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Service Tax - Taxability of 'Ocean Freight' - Appellant enters into Cost, Insurance, and Freight (CIF) contracts with the foreign exporters for the supply of goods, wherein the exporter arranges for the transportation of goods through a foreign shipping line - Appellant pays a single consideration to the foreign exporter that includes the value of the goods, insurance, and freight - Whether the appellant is liable to pay service tax on the 'Ocean Freight' component under RCM – HELD - The 'Ocean Freight' is not liable to service tax. The service of transportation of goods up to the Indian port is an extraterritorial event... [Read more]

Service Tax - Taxability of 'Ocean Freight' - Appellant enters into Cost, Insurance, and Freight (CIF) contracts with the foreign exporters for the supply of goods, wherein the exporter arranges for the transportation of goods through a foreign shipping line - Appellant pays a single consideration to the foreign exporter that includes the value of the goods, insurance, and freight - Whether the appellant is liable to pay service tax on the 'Ocean Freight' component under RCM – HELD - The 'Ocean Freight' is not liable to service tax. The service of transportation of goods up to the Indian port is an extraterritorial event occurring beyond the land mass of the country, and the Finance Act, 1994 does not empower the Central Government to levy service tax on such extraterritorial events - The ‘Ocean Freight’ is not liable to service tax and hence no liability can be fastened on the appellant - the impugned order is set aside. The appeal is allowed [Read less]

Customs - Classification of Optical Ground Wire (OPGW) Fiber Optic Cable, Customs Tariff Heading 8544 70 90 vs 9001 00 00 – Respondents imported Optical Ground Wire (OPGW) Fiber Optic Cable classifying the same under Customs Tariff Heading (CTH) 8544 70 90 - Show Cause Notice issued alleging that the product should be classified under CTH 9001 00 00 and demanded differential duty along with interest and penalty. The Adjudicating Authority confirmed the demand for imports during 11/06/2019 to 11/06/2021, but dropped the demand for imports during 16/6/2016 to 10/06/2019 on the ground of limitation period - Whether the OPGW... [Read more]

Customs - Classification of Optical Ground Wire (OPGW) Fiber Optic Cable, Customs Tariff Heading 8544 70 90 vs 9001 00 00 – Respondents imported Optical Ground Wire (OPGW) Fiber Optic Cable classifying the same under Customs Tariff Heading (CTH) 8544 70 90 - Show Cause Notice issued alleging that the product should be classified under CTH 9001 00 00 and demanded differential duty along with interest and penalty. The Adjudicating Authority confirmed the demand for imports during 11/06/2019 to 11/06/2021, but dropped the demand for imports during 16/6/2016 to 10/06/2019 on the ground of limitation period - Whether the OPGW Fiber Optic Cable should be classified under CTH 8544 70 90 or 9001 00 00 – HELD - The issue has been under litigation for about two decades with different views taken by various Benches. The Larger Bench decision in the case of Vodafone, which held that the goods are classifiable under CTH 9001 00 00, was stayed by the Supreme Court and the issue was sub-judice - the issue of classification was a matter of interpretation and the appellant had cleared the goods by filing Bills of Entry without concealing any facts. The suppression clause cannot be applied in such cases. The Revenue's appeal against the dropping of the demand for the extended period is dismissed as the Department did not have any evidence in the form of a test report to contradict the earlier test report which was accepted by the Department - For the normal period, the appellant's claim was backed by the earlier test report accepted by the Department, and the Revenue did not have any concrete evidence in the form of a sample test report to support its argument for classification under CTH 9001 00 00. Each consignment must be assessed separately, and test reports of one consignment cannot be made applicable to other consignments - The Revenue's appeal is dismissed and the appeal filed by the importer is allowed [Read less]

Customs - Import of raw materials for the manufacture of bulk drugs by drug manufacturers. The raw materials were allowed for warehousing under Section 59 of the Customs Act, 1962, but it was alleged that the original materials were substituted with fake materials by the CHA. The substituted fake material was found to be lying in the customs bonded warehouses pending clearance. Further, it was alleged that the CHA had fabricated the Bills of Entry showing Customs duty endorsement and sent the same to the Importers - Whether the Importers-appellants are liable to pay the entire short levied Customs duty in terms of the prov... [Read more]

Customs - Import of raw materials for the manufacture of bulk drugs by drug manufacturers. The raw materials were allowed for warehousing under Section 59 of the Customs Act, 1962, but it was alleged that the original materials were substituted with fake materials by the CHA. The substituted fake material was found to be lying in the customs bonded warehouses pending clearance. Further, it was alleged that the CHA had fabricated the Bills of Entry showing Customs duty endorsement and sent the same to the Importers - Whether the Importers-appellants are liable to pay the entire short levied Customs duty in terms of the proviso to Section 28(1) of the Customs Act, 1962 and are also liable for penalty under Sections 114A/112(a) of the Customs Act, 1962 – HELD - The non-payment of duty has arisen on account of the guilty act of the CHA, and therefore, the CHA alone would be liable to pay the duty under Section 147(3) of the Customs Act, 1962. There is clear evidence that the CHA had exceeded his authority, and in the absence of any evidence to doubt the bona fides of the Importers, the demand of duty and penalties against the Importers cannot be sustained. The importers had made payment of the Customs duty by way of Demand Drafts to their CHA, and the date of presentation of the Demand Draft by the CHA to the Customs authorities would be deemed to be the date on which the Importers had paid the duty. Any further misuse of the said amounts, either by the CHA and/or with the connivance of the Customs officials, cannot result in a demand of duty or penalty on the Importers - The impugned order is set aside and the appeals are allowed [Read less]

Service Tax – Classification of Service - Supply of Crane and Forklift Services, Demand under Business Support Services - Appellant supplied cranes and forklifts along with a crew to their customers for shifting of big machinery/materials from one place to another on collection of charges - Department initiated proceedings and classified the services as 'Business Support Services', demanding service tax, interest, and penalty - Whether the services provided by the appellant, involving the supply of cranes and forklifts along with a crew for shifting of machinery/materials, are classifiable under 'Business Support Service... [Read more]

Service Tax – Classification of Service - Supply of Crane and Forklift Services, Demand under Business Support Services - Appellant supplied cranes and forklifts along with a crew to their customers for shifting of big machinery/materials from one place to another on collection of charges - Department initiated proceedings and classified the services as 'Business Support Services', demanding service tax, interest, and penalty - Whether the services provided by the appellant, involving the supply of cranes and forklifts along with a crew for shifting of machinery/materials, are classifiable under 'Business Support Services' under the Finance Act, 1994 – HELD - An identical issue for the previous period i.e. May 2006 to March 2009 has been decided by a Coordinate Bench of this Tribunal in favour of appellant. The judicial discipline requires us to follow the judgment of a Coordinate Bench for an earlier period, especially when the issues therein has not been distinguished on facts by Revenue - The services provided by the appellant involving the supply of cranes and forklifts for shifting of machinery/materials are not classifiable under 'Business Support Services', such services are rightly classifiable under the category of 'Supply of Tangible Goods Service' as per Section 65(105)(zzzzj) of the Finance Act, 1994, which was introduced with effect from 16.05.2008. Since the period is prior to 16.05.2008, the services were not liable to service tax – The appeal is allowed [Read less]

Customs – Eligibility to Customs duty exemption on oxygen concentrator, ventilator – Rejection of claim for entitlement to Notification 20/2020-Cus dated 9th April 2020 extending the benefit of 'nil' rate of customs duties on an oxygen concentrator – Revenue of the view that the exemption notification covering "artificial respiration or other therapeutic respiration apparatus (ventilators)" was limited to conventional "ventilators" and did not extend to oxygen concentrators - Whether the exemption notification covering "artificial respiration or other therapeutic respiration apparatus (ventilators)" should be interpr... [Read more]

Customs – Eligibility to Customs duty exemption on oxygen concentrator, ventilator – Rejection of claim for entitlement to Notification 20/2020-Cus dated 9th April 2020 extending the benefit of 'nil' rate of customs duties on an oxygen concentrator – Revenue of the view that the exemption notification covering "artificial respiration or other therapeutic respiration apparatus (ventilators)" was limited to conventional "ventilators" and did not extend to oxygen concentrators - Whether the exemption notification covering "artificial respiration or other therapeutic respiration apparatus (ventilators)" should be interpreted narrowly to cover only conventional "ventilators", or whether it should be interpreted more broadly to cover other apparatuses that serve the function of therapeutic respiration, such as oxygen concentrators – HELD - The exemption notification should be interpreted broadly to cover any apparatus that serves the function of therapeutic respiration, and not be limited only to conventional "ventilators." The description in the notification should be read holistically, considering the context provided by the corresponding headings in the Customs Tariff Act. The "ventilator" is not even enumerated in the Tariff Act, and therefore the parenthetical reference to "ventilators" should not be interpreted as restricting the broader description of "artificial respiration or other therapeutic respiration apparatus." The notification was intended to provide expedient relief during the pandemic, and a narrow interpretation would be insensitive to the "humankind crisis" confronting society at the time. Accordingly, the impugned order is set aside and the appeal is allowed, holding that the oxygen concentrator imported by the appellant was eligible for the exemption benefit – the appeal is allowed [Read less]

Service Tax - Cenvat credit on professional indemnity insurance - Appellant availed professional indemnity insurance to cover the risk against losses arising from negligent acts, errors, and omissions by its employees in relation to its business – Denial of Cenvat credit of the service tax paid on the professional indemnity insurance - Whether the appellant is entitled to avail Cenvat credit of the service tax paid on professional indemnity insurance - HELD - The appellant is entitled to the Cenvat credit of the service tax paid on the professional indemnity insurance. The Tribunal in similar cases has held that professi... [Read more]

Service Tax - Cenvat credit on professional indemnity insurance - Appellant availed professional indemnity insurance to cover the risk against losses arising from negligent acts, errors, and omissions by its employees in relation to its business – Denial of Cenvat credit of the service tax paid on the professional indemnity insurance - Whether the appellant is entitled to avail Cenvat credit of the service tax paid on professional indemnity insurance - HELD - The appellant is entitled to the Cenvat credit of the service tax paid on the professional indemnity insurance. The Tribunal in similar cases has held that professional indemnity insurance helps and protects the professional advice and services provided by the officials/individuals of the appellant from bearing the full cost of damages awarded in a civil suit to the service recipient, and therefore, the service of professional indemnity insurance qualifies as an input service under the Cenvat Credit Rules. The professional indemnity insurance taken by the appellant is related to the business carried on by the appellant and there is a direct and visible nexus between the input service and the output service rendered by the appellant. Therefore, the Cenvat credit of the service tax paid on the professional indemnity insurance would be allowed to the appellant - The impugned order is set aside and the appeal is allowed [Read less]

GST - Cancellation of GST registration with retrospective effect basis vague show cause notice - Whether the cancellation of the petitioner's GST registration with retrospective effect is valid, given the vague nature of the show cause notice – HELD - The show cause notice issued to the petitioner was vague, as it did not specify the period for which the tax dues were not paid, nor the period from which the cancellation was to be effected. The vague show cause notice denies the petitioner the opportunity of hearing - While the provisions of the GST Act empower the authorities to cancel registration with retrospective eff... [Read more]

GST - Cancellation of GST registration with retrospective effect basis vague show cause notice - Whether the cancellation of the petitioner's GST registration with retrospective effect is valid, given the vague nature of the show cause notice – HELD - The show cause notice issued to the petitioner was vague, as it did not specify the period for which the tax dues were not paid, nor the period from which the cancellation was to be effected. The vague show cause notice denies the petitioner the opportunity of hearing - While the provisions of the GST Act empower the authorities to cancel registration with retrospective effect, the principles of natural justice require the authorities to provide sufficient details in the show cause notice to enable the petitioner to effectively respond. The respondents are directed to issue a modified show cause notice to the petitioner, and the petitioner is allowed to file a reply within the specified time - The orders of cancellation and dismissal of appeal are set aside – The petition is partly allowed [Read less]

