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Service Tax liability on security services, hiring of cars, legal charges, rent received from employees, and goods transport agency service – HELD - For the services of security and hiring of cars, the service provider is required to pay the service Tax, and the appellant as the receiver of these services is not liable to pay the Service Tax. Regarding the legal charges, the appellant had included payments for Chartered Accountant's services and other consultants under this head, and the appellant conceded the demand. For the rent received from employees equivalent to the House Rent Allowance paid to them, this can be tr... [Read more]

Service Tax liability on security services, hiring of cars, legal charges, rent received from employees, and goods transport agency service – HELD - For the services of security and hiring of cars, the service provider is required to pay the service Tax, and the appellant as the receiver of these services is not liable to pay the Service Tax. Regarding the legal charges, the appellant had included payments for Chartered Accountant's services and other consultants under this head, and the appellant conceded the demand. For the rent received from employees equivalent to the House Rent Allowance paid to them, this can be treated as free accommodation provided by the appellant, and hence the appellant is not required to pay Service Tax on this - The appeals are partially allowed, with the Service Tax demand upheld only on the legal charges and goods transport agency service, along with interest. No Service Tax was payable by the appellant on the security services, hiring of cars, and rent received from employees equivalent to the House Rent Allowance. No penalties were imposed on the appellant - The appeals are disposed of [Read less]

GST – Gujarat AAAR - Classification of Geomembranes – Respondent-Assessee manufacturer of textile products including geomembranes sought advance ruling on whether geomembranes should be classified under HSN 5971 (textile products coated/covered/laminated with plastics) or HSN 3926 (other articles of plastics) - Advance Ruling Authority held that geomembranes are classified under HSN 5911 (textile products and articles for technical uses) - Department appealed against AAR ruling claiming that the product geomembranes manufactured from HDPE strips is rightly classifiable under HSN 3926 – HELD - The issue stands settled... [Read more]

GST – Gujarat AAAR - Classification of Geomembranes – Respondent-Assessee manufacturer of textile products including geomembranes sought advance ruling on whether geomembranes should be classified under HSN 5971 (textile products coated/covered/laminated with plastics) or HSN 3926 (other articles of plastics) - Advance Ruling Authority held that geomembranes are classified under HSN 5911 (textile products and articles for technical uses) - Department appealed against AAR ruling claiming that the product geomembranes manufactured from HDPE strips is rightly classifiable under HSN 3926 – HELD - The issue stands settled by the Gujarat High Court in the case of an identical product, where the High Court had held that geomembranes are correctly classified under HSN 5911, and not under Chapter 39. The manufacturing process followed by the respondent is identical to the one considered by the High Court - Since the jurisdictional High Court in the case of M/s Ananta Synthetic Innovations has held that the product in question is classifiable under Chapter 59 and not under Chapter 39, the Authority is bound to follow the same. Accordingly, the geomembranes manufactured by the respondent are correctly classified under HSN 5911 – The Department’s appeal is rejected [Read less]

Service Tax – Reimbursement of salary, Deputation of expats, Penalty under Section 78 and 77 of the Finance Act, 1994 - The appellant reimbursed the salary and travelling expenses incurred on deputation by experts from a company situated outside India - Department raised demand for service tax under the category of 'Manpower Recruitment or Supply Agency Services' (MRSAS) and also imposed penalties under Sections 78, 77(1) and 77(2) of the Finance Act, 1994 – HELD - The appellant had bonafide belief that service tax was not payable on the reimbursement of expenses as it was on a cost-to-cost basis, and the appellant had... [Read more]

Service Tax – Reimbursement of salary, Deputation of expats, Penalty under Section 78 and 77 of the Finance Act, 1994 - The appellant reimbursed the salary and travelling expenses incurred on deputation by experts from a company situated outside India - Department raised demand for service tax under the category of 'Manpower Recruitment or Supply Agency Services' (MRSAS) and also imposed penalties under Sections 78, 77(1) and 77(2) of the Finance Act, 1994 – HELD - The appellant had bonafide belief that service tax was not payable on the reimbursement of expenses as it was on a cost-to-cost basis, and the appellant had voluntarily paid the entire service tax and interest before the issuance of the Show Cause Notice. The taxability on seconded employees was a matter of prolonged litigation, and there was no deliberate attempt by the appellant to evade payment of service tax. In the given factual matrix, the appellant is eligible for relief under Section 73(3) of the Finance Act, 1994 and the penalties under Sections 78 and 77 are not sustainable - The penalties imposed under Sections 78 and 77 are set aside, while upholding the remaining part of the Order-in-Original – The appeal is allowed partly [Read less]

Service Tax - Assignment of copyright and undertaking of production work - Appellant assigned the exclusive copyrights and all ownership rights to Gemini TV for a perpetual period, while also agreeing to undertake the production work for the serial on behalf of Gemini TV as per their directions – Whether Assignment of copyright and production work falls under the taxable service of "Programme Producer's Service" under Section 65(105)(zzu) of the Finance Act, 1994 – HELD - The agreement between the appellant and Gemini TV contained terms that evidenced the appellant undertaking production work on behalf of Gemini TV, in... [Read more]

Service Tax - Assignment of copyright and undertaking of production work - Appellant assigned the exclusive copyrights and all ownership rights to Gemini TV for a perpetual period, while also agreeing to undertake the production work for the serial on behalf of Gemini TV as per their directions – Whether Assignment of copyright and production work falls under the taxable service of "Programme Producer's Service" under Section 65(105)(zzu) of the Finance Act, 1994 – HELD - The agreement between the appellant and Gemini TV contained terms that evidenced the appellant undertaking production work on behalf of Gemini TV, in addition to the assignment of copyrights in perpetuity - The consideration received by the appellant for the production work undertaken is taxable under the "Programme Producer's Service" category, notwithstanding the fact that the agreement also contained terms for assignment of copyrights in perpetuity - The fact that the agreement contains clauses indicating perpetual assignment of copyright of the program produced does not detract from the fact that the agreement equally contains clauses that required the appellant to undertake production work on behalf of M/s. Gemini TV. In such circumstances, the agreement cannot be viewed as one that pertains solely to assignment of copyrights so as to denude the Revenue from levying service tax on the service rendered by the appellant to M/s. Gemini TV, namely, the activity of production work – The invocation of the extended period of limitation and imposition of penalty is upheld, as the appellant had failed to disclose the income from the production work in its ST-3 returns initially, despite commencing payment of service tax from April 2008 without any material change in the agreement - The demand of service tax on the appellant for 'programme producer's services' based on the assignment agreement between the appellant and Gemini TV is upheld and the appeal is dismissed [Read less]

