae prescribed in the rules are arbitrary, as the objective of the provision is to prevent tax evasion and some harsh conditions may be necessary to achieve that – The Notifications and the Rules are prima facie within the legislative mandate of Section 3A and not manifestly ultra vires on the ground that they determine capacity by the factors and manner prescribed – There is no prima facie case of the Notifications and Rules being beyond the legislative mandate or manifestly arbitrary, and grant of any interim relief is declined – Ordered accordingly - Validity of mechanistic capacity formulas - HELD - The correct test is not actual production but conformity with the legislative objective to curb tax evasion under Section 3A. The petitioners did not demonstrate that the figures were impossible; conditions appearing harsh do not render the rule irrational when justified by revenue protection. Consequently, the prima facie view was that the mechanistic formula does not invalidate the Rules. The mechanistic capacity formula in Rule 5 is not prima facie arbitrary or irrational so as to warrant interim relief - Compliance measures including CCTV - Legality of mandating CCTV installation under Rule 16 as a compliance and anti-evasion measure - HELD – There is no unreasonableness in mandating CCTV installation as such a requirement aids enforcement and compliance in the context of Section 3A's objective to curb tax evasion - Requirement of CCTV installation under the Rules is prima facie reasonable and permissible - Capacity-based duty rate specification - HELD - The Section 3A(3) authorises levying duty at a rate on the unit of production or other specified production factor, and the second notification prescribing rates of duty relates to the factor relevant to production and is prima facie consistent with that provision of Section 3A(3). [Read less]

GST - Export of Services; Intermediary Services – Rejection of refund claim on the ground that the services were intermediary services and not export of services - Whether the services provided by the petitioner to its overseas group companies qualify as export of services or intermediary services - HELD - The contentions raised by the petitioner regarding the nature of the agreement between the parties and the applicability of the provisions of Section 13(8) of the IGST Act were not appropriately considered by the respondent while passing the impugned order. In a similar case, a coordinate Bench of the Court had remande... [Read more]

GST - Export of Services; Intermediary Services – Rejection of refund claim on the ground that the services were intermediary services and not export of services - Whether the services provided by the petitioner to its overseas group companies qualify as export of services or intermediary services - HELD - The contentions raised by the petitioner regarding the nature of the agreement between the parties and the applicability of the provisions of Section 13(8) of the IGST Act were not appropriately considered by the respondent while passing the impugned order. In a similar case, a coordinate Bench of the Court had remanded the matter to the appellate authority for a de novo consideration of the matter in light of the relevant circulars and the decision in the Sundyne Pumps and Compressors India Pvt. Ltd. case. Accordingly, the impugned order is set aside and matter is remanded to the respondent for a de novo consideration and a fresh order to be passed in accordance with law, after hearing the parties – The petition is disposed of [Read less]

GST – Refund - Delay in the electronic transmission of invoices from ICEGATE portal to the GST portal - Time Limitation for Filing Refund Application under Section 54 of CGST Act, 2017 - The appellant exported goods and paid IGST, and filed a refund claim under Section 54 which was rejected by the adjudicating authority as time-barred - Whether the refund application is hit by the time limit under Section 54(1) of CGST Act, 2017 – HELD – The refund application filed by the appellant on 23.04.2024 should be considered in continuation of the deemed refund application filed in the form of the Shipping Bill dated 15.04.2... [Read more]

GST – Refund - Delay in the electronic transmission of invoices from ICEGATE portal to the GST portal - Time Limitation for Filing Refund Application under Section 54 of CGST Act, 2017 - The appellant exported goods and paid IGST, and filed a refund claim under Section 54 which was rejected by the adjudicating authority as time-barred - Whether the refund application is hit by the time limit under Section 54(1) of CGST Act, 2017 – HELD – The refund application filed by the appellant on 23.04.2024 should be considered in continuation of the deemed refund application filed in the form of the Shipping Bill dated 15.04.2021 as per Rule 96 of the CGST Rules, 2017. The delay in the electronic transmission of the invoices from the ICEGATE/Customs portal to the GST portal was not attributable to the appellant. The appellant had taken reasonable steps to get the technical glitch resolved. It will be grave injustice to the appellant to de link the refund application filed by them in 2024 from the deemed refund claim application in the form of shipping bill dated 15.04.2021 – The substantive rights cannot be defeated on procedural grounds - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax demand based on Income Tax Data - Revenue initiated proceedings against the assessee based on information obtained from Form 26AS, which indicated receipts from various companies - Whether a service tax demand is sustainable when based primarily on Form 26AS data without establishing the specific nature of the taxable services through contracts or corroborative evidence – HELD - The entire case was built on data from the Income Tax authorities. The Show Cause Notice lacked explicit details to conclude the nature of the services provided or whether the total income arose from taxable provisions. There was no e... [Read more]

