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GST - Anti-Profiteering - Methodology for Determination of Profiteering Benefit in Real Estate Projects - Treatment of Unavailed Pre-GST CENVAT Credit - Petitioner's residential project was subjected to profiteering proceedings under Section 171 of the CGST Act, 2017 - Remand order directing recomputation of the total savings on account of introduction of GST divided by total area - DGAP recalculated the profiteered amount by determining the additional input tax credit availed post-GST as against the purchase value of goods and services, apportioning the resultant saving over the project area and sold area, and adding GST ... [Read more]

GST - Anti-Profiteering - Methodology for Determination of Profiteering Benefit in Real Estate Projects - Treatment of Unavailed Pre-GST CENVAT Credit - Petitioner's residential project was subjected to profiteering proceedings under Section 171 of the CGST Act, 2017 - Remand order directing recomputation of the total savings on account of introduction of GST divided by total area - DGAP recalculated the profiteered amount by determining the additional input tax credit availed post-GST as against the purchase value of goods and services, apportioning the resultant saving over the project area and sold area, and adding GST and interest thereon, which determination was upheld by the GSTAT - Whether the methodology adopted on remand, and the treatment of pre-GST CENVAT credit which was legally available to the petitioner on input services but not actually availed, is sustainable - HELD - The methodology adopted after remand, which determined the total saving at the project level by reference to the purchase value of goods and services and thereafter divided the saving by the total project area to arrive at a per square feet figure applied to the sold area, was materially different from the ratio of ITC to turnover methodology earlier found to be flawed, and consistent with the binding direction in Reckitt Benckiser case to calculate total project savings and distribute the same on a per square feet basis - The distinction between eligibility and actual availment of credit is material. The relevant enquiry under the anti-profiteering provision is the benefit of ITC actually accruing to the supplier and required to be passed on, and not whether a credit could theoretically have been availed had the assessee acted differently in the pre-GST period - Since the statutory returns for the pre-GST period reflected nil credit actually availed, the tax paid on input services constituted a cost during that period. The ITC actually availed after introduction of GST cannot be excluded merely because a corresponding credit was legally available but not utilised earlier - The contention that only credit relatable to goods and not services could constitute the benefit was not sustainable, as the distinction between goods and services is not determinative of the total additional credit actually availed after introduction of GST - Addition of tax on the additional realisation to the profiteered amount, and the direction for payment of interest, followed the governing precedent and the statutory scheme. A mere disagreement with the methodology or appreciation of material, where the methodology is within the parameters laid down by binding precedent and the contentions were duly considered, does not constitute a ground for interference in writ jurisdiction – The petitioner has failed to establish any ground warranting interference with the impugned order passed by GSTAT – The writ petition is dismissed [Read less]

GST - Constitutional validity of Section 93(1)(b) of the CGST Act, 2017, Construction of Section 93 of the CGST Act - Proceedings for determination of penalty against a legal representative after the death of the person alleged to have committed the contravention – Issue of Show Cause Notice more than three years after the death of the petitioner's husband, proposing penalty under Section 122(3)(a) for his alleged acts and invoking Section 93 against the petitioner as his legal representative - Whether the expression "is determined after his death" in Section 93(1) permits commencement of fresh proceedings after death, o... [Read more]

GST - Constitutional validity of Section 93(1)(b) of the CGST Act, 2017, Construction of Section 93 of the CGST Act - Proceedings for determination of penalty against a legal representative after the death of the person alleged to have committed the contravention – Issue of Show Cause Notice more than three years after the death of the petitioner's husband, proposing penalty under Section 122(3)(a) for his alleged acts and invoking Section 93 against the petitioner as his legal representative - Whether the expression "is determined after his death" in Section 93(1) permits commencement of fresh proceedings after death, or is confined to completion of proceedings already commenced during the deceased's lifetime - HELD - Section 93 contemplates a liability, including penalty, which is "determined after his death", and its concluding words distinguish a liability determined before death but remaining unpaid from one determined thereafter, without making a notice during the deceased's lifetime a condition precedent to the latter determination - The opening words "where a person, liable to pay tax, interest or penalty under this Act, dies" cannot be confined to a liability already quantified before death, since the provision itself contemplates the liability being determined thereafter, provided it arises from conduct attributable to the deceased under the substantive provisions of the Act - Investigation and adjudication are distinct stages, and the fact that investigation had commenced and a statement was recorded during the deceased's lifetime does not itself constitute the source of the power to proceed after death; that authority is found in Section 93 itself - Section 93 must be kept distinct from Section 122(3)(a), which supplies the substantive penalty. Section 93 is not an independent penal provision against the legal representative but enables liability arising under the substantive provisions to be determined and enforced through the legal representative, subject to the conditions of clause (a) or (b), with liability under clause (b) confined to the estate of the deceased to the extent it is capable of meeting the charge - The Show Cause Notice is not without jurisdiction solely because it was issued after death. The lapse of time after death does not by itself create a bar under Section 93, without prejudice to any applicable limitation requirements - The Petitioner is granted liberty to institute an appeal under Section 107 of the CGST Act against the impugned order – The petition is disposed of - GST - Constitutional validity of Section 93(1)(b) of the CGST Act, 2017 - Challenge to Section 93(1)(b), insofar as it permits determination of penalty against a legal representative after the death of the person alleged to have committed the contravention, as arbitrary and violative of Article 14 of the Constitution, on the ground that a legal representative cannot meaningfully answer allegations concerning matters within the personal knowledge of a person no longer alive - HELD - The provision preserves liabilities attributable to the deceased's lifetime conduct for lawful determination and satisfaction from his estate, and the resulting distinction bears a direct relation to the statutory purpose; Section 93 does not deem the representative to have committed the alleged wrong, and clause (b) confines payment to the estate's capacity to meet the charge, with the underlying contravention and conditions of representative liability still required to be established by the Adjudicating Authority - Section 126(3) of the Act requires an effective opportunity of hearing, under which the representative must receive the relied-upon material and be permitted to contest the alleged contravention - These safeguards answer the contention that Section 93 confers unguided power or necessarily denies a defence; that a particular adjudication may fail for want of evidence or a fair opportunity does not establish that every determination after death must be unfair - The statutory purpose, representative procedure and limitation of liability to estate assets provide a rational basis for the provision, which is neither discriminatory nor manifestly arbitrary, and the Constitutional challenge to Section 93(1)(b) is rejected. [Read less]

GST - Scope of the bar against parallel proceedings under Section 6(2)(b) of the CGST Act, 2017, Maintainability of writ petition challenging an order under Section 73 of the CGST Act, 2017 - Petitioner did not appeal against the order raising a demand and instead filed a rectification application, followed by the present writ petition nearly two years after the order - Whether the writ petition is maintainable in the face of an efficacious alternative statutory remedy of appeal not availed within the prescribed period, and whether the delay in approaching the Court is explained - HELD - The existence of an efficacious alt... [Read more]

GST - Scope of the bar against parallel proceedings under Section 6(2)(b) of the CGST Act, 2017, Maintainability of writ petition challenging an order under Section 73 of the CGST Act, 2017 - Petitioner did not appeal against the order raising a demand and instead filed a rectification application, followed by the present writ petition nearly two years after the order - Whether the writ petition is maintainable in the face of an efficacious alternative statutory remedy of appeal not availed within the prescribed period, and whether the delay in approaching the Court is explained - HELD - The existence of an efficacious alternative statutory remedy is a material consideration while exercising discretionary jurisdiction under Article 226 of the Constitution, and the petitioner did not demonstrate any circumstance warranting bypassing the statutory appellate mechanism, the challenge being essentially jurisdictional and factual in nature, appropriately examinable in appellate proceedings - The writ petition was instituted with a substantial lapse of time after the impugned order. The mere filing of a rectification application cannot obliterate the delay in challenging the original order, particularly where the petitioner consciously chose not to avail the statutory appeal - The writ jurisdiction is discretionary and equitable, and a party challenging an order after the statutory appeal period has lapsed must satisfactorily explain the delay, which has not been done - The pendency of a rectification application does not confer a fresh or extended period of limitation for challenging the original order, nor constitutes sufficient explanation for the delay - The petition suffers from unexplained delay and laches and is liable to fail on this ground - Scope of the bar against parallel proceedings under Section 6(2)(b) of the CGST Act, 2017 where two proceedings arise from overlapping periods but under different statutory provisions and different allegations - A Notice under Section 73 was issued by one authority alleging incorrect declaration of tax liability and inadmissible ITC, while a separate Notice under Section 74 had earlier been issued by the DGGI, alleging fraudulent availment of ITC without actual supply of goods or services, which proceedings were later treated as concluded upon payment by the principal noticee - Whether the subsequent proceedings under Section 73 were barred under Section 6(2)(b) of the CGST Act as being on the "same subject matter" as the earlier DGGI proceedings under Section 74 - HELD - The mere fact that two proceedings arise out of the affairs of the same assessee, relate to overlapping periods, or originate from transactions with some common factual background does not by itself establish identical ‘subject matter’ - The proceedings under Section 73 were directed towards determination of correct tax liability including admissibility of ITC under Section 16(2)(c), whereas the DGGI proceedings under Section 74 were founded on allegations of fraudulent availment of ITC without actual supply of goods or services and involved forty-five notices - The statutory provisions invoked, the nature of allegations and the liability sought to be determined in the two proceedings are materially different, and the bar under Section 6(2)(b) is not attracted - The conclusion of the DGGI proceedings, consequent upon payment by the principal noticee, resulted in no tax, interest or penalty being directed to be recovered from the petitioner in those proceedings; such conclusion cannot retrospectively invalidate the independently initiated proceedings under Section 73, which concerned a different statutory basis and subject matter - The bar under Section 75(13) requires a prior imposition of penalty for the same act or omission, and since no such prior penalty upon the petitioner has been shown, the said provision is not attracted - The challenge to the impugned order fails on merits as well - The writ petition is dismissed. [Read less]

GST - Detention of goods and imposition of penalty for expired e-way bill and mismatch of vehicle registration number under Section 129 of CGST Act, 2017 read with Section 68 and Rule 138 of CGST Rules, 2017 - Appellant contended that non-updation of vehicle details in the e-way bill was a technical and procedural lapse not affecting taxability or resulting in revenue implication - Whether the appellant is liable to penalty under Section 129 for expiry of e-way bill coupled with mismatch of vehicle registration number - HELD - As per Section 68 of the CGST Act, the driver of a conveyance carrying goods exceeding the specif... [Read more]

GST - Detention of goods and imposition of penalty for expired e-way bill and mismatch of vehicle registration number under Section 129 of CGST Act, 2017 read with Section 68 and Rule 138 of CGST Rules, 2017 - Appellant contended that non-updation of vehicle details in the e-way bill was a technical and procedural lapse not affecting taxability or resulting in revenue implication - Whether the appellant is liable to penalty under Section 129 for expiry of e-way bill coupled with mismatch of vehicle registration number - HELD - As per Section 68 of the CGST Act, the driver of a conveyance carrying goods exceeding the specified threshold must carry relevant documents, and Explanation (2) to Rule 138(3) provides that an e-way bill is not valid for movement of goods until Part B is duly filled up with correct details of the vehicle - CBIC Circular No. 64/38/2018-GST covering minor clerical errors of one or two digits in the vehicle number cannot be extended to a case of complete substitution of vehicle number - The vehicle number mentioned even in the expired e-way bill was entirely different from the vehicle in which the goods were actually being transported, and no plausible explanation or relevant document was furnished by the appellant to show bona fide - Transporting consignments with an incomplete or expired e-way bill creates a rebuttable presumption of intention to evade tax, and the onus shifts to the dealer or consignor to rebut such presumption with credible positive evidence or surrounding circumstances - The presumption of intention to evade tax stands established from the facts and circumstances of the case and has not been rebutted by the appellant - No legal or factual error is found in the concurrent findings recorded by the authorities below warranting interference by the Tribunal - The appeal is dismissed [Read less]

GST - Requirement of e-way bill for inter-State movement of goods prior to 01.02.2018 - Revenue appeal against order of appellate order setting aside penalty and proceedings initiated for non-accompaniment of e-way bill with consignment intercepted in transit - First Appellate Authority allowed the first appeal holding that non-production of e-way bill was a bona fide or inadvertent mistake, there being no other allegation of intention to evade tax, and quashed the proceedings under Section 129 of CGST Act, 2017- Whether generation and carrying of an e-way bill under Rule 138 of the CGST Rules, 2017 was legally mandatory f... [Read more]

GST - Requirement of e-way bill for inter-State movement of goods prior to 01.02.2018 - Revenue appeal against order of appellate order setting aside penalty and proceedings initiated for non-accompaniment of e-way bill with consignment intercepted in transit - First Appellate Authority allowed the first appeal holding that non-production of e-way bill was a bona fide or inadvertent mistake, there being no other allegation of intention to evade tax, and quashed the proceedings under Section 129 of CGST Act, 2017- Whether generation and carrying of an e-way bill under Rule 138 of the CGST Rules, 2017 was legally mandatory for inter-State movement of goods on the relevant date - HELD - Rule 138 of the CGST Rules dealing with the mechanism of e-way bills was substituted by notification dated 30.08.2017 without its mandatory operational date being notified, the mandatory requirement of e-way bill for interstate and intrastate movement of goods was appointed to come into force from 01.02.2018 by notification dated 29.12.2017, and nationwide mandatory compliance was finally brought into force from 01.04.2018 by a further notification - Since the goods were intercepted on 24.11.2017, a date much earlier than 01.04.2018, the mandatory requirement of accompanying an e-way bill along with interstate movement of goods was not applicable on the relevant date - No discrepancies were found in the quantity, weight or description of the goods, both buyer and seller were bona fide dealers and the vehicle was found on its designated route, leaving no possibility of tax evasion. Consequently, detention, seizure and imposition of penalty under Section 129 read with Section 122 of the CGST Act for non-production of e-way bill on the relevant date is not sustainable in law - The appeal filed by the Department is dismissed [Read less]

Customs - Classification of imported cuvettes used with an in-vitro diagnostic analyser - Appellant imported goods described as micro cuvettes for use with an Analyser under a self-assessed Bill of Entry, classifying them under CTH 9027 9090 - Department alleged that the goods were consumable/disposable in nature and could not be treated as parts or instruments, and were more appropriately classifiable under CTI 3926 9099 - Whether the imported cuvettes, being specially designed for use with a particular analytical instrument, merit classification as 'parts' under CTH 9027 9090 in terms of Note 2(b) to Chapter 90, or as an... [Read more]

Customs - Classification of imported cuvettes used with an in-vitro diagnostic analyser - Appellant imported goods described as micro cuvettes for use with an Analyser under a self-assessed Bill of Entry, classifying them under CTH 9027 9090 - Department alleged that the goods were consumable/disposable in nature and could not be treated as parts or instruments, and were more appropriately classifiable under CTI 3926 9099 - Whether the imported cuvettes, being specially designed for use with a particular analytical instrument, merit classification as 'parts' under CTH 9027 9090 in terms of Note 2(b) to Chapter 90, or as an article of plastic under the residuary entry CTI 3926 9099 - HELD - A similar item was examined by the Bench in an earlier decision and found classifiable as a 'part' of a machine under CTI 9027 9090 and not as an article of plastic - Chapter 90 Note 2(b) provides that parts and accessories suitable for use solely or principally with a particular kind of machine, instrument or apparatus are to be classified with that machine, instrument or apparatus, and permanent physical attachment is not required - A part is an essential component of the whole without which the whole cannot function, and the relevant criteria for determining whether an item qualifies as a part include operational necessity, being an integral component, physical installation and common trade usage - 'Disposable' and 'consumable' are not synonymous, and single use, short durability or disposal after use does not by itself preclude an article from being a part or accessory - The imported cuvettes are not ordinary plastic containers but are specially designed to enable accurate analysis through the Analyser. The Revenue has not established any practical use of the goods with instruments other than the Analyser or for general use as a plastic article - These characteristics are integral to the analytical function of the Analyser and satisfy the essential characteristics of a part, and classification must be determined by the goods' objective characteristics and function rather than merely by material of manufacture - Applying Chapter 90 Note 2(b), the goods are classifiable under CTI 9027 9090. The classification adopted by appellant is upheld. Since the classification is decided in favour of the appellant, the question of interest, confiscation and penalty does not arise - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Classification of imported surgical instruments as 'Orthopaedic Instruments' under CTH 9018 or 'Orthopaedic Appliances' under CTH 9021 - Assessee imported items including a power console/handpiece driver, motorized handpiece and footswitch used in arthroscopic and spinal surgery, declaring them as 'Orthopaedic Appliances' under CTH 90211100 and availing 'Nil' Basic Customs Duty under Notification No.50/2017-Customs - Department, on scrutiny of supplier's catalogues and noting that identical goods had earlier been classified under CTH 9018, reclassified the goods under CTH 9018 and confirmed differential duty - Wh... [Read more]

Customs - Classification of imported surgical instruments as 'Orthopaedic Instruments' under CTH 9018 or 'Orthopaedic Appliances' under CTH 9021 - Assessee imported items including a power console/handpiece driver, motorized handpiece and footswitch used in arthroscopic and spinal surgery, declaring them as 'Orthopaedic Appliances' under CTH 90211100 and availing 'Nil' Basic Customs Duty under Notification No.50/2017-Customs - Department, on scrutiny of supplier's catalogues and noting that identical goods had earlier been classified under CTH 9018, reclassified the goods under CTH 9018 and confirmed differential duty - Whether the imported goods, being surgical tools used by doctors during surgery, are classifiable as 'Orthopaedic Instruments' under CTH 9018 or as 'Orthopaedic Appliances' under CTH 9021 - HELD - Chapter Note 6 to Chapter 90 defines 'orthopaedic appliances' for the purpose of Heading 9021 as appliances for preventing or correcting bodily deformities, or for supporting or holding parts of the body following an illness, operation or injury, and a conjoint reading of Heading 9021 with Chapter Note 6 shows that Tariff Item 90211000 covers goods actually used by patients suffering from orthopaedic disease or illness, which are implanted or strapped to their body - 'Orthopaedic Instruments' are different from 'Orthopaedic Appliances', instruments being those used during surgery or operation by surgeons, as covered by the preamble to the HSN Explanatory Notes to Heading 9018 - The Assessee did not dispute its own earlier declaration of the very same items under CTH 9018 in prior imports and offered no appreciable explanation for the change in classification - The goods, verified against the sellers' website, are surgical tools/instruments used by doctors or health professionals during surgery and are not implanted or strapped to the body, and CTH 9021 does not cover such surgical tools or instruments - The Assessee has not made any attempt to dislodge the reasoning of the adjudicating authority or to justify its claim of classification under CTH 9021 - The goods are classifiable as 'Orthopaedic Instruments' under CTH 9018 - The appeal filed by the Assessee against reclassification is dismissed - Eligibility of surgical instruments used in spinal surgery for exemption from Basic Customs Duty as goods for the disabled under Notification No.50/2017-Customs, Serial No.578 read with List 30 - Whether goods classifiable as 'spinal instruments', though not 'appliances' for the disabled, are covered by the entry at Serial No.E(9) of List 30 to Notification No.50/2017-Customs for the period prior to its amendment - HELD - Serial No.578 of Notification No.50/2017-Customs, as applicable during the disputed period, covers "Assistive devices, rehabilitation aids and other goods for disabled, specified in List 30", and Serial No.E(9) of List 30, prior to its amendment by Notification No.1/2020-Customs, expressly covered "Instruments and implants for severely physically handicapped patients and joints replacement and spinal instruments and implants including bone cement" - The goods in question, being specifically designed as surgical tools used in various spinal surgeries, are 'spinal instruments' falling within the express language of the unamended entry, and the Adjudicating Authority correctly extended the benefit of the Notification for the period from 16.07.2018 to 12.12.2019 - This issue is decided against the Revenue - Eligibility of the same surgical instruments for IGST exemption under Notification No.01/2017-Integrated Tax (Rate), Serial No.257 read with List 3, for the period during which they were eligible for the parallel Customs Notification benefit - Whether the Assessee was correctly extended the benefit of IGST exemption on the ground that the entry at Serial No.E(9) of List 3 is identical to Serial No.E(9) of List 30 of Notification No.50/2017-Customs - HELD - The entry at Serial No.E(9) of List 3 of Schedule-I of Notification No.01/2017-Integrated Tax (Rate) is identical to Serial No.E(9) of List 30 of Notification No.50/2017-Customs, and since the goods imported during the period 16.07.2018 to 12.12.2019 were held eligible for the benefit of the Customs Notification, there is no difficulty in extending the benefit of the identical IGST Notification entry for the same period - Since no corresponding amendment restricting the scope of Entry E(9) was made to List 3, unlike the amendment made to List 30 with effect from 02.02.2020, the items continue to enjoy the benefit of classification under Schedule-I for the entire period of the Notification - No case is made out for interference with the order of the Principal Commissioner, and this issue is also decided against the Revenue - The appeal filed by the Revenue is rejected. [Read less]