Service Tax - Applicability of Service Tax under Intellectual Property Rights Service (IPRS) - Whether the exchange of non-public information like designs, plans, ideas, and cost data between the appellant and a foreign entity would fall under the ambit of IPRS under Section 65(55b) of the Finance Act 1994 and thereby attract service tax – HELD - For an activity to be taxed under IPRS, the intangible property like trademark, design, patent, etc. should be governed and enforceable under Indian laws – In the instant case, there is nothing on record to suggest that said confidential information was otherwise protected und... [Read more]

Service Tax - Applicability of Service Tax under Intellectual Property Rights Service (IPRS) - Whether the exchange of non-public information like designs, plans, ideas, and cost data between the appellant and a foreign entity would fall under the ambit of IPRS under Section 65(55b) of the Finance Act 1994 and thereby attract service tax – HELD - For an activity to be taxed under IPRS, the intangible property like trademark, design, patent, etc. should be governed and enforceable under Indian laws – In the instant case, there is nothing on record to suggest that said confidential information was otherwise protected under any Indian law or otherwise and therefore such exchange of information could not have been brought under the purview of IPRS - Further, even though, classification itself has not been contested under the category of IPRS, even though there were certain clarifications issued by Board and certain judgments were also available on this issue, the appellant had opted not to contest the classification on merit - Since the confidential information exchanged was not protected under any Indian law, it could not be considered as an IPR and thus, the demand under IPRS is not maintainable. However, service tax demand is upheld as the appellant did not contest the classification - The service tax demand under IPRS is upheld, but the payment made by the appellant through CENVAT credit is held to be valid. The penalty under Section 15 of the CENVAT Credit Rules 2004 is set aside, but the penalty under Sections 76, 77, and 78 of the Finance Act 1994 is upheld – The appeal is partly allowed - Utilization of CENVAT Credit for payment of service tax under Reverse Charge Mechanism - Whether the appellant could utilize the available CENVAT credit to pay the service tax liability under RCM prior to the amendment in Cenvat Credit Rules 2004 w.e.f. 01.07.2012 – HELD - The appellant was entitled to utilize the available CENVAT credit to discharge the service tax liability under RCM for the period prior to 01.07.2012, as there was no statutory bar during that period. The payment made by the appellant by debiting the CENVAT credit account was correct and should be adjusted towards the confirmed demand. [Read less]

GST - Anti-Profiteering – The Complainant alleged respondent failed to pass on benefit of ITC to homebuyers - DGAP investigated and concluded that the no benefit accrued to the Respondent on introduction of the GST law and hence, there was no requirement to pass on any benefit in terms of Section 171 of the CGST Act - Complainant objected to DGAP's methodology, computation, and reliance on respondent's data – HELD - There is no direct co-relation between the turnover and the ITC availed for a particular period as the expenses in a real estate project are not uniform throughout the life cycle of the project. The eligibi... [Read more]

GST - Anti-Profiteering – The Complainant alleged respondent failed to pass on benefit of ITC to homebuyers - DGAP investigated and concluded that the no benefit accrued to the Respondent on introduction of the GST law and hence, there was no requirement to pass on any benefit in terms of Section 171 of the CGST Act - Complainant objected to DGAP's methodology, computation, and reliance on respondent's data – HELD - There is no direct co-relation between the turnover and the ITC availed for a particular period as the expenses in a real estate project are not uniform throughout the life cycle of the project. The eligibility of credit depends on the nature of the construction activity undertaking during the particular period. For the purpose of computation of profiteering, one has to calculate the total saving on account of GST and divide such savings by total area to arrive at the per square feet benefit to be passed on to the recipient i.e. the homebuyers - The DGAP correctly followed methodology prescribed by High Court in Reckitt Benckiser case, which held no uniform formula can be prescribed, and savings on entire project should be divided by total area to arrive at per sq. ft. benefit - DGAP's computation of credit ratio to purchase value, considering reversal of ITC on unsold units, was proper - Complainant's objections about inconsistency in DGAP reports, non-examination of EPC contractor's ITC flow, and reliance on respondent's data without independent verification, are unsubstantiated - DGAP report is accepted and the Complainant's objections are rejected – Ordered accordingly [Read less]

GST – Gujarat AAR - Eligibility to Input Tax Credit on input services for construction of foundation and structural support for plant and machinery within factory – Construction of RCC foundation and structural steel support for installing various equipment and machinery – Foundation and structural support within the scope of definition of ‘plant and machinery’ - Whether the applicant is eligible to avail ITC on the input services used for the construction of foundation and structural support for the equipment and machinery installed within the factory, in terms of Section 17(5)(c) of the CGST Act, 2017 – HELD ... [Read more]

