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Service Tax – Duty paying document, Admissibility of Cenvat Credit of Service Tax paid under Reverse Charge through TR-6 challans, Refund of unutilized credit – Appellant-exporter of IT software services paid Service Tax on reverse charge basis through TR-6 challans and claimed refund of accumulated Cenvat Credit of input services for export period - Department rejected refund claim on ground of violation of Rule 9(1)(bb) of Cenvat Credit Rules 2004 - Whether Service Tax paid under reverse charge on basis of TR-6 challans can be denied by invoking Rule 9(1)(bb) - HELD – The Rule 9(1)(e) of Cenvat Credit Rules specifi... [Read more]

Service Tax – Duty paying document, Admissibility of Cenvat Credit of Service Tax paid under Reverse Charge through TR-6 challans, Refund of unutilized credit – Appellant-exporter of IT software services paid Service Tax on reverse charge basis through TR-6 challans and claimed refund of accumulated Cenvat Credit of input services for export period - Department rejected refund claim on ground of violation of Rule 9(1)(bb) of Cenvat Credit Rules 2004 - Whether Service Tax paid under reverse charge on basis of TR-6 challans can be denied by invoking Rule 9(1)(bb) - HELD – The Rule 9(1)(e) of Cenvat Credit Rules specifically recognizes challan evidencing payment of Service Tax by person liable to pay tax under RCM as prescribed document for availing credit. Department's reliance on Rule 9(1)(bb) is legally erroneous as Rule 9(1)(bb) was introduced only with effect from 01.04.2011 and refund period involved is January 2010 to March 2010 making said provision not applicable to period in dispute. Further, the Rule 9(1)(bb) applies only to supplementary invoices issued by provider of output service and appellant is not claiming credit on basis of supplementary invoices but on basis of TR-6 challans evidencing payment of Service Tax under Reverse Charge. Therefore denial of refund relating to Cenvat Credit on ground that Rule 9(1)(bb) applies is not sustainable in law - The Tribunal has consistently held in multiple decisions that Service Tax paid under reverse charge is governed by Rule 9(1)(e) and not Rule 9(1)(bb) - The rejection of refund of amount relating to Service Tax paid under reverse charge is set aside and the appeal is allowed - Service Tax - Computation of refund of Cenvat Credit using statutory formula prescribed under Notification No. 5/2006 - Adjudicating Authority applied export turnover ratio on closing balance instead of gross eligible Cenvat Credit earned during quarter - Whether refund computation adopted is consistent with statutory formula - HELD - Computation of refund adopted by authority is inconsistent with formula prescribed under Notification No. 5/2006. The appellant has demonstrated through working sheet that authority incorrectly applied export turnover ratio on closing balance instead of on gross eligible credit earned during relevant quarter resulting in excess rejection of amount. Refund requires re-computation by strictly applying statutory formula on eligible credit earned during relevant quarter. Rejection arising from incorrect computation is set aside and direction is given to recompute refund in accordance with Notification No. 5/2006 - Service Tax - Rejection of refund claim on procedural grounds relating to non-submission of invoices - Appellant subsequently placed invoices on record before Tribunal - Whether refund can be denied merely on technical grounds when substantive eligibility is otherwise established - HELD - Refund cannot be denied merely on technical or procedural grounds when substantive eligibility is otherwise established. Original Authority shall verify invoices already produced by appellant and upon verification consequential refund shall be granted. Rejection of refund amount on procedural grounds based on alleged non-submission of invoices is remanded to Adjudicating Authority solely for verification of invoices now produced. [Read less]

GST - Inherent Powers of Goods and Services Tax Appellate Tribunal - Dismissal of appeal for Non-Prosecution - The Registry served a defect memo, but the appellant failed to cure the defects despite sufficient time and opportunities. The matter was listed before the Division Bench on three occasions, and on each occasion, none appeared on behalf of the appellant, nor was any application for adjournment filed, and the defects continued to remain uncured - Whether the GSTAT has powers to dismissed the defective appeals - HELD - The appellant has abandoned the prosecution of the present appeal. The Tribunal has inherent power... [Read more]

GST - Inherent Powers of Goods and Services Tax Appellate Tribunal - Dismissal of appeal for Non-Prosecution - The Registry served a defect memo, but the appellant failed to cure the defects despite sufficient time and opportunities. The matter was listed before the Division Bench on three occasions, and on each occasion, none appeared on behalf of the appellant, nor was any application for adjournment filed, and the defects continued to remain uncured - Whether the GSTAT has powers to dismissed the defective appeals - HELD - The appellant has abandoned the prosecution of the present appeal. The Tribunal has inherent powers not expressly provided by statute but necessary to secure the ends of justice and prevent abuse of the process. The Rule 10 of the GSTAT Procedure Rules. Rule 24 prescribes a procedure for scrutiny of appeals and removal of defects and expressly empowers the Bench to either direct registration of the appeal or reject the same after hearing the party. The principle founded on the legal maxim Vigilantibus non dormientibus jura subveniunt establishes that the law assists those who are vigilant and not those who sleep over their rights, and the principle Interest reipublicae ut sit finis litium emphasizes that it is in the public interest that there should be an end to litigation - A litigant invoking the statutory appellate jurisdiction is expected to prosecute the proceedings with due diligence. Keeping such a defective appeal pending would serve no useful purpose and would unnecessarily burden the docket - The defective appeal is dismissed for non-prosecution without expressing any opinion on the merits of the controversy involved. Pending applications, if any, shall also stand disposed of – Ordered accordingly [Read less]

GST - Meaning of ‘Brand Name’ - Printing of Manufacturer's Name for Statutory Compliance – Appellant-Dept contended that respondent-assessee, engaged in the supply of frozen poultry and ready-to-cook products, is not eligible for exemption under Sl. No. 9 of Notification No. 02/2017-CT(R) dated 28.06.2017 as it continued to print its corporate name and address on the packaging of unit containers, which in the opinion of the Dept constituted the use of a brand name - Respondent had removed the specific brand logos from the packaging for institutional supplies but retained the corporate name and address as mandated by ... [Read more]

GST - Meaning of ‘Brand Name’ - Printing of Manufacturer's Name for Statutory Compliance – Appellant-Dept contended that respondent-assessee, engaged in the supply of frozen poultry and ready-to-cook products, is not eligible for exemption under Sl. No. 9 of Notification No. 02/2017-CT(R) dated 28.06.2017 as it continued to print its corporate name and address on the packaging of unit containers, which in the opinion of the Dept constituted the use of a brand name - Respondent had removed the specific brand logos from the packaging for institutional supplies but retained the corporate name and address as mandated by the Food Safety and Standards (Labelling and Display) Regulations, 2020 and the Legal Metrology Act, 2009 - Whether the printing of the manufacturer's corporate name and address on the packaging to comply with statutory requirements constitutes the use of a brand name within the meaning of the exemption notification - HELD - The requirement to print the manufacturer's name and address on the packaging is a statutory obligation under the Food Safety and Standards Labelling and Display Regulations, 2020 and the Legal Metrology Act, 2009. Compliance with a statutory mandate for traceability and safety does not equate to the use of a brand name intended to indicate a commercial connection in the course of trade to enhance the product's value - The markings was made under the compulsion of law are for identification and control by Governmental agencies and do not constitute a brand name. The mandatory declaration of a manufacturer's name under statutory requirement does not render a unit container branded - As regard the contention of the revenue that the invoice of the goods bears the brand name, it is clear that as per the terms of the exemption it is the goods which should be affixed with the brand name. Since the goods do not bear the brand name, the condition of the notification stood satisfied, merely because the invoice bears the brand name would not render the goods as branded goods - The cessation of the use of the brand name on the packaging while continuing to print the company's name for statutory compliance does not amount to affixing a brand name, and the goods supplied are eligible for exemption under Notification No. 02/2017-CT(Rate) dated 28.06.2017 - The demand for tax, interest, and penalty cannot be sustained. The impugned Order-in-Appeal is upheld and the Revenue’s appeals are dismissed - Exemption to Pre-packaged and Labelled Commodities intended for institutional consumers - Institutional Supplies and Exemption under GST – HELD - Even for the period post 18.07.22, as regards “pre-packaged and labelled" goods, in terms of Rule 3 of the Legal Metrology (Packaged Commodities) Rules, 2011, packages intended for institutional consumers do not qualify as pre-packaged commodities meant for retail sale. The Revenue has not brought forth sufficient evidence or grounds to counter this legal position regarding institutional supplies - Binding nature of order of the Advance Ruling Authority – HELD - The adjudicating authority has heavily relied upon some orders of Advance ruling authorities. Firstly, the said order is applicable only to the party in the order, and secondly, the order of the Advance Ruling Authority is not binding on the Tribunal. Hence the said orders of the AAR, relied upon by the revenue are not of any help to the revenue. [Read less]

GST - Jurisdiction of Assessing Authority - Competence to initiate and complete adjudication proceedings under Section 73 by issuing Show Cause Notice and passing Order-in-Original against a deceased proprietor - Petitioner contended that the Show Cause Notice and Order-in-Original were issued and passed in the name of the deceased proprietor and the GST Department was aware of such death prior to issuance of said notices and orders - Whether the Respondent-Dept could initiate and complete proceedings under Section 73 of the GST Act by issuing Show Cause Notice and Order-in-Original against a dead person without issuing no... [Read more]

GST - Jurisdiction of Assessing Authority - Competence to initiate and complete adjudication proceedings under Section 73 by issuing Show Cause Notice and passing Order-in-Original against a deceased proprietor - Petitioner contended that the Show Cause Notice and Order-in-Original were issued and passed in the name of the deceased proprietor and the GST Department was aware of such death prior to issuance of said notices and orders - Whether the Respondent-Dept could initiate and complete proceedings under Section 73 of the GST Act by issuing Show Cause Notice and Order-in-Original against a dead person without issuing notice to the legal representatives – HELD - The Section 93 of the CGST Act only deals with liability to pay tax, interest or penalty in cases where business is continued after death by legal representative or where business is discontinued, and does not authorize determination to be made against a dead person and recovery from legal representative - The sine qua non for acquiring jurisdiction to initiate assessment is that notice should be issued to a correct person and not to a dead person, which is not merely a procedural requirement but a condition precedent to the validity of the notice in law - Once provision deals with liability of legal representative on account of death of proprietor, it is essential that legal representative is issued show cause notice and after seeking response from legal representative, determination should take place - The doctrine that assessment orders passed in pursuance of notice issued to dead person cannot be sustained is trite law, as issuance of notice upon a dead person does not come under ambit of mistake, defect or omission - The impugned Show Cause Notice and Order-in-Original being wholly without jurisdiction and non est in the eye of law are quashed, and the Proper Officer is directed to take appropriate proceeding by issue of notice to the petitioner representing the interest of other legal heirs or legal representatives of the deceased proprietor and proceed in accordance with law – The writ petition is disposed of [Read less]

Customs - Valuation of Hardware against Software Piracy [HASP], Inclusion of software license value in assessable value – Appellant-Importer imported HASP hardware locks declaring as Hardware Locks declared value without including value of DCM software license downloaded from internet which is essential for activation of hardware locks - Department proposed inclusion of software license value in assessable value - Whether value of downloaded DCM software license should form part of assessable value of imported hardware when both hardware and software are specific to each other and imported from same supplier - HELD – T... [Read more]

Customs - Valuation of Hardware against Software Piracy [HASP], Inclusion of software license value in assessable value – Appellant-Importer imported HASP hardware locks declaring as Hardware Locks declared value without including value of DCM software license downloaded from internet which is essential for activation of hardware locks - Department proposed inclusion of software license value in assessable value - Whether value of downloaded DCM software license should form part of assessable value of imported hardware when both hardware and software are specific to each other and imported from same supplier - HELD – The DCM software downloaded from internet is integral and specific part of imported hardware and cannot be considered separately as hardware cannot be activated or function without said software. Transaction value under Section 14 of Customs Act means price actually paid or payable for goods when sold for export including amounts paid or payable for costs, services, royalties and licence fees. Hardware and software both imported from same supplier and are customized and specific to each other and hardware has no existence in absence of downloaded software - When imported product comprises both hardware and software as integral parts, transaction value includes value of both hardware and software collectively. The appellant was well aware of nature of products being imported and was importing from same supplier making exclusion of software value deliberate under-valuation. The extended period was correctly invoked as appellant intentionally withheld information regarding software value by giving intimation of downloading the software to an authority which was not competent to receive the said information – The demand of differential customs duty on included value of both hardware and software is rightly confirmed and penalty imposed is sustained. The appeal is dismissed [Read less]

Customs - Denial of ASEAN-India Free Trade Area exemption benefit – Appellant imported Cold Rolled Stainless Steel Coil from Malaysia with Certificates of Origin issued by competent Malaysian authorities and claimed exemption benefit under Sl. No. 967(I) of Notification No. 46/2011-Customs pursuant to ASEAN-India Free Trade Area preferential tariff agreement – DRI investigation found that overseas supplier M/s. Bahru Stainless SDN. BHD. refused to furnish documents during on-site verification citing confidentiality obligations and shareholder duties – Department formed view that non-cooperation constituted non-compli... [Read more]

Customs - Denial of ASEAN-India Free Trade Area exemption benefit – Appellant imported Cold Rolled Stainless Steel Coil from Malaysia with Certificates of Origin issued by competent Malaysian authorities and claimed exemption benefit under Sl. No. 967(I) of Notification No. 46/2011-Customs pursuant to ASEAN-India Free Trade Area preferential tariff agreement – DRI investigation found that overseas supplier M/s. Bahru Stainless SDN. BHD. refused to furnish documents during on-site verification citing confidentiality obligations and shareholder duties – Department formed view that non-cooperation constituted non-compliance with origin verification mechanism and Board recommended denial of preferential treatment for all Certificates of Origin issued by said supplier – Whether preferential tariff benefit can be denied on basis of alleged non-cooperation of overseas supplier during verification exercise without individual examination of each Certificate of Origin and whether extended period of limitation under Section 28(4) can be invoked – HELD – The Non-cooperation by overseas supplier during verification cannot automatically translate into wholesale invalidation of every Certificate of Origin previously issued – Legislative scheme does not contemplate that isolated act of non-cooperation by overseas supplier would ipso facto extinguish legal efficacy of every Certificate of Origin irrespective of individual transaction or importer concerned. Every Certificate of Origin represents independent statutory document issued in relation to distinct import transaction and carries separate legal presumption until lawfully displaced in accordance with prescribed procedure. The validity of one Certificate cannot be mechanically determined on basis of generalized administrative recommendation issued in respect of exporter – Certificates of Origin were accepted by proper officer at time of assessment without any finding that they were forged, fabricated, cancelled or declared invalid by competent issuing authority. The subsequent departmental communications are merely administrative correspondence and cannot substitute statutory procedure contemplated under Rules of Origin nor nullify Certificates issued by competent designated authority of sovereign contracting party – Denial of substantive fiscal benefit cannot rest on speculative foundations or generalized administrative presumptions. Imports previously effected cannot retrospectively deprive importer of benefit which had accrued on basis of documents accepted by proper officer – Further, the extended period of limitation cannot be invoked as Revenue failed to establish by cogent evidence existence of fraud, collusion, wilful misstatement or suppression with intent to evade duty – Impugned order set aside and appellant entitled to preferential rate under AIFTA. The appeal is allowed [Read less]

Service Tax - Applicability of Reverse Charge Mechanism under Notification No. 30/2012-ST to work contract services provided to Government authorities – Appellant-Contractor providing construction and allied services to PWD and other Government entities under work orders - Whether benefit of 50% RCM notification is admissible when services are provided to Government authorities as service recipients and whether extended period of limitation can be invoked to demand service tax - HELD – The benefit of Notification No. 30/2012-ST providing for 50% RCM is admissible to the appellant as the services have been provided to b... [Read more]

Service Tax - Applicability of Reverse Charge Mechanism under Notification No. 30/2012-ST to work contract services provided to Government authorities – Appellant-Contractor providing construction and allied services to PWD and other Government entities under work orders - Whether benefit of 50% RCM notification is admissible when services are provided to Government authorities as service recipients and whether extended period of limitation can be invoked to demand service tax - HELD – The benefit of Notification No. 30/2012-ST providing for 50% RCM is admissible to the appellant as the services have been provided to business entities registered as body corporate as Government authorities like PWD, CPWD and other Government undertakings are body corporate under their respective constituting statutes and therefore qualify as business entities within the meaning of the notification. Government authorities engaging in construction and maintenance activities are bodies corporate engaged in business and commerce and hence are covered under the definition of body corporate – The extended period of limitation can be invoked by the Department in invoking extended period under proviso to Section 73 of the Finance Act as the appellant had sufficient knowledge about the leviability of service tax in respect of these services but have not deposited the same nor informed the authorities about it thus constituting suppression of facts with intent to evade payment of service tax. Demand made by invoking extended period of limitation cannot be faulted with where there is clear evidence of suppression with intent to evade tax. However, after allowing the benefit of Notification No. 30/2012-ST, the demand needs to be recomputed and quantified accordingly – The appeal is partly allowed [Read less]

Service Tax – Taxability of remuneration paid to Managing Directors and Whole-time Directors under Reverse Charge Mechanism – Whether remuneration paid to Managing Directors and Whole-time Directors represents consideration for taxable services or salary paid in course of employment and whether service tax under Reverse Charge Mechanism is applicable – HELD – Once existence of employer-employee relationship is established, charging provisions of service tax cease to operate and RCM provisions become inapplicable. The Section 65B(44)(b) specifically excludes services provided by employee to employer in course of emp... [Read more]

Service Tax – Taxability of remuneration paid to Managing Directors and Whole-time Directors under Reverse Charge Mechanism – Whether remuneration paid to Managing Directors and Whole-time Directors represents consideration for taxable services or salary paid in course of employment and whether service tax under Reverse Charge Mechanism is applicable – HELD – Once existence of employer-employee relationship is established, charging provisions of service tax cease to operate and RCM provisions become inapplicable. The Section 65B(44)(b) specifically excludes services provided by employee to employer in course of employment from definition of service – The undisputed facts on record that Managing Directors and Whole-time Directors were appointed by Board resolutions approved by shareholders in accordance with Companies Act, their remuneration consisted of salary and employment benefits, TDS was deducted under Section 192 applicable only to salary income, Form-16 was issued and provident fund contributions deposited, it clearly demonstrates that company itself treated remuneration as salary arising from employer-employee relationship – CBIC Circular No. 115/9/2009-ST dated 31.07.2009 clarified that remuneration paid to Managing Directors and Whole-time Directors acting in such capacity would not attract service tax – Merely because directors are promoters or shareholders does not distinguish their separate legal capacity as employees. Income Tax Department's acceptance of TDS deduction treating remuneration as salary is relevant and indirect tax authorities cannot adopt inconsistent stand – Remuneration paid by company to Managing Director and Whole-time Directors constitutes salary in employer-employee relationship falling within exclusion of Section 65B(44)(b) and no service tax was payable under RCM – The impugned order is upheld and the Revenue appeal is dismissed [Read less]

Service Tax - Cenvat Credit – Eligibility of input services on cleaning, insurance, club association, event management, outdoor catering, health and fitness and other services – Appellant bank availed Cenvat credit on various input services including cleaning, club or association, convention, event management, general insurance, health and fitness, insurance auxiliary, mandap keeper, outdoor catering, rent a cab and tour operator services for the period April 2009 to September 2015 – Adjudication Authority confirmed demand for ineligible input services claiming such services do not fall within definition of input ser... [Read more]