Service Tax demand based on Income Tax Data - Revenue initiated proceedings against the assessee based on information obtained from Form 26AS, which indicated receipts from various companies - Whether a service tax demand is sustainable when based primarily on Form 26AS data without establishing the specific nature of the taxable services through contracts or corroborative evidence – HELD - The entire case was built on data from the Income Tax authorities. The Show Cause Notice lacked explicit details to conclude the nature of the services provided or whether the total income arose from taxable provisions. There was no evidence that the Department had scrutinized the contracts between the assessee and the service recipients to verify the classification of services such as manpower recruitment or the supply of tangible goods - For services like the supply of tangible goods, evidence regarding the transfer of right of possession or effective control is crucial for classification, and claims regarding the sale of goods rather than provision of service must be examined - without any detailed corroboration and only because certain payments were made to the appellant, the Department has presumed that they have provided a taxable service - The adjudicating authority is directed to examine the nature of services with relevant documents and evidence to determine the net demand and allow for adjustments of tax already paid – Appeal is allowed by way of remand - Limitation and Invocation of Extended Period - Whether the Department was justified in invoking the extended period of limitation when the assessee was aware of their tax liability but failed to comply with filing and payment obligations – HELD - The Department is correct in invoking the extended period of limitation as the appellant was aware of the service tax liability associated with the services they provided, yet they failed to file the required returns or accurately discharge their tax liability. The grounds such as financial difficulty cannot be accepted as a basis for the non-payment of taxes. [Read less]

Service Tax - Levy of Service Tax/IGST on Ocean Freight - The petitioner challenged the provisions of the Finance Act 1994 along with related Notifications, that sought to levy Service Tax on services by way of transportation of goods by a vessel provided by a service provider located outside the taxable territory and received by a person outside the taxable territory – HELD – In the case of Sanathan Textiles Pvt. Ltd. v. Union of India and Sal Steel India Ltd. & Ors. v. Union of India, it has been held that the impugned notifications were ultra vires Sections 64, 65B(44), 66(b), 67, 68 and 94 of the Finance Act 1994 -... [Read more]

Service Tax - Levy of Service Tax/IGST on Ocean Freight - The petitioner challenged the provisions of the Finance Act 1994 along with related Notifications, that sought to levy Service Tax on services by way of transportation of goods by a vessel provided by a service provider located outside the taxable territory and received by a person outside the taxable territory – HELD – In the case of Sanathan Textiles Pvt. Ltd. v. Union of India and Sal Steel India Ltd. & Ors. v. Union of India, it has been held that the impugned notifications were ultra vires Sections 64, 65B(44), 66(b), 67, 68 and 94 of the Finance Act 1994 - Further, the levy of IGST on such ocean freight under the Reverse Charge Mechanism would be violative of CGST Act, 2017, as the Indian importers were liable to pay IGST on the 'composite supply' comprising of supply of goods and supply of services of transportation, insurance, etc. in CIF contracts - Any deposit or demand of Service Tax/IGST would be without authority in law and violative of Article 265 of the Constitution. The petitioner would be entitled to the refund of the duty, if any paid, subject to the petitioner filing the refund application which would be decided in accordance with law including on the principles of unjust enrichment – The petition is disposed of [Read less]

GST - Quashing of ex-parte order-in-original and refund of tax amount recovered – The petitioner sought to set aside the ex-parte order-in-original and the recovery of tax amount - HELD - The order-in-original was passed without the benefit of any reply to the show cause notice. The petitioner had not participated in the proceedings due to a bona fide lapse. The petitioner has asserted that it had material to explain the grounds raised in the show cause notice - Considering the substantial amount recovered, it would be appropriate to afford the petitioner an opportunity to submit its reply. Accordingly, the order-in-orig... [Read more]

GST - Quashing of ex-parte order-in-original and refund of tax amount recovered – The petitioner sought to set aside the ex-parte order-in-original and the recovery of tax amount - HELD - The order-in-original was passed without the benefit of any reply to the show cause notice. The petitioner had not participated in the proceedings due to a bona fide lapse. The petitioner has asserted that it had material to explain the grounds raised in the show cause notice - Considering the substantial amount recovered, it would be appropriate to afford the petitioner an opportunity to submit its reply. Accordingly, the order-in-original is set aside and the matter is remitted to the stage of reply to the show cause notice – The petition is disposed of [Read less]