GST – Gujarat AAR - Eligibility to Input Tax Credit on input services for construction of foundation and structural support for plant and machinery within factory – Construction of RCC foundation and structural steel support for installing various equipment and machinery – Foundation and structural support within the scope of definition of ‘plant and machinery’ - Whether the applicant is eligible to avail ITC on the input services used for the construction of foundation and structural support for the equipment and machinery installed within the factory, in terms of Section 17(5)(c) of the CGST Act, 2017 – HELD - What qualifies as ‘plant and machinery’ is an apparatus, equipment, and machinery which is fixed to earth by foundation. The various equipments which are set up in the plants would qualify as an apparatus/machinery. The equipment and machinery installed in the plants, such as reactors, distillation columns, pumps, etc., qualify as 'plant and machinery' as per the explanation to Section 17 of the CGST Act. Further, the foundation and structural support, including RCC structures and structural steel, are essential and integral to the installation and functioning of these equipment/machinery - The CBIC Circular No. 219/13/2024-GST had clarified that ITC on ducts and manholes used in the network of Optical Fiber Cables is eligible, as they are the basic components for the OFC network used in providing telecommunication services. Similar logic applies to the foundation and structural support for plant and machinery, as they are specifically included in the definition of 'plant and machinery' under the Act, and are not excluded from the scope of ITC - The applicant is eligible to avail ITC on input services used for construction of foundation and structural support for plant and machinery installed within the factory for manufacture of APIs – Ordered accordingly [Read less]

Central Excise - Refund claim for double payment of excise duty, Period of Limitation - Appellant had wrongly utilized Cenvat credit for payment of excise duty on goods cleared under an exemption notification, and subsequently paid the duty in cash from their current account, resulting in double payment – Rejection of refund claim for the amount paid in excess on the ground of time-barred - Whether the refund claim filed by the appellant is barred by limitation under Section 11B of the Central Excise Act, 1944 – HELD - The refund claim filed by the appellant cannot be barred by limitation merely because the period of l... [Read more]

Central Excise - Refund claim for double payment of excise duty, Period of Limitation - Appellant had wrongly utilized Cenvat credit for payment of excise duty on goods cleared under an exemption notification, and subsequently paid the duty in cash from their current account, resulting in double payment – Rejection of refund claim for the amount paid in excess on the ground of time-barred - Whether the refund claim filed by the appellant is barred by limitation under Section 11B of the Central Excise Act, 1944 – HELD - The refund claim filed by the appellant cannot be barred by limitation merely because the period of limitation under Section 11B had expired. When duty is paid under a mistake of law, the refund claim is admissible for the period covered by the refund application, regardless of the expiry of the limitation period. The appellant had made the double payment due to a bona fide mistake, and not due to any deliberate contravention of the Cenvat Credit Rules - It is not the case of contravention of the provisions of Rule 3(4) of the CCR, 2004 rather it is a case of wrong payment of duty from Cenvat Credit account. There is nothing on record which can prove that the payment of duty from Cenvat Credit account was made deliberately so that he is not required to pay the amount of duty in cash from the current account. It appears to be a case of bonafide mistake which cannot be considered as contravention of the provision of Rule 3(4) of CCR, 2004 - The ld. Commissioner erred in holding that the refund claim of the appellant is barred by limitation, whereas, in the present case the limitation provided in Section 11B of CEA is not applicable - The impugned order is set aside and the appeal is allowed [Read less]

GST – Gujarat AAR - Exemption to Training Services provided by NSDC Approved Training Partner – Applicant is an NSDC approved training partner, provides digital marketing training courses as part of the Government's Skill India initiative - Prior to the changes in law, the training services provided by the applicant were treated as exempt supplies. However, due to amendments in 2024 and their subsequent reversal in 2025, there was ambiguity about the GST applicability during the interim period - Whether the training services provided by the applicant as an MSDE/NSDC affiliated Training Partner imparting NSQF-aligned di... [Read more]

GST – Gujarat AAR - Exemption to Training Services provided by NSDC Approved Training Partner – Applicant is an NSDC approved training partner, provides digital marketing training courses as part of the Government's Skill India initiative - Prior to the changes in law, the training services provided by the applicant were treated as exempt supplies. However, due to amendments in 2024 and their subsequent reversal in 2025, there was ambiguity about the GST applicability during the interim period - Whether the training services provided by the applicant as an MSDE/NSDC affiliated Training Partner imparting NSQF-aligned digital marketing courses to students are exempt from GST under Sl. No. 69 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended from time to time (including by Notification Nos. 08/2024-CT(R) and 06/2025-CT(R)) – HELD – The Entry No. 69 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended exempts services provided by a training partner approved by the NSDC in relation to the National Skill Development Programme implemented by NSDC or any other scheme implemented by NSDC. Since the applicant is an NSDC approved training partner and the digital marketing course it provides is aligned with the National Skills Qualifications Framework (NSQF) and is part of the Government's Skill India mission, the applicant's services fall within the scope of the exemption - However, during the intervening period from 10.10.2024 to 15.01.2025, when the exemption for NSDC approved training partners was temporarily withdrawn, the applicant's liability to pay GST would be on an 'as is where is' basis. This means that if the applicant had not paid GST during this period, it would not be required to do so now, but if it had paid, the payment would be allowed to stand - The training services provided by the applicant are exempt from GST under Entry No. 69 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended, except for the intervening period from 10.10.2024 to 15.01.2025, where the liability would be on an 'as is where is' basis – Ordered accordingly [Read less]

Service Tax – Demand beyond the scope of Show Cause Notice, Classification of taxable service – While the SCN proposed demand under "Construction of Residential Complex Services" in the Show Cause Notice, the Adjudicating Authority confirmed the demand under 'Works Contract Services' - Whether the adjudicating authority can confirm the demand under a taxable category different from the one proposed in the notice - HELD – The adjudicating authority cannot travel beyond the scope of the show cause notice and confirm the demand under a different taxable head. A service tax demand must align with the specific head propos... [Read more]