Service Tax - Cenvat Credit – Eligibility of input services on cleaning, insurance, club association, event management, outdoor catering, health and fitness and other services – Appellant bank availed Cenvat credit on various input services including cleaning, club or association, convention, event management, general insurance, health and fitness, insurance auxiliary, mandap keeper, outdoor catering, rent a cab and tour operator services for the period April 2009 to September 2015 – Adjudication Authority confirmed demand for ineligible input services claiming such services do not fall within definition of input services and were not directly connected with output services – Whether disputed services qualify as input services under Rule 2(l) of Cenvat Credit Rules 2004 for the periods prior to 01.04.2011 and post 01.04.2011 – HELD – Prior to 01.04.2011 the definition of input service was broad and included services used in activities relating to business providing expansive scope for services having reasonable nexus with business of providing output services – After 01.04.2011 significant narrowing occurred with deletion of phrase activities relating to business and introduction of express exclusion clause denying credit for services for employees personal use and consumption including outdoor catering, health insurance, club membership – Post 01.04.2011 admissibility of credit must be tested in three stages namely whether service falls within main part of definition, whether covered by inclusive part and whether barred by exclusions – Cleaning service including housekeeping and maintenance of office premises is eligible as it is not personal in nature – General insurance premium for cardholders against fraudulent transactions and theft is integrally connected with credit card services and eligible – Convention services and event management services related to business strategy and sales promotion are eligible – Club and association membership services for personal benefit and employee welfare are not eligible as they are excluded for personal use or consumption – Health and fitness services provided as employee welfare are not eligible as expressly excluded for personal consumption – Outdoor catering services are not eligible as held by Supreme Court in Toyota Kirloskar Motor – Rent a cab and tour operator services are not eligible as they constitute personal convenience excluded from definition – Insurance auxiliary services to extent used for employee personal use are not eligible – Mandap keeper service claimed as part of sales promotion is eligible – Matter remanded to Original Authority for re-quantification of demand limiting to normal period - Extended period of limitation – The extended period of limitation cannot be invoked as dispute is interpretational in nature involving bona fide interpretation of Rule 2(l) with extensive judicial precedents and Board circulars clarifying scope – Suppression of facts must be wilful and deliberate with intent to evade duty and mere omission or failure to disclose without such intent is insufficient – Interest is payable only where wrongly availed credit is also utilized and not merely taken wrongly as per Notification 18/2012-CE – Penalties are set aside as dispute involves interpretational issues – Matter remanded to Original Authority for re-quantification of demand limiting to normal period and determining interest based on verification of whether net Cenvat credit balance fell below demanded amount [Read less]

GST – Validity of service of Notice and Orders solely on Common Portal - Petitioners aggrieved by demand orders passed by GST authorities without valid service of notices through proper modes prescribed under Section 169 of CGST Act 2017 - Notices and demand orders uploaded only on tab 'View Additional Notices and Orders' on Common Portal www.gst.gov.in without any other mode of communication - Whether uploading of notices and orders on Common Portal amounts to valid service triggering limitation period for filing appeal under Section 107 of CGST Act 2017 - HELD - As per Notifications dated 19.06.2017, 23.01.2018 and 13.... [Read more]

GST – Validity of service of Notice and Orders solely on Common Portal - Petitioners aggrieved by demand orders passed by GST authorities without valid service of notices through proper modes prescribed under Section 169 of CGST Act 2017 - Notices and demand orders uploaded only on tab 'View Additional Notices and Orders' on Common Portal www.gst.gov.in without any other mode of communication - Whether uploading of notices and orders on Common Portal amounts to valid service triggering limitation period for filing appeal under Section 107 of CGST Act 2017 - HELD - As per Notifications dated 19.06.2017, 23.01.2018 and 13.12.2019, the Common Portal has been notified under Section 146 only for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax and issuance of electronic way bills, but no Notification issued for service of notices or orders under CGST Act 2017 - Section 146 requires that any use of Common Portal beyond expressly enumerated purposes must be prescribed under CGST Rules, 2017 and no Rule prescribes uploading of notices or orders on portal - Section 169 provides multiple modes for service but law requires that when statute prescribes particular manner of doing thing, it must be done in that manner alone and not in any other manner as established by settled principle of statutory interpretation - Mere uploading of notice or order on Common Portal without notification under Section 146 cannot constitute valid service under Section 169 of Act – The e-mail intimation that notice has been uploaded on portal is not same as sending notice itself by email under Section 169(1)(c) and therefore respondents cannot take shelter of email mode of service when email does not contain attachment of actual notice or order - Process of locating notices through nested tabs on GST portal is cumbersome and renders it extremely challenging for taxpayer to know about issuance of SCN or order and does not meet objective of effective communication required by statutory scheme – The Department is called upon to revisit manner and methodology of serving SCN and orders. Mere uploading of notice/order on ‘View Additional Notices and Orders’ cannot be held to be a valid mode of its service on the registered entity. However, service of notice by uploading it on the Common Portal cannot be discarded where the person concerned has knowledge of it and has contested the proceedings by filing reply etc. In such cases, the SCN cannot be said to have not been served upon the assessee and the order-in-original cannot be challenged merely due to defect in service of SCN/order on the taxpayer by uploading it on the Common Portal – The writ petitions are disposed of [Read less]

GST - Taxability of Diagnostic Services under GST - The petitioner also sought a direction to the Authority for Advance Ruling to decide its applications - HELD – The Section 97 of the CGST Act specifically empowers the Authority for Advance Ruling to determine questions relating to the classification of goods or services, the applicability of exemption notifications and the determination of liability to pay tax. The issues sought to be raised by the petitioner fall within the ambit of the questions which the legislature has expressly entrusted to the Authority for Advance Ruling for determination - Since the petitioner ... [Read more]

GST - Taxability of Diagnostic Services under GST - The petitioner also sought a direction to the Authority for Advance Ruling to decide its applications - HELD – The Section 97 of the CGST Act specifically empowers the Authority for Advance Ruling to determine questions relating to the classification of goods or services, the applicability of exemption notifications and the determination of liability to pay tax. The issues sought to be raised by the petitioner fall within the ambit of the questions which the legislature has expressly entrusted to the Authority for Advance Ruling for determination - Since the petitioner has already invoked the statutory mechanism by filing applications under Section 97 seeking determination of the very issues, the Court did not consider it appropriate to examine such questions in exercise of its writ jurisdiction - Accordingly, without expressing any opinion on the merits of the rival contentions, all questions of fact and law are left open to be urged before the Authority for Advance Ruling – The petition is disposed of [Read less]

Customs - Liability to confiscation under Section 111(m) and imposition of penalties under Section 112(a) for deliberate undervaluation of imported furniture - Importer provisionally released imported goods under Section 18(1) and subsequently assessment was finalized under Section 18(2) with differential duty paid - Statement of Managing Partner admitting to actual value - Whether goods are liable to confiscation after provisional release and final assessment - HELD - Confiscation is sustainable even after provisional release under Section 18(1) and finalization of assessment under Section 18(2) where deliberate undervalu... [Read more]

Customs - Liability to confiscation under Section 111(m) and imposition of penalties under Section 112(a) for deliberate undervaluation of imported furniture - Importer provisionally released imported goods under Section 18(1) and subsequently assessment was finalized under Section 18(2) with differential duty paid - Statement of Managing Partner admitting to actual value - Whether goods are liable to confiscation after provisional release and final assessment - HELD - Confiscation is sustainable even after provisional release under Section 18(1) and finalization of assessment under Section 18(2) where deliberate undervaluation is established through reliable documentary and electronic evidence. The recovery of original commercial invoice, electronic records retrieved from laptop and hard disc, corroborating documentary evidence and admission made in statement recorded under Section 108 constitute valid foundation for adjudication. Undervaluation was not detected on basis of suspicion but on reliable evidence clearly disclosing intentional mis-declaration of value with view to evade payment of customs duty. Acceptance of differential duty liability after detection of offence does not obliterate contravention already committed. Payment of duty may be mitigating circumstance in determining quantum of penalty but does not extinguish statutory liability to penalty where contravention is deliberate and supported by cogent evidence – The appeal is dismissed - Whether penalties can be imposed upon both firm and managing partner for same alleged offence – HELD - Section 112(a) imposes personal liability upon any person whose acts or omissions render goods liable to confiscation and where evidence establishes active involvement of Managing Partner in planning, directing or facilitating undervaluation, such partner incurs independent liability. Separate penalty upon Managing Partner is sustainable as his liability flows from his own acts and omissions which contributed to mis-declaration and is not merely vicarious. Therefore, penalties under Section 112(a) upon both firm and Managing Partner are legally sustainable. However, acceptance of differential duty and non-prolongation of litigation on valuation may legitimately be considered for determining whether quantum of penalties calls for marginal reduction but request for complete waiver is not acceptable. [Read less]

Customs - Applicability of Monetary Limits Circular to confiscation matters - Seizure of gold and foreign currency from Respondent and proceedings before Adjudicating Authority resulting in absolute confiscation - Whether Departmental appeal is barred by Monetary Limits Circular issued under Section 131BA of the Customs Act, 1962 when the value involved is below prescribed threshold limit of Rs.50 lakhs - HELD - Monetary Limits Circular does not apply mechanically to confiscation cases as the Circular is essentially a litigation management policy to reduce avoidable appeals in low revenue matters and is designed for disput... [Read more]

Customs - Applicability of Monetary Limits Circular to confiscation matters - Seizure of gold and foreign currency from Respondent and proceedings before Adjudicating Authority resulting in absolute confiscation - Whether Departmental appeal is barred by Monetary Limits Circular issued under Section 131BA of the Customs Act, 1962 when the value involved is below prescribed threshold limit of Rs.50 lakhs - HELD - Monetary Limits Circular does not apply mechanically to confiscation cases as the Circular is essentially a litigation management policy to reduce avoidable appeals in low revenue matters and is designed for disputes involving realization of duty, tax, interest or penalty. In cases of confiscation, particularly absolute confiscation, the dispute is not merely monetary but involves enforcement of Customs restrictions, anti-smuggling measures and national economic interests as Customs Act is not enacted solely for collection of revenue but also protects economic security and monetary stability - The issue transcends beyond mere revenue implications as where smuggled gold and foreign currency is ordered to be absolutely confiscated, allowing release of restricted goods by applying monetary threshold mechanically would defeat the very object of Customs enforcement. Even otherwise, the total value involved is above the prescribed threshold. The preliminary objection raised by Respondent regarding maintainability of the appeal on the ground of Monetary Limit is rejected and the Departmental appeal is held to be maintainable - Confiscation of Gold without Foreign Markings - Confiscation of gold without foreign markings, serial number or refinery identification and liability to seizure - Seizure and confiscation of melted gold bar with nil markings and nil serial number from Respondent - Whether such gold lacking foreign markings and corroborative evidence can be presumed to be of smuggled or foreign origin warranting absolute confiscation. HELD - Purity of gold alone cannot establish foreign origin or smuggled nature as domestic gold of high purity is also available through legal channels and the assayer's report merely certifies purity and not origin. In absence of any foreign markings, brand identification, serial number, import document, route of smuggling or corroborative evidence linking the said gold to any act of illicit import, the mere fact of possession cannot lead to the presumption that the gold is of smuggled origin. Section 123 of the Customs Act is not automatically attracted merely for possessing gold without markings as the Department must first establish a foundational fact giving rise to reasonable belief and mere suspicion cannot replace legal proof - The burden lies upon the Department to establish reasonable belief regarding smuggled nature and the same cannot be discharged merely on suspicion or purity of gold. Therefore, gold without foreign markings is not liable for confiscation and the finding of Commissioner (Appeals) granting unconditional release is legally correct and requires no interference – The Revenue appeal is dismissed - Confiscation of Gold with Foreign Markings - Absolute confiscation of gold bearing foreign markings like VALCAMBI SUSSE and RAND refinery with serial numbers - Seizure of gold biscuits with foreign markings from Respondent's jewellery shop and claim that they represent smuggled goods - Whether absolute confiscation without right of redemption is justified for gold bearing foreign markings - HELD - Foreign markings by themselves do not establish that goods are smuggled as gold is a commodity which circulates widely in domestic market and may bear foreign inscriptions even when legally acquired - Gold is not a prohibited item but a restricted item and therefore even where confiscation is justified, the option of redemption under Section 125 of the Customs Act must ordinarily be given as absolute confiscation of gold is not justified in routine cases and should be reserved for serious cases involving clear evidence of prohibited or smuggled goods. Where Respondent produced invoices, banking transactions and purchase details to explain licit acquisition, though discrepancies were noted it cannot be said that explanation is wholly false or there is conclusive proof of smuggling. Therefore, absolute confiscation is not warranted and Commissioner (Appeals) rightly exercised discretion under Section 125 of the Customs Act for allowing release of goods on payment of redemption fine - Violation of principles of natural justice by denying cross-examination of witnesses - Adjudicating Authority relied upon statements of co-accused, panch witnesses and officers but denied Respondent the opportunity to cross-examine these witnesses - HELD - Denial of cross-examination when statements are relied upon constitutes serious flaw which makes the order void as it violates principles of natural justice. When Department relies upon statement of a person to establish allegations against respondent, the respondent must ordinarily be afforded an opportunity to cross-examine that person. Statement recorded under Section 108 of Customs Act cannot automatically be treated as substantive evidence and before relying upon such statements in adjudication, Adjudicating Authority must comply with requirements of Section 138B of Customs Act. Therefore, proceedings suffer from violation of principles of natural justice - Confiscation of Foreign Currency - Nexus with Smuggled Goods - Confiscation of foreign currency seized from Respondent and another person - Claim that currency represents sale proceeds of smuggled gold - Whether confiscation of currency is sustainable without establishing nexus between seized currency and smuggled goods - HELD - The burden is entirely upon the Department to prove that there was a sale and the sale was of smuggled gold and the money represents such sale proceeds. In absence of direct evidence establishing nexus between currency and alleged smuggled gold and in absence of conclusive evidence showing that confiscation was outcome of unlawful transaction, mere possession of foreign currency without proper documentation does not automatically imply illegal acquisition or circulation. Where circumstances do not conclusively establish nexus between seized cash and alleged smuggled gold and there is no corroborative evidence that seized currency is related to sale proceeds of any smuggled goods, confiscation of currency is not sustainable. Therefore, confiscation of foreign currency is set aside - Imposition of penalty under Section 112 of Customs Act - Penalty imposed on Respondent for possession of seized gold and currency - Whether penalty is justified in absence of conclusive proof of knowledge, intent and active involvement - HELD - Penalty under Section 112 of Customs Act requires knowledge, intent and active involvement and is not automatic. In absence of conclusive proof of these requisites, penalty must be proportionate and reduction of penalty is therefore justified. Commissioner (Appeals) has properly exercised discretion in reducing the penalty. [Read less]

Central Excise - Denial of concessional excise duty rate under Notification No. 12/2012-CE due to availment of Cenvat Credit – Appellant-manufacturer of Fertilizer availed concessional duty of one percent on NPK Mixtures subject to condition no. 25 requiring that no Cenvat Credit should be taken on duty or service tax paid on inputs - Appellant reflected Cenvat Credit in ST-3 returns relating to service tax and ER-1 returns for June 2017 - Whether availment of Cenvat Credit violates Condition No. 25 and whether non-utilization or subsequent reversal or lapse during GST transition cures the violation - HELD - Condition No... [Read more]

Central Excise - Denial of concessional excise duty rate under Notification No. 12/2012-CE due to availment of Cenvat Credit – Appellant-manufacturer of Fertilizer availed concessional duty of one percent on NPK Mixtures subject to condition no. 25 requiring that no Cenvat Credit should be taken on duty or service tax paid on inputs - Appellant reflected Cenvat Credit in ST-3 returns relating to service tax and ER-1 returns for June 2017 - Whether availment of Cenvat Credit violates Condition No. 25 and whether non-utilization or subsequent reversal or lapse during GST transition cures the violation - HELD - Condition No. 25 of Notification clearly provides that concessional duty is available only where no credit has been taken on excise duty or service tax on inputs and the language used is clear and unambiguous. The phrase no credit has been taken focuses on act of availment itself and not merely on utilization - There is marked distinction between taking credit and utilizing credit as law recognizes both as separate events. Once credit is entered and availed under statutory records it constitutes availment of Cenvat Credit even if credit remained unutilized as notification condition specifically says credit should not be taken and not that credit should not be utilized. Mere non-utilization does not erase fact of availment – The contention that credit shown in June 2017 represented transitional closing stock credit while shifting to GST is untenable as issue is not whether credit later migrated to GST or lapsed but whether during disputed excise period appellant availed credit while simultaneously availing concessional excise duty and subsequent transition to GST cannot retrospectively cure breach of notification condition. Exemption notifications must be construed strictly and burden to establish eligibility lies entirely upon claimant. Department correctly invoked extended period under proviso to Section 11A as appellant continued to avail concessional duty despite taking credit prohibited under notification - The demand of differential duty along with interest and penalty is sustained – The appeal is dismissed [Read less]

Central Excise - Inclusion of refundable die-development security deposits in transaction value when the deposit is forfeited – Appellant collects refundable security deposits from customers towards cost of die-development with contractual provision for refund on lifting of agreed minimum quantity within stipulated period. If the customer fails either to place the agreed orders or to lift the agreed minimum quantity, the deposit is forfeited - Whether forfeited deposits constitute additional consideration under Section 4(3)(d) of Central Excise Act or represent liquidated damages for breach of contract - HELD – The ref... [Read more]

Central Excise - Inclusion of refundable die-development security deposits in transaction value when the deposit is forfeited – Appellant collects refundable security deposits from customers towards cost of die-development with contractual provision for refund on lifting of agreed minimum quantity within stipulated period. If the customer fails either to place the agreed orders or to lift the agreed minimum quantity, the deposit is forfeited - Whether forfeited deposits constitute additional consideration under Section 4(3)(d) of Central Excise Act or represent liquidated damages for breach of contract - HELD – The refundable die-development deposits are in nature of security deposits and not part of sale price of Aluminium Profiles. The liability to suffer forfeiture does not arise because Aluminium Profiles were sold but because customer failed to honour contractual obligations regarding minimum lifting commitments. Forfeiture arose solely because of breach of contract and represents liquidated damages or contractual compensation and not consideration for sale - A distinction must be maintained between consideration for sale and compensation arising from breach of contract. The additional amount under Section 4(3)(d) of the CEA, 1944 must possess direct and proximate nexus with sale transaction and must represent consideration for sale or something intrinsically connected with sale. Merely because the contractual relationship emanated from sale of goods does not convert every successive payment into sale consideration - Rule 6 of Central Excise Valuation Rules merely provides mechanism for determining value and does not enlarge definition of transaction value and cannot independently justify inclusion unless amount first satisfies Section 4 itself – In this case, extended period of limitation is not invokable as dispute is interpretational in nature concerning legal character of forfeited deposits and Department has not produced evidence showing deliberate concealment or fraud. Appellant entertained bonafide view that forfeited deposits represented liquidated damages and not transaction value. The demand of duty, interest and penalty cannot be sustained and set aside – The appeal is allowed [Read less]

Central Excise - Reversal of common input service credit in respect of trading activity under Rule 6 of Cenvat Credit Rules 2004 - Manufacturer of excisable goods also engaged in purchase and sale of bought-out items as trading activity - Whether trading constitutes exempted service for purposes of Rule 6 requiring reversal of proportionate common input service credit attributable to trading - HELD - Trading is an exempted service for limited purpose of Rule 6 of Cenvat Credit Rules 2004. The insertion of Explanation to Rule 2(e) by Notification No. 3/2011-CE (NT) dated 01.03.2011 consciously created legal fiction by provi... [Read more]