Service Tax - Calculation of interest on service tax due on short paid service tax – Demand of short paid service tax along with interest and penalty. The appellant paid the service tax, part of the interest and penalty within 30 days of the show cause notice - Whether the interest calculated by the lower authorities is correct or the appellant's calculation of interest at 12% as per Notification No.13/2016 dated 01.03.2016 is correct - HELD - The case is simply one of short payment of service tax, and not a case where the appellant had collected service tax from the customers but failed to deposit it with the government... [Read more]

Service Tax - Calculation of interest on service tax due on short paid service tax – Demand of short paid service tax along with interest and penalty. The appellant paid the service tax, part of the interest and penalty within 30 days of the show cause notice - Whether the interest calculated by the lower authorities is correct or the appellant's calculation of interest at 12% as per Notification No.13/2016 dated 01.03.2016 is correct - HELD - The case is simply one of short payment of service tax, and not a case where the appellant had collected service tax from the customers but failed to deposit it with the government. Therefore, the interest should be calculated as per Sl. No. 2 of Notification No. 13/2016-Service Tax, which prescribes a rate of 15% for the first six months, 21% for the next six months, and 27% for the period beyond one year. The Tribunal calculated the interest accordingly and found that the appellant had already deposited the entire interest amount - The demand of the balance interest and penalty is set aside and the appeal is allowed [Read less]

Service Tax - Invocation of Extended Period of Limitation based on difference between value of services declared in ITR and ST-3 returns – HELD - For invocation of extended period of limitation under proviso to Section 73(1), there must be specific averments in the SCN alleging fraud, collusion, wilful misstatement or suppression of facts with intent to evade payment of tax. Mere difference between ITR and ST-3 return values, without any specific allegation of suppression or intent to evade, is not sufficient to invoke the extended period - The appellant had bonafidely believed that the services provided were exempted an... [Read more]

Service Tax - Invocation of Extended Period of Limitation based on difference between value of services declared in ITR and ST-3 returns – HELD - For invocation of extended period of limitation under proviso to Section 73(1), there must be specific averments in the SCN alleging fraud, collusion, wilful misstatement or suppression of facts with intent to evade payment of tax. Mere difference between ITR and ST-3 return values, without any specific allegation of suppression or intent to evade, is not sufficient to invoke the extended period - The appellant had bonafidely believed that the services provided were exempted and accordingly did not pay service tax, which amounts to a dispute on interpretation of law and not suppression or fraud. In the absence of any such specific allegations in the show-cause notice, the extended period of limitation could not have been invoked against the appellant - The impugned order is set aside and the appeal is allowed [Read less]

Assam Value Added Tax Act, 2003 - Taxable turnover, Free samples as Trade discount - Petitioner provided free samples of medicines to retailers as a promotional activity. The authorities reassessed the petitioner's tax liability for the assessment years 2007-08 to 2009-10, including the value of the free samples in the taxable turnover – Whether the free samples can be treated as trade discount and excluded from the taxable turnover under Section 11 of the AVAT Act read with Rule 9(b) of the Assam VAT Rules – HELD – A free sample is a sample which is provided to the end customer free of cost for promotion of the prod... [Read more]

Assam Value Added Tax Act, 2003 - Taxable turnover, Free samples as Trade discount - Petitioner provided free samples of medicines to retailers as a promotional activity. The authorities reassessed the petitioner's tax liability for the assessment years 2007-08 to 2009-10, including the value of the free samples in the taxable turnover – Whether the free samples can be treated as trade discount and excluded from the taxable turnover under Section 11 of the AVAT Act read with Rule 9(b) of the Assam VAT Rules – HELD – A free sample is a sample which is provided to the end customer free of cost for promotion of the product. On the other hand, a trade discount is a percentage reduction from the listed price, given to the intermediaries (wholesalers/retailers) for bulk purchase thereby reducing the invoice value. The free samples cannot be equated to trade discounts for the purpose of deduction from taxable turnover under Rule 9(b) of the AVAT Rules. While trade discounts are allowed as deductions, free samples provided for promotional purposes are not covered under this provision - The Government had issued a Notification dated 11.10.2006 clarifying that free supplies along with sale at the first point of sale in the State on MRP shall be deemed as sale and liable to tax on the MRP. This Notification is found to be a valid exercise of power under the AVAT Act to address the prevalent practice of providing free samples which were subsequently sold by retailers at MRP along with tax - the petitioner being in the trade of medicine ought to have known about the Notification dated 11.10.2006 which was holding the field at least till 31.10.2009. The petitioner never challenged the said notification till filing of the present proceedings in the year 2018. Under such circumstances also, the impugned notification cannot be interfered with - The writ petitions filed by the petitioner company challenging the reassessment orders imposing tax on the value of free samples provided to retailers are dismissed [Read less]

