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Service Tax - Business Auxiliary Service, Vague Show Cause Notice, Extended Period of Limitation – Appellant was paying certain amounts in foreign currency under the head "Other expenses" including salary to trainers from foreign companies - Department alleged that the appellant is liable to pay service tax on these charges under the category of "Business Auxiliary Service" from July 2003 onwards - hether the service tax can be levied on the "other expenses" including salary to trainers from foreign companies incurred in foreign currency under the category of Business Auxiliary Service on RCM basis – HELD - the SCN and... [Read more]

Service Tax - Business Auxiliary Service, Vague Show Cause Notice, Extended Period of Limitation – Appellant was paying certain amounts in foreign currency under the head "Other expenses" including salary to trainers from foreign companies - Department alleged that the appellant is liable to pay service tax on these charges under the category of "Business Auxiliary Service" from July 2003 onwards - hether the service tax can be levied on the "other expenses" including salary to trainers from foreign companies incurred in foreign currency under the category of Business Auxiliary Service on RCM basis – HELD - the SCN and the impugned order did not specify the sub-clause under Section 65(19) of the Finance Act, 1994 under which the services rendered by the appellant were being classified as Business Auxiliary Service. The failure to specify the sub-clause renders the notice invalid - Department itself was unsure of the nature of service as to the exact classification under the sub-clause was not done. Therefore, when the nature of service was not ascertainable by the Department while raising demand, the demand raised could not sustain - The Department failed to prove the taxability of the "other expenses" and did not establish the service provider-service recipient relationship. The appellant had provided the breakup of the "other expenses" which was not examined in detail by the lower authority. Therefore, the demand cannot be sustained – The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation can be invoked in respect of the demand for the period from July 2003 to March 2008 – HELD - The extended period of limitation cannot be invoked in the present case as there was no positive act of suppression of facts by the appellant with an intent to evade payment of service tax. The appellant had recorded all the transactions in its books of accounts and regularly filed the ST-3 returns. The Tribunal relied on various precedents which held that mere omission or failure to declare the value of certain expenditure in the returns does not amount to suppression, and the extended period cannot be invoked in such cases. Therefore, the extended period of limitation was not justified in the present case. [Read less]

Central Excise - CENVAT Credit on Capital goods, exempted Goods, Duty Reversal – Denial of CENVAT credit availed on duties paid towards procurement of capital goods on the ground that the capital goods were used exclusively in the manufacture of exempted goods - Whether the CENVAT credit taken by the appellant on the capital goods used in the manufacture of exempted goods is permissible under the CENVAT Credit Rules, 2004 - HELD - The Rule 6(4) of the CENVAT Credit Rules, 2004 is not a bar to taking credit which flows from the authority of Rule 3(1) therein. The Rule 6 is for extinguishment of credit by deployment of 'in... [Read more]

Central Excise - CENVAT Credit on Capital goods, exempted Goods, Duty Reversal – Denial of CENVAT credit availed on duties paid towards procurement of capital goods on the ground that the capital goods were used exclusively in the manufacture of exempted goods - Whether the CENVAT credit taken by the appellant on the capital goods used in the manufacture of exempted goods is permissible under the CENVAT Credit Rules, 2004 - HELD - The Rule 6(4) of the CENVAT Credit Rules, 2004 is not a bar to taking credit which flows from the authority of Rule 3(1) therein. The Rule 6 is for extinguishment of credit by deployment of 'input' or 'input service' in manufacture of exempted goods or in rendering of exempted service, and unlike these, insofar as capital goods are concerned, retention of credit is barred only if used exclusively in manufacture of exempted goods - The returns submitted by the appellant clearly showed that the goods have been exported, and consequently, Rule 6(4) of the CENVAT Credit Rules, 2004 is inapplicable. The authorities failed to establish that the capital goods were used exclusively in the manufacture of exempted goods, and the mere allegation without substance cannot operate to shift the onus on to the appellant to disprove - the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Cenvat Credit on security services, Remote location, Residential colony - To provide security to the factory and the residential colony, the company engaged a security service provider and availed Cenvat credit on the service tax paid – Denial of Cenvat credit on the ground that the security services provided to the residential colony did not have a direct nexus with the manufacturing activity - Whether the Cenvat credit availed by the appellant on the security services provided to the residential colony is admissible under the CENVAT Credit Rules, 2004 - HELD - The security services provided to the resi... [Read more]

Central Excise - Cenvat Credit on security services, Remote location, Residential colony - To provide security to the factory and the residential colony, the company engaged a security service provider and availed Cenvat credit on the service tax paid – Denial of Cenvat credit on the ground that the security services provided to the residential colony did not have a direct nexus with the manufacturing activity - Whether the Cenvat credit availed by the appellant on the security services provided to the residential colony is admissible under the CENVAT Credit Rules, 2004 - HELD - The security services provided to the residential colony located in the remote area near the factory are admissible as Cenvat credit under Rule 2(l) of the CENVAT Credit Rules, 2004. The residential colony was set up by the appellant to ensure the availability of trained manpower to run the plant for production of dutiable goods. In the absence of any municipal services in the remote area, the security services provided to the residential colony were essential for the maintenance of the colony and had a direct nexus with the manufacturing activity of the appellant - The security services qualify as input services under the CENVAT Credit Rules and the appellant is entitled to avail the Cenvat credit on the same - The impugned order is set aside and the appeal is allowed [Read less]

GST – Tamil Nadu AAAR - Classification of Tapioca Flour, Applicability of exemption notification, Requirement of registration - Appellant had sought an Advance Ruling on the classification of Tapioca Flour – The AAR both in the original order and in the rectification order classified the subject under 230310 and held that appellant is not eligible for exemption and the product is chargeable to 5% GST - Whether Tapioca Flour should be classified under HSN 1106 or 2303.10 – HELD - The appellant's submissions on the manufacturing process were not clear and consistent. The appellant was not able to provide enough documen... [Read more]

GST – Tamil Nadu AAAR - Classification of Tapioca Flour, Applicability of exemption notification, Requirement of registration - Appellant had sought an Advance Ruling on the classification of Tapioca Flour – The AAR both in the original order and in the rectification order classified the subject under 230310 and held that appellant is not eligible for exemption and the product is chargeable to 5% GST - Whether Tapioca Flour should be classified under HSN 1106 or 2303.10 – HELD - The appellant's submissions on the manufacturing process were not clear and consistent. The appellant was not able to provide enough documentary evidence to support their claim that the product is manufactured from 'wet thippi' or 'sago pith' and not from the residues of starch manufacture - the issue of classification requires re-examination by the AAR after the appellant submits all relevant facts and documentary evidence regarding the exact manufacturing process - the original and rectification orders passed by the AAR are set aside and the matter is remanded back to the AAR for fresh consideration – Ordered accordingly [Read less]

Central Excise - Clandestine removal, Compliance with Section 36B of the Central Excise Act, 1944, Reliance on Director's statement, Burden of proof - Whether the data retrieved from the computer and pen-drive was admissible as evidence without compliance with the certification requirements under Section 36B of the CEA, 1944 – HELD - The Department failed to comply with the mandatory requirements of section 36B, which requires the data retrieved from a computer to be certified by the person occupying a responsible official position in relation to the operation of the device. The mere panchnama prepared in the presence of... [Read more]

Central Excise - Clandestine removal, Compliance with Section 36B of the Central Excise Act, 1944, Reliance on Director's statement, Burden of proof - Whether the data retrieved from the computer and pen-drive was admissible as evidence without compliance with the certification requirements under Section 36B of the CEA, 1944 – HELD - The Department failed to comply with the mandatory requirements of section 36B, which requires the data retrieved from a computer to be certified by the person occupying a responsible official position in relation to the operation of the device. The mere panchnama prepared in the presence of witnesses and the Director cannot be treated as a valid certificate under Section 36B. The printout of the data retrieved from the USB drive, without any certification, has no evidentiary value - Department failed to comply with the mandatory procedural requirements and did not establish the allegations through cogent and corroborative evidence – The Revenue appeal is dismissed - Whether the statement of the director, Rakshit Bhansali, recorded under section 14 of the Central Excise Act can be relied upon without following the procedure under section 9D of the Act – HELD - The Commissioner (Appeals) rightly held that the statement of the Director can be considered as relevant evidence only if the procedure contemplated under Section 9D of the Central Excise Act is followed, i.e., the director is examined as a witness before the adjudicating authority, and the authority is of the opinion that the statement should be admitted in the interest of justice. Failure to comply with the mandatory procedure under Section 9D renders the Director's statement inadmissible - Whether the department discharged its burden of proof to substantiate the allegations of clandestine removal of goods – HELD - The Commissioner (Appeals) correctly observed that the department failed to discharge its burden of proof by not obtaining crucial evidence from the buyers to whom the goods were allegedly sold. The Department did not summon any of the buyers to record their statements, which was essential to determine the type of products sold by the Respondent. [Read less]

GST - GST Appellate Tribunal, Search-cum-Selection Committee, Reconstitution of Committee, Applicability of Rules - The petitioner applied for the post of a Member in the GSTAT. The Search-cum-Selection Committee shortlisted the petitioner for personal interaction, however, when the Committee was reconstituted due to the demitting of office by one of its members, the reconstituted Committee did not include the petitioner in the shortlist for personal interaction, and instead decided to start the process de novo after considering the feedback from the Intelligence Bureau - Whether the reconstituted Search-cum-Selection Comm... [Read more]

GST - GST Appellate Tribunal, Search-cum-Selection Committee, Reconstitution of Committee, Applicability of Rules - The petitioner applied for the post of a Member in the GSTAT. The Search-cum-Selection Committee shortlisted the petitioner for personal interaction, however, when the Committee was reconstituted due to the demitting of office by one of its members, the reconstituted Committee did not include the petitioner in the shortlist for personal interaction, and instead decided to start the process de novo after considering the feedback from the Intelligence Bureau - Whether the reconstituted Search-cum-Selection Committee can start the selection process de novo, or it is bound to continue from the stage where the earlier Committee had left the process – HELD - The reconstituted Search-cum-Selection Committee can start the selection process de novo, and is not bound to continue from the stage where the earlier Committee had left the process - The provisions of Rule 3 of the GSTAT (Appointment and Conditions of Services of President and Members) Rules, 2023 do not expressly prohibit the reconstituted Committee from starting the process de novo. The interpretation of the statutory provisions should be done in a pragmatic manner to uphold the intention of the lawmakers and to make the provisions workable, rather than rendering them otiose or redundant - The suitability and integrity of the appointees to the GSTAT is of paramount importance, and the Committee, comprising high-ranking constitutional authorities, should be allowed to exercise its discretion in the selection process - The opinion of the Intelligence Bureau should be given due importance, and the Court should not sit in appeal over such decision of the constitutional authorities - The reconstituted Search-cum-Selection Committee did not act illegally in deciding to start the selection process de novo after considering the feedback from the Intelligence Bureau - The writ petition is dismissed [Read less]

Madhya Pradesh Commercial Tax Act, 1994 - Tax exemption, reassessment, forfeiture of tax, cumulative quantum of tax exemption - Petitioner was granted a tax exemption under Government notification for setting up a non-conventional power generation system. The petitioner was granted provisional eligibility certificates on 28.01.1999 with retrospective effect from 29.04.1998. During the period from 01.04.1998 to 31.01.1999, the petitioner paid tax while awaiting the issuance of the provisional certificates - Whether the Assessing Officer was justified in forfeiting the amount paid by the petitioner as tax during the period f... [Read more]

