More Judgements

1. Home
2. More Judgements

Service Tax - Taxability of Interest Income, Balances Written Back, Profit on Sale of Fixed Assets and Service Tax on Expenses – HELD - The income by way of interest on fixed deposits with banks and inter-corporate deposits is covered under the Negative List of Services under Section 66D(n)(i) of the Finance Act, 1994. The Adjudicating Authority erred in ignoring the Chartered Accountant's Certificate based on the audited accounts, and the demand on this count was set aside - The amounts written back as bad debts recovered cannot be construed as consideration received for services rendered and are not taxable. Accordingl... [Read more]

Service Tax - Taxability of Interest Income, Balances Written Back, Profit on Sale of Fixed Assets and Service Tax on Expenses – HELD - The income by way of interest on fixed deposits with banks and inter-corporate deposits is covered under the Negative List of Services under Section 66D(n)(i) of the Finance Act, 1994. The Adjudicating Authority erred in ignoring the Chartered Accountant's Certificate based on the audited accounts, and the demand on this count was set aside - The amounts written back as bad debts recovered cannot be construed as consideration received for services rendered and are not taxable. Accordingly, the demand on this count is set aside - the demand on the issues of interest income and balances written back is set aside, and remanding the remaining issues to the Adjudicating Authority for fresh consideration after taking into account the documents provided by the Appellant as non-consideration of the documents relied on by the appellant amounts to violation of principle of natural justice resulting in denial of effective hearing to the appellant – The appeal is allowed by remand [Read less]

Central Excise - ISD credit distribution, technical deficiencies in supplier invoices, extended period of limitation – Appellant availed CENVAT credit on the basis of invoices issued by their Input Service Distributor (ISD) - Department disallowed the credit on the grounds that the supplier invoices were addressed not to the ISD; invoices lacked details of the original service providers and relied upon internal ledger entries - Whether the distribution of ISD credit to the Ambattur unit is valid even though the supplier invoices were addressed to the another unit - HELD - The mere technical defects in supplier invoices, ... [Read more]

Central Excise - ISD credit distribution, technical deficiencies in supplier invoices, extended period of limitation – Appellant availed CENVAT credit on the basis of invoices issued by their Input Service Distributor (ISD) - Department disallowed the credit on the grounds that the supplier invoices were addressed not to the ISD; invoices lacked details of the original service providers and relied upon internal ledger entries - Whether the distribution of ISD credit to the Ambattur unit is valid even though the supplier invoices were addressed to the another unit - HELD - The mere technical defects in supplier invoices, such as the invoice being addressed to another unit instead of the ISD, are not sufficient to disallow the ISD distributed credit, as long as the substantive documentary trail establishes genuine receipt of service and lawful distribution by the ISD. Since the payments were accounted and paid from the head office, which is registered as the ISD, the distribution of credit to the Ambattur unit is valid – Further, the absence of non-essential particulars in the ISD invoices, such as the details of the original service providers, is not sufficient to disallow the ISD distributed credit, as long as the genuineness of the invoices and the payments can be established through other documentary evidence like bank payments, contractual letters, delivery/performance certificates, etc. The appellant had provided such corroborating evidence and hence, the distribution of credit cannot be denied on this ground – Moreover, the Department failed to establish the ingredients for invoking the extended period of limitation, such as fraud, collusion, or deliberate misstatements. Mere non-payment of duties is not equivalent to collusion or willful misstatement or suppression of facts. The burden of proving any form of mala fide lies on the Department, which it failed to discharge in this case. Accordingly, the demand is time-barred and the penalties imposed on both the Appellants are not justified - the demand of ineligible CENVAT credit, interest, and all the consequent penalties are set aside – The appeal is allowed [Read less]

GST – Non-generation of E-way bill due to technical glitch, Intention to evade tax - The goods in question were transported with tax invoice but the e-way bill could not be generated due to a technical glitch but generated later on the same day - The vehicle was intercepted and penalty was levied on the ground that the e-way bill was not available at the time of inspection - Whether the penalty imposed on the petitioner for the non-availability of the e-way bill at the time of interception is justified, considering that the e-way bill was generated prior to the interception - HELD - Once the petitioner had produced the e... [Read more]

