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Central Excise - Cenvat Credit on Input Services used for setting up of Factory, Extended Period – Appellants were constructing a plant and availing certain Cenvat credits in respect of various input services - Dept raised two demands- one for credit being the irregularly availed on input services used for initial setting up of the unit, and another for irregular credit availed on various counts - Whether Cenvat credit is eligible on input services used for initial setting up of factory – HELD - The definition of 'input service' in the CCR, 2004 underwent changes before and after April 1, 2011, whereby the term 'settin... [Read more]

Central Excise - Cenvat Credit on Input Services used for setting up of Factory, Extended Period – Appellants were constructing a plant and availing certain Cenvat credits in respect of various input services - Dept raised two demands- one for credit being the irregularly availed on input services used for initial setting up of the unit, and another for irregular credit availed on various counts - Whether Cenvat credit is eligible on input services used for initial setting up of factory – HELD - The definition of 'input service' in the CCR, 2004 underwent changes before and after April 1, 2011, whereby the term 'setting up' was excluded from the inclusive part of the definition. While certain specified services like architectural services, construction services etc. used for setting up of the factory were ineligible for Cenvat credit, the credit on other input services used during the setting up stage, which were not specifically excluded, should be allowed - The matter back is remanded back to the original adjudicating authority to re-examine the invoices and allow the benefit of Cenvat credit on those input services which were clearly not covered under the excluded category of services – The appellant had itself reversed the entire amount of irregular credit along with interest before the issuance of the show cause notice. Merely because the appellant had made good the amount, it did not absolve them of the statutory violations, and the Department was justified in invoking the extended period of limitation and imposing the penalty - The appeal is partly allowed by way of remand to the original adjudicating authority to re-examine the invoices and allow the Cenvat credit on those input services which were not specifically excluded under the definition of 'input service'. The demand and penalty in respect of the irregular credit availed is upheld – The appeal is partly allowed [Read less]

Customs - Valuation, Rejection of declared value, Confiscation of goods, redemption fine, penalty - Appellant voluntarily accepted that the declared value was liable for rejection under the Customs Valuation Rules, 2007 and agreed to an enhanced value - Department passed a spot adjudication order rejecting the declared value and re-determining the value. The goods were also confiscated under Section 111(m) of the Customs Act, 1962, and redemption fine and penalty were imposed - Whether the appellant's acceptance of the enhanced value was a coerced acceptance or a voluntary one – HELD - In order to reject the transaction ... [Read more]

Customs - Valuation, Rejection of declared value, Confiscation of goods, redemption fine, penalty - Appellant voluntarily accepted that the declared value was liable for rejection under the Customs Valuation Rules, 2007 and agreed to an enhanced value - Department passed a spot adjudication order rejecting the declared value and re-determining the value. The goods were also confiscated under Section 111(m) of the Customs Act, 1962, and redemption fine and penalty were imposed - Whether the appellant's acceptance of the enhanced value was a coerced acceptance or a voluntary one – HELD - In order to reject the transaction value, the proper officer should, in the first place have some reason to doubt. If he has such reason, he can call for additional information from the importer and on receiving such information or if no information is provided, if the proper officer still has a reasonable doubt about the transaction value, it shall be deemed that the assessable value cannot be the transaction value - In this case, since the declared values were far lower than the contemporaneous values, the proper officer had reason to doubt the transaction value. When asked, the appellant agreed that the declared values may be rejected and the goods may be assessed at contemporaneous values of imports. The appellant had responded to the department's query online, sitting in his office, and could have easily disagreed with the enhancement. The proper officer had reasonable doubt about the truth and accuracy of the transaction value, and hence, was justified in rejecting the declared value. The appellant's acceptance of the enhanced value was not a coerced acceptance - Since the appellant had correctly declared the transaction value in the B/E, the goods are not liable for confiscation under Section 111(m). It is impossible for the appellant to anticipate if the proper officer would reject the transaction value and what value would be fixed - The re-determination of the value is upheld but set aside the confiscation, redemption fine, and penalty imposed under the impugned order - The appeal is partly allowed [Read less]

Central Excise - CENVAT credit on Additional Duty of Customs (CVD) – Import of steam coal - The imported steam coal attracted Nil Basic Customs Duty and Additional Duty of Customs (CVD) at the concessional rates of 1% and 2% under Customs Notification No. 12/2012-Cus and No. 12/2013-Cus, respectively. The appellant availed CENVAT credit of the said CVD under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004 – Denial of CENVAT credit on the ground that the concessional excise duty rates on domestic steam coal were subject to the condition of non-availment of CENVAT credit, and the same condition should apply to the CVD pa... [Read more]

Central Excise - CENVAT credit on Additional Duty of Customs (CVD) – Import of steam coal - The imported steam coal attracted Nil Basic Customs Duty and Additional Duty of Customs (CVD) at the concessional rates of 1% and 2% under Customs Notification No. 12/2012-Cus and No. 12/2013-Cus, respectively. The appellant availed CENVAT credit of the said CVD under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004 – Denial of CENVAT credit on the ground that the concessional excise duty rates on domestic steam coal were subject to the condition of non-availment of CENVAT credit, and the same condition should apply to the CVD paid on imported steam coal as well - Whether CENVAT credit of 1% / 2% CVD paid on imported steam coal is admissible under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004 - HELD - The CENVAT credit of 1% / 2% CVD paid on imported steam coal is admissible under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004. The Rule 3(1)(vii) clearly allows credit of "the additional duty leviable under Section 3 of the Customs Tariff Act", and there is no qualification in the Rule that credit is admissible only if CVD is paid at the tariff rate and not at a concessional rate. The proviso to Rule 3(1)(i), which restricts availment of credit in cases where the benefit of certain central excise exemption notifications is availed, expressly refers only to duties of excise paid under the Central Excise Act and notifications issued thereunder, and does not extend its scope to additional duty of customs paid under the Customs Tariff Act or incorporate customs exemption notifications within its ambit - The CENVAT credit on 1% / 2% CVD paid on imported steam coal under Customs Notification is legally admissible. The denial of CENVAT credit in the impugned Orders-in-Original is set aside and the appeal is allowed [Read less]

Service Tax - Export proceeds, Payment of bank charges, Demand under Banking and Other Financial Services - Demand alleging that the bank charges deducted by foreign banks from the appellant's export proceeds were taxable as "Banking and Other Financial Services" under Section 66A of the Finance Act, 1994 - Whether the bank charges deducted by the foreign banks from the appellant's export proceeds are exigible to service tax under "Banking and Other Financial Services" – HELD - The appellant had engaged the State Bank of India for realizing the export sale proceeds, and the foreign banks had only deducted their charges w... [Read more]

Service Tax - Export proceeds, Payment of bank charges, Demand under Banking and Other Financial Services - Demand alleging that the bank charges deducted by foreign banks from the appellant's export proceeds were taxable as "Banking and Other Financial Services" under Section 66A of the Finance Act, 1994 - Whether the bank charges deducted by the foreign banks from the appellant's export proceeds are exigible to service tax under "Banking and Other Financial Services" – HELD - The appellant had engaged the State Bank of India for realizing the export sale proceeds, and the foreign banks had only deducted their charges while remitting the export sale proceeds to SBI. There was no evidence that the appellant had any direct dealings with the foreign banks or received any services from them - When the Indian bank pays the charges to the foreign bank, the exporter cannot be treated as the service recipient, and no service tax can be charged - The demand of service tax is set aside and the appeal is allowed [Read less]

Service Tax - Trading activity or not, Supply of Gift vouchers, CENVAT credit - Appellant is engaged in providing loyalty management and customer relationship services to its clients. As part of this, the appellant procures and supplies gifts and gift vouchers to customers upon redemption of loyalty points - Department of the view that the procurement and supply of goods and gift vouchers constitute a trading activity, which is either a non-taxable activity prior to 01.04.2011 or an exempted service thereafter – Department alleged that the appellant had wrongly availed and utilized CENVAT credit on common input services ... [Read more]

Service Tax - Trading activity or not, Supply of Gift vouchers, CENVAT credit - Appellant is engaged in providing loyalty management and customer relationship services to its clients. As part of this, the appellant procures and supplies gifts and gift vouchers to customers upon redemption of loyalty points - Department of the view that the procurement and supply of goods and gift vouchers constitute a trading activity, which is either a non-taxable activity prior to 01.04.2011 or an exempted service thereafter – Department alleged that the appellant had wrongly availed and utilized CENVAT credit on common input services attributable to such trading activity, in contravention of Rule 6 of the CENVAT Credit Rules, 2004 - Whether the procurement and supply of goods and gift vouchers by the appellant constitute "trading activity" under the CENVAT Credit Rules, 2004 – HELD - The undisputed facts is that the appellant procures goods and vouchers independently, recovers the cost separately, and discharges VAT/CST on such supplies. These facts clearly demonstrate that the appellant is engaged in buying and selling of goods/vouchers, which squarely falls within the ordinary and commercial understanding of trading - The procurement and supply of goods and gift vouchers constitute trading activity which is a non-taxable activity prior to 01.04.2011, and an exempted service thereafter - The appellant is not entitled to avail CENVAT credit on inputs and input services attributable to such trading activity: prior to 01.04.2011, and subsequent thereto, in the absence of strict compliance with Rule 6 of the CENVAT Credit Rules, 2004, the demands for reversal/recovery of inadmissible CENVAT credit, as confirmed in the impugned Orders-in-Original and Orders-in-Appeal, are upheld – The appeals are disposed of - Whether gift vouchers are actionable claims or goods-in-lieu, and whether their supply can escape the ambit of Rule 6 of the CENVAT Credit Rules – HELD - The gift vouchers are not actionable claims but represent goods-in-lieu, with assured redemption value, and their trading attracts the consequences under Rule 6 of the CENVAT Credit Rules - Whether CENVAT credit attributable to trading activity is admissible prior to 01.04.2011 under the CENVAT Credit Rules, 2004 – HELD - Even prior to 01.04.2011, when trading was neither a taxable service nor an exempted service, credit attributable to trading activity was not admissible, as trading is neither manufacture nor provision of a taxable service, and therefore, credit was not eligible under Rule 3(1) of the CENVAT Credit Rules - Whether, for the period from 01.04.2011 to 31.03.2016, the appellant is entitled to avail CENVAT credit on common input services attributable to trading activity, and whether compliance with Rule 6 of the CENVAT Credit Rules, 2004 is mandatory – HELD – The argument of the appellant that Rule 6 is optional is misplaced. The period from 01.04.2011 onwards, when trading was expressly included as an "exempted service" under Rule 2(e) of the CENVAT Credit Rules, the appellant was required to strictly comply with the requirements of Rule 6, which mandates reversal or payment of an amount proportionate to the value of exempted services. Since the appellant failed to maintain separate accounts or follow the prescribed reversal mechanism, the denial of credit is legally sustainable - Whether, after the amendments to the CENVAT Credit Rules post-2016, the appellant is entitled to avail CENVAT credit, and whether the demands for the post-2016 period are sustainable – HELD - Even after the post-2016 amendments to the CENVAT Credit Rules, trading continued to be treated as an exempted service, and the core eligibility condition for availment of credit under Rule 6 remained unchanged. The appellant's failure to maintain separate accounts or comply with the reversal mechanism under Rule 6(3A) renders the demands for the post-2016 period also sustainable. [Read less]