Madhya Pradesh Commercial Tax Act, 1994 - Tax exemption, reassessment, forfeiture of tax, cumulative quantum of tax exemption - Petitioner was granted a tax exemption under Government notification for setting up a non-conventional power generation system. The petitioner was granted provisional eligibility certificates on 28.01.1999 with retrospective effect from 29.04.1998. During the period from 01.04.1998 to 31.01.1999, the petitioner paid tax while awaiting the issuance of the provisional certificates - Whether the Assessing Officer was justified in forfeiting the amount paid by the petitioner as tax during the period from 01.04.1998 to 31.01.1999 – HELD - The petitioner paid tax from 01.04.1998 till 31.01.1999 which has been declared illegal. The amount has wrongly been declared illegal because the petitioner did not possess the provisional exemption certificate therefore, as a bonafide taxpayer, paid the taxes from 01.04.1998 till 31.01.1999 - As per the language of the notification, the exemption period was to commence from the date of start of production, which the petitioner had declared and which was mentioned in the exemption certificates as 29.04.1998. Therefore, the amount paid by the petitioner as tax from 01.04.1998 to 28.01.1999 cannot be forfeited under the doctrine of unjust enrichment, as the petitioner was a bona fide taxpayer during that period - the petitioner is not claiming refund of the same but the said amount of tax is not liable to be reduced from the total amount of exemption given to the petitioner. The petitioner is entitled to an exemption for the period of 6 years or achievement of a total amount, whichever is earlier. Once tax collected for the said period is forfeited treating it to be illegally paid, the reduction of said amount from the cumulative quantum of tax exemption amounts to double jeopardy – The impugned orders are set aside to the extent of deduction of amount paid by the petitioner from the cumulative quantum of tax exemption – The writ petition is partly allowed - Whether the Assessing Officer was justified in reducing the cumulative quantum of tax exemption of Rs. 2,97,58,902/- by Rs. 73,81,605/- - HELD - The reduction of Rs. 73,81,605/- from the cumulative quantum of tax exemption of Rs. 2,97,58,902/- amounted to double jeopardy. Once the tax collected for the said period was forfeited, treating it as illegally paid, the reduction of the same amount from the cumulative quantum of tax exemption was not justified. The petitioner was entitled to the full exemption of Rs. 2,97,58,902/- for the maximum period of six years or until the cumulative quantum was achieved, whichever was earlier. [Read less]

GST - Cancellation of GST registration, Dismissal of appeal on ground of delay, Requirement to provide reasons for administrative decisions – Cancellation of Registration on the ground of non-filing of GST returns for the period from April 2023 to February 2025. The petitioner filed an appeal against the cancellation order, which was dismissed by the appellate authority solely on the ground of delay in filing the appeal - Whether the appellate authority was justified in dismissing the petitioner's appeal solely on the ground of delay, without providing any reasons for the decision – HELD - The dismissal of the petition... [Read more]

GST - Cancellation of GST registration, Dismissal of appeal on ground of delay, Requirement to provide reasons for administrative decisions – Cancellation of Registration on the ground of non-filing of GST returns for the period from April 2023 to February 2025. The petitioner filed an appeal against the cancellation order, which was dismissed by the appellate authority solely on the ground of delay in filing the appeal - Whether the appellate authority was justified in dismissing the petitioner's appeal solely on the ground of delay, without providing any reasons for the decision – HELD - The dismissal of the petitioner's appeal by the Appellate Authority without assigning any reasons was not justified and violated the principles of natural justice - The requirement to provide reasons is an essential component of a fair decision-making process, as it ensures transparency, fairness, and accountability. The absence of reasons renders the order arbitrary and unsustainable, particularly when the order is subject to further challenge before a higher forum - Every order passed by a public authority must disclose due and proper application of mind by the person making the order - The appellate authority had not assigned any reasons for rejecting the petitioner's appeal on the ground of delay, which was contrary to the settled legal position - The impugned appellate order is quashed and matter remanded back to the Appellate Authority with a direction to pass a reasoned and speaking order after providing the petitioner an opportunity of hearing - The petition is disposed of [Read less]

Service Tax – Sections 65(64)(ii)(b) of Finance Act, 1994 – Classification of Service – Appellants had entered into Power Station Maintenance Agreements with NTPC for provision of various services – In respect of works executed under Construction Services, Appellants paid service tax on 33% of value after availing abatement of 67% in terms of Notification 15/2004-ST – Department issued show cause notice proposing demand of short paid service tax – Adjudicating authority confirmed demand raised in show cause notice and imposed penalty under Section 78 of the Act – Whether Adjudicating authority is justified in... [Read more]

Service Tax – Sections 65(64)(ii)(b) of Finance Act, 1994 – Classification of Service – Appellants had entered into Power Station Maintenance Agreements with NTPC for provision of various services – In respect of works executed under Construction Services, Appellants paid service tax on 33% of value after availing abatement of 67% in terms of Notification 15/2004-ST – Department issued show cause notice proposing demand of short paid service tax – Adjudicating authority confirmed demand raised in show cause notice and imposed penalty under Section 78 of the Act – Whether Adjudicating authority is justified in classifying services under category of Management, Maintenance or Repair Service (MMRS) – HELD – As per Section 65(64)(ii)(b) of the Act, any service provided by any person under a contract in relation to maintenance or repair of properties, is required to be classified under Management, Maintenance or Repair Service – Letter of Awards (LOAs) given by NTPC to Appellant contains repair and maintenance part. The subject of LOAs is mentioned as Annual Maintenance contract for all types of civil works of all building and structure – Work undertaken by Appellant based on maintenance contract is nothing but repairs of buildings – Services as mentioned in LOAs are required to be classified under Management, Maintenance or Repair service and not under Construction service – Adjudicating authority has rightly classified above services under MMRS and accordingly, Appellants are not entitled for abatement as availed – In a case which involves issues related to classification, Appellant cannot be held responsible for interpreting same in such a way that it could be beneficial to them – Since there is no willful misstatement or suppression of facts involved, invocation of extended period or imposition of penalty under Section 78 is not sustainable - the appeal is partly allowed - Transportation activity – Demand of tax – Whether demand confirmed under category of Cleaning Services is sustainable – HELD – Appellant had undertaken activities of loading, transportation and unloading of mill rejects, ash, coal dust and cylinders in dump yard located within factory premises – Department has classified this service under ‘cleaning services’ – Activity of removing fly ash by mechanical means from ash pond to other area is not covered under cleaning activity services – In instant case, there is only transportation within factory premises – Above service is not cleaning activity, but only transportation within factory premises from one place to another and accordingly, is not taxable – Demand confirmed under category of Cleaning Services is set aside - Invocation of extended period of limitation – Imposition of penalty – Whether invocation of extended period of limitation is justified in facts and circumstances of case – HELD – Adjudicating Authority has not given any specific reason about invocation of provision under Section 73(1) of the Act – By merely claiming classification under a specific tariff heading, it cannot be said that there was any willful misstatement or suppression of facts – In a case which involves issues related to classification, Appellant cannot be held responsible for interpreting same in such a way that it could be beneficial to them – Since there is no willful misstatement or suppression of facts involved, invocation of extended period or imposition of penalty under Section 78 is not sustainable. [Read less]

Service Tax – Rule 2A of Service Tax (Determination of Value) Rules, 2006 –– Construction of houses – Department of the view that Appellant is liable to pay service tax on services rendered in relation to two projects, but Appellant did not pay applicable service tax – Department issued show cause notice to Appellant, proposing demand of Service Tax – Adjudicating Authority confirmed demands proposed in show cause notice – Whether demand related to project Prakruti Nivas is sustainable – HELD – Initially, Appellant entered into agreement for sale mentioning the total sale price and after receiving partial... [Read more]

Service Tax – Rule 2A of Service Tax (Determination of Value) Rules, 2006 –– Construction of houses – Department of the view that Appellant is liable to pay service tax on services rendered in relation to two projects, but Appellant did not pay applicable service tax – Department issued show cause notice to Appellant, proposing demand of Service Tax – Adjudicating Authority confirmed demands proposed in show cause notice – Whether demand related to project Prakruti Nivas is sustainable – HELD – Initially, Appellant entered into agreement for sale mentioning the total sale price and after receiving partial consideration, Sale Deed was executed in favour of customer and completed the construction – Construction of houses/villas in project Prakruti Nivas was completed and completion certificate was received from Gram Panchayat – Whenever the service is rendered for completion or construction of a flat for personal use of service recipient, no Service Tax is payable in view of exclusion in definition of residential complex service – Service tax is not required to be paid in terms of Board’s clarification dated 29-1-2009 – Demand related to this project is not sustainable and hence, set aside – Appeal is partly allowed - Recalculation of tax – Whether Appellant is liable to pay Service Tax in regard to Project Srinivasa Krupa – HELD – The said project is related to construction of residential unit – Appellant entered into agreement with land owners and entitled to a share of 50% of super built up area and sold 3 flats of their share receiving consideration – Service tax could not be levied on value of undivided share of land acquired by buyer of a dwelling unit or on value of goods which are incorporated in project by developer – Impugned Order-in-Original has confirmed demand on total value that includes the land, house and materials – In case of any liability held to be sustainable, demand needs to be re-quantified by taking 25% total amount charged as taxable value under Rule 2A of the Rules – In regard to Project Srinivasa Krupa, matter should be remanded back for redetermination of service tax in accordance with Rule 2A of 2006 Rules – Demand relating to Project Srinivasa Krupa needs to be recalculated. [Read less]

Customs – Import of shea butter – Denial of exemption and demand of duty – Appellant had imported Shea Butter by classifying it under CTH 1515 9099 and claimed benefit of Serial No.33B of Customs Notification No.21/2002 – Adjudicating Authority denied exemption claimed by Appellant and confirmed demand of duty - Whether Appellant is entitled for benefit of Entry 33A or 33B of Customs Notification No.21/2002-Cus – HELD – It is an admitted fact that imported shea butter is not in a refined form and it is in crude form. For purpose of entry, what is important is to understand either this crude shea butter is of ed... [Read more]

Customs – Import of shea butter – Denial of exemption and demand of duty – Appellant had imported Shea Butter by classifying it under CTH 1515 9099 and claimed benefit of Serial No.33B of Customs Notification No.21/2002 – Adjudicating Authority denied exemption claimed by Appellant and confirmed demand of duty - Whether Appellant is entitled for benefit of Entry 33A or 33B of Customs Notification No.21/2002-Cus – HELD – It is an admitted fact that imported shea butter is not in a refined form and it is in crude form. For purpose of entry, what is important is to understand either this crude shea butter is of edible grade or otherwise – Appellant’s argument that entire quantity of imported crude shea butter was meant for manufacturing shea stearin, which is an edible product, is not correct, as certain amount of crude shea butter has also been used for other purposes like cosmetics etc. – Appellants are trying to avail benefit by claiming imported item as an edible grade in terms of its end use, whereas, there is no such condition prescribed either at Serial No.33A or 33B of notification – The intention of legislature is quite clear that all crude and edible grade are exempted without any condition. There is no sufficient document adduced to come to conclusion that identical product has been considered as edible grade by Customs Authorities – Impugned product “shea butter” in crude form is not of edible grade and therefore, it would not fall either under 33A or 33B of Notification – Appellant is not entitled for benefit of notification. The impugned order does not suffer from any infirmity and therefore, same is upheld – The appeal is dismissed [Read less]

