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The Court strongly deprecate the practice of voluntarily offering monetary deposits to secure bail and later reneging on it. The sanctity of judicial process cannot be allowed to be compromised by parties playing "ducks and drakes" with the Court.

GST - Quashing of criminal complaint, Applicability of Criminal Procedure Code (CrPC) to CGST Act, 2017 - Petitioners filed a petition for quashing of a complaint filed against them under Sections 69 and 132 of the HPGST/CGST Act, 2017 - The complaint was filed by the complainant alleging that the petitioners, who are partners of M/s G.M. PowerTech, availed fraudulent input tax credit by declaring inward supplies from fictitious and non-existent firms and using fake invoices and vehicles for transporting the goods - Whether the provisions of the CrPC apply to the proceedings under the CGST Act – HELD - The Supreme Court ... [Read more]

GST - Quashing of criminal complaint, Applicability of Criminal Procedure Code (CrPC) to CGST Act, 2017 - Petitioners filed a petition for quashing of a complaint filed against them under Sections 69 and 132 of the HPGST/CGST Act, 2017 - The complaint was filed by the complainant alleging that the petitioners, who are partners of M/s G.M. PowerTech, availed fraudulent input tax credit by declaring inward supplies from fictitious and non-existent firms and using fake invoices and vehicles for transporting the goods - Whether the provisions of the CrPC apply to the proceedings under the CGST Act – HELD - The Supreme Court in Radhika Agarwal v. Union of India has held that the provisions of the CrPC apply to the proceedings under the GST Act to the extent that there is no contrary provision in the GST Act. The GST Act is not a complete code when it comes to the provisions of search, seizure, and arrest, and the provisions of the CrPC would equally apply unless expressly or impliedly excluded by the GST Act. Therefore, the submission that the CrPC does not apply to the GST Act is not correct - the provisions of the CrPC apply to the proceedings under the GST Act, and the investigation and filing of the complaint by the officials of the Department do not make the complaint liable to be quashed at this stage - the petition fails and the same is dismissed - Whether the investigation and filing of the complaint by the officials of the Department materially prejudiced the petitioners, and the continuation of the proceedings amounts to an abuse of the process of law – HELD - The fact that the investigation was conducted by the officials of the Department does not, by itself, vitiate the investigation or make it an abuse of process. The Supreme Court in Mukesh Singh v. State (Narcotic Branch of Delhi) has held that the question of bias or prejudice would depend on the facts and circumstances of the case. In the present case, when the officials visited the addresses mentioned in the invoices and found that no such entity existed, it was sufficient to infer that the invoices were fake, and the material shown to have been supplied could not have been supplied. The Court need not sift the evidence to determine its creditworthiness or value at the stage of quashing, as this is for the trial court to consider. Therefore, the mere fact that the investigation was conducted by the officials of the department does not make the complaint liable to be quashed. [Read less]

Customs - Classification and applicable rate of IGST on Lithium-ion batteries, Parts for manufacture of mobile phones - Customs Tariff Vs IGST Rate Notification - Appellants imported lithium-ion batteries for use in the manufacture of mobile phones, classifying them under Customs Tariff Item 8507 60 00 and discharging IGST at 12% under Serial No. 203 of Schedule II to the IGST Rate Notification - Department issued notices demanding IGST at 28% under Serial No. 139 of Schedule IV to the IGST Rate Notification up to 26.07.2018, and thereafter at 18% under Serial No. 376AA of Schedule III - Whether the lithium-ion batteries i... [Read more]

Customs - Classification and applicable rate of IGST on Lithium-ion batteries, Parts for manufacture of mobile phones - Customs Tariff Vs IGST Rate Notification - Appellants imported lithium-ion batteries for use in the manufacture of mobile phones, classifying them under Customs Tariff Item 8507 60 00 and discharging IGST at 12% under Serial No. 203 of Schedule II to the IGST Rate Notification - Department issued notices demanding IGST at 28% under Serial No. 139 of Schedule IV to the IGST Rate Notification up to 26.07.2018, and thereafter at 18% under Serial No. 376AA of Schedule III - Whether the lithium-ion batteries imported and used in the manufacture of mobile phones are chargeable to IGST at 12% under Serial No. 203 of Schedule II to the IGST Rate Notification, as claimed by the manufacturers, or at the higher rates claimed by the Department - HELD - The IGST Rate Notification is not completely aligned with the Customs Tariff, and the phrase "so far as may be" in Explanation (iv) to the IGST Rate Notification means that the rules for interpretation of the Customs Tariff can only be generally followed to the extent possible and cannot be applied rigidly. The Authority for Advance Ruling in the case of Epcos India Pvt. Ltd., held that lithium-ion batteries used in the manufacture of mobile phones would be covered under Serial No. 203 of Schedule II to the IGST Rate Notification. The IGST Rate Notification is a taxing notification and should be strictly construed and any ambiguity should be interpreted in favor of the taxpayer – Further, the words "for manufacture" in Serial No. 203 should be construed to mean "intended for manufacture", in line with the Supreme Court's decision in BPL Display Devices Ltd. vs. Commissioner of Central Excise - The lithium-ion batteries imported by the manufacturers for use in the manufacture of mobile phones are chargeable to IGST at 12% under Serial No. 203 of Schedule II to the IGST Rate Notification - the impugned orders are set aside and the appeals filed by manufacturer-importers are allowed [Read less]

Service Tax – Larger Bench - Online Information and Database Access or Retrieval (OIDAR) Services, Computer Reservation System (CRS) Companies - Non-payment of service tax on a reverse charge basis on payments made by the appellant to CRS companies - Whether the services provided by CRS companies to the appellant would be taxable under the category of OIDAR services on a Reverse Charge basis – HELD - The expression “providing data/information” in the context of OIDAR service would mean to supply such data/information which was previously not available to the service recipient. The ownership of data is relevant for ... [Read more]

Service Tax – Larger Bench - Online Information and Database Access or Retrieval (OIDAR) Services, Computer Reservation System (CRS) Companies - Non-payment of service tax on a reverse charge basis on payments made by the appellant to CRS companies - Whether the services provided by CRS companies to the appellant would be taxable under the category of OIDAR services on a Reverse Charge basis – HELD - The expression “providing data/information” in the context of OIDAR service would mean to supply such data/information which was previously not available to the service recipient. The ownership of data is relevant for deciding the taxability of OIDAR services - In the present case, the data or information belonged to the appellant and the CRS companies did not provide any data or information to the appellant. The purpose of the agreement between the appellant and the CRS companies was to enable seamless booking of the appellant's flight tickets through subscribed travel agents across the world and not to receive any data or information – The entire data base of the CRS Companies has been created by accessing information from the appellant and other various airlines. The appellant only intended to use the infrastructure set up by the CRS Companies to facilitate a better booking mechanism for travel agents. The CRS Companies were only obliged to ensure that the information of the appellant could reach the travel agents on real time basis. Thus, the transaction between the appellant and the CRS Companies cannot be treated as provision of OIDAR service by the CRS Companies to the appellant - The decisions in British Airways vs. Commissioner of Central Excise (Adjudication), Delhi and Jet Airways (I) Ltd. vs. Commissioner of Service Tax, Mumbai, which had held the services provided by CRS companies to be taxable under OIDAR services, did not consider the ratio of the decision in United Telecom and were, therefore, not applicable to the present case - The decision in United Telecom lays down the correct position of law, and the services provided by CRS companies to the appellant would not be taxable under the category of OIDAR services – The reference to Larger Bench is answered accordingly [Read less]

The documents issued on the GST portal, even without physical signature, are valid as they are generated from the login of the officer using digital signature. The impugned orders are signed orders as they were duly uploaded on the GST portal.

Service Tax – Cash refund of Cenvat Credit – While the High Court disposed of both the Writ Petition and the Appeal with liberty to Revenue to prefer appeal before the Supreme Court, it stayed the direction of CESTAT for cash refund – Validity of High Court order – HELD - Prima facie, the High Court could not have passed the order of stay after holding the Appeal to be not maintainable and after recording that the Writ Petition and the Appeal are disposed of as not pressed - Issue notice, in the meanwhile, impugned order of the High Court shall remain stayed – Ordered accordingly

Central Excise - Limitation, Extended period, Intent to evade duty - For the period involved in the case from 21.10.1986 to 28.11.1988, the show cause notice was issued on 11.12.1989. The appellant argued that the entire demand was barred by limitation, as at the relevant time, the normal period for issuing the show cause notice without invoking the extended period clause under Section 11A was six months - Whether the extended period can be invoked in the present case, considering the legal interpretations and the nature of the appellant being a public sector undertaking - HELD - The position stated by the appellant's coun... [Read more]

Central Excise - Limitation, Extended period, Intent to evade duty - For the period involved in the case from 21.10.1986 to 28.11.1988, the show cause notice was issued on 11.12.1989. The appellant argued that the entire demand was barred by limitation, as at the relevant time, the normal period for issuing the show cause notice without invoking the extended period clause under Section 11A was six months - Whether the extended period can be invoked in the present case, considering the legal interpretations and the nature of the appellant being a public sector undertaking - HELD - The position stated by the appellant's counsel is legally correct and has been scrutinized up to the level of the Supreme Court in the decisions of Padmini Products v. Collector of C. Ex. and Baidyanath Ayurved Bhavan Ltd. v. Collector of Central Excise, Allahabad - in the face of legal interpretation involved, negligence in not taking a license is not sufficient to invoke the extended period, even if the matter is decided in favor of the revenue on merits. There are shades of legal opinions on the issue and it could not be said categorically that the appellant had no reason to doubt the legal interpretation adopted by the Department. Considering the history of the litigation and the nature of the appellant being a public sector undertaking, the extended period cannot be invoked in the present case, despite the matter being decided in favor of the revenue on merits - The appeal is allowed on the ground of limitation [Read less]

Central Excise – Clearance of stationary engines – Payment of concessional rate of duty – Appellant is a 100% Export Oriented Unit (EOU) engaged in manufacture of Tractors, Engines and Parts thereof – Appellant is permitted to sell a portion of similar goods in Domestic Tariff Area (DTA) at concessional rate of duty in terms of Foreign Trade Policy 2009-2014 read with Notification No.23/2003-CE – Appellant has cleared stationary engines to DTA for use in construction equipment, water pumps etc. on payment of duty at concessional rate – Department issued notice proposing demand of differential duty short paid on... [Read more]