Central Excise - Rebate Claim – Petitioner-Merchant-exporter filed claim for rebate of excise duty paid on exported goods - Denial of rebate claim on the grounds of non-submission of original ARE-1 documents and claim being time-barred – Whether the non-production of original and duplicate copies of ARE-1 forms is fatal to a rebate claim when the fact of export and payment of duty is established through other contemporaneous documentary evidence – HELD - The production of original and duplicate copies of ARE-1 is a procedural requirement and is directory rather than mandatory. If an exporter is able to prove through... [Read more]

Central Excise - Rebate Claim – Petitioner-Merchant-exporter filed claim for rebate of excise duty paid on exported goods - Denial of rebate claim on the grounds of non-submission of original ARE-1 documents and claim being time-barred – Whether the non-production of original and duplicate copies of ARE-1 forms is fatal to a rebate claim when the fact of export and payment of duty is established through other contemporaneous documentary evidence – HELD - The production of original and duplicate copies of ARE-1 is a procedural requirement and is directory rather than mandatory. If an exporter is able to prove through other documents, such as shipping bills, bills of lading, and invoices, that the excisable goods were indeed exported on payment of duty, the rebate cannot be denied solely on the absence of specific original forms. If the substantive conditions are satisfied and the authenticity of the export is not doubted by the Revenue, technical lapses in documentation should not frustrate the claim. There can be valid reasons for the loss of documents and that secondary evidence, such as quadruplicate copies supported by indemnity bonds, is sufficient for adjudication - The impugned orders are quashed and set aside - The petition is allowed - Revenue authorities rejected the re-filed claim as being barred by limitation, arguing that the time should be calculated from the date of the second filing - Whether a rebate application re-filed after the removal of technical defects relates back to the date of the original filing for the purpose of computing the limitation period under Section 11B of CEA, 1944 – HELD - The subsequent filing of a rebate application after the rectification of defects relates back to the original date of filing. Since the initial application was filed within the statutory period and was merely returned rather than rejected, the re-presentation of the application in the correct format constitutes a continuous attempt to seek the benefit. The technicalities should not be used to defeat a substantive claim that was initially brought within time. To hold otherwise would allow the Dept to time-bar claims by simply returning them for minor defects near the expiry of the limitation period - Whether the tax authorities have a statutory obligation to point out specific deficiencies in a rebate claim to allow the claimant to rectify them, rather than summarily returning the application – HELD - The action of the authority in returning the claim application without a formal order or a specific deficiency memo amounts to a refusal to perform a statutory duty. In terms of the CBEC Manual, the rebate sanctioning authority is required to point out all deficiencies collectively within a specified timeframe to enable the exporter to cure them. The duty of the officer is to consider the application on its merits and pass a reasoned order under the Act and Rules. Summarily returning applications on the day of filing without providing a chance for rectification constitutes a procedural irregularity. [Read less]

Customs - Penalty on Customs Broker for violation of statutory provisions - Whether the penalty imposed is grossly disproportionate to the seriousness of the offences – HELD – The proceedings under the Customs Brokers Licensing Regulations (CBLR) are disciplinary in nature, intended to ensure statutory compliance and maintain discipline within the Customs area. The Original Authority, being a Commissioner of adequate seniority, is presumed to possess the requisite legal expertise and institutional competence to appreciate the complexities of the dispute. Where the Commissioner exercises discretionary jurisdiction for t... [Read more]

Customs - Penalty on Customs Broker for violation of statutory provisions - Whether the penalty imposed is grossly disproportionate to the seriousness of the offences – HELD – The proceedings under the Customs Brokers Licensing Regulations (CBLR) are disciplinary in nature, intended to ensure statutory compliance and maintain discipline within the Customs area. The Original Authority, being a Commissioner of adequate seniority, is presumed to possess the requisite legal expertise and institutional competence to appreciate the complexities of the dispute. Where the Commissioner exercises discretionary jurisdiction for this purpose, the Tribunal ought not to interfere or substitute its own discretion in the absence of cogent reasons warranting such interference. The Tribunal cannot interfere with the findings of the Inquiry Officer or competent authority where they are not arbitrary or utterly perverse - The issue of fraud relates to one of the employees of the Customs Broker firm, and the Adjudicating Authority was satisfied with the response of the Customs Broker that it had terminated the services of the delinquent employee and closed its firm in Mumbai. Considering the facts and circumstances of the case, the discretion exercised by the Adjudicating Authority is reasonable and in consonance with law. The revocation of a Customs Broker licence is a drastic penal measure which needs to be finely balanced. The impugned order reflects due application of mind, satisfies the test of proportionality, and does not suffer from arbitrariness, perversity, or violation of principles of natural justice - The impugned order is upheld and the Revenue appeal is dismissed [Read less]