Central Excise - Reversal of common input service credit in respect of trading activity under Rule 6 of Cenvat Credit Rules 2004 - Manufacturer of excisable goods also engaged in purchase and sale of bought-out items as trading activity - Whether trading constitutes exempted service for purposes of Rule 6 requiring reversal of proportionate common input service credit attributable to trading - HELD - Trading is an exempted service for limited purpose of Rule 6 of Cenvat Credit Rules 2004. The insertion of Explanation to Rule 2(e) by Notification No. 3/2011-CE (NT) dated 01.03.2011 consciously created legal fiction by providing that exempted service includes trading. Appellant's contention that trading cannot be regarded as service since transfer of title in goods is sale ignores specific deeming fiction created by Rules - The dispute does not concern levy of Service Tax on trading but relates to special scheme in Rule 6. Prior to amendment divergent judicial opinions existed but amendment was introduced to remove such ambiguity - The argument that bought-out goods are not inputs and no Cenvat Credit was availed on such goods is irrelevant as Department has never alleged availment of credit on bought-out goods themselves but on common input services like security, telephone, insurance and professional services used for both manufacturing and trading activities. Rule 6 requires reversal because common input service credit attributable to exempted activity cannot be retained - Appellant was required to determine value of trading activity in accordance with statutory formula prescribed under Explanation (c) to Rule 6 being the difference between selling price and cost of goods sold or ten percent of cost of goods sold whichever is higher. Omission to include trading value while computing reversal resulted in short reversal of credit and constitutes suppression justifying invocation of extended period. Therefore, demand for Cenvat Credit reversal together with applicable interest and penalty is sustainable – The appeal is dismissed [Read less]

Central Excise - Determination of place of removal - Includability of freight and insurance charges in assessable value under FOR destination contracts - Appellant supplying PSCC poles to electricity distribution companies on FOR destination basis where contracts provided that price was inclusive of transportation charges, ownership remained with supplier till delivery at buyer's premises and supplier bore risk and responsibility for safe delivery at destination - Whether buyer's premises constitutes place of removal and freight and insurance charges form part of assessable value - HELD - The decisive test for determining ... [Read more]

Central Excise - Determination of place of removal - Includability of freight and insurance charges in assessable value under FOR destination contracts - Appellant supplying PSCC poles to electricity distribution companies on FOR destination basis where contracts provided that price was inclusive of transportation charges, ownership remained with supplier till delivery at buyer's premises and supplier bore risk and responsibility for safe delivery at destination - Whether buyer's premises constitutes place of removal and freight and insurance charges form part of assessable value - HELD - The decisive test for determining place of removal is the point where transfer of property in goods occurs and where sale is completed. Where contracts expressly provide that ownership remains with supplier till delivery of goods in good condition at buyer's premises, sale is not concluded at factory gate but is completed only upon delivery at destination and therefore buyer's premises constitute place of removal. Freight and insurance charges are includable in assessable value when they are incurred and form integral component of supply contract and not optional or independent transport service - Explanation 2 to Rule 5 of CEVR, 2000 clarifies that cost of transportation from factory to place of removal where factory is not place of removal shall not be excluded for determining value of excisable goods. When delivery is on FOR destination basis and ownership remains with seller till destination, freight and insurance are includable in assessable value as established by Supreme Court judgments - Suppression is established as material purchase order clauses relating to FOR destination pricing and freight inclusion were not specifically disclosed to Department. Absence of disclosure of contractual terms coupled with exclusion of freight from assessable value despite contractual clauses clearly indicating destination sale constitutes suppression leading to short payment warranting invocation of extended period under Section 11A(4) of Central Excise Act. Bonafide belief lacks merit as mere self-serving assertion of belief without seeking legal opinion or departmental clarification cannot defeat statutory liability. Therefore, demand of excise duty along with interest and penalty is rightly confirmed - The impugned order is upheld and the appeal is dismissed [Read less]

Central Excise - Service of Order – Appellant received a communication from the Range Officer demanding payment of arrears but did not receive the actual Orders-in-Original regarding clearances made without following prescribed procedures - The Appellate Authority rejected the appeals as time barred, holding that they were filed beyond the statutory time limit of 60 days from the date of communication of orders - Whether appeals filed beyond the statutory time limit are barred by limitation when the orders have not been properly served on the appellant - HELD - Whenever an order is passed to the detriment of an assessee,... [Read more]

Central Excise - Service of Order – Appellant received a communication from the Range Officer demanding payment of arrears but did not receive the actual Orders-in-Original regarding clearances made without following prescribed procedures - The Appellate Authority rejected the appeals as time barred, holding that they were filed beyond the statutory time limit of 60 days from the date of communication of orders - Whether appeals filed beyond the statutory time limit are barred by limitation when the orders have not been properly served on the appellant - HELD - Whenever an order is passed to the detriment of an assessee, the department is duty bound to ensure that such order has been properly served on the affected assessee so as to put the assessee to notice and enable the assessee to initiate requisite action to contest the same - Service of notice should be in a manner that is meaningful and realistic and it would be an anathema in law to decide a matter without due notice to the concerned party - The Appellate Authority merely stated that one order was dispatched and was not returned and that the second order was dispatched by registered post but no evidence of such proof of dispatch, receipt by the appellant, or dated acknowledgment has been relied upon - No statutory proof of service as prescribed under Section 37C of the Act is available on record - Since the appellant upon receipt of the order filed the appeals in time, the appeals are not barred by limitation - The impugned orders are set aside and the matters are remitted back to the Appellate Authority to hear the appeals on merits - The appeals are allowed by way of remand [Read less]

Service Tax - Taxability of miscellaneous income recovered from sub-contractors as consideration for service under Section 66E(e) of Finance Act 1994 - Contractor paid advances to sub-contractors for execution of works and recovered sums from sub-contractors who failed to perform or absconded or delivered poor quality work - Whether such recovery amounts constitute consideration for agreed obligation to tolerate breach and refraining from act - HELD - Mere recovery of damages, compensation, forfeiture or adjustment due to breach does not automatically become taxable consideration under Section 66E(e) of Finance Act as esse... [Read more]

Service Tax - Taxability of miscellaneous income recovered from sub-contractors as consideration for service under Section 66E(e) of Finance Act 1994 - Contractor paid advances to sub-contractors for execution of works and recovered sums from sub-contractors who failed to perform or absconded or delivered poor quality work - Whether such recovery amounts constitute consideration for agreed obligation to tolerate breach and refraining from act - HELD - Mere recovery of damages, compensation, forfeiture or adjustment due to breach does not automatically become taxable consideration under Section 66E(e) of Finance Act as essential ingredients of service under that section require existence of agreement or contractual understanding concerning obligation to tolerate and consideration flowing specifically for such tolerance - Service tax can be levied only on consideration for a service with quid pro quo and amounts without service nexus cannot be taxed. Compensation for breach or non-compliance of contractual terms and conditions cannot be construed as consideration for refraining or tolerating act - In present case no evidence exists on record showing any clause permitting sub-contractors to deliberately default or any agreement whereby appellant agreed to tolerate deficient performance for consideration. Poor performance is breach of contract and recovery is compensatory in nature not arising from pre-agreed contractual obligation to tolerate breach. Therefore such amounts cannot be treated as consideration for declared service under Section 66E(e) – The demand is unsustainable and set aside – The appeal is allowed - Service Tax - Taxability of service provided to HSIIDC - Exemption of construction services provided to Governmental Authority under Notification No. 25/2012-ST entry 12 - Infrastructure development contractor providing construction, erection, commissioning and installation services to Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) for industrial estate development - Whether HSIIDC qualifies as Governmental Authority entitled to exemption and whether works predominantly for commerce or public utility - HELD - HSIIDC qualifies as Governmental Authority under definition provided in Notification as it is corporation set up and controlled by State Government with complete governmental participation and policy control. Functions of HSIIDC substantially overlap with Article 243W of Constitution which enumerates municipal functions. Services provided to Government, Local Authority or Governmental Authority by way of construction and commissioning of civil structures and original works meant predominantly for use other than for commerce, industry or any other business or profession are exempted under Notification entry 12. Therefore appellant is entitled to exemption and demand cannot survive - Service Tax - Invocation of extended period of limitation and imposition of penalties - Contractor was registered with Department, filing ST-3 returns regularly and subjected to periodical audit - Dispute arose from audit scrutiny of disclosed records regarding exemption and taxability of certain services - HELD - Extended period under Section 73 of Finance Act cannot be invoked merely because Department later interprets law differently. Suppression requires deliberate intent to evade duty and where material facts are available in books and returns, allegation of suppression cannot be sustained. Present dispute is interpretational regarding exemption and taxability based on disclosed records making extended period not justified. Once demand itself fails, interest and penalty automatically fail. Suppression and wilful misstatement are not established and therefore penalties under Section 78 of Finance Act are not invokable. [Read less]

Service Tax - Refund of CENVAT Credit under Section 142 of the CGST Act, 2017 - Transitional provisions for cash refund of CENVAT credit not transitioned into GST regime – Appellant filed revised ST-3 return claiming additional CENVAT credit on input services and filed refund claim under Section 142(9)(b) CGST Act but Department rejected refund alleging non-production of complete primary invoices and non-substantiation of services falling under excluded input services category – Whether refund of CENVAT credit can be allowed under Section 142(3) CGST Act when admissibility of credit itself is in question due to non-pro... [Read more]

Service Tax - Refund of CENVAT Credit under Section 142 of the CGST Act, 2017 - Transitional provisions for cash refund of CENVAT credit not transitioned into GST regime – Appellant filed revised ST-3 return claiming additional CENVAT credit on input services and filed refund claim under Section 142(9)(b) CGST Act but Department rejected refund alleging non-production of complete primary invoices and non-substantiation of services falling under excluded input services category – Whether refund of CENVAT credit can be allowed under Section 142(3) CGST Act when admissibility of credit itself is in question due to non-production of supporting documents and failure to clarify nature and use of services – HELD – As the old law stands repealed, The Section 142(3) of the CGST Act can be seen as creating a new statutory right to cash refund of transitional credit, subject mainly to, the proof that credit legitimately accrued and the satisfaction of test of unjust enrichment. The prevailing judicial precedent is to permit such refunds, once its eligibility and correctness is verified - CENVAT credit is a substantive right but burden of proof strictly lies on the claimant under Section 11B of Central Excise Act and Rule 5 of CENVAT Credit Rules – Non-production of complete primary invoices in large number of cases and failing to utilize multiple opportunities to submit clarification of excluded input services reveals lack of due diligence and failure to discharge burden of proof on part of claimant – Once basic requirement of eligibility of credit is in question then refund under Section 142(3) CGST Act does not arise – The impugned order is upheld and the appeal is dismissed - Delay in Filing Revised Return – Compliance with time limit for filing revised return under Section 142(9)(b) CGST Act read with Rule 7B Service Tax Rules – Appellant filed original ST-3 return on 14.08.2017 and revised return on 29.09.2017 thereby filing revised return on 46th day instead of prescribed 45 days from date of original filing – Whether delay of one day in filing revised return constitutes procedural lapse which can be overlooked or whether time limit is sacrosanct requirement – HELD – Legal provisions with specific time limit such as Rule 7B incorporated in statute to correct previous errors or bona-fide mistakes are to be read strictly – Any delay in filing of revised return even of one day cannot be further diluted by referring it as procedural lapse. Time limits specified in special statutes for correction of errors operate as independent requirements and legislature ensures certainty and predictability in legal proceedings by providing detailed provisions governing limitation periods – Time limit specified under Rule 7B is sacrosanct. The delay of one day in filing revised return cannot be condoned as procedural delay – Appeal dismissed - Late Fee for Delayed Filing of Return – Applicability of Rule 7C to revised returns filed under Rule 7B Service Tax Rules – Appellant contended that although revised return was filed with delay of one day the delay can be regularized by imposition of late fee prescribed under Rule 7C – Whether Rule 7C which prescribes late fee for delayed filing of returns is applicable to revised returns filed under Rule 7B – HELD – Rule 7C itself clearly restricts scope to returns under Rule 7 and does not cover revised returns stipulated in Rule 7B – Notification No.19/2016 came into existence on 01.03.2016 at which time Rule 7B existed alongside Rule 7 but absence of reference to Rule 7B in said Notification clearly confirms that intent of provision was to make it applicable with respect to Rule 7 only and not Rule 7B – Rule 7C does not apply to revised returns filed under Rule 7B. Submissions of appellant on applicability of Rule 7C are not legally tenable – Appeal dismissed - Deemed Date of Filing – Applicability of Board's Circular for filing revised returns – Board's Circular No. 207/5/2017-ST dated 28.09.2017 clarified that all ST-3 returns filed on or before 31.08.2017 shall be deemed to be filed on 31.08.2017 – Appellant contended that said Circular is applicable for filing revised returns thereby making revised return filed on 29.09.2017 timely – Whether Board's Circular providing deemed date of filing for original returns applies to revised returns filed under Rule 7B for compliance with time limit specified in Section 142(9)(b) CGST Act – HELD – The said Circular is applicable in cases of invoices pertaining to Reverse Charge Mechanism. Records indicated that majority of invoice numbers referred did not pertain to RCM and remaining details of RCM related invoices form part of excluded input services under Rule 2(l) of CENVAT Credit Rules – In the instant case it is not only non-compliance of provisions of Section 142(9)(b) of CGST Act, 2017, but also non-fulfilment of conditions enumerated in Rule 9 of Cenvat Credit Rules,2024, with respect of non-submission of supporting documents to claim admissibility of Cenvat credit - Appellant failed to provide clarification regarding eligibility of such RCM related services for credit despite several opportunities granted. Board's Circular is not applicable for deeming revised return as timely filed – Contention of appellant regarding applicability of Board's Circular is rejected - New Allegations in Remand Proceedings – Whether fresh allegations can be raised by adjudicating authority in remand proceedings – Original Adjudicating Authority rejected refund on ground of inadmissibility of credit – Matter was remanded by Appellate Authority for fresh decision. On remand authority proposed to reject refund on ground of delay in filing revised return – Whether after remand by Appellate Authority adjudicating authority can raise new grounds not previously raised in original order – HELD – Original Adjudicating Authority while deciding refund application had made specific observation regarding non-examination of other aspects of admissibility as appellant had not provided records relating to admissibility of CENVAT credit – On remand the Adjudicating Authority examined violations under Section 142(9)(b) CGST Act and held the same was sufficient to reject refund claim – Issues raised in both Orders dated 23.06.2020 and 09.11.2021 are essential requirements under Section 142(9)(b) CGST Act. There is no merit in submission that new allegations were raised. [Read less]

Service Tax - Classification of horticultural, landscaping, beautification and developmental work – Appellant-Contractor executing work orders awarded by Government undertaking involving horticulture, landscaping, beautification, development of gardens, green belts, jungle clearance, road paving, footpaths and allied development works within plant premises - Whether above activities constitute Maintenance or Repair Service and benefit of Notification No. 12/2003-ST and 24/2009-ST is admissible - HELD - Activities undertaken by appellant are predominantly developmental, horticultural, landscaping and composite works and a... [Read more]

Service Tax - Classification of horticultural, landscaping, beautification and developmental work – Appellant-Contractor executing work orders awarded by Government undertaking involving horticulture, landscaping, beautification, development of gardens, green belts, jungle clearance, road paving, footpaths and allied development works within plant premises - Whether above activities constitute Maintenance or Repair Service and benefit of Notification No. 12/2003-ST and 24/2009-ST is admissible - HELD - Activities undertaken by appellant are predominantly developmental, horticultural, landscaping and composite works and are not liable to Service Tax under Maintenance or Repair Service. Maintenance ordinarily presupposes preservation or upkeep of already existing asset whereas developmental activities resulting in creation or improvement of landscaping cannot automatically be treated as maintenance or repair. Horticulture and landscaping activities do not attract Service Tax under Maintenance or Repair Service as these are independent developmental or construction activities and not maintenance contracts - Many contracts are composite work contracts involving both material and labour and during relevant period artificial vivisection of composite contracts merely to levy Service Tax under Maintenance category was legally impermissible. Appellant is entitled to exclusion of value of materials sold under Notification No. 12/2003-ST subject to verification of documentary evidence - Substantial portion of contracts relate to roads and Notification No. 24/2009-ST exempted Maintenance or Repair of roads with retrospective exemption granted under Section 97 of Finance Act 2012. Service Tax cannot survive on road-related component and authorities below have not carried out proper segregation of taxable and exempt components - Extended period of limitation has been wrongly invoked as appellant was registered with Department, transactions were reflected in books of accounts and mere disagreement regarding classification does not establish wilful suppression or intent to evade tax - The demand of Service Tax, interest and penalties are set aside and the appeal is allowed [Read less]

Service Tax - Taxability of despatch money received from foreign buyers - Appellant received despatch money from foreign buyers as consideration for faster completion of loading of exported cargo within the port area before expiry of agreed laytime under FOB (Free on Board) export contracts - Whether despatch money represents consideration for rendering taxable service under Port Services or is a contractual adjustment akin to demurrage and not liable to service tax - HELD - Despatch money is not consideration for an independent taxable service but is merely a contractual adjustment and incentive for faster performance aki... [Read more]

Service Tax - Taxability of despatch money received from foreign buyers - Appellant received despatch money from foreign buyers as consideration for faster completion of loading of exported cargo within the port area before expiry of agreed laytime under FOB (Free on Board) export contracts - Whether despatch money represents consideration for rendering taxable service under Port Services or is a contractual adjustment akin to demurrage and not liable to service tax - HELD - Despatch money is not consideration for an independent taxable service but is merely a contractual adjustment and incentive for faster performance akin to demurrage - Appellant is primarily engaged in sale and export of goods and loading and associated operations are incidental to fulfilment of export obligations and therefore, receipt of financial incentive merely because of efficient performance cannot automatically be concluded to be consideration for a taxable service. Consideration under service tax law must be for a service rendered to another person and must have direct nexus with taxable service. No separate agreement exists between appellant and vessel owner for providing quick loading service. The payment arises solely because of contractual performance under sale and export arrangement and is in nature of demurrage and liquidated damages which cannot be subjected to service tax as they are conditions of contract and not consideration for executing contract - Revenue's attempt to isolate despatch from the contract by artificially separating it is legally unsustainable as contractual clauses cannot be dissected artificially to impose tax on isolated components unless statute clearly permits - The despatch money received by appellant is not liable to service tax and demand, interest and penalties are set aside and the appeal is allowed [Read less]

Central Excise – Applicable rate of interest on Refund of Pre-deposit - Appellant filed an appeal before the Tribunal and made a pre-deposit as required under Section 35F of the Central Excise Act 1944, and following the Tribunal's Final Order, claimed refund of the pre-deposit amount along with interest thereon - Authorities below granted refund of the pre-deposit but denied interest and thereafter granted interest at the rate of 6 percent per annum pursuant to a subsequent Tribunal order - Whether the appellant is entitled to interest at 12 percent per annum on the refunded pre-deposit amount or whether the statutory r... [Read more]

Central Excise – Applicable rate of interest on Refund of Pre-deposit - Appellant filed an appeal before the Tribunal and made a pre-deposit as required under Section 35F of the Central Excise Act 1944, and following the Tribunal's Final Order, claimed refund of the pre-deposit amount along with interest thereon - Authorities below granted refund of the pre-deposit but denied interest and thereafter granted interest at the rate of 6 percent per annum pursuant to a subsequent Tribunal order - Whether the appellant is entitled to interest at 12 percent per annum on the refunded pre-deposit amount or whether the statutory rate of 6 percent per annum prescribed under Notification is the applicable rate – HELD - The refund of pre-deposit under Section 35F of the Central Excise Act 1944 and its interest are governed by the statutory notification. Notification No. 24/2014-C.E.(N.T.) dated 12.08.2014 specifically prescribes the rate of interest at 6 percent per annum for the purpose of Section 35FF of the Central Excise Act 1944. The CBIC vide Circular No. 984/8/2014-CX dated 16.09.2014 clarified that Section 35FF provides for payment of refund along with interest at the prescribed rate on the amount pre-deposited from the date of payment till the date of refund with the specified rate of interest being 6 percent. The statutory notification categorically provides for interest rate of 6 percent in respect of refund of pre-deposits and does not provide for any other rate. There is no merit in the appellant's claim for 12 percent interest as the statutory mechanism does not contemplate such a rate for pre-deposits under Section 35F - The impugned order is upheld and the appeal is rejected [Read less]