Service Tax – Demand beyond the scope of Show Cause Notice, Classification of taxable service – While the SCN proposed demand under "Construction of Residential Complex Services" in the Show Cause Notice, the Adjudicating Authority confirmed the demand under 'Works Contract Services' - Whether the adjudicating authority can confirm the demand under a taxable category different from the one proposed in the notice - HELD – The adjudicating authority cannot travel beyond the scope of the show cause notice and confirm the demand under a different taxable head. A service tax demand must align with the specific head proposed in the show cause notice. Confirming the demand under WCS, when it was proposed under 'Construction of Residential Complex Services', violates the principles of natural justice as the assessee cannot defend a charge not originally levelled - The show cause notice is the foundation of the case and the adjudicating authority is bound by the classification stated therein – The demand confirmed under WCS is set aside and the appeal of the assessee is allowed - Exemption for construction of historical monument and related facilities - Fact - The department appealed against the dropping of demand for service tax on the construction of Coronation Park, which included an International Centre and a Restaurant building - HELD - The Coronation Park is a historical monument of national importance. The construction of the park and the related facilities like parking lot are eligible for exemption under the Mega Notification 25/2012-ST. The activities carried out by the Government for public welfare, without profit motive, cannot be considered as 'commercial' in nature. Thus, the construction of the parking lot adjacent to the historical monument is also eligible for the exemption. Further, even if there was a demand on the construction of International Centre and Restaurant, the same cannot be sustained as the demand was initially proposed under a different taxable head - The cross-appeal filed by the Department is rejected [Read less]

The mere participation in hearing does not fulfil the requirement of PoNJ. The passing of adjudication order on the same day of conclusion of personal hearing indicates that the material placed on record may not have been adequately considered.

Service Tax – Development of property under Joint Development Agreement, Demand under Commercial or Industrial Construction Service – Appellants are developer engaged in the construction of commercial buildings and residential complexes - Demand alleging rendering of 'Commercial or Industrial Construction Service' without registration or payment of service tax for the period October 2005 to March 2008 – HELD - The construction agreements between builders/developers and buyers are works contracts, which became taxable only from 01.07.2010, upon insertion of the Explanation to Section 65(105)(zzzh). Accordingly, no ser... [Read more]

Service Tax – Development of property under Joint Development Agreement, Demand under Commercial or Industrial Construction Service – Appellants are developer engaged in the construction of commercial buildings and residential complexes - Demand alleging rendering of 'Commercial or Industrial Construction Service' without registration or payment of service tax for the period October 2005 to March 2008 – HELD - The construction agreements between builders/developers and buyers are works contracts, which became taxable only from 01.07.2010, upon insertion of the Explanation to Section 65(105)(zzzh). Accordingly, no service tax was leviable on the appellant's activities prior thereto - Since the disputed period in this appeal, is October 2005 to March 2008, there was no legislative intent to tax the appellant’s activities – Further, no malafide could be attributed to the appellants warranting invoking of the extended period of limitation - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax liability on Services provided by educational institute affiliated with NIELIT – Appellant-institute was running certificate, diploma and degree courses affiliated with the National Institute of Electronics & Information Technology (NIELIT) - Based on information received from the Income Tax Department, a demand was raised alleging that the appellant suppressed value of taxable services and did not pay the applicable service tax - Whether the services provided by the appellant institute were exempt from service tax under Notification No. 25/2012-ST dated 20.06.2012 – HELD - The diploma/certificate courses r... [Read more]

Service Tax liability on Services provided by educational institute affiliated with NIELIT – Appellant-institute was running certificate, diploma and degree courses affiliated with the National Institute of Electronics & Information Technology (NIELIT) - Based on information received from the Income Tax Department, a demand was raised alleging that the appellant suppressed value of taxable services and did not pay the applicable service tax - Whether the services provided by the appellant institute were exempt from service tax under Notification No. 25/2012-ST dated 20.06.2012 – HELD - The diploma/certificate courses run by the appellant institute, which was affiliated with NIELIT, are covered by the exemption under Notification No. 25/2012-ST dated 20.06.2012 for the services provided to educational institutions. The educational institutions conducting any course which is a requirement to write an examination to obtain a degree or certificate awarded by any agency created by law and which enables the students to get jobs or work as an entrepreneur/self-employed, are entitled to the exemption under the said notification - Furthermore, the demand is barred by limitation as the revenue had picked up the figures from the Income Tax Return maintained by the assessee, which is a public document. When the income arising from various activities is reflected in the public documents, it cannot be said that there was any suppression or misstatement on the part of the assessee to invoke the longer period of limitation - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Relevant date for determination of rate of duty, Applicability of Customs Duty Exemption Notification 21/2022 for import of raw cotton - On the same day as the last Bill of Entry was filed, a new exemption Notification No. 21/2022 was issued exempting BCD and Additional Duty of Customs on import of cotton with effect from April 14, 2022 - Appellant sought reassessment and substitution/cancellation of the Bills of Entry to avail the exemption benefit under Notification No. 21/2022, which was rejected by the authorities - Whether the appellant is eligible to avail the exemption benefit provided by Notification No. ... [Read more]

Customs - Relevant date for determination of rate of duty, Applicability of Customs Duty Exemption Notification 21/2022 for import of raw cotton - On the same day as the last Bill of Entry was filed, a new exemption Notification No. 21/2022 was issued exempting BCD and Additional Duty of Customs on import of cotton with effect from April 14, 2022 - Appellant sought reassessment and substitution/cancellation of the Bills of Entry to avail the exemption benefit under Notification No. 21/2022, which was rejected by the authorities - Whether the appellant is eligible to avail the exemption benefit provided by Notification No. 21/2022 – HELD - The appellant is not entitled to avail the benefit of Notification No. 21/2022 as the same was non-existent on the date of filing of the B/E. As per Section 15(1)(a) of the Customs Act, 1962, the relevant date for determination of duty rate is the date of filing of the Bill of Entry. Since the exemption notification was issued after the filing of the Bills of Entry, the benefit thereof cannot be extended to the appellant - The appellant's request for substitution of the Bills of Entry from home consumption to warehousing was rightly rejected by the authorities as the primary concern is to protect the interest of the Revenue, which would have been prejudicially affected by permitting such substitution solely to avail the benefit of the later exemption notification. The appellant cannot exercise the option to choose the more beneficial exemption notification when the later notification was not in existence at the time of filing of the Bills of Entry - The impugned order is affirmed and the appeal is dismissed [Read less]

