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Customs - Import of parts of wind-operated electricity generator (WOEG), Levy of Countervailing Duty (CVD), Scope of CVD Notification, Vivisection of value of imported goods - Respondent-importer imported certain parts of a WOEG (windmill) from China. The parts were provisionally assessed to levy CVD under Notification No. 1/2016-Customs (CVD) - Respondent challenged the provisional assessment in appeal, contending that the CVD Notification covers only 'castings' and not the specific and distinct products used in WOEGs that have acquired a different character and nomenclature - Whether the CVD Notification covers only 'cas... [Read more]

Customs - Import of parts of wind-operated electricity generator (WOEG), Levy of Countervailing Duty (CVD), Scope of CVD Notification, Vivisection of value of imported goods - Respondent-importer imported certain parts of a WOEG (windmill) from China. The parts were provisionally assessed to levy CVD under Notification No. 1/2016-Customs (CVD) - Respondent challenged the provisional assessment in appeal, contending that the CVD Notification covers only 'castings' and not the specific and distinct products used in WOEGs that have acquired a different character and nomenclature - Whether the CVD Notification covers only 'castings' or also the specific and distinct parts/products used in WOEGs that have acquired a different character and nomenclature – HELD - The Notification primarily seeks to impose CVD on castings. However, in describing the state in which these castings may, in any given case exist, the Notification has extended the scope of the levy to castings existing in “raw, finished or sub-assembled form” or, crucially, "as a part of a sub-assembly”, equipment or component meant for WOEGs. The meaning of these words, particularly the words “as a part of a sub-assembly” are perfectly clear that the CVD Notification clearly authorizes the levy of CVD on 'castings' even if they form a part of the sub-assembly, equipment or component meant for WOEGs. The language of the Notification is plain and unambiguous in this regard - the Commissioner (Appeals) erred in holding that if the castings are a part of other equipment/ components, such equipment/ components cannot be vivisected, to subject only the castings to duty. If the castings cannot be subjected to duty when they are imported as a part of other equipment, then that portion of the Notification which expressly and specifically authorises this, is rendered nugatory. Where the casting is a part of some other component or equipment, duty may be imposed on the casting - The matter to the Adjudicating Authority to reasonably determine the value of the casting portion as per law after considering the submissions of the respondent-importer. If the Authority is unable to determine such a value, no CVD can be levied – The Revenue appeal is allowed for statistical purposes - Whether the value of the imported goods can be vivisected into 'castings' and 'parts' which are not 'castings' to impose CVD only on the 'castings' – HELD - The Commissioner was correct in concluding that vivisection of the value of the imported goods is not possible. Once a casting has undergone value addition to become a distinct product, its value would be subsumed in the value of the resulting item. Therefore, CVD can only be levied on the value of the casting portion and not on the entire value of the imported goods. [Read less]

Central Excise – Refund of duty paid on supplies to SEZ units, Deemed exports – Rejection of refund of excise duty paid on supplies to SEZ on the ground that as per the provisions of Chapter 8 (Deemed Exports) of the Foreign Trade Policy, 2009-14, the refund claims have to be made from the Development Commissioner (DC) or Regional Authority (RA) - Whether the denial of refund claims by the Commissioner (Appeals) is valid – HELD - The conclusion drawn by the lower authorities in rejecting the appellant's claim by treating the supply to its SEZ units as deemed exports is erroneous – The Chapter 8 which is heavy relie... [Read more]

Central Excise – Refund of duty paid on supplies to SEZ units, Deemed exports – Rejection of refund of excise duty paid on supplies to SEZ on the ground that as per the provisions of Chapter 8 (Deemed Exports) of the Foreign Trade Policy, 2009-14, the refund claims have to be made from the Development Commissioner (DC) or Regional Authority (RA) - Whether the denial of refund claims by the Commissioner (Appeals) is valid – HELD - The conclusion drawn by the lower authorities in rejecting the appellant's claim by treating the supply to its SEZ units as deemed exports is erroneous – The Chapter 8 which is heavy relied upon by both the Lower Authorities talks of ‘Deemed Exports’; para 8.2 (b) refers to supply of goods to EOU/STP/EHTP/BTP and ‘SEZ’ is not figuring therein - The Bombay High Court in the case of M/s. Tiger Steel Engineer (India) Pvt. Ltd. vs. Union of India, held that the rebate of duty on goods cleared from DTA to SEZ would be treated as export for the purposes of Cenvat Credit Rules and Central Excise Rules, which in fact is also the spirit of CBEC Circular No.1001/8/2015-C.X.8, dated 28.04.2015 – The impugned orders are set aside and the matter is remanded to the original authority to decide the issue afresh after considering the Bombay High Court decision and the CBEC circular - The appeals are allowed by remand [Read less]

Central Excise – Area-based exemption, Mentioning of wrong notification, Notification No. 56/2003 vs Notification No. 20/2007 – Appellant had set up a unit in Sikkim and opted to avail the benefit of exemption under Notification No. 56/2003. Later, the notification was amended to provide exemption based on value addition, reducing the exemption benefit to 56% from 100%. The appellant filed refund claims claiming 100% duty paid, but the jurisdictional officer sanctioned the claims by reducing the amount to 56%. The revenue issued a SCN demanding the alleged erroneous refund, as the appellant's unit commenced commercial ... [Read more]

Central Excise – Area-based exemption, Mentioning of wrong notification, Notification No. 56/2003 vs Notification No. 20/2007 – Appellant had set up a unit in Sikkim and opted to avail the benefit of exemption under Notification No. 56/2003. Later, the notification was amended to provide exemption based on value addition, reducing the exemption benefit to 56% from 100%. The appellant filed refund claims claiming 100% duty paid, but the jurisdictional officer sanctioned the claims by reducing the amount to 56%. The revenue issued a SCN demanding the alleged erroneous refund, as the appellant's unit commenced commercial production after the due date specified in the notification - Whether the appellant is eligible for the 100% exemption benefit under Notification No. 20/2007, instead of 56% under Notification No. 56/2003, despite the inadvertent mentioning of the wrong notification in the refund claims – HELD - The conditions imposed and benefits available under both the notifications are same and identical, and the legislative intent was to continue the 100% exemption benefit for the units operating in the Sikkim region. The only difference is that the industries which have commenced their commercial production between 23.12.2002 to 31.03.2007 are entitled for the benefit under Notification No. 56/2003-CE whereas the industries which have commenced their commercial production between 01.04.2007 to 31.03.2017 are entitled for the benefit under Notification No. 20/2007-CE - It is a case of mere inadvertent mentioning of Notification No. 56/2003-CE instead of Notification No. 20/2007-CE. As the appellant had duly complied with all the relevant provisions of the Notification No. 20/2007-CE, the inadvertent error in wrong mentioning of the Notification No. 56/2003 would not disentitle them from availing the benefit of Notification No. 20/2007 which is otherwise entitled to them - The appellant is eligible for the 100% exemption benefit under Notification No. 20/2007 and the demand on account of allegedly erroneous refund is not legally sustainable - The impugned order is set aside and the appeal is allowed - Whether the show cause notice issued by the revenue for recovering the allegedly erroneous refund is legally sustainable – HELD - The SCN issued by the revenue for recovering the allegedly erroneous refund is not legally sustainable. Relying on the decision of the Madras High Court in Eveready Industries India Ltd. Vs CESTAT, the Tribunal observed that once the refund orders were passed by the adjudicating authority under Section 11B of the Act, the revenue could not have taken recourse to recover the refund by issuing a show cause notice under Section 11A, without challenging the refund orders before the appellate authority. [Read less]

Central Excise - Clandestine clearance, Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - The adjudicating authority confirmed the duty along with interest and equal amount of penalty - Commissioner (Appeals) dropped the part of demand - Whether the demand of the balance amount of Central Excise duty and penalty can be confirmed against the respondent-company when matter is settled under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – HELD - The respondent company had applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 for settlement of the matter and had paid the balance amount as pe... [Read more]

Central Excise - Clandestine clearance, Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - The adjudicating authority confirmed the duty along with interest and equal amount of penalty - Commissioner (Appeals) dropped the part of demand - Whether the demand of the balance amount of Central Excise duty and penalty can be confirmed against the respondent-company when matter is settled under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – HELD - The respondent company had applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 for settlement of the matter and had paid the balance amount as per the scheme. The jurisdictional CGST Commissionerate had issued the discharge certificate in the form of SVLDR-4, which is conclusive as to the matter and the time period stated therein. As per Section 129 of the Sabka Vishwas Scheme, the declarant (respondent company) shall not be liable to pay any further duty, interest, or penalty with respect to the matter and time period covered in the declaration. Considering this, the department's appeal has become infructuous and dismissed [Read less]

GST – Appeal against demand of penalty and interest absence any tax liability, Dismissal of appeal on the ground of delay and non-compliance with the condition of statutory pre-deposit, Insertion of proviso in Section 107(6) of CGST Act, 2017 - Whether the requirement of pre-deposit under Section 107(6) of the CGST Act, 2017 was applicable where the order impugned only involved demand of penalty and interest and there was no tax liability - HELD - The requirement of pre-deposit under Section 107(6) is not applicable in cases where the appeal was carried against an order pertaining only to penalty and there being no amoun... [Read more]

GST – Appeal against demand of penalty and interest absence any tax liability, Dismissal of appeal on the ground of delay and non-compliance with the condition of statutory pre-deposit, Insertion of proviso in Section 107(6) of CGST Act, 2017 - Whether the requirement of pre-deposit under Section 107(6) of the CGST Act, 2017 was applicable where the order impugned only involved demand of penalty and interest and there was no tax liability - HELD - The requirement of pre-deposit under Section 107(6) is not applicable in cases where the appeal was carried against an order pertaining only to penalty and there being no amount of tax in dispute - It is well settled that right to prefer appeal is a substantive right. It is equally settled that when a statute provides for a right to prefer appeal, it can also limit or restrict such right by imposing appropriate conditions. Requirement of pre-deposit for filing appeal under Section 107(6) of the CGST Act is one such condition. The non-existent conditions affecting substantive rights of appeal cannot be imported into the statute - When there was no provision for making any pre-deposit in respect of an appeal against an order demanding penalty or interest the petitioner could not have been asked to make pre-deposit where the order impugned only involved demand of penalty and interest – The Section 107(6) was subsequently amended by the Finance Act, 2025 thereby inserting the following proviso mandating pre-deposit even in cases where penalty has been imposed. The above proviso has taken effect only from October 01, 2025 and would not apply to the facts of the present case inasmuch as the same was not there in the statute book at the time when the appeal was preferred – The matter is remanded back to Appellate Authority with direction to consider the application for condonation of delay and if satisfied with the causes shown, to proceed to hear the appeal on merits without insisting on pre-deposit - The writ petition is disposed of [Read less]

Tamil Nadu General Sales Tax Act, 1959 – Non-payment of tax by seller, Levy of purchase tax on Asphalt - Authorities levied purchase tax on the petitioner under Section 7A of the TNGST Act on the ground that the tax was not paid by the sellers - Whether purchase tax is leviable under Section 7A of the TNGST Act, 1959 on the petitioner, on the premise that the tax has not been paid/remitted by the seller/vendor - HELD - The levy of purchase tax under Section 7A of the TNGST Act, 1959 is not warranted in the present case. The Section 7A can be invoked only if the purchase is made in circumstances where no tax is payable, a... [Read more]