Customs - Abetment of smuggling by Custom House Agent company - The appellant was imposed a penalty under Section 112(a)(i) of the Customs Act based solely on his statement recorded under Section 108 of the Customs Act - Whether penalty can be imposed under Section 112(a)(i) of Customs Act solely based on statements recorded under Section 108 – HELD – The Sections 138B(1)(b) of the Customs Act and 9D(1)(b) of the Central Excise Act mandate that statements recorded under Sections 108 and 14, respectively, can be considered relevant for proving the truth of the facts contained in them only when the person who made the st... [Read more]

Customs - Abetment of smuggling by Custom House Agent company - The appellant was imposed a penalty under Section 112(a)(i) of the Customs Act based solely on his statement recorded under Section 108 of the Customs Act - Whether penalty can be imposed under Section 112(a)(i) of Customs Act solely based on statements recorded under Section 108 – HELD – The Sections 138B(1)(b) of the Customs Act and 9D(1)(b) of the Central Excise Act mandate that statements recorded under Sections 108 and 14, respectively, can be considered relevant for proving the truth of the facts contained in them only when the person who made the statement is examined as a witness before the adjudicating authority and the authority forms an opinion that the statement should be admitted in evidence in the interests of justice. This procedural requirement has been held to be mandatory by various High Courts and the Tribunal, with the rationale being to neutralize the possibility of such statements being recorded under coercion or compulsion. In the absence of compliance with this procedure, the statements cannot be relied upon as evidence – Further, mere facilitation without knowledge would not amount to abetment. Intentional aiding and active complicity is the gist of the offence of abetment under Section 112(a)(i). There was no allegation that the appellant had knowledge that the documents submitted by the other persons were not genuine. Therefore, penalty under Section 112(a)(i) could not have been imposed upon the appellant – The penalty imposed upon the appellant under section 112(a)(i) of the Customs Act is set aside and the appeal is allowed [Read less]

Customs - Provisional release of goods on furnishing of Bonds and Bank Guarantees – Import of "Prime Cold Rolled Stainless Steel Coils", claiming preferential duty exemption under Notification No. 46/2011-Cus. - Department refused to grant "Out of Charge" order for clearance of the goods, citing instructions to deny preferential benefits on the basis of Certificates of Origin issued in the name of the foreign supplier - Whether the petitioners are entitled to provisional release of the goods upon furnishing of Bonds and Bank Guarantees securing the differential duty, pending further verification by the customs department... [Read more]

Customs - Provisional release of goods on furnishing of Bonds and Bank Guarantees – Import of "Prime Cold Rolled Stainless Steel Coils", claiming preferential duty exemption under Notification No. 46/2011-Cus. - Department refused to grant "Out of Charge" order for clearance of the goods, citing instructions to deny preferential benefits on the basis of Certificates of Origin issued in the name of the foreign supplier - Whether the petitioners are entitled to provisional release of the goods upon furnishing of Bonds and Bank Guarantees securing the differential duty, pending further verification by the customs department. HELD - In respect of similar consignments supplied by the same foreign exporter, clearance of the goods for domestic consumption was granted to other importers. The foreign supplier had also expressed its willingness to fully cooperate in any verification process. In these circumstances, the provisional release of the goods would serve the interests of justice, particularly when the petitioners offered to secure the differential duty, if any, by furnishing Bonds and Bank Guarantees - The Department is directed to provisionally assess the goods within 10 days, and upon the petitioners furnishing the requisite Bonds and Bank Guarantees within 7 days thereafter, to release the goods within 7 days. This order is confined to the grant of provisional release and shall not be construed as an expression of opinion on the merits of the rival contentions - The writ petitions are disposed of [Read less]

GST – Karnataka AAR – RWA, Housing Society - Exemption under Entry 77 of Notification No. 12/2017-Central Tax (Rate) on amount of Rs.7,500/- collected on annual basis - Whether the availability of exemption up to an amount of Rs.7,500/- per member per month under entry No.77 of Notification 12/2017 - Central Tax (Rate) dated 28-06-2017, as amended is to be ascertained on per annum basis i.e. 90,000/- (7500x12) per financial year per member or on the basis of invoicing period i.e. Monthly/Quarterly Invoicing – HELD - the exemption of Rs.7,500 per month per member, in respect of sourcing of goods or services from a thi... [Read more]