Central Excise - Refund of unutilized CENVAT credit, Period of Limitation for claim of refund – Rejection of part of the claims as time-barred. The appellants contended that the limitation period under Section 11B of the Central Excise Act, 1944 does not apply to refund claims under the Cenvat Credit Rules – HELD – When the statute does not prescribe the relevant date from which the limitation period is to be counted, it cannot be construed that any limitation period applies. The learned Commissioner (Appeals) had not examined these legal aspects in detail. Further, the subsequent amendment to the CENVAT Credit Rules... [Read more]

Central Excise - Refund of unutilized CENVAT credit, Period of Limitation for claim of refund – Rejection of part of the claims as time-barred. The appellants contended that the limitation period under Section 11B of the Central Excise Act, 1944 does not apply to refund claims under the Cenvat Credit Rules – HELD – When the statute does not prescribe the relevant date from which the limitation period is to be counted, it cannot be construed that any limitation period applies. The learned Commissioner (Appeals) had not examined these legal aspects in detail. Further, the subsequent amendment to the CENVAT Credit Rules through Notification No. 14/2016-CE(NT) dated 01.03.2016, prescribed the limitation period for service tax refunds, was also not considered by the Ld. Commissioner – The matter is remanded back to the Commissioner (Appeals) to re-examine the legal issues raised by the appellants regarding the applicability of the limitation period under Section 11B of the Central Excise Act, 1944 to the service tax refund claims - The appeals are allowed by way of remand [Read less]

Customs - Valuation of used machinery import, Enhancement of value based on Chartered Engineer's Certificate - The appellant imported 20 used Picanol GTM AS Rapier Looms and declared a value of USD 4,000 per unit. The Customs authorities rejected the declared value and re-determined the value at USD 7,500 per unit based on a Chartered Engineer's certificate obtained locally - Whether the declared value of the imported second-hand machines was rightly enhanced based solely on the Chartered Engineer's Certificate – HELD - The Appellant had obtained a Chartered Engineer's certificate from the port of loading, which containe... [Read more]

Customs - Valuation of used machinery import, Enhancement of value based on Chartered Engineer's Certificate - The appellant imported 20 used Picanol GTM AS Rapier Looms and declared a value of USD 4,000 per unit. The Customs authorities rejected the declared value and re-determined the value at USD 7,500 per unit based on a Chartered Engineer's certificate obtained locally - Whether the declared value of the imported second-hand machines was rightly enhanced based solely on the Chartered Engineer's Certificate – HELD - The Appellant had obtained a Chartered Engineer's certificate from the port of loading, which contained all the material particulars of the used machinery, except the year of manufacture. The rejection of the Load Port Chartered Engineer's certificate solely on the ground of non-mentioning of the year of manufacture is not justified, especially when the local Chartered Engineer's certificate also did not indicate any significant difference in the condition of the machinery - The purpose of the Board's Circular of 2008, which mandated the Load Port Chartered Engineer's certificate, was to curb the practice of importing new machinery in the guise of used machinery. However, in the present case, the Load Port Chartered Engineer's certificate contained all the material particulars, and the only missing information was the year of manufacture, which did not fundamentally alter the nature of the goods imported. Therefore, the redetermination of the declared value based solely on the local Chartered Engineer's certificate is not in order and set aside - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Demand based on difference between receipts as per ST-3 and Financial records invoking extended period - Whether the appellant is liable to pay service tax on the differential amount – HELD - The nature of services provided by the appellant had already been decided in the earlier proceedings and it was held that the exemption under Notification No.25/2012 would be admissible in respect of the same. The impugned order was a non-speaking order and did not record any reasons for setting aside the Order-in-Original - The SCN has been issued in terms of Section 73(1A) having recorded so should have considered th... [Read more]

Service Tax - Demand based on difference between receipts as per ST-3 and Financial records invoking extended period - Whether the appellant is liable to pay service tax on the differential amount – HELD - The nature of services provided by the appellant had already been decided in the earlier proceedings and it was held that the exemption under Notification No.25/2012 would be admissible in respect of the same. The impugned order was a non-speaking order and did not record any reasons for setting aside the Order-in-Original - The SCN has been issued in terms of Section 73(1A) having recorded so should have considered the orders passed in respect of show cause notice itself. It is settled position in law that departmental authorities could not be selective in making demands unless and until any changes in position of law and other facts - Since there was no new material or change in the position of law, there is no merit in the impugned order and set aside - The appeal is allowed [Read less]

GST – Odisha AAR – Transfer of leasehold land and partially constructed property as capital contribution to LLP, Non-monetary consideration – Applicant proposes to enter into a Limited Liability Partnership (LLP) with another party for operating the hotel business. As its capital contribution to the LLP, the applicant intends to transfer the developed leasehold land and the constructed hotel portion of the building - Whether contribution of developed leasehold land and constructed structure to the LLP constitutes a "supply" under GST law and attracts GST liability – HELD - The proposed transaction would be treated ... [Read more]

GST – Odisha AAR – Transfer of leasehold land and partially constructed property as capital contribution to LLP, Non-monetary consideration – Applicant proposes to enter into a Limited Liability Partnership (LLP) with another party for operating the hotel business. As its capital contribution to the LLP, the applicant intends to transfer the developed leasehold land and the constructed hotel portion of the building - Whether contribution of developed leasehold land and constructed structure to the LLP constitutes a "supply" under GST law and attracts GST liability – HELD - The proposed transaction would be treated as a supply of service under the GST Act and not a mere capital contribution. The applicant has undertaken the construction and development of the hotel project with the clear intention of commercially exploiting it through a pre-planned LLP arrangement. The contribution of the developed leasehold rights and associated commercial infrastructure to the LLP is not a passive or incidental capital restructuring but a structured commercial transaction undertaken with a clear commercial objective of transferring the developed leasehold rights and associated commercial infrastructure to the LLP for the purpose of operating a hotel business - Under the GST framework, the true nature of a transaction must be determined based on its economic substance rather than the nomenclature adopted by the parties. Where a transaction is structured as part of a pre-arranged commercial arrangement resulting in the transfer of valuable business rights to another taxable person, the same would fall within the scope of 'supply' under Section 7 read with Schedule II of the CGST Act, 2017 - The proposed transaction by the applicant of transferring the developed leasehold land and constructed hotel property as capital contribution to the LLP would be treated as a supply of service under the GST framework and attract the levy of GST – Ordered accordingly [Read less]