Central Excise - Reversal of CENVAT credit on inputs and input services used for repair and refurbishment of imported used tunnel boring machines - Department issued notice alleging that the availment of CENVAT credit by the respondent on the inputs and input services used for the repair and refurbishment process is in contravention of the CENVAT Credit Rules, 2004 as the said activity does not amount to 'manufacture' within the meaning of Section 2(f) of the Central Excise Act, 1944 - Whether the activity of repair and refurbishment undertaken by the respondent on the imported used TBMs amounts to 'manufacture' within the... [Read more]

Central Excise - Reversal of CENVAT credit on inputs and input services used for repair and refurbishment of imported used tunnel boring machines - Department issued notice alleging that the availment of CENVAT credit by the respondent on the inputs and input services used for the repair and refurbishment process is in contravention of the CENVAT Credit Rules, 2004 as the said activity does not amount to 'manufacture' within the meaning of Section 2(f) of the Central Excise Act, 1944 - Whether the activity of repair and refurbishment undertaken by the respondent on the imported used TBMs amounts to 'manufacture' within the meaning of Section 2(f) of the CEA, 1944, and consequently, whether the respondent is eligible for CENVAT credit on the inputs and input services utilized for the same - HELD - In another case involving the respondent, the Commissioner had held that the activity undertaken by the respondent amounted to 'manufacture' within the meaning of Section 2(f) of the Central Excise Act, 1944, and this order was further accepted by the Committee of Chief Commissioners on review. Once the department has accepted that the respondent's activity of repair and refurbishment amounts to 'manufacture', it follows that the respondent is eligible for CENVAT credit on the inputs and input services utilized for the same - The activity of repair and refurbishment undertaken by the respondent on the imported used TBMs amounts to 'manufacture' within the meaning of Section 2(f) of the Central Excise Act, 1944, and the respondent is eligible for CENVAT credit on the inputs and input services utilized for the same - The Revenue’s appeal is rejected being not maintainable [Read less]

GST - Demand for reversal of input tax credit subsequent to cancellation of registration – Subsequent to cancellation of registration with effect from 16.07.2020, respondent issued a show cause notice directing the petitioner to reverse the closing balance of ITC lying in its Electronic Credit Ledger as per Section 29(5) of the CGST Act, 2017 - Whether the order passed by the respondent directing the petitioner to reverse the closing balance of ITC is valid and sustainable in law – HELD - The petitioner had filed a writ petition challenging the cancellation of its GST registration, and the same was allowed by the Court... [Read more]

GST - Demand for reversal of input tax credit subsequent to cancellation of registration – Subsequent to cancellation of registration with effect from 16.07.2020, respondent issued a show cause notice directing the petitioner to reverse the closing balance of ITC lying in its Electronic Credit Ledger as per Section 29(5) of the CGST Act, 2017 - Whether the order passed by the respondent directing the petitioner to reverse the closing balance of ITC is valid and sustainable in law – HELD - The petitioner had filed a writ petition challenging the cancellation of its GST registration, and the same was allowed by the Court, consequently restoring the petitioner's registration. Since the petitioner's GST registration has been restored, the question of reversal of the closing balance of ITC does not arise - The assessment order passed by the first respondent directing the petitioner to reverse the closing balance of ITC is set aside – The writ petition is allowed [Read less]

The N/No.09/2025-CT(Rate) dated 17.09.2025 specifically uses the term "Toilet Soap" and does not mention "Medicated Toilet Soap". The intent appears to be to restrict the concessional 5% rate only to general toilet soaps, and not the medicated ones.

Central Excise – Majority Order - Shortage of finished goods, Conclusion of clandestine removal - Whether the demand of excise duty on the stock of sugar found short consequent to physical verification is sustainable - HELD - The mere shortage of goods, without any other evidence of clandestine removal, cannot lead to the conclusion that the goods were removed in a clandestine manner - the present litigation is a second round of litigation and in earlier round of litigation, the Tribunal remanded the matter back to the Adjudicating Authority for a fresh decision. The said Final Order has not challenged by the department ... [Read more]

Central Excise – Majority Order - Shortage of finished goods, Conclusion of clandestine removal - Whether the demand of excise duty on the stock of sugar found short consequent to physical verification is sustainable - HELD - The mere shortage of goods, without any other evidence of clandestine removal, cannot lead to the conclusion that the goods were removed in a clandestine manner - the present litigation is a second round of litigation and in earlier round of litigation, the Tribunal remanded the matter back to the Adjudicating Authority for a fresh decision. The said Final Order has not challenged by the department and thus the same has attained finality and cannot be contested at this stage. Instead of bringing fresh evidence of clandestine removal, the Adjudicating Authority has again confirmed the demand on the basis of mere shortage which cannot lead to a conclusion that there was a clandestine removal of goods - The issue is no more res integra and has been settled in various decisions, wherein the Tribunal has held that mere shortage cannot lead to the conclusion of clandestine removal of goods in the absence of any other evidence brought on record by the Revenue showing such illegal activity on the part of the assessee - the Member (Technical) has taken into consideration that the Appellant has not been able to furnish acceptable explanation for the shortage and therefore, acceptance by the Appellant is sufficient to confirm the demand. After considering the various decisions of the High Courts and the order of the Tribunal in earlier round of litigation which has not been challenged by the department, the view taken by the Member (Judicial) is legally correct and affirmed - When the demand is set aside on merit, then the penalty under Rule 25 cannot be upheld and the Member (Judicial) has rightly set aside the same - The view taken by the Member (Judicial) is justified in law and the same is afformed – The appeal is allowed by majority order - Whether the Cenvat Credit taken on HR Coils, Sheet, Shape, Section, Angle, Rod, Plate etc which were used for making base-structure, shades and civil-work in the factory, would be admissible or not – HELD - the Adjudicating Authority has denied the credit mainly on the basis of law laid down by the Larger Bench of the Tribunal in Vandana Global Ltd’s case. The said decision of the Larger Bench has been set aside by the Hon’ble Chhattisgarh High Court by relying upon the judgment of Hon’ble Gujarat High Court in Mundra Ports & Special Economic Zone Ltd’s case - In view of these circumstances, the Appellant are entitled to Cenvat Credit on these items, therefore, in this regard the view taken by the Member (Judicial) is legally correct, accordingly, the same is confirmed - Whether credit can be allowed on capital goods after the factory has become operational – HELD - It is irrelevant that the factory became operational or not; capital goods can be received even after the factory has become operational and the capital goods are regularly received in the factory and hence, credit cannot be disallowed - The credit cannot be disallowed on capital goods simply because the same was received when the factory was in operation. On this issue also, the view of Member (Judicial) is upheld - Whether the Cenvat Credit taken on HR Coils, Sheet, Shape, Section, Angle, Road, Plate etc which were cleared from the factory as such, would be allowable or not – HELD - The credit has been disallowed on the ground that the inputs of their capital goods received in the factory were cleared from the factory as such under Rule 3(5) of the Cenvat Credit Rules; the appellant is liable to reverse the Cenvat credit. The appellant is not contesting the same on merits but contesting the same on limitation - On this issue, the Member (Judicial) has given the benefit of limitation on the ground that the issue of substantial amount was decided by the Larger Bench of the Tribunal in Vandana Global Ltd’s case which has already been reversed by Hon’ble High Court. Therefore, the invoking the extended period of limitation cannot sustain; accordingly, on this issue, the finding of the Member (Judicial) is correct - Whether the Cenvat Credit taken on Weigh Bridges installed outside the factory premises, would be valid or not – HELD - It is clear from the SCN that 9 weigh scales, which were of higher capacity, were installed in the factory itself and balance 41 weigh scales of lower capacity were installed at the Agriculture Fields to weigh the sugarcanes from the farmers during the crushing season; the said weigh scales of smaller capacity are not permanently removed from the Appellant’s factory and the issue regarding the eligibility of credit on weigh-scales has been decided in the case of Triveni Engg. & Inds. Ltd. hence, the Member (Judicial) has allowed the credit – There is no infirmity in the finding of the Member (Judicial) on this aspect which is based upon the earlier decision of the Tribunal - Whether the Cenvat Credit taken on Computers installed in Offices of the party, would be legally correct or not – HELD – The issue is squarely covered by the decision of the Tribunal in the case of Maruti Suzuki Ltd vs. CCE, Gurugram. By following the said decision, the Member (Judicial) has allowed the credit. There is no infirmity in the finding of the Member (Judicial) on this aspect also and accordingly, same is confirmed. [Read less]

Customs – Diversion of goods exported under Focus Market Scheme, Confiscation of goods, statements under Section 108 – Appellant filed shipping bills for export of readymade garments claiming benefit of the Focus Market Scheme. The investigation revealed that the goods were diverted to Jebel Ali in the UAE by fraudulently amending the TR-1 and TR-2 copies of the shipping bills. The authorities issued a show cause notice proposing confiscation of the goods under Section 113(d), (g) and (i) of the Customs Act, recovery of drawback, and imposition of penalties under Sections 114(iii) and 114AA of the Customs Act - Whether... [Read more]