GST – Karnataka AAR – RWA, Housing Society - Exemption under Entry 77 of Notification No. 12/2017-Central Tax (Rate) on amount of Rs.7,500/- collected on annual basis - Whether the availability of exemption up to an amount of Rs.7,500/- per member per month under entry No.77 of Notification 12/2017 - Central Tax (Rate) dated 28-06-2017, as amended is to be ascertained on per annum basis i.e. 90,000/- (7500x12) per financial year per member or on the basis of invoicing period i.e. Monthly/Quarterly Invoicing – HELD - the exemption of Rs.7,500 per month per member, in respect of sourcing of goods or services from a third party for the common use of its members in a housing society or residential complex, is available on a monthly basis, irrespective of the pattern of issuance of invoices, whether monthly or quarterly – Ordered accordingly - Whether contribution collected from members for supply of water procured through water tanker or BWSSB are covered under entry no. 99 of Notification.2/2017 Central Tax (Rate) dated 28-06-2017, as amended i.e. under HSN Code 2201 and therefore exempt - HELD - As per Section 2(30) of the CGST Act, 2017, a composite supply consists of two or more supplies which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. In the present case, the principal supply is upkeep and maintenance services, and the supply of water is ancillary thereto. Accordingly, the entire consideration collected from the members, including amounts attributable to water supply, forms part of the value of the composite supply, the principal supply being services classifiable under SAC 999598. Therefore, the exemption under Entry No. 99 of Notification No. 02/2017-Central Tax (Rate) is not applicable to the applicant - Whether the applicant is liable to pay GST on amounts which it collects from its members for setting up a corpus fund/sinking fund which is in form of deposit – HELD - An advance is generally a payment made upfront toward a future supply and is typically non-refundable, whereas a deposit is ordinarily refundable and held as security, subject to return upon occurrence of specified conditions - The amount collected towards the corpus fund are indisputably in the nature of advances for future supply of service and not deposits. The corpus fund collected by the applicant for future contingencies constitutes consideration for a future supply of services and, therefore, attracts GST in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, under SAC 999598 - Whether the application of deposit towards consideration at the time of actual supply of service (Capital asset purchase) can be proportion to the depreciation charged in books of accounts in relation to a capital asset – HELD - Accounting treatment or depreciation practices do not determine the GST liability or timing, which is governed by the provisions of the CGST Act. the applicant’s argument that GST should be levied only in proportion to depreciation over the life of the capital asset is not supported by the provisions of the CGST Act. Taxability must be determined based on the existence of a supply, the time of supply as per Sections 12 or 13, and the consideration attributable to such supply, independent of accounting treatment or depreciation practices - Whether the exemption up to an amount of Rs.7,500 per member per month for sourcing of goods or services for the common use of members under Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended) is available in respect of sinking/ repair fund contributions collected from members, either at the time of actual supply of services when such deposits are applied as consideration or at the time of collection treating them as advances – HELD - the amount collected by the applicant from its members towards sinking fund/corpus fund constitutes an advance received against future supply of services to its members. Accordingly, the time of supply is determined at the time of receipt of such advance, in terms of Section 13 of the CGST Act, 2017 - the amounts collected towards sinking fund/corpus fund are not required to be clubbed with common area maintenance charges for the purpose of determining eligibility for exemption under Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended - Whether voluntary contribution received from members for celebration of cultural festivals is liable to GST – HELD - the voluntary donations collected by the applicant do not involve any quid pro quo, as the applicant is not under any contractual or statutory obligation to provide any goods or services in return for such donations. The contributions are made at the discretion of the members and are not linked to any specific supply. In view of the above, the voluntary donations collected by the applicant from its members for the celebration of cultural festivals do not constitute consideration for any supply and, therefore, are not liable to GST. [Read less]

GST - Cancellation of GST Registration - Failure to Challenge Assessment Order within Time - Petitioner had participated in the personal hearing during the GST assessment proceedings. However, due to the change of the proper officer, the new officer had issued fresh notices for production of documents and personal hearing, which the petitioner failed to comply with. Subsequently, the impugned GST assessment order was passed. The petitioner had later filed an application for cancellation of GST registration, which was granted. The petitioner remained unaware of the assessment order due to the cancellation of registration an... [Read more]

GST - Cancellation of GST Registration - Failure to Challenge Assessment Order within Time - Petitioner had participated in the personal hearing during the GST assessment proceedings. However, due to the change of the proper officer, the new officer had issued fresh notices for production of documents and personal hearing, which the petitioner failed to comply with. Subsequently, the impugned GST assessment order was passed. The petitioner had later filed an application for cancellation of GST registration, which was granted. The petitioner remained unaware of the assessment order due to the cancellation of registration and filed the present writ petition challenging the assessment order after 11 months - Whether the writ petition filed by the petitioner challenging the GST assessment order is maintainable - HELD - The petitioner's contention of not being aware of the assessment order due to the cancellation of GST registration is not acceptable. Having filed the reply and participated in the personal hearing, now, it is not proper for the petitioner to make a plea that he is not aware of the uploading of assessment order. It is the duty of an assessee to verify the GST web portal for any subsequent developments in the proceedings, after participating in the same. The petitioner had filed the application for cancellation of GST registration only after the quantification of tax liabilities, which suggests that the petitioner was aware of the assessment order - The petitioner is at liberty to file an appeal against the assessment order, subject to the petitioner paying an additional 10% of the disputed tax amount over and above the statutory pre-deposit, and permitting the petitioner to utilize the bank account to make a payment of 20% of the disputed tax amount to the department - The writ petition is dismissed [Read less]