Central Excise - Finalisation of provisional assessment, Refund of Excise Duty - Bar of Unjust Enrichment - Appellant filed refund claims seeking refund of excess duty paid on account of finalization of provisional assessment and the Adjudicating Authority rejected the refund claims on the sole ground that the same were hit by bar of unjust enrichment which was upheld by the Commissioner in Appeal - Whether the rejection of refund claims on the ground of unjust enrichment is sustainable when the appellant has duly supported its refund claim with a Chartered Accountant's certificate certifying that excess duty paid upon cle... [Read more]

Central Excise - Finalisation of provisional assessment, Refund of Excise Duty - Bar of Unjust Enrichment - Appellant filed refund claims seeking refund of excess duty paid on account of finalization of provisional assessment and the Adjudicating Authority rejected the refund claims on the sole ground that the same were hit by bar of unjust enrichment which was upheld by the Commissioner in Appeal - Whether the rejection of refund claims on the ground of unjust enrichment is sustainable when the appellant has duly supported its refund claim with a Chartered Accountant's certificate certifying that excess duty paid upon clearing of goods was not being recovered and passed on to the customers by way of sale price charges – HELD - The refund claim is not hit by the bar of unjust enrichment. A quasi-judicial Authority is required to consider the applicability and relevancy of documents placed before it before rejecting or accepting the same. A responsible Chartered Accountant's certificate when placed on record and certifying that no part of duty was being passed on to customers must be given effect to and cannot be simply ignored. The Authority's failure to consider such documented evidence and requirement for de-novo proceedings after final assessment orders had already verified all material documents including invoices was not justified. Decisions of various judicial Fora support that unjust enrichment bar does not apply when the burden of tax has not been passed on to the customers - The impugned order rejecting the refund claims is set aside and the appeals are allowed [Read less]

Service Tax - Renting of Immovable Property Service - Status of Co-owners as Association of Persons - Appellants, who are co-owners of a commercial complex let out to various tenants from whom monthly rentals were being collected, were issued a Show Cause Notice proposing demand of service tax for the period from 2007 to 2012 on the basis that renting of immovable property fell under the definition of Renting of Immovable Property Service and treating them as an association of persons for assessment purposes - Whether co-owners of a property who individually collect rents and claim exemption within the threshold limit can ... [Read more]

Service Tax - Renting of Immovable Property Service - Status of Co-owners as Association of Persons - Appellants, who are co-owners of a commercial complex let out to various tenants from whom monthly rentals were being collected, were issued a Show Cause Notice proposing demand of service tax for the period from 2007 to 2012 on the basis that renting of immovable property fell under the definition of Renting of Immovable Property Service and treating them as an association of persons for assessment purposes - Whether co-owners of a property who individually collect rents and claim exemption within the threshold limit can be treated as an association of persons for Service Tax purposes and assessed jointly on the aggregate rental income received from the entire property – HELD - Co-owners cannot be regarded as an association of persons for joint assessment of their total rental income under Service Tax. Formation of an association of persons requires a meeting of the minds with shared objective and a conscious and consensual agreement among individuals. Mere co-ownership by operation of law through inheritance or under a common sale deed without any agreement to have a common or joint venture with joint management does not constitute an association of persons - The essential element required is volition and voluntary association with collective intent among the parties to manage the property for economic gain. Co-ownership arising from automatic or incidental circumstances does not satisfy this requirement. Separation of rental receipts paid directly to each co-owner and their distinct and identifiable ownership shares demonstrate absence of volition required for association formation. Each co-owner owns the property on his own strength and is entitled to individual assessment respecting their respective shares of rental income and may avail the applicable threshold exemption on an individual basis - The impugned orders are set aside and the appeals are allowed [Read less]

GST – Taxability of Assignment/Transfer of long-term leasehold for industrial plot – Vide the impugned order the High Court held that the assignment of leasehold rights of the plot of land allotted by GIDC to the lessee-assignor in favour of third party-assignee is not liable to levy of GST – Revenue in appeal against the impugned order – SC HELD – This Court has already dismissed a Special Leave Petition filed by the Revenue on the similar matter. In view of the fact that a similar SLP has been dismissed, the instant SLPs are also dismissed – Ordered accordingly

Customs - Refund of Duty Paid on Imported Goods not cleared for Home Consumption - Appellant imported goods and provisionally paid customs duty but the goods were never cleared for home consumption and were warehoused and thereafter re-exported - Appellant filed a refund claim initially under Section 27 of the Customs Act 1962 and subsequently changed the basis of the claim to Section 26A - Dept rejected the refund claim invoking the second proviso to Section 26A on the ground that an offence appeared to have been committed - Whether Section 26A applies to refund claims in cases where goods have been paid duty but never cl... [Read more]

Customs - Refund of Duty Paid on Imported Goods not cleared for Home Consumption - Appellant imported goods and provisionally paid customs duty but the goods were never cleared for home consumption and were warehoused and thereafter re-exported - Appellant filed a refund claim initially under Section 27 of the Customs Act 1962 and subsequently changed the basis of the claim to Section 26A - Dept rejected the refund claim invoking the second proviso to Section 26A on the ground that an offence appeared to have been committed - Whether Section 26A applies to refund claims in cases where goods have been paid duty but never cleared for home consumption and remained under the control of Customs authorities and were re-exported and whether the second proviso to Section 26A can be invoked to deny the refund – HELD – The Section 26A applies only where duty has been paid on clearance of goods for home consumption and the opening words of sub-section 1 require that goods be cleared for home consumption as a sine qua non for the applicability of the section. In the present case the goods were never cleared for home consumption and remained warehoused under the control of Customs authorities and were re-exported and therefore Section 26A is wholly inapplicable. Since Section 26A itself does not apply a proviso which merely carves out an exception from the substantive right cannot equally apply as a proviso cannot have an existence independent of or wider than the main provision to which it is attached - The impugned order by invoking the second proviso to a section that does not govern the claim at all has proceeded on a fundamental error of law. Since the appellant had raised the plea of considering the refund claim under Section 27 before the Commissioner in Appeal but this was not recorded or addressed in the impugned order and further the appellant had changed the stand before the Adjudicating authority creating confusion - The matter is remanded to the Commissioner (Appeals) with directions to verify whether the plea under Section 27 was actually raised and if substantiated to consider the refund claim on merits under Section 27 or otherwise pass the order under Section 26A only - The appeal stands disposed of by way of remand [Read less]

GST – Cancellation of Registration, Condonation of delay in filing Appeal - Competence of Appellate Authority to condone delay beyond prescribed period - Petitioner preferred appeal under Section 107 of CGST Act against cancellation of GST registration beyond the period of one month that can be condoned after expiry of three months as prescribed under the Act - Whether the Appellate Authority is competent to condone delay in filing appeal beyond the outer limit of period prescribed under the CGST Act – HELD - In view of provisions of CGST Act, once outer limit of period which can be condoned by the authority has been p... [Read more]

GST – Cancellation of Registration, Condonation of delay in filing Appeal - Competence of Appellate Authority to condone delay beyond prescribed period - Petitioner preferred appeal under Section 107 of CGST Act against cancellation of GST registration beyond the period of one month that can be condoned after expiry of three months as prescribed under the Act - Whether the Appellate Authority is competent to condone delay in filing appeal beyond the outer limit of period prescribed under the CGST Act – HELD - In view of provisions of CGST Act, once outer limit of period which can be condoned by the authority has been prescribed under the Act, the Appellate Authority is not competent to condone delay beyond the one month after expiry of three months. Since the statute prescribes an outer limit of condonation, it cannot be breached, and therefore the appeal preferred by petitioner after expiry of such outer limit is not maintainable and is rightly dismissed by Appellate Authority on ground of limitation - While the statutory limitation for filing appeal or application for revocation of registration cannot be condoned beyond the prescribed period as a matter of law, the Court in exercise of equitable writ jurisdiction can set aside the cancellation order. Considering the petitioner's bona fide efforts to remedy the default and genuine financial hardship faced by the petitioner, particularly where the petitioner has already paid the arrears of tax and is willing to pay all outstanding tax along with applicable interest, late fee and penalty, thereby curing the default that led to cancellation, the cancellation order deserves to be set aside on equitable grounds - The cancellation orders are set aside and GST registration is revived to its original status subject to payment of entire tax payable for the relevant period along with interest, late fee and penalty, with direction to Appellate Authority to quantify the liability by stipulated date and to respondents to enable payment by opening portal – The petition is disposed of [Read less]

Central Excise - Eligibility for exemption from central excise duty on manufactured goods supplied through intermediary - Interpretation of condition requiring proof to satisfaction of Assistant Commissioner or Deputy Commissioner of Central Excise that goods are cleared for intended use - Appellant, a job worker, manufactured Aluminium Baxter Flyer without payment of central excise duty, claiming exemption under Notification 6/2006-CE dated 01.03.2006 superseded by Notification 12/2012-CE dated 17.03.2012 - The principal manufacturer supplied the goods for the intended use after subjecting them to further processing - Dep... [Read more]

Central Excise - Eligibility for exemption from central excise duty on manufactured goods supplied through intermediary - Interpretation of condition requiring proof to satisfaction of Assistant Commissioner or Deputy Commissioner of Central Excise that goods are cleared for intended use - Appellant, a job worker, manufactured Aluminium Baxter Flyer without payment of central excise duty, claiming exemption under Notification 6/2006-CE dated 01.03.2006 superseded by Notification 12/2012-CE dated 17.03.2012 - The principal manufacturer supplied the goods for the intended use after subjecting them to further processing - Department issued Notice to demand duty along with interest and equal penalty contending that the appellant had not fulfilled condition 2 of the exemption notification - Whether goods manufactured by a job worker can be eligible for exemption under the notification even when the goods are further processed and subsequently supplied to the ultimate user by the principal manufacturer and whether non-intimation to the jurisdictional officer regarding clearance without payment of duty results in denial of the exemption benefit - HELD - Baxter Flyer is a crucial component used exclusively in the jute industry as a part of jute spinning frames and can only be used in a jute mill for making jute textile and cannot be used elsewhere - The condition 2 of the exemption notification requires that the goods be cleared for the intended use specified in the notification, which is goods required by a jute mill for making jute textiles - The expression intended for use is sufficiently wide to cover situations where goods manufactured by the appellant are ultimately used in a jute mill after undergoing some process of further treatment at the hands of the principal manufacturer - The Appellant has fulfilled the condition by ensuring that the goods were ultimately used only in jute mills for making jute textiles as evidenced by the invoices submitted by the Appellant showing that the principal cleared the goods to jute mills and the department has not produced any evidence to the contrary - The exemption notification does not prescribe any condition requiring prior or post intimation to the jurisdictional Central Excise officer regarding clearance of the goods without payment of duty and non-intimation to the jurisdictional officer can at the maximum be considered only as a procedural breach and the same cannot result in denial of the exemption benefit as procedural law is always subservient to and in aid to justice - The Department has wrongly interpreted the condition by importing a requirement of prior permission from the jurisdictional officer which is not prescribed in the notification itself - The demand of central excise duty is not sustainable and set aside - The questions of demanding interest or imposing penalty do not arise as the duty demanded is not sustainable - The appeal is allowed [Read less]

Central Excise - Exemption for Captively Consumed Capital Goods - Demand for excise duty by denying the benefit of exemption granted under Notification No. 67/95-C.E. for specified capital goods manufactured and captively consumed, in respect of items including trolley, lifting tackle, trailer and cabinet work bench, rack and table - Whether the goods in question namely shop floor equipment qualify for exemption under Notification No. 67/95 as specified capital goods and inputs manufactured in the factory and used within the factory of production in or in relation to the manufacture of final products – HELD - The identic... [Read more]

Central Excise - Exemption for Captively Consumed Capital Goods - Demand for excise duty by denying the benefit of exemption granted under Notification No. 67/95-C.E. for specified capital goods manufactured and captively consumed, in respect of items including trolley, lifting tackle, trailer and cabinet work bench, rack and table - Whether the goods in question namely shop floor equipment qualify for exemption under Notification No. 67/95 as specified capital goods and inputs manufactured in the factory and used within the factory of production in or in relation to the manufacture of final products – HELD - The identical issue has been squarely covered in favour of the appellant by this Tribunal in its earlier decision where it was held that the goods in question are classifiable under Chapter 94 of the Tariff which is not disputed by the Revenue and this Chapter is not excluded from the benefit of Notification No. 67/95 - The goods are shop floor equipment which are tailor made products facilitating shop floor operations including tool cabinets, pigeon hole cabinets, different types of racks, die racks, workbench and tables made of steel and are used only for captive consumption. These items qualify as capital goods under the definition which includes plant, machine or machinery used in or in relation to manufacture and their parts, accessories and components. Being used in the factory of production in or in relation to the manufacture of final products they qualify for exemption under the Notification. The issue has reached finality - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Scope of Business Auxiliary Service - Agency versus Sale of Goods – Appellant-Dept sought to recover service tax from Respondents-assessee for providing outlets and services for sale of CNG manufactured and supplied by Mahanagar Gas Limited (MGL) - Respondents contested the demand claiming they were purchasing CNG from MGL and reselling it on principal to principal basis and therefore no service tax was payable - Adjudicating Authority confirmed the demand treating the arrangement as one of agency. The CESTAT allowed the assessees appeals and set aside the demand - Whether the arrangement between MGL and ... [Read more]

Service Tax – Scope of Business Auxiliary Service - Agency versus Sale of Goods – Appellant-Dept sought to recover service tax from Respondents-assessee for providing outlets and services for sale of CNG manufactured and supplied by Mahanagar Gas Limited (MGL) - Respondents contested the demand claiming they were purchasing CNG from MGL and reselling it on principal to principal basis and therefore no service tax was payable - Adjudicating Authority confirmed the demand treating the arrangement as one of agency. The CESTAT allowed the assessees appeals and set aside the demand - Whether the arrangement between MGL and Respondents for supply and sale of CNG through retail outlets owned by Respondents constitutes a contract of sale on principal to principal basis or a contract of agency whereby Respondents act as agents of MGL for rendering Business Auxiliary Service – HELD - The arrangement between the parties constitutes a principal-agent relationship and not a sale transaction. The essential test to determine the true nature of arrangement is the passing of property or ownership in goods from one party to another. When property does not pass, the arrangement is one of agency even though goods are delivered. All terms and conditions of the Agreements taken together establish that ownership of CNG remained with MGL at all times. MGL retained control over supply, fixed and revised prices which Respondents were bound to follow, MGL maintained all equipment and inspected operations, MGL was sole regulator of supply quantities, risk never transferred from MGL to Respondents, and upon termination all unsold CNG was to be returned to MGL – The Respondents were obliged to provide site, construct infrastructure, supply electricity and water, provide trained staff and promote sale on behalf of MGL. Clause 8.4 of Agreements expressly stipulated payment of commission to Respondents which is indicative of agent status not buyer status. Commission was payable only on actual quantity sold and was dependent on Government directives confirming it was remuneration for services not profit on purchase - The Respondents were facilitators acting as commission agents under Section 65(19) read with Section 65(105)(zzb) of Finance Act 1994 and were rendering taxable Business Auxiliary Service of promotion and marketing of goods belonging to MGL. No buying and selling occurred between the parties. Respondents were recipients of goods for sale on behalf of MGL not buyers for resale - The decision of CESTAT based on erroneous reasoning is set aside and the Adjudicating Authority's findings upholding the demand for service tax under BAS are confirmed - The appeals are allowed and the Orders-in-Original confirming the service tax demand against Respondents are restored – The Revenue’s appeals are allowed [Read less]

Service Tax - Taxable value of turnover/transaction charges - Appellant, a registered forward contract services provider, collected turnover or transaction charges and deposited with exchanges but paid service tax only on brokerage received during the relevant period while failing to include such turnover charges in the taxable value and a demand for service tax was raised with allegation of short payment and suppression of material facts invoking extended period of limitation - Whether turnover or transaction charges collected by the stockbroker are includable in the taxable value for service tax purposes – HELD - The t... [Read more]

Service Tax - Taxable value of turnover/transaction charges - Appellant, a registered forward contract services provider, collected turnover or transaction charges and deposited with exchanges but paid service tax only on brokerage received during the relevant period while failing to include such turnover charges in the taxable value and a demand for service tax was raised with allegation of short payment and suppression of material facts invoking extended period of limitation - Whether turnover or transaction charges collected by the stockbroker are includable in the taxable value for service tax purposes – HELD - The turnover or transaction charges are includable in the taxable value for service tax purposes as clarified through Departmental Circular dated 17.09.2010 and amendment dated 16.05.2008. The appellant was not acting as a pure agent and the charges represent liability of the service provider which must be included in taxable value. No bonafide confusion existed about the taxability as clarification on the matter was already issued prior to the relevant period through circular dated 19.04.2006 - The appellant having sought clarification from the department which was denied subsequently failed to include the charges in returns amounts to wilful suppression of material facts with clear intention of evasion. The extended period of limitation has been rightly invoked in cases where the assessee deliberately conceals tax liability despite being aware of the obligation to pay tax - The order confirming the demand and upholding invocation of extended period of limitation is upheld - The appeal is dismissed [Read less]

Central Excise - Eligibility for declaration under Sabka Vishwas Legacy Dispute Resolution Scheme - Scope of SVLDR Scheme under Finance Act 2019 – The Order-in-Original directed confiscation of MS Ingots and granted option to redeem goods on payment of redemption fine in lieu of confiscation. Petitioner also imposed penalty - During pendency of second appeal before CESTAT, SVLDRS, 2019 was introduced - Petitioner filed declaration under SVLDR Scheme seeking settlement of arrears - Designated Committee rejected declaration on ground that redemption fine does not fall within scope of SVLDR Scheme rendering petitioner ineli... [Read more]

Central Excise - Eligibility for declaration under Sabka Vishwas Legacy Dispute Resolution Scheme - Scope of SVLDR Scheme under Finance Act 2019 – The Order-in-Original directed confiscation of MS Ingots and granted option to redeem goods on payment of redemption fine in lieu of confiscation. Petitioner also imposed penalty - During pendency of second appeal before CESTAT, SVLDRS, 2019 was introduced - Petitioner filed declaration under SVLDR Scheme seeking settlement of arrears - Designated Committee rejected declaration on ground that redemption fine does not fall within scope of SVLDR Scheme rendering petitioner ineligible - Whether redemption fine imposed in lieu of confiscation of goods is covered under SVLDR, 2019 - HELD - Section 125 of Finance Act 2019 enumerates categories of persons excluded from filing declaration and cases involving confiscation of goods or redemption fine are not excluded from filing declaration under SVLDR Scheme - Persons who have been asked to pay redemption fine in lieu of confiscation of goods cannot be treated as ineligible to file declaration under Scheme solely on that ground - The levy of a redemption fine in lieu of confiscation of goods forms part of the amount of duty which is recoverable under the indirect tax enactment, and the same cannot be segregated from the demand of duty for the purposes of the SVLDRS, 2019. The CBIC's letter dated 20.12.2019 seeking to exclude redemption fine from ambit of Scheme is contrary to provisions of Finance Act 2019 and does not merit acceptance - The impugned order rejecting petitioner's declaration is set aside – Respondent-Department is directed to treat declaration in Form SVLDR-1 as eligible declaration and consider same on merits in accordance with SVLDR Scheme 2019 and rules made thereunder – The writ petitions are allowed [Read less]

GST - Denial of ITC on the ground of cancellation of registration of the supplier - Whether the proceedings for denial ITC claimed by the petitioner can be justified in the absence of any findings of fraud, willful misstatement, or suppression of facts to evade tax – HC held that once actual movement of goods as well as payment of tax have been proved by the purchasing dealer, proceedings under Section 74 is not justified – Revenue in appeal against the impugned order – SC HELD – There is no good ground to entertain this petition, the special leave petition is dismissed.