Central Excise – Clearance of stationary engines – Payment of concessional rate of duty – Appellant is a 100% Export Oriented Unit (EOU) engaged in manufacture of Tractors, Engines and Parts thereof – Appellant is permitted to sell a portion of similar goods in Domestic Tariff Area (DTA) at concessional rate of duty in terms of Foreign Trade Policy 2009-2014 read with Notification No.23/2003-CE – Appellant has cleared stationary engines to DTA for use in construction equipment, water pumps etc. on payment of duty at concessional rate – Department issued notice proposing demand of differential duty short paid on clearance of stationary engines – Adjudicating Authority confirmed demand proposed in show cause notice – Whether stationary engines cleared by Appellant to DTA are eligible for concessional rate of duty under Notification No.23/2003-CE – HELD – The expression “similar” does not mean “identical” but it means corresponding to resembling to in many respects; somewhat like; or having a general likeness. The Object and purpose of legislation which is subjected to process of interpretation or construction has necessarily to be taken into consideration – EOU scheme under FTDR Act is a part of beneficial legislation for facilitating imports and increasing exports and hence, it needs to be read in a liberal way in context of FTDR Act. One does not need to go deep into the matter and by a process of hairsplitting and semantic niceties deny the benefit of exemption notification – Impugned goods fall under definition of “similar goods” as per paragraph 6.8 of Foreign Trade Policy 2009-14 and are eligible for concessional rate of duty under Notification No.23/2003-CE – Impugned order passed is set aside and the appeal allowed [Read less]

Customs Brokers Licensing Regulations, 2013 – Regulations 11(d) and 18 – Imposition of penalty – Based on inputs received that goods imported under bills of entry were mis-declared in respect of weight, SIIB officers detained goods for detailed examination – On scrutiny of weighment slips, department found that importer had mis-declared the weight in respect of various consignments – After due process of law, Adjudicating Authority imposed penalty on Appellant/Customs Broker (CB) under Regulation 18 of the Regulations – Whether Appellant has committed a blame worthy act under the Regulations leading to impositi... [Read more]

Customs Brokers Licensing Regulations, 2013 – Regulations 11(d) and 18 – Imposition of penalty – Based on inputs received that goods imported under bills of entry were mis-declared in respect of weight, SIIB officers detained goods for detailed examination – On scrutiny of weighment slips, department found that importer had mis-declared the weight in respect of various consignments – After due process of law, Adjudicating Authority imposed penalty on Appellant/Customs Broker (CB) under Regulation 18 of the Regulations – Whether Appellant has committed a blame worthy act under the Regulations leading to imposition of penalty – HELD – Impugned order has neither revoked licence of Appellant nor ordered forfeiture of security deposit, but has only imposed a penalty under Regulation 18 of the Regulations. The Regulation 11(d) of the Regulations requires CB to advise his client to comply with provisions of the Act and in case of non-compliance, shall bring the matter to notice of Deputy Commissioner or Assistant Commissioner - If a CB’s actions show that he did not show due diligence or showed recklessness or misconduct in discharge of his duty or he acted negligently or omitted to fulfill prescribed conditions of the Regulations which are essential for discharge of his duty, he could be found to have committed a blame worthy act, punishable under the Regulations – Regulations requires Appellant to discharge its functions with diligence and efficiency and merely stating that he was not aware of mis-declaration would not suffice. Appellant had committed a blame worthy act under the Regulations leading to imposition of penalty – Impugned order passed by is sustained and the appeal is dismissed [Read less]

GST – Levy of penalty and interest without determining the tax demand, availment of disputed Input Tax Credit, Payment under protest - Whether the impugned order passed levying interest and penalty based on the petitioner's deposit of amount under protest, is valid – HELD - The manner in which the Commissioner acted in this case cannot be countenanced and leaves a lot to be desired - Once the petitioner had deposited the amount 'under protest', the same could not have been considered an admission of liability. The necessary corollary of deposit under protest is that the amount towards the alleged liability has been dep... [Read more]

GST – Levy of penalty and interest without determining the tax demand, availment of disputed Input Tax Credit, Payment under protest - Whether the impugned order passed levying interest and penalty based on the petitioner's deposit of amount under protest, is valid – HELD - The manner in which the Commissioner acted in this case cannot be countenanced and leaves a lot to be desired - Once the petitioner had deposited the amount 'under protest', the same could not have been considered an admission of liability. The necessary corollary of deposit under protest is that the amount towards the alleged liability has been deposited without admitting the liability and the petitioner has the inherent right to challenge the order – Further, the adjudicating authority completely erred and failed to take note that Input Tax Credit could not have been reversed merely on the basis of suspicion without carrying out any independent investigation coupled with other evidence – The Commissioner was required to conduct an impartial inquiry regarding the aforesaid amount and could not have based its decision solely on summary of show cause notice in Form DRC-01 - the order passed charging interest and levying penalty is set aside and the Respondents are directed to issue a fresh DRC-07 incorporating only the disputed amount of tax on account of the alleged wrong availment of ITC, so as to enable the petitioner to agitate the same by filing an appeal before the Appellate Authority – The writ petition is allowed [Read less]

GST – Late filing of GSTR-3B, Extension of time, COVID-19 pandemic - Denial of input tax credit due to the late filing of the GSTR-3B return for October 2020, which was filed on 19th February 2022 instead of the prescribed due date of 30th November 2021 - Whether the petitioner is entitled to the benefit of input tax credit despite the late filing of the GSTR-3B return – HELD - The Section 16(4) of the CGST Act, 2017 requires the return in respect of ITC to be filed within 30 days of the end of the financial year, i.e., by 30th November 2021 for the tax period of October 2020 - The COVID-19 pandemic was prevailing duri... [Read more]

GST – Late filing of GSTR-3B, Extension of time, COVID-19 pandemic - Denial of input tax credit due to the late filing of the GSTR-3B return for October 2020, which was filed on 19th February 2022 instead of the prescribed due date of 30th November 2021 - Whether the petitioner is entitled to the benefit of input tax credit despite the late filing of the GSTR-3B return – HELD - The Section 16(4) of the CGST Act, 2017 requires the return in respect of ITC to be filed within 30 days of the end of the financial year, i.e., by 30th November 2021 for the tax period of October 2020 - The COVID-19 pandemic was prevailing during the relevant time period and the Supreme Court had extended the period of limitation for filing appeals and proceedings. However, the legislature had subsequently inserted Section 16(5) in the CGST Act, which did not extend the time for filing returns under Section 39 for the year 2020-21 beyond 30th November 2021. Since the Constitutional validity of Section 16(5) is not in challenge, the Court is bound by the legislative intent as reflected in the provision - The petitioner is not entitled to the benefit of input tax credit due to the late filing of the GSTR-3B return - The writ petition fails and dismissed [Read less]

GST - Short/Non-payment of GST, Demand of interest under Section 50 of CGST Act, 2017 - Demand of interest for the financial year 2017-18 on account of GST short paid/not paid – HELD - The demand is unsustainable in light of the decision taken by the GST Council in its 31st meeting on 22.12.2018 and the subsequent amendment carried out in Section 50 of the CGST Act with retrospective effect – The ld. Standing Counsel fairly conceded that the impugned demand is untenable in view of the decision rendered in Utkal Automobile Private Limited case, which squarely applies to the present facts-situation - Accordingly, the ord... [Read more]

GST - Short/Non-payment of GST, Demand of interest under Section 50 of CGST Act, 2017 - Demand of interest for the financial year 2017-18 on account of GST short paid/not paid – HELD - The demand is unsustainable in light of the decision taken by the GST Council in its 31st meeting on 22.12.2018 and the subsequent amendment carried out in Section 50 of the CGST Act with retrospective effect – The ld. Standing Counsel fairly conceded that the impugned demand is untenable in view of the decision rendered in Utkal Automobile Private Limited case, which squarely applies to the present facts-situation - Accordingly, the order-in-original is set aside and the petition is allowed by remand [Read less]

Central Excise - National Calamity Contingent Duty (NCCD), Extended period of limitation, Bona fide belief – Demand of NCCD for the period from September 2009 to May 2011, on the ground that Notification No. 06/2006-CE dated 01.03.2006 exempted goods only from the duty of excise and not from the NCCD - Whether the NCCD is exempted when there is an exemption notification exempting the goods from Central Excise duty – HELD - As per the settled position, NCCD is not exempted merely because there is an exemption notification exempting goods from Central Excise duty. Therefore, as far as merit of the case is concerned, NCCD... [Read more]

Central Excise - National Calamity Contingent Duty (NCCD), Extended period of limitation, Bona fide belief – Demand of NCCD for the period from September 2009 to May 2011, on the ground that Notification No. 06/2006-CE dated 01.03.2006 exempted goods only from the duty of excise and not from the NCCD - Whether the NCCD is exempted when there is an exemption notification exempting the goods from Central Excise duty – HELD - As per the settled position, NCCD is not exempted merely because there is an exemption notification exempting goods from Central Excise duty. Therefore, as far as merit of the case is concerned, NCCD was not exempted merely because an exemption notification exempting goods from Central Excise duty was in existence - However, on the issue of limitation, during the relevant period, there were contradictory views and judgments on this issue, with one set of judgments holding that NCCD is covered within the ambit of exemption notifications, while another set of judgments held that NCCD is not exempted unless a specific notification for exemption is issued for NCCD. The Board had also issued certain clarifications due to the confusion in the field regarding the interpretation of whether NCCD is exempted or otherwise when there is only a notification exempting duty or Rule deferring payment of Central Excise duty under certain situations - The appellant had sufficient ground for interpretation and this cannot be held against them that they followed what they felt was suitable to them - Department did not have sufficient ground for invoking the extended period and since the entire demand is issued beyond the normal period, the demand cannot be sustained on the grounds of limitation - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Dropping of proceedings – Investigation carried out by department revealed that Respondent has entered into contracts with various parties for design, drawing and construction work, but has not paid service tax towards such turnkey projects – Department viewed that services rendered by Respondent would be classifiable under "Erection, Commissioning or Installation Services" and "Commercial or Industrial Construction Service" – Department issued show cause notice to Respondent demanding service tax under Section 73(1) of the Act – After following due process of law, Adjudicating authority has dropped... [Read more]

Service Tax – Dropping of proceedings – Investigation carried out by department revealed that Respondent has entered into contracts with various parties for design, drawing and construction work, but has not paid service tax towards such turnkey projects – Department viewed that services rendered by Respondent would be classifiable under "Erection, Commissioning or Installation Services" and "Commercial or Industrial Construction Service" – Department issued show cause notice to Respondent demanding service tax under Section 73(1) of the Act – After following due process of law, Adjudicating authority has dropped proceedings initiated under show cause notice – Whether impugned Order in Original is tenable in law – HELD – When an adjudicating authority has proceeded to adjudicate a matter by placing reliance on an Apex Court decision and other binding decisions of the higher judicial forums in strict adherence to judicial discipline, and has passed an order in his quasi-judicial capacity, which is fair, legal and proper, the same cannot be set aside in deference to the Department’s administrative instruction to keep the matter in call book – Further, only those contracts which are services simpliciter, not involving supply of materials, will be subject to levy of service tax under categories of Commercial or Industrial Construction Services and Erection, Commissioning and installation services – Turnkey projects executed by Respondent under composite contracts cannot be classified and levied to service tax under aforesaid categories – Classification sought to be applied and consequential demand raised under those categories in terms of show cause notice cannot legally sustain – There is no illegality or perversity in impugned order in original, which is clearly tenable on merits – Impugned order in original passed by Adjudicating authority is sustained and Revenue appeal is dismissed [Read less]