Tamil Nadu General Sales Tax Act, 1959 – Non-payment of tax by seller, Levy of purchase tax on Asphalt - Authorities levied purchase tax on the petitioner under Section 7A of the TNGST Act on the ground that the tax was not paid by the sellers - Whether purchase tax is leviable under Section 7A of the TNGST Act, 1959 on the petitioner, on the premise that the tax has not been paid/remitted by the seller/vendor - HELD - The levy of purchase tax under Section 7A of the TNGST Act, 1959 is not warranted in the present case. The Section 7A can be invoked only if the purchase is made in circumstances where no tax is payable, and not when the tax is not paid by the seller though the sale was liable to tax - If the seller's turnover exceeds the threshold limit for taxation under the Act, the purchase cannot be said to be in circumstances where no tax is payable. In the present case, the petitioner's vendors' turnover was beyond the threshold limit for taxation, and therefore, the sale to the petitioner was liable to tax. The non-payment of tax by the seller cannot lead to the levy of purchase tax on the petitioner under Section 7A of the TNGST Act - The impugned order of the Tribunal is set aside and the writ petitions are allowed [Read less]

Central Excise - Assessable value, Type test charges, Service versus manufacturing – Demand along with interest and penalty for including 'type test' charges in the assessable value of 'transformers' cleared by appellant - The company argued that the tests were carried out at the request of some customers as a service and were not mandatory for the product, and hence should not be included in the assessable value - Whether the 'type test' charges can be included in the assessable value of the 'transformers' – HELD – The Tribunal in its earlier decision held that the undertaking of such tests before clearance does not... [Read more]

Central Excise - Assessable value, Type test charges, Service versus manufacturing – Demand along with interest and penalty for including 'type test' charges in the assessable value of 'transformers' cleared by appellant - The company argued that the tests were carried out at the request of some customers as a service and were not mandatory for the product, and hence should not be included in the assessable value - Whether the 'type test' charges can be included in the assessable value of the 'transformers' – HELD – The Tribunal in its earlier decision held that the undertaking of such tests before clearance does not, of itself, validate inclusion thereof in the assessable value. Further, in the case of Ericsson India Pvt Ltd v. Commissioner of Central Excise, Pondicherry and the ratio of the decision of the Karnataka High Court in Essar Telecom v. Union of India, it was held that there cannot be justification for collection of duties of central excise on the consideration realised for an activity which has been subjected to levy under the Finance Act, 1994. Accordingly, the demand and detriments in the impugned order are set aside to allow the appeal [Read less]

Central Excise – Admissibility of Cenvat Credit on waste disposal – Appellant availed credit of tax paid on 'services' received for undertaking processing of hazardous chemical waste accumulated as per the directives of Maharashtra State Pollution Control Board (MPCB)/ Central Pollution Control Board (CPCB) - Whether the credit availed by the appellant for the services rendered by the service providers for disposal of hazardous waste is eligible under the CENVAT Credit Rules, 2004 - HELD - The disposal of hazardous waste is an essential activity, without which, the final products cannot be manufactured. The removal of ... [Read more]

Central Excise – Admissibility of Cenvat Credit on waste disposal – Appellant availed credit of tax paid on 'services' received for undertaking processing of hazardous chemical waste accumulated as per the directives of Maharashtra State Pollution Control Board (MPCB)/ Central Pollution Control Board (CPCB) - Whether the credit availed by the appellant for the services rendered by the service providers for disposal of hazardous waste is eligible under the CENVAT Credit Rules, 2004 - HELD - The disposal of hazardous waste is an essential activity, without which, the final products cannot be manufactured. The removal of effluents emanating in the manufacturing process is a statutory obligation, and such disposal of waste is inextricably part of the factory operations. Therefore, the services rendered for the disposal of hazardous waste fall squarely within the definition of 'input service' under the CENVAT Credit Rules, 2004, and the appellant is entitled to the credit availed - The impugned order is set aside and the appeal is allowed [Read less]

Customs – Confiscation of goods alleging claim of inflated amount of drawback by over-invoicing - Appellant had made export shipments of garments. The goods were alleged to be over-invoiced with the intention of claiming inflated amount of drawback - Show Cause Notice issued proposing confiscation of the goods and disallowance of the drawback - Whether the appellant is entitled to claim the drawback in respect of the shipments of garments which did not reach destination – HELD - The export were made in accordance of Protocol signed between India and Russia in the year 1992. According to which Indian Government was not ... [Read more]

Customs – Confiscation of goods alleging claim of inflated amount of drawback by over-invoicing - Appellant had made export shipments of garments. The goods were alleged to be over-invoiced with the intention of claiming inflated amount of drawback - Show Cause Notice issued proposing confiscation of the goods and disallowance of the drawback - Whether the appellant is entitled to claim the drawback in respect of the shipments of garments which did not reach destination – HELD - The export were made in accordance of Protocol signed between India and Russia in the year 1992. According to which Indian Government was not required to pay the money to the Russian supplier but instead was to put the money to a special account to RBI. The Russian supplier had the right to use the money in this account for buying goods in the Indian market - As per the Drawback Rules, the moment any goods are taken out of India to a place outside India, it amounts to export, and the exporter is entitled to get the refund of duty paid on importation of such goods in the form of drawback. There is no condition in the Drawback Rules regarding the final destination of the goods. The remittances were received by the appellant, and the RBI had released the remittance in Indian rupees out of the State Credit funds, which falsified the findings in the impugned order that the goods did not reach Russia - The reliance on Rule 16A of the Customs & Central Excise Duties Drawback Rules 1995 is not appropriate as the exports in question were made prior to the coming into effect of these rules, and the provisions do not have any retrospective effect. The amount already refunded by the appellant to the department was wrongly appropriated by the adjudicating authority. The order confiscating the goods is set aside as the goods were allowed to be released provisionally – The appellant entitled to Drawback on consignments of garments exported by the appellant to a place outside India - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Technical Testing and Analysis (TTA) Services, Export of Services - Appellant was receiving the services of clinical trials from overseas and making payments in foreign currency. The Department alleged that these services were classifiable under the category of "Technical Testing and Analysis (TTA) Services" as defined under Section 65(105)(zzh) of the Finance Act, 1994 - Whether the clinical trials and tests provided by the foreign companies and used by the appellant are classifiable under the category of 'Technical Testing and Analysis' Services – HELD - As per the decision in the matter of B.A. Research ... [Read more]

Service Tax - Technical Testing and Analysis (TTA) Services, Export of Services - Appellant was receiving the services of clinical trials from overseas and making payments in foreign currency. The Department alleged that these services were classifiable under the category of "Technical Testing and Analysis (TTA) Services" as defined under Section 65(105)(zzh) of the Finance Act, 1994 - Whether the clinical trials and tests provided by the foreign companies and used by the appellant are classifiable under the category of 'Technical Testing and Analysis' Services – HELD - As per the decision in the matter of B.A. Research India Ltd., the performance of the TTA service is not complete until the testing and analysis report is delivered to the client. In the present case, when the reports were delivered to the clients outside India, it amounts to taxable service partly performed outside India. Following the ratio of the above decision and considering the terms of the agreement, the appellant had received the service of clinical trial study/analysis from the service providers based outside India and the same is classifiable under the taxable category of TTA Services in terms of Section 65 (105) of the Finance Act, 1994 - When the appellant can take the credit and utilize it further for the payment of tax, naturally it would not get the benefit for not paying such tax and attracting penal provisions of law. Thus, there was no intention of evading taxes as alleged - The demand along with interest is sustained only for the normal period, and all other penalties are set aside – The appeal is partly allowed [Read less]

Service Tax - Refund Claim - Refund of service tax paid on construction of hostel building for an educational institute - Appellant filed a refund claim for the service tax paid, which was partly rejected on the grounds of unjust enrichment - Whether the subsequent orders passed by the department after the order of the Commissioner (Appeals) dated 15.12.2015 attaining finality were legally valid – HELD - The order of the Commissioner (Appeals) dated 15.12.2015 had attained finality as the department did not file any appeal against it. The subsequent orders passed by the Assistant Commissioner dated 26.09.2017 and the imp... [Read more]

Service Tax - Refund Claim - Refund of service tax paid on construction of hostel building for an educational institute - Appellant filed a refund claim for the service tax paid, which was partly rejected on the grounds of unjust enrichment - Whether the subsequent orders passed by the department after the order of the Commissioner (Appeals) dated 15.12.2015 attaining finality were legally valid – HELD - The order of the Commissioner (Appeals) dated 15.12.2015 had attained finality as the department did not file any appeal against it. The subsequent orders passed by the Assistant Commissioner dated 26.09.2017 and the impugned Order-in-Appeal are not legally valid, as the Assistant Commissioner had no power to review or modify the order of the Commissioner (Appeals) which had attained finality. Once the order for granting refund has attained finality, any subsequent order proposing a contrary decision is not sustainable - the impugned Order-in-Appeal is set aside and the order of Commissioner (Appeals) shall be the final order – The appeal is allowed [Read less]

Customs - Classification of Small Form Factor Pluggable (SFP) devices - Whether the Small Form Factor Pluggable is a part of a machinery and is liable to be classified under CTH 8517 7990 or whether it is to be classified as an apparatus/machine under CTH 8517 6290 – Vide the impugned order the High Court held that SFPs is classifiable under Entry 85177990 and be entitled to applicable exemptions – Revenue in appeal – SC HELD – The Court is not inclined to interfere with the common impugned order passed by the High Court - The Special Leave Petitions filed by the Revenue is dismissed

Service Tax – Sections 73(1) and 78 of Finance Act, 1994 – Providing of cable operator services – Demand of tax – Appellant is engaged in providing Cable Operator Services taxable under the Act, but did not pay service tax on same – Department issued show cause notice proposing demand of Service Tax to Appellant by invoking extended period under proviso to Section 73(1) of the Act – Adjudicating authority confirmed demand along with interest and penalty – Commissioner (Appeals) rejected appeal filed by Appellant – Whether demand confirmed against Appellant is sustainable – HELD – Basis for making demand... [Read more]

Service Tax – Sections 73(1) and 78 of Finance Act, 1994 – Providing of cable operator services – Demand of tax – Appellant is engaged in providing Cable Operator Services taxable under the Act, but did not pay service tax on same – Department issued show cause notice proposing demand of Service Tax to Appellant by invoking extended period under proviso to Section 73(1) of the Act – Adjudicating authority confirmed demand along with interest and penalty – Commissioner (Appeals) rejected appeal filed by Appellant – Whether demand confirmed against Appellant is sustainable – HELD – Basis for making demand against Appellant is decision of Chandigarh Bench in case of Blue Star Communications. It is settled principal in law that a subsequent judgment cannot be a basis for making demand by invoking extended period. Extended period of limitation would not be available for making this demand, hence, demand should be restricted to normal period of limitation. As extended period of limitation could not have been invoked in this matter, penalty imposed under Section 78 is set aside. As per additional submissions filed, Appellant have claimed that they have made deposits for period in dispute, hence, these amount needs to be adjusted against demand, which would be worked out for normal period only. Matter is remanded back to Original Authority for re-quantification of demand – Appeal partly allowed [Read less]

Customs – Section 114 of Customs Act, 1962 – Rule 16A of Customs and Central Excise Duties and Service Tax Drawback Rules, 1995 – Export of readymade garments – Allegation of fraudulent exports – Recovery of drawback – Appellant had exported readymade garments by availing benefit of Drawback scheme and drawback was paid to it – Investigation conducted by Income Tax Department revealed that Appellant was involved in fraudulent exports – After further investigation, Commissioner ordered for recovery of Drawback paid to Appellant under Rule 16A of the Rules and imposed penalty under Section 114 of the Act – ... [Read more]