GST - Detention and demand order for delayed movement of goods – Non-generation of new e-way Bill - Whether the impugned order deserves to be quashed and set aside as the appellate authority has not considered the explanation tendered by the petitioner – HELD - The petitioner had specifically contended that the E-way Bills were duly generated on 31.05.2025 and the vehicle was scheduled to depart on Sunday, 1st June, 2025, however, due to technical fault the vehicle remained in a non-motorable condition throughout 1st June, 2025 and the movement of the vehicle began only on the morning of 2nd June, 2025 - The appellate ... [Read more]

GST - Detention and demand order for delayed movement of goods – Non-generation of new e-way Bill - Whether the impugned order deserves to be quashed and set aside as the appellate authority has not considered the explanation tendered by the petitioner – HELD - The petitioner had specifically contended that the E-way Bills were duly generated on 31.05.2025 and the vehicle was scheduled to depart on Sunday, 1st June, 2025, however, due to technical fault the vehicle remained in a non-motorable condition throughout 1st June, 2025 and the movement of the vehicle began only on the morning of 2nd June, 2025 - The appellate authority has not even remotely adverted to the explanation tendered by the petitioner and has proceeded to pass the impugned order without considering the same - Accordingly, the impugned order is quashed and set aside, and the matter is remanded to the respondent who shall pass a fresh, reasoned and speaking order after duly considering the explanation submitted by the petitioner and after granting an opportunity of hearing, if so required - The petition is allowed [Read less]

GST - Cancellation of Bail – Revenue’s application seeking for cancellation of bail granted to the respondent for offences under Sections 132(1)(a)(f)(h) and (1) of CGST Act, 2017 - The respondent was accused of clandestinely supplying goods without issuing invoices – HELD - The Trial court's reasoning for granting bail is flawed, as the offences under Section 132 of the CGST Act are non-cognizable and non-bailable if the tax evasion amount exceeds Rs. 5 crores, irrespective of the deposit made by the accused. In this case, the deposit of Rs.5 Crores from an allegedly evaded tax does not alter the classification of t... [Read more]

GST - Cancellation of Bail – Revenue’s application seeking for cancellation of bail granted to the respondent for offences under Sections 132(1)(a)(f)(h) and (1) of CGST Act, 2017 - The respondent was accused of clandestinely supplying goods without issuing invoices – HELD - The Trial court's reasoning for granting bail is flawed, as the offences under Section 132 of the CGST Act are non-cognizable and non-bailable if the tax evasion amount exceeds Rs. 5 crores, irrespective of the deposit made by the accused. In this case, the deposit of Rs.5 Crores from an allegedly evaded tax does not alter the classification of the offence as either non-cognisable or bailable. Additionally, under section 138 of the Act, tax evasion up to 5 crores is compoundable, whereas amounts above 5 crores are not compoundable. Therefore, the analogy used by the trial court is flawed and cannot justify granting bail to the respondent - Nevertheless, beyond this analogy, the respondent intends to deposit 50 per cent of the alleged evasion amount. The department’s counsel has agreed to this and in accordance with the court’s order, the respondent has already deposited five crores in the trial court. Additionally, other co-accused had been granted bail by the Supreme Court. Accordingly. the instant application to cancel bail is dismissed [Read less]

Service Tax - Demand based solely on difference between income reported under Income Tax and Service Tax - Whether the initiation and conclusion of the proceedings solely on the ground of discrepancy between the service tax returns filed and the income declared under the Income Tax Act, 1961 is sustainable – HELD - The scope of the show cause notice was limited to the discrepancy between the income reported for assessment under the Income Tax Act, 1961 and that reported under Section 70 of the Finance Act, 1994 – A show cause notice issued solely on the ground of difference between the returns under the Income Tax Act,... [Read more]

Service Tax - Demand based solely on difference between income reported under Income Tax and Service Tax - Whether the initiation and conclusion of the proceedings solely on the ground of discrepancy between the service tax returns filed and the income declared under the Income Tax Act, 1961 is sustainable – HELD - The scope of the show cause notice was limited to the discrepancy between the income reported for assessment under the Income Tax Act, 1961 and that reported under Section 70 of the Finance Act, 1994 – A show cause notice issued solely on the ground of difference between the returns under the Income Tax Act, 1961 and the value of the taxable service under the Finance Act, 1994 is not sustainable. The department must first identify the nature of the taxable service and the service recipient before fastening any duty liability on the assessee, a show cause notice based on presumption and third-party information without examining the books of account and records of the assessee is not sustainable - The service tax demand based solely on the difference between the income reported under the Income Tax Act, 1961 and the Service Tax Act, 1994 is set aside – The appeal is allowed [Read less]