GST - Bunching of show cause notice/orders, Issue of Show Cause notice under wrong provision – HELD - The GST Act permits issuance of show cause notice based on the tax period, i.e., the entire financial year. Therefore, the show cause notice cannot be clubbed and issued for more than one financial year. In the present case, the impugned order was passed for multiple financial years, which is without jurisdiction and hence, liable to be quashed – Further, the provisions of Sections 73 and 74 of the CGST Act stood omitted with effect from 01.04.2024, and only the provisions of Section 74A would apply for the financial y... [Read more]

GST - Bunching of show cause notice/orders, Issue of Show Cause notice under wrong provision – HELD - The GST Act permits issuance of show cause notice based on the tax period, i.e., the entire financial year. Therefore, the show cause notice cannot be clubbed and issued for more than one financial year. In the present case, the impugned order was passed for multiple financial years, which is without jurisdiction and hence, liable to be quashed – Further, the provisions of Sections 73 and 74 of the CGST Act stood omitted with effect from 01.04.2024, and only the provisions of Section 74A would apply for the financial years 2024-25 and 2025-26. However, the respondent had issued the show cause notice under Section 73 and passed the impugned assessment order without any jurisdiction - The impugned order is passed by the respondent in total non-application of mind, and hence, liable to be quashed on this aspect as well - The impugned assessment order and all the other consequential orders are quashed. The respondents were granted liberty to initiate separate proceedings against the petitioner for each financial year – The writ petition is disposed of [Read less]

GST – Demand of IGST on Ocean Freight, Retrospective effect of judgement in Mohit Minerals case - Petitioner argued that as per the judgment of the Supreme Court in the case of Union of India vs. Mohit Minerals (P.) Ltd., IGST was not leviable on ocean freight for import of good - Revenue authorities contended that the amendment to Notification No.10/2017, which deleted Entry 10 with effect from October 1, 2023, made the petitioner liable to pay IGST on ocean freight for the period prior to the amendment - Whether the petitioner could be held liable to pay IGST on ocean freight for imported goods for the period prior to ... [Read more]

GST – Demand of IGST on Ocean Freight, Retrospective effect of judgement in Mohit Minerals case - Petitioner argued that as per the judgment of the Supreme Court in the case of Union of India vs. Mohit Minerals (P.) Ltd., IGST was not leviable on ocean freight for import of good - Revenue authorities contended that the amendment to Notification No.10/2017, which deleted Entry 10 with effect from October 1, 2023, made the petitioner liable to pay IGST on ocean freight for the period prior to the amendment - Whether the petitioner could be held liable to pay IGST on ocean freight for imported goods for the period prior to the amendment of Notification No.10/2017 – HELD - The judgment of a Constitutional Court declaring a law applies retrospectively unless it is expressly made prospective, whereas a statute applies prospectively unless it is expressly made retrospective. Since the Supreme Court judgment in Mohit Minerals (P.) Ltd. did not indicate that it would apply prospectively, the petitioner cannot be saddled with the IGST liability for the period prior to the amendment of Notification No.10/2017 - the Proper Officer was not right in concluding that since the judgment of the Hon’ble Supreme Court in the case of Mohit Minerals (P.) Ltd. did not indicate as to whether the same would apply prospectively or retrospectively, the same should be given prospective effect - Furthermore, reliance of the Proper Officer on the amendment to the Notification No.10/2017 to impose levy on the petitioner was/is also without basis. The said Notification No.10/2017 cannot be seen as enacting a law overriding the statutory provisions - The impugned orders are set aside and the petition is allowed [Read less]

Central Sales Tax Act, 1956 – Consideration of C-Form furnished belatedly - The purchaser-SAIL failed to provide the required Form C as the case of supply of material is under CBI investigation. Consequently, the Assessing Authority imposed a 5% tax on the petitioner in the absence of Form C – HELD - The purchaser (SAIL) was under an obligation to obtain and provide the Form C to the seller-petitioner), but due to unavoidable circumstances, it failed to do so, resulting in the adverse assessment order against the petitioner. The Form-C has now been provided by SAIL to the petitioner during the pendency of the writ peti... [Read more]

Central Sales Tax Act, 1956 – Consideration of C-Form furnished belatedly - The purchaser-SAIL failed to provide the required Form C as the case of supply of material is under CBI investigation. Consequently, the Assessing Authority imposed a 5% tax on the petitioner in the absence of Form C – HELD - The purchaser (SAIL) was under an obligation to obtain and provide the Form C to the seller-petitioner), but due to unavoidable circumstances, it failed to do so, resulting in the adverse assessment order against the petitioner. The Form-C has now been provided by SAIL to the petitioner during the pendency of the writ petition - The delay in submission of Form C was due to circumstances beyond the petitioner's control. The Assessing Authority is directed to decide the matter afresh after affording due opportunity of hearing to the petitioner and considering the Form C submitted - The writ petition is disposed of [Read less]

Customs - Classification of "Lauric Acid" – Appellant classified "Lauric Acid" under tariff item 29157090 and availing exemption under Notification No.12/2012-Cus. Department issued SCNs proposing to change the classification to CTH 29159090, denying the benefit of the notification and demanding differential duties - The adjudicating authority rejected the appellant's classification, ordered reclassification, and confirmed the demand of differential duty and interest. The appellant appealed against these orders. Whether the rejection of the declared classification of the goods is tenable – HELD - The Revenue is not pre... [Read more]

Customs - Classification of "Lauric Acid" – Appellant classified "Lauric Acid" under tariff item 29157090 and availing exemption under Notification No.12/2012-Cus. Department issued SCNs proposing to change the classification to CTH 29159090, denying the benefit of the notification and demanding differential duties - The adjudicating authority rejected the appellant's classification, ordered reclassification, and confirmed the demand of differential duty and interest. The appellant appealed against these orders. Whether the rejection of the declared classification of the goods is tenable – HELD - The Revenue is not precluded from resorting to Section 28(1) of the Customs Act to review the assessment for ascertaining if there has been a short levy, and such review would also cover the aspect of the correctness of the classification claimed by the appellant. The appellant has the burden to prove that the goods imported are classifiable under tariff item 29157090 as claimed, in accordance with the principles laid down by the Supreme Court in Dilip Kumar & Company case. The appellant failed to provide any documentary evidence, such as analysis certificate or composition certificate, to substantiate its claim of classification - The chapter sub-heading from 2915.11 to 2915.70 specifically cover certain saturated acyclic monocarboxylic acid and their derivatives, and lauric acid is not covered thereunder - the Lauric Acid is classifiable under Tariff Item 29159090 - The impugned order is set aside and the appeal is dismissed [Read less]

Customs – Valuation and Classification of Electric Motor Controller – Respondent imported motor controllers and electric tricycle spare parts. The Assessing Officer reassessed the importation by enhancing the CIF value and reclassifying the "Motor Controller" from CTH 8503 0090 to CTH 8708 9900. The respondent, to avoid delay and demurrage charges, cleared the goods on payment of the enhanced customs duty, under protest, and requested the lower authority to issue the order(s) of assessment under Section 17(5) of the Customs Act, 1962. The Ld. Commissioner (Appeals) subsequently set aside the orders of assessment, accep... [Read more]

Customs – Valuation and Classification of Electric Motor Controller – Respondent imported motor controllers and electric tricycle spare parts. The Assessing Officer reassessed the importation by enhancing the CIF value and reclassifying the "Motor Controller" from CTH 8503 0090 to CTH 8708 9900. The respondent, to avoid delay and demurrage charges, cleared the goods on payment of the enhanced customs duty, under protest, and requested the lower authority to issue the order(s) of assessment under Section 17(5) of the Customs Act, 1962. The Ld. Commissioner (Appeals) subsequently set aside the orders of assessment, accepted the transaction value declared by the respondent, and classified the goods as "Motor Controller" under CTH 8503 0090 - Whether the Ld. Commissioner (Appeals) erred in accepting the transaction value declared by the respondent and not enhancing the value under the Customs Valuation Rules, 2007 – HELD - The assessing officer had rejected the transaction values without any valid basis/reasons and without following the due procedure as laid down under Section 14 and Valuation Rules. There was nothing on record to suggest that the transaction values declared by the respondent were not the price actually paid for the goods when sold for export to India, or that the buyer and seller were related or the price was not the sole consideration for sale. The Department also did not adduce any evidence that the respondent had paid any amount over and above the invoice value to the foreign supplier. Accordingly, the Ld. Commissioner (Appeals)'s decision to accept the transaction value declared by the respondent is upheld – Further, the "Motor Controller" imported by the respondent is rightly classifiable under CTH 8503 0090 as it is a part suitable for use solely or principally with the machines of heading 8501 or 8502 (electric motors). The controller performs functions like starting, stopping, and regulating the speed of the motor, which are connected to the motor and principally used with it. There is no specific entry for the controller in the Customs Tariff Act, 1975, and the goods imported by the respondent did not fulfill the description of parts and accessories of e-rickshaw under CTH 8708. Therefore, the Ld. Commissioner (Appeals)'s decision to classify the "Motor Controller" under CTH 8503 0090 is upheld – The Revenue appeal is dismissed [Read less]

Service Tax - Data hosting services, Intermediary services or Export of services - Appellant is engaged in providing data hosting services and marketing services to Amazon Web Services, Inc. USA (AWSI) under the Data Services Agreement and Marketing Services Agreement - Department case that the appellant acts as an intermediary between AWSI and its customers located in India by temporarily holding and routing the data through the edge servers installed in India, and thereby facilitating the provision of cloud computing services by AWSI to its Indian customers - Demand of service tax on the data hosting services and marketi... [Read more]

Service Tax - Data hosting services, Intermediary services or Export of services - Appellant is engaged in providing data hosting services and marketing services to Amazon Web Services, Inc. USA (AWSI) under the Data Services Agreement and Marketing Services Agreement - Department case that the appellant acts as an intermediary between AWSI and its customers located in India by temporarily holding and routing the data through the edge servers installed in India, and thereby facilitating the provision of cloud computing services by AWSI to its Indian customers - Demand of service tax on the data hosting services and marketing services provided by the appellant, treating it as an intermediary service - Whether the appellant is covered under the definition of 'intermediary' under Rule 2(f) of the Place of Provision of Service Rules, 2012 and therefore liable to pay service tax on the data hosting services provided to AWSI – HELD - As per the agreement, the appellant is rendering only one service, i.e. data hosting services to AWSI. The cloud computing services provided by AWSI to its customers is by virtue of a separate agreement between them, to which appellant is not a party. The role of the appellant is altogether for an independent activity in the nature of data hosting services, which is one of the inputs for provision of cloud computing services by AWSI. There is no scope for arranging or facilitating any provision of service by the appellant. the appellant is providing the data hosting service on his own account. The appellant is not an 'intermediary' as defined under Rule 2(f) of the Place of Provision of Service Rules, 2012 - The requirements and conditions to be an intermediary either under the POPS Rules or under IGST Act are absolutely same. There is no difference even in the meaning of the term ‘intermediary’ as defined under the two provisions. In this context, considering the definition under the two provisions, CBIC has taken the view that broadly there is no change in the scope of intermediary services in the GST regime vis-a-vis the service tax regime, except addition of supply of securities in the definition of intermediary in the GST law – In the clarification issued by the CBIC in Circular No. 232/26/2024-GST dated September 10, 2024, it was clarified that the data hosting service provider, who provides data hosting services to the cloud computing service provider on a principal-to-principal basis on its own account, cannot be considered as an 'intermediary' - The definition of intermediary in the GST regime which has been picked up from the service tax laws squarely covers the issue at hand and consequently, the appellant cannot be held to be an intermediary as the services provided are export of services. Accordingly, the demand of service tax on the data hosting services is set aside. The issue of penalty and interest on the marketing services is remanded to the Adjudicating Authority for a limited examination - The appeal is allowedrnrnIssue 2: Whether the appellant is liable to pay penalty and interest on the service tax paid on the marketing services before the issuance of the show cause notice – HELD – The matter is remanded the issue of penalty and interest on the marketing services to the Adjudicating Authority to examine whether the appellant had paid the interest amount before the issuance of the show cause notice. If the appellant had paid the interest amount along with the service tax before the issuance of the show cause notice, the provisions of Section 73(3) of the Finance Act, 1994 would apply, and no penalty would be leviable. [Read less]