GST – Non-generation of E-way bill due to technical glitch, Intention to evade tax - The goods in question were transported with tax invoice but the e-way bill could not be generated due to a technical glitch but generated later on the same day - The vehicle was intercepted and penalty was levied on the ground that the e-way bill was not available at the time of inspection - Whether the penalty imposed on the petitioner for the non-availability of the e-way bill at the time of interception is justified, considering that the e-way bill was generated prior to the interception - HELD - Once the petitioner had produced the e-way bill, which was generated prior to the detention and physical verification, no adverse view could be drawn against the petitioner. If the requisite documents, which were not accompanying the goods at the time of interception, were produced before the seizure order was passed, and if there was no intention to avoid the legitimate tax, the levy of penalty is not justified. In the present case, the e-way bill was generated much prior to the detention order, and therefore, there was no intention to evade payment of tax - The penalty imposed on the petitioner is set aside and the petition is allowed [Read less]

Odisha Value Added Tax Act, 2004 - Audit Assessment; Limitation Period – Challenge to validity of Joint Commissioner of Sales Tax initiating Audit Assessment proceedings under Section 42 of the OVAT Act, 2004 based on an Audit Visit Report submitted under Section 41 beyond the stipulated time period - The Assessing Authority had earlier proceeded under Section 43 for assessing escaped turnover based on the same Audit Visit Report, which was set aside by the Appellate Authority - Whether the Assessing Authority could have initiated Audit Assessment proceedings under Section 42 based on the AVR which was time-barred under ... [Read more]

Odisha Value Added Tax Act, 2004 - Audit Assessment; Limitation Period – Challenge to validity of Joint Commissioner of Sales Tax initiating Audit Assessment proceedings under Section 42 of the OVAT Act, 2004 based on an Audit Visit Report submitted under Section 41 beyond the stipulated time period - The Assessing Authority had earlier proceeded under Section 43 for assessing escaped turnover based on the same Audit Visit Report, which was set aside by the Appellate Authority - Whether the Assessing Authority could have initiated Audit Assessment proceedings under Section 42 based on the AVR which was time-barred under Section 41(4), by invoking the provisions of Section 49(2) of the Act - HELD - The provisions of Section 49(2) cannot be invoked to correct the jurisdictional error within the same statute, i.e., from Section 43 to Section 42. Section 49(2) empowers the Assessing Authority to reassess tax under the OVAT Act or Central Sales Tax Act when a Court or Tribunal determines that the transaction was assessed under the wrong law. However, it does not apply when the Assessing Authority chooses to proceed under a wrong provision within the same statute, i.e., Section 43 instead of Section 42 – Further, the "Appellate Authority" defined under the Act cannot be equated with a "Court" for the purposes of Section 49(2). The express language of Section 49(2) refers to an order passed by "any Court or Tribunal" in appeal or revision, which does not include the order of the Appellate Authority under Section 77 - Since the AVR was time-barred under Section 41(4), the Assessing Authority could not have initiated Audit Assessment proceedings under Section 42 relying on the same. The notice dated 01.05.2024 in Form VAT-306 and the consequent Audit Assessment order are accordingly quashed - The writ petition is allowed [Read less]

Central Excise – Rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Collection of transportation cost – Duty liability – Appellant is engaged in manufacture of Plastic Storage Water Tanks, which are cleared on payment of duty – Revenue issued show cause notice alleging that cost of transportation collected by Appellant from buyers was required to be included in assessable value of goods in terms of Rule 5 of the Rules – Adjudicating Authority dropped demand as proposed in show cause notice – Commissioner (Appeals) set aside order passed by Adjudicating Authority – W... [Read more]