Customs - Interest on delayed refund under Section 27A of the Customs Act, 1962 - Relevant date for computation of interest - Commissioner (Appeals) allowed interest at the rate of 6% per annum computed from three months after the date of filing of the original refund application - Whether interest under Section 27A of the Customs Act, 1962 is payable from the date of expiry of three months from the date of receipt of the refund application, or only from the date of expiry of three months from the date of the order finally sanctioning the refund - HELD - Section 27A mandates payment of interest where duty ordered to be ref... [Read more]

Customs - Interest on delayed refund under Section 27A of the Customs Act, 1962 - Relevant date for computation of interest - Commissioner (Appeals) allowed interest at the rate of 6% per annum computed from three months after the date of filing of the original refund application - Whether interest under Section 27A of the Customs Act, 1962 is payable from the date of expiry of three months from the date of receipt of the refund application, or only from the date of expiry of three months from the date of the order finally sanctioning the refund - HELD - Section 27A mandates payment of interest where duty ordered to be refunded is not refunded within three months from the date of receipt of the application for refund, and the explanation thereto deems an order of refund passed by the Commissioner (Appeals), the Tribunal or any court to be an order passed under Section 27(2) for the purpose of Section 27A - The explanation only extends the deeming fiction to appellate orders and has no bearing on postponing the date from which interest becomes payable - Reliance was placed on the decision of the Hon'ble Supreme Court which held that liability to pay interest commences from the expiry of three months from the date of receipt of the application for refund and not from the date on which the order of refund is made - In this case, the application for refund was filed on 29.10.2018 and three months expired on 28.01.2019 and the refund has been granted to the assessee after long litigation on 16.09.2025, therefore, relying on the decision of the Hon’ble Apex Court in the Ranbaxy Laboratories’ case, respondent-assessee is entitled for interest from 28.01.2019 till 16.09.2025 - The appeal filed by the Revenue is dismissed [Read less]

Customs - Entitlement to concessional rate of Basic Customs Duty - Prospective or retrospective operation of amending Notification - Appellant, a regular importer of Carbon Less Paper Black Image, claimed the benefit of concessional Basic Customs Duty under a Notification for goods classifiable under certain Customs Tariff Headings - Exemption benefit was denied on the ground that as on the date of filing of the Bills of Entry in dispute, the said Notification stood amended and the goods in question were not covered by the amended Notification - Whether the Appellant is entitled to the concessional benefit under the Notifi... [Read more]

Customs - Entitlement to concessional rate of Basic Customs Duty - Prospective or retrospective operation of amending Notification - Appellant, a regular importer of Carbon Less Paper Black Image, claimed the benefit of concessional Basic Customs Duty under a Notification for goods classifiable under certain Customs Tariff Headings - Exemption benefit was denied on the ground that as on the date of filing of the Bills of Entry in dispute, the said Notification stood amended and the goods in question were not covered by the amended Notification - Whether the Appellant is entitled to the concessional benefit under the Notification, and whether the subsequent Notification restoring the benefit is to be interpreted as having retrospective operation - HELD - As on the dates of filing of the Bills of Entry in dispute, the Notification claimed was not in operation, and the Notification then holding the field did not cover the goods in question, nor did the Notification amending it thereafter, indicating that if it were truly an error it would have been rectified in the subsequent amending Notification, which was not done - It is only the later Notification that clearly indicates the goods are eligible for the benefit, and the said Notification has not been given retrospective effect - Unlike the precedents relied upon by the Appellant, where the Government had positively admitted a mistake and issued a corrective Notification, there is no such positive admission of mistake by the Government in the present case, and the decisions relied upon are therefore not applicable - Following the settled principles on interpretation of taxing statutes and on distinguishing a clarificatory or retrospective amendment from a substantive prospective one, the effect of the subsequent Notification restoring the benefit can only be prospective in nature, applicable from the date of its Gazette Notification - The appellant is not entitled to the concessional benefit for the period in dispute - The Appeal is dismissed - Customs - Invocation of extended period of limitation - Show cause notice was issued invoking the extended period of limitation to deny the concessional duty benefit claimed by the Appellant - Whether Revenue was justified in invoking the extended period of limitation - HELD - As on the date of filing of the Bills of Entry, the Notification under which the benefit was claimed had ceased to exist, and claiming a benefit flowing from a non-existent Notification amounts to claiming a benefit with an ulterior motive, justifying invocation of the extended period of limitation - The Appellant cannot plead ignorance of the non-availability of the Notification, since the Appellant is presumed to be aware that the Notification whose benefit was claimed stood amended - No case is made out for interfering with the impugned order. [Read less]

Service Tax - Imposition of penalty in proceedings for refund of pre-deposit, contrary to a final order of the Tribunal setting aside such penalty - Appellant's pre-deposit made pursuant to a stay order of the Tribunal became refundable following the Tribunal's final order setting aside penalties and part of the demand; in the refund proceedings, however, the adjudicating authority again computed and appropriated penalty and interest against the refund due - Whether the Revenue could, in proceedings for refund of pre-deposit, impose or recover fresh penalties contrary to the Tribunal's final order which had set aside the p... [Read more]

Service Tax - Imposition of penalty in proceedings for refund of pre-deposit, contrary to a final order of the Tribunal setting aside such penalty - Appellant's pre-deposit made pursuant to a stay order of the Tribunal became refundable following the Tribunal's final order setting aside penalties and part of the demand; in the refund proceedings, however, the adjudicating authority again computed and appropriated penalty and interest against the refund due - Whether the Revenue could, in proceedings for refund of pre-deposit, impose or recover fresh penalties contrary to the Tribunal's final order which had set aside the penalties earlier imposed - HELD - Penalties under Section 78 and Section 76 imposed by the original adjudication order were set aside by the Tribunal's final order, and the demand in respect of Event Management Service was further set aside by the Hon'ble Supreme Court - In refund proceedings seeking refund of pre-deposit made pursuant to the stay order of the Tribunal, the Revenue could not initiate another proceeding for imposition of fresh penalties on the appellant; if permissible in law, they could have proceeded separately, but not within the refund proceedings - Imposition of penalty and its appropriation against the refund due to the appellant, in refund proceedings, is contrary to settled principles of judicial discipline, since the refund claim ought to have been examined strictly in accordance with the order of the Tribunal setting aside the demand - There is no merit in the imposition of penalties and their appropriation against the refund due to the appellant - The matter remanded for re-computation of refund and the interest – The appeal is allowed - Service Tax - Interest on delayed refund of pre-deposit made under Section 35F of the Central Excise Act, 1944 as applied to service tax - Whether interest on refund of pre-deposit made pursuant to an appeal filed prior to the amendment of Section 35F with effect from 06.08.2014 is governed by the unamended or the amended provisions of Section 35FF - Appellant's appeal before the Tribunal was filed on 16.05.2014, prior to the amendment of Section 35F, and pre-deposit was made pursuant to a stay order passed thereafter - HELD - The proviso to the amended Section 35F expressly provides that the amended provisions shall not apply to stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014 - The relevant consideration for applicability of the amended or unamended provision is not the date of deposit but the provision under which the appeal was pending and the amount was deposited - Since the appellant's appeal was filed and pending prior to the amendment, the refund of the pre-deposit is governed by the unamended provisions of Section 35FF - The refund arising consequent to the Tribunal's order and, further, consequent to the Hon'ble Supreme Court's order setting aside the demand in respect of Event Management Service, the exact amount due, the date from which it is due, and the interest payable thereon require recomputation - The matter is remanded to the original authority for computation of the refund amount due and the interest payable in terms of the unamended provisions of Section 35FF. [Read less]

Service Tax - Taxability of licence fees and additional licence fees paid to the State Government for grant of exclusive privilege to trade in liquor - Appellant, a State Government undertaking vested with the exclusive right and privilege of importing, exporting and carrying on wholesale trade and distribution of foreign liquor, paid licence fees and additional licence fees under the applicable excise law - Whether the statutory grant or continuance of a liquor licence, and the fees paid therefor, constitute a 'service' within the meaning of Section 65B(44) of the Finance Act, 1994 - HELD - The mere statutory grant or con... [Read more]

Service Tax - Taxability of licence fees and additional licence fees paid to the State Government for grant of exclusive privilege to trade in liquor - Appellant, a State Government undertaking vested with the exclusive right and privilege of importing, exporting and carrying on wholesale trade and distribution of foreign liquor, paid licence fees and additional licence fees under the applicable excise law - Whether the statutory grant or continuance of a liquor licence, and the fees paid therefor, constitute a 'service' within the meaning of Section 65B(44) of the Finance Act, 1994 - HELD - The mere statutory grant or continuance of a licence to carry on the regulated liquor trade cannot by itself establish the essential relationship of service provider and service recipient - The right to manufacture, possess, transport, purchase or sell intoxicating liquor is within the exclusive regulatory domain of the State under Entry 8 of List II of the Seventh Schedule, and the amount charged for permitting exercise of such privilege, though termed a licence fee, cannot be equated with consideration for a service, there being no reciprocity, quid pro quo or corresponding obligation upon the State Government to provide any service against such payments - The grant of a statutory licence does not constitute "support services" within the meaning of Section 65B(49) as it does not answer the description of infrastructural, operational, administrative, logistic, marketing or other support that entities ordinarily perform themselves and may elect to outsource - For the period up to 31.03.2016, the grant of licence or exclusive privilege remained covered by the Negative List under Section 66D(a) - For the period from 01.04.2016, the amendment substituting "any service" for "support services" in Section 66D(a)(iv) merely altered the scope of the Negative List and did not dispense with the threshold requirement of an activity performed for consideration under Section 65B(44) - In any event, the levy for the period from 01.04.2016 to 30.06.2017 stands expressly neutralised by the retrospective statutory dispensation under Section 117 of the Finance (No. 2) Act, 2019, which provides that no service tax shall be levied on services provided by the State Government by way of grant of liquor licence against consideration in the form of licence fee or application fee for that period - Licence fees and additional licence fees paid by the appellant do not constitute consideration for any service rendered by the State Government - The demand of service tax, along with interest and penalties is set aside – The appeal is allowed - Invocation of extended period of limitation - Whether the extended period could be invoked against a State Government undertaking whose activities are in the public domain - HELD - The appellant is a Government undertaking incorporated for the purpose of regulating the wholesale trade and distribution of foreign liquor in the State, and all activities undertaken by the appellant are in the public domain, with no suppression of information from the Department - Suppression of facts with intention to evade tax is not established, and the extended period cannot be invoked to demand service tax in this case. [Read less]

Service Tax - Taxability of income from sale of cargo space under 'Business Auxiliary Service' - Appellant, appointed as General Sales Agent of an airline, received commission for acting as such agent and separately earned income from trading of cargo space, being the difference between the purchase price and the selling price of cargo slots - Service tax was demanded on such difference on the ground that it constituted consideration for Business Auxiliary Service - Whether the difference between the sale price and the purchase price of cargo space, arising from trading of cargo slots as an independent buyer, is exigible t... [Read more]

Service Tax - Taxability of income from sale of cargo space under 'Business Auxiliary Service' - Appellant, appointed as General Sales Agent of an airline, received commission for acting as such agent and separately earned income from trading of cargo space, being the difference between the purchase price and the selling price of cargo slots - Service tax was demanded on such difference on the ground that it constituted consideration for Business Auxiliary Service - Whether the difference between the sale price and the purchase price of cargo space, arising from trading of cargo slots as an independent buyer, is exigible to service tax under BAS - HELD - Under the agreement between the appellant and the airline, the appellant is entitled to sales commission only for services rendered as General Sales Agent, and where there is a specific rate arrangement for a particular consignment, the appellant is not entitled to any commission - The appellant has discharged service tax on the commission received as General Sales Agent, and the demand is confined to the difference between the sale price and purchase price of cargo slots purchased and resold by the appellant in the capacity of an independent buyer. Such trading of cargo space, where the appellant may make a profit or incur a loss, does not partake the character of commission earned as an agent and does not fall within the ambit of BAS - The amount received on sale of cargo space is only trading of cargo space and not subject to levy of service tax - The issue stands settled by earlier orders of the Bench in the appellant's own case on identical facts, which have attained finality - The impugned order is set aside and the appeals are allowed [Read less]

Service Tax – Eligibility for exemption to Rent-a-cab service provided to a unit in SEZ - Denial of exemption under Notification No.4/2004 - Whether the denial of exemption under Notification No.4/2004 on the ground that the rent-a-cab service was not utilized within the SEZ area is sustainable - HELD - The Appellant had filed FORM A-1 issued by the Specified Officer of SEZ, clearly indicating the Appellant as providing 'Rent-a-cab service', and there was no dispute that the service was an 'Authorized Service' as per the said Form - The only reason for denial, namely that the service was not utilized within the SEZ area,... [Read more]

Service Tax – Eligibility for exemption to Rent-a-cab service provided to a unit in SEZ - Denial of exemption under Notification No.4/2004 - Whether the denial of exemption under Notification No.4/2004 on the ground that the rent-a-cab service was not utilized within the SEZ area is sustainable - HELD - The Appellant had filed FORM A-1 issued by the Specified Officer of SEZ, clearly indicating the Appellant as providing 'Rent-a-cab service', and there was no dispute that the service was an 'Authorized Service' as per the said Form - The only reason for denial, namely that the service was not utilized within the SEZ area, is a basic fallacy, since the officer himself admitted that the Appellant provided services to the SEZ by way of pick-up and drop of staff, and not accepting this as service consumed within the SEZ defeats the very purpose of rent-a-cab service - The situs of rendering services is not relevant so long as the taxable services are provided to a unit in a SEZ to carry on authorised operations - The lower authorities erred in ignoring FORM A-1 issued by the Authorized Officer. The denial of exemption is unsustainable - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Taxability of outbound/international package tour service - Appellant, engaged in providing tour operator services, was demanded service tax on international package tours on the ground of non-payment of tax during audit - Whether service tax is leviable on outbound tours where the service is consumed by the tourist consumer beyond Indian territory - HELD - The service is consumed by the tourist consumer beyond the Indian territory and hence not liable to levy and collection of service tax under the provisions of the Act, the facts of the present case being squarely covered by the decision of the Larger Bench... [Read more]

Service Tax - Taxability of outbound/international package tour service - Appellant, engaged in providing tour operator services, was demanded service tax on international package tours on the ground of non-payment of tax during audit - Whether service tax is leviable on outbound tours where the service is consumed by the tourist consumer beyond Indian territory - HELD - The service is consumed by the tourist consumer beyond the Indian territory and hence not liable to levy and collection of service tax under the provisions of the Act, the facts of the present case being squarely covered by the decision of the Larger Bench of the Tribunal on the same issue - The demand on this count is unsustainable - Service Tax - Inclusion of cost of air ticket in value of domestic package tour - Demand was raised treating the cost of air tickets as part of the gross value for the purpose of service tax on domestic package tours - Whether reimbursement of air ticket cost collected from customers can be included in the taxable value and subjected to service tax - HELD - Reimbursement of ticket charges from customers cannot be subjected to service tax, following the decision of the Supreme Court on reimbursable expenses - The demand on this count is unsustainable - Service Tax - Taxability of cancellation charges collected by tour operator - Service tax was demanded on charges collected by the Appellant towards cancellation of bookings - Whether cancellation charges, collected when services are cancelled or withdrawn, amount to consideration for provision of taxable tour operator service - HELD - Booking cancellation charges received by the Appellant are in the nature of compensation and not consideration for service, since levy of service tax can be imposed only when service is actually provided and not on charges collected in the form of damages or penal charges on cancellation or withdrawal of services - No service tax is chargeable on such charges - The demand on this count is unsustainable - Service Tax - Invocation of extended period of limitation - Show cause notice was issued invoking the extended period of limitation for the period 2007-2009, beyond the normal period from the date of filing of ST-3 returns - Whether the extended period of limitation is invokable in the absence of any allegation of fraud, suppression or wilful mis-statement with intent to evade payment of tax - HELD - ST-3 returns for the periods 2007-2008 and 2008-09 were filed well before issuance of the show cause notice, and in the absence of any reason to allege fraud, suppression or wilful negligence to pay service tax, the demand for the entire period from 2007-2009 is barred by limitation - The demand invoking extended period is unsustainable [Read less]

Service Tax - Refund of duplicate payment of service tax - Assessee inadvertently paid the same financial year's service tax liability a second time during departmental audit - On discovery, assessee filed a refund claim which was rejected by the first adjudicating authority, allowed by the appellate authority in one round, and rejected again in a subsequent round, giving rise to cross appeals by the assessee and Revenue - Revenue contended that the assessee had not disclosed the original payment in the return and had not established that the two payments related to the same liability, relying on accounting discrepancies a... [Read more]

Service Tax - Refund of duplicate payment of service tax - Assessee inadvertently paid the same financial year's service tax liability a second time during departmental audit - On discovery, assessee filed a refund claim which was rejected by the first adjudicating authority, allowed by the appellate authority in one round, and rejected again in a subsequent round, giving rise to cross appeals by the assessee and Revenue - Revenue contended that the assessee had not disclosed the original payment in the return and had not established that the two payments related to the same liability, relying on accounting discrepancies and the requirement of unjust enrichment - Whether the assessee is entitled to refund of the amount paid a second time for a liability already discharged earlier - HELD - The factual foundation is not in serious controversy, both authorities below having themselves referred to the payment as a duplicate/second payment, and Revenue has not shown the earlier payment was adjusted towards any other liability or that any fresh liability arose for the second payment - The CENVAT reconciliation shows the duplicate portion was not taken as credit, and the omission in the return does not extinguish the legal effect of an actual payment made into the Government account, nor can a wrong accounting head justify denial of refund once the liability has been discharged - On unjust enrichment, the documentary evidence shows the duplicate amount was continuously reflected as recoverable and not written off or passed on, and Revenue has not shown otherwise - Procedural omissions in reporting cannot convert a duplicate payment into tax legally due, and retention of such amount by the Department would amount to retention of tax not legally due - The assessee is entitled to refund of the duplicate payment under Section 11B, and Revenue's appeal challenging the order allowing such refund has no merit and is dismissed - Entitlement to consequential interest on refund of duplicate payment - Section 11BB of the Central Excise Act, 1944 - Once refund of the duplicate payment is held admissible, whether the assessee is entitled to consequential interest thereon - HELD - Following settled law that statutory interest follows where refund is not sanctioned within the prescribed period, the claim for interest is allowed under Section 11BB read with Section 83 of the Finance Act, 1994 - The appellant is entitled to refund along with consequential interest under Section 11BB in accordance with law [Read less]

Central Excise - Classification of Greenhouse - Whether classifiable as Plant growth chambers under CTH 8419 or as Prefabricated Buildings/Greenhouse in ready to assemble sets under CTH 9406 - Appellant, manufacturing customised greenhouses, cleared the goods under CTH 8419 8960 availing concessional duty under an exemption Notification - Revenue proposed classification under CTH 9406 0011 and demanded differential duty with interest and penalty, on the ground that fabricated structures were cleared from the factory with only assembly done at site - Whether the product is correctly classifiable under CTH 8419 or under CTH ... [Read more]

Central Excise - Classification of Greenhouse - Whether classifiable as Plant growth chambers under CTH 8419 or as Prefabricated Buildings/Greenhouse in ready to assemble sets under CTH 9406 - Appellant, manufacturing customised greenhouses, cleared the goods under CTH 8419 8960 availing concessional duty under an exemption Notification - Revenue proposed classification under CTH 9406 0011 and demanded differential duty with interest and penalty, on the ground that fabricated structures were cleared from the factory with only assembly done at site - Whether the product is correctly classifiable under CTH 8419 or under CTH 9406 0011 - HELD - The appellant processes raw materials in the factory and clears the greenhouse in ready to assemble condition, with installation done at site owing to bulky size making transportation in assembled condition difficult - The product is specifically covered under CTH 9406 0011 as greenhouse in ready to assemble sets, to be preferred over the general description under CTH 8419 8960, a heading with the most specific description being preferred to one with a more general description - Following precedent that greenhouses in ready to assemble sets are classifiable under CTH 9406 0011, the appellant's claim for classification under CTH 8419 8960 is not legally correct, and the classification under CTH 9406 0011 held by the lower appellate authority is upheld. However, the appeal is allowed on limitation, and the duty demand, interest and penalty are set aside - Central Excise - Invocation of extended/amended period of limitation for issue of show cause notice - Section 11A of the Central Excise Act, 1944 - Show cause notice demanding differential duty for March to December 2014 was issued after the normal one-year period under the then-existing Section 11A(1)(a) had expired, relying on the substituted two-year period introduced by a later amendment - Whether the show cause notice invoking the amended limitation period is time barred - HELD - The demand would have already become time-barred under the one-year period applicable before the amendment enhancing it to two years - A statutory amendment is prospective unless specifically declared retrospective, and cannot revive a demand already time-barred before it came into force - The show cause notice is time barred, as the one-year period to issue it had already expired prior to the amendment - The appeal is allowed on limitation. [Read less]