Customs – Section 112(b)(ii) of Customs Act, 1962 - Re-import of diesel generating sets – Demand of duty and imposition of penalty – Appellants are 100% EOU engaged in manufacture of Diesel Generating (DG) sets – During audit, CERA raised objection that Appellant has been granted Letter of Permission for manufacturing of DG sets, but they have imported DG sets and sold them without undergoing any authorized manufacturing activity – Based on observations of CERA, Department issued show cause notice alleging violation of conditions of Notification No.52/2003-Cus and evasion of Customs duty, by invoking extended per... [Read more]

Customs – Section 112(b)(ii) of Customs Act, 1962 - Re-import of diesel generating sets – Demand of duty and imposition of penalty – Appellants are 100% EOU engaged in manufacture of Diesel Generating (DG) sets – During audit, CERA raised objection that Appellant has been granted Letter of Permission for manufacturing of DG sets, but they have imported DG sets and sold them without undergoing any authorized manufacturing activity – Based on observations of CERA, Department issued show cause notice alleging violation of conditions of Notification No.52/2003-Cus and evasion of Customs duty, by invoking extended period of limitation – Adjudicating authority confirmed demand of duty and imposed equal penalty under Section 112(b)(ii) of the Act – Commissioner (Appeals) upheld order passed by lower authority – Whether invocation of extended period of limitation is justified in facts and circumstances of case – HELD – The issue in matter is contravention of conditions of Notification No. 52/2003-Cus. and consequent demand of Customs duty on re-imported rejected DG sets – Appellant had supplied 5 DG sets to its customer, who rejected 3 DG sets on ground that these are not as per specification – When Appellant had disclosed full facts by way of enclosing supplier’s invoice along with Bill of Entry clearly indicating that rejected DG sets are being sent back to supplier, Authorised Officer allowed duty free import. It was incumbent upon officer to examine either of the conditions of notification are satisfied – Condition No.15 of notification, whose violation is being alleged, should have been seen when goods were re-imported by Appellant – Department woke up after more than four years from date of import and issued show cause notice after CERA raised objection – There is no ground for invocation of extended period of limitation – Without further going into merits of case, Customs duty confirmed by lower authorities is held unsustainable and accordingly, set aside – Penalty imposed on Appellant Section 112(b)(ii) of the Act is also set aside – Appeal is allowed [Read less]

Service Tax – Sections 68 and 78 of Finance Act, 1994 – Construction of residential complex – Appellant/sub-contractor was engaged in providing construction of residential complex services, but had failed to pay service tax on payments received from main contractor – Department issued show cause notice proposing demand of Service Tax on payments received by Appellant for services provided to main contractor – The adjudicating authority dropped demand proposed in SCN. Commissioner (Appeals) set aside order-in-original and upheld demand along with equal penalty under Section 78 of the Act – Whether Appellant is l... [Read more]

Service Tax – Sections 68 and 78 of Finance Act, 1994 – Construction of residential complex – Appellant/sub-contractor was engaged in providing construction of residential complex services, but had failed to pay service tax on payments received from main contractor – Department issued show cause notice proposing demand of Service Tax on payments received by Appellant for services provided to main contractor – The adjudicating authority dropped demand proposed in SCN. Commissioner (Appeals) set aside order-in-original and upheld demand along with equal penalty under Section 78 of the Act – Whether Appellant is liable to pay service tax on payments received for services provided to main contractor – HELD – It is an admitted fact that Appellant was a sub-contractor. The Section 68 of the Act provides that every person, which would include a sub-contractor, providing taxable service to any person shall pay Service Tax at rate specified. In absence of any exemption granted, sub-contractor has to discharge tax liability – Post 1.7. 2012, the services provided by Sub-contractor was exempted only if the services provided by the main contractor were exempted. If main contractor was liable to Service Tax, sub-contractor was also liable to Service Tax. In the instant case, the construction of residential complexes was not exempt from service tax duty. Hence, the sub-contractors, viz. appellants were liable to discharge their service tax liability on such services provided by them to the main contractor - Appellant/sub-contractor is liable to discharge service tax liability on services provided by them to main contractor – There is no infirmity in impugned order passed by Commissioner (Appeals) and hence, said order is upheld – The appeals are dismissed [Read less]

Service Tax - Difference between ST-3 Returns and Trial Balance, Certificate by Chartered Accountant - Demand of service tax based on the difference between the taxable value declared in the ST-3 returns and the value shown in the Trial Balance - Whether service tax can be demanded solely on the basis of the difference between the figures in the ST-3 returns and the Trial Balance - HELD - In the absence of any evidence to prove that the excess amount in the Trial Balance reflects receipts for providing taxable services, demand cannot be confirmed merely by comparing the ST-3 returns with the Trial Balance figures - The onu... [Read more]

Service Tax - Difference between ST-3 Returns and Trial Balance, Certificate by Chartered Accountant - Demand of service tax based on the difference between the taxable value declared in the ST-3 returns and the value shown in the Trial Balance - Whether service tax can be demanded solely on the basis of the difference between the figures in the ST-3 returns and the Trial Balance - HELD - In the absence of any evidence to prove that the excess amount in the Trial Balance reflects receipts for providing taxable services, demand cannot be confirmed merely by comparing the ST-3 returns with the Trial Balance figures - The onus is on the department to establish that the differential amount is payable towards taxable services – Further, the Appellant had provided a detailed reconciliation statement and a certificate from Chartered Accountant, which stated that there was no short payment of service tax during the disputed period. Such a certificate from an expert in the accounting profession has immense evidentiary value and cannot be brushed aside without providing another expert opinion to the contrary - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Affiliation Fees, Rental Income – Demand of service tax on affiliation fees, inspection fees, NOC fees collected from affiliated colleges and rental income received from renting out auditorium/buildings located in the university campus - Taxability of Affiliation Fees – HELD - The issue relating to the taxability of affiliation fees collected by the university was no longer res integra and had been decided in favor of the appellant by the Tribunal in the case of M/s Jiwaji Vishwavidhyalaya versus Commissioner, CGST & CE, Bhopal – Further, the Karnataka High Court in Rajiv Gandhi University of Health Sci... [Read more]

Service Tax - Affiliation Fees, Rental Income – Demand of service tax on affiliation fees, inspection fees, NOC fees collected from affiliated colleges and rental income received from renting out auditorium/buildings located in the university campus - Taxability of Affiliation Fees – HELD - The issue relating to the taxability of affiliation fees collected by the university was no longer res integra and had been decided in favor of the appellant by the Tribunal in the case of M/s Jiwaji Vishwavidhyalaya versus Commissioner, CGST & CE, Bhopal – Further, the Karnataka High Court in Rajiv Gandhi University of Health Sciences, Karnataka case held that the act of a University in granting affiliation to a private college has to be considered as a service in furtherance of providing education and the decision of the department to consider it otherwise is erroneous - the affiliation fees collected by the university are not taxable under the Finance Act, 1994 - Taxability of Rental Income – HELD - Since the affiliation fees have been held as not taxable, the appellant enjoys the threshold exemption on such rental income, and hence the demand on rental income is also set aside along with the penalties imposed on the appellant. [Read less]

GST – Section 169 of the CGST Act, 2017 - Service of notice on inaccessible email address, Assessment proceedings, Natural justice - Petitioner submitted that it did not receive any communication or notices sent by the assessing authority during the assessment proceedings, as the email address and mobile number provided at the time of registration belonged to the employee who had left the job - Whether the assessment proceedings and the consequential orders passed by the respondent-authorities are liable to be set aside on the ground of non-service of notice to the petitioner, thereby violating the principles of natural ... [Read more]

GST – Section 169 of the CGST Act, 2017 - Service of notice on inaccessible email address, Assessment proceedings, Natural justice - Petitioner submitted that it did not receive any communication or notices sent by the assessing authority during the assessment proceedings, as the email address and mobile number provided at the time of registration belonged to the employee who had left the job - Whether the assessment proceedings and the consequential orders passed by the respondent-authorities are liable to be set aside on the ground of non-service of notice to the petitioner, thereby violating the principles of natural justice – HELD - The service of notice was made as per the provisions of Section 169(c) of the CGST Act, which allows service through the email address provided at the time of registration - The petitioner had provided the email address and mobile number for the purpose of communication, and there was an agreement for exchange of communication through electronic mode - Under Section 13 of the Information Technology Act, 2000, an electronic record is deemed to be received when it enters the designated computer resource. Therefore, the respondent-authorities cannot be held responsible for not giving adequate opportunity of hearing to the petitioner if the petitioner had provided an incorrect or inaccessible email address - The petitioner has an equally efficacious statutory remedy before the First Appellate Authority, and accordingly, the petitioner is relegated to the same - The writ petition is dismissed as not maintainable [Read less]

In the absence of taxable supply, the question of tax evasion does not arise. The Circular dtd. 06.07.2022 clarified that in cases where there is no actual supply, no demand or recovery can be made in respect of ITC wrongly or fraudulently availed.

Customs - Classification of Unmanned Aerial Vehicle (UAV) /Unmanned Aircraft System (UAS)/ Drones, Prohibited Goods, DGCA Clearance - Department classified the goods as prohibited under Chapter Heading 88 and confiscated them under Section 111(d) and imposed a penalty under Section 112(a) for contravention of the relevant provisions - Whether the imported UAVs/UAS/Drones are prohibited goods requiring clearance from the Directorate General of Civil Aviation (DGCA) – HELD - The imported goods are classified under Chapter Heading 9503 as recreational articles of plastics, which are meant for persons of age 14 and above. Si... [Read more]

Customs - Classification of Unmanned Aerial Vehicle (UAV) /Unmanned Aircraft System (UAS)/ Drones, Prohibited Goods, DGCA Clearance - Department classified the goods as prohibited under Chapter Heading 88 and confiscated them under Section 111(d) and imposed a penalty under Section 112(a) for contravention of the relevant provisions - Whether the imported UAVs/UAS/Drones are prohibited goods requiring clearance from the Directorate General of Civil Aviation (DGCA) – HELD - The imported goods are classified under Chapter Heading 9503 as recreational articles of plastics, which are meant for persons of age 14 and above. Similar articles were being imported at various other ports and allowed without any restriction, which is not disputed by the Department – Further, the Notification 16/2015-2020 dated 27.07.2016 introduced policy condition No.3 under chapter 88 of ITC, hence the goods classified under Chapter 9503 cannot be restricted as per the above policy condition - Since the goods are classified under Chapter Heading 9503 and not Chapter Heading 88, the requirement of DGCA clearance under the Notification No. 16/2015-2020 dated 27.07.2016 does not apply to the goods in question - the impugned order is set aside and the appeal is allowed [Read less]

Customs - Section 28(4) of Customs Act, 1962 – Section 3(1) of Customs Tariff Act, 1975 – Rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – Denial of duty exemption to import of HIV-VL test kits - Appellant imported HIV-viral load test kits through a Bill of Entry and claimed exemption from Basic Customs Duty (BCD) and Countervailing Duty (CVD) – Principal Commissioner denied exemption claimed by Appellant and rejected declared assessable value of other imported goods under Rule 12 of the Rules and re-determined same and confirmed proposed duty under Section 28(4) of the Act – ... [Read more]