Customs – Diversion of goods exported under Focus Market Scheme, Confiscation of goods, statements under Section 108 – Appellant filed shipping bills for export of readymade garments claiming benefit of the Focus Market Scheme. The investigation revealed that the goods were diverted to Jebel Ali in the UAE by fraudulently amending the TR-1 and TR-2 copies of the shipping bills. The authorities issued a show cause notice proposing confiscation of the goods under Section 113(d), (g) and (i) of the Customs Act, recovery of drawback, and imposition of penalties under Sections 114(iii) and 114AA of the Customs Act - Whether the statements recorded under Section 108 of the Customs Act can be considered as relevant evidence - HELD - The statements recorded under Section 108 cannot be considered as relevant evidence as the procedure prescribed under Section 138B of the Customs Act was not followed. The provisions of Section 138B are mandatory, and failure to comply with the procedure would mean that no reliance can be placed on the statements recorded under Section 108 – The Section 113 of the Customs Act deals with confiscation of goods attempted to be improperly exported, whereas in the instant case, the goods had already been exported on the basis of Let Export Orders, and the investigation was started later. Therefore, Section 113 would not be applicable - Since the goods are not liable to confiscation under Section 113, penalty under Section 114(iii) could not be imposed. Similarly, the penalty under Section 114AA could not be imposed as the statements recorded under Section 108 cannot be relied upon as evidence - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Classification of Service - Transportation of Goods by Air or BAS, Place of provision of services, Intermediary services – Appellant was appointed as the sole selling agent for export of cargo. The appellant invoiced the exporters a consolidated amount covering the cost of transportation from the exporter's location to the final destination, including the international leg through Aeroflot and incidental expenses. The appellant paid Aeroflot and other service providers for their respective services - Whether the appellant's services were "Transportation of Goods by Air" under Section 65(105)(zzn) of the F... [Read more]

Service Tax – Classification of Service - Transportation of Goods by Air or BAS, Place of provision of services, Intermediary services – Appellant was appointed as the sole selling agent for export of cargo. The appellant invoiced the exporters a consolidated amount covering the cost of transportation from the exporter's location to the final destination, including the international leg through Aeroflot and incidental expenses. The appellant paid Aeroflot and other service providers for their respective services - Whether the appellant's services were "Transportation of Goods by Air" under Section 65(105)(zzn) of the Finance Act, 1994, which was exempt from service tax, or "Business Auxiliary Services" under Section 65(105)(zzb), which were taxable – HELD – The charge of the service tax is on the service rendered and not on the agreements signed. In a case such as this where the services were rendered differently from what was contemplated in the agreement, the actual services rendered must be considered regardless of what was agreed to - Instead of selling space on behalf of Aeroflot, the appellant offered to the exporters a complete end-to-end package transporting from the exporter’s place up to the final destination and invoiced the exporters a consolidated amount for this service - The appellant did not act as an agent of either Aeroflot or the exporters, but rather entered into principal-to-principal agreements with both. The appellant offered a complete package deal of transporting the goods from the exporter's location to the final destination, utilizing the services of Aeroflot and other service providers. Therefore, the appellant's services were covered under the definition of "aircraft operator" in Section 65(3b) and "Transportation of Goods by Air" under Section 65(105)(zzn), which are exempt from service tax – The impugned order confirming demand of service tax with interest and penalties is set aside and the appeal is allowed - Whether the appellant's services after 1.7.2012 were taxable under the Place of Provision of Services Rules, 2012 (POPS Rules) – HELD - The appellant did not provide any intermediary services, but rather rendered the service of transporting the goods by air to the destination. As per Rule 10 of the POPS Rules, the place of provision of such services is the destination, which was outside India. Therefore, no service tax was payable on the appellant's services after 1.7.2012 as well - Interpretation of term ‘aircraft operator’ – HELD - The term ‘aircraft operator’ must be interpreted as per the statutory definition in section 65 (105) (3b) insofar as it pertains to this Act according to which ‘aircraft operator’ means any person which provides the service of transport of goods or passengers by aircraft. Nothing in this definition requires one to either own or lease or run an aircraft. So long as one provides the service of transport of goods or passengers by aircraft, one is covered by the definition of ‘aircraft operator’. The appellant provided the service of transporting goods of the exporters by air using the services of Aeroflot, domestic airlines, etc. and hence is squarely covered by the term aircraft operator and is covered by the charging section 65 (105) (zzn) of the Act which service, was exempt by notification no. 29/2005-ST dated 15.7.2005. [Read less]

Customs - Classification aluminium shelves imported along with other equipment, for mushroom cultivation - Revenue authorities sought to classify the aluminium shelves under CTI 76109010 as 'Aluminium Structures', while the respondent claimed classification under CTI 84369900 as 'Parts of Agricultural Machinery' - Whether the aluminium shelves can be classified as 'Aluminium Structures' under CTI 76109010 or as 'Parts of Agricultural Machinery' under CTI 84369900 – HELD - Chapter Heading 7610 is purely an eo-nomine provision and makes no reference to use in any manner whatsoever, either explicitly or inherently. An eo-no... [Read more]

Customs - Classification aluminium shelves imported along with other equipment, for mushroom cultivation - Revenue authorities sought to classify the aluminium shelves under CTI 76109010 as 'Aluminium Structures', while the respondent claimed classification under CTI 84369900 as 'Parts of Agricultural Machinery' - Whether the aluminium shelves can be classified as 'Aluminium Structures' under CTI 76109010 or as 'Parts of Agricultural Machinery' under CTI 84369900 – HELD - Chapter Heading 7610 is purely an eo-nomine provision and makes no reference to use in any manner whatsoever, either explicitly or inherently. An eo-nomine provision is one that describes a commodity by its name. A use limitation cannot be imposed on an eo-nomine provision unless the name inherently suggests use. An eo-nomine provision would ordinarily include all forms of the name article. Consequently, Chapter Heading 7610 would cover all forms of aluminium structures, except for prefabricated buildings of heading 94.06, which have been excluded by the heading itself - On the basis of examining the objective characteristics and properties of the subject goods, it is evident that the subject goods fulfil the characteristics and unquestionably fall within the category of structures. Even in common parlance, the subject goods would be referred to as structures. Therefore, the subject goods are classifiable under CTI 76109010 as Aluminium Structures – Further, the subject goods also fail to qualify as parts of the machines with which they are integrated post-importation. All of the individual machines are already complete and fully operational on their own, i.e., their mechanical and electrical functions do not rely on the aluminium shelves. These shelves do not contribute to their operation; they merely serve as a surface for the devices to perform their functions. Looked at from any angle, the subject goods cannot be classified under Chapter Heading 8436. Consequently, the subject goods are liable to be classified under CTI 76109010 as ‘Aluminium Structures’ – The impugned order passed by the Tribunal is set aside and the Revenue appeal is allowed [Read less]

The Section 16(2)(c) places an onerous burden on a bonafide purchasing dealer. The Sec.16(2)(c) is read down to apply only in cases where the transaction is found to be not bonafide or is a collusive or fraudulent transaction to defraud the revenue.

GST - Challenge to Dismissal of Appeal by Appellate Authority on the ground of delay - Whether the reasons provided by the petitioners for the delay in filing the appeal before the Appellate Authority were sufficient to condone the delay – HELD - The reasons provided by the petitioners for the delay, such as the adjudication order being uploaded on the "Additional Notices and Orders" tab of the GST Portal instead of the "View Orders" tab, and an employee inadvertently deleting certain emails, are not fully satisfactory as the petitioners had knowledge of the earlier notices served upon them. However, if the petitioners a... [Read more]

GST - Challenge to Dismissal of Appeal by Appellate Authority on the ground of delay - Whether the reasons provided by the petitioners for the delay in filing the appeal before the Appellate Authority were sufficient to condone the delay – HELD - The reasons provided by the petitioners for the delay, such as the adjudication order being uploaded on the "Additional Notices and Orders" tab of the GST Portal instead of the "View Orders" tab, and an employee inadvertently deleting certain emails, are not fully satisfactory as the petitioners had knowledge of the earlier notices served upon them. However, if the petitioners are not permitted to press their appeal before the Appellate Authority on merits, they would be losing an important forum - The petitioner is directed to pay a sum of Rs. 20,000/- to the State Legal Services Authority, West Bengal and upon furnishing proof of such payment, the Appellate Authority is directed to proceed to hear the petitioners' appeal on merit – The petition is disposed of [Read less]

GST - Refund claim under GST on export of services – Petitioner is an India entity engaged in the business of providing taxable services under the category "Information Technology Software Services" which are exported mainly to its associated enterprises located outside India. The petitioner filed GST-RFD-01 along with supporting documents claiming refund on account of services for different periods. The refund sanctioning authority allowed the refund in some periods but rejected the refund in other periods - Whether the petitioner's supplies qualify as "export of services" under Section 2(6) of the IGST Act, 2017 – HE... [Read more]

GST - Refund claim under GST on export of services – Petitioner is an India entity engaged in the business of providing taxable services under the category "Information Technology Software Services" which are exported mainly to its associated enterprises located outside India. The petitioner filed GST-RFD-01 along with supporting documents claiming refund on account of services for different periods. The refund sanctioning authority allowed the refund in some periods but rejected the refund in other periods - Whether the petitioner's supplies qualify as "export of services" under Section 2(6) of the IGST Act, 2017 – HELD - The appellate authority and the refund sanctioning authority relied on clause (C) of the agreement between the petitioner and its overseas client which provided that the petitioner may enter into contract with third parties. Merely on this basis, the authorities held that the petitioner is providing "intermediary services" and therefore the place of provision of services is in India, which does not qualify as "export of services" under Section 2(6) of the IGST Act - The authorities failed to record any finding as to the existence of a third party in the transaction or how the supplies made by the petitioner are not between two principals or by the petitioner not on its own account, despite the petitioner submitting all relevant documents. The authorities also failed to analyze the requirements under Section 13(2) defining "intermediary", Section 2(6) defining "export of services" and Section 13 providing for "place of supplier services". The findings of the authorities are cryptic and suffered from non-application of mind to the materials on record - The impugned orders are set aside and matter is remanded to the appellate authority and the refund sanctioning authority to re-examine the issue afresh in light of the relevant provisions and the principles laid down in the CBIC Circular on intermediary services – The petitions are allowed by remand [Read less]