Central Excise – Penalty on co-noticee for alleged involvement in clandestine manufacture and removal of Pan Masala and Scented Jarda Tobacco – Rule 26 of the Central Excise Rules, 2002 – Penalty was imposed on the appellant as a co-noticee in proceedings initiated against a manufacturer for clandestine manufacture and removal of goods without payment of duty, on the ground that the appellant was concerned in the affairs of the manufacturing unit – Appellant contended that he had no role in the illegal activities, that his role was limited to extending a loan and assisting in procurement of laminates and miscellane... [Read more]

Central Excise – Penalty on co-noticee for alleged involvement in clandestine manufacture and removal of Pan Masala and Scented Jarda Tobacco – Rule 26 of the Central Excise Rules, 2002 – Penalty was imposed on the appellant as a co-noticee in proceedings initiated against a manufacturer for clandestine manufacture and removal of goods without payment of duty, on the ground that the appellant was concerned in the affairs of the manufacturing unit – Appellant contended that he had no role in the illegal activities, that his role was limited to extending a loan and assisting in procurement of laminates and miscellaneous goods, that statements of workers did not implicate him, and that invoking Rule 26 for imposing penalty on such basis is not sustainable – Whether the appellant is liable for penalty under Rule 26 of the Central Excise Rules, 2002 and whether such penalty is legally sustainable – HELD – On perusal of the impugned order and the show cause notice, the role attributed to the appellant is limited to having provided laminates and miscellaneous goods and extended a loan facility, and there is a lack of clarity arising from apparent similarity of names between the appellant and another co-noticee – Rule 26 requires that a person acquire possession of, or be concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing excisable goods, or otherwise deal with such goods with knowledge that they are liable to confiscation – No evidence on record shows the appellant was involved in any activity specified under Rule 26, and statements of workers indicate that manufacture and transportation were carried out under the supervision and directions of another person – In the absence of evidence establishing the appellant's involvement in the activities specified under Rule 26, imposition of penalty is not legally sustainable and is contrary to the statements on record – Reliance is placed on judicial precedent holding that penalty under Rule 26 cannot be sustained absent evidence brought on record by the department, and that retracted statements cannot be relied upon as the sole basis for confirming demand and penalty – The impugned order is partly set aside to the extent it imposes penalty on the appellant, without interference with the remaining portions of the order not under challenge – The appeal is allowed [Read less]

GST - Erroneous refund of unutilised input tax credit, Proceeding under Section 73 of the CGST Act, 2017 - Refund of unutilised input tax credit was sanctioned to the Appellant under Section 54(3) on account of inverted duty structure - Proceedings under Section 73 were subsequently initiated treating the said amount as erroneously refunded upon application of the substituted Rule 89(5) formula - Appellant contending that Section 73(1) separately refers to tax erroneously refunded and to input tax credit wrongly availed or utilised, but does not expressly use the words input tax credit erroneously refunded - Whether a mone... [Read more]

GST - Erroneous refund of unutilised input tax credit, Proceeding under Section 73 of the CGST Act, 2017 - Refund of unutilised input tax credit was sanctioned to the Appellant under Section 54(3) on account of inverted duty structure - Proceedings under Section 73 were subsequently initiated treating the said amount as erroneously refunded upon application of the substituted Rule 89(5) formula - Appellant contending that Section 73(1) separately refers to tax erroneously refunded and to input tax credit wrongly availed or utilised, but does not expressly use the words input tax credit erroneously refunded - Whether a monetary refund originating from accumulated input tax credit is capable of being treated as tax erroneously refunded for the purposes of Section 73(1) - HELD - Section 54(3) contemplates a statutory refund of unutilised input tax credit, and when such credit is converted, on the claimant's application, into a monetary payment under Section 54, the transaction is a refund. If the amount so paid exceeds what Section 54 read with Rule 89(5) permits, it is capable of answering the statutory description erroneously refunded - To exclude every Section 54(3) cash refund merely because its source is input tax credit would leave a substantial class of statutory refunds outside the express erroneous refund limb without any language in the Act requiring such exclusion - The absence of the exact phrase input tax credit erroneously refunded cannot nullify the first limb of Section 73 when a monetary refund has in fact been made - The refund is held capable in law of being treated as an erroneous refund under Section 73 notwithstanding that its source was accumulated input tax credit – The appeal is dismissed - Jurisdiction under Section 73 of the CGST Act, 2017 notwithstanding a subsisting refund order - The refund sanction order passed after examination of the refund claim and consideration of the Appellant's reply, and was not challenged by the Department - Appellant contended that the order, having attained finality in absence thereof, could not be collaterally nullified through proceedings under Section 73 - Whether proceedings under Section 73 are without jurisdiction merely because the refund sanction order had not first been reversed through Departmental appeal or revision - HELD - Section 73 is a substantive statutory provision enacted specifically for determination of tax erroneously refunded, and neither Section 107(2), Section 108 nor Section 73 contains language making Section 73 jurisdiction conditional upon prior departmental appeal or revision of the refund order, the provisions operating in related but distinct fields - Departmental appeal or revision tests the legality or propriety of the refund order as an order, whereas Section 73 provides demand and determination machinery for amounts erroneously refunded, subject to its own notice, adjudication and limitation safeguards - An executive instruction prescribing review of refund orders cannot read into Section 73 an additional jurisdictional condition which the legislature has not expressed - Non-invocation of Section 107(2) or Section 108 did not, by itself, oust the jurisdiction of the proper officer under Section 73 in the facts of the present case - Survival of controversy regarding the principal refund amount computed under Rule 89(5) of the CGST Rules, 2017 - The refund authority had rejected the larger part of the claim on account of input service and capital goods credit and sanctioned only a residual amount - Department subsequently took the view that upon restricting net input tax credit to eligible input goods credit and applying the complete Rule 89(5) formula, the maximum refund worked out to a negative figure - Appellant having repaid the entire sanctioned amount during pendency of the Section 73 proceedings and quantified only the consequential interest as the amount in dispute in the present appeal - Whether any controversy survives as to the principal refund entitlement under Rule 89(5), having regard to repayment of the sanctioned amount and absence of any competing computation from the Appellant - HELD - The validity of Rule 89(5), confining net input tax credit to input goods credit for the inverted duty refund formula, stands upheld by binding precedent in VKC Footsteps declaring the operation of an existing Rule already effective prior to the refund application and sanction - The computation recorded in the impugned proceedings has not been displaced by any alternative computation from the Appellant - A general prayer for setting aside the impugned order cannot, in the absence of a corresponding challenge to and quantified claim concerning the principal amount, enlarge the subject matter of the appeal into a claim for restitution which has not been made - No subsisting claim for restoration of the principal amount survives, and the controversy is confined to whether the demand of interest is legally and arithmetically sustainable - Levy and computation of interest under Section 50 read with Section 73 of the CGST Act, 2017 on an erroneous refund - Whether Section 73 read with Section 50 supplies substantive statutory authority to levy interest on an erroneous refund - HELD - Section 73(1), (5), (8) and (9) repeatedly and expressly link the amount erroneously refunded with interest payable under Section 50, forming an integral part of the statutory scheme governing determination and recovery, and liability to interest does not depend upon identifying fault. Section 73 being the provision applicable where the erroneous refund is for reasons other than fraud, wilful misstatement or suppression of facts - The substituted Rule 89(5) had already been made operative from a date prior to the refund application and sanction, and its subsequent judicial affirmation did not create a new retrospective liability but declared the operation of an already existing Rule. The later inserted Rule on manner of calculation of interest being incapable of creating or extinguishing a charge already existing in the Act - The dates governing computation being admitted, no specific error in the applicable rate or arithmetic of the interest demand has been established, and Sections 73 and 50, read together, provide statutory authority for interest on an erroneous refund - The appeal is dismissed [Read less]

GST - Refund of accumulated Input Tax Credit under inverted duty structure - Section 54(3)(ii) of CGST Act, 2017 read with Rule 89(5) of CGST Rules, 2017 - Determination of correct value of turnover of inverted rated supply of goods and services and adjusted total turnover for computing admissible refund - Revenue appeal before the Tribunal contending that the FAA wrongly considered outward supplies attracting GST at 5% only for computing adjusted turnover, whereas the respondent-assessee had also issued certain outward supply invoices attracting GST at 18%, resulting in sanction of excess refund - Whether the value of out... [Read more]

GST - Refund of accumulated Input Tax Credit under inverted duty structure - Section 54(3)(ii) of CGST Act, 2017 read with Rule 89(5) of CGST Rules, 2017 - Determination of correct value of turnover of inverted rated supply of goods and services and adjusted total turnover for computing admissible refund - Revenue appeal before the Tribunal contending that the FAA wrongly considered outward supplies attracting GST at 5% only for computing adjusted turnover, whereas the respondent-assessee had also issued certain outward supply invoices attracting GST at 18%, resulting in sanction of excess refund - Whether the value of outward supplies attracting GST at 18% ought to have been included in the adjusted total turnover for computing the admissible refund under Rule 89(5) of the CGST Rules, 2017 - HELD - On plain reading of the formula under Rule 89(5), the value of inverted rated supply of goods and services along with adjusted total turnover are relevant for determining the correct value of admissible refund - The first Appellate Authority has not mentioned any outward supplies at 18% and has taken all outward supplies at 5% tax rate only - The Revenue has not produced any evidence or documents of the outward invoices where GST was charged at 18%. In absence of such evidence, it is not clear whether the respondent dealt only in 5% tax rated goods or also in 18% tax rated goods, and without this issue being addressed, the correct refund amount cannot be ascertained - The matter is remanded back to the first Appellate Authority for determination of the correct amount of inverted rated supply of goods and services, aggregate turnover and the admissible amount of refund under the inverted duty structure, with a direction that the Revenue shall produce the relevant documents relating to 18% outward supplies, reasonable opportunity be granted to both parties - The appeal is disposed of by way of remand [Read less]

GST - Requirement of a reasoned and speaking order by the First Appellate Authority - Appellants raised specific grounds of appeal before the FAA - The first appellate authority merely observed that the appellant had failed to produce satisfactory evidence and confirmed the orders without considering any of the specific grounds or the precedents relied upon - Whether an order of the first appellate authority which fails to consider or deal with any of the specific grounds of appeal and the judicial precedents relied upon constitutes a valid, reasoned and speaking order - HELD - Recording of reasons is an essential componen... [Read more]

GST - Requirement of a reasoned and speaking order by the First Appellate Authority - Appellants raised specific grounds of appeal before the FAA - The first appellate authority merely observed that the appellant had failed to produce satisfactory evidence and confirmed the orders without considering any of the specific grounds or the precedents relied upon - Whether an order of the first appellate authority which fails to consider or deal with any of the specific grounds of appeal and the judicial precedents relied upon constitutes a valid, reasoned and speaking order - HELD - Recording of reasons is an essential component of a judicial or quasi-judicial order and constitutes the soul of every such order - An order that reproduces an identical conclusion across separate appeals without independent consideration of the grounds and citations raised in each amounts to a failure to exercise the appellate jurisdiction vested in the authority, and cannot be regarded as a reasoned and speaking order - The appellate authority accordingly failed to adhere to the principle of natural justice requiring recording of reasons - Where the first appellate authority has failed to consider and adjudicate any ground raised before it, remand for proper consideration is necessary in the interest of justice - Deciding the matter on merits at the second appellate stage would curtail the valuable right of appeal available to the aggrieved party - Given that the original adjudication also raised fundamental objections including alleged absence of effective opportunity of personal hearing and adjudication ex parte on disputed demands founded on seized material, the matters are remanded to the original adjudicating authorities, rather than merely the first appellate authority, for fresh adjudication in accordance with law, with the relied-upon documents to be identified and made available, reasonable opportunity to reply afforded, and reasoned orders passed after effective personal hearing - The impugned Orders-in-Appeal and the corresponding Orders-in-Original are set aside and the appeals are allowed by way of remand [Read less]

Central Excise - Reversal of CENVAT Credit on common input services used in trading activity under Rule 6 of the CENVAT Credit Rules, 2004 - Whether the CENVAT credit reversed by the appellant, computed in accordance with Explanation I(c) to Rule 6(3A) as the difference between the sale price and the cost of goods sold, is correctly determined - Demand of CENVAT credit on account of common input services used in trading - HELD - Under Explanation I to Rule 6(3) and (3A), the value for trading is to be calculated as the difference between the sale price and the cost of goods sold, or ten per cent of the cost of goods sold, ... [Read more]

Central Excise - Reversal of CENVAT Credit on common input services used in trading activity under Rule 6 of the CENVAT Credit Rules, 2004 - Whether the CENVAT credit reversed by the appellant, computed in accordance with Explanation I(c) to Rule 6(3A) as the difference between the sale price and the cost of goods sold, is correctly determined - Demand of CENVAT credit on account of common input services used in trading - HELD - Under Explanation I to Rule 6(3) and (3A), the value for trading is to be calculated as the difference between the sale price and the cost of goods sold, or ten per cent of the cost of goods sold, whichever is higher, and the entire sale price cannot be treated as the value for this purpose - The calculations adopted by the appellant for arriving at the value of trading and for reversing the CENVAT credit attributable to common input services used in trading are in accordance with the explanation clause, and the finding of the adjudicating authority to the contrary is contrary to the legal provision - A Co-ordinate Bench, in the appellant's own case on identical facts, has held that once proportionate credit is reversed along with interest for the delayed period, a demand computed at a percentage of the value of exempted goods/services under Rule 6(3) cannot be sustained - Trading activity was included within the definition of 'exempted services' only with effect from 01.04.2011 by the explanation inserted in Rule 2(e) of the CENVAT Credit Rules, 2004, and there is accordingly no requirement for reversal of CENVAT credit on trading activity prior to that date - The appellant has correctly determined and paid the CENVAT amount payable in respect of common input services involved in trading activity for the disputed period, under intimation to the department, and no further demand is sustainable - The impugned order confirming the CENVAT demand is set aside and the appeal is allowed [Read less]

Customs - Classification of ‘Digital Axle Counter’ used for railway signalling, safety and traffic control - Appellant-company imported Digital Axle Counters and classified the same under Customs Tariff Item 86080030, whereas the Department alleged that the goods were more appropriately classifiable under Customs Tariff Item 85301010 - Whether ‘Digital Axle Counter’ is classifiable as mechanical (including electro-mechanical) signalling, safety or traffic control equipment under Chapter Heading 8608, or as electrical signalling, safety or traffic control equipment under Chapter Heading 8530 - HELD - Heading 8530 ex... [Read more]

Customs - Classification of ‘Digital Axle Counter’ used for railway signalling, safety and traffic control - Appellant-company imported Digital Axle Counters and classified the same under Customs Tariff Item 86080030, whereas the Department alleged that the goods were more appropriately classifiable under Customs Tariff Item 85301010 - Whether ‘Digital Axle Counter’ is classifiable as mechanical (including electro-mechanical) signalling, safety or traffic control equipment under Chapter Heading 8608, or as electrical signalling, safety or traffic control equipment under Chapter Heading 8530 - HELD - Heading 8530 expressly excludes equipment falling under Heading 8608 by the words "other than those of heading 8608", and Heading 8608 expressly includes mechanical, including electro-mechanical, signalling, safety and traffic control equipment. The mere presence of electrical or electronic components, or the use of electricity and electromagnetic effects during operation, does not by itself determine classification under Chapter 85, since such an interpretation would render the words "including electro-mechanical" in Heading 8608 otiose - The technical literature, including the Maintenance Handbook published by the Ministry of Railways and the publication on Signalling Relays and Cables, establishes that the vital relay driven by the Central Evaluator is an essential and integral component of the apparatus - the DAC is a single, functionally integrated railway safety and signalling system, notwithstanding that its constituent stages may be separately identifiable and, depending upon the manner of importation, separately packaged or installed. The Vital Relay is not an external electrical switch added after completion of the DAC; it is the mechanism through which the system's electronic determination is converted into the physical, fail-safe signalling condition required by the railway interlocking system - The essential character, functional architecture and principal use of the complete DAC are consistent with the description of electro-mechanical signalling, safety or traffic control equipment covered by Heading 8608. The presence of electronic and digital components does not take the apparatus outside that heading - The relay is not an adventitious or independently functioning electrical switch but the electro-mechanical extension through which the electronic determination of the apparatus is translated into the physical signalling condition, and in its absence the system would be incapable of performing its dedicated railway safety function - The burden lay upon the Revenue to establish that the goods were appropriately classifiable under Heading 8530 and that their essential character did not bring them within Heading 8608, which burden has not been discharged - The classification adopted by the appellant under Customs Tariff Item 86080030 is found to be in consonance with the tariff structure, the relevant Chapter and Section Notes and the technical literature. The reclassification under Customs Tariff Item 85301010 is devoid of merit. The consequential demand of Integrated Tax, together with interest, is set aside – The appeal is allowed - Confiscation of imported goods under Section 111(m) of the Customs Act, 1962 - Whether goods declared as Digital Axle Counters, in respect of which only the tariff classification was disputed, are liable to confiscation for not corresponding with the particulars declared in the bill of entry - HELD - Section 111(m) is attracted where the goods do not correspond, in respect of value or any other particular, with the entry made under the Act, and the statutory pre-condition is a material discrepancy between the goods imported and the particulars declared - No such discrepancy exists where the identity, quantity, value, country of origin and physical description of the goods were disclosed to the Department, and the dispute is confined to the tariff classification applicable to goods whose identity, nature and function had been disclosed - Once the classification adopted by the appellant is found to be correct, the very foundation of the alleged misclassification is untenable, and the consequential invocation of Section 111(m) cannot survive - The order of confiscation is set aside, and the redemption fine imposed under Section 125, being purely consequential to confiscation, does not survive - Invocation of extended period of limitation under Section 28(4) of the Customs Act, 1962 - Whether the extended period could be invoked on the ground of collusion, wilful misstatement or suppression of facts, where the revised classification was disclosed to the jurisdictional authorities - HELD - The extended period under Section 28(4) requires collusion, wilful misstatement or suppression of facts with intent to evade duty - The appellant had commenced declaring the goods under the revised classification and, by a representation to the jurisdictional authorities, expressly disclosed its understanding of the classification along with supporting product literature, following which the bills of entry continued to be assessed and the goods cleared under the declared classification without objection from the Department - The classification was thus neither concealed nor adopted clandestinely, and mere disclosure of a classification carrying a lower rate of tax, even if subsequently found untenable, does not amount to misdeclaration or furnish the foundation for alleging wilful misstatement or suppression with intent to evade duty - In the absence of material establishing collusion, wilful misstatement or suppression of facts with the requisite intent, the essential ingredients for invocation of the extended period are not established, and the differential duty demand, insofar as founded upon such invocation, is unsustainable and set aside. 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Customs – Suspension of registration of authorised carrier – Non-compliance with detention and demurrage waiver certificate – Regulation 10(1)(l) and 10(1)(m) of Sea Cargo Manifest and Transhipment Regulations, 2018 and Regulation 6(1)(l) of Handling of Cargo in Customs Areas Regulations, 2009 – Appellant, engaged in international container shipping and Non-Vessel Operating Common Carrier operations, was issued a detention and demurrage waiver certificate pursuant to High Court directions, recommending waiver from the date of hold up to delivery of goods – Appellant did not comply with the waiver beyond the maxim... [Read more]