GST – Mandatory time gap between issue of notice under Section 73(2) and passing of order under Section 73(10) - Whether the time gap of three months between the issuance of notice under Section 73(2) and the passing of the order under Section 73(10) of the CGST Act is mandatory – HELD - The time gap of three months between the issuance of notice under Section 73(2) and the passing of the order under Section 73(10) of the CGST Act is mandatory. The purpose of the three-month time gap is to ensure that the assessee gets a meaningful opportunity to file a reply, make submissions, and obtain adjournments for personal hear... [Read more]

GST – Mandatory time gap between issue of notice under Section 73(2) and passing of order under Section 73(10) - Whether the time gap of three months between the issuance of notice under Section 73(2) and the passing of the order under Section 73(10) of the CGST Act is mandatory – HELD - The time gap of three months between the issuance of notice under Section 73(2) and the passing of the order under Section 73(10) of the CGST Act is mandatory. The purpose of the three-month time gap is to ensure that the assessee gets a meaningful opportunity to file a reply, make submissions, and obtain adjournments for personal hearing. The three month time gap is necessary to fulfill the requirements of Sections 73(3) and 73(5) of the CGST Act, which provide for the service of a statement upon the noticee with details of the demand proposed to be raised and the option for the assessee to pay the tax through self-assessment. This time gap is essential to protect the assessee's right to be heard and to obtain at least three adjournments for personal hearing, which would be rendered otiose if the assessment is to be done within a time lesser than three months - In the present case, the SCN has been issued on 27-12-2023 and final order has been passed on 22-3-2024. Thus, there was time gap of about two months 24 days. The order impugned is unsustainable and set aside - The matter was remanded back to the respondents for fresh consideration in accordance with the law and the observations made by the Court - The petition is partly allowed [Read less]

GST – Validity of clubbing of Show Cause Notice of multiple tax periods, limitation period for demand and recovery of tax – Respondent issued under Section 74 of the CGST Act, 2017 alleging suppression of taxable value and short payment of tax for the financial years 2018-19 to 2023-24 - Whether the authorities can issue a consolidated show cause notice covering multiple financial years/tax periods under Section 74 of the CGST Act – HELD - Consolidation of multiple financial years/tax periods in a show cause notice under Section 74 of the CGST Act is not permissible. The GST scheme is based on annual returns for each... [Read more]

GST – Validity of clubbing of Show Cause Notice of multiple tax periods, limitation period for demand and recovery of tax – Respondent issued under Section 74 of the CGST Act, 2017 alleging suppression of taxable value and short payment of tax for the financial years 2018-19 to 2023-24 - Whether the authorities can issue a consolidated show cause notice covering multiple financial years/tax periods under Section 74 of the CGST Act – HELD - Consolidation of multiple financial years/tax periods in a show cause notice under Section 74 of the CGST Act is not permissible. The GST scheme is based on annual returns for each financial year, and the statute fixes a separate five-year time limit for demanding and recovering tax from the due date for furnishing the annual return for that year or from the date of erroneous return. Issuing a single show cause notice covering multiple years would aggregate different tax periods with different due dates and different limitations, which the statute does not permit - Tax period is defined under Section 2(106) of the CGST Act as the period, for which the return is required to be furnished. Return can be monthly or yearly, but the statute treats each financial year as a separate tax period for the purpose of assessment and recovery - The niceties of the GST scheme were not considered by the Delhi High Court in the case of Mathur Polymers Vs. Union of India, relied upon by the respondents - The impugned order and show cause notices are quashed. The respondents were, however, granted liberty to re-issue the notices strictly in terms of the provisions of Section 74 of the CGST Act, if there was no other legal impediment – The petition is partly allowed [Read less]

Central Excise – Clearance of waste products – Refund of duty – Respondents are engaged in manufacture of Refined Bran Oil, which is exempted from payment of duty vide Notification No.3/2006-CE – During process of manufacturing of Refined Bran Oil, certain by-products namely Fatty Acids, Gums & Waxes were generated – Respondents had paid duty under protest on clearance of Fatty Acids, Gums & Waxes on plea that Fatty Acids, Gums & Waxes are exempted under Notification No.89/95-CE – Respondents filed refund claim along with copies of invoices showing duty payment under protest – Adjudicating Authority rejected ... [Read more]

Central Excise – Clearance of waste products – Refund of duty – Respondents are engaged in manufacture of Refined Bran Oil, which is exempted from payment of duty vide Notification No.3/2006-CE – During process of manufacturing of Refined Bran Oil, certain by-products namely Fatty Acids, Gums & Waxes were generated – Respondents had paid duty under protest on clearance of Fatty Acids, Gums & Waxes on plea that Fatty Acids, Gums & Waxes are exempted under Notification No.89/95-CE – Respondents filed refund claim along with copies of invoices showing duty payment under protest – Adjudicating Authority rejected refund claim filed by Respondents – Commissioner (Appeals) allowed appeals filed by Respondents and allowed refund subject to verification – Whether denial of refund claims of duty paid on clearance of Fatty Acids, Gums & Waxes generated as waste products during manufacture of Refined Rice Bran Oil is justified or not – HELD – In various decisions, Tribunal held that products generated during manufacturing process of final product shall be exempted from payment of duty being waste under Notification No.89/95-CE. Respondents have produced CA Certificate showing as to how much duty had been passed on buyers and how much duty had been borne by themselves separately, which had been noted by Commissioner (Appeals) in impugned order. Though Commissioner (Appeals) had directed department to determine extent of duty of incidence that had not been passed by Respondents to its customers within 15 days from receipt of impugned order, but no contrary evidence had been brought forward by department. Allegation of unjust enrichment is not sustainable in present case. Impugned order passed by Commissioner (Appeals) is affirmed – Appeals dismissed [Read less]

Customs – Seizure of imported goods – Order of provisional release – Imposition of conditions – Appellants imported goods declared as Stock Lot of Fabrics laminated with Thermo Plastic Polyurethane - Officers seized goods on basis of reports received from CRCL to effect that goods were mis-declared – Appellants requested Commissioner to release imported goods on execution of a bond without any bank guarantee – Commissioner ordered for provisional release of imported goods subject to furnishing of bond and a bank guarantee – Whether conditions put forth by Commissioner for provisional release of imported goods... [Read more]

Customs – Seizure of imported goods – Order of provisional release – Imposition of conditions – Appellants imported goods declared as Stock Lot of Fabrics laminated with Thermo Plastic Polyurethane - Officers seized goods on basis of reports received from CRCL to effect that goods were mis-declared – Appellants requested Commissioner to release imported goods on execution of a bond without any bank guarantee – Commissioner ordered for provisional release of imported goods subject to furnishing of bond and a bank guarantee – Whether conditions put forth by Commissioner for provisional release of imported goods are justified or not – HELD – While adjudicating authority is well within his right to impose conditions for provisional release of goods, said conditions should not be so impracticable and harsh so as to kill the importer’s business itself. CRCL had not addressed all queries raised by Appellants and have not tested all parameters as per Indian or International standards. Appellant’s averment that impugned goods cannot be actually sold in market at value arrived at by Revenue cannot be discarded. Interest of justice and also interest of Revenue will be safeguarded by seeking a bond for full value of goods and Bank Guarantee to extent of 30% of duty estimated. Other conditions for provisional release, as ordered by Commissioner need not be interfered with – Appeal partly allowed [Read less]

GST – Condonation of delay in filing statutory appeal - The petitioner filed an appeal challenging the demand order belatedly after 284 days. The appellate authority rejected the appeal on the ground of delay - Whether the delay in filing the appeal can be condoned by the Court under its powers under Article 226 of the Constitution of India – HELD - High Court cannot condone the delay in filing the appeal beyond the maximum period prescribed under the statute. The Court cannot disregard the statutory period for redressal of the grievance and entertain a writ petition even if filed after the expiry of the maximum limita... [Read more]

GST – Condonation of delay in filing statutory appeal - The petitioner filed an appeal challenging the demand order belatedly after 284 days. The appellate authority rejected the appeal on the ground of delay - Whether the delay in filing the appeal can be condoned by the Court under its powers under Article 226 of the Constitution of India – HELD - High Court cannot condone the delay in filing the appeal beyond the maximum period prescribed under the statute. The Court cannot disregard the statutory period for redressal of the grievance and entertain a writ petition even if filed after the expiry of the maximum limitation period, as it would be inconsistent with the legislative intent and render the statutory provision otiose - The statute grants discretion to the Appellate Authority to condone the delay up to 30 days beyond the initial 90 days, but this discretion does not extend to the powers of the High Court under Article 226 – Further, the reason assigned by the petitioner for the delay, i.e. lack of knowledge of computers by the petitioner and its accountant, as not palatable in the present era. Even if the petitioner had a valid reason and sufficient cause explaining the delay, the Court cannot condone the delay beyond 120 days as the taxing statutes operate in a strict time frame and any relaxation or easing of the limitation period will have a cascading effect on the functioning of the revenue - The writ petition is dismissed [Read less]

GST – West Bengal AAR - Classification of supply of CKD e-rickshaw and the applicable GST rate - To optimize logistics and facilitate sales through authorized dealers/assemblers, the applicant intends to supply electric three-wheeler passenger and goods transport vehicles (e-rickshaws) in a Completely Knocked Down (CKD) condition - Whether the supply of a complete set of components of an electric three-wheeler vehicle (e-rickshaw) in a Completely Knocked Down (CKD) form, necessary and sufficient for the assembly of the finished vehicle, should be classified as (a) the finished vehicle itself or (b) a set of parts – HEL... [Read more]

GST – West Bengal AAR - Classification of supply of CKD e-rickshaw and the applicable GST rate - To optimize logistics and facilitate sales through authorized dealers/assemblers, the applicant intends to supply electric three-wheeler passenger and goods transport vehicles (e-rickshaws) in a Completely Knocked Down (CKD) condition - Whether the supply of a complete set of components of an electric three-wheeler vehicle (e-rickshaw) in a Completely Knocked Down (CKD) form, necessary and sufficient for the assembly of the finished vehicle, should be classified as (a) the finished vehicle itself or (b) a set of parts – HELD - The Rule 2(a) of the General Rules for the Interpretation of the Harmonized System (GIR) and the Office Order issued by the Commissioner of Customs, ICD, TKD, New Delhi, identified five essential components of an e-rickshaw. The presence of the motor and any three of the other four essential components satisfies the "essential character" test under Rule 2(a) for classifying the CKD supply as the finished vehicle - If the CKD parts contain the motor and any three of the four essential components (transmissions, axles, chassis and controller) in proportionate numbers capable of building complete e-rickshaws, then the supply should be classified as the finished vehicle itself and be taxed at 5% GST under HSN code 87038040 and serial no. 441 of Schedule I of the GST notification - However, if the supply does not include either the motor or any two of the other four essential components, then it should be classified as a set of parts and taxed at 18% GST under the respective HSN codes for the individual parts – Ordered accordingly [Read less]