Service Tax - Insurance Auxiliary Services, Overriding Commission, Availment of CENVAT Credit - In the course of their business, the assessee would procure various services from insurance agents and pay them commission under the Reverse Charge Mechanism (RCM) for 'Insurance Auxiliary Services' (IAS). Apart from the IAS, the insurance agents charged the assessee separately for providing operating space, computers, database, and reimbursement of marketing expenses, which the assessee termed as 'Overriding Commission' (ORC). The assessee has availed CENVAT credit on the payments made to the insurance agents, which was sought ... [Read more]

Service Tax - Insurance Auxiliary Services, Overriding Commission, Availment of CENVAT Credit - In the course of their business, the assessee would procure various services from insurance agents and pay them commission under the Reverse Charge Mechanism (RCM) for 'Insurance Auxiliary Services' (IAS). Apart from the IAS, the insurance agents charged the assessee separately for providing operating space, computers, database, and reimbursement of marketing expenses, which the assessee termed as 'Overriding Commission' (ORC). The assessee has availed CENVAT credit on the payments made to the insurance agents, which was sought to be denied and recovered by the department along with interest and penalty - Whether the payments made by the assessee to the insurance agents for services such as providing operating space, computers, database, and reimbursement of marketing expenses, termed as 'Overriding Commission' (ORC), are liable to service tax under the category of 'Insurance Auxiliary Services' (IAS) under the Reverse Charge Mechanism - HELD - The services provided by the insurance agents, as per the referral agreement, are in relation to the general insurance business of the assessee and should be classified as 'Insurance Auxiliary Services' under RCM and not as 'Business Auxiliary Services'. The payments made by the assessee to the agents were in the nature of commission or other remuneration for soliciting or procuring insurance business, and not for the provision of other services such as operating space, computers, or marketing expenses - the assessee's act of availing CENVAT credit on the basis of self-generated invoices, instead of invoices issued by the service providers, was in violation of the CENVAT Credit Rules, 2004, and the credit was rightly denied by the Department – The demand for service tax under RCM on the 'Overriding Commission' paid by the assessee to the insurance agents and the denial of CENVAT credit on the basis of self-generated invoices are upheld – The appeal is disposed of - Whether the assessee's act of availing CENVAT credit on the basis of self-generated invoices was in violation of the CENVAT Credit Rules, 2004 - HELD - The assessee's act of availing CENVAT credit on the basis of self-generated invoices, instead of invoices issued by the service providers, was in violation of the CENVAT Credit Rules, 2004. The statutory provisions require the recipient of the service to satisfy the proper officer regarding the admissibility of the credit, as per the proviso to Rule 9(2) of the CENVAT Credit Rules, 2004. The principles laid down by the Supreme Court in the case of The State of Karnataka Vs M/s Ecom Gill Coffee Trading Private Limited, is that the burden of proving the correctness of the CENVAT credit claimed lies on the output service provider, and mere production of invoices and payment by cheque is not sufficient to discharge this burden - Denial of CENVAT credit on the basis of self-generated invoices by the assessee is upheld [Read less]

Customs – Import of “Latex Rubber Surgical Gloves” – Denial of duty concession – Appellants have imported Latex Rubber Surgical Gloves from Sri Lanka by classifying same under Customs Tariff Item 4015 1200 of First Schedule to the Act and claiming concessional duty under List-5 of Notification No.26/2000 – Original authority rejected exemption benefit claimed by Appellants – Commissioner (Appeals) rejected appeals filed by Appellants by upholding original orders – Whether denial of concessional basic customs duty under Notification No.26/2000- Customs read with Notification No.19/2000-Customs in respect of ... [Read more]

Customs – Import of “Latex Rubber Surgical Gloves” – Denial of duty concession – Appellants have imported Latex Rubber Surgical Gloves from Sri Lanka by classifying same under Customs Tariff Item 4015 1200 of First Schedule to the Act and claiming concessional duty under List-5 of Notification No.26/2000 – Original authority rejected exemption benefit claimed by Appellants – Commissioner (Appeals) rejected appeals filed by Appellants by upholding original orders – Whether denial of concessional basic customs duty under Notification No.26/2000- Customs read with Notification No.19/2000-Customs in respect of impugned goods covered by disputed imports, is legally sustainable – HELD – There is no dispute with respect to classification of impugned goods, scope of coverage of impugned goods under NotificationNo.26/2000-Customs enabling Appellants eligible to claim customs duty exemption – Impugned goods are covered under List-5 of Notification No.26/2000 and are eligible for 50% applied rate of duty – Dispute lies in narrow compass of examining either procedure prescribed under Notification No.19/2000-Customs have been fulfilled with respect to ‘Country of Origin’ (COO) certificate – Only objection raised by department is that COO certificate does not have separate indication of details of third party invoicing and therefore, notification benefit cannot be extended – There is sufficient evidence to state that impugned goods are wholly obtained from Sri Lanka – There is no specific requirement for indicating third party invoicing details in COO certificate, in terms of legal provisions governing procedure for grant of India-Sri Lanka Free Trade Agreement (ISFTA) concession – Conclusion arrived at by Commissioner (Appeals) for denying ISFTA duty concession is not supported by any legal basis and therefore on this ground, impugned order is set aside – Impugned order is set aside and appeal is allowed [Read less]

Central Excise - CENVAT Credit, Manufacture, Production Facility - Appellant supplied "Wire Insulated Assembly" to M/s. Godrej Consumer Products Limited, which was used in the manufacture of Mosquito Repellent Device - Department conducted a search at the appellant's premises and alleged that the appellant had wrongly availed CENVAT credit on ineligible invoices in the absence of manufacturing activity - HELD - The Department has not totally denied the existence of manufacturing plant/facilities of the appellant, and without any adverse finding on the manufacturing activity, the Department cannot simply assert that there w... [Read more]

Central Excise - CENVAT Credit, Manufacture, Production Facility - Appellant supplied "Wire Insulated Assembly" to M/s. Godrej Consumer Products Limited, which was used in the manufacture of Mosquito Repellent Device - Department conducted a search at the appellant's premises and alleged that the appellant had wrongly availed CENVAT credit on ineligible invoices in the absence of manufacturing activity - HELD - The Department has not totally denied the existence of manufacturing plant/facilities of the appellant, and without any adverse finding on the manufacturing activity, the Department cannot simply assert that there was no manufacturing activity at all - The presence of various raw materials, work-in-progress, semi-finished goods, and machinery were not properly considered by the Adjudicating Authority. The Department failed to correlate the volume of finished products cleared by the appellant with the required raw materials as per the Bill of Materials - Further, there was no seizure of any allegedly diverted material during transportation or at the alleged destinations. Considering these factors, the allegation of the Department stands disproved - the case is remanded back to the Adjudicating Authority to consider all the relevant claims of the appellant supported by documentary evidence and to pass a de novo speaking order - Appeals stand disposed of [Read less]

Customs – Section 111(b) of Customs Act, 1962 – Seizure of gold bars – Absolute confiscation – Sustainability – Officers of Directorate of Revenue Intelligence (DRI) intercepted Appellant and recovered gold bars and currencies from him – On completion of enquiry, department issued show cause notice to Appellant for absolute confiscation of seized gold along with currencies – Adjudicating authority ordered for absolute confiscation of gold in question under Section 111(b) of the Act along with currencies and vehicle in question – Whether absolute confiscation of gold in question is sustainable – HELD – I... [Read more]

Customs – Section 111(b) of Customs Act, 1962 – Seizure of gold bars – Absolute confiscation – Sustainability – Officers of Directorate of Revenue Intelligence (DRI) intercepted Appellant and recovered gold bars and currencies from him – On completion of enquiry, department issued show cause notice to Appellant for absolute confiscation of seized gold along with currencies – Adjudicating authority ordered for absolute confiscation of gold in question under Section 111(b) of the Act along with currencies and vehicle in question – Whether absolute confiscation of gold in question is sustainable – HELD – It is an admitted fact that Appellant was engaged in sale and purchase of jewellery – Allegation of Revenue is that Appellant has brought gold from Myanmar, which is a smuggled one – It is a fact on record that gold has been seized in town and not at any international border/port and there is no foreign marking on gold in question – Appellant has produced evidence of procurement of gold in question by way of an Affidavit executed by mother of Appellant – Appellant has explained the source of procurement of gold in question, which has been inherited from Appellant’s mother, who in turn has given said gold to Appellant after converting her jewellery into gold – Confiscation of gold under presumption of Customs Officer that same was smuggled one, was set aside – Appeal allowed - Confiscation of currencies – Whether currencies seized during course of investigation are liable for confiscation – HELD – Foreign currency recovered from possession of Appellant has been seized on allegation that same was smuggled into India – For said foreign currency, Appellant has explained the source of procurement – Mere possession of foreign currency cannot lead the Department to allege that said foreign currency was smuggled into India by Appellant – Foreign currency seized during course of investigation is not liable for confiscation – Indian currency recovered during course of investigation has not been proved by Revenue to be sale proceeds of smuggled goods – Consequently, Indian currency recovered during course of investigation is also not liable for confiscation – Moreover, vehicle seized during course of investigation is also not liable for confiscation, as same was not involved in any activity of smuggling by Appellant – Impugned order passed by Adjudicating authority set aside. [Read less]

GST - Opportunity of hearing, Predetermined mind - Petitioner submitted that the proper officer had already made up his mind and afforded the petitioner an opportunity of personal hearing along with the show-cause notice indicates a predetermined mind - Petitioner case that the proper officer should have awaited the reply to the show-cause notice before affording the opportunity of personal hearing - Whether the proper officer's action of affording the opportunity of personal hearing along with the show-cause notice indicates a predetermined mind and is in violation of Section 75(4) of the CGST Act, 2017 – HELD - The mer... [Read more]

GST - Opportunity of hearing, Predetermined mind - Petitioner submitted that the proper officer had already made up his mind and afforded the petitioner an opportunity of personal hearing along with the show-cause notice indicates a predetermined mind - Petitioner case that the proper officer should have awaited the reply to the show-cause notice before affording the opportunity of personal hearing - Whether the proper officer's action of affording the opportunity of personal hearing along with the show-cause notice indicates a predetermined mind and is in violation of Section 75(4) of the CGST Act, 2017 – HELD - The mere fact that the proper officer afforded the opportunity of personal hearing along with the SCN does not indicate a predetermined mind. The proper officer had duly afforded the petitioner an opportunity to respond to the show-cause notice well before the opportunity of personal hearing was afforded - The word "contemplate" as used in Section 75(4) of the Act does not mean that the proper officer had made up its mind to pass an adverse order against the petitioner. The dictionary meaning of the word "contemplate" means "to view or consider with continued attention; to regard thoughtfully; to have in view as contingent or probable as an end or intention," and does not imply that the proper officer had made up its mind - There was no irregularity on the part of the proper officer in providing the petitioner with an opportunity of hearing by notifying the same along with the show-cause notice, especially when the opportunity of hearing was afforded subsequent to the date of furnishing the response to the SCN - the writ petition is dismissed [Read less]