GST - Opportunity of Personal Hearing - The petitioner contended that the show cause notice was uploaded on the GST Portal, but they were unaware of it and hence could not file a reply within the time – HELD - Merely uploading the notice on the GST Portal does not constitute effective service, especially when the taxpayer has not responded to the repeated reminders. The officer should have explored other modes of service prescribed under Section 169 of the CGST Act, such as sending the notice by Registered Post Acknowledgment Due (RPAD), to ensure effective service. Passing an ex-parte order without providing a personal ... [Read more]

GST - Opportunity of Personal Hearing - The petitioner contended that the show cause notice was uploaded on the GST Portal, but they were unaware of it and hence could not file a reply within the time – HELD - Merely uploading the notice on the GST Portal does not constitute effective service, especially when the taxpayer has not responded to the repeated reminders. The officer should have explored other modes of service prescribed under Section 169 of the CGST Act, such as sending the notice by Registered Post Acknowledgment Due (RPAD), to ensure effective service. Passing an ex-parte order without providing a personal hearing opportunity would lead to multiplicity of litigations, which would waste the time of the authorities and the court - The impugned assessment order is set aside and matter is remanded to the Respondent to provide the petitioner an opportunity of personal hearing and decide the matter afresh in accordance with law - Since the respondent had already recovered the entire disputed tax amount from the petitioner, the respondent is directed to release the attachment made on the petitioner's bank account and instruct the concerned bank to de-freeze the account forthwith – The petition is disposed of [Read less]

GST – Issuance of composite intimation of tax liability as well as a composite show cause notice issued - Whether the authorities can issue a composite notice/intimation by clubbing demands for multiple financial year – HELD - Since the subject matters involved in the various financial years were different, issuing a composite intimation and show cause notice is not maintainable. Separate intimations and show cause notices should have been issued for each financial year, as the "tax period" under the CGST Act refers to the period for which a return is required to be furnished, which is on a yearly basis – Further, th... [Read more]

GST – Issuance of composite intimation of tax liability as well as a composite show cause notice issued - Whether the authorities can issue a composite notice/intimation by clubbing demands for multiple financial year – HELD - Since the subject matters involved in the various financial years were different, issuing a composite intimation and show cause notice is not maintainable. Separate intimations and show cause notices should have been issued for each financial year, as the "tax period" under the CGST Act refers to the period for which a return is required to be furnished, which is on a yearly basis – Further, the authorities did not consider the petitioner's reply to the intimation before issuing the show cause notice, which was a violation of the principles of natural justice - The composite intimation and show cause notice are quashed and granting liberty to the respondent authorities to take appropriate action in accordance with law by issuing separate intimations and show cause notices – The petition is disposed of [Read less]

GST – Manual filing of GSTR-3B Return – Petitioner seeking direction to the respondents to accept the manual filing of GSTR-3B for the quarter ending March 2021 with an additional claim of Input Tax Credit - Petitioner failed to claim the ITC in the original return filed for the financial year 2020-21 due to an error, which was later rectified in the annual return GSTR-9 filed in 2022 - Respondents contended that the petitioner had knowledge of the error in 2022 but did not take immediate action, and there was no provision under the CGST Act to permit manual filing of returns – HELD - There is merit in petitioner's a... [Read more]

GST – Manual filing of GSTR-3B Return – Petitioner seeking direction to the respondents to accept the manual filing of GSTR-3B for the quarter ending March 2021 with an additional claim of Input Tax Credit - Petitioner failed to claim the ITC in the original return filed for the financial year 2020-21 due to an error, which was later rectified in the annual return GSTR-9 filed in 2022 - Respondents contended that the petitioner had knowledge of the error in 2022 but did not take immediate action, and there was no provision under the CGST Act to permit manual filing of returns – HELD - There is merit in petitioner's argument that the rectification of the error was made in the Annual return GSTR-9, but the mistake was not accounted for in the department's records, leading to the issuance of the show-cause notice - Considering the facts and circumstances of the case, the respondents are directed to allow the petitioner to file the manual return as prayed for. However, filing of manual return would not automatically absolve the petitioner from meeting the demand order and that the same shall remain intact subject to any further order that may be passed by the competent authority – The petition is disposed of [Read less]

GST – Time Limit for distribution of Input Tax Credit by Input Service Distributor - Challenge to validity of Rule 39(1)(a) of CGST Rules, 2017 insofar as it mandates distribution of Input Tax Credit within the same month – Petitioner case that Rule 39(1)(a) of CGST Rules is ultra vires Section 20 of the CGST Act, 2017 as it introduces a mandatory time limitation not contemplated by the CGST Act - During audit for FY 2017-18 and 2018-19, the authorities observed that the petitioner had accumulated ITC and distributed it in the last month instead of distributing it monthly as per Rule 39(1)(a) of the CGST Rules. The aut... [Read more]

GST – Time Limit for distribution of Input Tax Credit by Input Service Distributor - Challenge to validity of Rule 39(1)(a) of CGST Rules, 2017 insofar as it mandates distribution of Input Tax Credit within the same month – Petitioner case that Rule 39(1)(a) of CGST Rules is ultra vires Section 20 of the CGST Act, 2017 as it introduces a mandatory time limitation not contemplated by the CGST Act - During audit for FY 2017-18 and 2018-19, the authorities observed that the petitioner had accumulated ITC and distributed it in the last month instead of distributing it monthly as per Rule 39(1)(a) of the CGST Rules. The authorities issued a show-cause notice proposing a penalty for this alleged violation - Whether Rule 39(1)(a) of the CGST Rules, which mandates distribution of ITC within the same month, is ultra vires Section 20 of the CGST Act as it introduces a mandatory time limitation not contemplated by the Act – HELD - The Rule 39(1)(a) of the CGST Rules is ultra vires Section 20 of the CGST Act as it travels beyond the scope of the parent provision by introducing a mandatory time limit for distribution of ITC, which is not contemplated under Section 20 - While delegated legislation enjoys a presumption of validity, such presumption stands rebutted where the rule demonstrably travels beyond the limits of authority conferred by the parent statute. The Section 20 of the CGST Act merely provides that the credit 'shall be distributed in such manner as may be prescribed', without stipulating any time limit. In the absence of any express or implied statutory mandate authorising the prescription of a limitation period, the Rule-making authority cannot, under the guise of prescribing the "manner", introduce a substantive restriction which has the effect of extinguishing a vested statutory entitlement - The Act permits a recipient unit to avail ITC directly until the due date for filing of the return for the month of September or November of the subsequent financial year. The denial of an identical benefit solely on the ground that the credit is routed through an ISD results in hostile discrimination and is manifestly arbitrary and violation of Articles 14 and 300-A of the Constitution of India - The Section 20 of the CGST Act is intended to ensure seamless flow and equitable distribution of ITC. Any interpretation of the rule-making power that imposes rigid time constraints not envisaged by the statute would defeat this object and run contrary to the purpose of the provision - The Rule 39(1)(a) of the CGST Rules, to the extent it mandates distribution of ITC within the same month, as ultra vires Section 20 of the CGST Act and struck it down – The writ petition is allowed - Legislative intent of Section 20 - Where the legislature intends to authorise the prescription of a time limit through subordinate legislation, it has done so expressly. The absence of any such provision in Section 20 of the CGST Act, as it stood prior to 01.04.2025, is therefore to be treated as intentional and not accidental - It is trite law that when the parent statute does not provide for a limitation period, the rule-making authority cannot introduce a time restriction by invoking general rule-making powers, particularly where such restriction results in extinguishment of a statutory right, as this would amount to rewriting the statute and is impermissible in law - Violation of principles of natural justice - The petitioner had sought reasonable time to respond to the spot memos issued by the respondents, citing difficulties in collating voluminous data. However, the respondents declined the request and proceeded to conclude the audit in undue haste without affording the petitioner an opportunity to present its explanation or clarify its position - Whether the impugned Audit Proceedings and the show-cause notice are in violation of principles of natural justice - HELD - The audit objections were finalized and the matter was placed before the Monthly Monitoring Committee Meeting without prior notice to the petitioner and without affording it an opportunity to be heard. This action is held to be in clear derogation of the fundamental principles of natural justice. As per the CBIC GST Audit Manual, 2019, audit objections are required to be discussed with the taxpayer prior to finalization of the audit report, which was not done in the present case. The precipitate manner in which the audit proceedings were concluded, by denying the petitioner at least an opportunity to place its case on record, is held to vitiate the entire audit process - The Final Audit Report and the show-cause notice are quashed on the ground of violation of principles of natural justice - Issue of limitation - The proceedings pertain to FY 2017-18 and 2018-19, whereas the show-cause notice was issued on 30.01.2024, which is beyond the normal period of limitation prescribed under Section 73 of the CGST Act. The respondents sought to invoke the extended period of limitation under Section 74 on the allegation of 'suppression' - Whether the proceedings are barred by limitation - HELD - The invocation of the extended period of limitation under Section 74 on the ground of 'suppression' does not appear to be sustainable, as the record indicates that the particulars of distribution of ITC were duly disclosed by the petitioner in its periodical returns in Form GSTR-6 and were available to the department on the common GST portal. The suppression cannot be alleged when the facts are known to both the parties. The proceedings are barred by limitation and the Final Audit Report and the show-cause notice are quashed. [Read less]

Service Tax - Grant of Regular Bail in Economic Offences – Petitioners were alleged to have engaged in multi-level direct marketing and failed to properly discharge their tax liability, leading to evasion of service tax - Whether the petitioners should be granted regular bail, given the nature of the economic offences alleged against them - HELD – The economic offences constitute a class apart and need to be viewed seriously, as they affect the economy of the country as a whole and pose a serious threat to the financial health of the nation. The petitioners, being the key persons in charge of the company, were the mast... [Read more]