GST – West Bengal AAR - ITC on food and beverages in event management services - The applicant is engaged in event management and tourism services. The hotels provide bundled services to the applicant, including room accommodation, conference space, and food, sometimes issuing a single invoice and sometimes separate invoices. The applicant charges the client a consolidated event management fee - Whether the applicant is eligible to claim ITC on the inward supply of food and beverages used in providing the outward taxable bundled services - HELD - Event management involves supply of various kinds of goods and services in ... [Read more]

GST – West Bengal AAR - ITC on food and beverages in event management services - The applicant is engaged in event management and tourism services. The hotels provide bundled services to the applicant, including room accommodation, conference space, and food, sometimes issuing a single invoice and sometimes separate invoices. The applicant charges the client a consolidated event management fee - Whether the applicant is eligible to claim ITC on the inward supply of food and beverages used in providing the outward taxable bundled services - HELD - Event management involves supply of various kinds of goods and services in a bundled form. The event management service provided by the applicant is a composite supply under section 2(30) of the CGST Act, 2017, where the provision of food and beverages is an ancillary component of the principal supply of event management services. The proviso to Section 17(5)(b)(i) of the CGST Act allows ITC on inward supply of goods or services that are used as an element of a taxable composite or mixed supply. Since the applicant's outward supply is a taxable composite supply, the inward supply of food and beverages falls within the exception and is eligible for ITC - The applicant is eligible ITC on food and beverage services under the proviso to Section 17(5) for carrying out event management services which includes supply of foods and beverages – Ordered accordingly - Requirement of separate invoices for claiming ITC on food and beverages - Whether separate invoices from the hotel vendors are required for claiming ITC on food and beverage services - HELD – A separate invoices are not required for claiming ITC on food and beverages. Since the supply from the hotel is a composite supply, the individual elements lose their separate identity. The GST law does not mandate separate invoicing for each component of a composite supply. A single, consolidated invoice from the hotel, clearly detailing the charges for room rent, conference hall, and food, is sufficient for the applicant to claim ITC on all components, provided the invoice complies with the requirements of Section 16(2) of the CGST Act - ITC when food invoice is raised by hotel with margin charged by applicant - The hotel raises an invoice to the applicant for the food and beverages, and the applicant charges the client a margin over the hotel's invoice and issues its own invoice - Whether the applicant is eligible to claim ITC when the food and beverage invoice is raised by the hotel to the applicant, and the applicant charges the client a margin over it and issues its own invoice - HELD - The applicant is eligible to claim ITC in this scenario. The act of re-invoicing the food and beverage cost (plus margin) to the client demonstrates clear commercial re-supply, eliminating the "personal consumption" barrier. The transaction meets the requirement of being an "element of a taxable composite supply" under the proviso to Section 17(5)(b)(i) of the CGST Act - ITC on inseparable charges for conference hall and food - The hotel issues a single invoice under a combined heading such as "conference package" or "banquet package," without separate line items for food and hall rent - Whether the applicant is eligible to avail ITC on the entire value of such invoice where the charges for the conference hall and food are inseparable - HELD - The applicant is eligible to avail ITC on the entire value of the "conference package" invoice. Since the bundle constitutes a single inward Composite Supply to the applicant, and the input food and beverages are procured solely as an integral element of this service and used entirely for the applicant's outward taxable supply, the full input tax is eligible for credit under the proviso to Section 17(5)(b)(i) of the CGST Act. [Read less]

Customs – Customs duty on re-imported goods – Respondent-assessee exported certain consignments to Kenya Medical Supply Agency (KEMSA), which were not accepted by KEMSA on the grounds that the drugs were delisted by the USFDA and hence no longer eligible for procurement using USAID Funds - The respondent sought to re-import the goods for destruction, as the DCGI informed that the goods had less than 60% shelf life and could not be used domestically. The adjudicating authority allowed the re-importation without payment of customs duty, holding that the goods were meant for destruction and had no commercial value - Wheth... [Read more]

Customs – Customs duty on re-imported goods – Respondent-assessee exported certain consignments to Kenya Medical Supply Agency (KEMSA), which were not accepted by KEMSA on the grounds that the drugs were delisted by the USFDA and hence no longer eligible for procurement using USAID Funds - The respondent sought to re-import the goods for destruction, as the DCGI informed that the goods had less than 60% shelf life and could not be used domestically. The adjudicating authority allowed the re-importation without payment of customs duty, holding that the goods were meant for destruction and had no commercial value - Whether the re-imported goods were liable to customs duty or were exempt from duty payment – HELD - The re-importation of goods attracts Customs duty under Section 20 of the Customs Act, as the re-imported goods are subject to the same conditions and restrictions as goods of like kind and value imported for the first time. The Tribunal observed that there is no specific exemption notification that exempts goods from levy of customs duty at the time of re-importation. The reliance placed by the adjudicating authority on provisions related to 100% EOUs for destruction of goods without payment of duty was misplaced, as those provisions do not apply in the present case. The proper course of action would have been for the respondent to pay the applicable customs duty at the time of re-importation and then seek remission of duty under Section 23 of the Customs Act, which deals with remission of duty on lost, destroyed or abandoned goods. Matter remanded the matter back to the adjudicating authority to decide the issue of customs duty payable on the re-imported goods - The appeal filed by the Department is allowed by way of remand to the adjudicating authority to decide the issue of customs duty payable on the re-imported goods – The appeal is allowed by way of remand [Read less]

Customs – Import of jewellery – Denial of exemption – Demand of duty – Appellant had imported gold jewellery from Thailand and cleared same by availing exemption benefits under Notification No.85/2004-Cus – After investigation, Principal Commissioner denied exemption benefits and demanded payment of duty on goods cleared under bills of entry – Whether gold jewellery imported from Thailand is eligible for exemption benefit in terms of Notification No.85/2004-Cus – HELD – As per Notification No.85/2004-Customs availed by Appellant, duty concession was extended to certain specified goods when imported into cou... [Read more]

Customs – Import of jewellery – Denial of exemption – Demand of duty – Appellant had imported gold jewellery from Thailand and cleared same by availing exemption benefits under Notification No.85/2004-Cus – After investigation, Principal Commissioner denied exemption benefits and demanded payment of duty on goods cleared under bills of entry – Whether gold jewellery imported from Thailand is eligible for exemption benefit in terms of Notification No.85/2004-Cus – HELD – As per Notification No.85/2004-Customs availed by Appellant, duty concession was extended to certain specified goods when imported into country from Thailand subject to condition that such goods are of origin of Thailand in accordance with provisions of Interim Rules of Origin. Case of Appellant is that demand and its confirmation made under show cause notice and Order-in-Original is premature, as admittedly, Country of Origin certificate issued by statutory authority had been questioned and a reference had been made to designated authority of Kingdom of Thailand through Director General, DRI. Matter requires to be decided afresh on merits. Matter is remanded to Original Authority to re-examine issue after making available the outcome of reference made to designated authority of kingdom of Thailand – Appeal disposed of [Read less]

Central Sales Tax Act, 1956 - Sale in the course of import - Petitioner received purchase orders for supply of medical equipment, accessories and installation. As per the terms of the purchase orders, the petitioner was required to procure the equipment from its counterpart in Germany and not from its stock in India - The petitioner placed a purchase order on the foreign supplier and the goods were imported and ultimately sold to the 4th respondent - Petitioner claimed exemption under Section 5(2) of the CST Act for the sale to the equipment as a "sale in the course of import". Respondent imposed a penalty on the petitione... [Read more]

Central Sales Tax Act, 1956 - Sale in the course of import - Petitioner received purchase orders for supply of medical equipment, accessories and installation. As per the terms of the purchase orders, the petitioner was required to procure the equipment from its counterpart in Germany and not from its stock in India - The petitioner placed a purchase order on the foreign supplier and the goods were imported and ultimately sold to the 4th respondent - Petitioner claimed exemption under Section 5(2) of the CST Act for the sale to the equipment as a "sale in the course of import". Respondent imposed a penalty on the petitioner under Section 67 of the KVAT Act for the assessment year 2016-17, on the ground that the transaction was not eligible for exemption - Whether the transaction between the petitioner and the 4th respondent is eligible for exemption under Section 5(2) of the CST Act as a "sale in the course of import" – HELD - Where there is an inextricable link between the purchase order, import, and the ultimate sale, the transaction would qualify as a "sale in the course of import" under Section 5(2) of the CST Act - In the present case, there was a clear link between the purchase order placed by the 4th respondent (Hospital), the import effected by the petitioner, and the ultimate sale to the customer in the State. The assessment of the petitioner for the relevant year had been completed by the Deputy Commissioner (Assessment) accepting the petitioner's claim of exemption, in line with the Court's earlier judgment - Further, the penalty under Section 67 of the KVAT Act cannot be imposed as the petitioner had declared the transaction in its return, claiming exemption, and there was no suppression of any material facts - The order imposing the penalty under Section 67 of the KVAT Act is set aside and the writ petition is allowed [Read less]

Service Tax - Jurisdiction to pass Order against deceased person - Dept passed an ex parte Order-in-Original raising a demand of service tax under Sections 73, 75, 77 and 78 of Chapter-V of the Finance Act, 1994 pertaining to Financial Years 2015-16 and 2016-17 - Whether the Assistant Commissioner was justified in passing the Order-in-Original against the deceased - HELD - The Order-in-Original passed against the deceased is non est in the eye of law and a nullity. The Supreme Court judgment in Shabina Abraham v. Collector of Central Excise and Customs, held that in the absence of any statutory provision to continue procee... [Read more]

Service Tax - Jurisdiction to pass Order against deceased person - Dept passed an ex parte Order-in-Original raising a demand of service tax under Sections 73, 75, 77 and 78 of Chapter-V of the Finance Act, 1994 pertaining to Financial Years 2015-16 and 2016-17 - Whether the Assistant Commissioner was justified in passing the Order-in-Original against the deceased - HELD - The Order-in-Original passed against the deceased is non est in the eye of law and a nullity. The Supreme Court judgment in Shabina Abraham v. Collector of Central Excise and Customs, held that in the absence of any statutory provision to continue proceedings against a non-existing person, the proceedings stand abated. The definition of "assessee" under Section 65(7) of the Finance Act, 1994 includes a "person" and "his agent", but does not extend to the legal heirs of the deceased person. The legal heir cannot be construed as a "person liable to pay service tax" or "his agent" under the Act, and hence the proceedings under Section 73 could not have been continued after the death of the service provider. In the absence of any provision empowering the authority to continue the proceedings after the death of the service provider, the Order-in-Original passed against the deceased person is not maintainable - The Order-in-Original as well as the subsequent Letter initiating recovery proceedings under Section 87 of the Finance Act, 1994 – The writ petition is allowed [Read less]

Service Tax – Section 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Sustainability – Appellant is engaged in providing various taxable services – On basis of information received from Income Tax department, Revenue issued show cause notice proposing demand of differential service tax by invoking extended period of limitation – Adjudicating authority confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether demand confirmed by invoking extended period of limitation under proviso to Section 73(1) of the Ac... [Read more]

Service Tax – Section 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Sustainability – Appellant is engaged in providing various taxable services – On basis of information received from Income Tax department, Revenue issued show cause notice proposing demand of differential service tax by invoking extended period of limitation – Adjudicating authority confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether demand confirmed by invoking extended period of limitation under proviso to Section 73(1) of the Act is sustainable – HELD – Admittedly, Appellant had suppressed values of services received and provided in their ST-3 returns filed for relevant period and had deliberately declared lower value to evade payment of due taxes. From perusal of ST-3 returns, it is evident that Appellant was well aware of his liability to pay service tax and method of computation of same. Clear case made out against Appellant is of suppression of taxable value in ST-3 return with intention to evade payment of service tax. Department had rightly invoked extended period of limitation. Demand of service tax confirmed by invoking extended period of limitation is sustained – Appeal dismissed [Read less]