Service Tax – Valuation of Franchisee services, Supply of Study Material - Appellant is providing Coaching and Training in the field of Accounting and Book keeping using computer facilities - Whether the value of the study material provided by the appellant should be included in the valuation of the Franchisee services for the purpose of levying Service Tax - HELD - The sale of study material by the appellant is not a service, but a sale of goods, and hence the value of the study material cannot be included in the valuation of the Franchisee services for the purpose of levying Service Tax - the study material is sold by ... [Read more]

Service Tax – Valuation of Franchisee services, Supply of Study Material - Appellant is providing Coaching and Training in the field of Accounting and Book keeping using computer facilities - Whether the value of the study material provided by the appellant should be included in the valuation of the Franchisee services for the purpose of levying Service Tax - HELD - The sale of study material by the appellant is not a service, but a sale of goods, and hence the value of the study material cannot be included in the valuation of the Franchisee services for the purpose of levying Service Tax - the study material is sold by the appellant and not provided as part of the coaching and training service, and therefore, the value of the study material cannot be included in the value of service Tax - the demand along with interest and penalty thereon relating to the inclusion of the value of the study material in the valuation of the Franchisee services is set aside – The appeal is allowed - Whether the demand for the period 10/09/2004 to 07/06/2005 pertaining to the short payment or arrear in payment of tax on Course Fees is time-barred - HELD - During the period 10/09/2004 to 07/06/2005, there were interpretation difficulties as to whether the appellant's service would fall under the category of "Computer Training Institute" or under "Vocational Training". The appellant had a bonafide belief that no Service Tax was payable during this period and the Show Cause Notice did not contain any specific evidence of suppression by the appellant to invoke the extended period of limitation. Therefore, the Tribunal held that the demand for the period 10/09/2004 to 07/06/2005 is also hit by the time-bar. [Read less]

Customs – Sections 28(4) and 138C of Customs Act, 1962 – Enhancement of assessable value – Demand of differential duty – Appellants had imported varieties of bags from China – Directorate of Revenue Intelligence (DRI) had developed an intelligence that Appellants have resorted to undervaluation of imported goods with an intention to evade customs duty – After following due process of law, Adjudicating authority has rejected declared assessable value and re-determined same and confirmed demand of differential duty under Section 28(4) of the Act – Whether demand of differential duty on imported goods, confiscat... [Read more]

Customs – Sections 28(4) and 138C of Customs Act, 1962 – Enhancement of assessable value – Demand of differential duty – Appellants had imported varieties of bags from China – Directorate of Revenue Intelligence (DRI) had developed an intelligence that Appellants have resorted to undervaluation of imported goods with an intention to evade customs duty – After following due process of law, Adjudicating authority has rejected declared assessable value and re-determined same and confirmed demand of differential duty under Section 28(4) of the Act – Whether demand of differential duty on imported goods, confiscation of goods and imposition of penalty, is legally sustainable – HELD – Adjudicating authority had confirmed demand based on statements of partners of Appellant company, without considering the vital facts about value of goods declared before jurisdictional customs authorities. Statements have been retracted by concerned persons at first available opportunity and thus, these cannot form basis for confirmation of demand of duty – Alleged higher value invoices and other evidential documents were taken by way of computer printouts during search of premises of Appellant by DRI. Since legal requirements of Section 138C of the Act have not been complied, said computer printouts are not admissible as evidence under Section 138C of the Act – Confirmation of differential duty, confiscation of impugned goods and imposition of penalty on Appellants, by Commissioner vide impugned order does not stand the legal scrutiny – Impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Refund of Excise Duty, SFIS Notification, Furnishing of Installation Certificate - Appellant is engaged in the manufacturing of ‘Reach Stacker' falling under Chapter sub-heading 84264100 of the Central Excise Tariff Act, 1985 – Appellant cleared consignment under the Served From India Scheme (SFIS) and paid the excise duty on the invoices by mistake, even though the duty amount was initially debited while clearing the goods under the SFIS. The appellant filed a refund claim which was rejected by the authorities on the ground that the appellant had not complied with the condition of Notification No.34/2... [Read more]

Central Excise - Refund of Excise Duty, SFIS Notification, Furnishing of Installation Certificate - Appellant is engaged in the manufacturing of ‘Reach Stacker' falling under Chapter sub-heading 84264100 of the Central Excise Tariff Act, 1985 – Appellant cleared consignment under the Served From India Scheme (SFIS) and paid the excise duty on the invoices by mistake, even though the duty amount was initially debited while clearing the goods under the SFIS. The appellant filed a refund claim which was rejected by the authorities on the ground that the appellant had not complied with the condition of Notification No.34/2006-CE dated 14.06.2006 regarding the submission of the installation certificate issued by the jurisdictional Officer - Whether the appellant is entitled to the refund of the excise duty paid inadvertently on the goods cleared under the SFIS – HELD - The Notification No. 34/2006-CE dated 14.06.2006 allows the submission of the installation certificate from either the jurisdictional Deputy Commissioner/Assistant Commissioner of Central Excise or an independent Chartered Engineer. In the present case, the appellant had initially submitted the Chartered Engineer's certificate within the stipulated period, which was not accepted by the Department, and they insisted on the certificate from the jurisdictional officers. The appellant subsequently submitted the certificate from the jurisdictional officers, which was delayed by more than 6 months. The rejection of the refund claim on the ground of the delayed submission of the installation certificate is not justified, as the Notification allows the submission of the certificate from a Chartered Engineer also - Further, it is not disputed that the goods cleared by the appellant had reached the factory premises of the consignee and a re-warehousing certificate has been issued. In the event of any discrepancy or non-use of the capital goods in accordance with the condition, the consignee is required to discharge the duty liability under Rule 20 of the Central Excise Rules, 2001 – the impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Demand of tax invoking of extended period of limitation – Appellants have been providing services of Cable Operator and Multi System Operator’s Service – Department issued show cause notice to Appellant proposing to demand Service Tax by invoking extended period of limitation – Commissioner confirmed demand of service tax – Whether Commissioner is justified in invoking extended period of limitation as provided under Section 73 of the Act – HELD - There is no dispute as regards chargeability of service on service provided by Appellant – Appellant, in spite of several summons, have not provided ... [Read more]

Service Tax – Demand of tax invoking of extended period of limitation – Appellants have been providing services of Cable Operator and Multi System Operator’s Service – Department issued show cause notice to Appellant proposing to demand Service Tax by invoking extended period of limitation – Commissioner confirmed demand of service tax – Whether Commissioner is justified in invoking extended period of limitation as provided under Section 73 of the Act – HELD - There is no dispute as regards chargeability of service on service provided by Appellant – Appellant, in spite of several summons, have not provided complete and true details/information – Appellant have failed to disclose their correct income/gross value – Department has calculated tax liability based on number of connections subscribed – Rate charged has been taken on basis of base rate per connection in terms of agreement between Appellant and channel providers – No cogent or sufficient documents have been produced in course of investigation nor before this Tribunal – It is clear from above mentioned facts that Appellant purposefully and intentionally suppressed the facts and evaded payment of service tax – In these circumstances, Commissioner rightly invoked extended period as provided under Section 73 of the Act – Appeal is dismissed [Read less]

Customs – Import of polyester knitted fabric – Redetermination of value – Demand of differential duty – Appellant/importer filed bills of entry for import of polyester knitted fabric classifying under CTH 60053200 – After detailed examination, DRI found that Appellant had mis-declared the description and grossly under invoiced the goods to evade payment of appropriate customs duties – After due process of law, Adjudicating Authority rejected description, classification of goods and reclassified same as viscose knitted fabrics and redetermined value of goods and demanded differential duty – Commissioner (Appea... [Read more]

Customs – Import of polyester knitted fabric – Redetermination of value – Demand of differential duty – Appellant/importer filed bills of entry for import of polyester knitted fabric classifying under CTH 60053200 – After detailed examination, DRI found that Appellant had mis-declared the description and grossly under invoiced the goods to evade payment of appropriate customs duties – After due process of law, Adjudicating Authority rejected description, classification of goods and reclassified same as viscose knitted fabrics and redetermined value of goods and demanded differential duty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether impugned order passed by Commissioner (Appeals) is sustainable – HELD – It is seen from facts of case that description and value of goods were prima facie mis-stated as per test report and contemporaneous imports cited in show cause notice. Revenue discharged the onus of proof and shifted it back to Appellant – Appellant in his support has shifted the onus by stating to have submitted evidence purportedly showing that similar/identical goods were allowed clearance by accepting declared value during relevant period. Appellant’s grievance is that this evidence was not considered by lower authorities – It was the duty of original authority to examine this evidence and to accept same or make out a case contrary to what has been stated. Original authority could not have concluded existence of fact contrary to evidence put forward by Appellant without specifically disproving the material before him – Commissioner (Appeals) has failed to take plea of Appellant into consideration while deciding appeal, hence, impugned order is defective and merits to be set aside – Non-consideration of evidence submitted by Appellant in Order-in-Original is a curable defect and hence, matter merits to be remanded back to original authority for examining all evidences submitted by Appellant afresh before coming to a conclusion in the matter – Impugned order passed by Commissioner (Appeals) set aside – Matter remanded back to Original authority for denovo adjudication – Appeal is disposed of [Read less]

Customs – Jurisdiction of Customs authorities, AIFTA, Customs Notification No. 46/2011, Regional Value Content (RVC), Certificate of Origin (COO) - Demand-cum-notices alleged that the petitioners had secured benefits under Customs Exemption Notification No. 46/2011 by misrepresenting that the Regional Value Content (RVC) of the imported Tin Ingots from Malaysia was more than 35% when it was not. The petitioners contended that the ASEAN-India Free Trade Agreement (AIFTA) dated August 30, 2009 governed the subject transactions, and therefore, the initiation of any adjudication proceedings under the Customs Act without obse... [Read more]

Customs – Jurisdiction of Customs authorities, AIFTA, Customs Notification No. 46/2011, Regional Value Content (RVC), Certificate of Origin (COO) - Demand-cum-notices alleged that the petitioners had secured benefits under Customs Exemption Notification No. 46/2011 by misrepresenting that the Regional Value Content (RVC) of the imported Tin Ingots from Malaysia was more than 35% when it was not. The petitioners contended that the ASEAN-India Free Trade Agreement (AIFTA) dated August 30, 2009 governed the subject transactions, and therefore, the initiation of any adjudication proceedings under the Customs Act without observing the Dispute Resolution Mechanism prescribed in Article 24 of the AIFTA was without jurisdiction - Whether the Customs authorities had the jurisdiction to issue SCNs without first resorting to the dispute resolution mechanism under Article 24 of the AIFTA – HELD - The petitioners' contention about the enforceability of Article 24 of AIFTA, even though the petitioners were unable to show any statute or rules by which this treaty provision had been transformed into municipal law, is untenable. Unless a treaty provision is incorporated or transformed into municipal law, it cannot be directly enforced before a domestic Court. The Customs Tariff (DOGPTA) Rules, 2009, enacted to give effect to the AIFTA provisions, did not contain any reference to Article 24, and thus, the provisions of Article 24 could not be said to have formed part of the domestic or municipal laws - The Gujarat High Court in the Trafigura case had already addressed the issue of the invocability of Article 24 of AIFTA and had rejected the identical contention. The Court found no reason to adopt a view different from the one taken by the Gujarat High Court - The Section 28 of the Customs Act confers ample powers upon the Customs authorities to investigate and adjudicate upon violations due to misrepresentation, suppression, or fraud. Based on the material collected by the Customs authorities, the issuance of the show cause notices did not suffer from any legal or jurisdictional infirmity and the provisions of Article 24 of AIFTA did not deprive the Customs authorities of their powers or jurisdiction to issue such show cause notices - the jurisdiction of the Customs authorities to issue the impugned show cause notices is upheld – The writ petitions are dismissed [Read less]