Tamil Nadu General Sales Tax Act, 1959 - Taxation of Imported Goods - Determination of Situs of Sale in High Seas Sales - Petitioner contended that sales of imported cars were effected on high seas before goods entered Indian customs territory and therefore not liable to tax under TNGST Act, 1959 - The goods directly moved from Mumbai port to customers in different States without entering Tamil Nadu, and invoice location at Tamil Nadu should not be treated as situs of sale when physical movement was from Mumbai - Whether levy of tax on imported cars claimed to be High Seas Sales is sustainable when invoices raised by deale... [Read more]

Tamil Nadu General Sales Tax Act, 1959 - Taxation of Imported Goods - Determination of Situs of Sale in High Seas Sales - Petitioner contended that sales of imported cars were effected on high seas before goods entered Indian customs territory and therefore not liable to tax under TNGST Act, 1959 - The goods directly moved from Mumbai port to customers in different States without entering Tamil Nadu, and invoice location at Tamil Nadu should not be treated as situs of sale when physical movement was from Mumbai - Whether levy of tax on imported cars claimed to be High Seas Sales is sustainable when invoices raised by dealer show factory address in Tamil Nadu and goods were delivered from Mumbai after entry into Indian territory – HELD - The situs of sale for tax purposes is determined by the place where transfer is shown in sales invoice and not merely by the physical movement of goods or location of invoice addressee. In the absence of conclusive proof that transfer occurred while goods were on high seas, the place of transfer is to be determined from sales invoice which showed factory address in Tamil Nadu. The Customs duty was paid by the dealer and not by end users or dealers outside Tamil Nadu, therefore goods were taxable in Tamil Nadu - In the absence of proof that the transfer of the goods were affected while the goods where in high seas and in view of absolute proof that the sales of the cars imported were effected from Tamil Nadu through invoices showing the factory address at Tamil Nadu, the plea of the appellant-assessee that the sales were high seas sales is unsustainable - The alternate plea of inter-State sales is mutually destructive and proves suppression of turnover with intent to evade tax warranting penalty - The plea of petitioner regarding high seas sales is unsustainable and the order of Tribunal confirming assessment is affirmed – The appeal is dismissed - Violation of Conditions of Exemption Notification - Jurisdiction of Appellate Authority to set aside order of Assessing Officer - Petitioner claimed exemption under G.O.Ms.No.381 on purchase of goods to be used in manufacture of cars and availed tax benefit by furnishing declaration, but Assessing Officer found goods were not utilized for manufacturing but disposed otherwise and levied tax - Appellate Authority set aside assessment and remanded for levy of compounding fees, and Tribunal restored assessment order - Whether Tribunal was right in restoring order of Assessing Officer by overturning finding of Appellate Authority without appeal by Department challenging the exemption order – HELD - The exemption notification provides that goods purchased against declaration for manufacturing must be used for that purpose and if disposed otherwise, dealer must pay tax at applicable rate - When trader opts to avail exemption under Government notification after furnishing mandatory declaration, the trader is bound by conditions stipulated in the notification - Tribunal was right in considering error of Appellate Authority in misapplying Section 5(3) of CST Act to goods exempted under G.O.Ms.No.381 as the exemption under CST Act applies to sellers and not to dealers who availed exemption after declaration, and trader having failed to produce evidence that exempted goods were used in manufacturing as declared is estopped from raising plea contrary to own declaration - Tribunal was competent to correct error of law apparent in Appellate Authority order even without Department appeal as Tribunal was testing legality of Appellate order in dealer's appeal - The order of Tribunal restoring assessment order is correct and affirmed [Read less]

GST - Service of notice on portal, Clean hand Doctrine, Ex-parte order - Demand for excess claim of Input Tax Credit - Petitioner challenge Show Cause Notice and summary of orders on ground of being ex-parte order and non-compliance with requirement of Section 169 of CGST Act as the Show Cause Notice was uploaded on GST portal under heading ‘Additional Notices and Orders’ tab which is not proper compliance - HELD – The petitioner is silent on merit on allegations that petitioner had availed huge amount of excess Input Tax Credit - Show Cause Notice in GST Form DRC-01 clearly states ITC as per GSTR-2A whereas ITC clai... [Read more]

GST - Service of notice on portal, Clean hand Doctrine, Ex-parte order - Demand for excess claim of Input Tax Credit - Petitioner challenge Show Cause Notice and summary of orders on ground of being ex-parte order and non-compliance with requirement of Section 169 of CGST Act as the Show Cause Notice was uploaded on GST portal under heading ‘Additional Notices and Orders’ tab which is not proper compliance - HELD – The petitioner is silent on merit on allegations that petitioner had availed huge amount of excess Input Tax Credit - Show Cause Notice in GST Form DRC-01 clearly states ITC as per GSTR-2A whereas ITC claimed in GSTR-3B was significantly higher – The Writ application is also silent on ground stated in Notice which talks of excess claim of Input Tax Credit and suppression of turnover - Despite clear assertion in summary of order that last reminder was sent on registered mail, petitioner has not made specific and categorical statement that no email was received by petitioner on registered email ID - Since petitioner is seeking quashing of SCN and summary of order, it was incumbent upon petitioner to state on fact actual accrual of ITC present in GSTR-2A – Further, the statement of petitioner that petitioner got information about bank attachment much later when he visited jurisdictional office of respondents and copies of notices and orders were obtained at even later date upon perusal of portal subsequent to signing of alleged undertaking letter is nothing but an afterthought - This writ application has been filed after three months from date of execution of undertaking and submission of three post-dated cheques - There is nothing on record to take view that for more than three months after execution of undertaking and submission of post-dated cheques, petitioner could not have raised any protest or preferred appeal against impugned SCN and impugned summary of order. This is not bonafide writ application. Writ remedy is meant for those who come clean before this Court - In facts of this case, plenary and discretionary jurisdiction of issuance of extraordinary writ is not fit to be exercised - Conduct of petitioner is such that it requires dismissal of writ application with cost - Writ application is dismissed with cost [Read less]

GST - Anti-profiteering – Relevant date for reckoning of Project completion date – Whether, for the purposes of Section 171 of the CGST Act, 2017, project completion should be reckoned from the date of actual issuance of Occupancy Certificate or from the date of filing of application seeking such certificate – HELD - A project is deemed to be completed only upon actual grant of Occupancy Certificate from the competent authority and not upon mere filing of an application therefor - The submission that construction was completed on filing of application for Occupancy Certificate is devoid of merit - In the present case... [Read more]

GST - Anti-profiteering – Relevant date for reckoning of Project completion date – Whether, for the purposes of Section 171 of the CGST Act, 2017, project completion should be reckoned from the date of actual issuance of Occupancy Certificate or from the date of filing of application seeking such certificate – HELD - A project is deemed to be completed only upon actual grant of Occupancy Certificate from the competent authority and not upon mere filing of an application therefor - The submission that construction was completed on filing of application for Occupancy Certificate is devoid of merit - In the present case Occupancy Certificate was granted during the post-GST period and the Respondent continued to avail Input Tax Credit during the relevant period which clearly establishes that the project was ongoing in the post-GST period - The contention is rejected - Period of investigation for Anti-profiteering matter - Methodology for Computation of profiteered amount - Whether the DGAP correctly restricted the period of investigation to the period from introduction of GST till issuance of Occupancy Certificate and whether the methodology adopted for computation of profiteered amount is legally sustainable as per Section 171 – HELD – The Schedule III and Section 17 of CGST Act make it evident that sale of units after issuance of Occupancy Certificate is treated as exempt supply and falls outside purview of taxable supply and ITC attributable to such supplies is not available and is liable to be reversed - Since anti-profiteering provisions operate only where benefit of input tax credit accrues to supplier and is required to be passed on to recipients, no profiteering can arise in respect of units sold after issuance of Occupancy Certificate as no admissible input tax credit benefit survives in relation to such units - Investigation must be confined to period up to date of issuance of Occupancy Certificate - The DGAP correctly restricted the period of investigation to the relevant period representing duration during which project was ongoing and supplier was availing input tax credit under GST regime – The buyers had booked units and made payments during pre-GST period and became entitled to benefit of additional Input Tax Credit accruing to Respondent in post-GST period - DGAP correctly computed additional ITC benefit by comparing ratio of ITC to purchase value in pre-GST and post-GST periods. The methodology is in conformity with Section 171 of CGST Act and consistent with principles enunciated by Delhi High Court - No infirmity can be found in methodology or in quantification of profiteered amount - Identifiability of recipients - Rule 133(3)(b) and Rule 133(3)(c) – HELD - Rule 133(3)(c) is residuary provision attracted only in those cases where eligible recipients are genuinely unidentified. Expression “recipient is not identifiable” cannot be interpreted to mean recipient has not filed complaint, is not presently available or that computation has not initially been made buyer-wise - Test under Rule 133(3)(c) is one of objective impossibility of identification - Where supplier's books of account, allotment letters, agreements for sale, demand notices, payment schedules and statutory records disclose identity of purchasers, recipients remain identifiable notwithstanding that they may not have participated in proceedings or may presently be untraceable or may have resold their flats - In present case Respondent is real estate developer engaged in sale of residential flats and nature of such transactions necessitates maintenance of exhaustive records of each homebuyer. Respondent itself relied upon buyer-specific data and categorised purchasers according to stage and timing of payments received. Such stand itself demolishes contention that recipients are unidentifiable - Factual matrix falls squarely within ambit and scope of clause (b) of sub-rule (3) of Rule 133 of CGST Rules - Respondent having collected excess consideration from homebuyers in contravention of Section 171 cannot be permitted to retain same - Respondent is directed to refund profiteered amount to respective homebuyers individually along with interest at rate of eighteen per cent per annum calculated from date of collection of excess amount from each homebuyer until date of actual restitution - Penalty under Section 171(3A) of CGST Act - Whether Respondent is liable to pay penalty under Section 171(3A) – HELD - Since period of investigation in present case has been restricted to period from introduction of GST till issuance of Occupancy Certificate which is prior to coming into force of Section 171(3A), penalty provision is not attracted for period of investigation - It is well-settled principle of law that penal provisions cannot be applied retrospectively unless expressly stated - Section 171(3A) was inserted with effect from specified date and does not contain any provision for retrospective application - For period prior to coming into force of Section 171(3A), Respondent cannot be held liable for penalty under said provision - Respondent is not liable to pay penalty under Section 171(3A) of CGST Act. 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Service Tax - Refund of service tax paid on services received by Special Economic Zone unit for authorized operations - Appellant, an SEZ unit engaged in manufacture of excisable goods, claimed refund of service tax paid on various services including payroll processing, insurance brokerage, legal consultancy, professional and consultancy charges, and construction services received during the period - Whether services used for authorized operations of SEZ unit but not wholly consumed within the SEZ are eligible for refund of service tax under Notification No. 17/2011-Service Tax - HELD - Services received by an SEZ unit for... [Read more]

Service Tax - Refund of service tax paid on services received by Special Economic Zone unit for authorized operations - Appellant, an SEZ unit engaged in manufacture of excisable goods, claimed refund of service tax paid on various services including payroll processing, insurance brokerage, legal consultancy, professional and consultancy charges, and construction services received during the period - Whether services used for authorized operations of SEZ unit but not wholly consumed within the SEZ are eligible for refund of service tax under Notification No. 17/2011-Service Tax - HELD - Services received by an SEZ unit for authorized operations are eligible for exemption and refund under Notification No. 17/2011-ST and Section 26(1)(e) of the Special Economic Zones Act, 2005, provided such services are used in authorized operations of the SEZ unit. The requirement of being wholly consumed within SEZ applies only to specific services as enumerated in the Explanation to the notification and does not apply to all services for which refund is claimed - The notification provides a refund mechanism for services used in authorized operations and does not impose an artificial demarcation of wholly consumed within SEZ as a condition for all services - The exemption under SEZ Act has overriding effect over the Finance Act provisions and procedural irregularities in compliance with notification requirements cannot be pressed into service to deny substantial benefits - The revenue had not contended that the impugned services were not used in authorized operations and the appellant had clearly demonstrated utilization of services in authorized operations – The refund of service tax claimed for the rejected amount is granted, the order of lower authorities denying refund on the ground of non-consumption within SEZ is set aside - The appeal is allowed [Read less]

Central Excise - Cenvat Credit – Eligibility of credit on input services used for setting up of factory after deletion of word ‘setting up’ from inclusive portion of definition of input services – Appellant availed Cenvat credit on services procured for setting up of Plant – Department during audit issued show cause notice denying Cenvat credit of the entire amount claimed, alleging that after the deletion of the term setting up from the inclusive portion of the definition of input services w.e.f. 01.04.2011, no credit of any service used for setting up of factory would be available and confirmed the demand – W... [Read more]

Central Excise - Cenvat Credit – Eligibility of credit on input services used for setting up of factory after deletion of word ‘setting up’ from inclusive portion of definition of input services – Appellant availed Cenvat credit on services procured for setting up of Plant – Department during audit issued show cause notice denying Cenvat credit of the entire amount claimed, alleging that after the deletion of the term setting up from the inclusive portion of the definition of input services w.e.f. 01.04.2011, no credit of any service used for setting up of factory would be available and confirmed the demand – Whether Cenvat credit is available for input services used in setting up of factory after the amendment to Rule 2(l) of Cenvat Credit Rules, 2004 – HELD – The definition of input service has three limbs namely means clause, includes clause and excludes clause – Services used for setting up of a factory are directly linked to the manufacture of the final product and are covered within the ambit of means clause which defines input service as service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products – Although the word setting up was specifically excluded from the includes clause w.e.f. 01.04.2011, the services remain covered under the main means clause as they are used in relation to manufacture – Services for setting up a factory are activities in relation to manufacture and being covered by the main clause and not specifically excluded by the excludes part, qualify as input service for Cenvat credit – None of the exclusionary clauses cover the services on which Cenvat credit has been availed and these services are clearly not in relation to construction of any building or civil structure but are covered under the means portion of the definition of input services – The Cenvat credit on services used in setting up of factory is admissible post 01.04.2011 – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Validity of Arrest under Health Security Se National Security Act, 2025 - Petitioner was arrested by Excise authorities for alleged clandestine manufacture of tobacco and pan masala products in undeclared packing machines and for alleged evasion of tax, and the petitioner challenges the legality of his arrest and detention in a habeas corpus petition - Whether the arrest and detention of the petitioner is in accordance with law and the procedure prescribed under the Bharatiya Nagarik Suraksha Sanhita 2023 when the authorization for arrest was issued subsequent to the arrest and various procedural requireme... [Read more]

Central Excise - Validity of Arrest under Health Security Se National Security Act, 2025 - Petitioner was arrested by Excise authorities for alleged clandestine manufacture of tobacco and pan masala products in undeclared packing machines and for alleged evasion of tax, and the petitioner challenges the legality of his arrest and detention in a habeas corpus petition - Whether the arrest and detention of the petitioner is in accordance with law and the procedure prescribed under the Bharatiya Nagarik Suraksha Sanhita 2023 when the authorization for arrest was issued subsequent to the arrest and various procedural requirements were not complied with – HELD - The arrest, remand and detention of petitioner do not appear to be in accordance with law. The authorization for arrest under Section 21(1) was issued by the Commissioner on 23.05.2026 only, whereas the petitioner was actually arrested on the intervening night of 22/23.05.2026, making the authorization subsequent to the arrest. The arrest memo does not indicate that a copy thereof was supplied to any relative or nominee of the petitioner as required under the B.N.S.S. procedures - All witnesses mentioned in the arrest memo appear to be strangers to the petitioner. The arrest memo does not contain any recital indicating that the petitioner was informed of his right to avail legal assistance from an advocate of his choice. Though the authorization for search was issued on 22.05.2026, the time of arrest has been recorded as 1:30 p.m. on 23.05.2026 in the arrest memo despite the actual arrest being on 22.05.2026 creating a discrepancy in records. Further, the basis of alleged evasion figure is not based on any audit and assessment under the Act. Relying on the principles laid down in Satender Kumar Antil vs. C.B.I., the arrest is not justified as the maximum punishment under the Act extends to five years only and the procedural requirements have not been complied with - The arrest, remand and detention are set aside and the petitioner is directed to be released forthwith - The habeas corpus writ petition is allowed [Read less]

Central Excise - Health Security Se National Security Cess Act, 2025 - Computation of Cess on Basis of Operational Machines - Petitioners engaged in manufacturing of pan masala challenge the order regarding cess computation under the Cess Act and contend that machines installed after 20.03.2026 should not be included in the computation of cess liability for the month of March as such machines were installed at the end of the month and therefore should be excluded from the total number of operational machines used for manufacturing - Whether Rule 12(4) of the Health Security Se National Security Cess Rules, 2026 requires in... [Read more]

Central Excise - Health Security Se National Security Cess Act, 2025 - Computation of Cess on Basis of Operational Machines - Petitioners engaged in manufacturing of pan masala challenge the order regarding cess computation under the Cess Act and contend that machines installed after 20.03.2026 should not be included in the computation of cess liability for the month of March as such machines were installed at the end of the month and therefore should be excluded from the total number of operational machines used for manufacturing - Whether Rule 12(4) of the Health Security Se National Security Cess Rules, 2026 requires inclusion of machines installed at the end of the month in the cess computation when such machines are actually operational and used in production of goods listed in Schedule-II of the Cess Act and whether the statutory exception under Section 5(7) for proportionate abatement applies to machines installed at the end of a month – HELD - The Rule 12(4) mandates that the total number of operational machines used for manufacturing goods listed in Schedule-II must be treated as the maximum number of installed machines for Cess computation in a given month - When machines are installed towards the end of the month and are actively used to produce or package goods in pouches or containers they must be included in the cess calculation. The sole statutory exception to cess liability under Section 5(7) provides for proportionate abatement only if a machine remains inoperative for a continuous period of 15 days or more. The meaning of the word inoperative cannot be extended to operational machines installed at the end of the month nor can it be extended to newly registered taxable persons who install machines at any time during the month - The word inoperative applies only to machines that have remained in such status for a period of 15 days or more after installation before becoming operational and not to machines installed later in the month and made operational. Rule 12(4) does not violate the enabling provisions of the Cess Act nor does it convey manifest arbitrariness or unreasonableness. The statutory scheme charges cess on production based on installed and operational machines in a given month and the petitioners have misread the provisions - The writ petition is dismissed [Read less]

Service Tax - Invocation of extended period of limitation for demanding service tax on suppression of facts - Appellant engaged in providing work contract services and received amounts from clients during financial years but failed to file ST-3 returns and pay service tax - Revenue made demand invoking extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 on the ground of suppression of facts - Appellant contended that demand is barred by limitation and relied upon decisions distinguishing between services covered under negative list and those where appellant failed to file prescribed return... [Read more]

Service Tax - Invocation of extended period of limitation for demanding service tax on suppression of facts - Appellant engaged in providing work contract services and received amounts from clients during financial years but failed to file ST-3 returns and pay service tax - Revenue made demand invoking extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 on the ground of suppression of facts - Appellant contended that demand is barred by limitation and relied upon decisions distinguishing between services covered under negative list and those where appellant failed to file prescribed returns despite being registered - Whether extended period of limitation is invocable when a service provider who is statutorily registered with the Department deliberately suppresses gross amounts received from clients by not filing ST-3 returns in the prescribed manner - HELD - When a statute prescribes a manner for performance of an act, it must be performed in that manner only, the appellant was required to file ST-3 return declaring gross amount received for taxable services and claim deductions in prescribed format, by not filing returns in the prescribed manner the appellant deliberately and knowingly suppressed the gross amounts received with intention to evade payment of service tax - The suppression of facts constitutes willful concealment bringing the case within the purview of extended period of limitation under proviso to Section 73(1), appellant cannot claim benefit of his own wrong as per the maxim commodum ex injuria sua nemo habere debet - The penalty under Section 78 is justified as the extended period of limitation has been validly invoked, the appellant's non-response to summons and failure to produce requisite documents further supports invocation of extended period - Extended period of limitation has been rightly invoked for making demand, appeal is dismissed, penalty under Section 78 imposed by adjudicating authority is upheld. The appeal is dismissed [Read less]