Service Tax – Sections 65B(44) and 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Sustainability – Appellant is registered with Service Tax Department for providing taxable services as defined under Section 65B(44) of the Act – On basis of third party information received from Income Tax Department, Revenue issued show cause notices proposing demand of Service Tax by invoking extended period of limitation under proviso to Section 73(1) of the Act – Adjudicating Authority dropped demands proposed in show cause notice – Commissioner (Appeals) set aside order passed by... [Read more]

Service Tax – Sections 65B(44) and 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Sustainability – Appellant is registered with Service Tax Department for providing taxable services as defined under Section 65B(44) of the Act – On basis of third party information received from Income Tax Department, Revenue issued show cause notices proposing demand of Service Tax by invoking extended period of limitation under proviso to Section 73(1) of the Act – Adjudicating Authority dropped demands proposed in show cause notice – Commissioner (Appeals) set aside order passed by Adjudicating Authority – Whether demand made by invoking extended period of limitation is sustainable – HELD – Entire matter had been made on basis of show cause notices issued by making demand by invoking extended period of limitation on basis of differences noticed between figures declared by Appellant in their income tax return and ST-3 return. Records of Appellant were duly audited earlier and matter in respect of short payments was also adjudicated against Appellant. In such circumstances, show cause notice could not have been issued by invoking extended period of limitation. In number of decisions, Tribunal held that extended period of limitation could not have been invoked for making demand when Appellant was registered and was duly audited. In such circumstances, invocation of extended period of limitation under Section 73 of the Finance Act is wholly unwarranted. Impugned order passed by Commissioner (Appeals) is set aside – Appeal allowed [Read less]

Customs - Export duty on iron ore fines, Acceptance of test reports, assessment on wet metric ton (WMT) basis – Respondent-assessee exported iron ore fines and the Customs duty was determined based on the test report of a private NABL accredited agency indicating the iron content (Fe%) to be less than 58% on WMT basis - Customs department rejected this report and relied on the test report of the Central Revenues Control Laboratory (CRCL), which showed the Fe% to be more than 58% on dry metric ton (DMT) basis, and accordingly levied export duty. The Respondent's appeal against this was allowed by the Commissioner (Appeals... [Read more]

Customs - Export duty on iron ore fines, Acceptance of test reports, assessment on wet metric ton (WMT) basis – Respondent-assessee exported iron ore fines and the Customs duty was determined based on the test report of a private NABL accredited agency indicating the iron content (Fe%) to be less than 58% on WMT basis - Customs department rejected this report and relied on the test report of the Central Revenues Control Laboratory (CRCL), which showed the Fe% to be more than 58% on dry metric ton (DMT) basis, and accordingly levied export duty. The Respondent's appeal against this was allowed by the Commissioner (Appeals) and the CESTAT - Whether the CRCL test report showing higher Fe% on DMT basis should be relied upon over the private agency's report on WMT basis for the purpose of levying export duty - HELD - The Courts have consistently held that for determining export duty, the Fe% has to be calculated on WMT basis as per the Supreme Court decision in Gangadhar Narsingdas Agrawal case, which was the prevailing legal position at the time of these exports. The final invoice and payments were also based on the WMT Fe% as per the contract between the parties. The CRCL report on DMT basis was therefore not relevant for the purpose of levy of export duty. The CESTAT was justified in relying on the private agency's report on WMT basis over the CRCL report – Further, the questions raised by the Revenue were essentially based on findings of fact and the legal position prevailing at the relevant time. As the legal position is well settled, the questions raised by the Revenue do not involve any "substantial question of law" that would warrant interference by the High Court. The concurrent findings of fact by the lower authorities also could not be disturbed - No "substantial question of law" arose from the CESTAT's order, which had correctly relied on the private agency's report on WMT basis for determining the export duty liability – The Revenue appeal is dismissed [Read less]

Service Tax – Sections 102 and 103 of Finance Act, 1994 – Payment of tax – Entitlement of refund – Appellant is engaged in providing services relating to resurfacing of runway at Air Force Station, but did not pay service tax on said services in view of exemption under Entry 12(a) of Notification No.25/2012-ST – Due to omission of said entry vide Notification No.6/2015-ST, Appellant paid service tax – With introduction of Section 102 and 103 in the Act, exemption which was withdrawn was restored retrospectively and allowing refund of service tax paid – Appellant claimed refund of service tax paid on aforesaid... [Read more]

Service Tax – Sections 102 and 103 of Finance Act, 1994 – Payment of tax – Entitlement of refund – Appellant is engaged in providing services relating to resurfacing of runway at Air Force Station, but did not pay service tax on said services in view of exemption under Entry 12(a) of Notification No.25/2012-ST – Due to omission of said entry vide Notification No.6/2015-ST, Appellant paid service tax – With introduction of Section 102 and 103 in the Act, exemption which was withdrawn was restored retrospectively and allowing refund of service tax paid – Appellant claimed refund of service tax paid on aforesaid services – Adjudicating Authority rejected refund claim filed by Appellant – Whether services rendered by Appellant are covered under provisions of Section 102 or Section 103 of the Act – HELD – There is no dispute to fact that services were provided by Appellant to Air Force Station and no service tax was paid in view of exemption under existing Entry 12(a) of Exemption Notification No.25/2012. Department never raised any objection to applicability of Exemption Notification No.25/2012 on services rendered by Appellant. It is not the case of Revenue that services provided by Appellant when Sl.No.12(a) was prevalent had undergone any change. When same services have been continued to be provided by Appellant, there is no reason to deny exemption on ground that they are not covered under services referred in the entry. Revenue had not pointed out any justification for taking a different view. Department cannot take contrary stand during different periods when subject matter is identical and had been assessed earlier. Appellant is entitled to refund as claimed. Order under challenge is set aside – Appeal allowed [Read less]

GST – Best Judgement assessment, Delay in filing GST returns, Passing of adjudication orders under Section 62 of the CGST Act, 2017 - The petitioner contended that the returns were filed belatedly due to bonafide reasons - Whether the delay in filing the returns by the petitioner can be condoned and the adjudication orders passed under Section 62 of the CGST Act be set aside – HELD - The adjudication orders were passed under Section 62 of the GST Act on the premise that the petitioner had not filed the returns. The petitioner had filed the returns belatedly, after the respective adjudication orders were passed. The adj... [Read more]

GST – Best Judgement assessment, Delay in filing GST returns, Passing of adjudication orders under Section 62 of the CGST Act, 2017 - The petitioner contended that the returns were filed belatedly due to bonafide reasons - Whether the delay in filing the returns by the petitioner can be condoned and the adjudication orders passed under Section 62 of the CGST Act be set aside – HELD - The adjudication orders were passed under Section 62 of the GST Act on the premise that the petitioner had not filed the returns. The petitioner had filed the returns belatedly, after the respective adjudication orders were passed. The adjudication orders were passed with a condition that if the returns were filed within 30 days, the orders would stand withdrawn - In view of the purport of Section 62 of the CGST Act and the fact that the adjudication orders were not based on the returns filed, it would be appropriate to afford the petitioner another chance by taking the belatedly filed returns on record and proceed to adjudicate the same in terms of Sections 73 or 74 of the CGST Act, as the case may be, in accordance with law. Considering the lapse on the part of the petitioner in filing the returns belatedly, the petitioner is directed to pay a cost of Rs. 25,000/- to the High Court Legal Services Authority - The adjudication orders are quashed and the authorities are directed to take the belatedly filed returns on record and proceed to adjudicate the same in accordance with law – The petition is disposed of [Read less]

Customs – Classification of “Door Latch and Actuator Assembly” – Appellant imported Door Latch and Actuator Assembly by classifying same under Customs Tariff Item (CTI) 87089900 and availed benefit of concessional rate of duty under Notification No.46/2011-Cus – Department issued SCN proposing re-classification of imported goods under CTI 83012000, denial of benefit of concessional rate of duty and confiscation of imported goods – Adjudicating Authority confirmed proposals made in show cause notice – Whether imported goods are qualified to be considered as a semi-finished locks of a kind used in automobiles ... [Read more]

Customs – Classification of “Door Latch and Actuator Assembly” – Appellant imported Door Latch and Actuator Assembly by classifying same under Customs Tariff Item (CTI) 87089900 and availed benefit of concessional rate of duty under Notification No.46/2011-Cus – Department issued SCN proposing re-classification of imported goods under CTI 83012000, denial of benefit of concessional rate of duty and confiscation of imported goods – Adjudicating Authority confirmed proposals made in show cause notice – Whether imported goods are qualified to be considered as a semi-finished locks of a kind used in automobiles capable of performing essential function of a lock or not – HELD – During investigation, Appellant had explained that imported goods are parts of Door Lock systems and they are used along with other components procured from domestic manufacturers such as handles, wiring harness, lock cylinders and screws. Imported items are not capable of performing any independent function of a lock, since substantial and vital manufacturing process along with other procured components are required to make it as a lock, which is capable of being fitted into an automobile vehicle. Imported Door Latch and Actuator Assembly have been held to be classified as ‘parts of Automobile Locks’ under CTI 83016000 and not under CTI 83012000. In view of this, observation of Adjudicating Authority is unsustainable – Appeal is allowedrnrnIssue 2: Customs – Entitlement of preferential rate of duty – Whether benefit of preferential rate of duty can be denied or not – HELD – At time of import and clearance of goods, Appellant had sought benefit of preferential rate in terms of Sl.No.1478(I) of Notification No.46/2011. Said Notification provides benefit of preferential duty for all goods classifiable under CTH 870895 to CTH 870899 and applicable rate of Basic Customs Duty is 5%. Country of Origin Certificate issued by Competent Authority at Country of Export is valid and legal and, as a result, at this stage, there is no authority or power conferred to deny benefit availed under said notification. Impugned order denying benefit of preferential rate of duty is clearly unsustainable.rnrnIssue 3: Customs – Order of confiscation – Sustainability – Whether imported and cleared goods are liable for confiscation due to an attempt in reclassification of imported goods – HELD – There is no documentary evidence placed on record by Revenue to substantiate that their attempt for reclassification was an outcome of any commission or omission of Appellant. There is no finding concerning any fraudulent intention or mala-fide action of Appellant to seek wrong classification to avail benefit of preferential rate of duty. In absence of any credible evidence or prima facie material, imported goods are not liable for confiscation. Impugned order passed by Adjudicating Authority is set aside. [Read less]

Customs – Import of electronic components – Allegation of undervaluation – Demand of duty – Appellant is engaged in sale of various types of Phillips brand transistors, diodes and other electronic components – On completion of investigation, department issued show cause notice alleging undervaluation of electronic components imported by Appellant – Commissioner confirmed demand of duty along with interest and penalty – Whether electronic components imported by Appellant was of Phillips brand and had been deliberately undervalued in order to evade customs duty – HELD – Allegation of undervaluation must be ... [Read more]

Customs – Import of electronic components – Allegation of undervaluation – Demand of duty – Appellant is engaged in sale of various types of Phillips brand transistors, diodes and other electronic components – On completion of investigation, department issued show cause notice alleging undervaluation of electronic components imported by Appellant – Commissioner confirmed demand of duty along with interest and penalty – Whether electronic components imported by Appellant was of Phillips brand and had been deliberately undervalued in order to evade customs duty – HELD – Allegation of undervaluation must be proved by cogent and positive evidence. Examination report is the primary contemporaneous record of what was actually found, i.e., nature of goods, brand, model, quantity/weight and any visible features affecting value. Department could not supply copy of said examination report, as same had been destroyed. Impugned order had nowhere stated that goods on examination were found to be of Phillips brand. Department had not led any evidence to establish that Appellant had deliberately not indicated the brand in order to undervalue the goods. In absence of any evidence led by department that goods imported were of Phillips brand, and also lack of evidence of contemporaneous imports to establish undervaluation, declared transaction value should be accepted. Impugned order passed by Commissioner is set aside – The appeal is allowed [Read less]