Customs – Suspension of registration of authorised carrier – Non-compliance with detention and demurrage waiver certificate – Regulation 10(1)(l) and 10(1)(m) of Sea Cargo Manifest and Transhipment Regulations, 2018 and Regulation 6(1)(l) of Handling of Cargo in Customs Areas Regulations, 2009 – Appellant, engaged in international container shipping and Non-Vessel Operating Common Carrier operations, was issued a detention and demurrage waiver certificate pursuant to High Court directions, recommending waiver from the date of hold up to delivery of goods – Appellant did not comply with the waiver beyond the maximum permissible sixty days under the proviso to Regulation 10(1)(l) of SCMTR, and was issued an order of immediate suspension of registration under Regulation 11(2)(a) and 11(2)(c) of SCMTR – Appellant contended it is registered only as "Other Notified Carrier" and not as "Authorised Sea Carrier", hence not covered by Regulation 10(1)(l), that there is no risk to revenue and the order is disproportionate, relying on a Supreme Court decision that customs officers cannot overreach contractual terms absent any provision under the Customs Act – Whether the appellant fulfilled its obligations under SCMTR and HCCAR, and whether the suspension order is sustainable – HELD – Regulation 10(1)(l) of SCMTR only bars demanding container detention charges for a maximum of sixty days, beyond which such charges may be demanded – Under Regulation 6(l) of HCCAR, a Customs Cargo Service Provider shall not charge rent or demurrage on goods seized or detained, and since the goods were seized by the Directorate of Revenue Intelligence, the appellant is debarred from charging such charges – Non-Vessel Operating Common Carriers fall under the definition of Customs Cargo Service Provider under HCCAR and must comply with its provisions, and non-compliance with Regulation 6(1) amounts to violation of Regulation 10(1)(m) of SCMTR – The decision relied upon, rendered under Section 45(2)(b) of the Customs Act, does not deal with HCCAR or SCMTR, issued under distinct statutory provisions, and no guidance can be drawn from it – Since the appellant did not comply with Regulation 6(1)(l) of HCCAR, failure to fulfil Regulation 10(1)(m) of SCMTR is attracted, and the suspension order is legally valid and sustainable – The appellant was given an opportunity to submit its representation through a post-decisional hearing, observing natural justice – The impugned order does not require interference – The appeal is dismissed [Read less]

GST - Availability of Input Tax Credit for service tax refunded to buyers on cancellation of bookings - Appellant contended that the service tax paid on cancelled bookings is refundable and Section 142(5) of CGST Act, 2017 is only an enabling provision which does not bar self-adjustment through the electronic credit ledger - Department contended refund of previously paid service tax is specifically provided for under sub-section 5 of Section 142 of the Act, and that a taxpayer cannot create its own mechanism for such refund - Whether service tax deposited under the erstwhile Finance Act, 1994 on advance received for bookin... [Read more]

GST - Availability of Input Tax Credit for service tax refunded to buyers on cancellation of bookings - Appellant contended that the service tax paid on cancelled bookings is refundable and Section 142(5) of CGST Act, 2017 is only an enabling provision which does not bar self-adjustment through the electronic credit ledger - Department contended refund of previously paid service tax is specifically provided for under sub-section 5 of Section 142 of the Act, and that a taxpayer cannot create its own mechanism for such refund - Whether service tax deposited under the erstwhile Finance Act, 1994 on advance received for booking of residential flats, and subsequently refunded to buyers along with the advance upon cancellation of bookings after the appointed date under the CGST Act, can be claimed as Input Tax Credit under the CGST/SGST Act and adjusted against GST liability - HELD - Service tax deposited by the taxpayer under the existing law, namely the Finance Act, 1994, does not fall within the definition of input tax under the Act and its credit cannot therefore be claimed as input tax credit - The transitional provisions under sub-section 5 of Section 142, govern refund of tax paid under the existing law in respect of services not ultimately provided, and any such claim must be disposed of in accordance with the existing law with the amount eventually accruing being paid in cash - Since the services promised through the bookings were not ultimately provided, the refund of the service tax deposited has to be dealt with under the existing law, and the taxpayer cannot avail ITC as a mode of refund nor unilaterally pass an entry in the electronic credit ledger to absorb or adjust such refund claim without explicit statutory sanction - The impugned order of the FAA is in compliance with the legal provisions and upheld - The appeal is dismissed [Read less]

Service Tax - Taxability of commission earned on export of Business Auxiliary Service - Appellant, under contract with a foreign principal for soliciting orders and promoting sale of its goods, earned commission based on sales made directly by the foreign principal to customers in India and neighbouring countries, and did not pay service tax treating the activity as export of service - Whether such commission earned for procuring orders for a foreign entity qualifies as export of service under the Export of Services Rules, 2005 and the Place of Provision of Services Rules, 2012, and is accordingly not liable to service tax... [Read more]

Service Tax - Taxability of commission earned on export of Business Auxiliary Service - Appellant, under contract with a foreign principal for soliciting orders and promoting sale of its goods, earned commission based on sales made directly by the foreign principal to customers in India and neighbouring countries, and did not pay service tax treating the activity as export of service - Whether such commission earned for procuring orders for a foreign entity qualifies as export of service under the Export of Services Rules, 2005 and the Place of Provision of Services Rules, 2012, and is accordingly not liable to service tax - HELD - Business Auxiliary Services were classified under Rule 3(1)(iii) of the Export of Services Rules, 2005 and qualified as export if provided to a recipient located outside India - Since the foreign principal is the recipient of the service and is located outside India, and consideration is received in foreign exchange, the service qualified as export under the Export of Services Rules, 2005 up to 30.06.2012, and under Rule 3 of the Place of Provision of Services Rules, 2012 thereafter, the place of provision being based on the location of the recipient - The service of procuring orders for the foreign entity qualifies as export and the Appellant is not liable to pay service tax on the commission earned - The demand of service tax under Business Auxiliary Services is set aside – The appeal is allowed - Taxability under 'Supply of Tangible Goods' service where effective control and possession of rented equipment is transferred to the customer and VAT is discharged as a deemed sale - Appellant entered into agreements for renting out equipment, transferring possession, custody and effective control of the equipment to customers during the rental period, and discharged VAT on the transaction as a deemed sale - Whether service tax is additionally payable under 'Supply of Tangible Goods' service where VAT has already been discharged on the transaction - HELD - The terms of the agreement establish that the equipment was under the control, custody and possession of the customer during the tenure of the agreement, with the customer liable to pay VAT/CST and other statutory levies, and the appellant did not use or withdraw the equipment during the currency of the agreement - Such transfer of effective control, possession and custody takes the transaction out of the ambit of a taxable service and into the nature of a deemed sale - The issue stands covered by earlier decisions in the Appellant's own case setting aside the demand of service tax on rental income where VAT has been discharged thereon - The service tax demand under 'Supply of Tangible Goods' service is not sustainable and is set aside - Invocation of extended period of limitation for demand under reverse charge mechanism on import of software, based solely on balance sheet figures - Demand under RCM for import of software was confirmed solely on the basis of figures available in the balance sheet, which are public records, without any evidence of suppression or wilful misstatement - Whether the extended period of limitation is invocable where the demand is based solely on the assessee's balance sheet/profit and loss account or on records maintained in the usual course of business, and whether the demand is in any event revenue-neutral - HELD - Where the demand is based solely on balance sheet or profit and loss account figures or on records made in the usual course of business, without evidence of suppression or wilful misstatement, the extended period of limitation is not invocable - Had the Appellant discharged service tax under RCM on import of the services, it would undisputedly have been eligible to avail Cenvat credit thereon in light of the wide definition of 'input service', rendering the exercise revenue-neutral, and on this ground also the demand raised by invoking the extended period is time-barred - The demand confirmed under RCM for import of software is set aside - CENVAT Credit - Denial of credit carried forward in opening balance upon demerger under Rule 10 of the CENVAT Credit Rules, 2004 - Appellant, on demerger from its parent company pursuant to an order of the High Court, took credit of the parent's Cenvat balance in its opening balance for the return filed for April 2010 to September 2010 under Rule 10, duly intimating the fact to the Department - Whether the demand disallowing such credit, raised by a Show Cause Notice issued on 19.04.2016 in respect of credit availed in the return for April 2010 to September 2010, is barred by limitation, and whether the credit was in any event validly availed under Rule 10 - HELD - Raising a demand for the period April 2010 to September 2010 by a Show Cause Notice issued on 19.04.2016 is beyond even the extended period of limitation of five years, and the demand is liable to be set aside on this ground alone - In any event, as a result of the demerger, the Appellant was eligible to carry forward the closing balance of Cenvat credit under Rule 10, and in the absence of a specific column for availing such credit, correctly added it to its opening balance, a fact duly intimated to the Department - The disallowance of the credit availed under Rule 10 upon demerger is set aside - Denial of credit for want of documents where invoices and reconciliation statements were furnished but not considered - Cenvat credit was denied on the ground of non-submission of documents, though the Appellant had submitted the list of invoices, the input service tax register, sample invoices and a reconciliation statement of the Cenvat credit register with the ST-3 return along with its reply to the Show Cause Notice - Whether denial of credit on the ground of want of documents is sustainable where such documents were in fact furnished but were not considered by the adjudicating authority - HELD - The documents furnished by the Appellant, establishing the eligibility of Cenvat credit on the input services in question, were blatantly ignored, and the Department failed to consider the documents submitted along with the reply to the SCN, denying credit solely on the ground of non-submission - Given the undisputed eligibility of Cenvat credit on such input services, the Appellant cannot be denied the credit, and the denial of Cenvat credit for want of documents is legally not sustainable and is set aside. 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Service Tax - Exemption under Mega Exemption Notification No.25/2012-ST for works contract service of widening and strengthening a road, including provision of footpath, provided to a Government authority - Appellant rendered works contract service for widening and strengthening of a road, including construction of double lane, slow lane and footpath, to the Public Works (Roads) Department of the State Government, a 'Government Authority' as defined under Notification No.25/2012-ST, and claimed exemption under Entry 13 thereof for services relating to construction of road - The adjudicating authority denied exemption on th... [Read more]

Service Tax - Exemption under Mega Exemption Notification No.25/2012-ST for works contract service of widening and strengthening a road, including provision of footpath, provided to a Government authority - Appellant rendered works contract service for widening and strengthening of a road, including construction of double lane, slow lane and footpath, to the Public Works (Roads) Department of the State Government, a 'Government Authority' as defined under Notification No.25/2012-ST, and claimed exemption under Entry 13 thereof for services relating to construction of road - The adjudicating authority denied exemption on the ground that only the footpath had been widened/strengthened on the edge of the road and that 'Road' had not been constructed - Whether widening and strengthening of a road, including provision of footpath as part of a composite road-development work order, amounts to construction of a road exempted under Entry 13 of Notification No.25/2012-ST - HELD - The expression 'road' is not restrictively defined under the service tax law, and in its ordinary and legal meaning a public road encompasses its integral components and facilities meant for movement of the public, including pedestrian pathways/footpaths, which cannot be artificially segregated from the road merely to deny exemption - The work, described in the Work Orders as widening and strengthening of the road including footpath, has to be examined as a composite road-development project and not by isolating the footpath component, providing a footpath being part of the construction of a road - The work order was awarded by the Public Works (Roads) Directorate responsible for planning, survey, design, construction and maintenance of roads, and the services of widening/strengthening of road for providing footpath amount to construction of road - The appellant neither charged nor collected service tax from the Government department, bona fide treating the services as exempt - The appellant is eligible for exemption under Entry 13 of Mega Exemption Notification No.25/2012-ST - The demand of service tax is set aside; as the demand is not sustained, the question of interest or penalty does not arise – The appeal is allowed - Service Tax - Invocation of extended period of limitation where demand is based solely on Form 26AS/Income Tax Return data - Show Cause Notice was issued on the basis of figures available in Form 26AS, Income Tax Returns and the Statement of Receipt furnished by the appellant, treating the differential turnover as suppression of taxable value and invoking the extended period under Section 73(1) of the Finance Act, 1994 - Whether the extended period of limitation is invocable where the demand is based solely on Form 26AS/ITR data without independent investigation or evidence of wilful suppression - HELD - Where the demand is based solely on Form 26AS/ITR data, the extended period is not invocable and the demand is liable to be set aside on limitation alone - Suppression of facts and wilful violation to invoke the extended period were claimed only on assumption and presumption, without verification or due diligence, and the Show Cause Notice was issued without going through the relevant facts, figures and documents submitted by the appellant - The term 'suppression' must be construed strictly and does not mean any omission; the act must be deliberate and wilful to evade payment of duty, and mere failure to declare does not amount to wilful suppression in the absence of a positive act on the part of the assessee - The demands confirmed in the impugned order by invoking the extended period of limitation are not sustainable and set aside. [Read less]

Service Tax - Invocation of extended period of limitation against a statutory municipal corporation - Whether the extended period of limitation is invocable against a municipal corporation constituted under Article 243W of the Constitution of India, where the Show Cause Notice alleges suppression, wilful misstatement, fraud or collusion with intent to evade payment of service tax - HELD - The appellant, being a municipal corporation constituted in terms of Article 243W of the Constitution of India and a creature of the Constitution, cannot be alleged to have had any intent to evade payment of tax or to have suppressed mate... [Read more]

Service Tax - Invocation of extended period of limitation against a statutory municipal corporation - Whether the extended period of limitation is invocable against a municipal corporation constituted under Article 243W of the Constitution of India, where the Show Cause Notice alleges suppression, wilful misstatement, fraud or collusion with intent to evade payment of service tax - HELD - The appellant, being a municipal corporation constituted in terms of Article 243W of the Constitution of India and a creature of the Constitution, cannot be alleged to have had any intent to evade payment of tax or to have suppressed material facts with wilful intention of not paying tax, or to have committed fraud or collusion - In the absence of these elements, the extended period of limitation is not invocable - Since the Show Cause Notice in this case was issued by invoking the extended period of limitation, the whole of the demand is barred by limitation - The demand confirmed by the impugned order is set aside and no penalty is imposable on the appellant – The appeal is allowed [Read less]

Service Tax - Liability of a Goods Transport Agency to pay service tax where the consignment note is issued in favour of a service receiver not covered under the reverse charge notification - Appellant, engaged in providing GTA service, was found on scrutiny of ITR/TDS data to have a mismatch between taxable receipts reflected in income tax returns and 'nil' figures reflected in ST-3 returns, resulting in confirmation of service tax - Whether the appellant, having issued the consignment note in favour of a service receiver not falling within the class of persons liable to pay service tax under reverse charge in terms of Ru... [Read more]

Service Tax - Liability of a Goods Transport Agency to pay service tax where the consignment note is issued in favour of a service receiver not covered under the reverse charge notification - Appellant, engaged in providing GTA service, was found on scrutiny of ITR/TDS data to have a mismatch between taxable receipts reflected in income tax returns and 'nil' figures reflected in ST-3 returns, resulting in confirmation of service tax - Whether the appellant, having issued the consignment note in favour of a service receiver not falling within the class of persons liable to pay service tax under reverse charge in terms of Rule 2(1)(d)(B) of the Service Tax Rules, 1994 read with Notification No. 26/2012-ST dated 20.06.2012, is itself liable to discharge the service tax on such service - HELD - The appellant issued the consignment note in favour of the recipient of taxable service, who does not fall under the purview of Rule 2(1)(d)(B) of the Service Tax Rules, 1994 read with the relevant Notification - The appellant is accordingly liable to pay service tax in respect of the taxable service provided to such recipient, and since the appellant did not discharge such liability, the demand was rightly confirmed - The contention that the SCN did not capture the facts of the case properly is not tenable, since the appellant had itself submitted the background facts, including that the recipients of service had discharged service tax liability either as consignor or consignee in respect of the substantial part of the demand – Further, since the appellant, though registered with the department, did not correctly capture the figures in its service tax returns, the department had no scope or occasion to ascertain the actual taxable service provided, and the show cause proceedings were initiated based on information subsequently submitted by the appellant. The show cause notice cannot be said to be barred by limitation of time – The matter is remanded to the original authority for the limited purpose of quantification of the abatement benefit, actually extendable to the appellant, if any - The appeal is disposed of [Read less]

Central Excise - Includibility of type test charges in assessable value of goods -Appellant, engaged in manufacture of ACSR Conductors, collected type test charges from a buyer for testing conducted through a third-party agency at the buyer's instance, without including the same in the assessable value for payment of central excise duty - Demand of differential duty, interest and penalty was confirmed on the ground that such charges were paid by the buyer in connection with the sale of goods and hence includible in the transaction value - Whether type test charges received by the appellant from the buyer are includible in ... [Read more]

Central Excise - Includibility of type test charges in assessable value of goods -Appellant, engaged in manufacture of ACSR Conductors, collected type test charges from a buyer for testing conducted through a third-party agency at the buyer's instance, without including the same in the assessable value for payment of central excise duty - Demand of differential duty, interest and penalty was confirmed on the ground that such charges were paid by the buyer in connection with the sale of goods and hence includible in the transaction value - Whether type test charges received by the appellant from the buyer are includible in the value of goods for charging central excise duty - HELD - Type tests on ACSR Conductors are prescribed under the applicable Indian Standard to verify design, material quality and manufacturing process, ensuring the conductor can safely withstand mechanical, thermal and electrical stress before mass production, and are mandated by the applicable standards to be conducted in certified, accredited laboratories - Such type tests undertaken as per the mandate of the standard are for ensuring safety in transmission of electricity and are thus mandatory tests, and cannot be considered optional testing - The additional amount received towards type test charges is in relation to the sale of goods, as without the requisite certificate/report the sale would not take place, and hence such amount is received in connection with sale of goods and is includible in the value of goods for payment of central excise duty - The plea of revenue neutrality is a presumption, since leviability of excise duty on excisable goods and availment of Cenvat credit are governed by separate provisions and procedural requirements - The demand of differential duty along with interest is confirmed - Quantum of penalty under Rule 25 of the Central Excise Rules, 2002 - Equal penalty was imposed on the appellant along with confirmation of duty demand for non-inclusion of type test charges in assessable value - Whether the quantum of penalty imposed requires modification, considering that similar show cause notices for the same issue had been issued to the appellant for earlier periods - HELD - Taking a lenient view of the matter, considering that the issue in respect of the appellant is not a new one, the quantum of penalty is reduced - The duty demand along with interest is confirmed, but the penalty amount is reduced, and with this modification, the impugned order is upheld - The appeal is partly allowed [Read less]

GST - Budgetary Support Scheme - Recovery of alleged excess budgetary support received under the Budgetary Support Scheme - The petitioner was granted budgetary support calculated as a percentage of Central Tax and Integrated Tax paid after utilisation of eligible Input Tax Credit - The Respondents alleged excess budgetary support on the basis that the petitioner had inadvertently disclosed a certain amount in Table 8C of GSTR-9, and confirmed recovery along with interest, adjusting the amount against a refund otherwise payable to the petitioner - HELD - The question requiring consideration was whether the ITC reflected in... [Read more]

GST - Budgetary Support Scheme - Recovery of alleged excess budgetary support received under the Budgetary Support Scheme - The petitioner was granted budgetary support calculated as a percentage of Central Tax and Integrated Tax paid after utilisation of eligible Input Tax Credit - The Respondents alleged excess budgetary support on the basis that the petitioner had inadvertently disclosed a certain amount in Table 8C of GSTR-9, and confirmed recovery along with interest, adjusting the amount against a refund otherwise payable to the petitioner - HELD - The question requiring consideration was whether the ITC reflected in GSTR-2A was in fact legally available and capable of being utilised by the petitioner. The petitioner was required to explain the discrepancy through reconciliation statements, invoices and account details. If such explanations were supported by material demonstrating that the ITC was not actually eligible or available for utilisation, the Respondents were required to consider those explanations and record reasons for accepting or rejecting them in a reasoned order - This exercise was not properly undertaken in the present matter. One further opportunity ought to be given to the petitioner to demonstrate, with supporting documents, the basis on which the ITC reflected in GSTR-2A had arisen and why it was not available for utilisation - The impugned orders are set aside and the Respondents are directed to reconsider the matter afresh after affording an effective opportunity of hearing, and to deal with the petitioner's explanations and supporting documents - Writ petition is disposed of [Read less]

Central Excise - Denial of Cenvat credit on the allegation of non-receipt of goods on the strength of invoices issued by a registered dealer - Appellant availed Cenvat credit on the basis of invoices issued by a registered dealer for supply of Sponge Iron, which was alleged to be fraudulent on the ground that the dealer had supplied only invoices without actual supply of goods - Whether the disallowance of Cenvat credit on the ground of non-receipt of goods, based on such third-party statements not tested by examination-in-chief under Section 9D of the Central Excise Act, 1944, and in the absence of any investigation at th... [Read more]

Central Excise - Denial of Cenvat credit on the allegation of non-receipt of goods on the strength of invoices issued by a registered dealer - Appellant availed Cenvat credit on the basis of invoices issued by a registered dealer for supply of Sponge Iron, which was alleged to be fraudulent on the ground that the dealer had supplied only invoices without actual supply of goods - Whether the disallowance of Cenvat credit on the ground of non-receipt of goods, based on such third-party statements not tested by examination-in-chief under Section 9D of the Central Excise Act, 1944, and in the absence of any investigation at the appellant's factory, is sustainable - HELD - The appellant had recorded receipt of the goods in RG-23A Part-I, made payments to the supplier through proper banking channel, disclosed the credit availed in monthly ER-1 returns, and produced certified copies of the invoices, road permits and freight vouchers. There was no case of excess or shortage of raw materials or finished goods, nor any evidence of alternative sourcing of raw material or refund of cash by the dealer - Consumption of the goods in manufacture of the final product was not disputed and duty on clearance of the final product was accepted by the department - No investigation was carried out at the factory or office premises of the appellant to ascertain the genuineness of the documents produced, and the onus lies on the department to establish that the documents relied upon by the appellant are fake, which onus has not been discharged - The dealer alleged to have supplied only invoices without goods was not made a party to the notice, nor was any penalty proposed against it, rendering the allegation of receipt of invoices without receipt of goods against the appellant alone unsustainable - Statements of the supplier, the customer's representative and the transporter, not tested by examination-in-chief as mandated under Section 9D of the Central Excise Act, 1944, have no evidentiary value and cannot form the basis for confirming the demand - In the absence of any positive and substantial evidence establishing that the appellant availed irregular credit without receipt of goods, the disallowance of Cenvat credit on inputs and input services, along with interest, cannot be sustained - The demand is set aside and the appeal is allowed [Read less]