Central Excise – Rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Collection of transportation cost – Duty liability – Appellant is engaged in manufacture of Plastic Storage Water Tanks, which are cleared on payment of duty – Revenue issued show cause notice alleging that cost of transportation collected by Appellant from buyers was required to be included in assessable value of goods in terms of Rule 5 of the Rules – Adjudicating Authority dropped demand as proposed in show cause notice – Commissioner (Appeals) set aside order passed by Adjudicating Authority – Whether impugned orders are sustainable in law – HELD – In case of Baroda Electric Motor Vs CCE, Supreme Court observed that equalized freight charged from everyone is not includible into assessable value, since duty of excise is on manufacture and not on profit made on transportation. Applying the above ratio, Adjudicating Authority held that average cost of transportation collected at depots for delivery of goods at customer’s place would not form part of assessable value. Appellate Commissioner had not properly applied his mind before passing impugned orders. Impugned orders passed by Commissioner (Appeals) are set aside – Appeals allowed [Read less]

Central Excise – Manufacture of menthol flakes – Entitlement of exemption – Appellants were engaged in manufacture of Menthol Flakes and were availing area based exemption under Notification No.56/2002-CE – Investigation revealed that Appellants were not procuring raw material and were not manufacturing finished goods and had wrongly claimed exemption – After following due process, Commissioner confirmed demand of duty – Whether Appellants had manufactured and cleared finished goods under Notification No.56/2002-CE and had correctly claimed exemption/refund thereto – HELD – Case of department is that Appell... [Read more]

Central Excise – Manufacture of menthol flakes – Entitlement of exemption – Appellants were engaged in manufacture of Menthol Flakes and were availing area based exemption under Notification No.56/2002-CE – Investigation revealed that Appellants were not procuring raw material and were not manufacturing finished goods and had wrongly claimed exemption – After following due process, Commissioner confirmed demand of duty – Whether Appellants had manufactured and cleared finished goods under Notification No.56/2002-CE and had correctly claimed exemption/refund thereto – HELD – Case of department is that Appellants had fraudulently shown procurement of raw material and its use in production and clearance of finished products with an intent to avail illegal monetary benefit under Notification No.56/2002-CE. Entire case of department is built on basis of investigation conducted by Commissioner in respect of supplier of Appellants. Appellants have submitted sale invoices and barrier toll receipts to substantiate fact that they have received material through proper invoices and have used same for manufacturing and subsequently have cleared the goods. Appellants had correctly claimed exemption under Notification No.56/2002-CE. Allegation leveled against Appellants do not sustain. Impugned order is liable to be set aside – Appeals allowed [Read less]

Customs – Import of microphones – Denial of exemption – Demand of duty – Appellant imported microphones and receivers and claimed exemption from duty of customs under Notification No.57/2017-Customs – Principal Commissioner denied benefit of exemption claimed by Appellant and ordered for recovery of short paid duty – Whether Appellant is entitled to benefit of exemption from duty of customs under Notification No.57/2017-Customs – HELD – Serial No.6 of Notification No.57/2017-Customs provided that parts imported for use in manufacture of Printed Circuit Board Assembly (PCBA) would be exempted. Case of Appell... [Read more]

Customs – Import of microphones – Denial of exemption – Demand of duty – Appellant imported microphones and receivers and claimed exemption from duty of customs under Notification No.57/2017-Customs – Principal Commissioner denied benefit of exemption claimed by Appellant and ordered for recovery of short paid duty – Whether Appellant is entitled to benefit of exemption from duty of customs under Notification No.57/2017-Customs – HELD – Serial No.6 of Notification No.57/2017-Customs provided that parts imported for use in manufacture of Printed Circuit Board Assembly (PCBA) would be exempted. Case of Appellant is that imported parts like microphones and receivers were used in manufacture of PCBA. Appellant claimed exemption from duty of customs under Serial No.6 of Exemption Notification No.57/2017. Impugned order had placed reliance upon Explanation (b) which was added by amended Notification No.22/2018-Customs. Amended Notification does not alter Serial No.6 of Exemption Notification. On basis of some information, Principal Commissioner hold that microphones and receivers are not used in PCBA. In absence of opinion of any expert having been obtained, reliance placed on information downloaded from website cannot be considered as authentic. In reply filed by Appellant to show cause notice, reference was made to a certificate issued by Chartered Engineer mentioning that microphones and receivers are mounted on PCBA. Appellant is entitled to benefit of exemption from duty of customs under Notification No.57/2017. Impugned order passed by Principal Commissioner is set aside – Appeal allowed [Read less]