Service Tax – Sections 65(105)(zzg), 73(1), 77 and 78 of Finance Act, 1994 – Special Economic Zones Act, 2005 – Section 26 – Providing of garden related services – Tax liability – Appellant is engaged in providing garden related services – Department opined that activities undertaken by Appellant constituted maintenance of gardens, which is taxable under Section 65(105)(zzg) of the Act – Department issued show cause notice proposing demand of service tax by invoking extended period of limitation – Commissioner confirmed demand proposed in show cause notice – Whether landscaping and garden maintenance ac... [Read more]

Service Tax – Sections 65(105)(zzg), 73(1), 77 and 78 of Finance Act, 1994 – Special Economic Zones Act, 2005 – Section 26 – Providing of garden related services – Tax liability – Appellant is engaged in providing garden related services – Department opined that activities undertaken by Appellant constituted maintenance of gardens, which is taxable under Section 65(105)(zzg) of the Act – Department issued show cause notice proposing demand of service tax by invoking extended period of limitation – Commissioner confirmed demand proposed in show cause notice – Whether landscaping and garden maintenance activities undertaken by Appellant are classifiable as taxable services – HELD – Contracts and invoices on record unmistakably show that Appellant was entrusted with upkeep, preservation and periodic maintenance of existing gardens and parks and not with one time development or creation of new horticultural assets. Services rendered by Appellant clearly satisfy the definition of management, maintenance or repair service. Activities are correctly classifiable as taxable “management, maintenance or repair service” – The appeal is partly allowedrnrnIssue 2: Service Tax – Rendering of services to municipal corporation – Demand of tax – Whether services rendered by Appellant to Coimbatore City Municipal Corporation constitute sovereign functions under Article 243W of the Constitution – HELD – There is no dispute that maintenance of parks and gardens is a municipal function and such functions may be outsourced to private agencies. Article 243W of the Constitution only identifies municipal responsibilities and it does not grant tax immunity to private entities executing outsourced work. Appellant does not step into shoes of State or municipality merely because the work relates to a municipal function. Service tax law exempts services rendered by Government and not services rendered to them by private contractors. Services rendered by Appellant to Coimbatore Municipal Corporation cannot be treated as sovereign functions and are not immune from levy of service tax. Appellant is liable to tax on this score.rnrnIssue 3: Service Tax – Sale of plants – Tax liability – Whether sale of plants, manure, soil, milk etc. attracts service tax – HELD – It is well settled that pure sale of goods involving transfer of property in goods is outside scope of service tax in view of Article 366(29A) of the Constitution. Value of goods and value of services are required to be segregated and service tax cannot be levied on value of goods. Only those sales which are established as pure sales of goods, supported by documentary evidence such as invoices, stock records and separate accounting, would be eligible for exclusion from taxable value. Since necessary factual details and supporting documents are not readily available on record, it is unable to quantify exact extent of exclusion at this stage. Demand to extent it includes value of pure sale of goods not relatable to landscaping and maintenance contracts is unsustainable. For purpose of limited verification and re-computation, issue is remanded to Adjudicating Authority, who shall examine the documentary evidence produced by Appellant, verify either sales are independent of service contracts and allow appropriate relief and re-compute demand in accordance with law. rnrnIssue 4: Service Tax – Rendering of services to special economic zone – Denial of exemption – Whether services rendered by Appellant to SEZ units are exempt from payment of Service Tax – HELD – Merely because recipient happens to be an SEZ unit does not render all services rendered to it exempt. Appellant had failed to establish that landscaping and garden maintenance services rendered to SEZ units were approved as authorised operations under SEZ Act. Appellant had not demonstrated compliance with mandatory procedural requirements prescribed under SEZ Act and relevant service tax exemption notifications. In absence of such compliance, exemption under Section 26 of SEZ Act cannot be extended. Services rendered by Appellant to SEZ units are not exempt from payment of Service Tax.rnrnIssue 5: Service Tax – Invoking of extended period of limitation – Imposition of penalty – Whether invocation of extended period and imposition of interest & penalties are sustainable – HELD – Proviso to Section 73(1) of the Act permits invocation of extended period, where non-payment of tax is by reason of fraud, collusion, wilful misstatement, suppression of facts or contravention of statutory provisions with intent to evade tax. Although Appellant was registered under one taxable category, they did not declare impugned activities and did not discharge tax under appropriate category of Management, Maintenance or Repair Service. Appellant did not file ST-3 returns reflecting consideration received under contracts. Mere availability of information in books of accounts, contracts or invoices would not amount to disclosure unless same is specifically declared in statutory returns. Extended period has been correctly invoked. Once tax liability is upheld, interest follows automatically. There is no infirmity in imposition of penalties, as Appellant had failed to comply with statutory obligations. Penalties imposed under Sections 77 and 78 of the Act are sustainable, subject to re-computation of tax liability after excluding value of sale of goods, as held above in this order. [Read less]

GST - Anticipatory bail, Offence under Sections 132(1)(b), 132(1)(c), 132(5) of CGST Act, 2017 - ITC fraud, non-existent entities, fake invoices – Petition seeking anticipatory bail in a case filed by the DGGI under Sections 132(1)(b), 132(1)(c) read with Section 132(5) of the CGST Act, 2017 - The investigation revealed that four GST registered companies, in which the petitioner was a partner/director, had availed, utilized and passed on ineligible Input Tax Credit in excess of the credit actually reflected in their GSTR-2B returns and issued invoices without any underlying supply of goods or services, thereby illegally ... [Read more]

GST - Anticipatory bail, Offence under Sections 132(1)(b), 132(1)(c), 132(5) of CGST Act, 2017 - ITC fraud, non-existent entities, fake invoices – Petition seeking anticipatory bail in a case filed by the DGGI under Sections 132(1)(b), 132(1)(c) read with Section 132(5) of the CGST Act, 2017 - The investigation revealed that four GST registered companies, in which the petitioner was a partner/director, had availed, utilized and passed on ineligible Input Tax Credit in excess of the credit actually reflected in their GSTR-2B returns and issued invoices without any underlying supply of goods or services, thereby illegally availing ITC - Whether the petitioner is entitled to anticipatory bail – HELD - There are specific and serious allegations against the petitioner who had allegedly managed two firms and floated fictitious firms, thereby passing off fake ITC to the tune of Rs.8.24 crores by showing fictitious inward supplies and issuing fake invoices. The inquiry is at its nascent stage and the petitioner had not cooperated with the investigation so far. A proper and thorough inquiry is required to be conducted, and there is a possibility of the petitioner misusing the concession of pre-arrest bail, enabling him to avoid custodial interrogation, tamper with evidence, or manipulate records by taking undue advantage of legal and procedural loopholes. The petitioner may also influence the persons who were aware of the transactions and delay the investigation by avoiding personal appearance. Considering the facts and circumstances, the petition for anticipatory bail is rejected [Read less]

Central Excise - Penalties under Rule 26(2) of the Central Excise Rules, 2002; Allegation of irregular transfer of CENVAT Credit – Penalty under Rule 26(2) of the Central Excise Rules, 2002 for allegedly irregular transfer of CENVAT Credit to the appellants - Whether the penalties imposed on the appellants under Rule 26(2) of the Central Excise Rules, 2002 were justified – HELD - Under Rule 26(2), a person who issues invoices or any document enabling the user to avail irregular CENVAT Credit is liable to be penalized. In the present case, the Revenue's allegation was that the goods had not been moved. In such circumsta... [Read more]

Central Excise - Penalties under Rule 26(2) of the Central Excise Rules, 2002; Allegation of irregular transfer of CENVAT Credit – Penalty under Rule 26(2) of the Central Excise Rules, 2002 for allegedly irregular transfer of CENVAT Credit to the appellants - Whether the penalties imposed on the appellants under Rule 26(2) of the Central Excise Rules, 2002 were justified – HELD - Under Rule 26(2), a person who issues invoices or any document enabling the user to avail irregular CENVAT Credit is liable to be penalized. In the present case, the Revenue's allegation was that the goods had not been moved. In such circumstances, the transporter could not be held liable for the penalty under Rule 26(2), as it was not involved in issuing any invoice or document - There penalties on buyer-appellants are also not imposable under Rule 26(2) of the Central Excise Rules, 2002 - The penalties imposed on all the appellants are set aside and the appeal is allowed [Read less]

Central Excise - Rules 2(a) and 4(5)(a) of Cenvat Credit Rules, 2004 – Eligibility to Cenvat credit on 'Kink Bending Machine'– Appellant is engaged in manufacture of Trucks and Commercial Vehicles and their parts and accessories – Appellant had availed CENVAT credit on Kink Bending Machine without receipt of goods into factory premises – Department issued show cause notice to Appellant by proposing recovery of said credit – Adjudicating Authority dropped proceedings initiated in notice – On appeal filed by department, First Appellate Authority set aside order passed by Adjudicating Authority – Whether Appella... [Read more]

Central Excise - Rules 2(a) and 4(5)(a) of Cenvat Credit Rules, 2004 – Eligibility to Cenvat credit on 'Kink Bending Machine'– Appellant is engaged in manufacture of Trucks and Commercial Vehicles and their parts and accessories – Appellant had availed CENVAT credit on Kink Bending Machine without receipt of goods into factory premises – Department issued show cause notice to Appellant by proposing recovery of said credit – Adjudicating Authority dropped proceedings initiated in notice – On appeal filed by department, First Appellate Authority set aside order passed by Adjudicating Authority – Whether Appellant is eligible to avail credit on basis of invoice issued by KLT for Kink Bending Machine in terms of Rule 4(5)(a) of the Rules – HELD – It is not the case of Revenue that goods in question ‘Kink Bending Machine’ was ineligible capital goods per Rule 2(a) of the Rules. In terms of amended Rule 4(5)(a) of the Rules, an assessee can take cenvat credit on goods sent directly to job worker's premises without being brought to factory of assessee. Owing to size and weight of machines in question, they were not brought to Appellant’s factory premises. There is no dispute as to Appellant being owner of machines and also to fact that same were used exclusively for manufacture of chassis frames, hence, there may not be any issue as to Appellant’s eligibility for taking and retention of credit as per Rule 4(5)(a) of the Rules. Impugned Order-in-Appeal does not sustain and is set aside – The appeal is allowed [Read less]

Service Tax – Section 65(105) of Finance Act, 1994 – Demand of tax – Demand of Service Tax and also recovery of CENVAT Credit along with interest – Whether demand confirmed in impugned order against Appellant is sustainable – HELD – Main contention of Appellant is that show cause notice had not specified as to under which taxable category Service Tax is being demanded. Demand had been raised simply on basis of difference between Profit & Loss Accounts, Trial Balance and ST-3 Returns. It was necessary for Department to establish that alleged differential income pertained to rendering of taxable services falling ... [Read more]

Service Tax – Section 65(105) of Finance Act, 1994 – Demand of tax – Demand of Service Tax and also recovery of CENVAT Credit along with interest – Whether demand confirmed in impugned order against Appellant is sustainable – HELD – Main contention of Appellant is that show cause notice had not specified as to under which taxable category Service Tax is being demanded. Demand had been raised simply on basis of difference between Profit & Loss Accounts, Trial Balance and ST-3 Returns. It was necessary for Department to establish that alleged differential income pertained to rendering of taxable services falling under one of sub-clauses of Section 65(105) of the Act. Burden is cast upon the Department to prove that Service Tax is leviable under the charging provision, which the Department had failed to do in instant case. Demand confirmed in impugned order is set aside – Appellant is not contesting denial of credit since it had reversed CENVAT Credit from their CENVAT Credit account prior to utilization of same and much before passing of Order-in-Original. Disallowance of CENVAT Credit vide impugned order is upheld - Appeal disposed of [Read less]