GST – Karnataka AAR - Classification of diesel and biodiesel blends manufactured from used cooking oil - Classification and applicable GST rate on biodiesel blends of B20 (Biodiesel 20% + HSD 80%) (b) B30 (Biodiesel 30% + HSD 70%) (c) B40 (Biodiesel 40% + HSD 60%) (d) B50 (Biodiesel 50% + HSD 50%) (e) B60 (Biodiesel 60% + HSD 40%) (f) B70 (Biodiesel 70% + HSD 30%) – HELD - Under the GST regime, specified petroleum products, including High-Speed Diesel, have been consciously kept outside the levy of GST. However, this exclusion is product-specific and does not automatically extend to all blends or mixtures containing pe... [Read more]

GST – Karnataka AAR - Classification of diesel and biodiesel blends manufactured from used cooking oil - Classification and applicable GST rate on biodiesel blends of B20 (Biodiesel 20% + HSD 80%) (b) B30 (Biodiesel 30% + HSD 70%) (c) B40 (Biodiesel 40% + HSD 60%) (d) B50 (Biodiesel 50% + HSD 50%) (e) B60 (Biodiesel 60% + HSD 40%) (f) B70 (Biodiesel 70% + HSD 30%) – HELD - Under the GST regime, specified petroleum products, including High-Speed Diesel, have been consciously kept outside the levy of GST. However, this exclusion is product-specific and does not automatically extend to all blends or mixtures containing petroleum oils. The Customs Tariff draws a clear statutory distinction between petroleum-dominant fuels falling under Chapter 27 and biodiesel and its mixtures falling under Chapter 38 – The Biodiesel blends containing 70% or more by weight of petroleum oils or oils obtained from bituminous minerals are classifiable under Heading 2710 of the Customs Tariff. Accordingly, the biodiesel blends B20 (Biodiesel 20% + HSD 80%) and B30 (Biodiesel 30% + HSD 70%) are classifiable under Sub-heading 2710 20, specifically under tariff item 27102020 (Diesel fuel blend (B6 to B20) conforming to standards IS 16531) and 27102090 (Other petroleum oil preparations), respectively - However, biodiesel and its blends containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals are specifically excluded from Heading 2710 and are therefore classifiable under Heading 3826 of the Tariff and the corresponding GST Tariff Heading 3826 - Accordingly, the biodiesel blends B40, B50, B60, and B70 are classifiable under tariff item 38260000 (Biodiesel and mixtures thereof, not containing or containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals) – Ordered accordingly [Read less]

GST – Karnataka AAR – Applicability of Margin Scheme to purchase and sell of used cars – HELD - Motor vehicles, including second-hand cars, being movable property, squarely fall within the ambit of “goods” defined under Section 2(52) of the CGST Act, 2017. Therefore, the applicant is engaged in the business of dealing in second-hand goods – The Rule 32(5) of the CGST Rules, 2017 provides a special method of valuation for persons engaged in the business of buying and selling of second-hand goods, permitting payment of GST on the margin, being the difference between the selling price and the purchase price, subje... [Read more]

GST – Karnataka AAR – Applicability of Margin Scheme to purchase and sell of used cars – HELD - Motor vehicles, including second-hand cars, being movable property, squarely fall within the ambit of “goods” defined under Section 2(52) of the CGST Act, 2017. Therefore, the applicant is engaged in the business of dealing in second-hand goods – The Rule 32(5) of the CGST Rules, 2017 provides a special method of valuation for persons engaged in the business of buying and selling of second-hand goods, permitting payment of GST on the margin, being the difference between the selling price and the purchase price, subject to certain conditions. Further, Notification No. 8/2018-Central Tax (Rate), as amended, also provides for payment of GST on the value representing the difference between the selling price and the purchase price in respect of old and used motor vehicles, subject to the condition that no input tax credit has been availed on such vehicles. However, in the absence of necessary details and documentary evidence provided by the applicant regarding the nature and extent of repairs undertaken on the used cars, the Authority is unable to conclusively verify whether the applicant meets the prescribed conditions for availing the benefit of the said margin scheme – Ordered accordingly - Classification and Valuation - Applicable HSN code and rate of tax for the second-hand cars sold by the Applicant – HELD - Motor vehicles, including second-hand cars, are classifiable under Heading 8703 of the GST Tariff. The applicable rate of tax shall be as prescribed under the relevant rate notifications, read with Notification No. 8/2018-Central Tax (Rate), as amended. However, in the absence of particulars relating to engine capacity, vehicle length, and fuel type furnished by the applicant, the exact applicable rate of tax cannot be determined. Regarding valuation, the taxable value shall be the difference between the selling price and the purchase price of the second-hand motor vehicles, and where such difference is negative, the same shall be ignored. [Read less]

GST – Karnataka AAR - Taxability of water charges collected by Residents Welfare Association (RWA) from its members - Applicant, a Residents Welfare Association, supplies unprocessed water to its members sourced from its own borewells as well as from third-party vendors - The applicant collects the water charges separately from the maintenance charges levied on the members - Whether the supply of unprocessed, unbottled water by the RWA to its members is exempt from GST under Entry 99 of Notification No.2/2017-Central Tax (Rate) – HELD - The applicant is not selling water as goods to its members, it is merely recovering... [Read more]