Customs - Classification of imported parts and accessories of motor vehicles - Burden of proof in reclassification - Customs Tariff Item 87089900 vis-a-vis 87082900 - Appellant cleared the goods under a residuary Customs Tariff Item availing concessional duty under an exemption Notification on the strength of certificates of origin whose genuineness was never questioned - Department proposed reclassification of certain articles as parts and accessories of bodies under another Customs Tariff Item and other headings, relying upon technical write-ups furnished by the appellant and material said to be on the appellant's own we... [Read more]

Customs - Classification of imported parts and accessories of motor vehicles - Burden of proof in reclassification - Customs Tariff Item 87089900 vis-a-vis 87082900 - Appellant cleared the goods under a residuary Customs Tariff Item availing concessional duty under an exemption Notification on the strength of certificates of origin whose genuineness was never questioned - Department proposed reclassification of certain articles as parts and accessories of bodies under another Customs Tariff Item and other headings, relying upon technical write-ups furnished by the appellant and material said to be on the appellant's own website - Whether Revenue discharged the burden of establishing the proposed classification - HELD - The burden of establishing a reclassification lies upon Revenue, and classification must proceed under the General Rules of Interpretation read with the Section and Chapter Notes and Explanatory Notes, applying the cumulative conditions for parts and accessories, not by assertion drawn from a website never placed on record - Examination of a small sample cannot be extended to the whole disputed list without a finding matching each article's characteristics against the tariff entry, and a quasi-judicial authority cannot treat non-appearance at investigation or an unrebutted assertion as proof, since that inverts the burden on Revenue - Foreign customs rulings, though only persuasive, cannot be brushed aside without reasons, and absent material or trade evidence to redetermine classification for the first time at the appellate stage, a new case cannot be laid then - Revenue having failed to discharge its burden, the declared classification holds the field, and denial of exemption, being consequential upon the reclassification, collapses with it - The demand of differential duty referable to the reclassification is set aside, and no classification dispute arises for articles where the appellant itself proposed and Revenue accepted a revised classification – The appeal is allowed - Customs - Invocation of extended period of limitation - Section 28(4) of the Customs Act, 1962 - Effect of a corrigendum introducing fresh articles into a show cause notice - Demand was confirmed invoking the extended period on the ground of knowing misdeclaration with intent to evade duty, and a corrigendum revising the computation and introducing fresh articles across bills of entry not earlier in issue was treated as not affecting limitation so long as the demand on those articles fell within five years of the corrigendum - Whether the extended period was available, and the effect of the corrigendum on limitation - HELD - The extended period is available only where short levy is by collusion, wilful misstatement or suppression, the foundation for which must be laid in the notice and established on evidence, not by mechanical recital of statutory expressions - The charge being built on material the appellant itself furnished and published, such material cannot be said to have been suppressed - Claim of classification with the description correctly declared is neither misdeclaration nor suppression, particularly where the appellant had itself proposed and voluntarily paid differential duty for certain articles before the notice, conduct antithetical to intent to evade - A corrigendum is a device for correcting a clerical or arithmetical slip and cannot enlarge a notice to a noticee's disadvantage; where it so alters the notice that a fresh case must be met, limitation runs from the corrigendum date, and a demand relatable to articles it introduced for clearances beyond the resulting five-year limit is without jurisdiction - The extended period was not available, and the demand referable to articles introduced by the corrigendum beyond the resulting limit is void, while the demand within the normal period cannot survive either for want of reconciliation and credit for payments already made - Customs - Confiscation and redemption fine - Sections 111(m), 111(o) and 125 of the Customs Act, 1962 - Whether the goods were liable to confiscation and a redemption fine could be imposed - HELD - Confiscation under Section 111(m) requires goods not corresponding in value or other particular with the entry made, and an incorrect choice of tariff item, description and value undisputed, is not a misdeclaration; Section 111(o) is equally inapplicable since the exemption was claimed on certificates of origin never questioned and no condition is shown breached, ineligibility for a notification being a matter of eligibility, not breach of condition - Invoking both clauses without a finding on which particular was false or condition infringed cannot be sustained. Once the foundation for confiscation disappears, a fine in lieu thereof cannot survive - The confiscation and redemption fine are set aside - Customs - Penalty and interest - Sections 114A and 28AA of the Customs Act, 1962 - Penalty equal to the duty determined together with interest was imposed, consequent upon the demand and findings on suppression - Whether the penalty and interest are sustainable - HELD - Penalty under Section 114A is exigible only where duty is short levied by collusion, wilful misstatement or suppression and follows the demand, and is not to be imposed for a technical or venial breach or where conduct flows from a bona fide belief - The demand having been set aside and the ingredients for the extended period found wanting, no penalty survives, and interest, being consequential, cannot stand alone - The penalty and interest are set aside, and the impugned order is set aside in its entirety, without prejudice to such course as may lawfully be open to Revenue under the law of limitation and after affording proper opportunity to the appellant - The appeal is allowed. 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GST - Refund of unutilized Input Tax Credit of Compensation Cess accumulated on account of zero-rated supplies - Computation of Net ITC under Rule 89(4) of CGST Rules, 2017 read with paragraph 43(c) of CBIC Circular No. 125/44/2019-GST - Respondent filed a refund claim for unutilized Cess credit accumulated on raw materials attracting Compensation Cess while the final product did not attract such Cess - The adjudicating authority sanctioned the refund and the First Appellate Authority upheld the sanction - Revenue appealed contending that any ITC reversed in the return during the refund period, irrespective of the period t... [Read more]

GST - Refund of unutilized Input Tax Credit of Compensation Cess accumulated on account of zero-rated supplies - Computation of Net ITC under Rule 89(4) of CGST Rules, 2017 read with paragraph 43(c) of CBIC Circular No. 125/44/2019-GST - Respondent filed a refund claim for unutilized Cess credit accumulated on raw materials attracting Compensation Cess while the final product did not attract such Cess - The adjudicating authority sanctioned the refund and the First Appellate Authority upheld the sanction - Revenue appealed contending that any ITC reversed in the return during the refund period, irrespective of the period to which it related, must be deducted from Net ITC - Whether the adjudicating authority was justified in sanctioning the refund of unutilized ITC of Cess under Section 54(3) of the CGST Act read with Rule 89(4) of the CGST Rules, where the ITC in question was reversed during the relevant period but related to an earlier period - HELD - The statutory test under Rule 89(4)(B) for determining Net ITC is whether the credit was actually availed during the relevant refund period, and not merely whether an amount was debited or credited in the electronic credit ledger during that period - The reversal in question pertained to an earlier tax period and was made only after the refund of the proportionate eligible ITC had already been sanctioned, and could not therefore reduce the Net ITC for the refund period under consideration, particularly since the total ITC of Cess availed during the relevant period was itself less than the reversed amount - Circulars issued by the Board are binding on the departmental authorities but cannot override or add words to a statutory rule, and cannot bind the courts or curtail substantive rights where they run contrary to the statute - Paragraph 43(c) of the Circular cannot be read as laying down that every reversal made during the refund period must be treated as a reduction of ITC availed during that period, irrespective of the period to which the underlying credit relates, since Rule 89(4) refers specifically to ITC availed during the relevant period and does not equate reversal with non-availment for all purposes - Where entitlement to refund is not disputed and the conditions of Section 54(3) of the Act and Rule 89(4) of the Rules are satisfied, a clarification in a circular cannot prevail over the statutory prescription - The impugned order is upheld and the appeal filed by the Revenue is dismissed [Read less]

Customs - Classification - Goods imported declared as Scrap Metal/Heavy Melting Scrap, were found on examination and testing to be assorted in size, extensively rusted, edge-damaged, cut and severely defective, and were held by the Adjudicating Authority to be used rails/railway sleepers/G.I. angles classifiable under Headings 7302 and 7301, denying the benefit of the concessional exemption Notification - Whether used rails, railway sleepers and G.I. angles imported and declared as Heavy Melting Scrap/re-rollable scrap under Chapter Heading 7204 were correctly reclassified under Headings 7302 and 7301 as railway/tramway tr... [Read more]

Customs - Classification - Goods imported declared as Scrap Metal/Heavy Melting Scrap, were found on examination and testing to be assorted in size, extensively rusted, edge-damaged, cut and severely defective, and were held by the Adjudicating Authority to be used rails/railway sleepers/G.I. angles classifiable under Headings 7302 and 7301, denying the benefit of the concessional exemption Notification - Whether used rails, railway sleepers and G.I. angles imported and declared as Heavy Melting Scrap/re-rollable scrap under Chapter Heading 7204 were correctly reclassified under Headings 7302 and 7301 as railway/tramway track construction material - HELD - An article originally manufactured as a railway rail does not, merely by reason of its identity or residual physical form, invariably fall under Heading 7302; the mere description of goods as scrap by the importer also cannot determine classification - The relevant consideration is the condition and character of the goods as imported and whether they continued to be usable as railway/track material or had ceased to be so and constituted waste or scrap within the meaning of Section Note 8(a) to Section XV of the Customs Tariff Act, 1975 - The unrebutted expert opinion of the National Metallurgical Laboratory establishing that the material was unfit for re-use and suitable only for melting/re-rolling directly establishes lack of usability, and such material answers the description of waste and scrap under Section Note 8(a) to Section XV, being appropriately classifiable under Heading 7204 - Railway sleepers identifiable and usable as such remain classifiable under Heading 7302 by specific tariff description, but where the material had become unusable and was imported only as scrap, its classification is to be determined with reference to the statutory provisions governing waste and scrap - Department cannot classify goods under Heading 7302 merely from their original identity without establishing condition and usability at the time of import - The same reasoning applies with greater force to G.I. Angles, ordinarily covered by Heading 7216 and not brought under Heading 7302 merely because found in a consignment declared as HMS - The classification as declared by the appellant is accordingly sustained for the goods available for examination, and for goods covered by the Bills of Entry relating to past clearances, not available for inspection, the classification as declared is to be accepted – The appeal is disposed of - Rejection of declared values and their re-determination - The adjudicating authority has rejected the declared values under Rule 12 of the CVR 2007 and has thereafter determined enhanced values – HELD - The present order does not sufficiently disclose the precise manner in which the enhanced figures were arrived at. In particular, where the value is sought to be determined under the residual mechanism, the order must demonstrate why the preceding methods could not be applied and what contemporaneous or other reliable data constitutes the basis of the substituted value - On the issue of valuation, the matter is remanded for fresh determination. In case the value suggested by the department is contested by the importer, the Original Authority shall first record its reasons for rejecting the declared transaction value and shall thereafter determine the value strictly in accordance with the sequential scheme of the 2007 Rules - Levy of Redemption fine - Whether redemption fine under Section 125 of the Customs Act, 1962 could be imposed on goods held liable to confiscation but which had already been cleared and were not physically available - In respect of goods covered by 17 Bills of Entry relating to past clearances, held liable to confiscation, the Adjudicating Authority did not impose any redemption fine on the ground that the goods had already been cleared and were not physically available - Whether this finding, declining to impose redemption fine on unavailable goods, calls for interference - HELD - Redemption under Section 125 presupposes the availability of the goods for redemption, particularly where the goods have been finally cleared and were not released against a bond, this position being distinguishable from cases where goods were released against a bond or undertaking - Since the Adjudicating Authority itself recorded that the consignments were already cleared and physically unavailable, no redemption fine could be imposed, and that part of the order does not call for interference. [Read less]

Customs – Utilization of scrips/export earnings of a 'group company' for discharge of export obligation under EPCG/SFIS/SHIS schemes – Paragraph 9.28 of the Foreign Trade Policy – Appellant importer, engaged in development of infrastructure projects, had used EPCG licences and SFIS/SHIS duty credit scrips issued to its group company for import of capital goods, discharging export obligation by utilising the group company's export earnings, including earnings from port handling services rendered to foreign vessels calling for import cargo – Demand of differential customs duty was raised on the ground that the two co... [Read more]

Customs – Utilization of scrips/export earnings of a 'group company' for discharge of export obligation under EPCG/SFIS/SHIS schemes – Paragraph 9.28 of the Foreign Trade Policy – Appellant importer, engaged in development of infrastructure projects, had used EPCG licences and SFIS/SHIS duty credit scrips issued to its group company for import of capital goods, discharging export obligation by utilising the group company's export earnings, including earnings from port handling services rendered to foreign vessels calling for import cargo – Demand of differential customs duty was raised on the ground that the two companies did not qualify as 'group companies' since neither held shareholding in the other, that shareholding of common individual directors was not relevant, and that earnings from services to import vessels could not be adjusted towards export obligation – Appellant contended that the two companies, both incorporated companies with common directors combinedly holding the requisite shareholding, satisfy the definition of 'group company', and that the competent authority's clarification to that effect is final and binding on the Customs Authorities – Whether the appellant and its group company qualify as 'group companies', and whether the group company's earnings from services to import vessels could be adjusted towards the appellant's export obligation – HELD – The definition of 'group company' requires two or more enterprises exercising the requisite voting rights or power to appoint the requisite proportion of directors in each other, and where both entities are companies with common directors combinedly holding the requisite shareholding in each, the twin criteria are satisfied, individuals having represented as directors and not in their individual capacity – The competent authority's clarification that the companies are group companies is final and binding on the Customs Authorities, whose role is limited once such clarification is issued – Following the settled position, upheld up to the Supreme Court, that companies with common controlling shareholding through their promoters qualify as group companies, the issue is no longer res integra – Earnings from port handling services to foreign vessels, being earned in foreign exchange or its equivalent, constitute export of service eligible for adjustment towards export obligation, and once the group company relationship is established, such earnings can be utilised to discharge export obligation – The orders dropping the demand on this ground do not require interference - Customs – Eligibility of parts of helicopter for exemption as 'capital goods' under SFIS/SHIS scheme – Notification No. 91/2009-Customs – Demand of differential duty was confirmed on import of helicopter parts on the ground that the helicopter was used for private purposes and could not be treated as capital goods related to the appellant's service sector business – Appellant contended that the helicopter was essential for transporting personnel to remote project sites for monitoring infrastructure projects, that its use was for private purpose in the civil aviation sense and not personal use of an individual, and that such use qualifies it as capital goods – Whether helicopter parts qualify as capital goods eligible for the exemption – HELD – Capital goods under the Foreign Trade Policy covers plant, machinery, equipment or accessories required, directly or indirectly, for rendering services, and the impugned goods, being parts for functioning of a helicopter used to transport personnel connected with infrastructure projects in remote areas, fall within that definition – Permission for operating the aircraft for 'private use' relates to the regulatory category under Civil Aviation Requirements and does not mean personal use of an individual, since a non-scheduled operator may operate flights for a company within its group and associated companies and its own employees and their family members – Use of helicopter parts for the appellant's infrastructure projects is capital goods under the Foreign Trade Policy, and use of the group company's scrips for the exemption is well within the Policy – The confirmation of duty demand on this count is not legally sustainable - Customs – Invocation of extended period of limitation – Section 28(4) of the Customs Act, 1962 – Demand on import of helicopter parts for part of the disputed period was raised beyond the normal period by invoking the extended period, alleging suppression and wilful mis-statement – Whether the extended period was invokable – HELD – Suppression requires a deliberate act to withhold correct information with intent to escape duty, and where facts are known to both parties, omission by one to do what it might have done does not amount to suppression – The appellant had itself referred the issue to the competent authority, obtained the necessary clarification, and furnished it to the department, besides obtaining requisite permits for import, use and operation of the helicopter – No case is made out for invoking the extended period, and the demand beyond the normal period does not stand legal scrutiny on this count also [Read less]

Central Excise - Excisability and marketability - Dutiability of printing and stationery items such as registers, account books, receipt books, forms, order books, letter pads, memorandum pads and similar articles printed with logo and inscriptions of Western Railway - Whether the appellant is liable to pay Central Excise duty on such articles of stationery for the disputed period - HELD - The issue for earlier periods has already been decided in favour of the appellant and similarly situated railway printing presses by coordinate benches of the Tribunal. It was held that goods not proved by the department as capable of be... [Read more]

Central Excise - Excisability and marketability - Dutiability of printing and stationery items such as registers, account books, receipt books, forms, order books, letter pads, memorandum pads and similar articles printed with logo and inscriptions of Western Railway - Whether the appellant is liable to pay Central Excise duty on such articles of stationery for the disputed period - HELD - The issue for earlier periods has already been decided in favour of the appellant and similarly situated railway printing presses by coordinate benches of the Tribunal. It was held that goods not proved by the department as capable of being bought and sold for consideration in the market are not excisable - Printed material of this nature is printed with the name and details of the Railway. It is meant for the exclusive use of departments of the Railway and not for general use in the market. It is therefore not capable of being bought and sold for consideration and hence not marketable goods - The burden of proving marketability lies on the Revenue. Where that burden is not discharged the claim that the goods are not marketable must be accepted. Marketability is an essential ingredient of excisable goods for being subjected to excise duty - The product in question is in the form of various printed forms and is a product of printing industry. It is not dutiable on the counts of both classification and marketability - The issue stands settled by the decisions of the coordinate benches in the case of the appellant itself and in the case of a similarly situated railway printing press. The issue is no longer res integra - Impugned order confirming the demand and imposing penalty is set aside – The appeal is allowed [Read less]

Central Excise - Includability of mould modification service charges in assessable value of bumpers under Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Appellant procured moulds from third party manufacturers, availed Cenvat Credit thereon and sold them to the buyer on payment of VAT while retaining the moulds in its factory for manufacture of bumpers and amortising their cost in the sale price of bumpers on which excise duty was discharged. Separately, on the buyer's instructions, the appellant carried out modifications to the moulds and collected service charges, discharging... [Read more]

Central Excise - Includability of mould modification service charges in assessable value of bumpers under Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Appellant procured moulds from third party manufacturers, availed Cenvat Credit thereon and sold them to the buyer on payment of VAT while retaining the moulds in its factory for manufacture of bumpers and amortising their cost in the sale price of bumpers on which excise duty was discharged. Separately, on the buyer's instructions, the appellant carried out modifications to the moulds and collected service charges, discharging service tax on the same - Department alleged that the service charges towards mould modification were required to be included in the amortised cost of the moulds for arriving at the transaction value of the bumpers - Whether the service charges collected by the appellant from the buyer for carrying out modifications to the moulds are required to be included in the amortised cost of the moulds for the purpose of arriving at the assessable value of the bumpers under Rule 6 of the CEVR, 2000 - HELD - The modification charges are not additional consideration for the sale of bumpers but consideration for a distinct and independent service rendered by the appellant, on which service tax was discharged; for a payment to qualify as additional consideration under Rule 6, there must be a nexus between the consideration and the transaction value of the goods under clearance, and no such nexus was established by the department - Explanation 1 to Rule 6 deals with the value of tools, dies, moulds and similar items provided by the buyer free of cost or at reduced cost to the manufacturer; in the present case the moulds were purchased by the appellant and sold to the buyer on payment of VAT, and are not supplied free of cost, so the Explanation does not extend to service charges for modification or repair work on moulds whose cost has already been amortised - Reliance placed on Circular No. 170/4/96-CX, which addresses amortisation of the cost of patterns in the assessable value of castings, is misplaced as it does not address service charges for modification of moulds on which service tax has been discharged - The appellant's practice accords with Accounting Standard 10 - The service charges collected for mould modification are not includable in the assessable value of the bumpers under Rule 6, being consideration for a service and not additional consideration for the bumpers - Demand on this count is not sustainable on merits and set aside – The appeal is allowed - Limitation - Invocation of extended period under proviso to Section 11A of Central Excise Act, 1944 and imposability of penalty under Section 11AC - Whether the extended period of limitation under the proviso to Section 11A was rightly invoked, and whether penalty under Section 11AC is imposable - HELD - Misstatement or suppression of fact must be wilful, that is, with intent to evade duty, and mere non-payment of duty does not amount to suppression; the burden of establishing the ingredients attracting the extended period lies on the Revenue - The department had conducted an audit of the appellant's records in 2014 and the show cause notice arose from that very audit; the appellant had been filing its returns regularly, paying service tax on the mould modification charges, and amortising the cost of moulds, so every material fact alleged to have been suppressed was already within the knowledge of the department or readily ascertainable from its records - Where the department has conducted an audit and was fully aware of the assessee's activities, it cannot be said that there was any misstatement or fraud, and the extended period is not invokable – Further, the issue is genuinely one of interpretation - The finding of suppression is not supported by any positive or deliberate act of concealment - Since the entire demand falls beyond the normal period, if the extended period is not invokable, the entire demand falls. [Read less]