Service Tax – Section 77(1)(a) of Finance Act, 1994 – Textile processing – Entitlement of exemption – Appellant is engaged in providing various taxable services – Department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Principal Commissioner confirmed demands proposed in show cause notice – Whether demand confirmed under category of Business Support Service is sustainable – HELD – The activity of processing of textiles undertaken by Appellant had been categorized as an activity liable to Service Tax under category of Business Support Service. Notifica... [Read more]

Service Tax – Section 77(1)(a) of Finance Act, 1994 – Textile processing – Entitlement of exemption – Appellant is engaged in providing various taxable services – Department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Principal Commissioner confirmed demands proposed in show cause notice – Whether demand confirmed under category of Business Support Service is sustainable – HELD – The activity of processing of textiles undertaken by Appellant had been categorized as an activity liable to Service Tax under category of Business Support Service. Notification No.14/2004-ST specifically exempts activity of textile processing from levy of Service Tax. Activity of textile processing undertaken by Appellant is not liable to Service Tax. Demand confirmed under category of Business Support Service is legally not sustainable and hence, it is set aside – The appeal is disposed ofrnrnIssue 2: Service Tax – Renting of immovable property – Tax liability – Whether Appellant is liable to pay Service Tax in respect of renting of immovable property and renting of machinery services – HELD – Appellant had not declared these services rendered by them specifically either in balance sheet or in Income Tax Returns filed by them. Appellant is liable to pay Service Tax in respect of rendering of these services. Appellant had questioned computation of their Service Tax liability in respect of renting of immovable property and renting of machinery services and have made various submissions to this extent. Considering these submissions, for purpose of re-quantification of Service Tax demand in respect of these services, matter is remanded to Adjudicating authority. rnrnIssue 3: Service Tax – Goods transport agency service – Demand of tax – Whether demand confirmed against Appellant in impugned order under category of ‘goods transport agency service’ is sustainable – HELD – Appellant had actually received CHA services from their service providers. Documentary evidence submitted by Appellant clearly indicates that services received by Appellant are from CHA and there is no evidence of receipt of goods transport agency services. Demand confirmed against Appellant in impugned order under category of ‘goods transport agency service’ is set aside.rnrnIssue 4: Service Tax – Imposition of penalty – Whether penalty imposed on Appellant under Section 77(1)(a) of the Act is sustainable – HELD – Section 77(1)(a) of the Act imposes a penalty on any person liable to pay service tax who fails to take required registration. As Appellant is liable to pay Service Tax on renting of immovable property and renting of machinery services and had not taken registration for said services, penalty imposed on Appellant under Section 77(1)(a) of the Act is uphold. [Read less]

GST – Payment of CGST+SGST instead of IGST payment, Levy of penalty for payment of tax under wrong head – Petitioner mistakenly deposited the tax amount that was to be paid under the IGST head, under the CGST and SGST heads – Levy of penalty for non-payment of tax under the IGST head instead of under CGST and SGST – HELD - There should be a mechanism to transfer the tax deposited in the wrong head to the correct head. The petitioner has paid the total tax amount, but in the wrong heads. The authorities are directed to consider the matter afresh, taking into account the tax deposited under the CGST and SGST heads, a... [Read more]

GST – Payment of CGST+SGST instead of IGST payment, Levy of penalty for payment of tax under wrong head – Petitioner mistakenly deposited the tax amount that was to be paid under the IGST head, under the CGST and SGST heads – Levy of penalty for non-payment of tax under the IGST head instead of under CGST and SGST – HELD - There should be a mechanism to transfer the tax deposited in the wrong head to the correct head. The petitioner has paid the total tax amount, but in the wrong heads. The authorities are directed to consider the matter afresh, taking into account the tax deposited under the CGST and SGST heads, and transfer the same to the IGST head - The impugned orders imposing liability on the petitioner for non-payment of IGST are quashed and set aside. The writ petition is disposed of [Read less]

Service Tax - Import of Business Support Services, Service Tax demand from Representative Office, Separate Person - Appellant is a 100% owned subsidiary of Indian entity and is engaged in basic and detailed engineering and project management. It has established a representative office in Saudi Arabia to undertake the execution of projects abroad, including contract implementation, tender participation, and liaison with local authorities. The representative office incurs various expenditures in operating and maintaining the office which are reimbursed by the appellant - Whether the appellant is liable to pay service tax und... [Read more]

Service Tax - Import of Business Support Services, Service Tax demand from Representative Office, Separate Person - Appellant is a 100% owned subsidiary of Indian entity and is engaged in basic and detailed engineering and project management. It has established a representative office in Saudi Arabia to undertake the execution of projects abroad, including contract implementation, tender participation, and liaison with local authorities. The representative office incurs various expenditures in operating and maintaining the office which are reimbursed by the appellant - Whether the appellant is liable to pay service tax under the Reverse Charge Mechanism on the expenses reimbursed to the foreign representative office, which is alleged to be an import of Business Support Services – HELD - The appellant and its overseas representative office are part of the same legal entity and are not two separate legal persons. In such an event, the overseas representative office cannot be treated as a distinct person for the purposes of taxing any transactions between the two. The transactions between the representative office and the appellant do not satisfy the pre-conditions for the levy of service tax, which requires the presence of two persons and the element of 'consideration' - This Tribunal in the case of Torrent Pharmaceuticals Ltd., held that the permanent establishment of a business person abroad cannot be treated as a separate person from the head office in India for the purpose of service tax. The transactions within the same company cannot be considered as a service, and therefore, no service tax can be levied on such transactions – Further, the expenditure incurred by the representative office is reimbursed by the appellant, and there is no agreed consideration charged by the representative office for carrying out their activities. No service tax can be levied on the transactions between the appellant and its representative office, as they are part of the same legal entity and the transactions do not involve the element of 'consideration' required for the levy of service tax – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Rules 14 and 15(5) of CENVAT Credit Rules, 2004 – Demand of credit – Imposition of penalty – Appellant is engaged in manufacture of PVC pipes – Appellant entered into an agreement with KSRTC for operation of courier services through buses belonging to KSRTC and paid an amount as license fee including service tax to agency and availed same as CENVAT credit, which appears to be ineligible – Department issued show cause notice proposing demand of said irregular CENVAT credit availed by Appellant – Adjudicating authority confirmed demand of credit and imposed equal amount of penalty under Rule 15... [Read more]

Central Excise – Rules 14 and 15(5) of CENVAT Credit Rules, 2004 – Demand of credit – Imposition of penalty – Appellant is engaged in manufacture of PVC pipes – Appellant entered into an agreement with KSRTC for operation of courier services through buses belonging to KSRTC and paid an amount as license fee including service tax to agency and availed same as CENVAT credit, which appears to be ineligible – Department issued show cause notice proposing demand of said irregular CENVAT credit availed by Appellant – Adjudicating authority confirmed demand of credit and imposed equal amount of penalty under Rule 15(5) of the Rules – Whether impugned order confirming demand of Cenvat credit is sustainable – HELD – As per evidence on record, Appellant had reversed CENVAT Credit before utilization and immediately on being pointed out by Revenue. Reversal of unutilized CENVAT credit amounts to not taking of credit. Since credit had been reversed before utilization, show cause notice could not have been issued. Issue of notice itself was invalid in terms of Rule 14 of the Rules. Since there was no intention to avail ineligible CENVAT Credit, penalty imposed under Rule 15(1) of the Rules was incorrect. Demand of cenvat credit already reversed before utilization and imposition of penalty is unsustainable. Impugned order to extent of confirmation of demand of Cenvat credit and imposition of penalty is set aside – The appeal is partly allowed [Read less]

Service Tax - Cenvat credit on construction services - Proceedings for recovery of wrongly availed Cenvat credit along with interest by invoking the extended period of limitation - Whether the respondent-assessee was required to be registered with the department before availing the Cenvat credit on input services, Cenvat credit on commercial construction – HELD - Obtaining registration is not necessary for claiming Cenvat credit or even for claiming refund of Cenvat credit under the Cenvat Credit Rules, 2004. This issue is no longer res integra and has been settled in favor of the assessee - The Cenvat credit availed by ... [Read more]

Service Tax - Cenvat credit on construction services - Proceedings for recovery of wrongly availed Cenvat credit along with interest by invoking the extended period of limitation - Whether the respondent-assessee was required to be registered with the department before availing the Cenvat credit on input services, Cenvat credit on commercial construction – HELD - Obtaining registration is not necessary for claiming Cenvat credit or even for claiming refund of Cenvat credit under the Cenvat Credit Rules, 2004. This issue is no longer res integra and has been settled in favor of the assessee - The Cenvat credit availed by the respondent on various input services used for setting up the premises of the hotel falls within the definition of "input service" as defined under Rule 2(l) of the Cenvat Credit Rules, 2004, prior to the amendment effective from 01.04.2011 - Cenvat credit cannot be denied on the input services used for setting up the premises. The respondent had availed Cenvat credit during the period of April 2011 to December 2011, which was after the amendment in the definition of "input service". The ld. Commissioner had clarified that this credit did not pertain to the construction service, which was excluded from the definition of "input service" w.e.f. 01.04.2011 - The impugned order is upheld and the appeal filed by the Revenue is dismissed [Read less]

Service Tax – Section 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Appellant is engaged in providing Works Contract Services, but had not paid any service tax – Department issued show cause notice proposing demand of Service Tax, to Appellant, by invoking extended period of limitation – Joint Commissioner confirmed demand proposed in show cause notice – Commissioner (Appeals) upheld order passed by Joint Commissioner – Whether demand confirmed by invoking extended period of limitation as per proviso to Section 73(1) of the Act is sustainable – HELD – Appellant... [Read more]

Service Tax – Section 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Appellant is engaged in providing Works Contract Services, but had not paid any service tax – Department issued show cause notice proposing demand of Service Tax, to Appellant, by invoking extended period of limitation – Joint Commissioner confirmed demand proposed in show cause notice – Commissioner (Appeals) upheld order passed by Joint Commissioner – Whether demand confirmed by invoking extended period of limitation as per proviso to Section 73(1) of the Act is sustainable – HELD – Appellant was engaged in providing taxable services under category of work contract services to various contractors, who were providing services to various government authorities, which have been held to be exempt from payment of service tax by adjudicating authority. Demand had been confirmed only on excess receipts over the value of contracts entered between Appellant. Appellant had claimed that excess receipt shown in 26AS towards provision of services was not in respect of any services provided by Appellant, but was towards supply of material. Appellant had also produced evidences to support its claim. As Appellant had entertained a bonafide belief that they were not required to pay any service tax in respect of services provided, there is no merits in confirmation of this demand by invoking extended period of limitation as per proviso to Section 73(1) of the Act. Order under challenge is set aside – the appeal is allowed [Read less]

Tamil Nadu General Sales Tax Act, 1959 - Dispute over tax rate on sale of car audio systems, Whether 12.5% as domestic product or 20% as imported goods - For the assessment year 2003-04, assessee had offered to tax the turnover from sales of car audio systems at the rate of 12.5% under Entry 14(vi)/Part D/First Schedule of the TNGST Act, 1959. However, the assessing authority revised the assessment proposing to levy 20% tax plus surcharge on the ground that the product sold under the 'Kenwood car audio' logo constitutes an imported product - Whether the car audio systems sold by the assessee should be taxed at the rate of ... [Read more]