Customs - Section 28(4) of Customs Act, 1962 – Section 3(1) of Customs Tariff Act, 1975 – Rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – Denial of duty exemption to import of HIV-VL test kits - Appellant imported HIV-viral load test kits through a Bill of Entry and claimed exemption from Basic Customs Duty (BCD) and Countervailing Duty (CVD) – Principal Commissioner denied exemption claimed by Appellant and rejected declared assessable value of other imported goods under Rule 12 of the Rules and re-determined same and confirmed proposed duty under Section 28(4) of the Act – Whether HIV-VL test kits imported by Appellant can be denied exemption from BCD and CVD and lower rate of IGST – HELD – Customs Notification dated 17-3-2012 exempted customs duty and additional duty leviable under Section 3(1) of Tariff Act to diagnostic test and test kits specified in List 4, which refers to “diagnostic kits for detection of HIV antibodies” - HIV-VL test kits are life-saving diagnostic kits used for detection and prognosis of HIV virus in human body. the Kits imported by Appellant not only detect presence of HIV infection, but being more sensitive and accurate, are used for regular monitoring of spread of HIV infection in body – When intention of Exemption Notification was to grant exemption to diagnostic kits for HIV antibodies, there is no good reason why test kits imported by Appellant for detection of HIV should be denied exemption – The HIV-VL test kits imported by Appellant would be entitled for exemption from BCD and CVD, and only 5% integrated tax as provided for in List 1 of IGST Rate Notification would be payable by Appellant – Impugned order denying exemption from BCD and CVD, and 5% IGST to Appellant, is set aside and the appeal is allowed - Re-determination of value – Whether declared value could be rejected and re-determined – HELD – Declared import values have been enhanced by Principal Commissioner by applying different load percentages – Principal Commissioner could not have taken into consideration any Bill of Entry which was not referred to in show cause notice, as no opportunity was provided to Appellant to rebut such Bills of Entries – Principal Commissioner was obliged to re-determine value only in accordance with allegations made in show cause notice – Impugned order has travelled beyond show cause notice – Re-determination of value of goods imported by Appellant is set aside – Matter is remitted to adjudicating authority to examine this issue afresh after supplying a copy of SVB report to Appellant and in terms of allegations made in show cause notice. [Read less]

Service Tax - Multiple Assessment Orders, Ex Parte Order – Petitioner challenged an ex parte assessment order raising a demand of service tax for the financial years 2015-16 and 2016-17 - Petitioner argued that for the same periods, the Commissioner, CGST & CX (Audit) Commissionerate, Nashik had passed an assessment order after affording him an opportunity of personal hearing - Whether the ex parte assessment order passed by the Commissioner, GST & CX Commissionerate, Rourkela is sustainable in light of the subsequent assessment order passed by the Commissioner, CGST & CX (Audit) Commissionerate, Nashik – HELD - When m... [Read more]

Service Tax - Multiple Assessment Orders, Ex Parte Order – Petitioner challenged an ex parte assessment order raising a demand of service tax for the financial years 2015-16 and 2016-17 - Petitioner argued that for the same periods, the Commissioner, CGST & CX (Audit) Commissionerate, Nashik had passed an assessment order after affording him an opportunity of personal hearing - Whether the ex parte assessment order passed by the Commissioner, GST & CX Commissionerate, Rourkela is sustainable in light of the subsequent assessment order passed by the Commissioner, CGST & CX (Audit) Commissionerate, Nashik – HELD - When multiple assessment orders exist for the same assessment year in respect of the same assessee on identical subject-matter, the order that addresses the merits of the case generally takes precedence over an ex parte order because an ex parte order is typically made without considering the taxpayer's arguments, evidence, or objections/explanation, if any. The order based on merit reflects application of mind in decision making and thorough examination of the facts and law being made, such order is preferred to be sustained rather than the order which is passed in absence of the assessee for want of service of notice. The rationale behind this principle is rooted in the principles of natural justice and fairness, as a taxpayer should have the opportunity to present their case – The decision taken on compliance of principles of natural justice and on merits is tenable particularly when the same is not questioned before any other forum and attained finality. Accordingly, the ex parte assessment order is quashed and the parties are to act according to the assessment order passed by the Commissioner, CGST & CX Commissionerate (Audit), Nashik - The writ petition is disposed of [Read less]

Service Tax - Affiliation Fees, Educational Institutions, Mega Exemption Notification - Whether the affiliation fees charged by the university from the educational institutions/colleges can be subjected to levy of service tax - HELD - The issue is no longer res integra and has been decided in favour of the appellant by the Tribunal in the case of M/s Jiwaji Vishwavidhyalaya versus Commissioner, CGST & CE, Bhopal. The Tribunal relied on the decision of the Karnataka High Court in Rajiv Gandhi University of Health Sciences, Karnataka, where it was held that the act of a University in granting affiliation to a private college... [Read more]

Service Tax - Affiliation Fees, Educational Institutions, Mega Exemption Notification - Whether the affiliation fees charged by the university from the educational institutions/colleges can be subjected to levy of service tax - HELD - The issue is no longer res integra and has been decided in favour of the appellant by the Tribunal in the case of M/s Jiwaji Vishwavidhyalaya versus Commissioner, CGST & CE, Bhopal. The Tribunal relied on the decision of the Karnataka High Court in Rajiv Gandhi University of Health Sciences, Karnataka, where it was held that the act of a University in granting affiliation to a private college has to be considered as a service in furtherance of providing education and the decision of the department to consider otherwise is erroneous - the services provided by the university to the affiliated colleges are in relation to higher education, such as curriculum structure, system of evaluation and examination, content, eligibility criteria for admitting students, and process of teaching and learning, and these services are covered by the negative list and the mega exemption notification. Therefore, the appellant-university is not liable to pay service tax on the affiliation fees collected from the affiliated colleges - The impugned order is affirmed and appeal filed by Revenue is dismissed [Read less]

Service Tax - Collection of ‘Delayed Payment Charges’ - Demand of service tax on ‘Delayed Payment Charges’ under the category of ‘Stock Broker Services’ – HELD - The appellant had made payments to Stock Exchanges on behalf of their clients, who delayed the payments against their transactions of securities and the appellant charged the DPC from the said clients by making debit entries in their ledger, which cannot be termed as consideration for the service rendered - the impugned order is contrary to the decisions of the Tribunal and Apex Court - The impugned order is set aside and the appeal is allowed

Service Tax - Refund claim, Limitation under Section 11B of the Central Excise Act, 1944 - Appellant filed refund claim after lapses of two years of the order passed by the Tribunal, which held that the service rendered by the appellant is not liable to tax as the said service does not fall under BAS. The refund claim was rejected on the ground that it is barred by limitation - Whether the refund claim filed by the appellant is barred by limitation under Section 11B of the Central Excise Act, 1944 - HELD - The provisions of Section 11B of the CEA, 1944 are not applicable to the facts of the case, as the amount paid by the ... [Read more]

Service Tax - Refund claim, Limitation under Section 11B of the Central Excise Act, 1944 - Appellant filed refund claim after lapses of two years of the order passed by the Tribunal, which held that the service rendered by the appellant is not liable to tax as the said service does not fall under BAS. The refund claim was rejected on the ground that it is barred by limitation - Whether the refund claim filed by the appellant is barred by limitation under Section 11B of the Central Excise Act, 1944 - HELD - The provisions of Section 11B of the CEA, 1944 are not applicable to the facts of the case, as the amount paid by the appellant during the course of investigation was not service tax. After the decision of the Tribunal, the adjudicating authority was required to refund the amount of deposit made by the appellant during the course of the investigation, which was not from the part of service tax, but the adjudicating authority failed to do so - the refund claim filed by the appellant is not barred by limitation and the appellant is entitled to the refund of the said amount – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Section 9D of Central Excise Act, 1944 – Allegation of clandestine clearance – Demand of duty – After visiting the factory premises of Appellant and undertaking investigation, department alleged that Appellant has cleared finished goods clandestinely – Department issued show cause notice to Appellant, proposing demand of Excise Duty – After due process, Adjudicating authority confirmed demand along with interest and penalty – Whether department has established case of clandestine clearance of finished goods against Appellant – HELD – There is no documentary evidence relied upon by Revenue... [Read more]

Central Excise – Section 9D of Central Excise Act, 1944 – Allegation of clandestine clearance – Demand of duty – After visiting the factory premises of Appellant and undertaking investigation, department alleged that Appellant has cleared finished goods clandestinely – Department issued show cause notice to Appellant, proposing demand of Excise Duty – After due process, Adjudicating authority confirmed demand along with interest and penalty – Whether department has established case of clandestine clearance of finished goods against Appellant – HELD – There is no documentary evidence relied upon by Revenue towards huge cash purchase that would be required to convert finished goods. No statements have been recorded from purported sellers of raw materials and buyers of finished goods – In search seizure operations, there is nothing to indicate that any private records towards cash in-flow/out-flow has been found – While statements have been recorded from various persons, statement of Contractor, who was actually carrying cutting job-work has not been recorded. Non summoning of Contractor and recording of his statement by asking specific questions to him, would prove to be a costly error on part of Revenue – Statements relied upon by Revenue get vitiated in view of non-following of procedure prescribed in Section 9D of the Act – No serious efforts have been made by Revenue to bring in proper evidence to effect that Appellant have consumed excess raw materials, electricity etc. so as to manufacture finished goods clandestinely and subsequently clear the same clandestinely – Confirmed demand does not legally sustain on merits. Since demand is found to be not sustainable and has been set aside, penalty imposed on Director of Appellant company is also set aside – The appeal is allowed [Read less]

Central Excise - Denial of Cenvat credit on the ground that the supplier did not actually supply the goods and it was only a paper transaction - Whether the appellant is entitled to the Cenvat credit in question - HELD - The admission of the partner of the appellant that they had received the goods against the invoices issued by supplier has not been denied by the Revenue. The statement of the proprietor of supplier cannot be relied upon as it was not tested as per the procedure laid down under Section 9D of the CEA, 1944 and is, therefore, not admissible – Further, the Cenvat credit cannot be denied merely on the ground... [Read more]

Central Excise - Denial of Cenvat credit on the ground that the supplier did not actually supply the goods and it was only a paper transaction - Whether the appellant is entitled to the Cenvat credit in question - HELD - The admission of the partner of the appellant that they had received the goods against the invoices issued by supplier has not been denied by the Revenue. The statement of the proprietor of supplier cannot be relied upon as it was not tested as per the procedure laid down under Section 9D of the CEA, 1944 and is, therefore, not admissible – Further, the Cenvat credit cannot be denied merely on the ground that the supplier did not have the facility to manufacture the goods, when the recipient has admitted receiving the goods and using them in the manufacture of excisable goods on which duty has been paid – the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Deemed Sale, Payment of VAT – Appellant is engaged in the business of supply of machines such as JCB, Hydra, Excavator, etc., to different clients. While supplying the said machines to clients, both effective possession and control of these machines were transferred to the respective clients and appropriate VAT has been charged - Whether the appellant is liable to pay Service Tax on the supply of machines to the clients, when the Commercial Tax Department has considered the activity as 'deemed sale' and the appellant has paid the applicable VAT - HELD - Once the VAT liability is discharged, service tax cann... [Read more]