Service Tax - Grant of Regular Bail in Economic Offences – Petitioners were alleged to have engaged in multi-level direct marketing and failed to properly discharge their tax liability, leading to evasion of service tax - Whether the petitioners should be granted regular bail, given the nature of the economic offences alleged against them - HELD – The economic offences constitute a class apart and need to be viewed seriously, as they affect the economy of the country as a whole and pose a serious threat to the financial health of the nation. The petitioners, being the key persons in charge of the company, were the masterminds and beneficiaries of the entire scheme of duty evasion. Their liabilities have already been assessed and adjudicated to be around Rs. 55 crores, which they are alleged to have evaded. Additionally, the petitioners were found to be involved in 49 other FIRs registered against them in different parts of the country for allegedly defrauding public persons – Further, the petitioners had not cooperated with the investigation and failed to furnish the requisite records despite receiving show cause notices, thereby compelling the adjudicating authority to adjudicate the matter. Considering the gravity of the allegations, the involvement of the petitioners in multiple cases, and their act of delaying the proceedings since 2018, the petitioners do not deserve to be extended the benefit of bail - The petition for regular bail is dismissed [Read less]

Central Excise – Section 11D of Central Excise Act, 1944 – Rules 3(5) and 9 of Cenvat Credit Rules, 2004 – Demand of short paid duty – Sustainability – On basis of audit conducted on records maintained by Appellant, department issued show cause notice alleging short payment of Central Excise Duty by Appellant on “inputs cleared as such” – Adjudicating Authority confirmed demand proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether demand of short paid duty confirmed against Appellant is sustainable – HELD – From perusal of provision of Rule 3(... [Read more]

Central Excise – Section 11D of Central Excise Act, 1944 – Rules 3(5) and 9 of Cenvat Credit Rules, 2004 – Demand of short paid duty – Sustainability – On basis of audit conducted on records maintained by Appellant, department issued show cause notice alleging short payment of Central Excise Duty by Appellant on “inputs cleared as such” – Adjudicating Authority confirmed demand proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether demand of short paid duty confirmed against Appellant is sustainable – HELD – From perusal of provision of Rule 3(5) of the Rules, it is clear that Appellant was required to pay an amount equal to credit availed in respect of such inputs and such removal shall be under cover of an invoice referred to in Rule 9 of the Rules. Appellant had complied with provision of Rule 3(5) of the Rules and reversed credit while clearing input as such. During course of audit of records and documents maintained by Appellant, Central Excise Auditors noticed that price at which Cenvat inputs were cleared as such under Rule 3(5) of the Rules was higher than the basic price at which such inputs were originally purchased. Appellant had collected certain amount from purchaser which were in excess to purchase price, therefore, same had to be forthwith paid to Central Government in terms of Section 11D of the Act. Impugned order passed by Commissioner (Appeals) is upheld – Appeal dismissed [Read less]

Customs - Import of coral goods, undervaluation, misdeclaration - Department enhanced the value of the goods, alleging undervaluation and misdeclaration - Whether the department was justified in confirming the demand for differential duty based on investigations carried out for a different consignment – HELD - Department cannot confirm a demand solely on the basis of extrapolation from investigations carried out for a different consignment or on the presumption that the same modus operandi would have been followed for all imports. Each import is an assessment by itself and the transaction value cannot be rejected merely ... [Read more]

Customs - Import of coral goods, undervaluation, misdeclaration - Department enhanced the value of the goods, alleging undervaluation and misdeclaration - Whether the department was justified in confirming the demand for differential duty based on investigations carried out for a different consignment – HELD - Department cannot confirm a demand solely on the basis of extrapolation from investigations carried out for a different consignment or on the presumption that the same modus operandi would have been followed for all imports. Each import is an assessment by itself and the transaction value cannot be rejected merely by projections and extrapolations - The department had failed to provide any direct or material evidence to substantiate the allegations of misdeclaration and undervaluation with respect to the subject bill of entry – Further, the department had not adequately rebutted the documentary evidence, including the invoice and declarations provided by the appellant. The impugned order is set aside and the appeal is allowed [Read less]

Customs – Rejection of assessable value and invocation of extended period of limitation under Section 28(1) of the Customs Act, 1962 - The goods were cleared by the proper officer after examination and accepting the value declared by the appellant. After around three years Dept issued show cause notice proposing to reject the assessable value and enhance it under the Customs Valuation Rules - Whether the extended period of limitation could have been invoked by the department in the present case – HELD - Mere undervaluation of goods cannot be a ground to invoke the extended period of limitation unless the Department bri... [Read more]

Customs – Rejection of assessable value and invocation of extended period of limitation under Section 28(1) of the Customs Act, 1962 - The goods were cleared by the proper officer after examination and accepting the value declared by the appellant. After around three years Dept issued show cause notice proposing to reject the assessable value and enhance it under the Customs Valuation Rules - Whether the extended period of limitation could have been invoked by the department in the present case – HELD - Mere undervaluation of goods cannot be a ground to invoke the extended period of limitation unless the Department brings on record relevant material to show that the undervaluation was with an intent to evade payment of duty - The finding recorded by the Commissioner to the effect that the appellant after having made up his mind of paying duty backed off is based to the statement made by the appellant under section 108 of the Customs Act. This statement of the appellant cannot be considered as relevant in view of the decision of this Tribunal in the case of Surya Wires Pvt. Ltd. Vs. Principal Commissioner of CGST, Raipur - The extended period of limitation could not have been invoked by the department in the present case as the department failed to establish that the appellant had any intention to evade payment of duty – the impugned order is set aside and the appeal is allowed [Read less]

GST - Multiple assessment proceedings for the same tax period - The petitioner had earlier challenged a previous Show Cause Notice for the same tax period which was quashed by the Court. The present SCN had some overlapping issues with the previous one - Whether the respondent was barred from issuing multiple Show Cause Notices for the same tax period under the GST enactments – HELD - There is no bar under the GST enactments for the issuance of multiple SCNs for the same tax period, provided they address different and separate issues - The principles of res-judicata do not strictly apply to tax proceedings, and the respo... [Read more]

GST - Multiple assessment proceedings for the same tax period - The petitioner had earlier challenged a previous Show Cause Notice for the same tax period which was quashed by the Court. The present SCN had some overlapping issues with the previous one - Whether the respondent was barred from issuing multiple Show Cause Notices for the same tax period under the GST enactments – HELD - There is no bar under the GST enactments for the issuance of multiple SCNs for the same tax period, provided they address different and separate issues - The principles of res-judicata do not strictly apply to tax proceedings, and the respondent was within its rights to issue the impugned show cause notice, as it addressed different issues from the previous show cause notice that was quashed by the Court - Merely because earlier Show Cause Notice stood quashed by the Court ipso facto would not mean the impugned Show Cause proceedings is without any jurisdiction - The petitioner is directed to file a reply to the impugned show cause notice within 30 days and the respondent to proceed to pass a final order on merits thereafter – The writ petition is dismissed [Read less]

Customs – Regulations 16(1) and 17(1) of Customs Broker Licensing Regulations, 2018 – Violation of regulations – Suspension of license – Appellant/Customs Broker filed Bills of Entry on behalf of importer for import of light melting scrap – On examination by officers of DRI, goods were found to be dry dates as against declared light melting scrap – Commissioner suspended customs broker license of Appellant under Regulation 16(1) of the Regulations – Whether Commissioner has complied with timelines prescribed under Regulation 17(1) of the Regulations – HELD – In recent times, Courts have been taking a stri... [Read more]

Customs – Regulations 16(1) and 17(1) of Customs Broker Licensing Regulations, 2018 – Violation of regulations – Suspension of license – Appellant/Customs Broker filed Bills of Entry on behalf of importer for import of light melting scrap – On examination by officers of DRI, goods were found to be dry dates as against declared light melting scrap – Commissioner suspended customs broker license of Appellant under Regulation 16(1) of the Regulations – Whether Commissioner has complied with timelines prescribed under Regulation 17(1) of the Regulations – HELD – In recent times, Courts have been taking a strict view of timelines prescribed under the Regulations. High Courts have been consistently holding that timelines prescribed under the Regulations for issuance of show cause notice and order are mandatory in nature. Orders issued in violation of timelines are vitiated and are liable to be set aside. Revenue had initiated proceedings against Appellant alleging various violations of the Regulations. It was incumbent on officers to adhere to procedures laid down in law while dealing with the violations. Since timelines prescribed under Regulation 17(1) of the Regulations were not followed, proceedings initiated against Appellant are liable to be dropped. Order under challenge is set aside – Appeal allowed [Read less]

GST – Interception of goods and imposition of penalty, Release of perishable goods - Whether the provisions of Section 130 of the CGST Act could have been invoked by the authorities – HELD - The arecanuts are such goods that come under the definition of perishable goods. Considering that the dispute needs to be examined on factual aspects, the goods are directed to be released to the petitioner upon furnishing a bank guarantee or solvency security equivalent to the amount reflected in the invoice of purchase. However, the release of the goods would not affect the merits of the demand being raised by the Department, whi... [Read more]

GST – Interception of goods and imposition of penalty, Release of perishable goods - Whether the provisions of Section 130 of the CGST Act could have been invoked by the authorities – HELD - The arecanuts are such goods that come under the definition of perishable goods. Considering that the dispute needs to be examined on factual aspects, the goods are directed to be released to the petitioner upon furnishing a bank guarantee or solvency security equivalent to the amount reflected in the invoice of purchase. However, the release of the goods would not affect the merits of the demand being raised by the Department, which is to be examined independently by the Authorities after considering the replies and documents of the respondents and the petitioner – The writ petitions are disposed of [Read less]

Service Tax - Refund of service tax, SEZ unit - Appellant availed various input services for their SEZ operations and paid service tax either to the service providers or under the reverse charge mechanism. Being an SEZ unit, the appellant filed refund claims for the service tax paid on these input services – Rejection of refund without granting the appellant an opportunity of being heard – HELD - The lower adjudicating authority had indeed violated the principles of natural justice by not granting an opportunity of being heard to the appellant before passing the Orders-in-Original. The Commissioner (Appeals) should hav... [Read more]