Central Excise - Exemption to Dual Fuel Burner System supplied for a biomass gasification project as non-conventional energy device/system under Sl. No. 332 of Notification No. 12/2012-CE dated 17.03.2012 - Appellant cleared Dual Fuel Burner Systems and allied equipment to a project integrator without payment of duty claiming exemption under the said notification - Department viewed the goods as mere parts and accessories not covered by the notification - Whether the impugned goods cleared are eligible for exemption under Sl. No. 332 of Notification No. 12/2012-CE as non-conventional energy devices/systems specified in Lis... [Read more]

Central Excise - Exemption to Dual Fuel Burner System supplied for a biomass gasification project as non-conventional energy device/system under Sl. No. 332 of Notification No. 12/2012-CE dated 17.03.2012 - Appellant cleared Dual Fuel Burner Systems and allied equipment to a project integrator without payment of duty claiming exemption under the said notification - Department viewed the goods as mere parts and accessories not covered by the notification - Whether the impugned goods cleared are eligible for exemption under Sl. No. 332 of Notification No. 12/2012-CE as non-conventional energy devices/systems specified in List 8 - HELD - The purchase order specifically described the supply as a Dual Fuel Burner System comprising numerous integrated components constituting a complete system and not isolated spare parts supplied independently, specially designed to utilise bio-gas generated by a biomass gasification plant and convert the same into usable heat energy - Where components are supplied together as an integrated system designed for a specific non-conventional energy application, the exemption cannot be denied by artificially disaggregating the system into individual parts. The goods should not be examined item by item and classified merely as valves, blowers, burners or regulators, as such an approach ignores commercial reality and the manner in which the goods were conceived, manufactured, supplied and installed - The amendment inserting Sl. No. 332A with effect from 11.07.2014, extending exemption to specified parts, is irrelevant once it is found that the goods supplied constituted a complete burner system and not mere parts - The documentary evidence established that the items formed constituent elements of a single integrated system intended to convert bio-gas into usable thermal energy - The functional role performed by the system within the biomass gasification project, and not the fact that the system comprises multiple components, is the determinative factor for eligibility to exemption - The impugned goods satisfy the description of a non-conventional energy device specified in List 8 and are entitled to exemption - Denial of exemption is unsustainable and set side – The appeal is allowed - Limitation - Invocation of extended - Whether the demand of duty, interest and penalty is sustainable on the ground of limitation - HELD - The clearances covered under the relevant invoices were initially omitted from the ER-1 return, but the appellant, by letter addressed to the jurisdictional Superintendent shortly thereafter and well before initiation of any investigation, voluntarily brought this omission to the notice and requested inclusion of the clearances as exempted clearances under the notification - Such conduct is wholly inconsistent with any allegation of suppression, wilful misstatement or intent to evade duty - The dispute essentially concerns the interpretation and applicability of the exemption notification to the goods in question - The extended period cannot be invoked merely on account of non-payment of duty or a dispute regarding interpretation of law in the absence of deliberate suppression with intent to evade duty. The demand is barred by limitation. [Read less]

GST – Gujarat AAR - Applicability of GST on rent paid for hired godowns used exclusively for storage and warehousing of raw agricultural produce - Liability under Reverse Charge Mechanism - Applicant used both owned and hired godowns exclusively for storage and warehousing services for raw agricultural produce on behalf of agencies such as NAFED and NCCF - Whether GST is applicable on rent paid for hired godowns used exclusively for storage and warehousing of raw agricultural produce – Taxability under Reverse Charge Mechanism or Forward Charge Mechanism - HELD - Hiring of godowns from registered/unregistered persons o... [Read more]

GST – Gujarat AAR - Applicability of GST on rent paid for hired godowns used exclusively for storage and warehousing of raw agricultural produce - Liability under Reverse Charge Mechanism - Applicant used both owned and hired godowns exclusively for storage and warehousing services for raw agricultural produce on behalf of agencies such as NAFED and NCCF - Whether GST is applicable on rent paid for hired godowns used exclusively for storage and warehousing of raw agricultural produce – Taxability under Reverse Charge Mechanism or Forward Charge Mechanism - HELD - Hiring of godowns from registered/unregistered persons on payment of rent, and provision of storage and warehousing services for raw agricultural produce in own and hired godowns for consideration, both fall under the definition of "services" under Section 2(102) of the CGST Act, 2017 and, being made for consideration in the course or furtherance of business, qualify as "supply" under Section 7 of the Act - The storage and warehousing service provided for raw agricultural produce is exempt under Entry No. 54(e) of Notification No. 12/2017-Central Tax (Rate). However, the activity of hiring godowns from registered/unregistered persons on payment of rent is a separate service, covered under Entry No. 16 of Notification No. 11/2017-Central Tax (Rate) having SAC 997212 and liable to 18% GST - These two services cannot be read in tandem merely because the hired godowns are used exclusively for the exempt warehousing activity and must be examined independently with reference to the notifications applicable to each – Further, following insertion of Entry No. 5AB in Notification No. 13/2017-Central Tax (Rate) by Notification No. 09/2024-Central Tax (Rate) with effect from 10.10.2024, covering renting of any property other than residential dwelling by an unregistered person to a registered person - GST at 18% is payable by the applicant on RCM basis on rent paid for godowns hired from unregistered persons with effect from 10.10.2024 – Ordered accordingly [Read less]

GST - Pre-deposit under Section 112(8)(b) of the CGST Act, 2017 - Interim Application by Revenue seeking recall/modification of earlier order admitting appeal without requiring further pre-deposit - Revenue prayer for reconsideration of interpretation of the expression "in addition to the amount paid under sub-section (6) of Section 107" occurring in Section 112(8)(b) - Assessee had made pre-deposit under Section 107(6) against the original disputed tax liability at the first appellate stage, the disputed tax liability was subsequently reduced by the Appellate Authority - On the appellant's application before the Tribunal ... [Read more]

GST - Pre-deposit under Section 112(8)(b) of the CGST Act, 2017 - Interim Application by Revenue seeking recall/modification of earlier order admitting appeal without requiring further pre-deposit - Revenue prayer for reconsideration of interpretation of the expression "in addition to the amount paid under sub-section (6) of Section 107" occurring in Section 112(8)(b) - Assessee had made pre-deposit under Section 107(6) against the original disputed tax liability at the first appellate stage, the disputed tax liability was subsequently reduced by the Appellate Authority - On the appellant's application before the Tribunal for admission of appeal under Section 112(8)(b), it was held that no further pre-deposit was required as the amount already deposited exceeded the requisite percentage of the reduced tax in dispute - Whether the assessee is required to make a further deposit under Section 112(8) where the pre-deposit already made at the first appellate stage is equal to or exceeds the prescribed percentage of the tax remaining in dispute after reduction by the Appellate Authority - HELD - The statutory requirement of pre-deposit, though prescribed in general terms, cannot be applied mechanically in every situation without regard to the fact that the assessee may have already deposited an amount which, in terms of the reduced tax liability, is either equivalent to or exceeds the aggregate percentage of the tax remaining in dispute before the Tribunal - The pre-deposit already made by the assessee is not a payment towards any separate or independent liability but represents a specified portion of the disputed tax itself paid at the time of filing appeal under Section 107(6) - Following the ratio of the Hon'ble High Court of Jharkhand in M/s Ashirwad Food Industries v. Union of India, there is no ground warranting interference with the earlier order holding that no further pre-deposit is required to be paid by the assessee-appellant for pursuing the appeal under Section 112(8) - The Interim Application filed by Revenue is disposed of [Read less]

Central Excise - Recoverability of Education Cess and Secondary and Higher Education Cess refunded pursuant to CESTAT orders based on the law laid down in SRD Nutrients Pvt. Ltd., subsequently declared per incuriam in Unicorn Industries vs. Union of India - Whether the refund of EC and SHEC released to the petitioner pursuant to the law laid down in SRD Nutrients Pvt. Ltd. could be recovered on the strength of the subsequent overruling judgment in Unicorn Industries Pvt. Ltd. - HELD - The decision in SRD Nutrients Pvt. Ltd. had attained finality and was binding on the parties thereto - The CESTAT orders holding the petitio... [Read more]

Central Excise - Recoverability of Education Cess and Secondary and Higher Education Cess refunded pursuant to CESTAT orders based on the law laid down in SRD Nutrients Pvt. Ltd., subsequently declared per incuriam in Unicorn Industries vs. Union of India - Whether the refund of EC and SHEC released to the petitioner pursuant to the law laid down in SRD Nutrients Pvt. Ltd. could be recovered on the strength of the subsequent overruling judgment in Unicorn Industries Pvt. Ltd. - HELD - The decision in SRD Nutrients Pvt. Ltd. had attained finality and was binding on the parties thereto - The CESTAT orders holding the petitioner entitled to refund of cess on the strength of SRD Nutrients Pvt. Ltd. have virtually attained finality, except that some belated appeals against some of the orders are still sub judice - Assessees similarly situated with the petitioner have been permitted to retain the refund of cess received by them in view of the law laid down in SRD Nutrients Pvt. Ltd. by following the clarification given by the Supreme Court in Sarswati Agro Chemicals Ltd. - With a view to balance equities, maintain parity and safeguard the interest of Revenue, the petitioner is entitled to refund of the entire amount of Cess paid back under protest, such release being subject to the outcome of pending appeals before the Supreme Court against the CESTAT refund orders, subject to furnishing of a bank guarantee with liberty to Revenue to encash the same in the event the Revenue succeeds - The petition is disposed of [Read less]

Service Tax - Includability of TDS in the value of taxable service - Appellant received service from a Foreign Service Provider and did not pay service tax on the portion withheld as TDS towards Income Tax - Whether the withholding tax borne by the appellant is includible in the value of taxable service – HELD - Tax deducted at source and paid to the credit of the Central Government by a service recipient out of its own funds, without recovering the same from the foreign service provider, does not form part of the value of taxable service under Section 67, not being consideration flowing to the service provider but a sta... [Read more]

Service Tax - Includability of TDS in the value of taxable service - Appellant received service from a Foreign Service Provider and did not pay service tax on the portion withheld as TDS towards Income Tax - Whether the withholding tax borne by the appellant is includible in the value of taxable service – HELD - Tax deducted at source and paid to the credit of the Central Government by a service recipient out of its own funds, without recovering the same from the foreign service provider, does not form part of the value of taxable service under Section 67, not being consideration flowing to the service provider but a statutory obligation discharged by the recipient on its own account, this principle being settled by a consistent line of decisions of the Tribunal - The withholding tax retained by the appellant from its own funds is not includible in the value of taxable service, no service tax is payable on that component - The remand directed by the Commissioner (Appeals) on this aspect was unnecessary and is set aside, and the penalty referable to this demand cannot survive – The appeal is allowed - Applicable rate of tax applicable under RCM under Section 66A of the Finance Act, 1994 where the service was received while the rate stood at 12% but payment to the Foreign Service Provider was made after the rate was reduced to 10% - Appellant discharged service tax at ten per cent on services received from a Foreign Service Provider, contending that liability under Section 66A arises only on payment and that the rate on the date of payment governs, whereas the department confirmed a differential demand on the footing that twelve per cent was the applicable rate - Whether the rate applicable under the reverse charge mechanism is the rate in force on the date the service is received or the rate on the date of payment - HELD - The rate chargeable is the rate in force when the service is rendered, not the rate on the date of billing or receipt of payment, this principle having been applied on the reverse charge side as well, where the date of receipt of the service, not the date of payment, fixes the rate under Section 66A - A contrary decision relied upon by the appellant arose on the forward charge and did not advert to the decisions establishing the receipt-of-service test, and is accordingly not followed - The services in the present case were received while the rate stood at twelve per cent, and the deferral of payment to a later date after reduction of the rate does not attract the reduced rate - The demand confirmed on this count, together with interest, is sustainable in law; however, given that the dispute is one of interpretation, no penalty is leviable in this regard - Impugned order sustained to the extent it upholds this demand together with interest, but set aside as to the demand on the withholding tax component - Appeal partly allowed - Power to remand - The original authority found TDS to have been borne by the appellant and not deducted from the consideration payable to the provider, yet confirmed the demand treating the withholding tax as part of the consideration; the Appellate Authority, noticing this inconsistency, remanded the matter for factual verification instead of resolving it - Whether the Commissioner (Appeals) had power to remand the matter under Section 85 of the Finance Act, 1994 - HELD - The amendment to Section 35A(3) of the Central Excise Act, 1944 withdrawing the power of remand of the Commissioner (Appeals) has no bearing on an order passed under the Finance Act, 1994, since Section 83 of that Act does not make Section 35A applicable to service tax, and Section 85(4) confers on the Commissioner (Appeals) power to pass such order as he thinks fit, including an order of remand, in an appeal under Section 85 - The power to remand is, however, not to be exercised as a matter of course, more so in a case touching public revenue which ought to attain finality without needless rounds of adjudication - A remand is warranted only where a fact material to the decision remains to be ascertained, serving no purpose where that fact already stands recorded and is undisputed - The original authority had itself found that the withholding tax was borne by the appellant and not recovered from the Foreign Service Provider, yet confirmed the demand on the opposite footing in the operative part of the same order, an infirmity which the Commissioner (Appeals), having noticed the inconsistency, ought to have resolved rather than remanding. [Read less]

GST - Maintainability of writ petition against Order-in-Original, Bar under Section 6(2)(b) of the CGST Act, 2017 - Petitioner challenged a Show Cause Notice issued by the DGGI under Section 74 of the CGST Act, and subsequently amended the writ petition to challenge the consequential Order-in-Original passed during the pendency of the writ proceedings - Whether the writ petition against the Order-in-Original ought to be entertained notwithstanding the availability of the statutory appellate remedy - HELD - The existence of an efficacious alternative statutory remedy is a material consideration while exercising discretionar... [Read more]

GST - Maintainability of writ petition against Order-in-Original, Bar under Section 6(2)(b) of the CGST Act, 2017 - Petitioner challenged a Show Cause Notice issued by the DGGI under Section 74 of the CGST Act, and subsequently amended the writ petition to challenge the consequential Order-in-Original passed during the pendency of the writ proceedings - Whether the writ petition against the Order-in-Original ought to be entertained notwithstanding the availability of the statutory appellate remedy - HELD - The existence of an efficacious alternative statutory remedy is a material consideration while exercising discretionary jurisdiction under Article 226 of the Constitution. The fact that the original challenge was instituted when the Show Cause Notice was pending does not alter the position once the adjudicatory proceedings have culminated in an Order-in-Original during the pendency of the writ proceedings - The challenge to the Order-in-Original raises issues concerning the factual and evidentiary foundation of the proceedings, including the nature of the ITC allegedly availed, the suppliers involved, the allegations of fraud, the material relied upon and the alleged overlap between State and Central proceedings, which are matters that can appropriately be examined in the statutory appellate proceedings, the appellate authority being competent to examine the legality and correctness of the adjudication - The requirement of statutory pre-deposit cannot, by itself, furnish a ground for bypassing the statutory remedy - The fact that the petition was initially filed when the Show Cause Notice was pending does not justify continuation of the writ proceedings for adjudication of the challenge to the Order-in-Original once the adjudicatory proceedings have been completed and the order is independently amenable to challenge under Section 107 - The writ petition is dismissed - Bar under Section 6(2)(b) of the CGST Act, 2017 against initiation of proceedings by the Central tax authority on the same subject matter already proceeded upon by the State tax authority - Whether the proceedings initiated by the DGGI concern the "same subject matter" as the proceedings earlier initiated by the State GST authorities so as to attract the bar under Section 6(2)(b) of the CGST Act - HELD - The expression "subject matter" refers to the tax liability, deficiency or obligation arising from a particular contravention which the Department seeks to assess or recover. The statutory bar is attracted only where two proceedings are, in substance, directed towards the same or overlapping tax liability, deficiency or obligation arising from the same contravention - Proceedings concerning distinct infractions not constituting the same subject matter merely because the tax liability or obligation may be similar - The mere fact that two proceedings arise out of the affairs of the same assessee, concern the same general period, or involve ITC cannot, by itself, establish identity of subject matter - The State proceedings under Section 73 concerned alleged availment of ineligible ITC from cancelled/non-existent suppliers, whereas the DGGI proceedings under Section 74 arose from an independent investigation into alleged fraudulent availment of ITC, indicating a distinction in the nature of the allegations forming the basis of the respective proceedings - The mere fact that certain ITC claims or transactions may feature in both proceedings cannot, by itself, lead to the conclusion that the two proceedings concern the identical liability or the same alleged contravention. The statutory prohibition being against initiation of proceedings on the same subject matter and not against every subsequent proceeding concerning the same assessee or a related transaction - The fact that the DGGI proceedings were initiated after the State GST proceedings had commenced does not, by itself, attract the statutory bar - The contention under Section 6(2)(b) does not warrant interference in exercise of writ jurisdiction - Validity of a consolidated Show Cause Notice covering more than one financial year - Whether issuance of a consolidated Show Cause Notice under Section 74 covering multiple financial years is impermissible - HELD - Having regard to the language employed in Sections 73(3) and 74(3), as well as Sections 73(10) and 74(10) of the CGST Act, the statutory scheme does not prohibit issuance of a consolidated SCN covering more than one financial year - The mere fact that the SCN covers more than one financial year cannot, by itself, render the notice without jurisdiction. [Read less]

GST - Refund - Eligibility of a SEZ unit to claim refund of unutilized Input Tax Credit - Rejection of refund claim on the ground that Section 16 of the IGST Act, Section 54 of the CGST Act and Rule 89 of the CGST Rules in conjunction stipulate that only suppliers supplying goods and/or services to SEZ units are eligible to claim refund, and that there is no enabling provision for the SEZ unit itself to claim refund of unutilized credit - Whether a SEZ unit is eligible to claim refund of unutilized Input Tax Credit - HELD - The issue is squarely covered by the judgment in Platinum Holdings Private Limited case – The Rule... [Read more]

GST - Refund - Eligibility of a SEZ unit to claim refund of unutilized Input Tax Credit - Rejection of refund claim on the ground that Section 16 of the IGST Act, Section 54 of the CGST Act and Rule 89 of the CGST Rules in conjunction stipulate that only suppliers supplying goods and/or services to SEZ units are eligible to claim refund, and that there is no enabling provision for the SEZ unit itself to claim refund of unutilized credit - Whether a SEZ unit is eligible to claim refund of unutilized Input Tax Credit - HELD - The issue is squarely covered by the judgment in Platinum Holdings Private Limited case – The Rule 89(1) does not envisage any restriction confining the right to apply for refund to suppliers alone, and applies to any entity - The second proviso to Rule 89 refers to a supplier of an SEZ, which is only one kind of entity that may make an application under the Rule, and this reference to a supplier does not exclude other applicants - The second proviso does not deploy the word "only", and there can be no insertion of a word or phrase into a statutory provision or rule which must be read and applied as framed, no restriction or amplification being permissible by interpretation - On a combined reading of Section 54 and Rule 89, the restriction read into the provision by the Revenue is misplaced - Impugned order is set aside and respondents are directed to process the refund application in accordance with the law – The petition is allowed [Read less]

GST - Pre-deposit under Section 112(8) of CGST Act, 2017 - Maintainability of appeal against penalty-only order without payment of pre-deposit - Appellant's appeal against order confirming penalty under Sections 122(1)(i) and 122(1)(vii) of the Act was flagged by Registry for non-payment of statutory pre-deposit under proviso to Section 112(8) - SCN in the matter was issued on 24.12.2021 and impugned order was passed on 31.10.2025, prior to which the proviso mandating ten per cent pre-deposit for penalty-only orders was inserted with effect from 01.10.2025 - Whether pre-deposit of ten per cent under proviso to Section 112(... [Read more]