Service Tax - Deemed Sale, Payment of VAT – Appellant is engaged in the business of supply of machines such as JCB, Hydra, Excavator, etc., to different clients. While supplying the said machines to clients, both effective possession and control of these machines were transferred to the respective clients and appropriate VAT has been charged - Whether the appellant is liable to pay Service Tax on the supply of machines to the clients, when the Commercial Tax Department has considered the activity as 'deemed sale' and the appellant has paid the applicable VAT - HELD - Once the VAT liability is discharged, service tax cannot be demanded since VAT and service tax are mutually exclusive. The Commercial Tax Department has considered the activity undertaken by the appellant as 'deemed sale' and the appellant has paid the applicable VAT. Therefore, no Service Tax is payable by the appellant on the said activity - The demand of service tax confirmed in the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - CENVAT credit, Paper transaction – Appellant had claimed Cenvat Credit on inputs received from M/s D.K. Steel India. The Revenue contended that M/s D.K. Steel India, who is a trader, had not received the goods from M/s Modi Alloys & Metalics Pvt. Ltd., who is a first stage dealer, and therefore, it was a paper transaction - Whether the CENVAT credit claimed by the appellants can be denied on the ground that it was a paper transaction – HELD - In the absence of any investigation conducted against the appellants, the M/s D.K. Steel India, or the transporters to prove the fact that the appellants did not ... [Read more]

Central Excise - CENVAT credit, Paper transaction – Appellant had claimed Cenvat Credit on inputs received from M/s D.K. Steel India. The Revenue contended that M/s D.K. Steel India, who is a trader, had not received the goods from M/s Modi Alloys & Metalics Pvt. Ltd., who is a first stage dealer, and therefore, it was a paper transaction - Whether the CENVAT credit claimed by the appellants can be denied on the ground that it was a paper transaction – HELD - In the absence of any investigation conducted against the appellants, the M/s D.K. Steel India, or the transporters to prove the fact that the appellants did not receive the goods in question, the Cenvat credit cannot be denied. The Tribunal relied on the decision in the case of M/s Chaudhary Steel Traders v. Commissioner of CE&ST Ludhiana, wherein it was held that the CENVAT credit cannot be denied on mere assumptions and presumptions – Further, in the case of M/s Durga Multimetals Pvt. Ltd., which involved similar facts, the Commissioner (Appeals) had allowed the CENVAT credit on the ground that no investigation was conducted regarding the goods and records, the appellant, or the transport of goods. However, in the present case, the Commissioner (Appeals) had not given any such findings and had denied the CENVAT credit without any investigation. The learned Commissioner (Appeals) has discriminated the appellant on the same grounds which is not correct - The impugned order is set aside and the appeal is allowed [Read less]

GST - Demand notice, Appellate remedy - Whether the writ petition is maintainable without exhausting the statutory remedy of appeal before the Appellate Authority – HELD - In the present case, the petitioner has the statutory remedy of appeal before the Appellate Authority, which is considered an adequate and efficacious remedy - The petitioner's contention that the impugned order was not uploaded and hence the remedy of appeal could not be invoked is a disputed issue and the same cannot be adjudicated under Article 226 - The concerned authority is directed to upload the impugned order within one week, and if the appeal ... [Read more]

GST - Demand notice, Appellate remedy - Whether the writ petition is maintainable without exhausting the statutory remedy of appeal before the Appellate Authority – HELD - In the present case, the petitioner has the statutory remedy of appeal before the Appellate Authority, which is considered an adequate and efficacious remedy - The petitioner's contention that the impugned order was not uploaded and hence the remedy of appeal could not be invoked is a disputed issue and the same cannot be adjudicated under Article 226 - The concerned authority is directed to upload the impugned order within one week, and if the appeal is filed, the Appellate Authority is directed to entertain the appeal without insisting on the limitation period - The writ petition is disposed of [Read less]

GST – Tamil Nadu AAAR – Sections 2(31) & 2(93) of the CGST Act, 2017 – Consideration for Service, Recipient of Service - Eligibility to exemption to Transportation Services provided to Educational Institutions - Appellant had sought an Advance Ruling on whether the transportation services provided to school students and staff are exempt from GST under Notification No. 12/2017-Central Tax (Rate) – The AAR ruled that the services provided by the appellant cannot be considered as services provided to the school (educational institution) and are not exempt from GST - Whether the transportation services provided by the ... [Read more]

GST – Tamil Nadu AAAR – Sections 2(31) & 2(93) of the CGST Act, 2017 – Consideration for Service, Recipient of Service - Eligibility to exemption to Transportation Services provided to Educational Institutions - Appellant had sought an Advance Ruling on whether the transportation services provided to school students and staff are exempt from GST under Notification No. 12/2017-Central Tax (Rate) – The AAR ruled that the services provided by the appellant cannot be considered as services provided to the school (educational institution) and are not exempt from GST - Whether the transportation services provided by the appellant to school students and staff can be considered as services provided to the educational institution, and therefore eligible for GST exemption under Notification No. 12/2017-Central Tax (Rate) – HELD - The appellant is the supplier of the transportation service and the recipients of the service are the parents of the students who pay the consideration directly to the appellant. The appellant receives the transportation cost directly from the students and no consideration is being paid by the school towards the transportation charges of either the students or its faculty and staff - Where there is consideration involved, the person who is liable to make the payment would be the recipient and in case no consideration is involved, then the person to whom services are rendered would be the recipient - The educational institution is neither the supplier nor the recipient of the service - The exemption under Notification No. 12/2017-Central Tax (Rate) is available only for services provided by an educational institution to its students, faculty and staff, or services provided to an educational institution. Since the appellant is neither providing services to the educational institution nor receiving services from the educational institution, the exemption is not applicable in the present case – Further, the fact that the transportation permits are obtained in the name of the educational institution or that the appellant has entered into agreements with the schools, does not change the nature of the transaction - the services provided by the appellant by way of transportation of students and staff, shall not be considered as the services provided to the school - The ruling of the AAR is upheld and the appeal is dismissed [Read less]

Service Tax – Classification of Service – Works Contract or Commercial or Industrial Construction Services - Demand of service tax under the category of commercial or industrial construction services against services rendered as works contracts – HELD - the contract entered into by the appellant with the Power Grid Corporation and other parties are works contract in nature whereas the Department has sought to tax them under commercial or industrial construction/ construction of residential complex - the contract involves in the present case are works contract which cannot be taxed prior to 01.07.2007 as the concept o... [Read more]

Service Tax – Classification of Service – Works Contract or Commercial or Industrial Construction Services - Demand of service tax under the category of commercial or industrial construction services against services rendered as works contracts – HELD - the contract entered into by the appellant with the Power Grid Corporation and other parties are works contract in nature whereas the Department has sought to tax them under commercial or industrial construction/ construction of residential complex - the contract involves in the present case are works contract which cannot be taxed prior to 01.07.2007 as the concept of works contract was introduced w.e.f. 01.07.2007 in the Finance Act, 1994 - it is a settled law that the activity of works contract cannot be taxed under the category of commercial or industrial construction/ construction of residential complex even after 01.07.2007 as the services under the works contract service is totally different from that of commercial or industrial construction - the demand raised under the category of commercial or industrial construction service is set aside - the appeal is allowed [Read less]

Service Tax – Goods Transport Agency service, Best judgment method – Appellant was engaged in providing GTA service to various companies & transporters – Demand of service tax on account of short payment of tax due to mismatch between its ST-3 and IT returns, by invoking extended period of limitation – Adjudicating authority confirmed demand along with interest and penalty – Whether demand raised on basis of difference between ST-3 and IT returns is sustainable – HELD - The Show cause notice was issued proposing demand of service tax on account of short payment of tax due to mismatch between ST-3 and 26AS/ITR r... [Read more]

Service Tax – Goods Transport Agency service, Best judgment method – Appellant was engaged in providing GTA service to various companies & transporters – Demand of service tax on account of short payment of tax due to mismatch between its ST-3 and IT returns, by invoking extended period of limitation – Adjudicating authority confirmed demand along with interest and penalty – Whether demand raised on basis of difference between ST-3 and IT returns is sustainable – HELD - The Show cause notice was issued proposing demand of service tax on account of short payment of tax due to mismatch between ST-3 and 26AS/ITR returns by invoking extended period of limitation – Appellant filed reply to show cause notice, but same was not considered by original authority – Order-in-Original was passed ex-parte on ground that Appellant did not file reply to show cause notice and did not attend personal hearing, which is factually incorrect, because Appellant did not get personal hearing notice from Respondent – It is a settled law that demand cannot be raised solely on basis of difference between ST-3 and 26AS/ITR, hence, on this issue alone, demand is liable to be set aside – Suppression cannot be alleged by Department on part of Appellant in order to invoke extended period of limitation – Most of companies to whom Appellant has rendered services are body corporates and therefore, service tax cannot be demanded from appellant as the liability to pay service tax in such cases will be on the body corporate receiving GTA service by way of RCM – Further, the Department has wrongly applied best judgment method for computation of demand. Once, the appellant has duly filed the ST-3 returns during the relevant period, the question of invoking the best judgment method is not warranted - Impugned order being not sustainable in law on merits as well as on limitation is set aside – The appeal is allowed [Read less]

Service Tax - Manpower Recruitment or Supply Agency Service – Service tax on deputation charges collected for Deputation of Employees – Appellant was deputing its employees to other refineries and collecting deputation charges. Department considered such deputation charges as falling under the category of 'Manpower Recruitment or Supply Agency Service' and initiated proceedings to demand service tax - Whether the deputation charges collected by the appellant for deputing its employees to other refineries can be considered as 'Manpower Recruitment or Supply Agency Service' and subjected to service tax - HELD - The appel... [Read more]

Service Tax - Manpower Recruitment or Supply Agency Service – Service tax on deputation charges collected for Deputation of Employees – Appellant was deputing its employees to other refineries and collecting deputation charges. Department considered such deputation charges as falling under the category of 'Manpower Recruitment or Supply Agency Service' and initiated proceedings to demand service tax - Whether the deputation charges collected by the appellant for deputing its employees to other refineries can be considered as 'Manpower Recruitment or Supply Agency Service' and subjected to service tax - HELD - The appellant was not engaged in 'Manpower Recruitment or Supply Agency Service' to bring it under the ambit of Section 65(68) of the Finance Act, 1994. The judgment relied upon by the department in the matter of CCE & ST, Bangalore vs. Northern Operating Systems Pvt. Ltd. is not applicable in the present case as the issue involved in that matter was relating to secondment of employees by an overseas entity for the purpose of completion of the assessee's job – the appellant had deputed their staff to other refineries and had collected the deputation charges for the said deputation of their employees. However, appellant is not engaged in ‘Manpower Recruitment or Supply Agency Service’ to bring under the ambit of Section 65(68) of the Finance Act, 1994 - Further, the department had earlier dropped the demand for the previous period in the appellant's own case, and once the demand is dropped, the department has no reason or justification to confirm the demand for the subsequent period without the order being set aside by the appellate authorities – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Sections 66B and 73A of Finance Act, 1994 – Service tax demand on extraction of baryte ore – Whether Appellant is liable to pay Service Tax on amount received towards extraction of baryte ore – HELD – Appellants are required to undertake total work right from the beginning of excavation and removal of overburden to the extraction of barytes ore and its further sizing, screening and transportation. What was covered under the mining services prior to negative list regime may or may not be liable to service tax under negative list regime depending on whether the said activity is covered in the negative... [Read more]