Service Tax – Benefit of reduced penalty on payment of tax within stipulated time-frame - Appellant submitted that due to non-receipt of communication regarding personal hearing in time, they were unable to make payment within prescribed 30-day period but subsequently paid the tax amount and also claimed to have paid the reduced penalty - Whether appellant has produced evidence to establish payment of reduced penalty of 25% of tax amount within the prescribed time-frame for availing the benefit of penalty reduction - HELD - The appellant could not produce any evidence to establish that reduced penalty of 25% of tax amoun... [Read more]

Service Tax – Benefit of reduced penalty on payment of tax within stipulated time-frame - Appellant submitted that due to non-receipt of communication regarding personal hearing in time, they were unable to make payment within prescribed 30-day period but subsequently paid the tax amount and also claimed to have paid the reduced penalty - Whether appellant has produced evidence to establish payment of reduced penalty of 25% of tax amount within the prescribed time-frame for availing the benefit of penalty reduction - HELD - The appellant could not produce any evidence to establish that reduced penalty of 25% of tax amount had been paid within the 30-day period prescribed in the order-in-original - The matter is remanded back to the adjudicating authority to verify the correctness of the claim made by appellant towards payment of reduced penalty of 25% of the tax amount within 30 days from the date of communication of the order for the limited purpose of ascertaining eligibility for the benefit of reduction of penalty under Section 78 of the Finance Act, 1994, appeal is disposed of by way of remand [Read less]

GST – Application for Anticipatory bail - Fraudulent availment of Input Tax Credit - Necessity of Custodial Interrogation - Petitioners were partners of partnership firm engaged in business of supplying stainless steel products and ferrous scrap - DGGI initiated investigation alleging wrongful availment of ITC and estimated at approximately Rs. 94.96 crores by claiming credit on invoices without actual receipt of goods and from fake or non-existent suppliers - Petitioners apprehending arrest and seeking anticipatory bail - Whether arrest can be effected as matter of course in economic offences involving large-scale GST e... [Read more]

GST – Application for Anticipatory bail - Fraudulent availment of Input Tax Credit - Necessity of Custodial Interrogation - Petitioners were partners of partnership firm engaged in business of supplying stainless steel products and ferrous scrap - DGGI initiated investigation alleging wrongful availment of ITC and estimated at approximately Rs. 94.96 crores by claiming credit on invoices without actual receipt of goods and from fake or non-existent suppliers - Petitioners apprehending arrest and seeking anticipatory bail - Whether arrest can be effected as matter of course in economic offences involving large-scale GST evasion or whether necessity of custodial interrogation must be independently established by investigating agency - HELD – The power of arrest under Section 69 of CGST Act is neither mechanical nor automatic and can be exercised only where Commissioner has reasons to believe person has committed specified offence and expression reasons to believe embodies substantive statutory safeguard requiring objective satisfaction founded on tangible material and not mere suspicion or allegations - Arrest is investigative measure and not punitive one and mere existence of power to arrest does not justify its exercise. Arrest must be shown to be necessary for purposes of investigation such as preventing abscondence, tampering with evidence, influencing witnesses or obstructing course of justice - Gravity of allegation by itself cannot justify curtailment of personal liberty. While economic offences constitute distinct class warranting fair thorough and effective investigation, constitutional safeguards protecting personal liberty cannot be ignored - In present case investigation substantially centres around documentary financial and electronic records already in custody of authorities and petitioners being permanent residents with known identities and addresses have expressed willingness to cooperate and undertaken to appear before investigating authority whenever required - Custodial interrogation not indispensable at this stage where investigation can effectively proceed without depriving accused of personal liberty – The petitioners are granted anticipatory bail subject to stringent conditions - The Criminal Petition is allowed [Read less]

GST - Condonement of Delay in Filing Appeal - Petitioner contended that delay in filing appeal is bona fide and not intentional as appellant was not aware that impugned order had been made available on GST portal and mere uploading of order on portal does not amount to effective communication - Whether appeal deserves to be considered on merits after condoning delay - HELD - While it is true that Appellate Authority is bound by statutory provisions of limitation provided under Section 107 of CGST Act, 2017, however, considering reasons owing to which petitioner could not submit appeal within stipulated time being beyond it... [Read more]

GST - Condonement of Delay in Filing Appeal - Petitioner contended that delay in filing appeal is bona fide and not intentional as appellant was not aware that impugned order had been made available on GST portal and mere uploading of order on portal does not amount to effective communication - Whether appeal deserves to be considered on merits after condoning delay - HELD - While it is true that Appellate Authority is bound by statutory provisions of limitation provided under Section 107 of CGST Act, 2017, however, considering reasons owing to which petitioner could not submit appeal within stipulated time being beyond its control, non-adjudication of appeal on merits would cause grave injury and prejudice to petitioner - Following consistent view already taken by this Court, the writ petition is allowed to extent of condoning delay of 172 days in filing of appeal by petitioner – The writ petition is allowed [Read less]

GST – Notice absent reason - Issue of Notice under Section 74 for determination of tax on account of wrongful availment of Input Tax Credit with subsequent order of recovery and order of attachment of bank account - Notice alleged that petitioner purchased goods from non-existing dealers and claimed bogus ITC from bogus dealers - Petitioner approached Department for relevant documents but those documents were not provided - Whether notice under Section 74 was issued in accordance with provisions - HELD - Bare perusal of Section 74 makes it clear that authority concerned has to specify reasons in accordance with Section 7... [Read more]

GST – Notice absent reason - Issue of Notice under Section 74 for determination of tax on account of wrongful availment of Input Tax Credit with subsequent order of recovery and order of attachment of bank account - Notice alleged that petitioner purchased goods from non-existing dealers and claimed bogus ITC from bogus dealers - Petitioner approached Department for relevant documents but those documents were not provided - Whether notice under Section 74 was issued in accordance with provisions - HELD - Bare perusal of Section 74 makes it clear that authority concerned has to specify reasons in accordance with Section 74 of CGST Act, 2017, but in impugned notice authority merely reproduced provision of Section 74 without specifying any independent reasons - It is settled legal proposition that if order is bad in its inception, it does not get sanctified at later stage as subsequent action cannot validate action which was not lawful at inception for reason that illegality strikes at root of order - As notice under Section 74 was not issued strictly in accordance with law and documents were not supplied to petitioner to defend his case, subsequent order of recovery and attachment of bank account cannot be held valid - The impugned notices and attachment order are quashed and matter is remitted back to authorities concerned to issue fresh notice under Section 74 with specific reason and thereafter competent authorities would be at liberty to take proper decision if so advised – The petition is allowed [Read less]

GST - Denial of Opportunity of Hearing - Competence to impose penalty without affording cross-examination - Whether imposition of penalty under Section 122(1)(i) and Section 122(1)(vii) of CGST Act is valid when imposed without affording opportunity to cross-examine witnesses whose statements formed basis of penalty order – HELD - The denial of opportunity to cross-examine persons whose statements have been relied upon for imposing penalty constitutes gross violation of principles of natural justice. The natural justice requires that when authority contemplates action against person based on statements of witnesses, the... [Read more]

GST - Denial of Opportunity of Hearing - Competence to impose penalty without affording cross-examination - Whether imposition of penalty under Section 122(1)(i) and Section 122(1)(vii) of CGST Act is valid when imposed without affording opportunity to cross-examine witnesses whose statements formed basis of penalty order – HELD - The denial of opportunity to cross-examine persons whose statements have been relied upon for imposing penalty constitutes gross violation of principles of natural justice. The natural justice requires that when authority contemplates action against person based on statements of witnesses, the affected person must be given opportunity to rebut such statements through cross-examination. Such procedural infirmity in exercise of statutory power renders the order liable to be set aside - The impugned order along with all consequential notices are set aside and matter is remanded to adjudicating authority for fresh consideration with direction to afford petitioner specific opportunity to cross-examine named witnesses and to submit fresh reply thereafter before passing final reasoned order in accordance with law – The petition is disposed of [Read less]

GST - Service of notice under Section 169 of the CGST Act, 2017 - Cancellation of registration without service of notice in modes prescribed in Section 169 and without passing speaking order - Whether mere uploading of notice on GST portal constitutes complete compliance with requirement of Section 169 – HELD - This Court has taken consistent view that notice should be communicated through registered post under acknowledgment. Despite presence of two judgments on record with petitioner, the Dept has not made any statement regarding those decisions - The respondents are not showing bonafide approach by merely reiterating ... [Read more]

GST - Service of notice under Section 169 of the CGST Act, 2017 - Cancellation of registration without service of notice in modes prescribed in Section 169 and without passing speaking order - Whether mere uploading of notice on GST portal constitutes complete compliance with requirement of Section 169 – HELD - This Court has taken consistent view that notice should be communicated through registered post under acknowledgment. Despite presence of two judgments on record with petitioner, the Dept has not made any statement regarding those decisions - The respondents are not showing bonafide approach by merely reiterating same and one stand which has already been rejected by ld. co-ordinate Bench of this Court. The conduct of respondents is bordering on face of contempt – Revenue cannot reiterate same response half-heartedly by taking same and one stand which has already been dealt with by this Court in several judgments. Nothing has been placed before this Court to show that department has taken judgment of this Court to Hon'ble Supreme Court - This being an admitted position that notice has not been served upon petitioner either by way of e-mail or registered post, the action of respondents would fall within teeth of judgments – The impugned order is set aside. The petitioner shall be served with fresh SCN in accordance with law giving sufficient time to file response whereafter if competent authority contemplates passing adverse order, he shall give personal hearing to petitioner and thereafter shall pass reasoned order in accordance with law – The writ application is allowed [Read less]

Customs - Classification of imported aluminium formwork structures - Appellant imported consignments of aluminium formwork structure with accessories and classified the goods under Customs Tariff Item No. 76109010 claiming exemption benefit under Notification No. 152/2009-Customs as amended by Notification No. 66/2016-Customs - Department challenged the classification contending that the imported goods should be classified under Tariff 84806000 and eligible for duty exemption under different serial numbers as the goods function as moulds for mineral materials - Whether imported aluminium formwork structures used for suppor... [Read more]

Customs - Classification of imported aluminium formwork structures - Appellant imported consignments of aluminium formwork structure with accessories and classified the goods under Customs Tariff Item No. 76109010 claiming exemption benefit under Notification No. 152/2009-Customs as amended by Notification No. 66/2016-Customs - Department challenged the classification contending that the imported goods should be classified under Tariff 84806000 and eligible for duty exemption under different serial numbers as the goods function as moulds for mineral materials - Whether imported aluminium formwork structures used for supporting and shaping concrete during construction and subsequently removed for reuse should be classified as structures under Tariff Heading 7610 or as moulds under Tariff Heading 8480 - HELD - Aluminium formwork structures operate as support for setting concrete and support structures in situ where concrete gets set to form immovable buildings, and are not moulds in the sense of shaping mineral materials into finished products, the goods are composed predominantly of aluminium consisting of aluminium plates and panels which are custom designed and assembled at site for construction purposes - When the product itself is not a mould, the exclusion from heading 7610 does not apply and the goods fall under heading 7610 which covers aluminium structures and parts of structures prepared for use in structures - The Explanatory Notes to heading 76.10 apply mutatis mutandis to equipment for scaffolding, shuttering, propping or pit-propping, and similar goods are classifiable under heading 7610 - The revenue's reclassification under Tariff 84806000 is not sustainable and the goods are correctly classifiable under Customs Tariff Heading 76109010, consequently the goods are entitled to exemption under Notification No. 152/2009 as amended – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Valuation of goods cleared to sister concern/Related party – Application of Rule 8 or Rule 4 of the Central Excise Valuation Rules, 2000 when goods are cleared for captive consumption to sister unit - Appellant engaged in manufacture of Bromine cleared a major part of production to independent buyers at higher rates and balance quantity to sister unit at lower value for captive consumption and manufacture of further products – Demand of differential duty on clearances to related party - Whether goods cleared partly to independent buyers and partly to sister unit for captive consumption should be valu... [Read more]

Central Excise – Valuation of goods cleared to sister concern/Related party – Application of Rule 8 or Rule 4 of the Central Excise Valuation Rules, 2000 when goods are cleared for captive consumption to sister unit - Appellant engaged in manufacture of Bromine cleared a major part of production to independent buyers at higher rates and balance quantity to sister unit at lower value for captive consumption and manufacture of further products – Demand of differential duty on clearances to related party - Whether goods cleared partly to independent buyers and partly to sister unit for captive consumption should be valued under Rule 8 of Central Excise Valuation Rules at cost of production or under Rule 4 at the sale price charged to independent buyers - HELD - Rule 8 of Central Excise Valuation Rules applies only when the entire quantity of excisable goods produced is consumed captively and not sold. A bare reading of Rule 8 which applies when excisable goods are not sold but are used for consumption shows that it is applicable to cases where entire production is consumed captively without any sale - When part of production is sold to independent buyers and the balance is transferred to related party for captive consumption, Rule 4 shall apply for determination of assessable value. The provision of Rule 4 stating that value shall be based on goods sold by the assessee for delivery at time nearest to removal of goods is applicable. Sale price to independent buyers shall be adopted for valuation of goods cleared for captive consumption as such transaction value is readily available and comparable to goods of similar specification and quality. The Board Circular dated 25.11.2013 regarding amended Rule 8, though clarificatory in nature, does not change the fundamental principle that Rule 8 applies only when entire quantity is consumed captively - The valuation under Rule 4 based on sale price to independent buyers for determining value of goods transferred to sister unit is correct. Demand for differential duty based on such valuation is upheld and the appeal is rejected - Extended Period of Limitation – Appellant did not separately disclose in ER-1 returns the quantity and value of goods cleared to sister unit and showed combined clearance quantity and clearance value without breakup between independent buyers and related party clearances. Whether extended period of limitation for demanding additional central excise duty can be invoked when the assessee has not separately disclosed related party sales in returns and whether such non-disclosure amounts to suppression of facts justifying invocation of extended period - HELD - The show cause notice clearly alleged that Appellant declared total quantity of goods cleared without providing breakup of quantity and value of clearances to related party which amounts to suppression of full and correct details of clearances in the prescribed format of returns. The Appellant has not disclosed full facts in excise returns and suppressed vital information regarding the fact that goods were cleared to sister unit at lower value compared to sales to independent buyers, with intent to evade payment of duty. Extended period of limitation can be invoked when there is suppression of facts or failure to provide accurate information regarding sales - The invocation of extended period of limitation is correctly upheld. The demand for differential duty for the larger period is sustainable. Interest is imposed as the Appellant did not provide accurate information to revenue. Penalty equal to duty amount is imposed. [Read less]

Service Tax - Refund Claim - Limitation Under Section 11B - Appellant a government housing board deposited service tax under bonafide mistake in respect of construction services for period prior to 01.07.2010 when construction services by builder to prospective buyers before completion were not treated as taxable as per CBEC Circular, but after amendment with effect from 01.07.2010, such services were made taxable - Whether the refund claim filed beyond one year from relevant date is barred by limitation prescribed under Section 11B of Central Excise Act, 1944 - HELD - Section 11B prescribes period of limitation as one yea... [Read more]

Service Tax - Refund Claim - Limitation Under Section 11B - Appellant a government housing board deposited service tax under bonafide mistake in respect of construction services for period prior to 01.07.2010 when construction services by builder to prospective buyers before completion were not treated as taxable as per CBEC Circular, but after amendment with effect from 01.07.2010, such services were made taxable - Whether the refund claim filed beyond one year from relevant date is barred by limitation prescribed under Section 11B of Central Excise Act, 1944 - HELD - Section 11B prescribes period of limitation as one year from relevant date for claiming refund of any duty or tax. However, in present case the refund sought was of amount deposited under mistake of law, which cannot be termed as tax or duty as there was no law at relevant time which required service tax to be paid on construction services. The government had no authority to collect any tax and therefore even if appellant had deposited amount under head of service tax, the same cannot be termed as service tax. The appellant is entitled to recover amount deposited under mistake of law and it has been repeatedly held that refund claim cannot be rejected on ground of limitation under Section 11B - The refund application cannot be rejected on ground of being time barred as per Section 11B – The appeal is disposed of - Doctrine of Unjust Enrichment - Appellant collected service tax from customers and claimed refund asserting that amount should be returned to eligible allottees from whom it was collected under mistake - Whether the refund claim is hit by doctrine of unjust enrichment under Section 11B(2) - HELD - Section 11B requires an applicant to prove that incidence of duty or tax has not been passed on to any other person. However, appellant has admitted that service tax was recovered and collected directly from allottees and buyers. The admitted position is that burden of amount deposited by appellant as service tax has been borne by allottees and buyers. Since Government cannot collect any tax except by authority of law, it cannot retain said amount. It is just and logical that liberty is granted to eligible allottees and buyers to make refund claim and on verification the same should be disbursed to them along with interest in accordance with law - Following decision in Mafatlal Industries, the refund claims cannot be entertained except in accordance with statutory provisions of Section 11B. However, in circumstances where deposit was not a service tax as there was no law under which service tax was leviable on services, the amount deposited was a mere deposit which government had no authority to retain - The refund claim cannot be rejected on ground of unjust enrichment, but liberty is granted to eligible allottees and buyers to make refund claims, and appellant is required to provide necessary assistance so that allottees are able to make refund application. [Read less]

Customs - Classification of Aluminium Formwork Structure – Appellant imported consignments of Aluminium Formwork Structure with Accessories, classified the goods under Customs Tariff Item No. 76109010 claiming exemption benefit under Notification No. 152/2009-Customs and paid IGST at the rate of 18 percent by classifying the goods under Schedule-III of IGST Notification 01/2017 – Department challenged the declared classification under Tariff 76109010 and claimed that the same is appropriately classifiable under Tariff 84806000 as moulds, eligible for different duty exemption benefit and applicable rate of IGST – The ... [Read more]

Customs - Classification of Aluminium Formwork Structure – Appellant imported consignments of Aluminium Formwork Structure with Accessories, classified the goods under Customs Tariff Item No. 76109010 claiming exemption benefit under Notification No. 152/2009-Customs and paid IGST at the rate of 18 percent by classifying the goods under Schedule-III of IGST Notification 01/2017 – Department challenged the declared classification under Tariff 76109010 and claimed that the same is appropriately classifiable under Tariff 84806000 as moulds, eligible for different duty exemption benefit and applicable rate of IGST – The goods are assembled at the site of the construction with molten concrete mixture poured in the hollow shape and after the concrete solidifies, the imported goods are disassembled and removed from the construction site and reused thereafter – Whether the imported goods are classifiable as structures under Tariff 76109010 or as moulds under Tariff 84806000 – HELD – The goods in question are acting as a support for setting of the concrete and once set the structure remains where it is and only the plates are removed, therefore there is a stark difference between this product and the mould and the goods cannot be treated as if they are a mould for moulding in building – The goods are in the nature of various aluminium plates though custom designed, which are assembled at site in situ for construction of buildings and since in view of the use of this panel it cannot be called a mould, the exclusion for moulds under Chapter 84 is not applicable – The Tribunal relied on the Explanatory Notes under HSN and prior decisions of Kolkata and Hyderabad benches which held similar goods as classifiable under Tariff 76109010 – The goods are classifiable under Tariff 76109010 and not under Tariff 84806000 – The impugned orders are set aside and the appeals are allowed [Read less]

Service Tax – Taxability of royalty paid on mining lease under Reverse Charge Mechanism – Appellant is an individual holding a mining lease for extraction of minerals from the State of Uttar Pradesh and paid royalty to the State Government but did not register with the Department, did not pay any service tax, and did not file the prescribed ST-3 returns – Department issued show cause notice demanding service tax on the royalty amount under reverse charge mechanism along with interest and penalties - Whether royalty paid by a mining lessee to the State Government for extraction of minerals constitutes consideration fo... [Read more]