GST - Pre-deposit under Section 112(8) of CGST Act, 2017 - Maintainability of appeal against penalty-only order without payment of pre-deposit - Appellant's appeal against order confirming penalty under Sections 122(1)(i) and 122(1)(vii) of the Act was flagged by Registry for non-payment of statutory pre-deposit under proviso to Section 112(8) - SCN in the matter was issued on 24.12.2021 and impugned order was passed on 31.10.2025, prior to which the proviso mandating ten per cent pre-deposit for penalty-only orders was inserted with effect from 01.10.2025 - Whether pre-deposit of ten per cent under proviso to Section 112(8) was required to be paid by the appellant for maintaining an appeal against a penalty-only order, where the lis originated prior to insertion of the said proviso - HELD - A right of appeal is a vested substantive right that accrues to a party when proceedings are first initiated - A statutory provision imposing a new substantive burden ought not to be applied retroactively to proceedings already in motion unless a contrary legislative intention is clearly manifested - The ratio laid down in respect of the pari materia amendment to Section 107(6) of the Act, which was held to be inapplicable to appeals arising from proceedings instituted before its effective date, applies equally to the proviso to Section 112(8), both provisions being founded on the same textual footing and legislative purpose concerning pre-deposit obligations - Since the lis in the present matter arose from a show cause notice issued before the proviso to Section 112(8) came into force, the parties' rights and obligations are governed by the law as it stood when the proceedings commenced, and the pre-deposit obligation introduced with effect from 01.10.2025 cannot be applied retrospectively to create a fresh condition for the appeal - The objection raised by the Registry regarding non-payment of pre-deposit is held to be misconceived and is set aside for the limited purpose of admission - The appeal is admitted and directed to be numbered – Ordered accordingly [Read less]

Gujarat Value Added Tax Act, 2003 - Classification of chewing gum – Taxability as "sweets and sweetmeats" under Entry 74A of Schedule II of the GVAT Act or under the residuary Entry 87 - The assessee classified sales of chewing gum under Entry 74A attracting tax at 4%. The Assessing Officer held chewing gum liable to tax at 12.5% under the residuary entry - Whether the Tribunal was justified in holding chewing gum taxable under Entry 74A as ‘sweets and sweetmeats’ - HELD - A literal application of the words "sweets and sweetmeats" would not include chewing gum. The relevant test for classification is the common parla... [Read more]

Gujarat Value Added Tax Act, 2003 - Classification of chewing gum – Taxability as "sweets and sweetmeats" under Entry 74A of Schedule II of the GVAT Act or under the residuary Entry 87 - The assessee classified sales of chewing gum under Entry 74A attracting tax at 4%. The Assessing Officer held chewing gum liable to tax at 12.5% under the residuary entry - Whether the Tribunal was justified in holding chewing gum taxable under Entry 74A as ‘sweets and sweetmeats’ - HELD - A literal application of the words "sweets and sweetmeats" would not include chewing gum. The relevant test for classification is the common parlance test, namely whether a particular item falls under a specific entry as understood by those who deal with it - The Supreme Court in Associated Distributors Ltd. has held that bubble gum in common parlance cannot be construed as mithai or sweetmeat. Bubble gum and chewing gum are not eatable items. They are kept in the mouth and thrown out after chewing. They are used as a mouth freshener and are not made only of sugar but also contain gum base and waxes. This finding of the Supreme Court is not distinguishable on the ground that the question before it did not directly concern classification of chewing gum, since the Court categorically held that bubble gum cannot be considered sweetmeat after considering the common parlance test - There is no conflict between two specific entries in the present case. The only question is whether chewing gum falls within Entry 74A - Since the Supreme Court has already answered this question, the decision applies squarely to the facts. The Tribunal committed an error in holding that chewing gum is consumed for its sweet juice and therefore qualifies as a sweet. This finding is contrary to the binding decision of the Supreme Court that chewing gum is not an eatable product - The Tribunal also erred in relying on a decision holding that duty cannot be levied under the residuary entry once an item is considered under a specific entry, since there is no other entry in Schedule II to levy duty except the residuary Entry 87 - The classification code assigned by the Commissioner under the entry of sweets and sweetmeats for e-services does not alter this position, since the code is based on the Excise Tariff classification of chewing gum, which itself carries a rate equivalent to the residuary entry - Chewing gum cannot be classified as "sweets and sweetmeats" under Entry 74A and is taxable under the residuary Entry 87 - Both questions of law are answered in favour of the Revenue and against the assessee – The Revenue appeal is allowed [Read less]

GST - Telangana AAR - Applicable rate of tax on leasing of Digital Cinema Equipment comprising Projector, Server, UPS and VSAT - Applicant, engaged in leasing Digital Cinema Equipment to theatres, provided four different equipment's, namely Projector, Server, UPS and VSAT, each bearing a different HSN, and charged lease rental for the entire set in a single invoice - Applicant contended that the supply is a mixed supply under Section 8, and that the HSN attracting the highest rate of tax would apply to the entire supply - Whether the supply constitutes a composite supply or a mixed supply under Section 8 of the CGST Act, 2... [Read more]

GST - Telangana AAR - Applicable rate of tax on leasing of Digital Cinema Equipment comprising Projector, Server, UPS and VSAT - Applicant, engaged in leasing Digital Cinema Equipment to theatres, provided four different equipment's, namely Projector, Server, UPS and VSAT, each bearing a different HSN, and charged lease rental for the entire set in a single invoice - Applicant contended that the supply is a mixed supply under Section 8, and that the HSN attracting the highest rate of tax would apply to the entire supply - Whether the supply constitutes a composite supply or a mixed supply under Section 8 of the CGST Act, 2017 - HELD - As per Section 2(30) of the CGST Act, a composite supply requires two or more taxable supplies that are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply - Applying the indicators for ascertaining natural bundling, none of the indicators are satisfied. The supply of Digital Cinema Equipment does not constitute a composite supply - As per Section 2(74) of the CGST Act, a mixed supply requires that the bundled supply not be a composite supply, have a single price, and that each item be capable of being supplied separately though not actually supplied separately. The equipment is leased together for a single lease rental and is not supplied separately, and is not naturally bundled. The supply of Digital Cinema Equipment therefore falls under the ambit of mixed supply - As per Section 8(b) of the CGST Act, a mixed supply comprising two or more supplies is treated as a supply of that particular supply which attracts the highest rate of tax - Among the equipment's comprising the Digital Cinema Equipment, the Projector bearing HSN 8528 attracts the highest rate of tax, and therefore the GST rate applicable to the Projector applies to the entire mixed supply - The applicable rate of GST on the mixed supply of Digital Cinema Equipment is held to be 28% upto 21.09.2025 and 18% thereafter – Ordered accordingly [Read less]

GST - Challenge to validity of Section 16(2)(c) of the CGST Act, 2017 to the extent it denies Input Tax Credit to a bona fide recipient on account of non-payment of tax by the supplier - Whether Section 16(2)(c) of the CGST Act, 2017 is constitutionally valid - HELD - The issue is no longer res integra. The provision has specifically been upheld by the Supreme Court, which rejected the argument that the provision must be read down merely because the supplier may default. The condition is neither arbitrary nor disproportionate. It merely requires the recipient to establish, through cogent material, that the tax charged has ... [Read more]

GST - Challenge to validity of Section 16(2)(c) of the CGST Act, 2017 to the extent it denies Input Tax Credit to a bona fide recipient on account of non-payment of tax by the supplier - Whether Section 16(2)(c) of the CGST Act, 2017 is constitutionally valid - HELD - The issue is no longer res integra. The provision has specifically been upheld by the Supreme Court, which rejected the argument that the provision must be read down merely because the supplier may default. The condition is neither arbitrary nor disproportionate. It merely requires the recipient to establish, through cogent material, that the tax charged has been actually deposited by the supplier - The challenge to the constitutional validity of Section 16(2)(c) does not survive - Whether a writ petition challenging a SCN and Order-in-Original under Section 73 of the CGST Act, 2017 ought to be entertained where grounds urged include denial of natural justice, the bar under Section 6(2)(b) of the Act, and duplication of proceedings with an earlier DGGI investigation - HELD - The mere availability of an alternative remedy does not oust the writ jurisdiction, particularly where there is a breach of natural justice or a want of jurisdiction. This exception is to be invoked sparingly and not where the grievance is factual in nature and capable of being cured by the Appellate Authority - Whether the petitioner discharged the burden of proving actual receipt of goods and actual payment of tax by suppliers is a matter requiring appreciation of material such as transport records, delivery challans and payment trails. This exercise is more appropriately undertaken by the Appellate Authority - The record indicates that a hearing was afforded and the petitioner's reply was considered though not accepted. Whether such consideration was adequate is essentially a question of fact requiring scrutiny of the reply, hearing notings and reasoning recorded. Even if any infirmity in the hearing is made out, such infirmity is curable and does not go to the root of jurisdiction - Whether the subject matter of the earlier DGGI proceedings under Section 122 and the impugned proceedings under Section 73 is, in substance, identical so as to attract the bar under Section 6(2)(b) is a mixed question of fact and law more appropriately examined by the Appellate Authority - The plea of parallel or duplicated proceedings is similarly a matter requiring factual verification not appropriate for a writ court where an efficacious alternative remedy is available - The petitioner is relegated to the alternative remedy of appeal – The petition is disposed of [Read less]

GST - Confiscation and penalty proceedings under Section 130 read with Section 122 of CGST Act, 2017 - Maintainability of Revenue appeal confined to amount of fine where penalty in lieu of confiscation of goods has already been set aside by first Appellate Authority - First Appellate Authority set aside the orders of the Adjudicating officer holding that seizure and confiscation under Section 130 cannot be resorted to where goods are merely found unaccounted, and that the Department ought to have initiated proceedings under Section 73/74 of the Act instead - Whether an appeal may be filed against the order of fine alone wh... [Read more]

GST - Confiscation and penalty proceedings under Section 130 read with Section 122 of CGST Act, 2017 - Maintainability of Revenue appeal confined to amount of fine where penalty in lieu of confiscation of goods has already been set aside by first Appellate Authority - First Appellate Authority set aside the orders of the Adjudicating officer holding that seizure and confiscation under Section 130 cannot be resorted to where goods are merely found unaccounted, and that the Department ought to have initiated proceedings under Section 73/74 of the Act instead - Whether an appeal may be filed against the order of fine alone where the penalty imposed in lieu of confiscation of goods under Section 130 has itself been set aside by FAA - HELD – The Section 35(1) of the CGST Act requires every registered person to maintain true and correct accounts, and Section 35(6) provides that where such accounts are not maintained, the proper officer shall determine the tax payable on unaccounted goods as if such goods had been supplied, applying the provisions of Section 73 or 74 mutatis mutandis - Where excess or unaccounted goods are found on survey of business premises, the proper officer is empowered only to initiate proceedings under Section 73/74 of the Act and not under Section 130 for confiscation and levy of penalty and fine - Proceedings under Section 130 read with Rule 120 initiated in the present matters, instead of proceedings under Section 73/74, are not sustainable in law - The FAA has rightly quashed such proceedings and set aside the demand of penalty and fine - Once the very foundation of the proceedings under Section 130, including the fine imposed thereunder, stands quashed, there remains no question of the amount of fine surviving independently or being left open for maintenance by the Tribunal - Direction by Commissioner of State Tax to file the present appeals confined only to the fine, without challenging the quashing of the underlying proceedings, reflects want of application of mind – The Revenue appeals are held to be without merit and are dismissed [Read less]

GST - Appeal involving ‘question of law’ within the meaning of Section 109(8) of the CGST Act, 2017 - Determination of Coram under Section 109(8) – Respondent-revenue contended that no question of law was involved in the appeal - Whether the appeal involves a question of law requiring it to be heard by a Division Bench of one Judicial Member and one Technical Member, as opposed to a Single Member - HELD - Section 109(8) provides that an appeal within the prescribed monetary limit which does not involve any question of law may be heard by a Single Member, and that in all other cases it shall be heard by a Division Ben... [Read more]

GST - Appeal involving ‘question of law’ within the meaning of Section 109(8) of the CGST Act, 2017 - Determination of Coram under Section 109(8) – Respondent-revenue contended that no question of law was involved in the appeal - Whether the appeal involves a question of law requiring it to be heard by a Division Bench of one Judicial Member and one Technical Member, as opposed to a Single Member - HELD - Section 109(8) provides that an appeal within the prescribed monetary limit which does not involve any question of law may be heard by a Single Member, and that in all other cases it shall be heard by a Division Bench, the expression used being ‘any question of law’ – Though the term ‘question of law’ is not defined under the Act, where interpretation of legal principles, statute or precedent is involved, a question of law is held to arise - The question whether a notice under Section 74(1) can be issued in the absence of allegation of fraud, wilful misstatement or suppression of facts requires interpretation of the foundational requirement of Section 74 and constitutes a question of law - The question whether the order in appeal is violative of Section 107(13) of the Act, having been issued more than one year after filing of the appeal, also involves interpretation of the statute and constitutes a question of law - The submissions of the appellant regarding the question of law involved are found to be sustainable, and the submissions of the Respondent are found not sustainable - The present appeal is held to involve a question of law within the meaning of Section 109(8) of the CGST Act, 2017, and shall accordingly be heard by Division Bench – Ordered accordingly [Read less]

GST - Revocation of cancellation of registration - Requirement of payment of interest, late fee and penalty under proviso to Rule 23(1) of the CGST Rules, 2017 as a condition for revocation - Respondent's registration was cancelled for failure to file returns for a continuous period of six months - First Appellate Authority allowed the appeal against cancellation upon verification that the respondent had filed the returns and paid the admitted tax - Department contended that the First Appellate Authority erred in allowing the appeal without considering the proviso to Rule 23(1) of the Rules which requires payment of intere... [Read more]

GST - Revocation of cancellation of registration - Requirement of payment of interest, late fee and penalty under proviso to Rule 23(1) of the CGST Rules, 2017 as a condition for revocation - Respondent's registration was cancelled for failure to file returns for a continuous period of six months - First Appellate Authority allowed the appeal against cancellation upon verification that the respondent had filed the returns and paid the admitted tax - Department contended that the First Appellate Authority erred in allowing the appeal without considering the proviso to Rule 23(1) of the Rules which requires payment of interest, penalty and late fee as well before an application for revocation can be entertained - Whether the First Appellate Authority was within its powers to allow the appeal and restore the registration without causing verification that interest, late fee and penalty had also been paid along with the admitted tax for the relevant period - HELD - The liability arising from the returns in question is not confined to the principal tax alone but expressly extends to interest, late fee and penalty, which are substantive obligations integral to the correct adjudication of any dispute concerning the returns - The FAA approached the matter solely on the basis of verification of tax payment and filing of returns, without any discernible consideration of the proviso to Rule 23(1) of the Rules, and this omission goes to the root of the substantive liability and the completeness of the adjudicatory exercise, amounting to a jurisdictional and substantive error - Where the amounts claimed are effectively admitted, recovery of interest and late fee is to be pursued under Section 50 and Section 47 of the Act respectively through the statutory machinery under Section 79 of the Act, being the appropriate mechanism for recovery of such admitted arrears - In addition, penalty as contemplated under Rule 23 of the Rules is separately exigible - The order impugned is held to be modified and the appeal is disposed of [Read less]

Service Tax - Valuation of works contract service - Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - Demand based on difference between figures in Income Tax Return and Service Tax Return - Appellant, registered under the composition scheme for works contract service and engaged in execution of original works, paid service tax on forty percent of the value of the works contract under Rule 2A(ii)(A), under reverse charge sharing fifty percent of the liability with the service recipient - Demand was raised alleging a difference between the Income Tax Return and Service Tax Return figures, and confirmed by tr... [Read more]

Service Tax - Valuation of works contract service - Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - Demand based on difference between figures in Income Tax Return and Service Tax Return - Appellant, registered under the composition scheme for works contract service and engaged in execution of original works, paid service tax on forty percent of the value of the works contract under Rule 2A(ii)(A), under reverse charge sharing fifty percent of the liability with the service recipient - Demand was raised alleging a difference between the Income Tax Return and Service Tax Return figures, and confirmed by treating part of the work as finishing work taxable at seventy percent under Rule 2A(ii)(B) - Whether the demand, treating part of the work as taxable at seventy percent and based merely on the return-figure difference, is sustainable - HELD - The work is execution of original works taxable only at forty percent under Rule 2A(ii)(A), the tax having already been paid under the relevant exemption Notification, the net rate under reverse charge being further reduced to reflect the fifty percent share - A demand founded solely on the difference between an Income Tax Return and a Service Tax Return, without examining the books of account or evidence that the recorded transactions are contrary to the facts, is not sustainable, the charges having to be based on the books of account and other admissible evidence - The notice, issued without such examination, is not sustainable, and the demand is set aside - Service Tax - Invocation of extended period of limitation - Section 73(1) of the Finance Act, 1994 - Show cause notice was issued invoking the extended period beyond the normal period - Whether the extended period is invokable - HELD - No extended period is invokable, the notice having been issued beyond the normal period and thus barred by limitation - A difference of opinion between the department and an assessee, or non-payment under a genuine belief that duty is not leviable, does not by itself establish wilful suppression, and the ingredients for invoking the extended period cannot be presumed merely from self-assessment - The demand is barred by limitation - The impugned order is set aside and the appeal is allowed. [Read less]

GST - Requirement of a quasi-judicial and speaking order in rejecting a delayed appeal - Whether an appeal filed under Section 107 of the CGST Act, whether time-barred or otherwise, can be mechanically rejected without being placed before the Appellate Authority for a reasoned, quasi-judicial order after hearing the appellant - HELD - Once an appeal is preferred before the Appellate Authority under Section 107, whether accompanied by an application for condonation of delay or otherwise, it must mandatorily be placed before the Appellate Authority, which must thereafter pass an appropriate order after hearing the aggrieved ... [Read more]

GST - Requirement of a quasi-judicial and speaking order in rejecting a delayed appeal - Whether an appeal filed under Section 107 of the CGST Act, whether time-barred or otherwise, can be mechanically rejected without being placed before the Appellate Authority for a reasoned, quasi-judicial order after hearing the appellant - HELD - Once an appeal is preferred before the Appellate Authority under Section 107, whether accompanied by an application for condonation of delay or otherwise, it must mandatorily be placed before the Appellate Authority, which must thereafter pass an appropriate order after hearing the aggrieved party - A time-barred appeal, or an appeal otherwise not maintainable, cannot be rejected mechanically by the Appellate Authority or its office; rejection can only be by way of a quasi-judicial and speaking order - Recording of reasons is an essential component of every judicial or quasi-judicial order, and even an administrative order deciding the rights of parties must be a speaking and reasoned order - The mere acknowledgment of submission of the appeal, containing an intimation of rejection without any reasons, is not acceptable in law and is not how statutory appeals are to be dealt with - The intimation of rejection is quashed and set aside, and the Appellate Authority is directed to restore the appeals and consider them, along with the applications for condonation of delay - The petitions stand disposed of [Read less]

GST - Detention and seizure of goods in transit - Validity of order passed under Section 129(3) of the CGST Act, 2017 beyond the statutory time limit of seven days from service of notice - Appellant's vehicle carrying sponge iron was intercepted for expiry of the e-way bill validity, notice under Section 129(3) was issued on 28.06.2019 but the order for payment of penalty under Section 129(3) was passed only on 26.07.2019, 28 days after issue of the notice - Whether an order passed under Section 129(3) beyond the mandatory seven-day time limit from the date of service of notice is valid - HELD - Section 129(3) mandates tha... [Read more]

GST - Detention and seizure of goods in transit - Validity of order passed under Section 129(3) of the CGST Act, 2017 beyond the statutory time limit of seven days from service of notice - Appellant's vehicle carrying sponge iron was intercepted for expiry of the e-way bill validity, notice under Section 129(3) was issued on 28.06.2019 but the order for payment of penalty under Section 129(3) was passed only on 26.07.2019, 28 days after issue of the notice - Whether an order passed under Section 129(3) beyond the mandatory seven-day time limit from the date of service of notice is valid - HELD - Section 129(3) mandates that the officer detaining or seizing the goods shall pass an order for payment of penalty within seven days from the date of service of the notice. The use of the expression "shall" signifying that adherence to the timeline is mandatory - In the present case, the order under Section 129(3) was issued 28 days after the notice, in blatant violation of the statutory time limit, rendering the order void ab initio and a nullity in the eyes of law – Further, various High Courts have consistently held that violation of the mandated time limit under Section 129(3) vitiates the entire proceedings - Since the order in original is a nullity and void ab initio for non-adherence to the statutory time limit, nothing else survives in the case – The impugned order-in-appeal is set aside and the appeal is allowed [Read less]

GST – Levy of penalty for mismatch of vehicle number in e-way bill, Difference of opinion between Judicial Member and Technical Member - Detention of goods and imposition of penalty under Section 129(3) of CGST Act, 2017 read with Section 68 and Rule 138 of CGST Rules, 2017 - Revenue appeal against appellate order setting aside penalty imposed for mismatch of vehicle registration number in e-way bill - Whether an e-way bill reflecting an entirely different vehicle registration number, and not merely a one or two digit variation, constitutes a valid document for transportation of goods or whether such mismatch constitutes... [Read more]