Service Tax – Sections 66B and 73A of Finance Act, 1994 – Service tax demand on extraction of baryte ore – Whether Appellant is liable to pay Service Tax on amount received towards extraction of baryte ore – HELD – Appellants are required to undertake total work right from the beginning of excavation and removal of overburden to the extraction of barytes ore and its further sizing, screening and transportation. What was covered under the mining services prior to negative list regime may or may not be liable to service tax under negative list regime depending on whether the said activity is covered in the negative list or otherwise – The Section 66B of the Act provides for levy of service tax on all services other than those services specified in negative list – Extraction of baryte ore from mines is an activity, which would amount to production of baryte ore, hence, it would be covered in negative list and therefore, not liable to service tax in terms of Section 66B of the Act – Impugned order confirming demand to this extent is not sustainable and set aside - The appeal filed by the appellant is allowed except to the extent of computation of demand on denial of ineligible credit on input/input service due to non-production of eligible documents – The appeal is disposed of - Transportation activity – Demand of tax – Whether demand confirmed by adjudicating authority on transportation activity is sustainable – HELD – Appellant has not contested this issue on merit, however, they have only taken ground of revenue neutrality that had paid this tax and they would have been eligible to take credit and therefore, demand is not sustainable – Appellant have also contested rate of service tax applied – There is some merit in Appellant’s contention that there have been certain errors in calculating amount of service tax – Demand upheld by adjudicating authority is correct, except to extent of wrong application of rate of service tax prevailing during relevant period, which needs to be cross-checked – Confirmed demand can be reduced to that extent of mistaken calculation on account of wrong rate of service tax applied and thereafter, remaining amount shall be payable by Appellant – For this limited purpose, matter remanded back to adjudicating authority to re-determine amount of service tax payable - Free supply of diesel – Dropping of demand – Whether free supply of diesel can be considered as additional consideration for including same in gross value – HELD – When proposition was made in show cause notice that demand could have been raised in terms of Section 73A of the Act, Revenue was not very sure as to either any service tax has been collected or even leviable on said free supply of diesel – There is no evidence that Appellant have collected any excess amount or any service tax in respect of free supply of diesel – Free supply of diesel cannot be considered as additional consideration for including same in gross value – Department’s appeal to extent of non-inclusion of free supply of diesel is not correct – Impugned order dropping demand to this extent is sustainable - Whether adjudicating authority is justified in dropping demand raised on Appellant for availing Cenvat credit on MS angles, sheets, squares etc. used for repairs of tippers and dumpers – HELD – In show cause notice, only ground taken for denial of said credit in respect of certain inputs was that said inputs were falling under Chapter 72 and therefore, cannot be treated as capital goods – Adjudicating authority has considered various submissions and was satisfied that said goods can be considered as components, spares, etc. of capital goods and since dumpers and tippers were capital goods, goods were eligible for credit – Conclusion drawn by adjudicating authority is correct. [Read less]

GST - Refund of disputed interest recovered during pendency of appeal, Section 107(7) of CGST Act 2017 – Challenge to order of the rejecting the refund of interest recovered by the authority during the pendency of the appeal filed by the petitioner under Section 107(1) of the CGST Act 2017 - Whether the Assessing Authority could have debited the disputed interest amount contrary to Section 107(7) of the CGST Act 2017 – HELD - The Assessing Authority could not have debited the disputed interest amount during the pendency of the appeal, as it was in contravention of Section 107(7) of the CGST Act 2017 - The Section 107(7... [Read more]

GST - Refund of disputed interest recovered during pendency of appeal, Section 107(7) of CGST Act 2017 – Challenge to order of the rejecting the refund of interest recovered by the authority during the pendency of the appeal filed by the petitioner under Section 107(1) of the CGST Act 2017 - Whether the Assessing Authority could have debited the disputed interest amount contrary to Section 107(7) of the CGST Act 2017 – HELD - The Assessing Authority could not have debited the disputed interest amount during the pendency of the appeal, as it was in contravention of Section 107(7) of the CGST Act 2017 - The Section 107(7) clearly contemplates that where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed - The unilateral debit undertaken by the Assessing Officer from the cash ledger towards the disputed amount of the creditor was erroneous, without jurisdiction, and contrary to the mandate provided under sub-section (7) of Section 107 - The respondent is directed to re-credit the disputed amount to the Electronic cash ledger of the petitioner – The writ petition is allowed [Read less]

Karnataka Value Added Tax, 2003 - Karasamadhana Scheme, 2021, finality of proceedings - Appellant then availed the benefits of the Karasamadhana Scheme, 2021, which granted a 100% waiver of interest and penalty. Subsequently, the respondent issued a notice under Section 64(1) of the KVAT Act, initiating suo-motu revisional proceedings against the appellant, which was challenged by the appellant - Whether the respondent could have exercised jurisdiction under Section 64(1) of the KVAT Act and issued a notice subsequent to the acceptance of the appellant's application under the Karasamadhana Scheme, 2021 – HELD - The Karas... [Read more]

Karnataka Value Added Tax, 2003 - Karasamadhana Scheme, 2021, finality of proceedings - Appellant then availed the benefits of the Karasamadhana Scheme, 2021, which granted a 100% waiver of interest and penalty. Subsequently, the respondent issued a notice under Section 64(1) of the KVAT Act, initiating suo-motu revisional proceedings against the appellant, which was challenged by the appellant - Whether the respondent could have exercised jurisdiction under Section 64(1) of the KVAT Act and issued a notice subsequent to the acceptance of the appellant's application under the Karasamadhana Scheme, 2021 – HELD - The Karasamadhana Scheme, 2021 was introduced to provide relief to dealers by waiving interest and penalty, provided the dealers paid the full tax arrears. The appellant had duly availed the benefits of the Scheme by paying the tax arrears and getting the interest and penalty waived - The subsequent initiation of suo-motu revisional proceedings under Section 64(1) of the KVAT Act would defeat the very purpose and object of the Karasamadhana Scheme, 2021. Once the proceedings against the appellant had attained finality under the Scheme, it was unreasonable and arbitrary for the respondent to invoke the revisional power under Section 64 - allowing the respondent to initiate such proceedings after the grant of benefits under the Scheme would render the Scheme otiose and defeat its purpose – The impugned order is set aside and the appeal is allowed [Read less]

GST - Input Tax Credit, Section 16(4) and Amendment to Section 16(5) of the CGST Act, 2017, Rectification Application – Payment of demand relating to the issue arising out of Section 16(4) of the CGST Act, 2017 - Whether the petitioner is entitled to the refund of amount paid towards the demand relating to the issue arising out of Section 16(4) of the CGST Act, 2017, in light of the amendment made by the Finance (No.2) Act, 2024, dated 16.08.2024, with effect from 01.07.2017 – HELD - The rectification application filed by the petitioner against the assessment order has been rejected summarily without any discussion. Th... [Read more]

GST - Input Tax Credit, Section 16(4) and Amendment to Section 16(5) of the CGST Act, 2017, Rectification Application – Payment of demand relating to the issue arising out of Section 16(4) of the CGST Act, 2017 - Whether the petitioner is entitled to the refund of amount paid towards the demand relating to the issue arising out of Section 16(4) of the CGST Act, 2017, in light of the amendment made by the Finance (No.2) Act, 2024, dated 16.08.2024, with effect from 01.07.2017 – HELD - The rectification application filed by the petitioner against the assessment order has been rejected summarily without any discussion. The petitioner's contention that the amount ought not to have been confirmed by the impugned order in light of the amendment made by the Finance (No.2) Act, 2024, which inserted Section 16(5) into the respective Acts, appears to be valid – Further, the petitioner's submission that the appellate remedy against the impugned orde has become redundant in view of the limitation prescribed under Section 107 of the Act, also carries some weight - the impugned order rejecting the petitioner's rectification application is quashed and the respondent is directed to pass a fresh order after considering the petitioner's submissions on merits - The writ petition challenging the order rejecting the rectification application is allowed and the matter is remanded back to the Respondent for fresh consideration [Read less]

Service Tax – Delay and Laches, maintainability of writ petition, Alternative Remedy - The petitioner failed to file an appeal under Section 86 of the Finance Act, 1994 within the prescribed time limit of 3 months from the date of receipt of the order - Whether the High Court ought to have entertained the writ petition filed by the petitioner, given the delay and failure to exhaust the alternative statutory remedy of appeal - HELD - The writ petition was not maintainable due to the delay and laches on the part of the petitioner. The High Court, while exercising its discretionary jurisdiction under Article 226 of the Cons... [Read more]

Service Tax – Delay and Laches, maintainability of writ petition, Alternative Remedy - The petitioner failed to file an appeal under Section 86 of the Finance Act, 1994 within the prescribed time limit of 3 months from the date of receipt of the order - Whether the High Court ought to have entertained the writ petition filed by the petitioner, given the delay and failure to exhaust the alternative statutory remedy of appeal - HELD - The writ petition was not maintainable due to the delay and laches on the part of the petitioner. The High Court, while exercising its discretionary jurisdiction under Article 226 of the Constitution, must consider factors such as delay and laches on the part of the petitioner - the petitioner had a statutory remedy of appeal under Section 86 of the Finance Act, 1994, which it failed to avail within the prescribed time limit. The petitioner cannot bypass the statutory remedy and directly approach the High Court under Article 226, especially after a significant delay of around 5 years - the High Court is duty-bound to consider factors such as the existence of an alternative effective remedy, the petitioner's unexplained delay and laches, and whether the petition is ex facie barred by any law of limitation - In the present case, the petitioner had failed to make out a case to invoke the extraordinary jurisdiction of the High Court under Article 226, given the delay and failure to exhaust the alternative statutory remedy - the writ petition is dismissed [Read less]

GST - Violation of directions of the Court, Delay in passing Assessment order, Rectification application, Abatement of proceedings – In earlier proceedings the Court had set aside the assessment orders and remitted the case to the respondents to pass a speaking order within a period of six weeks – The respondents passed the assessment order without complying with the time limit prescribed by the Court - Whether the proceedings are deemed to have abated due to the delay in passing the assessment order by the respondents, in violation of the time limit prescribed by the Court – HELD - the case law settled in the contex... [Read more]

GST - Violation of directions of the Court, Delay in passing Assessment order, Rectification application, Abatement of proceedings – In earlier proceedings the Court had set aside the assessment orders and remitted the case to the respondents to pass a speaking order within a period of six weeks – The respondents passed the assessment order without complying with the time limit prescribed by the Court - Whether the proceedings are deemed to have abated due to the delay in passing the assessment order by the respondents, in violation of the time limit prescribed by the Court – HELD - the case law settled in the context of service law cannot be imported for adjudication orders to be passed under the tax laws. No prejudice can be caused to the petitioner merely because there was a delay in passing the order within the period of six weeks stipulated by the Court's earlier order – Further, the pendency of the rectification application will entitle the petitioner to invoke Section 14 of the Limitation Act, 1963 - the petitioner has an alternative remedy to file an appeal against the impugned order rejecting the rectification application - The writ petitions are dismissed [Read less]