Customs – Regulation 17(4) of Customs Brokers Licensing Regulations, 2018 – Revocation of license – Forfeiture of security deposit – DRI had intercepted export consignment of red sanders, which was being attempted to be exported by way of mis-declaring same as ‘industrial pipes’ – Department found that Appellant/Customs Broker (CB) has involved in conspiracy of illegal smuggling – After due process, Adjudicating authority revoked CB license of Appellant and ordered for forfeiture of security deposit apart from imposing penalties on Appellant – Whether Adjudicating authority has complied with procedure pre... [Read more]

Customs – Regulation 17(4) of Customs Brokers Licensing Regulations, 2018 – Revocation of license – Forfeiture of security deposit – DRI had intercepted export consignment of red sanders, which was being attempted to be exported by way of mis-declaring same as ‘industrial pipes’ – Department found that Appellant/Customs Broker (CB) has involved in conspiracy of illegal smuggling – After due process, Adjudicating authority revoked CB license of Appellant and ordered for forfeiture of security deposit apart from imposing penalties on Appellant – Whether Adjudicating authority has complied with procedure prescribed by Regulation 17(4) of the Regulations – HELD – Regulation 17(4) of the Regulations provided that Customs Broker shall be entitled to cross-examine persons examined in support of grounds forming basis of proceedings, and where Deputy Commissioner or Assistant Commissioner declines permission to examine any person on ground that his evidence is not relevant, he shall record his reasons in writing for doing so – Show cause notice was issued within prescribed period, but department has not approved for cross-examination and reason given by Commissioner is not reasonable and sustainable – There was a clear violation of principles of natural justice – Impugned order is contrary to procedure prescribed by Regulation 17(4) of the Regulations – Matter remanded to Adjudicating Authority to decide afresh after giving proper opportunity of cross-examination to both parties – Appeals disposed of [Read less]

GST - Rule 22 of the CGST Rules, 2017, Cancellation of GST registration, Non-supply of reason for cancellation, Invalid Show Cause Notice - Petitioner argued that the Show Cause notice did not comply with the statutory requirements under Rule 22 of the CGST Rules, 2017 – HELD - As per Rule 22 of the CGST Rules, the authority is obligated to issue a Show Cause Notice granting a time of seven working days to the taxpayer to submit a reply. Additionally, the prescribed Form (FORM GST REG-17) for the show cause notice requires the authority to provide the specific reasons for the proposed cancellation of registration - In th... [Read more]

GST - Rule 22 of the CGST Rules, 2017, Cancellation of GST registration, Non-supply of reason for cancellation, Invalid Show Cause Notice - Petitioner argued that the Show Cause notice did not comply with the statutory requirements under Rule 22 of the CGST Rules, 2017 – HELD - As per Rule 22 of the CGST Rules, the authority is obligated to issue a Show Cause Notice granting a time of seven working days to the taxpayer to submit a reply. Additionally, the prescribed Form (FORM GST REG-17) for the show cause notice requires the authority to provide the specific reasons for the proposed cancellation of registration - In the present case, the SCN did not comply with these statutory requirements. Firstly, the notice did not mention the specific provision of the GST Act or Rules that the petitioner had allegedly violated. Secondly, the order of cancellation was passed before the expiry of the seven-day period granted to the petitioner to submit a reply. Therefore, the SCN could not be treated as a valid notice issued in compliance with the statutory stipulations contained in Rule 22 of the CGST Rules. Accordingly, order of cancellation of the petitioner's GST registration is quashed. The Respondent would be at liberty to initiate fresh proceedings for cancellation of the registration, provided a proper notice is issued to the petitioner, specifying the reasons and granting the statutory time limit for submitting a reply – The petition is disposed of [Read less]

Central Excise – Demand of duty – Confiscation of seized goods – On ground that Appellant was manufacturing Prefabricated Structure falling under tariff item 94060091 without obtaining CE Registration and clearing same without payment of Excise Duty, Revenue officials visited their unit and seized stocks of various items – Department issued show cause notice demanding Excise Duty by invoking extended period provisions – After due process, Adjudicating authority confirmed demand along with interest and also confiscated seized goods – Whether Department has brought any evidence to effect that Appellant has manufa... [Read more]

Central Excise – Demand of duty – Confiscation of seized goods – On ground that Appellant was manufacturing Prefabricated Structure falling under tariff item 94060091 without obtaining CE Registration and clearing same without payment of Excise Duty, Revenue officials visited their unit and seized stocks of various items – Department issued show cause notice demanding Excise Duty by invoking extended period provisions – After due process, Adjudicating authority confirmed demand along with interest and also confiscated seized goods – Whether Department has brought any evidence to effect that Appellant has manufactured and cleared pre-fabricated building in CKD/SKD condition – HELD – In normal course, demand should have been raised based on value of Pre-fabricated Structures manufactured by Appellant plus value of other items supplied by Appellant by purchasing same from vendors – Department has directly added turnover of other related parties to clearance value of Appellant to quantify the demand. The SCN does not explain as to how Appellant was the sole beneficiary of contracts executed independently by some of related firms in question – Quantified demand based on addition of turnover of other entities with that of Appellant is illegal – Appellant has limited machineries to carry out basic work on iron and steel items – Appellant do not have facility to manufacture and supply other items specified under contract issued by Army – Appellant has brought in evidence to effect that they have facility to only fabricate structures – Pre-fabricated building came into existence at site when Army erected the same at site where Appellant have no role to play – Department has not brought any evidence to effect that Appellant has manufactured and cleared pre-fabricated building/shed in CKD/SKD condition – Goods in question which happen to be inputs and semi-finished goods cannot be seized, since they have not even reached finished goods – Since Revenue has not made out any case of suppression against Appellant, confirmed demand in respect of extended period is set aside on account of time bar – Impugned order is set aside and the appeal is allowed [Read less]

Customs – Import of fabric – Denial of benefit of exemption – Demand of duty – Appellant imported fabric for manufacture and export of garments towards fulfillment of export obligation – Based on evidences recovered, department issued show-cause notice to Appellant demanding duty on differential quantity of fabrics found not to have been consumed in manufacture of export goods – Commissioner denied benefit of exemption Notification No.51/2000-Cus and confirmed demand of duty – Whether Appellant had fulfilled export obligation in respect of 10 advance licenses issued under Customs Notification No.51/2000-Cus �... [Read more]

Customs – Import of fabric – Denial of benefit of exemption – Demand of duty – Appellant imported fabric for manufacture and export of garments towards fulfillment of export obligation – Based on evidences recovered, department issued show-cause notice to Appellant demanding duty on differential quantity of fabrics found not to have been consumed in manufacture of export goods – Commissioner denied benefit of exemption Notification No.51/2000-Cus and confirmed demand of duty – Whether Appellant had fulfilled export obligation in respect of 10 advance licenses issued under Customs Notification No.51/2000-Cus – HELD – With regard to 3 advance licenses, Appellant has fulfilled export obligation and obtained Export Obligation Discharge Certificate (EODC) – Having fulfilled export obligation which is accepted by DGFT authorities, question of demand cannot be sustained – Appellant had approached Regional DGFT Authority requesting for clubbing and issue of EODC against number of licenses, which is still pending with DGFT – Since DGFT has accepted request for revalidation/extension in export obligation against disputed advance licenses and has directed Appellant to approach Regional Authority for clubbing of same, any demand of duty will be pre-mature – In interest of justice, matter needs to be remanded to Commissioner to verify with DGFT with regard to clubbing of exports in respect of other licenses – It is also on record that Appellant had simultaneously claimed drawback on some of quantity and to this extent, Appellant is liable to reverse the drawback – Demand with regard to 3 licenses stands set aside minus the drawback claimed on these exports – All other demands on 7 licenses stands remanded for verification of clubbing and amount of drawback to be reversed – Appeals are disposed of [Read less]

Service Tax – Construction of residential complex – Appellant is engaged in construction of Residential Complex – Department issued show cause notice to Appellant demanding service tax in respect of Construction of Residential Complex Service – Original Adjudicating Authority confirmed demand of service tax under Section 73(1) of the Finance Act, 1994 – Appellate Authority upheld taxability of residential complex service, but directed Lower Adjudicating Authority to consider plea of Appellant for 67% abatement vide Notification No.1/2006-ST – Whether service tax demand raised on Appellant under Construction of ... [Read more]

Service Tax – Construction of residential complex – Appellant is engaged in construction of Residential Complex – Department issued show cause notice to Appellant demanding service tax in respect of Construction of Residential Complex Service – Original Adjudicating Authority confirmed demand of service tax under Section 73(1) of the Finance Act, 1994 – Appellate Authority upheld taxability of residential complex service, but directed Lower Adjudicating Authority to consider plea of Appellant for 67% abatement vide Notification No.1/2006-ST – Whether service tax demand raised on Appellant under Construction of Residential Complex Service under Section 73(1) of the Act is sustainable – HELD – Investigations conducted in Appellant’s case has revealed that they are promoters of construction of residential flats, but have not registered under service tax law, not charged any service tax from their customers and also have not filed service tax returns – It is not disputed that Appellate Authority has directed Original Authority to allow 67% abatement in terms of Notification No.1/2006-ST, which clearly indicates construction of complex service rendered is composite in nature – Appellant has used all materials like cement, steel, wood and bricks for construction of residential complex – Appellant has produced a Certificate from Chartered Accountant testifying that contract executed is composite in nature, as its customers have not supplied any material like Steel, Cement, etc. – Demand raised on Appellant under category of Construction of Residential Complex Service is not sustainable when services rendered are composite in nature – Appeal is allowed [Read less]

Service Tax – Rule 9(1) of Cenvat Credit Rules, 2004 – Denial of cenvat credit – Appellant as a financial intermediary entered into an agreement to provide services to a concern towards pre-payment of loans and obtaining No Due Certificate from financial institutions – Appellant outsourced said work to a sub-contractor – Sub-contractor provided services to Appellant and raised invoices for providing said services – Appellant availed cenvat credit on said invoice – Revenue issued show cause notice to Appellant alleging wrongful and fraudulent availment of CENVAT Credit on strength of invoice raised by service ... [Read more]