GST - Corporate Insolvency Resolution Process (CIRP), Corporate Debtor Sold as Going Concern, Extinguishment of Past Dues – During the liquidation process, the petitioner company was sold as a going concern. The NCLT confirmed the sale and observed that the sale of the corporate debtor as a going concern is akin to a de-facto CIRP. Subsequent to the sale, the CGST authorities issued a demand notice to the petitioner company for tax dues - Whether the petitioner company, having been sold as a going concern in liquidation, can be held liable for the past tax dues (prior to the date of sale) or whether such past dues stand ... [Read more]

GST - Corporate Insolvency Resolution Process (CIRP), Corporate Debtor Sold as Going Concern, Extinguishment of Past Dues – During the liquidation process, the petitioner company was sold as a going concern. The NCLT confirmed the sale and observed that the sale of the corporate debtor as a going concern is akin to a de-facto CIRP. Subsequent to the sale, the CGST authorities issued a demand notice to the petitioner company for tax dues - Whether the petitioner company, having been sold as a going concern in liquidation, can be held liable for the past tax dues (prior to the date of sale) or whether such past dues stand extinguished - HELD - Upon successful completion of a CIRP or upon a corporate debtor being sold in liquidation as a going concern on a "clean state" basis, all the past dues of the corporate debtor shall stand frozen and extinguished - The order of priority for distribution of assets in liquidation under Section 53 of the Insolvency and Bankruptcy Code, 2016 cannot be overridden, and the operational creditors, such as the CGST authorities in the present case, cannot jump the queue in contravention of the priorities enumerated in Section 53 - The promotion of corporate revival is the avowed object of the Insolvency and Bankruptcy Code, 2016, and a buyer of a corporate debtor as a going concern should not be saddled with past dues. Accordingly, the order passed by the CGST authorities demanding tax dues from the petitioner company is quashed - The writ petition is allowed [Read less]

Service Tax - Works Contract Service, Non-filing of service tax return – Demand invoking extended period - Department alleged that the appellant had not paid/short paid service tax on work contract services provided to M/s Rajasthan Vidyut Prasaran Nigam Limited - Whether the department was correct in invoking the extended period of limitation to demand the service tax from the appellant – HELD - The confusion regarding the taxability of works contract services/composite contracts was settled by the Supreme Court in the case of Commissioner of C.Ex. & Cus., Kerala Vs. Larsen & Toubro Ltd. in 2015. The period in dispute... [Read more]

Service Tax - Works Contract Service, Non-filing of service tax return – Demand invoking extended period - Department alleged that the appellant had not paid/short paid service tax on work contract services provided to M/s Rajasthan Vidyut Prasaran Nigam Limited - Whether the department was correct in invoking the extended period of limitation to demand the service tax from the appellant – HELD - The confusion regarding the taxability of works contract services/composite contracts was settled by the Supreme Court in the case of Commissioner of C.Ex. & Cus., Kerala Vs. Larsen & Toubro Ltd. in 2015. The period in dispute was subsequent to this Supreme Court decision, and hence the appellant could not claim the benefit of any prevailing confusion. The ignorance of law is not a valid defense, and the appellant's claim of bona fide belief is not acceptable - The demand of service tax liability of along with the invocation of the extended period of limitation is upheld – The appeal is dismissed [Read less]

Service Tax – Sections 65(105)(zzzz) and 73 of Finance Act, 1994 – Renting of immovable property – Invoking of extended period of limitation – Demand of tax – Appellants were receiving rental income from Hospital by renting their immovable property – Department issued show cause notice proposing demand of service tax to Appellants by invoking extended period of limitation – Commissioner confirmed demand under Section 73 of the Act – Whether invocation of extended period of limitation is justified in facts and circumstances of case – HELD – Renting of Immovable Property was brought in the Act with effect... [Read more]