Customs - Customs Broker License, Revocation, Diplomatic Cargo, Mis-declaration – Appellant filed Bills of Entry for clearing certain consignments as Diplomatic cargo. However, upon inspection, it was found that the consignors were mis-declared as the "Ministry of Foreign Affairs, Abu Dhabi" instead of the actual private individuals - Commissioner of Customs issued Show Cause Notice to the appellant for revocation of its Customs broker license and imposition of penalty for violation of various obligations under the Customs Brokers Licensing Regulations, 2018 (CBLR) - Whether the adjudicating authority erred in not extend... [Read more]

Customs - Customs Broker License, Revocation, Diplomatic Cargo, Mis-declaration – Appellant filed Bills of Entry for clearing certain consignments as Diplomatic cargo. However, upon inspection, it was found that the consignors were mis-declared as the "Ministry of Foreign Affairs, Abu Dhabi" instead of the actual private individuals - Commissioner of Customs issued Show Cause Notice to the appellant for revocation of its Customs broker license and imposition of penalty for violation of various obligations under the Customs Brokers Licensing Regulations, 2018 (CBLR) - Whether the adjudicating authority erred in not extending an opportunity for cross-examination of Customs officers under Regulation 17(4) of the CBLR – HELD - The appellant did not initially request for cross-examination and the Customs Officers and staff who cleared the consignment as diplomatic cargo did not have any relevant role in the alleged breach of obligations by the appellant. The request for cross-examination was only a delay tactic. Since the appellant was given an opportunity to file representations against the inquiry report, there was no violation of natural justice - the appellant had violated its obligations under the CBLR by mis-declaring the consignors of the Diplomatic Cargo consignments, thereby facilitating the smuggling of gold. The relationship between a customs broker and the Customs Department is one of trust, and the appellant's actions had eroded that trust, justifying the revocation of its license - the revocation of the appellant's customs broker license is upheld and the appeal is dismissed - Whether the adjudicating authority committed an error by not producing relevant documents to the appellant at the time of issuance of the show cause notice – HELD - The Appellate Tribunal found that as per the Regulations, the appellant was entitled to receive only the documents mentioned in the show cause notice and the inquiry report. Since the appellant received both and was given an opportunity to file representations, there was no violation of natural justice - Whether the adjudicating and appellate authorities committed an error by not adhering to the time frame prescribed under Regulation 17(5) of the CBLR for submission of the inquiry report – HELD - The Appellate Tribunal found that the 90-day period under Regulation 17(5) was directory and not mandatory, especially since the appellant's license was not suspended during the proceedings and he was allowed to continue his operations. The appellant was not prejudiced by the delay in submission of the inquiry report. [Read less]

Central Excise - Valuation, Captive consumption, Adoption of Cost Accounting Standards (CAS-4), Revenue Neutrality – The compounded rubber is captively consumed within the factory for manufacture of pre-cured tread rubber and bonding gum, and also transferred to the appellant's other units for further use - Department alleged that the cost of the main raw material, i.e., natural rubber, was not reflected in the production, and initiated proceedings to re-determine the value - Whether the appellant correctly determined the assessable value of the goods by adopting the principles of CAS-4 certification – HELD - The appel... [Read more]

Central Excise - Valuation, Captive consumption, Adoption of Cost Accounting Standards (CAS-4), Revenue Neutrality – The compounded rubber is captively consumed within the factory for manufacture of pre-cured tread rubber and bonding gum, and also transferred to the appellant's other units for further use - Department alleged that the cost of the main raw material, i.e., natural rubber, was not reflected in the production, and initiated proceedings to re-determine the value - Whether the appellant correctly determined the assessable value of the goods by adopting the principles of CAS-4 certification – HELD - The appellant had been filing returns and subjected to audits from time to time. The evidence showed that the appellant had paid excess duty compared to the actual duty payable as per the CAS-4 calculations for the earlier periods. Further, the appellant had increased the use of imported raw material (Styrene Butadiene Rubber) by up to 126% when the cost of natural rubber increased, in order to neutralize the effect. Considering the revenue neutrality principle upheld by the Tribunal in the appellant's own case for the previous period, and the lack of any evidence of suppression of facts to invoke the extended period of limitation, there was no merit in rejecting the value as declared by the appellant – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Works Contract Service, Determination of Taxable Value – Appellant is engaged in the activity of interior decoration services relating to commercial, industrial or residential buildings - Demand notice for differential service tax on the ground that the appellant had remitted service tax on only 20.15% of the invoice value instead of 70% as per Rule 2A(ii)(C) of the Service Tax (Determination of Value) Rules, 2006 - Whether the appellant has correctly determined the taxable value of the Works Contract Service by applying the method under Rule 2A(i) instead of the default method under Rule 2A(ii) - HELD - Th... [Read more]

Service Tax - Works Contract Service, Determination of Taxable Value – Appellant is engaged in the activity of interior decoration services relating to commercial, industrial or residential buildings - Demand notice for differential service tax on the ground that the appellant had remitted service tax on only 20.15% of the invoice value instead of 70% as per Rule 2A(ii)(C) of the Service Tax (Determination of Value) Rules, 2006 - Whether the appellant has correctly determined the taxable value of the Works Contract Service by applying the method under Rule 2A(i) instead of the default method under Rule 2A(ii) - HELD - The Supreme Court in the case of Safety Retreading Co. (P) Ltd. Vs. Commissioner of Central Excise, Salem, held that the assessee is liable to pay service tax only on the service component and not on the total amount including the value of materials/goods used in the execution of the works contract - The appellant had arrived at the value of service portion as per Rule 2A(i) by deducting the value of transfer of property in goods, on which VAT had already been paid, from the gross amount charged. When VAT has already been paid on the value of goods, the same cannot be subjected to levy of service tax again. The appellant has correctly discharged service tax on the service portion - The appeal filed by the appellant is allowed [Read less]

Kerala General Sales Tax Act, 1963 - Tax refund, Adjustment of refund against pre-deposit - State in appeal against the judgment of the Single Judge directing the State to adjust the refund amount due to the assessee against the amount required to be paid by the assessee as pre-deposit under the interim orders of the Appellate Tribunal - In the absence of any specific enabling statutory provision, whether the State can adjust the refund amount due to the assessee against the pre-deposit amount required to be paid by the assessee under the interim orders of the Appellate Tribunal - HELD - In the present case, where the Stat... [Read more]

Kerala General Sales Tax Act, 1963 - Tax refund, Adjustment of refund against pre-deposit - State in appeal against the judgment of the Single Judge directing the State to adjust the refund amount due to the assessee against the amount required to be paid by the assessee as pre-deposit under the interim orders of the Appellate Tribunal - In the absence of any specific enabling statutory provision, whether the State can adjust the refund amount due to the assessee against the pre-deposit amount required to be paid by the assessee under the interim orders of the Appellate Tribunal - HELD - In the present case, where the State does not dispute its liability to refund the amount to the assessee, the State cannot contend that there is no statutory provision that permits the adjustment of the refund amount towards the pre-deposit amount required to be paid by the assessee - The provisions dealing with the adjustment of refund amounts under the KGST Act, 1963 are enabling provisions that allow the Department to adjust the refund amounts towards outstanding dues from an assessee, without having to pay the refund amount to the assessee. There is no reason to interfere with the impugned judgment of the Single Judge, which directed the adjustment of the legally due refund amount towards the pre-deposit amount required to be paid by the assessee, as the interests of the revenue were also protected by the direction that the assessee would be liable to make up for any shortfall in the pre-deposit amount - The adjustment of the refund amount towards the pre-deposit amount is justified in the facts and circumstances of the case - The writ appeal is dismissed [Read less]

The expression "tax payable" u/s 129(1)(a) refers to the tax that is legally enforceable not the tax that is merely leviable. In the absence of any tax payable on zero-rated supply, the petitioner cannot be subjected to penalty of 200% of tax payable.

Customs - Section 2(15) of the Customs Act, 1962 – Scope of term ‘duty’ - Duty Drawback on CVD & Cess – Petitioner imported capital goods and paid Customs duties including Basic Custom Duty (BCD), Countervailing Duty (CVD), and applicable Cess and availed CENVAT credit on these duties as per the CENVAT Credit Rules, 2004. The petitioner later re-exported the goods and filed for duty Drawback under Section 74 of the Customs Act, 1962 - Whether the petitioner is entitled to drawback on the BCD only or on the total duties paid, including CVD, Cess, etc. – HELD - As per Section 2(15) of the Customs Act, 1962, "duty" ... [Read more]

Customs - Section 2(15) of the Customs Act, 1962 – Scope of term ‘duty’ - Duty Drawback on CVD & Cess – Petitioner imported capital goods and paid Customs duties including Basic Custom Duty (BCD), Countervailing Duty (CVD), and applicable Cess and availed CENVAT credit on these duties as per the CENVAT Credit Rules, 2004. The petitioner later re-exported the goods and filed for duty Drawback under Section 74 of the Customs Act, 1962 - Whether the petitioner is entitled to drawback on the BCD only or on the total duties paid, including CVD, Cess, etc. – HELD - As per Section 2(15) of the Customs Act, 1962, "duty" means the duty of customs leviable under the Customs Act only, and not the additional duties like CVD, Cess, etc. payable under other statutes - The petitioner is entitled to drawback on the Basic Custom Duty only, and not on the other duties paid. In terms of definition of "duty" under the Customs Act and the provisions of Section 74 which refer to "any duty paid", the drawback is limited to the BCD – Further, the petitioner had already availed CENVAT credit on the other duties, and allowing drawback on those would amount to double benefit - the impugned order is modified and the respondent are directed to recompute the duty drawback allowable to the petitioner considering only the BCD paid, and after determining the relevant period for the purpose of applying the drawback rates under Notification No. 23/2008-Customs – The petition is disposed of - Whether the Revisionary Authority was justified in remanding the matter to the original adjudicating authority to determine the period between the date of clearance for home consumption and the date of re-export for the purpose of applying the rates under Notification No. 23/2008-Customs – HELD - As per Section 74(1)(i) of the Customs Act, the drawback is available only when the goods are "entered for export" and the proper officer makes an order permitting clearance and loading of the goods. Therefore, the period has to be calculated from the date of clearance for home consumption to the date when the goods were placed under customs control for export - The Court upheld the decision of the Revisionary Authority to remand the matter to the original adjudicating authority to determine the relevant period for applying the drawback rates under Notification No. 23/2008-Customs. [Read less]

GST – Kerala AAR - GST Exemption to Yoga Course Fees, Third-Party Online Platform - Whether the GST exemption available to Yoga institutions for their course fees can be availed when the courses are marketed and registrations are facilitated through a third-party online platform – HELD - The GST exemption available to Yoga institutions under Notification No. 12/2017-Central Tax (Rate) does not extend to third-party digital platforms such as the applicant. The exemption under this notification applies only to charitable entities registered under Section 12AA/12AB of the Income Tax Act, 1961, and not to intermediary or a... [Read more]