Service Tax – Rule 9(1) of Cenvat Credit Rules, 2004 – Denial of cenvat credit – Appellant as a financial intermediary entered into an agreement to provide services to a concern towards pre-payment of loans and obtaining No Due Certificate from financial institutions – Appellant outsourced said work to a sub-contractor – Sub-contractor provided services to Appellant and raised invoices for providing said services – Appellant availed cenvat credit on said invoice – Revenue issued show cause notice to Appellant alleging wrongful and fraudulent availment of CENVAT Credit on strength of invoice raised by service provider/sub-contractor – Adjudicating authority confirmed demand by denying cenvat credit – Commissioner (Appeals) confirmed order of adjudicating authority – Whether impugned order denying credit of Service Tax is sustainable – HELD – Reason for denial of cenvat credit is that service provider is a shell entity not engaged in any legitimate business as per alert letter issued by SEBI – Denial of cenvat credit cannot be based on alert letter issued by SEBI, which is much later about 16 months from date of obtaining of NOC through service provider – Non-payment of service tax by service provider cannot be a reason to deny cenvat credit to Appellant – Appellant has paid service tax, on which they have taken cenvat credit in terms of Rule 9(1) of the Rules, which has been duly reflected in their Books of Account as well as in their ST-3 Returns – Show cause notice issued to Appellant is highly barred by limitation –Cenvat credit cannot be denied to Appellant on merits as well as limitation – Impugned order passed by Commissioner (Appeals) set aside – Appeal allowed [Read less]

Punjab Value Added Tax Act, 2005 - Stock transfer or Sale, Transfer of goods – Detention of goods on the ground that the documents covering the goods were suspected to be not genuine and the transaction was suspected to be a case of Sale instead of Stock Transfer - Appellant claimed that the goods were not meant for sale but were to be supplied to customers on a right to use basis against a refundable security deposit and monthly rent – Assessing Authority concluded that the goods were actually meant to be sold and imposed a penalty under Section 51(7)(b) of the PVAT Act, 2005 - Whether the transaction was a genuine st... [Read more]

Punjab Value Added Tax Act, 2005 - Stock transfer or Sale, Transfer of goods – Detention of goods on the ground that the documents covering the goods were suspected to be not genuine and the transaction was suspected to be a case of Sale instead of Stock Transfer - Appellant claimed that the goods were not meant for sale but were to be supplied to customers on a right to use basis against a refundable security deposit and monthly rent – Assessing Authority concluded that the goods were actually meant to be sold and imposed a penalty under Section 51(7)(b) of the PVAT Act, 2005 - Whether the transaction was a genuine stock transfer or a sale transaction liable to tax – HELD - The goods were being supplied against an advance payment pursuant to an email order, which indicated that it was a sale transaction - There is no provision in the agreement for repair during the use of goods, atmospheric wear and tear or the otherwise depreciation of the material. Thus, no effective control of property remains with original owner of the goods i.e. appellant, while these may be in use by the customer. Therefore, the amount charged as security would accordingly constitute 'sale price' exigible to tax - Further, the security deposit charged from the customers and the condition that the goods would become the property of the customer after 5 years even if not returned, showed that it was a novel method of tax evasion. The appellant failed to provide any documentary evidence to prove that it was a genuine stock transfer. The appellant did not furnish any proof of payment of rent by the customers and deposit of tax on the rental amount. Therefore, the goods were meant to be sold and the documents covering the goods were not genuine and proper - the imposition of the penalty is upheld and the appeal is dismissed [Read less]

Customs – Section 17(1) of Customs Act, 1962 – Import of goods – Classification – Appellants/importer is engaged in assembly of ‘Wincor Beetal’ Modular Point Of Sale (POS) systems – For assembly of POS system, Appellants had imported a consignment of BA 63 display, cash drawer and cables by classifying it under Customs Tariff Item (CTI) 8471 6090 and self assessed same by claiming duty exemption vide Notification No.24/2005-Cus in terms of Section 17(1) of the Act – Original authority classified imported goods under CTI 8531 8000 and demanded duty along with interest – Commissioner (Appeals) confirmed ori... [Read more]

Customs – Section 17(1) of Customs Act, 1962 – Import of goods – Classification – Appellants/importer is engaged in assembly of ‘Wincor Beetal’ Modular Point Of Sale (POS) systems – For assembly of POS system, Appellants had imported a consignment of BA 63 display, cash drawer and cables by classifying it under Customs Tariff Item (CTI) 8471 6090 and self assessed same by claiming duty exemption vide Notification No.24/2005-Cus in terms of Section 17(1) of the Act – Original authority classified imported goods under CTI 8531 8000 and demanded duty along with interest – Commissioner (Appeals) confirmed original order and rejected appeal filed by Appellants – Whether goods imported by Appellants merits classification under CTI 8471 6090 as claimed by Appellants or under CTI 8531 8000 as determined by Original authority and upheld by Commissioner (Appeals) – HELD – Scope of coverage of Chapter Sub-heading 847160 is large enough to include all types of input or output units – Scope of coverage of goods under chapter sub-heading 853180 is restrictive to electric sound or visual signalling apparatus – In order to understand functionality of impugned goods under dispute, it is worthwhile to understand about what is a Point of Sale (POS) system – POS is a machine/appliance comprising both hardware and software components, intended to facilitate seamless sale/purchase transaction processing in retail environment – Impugned goods are essentially required for working with POS computer system – Impugned goods which are part of POS computer system shall be treated as input/output units of POS system – Impugned item/product is not covered by phrase ‘other apparatus’ appearing in HSN description of chapter sub-heading 853180 – Imported goods are classifiable under CTI 8471 60 90 of First Schedule to Tariff Act – Impugned order classifying imported goods under CTI 85318000 does not stand the scrutiny of law and therefore is not legally sustainable – Impugned order passed by Commissioner (Appeals) set aside – Appeal allowed [Read less]

Customs – Section 28(4) of Customs Act, 1962 – Re-assessment – Demand of differential duty – Appellants had imported ‘LED panels’ and classified same for assessment at rate of duty corresponding to tariff lines in heading 8529 of First Schedule to Tariff Act and claimed benefit of notification no.12/2012-Cus – After investigation, Commissioner had re-assessed imported goods as liable to duty at rate corresponding to sub-heading 8527 72 of First Schedule to Tariff Act and denied concession extended to ‘LED panels’ in impugned notification and charging differential duty under Section 28(4) of Customs Act �... [Read more]

Customs – Section 28(4) of Customs Act, 1962 – Re-assessment – Demand of differential duty – Appellants had imported ‘LED panels’ and classified same for assessment at rate of duty corresponding to tariff lines in heading 8529 of First Schedule to Tariff Act and claimed benefit of notification no.12/2012-Cus – After investigation, Commissioner had re-assessed imported goods as liable to duty at rate corresponding to sub-heading 8527 72 of First Schedule to Tariff Act and denied concession extended to ‘LED panels’ in impugned notification and charging differential duty under Section 28(4) of Customs Act – Whether Impugned order demanding differential duty under Section 28(4) of Customs Act is sustainable – HELD – There is no evidence that consignments as imported and presented on each occasion was capable of being assembled into specific number of television sets by very basic operations. Consignments contain ‘LED panels’ entitled to be cleared on rate of duty noted in impugned notification – With the ‘parts’ meriting appropriate classification, basis of denial, viz., treatment of goods as finished articles, is no longer available to be pressed into service – Differential duty was not to have been ordered for recovery – There is also no mis-declaration of value or any other particular in impugned bills of entry – Confiscation of goods is not in order and must be aside – Impugned order passed by Commissioner is bereft of any legal and factual sustenance and hence, set aside – Appeals allowed [Read less]

Customs – Sections 34, 39 and 41 of Customs Act, 1962 – Regulations 5, 10(1)(m) and 11 of Sea Cargo Manifest and Transshipment Regulations, 2018 – Export of goods – Filing of shipping bills – Implementation of regulations – Exporter filed shipping bills for export of goods through their customs broker – While processing shipping bills for allowing drawback on exports, error message of ‘Let Export Order (LEO) date greater than sailing date’ appeared in customs EDI system – Appellants/Authorised Sea Agent had taken up the matter of rectifying Export General Manifest (EGM) error by filing request letter to... [Read more]

Customs – Sections 34, 39 and 41 of Customs Act, 1962 – Regulations 5, 10(1)(m) and 11 of Sea Cargo Manifest and Transshipment Regulations, 2018 – Export of goods – Filing of shipping bills – Implementation of regulations – Exporter filed shipping bills for export of goods through their customs broker – While processing shipping bills for allowing drawback on exports, error message of ‘Let Export Order (LEO) date greater than sailing date’ appeared in customs EDI system – Appellants/Authorised Sea Agent had taken up the matter of rectifying Export General Manifest (EGM) error by filing request letter to proper officer of customs on basis of letter given by shipping company – On basis of inquiry report, Commissioner had passed impugned order for suspending operations of Appellants for failure to comply with provisions of Regulations 5 & 10(1)(m) of the Regulations – Whether Appellants have violated provisions of Regulations 5 & 10(1)(m) of the Regulations or not – HELD – Due to various technical difficulties and lack of preparedness of stake holders in participating and filing of details under the Regulations, implementation of such regulations were kept on extended for more than five years – Where CBIC had specifically directed Commissioners to sensitise the field officers not to take penal action in interim period, impugned order invoking provisions of the Regulations, which is yet to be implemented on relevant date of shipping bills concerning present case, for imposition of suspension of operation of Appellants does not stand for legal scrutiny – Impugned order holding that Regulations 5 and 10(1)(m) of the Regulations have been violated by Appellants does not stand the scrutiny of law – Appeal allowed - Whether Appellants have violated provisions of Sections 34, 39, 40 & 41 of the Act – HELD – In terms of legal provisions of Sections 34 and 39 of the Act, export goods shall not be loaded on to a vessel except under supervision of proper officer of Customs and master of vessel shall not permit loading of any export goods, until an order has been granted for entry outwards for such vessel by proper officer of customs – Only allegation levelled in present case is that LEO copy was not provided to shipping line/master of vessel on date when it sailed duly obtaining Entry Outwards by Customs authorities, after all export goods have been loaded under supervision of proper officer of Customs – There is no case for violation of provisions of Sections 34 and 39 of the Act – Plain reading of Section 41 of the Act make it clear that shipping lines or shipping agent or such other authorised persons alone are responsible for filing EGM within prescribed time – It is not the case of Revenue that EGM for vessel has not been filed, therefore, there is no case of violation of Section 41 of the Act - Suspension of operations – Imposition of penalty – Whether Appellants are liable for suspension of their operations under Regulation 11 of the Regulations or not – HELD – Process of issue of LEO for a shipping bill is the function of proper officer of Customs – In case of any undue delay in issue of LEO, exporter or his agent cannot be found fault and they cannot be allowed to loose the loading of export goods into the vessel, though which export goods were planned to be exported – Appellants have not violated any of legal provisions in not submitting LEO copy of shipping bills to person in-charge of vessel before sailing of vessel, particularly when Appellants have filed request for rectification of such error – Impugned order suspending operation of Appellants and imposing penalties on Appellants does not sustain and hence, set aside. [Read less]