Service Tax – Taxability of royalty paid on mining lease under Reverse Charge Mechanism – Appellant is an individual holding a mining lease for extraction of minerals from the State of Uttar Pradesh and paid royalty to the State Government but did not register with the Department, did not pay any service tax, and did not file the prescribed ST-3 returns – Department issued show cause notice demanding service tax on the royalty amount under reverse charge mechanism along with interest and penalties - Whether royalty paid by a mining lessee to the State Government for extraction of minerals constitutes consideration for service and is taxable under service tax law – HELD – Royalty is a contractual consideration paid by the mining lessee to the Government for the enjoyment of mineral rights and assignment of rights to use natural resources – The Supreme Court in Mineral Area Development Authority Versus Steel Authority of India has held that royalty is not a tax but a contractual consideration arising out of contractual conditions of the mining lease – Any activity undertaken by Government against a consideration constitutes a service, and even if such activity is undertaken as a statutory or mandatory requirement under law, it is taxable if payment is made as quid pro quo for the service received – Services provided by Government to a business entity became chargeable to service tax with effect from 01.04.2016. The services provided by Govt where the gross amount charged exceeds Rs. 5000 in a financial year are taxable and no exemption is available – The appellant cannot claim benefit of threshold exemption under Notification 33/2012-ST as it applies only to service providers and not on services received under RCM – The extended period of limitation under Section 73 is invokable as there is suppression of facts with intent to evade payment of service tax – The appellant deliberately failed to register, pay service tax and file returns despite clarity provided through Circular No. 192/02/2016-ST dated 13.04.2016 on taxability of such services – Penalties under Sections 77 and 78 of the Finance Act, 1994 are upheld for violation of statutory obligations and for suppression with intent to evade payment – The demand of service tax with interest and penalties is upheld and the appeal is dismissed [Read less]

Central Excise - Interest payable on pre-deposit refund made pursuant to appellate authority order - Appellant made pre-deposit pursuant to direction of Hon'ble High Court and subsequently the Tribunal decided the case in appellant's favour confirming their eligibility for CENVAT credit, the original authority sanctioned refund of pre-deposit along with interest at the rate specified in Section 11BB under the erstwhile Section 35FF of the Central Excise Act, 1944 which provided for interest after expiry of three months from the date of communication of the order of the appellate authority – Pr. Commissioner reviewed and ... [Read more]

Central Excise - Interest payable on pre-deposit refund made pursuant to appellate authority order - Appellant made pre-deposit pursuant to direction of Hon'ble High Court and subsequently the Tribunal decided the case in appellant's favour confirming their eligibility for CENVAT credit, the original authority sanctioned refund of pre-deposit along with interest at the rate specified in Section 11BB under the erstwhile Section 35FF of the Central Excise Act, 1944 which provided for interest after expiry of three months from the date of communication of the order of the appellate authority – Pr. Commissioner reviewed and directed denial of interest on the ground that amended Section 35FF effective from 06.08.2014 is not applicable as the pre-deposit was made prior to such date - Whether interest is payable on pre-deposit made prior to 06.08.2014 and refunded after 06.08.2014 in terms of the erstwhile or amended Section 35FF of the Central Excise Act, 1944 - HELD - The amended Section 35FF effective from 06.08.2014 providing for interest on pre-deposits from date of payment till date of refund was introduced to address mandatory pre-deposit requirement prescribed from that date, the proviso clause in amended Section 35FF clearly provides that pre-deposits made prior to 06.08.2014 shall be governed by the erstwhile provisions of Section 35FF as it stood before commencement of Finance (No. 2) Act, 2014 - The erstwhile provision required interest only if refund was not made within three months from date of communication of appellate order, in the present case the refund was sanctioned on 18.06.2015 which was within three months from the Tribunal order dated 16.04.2015 - Payment of interest does not arise since the refund was made within the stipulated period under the erstwhile Section 35FF - The impugned order upholding sanction of refund but denying payment of interest and ordering its repayment is sustained, appeal filed by appellant is dismissed [Read less]

GST – West Bengal AAAR - Jurisdiction and maintainability of application for Advance Ruling - Scope of Advance Ruling Authority under Section 95(a) and Section 97 of CGST Act, 2017 - Appellant filed application before Appellate Authority seeking advance ruling on taxability of amounts received pursuant to settlement agreement based on arbitral awards for extra expenditure incurred during execution of hydro power plant construction contract - Whether application for advance ruling relating to completed transactions requiring factual examination and determination of tax position already adopted by the applicant could be en... [Read more]

GST – West Bengal AAAR - Jurisdiction and maintainability of application for Advance Ruling - Scope of Advance Ruling Authority under Section 95(a) and Section 97 of CGST Act, 2017 - Appellant filed application before Appellate Authority seeking advance ruling on taxability of amounts received pursuant to settlement agreement based on arbitral awards for extra expenditure incurred during execution of hydro power plant construction contract - Whether application for advance ruling relating to completed transactions requiring factual examination and determination of tax position already adopted by the applicant could be entertained under the scheme of Advance Ruling - HELD - The institution of Advance Ruling is a distinct statutory mechanism conceived to provide certainty regarding the tax implications of transactions before disputes arise and is intended to facilitate voluntary compliance by enabling an applicant to obtain clarity regarding the GST implications of a proposed transaction or a transaction in the course of being undertaken - Section 95(a) of the CGST Act defines Advance Ruling as a decision provided by the Authority in relation to a supply of goods or services or both being undertaken or proposed to be undertaken by the applicant and the jurisdiction of the Authority is intrinsically linked with transactions which are prospective or ongoing - In the present case, the contractual work stood completed prior to 01.07.2017, the disputes were referred to arbitration culminating in an arbitral award passed in 2023, the applicant received the awarded amounts and thereafter furnished the relevant statutory return consciously treating the receipts as non-taxable before invoking the jurisdiction of the AAR - The application was not seeking advance certainty regarding a proposed or ongoing transaction but one seeking affirmation of a tax position already adopted and implementation of such opinion through filing of statutory return. Such enquiry falls squarely within the adjudicatory jurisdiction of the jurisdictional proper officer and not within the jurisdiction of the Advance Ruling Authority - The impugned ruling of the Advance Ruling Authority cannot be sustained and the application ought not to have been entertained under the scheme of Chapter XVII of the CGST Act - No final opinion has been expressed on the taxability or otherwise of the amounts and it shall be open to the jurisdictional proper officer to examine the issue independently – Ordered accordingly [Read less]

Service Tax - CENVAT Credit of Service Tax paid on Insurance Premium to Deposit Insurance and Credit Guarantee Corporation - Appellant availed CENVAT credit of service tax paid on insurance premium to Deposit Insurance Corporation. The lower authority and Commissioner (Appeals) denied the credit - Whether CENVAT credit can be availed on service tax paid on insurance premium for Deposit Insurance and Credit Guarantee scheme when the insurance service is treated as an input service - HELD - In order to render any output service under the category of Banking and Other Financial Services, it is necessary for a Bank to register... [Read more]

Service Tax - CENVAT Credit of Service Tax paid on Insurance Premium to Deposit Insurance and Credit Guarantee Corporation - Appellant availed CENVAT credit of service tax paid on insurance premium to Deposit Insurance Corporation. The lower authority and Commissioner (Appeals) denied the credit - Whether CENVAT credit can be availed on service tax paid on insurance premium for Deposit Insurance and Credit Guarantee scheme when the insurance service is treated as an input service - HELD - In order to render any output service under the category of Banking and Other Financial Services, it is necessary for a Bank to register itself with the Deposit Insurance Corporation and pay premium after registration. A Bank without obtaining registration and without payment of insurance premium on the deposits outstanding cannot render any output service of Banking and Other Financial Services. The insurance service provided by the Deposit Insurance Corporation to the Banks is an input service and CENVAT credit of service tax paid for this service received by the Banks from the Deposit Insurance Corporation can be availed by the Banks for rendering output services - The issue is squarely settled in favour of the Appellant by the Larger Bench of the Tribunal - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Provisional Release of Restricted Goods – Tariff Classification and Import Policy Restriction – Appellant imported silver jewelry with synthetic cubic zirconia and synthetic ruby stones, classified under Customs Tariff Item 71131145, from Thailand – Department opined goods were misclassified and correctly classifiable under CTI 71131149 which was restricted under DGFT Notification No. 34/2025-26 and seized the goods – Lower authority and Appellate Authority rejected application for provisional release on ground that goods were restricted under DGFT policy – Whether provisionally released goods deemed as... [Read more]

Customs - Provisional Release of Restricted Goods – Tariff Classification and Import Policy Restriction – Appellant imported silver jewelry with synthetic cubic zirconia and synthetic ruby stones, classified under Customs Tariff Item 71131145, from Thailand – Department opined goods were misclassified and correctly classifiable under CTI 71131149 which was restricted under DGFT Notification No. 34/2025-26 and seized the goods – Lower authority and Appellate Authority rejected application for provisional release on ground that goods were restricted under DGFT policy – Whether provisionally released goods deemed as prohibited or restricted can be released pending adjudication and whether revenue can deny provisional release on basis of policy restriction – HELD – Section 110A of Customs Act 1962 grants statutory discretion to adjudicating authority to provisionally release any goods, documents or things seized including those alleged to be prohibited or restricted – The expressions goods, documents and things seized are of general import without any qualifying words and do not impose any limitation on provisional release – CBIC Circular No. 35/2017 which sought to curtail discretion of adjudicating authority by prohibiting release of restricted goods was struck down as ultra vires by High Court and affirmed by Supreme Court – Provisional release is strictly an interim measure designed to protect commercial value of goods pending adjudication and is not a pre-determined adjudication. Revenue cannot deny provisional release on mere allegation that goods are prohibited or restricted – Allowing re-export of goods achieves the purpose of DGFT restriction by preventing entry of restricted goods into domestic market without causing unnecessary financial loss to importer through detention and demurrage charges - Even though classification remains disputed and final adjudication is pending, goods can be released for re-export purposes – Appeal is partly allowed and goods are permitted to be released for re-export subject to execution of bond equal to value of goods – Ordered accordingly [Read less]

Central Excise - Eligibility of credit on inputs procured for use in fabrication of capital goods by contractor service provider – Appellant manufacturer engaged contractors for fabrication of storage tanks and mechanical piping, procured inputs either directly or supplied them free of cost to contractors, all inputs were received in factory premises with appellant as consignee in invoices, excise duty and service tax paid on inputs was reimbursed by appellant – Department denied Cenvat credit alleging that the inputs were inputs for contractors-service providers and not for appellant, and credit was availed in violati... [Read more]

Central Excise - Eligibility of credit on inputs procured for use in fabrication of capital goods by contractor service provider – Appellant manufacturer engaged contractors for fabrication of storage tanks and mechanical piping, procured inputs either directly or supplied them free of cost to contractors, all inputs were received in factory premises with appellant as consignee in invoices, excise duty and service tax paid on inputs was reimbursed by appellant – Department denied Cenvat credit alleging that the inputs were inputs for contractors-service providers and not for appellant, and credit was availed in violation of Rule 3 of Cenvat Credit Rules 2004 – Whether manufacturer is entitled to avail Cenvat credit on inputs procured by itself or by contractors on its behalf and received in its factory premises when contractors used such inputs for fabricating capital goods that are ultimately used by manufacturer in production of excisable final products – HELD – Cenvat credit is attached to goods depending on their usage and not to persons, and there is no condition in Cenvat rules that attaches credit to ownership of goods or belongingness to a person. The primary and essential conditions for availing credit are that goods must be duty paid and must be used in or in relation to excisable goods directly or indirectly in the factory of production – All conditions prescribed under Rules 2(k), 3, 4 and 9 of CCR, 2004 are satisfied as inputs satisfy definition, have been received in factory, conditions are adhered to and invoices meet requirements – When the inputs have a direct nexus with manufacture of final products as they are used for fabrication of capital goods further used by manufacturer in production of final products, the manufacturer is entitled to avail credit where contractor-service provider has not availed abatement of service tax – The extended period cannot be invoked as there is no wilful suppression of facts and appellant regularly filed returns, provided all information, was under bona fide belief and statutory returns do not require disclosure of usage of inputs – Appeals partly allowed by remand for re-quantification on the basis that appellant is eligible for credit on inputs not covered by contractor's abatement benefit and ineligible where contractor availed abatement [Read less]

Central Excise - Cenvat Credit – Eligibility of credit on aircraft running expenses and hiring charges of executive jet – Respondent involved in sourcing of jewelry through conversion of bullion and manufacturing gold jewelry, availed input service credit on services including aircraft running expenses and hiring charges of executive jet used for transportation of high-valued gold, travel of executive managers and directors for business oversight and inauguration of showrooms – Adjudication Authority denied credit alleging these services were not in relation to manufacture of final product – Appellate Authority all... [Read more]

Central Excise - Cenvat Credit – Eligibility of credit on aircraft running expenses and hiring charges of executive jet – Respondent involved in sourcing of jewelry through conversion of bullion and manufacturing gold jewelry, availed input service credit on services including aircraft running expenses and hiring charges of executive jet used for transportation of high-valued gold, travel of executive managers and directors for business oversight and inauguration of showrooms – Adjudication Authority denied credit alleging these services were not in relation to manufacture of final product – Appellate Authority allowed credit holding services were used directly or indirectly in or in relation to manufacture of final product and formed part of business and sales promotion activities – Whether aircraft running expenses and hiring charges of executive jet availed for transportation of gold and official business travel form eligible input services under Rule 2(l) of CCR, 2004 – HELD – The definition of input service under Rule 2(l) is very wide and inclusive definition covers activities relating to business and promotion of sales. Such services fall within ambit of input service as they are activities directly or indirectly related to business and promotion of sales – Services were availed for official business purposes including transportation of valuable goods and travel of company executives and directors for conducting business across various locations. Invoices were issued in the name of the Respondent and service tax was remitted on such services – In absence of any admissible evidence to substantiate misuse of services for non-business purposes, credit cannot be denied – The extended period of limitation cannot be invoked as suppression of facts with intent to evade payment must be deliberate and with willful intention which has not been established by department. No evidence was produced to show services were used for purposes other than official and business purposes – Appellate Authority's finding is sustainable. The impugned order allowing cenvat credit is upheld and appeal filed by Revenue is dismissed [Read less]

GST - Refund of Unutilized Input Tax Credit under Section 54(3) of CGST Act 2017 on account of Inverted Duty Structure - Accumulation of input tax credit due to higher rates on cost of packing materials and other ancillary inputs - Petitioner, a textile manufacturing company engaged in manufacture of combed cotton yarn, purchased raw cotton yarn and undertakes process involving application of chemicals, consumables and packing materials - Rate of tax on principal input namely raw cotton yarn is 5 per cent same as output combed cotton yarn but other inputs attract GST at 12 per cent and 18 per cent resulting in accumulation... [Read more]

GST - Refund of Unutilized Input Tax Credit under Section 54(3) of CGST Act 2017 on account of Inverted Duty Structure - Accumulation of input tax credit due to higher rates on cost of packing materials and other ancillary inputs - Petitioner, a textile manufacturing company engaged in manufacture of combed cotton yarn, purchased raw cotton yarn and undertakes process involving application of chemicals, consumables and packing materials - Rate of tax on principal input namely raw cotton yarn is 5 per cent same as output combed cotton yarn but other inputs attract GST at 12 per cent and 18 per cent resulting in accumulation of unutilized input tax credit - Petitioner claimed refund under Section 54(3) of CGST Act 2017 but applications were rejected - Whether petitioner entitled to refund of accumulated unutilized input tax credit when rate of tax on certain inputs exceeds rate of tax on output supplies and whether Circular No. 135/05/2020-GST restricts such refund claim - HELD - The Section 54(3) does not make any distinction between major and minor components and clearly provides that if higher rate of tax on certain inputs compared to output supplies, party entitled to claim refund of unutilized input tax credit at end of any tax period - Statute has to be construed as such and taxing statutes are to be construed in manner that gives effect to legislative intent. The Circular No. 135/05/2020-GST cannot override statutory provisions of CGST Act 2017 and Circular No.125/44/2019-GST, dated 18.11.2019 has already been declared unconstitutional - In present case though rate of tax on cotton yarn is same with reference to chemicals used, packing and other materials used, there is higher rate of tax on inputs compared to output goods hence petitioner entitled to refund. The formula prescribed under Rule 89(5) of CGST Rules must be applied irrespective of individual rates of tax on various inputs - Impugned orders rejecting refund applications stand quashed - Respondent directed to process and sanction refund with interest - The writ petitions are allowed [Read less]

Customs - Valuation - Appellant imported PVC profile and other goods from China at declared values. During investigation of alleged mis-declaration regarding freight charges, invoices reflecting higher values were recovered during search and the Director admitted to declaring lower values for certain consignments while actual invoices received from overseas suppliers showed higher prices - Whether rejection of transaction value declared by Appellant and demand for differential duty based on invoices recovered during investigation and statements recorded from the importer is sustainable - HELD - The evidence on record inclu... [Read more]

Customs - Valuation - Appellant imported PVC profile and other goods from China at declared values. During investigation of alleged mis-declaration regarding freight charges, invoices reflecting higher values were recovered during search and the Director admitted to declaring lower values for certain consignments while actual invoices received from overseas suppliers showed higher prices - Whether rejection of transaction value declared by Appellant and demand for differential duty based on invoices recovered during investigation and statements recorded from the importer is sustainable - HELD - The evidence on record including invoices recovered during investigation established higher values than those declared and the statement recorded from the Director confirmed that goods were intentionally undervalued. The declared transaction value was properly rejected as the invoices recovered during investigation reflected the true prices of goods at the time of removal and the assessable value based on the actual invoices recovered represents the true transaction value under the Customs Valuation Rules read with Section 14 of the Customs Act. The rejection of declared value and determination of assessable value based on invoices recovered and admissions made by the importer is sustainable and in accordance with law - Demand for differential duty against undervalued imports is upheld and goods are liable for confiscation. Redemption fine is reduced to amount calculated at ten percent and penalty reduced to amount calculated at five percent of the enhanced value of goods cleared under the Bills of Entry – Ordered accordingly - Confiscation and Penalty in Provisional Assessment - Goods imported were provisionally assessed and provisionally released in April 2014. Subsequently show cause notice was issued under Section 28 of Customs Act for finalization of provisional assessments proposing confiscation and penalties alleged to be undervalued based on comparison with values of petroleum products imported during different periods and at different specifications - Whether confiscation and penalties can be imposed under Section 28 when goods are only provisionally assessed and assessment is not finalized - HELD - Allegations of mis-declaration, suppression of facts and non-payment or short payment of Customs Duty arise only after finalization of assessments and adjustment of duty paid or payable under Section 18(2) of Customs Act. Section 28 can be invoked only when duty has not been levied or has been short-levied following final assessment. There is no legal justification for issuance of show cause notice under Section 28 for finalization of provisional assessments as only the Proper Officers have jurisdiction to finalize provisional assessments - The comparison using prices of petroleum products from different periods for determining value is unsustainable as petroleum products have varying prices depending on international petroleum price fluctuations - The impugned order proposing demand, confiscation and penalties based on enhanced value in provisional assessment is set aside. The demand, confiscation and penalties imposed on Appellant and CEO are set aside. Jurisdictional Proper Officer is directed to expeditiously finalize the provisional assessments in accordance with law. [Read less]

GST - Cross-Empowerment of Officers under IGST Act, 2017 - Authorization without Central Government Notification - Statutory interpretation of Section 4 of IGST Act, 2017 regarding authorization of State officers as proper officers - Petitioner assailed confiscation order and summary order, contending that officers appointed under SGST Act are not authorized to exercise powers under the IGST Act without a specific notification issued by the Central Government under Section 4 of the IGST Act – Petitioner contends that though the Commissioner of State Tax had issued an order specifying proper officers under the State Act, ... [Read more]