GST – Kerala AAR - GST Exemption to Yoga Course Fees, Third-Party Online Platform - Whether the GST exemption available to Yoga institutions for their course fees can be availed when the courses are marketed and registrations are facilitated through a third-party online platform – HELD - The GST exemption available to Yoga institutions under Notification No. 12/2017-Central Tax (Rate) does not extend to third-party digital platforms such as the applicant. The exemption under this notification applies only to charitable entities registered under Section 12AA/12AB of the Income Tax Act, 1961, and not to intermediary or aggregator entities like the applicant - The applicant company cannot exclude the Yoga course fees from its taxable value under the "pure agent" provisions of Rule 33 of the CGST Rules, 2017, as it did not provide sufficient documentary evidence or contractual framework to establish that it is acting exclusively as a pure agent on behalf of the Yoga institutions. However, if in any future arrangement the applicant is able to fulfill all the conditions laid down under Rule 33, it may be entitled to exclude the Yoga course fees component from the taxable value, with GST applying only to the platform service fee – Ordered accordingly [Read less]

GST – Kerala AAR – Classification of Rooter Trainer Cup used for the propagation of rubber plants - Whether the Rooter Trainer Cup, made of plastic and used exclusively for the propagation of plants, an agricultural activity, can be classified as an agricultural implement - HELD - The Rooter Trainer Cup manufactured and supplied by the applicant, being manually operated and used exclusively by farmers for agricultural purposes, can be appropriately classified as an agricultural implement - The Rubber Research Institute of India had issued a certificate stating that the Rooter Trainer Cups are made of reusable plastic i... [Read more]

GST – Kerala AAR – Classification of Rooter Trainer Cup used for the propagation of rubber plants - Whether the Rooter Trainer Cup, made of plastic and used exclusively for the propagation of plants, an agricultural activity, can be classified as an agricultural implement - HELD - The Rooter Trainer Cup manufactured and supplied by the applicant, being manually operated and used exclusively by farmers for agricultural purposes, can be appropriately classified as an agricultural implement - The Rubber Research Institute of India had issued a certificate stating that the Rooter Trainer Cups are made of reusable plastic in sizes of 600cc and 800cc and are filled with treated coir pith in which rubber seeds are sown and later either bud-grafted with the required clone or planted with budded stumps of a specific clone - The Rubber Board had further certified that RT cups of 600cc and 800cc are recommended exclusively for the cultivation of rubber. In view of these facts, the Rooter Trainer Cup, being used exclusively for the propagation of plants, which is an agricultural activity, can be classified as an agricultural implement – The Rooter Trainer Cup, made of plastic and used exclusively for the propagation of plants, an agricultural activity, is classified under HSN 3926 90 99 and is taxable at 18% GST - Ordered accordingly - Classification and GST rate applicable on the Rooter Trainer Cup - HELD - The Rooter Trainer Cup, being made of plastic, is appropriately classifiable under Customs Tariff Heading (CTH) 3926 90 99, which covers "Other articles of plastics". The AAR noted that the product does not fall under any specific heading under Chapter 39 of the Customs Tariff, and hence, it is classified under the residual entry of 3926 90 99 - The Rooter Trainer Cup is taxable at 18% GST as per Sl. No. 111 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 (as amended). [Read less]

GST – Kerala AAR – Taxability of Leave Without Allowance (LWA) fees, Inspection fees, Self-financing educational institutions - Applicability of GST on fees collected from medical and paramedical staff who wish to avail of Leave Without Allowance (LWA) for private employment; and the fees collected from self-financing educational institutions for conducting departmental inspections and issuing No Objection Certificates (NOC) or Essentiality Certificates (EC) for starting new colleges or courses, or enhancing seats - Whether GST is applicable on the fees collected from medical and paramedical staff for availing LWA – ... [Read more]

GST – Kerala AAR – Taxability of Leave Without Allowance (LWA) fees, Inspection fees, Self-financing educational institutions - Applicability of GST on fees collected from medical and paramedical staff who wish to avail of Leave Without Allowance (LWA) for private employment; and the fees collected from self-financing educational institutions for conducting departmental inspections and issuing No Objection Certificates (NOC) or Essentiality Certificates (EC) for starting new colleges or courses, or enhancing seats - Whether GST is applicable on the fees collected from medical and paramedical staff for availing LWA – HELD - GST is not chargeable on the fees collected from medical and paramedical officers, nursing staff under the Medical Education Department who wish to avail LWA for employment within the country or abroad. The LWA fees are collected as a deterrent and are in the nature of a policy penalty, rather than a contractual or commercial fee. The payment does not induce any special accommodation or confer any special entitlement, and therefore lacks the characteristics of a transactional exchange - The absence of reciprocal benefit or enforceable obligation indicates that the fee does not constitute consideration within the meaning of the CGST Act. The CBIC Circular No. 178/10/2022-GST clarifies that such deterrent or penal recoveries are not consideration for any supply and are therefore not taxable under GST - GST is not applicable on the fees collected from medical and paramedical staff for availing LWA – Ordered accordingly - Whether GST is applicable on the fees collected from self-financing educational institutions for conducting departmental inspections and issuing NOC/EC – HELD - GST is applicable to the fees collected from self-financing educational institutions for conducting departmental inspections and issuing NOC/EC for starting new colleges or courses, or enhancing seats. These services are rendered to the institutions themselves, and not to their students or staff, and are not incidental to the imparting of education. The institutions are considered "business entities" within the meaning of the GST law, and the services are rendered in the course or furtherance of their business operations – The CBIC Circular No. 234/28/2024-GST, provides detailed clarification on the taxability of affiliation-related services under GST, and the inspection and certification services provided by the Directorate of Medical Education are similar in nature and are liable to GST at the rate of 18% - GST is applicable on the fees collected from self-financing educational institutions for conducting departmental inspections and issuing NOC/EC. [Read less]

GST – Kerala AAR - Municipal functions, Pure services, Composite supply – Applicant entered into an agreement with the Kayamkulam Municipality for the electrical maintenance contract, including the repair and maintenance of public street lights - Whether the activity of the applicant of providing pure services of repairs and maintenance of public street lighting infrastructure and supply of manpower based on the work order issued by the local authorities is exigible to GST – HELD - The activity of providing pure services of repairs and maintenance of public street lighting infrastructure and supply of manpower based ... [Read more]

GST – Kerala AAR - Municipal functions, Pure services, Composite supply – Applicant entered into an agreement with the Kayamkulam Municipality for the electrical maintenance contract, including the repair and maintenance of public street lights - Whether the activity of the applicant of providing pure services of repairs and maintenance of public street lighting infrastructure and supply of manpower based on the work order issued by the local authorities is exigible to GST – HELD - The activity of providing pure services of repairs and maintenance of public street lighting infrastructure and supply of manpower based on the work order issued by the local authorities is exempt from GST under Entry 3 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017. The Municipalities are Local Authorities under the GST law, and the maintenance of public street lighting falls within the Constitutional functions of Municipalities under Article 243W. Therefore, the pure service supply to the municipality is eligible for the GST exemption – Ordered accordingly - Whether the supply of street light maintenance services to various departments under the local authority provided by the applicant is eligible for exemption from GST as per Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended, being pure services as per the definition and relating to the functions listed under Articles 243G and 243W of the Constitution – HELD - The supply of street light maintenance services to various departments under the local authority provided by the applicant is eligible for exemption from GST as per Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended, as it is a pure service relating to the functions listed under Article 243W of the Constitution - Whether the services of street light maintenance provided to various Government authorities and Government entities by the applicant where the value of goods consumed is less than 25% of the total contract value, are eligible for exemption from GST as provided under Sr. No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended by Notification No. 16/2021-Central Tax (Rate) dated 18-11-2021, being pure services as per the definition and relating to the functions listed under Articles 243G and 243W of the Constitution – HELD - The services of street light maintenance provided to various Government authorities and Government entities by the applicant, where the value of goods consumed is less than 25% of the total contract value, are eligible for exemption from GST as provided under Sr. No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended by Notification No. 2/2018-Central Tax (Rate) dated 25-01-2018, as it is a composite supply of goods and services where the value of goods does not exceed 25% of the total contract value, and the services relate to the functions listed under Article 243W of the Constitution. [Read less]

GST – Kerala AAR – Supply of potable water, Exemption from GST - Whether the supply of potable water to customers in tanker lorries having capacity of 2000 Kiloliters to 30,000 Kiloliters is exempted vide serial No. 99 of Notification Number 2/2017- Central Tax (Rate) dated 28.06.2017, as amended – HELD - The drinking water supplied by the applicant to various customers through tanker lorries having capacity ranging from 2000 Kiloliters to 30,000 Kiloliters is eligible for exemption from tax under GST as per entry at serial No. 99 of Notification No. 02/2017- Central Tax (Rate) dated 28.06.2017, as amended from time ... [Read more]

GST – Kerala AAR – Supply of potable water, Exemption from GST - Whether the supply of potable water to customers in tanker lorries having capacity of 2000 Kiloliters to 30,000 Kiloliters is exempted vide serial No. 99 of Notification Number 2/2017- Central Tax (Rate) dated 28.06.2017, as amended – HELD - The drinking water supplied by the applicant to various customers through tanker lorries having capacity ranging from 2000 Kiloliters to 30,000 Kiloliters is eligible for exemption from tax under GST as per entry at serial No. 99 of Notification No. 02/2017- Central Tax (Rate) dated 28.06.2017, as amended from time to time - The applicant's process of purification through filtration and chlorination does not make the water similar to any of the categories of water specifically excluded from exemption under the GST Act, such as aerated, mineral, distilled, medicinal, ionic, battery, or demineralized water. Furthermore, the water is supplied in bulk through tanker lorries, not in sealed containers, which also qualifies it for the exemption under the said notification – Ordered accordingly [Read less]

GST – Kerala AAR - Scope of Supply, Cancellation of pre-GST lease agreement, GST liability on refund of unexpired lease period – Applicant had entered into long-term lease agreements with a Government-owned autonomous society, for two parcels of land in the pre-GST regime - Whether the cancellation of the pre-GST lease agreement and the refund of the unexpired lease period would be treated as a "supply" under the provisions of Section 7 of the CGST Act, 2017, and therefore subject to GST – HELD - The cancellation of the lease agreement and the refund of the proportionate amount corresponding to the unexpired lease pe... [Read more]

GST – Kerala AAR - Scope of Supply, Cancellation of pre-GST lease agreement, GST liability on refund of unexpired lease period – Applicant had entered into long-term lease agreements with a Government-owned autonomous society, for two parcels of land in the pre-GST regime - Whether the cancellation of the pre-GST lease agreement and the refund of the unexpired lease period would be treated as a "supply" under the provisions of Section 7 of the CGST Act, 2017, and therefore subject to GST – HELD - The cancellation of the lease agreement and the refund of the proportionate amount corresponding to the unexpired lease period shall not be treated as a "supply" under the provisions of Section 7 of the CGST Act, 2017 – The cancellation of the lease was not based on any agreement where the lessee (IIITMK) consented to or agreed to tolerate the cancellation in exchange for compensation. Instead, the cancellation was imposed by the Government under statutory provisions and pursuant to a government order - The refund received by the applicant was not contractual, but rather a return of consideration for the unutilized lease period, and therefore did not involve any supply of service under the GST law. Accordingly, the refund received by the applicant would not be subject to GST - However, the AAR clarified that any additional amount received by either party specifically under a pre-agreed arrangement for agreeing to refrain from an act, to tolerate an act or situation, or to do an act would require separate examination under the GST framework – Ordered accordingly [Read less]