Customs – Section 114 of Customs Act, 1962 – Rule 16A of Customs and Central Excise Duties and Service Tax Drawback Rules, 1995 – Export of readymade garments – Allegation of fraudulent exports – Recovery of drawback – Appellant had exported readymade garments by availing benefit of Drawback scheme and drawback was paid to it – Investigation conducted by Income Tax Department revealed that Appellant was involved in fraudulent exports – After further investigation, Commissioner ordered for recovery of Drawback paid to Appellant under Rule 16A of the Rules and imposed penalty under Section 114 of the Act – Whether order of recovery of drawback under Rule 16A of the Rules is sustainable – HELD – First assertion of department is that Appellant had claimed drawback as a manufacturer exporter, but no manufacturing activity was ever carried out at its premises. On verification by officers, no manufacturing activity had ever been carried out at premises of Appellant. No evidence had been placed by Appellant to show that it was actually a manufacturer and had not mis-declared itself as manufacturer exporter. To be eligible for drawback, remittance must be for exported goods. There were at least four remittances recorded in impugned order had no relation to exports. Fact that above remittances were from persons not connected with garments exported had not been denied by Appellant. Order of recovery of drawback under Rule 16A of the Rules is sustained – Appeal partly allowed - Imposition of penalty – Whether penalty under Section 114 of the Act imposed on Appellant is sustainable – HELD – Penalty under Section 114 of the Act can be imposed for acts or omissions which render export goods liable to confiscation under Section 113 of the Act. Impugned order did not confiscate goods under Section 113 of the Act nor did it hold that any goods were liable to confiscation and hence, penalty cannot be imposed under Section 114 of the Act. Penalty imposed under Section 114 of the Act is set aside. [Read less]

Central Excise – Availment of CENVAT credit by manufacturing units based on the ISD invoices, Rule 14 of CENVAT Credit Rules, 2004, Rule 6 of CENVAT Credit Rules, 2004 - The head office of the appellant is registered with the Service Tax department as an ISD and distributes the CENVAT credit amongst the manufacturing units - Show cause proceedings against the appellant, proposing recovery of CENVAT credit availed by the manufacturing units based on the ISD invoices issued by the head office, on the ground that the service tax paid on the input services was not properly available for credit since the appellant was engaged... [Read more]

Central Excise – Availment of CENVAT credit by manufacturing units based on the ISD invoices, Rule 14 of CENVAT Credit Rules, 2004, Rule 6 of CENVAT Credit Rules, 2004 - The head office of the appellant is registered with the Service Tax department as an ISD and distributes the CENVAT credit amongst the manufacturing units - Show cause proceedings against the appellant, proposing recovery of CENVAT credit availed by the manufacturing units based on the ISD invoices issued by the head office, on the ground that the service tax paid on the input services was not properly available for credit since the appellant was engaged in trading activities - Whether the CENVAT credit availed by the manufacturing units based on the ISD invoices issued by the head office is proper – HELD - Since the manufacturing units had correctly availed the CENVAT credit and utilized the same for clearance of the finished products, and did not engage in the trading activities, the embargo created in Rule 6 of the CCR, 2004 for maintenance of separate records or for payment of requisite percentage of amount shall not be applicable. The department had not specifically alleged regarding irregular availment or utilization of CENVAT credit by the manufacturing units, and therefore, the provisions of Rule 14 cannot be invoked for confirmation of the demands on the appellants - Since the appellants had maintained adequate records, based on which the statutory ST-3/ER-1 returns were filed before the jurisdictional authorities, it cannot be alleged that the appellants had involved in the activities, concerning fraud, collusion, willful misstatement etc., with intent to evade payment of the required dues. Therefore, the extended period of limitation cannot be invoked for recovery of the demands - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Manufacture of Fertilizers, Exemption under Notification No. 4/2006-CE dated 1st March 2006 – Appellant imported various goods including calcium nitrate, bentonite sulphur, mono potassium phosphate, potassium sulphate, and NPK fertilizers claiming exemption from Customs duty under Notification No. 4/2006-CE dated 1st March 2006, as amended by Notification No. 4/2011-CE dated 1st March 2011. The lower authorities rejected the claim for exemption and imposed duty liability, interest, and penalty on the appellant - Whether the imported goods were eligible for exemption from customs duty under the notification, eve... [Read more]

Customs - Manufacture of Fertilizers, Exemption under Notification No. 4/2006-CE dated 1st March 2006 – Appellant imported various goods including calcium nitrate, bentonite sulphur, mono potassium phosphate, potassium sulphate, and NPK fertilizers claiming exemption from Customs duty under Notification No. 4/2006-CE dated 1st March 2006, as amended by Notification No. 4/2011-CE dated 1st March 2011. The lower authorities rejected the claim for exemption and imposed duty liability, interest, and penalty on the appellant - Whether the imported goods were eligible for exemption from customs duty under the notification, even if they were not used in the manufacture of other fertilizers, but were traded by the appellant – HELD - A plain reading of the Notification indicates that the exemption is available for all goods falling under Chapter 31 of the Customs Tariff Act, 1975, except those that are "clearly not to be used" in the manufacture of other fertilizers. The exclusion from exemption is limited to such goods that are imported but not intended for use in the manufacture of other fertilizers. The lower authorities had not properly appreciated the scope of the notification and the fact that the goods were traded by the appellant did not, in itself, disentitle them from the exemption - The impugned order is set aside and matter remanded to the original authority for a fresh decision in light of the proper interpretation of the notification and the facts as brought out in the submissions of the appellant – The appeal is disposed of [Read less]

Customs - Classification of "Twaron Para Aramid Pulp" - Invocation of extended period of limitation under Section 28(4) of Customs Act, 1962, Penalty under Section 114A of Customs Act, 1962 - Appellant imported "Twaron Para Aramid Pulp" under several Bills of Entry. The appellant self-assessed the goods classifying them under CTI 5601 22 00 - Department classified the goods under CTI 5601 30 00 and demanded differential customs duty along with interest and penalty. The appellant challenged the classification and invocation of extended period of limitation and penalty in three separate appeals - Classification of "Twaron Pa... [Read more]

Customs - Classification of "Twaron Para Aramid Pulp" - Invocation of extended period of limitation under Section 28(4) of Customs Act, 1962, Penalty under Section 114A of Customs Act, 1962 - Appellant imported "Twaron Para Aramid Pulp" under several Bills of Entry. The appellant self-assessed the goods classifying them under CTI 5601 22 00 - Department classified the goods under CTI 5601 30 00 and demanded differential customs duty along with interest and penalty. The appellant challenged the classification and invocation of extended period of limitation and penalty in three separate appeals - Classification of "Twaron Para Aramid Pulp – HELD - The imported goods are "Textile flock and dust and mill neps" classifiable under CTI 5601 30 00, and not "Wadding of man-made fibres" under CTI 5601 22 00 as claimed by the appellant. The literature from the manufacturer showed the imported goods were "fibrillated fibres" intended to manufacture gaskets, and not textile wadding. Further, the test report submitted by the appellant indicated that the fiber length was less than 5 mm, which squarely fell under the scope of "textile flock" under CTI 5601 30 00. Consequently, the issue of classification is answered in favor of the Revenue - The Tribunal upheld the classification of the imported goods under CTI 5601 30 00 and the confirmation of demand of duty within the normal period of limitation with applicable interest. However, the demand of duty for the extended period of limitation and the penalties imposed on the appellant under Section 114A are set aside. The appeals are remanded to the adjudicating authorities for the limited purpose of computing the demand of duty within the normal period of limitation and applicable interest – The appeal is partly allowed [Read less]

Service Tax - CENVAT credit on exempted goods/services, Reversal of credit, Common credit vs total credit - Appellant provides various taxable services and avails CENVAT credit of Service Tax paid on input services under the CENVAT Credit Rules, 2004. The appellant also trades in certain goods, rendering both taxable and exempt services, and avails CENVAT credit in respect of some input services used for both taxable and exempted services. The issue relates to the manner of reversal of CENVAT credit attributable to exempted goods/services - Whether, for the tax periods under consideration (April 2012 to March 2014), the va... [Read more]

Service Tax - CENVAT credit on exempted goods/services, Reversal of credit, Common credit vs total credit - Appellant provides various taxable services and avails CENVAT credit of Service Tax paid on input services under the CENVAT Credit Rules, 2004. The appellant also trades in certain goods, rendering both taxable and exempt services, and avails CENVAT credit in respect of some input services used for both taxable and exempted services. The issue relates to the manner of reversal of CENVAT credit attributable to exempted goods/services - Whether, for the tax periods under consideration (April 2012 to March 2014), the variable "P" in Rule 6(3A) of the CENVAT Credit Rules, 2004 would denote total credit or common credit – HELD - The variable "P" in Rule 6(3A) should denote only common credit, which arises from inputs/input services used both for exempted and non-exempted goods/services, and not the total credit. The amendments made to Rule 6(3A) with effect from 01.04.2016 were clarificatory in nature and should be given retrospective effect. The Tribunal also relied on the judgment of the Madras High Court in Honda Motor India P. Ltd. v. CCE & ST, which observed that the amendments were made to remove the distortion arising from the strict application of the old format. Accordingly, the impugned order is bad in law – The appeal is allowed [Read less]

Service Tax - Appellant is engaged in selling and marketing of photocopiers and communication equipment. The Department alleged that the appellant was acting on behalf of certain companies and received commission for various responsibilities assigned, which was classifiable under the category of Business Auxiliary Services (BAS) – Demand invoking extended period - Whether the expenditure booked as "Installation Expenditure" is classifiable under ECIS – HELD - While the appellant did not contest the demand on merits, it contested the imposition of penalty. The ingredients for invoking penalty under Section 78 were prese... [Read more]

Service Tax - Appellant is engaged in selling and marketing of photocopiers and communication equipment. The Department alleged that the appellant was acting on behalf of certain companies and received commission for various responsibilities assigned, which was classifiable under the category of Business Auxiliary Services (BAS) – Demand invoking extended period - Whether the expenditure booked as "Installation Expenditure" is classifiable under ECIS – HELD - While the appellant did not contest the demand on merits, it contested the imposition of penalty. The ingredients for invoking penalty under Section 78 were present in the facts of the case as the appellant had neither filed the requisite ST-3 returns nor disclosed the facts to the Department, nor approached the Department to seek any clarification. The plea of bonafide belief would not sustain in the given factual matrix - the Department had mainly relied on the fact that the appellant was getting certain reimbursable expenditure towards installation services, which were required to be included in the value of the installation service, which in turn was leviable to Service Tax. However, the rule requiring inclusion of reimbursable expenses was subsequently declared null and void by the Supreme Court. Further, there was no detailed discussion or evidence to suggest that the expenditure was in relation to any activity associated with installation and commissioning. Therefore, the demand on the reimbursable expenditure would not sustain and was liable to be set aside - The demand under the category of BAS is upheld along with interest and penalty under Section 78. However, the demand under ECIS was set aside - The appeal is allowed partly [Read less]

Service Tax – Classification - Cargo handling service and GTA Service, Claim of abatement - Department of the view that the appellant had wrongly availed the abatement of service tax on 75% of the value of taxable service by misclassifying 'Cargo Handling Service' as 'Transportation of Goods by Road Service' in respect of imported goods by their clients - Whether the services rendered by the appellant can be termed as Cargo Handling services or whether the composite contract can be bifurcated as Goods Transport Services with abatement of 75% and the balance as Cargo Handling Services as claimed by the appellant – HELD ... [Read more]