GST – Karnataka AAR - Taxability of water charges collected by Residents Welfare Association (RWA) from its members - Applicant, a Residents Welfare Association, supplies unprocessed water to its members sourced from its own borewells as well as from third-party vendors - The applicant collects the water charges separately from the maintenance charges levied on the members - Whether the supply of unprocessed, unbottled water by the RWA to its members is exempt from GST under Entry 99 of Notification No.2/2017-Central Tax (Rate) – HELD - The applicant is not selling water as goods to its members, it is merely recovering from members the actual cost of water procured from third parties - The supply of water constitutes an integral component of the Home Owners’ Association services provided by the applicant and cannot be regarded as an independent or distinct supply. The provision of water is intrinsically linked with the maintenance and upkeep of the residential complex, which is the principal supply rendered by the Association to its members. Therefore, the recovery of water charges from members, even if shown separately in the invoice and collected on actual consumption basis, would form part of the composite supply of services provided by the Association. Such recovery does not assume the character of an independent supply of water as goods, but remains part of the principal supply of maintenance and related services - The supply of water by the RWA is not exempt under Entry 99 of Notification No.2/2017-Central Tax (Rate), as the supply of water forms an integral part of the "Home Owners' Association" services provided by the RWA to its members and does not constitute an independent supply of goods eligible for exemption - The supply of water by the RWA to its members is not exempt from GST, and the water charges must be included in the aggregate turnover for determining the INR 7,500 per member per month exemption threshold for the RWA's services – Ordered accordingly - Whether the water charges collected by the RWA should be included in the aggregate turnover for determining the INR 7,500 per month per member threshold for GST applicability on the services provided by the RWA – HELD - The activity of supplying water constitutes as a supply under Section 7(1)(aa) of the CGST Act, 2017 and the recovery of water charges is includable in value of supply. Consequently, such recoveries form part of the taxable value and are liable to GST - Applicant’s contention that water charges are pure reimbursements of expenses and should be excluded from the taxable value under Section 15(3) of the CGST Act and Rule 33 of the CGST Rules, is rejected as the RWA does not satisfy the conditions prescribed for a "pure agent" under the said Rule - The water charges collected by the RWA must be aggregated with the maintenance charges for determining the INR 7,500 per member per month exemption threshold under Notification No. 12/2017-CT (Rate). The activities undertaken by the RWA for its members constitute a supply of services, which is classifiable under SAC 999598 (Membership organisation services, including services of RWAs/Home Owners' Associations) and is taxable at 18% GST. [Read less]

GST – Karnataka AAR - Applicability of GST exemption on printing services of exam papers provided to universities - Applicant is engaged in supplying printing services of exam papers to various universities. They print and supply the question papers as per the specification and format provided by the universities - Whether the printing of exam papers provided to universities is exempt from tax in terms of Sl.no.66 (b) (IV) of the Notification No. 12/2017-Central (Tax) Rate dated 28.06.2017, as amended - HELD - The service of printing of examination question papers supplied by the applicant to universities constitutes a s... [Read more]

GST – Karnataka AAR - Applicability of GST exemption on printing services of exam papers provided to universities - Applicant is engaged in supplying printing services of exam papers to various universities. They print and supply the question papers as per the specification and format provided by the universities - Whether the printing of exam papers provided to universities is exempt from tax in terms of Sl.no.66 (b) (IV) of the Notification No. 12/2017-Central (Tax) Rate dated 28.06.2017, as amended - HELD - The service of printing of examination question papers supplied by the applicant to universities constitutes a service relating to the conduct of examinations. Such services are specifically covered under Entry at Serial No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended – The universities, being educational institutions, are statutorily required to conduct examinations as part of their academic functions, and activities such as printing of question papers, which are indispensable and integrally connected to the conduct of examinations, cannot be divorced from the examination process. Therefore, such services are services relating to the conduct of examination by an educational institution and are eligible for exemption from GST - The service of printing of examination question papers supplied by the applicant to universities is exempt from levy of GST – Ordered accordingly [Read less]

GST – Karnataka AAR - Taxability of pure labour service to single standalone residential dwelling units - The applicant is engaged in the supply of pure labour services to various single residential dwelling units. The applicant does not provide such services to residential apartments or residential complexes, and the services are strictly restricted to the supply of pure labour services only - Whether the supply of pure labour services for construction, erection, commissioning, or installation of original works pertaining to single residential dwelling units, otherwise than as part of a residential complex, is exempt fr... [Read more]

GST – Karnataka AAR - Taxability of pure labour service to single standalone residential dwelling units - The applicant is engaged in the supply of pure labour services to various single residential dwelling units. The applicant does not provide such services to residential apartments or residential complexes, and the services are strictly restricted to the supply of pure labour services only - Whether the supply of pure labour services for construction, erection, commissioning, or installation of original works pertaining to single residential dwelling units, otherwise than as part of a residential complex, is exempt from GST - HELD - The services supplied by the applicant satisfy all the essential conditions prescribed under Entry No. 11 of Notification No. 12/2017-Central Tax (Rate). The phrase "otherwise than as a part of a residential complex" in Entry Serial No. 11 of Notification No. 12/2017-CT (R) clearly excludes services rendered in respect of apartment buildings, housing projects, or residential complexes comprising multiple dwelling units with common infrastructure and shared facilities. Since the applicant provides services only to individual owners of stand-alone residential houses and not to residential apartments or complexes, the supply of pure labour services for construction, erection, commissioning, or installation of original works pertaining to single residential dwelling units, otherwise than as part of a residential complex, is exempt from GST, subject to fulfilment of the conditions that the activity qualifies as original works, the residential unit is a single stand-alone dwelling unit, and the same does not form part of a residential complex – Ordered accordingly [Read less]

GST – Karnataka AAR – Taxability of Rebates received from bank for usage of Corporate Card - Applicant, a liquor manufacturer, has obtained a Corporate Card from HSBC Bank to make payments towards excise duty. Based on the total excise duty payments made during a month, HSBC Bank grants a rebate at a specified percentage, which is adjusted against the outstanding card balance - Whether the rebate received for payment of excise duty through the Corporate Card is liable to GST – HELD - The rebates received by the applicant from bank are merely transaction in money and do not involve any supply of goods or services. The... [Read more]