Service Tax - Refund of service tax, SEZ unit - Appellant availed various input services for their SEZ operations and paid service tax either to the service providers or under the reverse charge mechanism. Being an SEZ unit, the appellant filed refund claims for the service tax paid on these input services – Rejection of refund without granting the appellant an opportunity of being heard – HELD - The lower adjudicating authority had indeed violated the principles of natural justice by not granting an opportunity of being heard to the appellant before passing the Orders-in-Original. The Commissioner (Appeals) should have set aside those orders and remanded the matter to the original authority instead of deciding the case based on the findings of the lower authority. The post-decisional hearing provided at the appellate stage could not cure the defect of the absence of a pre-decisional hearing – Further, the refund of service tax paid on rent-a-cab and insurance services cannot be denied as the appellant had obtained the requisite approval of the Unit Approval Committee for availing the rent-a-cab services, and these services were used for authorized operations of the SEZ unit. Therefore, the appellant was eligible for the refund of service tax paid on rent-a-cab and insurance services under Notification No. 40/2012-ST – The impugned order is set aside and the appeal is allowed - Whether the rejection of the refund claims relating to Management Consultancy Service and Security Service was correct – HELD - The rejection of the refund claims on the ground that the appellant was not liable to pay service tax under the Reverse Charge Mechanism is untenable. Once these services were "specified services" under Notification No. 40/2012-ST and their use for authorized operations is not in dispute, the refund could not be denied on the basis of technical objections regarding the liability under RCM. Even if the service tax paid was not payable, such payment would constitute a mere deposit, and the Department cannot retain any amount paid without authority. [Read less]

Customs – Section 110(1) of Customs Act, 1962 – Import of restricted item – Withholding of provisional release of goods – Appellants have imported consignments of Used Highly Specialized Equipment (HSE) Digital Multifunction Print & Copying Machine and filed Bills of Entry for clearance of same – Officers seized consignments under Section 110(1) of the Act on premise that import of subject goods is restricted and goods were liable for confiscation – Due to fact that completion of proceedings would require a lot of time and to save demurrage, Appellants requested for provisional release of goods against bond and... [Read more]

Customs – Section 110(1) of Customs Act, 1962 – Import of restricted item – Withholding of provisional release of goods – Appellants have imported consignments of Used Highly Specialized Equipment (HSE) Digital Multifunction Print & Copying Machine and filed Bills of Entry for clearance of same – Officers seized consignments under Section 110(1) of the Act on premise that import of subject goods is restricted and goods were liable for confiscation – Due to fact that completion of proceedings would require a lot of time and to save demurrage, Appellants requested for provisional release of goods against bond and bank guarantee – Principal Commissioner withheld provisional release of 63 pieces of imported HSEs in subject consignments – Whether Appellants are entitled to order of provisional release of 63 pieces of HSEs in question – HELD – Admittedly, goods imported by Appellants is a restricted item. Earlier, a consignment of similar goods had been seized by Kolkata Customs authorities. Importer had moved a Writ Petition before Calcutta High Court and litigation went to Supreme Court. Finally, in terms of order passed by Supreme Court, seized goods were provisionally released against bond and bank guarantee. Undisputedly, Appellants have already furnished Provisional Duty Bond and Bank Guarantee by taking into account the assessable value of whole consignment. As Appellants have already executed the Bond and Bank Guarantee as required for whole consignment, there is no valid reason for not releasing 63 pieces of HSEs in question. 63 pieces of HSEs imported by Appellants should be provisionally released, subject to fulfilment of conditions as mentioned in order passed by Calcutta High Court, which has been affirmed by Supreme Court – Appeal disposed of [Read less]

Central Excise – Section 4A of Central Excise Act, 1944 – Clearance of packaged drinking water – Demand of duty – Appellant is engaged in manufacture and clearance of packaged drinking water – On basis of intelligence collected and search action conducted at premises of Appellant, department issued show cause notice to Appellant by proposing demand of duty on MRP basis under Section 4A of the Act – Adjudicating Authority confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether impugned goods, i.e. packaged drinking water, manufactured and cleared ... [Read more]

Central Excise – Section 4A of Central Excise Act, 1944 – Clearance of packaged drinking water – Demand of duty – Appellant is engaged in manufacture and clearance of packaged drinking water – On basis of intelligence collected and search action conducted at premises of Appellant, department issued show cause notice to Appellant by proposing demand of duty on MRP basis under Section 4A of the Act – Adjudicating Authority confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether impugned goods, i.e. packaged drinking water, manufactured and cleared by Appellant is required to be assessed on MRP basis under Section 4A of the Act – HELD – Board Circulars do not empower department to treat every packaged potable water as mineral water when there is no evidence of addition/reduction of minerals. Appeal records do not identify any laboratory analysis demonstrating addition of mineral salts or demineralization to convert impugned product into mineral water. In absence of positive evidence, classification of impugned goods as “mineral water” is not tenable. As product is not statutorily covered by notifications relied upon, impugned demand which proceeds on MRP valuation under Section 4A of the Act cannot be sustained and must be set aside. Order-in-Appeal is set aside – Appeals allowed [Read less]

Uttarakhand VAT Act, 2005 – Imposition of Cess on the sale of country liquor under the Uttarakhand Cess Act, 2015 - Petitioner challenged the order imposing the cess, contending that he had already paid a 2% ad valorem cess as per the excise policy and was not liable to pay any extra cess - Whether the petitioner was liable to pay the additional cess under the Uttarakhand Cess Act, 2015 – HELD - The cess imposed on the petitioner was as per Section 3(1)(b) of the Uttarakhand Cess Act, 2015, which provides for the levy of cess for the purpose of the State Disease Fund on the sale of liquor. The validity of the Uttarakha... [Read more]

Uttarakhand VAT Act, 2005 – Imposition of Cess on the sale of country liquor under the Uttarakhand Cess Act, 2015 - Petitioner challenged the order imposing the cess, contending that he had already paid a 2% ad valorem cess as per the excise policy and was not liable to pay any extra cess - Whether the petitioner was liable to pay the additional cess under the Uttarakhand Cess Act, 2015 – HELD - The cess imposed on the petitioner was as per Section 3(1)(b) of the Uttarakhand Cess Act, 2015, which provides for the levy of cess for the purpose of the State Disease Fund on the sale of liquor. The validity of the Uttarakhand Cess Act, 2015 was not challenged in the writ petition, and the petitioner had only challenged the assessment order, which was appealable under Section 5 of the Uttarakhand Cess Act, 2015 read with Section 51 of the Uttarakhand VAT Act, 2005 - The pendency of a petition challenging the validity of the Uttarakhand Cess Act, 2015 before the Division Bench would not help the petitioner in the present case and the Division Bench would decide the matter on its own merits. Accordingly, the petitioner is liable to pay the cess imposed under the Uttarakhand Cess Act, 2015 – The writ petition is dismissed [Read less]

GST – Kerala AAR - Applicability of GST on centage charges collected for project management consultancy services provided to Government entities - Whether the centage charges collected for the Project Management Consultant services provided to the Government entities are liable to GST or whether they fall under the exemption available for 'pure services' under Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - HELD - The centage charges collected by the applicant for the PMC services are not liable to GST as they qualify as 'pure services' provided to Government entities in relation to function... [Read more]

GST – Kerala AAR - Applicability of GST on centage charges collected for project management consultancy services provided to Government entities - Whether the centage charges collected for the Project Management Consultant services provided to the Government entities are liable to GST or whether they fall under the exemption available for 'pure services' under Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - HELD - The centage charges collected by the applicant for the PMC services are not liable to GST as they qualify as 'pure services' provided to Government entities in relation to functions entrusted to Panchayats under Article 243G or Municipalities under Article 243W of the Constitution and exempt under Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) - The PMC services, such as supervision, coordination, and administrative management of civil, electrical, and infrastructure projects, including projects like the development of RRT & VET facilities for environmental protection, are directly connected with the functions enumerated in the Eleventh and Twelfth Schedules of the Constitution – Ordered accordingly - Whether the applicant can claim refund of GST already paid for the year 2017-18 onwards – HELD - Nothing prevents the applicant from claiming a refund of the taxes paid, provided the claim is made within the statutory time limit of two years as stipulated under Section 54. However, this authority cannot comment on the eligibility for refund, since factors not covered under this application, such as the issue of unjust enrichment, need to be examined for granting the refund. It is the prerogative of the jurisdictional officer to consider such matters on merits, on a case-to-case basis. [Read less]

U.P. Value Added Tax Act, 2008 - Input Tax Credit on goods purchased outside the State using DEPB Scrips - Whether the Tribunal was legally justified in allowing the ITC claim of the dealer-Respondent on the usage of DEPB Scrips license while making Custom duty payments on the imported goods – HELD - The ITC claim of the Respondent cannot be allowed as the goods purchased using the DEPB Scrips license were not used within the State of Uttar Pradesh. Under Section 13(1)(a) of the UPVAT Act, the benefit of ITC can only be granted if the goods are purchased within the State of Uttar Pradesh and used within the State – Fur... [Read more]

U.P. Value Added Tax Act, 2008 - Input Tax Credit on goods purchased outside the State using DEPB Scrips - Whether the Tribunal was legally justified in allowing the ITC claim of the dealer-Respondent on the usage of DEPB Scrips license while making Custom duty payments on the imported goods – HELD - The ITC claim of the Respondent cannot be allowed as the goods purchased using the DEPB Scrips license were not used within the State of Uttar Pradesh. Under Section 13(1)(a) of the UPVAT Act, the benefit of ITC can only be granted if the goods are purchased within the State of Uttar Pradesh and used within the State – Further, the provisions of the Delhi VAT Act, relied upon by the Tribunal, are different from those of Uttar Pradesh, and hence the judgment of the Delhi High Court is not applicable to the present case. The benefit of ITC can be granted only when the goods are manufactured, purchased, and used within the State of Uttar Pradesh, which was not the case here - The impugned order of the Tribunal is quashed and the revision filed by the Dept is allowed [Read less]