Service Tax – Classification - Cargo handling service and GTA Service, Claim of abatement - Department of the view that the appellant had wrongly availed the abatement of service tax on 75% of the value of taxable service by misclassifying 'Cargo Handling Service' as 'Transportation of Goods by Road Service' in respect of imported goods by their clients - Whether the services rendered by the appellant can be termed as Cargo Handling services or whether the composite contract can be bifurcated as Goods Transport Services with abatement of 75% and the balance as Cargo Handling Services as claimed by the appellant – HELD - The contracts contain separate break-up details for Transportation and stevedoring, wharfage and other charges, and the sample invoices also support this view. The Tribunal held that the price components for Cargo Handling services and GTA services have been bifurcated from verifiable evidence, and the main contract is for transportation of the cargo from the Vessel to the Importers' premises, and transportation gives the essential character of the service rendered. As the values have been bifurcated, the appellant has correctly indicated the values for GTA and CHS Separately and discharged the appropriate service tax - The lower authority has misdirected in holding that the entire service rendered as Cargo handling service disregarding the abatement of 75% claimed by the Appellant when separate values for cargo handling services and GTA Services are provided in the Contracts/Work Orders – The appellant has rightly classified the services and the Tax has been rightly discharged on the GTA Portion after availing the 75% abatement and 100% on the value of Cargo handling services. Further, as the demand fails to survive on the ground of merits, the interest and penalty will automatically fail to survive – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Penalty under Section 11AC - Authorities confirmed the demand of towards amortization of the cost of moulds and jigs and imposed an equal amount of penalty under Section 11AC of the Central Excise Act, 1944 - Whether the imposition of penalty under Section 11AC of the Central Excise Act, 1944 is justified when the entire duty and interest were paid prior to the issuance of the Order-in-Original – HELD - For invoking the extended period under the proviso to Section 11A(1), the Department must establish deliberate suppression of facts or wilful misstatement with an intent to evade payment of duty. Mere fai... [Read more]

Central Excise - Penalty under Section 11AC - Authorities confirmed the demand of towards amortization of the cost of moulds and jigs and imposed an equal amount of penalty under Section 11AC of the Central Excise Act, 1944 - Whether the imposition of penalty under Section 11AC of the Central Excise Act, 1944 is justified when the entire duty and interest were paid prior to the issuance of the Order-in-Original – HELD - For invoking the extended period under the proviso to Section 11A(1), the Department must establish deliberate suppression of facts or wilful misstatement with an intent to evade payment of duty. Mere failure or negligence, even a wrong interpretation of law, is not suppression. In the present case, the appellant had disclosed all relevant facts related to the import of moulds, availing of credit, and their use for specific customers. There was no suppression, fraud, or intent to evade. Therefore, even if the duty demand is upheld on valuation grounds, the penalty under Section 11AC cannot be automatically imposed and must be set aside - The penalty imposed under Section 11AC of the Central Excise Act, 1944 is set aside, while the duty and interest already paid are upheld - The appeal is allowed [Read less]

Service Tax - Point of Taxation Rules 2011, Payment on receipt basis as payments were received belatedly - Appellant was paying service tax on receipt basis instead of billed basis even after the Point of Taxation Rules (POTR), 2011 came into effect from July 1, 2011 requiring payment of service tax on accrual basis – Demand of tax alongwith interest and penalties under Sections 77 and 78 of the Finance Act, 1994 – Application of POTR 2011 on the bills raised and credit notes issued for the deficiency in service - Whether the service tax amount shown in the credit note is liable for deduction from the original billed a... [Read more]

Service Tax - Point of Taxation Rules 2011, Payment on receipt basis as payments were received belatedly - Appellant was paying service tax on receipt basis instead of billed basis even after the Point of Taxation Rules (POTR), 2011 came into effect from July 1, 2011 requiring payment of service tax on accrual basis – Demand of tax alongwith interest and penalties under Sections 77 and 78 of the Finance Act, 1994 – Application of POTR 2011 on the bills raised and credit notes issued for the deficiency in service - Whether the service tax amount shown in the credit note is liable for deduction from the original billed amount after 1.7.2011 – HELD - Prior to POTR, 2011, service tax was paid on collection basis, meaning it was due only when the service provider received payment from the client. For the invoices raised prior to 1.7.2011, the reduction of value based on actual basis for Rs.3,73,977/- is in order and has to be allowed as it is squarely covered by Rule 6(1) of Central Excise Rules 2002 i.e. prior to POTR Period - For the balance amount of Rs.10,75,681/-, it is covered by POTR for which the Adjudicating Authority has given detailed/well-reasoned findings. The averment of the assessee that he could not pay the tax dues within the stipulated time due to financial crisis cannot be considered as a reasonable cause as the tax payment is mandated by the Law. Even if the tax is held to be in excess due to realization at a later date, the excess paid tax can be adjusted against the tax liability for the succeeding month. Therefore, once the Invoice is raised, the assessee should have paid the due tax on the due date and later on they should have adjusted any excess payment in the tax liability of the succeeding month as has been held in the impugned order. It is clear that it is a revenue neutral situation in both the periods i.e. pre and post 01.07.2011 for the Appellant, however, the postulates laid down post 01.07.2011 is very clear, that it should be on accrual basis only. Therefore, the demand of Rs.10,75,681/- along with interest is upheld – the appeal is answered partly in favour of the Department as well as the Appellant - The appellant paid service tax on the lesser amount, which is arrived at after mutual understanding based on the actual man hours consumed on the maintenance work and has issued credit notes in such cases – HELD - Appellant contends that CENVAT credit to the tune of Rs.14,84,423/- referred to in their letter dated 19.12.2012 was never considered by the Commissioner. There is no proof to verify CENVAT reversal by the Appellant, and no proof submitted of having debited the same in the CENVAT Credit Ledger nor abstracted copy of the same has been placed before the Adjudicating Authority for verification. So, unable to agree to the contention of the Appellant on this issue. There is a mention of Availment of CENVAT Credit, but no proof of debit. Therefore, this amount of service tax of Rs.14,84,423/- is payable by the Appellant - Invocation of extended period – HELD - the Appellant has raised Invoices/Credit Notes mentioning Service Tax, the compliance of the Appellant in discharging the Tax along with interest before the issue of SCN though the Appellant was facing liquidity crisis with 50 % of the amount as receivables deserves a special mention. Further the Department has collected the details from the Appellant and the ST-3 returns and it is also an interpretative issue on the Taxability as contended by the Appellant. In an era of Trade liberalization, imposing stiff penalties will deter the trade and be counterproductive - the invocation of extended period is not justified. Consequently, the imposition of Penalty under Section 78 of FA 1994 i.e. penalty equal to demand will automatically fails to sustain – Further, penalty under Section 77 of FA 1994 is not imposable as the appellant has obtained registration, filed returns, raised Invoices and Credit Notes indicating Service Tax and paid a large portion of the Tax before issue of SCN along with interest and as such the penalty under Section 77 is not imposable and is ordered to be set aside. [Read less]

GST - Scrutiny of returns, Challenge to Show cause notice on the ground of Limitation under Section 73(2) read with Section 73(10) CGST Act, 2017 - Petitioner challenged the show cause notice on the ground that it is barred by limitation under Sections 73(2) and 73(10) of the CGST Act - HELD - As per Section 73(2), the proper officer is required to issue the notice at least three months prior to the time limit specified in sub-section (10) for issuance of order. Section 73(10) prescribes a time limit of three years from the due date for furnishing of Annual return for the relevant Financial year. In the present case, the s... [Read more]

GST - Scrutiny of returns, Challenge to Show cause notice on the ground of Limitation under Section 73(2) read with Section 73(10) CGST Act, 2017 - Petitioner challenged the show cause notice on the ground that it is barred by limitation under Sections 73(2) and 73(10) of the CGST Act - HELD - As per Section 73(2), the proper officer is required to issue the notice at least three months prior to the time limit specified in sub-section (10) for issuance of order. Section 73(10) prescribes a time limit of three years from the due date for furnishing of Annual return for the relevant Financial year. In the present case, the show cause notice was issued only on 12th August, 2024, which was beyond the time limit of 31st May, 2024 prescribed under Section 73(2) read with Section 73(10) - The purpose of Section 73(2) is to ensure that the assessee gets at least three months to file a reply to the show cause notice, which was not adhered to in the present case. The Department's contention that the delay was due to a technical glitch would not be tenable in law - The SCN dated 28th May, 2024 dispatched on 3rd June, 2024 cannot be held to be within time in terms of Section 73(2) of the CGST Act. Accordingly, the said SCN and any other order passed consequent thereto stand quashed – The writ petition is allowed [Read less]

Service Tax - Advertising agency, Sale of space or time for advertisement to State Govt by State transport undertaking, Renting of immovable property services - Department alleged that the appellant received amounts from the State Government for display of advertisements of the Government's achievements on the appellant's buses but failed to pay service tax on the said amounts - Whether the appellant, a State transport undertaking, was rendering advertisement service to the State Government by allowing display of advertisements on its buses – HELD - The appellant is primarily a State transport undertaking and not an adve... [Read more]

Service Tax - Advertising agency, Sale of space or time for advertisement to State Govt by State transport undertaking, Renting of immovable property services - Department alleged that the appellant received amounts from the State Government for display of advertisements of the Government's achievements on the appellant's buses but failed to pay service tax on the said amounts - Whether the appellant, a State transport undertaking, was rendering advertisement service to the State Government by allowing display of advertisements on its buses – HELD - The appellant is primarily a State transport undertaking and not an advertising agency. The amounts received by the appellant from the Government of Rajasthan were pursuant to an agreement/minutes of meeting for display of advertisements of the Government's achievements on the appellant's buses. Such amounts cannot be considered as received by the appellant for providing advertisement services - The activity of the appellant in displaying advertisements on its buses cannot be considered as rendering advertisement services – Further, the appellant is a State-owned corporation, a statutory body, and cannot have an intent to evade payment of tax. The department was not justified in invoking the extended period of limitation for issuing the SCN – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Rule 8(3A) of Central Excise Rules, 2002 – Belated payment of duty – Imposition of penalty – Appellant is engaged in manufacture of iron ore concentrate – During audit, department observed that Appellant had paid monthly duty liability belatedly – Lower authority imposed penalty on Appellant by invoking Rule 8(3A) of the Rules – Whether Appellant for having defaulted in payment of duty on time is liable to pay penalty @1% for such delay for entire month even if such payment stood made by a particular date of month – HELD – Perusal of Rule 8(3A) of the Rules showed that penalty has to be p... [Read more]

Central Excise – Rule 8(3A) of Central Excise Rules, 2002 – Belated payment of duty – Imposition of penalty – Appellant is engaged in manufacture of iron ore concentrate – During audit, department observed that Appellant had paid monthly duty liability belatedly – Lower authority imposed penalty on Appellant by invoking Rule 8(3A) of the Rules – Whether Appellant for having defaulted in payment of duty on time is liable to pay penalty @1% for such delay for entire month even if such payment stood made by a particular date of month – HELD – Perusal of Rule 8(3A) of the Rules showed that penalty has to be paid @1% on such amount of duty not paid for each month or a part thereof. Plain reading of Rule 8(3A) of the Rules does not envisage imposing liability upon an assessee even for one day where there was no default and payment of such duties stood made by the date. Appellant has already faced insolvency proceedings and there has been a resolution plan duly upheld by Supreme Court. As a consequence of said plan, tax liability stands extinguished. In totality of entire above discussion, impugned order is held to be passed in ignorance of earlier decisions, hence, it is set aside – Appeal allowed [Read less]

Customs – Sections 108, 111(m) and 138B of Customs Act, 1962 – Rules 9 and 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – Import of spray paints – Allegation of undervaluation – Rejection of transaction value – Appellant imported 14 consignments of spray paints from three foreign suppliers and filed Bill of Entry for clearance – On basis of proforma invoices retrieved from e-mail account of Appellant, department issued show cause notice proposing to reject transaction value under Rule 12 of the Rules, re-determine it under Rule 9 of the Rules and demand differential duty – ... [Read more]