Tamil Nadu General Sales Tax Act, 1959 - Dispute over tax rate on sale of car audio systems, Whether 12.5% as domestic product or 20% as imported goods - For the assessment year 2003-04, assessee had offered to tax the turnover from sales of car audio systems at the rate of 12.5% under Entry 14(vi)/Part D/First Schedule of the TNGST Act, 1959. However, the assessing authority revised the assessment proposing to levy 20% tax plus surcharge on the ground that the product sold under the 'Kenwood car audio' logo constitutes an imported product - Whether the car audio systems sold by the assessee should be taxed at the rate of 12.5% as a domestic product or 20% as an imported good - HELD - The assessee had entered into a license agreement with Kenwood Corporation, Japan to manufacture and assemble the car audio systems in India. While some key components were imported from Kenwood, the final product was an amalgamation of both imported and domestically sourced materials. The assessee is a manufacturing concern and the car audio systems had been cleared after remittance of excise duty. The parts imported by the assessee were distinct, commercially saleable goods in their own right, and did not by themselves constitute a complete car audio system as contemplated under the higher tax rate for imported goods. What was ultimately sold was a complete car audio system, which fell under the entry for domestic sound equipment attracting 12.5% tax - The order of the first appellate authority is confirmed answering the substantial questions of law in favour of the assessee and against the Revenue – The revision is allowed [Read less]

GST – Denial of Input Tax Credit for the financial year 2019-20 under sub-section (4) of Section 16 of the CGST Act, 2017 - Whether the petitioner is now entitled to the benefit of ITC under the newly notified sub-section (5) of Section 16 of the CGST Acts – HELD - The contention of the petitioner's counsel that the notification of sub-section (5) of Section 16 of the CGST/SGST Acts entitles the petitioner to the input tax credit that was earlier denied under sub-section (4) – The impugned order is set aside to the extent that it denied input tax credit to the petitioner under Section 16(4) and the competent authorit... [Read more]

GST – Denial of Input Tax Credit for the financial year 2019-20 under sub-section (4) of Section 16 of the CGST Act, 2017 - Whether the petitioner is now entitled to the benefit of ITC under the newly notified sub-section (5) of Section 16 of the CGST Acts – HELD - The contention of the petitioner's counsel that the notification of sub-section (5) of Section 16 of the CGST/SGST Acts entitles the petitioner to the input tax credit that was earlier denied under sub-section (4) – The impugned order is set aside to the extent that it denied input tax credit to the petitioner under Section 16(4) and the competent authority is directed to pass fresh orders, taking into account the provisions of Section 16(5) and after providing an opportunity of hearing to the petitioner - The writ petition is disposed of [Read less]

GST - Export of services by subsidiary company or Intermediary, Location of supply of services – Petitioner is a subsidiary to foreign entity provides information system products and services to customers based on software licenses of 'SAP'. The petitioner filed refund applications for unutilized input tax credit, claiming that the services provided to its parent company qualify as 'export of services' - The Assistant Commissioner initially sanctioned the refund, but the Principal Commissioner and the Joint Commissioner, CGST, on appeal, rejected the refund claim on the ground that the petitioner was acting as an agent/i... [Read more]

GST - Export of services by subsidiary company or Intermediary, Location of supply of services – Petitioner is a subsidiary to foreign entity provides information system products and services to customers based on software licenses of 'SAP'. The petitioner filed refund applications for unutilized input tax credit, claiming that the services provided to its parent company qualify as 'export of services' - The Assistant Commissioner initially sanctioned the refund, but the Principal Commissioner and the Joint Commissioner, CGST, on appeal, rejected the refund claim on the ground that the petitioner was acting as an agent/intermediary of its parent company - Whether the services provided by the petitioner to its parent company qualify as 'export of services' under the IGST Act, entitling the petitioner to a refund of unutilized input tax credit – HELD - Although the appellate authority had considered certain clauses of the service agreement between the petitioner and its parent company, in light of the decision in Sundyne Pumps and Compressors India Pvt. Ltd. v. Union of India and the applicability of the relevant circulars, the matter would require appropriate examination by the appellate authority on all the points urged on behalf of the petitioner - The Division Bench in Sundyne Pumps had examined the terms of the agreement and concluded that the petitioner therein was not acting as an agent of the parent company. Further, the Circulars issued by the CBIC clarified that transactions between sister/group companies or holding/subsidiary companies are not covered under the definition of 'intermediary' under the IGST Act - Considering the different clauses of the service agreement, the issues require a deeper scrutiny and examination by the appellate authority. The impugned order is set aside and the matter is remanded to the appellate authority for a de novo consideration – The petition is disposed of [Read less]

Service Tax - Short payment of service tax, Demand based on Income tax data - A show cause notice was issued to the appellant demanding service tax, along with interest, penalty, and late fee - Whether the demand of service tax can be raised on the basis of a third-party (Income Tax) data, which has been rectified by the appellant – HELD - The entire case against the appellant was made based on the differences observed in the figures in the ST-3 returns and the Form 26AS. However, the appellant produced the revised Form 26AS for the relevant period, which showed the details against the services provided as identical to t... [Read more]

Service Tax - Short payment of service tax, Demand based on Income tax data - A show cause notice was issued to the appellant demanding service tax, along with interest, penalty, and late fee - Whether the demand of service tax can be raised on the basis of a third-party (Income Tax) data, which has been rectified by the appellant – HELD - The entire case against the appellant was made based on the differences observed in the figures in the ST-3 returns and the Form 26AS. However, the appellant produced the revised Form 26AS for the relevant period, which showed the details against the services provided as identical to the figures declared in the ITR. The total value of receipts towards the provision of services during the period of 2016-17 was Rs. 26,11,508/-, and the service tax was required to be paid on this amount - The appellant is required to pay the differential amount along with the interest due on the same amount - The appellant had short paid the service tax by suppressing the correct value of the services provided. The intention to evade payment of tax by suppressing the value of services is evident - The late fee imposed upon the appellant for late/non-filing of the service tax return under Section 70 of the Finance Act, read with Rule 7 of the Service Tax Rules, 1994, and the penalty imposed under Rule 7 of the Service Tax Rules, 1994, read with Section 77(1)(c) of the Finance Act, 1994 are upheld - The impugned order modified and the appeal is disposed of [Read less]

Customs – Customs Brokers Licensing Regulations, 2018 – Regulation 10 – Revocation of customs broker license – Forfeiture of security deposit – Additional Commissioner sent an investigation report to office of Commissioner for taking action against Appellant for violation of provisions of the Regulations – After following due process of law, Commissioner revoked Customs Broker License of Appellant and forfeited its whole amount of security deposit and also imposed penalty on Appellant – Whether Commissioner has erred in holding that Appellant had violated provisions of Regulations 10(a), 10(d) and 10(n) of th... [Read more]

Customs – Customs Brokers Licensing Regulations, 2018 – Regulation 10 – Revocation of customs broker license – Forfeiture of security deposit – Additional Commissioner sent an investigation report to office of Commissioner for taking action against Appellant for violation of provisions of the Regulations – After following due process of law, Commissioner revoked Customs Broker License of Appellant and forfeited its whole amount of security deposit and also imposed penalty on Appellant – Whether Commissioner has erred in holding that Appellant had violated provisions of Regulations 10(a), 10(d) and 10(n) of the Regulations – HELD – Regulation 10(a) of the Regulations provides that Customs Broker shall obtain an authorization from person who employs him as a customs broker. In absence of any denial by importer that he had not issued authorization letter in favour of Appellant, it cannot be said that Appellant did not have authorization from importer as is required under Regulation 10(a) of the Regulations. Regulation 10(d) of the Regulations requires Customs Broker to advise his client to comply with provisions of the Act. Appellant had provided requisite information regarding compliance of provisions of the Act. Charge of contravention of Regulation 10(d) of the Regulations is not established. Since Appellant had clearly obtained requisite KYC documents, it cannot be said that Appellant had violated provisions of Regulation 10(n) of the Regulations. As findings of Commissioner on violation of each of Regulations cannot be sustained, impugned order passed by Commissioner deserves to be set aside – The appeal is allowed [Read less]

GST – Tamil Nadu AAAR - Eligibility of input tax credit on electrical works for factory expansion – Appellant aggrieved by the impugned AAR order holding that the ITC is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 as the electrical works constitute construction of an immovable property - Whether the input tax credit is eligible on the electrical works carried out for the expansion of the factory – HELD - For ITC to be eligible under Section 16(1) of the CGST Act, the goods or services should be used or intended to be used in the course or furtherance of business. However, Section 17(5)(c) and 1... [Read more]

GST – Tamil Nadu AAAR - Eligibility of input tax credit on electrical works for factory expansion – Appellant aggrieved by the impugned AAR order holding that the ITC is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 as the electrical works constitute construction of an immovable property - Whether the input tax credit is eligible on the electrical works carried out for the expansion of the factory – HELD - For ITC to be eligible under Section 16(1) of the CGST Act, the goods or services should be used or intended to be used in the course or furtherance of business. However, Section 17(5)(c) and 17(5)(d) of the CGST Act block the ITC on works contract services and goods/services received for construction of an immovable property, except for plant and machinery - The electrical installations like LT panels, bus ducts, electrical works, etc. do not qualify as 'apparatus, equipment or machinery' fixed to the earth. These installations, though movable in nature, are meant for the permanent beneficial enjoyment of the land and therefore constitute immovable property. Once the electrical installations are attached to the earth or fastened to anything attached to the earth, they become part of the immovable property, even if they can be detached and moved - Further, these installations do not have an independent existence and are tailor-made for the factory, and hence are not marketable. Therefore, the ITC on the electrical works contract is not eligible as it is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act - The ruling of the AAR is upheld and the appeal is dismissed [Read less]

GST – Tamil Nadu AAAR - Classification of Interactive Flat Panels Display – Appellant aggrieved by the impugned AAR order holding that Various models of ACER Interactive flat Panels with additional features are classifiable under 85285900 and liable to 28% GST – Whether the IFPDs supplied by the appellant should be classified under tariff heading 84714190 as 'Automatic Data Processing (ADP) machine' attracting a GST rate of 18%, or under tariff heading 85285900 as 'Monitors' attracting a GST rate of 28% - HELD - Though the IFPDs contain certain features of an ADP machine, the primary function of the product is for di... [Read more]

GST – Tamil Nadu AAAR - Classification of Interactive Flat Panels Display – Appellant aggrieved by the impugned AAR order holding that Various models of ACER Interactive flat Panels with additional features are classifiable under 85285900 and liable to 28% GST – Whether the IFPDs supplied by the appellant should be classified under tariff heading 84714190 as 'Automatic Data Processing (ADP) machine' attracting a GST rate of 18%, or under tariff heading 85285900 as 'Monitors' attracting a GST rate of 28% - HELD - Though the IFPDs contain certain features of an ADP machine, the primary function of the product is for display and viewing, and the other features are only ancillary in nature. The Chapter Notes 6(A) and 8 of Chapter 84 of the Customs Tariff, state that a machine incorporating features of an ADP machine but performing a specific function other than data processing should be classified according to its principal function or under the residual heading. The principal function of the IFPDs is for display and viewing, and hence, they are rightly classifiable under tariff heading 85285900 as 'Monitors' attracting a GST rate of 28% - Further, the Circular No. 12/2025-Customs dated 7th April, 2025, was intended to alleviate the confusion among trade and industry in classifying IFPDs under tariff heading 85285900. The various case laws and Customs Advance Ruling decisions cited by the appellant were pronounced before the issuance of the Notification and Circular by the CBIC on this issue, and hence, are not applicable in the present case - The ruling of the AAR is upheld and the appeal is dismissed [Read less]