Customs Duty - Export against supply by nominated agencies, duty-free gold import, maintenance of accounts - Respondent is a "Nominated Agency" under the Foreign Trade Policy and imported duty-free gold for supplying to domestic manufacturers and exporters. Derewala Industries furnished the required bonds and exported the jewellery manufactured from the gold supplied by the appellant within the prescribed time - Derewala Industries had allegedly diverted and sold in the domestic market the duty-free gold - Whether the Respondent is liable to pay the proposed customs duty and penalty under Section 112(ii) of the Customs Act... [Read more]

Customs Duty - Export against supply by nominated agencies, duty-free gold import, maintenance of accounts - Respondent is a "Nominated Agency" under the Foreign Trade Policy and imported duty-free gold for supplying to domestic manufacturers and exporters. Derewala Industries furnished the required bonds and exported the jewellery manufactured from the gold supplied by the appellant within the prescribed time - Derewala Industries had allegedly diverted and sold in the domestic market the duty-free gold - Whether the Respondent is liable to pay the proposed customs duty and penalty under Section 112(ii) of the Customs Act for the alleged diversion of duty-free gold by Derewala Industries – HELD - The Principal Commissioner held that the Respondent is not liable for the customs duty demand as it had complied with all the conditions under the Exemption Notification and the Customs authorities had duly cancelled the bonds executed by the Respondent after verifying the proof of exports submitted by Derewala Industries. The Principal Commissioner noted that as per the CBIC Circular, there is no requirement of one-to-one correlation between the gold procured and the jewellery exported. Further, the show cause notice did not invoke confiscation of the goods under Section 111 of the Customs Act, which is a prerequisite for imposing penalty under Section 112(ii). Therefore, the Principal Commissioner rightly dropped the customs duty demand and the penalty proposed under Section 112(ii) on the Respondent - Department appeal against the orders dropping the customs duty demand and penalty is dismissed [Read less]

Service Tax – Scope of Commercial Training or Coaching Service, In-plant Training/Project Training – Appellant provided in-plant training/Project training to students as part of their technical courses - Whether the services provided in the form of in-plant training/Project training to students as part of their technical courses can be classified as Commercial Training or Coaching Service, thereby attracting service tax – HELD - The services provided by the appellant in the form of permitting students to use the factory premises for their research work as a part of their academic curriculum will not make the receipt ... [Read more]

Service Tax – Scope of Commercial Training or Coaching Service, In-plant Training/Project Training – Appellant provided in-plant training/Project training to students as part of their technical courses - Whether the services provided in the form of in-plant training/Project training to students as part of their technical courses can be classified as Commercial Training or Coaching Service, thereby attracting service tax – HELD - The services provided by the appellant in the form of permitting students to use the factory premises for their research work as a part of their academic curriculum will not make the receipt of the appellant as consideration for services rendered under the category of 'commercial training or coaching'. The scope of the 'commercial training or coaching' service is specific and requires satisfaction of the ingredients contained in the relevant provisions of the Act, which was not the case here. The premises used for completion of project work cannot be considered as a service falling under a scope of Commercial Training or Coaching Service - The impugned orders are set aside and the appeal is allowed [Read less]

Service Tax - Erection, commissioning or installation services, Transmission or distribution of electricity - Appellant is engaged in providing various services in relation to transmission or distribution of electricity through transmission lines, erection, commissioning or installation of various capacity electrical sub-stations, lines, transformers, etc. – Demand of service tax under the category of Erection, Commissioning or Installation Services (ECIS) on the ground that the appellant was not entitled to the benefit of Notification No. 45/2010-ST dated 20.07.2010 issued under section 11C of the Central Excise Act, 19... [Read more]

Service Tax - Erection, commissioning or installation services, Transmission or distribution of electricity - Appellant is engaged in providing various services in relation to transmission or distribution of electricity through transmission lines, erection, commissioning or installation of various capacity electrical sub-stations, lines, transformers, etc. – Demand of service tax under the category of Erection, Commissioning or Installation Services (ECIS) on the ground that the appellant was not entitled to the benefit of Notification No. 45/2010-ST dated 20.07.2010 issued under section 11C of the Central Excise Act, 1944 and Notification No. 11/2010-ST dated 27.02.2010 under section 83 of the Finance Act, 1994. The appellant argued that their activity involves not only service but also a material portion, and it would be more appropriately classifiable under Works Contract Service (WCS) - Whether the activities carried out by the appellant are covered under the exemption provided in Notification No. 45/2010-ST dated 20.07.2010 and Notification No. 11/2010-ST dated 27.02.2010 – HELD - The observations made aby the adjudicating authority that the notifications are intended only for the companies directly engaged in transmission and distribution are not correct. The scope of the notifications covers any services provided in relation to transmission and distribution of electricity. The activities carried out by the appellant are directly relatable to either transmission or distribution of electricity and are, therefore, squarely covered within the ambit of the notifications issued under section 11C of the CEA, 1944 read with section 83 of the Finance Act, 1994 - the impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Non-payment of duty on Unsymmetrical Di-Methyl Hydrazine (UDMH) used in the manufacture of UH-25, which was subsequently cleared to the Indian Space Research Organization (ISRO) under exemption notification No. 64/95-CE dated 16.03.1995 - The Department's view was that since UH-25 was exempted, the UDMH manufactured within the factory and used captively is liable to central excise duty - Whether central excise duty is payable on the UDMH used in the manufacture of UH-25 that is cleared to ISRO under exemption notification - HELD – The matter is no longer res-integra. The issue involved has been examine... [Read more]

Central Excise – Non-payment of duty on Unsymmetrical Di-Methyl Hydrazine (UDMH) used in the manufacture of UH-25, which was subsequently cleared to the Indian Space Research Organization (ISRO) under exemption notification No. 64/95-CE dated 16.03.1995 - The Department's view was that since UH-25 was exempted, the UDMH manufactured within the factory and used captively is liable to central excise duty - Whether central excise duty is payable on the UDMH used in the manufacture of UH-25 that is cleared to ISRO under exemption notification - HELD – The matter is no longer res-integra. The issue involved has been examined by different Adjudicating and Appellate Authorities as also by the Tribunal and it has also been upheld by the Hon’ble Supreme Court. Therefore, there is no ground to consider imposition of any excise duty on the product UDMH emerging in the factory and used for mixing and then cleared as UH-25. It is also noted that if UDMH or UH-25 are cleared as such to ISRO, they will still remain exempted in terms of said notification - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Classification of service - Storage and warehousing service or Pure agent - Appellant entered into an agreement with Apollo Tyres for renting their premises and also for providing services of loading and unloading of the materials received in the godown - Department alleged that the services provided by the appellant are in the nature of 'Storage and Warehousing Service' - Whether the services provided by the appellant, including loading and unloading, fall under the category of 'Storage and Warehousing Service' – HELD - The activities undertaken by the appellant, such as providing the godown/premises for... [Read more]

Service Tax – Classification of service - Storage and warehousing service or Pure agent - Appellant entered into an agreement with Apollo Tyres for renting their premises and also for providing services of loading and unloading of the materials received in the godown - Department alleged that the services provided by the appellant are in the nature of 'Storage and Warehousing Service' - Whether the services provided by the appellant, including loading and unloading, fall under the category of 'Storage and Warehousing Service' – HELD - The activities undertaken by the appellant, such as providing the godown/premises for storage and warehousing and undertaking the activity of loading and unloading, stacking, etc., squarely fall under the category of 'Storage and Warehousing Service'. The Board Circular No.1/11/2002-TRU dated 01.08.2002, clarified that mere renting of space cannot be said to be in the nature of service provided for storage or warehousing of goods, and the essential test is whether the storage keeper provides for security of goods, stacking, loading/unloading of goods in the storage area. Since the appellant was providing these services, it cannot be treated as mere renting of space, and the service can be categorized under "storage and warehousing service" - The appellant's contention that they were acting as a 'pure agent' for the loading and unloading charges, is unacceptable - the impugned order is upheld and the appeal is rejected [Read less]

Service Tax - Supply of tangible goods, Transfer of right to use - Non-payment of service tax under the category of "Supply of Tangible Goods" Service (SOTG) on rental charges – Dept of the view that the rental charges collected by the respondent for the supply of bottles and crates along with the aerated drinks were in the nature of a taxable service and not a deemed sale - Whether the rental charges collected by the respondent for the supply of bottles and crates along with the aerated drinks were in the nature of a taxable service or a deemed sale – HELD - When the bottles and crates were sent by the respondent to t... [Read more]

Service Tax - Supply of tangible goods, Transfer of right to use - Non-payment of service tax under the category of "Supply of Tangible Goods" Service (SOTG) on rental charges – Dept of the view that the rental charges collected by the respondent for the supply of bottles and crates along with the aerated drinks were in the nature of a taxable service and not a deemed sale - Whether the rental charges collected by the respondent for the supply of bottles and crates along with the aerated drinks were in the nature of a taxable service or a deemed sale – HELD - When the bottles and crates were sent by the respondent to the distributor and customer, the end-customer or the retailer/wholesaler would have control or domain over the bottles and crates for a certain period, and therefore, it cannot be said that there was no transfer of the right to use the goods, which would be exigible to tax under the deemed sale provision. The transactions in question would be deemed sales leviable to VAT and not a service leviable to Service Tax - The order of the Adjudicating Authority dropping the proceedings is confirmed and the revenue appeal is dismissed [Read less]

Service Tax – Applicable rate of tax on Dredging services, eligibility to Cenvat credit on the inputs used for repair of dredgers - Department sought to apply the higher service tax rate of 12% from 18.04.2006 even though the services were rendered prior to that date - Whether the applicable service tax rate should be 10% or 12% for services rendered prior to 18.04.2006 – HELD - The taxable event for service tax is the rendition of service, not the date of invoice or payment receipt. Since the services were rendered prior to 18.04.2006, the applicable rate should be 10% and not 12% - the appellants are required to pay ... [Read more]