Customs – Sections 108, 111(m) and 138B of Customs Act, 1962 – Rules 9 and 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – Import of spray paints – Allegation of undervaluation – Rejection of transaction value – Appellant imported 14 consignments of spray paints from three foreign suppliers and filed Bill of Entry for clearance – On basis of proforma invoices retrieved from e-mail account of Appellant, department issued show cause notice proposing to reject transaction value under Rule 12 of the Rules, re-determine it under Rule 9 of the Rules and demand differential duty – Principal Commissioner confirmed proposals made in show cause notice – Whether rejection of transaction value under Rule 12 of the Rules is sustainable – HELD – Impugned order placed reliance on statement made by Appellant under Section 108 of the Act to effect that prices mentioned in proforma invoices were correct and were much higher than commercial invoices. Statement made by Appellant under Section 108 of the Act cannot be considered as relevant, as procedure contemplated under Section 138B of the Act had not been followed. After the statement was made, Appellant retracted the statement immediately. Appellant clearly stated that he was told that if he refused to sign in typed statement, he would be arrested with his family members. Appellant further stated that, to save himself from arrest and to save his family members from harassment, he signed typed statement without even reading it. Printouts alleged to have been taken during course of statement made by Appellant were not recorded under a panchnama. There is no other evidence which may substantiate undervaluation of goods imported through consignments. In these circumstances, transaction value could not have been rejected under Rule 12 of the Rules, as a result of which, it could not have been re-determined under Rule 9 of the Rules. Impugned order passed by Principal Commissioner is set aside – Appeal allowed [Read less]

Customs – Sections 113(f) and 114(iii) of Customs Act, 1962 – Imposition of penalty – Sustainability – Intelligence gathered information that a tug ‘Alliance’ owned by Appellants had illegally made supply of 20KL of diesel oil to a Pakistan going foreign flag vessel without filing export document – After investigation, department issued show cause notice to Appellants along with other co-noticees – Adjudicating Authority ordered for confiscation of impugned goods under Section 113(f) of the Act and imposed penalty on Appellants under Section 114(iii) of the Act – Commissioner (Appeals) upheld order passed... [Read more]

Customs – Sections 113(f) and 114(iii) of Customs Act, 1962 – Imposition of penalty – Sustainability – Intelligence gathered information that a tug ‘Alliance’ owned by Appellants had illegally made supply of 20KL of diesel oil to a Pakistan going foreign flag vessel without filing export document – After investigation, department issued show cause notice to Appellants along with other co-noticees – Adjudicating Authority ordered for confiscation of impugned goods under Section 113(f) of the Act and imposed penalty on Appellants under Section 114(iii) of the Act – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether penalty under Section 114(iii) of the Act has been rightly imposed upon Appellants – HELD – Penalty under Section 114(iii) of the Act can be imposed upon a person who in relation to any goods, does or omits to do any act which would render such goods liable to confiscation under Section 113 of the Act or abets the doing or omission of such act. Appellant No.1 had stated in his statement that he did not have any prior knowledge about fact that the person, to whom the tug was given on lease for supply of diesel, had not filed any shipping bill for supply of said goods. Appellant No.1 had nowhere stated that he had allowed any person to use the tug for supply of diesel and spares without filing shipping bill and without observing the law. Appellants were not involved in smuggling of diesel oil through tug “Alliance”. There was no connivance on part of Appellants to illegally supply bunker fuel to vessel. Penalty has been wrongly imposed upon Appellants. Impugned order upholding imposition of penalty upon Appellants is not sustainable and liable to be set aside – Appeals allowed [Read less]

Service Tax – Reimbursable electricity charges – Entitlement of deduction – Appellant is engaged in providing various taxable services, but had not paid service tax on same – After investigation, department issued show cause notice to Appellant by proposing demand of service tax under various categories – Adjudicating Authority confirmed demands as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is liable to pay Service Tax on electricity charges under category of Management, Maintenance and Repair (MMR) Services when same is claimed to ... [Read more]

Service Tax – Reimbursable electricity charges – Entitlement of deduction – Appellant is engaged in providing various taxable services, but had not paid service tax on same – After investigation, department issued show cause notice to Appellant by proposing demand of service tax under various categories – Adjudicating Authority confirmed demands as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is liable to pay Service Tax on electricity charges under category of Management, Maintenance and Repair (MMR) Services when same is claimed to be reimbursable by Appellant – HELD – Appellant on his own accord furnished details of income from maintenance of complexes. Department has added electricity charges and computed tax demand. Appellant had submitted proof that they have paid electricity charges which were subsequently reimbursed by clients. Service Tax is not leviable on electricity charges, as they are reimbursements. Demand on MMR services is payable after deducting value of electricity charges. Matter is remanded to Lower Appellate Authority for limited purpose of computing tax after deducting reimbursed expenses on account of electricity charges and pass a reasoned order after following principles of natural justice – Appeals disposed of - Receipt of commission – Demand of tax – Whether demand confirmed under category of Business Auxiliary Service (BAS) is sustainable – HELD – Appellant have canvassed financial products like Home Loan on behalf of various financial institutions and received Sales Commission from said institutions. Sales commission paid by institutions was the sole and gross consideration for procuring clients. Service tax is chargeable on gross amount received as consideration for providing service. Commission received from Financial Institutions are rightly classified under BAS in impugned order. Demand under BAS is upheld - Overlapping of demand – Whether demand under Security Agency service overlaps with demand made under MMR service – HELD – Security services have been included in composite service of MMR Service. Security Services have been held to be within scope of maintenance and same cannot be taxed again, which will tantamount to double taxation and is not sustainable in law. Demand under Security Agency service is required to be set aside being a repeated demand and being already covered under MMR Services for similar period. Demand under Security Agency service is dropped on ground of overlapping of demand with MMR service. [Read less]

GST - Mandatory pre-deposit under Section 107(6) of the CGST Act - Whether the amount deposited under protest can be adjusted towards the mandatory pre-deposit of 10% required for entertaining the appeal under Section 107(6) of the CGST Act - HELD - Once the amount deposited under protest has not been quantified from any of the demand, the petitioner can take the advantage of the said amount towards the pre-deposit for entertaining the appeal - The amount deposited by the petitioner under protest can be adjusted towards the mandatory pre-deposit of 10% required for entertaining the appeal under Section 107(6) of the CGST A... [Read more]

GST - Mandatory pre-deposit under Section 107(6) of the CGST Act - Whether the amount deposited under protest can be adjusted towards the mandatory pre-deposit of 10% required for entertaining the appeal under Section 107(6) of the CGST Act - HELD - Once the amount deposited under protest has not been quantified from any of the demand, the petitioner can take the advantage of the said amount towards the pre-deposit for entertaining the appeal - The amount deposited by the petitioner under protest can be adjusted towards the mandatory pre-deposit of 10% required for entertaining the appeal under Section 107(6) of the CGST Act. The Dept failed to bring on record any material to show that the amount deposited by the petitioner under protest has been adjusted against any other demand. Once the amount deposited under protest has not been adjusted till date, the petitioner is entitled to avail the said deposit under protest towards the adjustment / pre-deposit of 10% of the amount for entertainment of his appeal as required under Section 107(6) of CGST Act - The writ petitions is allowed [Read less]

GST - Audit, Period of limitation period – Authorities commenced Audit for the financial years 2017-18 to 2022-23 and issued various notices seeking information. A draft audit report was prepared, and a pre-SCN was issued, to which the Petitioner replied. However, before the time for filing a reply to the pre-SCN lapsed, the authorities issued the SCN - Whether the issuance of the SCN before the time for filing a reply to the pre-SCN lapsed was valid and whether the finalization of the audit report was within the limitation period prescribed under the CGST Act - HELD - The issuance of the SCN before the time for filing a... [Read more]

GST - Audit, Period of limitation period – Authorities commenced Audit for the financial years 2017-18 to 2022-23 and issued various notices seeking information. A draft audit report was prepared, and a pre-SCN was issued, to which the Petitioner replied. However, before the time for filing a reply to the pre-SCN lapsed, the authorities issued the SCN - Whether the issuance of the SCN before the time for filing a reply to the pre-SCN lapsed was valid and whether the finalization of the audit report was within the limitation period prescribed under the CGST Act - HELD - The issuance of the SCN before the time for filing a reply to the pre-SCN lapsed was in violation of the principles of natural justice. The SCN is set aside, and the proceedings were relegated to the pre-SCN stage, allowing the Petitioner to file its reply to the pre-SCN by the specified date - The provisions of Section 65 of the CGST Act, the registered person is to be informed by way of a notice period of at least 15 days prior to the conduct of the audit. The date from when the commencement of the audit takes place is the date from when the registered person makes available the records and other documents as called for by the authorities – The provisions prescribe a three-month period for the completion of the audit, extendable by further six months. The final reply was filed by the petitioner on October 11, 2024, and the audit report was communicated on February 13, 2025, which was within the permissible period. Therefore, the audit report was not issued beyond the period of limitation - The proceedings are relegated to the pre-SCN stage. The Petitioner is free to file its reply to the pre-SCN - The writ petitions are disposed of [Read less]

GST - Refund of IGST, Delayed issuance of deficiency memo, interest on delayed refunds - Whether the petitioner is entitled to interest on the delayed refund due to the deficiency memo not being issued within the prescribed 15-day timeline – HELD - As per the scheme of the CGST Act and Rules, the petitioner is entitled to interest at the rate of 6% per annum from the date immediately after the expiry of 60 days from the date of the first refund application until the date of sanction of refund. Further, if the second refund application is filed pursuant to the appellate orders upholding the petitioner's claim, the petitio... [Read more]

GST - Refund of IGST, Delayed issuance of deficiency memo, interest on delayed refunds - Whether the petitioner is entitled to interest on the delayed refund due to the deficiency memo not being issued within the prescribed 15-day timeline – HELD - As per the scheme of the CGST Act and Rules, the petitioner is entitled to interest at the rate of 6% per annum from the date immediately after the expiry of 60 days from the date of the first refund application until the date of sanction of refund. Further, if the second refund application is filed pursuant to the appellate orders upholding the petitioner's claim, the petitioner would be entitled to interest at the rate of 9% per annum from the date immediately after the expiry of 60 days from the date of the second refund application. The petitioner cannot be denied the benefit of interest for the delay caused due to the deficiency memo not having been issued within the stipulated period - the delay in processing and granting refunds has a cascading adverse effect on the business of the taxpayers. The respondents are directed to consider the refund applications expeditiously and granting the petitioner the benefit of interest as per the provisions of the CGST Act and Rules – The petition is disposed of [Read less]

Customs – Rejection of refund claim – Sustainability – Appellant filed refund claim in terms of Notification No.102/2007-Customs for refund of 4% Special Additional Duty of Customs paid on import of Hot Dipped Galvanised Steel Wire – Adjudicating authority rejected refund claim filed by Appellant for non-fulfillment of condition in Para 2(b) of Notification No.102/2007 – Lower appellate authority rejected appeal filed by Appellant – Whether Appellant is eligible for refund claimed in terms of Notification No.102/2007 – HELD – Lower authorities have found that sales invoices submitted by Appellant and random... [Read more]