GST – Karnataka AAR – Taxability of Rebates received from bank for usage of Corporate Card - Applicant, a liquor manufacturer, has obtained a Corporate Card from HSBC Bank to make payments towards excise duty. Based on the total excise duty payments made during a month, HSBC Bank grants a rebate at a specified percentage, which is adjusted against the outstanding card balance - Whether the rebate received for payment of excise duty through the Corporate Card is liable to GST – HELD - The rebates received by the applicant from bank are merely transaction in money and do not involve any supply of goods or services. The rebate is granted by the bank as a post-transaction financial adjustment linked to the usage of the corporate card and is not attributable to any independent or identifiable supply of goods or services by the applicant to the bank - The rebate merely results in a reduction of the outstanding monetary liability payable to the bank and falls within the definition of "money" under Section 2(75) of the CGST Act, 2017. The rebate does not represent consideration for any taxable service and hence cannot be brought to tax under GST - Further, the transaction is covered under the exemption provided for services by way of extending deposits, loans, or advances where the consideration is represented by way of interest or discount. Therefore, the rebates received by the applicant does not fall within the ambit of Section 7 of the CGST Act, 2017 and is not liable to GST - Ordered accordingly [Read less]

Customs - Seizure of goods in case pertaining to classification and valuation of the imported goods – Petitioner undertaken imports of what is described to be fabrics/table cloths and as described in B/E as PVC rolls, PVC table covers, readymade jackets (branded and unbranded). – Petitioner seeking provisional release of the goods – HELD - The goods had completely deteriorated and were of no utility to either the petitioner or the Revenue. Considering the case of a small entrepreneur, the Customs Authorities should have adopted an approach that would make the small business effective while also protecting the interes... [Read more]

Customs - Seizure of goods in case pertaining to classification and valuation of the imported goods – Petitioner undertaken imports of what is described to be fabrics/table cloths and as described in B/E as PVC rolls, PVC table covers, readymade jackets (branded and unbranded). – Petitioner seeking provisional release of the goods – HELD - The goods had completely deteriorated and were of no utility to either the petitioner or the Revenue. Considering the case of a small entrepreneur, the Customs Authorities should have adopted an approach that would make the small business effective while also protecting the interest of the Revenue. A hard-line approach, as in this case, would not benefit the Department or the importer, especially when the importer is a small enterprise. Such an approach may prove to be counter-productive to the trade of small-scale imports and domestic trade - As the goods have completely deteriorated, ld. advocate for the petitioner submitted that the Department is free to deal with the goods i.e. either auction the same or destroy, and appropriate intimation of either of it be given to the Petitioner. In the event any amount is realized in any auction/sale, let the same be appropriated by the Department and if any surplus amount is available, the same be paid to the Petitioner so as to pay off the liability towards warehousing charges - The Writ Petition is disposed of with a direction to the Respondents to issue a demurrage waiver certificate in respect of the subject goods – The petition is disposed of [Read less]

Customs - Seizure and Release of imported roasted areca nuts, Jurisdiction of Customs Authorities to seize the imported goods - FSSAI examined the goods and issued no-objection certificates confirming the goods were fit for human consumption. However, the Customs authorities subsequently seized the goods, citing CRCL test reports that allegedly found the goods unfit. The petitioner challenged the seizure and the conditions imposed for provisional release – HELD - Once the FSSAI, the statutory body responsible for food safety, had cleared the goods as fit for human consumption based on its test reports, the Customs author... [Read more]

Customs - Seizure and Release of imported roasted areca nuts, Jurisdiction of Customs Authorities to seize the imported goods - FSSAI examined the goods and issued no-objection certificates confirming the goods were fit for human consumption. However, the Customs authorities subsequently seized the goods, citing CRCL test reports that allegedly found the goods unfit. The petitioner challenged the seizure and the conditions imposed for provisional release – HELD - Once the FSSAI, the statutory body responsible for food safety, had cleared the goods as fit for human consumption based on its test reports, the Customs authorities could not question the credibility of those reports without valid reasons. The CRCL reports did not satisfactorily demonstrate that the goods were unfit, as they only noted minor damage to a small percentage of the goods. The seizure and the conditions imposed for release are without authority of law and quashed - Even assuming that a minuscule percentage of the goods which are agricultural products, are stated to be damaged, it cannot be that the same yardstick is applied to the entire consignment. If such tests are applied to the several range of agricultural products domestically available from the indigenous sources, it would be impossible for any agricultural produce to have a market - The action of the Respondents to detain the Petitioner’s imports in question, is not justified. The goods are to be released on payment of duty, subject to the petitioner removing any damaged portions under FSSAI supervision before selling the goods in the domestic market – The petition is disposed of [Read less]

Central Excise - clubbing of clearance values for SSI exemption, Denial of Cross-Examination of witnesses – HELD - When a case is made out on the basis of a statement of a witness, then cross-examination of that witness has to be given to the party who is aggrieved by the said statement – Further, the statements were typed by the department officers in English without explaining the same to the appellants in the vernacular language. There were also discrepancies in the statements, which fully justified the examination/cross-examination of the witnesses - The denial of the cross-examination of the persons whose statemen... [Read more]

Central Excise - clubbing of clearance values for SSI exemption, Denial of Cross-Examination of witnesses – HELD - When a case is made out on the basis of a statement of a witness, then cross-examination of that witness has to be given to the party who is aggrieved by the said statement – Further, the statements were typed by the department officers in English without explaining the same to the appellants in the vernacular language. There were also discrepancies in the statements, which fully justified the examination/cross-examination of the witnesses - The denial of the cross-examination of the persons whose statements were relied upon would seriously violate the principle of natural justice, and the statements cannot be relied upon against the appellants - The impugned order is set aside and the matter remanded back to the Adjudicating Authority with the direction to provide the opportunity of cross-examination of the relevant witnesses and officials whose statements have been relied upon before deciding the matter – The appeal is allowed by remand [Read less]