Customs – Sections 28AAA, 108 and 138B of Customs Act, 1962 – Export of goods – Recovery of scrips – Absence of jurisdiction – Appellant is engaged in manufacture and export of Ready Made Garments – To encourage exports to remote markets, Government introduced Focus Market Scheme (FMS), designed to offset higher freight costs borne by buyers – Appellant claimed benefits on goods exported through shipping bills – Department issued show cause notice to Appellant by proposing to demand ineligible benefit availed under FMS – Additional Commissioner ordered for recovery of ineligible Focus Market Scrips from A... [Read more]

Customs – Sections 28AAA, 108 and 138B of Customs Act, 1962 – Export of goods – Recovery of scrips – Absence of jurisdiction – Appellant is engaged in manufacture and export of Ready Made Garments – To encourage exports to remote markets, Government introduced Focus Market Scheme (FMS), designed to offset higher freight costs borne by buyers – Appellant claimed benefits on goods exported through shipping bills – Department issued show cause notice to Appellant by proposing to demand ineligible benefit availed under FMS – Additional Commissioner ordered for recovery of ineligible Focus Market Scrips from Appellant under Section 28AAA of the Act – Commissioner (Appeals) dismissed appeals filed by Appellant – Whether jurisdiction under Section 28AAA of the Act could have been invoked without Directorate General of Foreign Trade (DGFT) having initiated process for cancellation of license – HELD – Demand under Section 28AAA of the Act can be made only after DGFT, which is the concerned regional authority, initiates action for cancellation of instrument – It would be impermissible for customs authorities to either doubt the validity of an instrument issued under FTDR Act or go behind benefits availed pursuant thereto absent any adjudication having been undertaken by DGFT – Action for recovery of benefits claimed and availed would have to necessarily be preceded by competent authority under FTDR Act having found that certificate or scrip had been illegally obtained – Impugned order is without jurisdiction, as DGFT has neither cancelled the instrument nor even initiated proceedings for cancellation of instrument – Appeals allowed - Recording of statement – Admissibility – Whether statement of proprietor of Freight Forwarder recorded under Section 108 of the Act could be considered as evidence under Section 138B of the Act – HELD – Impugned order has placed reliance upon statement of proprietor of Freight Forwarder made under Section 108 of Act, in which Appellant has been implicated – Partner of Appellant company in his statement stated that all export documents received by him mentioned the country of export as Panama and he did not instruct anybody to change country of export – Provisions of Section 138B(1)(b) of the Act have been held to be mandatory and failure to comply with procedure would mean that no reliance can be placed on statements recorded under Section 108 of the Act – Statement of proprietor of Freight Forwarder made under Section 108 of the Act cannot be considered as evidence, as he was not examined by adjudicating authority – It is not possible to sustain order passed by Commissioner (Appeals) and hence, it is set aside. [Read less]

Customs – Sections 28AAA, 108 and 138B of Customs Act, 1962 – Recovery of scrips – Absence of jurisdiction – Appellant is engaged in manufacture and export of readymade garments – To encourage exports to remote markets, Government introduced Focus Market Scheme (FMS) – Under FMS, exporters often offer reduced prices to customers in designated countries like Panama – Appellant claimed benefits on goods exported through shipping bills – Department issued show cause notice to Appellant by proposing to demand ineligible benefit availed under FMS – Principal Commissioner ordered for recovery of ineligible Focu... [Read more]

Customs – Sections 28AAA, 108 and 138B of Customs Act, 1962 – Recovery of scrips – Absence of jurisdiction – Appellant is engaged in manufacture and export of readymade garments – To encourage exports to remote markets, Government introduced Focus Market Scheme (FMS) – Under FMS, exporters often offer reduced prices to customers in designated countries like Panama – Appellant claimed benefits on goods exported through shipping bills – Department issued show cause notice to Appellant by proposing to demand ineligible benefit availed under FMS – Principal Commissioner ordered for recovery of ineligible Focus Market Scrips from Appellant under Section 28AAA of the Act – Whether jurisdiction under Section 28AAA of the Act could have been invoked without DGFT having initiated process for cancellation of license – HELD – Demand under Section 28AAA of the Act can be made only after DGFT, which is the concerned regional authority, initiates action for cancellation of instrument – It would be impermissible for customs authorities to either doubt the validity of an instrument issued under FTDR Act or go behind benefits availed pursuant thereto absent any adjudication having been undertaken by DGFT – Action for recovery of benefits claimed and availed would have to necessarily be preceded by competent authority under FTDR Act having found that certificate or scrip had been illegally obtained – Impugned order is without jurisdiction, as DGFT has neither cancelled the instrument nor even initiated proceedings for cancellation of instrument – Appeals allowed - Recording of statement – Admissibility – Whether statement of proprietor of Freight Forwarder recorded under Section 108 of the Act could be considered as evidence under Section 138B of the Act – HELD – Impugned order has placed reliance upon statement of proprietor of Freight Forwarder made under Section 108 of Act, in which Appellant has been implicated – Partner of Appellant company in his statement stated that all export documents received by him mentioned the country of export as Panama and he did not instruct anybody to change country of export – Provisions of Section 138B(1)(b) of the Act have been held to be mandatory and failure to comply with procedure would mean that no reliance can be placed on statements recorded under Section 108 of the Act – Statement of proprietor of Freight Forwarder made under Section 108 of the Act cannot be considered as evidence, as he was not examined by adjudicating authority – It is not possible to sustain order passed by Principal Commissioner and hence, it is set aside. [Read less]

Service Tax – Section 65(25aa) of Finance Act, 1944 – Payment of tax by mistake – Rejection of refund claim – Appellant is a club engaged in providing services of restaurant and accommodation to its members – Appellant filed refund claim on ground that it mistakenly paid an amount as service tax under “club or association’ services as defined under Section 65(25aa) of the Act, which was not payable on basis of principle of mutuality of interest – Assistant Commissioner rejected refund claim filed by Appellant – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether Commissioner (Appeals) i... [Read more]

Service Tax – Section 65(25aa) of Finance Act, 1944 – Payment of tax by mistake – Rejection of refund claim – Appellant is a club engaged in providing services of restaurant and accommodation to its members – Appellant filed refund claim on ground that it mistakenly paid an amount as service tax under “club or association’ services as defined under Section 65(25aa) of the Act, which was not payable on basis of principle of mutuality of interest – Assistant Commissioner rejected refund claim filed by Appellant – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether Commissioner (Appeals) is justified in holding that Appellant is liable to pay service tax on services rendered by a club to its members – HELD – Only reason assigned by Commissioner (Appeals) for holding that Appellant was not entitled to refund of service tax already paid by it, is that Appellant was required to pay service tax in view of provisions of the Act – Definition of “club or association” contained in Section 65(25a) of the Act makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within tax net – It is clear from aforesaid provision that companies and cooperative societies which are registered under respective Acts were not included in Service Tax net – Appellant was established under provisions of 1958 Act – the finding recorded by Commissioner (Appeals) that Appellant would be liable to pay service tax on services rendered by a club to its members is not correct – Impugned order passed by Commissioner (Appeals) set aside – the appeal is allowed [Read less]

Customs - Long delay in finalisation of Provisional Assessment, Ullage Quantity, Transaction Value – Import of Petroleum Crude Oil - Assessment based on the Ship's Ullage Quantity at the port of discharge instead of the Bill of Lading quantity - Whether the finalization of provisional assessments after 16 years is vitiated by unreasonable delay and barred by limitation – HELD - The issue of delay in finalization of provisional assessments has been covered by the decision of the Hon'ble High Court in Bihar Foundry & Castings Ltd v UOI and ors, which held that finalization of provisional assessments after 6 to 9 years is... [Read more]

Customs - Long delay in finalisation of Provisional Assessment, Ullage Quantity, Transaction Value – Import of Petroleum Crude Oil - Assessment based on the Ship's Ullage Quantity at the port of discharge instead of the Bill of Lading quantity - Whether the finalization of provisional assessments after 16 years is vitiated by unreasonable delay and barred by limitation – HELD - The issue of delay in finalization of provisional assessments has been covered by the decision of the Hon'ble High Court in Bihar Foundry & Castings Ltd v UOI and ors, which held that finalization of provisional assessments after 6 to 9 years is vitiated by unreasonable delay and barred by limitation - In the present case, the delay in finalization of the provisional assessments was 16 years, which is much longer than the reasonable period of 6 months prescribed under the CBIC Manual of Instructions - The decision of the Larger Bench of Tribunal in Shakti Beverages Ltd vs CC, which was relied upon by the Commissioner (Appeals), cannot prevail over the decision of the Hon'ble High Court in Bihar Foundry & Castings Ltd - The Customs (Finalization of Provisional Assessment) Regulations, 2018, which were in force at the time of finalization of the assessments, stipulate a time limit of 2 months from the date of receipt of test report and submission of documents. Accordingly, the finalization of the provisional assessments after such a long delay of 16 years is vitiated by unreasonable delay and barred by limitation – The matter is remanded back to the adjudicating authority to (i) re-examine the issue of delay in finalization of the provisional assessments, and (ii) determine the permissible variation in quantity based on authoritative norms - Appeals are partly allowed as conditional remand - Whether the assessment based on the Ship's Ullage Quantity at the port of discharge is correct, or the assessment should have been based on the Bill of Lading quantity - HELD - The issue of assessment based on the Ship's Ullage Quantity has been covered by the decision of the Hon'ble Supreme Court in the case of Mangalore Refinery and Petrochemicals Ltd v CCE. The CBIC Circulars No. 96/2002-Cus dated 26.07.2002 and No. 34/2016 dated 26.07.2016 also provide that the assessment can be done based on the Ship's Ullage Quantity at the port of discharge. However, the appellant had contended that the variation in quantity found was within the permissible norms, and this aspect needs further examination by the department. The Tribunal remanded the matter back to the adjudicating authority to examine this issue. [Read less]

Service Tax - Sponsorship services – Appellants made payments to various companies towards sponsorship of the Indian Premier League (IPL) T20 tournament – Demand of service tax under 'Sponsorship Services' - Whether the service tax demand on the sponsorship payments made by the appellant prior to July 1, 2010 is sustainable – HELD - The entire demand confirmed by the adjudicating authority against the appellant for the services rendered by M/s. Royal Challengers Sports Pvt. Ltd. prior to July 1, 2010 are exempted as the activities are covered by the exclusion provision in the definition of 'Sponsorship Service' under... [Read more]