Customs – Rejection of refund claim – Sustainability – Appellant filed refund claim in terms of Notification No.102/2007-Customs for refund of 4% Special Additional Duty of Customs paid on import of Hot Dipped Galvanised Steel Wire – Adjudicating authority rejected refund claim filed by Appellant for non-fulfillment of condition in Para 2(b) of Notification No.102/2007 – Lower appellate authority rejected appeal filed by Appellant – Whether Appellant is eligible for refund claimed in terms of Notification No.102/2007 – HELD – Lower authorities have found that sales invoices submitted by Appellant and randomly verified at buyers’ end did not contain mandatory endorsement as per condition in para 2(b) of Notification No.102/2007. Basing on random verification of one sale invoice by Adjudicating authority, it cannot be concluded that sales invoices submitted by Appellant were not stamped with endorsement as per condition in para 2(b) of Notification No.102/2007. Issue of compliance of para 2(b) of Notification No.102/2007 came up for consideration before Larger Bench of this Tribunal in case of Chowgule & Company Pvt. Ltd. Versus Commissioner of Customs & Central Excise. In said case, Larger Bench held that a trader-importer, who paid SAD on imported goods and discharged VAT/ST liability on subsequent sale and issued commercial invoices without indicating any details of duty paid would be entitled to benefit of exemption under Notification 102/2007, notwithstanding fact that he made no endorsement that "credit of duty is not admissible" on commercial invoices. Judicial discipline requires that above judgment should be followed. Appellant is eligible for refund claimed. Impugned order rejecting refund claim is not proper and so ordered to be set aside – Appeal allowed [Read less]

Service Tax - Renting of immovable property service rendered to Govt Dept, Benefit of exemption Notification No.33/2007-ST dated 23.05.2007 - Whether the appellant was eligible for the exemption under Notification No.33/2007-ST dated 23.05.2007 for the 'Renting of Immovable Property Service' provided to the Queensland State Government Department – HELD - The appellant had rented his premises to Trade and Investment Office, Queensland and they could have availed the benefit of the Notification No.33/2007-ST dated 23.05.2007 by producing a certificate of entitlement from the protocol division of the Ministry of External Af... [Read more]

Service Tax - Renting of immovable property service rendered to Govt Dept, Benefit of exemption Notification No.33/2007-ST dated 23.05.2007 - Whether the appellant was eligible for the exemption under Notification No.33/2007-ST dated 23.05.2007 for the 'Renting of Immovable Property Service' provided to the Queensland State Government Department – HELD - The appellant had rented his premises to Trade and Investment Office, Queensland and they could have availed the benefit of the Notification No.33/2007-ST dated 23.05.2007 by producing a certificate of entitlement from the protocol division of the Ministry of External Affairs. The appellant did not claim the exemption nor produce the required certificate of entitlement from the Ministry of External Affairs - The exemption clauses or exemption notifications should be strictly interpreted. Since the exemption was not claimed by the appellant and neither till date any certificate has been produced, the benefit of the exemption cannot be extended by the appellant - The claim of the appellant is that it is a non-taxable service, is also not relevant since renting of immovable property in furtherance of business or commerce is valid in as much as the premises rented on payment of rental income which was otherwise exempted if it is for an embassy based on the Notification No.33/2007-ST. Since no such claim has been made, the appellant is liable to pay service tax - The appeal is disposed of confirming the demand along with interest and by setting aside the penalty under Section 78 of the Finance Act, 1994 – The appeal is partially allowed [Read less]

Service Tax – Filing of appeal – Maintainability – Appellant company has been engaged in execution of turnkey contracts for setting up of power plants for various Electricity Distribution Authorities – After investigation, Revenue issued show cause notice to Appellant by proposing demand of Service Tax on value of sale of equipment – Principal Commissioner confirmed demand as proposed in show cause notice – Whether appeal filed by Appellant company is maintainable or not – HELD – Revenue has taken preliminary objection on ground that appeals should have been filed by 45 noticees individually, since demand h... [Read more]

Service Tax – Filing of appeal – Maintainability – Appellant company has been engaged in execution of turnkey contracts for setting up of power plants for various Electricity Distribution Authorities – After investigation, Revenue issued show cause notice to Appellant by proposing demand of Service Tax on value of sale of equipment – Principal Commissioner confirmed demand as proposed in show cause notice – Whether appeal filed by Appellant company is maintainable or not – HELD – Revenue has taken preliminary objection on ground that appeals should have been filed by 45 noticees individually, since demand has been confirmed against 46 noticees, but one single appeal has been filed by one entity, i.e. headquarters of Appellant company. Appeal has been filed by Corporate Headquarters of Appellant, wherein accounts of all 45 units are maintained. Accounts are consolidated and a single balance sheet is prepared at end of Financial Year. Appellant company is operating under one single PAN Number. Irrespective of fact that demand is confirmed against various units of same company, final liability to pay confirmed demand, if any, would lie with headquarters. Preliminary objection raised by Respondent is rejected. Appeal filed by headquarters of Appellant company is maintainable – Appeals allowed - Sale of equipment – Tax liability – Whether value of equipments sold by Appellant can be included in value of works contract for levy of Service Tax – HELD – Turnkey contracts are divisible contracts for conceptualizing the project, supply of equipment, machinery, infrastructure, services of different nature and a number of other activities which may or may not involve tax liabilities. Contract for supply of equipments executed by Appellant with customers is totally distinct and not related to service contract. Contract for sale of equipment is a separate contract, wherein CST/VAT has been paid on sale of goods. No service tax is payable on value of equipments/materials, on which CST/VAT is applicable or paid/payable. Value of equipments sold under a distinct supply contract cannot be included in value of Works Contract for levy of Service Tax. Appellant has rightly not included value of sale of equipment to customers for purpose of payment of service tax. Demand confirmed in impugned order is set aside. [Read less]

Central Excise - Classification of corrugated boxes and parts, Eligibility for concessional excise duty rate – Demand of differential excise duty on the ground that the corrugated rolls/liners are classifiable under tariff item 4819 1090, which attracts a higher rate of 12% Basic Excise Duty (BED), instead of the concessional rate of 6% BED availed by the appellant under Notification No.12/2012-C.E - Whether the corrugated rolls/liners manufactured and cleared by the appellant are eligible for the concessional rate of 6% BED under Notification No.12/2012-C.E – HELD - The appellants are manufacturing the excisable goods... [Read more]

Central Excise - Classification of corrugated boxes and parts, Eligibility for concessional excise duty rate – Demand of differential excise duty on the ground that the corrugated rolls/liners are classifiable under tariff item 4819 1090, which attracts a higher rate of 12% Basic Excise Duty (BED), instead of the concessional rate of 6% BED availed by the appellant under Notification No.12/2012-C.E - Whether the corrugated rolls/liners manufactured and cleared by the appellant are eligible for the concessional rate of 6% BED under Notification No.12/2012-C.E – HELD - The appellants are manufacturing the excisable goods i.e., corrugated boxes along with rolls, stiffeners and liners classifiable for such corrugated boxes. The corrugated boxes manufactured by the appellants are correctly classifiable under tariff item 4819 1010, and goods under dispute viz., rolls, stiffeners and liners being part of the corrugated boxes are correctly classifiable under tariff item 4819 1090. Since, the concessional rate of BED vide Serial No.171 of Notification No.12/2012-C.E. dated 17.03.2012 is applicable for goods of chapter heading 4819 10, the disputed goods are also eligible for the concessional rate of BED at 6% - the issue of classification of dividers, partitions, plates, fitments, as parts of corrugated boxes and extending the concessional rate of BED, the CBEC had clarified vide its communication dated 02.09.1986 to the field formations that such parts of corrugated boxes cannot be separately classified as other articles of paper/paper board; and the parts of corrugated boxes will be classifiable under the heading under which the corrugated box itself is classifiable - the impugned order confirming the adjudged demands by the original authority in denying the concessional rate of duty and consequent imposition of penalty on the appellants is set aside – The appeal is allowed [Read less]

Central Excise - Intermix of superior kerosene oil (SKO) with motor spirit (MS) or high speed diesel (HSD) - Whether the activity of intermixing of SKO with MS/HSD amounts to manufacture under the Central Excise Act - Department initiated proceedings to recover the differential duty on the intermixed quantity of SKO, demanding duty at the higher rate applicable for MS/HSD – HELD - The appellant has correctly paid the duty on the intermixed SKO at the rate applicable for industrial SKO, as the goods cleared from the factory were MS/HSD and SKO. The Tribunal relied on the judgment of the Tribunal in the case of Indian Oil ... [Read more]

Central Excise - Intermix of superior kerosene oil (SKO) with motor spirit (MS) or high speed diesel (HSD) - Whether the activity of intermixing of SKO with MS/HSD amounts to manufacture under the Central Excise Act - Department initiated proceedings to recover the differential duty on the intermixed quantity of SKO, demanding duty at the higher rate applicable for MS/HSD – HELD - The appellant has correctly paid the duty on the intermixed SKO at the rate applicable for industrial SKO, as the goods cleared from the factory were MS/HSD and SKO. The Tribunal relied on the judgment of the Tribunal in the case of Indian Oil Corporation Ltd. v. Commissioner of Central Excise in Service Tax, Guwahati, wherein it was held that the CBEC circular suggesting application of the price of HSD/MS on clearance of SKO is not in line with the statutory provisions and cannot be binding on the assessee. The Tribunal also observed that the activity of intermixing of SKO with MS/HSD does not amount to 'manufacture' under the Central Excise Act, as the products are not specified in the Third Schedule and the activity does not fall under clause (iii) of Section 2(f) of the Act - The demand of differential duty on the intermixed quantity of SKO at the higher rate applicable for MS/HSD is not legally sustainable and set side – The appeal is allowed [Read less]

Service Tax - Remittances in foreign currency, Export-import transactions, Collection of remittances made by the overseas buyers towards proceeds of exports, Demand under RCM – Appellant was providing various banking and financial services, including services related to collection of remittances made by overseas buyers towards proceeds of exports. Department alleged that when foreign banks deduct certain charges from the remittance amount and remit the net amount to the Indian banks, the Indian banks are liable to pay service tax on such foreign bank charges under reverse charge mechanism - Whether the Indian banks are t... [Read more]

Service Tax - Remittances in foreign currency, Export-import transactions, Collection of remittances made by the overseas buyers towards proceeds of exports, Demand under RCM – Appellant was providing various banking and financial services, including services related to collection of remittances made by overseas buyers towards proceeds of exports. Department alleged that when foreign banks deduct certain charges from the remittance amount and remit the net amount to the Indian banks, the Indian banks are liable to pay service tax on such foreign bank charges under reverse charge mechanism - Whether the Indian banks are the recipient of service provided by the foreign banks in the export/import transactions for settling the foreign remittances, and thus liable to pay service tax under Reverse Charge basis – HELD - By relying on the decisions in the cases of State Bank of Bikaner & Jaipur and Central Bank of India, it is held that the Indian banks are not the recipient of any service rendered by the foreign banks in the export/import transactions for settling the foreign remittances. The Indian banks merely act as an agent of the Indian exporters/importers and facilitate the settlement of payments. There is no flow of consideration from the Indian banks to the foreign banks, and hence, the Indian banks cannot be made liable to pay service tax under RCM on the foreign bank charges. The transactions are in compliance with the legal requirements and the Indian banks do not have any role in the payment of foreign bank charges, which are borne by the Indian exporters/importers - The impugned orders are set aside and the appeals are allowed [Read less]

GST - Condonation of Delay, Extraordinary Jurisdiction of High Court - Whether the Appellate Authority under Sub-Section (4) of Section 107 of the SGST Act, 2017 is competent to condone the delay in filing an appeal beyond the prescribed period of one month after the expiry of three months - HELD - The Appellate Authority cannot entertain an appeal under Section 107 filed beyond the period of four months from the date of the decision or order. The statutory prohibition on condonation of delay beyond one month is a strong consideration, but it does not bar the jurisdiction of the High Court to condone the delay in exception... [Read more]