GST – Levy of penalty for mismatch of vehicle number in e-way bill, Difference of opinion between Judicial Member and Technical Member - Detention of goods and imposition of penalty under Section 129(3) of CGST Act, 2017 read with Section 68 and Rule 138 of CGST Rules, 2017 - Revenue appeal against appellate order setting aside penalty imposed for mismatch of vehicle registration number in e-way bill - Whether an e-way bill reflecting an entirely different vehicle registration number, and not merely a one or two digit variation, constitutes a valid document for transportation of goods or whether such mismatch constitutes a deliberate violation with intent to evade tax or a bona fide error entitled to the benefit of CBIC Circular No. 64/38/2018-GST - HELD - The Judicial Member of the view that the CBIC circular covering minor errors of one or two digits cannot be extended to a case of complete substitution of vehicle number, that the presumption of intention to evade tax stood established from the surrounding circumstances and was not rebutted by the respondent; the first Appellate Authority committed a manifest error of law and facts in setting aside the penalty, warranting restoration of the adjudicating officer's order - The Technical Member was of the view that mens rea or intention to evade tax is a sine qua non for invoking Section 129. The accompanying e-invoices contained no discrepancy as to description, quantity, value or destination of goods, and the mismatch in the e-way bill was a bona fide typographical error unsupported by any circumstantial evidence of malicious intent. The presumption of intention to evade tax stood successfully rebutted, warranting affirmation of the order of the first Appellate Authority - In view of the divergent opinions of the two Members on the point of difference, namely, whether an e-way bill reflecting an entirely different vehicle number constitutes a valid document for movement of goods or a deliberate violation with intent to evade tax, the matter is referred to the Hon'ble Vice President, GSTAT, Uttar Pradesh under Section 109(9) of the CGST Act for nomination of third member to resolve the point of difference - Ordered accordingly [Read less]

GST - Cancellation of registration - Validity of Order of Cancellation of GST registration passed without verification of the place of business – Denial of opportunity to reply to Show Cause Notice under Rule 25 of the CGST Rules, 2017 - Petitioner's GST registration was cancelled on the premise that the petitioner was not conducting business from the registered place of business and had raised invoices without underlying supply - Whether the cancellation of registration without verification of the place of business as contemplated under Rule 25 of the CGST Rules, 2017 and without opportunity to the petitioner to respond... [Read more]

GST - Cancellation of registration - Validity of Order of Cancellation of GST registration passed without verification of the place of business – Denial of opportunity to reply to Show Cause Notice under Rule 25 of the CGST Rules, 2017 - Petitioner's GST registration was cancelled on the premise that the petitioner was not conducting business from the registered place of business and had raised invoices without underlying supply - Whether the cancellation of registration without verification of the place of business as contemplated under Rule 25 of the CGST Rules, 2017 and without opportunity to the petitioner to respond is sustainable - HELD - Where the proposition to cancel registration is on the premise that the registered taxable person is not conducting business from the registered place of business, it is open to the proper Officer to get the place of business verified and upload the Verification Report in the prescribed format on the Portal. The Portal enables a report with photograph of the premises as well - The impugned order does not refer to any verification or Verification Report being uploaded. The Show Cause Notice only proposed cancellation of registration from the date of the notice, but without any elaboration the suspension was made effective from the date on which the petitioner was admitted to GST registration - These circumstances persuade intervention with the Order of Cancellation, and the proceedings under the Show Cause Notice are restored with opportunity to the petitioner to file a response - Impugned Order of Cancellation of registration is quashed and the petitioner reserved liberty to file response to the Show Cause Notice, with cancellation of registration to remain under suspension subject to the outcome of the restored proceedings – The petition allowed in part [Read less]

GST - Pre-deposit under Section 112(8) read with Section 107(6) of the CGST Act, 2017 – Appropriation of amount appropriated during investigations towards belated payment of self-assessed tax can be treated as pre-deposit for admission of appeal - Respondent contended that the amount paid was towards discharge of admitted tax liability voluntarily through belated returns - Whether the amount paid by the taxpayer during investigations, and subsequently appropriated against the confirmed demand, constitutes admitted liability or disputed liability for the purpose of determining the requirement of further pre-deposit under ... [Read more]

GST - Pre-deposit under Section 112(8) read with Section 107(6) of the CGST Act, 2017 – Appropriation of amount appropriated during investigations towards belated payment of self-assessed tax can be treated as pre-deposit for admission of appeal - Respondent contended that the amount paid was towards discharge of admitted tax liability voluntarily through belated returns - Whether the amount paid by the taxpayer during investigations, and subsequently appropriated against the confirmed demand, constitutes admitted liability or disputed liability for the purpose of determining the requirement of further pre-deposit under Section 112(8) of the Act - HELD - The appellant neither contested nor raised any dispute about the demand and appropriation of the said amount. The appellant had in fact, admitted the tax and interest liabilities, contesting only the imposition of penalty and specifically pleading that the payment was voluntary - The reliance placed on the decision permitting adjustment of protest payments towards pre-deposit is distinguishable, as no protest in any form was filed by the Appellant either with the Adjudicating Authority or the Department - The contention that the first Appellate Authority had accepted waiver of pre-deposit is devoid of any such discussion or direction in the impugned order - The pre-deposit under Sections 107(6) and 112(8) of the Act being a condition precedent to entertaining an appeal, an appeal in absence of compliance thereof would remain a dead letter and is not liable to be entertained - The amount paid through belated returns and not disputed at any previous quasi-judicial stage is to be treated as admitted liability, and the appellant is required to pay the full amount of admitted tax, interest, fine, fee and penalty together with ten per cent of the remaining disputed tax as pre-deposit - Pre-deposits under Sections 107(6) and 112(8) of the Act are held to be required to be made before admitting the appeal, and the Appellant is granted time for payment thereof, upon proof of which the Registry shall place the matter before the Bench for orders on admission - The request of the appellant is disposed of [Read less]

GST - Application seeking urgent hearing and out-of-turn fixation of appeal - Power to exempt from compliance with procedural requirements under Rule 13 of GSTAT (Procedure) Rules, 2025 - Appellant's GST registration was cancelled under Section 29(2)(c) of the CGST Act, 2017, resulting in the business coming to a complete standstill and continuing deprivation of its sole source of livelihood - Whether sufficient cause is shown for exempting the appellant from awaiting completion of the ordinary Registry scrutiny process under Rule 24 for the purpose of urgent listing of the appeal - HELD - Rule 13 of GSTAT (Procedure) Rule... [Read more]

GST - Application seeking urgent hearing and out-of-turn fixation of appeal - Power to exempt from compliance with procedural requirements under Rule 13 of GSTAT (Procedure) Rules, 2025 - Appellant's GST registration was cancelled under Section 29(2)(c) of the CGST Act, 2017, resulting in the business coming to a complete standstill and continuing deprivation of its sole source of livelihood - Whether sufficient cause is shown for exempting the appellant from awaiting completion of the ordinary Registry scrutiny process under Rule 24 for the purpose of urgent listing of the appeal - HELD - Rule 13 of GSTAT (Procedure) Rules, 2025 empowers the Tribunal, on sufficient cause being shown, to exempt parties from compliance with any requirement of the Rules and to give directions in matters of practice and procedure as considered just and expedient to render substantial justice - Rule 29 expressly includes an application for early hearing amongst interlocutory applications. Procedural provisions are intended to facilitate adjudication and not to defeat substantive justice - The application does not seek an early date merely on grounds of convenience, but pleads continuing prejudice arising from cancellation of registration affecting the appellant's sole source of livelihood, and that delay in consideration of the appeal may substantially diminish the practical value of the relief ultimately granted - Having regard to the inherent power under Rule 10, the provision for urgent matters under Rule 12, and the specific power to exempt under Rule 13 read with the express recognition of early-hearing applications under Rule 29, sufficient cause is shown for exercising procedural discretion in favour of urgent listing – However, such exemption from awaiting completion of ordinary scrutiny does not amount to waiver of any mandatory statutory requirement, including limitation, statutory pre-deposit, etc - The application for urgent hearing is allowed [Read less]

Bihar VAT Act, 2005 - Validity of tax demand raised for failure to file VAT return where the assessee was never registered under the VAT Act - Petitioner, registered under service tax prior to the GST regime and never registered under the VAT Act, was assessed and directed to file a final return (RT-3) under the VAT Act - Whether an assessee who was never registered under the VAT Act can be assessed and directed to comply with the requirement of filing a return under the VAT Act - HELD - It is an admitted position that the petitioner was never registered under the VAT Act, and that the petitioner had filed its service tax ... [Read more]

Bihar VAT Act, 2005 - Validity of tax demand raised for failure to file VAT return where the assessee was never registered under the VAT Act - Petitioner, registered under service tax prior to the GST regime and never registered under the VAT Act, was assessed and directed to file a final return (RT-3) under the VAT Act - Whether an assessee who was never registered under the VAT Act can be assessed and directed to comply with the requirement of filing a return under the VAT Act - HELD - It is an admitted position that the petitioner was never registered under the VAT Act, and that the petitioner had filed its service tax return, which fact was itself taken note of by the Assessing Officer - Since the petitioner cannot be assessed against the liability of the VAT Act when it was never registered under the VAT regime, it was impossible for the petitioner to file a final return under the VAT Act - The orders passed by the Assessing Authority and the Appellate Authority are set aside - The writ application is allowed [Read less]

GST - Rajasthan AAR - Classification of Rubberised Cork Sheet / Agglomerated Cork Sheet manufactured from cork granules - Applicability of concessional rate of 5% under Sl. No. 310 of Schedule-I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 - Whether the product is correctly classifiable under Tariff Item 45041010, is covered under Sl. No. 310 of Schedule-I of the notification, attracts GST at 5% - HELD - Classification is to be determined in accordance with the First Schedule to the Customs Tariff Act, 1975 read with the General Rules for Interpretation, under which the primacy of the terms of the headi... [Read more]

GST - Rajasthan AAR - Classification of Rubberised Cork Sheet / Agglomerated Cork Sheet manufactured from cork granules - Applicability of concessional rate of 5% under Sl. No. 310 of Schedule-I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 - Whether the product is correctly classifiable under Tariff Item 45041010, is covered under Sl. No. 310 of Schedule-I of the notification, attracts GST at 5% - HELD - Classification is to be determined in accordance with the First Schedule to the Customs Tariff Act, 1975 read with the General Rules for Interpretation, under which the primacy of the terms of the heading is absolute and recourse to succeeding Rules arises only where the terms of the heading and relative Notes leave the matter unresolved - Heading 4504 reads "Agglomerated cork (with or without a binding substance) and articles of agglomerated cork", prescribes no threshold for the proportion the binding substance may bear to the cork and names no particular class of binder to the exclusion of others - What is being agglomerated is the cork, and the polymer, chemicals and curatives and processing oil together constitute the binder system by which that agglomeration is effected - The word "natural" appears in headings 4501 to 4503 but is noticeably absent from heading 4504, since agglomerated cork is by definition cork which has been crushed, granulated or ground and thereafter reconstituted and cannot be natural cork; the notification contains separate entries for natural cork and for agglomerated cork at the same rate, and to read the entry for agglomerated cork as available only for natural cork would render it futile - The products, being sheets, fall under tariff item 4504 10 10, though this distinction is of no consequence to the rate since the notification entry specifies the heading 4504 without restriction to any sub-heading or tariff item - The products are classifiable under heading 4504, are covered by Sl. No. 310 of Schedule-I of the notification, and attract 5% GST, in respect of supplies made on or after 22.09.2025, and the benefit of the entry cannot be denied on the ground that the product is not natural cork - Ordered accordingly [Read less]

GST - Pre-deposit under Section 112(8) of CGST Act, 2017 - Timing of payment of pre-deposit and deemed date of filing of appeal - Appellant filed appeal in FORM GST APL-05 against Order-in-Appeal upon which a Provisional Acknowledgement was issued by the Registry - Registry issued Defect Notice pointing out non-payment of pre-deposit under Section 112(8) - Appellant contended that since the appeal pertained to rejection of an already-sanctioned refund and did not involve any disputed tax liability, the requirement of pre-deposit is inapplicable - Registry, after hearing, directed the appellant for mandatory payment of 10% ... [Read more]

GST - Pre-deposit under Section 112(8) of CGST Act, 2017 - Timing of payment of pre-deposit and deemed date of filing of appeal - Appellant filed appeal in FORM GST APL-05 against Order-in-Appeal upon which a Provisional Acknowledgement was issued by the Registry - Registry issued Defect Notice pointing out non-payment of pre-deposit under Section 112(8) - Appellant contended that since the appeal pertained to rejection of an already-sanctioned refund and did not involve any disputed tax liability, the requirement of pre-deposit is inapplicable - Registry, after hearing, directed the appellant for mandatory payment of 10% pre-deposit under Section 112(8)(b), which the appellant remitted vide FORM GST DRC-03 – Revenue objection that since no appeal can be filed under Section 112(8) without pre-deposit, and the pre-deposit was paid after the appeal was filed, the appeal was instituted without the requisite pre-deposit - Whether the appeal is to be treated as instituted without payment of pre-deposit when the pre-deposit was paid after the Provisional Acknowledgement but prior to issuance of the Final Acknowledgement - HELD - In terms of the Explanation to Rule 110(4) of the CGST Rules, 2017, an appeal is considered to have been "filed" in law only upon issuance of the Final Acknowledgement - Since the appellant paid pre-deposit within the timeline given by the Registry and prior to issuance of the Final Acknowledgement, the requirement of Section 112(8)(b) of the Act stands duly complied with - The Department's objection that the appeal was instituted without payment of the requisite pre-deposit is unsustainable, as the defect earlier notified stands duly rectified and removed - The objection raised by the Department is overruled and it is held that the provisions of Section 112(8) of the Act stand duly complied with - The Registry is directed to register the appeal and admit it for hearing on merits – Ordered accordingly [Read less]

GST - Rajasthan AAR - Applicable rate of GST on composite supply of works contract as on 01.06.2022 - Services covered by entry at Sl. No. 3(iii)(c) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 for pipeline, conduit or plant for water supply, water treatment or sewerage treatment or disposal – Applicant was awarded works relating to Design, Supply, Construction, Testing, Trial Run, Commissioning and Operation & Maintenance of Faecal Sludge Treatment Plant infrastructure Whether the applicable GST rate on Works Contract Services as on 01.06.2022 was 12% or 18% - HELD - Entry No. 3(iii) of Notification N... [Read more]

GST - Rajasthan AAR - Applicable rate of GST on composite supply of works contract as on 01.06.2022 - Services covered by entry at Sl. No. 3(iii)(c) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 for pipeline, conduit or plant for water supply, water treatment or sewerage treatment or disposal – Applicant was awarded works relating to Design, Supply, Construction, Testing, Trial Run, Commissioning and Operation & Maintenance of Faecal Sludge Treatment Plant infrastructure Whether the applicable GST rate on Works Contract Services as on 01.06.2022 was 12% or 18% - HELD - Entry No. 3(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended, provided a rate of 12% GST for composite supply of works contract services of the kind in question. This entry was omitted by Notification No. 03/2022-Central Tax (Rate) dated 13.07.2022 with effect from 18.07.2022 - In view of the above, the applicable GST rate on Works Contract Services as on 01.06.2022 was 12% - Ordered accordingly [Read less]

Service Tax - Valuation of works contract - Order confirming Service Tax on the gross value of a works contract - Department levied Service Tax on the gross contract value reflected in Form 26AS. The petitioner contended that tax could be levied only on the service component after excluding the value of property in goods transferred, and that liability ought to have been apportioned between the service provider and recipient under Notification No. 30/2012-ST – Whether the demand of service tax without considering Rule 2A of the Service Tax (Determination of Value) Rules, 2006, the Constitutional limitation under Article ... [Read more]

Service Tax - Valuation of works contract - Order confirming Service Tax on the gross value of a works contract - Department levied Service Tax on the gross contract value reflected in Form 26AS. The petitioner contended that tax could be levied only on the service component after excluding the value of property in goods transferred, and that liability ought to have been apportioned between the service provider and recipient under Notification No. 30/2012-ST – Whether the demand of service tax without considering Rule 2A of the Service Tax (Determination of Value) Rules, 2006, the Constitutional limitation under Article 366(29A)(b), and Notification No. 30/2012-Service Tax on reverse charge, is sustainable - HELD - After the Constitutional amendment embodied in Article 366(29A), a works contract is a composite contract involving both transfer of property in goods and rendition of services. Rule 2A of the Service Tax (Determination of Value) Rules, 2006 provides the mechanism for excluding the value of property in goods transferred in execution of the works contract. None of the petitioner's contentions on this count were denied or disputed in the counter affidavit - The impugned order does not disclose any meaningful discussion on the applicability of the valuation Rules, the determination of the service component, or the Constitutional principles governing taxation of works contracts - A quasi-judicial authority is under an obligation to deal with every substantial contention having a bearing on tax liability. Mere reference to submissions is not sufficient; there must be adjudication supported by reasons - The petitioner also disputed the description of its status as a private limited company, asserting it was a partnership firm entitled to the benefit of Notification No. 30/2012-ST on RCM. Once such a dispute was raised and the applicability of the notification depended on the legal status of the assessee, the adjudicating authority was required to ascertain the factual position and render a clear finding, which was not done - The requirement of recording reasons is a fundamental facet of fair adjudication and not an empty formality. The impugned order does not satisfactorily address the core legal issues raised - The Order-in-Original is quashed and set aside. The matter is remanded for fresh consideration with a reasoned order to be passed after affording adequate opportunity of hearing, preferably within four months, with no recovery from the petitioner until the fresh order is passed - Writ petition allowed - Service Tax - Maintainability of writ petition - The petitioner challenged an order confirming Service Tax, interest and penalty without first availing the appellate remedy before the CESTAT. The respondents raised a preliminary objection that the writ petition was not maintainable on this ground - Whether the existence of an alternative statutory remedy bars the writ petition - HELD - The rule regarding alternative remedy is a rule of self-imposed restraint and not one of jurisdiction. Where the challenge goes to the very manner in which the adjudicating authority has exercised jurisdiction the existence of an alternative remedy does not operate as an absolute bar. This applies where relevant statutory provisions and binding notifications are alleged to have been ignored. It also applies where the order ex facie suffers from non-consideration of material issues having a direct bearing on tax liability - In the present case the petitioner did not merely dispute the quantification of demand. The challenge proceeded on the foundation that the adjudicating authority failed to properly examine the valuation mechanism applicable to works contracts, the effect of Notification No. 30/2012-ST, and the constitutional limitation flowing from Article 366(29A)(b) of the Constitution. The controversy was therefore not confined to arithmetical determination of tax but concerned the very basis on which liability was assessed - The writ petition cannot be rejected solely on the ground of availability of an alternative remedy. [Read less]

GST - Jurisdiction of Principal Bench - Transfer of appeal involving issue covered under Section 20 of the CGST Act, 2017 relating to distribution of credit by Input Service Distributor - Appellant sought transfer of the appeal from the State Bench to the Principal Bench, GSTAT, New Delhi on the ground that one of the issues involved was covered under Section 20 of the CGST Act, 2017 - Whether the appeal, involving the issue of eligibility of ISD credit under Section 20 of the CGST Act, 2017, is required to be heard only by the Principal Bench in terms of clause (c) of the Notification S.O. 4219(E) dated 17.09.2025 - HELD ... [Read more]

GST - Jurisdiction of Principal Bench - Transfer of appeal involving issue covered under Section 20 of the CGST Act, 2017 relating to distribution of credit by Input Service Distributor - Appellant sought transfer of the appeal from the State Bench to the Principal Bench, GSTAT, New Delhi on the ground that one of the issues involved was covered under Section 20 of the CGST Act, 2017 - Whether the appeal, involving the issue of eligibility of ISD credit under Section 20 of the CGST Act, 2017, is required to be heard only by the Principal Bench in terms of clause (c) of the Notification S.O. 4219(E) dated 17.09.2025 - HELD - On examination of the impugned order, the Memo of Appeal and the documents accompanying the appeal, the claim of the appellant for ISD credit on Input Tax Credit accumulation is found to be the core issue before the Adjudicating Authority and the first Appellate Authority - Section 20 of the CGST Act, 2017 provides for the manner of distribution of credit by Input Service Distributor, and the issue of eligibility of such credit squarely falls within the scope of Section 20 - In view of clause (c) of the Notification dated 17.09.2025, an appeal involving an issue covered under Section 20 of the CGST Act, 2017 is required to be heard only by the Principal Bench - The appeal is directed to be placed before the Principal Bench, GSTAT – Ordered accordingly [Read less]