Service Tax – Applicable rate of tax on Dredging services, eligibility to Cenvat credit on the inputs used for repair of dredgers - Department sought to apply the higher service tax rate of 12% from 18.04.2006 even though the services were rendered prior to that date - Whether the applicable service tax rate should be 10% or 12% for services rendered prior to 18.04.2006 – HELD - The taxable event for service tax is the rendition of service, not the date of invoice or payment receipt. Since the services were rendered prior to 18.04.2006, the applicable rate should be 10% and not 12% - the appellants are required to pay only @ 10% and not @ 12% in as much as the taxable event has occurred prior to the date of enhancement of rate – As for Cenvat credit, goods used for the efficient functioning of a capital good (here, the dredgers) can be considered as inputs eligible for Cenvat credit, even though they may also be capital goods. Therefore, the appellant is eligible for Cenvat credit on the inputs used for dredger repairs - Since the goods are treated as inputs and not capital goods, the restriction on 50% credit in the first year would not apply. The appellant was eligible for 100% Cenvat credit on these goods - The appeal is partially allowed by setting aside the demand related to service tax rate and Cenvat credit eligibility, but upholding the demand for interest on credit reversal – The appeal is partly allowed [Read less]

Service Tax – Providing of services – Demand of tax – Appellant is engaged in providing services to Special Economic Zone (SEZ) unit – On basis of third party information received from Income Tax Department, revenue issued show cause notice to Appellant by proposing demand of Service Tax – Adjudicating Authority confirmed demand as proposed in show cause notice – Whether demand confirmed against Appellant is sustainable – HELD – Issue involved in matter is in respect of services provided by Appellant to a SEZ unit. Dispute in respect of similar issue relating to exemption from payment of service tax in resp... [Read more]

Service Tax – Providing of services – Demand of tax – Appellant is engaged in providing services to Special Economic Zone (SEZ) unit – On basis of third party information received from Income Tax Department, revenue issued show cause notice to Appellant by proposing demand of Service Tax – Adjudicating Authority confirmed demand as proposed in show cause notice – Whether demand confirmed against Appellant is sustainable – HELD – Issue involved in matter is in respect of services provided by Appellant to a SEZ unit. Dispute in respect of similar issue relating to exemption from payment of service tax in respect of services provided to SEZ have been dealt with in case of GMR Aerospace Engineering Limited by Andhra Pradesh High Court. In said case, High Court held that standalone exemptions under SEZ law are not subject to provisions of any other law including Finance Act and therefore, such exemption cannot be denied for mere non-filing of forms, as these are not required under SEZ law. Issue in dispute is also squarely covered by various decisions of Tribunal referred by Appellant. By respectfully following the decisions rendered by Tribunal and High Court, impugned order is set aside to extent it had confirmed demand proposed in show cause notice – Appeal allowed [Read less]

GST – Intermediary or Export of Services – Rejection of refund on the ground that the services provided by the petitioner were in the nature of "intermediary services" and not "export of services" - Whether the services provided by the petitioner qualify as "export of services" or "intermediary services" under the IGST Act, 2017 – HELD - The petitioner is not merely acting as an agent or broker, but was providing marketing support services and technical support services to its parent company in Singapore on its own account. The petitioner was not facilitating the supply of goods or services between two or more person... [Read more]

GST – Intermediary or Export of Services – Rejection of refund on the ground that the services provided by the petitioner were in the nature of "intermediary services" and not "export of services" - Whether the services provided by the petitioner qualify as "export of services" or "intermediary services" under the IGST Act, 2017 – HELD - The petitioner is not merely acting as an agent or broker, but was providing marketing support services and technical support services to its parent company in Singapore on its own account. The petitioner was not facilitating the supply of goods or services between two or more persons, but was providing the main supply of services to its parent company - Further, in the petitioner's own case in the pre-GST/service tax regime, the Tribunal had concluded that the petitioner was not an intermediary, and this order had attained finality especially when there is no change in the activity of the petitioner during pre-GST and post-GST period - the orders are set aside and the respondents are directed to sanction the refund the to the petitioner, along with applicable interest – The writ petition is allowed [Read less]

Central Excise - Supply to Indian Railways, Brand name exemption, Identification markings - Appellant received a purchase order from M/s Ganpati Industrial Pvt. Ltd. (GIPL) to supply Metal Liners to Indian Railways. The Metal Liners bore the initials "GIPL" - Department alleged that this amounted to use of a brand/trade name, disqualifying the appellant from exemption under Notification No. 9/2003-CE - The appellant claimed that the markings were not brand names but only identification initials required by Railways for traceability, and the goods were not intended for commercial sale - Whether the initials embossed on the ... [Read more]

Central Excise - Supply to Indian Railways, Brand name exemption, Identification markings - Appellant received a purchase order from M/s Ganpati Industrial Pvt. Ltd. (GIPL) to supply Metal Liners to Indian Railways. The Metal Liners bore the initials "GIPL" - Department alleged that this amounted to use of a brand/trade name, disqualifying the appellant from exemption under Notification No. 9/2003-CE - The appellant claimed that the markings were not brand names but only identification initials required by Railways for traceability, and the goods were not intended for commercial sale - Whether the initials embossed on the Metal Liners constitute a brand/trade name – HELD - The goods were never intended for commercial sale in the open market and were directly consumed by the Railways. The marking "GIPL" was not for branding but purely for traceability and rejection tracking, as clarified by Railways. The markings used for identification alone, particularly in compliance with regulatory or customer requirements, are not brand names – Further, the Department has not issued any notice to the owner of the brand 'GIPL' as a co-noticee, it is only the owner could clarify whether the embossing of 'GIPL' would amount to a brand name. The entire proceedings initiated against the appellant without involving the owner of the brand/initials ‘GIPL’ as a co-noticee, is legally not sustainable. The impugned order disqualifying the appellant from the exemption under Notification No. 9/2003-CE is set aside and the appeal is allowed [Read less]

Service Tax - Demand on the basis of difference in the figures as shown in the ST-3 returns and the data received from the Income Tax Department on the basis of Form-26AS / TDS Statements - Whether the extended period of limitation could be invoked to raise the service tax demand – HELD - under the self-assessment regime, the primary responsibility to ensure correct payment of service tax rests on the department's officers, who are required to scrutinize the returns and make a best judgment assessment if necessary. If the officer fails to do so and any tax escapes assessment, the responsibility lies with the officer, not... [Read more]

Service Tax - Demand on the basis of difference in the figures as shown in the ST-3 returns and the data received from the Income Tax Department on the basis of Form-26AS / TDS Statements - Whether the extended period of limitation could be invoked to raise the service tax demand – HELD - under the self-assessment regime, the primary responsibility to ensure correct payment of service tax rests on the department's officers, who are required to scrutinize the returns and make a best judgment assessment if necessary. If the officer fails to do so and any tax escapes assessment, the responsibility lies with the officer, not the assessee. Intentional and willful suppression of facts cannot be presumed merely because the assessee was operating under self-assessment or did not agree with the audit findings. The Tribunal concluded that the demand of service tax could not have been raised by invoking the extended period of limitation - As the demand itself is being set aside, the penalties imposed under Section 78 as well as under Section 77 are also set aside – The appeal is allowed [Read less]

Service Tax - Transfer of land development rights, Exclusion from definition of 'service' - Appellants are land owning companies who entered into memorandums of understanding (MOUs) with M/s Omax Limited. Under the MOUs, the appellants acquired land in their own names for and on behalf of Omax, and Omax was granted the rights to develop, construct, and market the projects - Demanding service tax on the transfer of land development rights, treating it as a 'deemed service' under the Finance Act, 1994 - Whether the appellant is liable to service of transfer of land development rights – HELD - The transfer of land developme... [Read more]

Service Tax - Transfer of land development rights, Exclusion from definition of 'service' - Appellants are land owning companies who entered into memorandums of understanding (MOUs) with M/s Omax Limited. Under the MOUs, the appellants acquired land in their own names for and on behalf of Omax, and Omax was granted the rights to develop, construct, and market the projects - Demanding service tax on the transfer of land development rights, treating it as a 'deemed service' under the Finance Act, 1994 - Whether the appellant is liable to service of transfer of land development rights – HELD - The transfer of land development rights does not amount to rendering of services under the head of 'development rights'. The transfer of development rights is immovable property and, therefore, stands excluded from the definition of 'service' under Section 65B(44) of the Finance Act, 1994 - the issue of transfer of development rights does not amount to rendering of services under the head of “development rights” is squarely covered in favour of the assessee in the earlier decisions. The Revenue argument that the present case is distinguishable from the earlier decisions is rejected on the basis that the SCNs were issued to the landowning companies (the appellants) and not to the developer (Omax). This distinction does not alter the basic principles enunciated in the earlier decisions, which is that the transfer of land development rights does not fall within the ambit of service tax - the impugned orders are set-aside and the appeals are allowed [Read less]

Central Excise - Delay in Adjudication of Show Cause Notices – challenge to delay in adjudication of Show cause notices issued in 2016 and 2017 - Whether the show cause notices, issued 9 and 8 years ago respectively, could be adjudicated by the revenue authorities – HELD - The show cause notices cannot be adjudicated after a considerable delay, as it would defeat the purpose of the proceedings and pose difficulties for both the revenue and the assessee to track necessary material - The revenue had kept the show cause notices in the "Call Book" due to the pendency of a related matter before the Supreme Court, which was ... [Read more]

Central Excise - Delay in Adjudication of Show Cause Notices – challenge to delay in adjudication of Show cause notices issued in 2016 and 2017 - Whether the show cause notices, issued 9 and 8 years ago respectively, could be adjudicated by the revenue authorities – HELD - The show cause notices cannot be adjudicated after a considerable delay, as it would defeat the purpose of the proceedings and pose difficulties for both the revenue and the assessee to track necessary material - The revenue had kept the show cause notices in the "Call Book" due to the pendency of a related matter before the Supreme Court, which was subsequently disposed of on the ground of monetary limit. However, the revenue did not take any steps to adjudicate the show cause notices even after the Supreme Court order. The Show cause notices cannot be adjudicated due to the gross delay, as it would be prejudicial to the petitioner - The show cause notices are quashed and the petitions are allowed [Read less]