GST - Condonation of Delay, Extraordinary Jurisdiction of High Court - Whether the Appellate Authority under Sub-Section (4) of Section 107 of the SGST Act, 2017 is competent to condone the delay in filing an appeal beyond the prescribed period of one month after the expiry of three months - HELD - The Appellate Authority cannot entertain an appeal under Section 107 filed beyond the period of four months from the date of the decision or order. The statutory prohibition on condonation of delay beyond one month is a strong consideration, but it does not bar the jurisdiction of the High Court to condone the delay in exceptional and extraordinary cases where application of the delay barring statute would result in gross injustice. The reasons provided by the petitioner for the delay, which were primarily due to the petitioner's old age, medical conditions, and reliance on an accountant did not make the case an exceptional one warranting interference by the High Court in its extraordinary jurisdiction - The petition is dismissed [Read less]

Service Tax – Applicable rate of interest on refund of service tax paid under protest – Appellant had paid service tax under protest during investigation. The order confirming the service tax demand was later set aside by the Tribunal. The appellant applied for refund of the amount paid under protest, which was granted. However, the interest on the refund amount was awarded at the rate of 6% per annum - Whether the appellant is entitled to interest on the refund amount at the rate of 12% per annum instead of 6% per annum – HELD - The amount paid by the appellant during the investigation was in the nature of a pre-dep... [Read more]

Service Tax – Applicable rate of interest on refund of service tax paid under protest – Appellant had paid service tax under protest during investigation. The order confirming the service tax demand was later set aside by the Tribunal. The appellant applied for refund of the amount paid under protest, which was granted. However, the interest on the refund amount was awarded at the rate of 6% per annum - Whether the appellant is entitled to interest on the refund amount at the rate of 12% per annum instead of 6% per annum – HELD - The amount paid by the appellant during the investigation was in the nature of a pre-deposit, and hence, Section 11B of the Central Excise Act, 1944 is not applicable. The interest on the refund of such amounts is governed by Section 35FF of the Central Excise Act, 1944 - As per the provisions of Section 35FF, the rate of interest can be between 5% to 36% per annum, as fixed by the Central Government. The Central Government had issued a notification fixing the rate of interest at 6% per annum and the plain language of the statute should be given effect to. Accordingly, the interest on the refund amount can be awarded only at the rate of 6% per annum, as per the applicable statutory provisions - the appellant's claim for interest at the rate of 12% per annum is rejected. The appeal is dismissed [Read less]

Gujarat Value Added Tax Act, 2003 - Delay in payment under Amnesty Scheme, Technical difficulties - The petitioner made attempts to pay the differential amount through the online portal, but due to technical issues, could not make the payment by the due date. The petitioner eventually paid the remaining amount 2 days after the scheduled deadline. The respondent rejected the petitioner's application under the Amnesty Scheme on the ground of delay in payment - Whether the delay of 2 days in making the payment under the Amnesty Scheme can be condoned considering the apparent bonafides of the petitioner and the technical diffi... [Read more]

Gujarat Value Added Tax Act, 2003 - Delay in payment under Amnesty Scheme, Technical difficulties - The petitioner made attempts to pay the differential amount through the online portal, but due to technical issues, could not make the payment by the due date. The petitioner eventually paid the remaining amount 2 days after the scheduled deadline. The respondent rejected the petitioner's application under the Amnesty Scheme on the ground of delay in payment - Whether the delay of 2 days in making the payment under the Amnesty Scheme can be condoned considering the apparent bonafides of the petitioner and the technical difficulties faced - HELD - The object of the Amnesty Scheme is to bring about expeditious and effective resolution of old disputes and recoveries of old outstanding dues of the Government. The petitioner had paid the first five installments within the time limit and was on the verge of paying the last installment on time, but could not do so due to technical issues on the online portal. There was a clear and unequivocal intention of the petitioner to avail the Scheme, which was not disputed by the respondent. Considering the bonafides of the petitioner and the technical difficulties faced, the delay of 2 days in making the payment under the Amnesty Scheme should be condoned - The order rejecting the petitioner's application under the Amnesty Scheme and condoned the delay of 2 days in making the payment is set aside – The petition is allowed [Read less]

Central Excise – Rebate on ATF, Foreign-going aircraft – Petitioner supplied Aviation Turbine Fuel (ATF) to Air India International flights. As the ATF was exported as stores for consumption on board a foreign-going aircraft, petitioner claimed rebate of the excise duty paid under Rule 18 of the Central Excise Rules, 2002 – Whether the petitioner is entitled to the rebate of excise duty paid on the ATF supplied to the foreign-going aircraft - HELD - The definition of "export" under Rule 18 of the Central Excise Rules, 2002 includes goods supplied as stores for use on board a foreign-going aircraft. The relevant Notif... [Read more]

Central Excise – Rebate on ATF, Foreign-going aircraft – Petitioner supplied Aviation Turbine Fuel (ATF) to Air India International flights. As the ATF was exported as stores for consumption on board a foreign-going aircraft, petitioner claimed rebate of the excise duty paid under Rule 18 of the Central Excise Rules, 2002 – Whether the petitioner is entitled to the rebate of excise duty paid on the ATF supplied to the foreign-going aircraft - HELD - The definition of "export" under Rule 18 of the Central Excise Rules, 2002 includes goods supplied as stores for use on board a foreign-going aircraft. The relevant Notifications have consistently allowed rebate on such supplies of mineral oil products, including ATF, to foreign-going aircraft. The respondent conceded that the rebate is admissible on the portion of ATF consumed during the foreign run of the aircraft. Therefore, the orders denying the rebate of excise duty paid on the ATF supplied by IOCL to the foreign-going aircraft is set aside – The petition is allowed [Read less]

GST – Scrutiny of the returns, Issue of notice under Section 61 – Petitioner was served with Notices under Section 61 of the CGST Act, 2017 - Petitioner contends that the preliminary Notice under Rule 142 1(A) of the CGST Rules, 2017 had not been served prior to the issuance of the Notice under Section 61 - Whether the issuance of Notice under Section 61 without first issuing the preliminary Notice under Rule 142 1(A) is valid - HELD - Since the proceedings initiated under Section 61 would have to result in further proceedings either under Section 73 or under Section 74, it would be appropriate that a Notice is issued ... [Read more]

GST – Scrutiny of the returns, Issue of notice under Section 61 – Petitioner was served with Notices under Section 61 of the CGST Act, 2017 - Petitioner contends that the preliminary Notice under Rule 142 1(A) of the CGST Rules, 2017 had not been served prior to the issuance of the Notice under Section 61 - Whether the issuance of Notice under Section 61 without first issuing the preliminary Notice under Rule 142 1(A) is valid - HELD - Since the proceedings initiated under Section 61 would have to result in further proceedings either under Section 73 or under Section 74, it would be appropriate that a Notice is issued under Rule 142 1(A) after the scrutiny under Section 61 is completed and the proper officer is not satisfied with the explanation given by the dealer - In the present cases, the proper officer had proceeded to pass orders of assessment under Section 73 without issuing the Notice under Rule 142 1(A), which is not permissible. The orders of assessment is set aside and the matter is remanded back to the proper officer to take appropriate action after issuing a Notice under Rule 142 1(A) - the principle laid down in this Order would be applicable only to such assessments as are covered for the period prior to the amendment of Rule 142 1(A), on 15.10.2020 – The writ petitions are disposed of [Read less]

Tamil Nadu General Sales Tax Act, 1959 - Works contract, Inter-state transactions, Levy of penalty under Section 16(2) of the TNGST Act, 1959 - Petitioners, engaged in the execution of interior works, procured goods from both Tamil Nadu and outside the State for the purpose of executing works contracts. The authorities rejected the petitioners' claim that the goods procured from outside Tamil Nadu were inter-state transactions covered under Section 3-B(2)(a) of the Tamil Nadu General Sales Tax Act, 1959 and thus not liable to tax - Whether the transactions involving procurement of goods from outside Tamil Nadu for use in e... [Read more]

Tamil Nadu General Sales Tax Act, 1959 - Works contract, Inter-state transactions, Levy of penalty under Section 16(2) of the TNGST Act, 1959 - Petitioners, engaged in the execution of interior works, procured goods from both Tamil Nadu and outside the State for the purpose of executing works contracts. The authorities rejected the petitioners' claim that the goods procured from outside Tamil Nadu were inter-state transactions covered under Section 3-B(2)(a) of the Tamil Nadu General Sales Tax Act, 1959 and thus not liable to tax - Whether the transactions involving procurement of goods from outside Tamil Nadu for use in execution of works contracts within Tamil Nadu can be considered as inter-state transactions covered under Section 3-B(2)(a) of the TNGST Act, 1959 and thus not liable to tax - HELD – To constitute an inter-state transaction under Section 3-B(2)(a), the petitioners needed to demonstrate a conceivable, if not inextricable, link between the inter-state movement of goods and the deemed sale (works contract). However, the authorities found that there was no such link established by the petitioners, as the goods were standard goods that could be diverted. The subject transactions were not inter-state in character and thus ineligible for the deduction under Section 3-B(2)(a) – However, the Tribunal had levied the penalty under Section 16(2) of the TNGST Act, 1959 without any finding by the lower authorities that there was willful non-disclosure of the assessable turnover by the petitioners, which is a prerequisite for invoking the penalty under Section 16(2). In the absence of such a finding, the levy of penalty under Section 16(2) cannot be sustained - The writ petitions are partly allowed [Read less]

Central Excise - Supplies to companies awarded oil/gas blocks under ICB, Exemption under Notification No. 6/2006-CE - Appellant claimed that the goods were supplied to companies like Reliance Industries Ltd. (RIL) engaged in oil exploration activities in the KG basin, which were exempted under Notification No. 21/2002-Cus and Notification No. 6/2006-CE as the supplies were for projects awarded under International Competitive Bidding (ICB) - Whether the Appellant is eligible for the exemption under Notification No. 6/2006-CE for the supplies made to the companies engaged in oil exploration activities awarded under ICB – H... [Read more]

Central Excise - Supplies to companies awarded oil/gas blocks under ICB, Exemption under Notification No. 6/2006-CE - Appellant claimed that the goods were supplied to companies like Reliance Industries Ltd. (RIL) engaged in oil exploration activities in the KG basin, which were exempted under Notification No. 21/2002-Cus and Notification No. 6/2006-CE as the supplies were for projects awarded under International Competitive Bidding (ICB) - Whether the Appellant is eligible for the exemption under Notification No. 6/2006-CE for the supplies made to the companies engaged in oil exploration activities awarded under ICB – HELD - The Appellant had provided the project authority certificates issued by RIL, which certified that the goods supplied by the Appellant were required in connection with petroleum operations undertaken under petroleum exploration license or mining lease under ICB. The adjudicating authority had wrongly tried to distinguish between the exploration of oil field and petroleum operation, which is not borne out by the correct appreciation of the project authority certificate - The clarification received by the Appellant from the Director General of Hydrocarbons that the awards of oil and gas blocks are made through ICB under the New Exploration License Policy (NELP). Further, the purchase orders issued by RIL as the operator clearly mentioned that there is no excise duty applicable on the items for which the order is being placed, indicating that the supplies were for the project awarded under ICB. Therefore, the Appellant, as a sub-contractor, is also eligible for the exemption under Notification No. 6/2006-CE for the supplies made to the companies engaged in oil exploration activities awarded under ICB - The documents adduced by the appellant are sufficient to indicate that the supplies were intended for use only in connection with the activity for which the work was awarded through ICB route to M/s RIL as operator. Therefore, the appellants are entitled for the benefit of notification claimed by them for non-payment of Central Excise duty – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Levy of personal penalty on co-noticee – Settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Whether when the case of the main noticee has been settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, the penalty proceedings on the co-noticees can be continued – HELD - It is a settled legal position that once the duty demand case of the main noticee is settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, there is a waiver of penalties not only on the main noticee but also on the other co-noticees. It is because the objective of the Scheme is to... [Read more]