GST - Cross-Empowerment of Officers under IGST Act, 2017 - Authorization without Central Government Notification - Statutory interpretation of Section 4 of IGST Act, 2017 regarding authorization of State officers as proper officers - Petitioner assailed confiscation order and summary order, contending that officers appointed under SGST Act are not authorized to exercise powers under the IGST Act without a specific notification issued by the Central Government under Section 4 of the IGST Act – Petitioner contends that though the Commissioner of State Tax had issued an order specifying proper officers under the State Act, the same would not empower such officers to pass orders unless there is a notification issued under Section 4 of the IGST Act empowering such officers to exercise their powers - Whether a Central Government notification is mandatory under Section 4 of the IGST Act to authorize State officers to exercise powers under IGST Act or whether the statutory language itself confers such authorization - HELD – From reading of Section 4 of the IGST Act it manifests that the officers appointed under the SGST are authorized to be the proper officers for the purpose of the IGST Act. The language of Section 4 of the IGST Act indubitably prescribes that the officers appointed under the SGST Act are authorized and empowered to carry out their powers or functions for the purpose of the IGST Act. The section does not in any manner mandate issuance of Notification by the Central Government suggesting or stipulating any division of powers by such proper officers but it is left on the discretion of the Proper Officer appointed by the State Government to further delegate the powers to other officers, which is already done through the order dated 23.06.2017 issued by the Commissioner of State Tax - The Court find merit in precedents from the High Court of Punjab and Haryana, High Court of Calcutta and High Court of Madhya Pradesh, all of which held that no notification is required and officers appointed under State GST Act are authorized to exercise powers under IGST Act. On overall appreciation of the provisions of the Acts as well as the legal precedent set out by other High Courts, there are no merits in the submissions that Notification is required since Section 4 of the IGST Act already takes care of the state of affairs - The confiscation order and summary order are valid and the writ petition is dismissed - Appeal remedy and procedural propriety - Scope of Section 107 of CGST Act for filing appeal against orders passed by proper officers under IGST Act - Petitioner contended that since there is no provision in the CGST Act or under State GST Act governing filing of appeal against any order passed by any proper officer under the IGST Act - The petitioner further relied on Section 6(3) of SGST Act arguing that any order passed by State authority officers shall not lie before an officer appointed under the CGST Act and therefore the petitioner is left without any remedy - Whether an appeal can be filed under Section 107 of the CGST Act against orders passed by State officers exercising powers under IGST Act and if so what is the proper appellate authority - HELD - The Section 107 of the CGST Act provides for filing an appeal against an order passed under this Act or the SGST Act or the UTGST Act. Section 4 of the IGST Act creates a deeming fiction of passing an order by the proper officers under the SGST Tax Act and hence an appeal would lie before the appellate authority under Section 107 of the CGST Act if the order is passed by the proper officer exercising powers under CGST Act. However since in the present case the orders have been passed by the proper officers of the State Government, the provision of Section 107 of the State Act gets attracted. – The provision of Section 6(3) of the SGST Act cannot be made an excuse of non-filing of an appeal since the appeal would only lie to the appellate authority of the State under the provision of Section 107 of the State Act. The petitioner has an alternative remedy of filing an appeal and therefore cannot resort to writ jurisdiction - The writ petition cannot be entertained and stands dismissed. [Read less]

Refund application cannot be rejected solely on the basis of title of certificate if it satisfies the requirements of BRC or FIRC. If the document confirms the genuineness of and the amounts involved in the transaction, the same should be accepted.

GST – Uttarakhand AAAR - Healthcare services by a clinical establishment - Exemption under Entry 74 of Notification No. 12/2017-Central Tax (Rate) - The Appellant operated Government Urban Health and Wellness Centres and Polyclinics and was nominated as the operating agency for providing healthcare services, medicines and treatment entirely free of cost to patients through its own deployed medical professionals, with consideration paid by a Government PSU executing agency rather than directly by patients – The Authority for Advance Ruling held the services taxable on the basis that consideration flowed from the executi... [Read more]

GST – Uttarakhand AAAR - Healthcare services by a clinical establishment - Exemption under Entry 74 of Notification No. 12/2017-Central Tax (Rate) - The Appellant operated Government Urban Health and Wellness Centres and Polyclinics and was nominated as the operating agency for providing healthcare services, medicines and treatment entirely free of cost to patients through its own deployed medical professionals, with consideration paid by a Government PSU executing agency rather than directly by patients – The Authority for Advance Ruling held the services taxable on the basis that consideration flowed from the executing agency treating it as the recipient of supply rather than examining the true nature of healthcare services rendered - Whether exemption under Entry 74 can be denied merely on the basis that consideration is paid by an implementing agency rather than directly by patient or whether the essential character must be determined based on the nature and substance of activity undertaken - HELD - The exemption available under Entry 74 for healthcare services by a clinical establishment cannot be denied merely because consideration is paid by an implementing or executing agency rather than directly by the patient as determination of taxability and classification of supply cannot rest solely upon the identity of the payer but must be based on the true nature, substance and objective of the contract and the activities actually performed - Where services performed as an integral part of delivery of healthcare under a Government health programme involve diagnosis, treatment and care for illness by medical professionals through a clinical establishment, the services retain their character as healthcare services regardless of whether consideration is paid by the Government, insurers, employers or nodal agencies. The lower Authority erred in placing undue emphasis on the contractual payment structure and relationship with the executing agency while overlooking the actual activities undertaken at the centres - Applying the doctrine that a composite transaction derives its GST character from its predominant or principal element and the principle that exemption provisions must be interpreted to give full effect to their beneficial purpose with any ambiguity resolved in favour of exemption, the services supplied constitute healthcare services classifiable as exempt under Entry 74 - The impugned Advance Ruling order is set aside and the services supplied in relation to operation and management of Government Urban Health and Wellness Centres and Polyclinics are held to be exempt from GST under Entry 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 – The appeal is allowed [Read less]

Gujarat Sales Tax Act, 1969 - Criminal Misconduct by Public Servants - Petitioner, State of Gujarat, preferred appeal under Section 378(1)(3) of Code of Criminal Procedure, 1973 against judgment and order of acquittal passed by Judicial Magistrate acquitting respondents accused from charges under Sections 75 and 80 of Sales Tax Act, 1969 and Section 9(2) of CST Act, 1956 - Prosecution alleged that accused, serving as Sales Tax Officer, Class-I and Sales Tax Inspector, failed to discharge lawful official duties with due care, shown negligence and entered into conspiracy with trader - Whether prosecution established case bey... [Read more]

Gujarat Sales Tax Act, 1969 - Criminal Misconduct by Public Servants - Petitioner, State of Gujarat, preferred appeal under Section 378(1)(3) of Code of Criminal Procedure, 1973 against judgment and order of acquittal passed by Judicial Magistrate acquitting respondents accused from charges under Sections 75 and 80 of Sales Tax Act, 1969 and Section 9(2) of CST Act, 1956 - Prosecution alleged that accused, serving as Sales Tax Officer, Class-I and Sales Tax Inspector, failed to discharge lawful official duties with due care, shown negligence and entered into conspiracy with trader - Whether prosecution established case beyond reasonable doubt that accused, being public servants, committed offence of criminal misconduct by indulging in aforementioned activities - HELD - A cumulative reading of Sections 75 and 80 of Gujarat Sales Tax Act, 1969 and Section 9(2) of Central Sales Tax Act makes it clear that authority concerned has to establish actual commission of offence and mere examination of witnesses and production of documentary evidence does not establish guilt unless evidence is reliable and inspires confidence - The prosecution examined several witnesses and produced various documentary pieces of evidence but no refund order had, in fact, been processed or issued in favour of company and prosecution failed to produce any material on record to prove charges against respondents as company had not been impleaded or prosecuted and merely prosecuting respondents was insufficient to establish alleged conspiracy - Even while considering documentary evidence, no documents established that any refund order had been prepared or issued in favour of beneficiary and no documentary evidence was produced by prosecution to establish that any refund had actually been sanctioned or disbursed - Considering entire evidence on record, there is no credible evidence to connect accused with alleged crime and evidence on record is not so convincing to prove beyond reasonable doubt that accused committed alleged crime - The trial Court has not committed any error of fact and law in appreciating evidence on record and in acquitting accused from charges levelled against them and even on re-appreciation of evidence, prosecution has miserably failed to prove charge levelled against accused beyond reasonable doubt - The impugned judgment and order of acquittal passed by trial Court is sustained and the appeal is dismissed [Read less]

GST – Functioning of Appellate Tribunal, Priority Hearing before the Tribunal - Petitioner was aggrieved by an order of the High Court which did not interfere in the matter on the ground that the GSTAT had started functioning and the matter was required to be considered by the Appellate Tribunal. The petitioner submitted that the Tribunal had not yet fully functioned as the cases had not even been registered or numbered on the portal – HELD - The GST Appellate Tribunal has specifically been constituted to lessen the load of the High Court in such matters and has become functional. The Court expect that the Tribunal wou... [Read more]

GST – Functioning of Appellate Tribunal, Priority Hearing before the Tribunal - Petitioner was aggrieved by an order of the High Court which did not interfere in the matter on the ground that the GSTAT had started functioning and the matter was required to be considered by the Appellate Tribunal. The petitioner submitted that the Tribunal had not yet fully functioned as the cases had not even been registered or numbered on the portal – HELD - The GST Appellate Tribunal has specifically been constituted to lessen the load of the High Court in such matters and has become functional. The Court expect that the Tribunal would start functioning fully - The SLP stands disposed of with liberty to the petitioner to mention the matter before the President of the GST Appellate Tribunal for not only registering/numbering the case but also to take up the matter and if required, at least hear it for the purpose of any interim relief which the petitioner may require - The Court is conscious that the Tribunal, because of its recent constitution and functioning, might be overloaded but having regard to the aforesaid circumstances, when the matter was at the final stage before the High Court, the Court find it to be an appropriate case where a discretion for priority hearing of the case of the petitioner is required to be exercised. The President of the GSTAT would take appropriate action if the matter was so mentioned - The Special Leave Petition stands disposed of [Read less]

Service Tax – Scope of Goods Transport Agency Service - Classification of transportation services - Appellant company engaged in extraction, processing and export of iron ore availed transportation services for movement of iron ore from mine head to processing plant and to ports for shipment and deposited service tax on transportation charges - Appellant filed refund claim contending that transporters engaged were individual truck owners and not GTA and therefore no service tax was payable under GTA service - Whether transportation undertaken by individual truck owners falls within ambit of Goods Transport Agency service... [Read more]

Service Tax – Scope of Goods Transport Agency Service - Classification of transportation services - Appellant company engaged in extraction, processing and export of iron ore availed transportation services for movement of iron ore from mine head to processing plant and to ports for shipment and deposited service tax on transportation charges - Appellant filed refund claim contending that transporters engaged were individual truck owners and not GTA and therefore no service tax was payable under GTA service - Whether transportation undertaken by individual truck owners falls within ambit of Goods Transport Agency service as defined under Section 65(50b) of Finance Act 1994 and whether documents described as pay slips constituted consignment notes - HELD – The definition of Goods Transport Agency does not make distinction between incorporated entity, partnership concern or individual transporter. The mere fact that transportation was undertaken by individual truck owners would not by itself exclude activity from scope of definition - Section 65(50b) employs expression consignment note by whatever name called indicating emphasis is on nature and contents of document and not name assigned to it. Once document substantially depicts receipt and transportation of goods and contains particulars ordinarily associated with consignment note, the mere fact that it is described as pay slip would not alter its legal character. The said documents depicted movement of goods and contained material particulars concerning transportation undertaken - The judgments relied upon by appellant are distinguishable as they found no goods consignment notes had been issued by transporter whereas pay slips issued answer description of consignment note - Transportation services received were liable to be classified under category of Goods Transport Agency service - Once levy itself is held to be valid, consequential claim for refund cannot survive - The impugned order does not suffer from any legal infirmity – The appeal is dismissed [Read less]

GST - Recovery of dues from partnership firm and partnership members - Liability of partners and authorized signatories under Section 88(3) of the CGST Act, 2017 - Petitioner in partnership firm challenged recovery proceedings initiated under Section 79(1)(c) of the Act seeking to attach bank accounts of the partnership firm to recover tax dues of a defaulting Private Limited company in respect of which one of the partners was a Director during the period of default - Whether recovery of tax dues from the partnership firm and its bank accounts could be initiated merely on account of the partnership of one of its members wi... [Read more]

GST - Recovery of dues from partnership firm and partnership members - Liability of partners and authorized signatories under Section 88(3) of the CGST Act, 2017 - Petitioner in partnership firm challenged recovery proceedings initiated under Section 79(1)(c) of the Act seeking to attach bank accounts of the partnership firm to recover tax dues of a defaulting Private Limited company in respect of which one of the partners was a Director during the period of default - Whether recovery of tax dues from the partnership firm and its bank accounts could be initiated merely on account of the partnership of one of its members with the defaulting company and the directorship of such member in the defaulting company during the tax period - HELD - When a private company is wound up and any tax, interest or penalty determined under the GST Act on the company for any period cannot be recovered from the company under liquidation, then every person who was a Director of such company at any time during the period for which the tax was due shall, jointly and severally, be liable for the payment of such tax, interest or penalty under Section 88(3) of the Act unless he proves to the satisfaction of the Commissioner that such non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company - The recovery proceedings have been validly initiated against the petitioners on account of the tax arrears from the Directors of the defaulting company as the said petitioner was the Director of the defaulting company during the period of the default and also a partner in the partnership firm during the period of accrual of demand - The burden of proof that the tax default was not on account of the said petitioner but on account of other Directors is to be discharged only before the Commissioner as is contemplated under Section 88(3) of the Act - The impugned recovery notices cannot be interfered with and liberty is given to the petitioner to work out her remedy within the statutory framework of Section 88(3) of the Act - The writ petitions are dismissed - GST - Bank attachment for recovery of tax dues - Validity of procedures followed under Section 79(1)(c) read with Section 145(1) of CGST Rules, 2017 - Petitioner challenged attachment of bank accounts of the partnership firm on the ground that recovery proceedings were initiated against a separate legal entity merely on the basis of common link of one of the partners with the defaulting company - Whether recovery proceedings validly initiated against a partnership firm for recovery of tax dues of a defaulting company could be sustained when the partnership firm itself had no direct liability for such dues - HELD - The scheme under Section 88(3) of the CGST Act makes it clear that when a private company is wound up and tax cannot be recovered from the company, every person who was a Director of such company during the period for which the tax was due shall be liable for the payment of such tax, interest or penalty - Since the petitioner in the individual petition was also the partner in the partnership firm and was the initial partner of the said firm after the execution and registration of the partnership deed and continued after default was made in the said company, the challenge to the impugned recovery communication addressed to the bank account holders cannot be countenanced - All partners of the defaulting company are also partners of the petitioner firm and therefore they cannot deny their relationship with the defaulting company and their liability to be proceeded under Section 88(3) of the Act. Merely because the petitioner resigned subsequently is of no anvil - There is no violation of principles of natural justice in attaching the bank accounts and the recovery proceedings have been validly initiated following the procedures laid down under Section 79 of the GST Act - The writ petitions are dismissed [Read less]

The statute expects the competent authority not only to examine the facts of the case but also to apply their mind before issuing a SCN. The use of an AI Tool for preparation and issuance of SCN is not permissible under the GST law.

GST - Jurisdiction of DGGI Officer to issue penalty notice under Section 122 of the CGST Act, 2017 – Irregular availment of input tax credit without actual supply of goods - Whether DGGI officer has jurisdiction to issue show-cause notice under Section 122 of the Act – Maintainability of writ petition - HELD – There are disputed questions of fact as to whether entire proceedings were conducted in violation of principles of natural justice and whether the DGGI was a "proper officer" which are required to be examined by the GST Tribunal - In order to avoid the condition of pre-deposit, the petitioner cannot be permitte... [Read more]

GST - Jurisdiction of DGGI Officer to issue penalty notice under Section 122 of the CGST Act, 2017 – Irregular availment of input tax credit without actual supply of goods - Whether DGGI officer has jurisdiction to issue show-cause notice under Section 122 of the Act – Maintainability of writ petition - HELD – There are disputed questions of fact as to whether entire proceedings were conducted in violation of principles of natural justice and whether the DGGI was a "proper officer" which are required to be examined by the GST Tribunal - In order to avoid the condition of pre-deposit, the petitioner cannot be permitted to invoke the writ jurisdiction of this Court. If the High Court is required to entertain each and every matter, then what would be the use of the constitution of the Tribunal – The petition dismissed with liberty to petitioner to approach Appellate Tribunal to avail remedy of appeal [Read less]

Andhra Pradesh General Sales Tax Act, 1957 - Levy of tax on blended coffee sold by Trade Mark Holder - Application of Section 5AA of APGST Act, 1957 - Appellant engaged in manufacturing and marketing of a product under its own trademark and brand name, purchasing raw materials from preceding points of sale which had already suffered tax. Appellant claimed exemption under Section 5 read with Entry 34A of the First Schedule to APGST Act, 1957 contending that the goods were entitled to exemption and that tax levied and collected at the preceding point of sale should be deducted from the tax payable at the subsequent point of ... [Read more]

Andhra Pradesh General Sales Tax Act, 1957 - Levy of tax on blended coffee sold by Trade Mark Holder - Application of Section 5AA of APGST Act, 1957 - Appellant engaged in manufacturing and marketing of a product under its own trademark and brand name, purchasing raw materials from preceding points of sale which had already suffered tax. Appellant claimed exemption under Section 5 read with Entry 34A of the First Schedule to APGST Act, 1957 contending that the goods were entitled to exemption and that tax levied and collected at the preceding point of sale should be deducted from the tax payable at the subsequent point of sale - Whether Section 5AA can be applied to sales effected by a dealer marketing goods under a trademark or brand name at a point of sale other than the first point of sale, and whether tax at preceding points of sale is liable to be deducted from tax payable under Section 5AA, notwithstanding any express prohibition claimed in the provision itself regarding first sales – HELD - The petitioner is engaged in the manufacture and marketing of Blended Coffee by purchasing coffee seeds and chicory, subjecting the coffee seeds to the process of roasting and grinding and thereafter blending them with chicory before marketing the final product - A dealer who markets goods under a trademark or brand name at a point of sale other than the first point of sale is liable to tax under Section 5AA of the APGST Act, 1957 irrespective of whether the trademark is registered or unregistered. The statutory language of Section 5AA does not contain any express prohibition prohibiting its application to dealers engaged in manufacturing and sale of goods under a trademark. The provision operates by deeming such a dealer to be the first seller in the State when goods are sold at any point other than the actual first point of sale - The liability to tax under Section 5AA is attracted by the mere fact of marketing goods under a trademark or brand name, irrespective of trademark registration status. The Appellate Tribunal committed no error in confirming the order of the Appellate Deputy Commissioner and the assessment made by the assessing authority – The Tax Revision Cases are dismissed and the impugned order is upheld [Read less]

GST - Export of services - Non-production of Foreign Investment Remittance Certificate and Bank Statements - Petitioner had commenced export of services business and filed all returns for the relevant period - Respondent initiated proceedings and confirmed adjudication order solely on the ground that petitioner failed to produce copies of FIRC and Bank Statements without considering Letter of Undertaking, sale invoices and banker's certificates evidencing remittances to Non-Resident Rupee Account - Whether proceedings could be confirmed only for non-production of specific documents without considering alternative evidence ... [Read more]

GST - Export of services - Non-production of Foreign Investment Remittance Certificate and Bank Statements - Petitioner had commenced export of services business and filed all returns for the relevant period - Respondent initiated proceedings and confirmed adjudication order solely on the ground that petitioner failed to produce copies of FIRC and Bank Statements without considering Letter of Undertaking, sale invoices and banker's certificates evidencing remittances to Non-Resident Rupee Account - Whether proceedings could be confirmed only for non-production of specific documents without considering alternative evidence of genuine foreign remittance - HELD - Where banker has acknowledged remittances to Non-Resident Rupee Account and issued certificates satisfying the requirements for which FIRC is issued, such evidence should have been considered before confirming proceedings, especially if it could be reasonably opined that the Certificate would be instead of FIRC – The adjudication order is quashed restoring proceedings to respondent calling upon petitioner to produce Certificates issued by the petitioner's bankers - The petition is allowed [Read less]