Service Tax - Sponsorship services – Appellants made payments to various companies towards sponsorship of the Indian Premier League (IPL) T20 tournament – Demand of service tax under 'Sponsorship Services' - Whether the service tax demand on the sponsorship payments made by the appellant prior to July 1, 2010 is sustainable – HELD - The entire demand confirmed by the adjudicating authority against the appellant for the services rendered by M/s. Royal Challengers Sports Pvt. Ltd. prior to July 1, 2010 are exempted as the activities are covered by the exclusion provision in the definition of 'Sponsorship Service' under Section 65(105)(zzzn) of the Finance Act, 1994. The Tribunal in the case of Hero Motocorp Limited vs. Commissioner of Service Tax, Delhi has held that sponsorship of an IPL team would amount to sponsoring the sport event and is covered by the exclusion provision – Further, the demands made for the services rendered prior to July 1, 2010 but payments received after July 1, 2010 are not taxable in terms of the second proviso to sub-rule (1) of Rule 6 of the Service Tax Rules, 1994, which provides that no service tax shall be payable for the part or whole of value of services which is attributable to service provided during the period when such service was not taxable - The demands for the period prior to July 1, 2010 and the demands for services rendered prior to July 1, 2010 but payments received after July 1, 2010 were set aside. However, the demand confirmed for the services rendered after July 1, 2010 was upheld, but the penalty imposed by the adjudicating authority is set aside as the appellant had paid the tax liability with interest before the issuance of the Show Cause notice – The appeal is partly allowed [Read less]

West Bengal VAT Act - Inter-state goods transportation, Levy of penalty for non-production of way-bill – Tribunal order confirmed levy of penalty on the ground that the driver of the vehicle did not have a valid way-bill when the vehicle along with the consignment was detained at the check-post. The vehicle had not entered the State of West Bengal, and the driver had produced the consignment note and other relevant documents within the time granted by the detaining authority - Whether the penalty imposed on the petitioner for the non-production of the way-bill at the time of detention was justified – HELD – the ident... [Read more]

West Bengal VAT Act - Inter-state goods transportation, Levy of penalty for non-production of way-bill – Tribunal order confirmed levy of penalty on the ground that the driver of the vehicle did not have a valid way-bill when the vehicle along with the consignment was detained at the check-post. The vehicle had not entered the State of West Bengal, and the driver had produced the consignment note and other relevant documents within the time granted by the detaining authority - Whether the penalty imposed on the petitioner for the non-production of the way-bill at the time of detention was justified – HELD – the identity of the goods, the weight, the value is not in dispute. The only ground on which penalty was imposed is on the ground that the driver of the vehicle did not have a way-bill when the vehicle was detained - Admittedly, the vehicle was detained in the check post between Jharkhand and the State of West Bengal and the vehicle has not come into the State of West Bengal. Apart from that on a request made by the driver of the vehicle, the detaining authority had granted time to produce the way-bill and within the time permitted, the way-bill was generated and produced. Thus, the petitioner cannot be stated to have violated the law, but has produced the valid way-bill, much before the vehicle had crossed the check post between the two States - the orders passed by the learned Tribunal and the authority imposing penalty are set aside - Since the petitioner has deposited the penalty amount as per the order passed by the learned Tribunal, the petitioner is entitled to file an application for refund – The writ petition is allowed [Read less]

GST - Delay in filing appeal, Refund application, Duty to communicate deficiencies, and opportunity to rectify deficiencies – Respondent-assessee filed refund applications, but the Department uploaded deficiency memos indicating that the supporting documents were incomplete, without providing any details of the deficiencies. The respondent then filed a writ petition seeking a direction to the department to process the refund application, which was allowed by the Single Bench - Whether the direction issued by the Single Bench to the respondent to rectify the deficiencies and submit a fresh refund application was justified... [Read more]

GST - Delay in filing appeal, Refund application, Duty to communicate deficiencies, and opportunity to rectify deficiencies – Respondent-assessee filed refund applications, but the Department uploaded deficiency memos indicating that the supporting documents were incomplete, without providing any details of the deficiencies. The respondent then filed a writ petition seeking a direction to the department to process the refund application, which was allowed by the Single Bench - Whether the direction issued by the Single Bench to the respondent to rectify the deficiencies and submit a fresh refund application was justified – HELD - The Department failed to communicate the specific deficiencies to the respondent, as required under the statutory provisions. The deficiencies were more procedural in nature, and the respondent should be given an opportunity to rectify them - the assessee was not made known of the defects which they are required to rectify. This is not only required for the purpose of compliance of the principles of natural justice but it is a statutory mandate in terms of sub-rule (3) of Rule 89 which mandates that where any deficiencies are noticed the proper officer was communicated to the application in Form GST RFD-03 through the common portal electronically, requiring him to file a fresh refund application after rectifying of such deficiencies - the learned Single Bench was fully justified in permitting the writ petitioner to cure the deficiencies and submit the refund application which has been directed to be processed - the direction issued by the learned Single Bench was just and proper and calls for no interference – The appeal is dismissed [Read less]

GST - Rectification of Order - Demand for wrong availment of input tax credit on account of contravention of provision of sub-section (4) of Section 16 of the CGST Act, 2017 – HELD - Subsequent to the writ petition being filed, the CBIC issued notification providing a special procedure for rectification of orders confirming demand for wrong availment of input tax credit. Additionally, Section 16 of the CGST Act was amended by inserting a new subsection (5) which entitles registered persons to take input tax credit for certain financial years up to 30th November, 2021. Considering these developments, order of adjudication... [Read more]

GST - Rectification of Order - Demand for wrong availment of input tax credit on account of contravention of provision of sub-section (4) of Section 16 of the CGST Act, 2017 – HELD - Subsequent to the writ petition being filed, the CBIC issued notification providing a special procedure for rectification of orders confirming demand for wrong availment of input tax credit. Additionally, Section 16 of the CGST Act was amended by inserting a new subsection (5) which entitles registered persons to take input tax credit for certain financial years up to 30th November, 2021. Considering these developments, order of adjudication is set aside and the adjudicating authority is directed to re-adjudicate the show-cause notice taking into account the newly inserted subsection (5) of Section 16 - The appeal and writ petition are allowed [Read less]

GST - Cancellation of registration, Violation of principles of natural justice, Lack of reasons in show cause notice, Reliance on inspection report without providing copy – Appellant challenge the orders cancelling its GST registration, which were affirmed by the appellate authority. The appellant argued that the show cause notice was devoid of reasons, the original and appellate authorities' orders lacked reasons, and the appellate authority had relied on an inspection report without providing a copy to the appellant - Whether the initiation of the proceedings by issuance of the show cause notice was flawed due to lack ... [Read more]

GST - Cancellation of registration, Violation of principles of natural justice, Lack of reasons in show cause notice, Reliance on inspection report without providing copy – Appellant challenge the orders cancelling its GST registration, which were affirmed by the appellate authority. The appellant argued that the show cause notice was devoid of reasons, the original and appellate authorities' orders lacked reasons, and the appellate authority had relied on an inspection report without providing a copy to the appellant - Whether the initiation of the proceedings by issuance of the show cause notice was flawed due to lack of reasons – HELD - The show cause notice was bereft of any particulars and did not contain any reasons, rendering it non-est in the eye of law. The appellant was not afforded adequate opportunity to rebut the allegations as the show cause notice did not set out the allegations. This inherent defect went to the root of the matter and could not be cured or rectified at a subsequent stage or in the appellate stage. The lack of reasons in the show cause notice violated the principles of natural justice – Further, the appellate authority had clearly referred to the inspection report which was drawn one day prior to the issuance of the show cause notice, and a copy of which was not furnished to the appellant. This is serious violation of the principles of natural justice, as the appellant was not afforded an opportunity to put forth its contentions - the orders passed in the writ petition and the orders impugned in the writ petition, including the show cause notice are set aside – The appeal is allowed [Read less]

The notice is neither in the form of show cause nor it is indicative of amount that is liable to be recovered. If a statute prescribes a particular thing to be done in a particular manner then it has to be done only in that manner and in no other way

Andhra Pradesh Value Added Tax Act, 2005 – Taxability of activity of imparting education, Business activity, Incidental activities – Petitioner is an institution registered with the Director General of Civil Aviation (DGCA), Government of India, to admit students for imparting education and training for obtaining Commercial Pilot license, Aircraft Maintenance Engineering, Engine Overhaul, and Avionics - Whether the activity of imparting education and training by the petitioner can be considered as 'business' under the APGST Act, 1957 and APVAT Act, 2005 thereby subjecting the receipts towards supply of food to students... [Read more]

Andhra Pradesh Value Added Tax Act, 2005 – Taxability of activity of imparting education, Business activity, Incidental activities – Petitioner is an institution registered with the Director General of Civil Aviation (DGCA), Government of India, to admit students for imparting education and training for obtaining Commercial Pilot license, Aircraft Maintenance Engineering, Engine Overhaul, and Avionics - Whether the activity of imparting education and training by the petitioner can be considered as 'business' under the APGST Act, 1957 and APVAT Act, 2005 thereby subjecting the receipts towards supply of food to students and sale of application forms to tax – HELD - The activity of imparting education and training by the petitioner, being a registered institute with the DGCA, cannot be equated to a simple coaching center. The training provided by the petitioner, which includes both theoretical and practical aspects, is a form of education, and such activity cannot be considered as 'business' as defined under the APGST Act, 1957 and APVAT Act, 2005. The petitioner, being an educational institution, cannot be treated as a 'dealer' under the respective Acts and the incidental proceeds of supplying food and sale of application forms cannot be subjected to tax. The activity of imparting of education is not a commercial activity, and any incidental activity to the core activity of education is also not commercial in nature - the petitioner's activity of imparting education and training cannot be considered as 'business' under the APGST Act, 1957 and APVAT Act, 2005 and the receipts towards supply of food to students and sale of application forms are not liable to tax – The petition is allowed [Read less]

Customs – Classification of Arecanuts, Scope of Review petition – Revenue seeking review of the High Court judgment which upheld the Advance Ruling that classified the imported arecanuts under Chapter 21 of the Customs Tariff Act, 1975 and not under Chapter 8 - The High Court had earlier directed testing of the samples which confirmed the classification under Chapter 21 - Whether the review petitions filed by the Customs Authorities are maintainable and whether there is any error apparent on the face of the record to warrant a review of the earlier High Court judgment - HELD - The review petitions are not maintainable ... [Read more]

Customs – Classification of Arecanuts, Scope of Review petition – Revenue seeking review of the High Court judgment which upheld the Advance Ruling that classified the imported arecanuts under Chapter 21 of the Customs Tariff Act, 1975 and not under Chapter 8 - The High Court had earlier directed testing of the samples which confirmed the classification under Chapter 21 - Whether the review petitions filed by the Customs Authorities are maintainable and whether there is any error apparent on the face of the record to warrant a review of the earlier High Court judgment - HELD - The review petitions are not maintainable as they merely seek to re-argue the same grounds which were already dealt with in the earlier judgment. The scope of review is very limited and an error must be self-evident on the face of the record to warrant a review - Mere change in opinion or a desire to rehear the case does not justify a review. The earlier findings on classification were consistent across multiple forums and the authorities had accepted the Advance Ruling in the importer's own prior case. Accordingly, the review petitions are dismissed holding that there is no error apparent on the face of the record to warrant a review of the earlier judgment - The review petitions filed by the Customs Authorities stand dismissed [Read less]