GST – Chhattisgarh AAR – Classification of Soap - Classification of soap as "toilet soap" or "laundry soap" - Applicant's soap has a Total Fatty Matter (TFM) content exceeding 60%, aligning with the definition of "toilet soap" as per BIS standards. However, the applicant's soap is used for both personal hygiene (bathing) and laundry purposes by consumers - Whether the applicant's soap, given its composition (TFM>60%) and dual-use nature (bathing and laundry), should be classified under HSN 3401 19 41 ("Toilet soap") or HSN 3401 19 42 ("Laundry soap") and the applicable GST rate thereon – HELD - Although it is not wit... [Read more]

GST – Chhattisgarh AAR – Classification of Soap - Classification of soap as "toilet soap" or "laundry soap" - Applicant's soap has a Total Fatty Matter (TFM) content exceeding 60%, aligning with the definition of "toilet soap" as per BIS standards. However, the applicant's soap is used for both personal hygiene (bathing) and laundry purposes by consumers - Whether the applicant's soap, given its composition (TFM>60%) and dual-use nature (bathing and laundry), should be classified under HSN 3401 19 41 ("Toilet soap") or HSN 3401 19 42 ("Laundry soap") and the applicable GST rate thereon – HELD - Although it is not within the jurisdiction of this authority to pronounce any decision as regards the mandatory requirement for displaying the crucial information on soap labels regarding the type of soap being manufactured and supplied, the contention of the applicant that the wrapping/packaging of the soap does not contain any marking or declaration as to whether the product is “toilet soap” or ‘‘laundry soap”, appears not to be in compliance with the procedures as mandated under the law in vogue - It is the goods that are manufactured and subsequently declared and supplied by the applicant, that attains significance leading to the determination the correct classification of goods and its effective rate of tax. The toilet soaps for washing the body/skin aptly falls under ITC(HS)Code 3401 11 90, whereas laundry soaps for washing purpose (other than toilet soap), merits classification under 3401 19 42 - Toilet soaps (other than industrial soaps) in the form of bars, cakes, moulded pieces or shapes, manufactured and sold/supplied by the applicant for washing of skin, classifiable under Heading no. 3401, attract tax at 5% GST. Conversely, Laundry soaps in the form of cakes, moulded pieces or shapes, whether or not containing soap [other than toilet soap in the form of bars, cakes, moulded pieces or shapes], manufactured and sold/supplied by the applicant for washing purposes, classifiable under Heading no. 3401, attract tax at 18% GST – Ordered accordingly [Read less]

Service Tax - Taxability of Services Provided for Transmission/Distribution of Electricity - Appellant, a petty contractor, provided services of maintenance and repair to M/s Purvanchal Vidyut Vitran Nigam Limited (PVVNL) for activities such as re-stringing of loose HT lines, strengthening of existing HT/LT lines, laying and stringing of conductors, and repairing of LT clamps, shackle insulators, etc. - Whether the services provided by the appellant for the maintenance and repair of transmission/distribution infrastructure of electricity are eligible for exemption under Notification No. 45/2010-ST – HELD - The services p... [Read more]

Service Tax - Taxability of Services Provided for Transmission/Distribution of Electricity - Appellant, a petty contractor, provided services of maintenance and repair to M/s Purvanchal Vidyut Vitran Nigam Limited (PVVNL) for activities such as re-stringing of loose HT lines, strengthening of existing HT/LT lines, laying and stringing of conductors, and repairing of LT clamps, shackle insulators, etc. - Whether the services provided by the appellant for the maintenance and repair of transmission/distribution infrastructure of electricity are eligible for exemption under Notification No. 45/2010-ST – HELD - The services provided by the appellant for the maintenance and repair of transmission/distribution infrastructure of electricity are eligible for exemption under Notification No. 45/2010-ST - The expression 'transmission of electricity' is very wide and encompasses activities such as maintenance and repair of transmission lines, substations, and other related equipment. Therefore, all taxable services rendered in relation to transmission/distribution of electricity would be eligible for the benefit of exemption under the said Notification - The confirmation of Service Tax demand in respect of the maintenance or repair activities undertaken by the appellant so far as it relates to the transmission/distribution of electricity cannot be sustained in law and set aside – The appeal is allowed [Read less]