Service Tax – Levy of personal penalty on co-noticee – Settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Whether when the case of the main noticee has been settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, the penalty proceedings on the co-noticees can be continued – HELD - It is a settled legal position that once the duty demand case of the main noticee is settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, there is a waiver of penalties not only on the main noticee but also on the other co-noticees. It is because the objective of the Scheme is to ensure amicable resolution of tax disputes and disclosure of unpaid taxes. Denying the benefits of the Scheme to the co-noticees would be contrary to the object of the Scheme and would also amount to injustice to them, especially when they could not pursue their applications under the Scheme due to procedural lapses - Since the penalty imposed on the main noticee was waived in full under the Sabka Vishwas Scheme, the penalty on the two appellants would also not survive, as it was merely a consequential imposition. Accordingly, the impugned order is set aside and the appeals are allowed [Read less]

GST - GSTR-3B and GSTR-2A Mismatch, Opportunity of hearing - The discrepancies were noticed between the petitioner's GSTR-3B returns and GSTR-2A returns, and the adjudicating authority had accordingly passed an order directing the petitioner to reverse the excess Input Tax Credit claimed. The petitioner contended that the discrepancies were due to bonafide reasons and sufficient cause - HELD - The CBIC Circular dated 27.12.2022 is applicable to the present case, where the discrepancy between GSTR-3B and GSTR-2A is less than Rs. 5 lakhs. The adjudicating authority ought to have followed the procedure prescribed in the Circu... [Read more]

GST - GSTR-3B and GSTR-2A Mismatch, Opportunity of hearing - The discrepancies were noticed between the petitioner's GSTR-3B returns and GSTR-2A returns, and the adjudicating authority had accordingly passed an order directing the petitioner to reverse the excess Input Tax Credit claimed. The petitioner contended that the discrepancies were due to bonafide reasons and sufficient cause - HELD - The CBIC Circular dated 27.12.2022 is applicable to the present case, where the discrepancy between GSTR-3B and GSTR-2A is less than Rs. 5 lakhs. The adjudicating authority ought to have followed the procedure prescribed in the Circular, irrespective of whether the petitioner had raised the contention. The impugned order is set aside and matter remitted back to the Assistant Commissioner for fresh consideration in accordance with the Circular, while also granting the petitioner an opportunity to submit additional documents and make its case - The Writ Petition is allowed [Read less]

GST – Andhra Pradesh AAR - Public Toilet Maintenance, Exemption to License Fees - Applicant owns bus stands and provides public toilet facilities at these stands. The Applicant grants licenses to third-party contractors to maintain and operate these public toilets, with the contractors collecting user fees from the public and paying a monthly license fee to the Applicant - Whether the license fees paid by the contractors to the Applicant are exempt from GST under Sl. No. 76 of Notification No. 12/2017-Central Tax (Rate), which exempts "Services by way of public conveniences such as provision of facilities of bathroom, wa... [Read more]

GST – Andhra Pradesh AAR - Public Toilet Maintenance, Exemption to License Fees - Applicant owns bus stands and provides public toilet facilities at these stands. The Applicant grants licenses to third-party contractors to maintain and operate these public toilets, with the contractors collecting user fees from the public and paying a monthly license fee to the Applicant - Whether the license fees paid by the contractors to the Applicant are exempt from GST under Sl. No. 76 of Notification No. 12/2017-Central Tax (Rate), which exempts "Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets" - HELD - The applicant is granting licenses to third-party contractors for operating and maintaining toilet blocks within bus stations. While the contractors undertake the cleaning, maintenance, and day-to-day operations, the role of the Applicant is pivotal in facilitating public convenience. By granting licenses, the Applicant ensures that these public toilet facilities remain functional, accessible, and hygienic for the public - The license fee collected by the Applicant is directly linked to enabling public access to toilet facilities and ensuring that the services of public convenience are available to passengers - the license fees collected by the applicant from contractors for operation and maintenance of public toilets is exempt from GST under Sl. No. 76 of Notification No. 12/2017–CT(Rate) – Ordered accordingly [Read less]

GST – Andhra Pradesh AAR - Research and development activities, Scope of Supply, Consideration – Applicant is a research organization, selected by the Ministry of AYUSH (MoA) and the Central Council for Research in Ayurvedic Sciences (CCRAS) to implement research projects under the "Ayurgyan" scheme. The applicant was designated as a sub-nodal agency under CCRAS and received grant funding from the government for executing these projects - Whether the R&D activities undertaken by the applicant for MoA/CCRAS under the grant-in-aid arrangement fall within the scope of 'supply' under Section 7 of the CGST Act, 2017 – HEL... [Read more]

GST – Andhra Pradesh AAR - Research and development activities, Scope of Supply, Consideration – Applicant is a research organization, selected by the Ministry of AYUSH (MoA) and the Central Council for Research in Ayurvedic Sciences (CCRAS) to implement research projects under the "Ayurgyan" scheme. The applicant was designated as a sub-nodal agency under CCRAS and received grant funding from the government for executing these projects - Whether the R&D activities undertaken by the applicant for MoA/CCRAS under the grant-in-aid arrangement fall within the scope of 'supply' under Section 7 of the CGST Act, 2017 – HELD – The R&D services, even when not resulting in the transfer of ownership or IP, are nonetheless services under GST - Under sub-section (a) of Section 2(31) of the Act, the consideration for the supply of goods or services may be paid by the recipient or any other person. Hence, even if services supplied by the applicant are not received by CCRAS but are received by the beneficiaries i.e., general public and medicine manufacturers, the amount paid by CCRAS to the applicant is still covered under the definition of ‘consideration’ paid for the said supply of goods or services by the applicant and is coveted in the definition of supply given under Section 7(1) of the Act - The applicant has acknowledged receiving financial assistance from CCRAS for the R&D activities. This financial assistance qualifies as consideration, as per Section 2(31) of the CGST Act - The transaction involves the supply of R&D services for consideration (the grant received from the Government), and it is undertaken in the course or furtherance of business, satisfying the essential elements of 'supply' under the GST law - The research and development activities undertaken by the applicant for MoA/CCRAS under the grant-in-aid arrangement fall within the scope of 'supply' under Section 7 of the CGST Act – Ordered accordingly - If the research and development activity is considered a 'supply', whether it qualifies for exemption under Entry No. 3 or Entry No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended – HELD - The research and development activities undertaken by the applicant do not qualify for exemption under Entry No. 3 or Entry No. 3A of Notification No. 12/2017-Central Tax (Rate), as amended. The services are not directly related to any function entrusted to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution, as required by the exemption entries. The supply is accordingly taxable under GST, and the applicant is liable to discharge GST at the applicable rate. [Read less]

GST – Andhra Pradesh AAR - Export of processed frozen shrimps, Pre-packaged and labelled commodities, GST applicability - Whether the export of processed frozen shrimps (HSN 0306), which are packaged in individual printed pouches/boxes and placed inside printed master cartons (up to 25 kg), and the export of the same in individual plain pouches/boxes placed inside plain master cartons (up to 25 kg) is liable to GST – HELD - As per the provisions of the Legal Metrology Act, 2009 and the Rules made there under, as the inner packing is printed and is having pre-determined quantity it immediately attains the characteristic... [Read more]

GST – Andhra Pradesh AAR - Export of processed frozen shrimps, Pre-packaged and labelled commodities, GST applicability - Whether the export of processed frozen shrimps (HSN 0306), which are packaged in individual printed pouches/boxes and placed inside printed master cartons (up to 25 kg), and the export of the same in individual plain pouches/boxes placed inside plain master cartons (up to 25 kg) is liable to GST – HELD - As per the provisions of the Legal Metrology Act, 2009 and the Rules made there under, as the inner packing is printed and is having pre-determined quantity it immediately attains the characteristics of ‘pre-packaged and labelled' category, meant for retail sale, irrespective of the fact whether the outer packaging is printed or not. Under these circumstances, the inner packaging which ranges from 250 grams to 2.5 kilograms becomes liable to GST, as the same fall within the ambit of 'pre-packaged and labelled' category which is mandated to bear the declarations - Further, the clarifications issued CBIC states that the supply of pre-packaged food articles would fall within the purview of the definition of 'pre-packaged commodity' under the Legal Metrology Act, 2009, if the pre-packaged and labelled packages contained a quantity up to 25 kilograms - The export of processed frozen shrimps, packaged in individual printed pouches/boxes and placed inside printed master cartons (up to 25 kg), as well as the export of the same in individual plain pouches/boxes placed inside plain master cartons (up to 25 kg), would attract GST – Ordered accordingly [Read less]

Central Excise – Larger Bench - Refund of excess duty in the absence of provisional assessment – Denial of refund of excess duty paid by the appellant on the ground that the appellant had not opted for provisional assessment - Whether in case an assessee did not opt for provisional assessment, can an assessee claim refund of excess duty paid by him in terms of Section 11B of the Central Excise Act, 1944 – HELD - If the clearances of goods are not made on a provisional basis, then reduction of price at a later date cannot be the foundation for seeking refund. This view has been upheld by the Supreme Court as well - An... [Read more]

Central Excise – Larger Bench - Refund of excess duty in the absence of provisional assessment – Denial of refund of excess duty paid by the appellant on the ground that the appellant had not opted for provisional assessment - Whether in case an assessee did not opt for provisional assessment, can an assessee claim refund of excess duty paid by him in terms of Section 11B of the Central Excise Act, 1944 – HELD - If the clearances of goods are not made on a provisional basis, then reduction of price at a later date cannot be the foundation for seeking refund. This view has been upheld by the Supreme Court as well - Any arrangement between the parties in relation to the price of the goods cannot override the statutory provision. Once the law requires that duty should be paid based on the price disclosed in the invoice issued at the time of clearance of the goods, mere subsequent reduction in price on the basis of some understanding arrived at between the parties cannot affect the duty liability in terms of the price disclosed in the invoice - Since the appellant had not opted for provisional assessment, the appellant is not entitled to the refund of excess duty paid - Let the matter be placed before the Single Member Bench for drawing the Final Order – Ordered accordingly [Read less]

GST – Andhra Pradesh AAR – Classification and applicable rate of tax for product "Mixed Talimpu Dinusulu" which consists of Channa dal (35%), Urad dal (30%), Mustard Seeds (30%), and Jeera (5%) in a combination pack – HELD - The "Mixed Talimpu Dinusulu" qualifies as a "mixed supply" under Section 2(74) of the CGST Act as it consists of two or more individual supplies of goods made in conjunction for a single price, and the supplies are not dependent on each other. Further, as per Section 8(b) of the CGST Act, a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which a... [Read more]

GST – Andhra Pradesh AAR – Classification and applicable rate of tax for product "Mixed Talimpu Dinusulu" which consists of Channa dal (35%), Urad dal (30%), Mustard Seeds (30%), and Jeera (5%) in a combination pack – HELD - The "Mixed Talimpu Dinusulu" qualifies as a "mixed supply" under Section 2(74) of the CGST Act as it consists of two or more individual supplies of goods made in conjunction for a single price, and the supplies are not dependent on each other. Further, as per Section 8(b) of the CGST Act, a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. In the present case, since all the individual ingredients attract 5% GST rate, the "Mixed Talimpu Dinusulu" shall be classified under the HSN code of the ingredient with the highest proportion, i.e., Channa dal (HSN 07139010) and shall be taxed at 5% GST rate – Ordered accordingly [Read less]