Service Tax – Sections 65(105)(zzzz) and 73 of Finance Act, 1994 – Renting of immovable property – Invoking of extended period of limitation – Demand of tax – Appellants were receiving rental income from Hospital by renting their immovable property – Department issued show cause notice proposing demand of service tax to Appellants by invoking extended period of limitation – Commissioner confirmed demand under Section 73 of the Act – Whether invocation of extended period of limitation is justified in facts and circumstances of case – HELD – Renting of Immovable Property was brought in the Act with effect from 1-6-2007 by introducing Section 65(105)(zzzz). Validity of said levy had been challenged before Delhi High Court. Delhi High Court held that mere renting of property by itself cannot be called as service and cannot attract service tax. Vide retrospective amendment introduced with effect from 1-6-2007 by 2010 Act, Renting of Immovable Property by itself became a taxable service, which was also further challenged before Delhi High Court and Delhi High Court granted stay. Keeping in view the circumstances and nature of levy as well as various decisions of Supreme Court, High Court and Tribunal on identical issue, invocation of extended period of limitation is not justified in present case. Impugned order is set aside only on limitation – Appeals allowed [Read less]

Service Tax – Section 66A of Finance Act, 1994 – Performing of work outside India – Tax liability – Western Geco, British Virgin Islands/headquarters of Appellant had entered into contracts with Oil and Natural Gas Commission (ONGC) and Reliance Industries Ltd (RIL) to conduct seismic survey of sea beyond 12 nautical miles from Indian land mass, analyse data and submit reports which help them in finding and drilling for oil and gas – Appellant/Western Geco Gurugram had paid service tax on 4% of total value of contracts received for data analysis done in Mumbai office – Department issued show cause notice to App... [Read more]

Service Tax – Section 66A of Finance Act, 1994 – Performing of work outside India – Tax liability – Western Geco, British Virgin Islands/headquarters of Appellant had entered into contracts with Oil and Natural Gas Commission (ONGC) and Reliance Industries Ltd (RIL) to conduct seismic survey of sea beyond 12 nautical miles from Indian land mass, analyse data and submit reports which help them in finding and drilling for oil and gas – Appellant/Western Geco Gurugram had paid service tax on 4% of total value of contracts received for data analysis done in Mumbai office – Department issued show cause notice to Appellant by proposing demand of Service Tax on remaining 96% of basic cost – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay Service Tax on entire value of contract when 96% of work was performed outside India – HELD – Section 66A of the Act states that if service was rendered by a person outside India, service recipient had to pay tax as if he had rendered the service. Contracts for service were entered into by Western Geco, BV Islands with ONGC and RIL and consideration was paid in US dollars. Nothing is brought on record to show that any contracts were entered into by Gurugram or Mumbai project offices of Western Geco. There was no lis between ONGC and Western Geco Mumbai or Western Geco Gurugram. Project offices of Western Geco in Mumbai and Gurugram and its headquarters in BV Islands were separate persons as per Section 66A of the Act and the service provider was Western Geco BV Islands which was not located in India. Services performed outside territorial waters of India are clearly not exigible to service tax, because Finance Act does not extend to places outside India. Liability to pay service tax could not have been fastened on Appellant which neither provided any service nor received any consideration. Charge of service tax was only on ONGC and RIL as per Section 66A of the Act. Demand confirmed against Appellant cannot be sustained and needs to be set aside – Appeal allowed [Read less]

Customs - Redetermination of export value at the time of final assessment, export of iron ore – Provisional assessment of shipping bills based on declared FOB and quantity. On finalization, the Original Authority observed that the Appellants had realized export proceeds as per their initial declaration and in terms of the contract, and there was no evidence of mis-declaration of value. However, the Original Authority held that the CRCL report's moisture content, in terms of the bond executed by the Appellants at the time of export, would be applicable for working out the duty. On appeal, the Commissioner (Appeals) modifi... [Read more]

Customs - Redetermination of export value at the time of final assessment, export of iron ore – Provisional assessment of shipping bills based on declared FOB and quantity. On finalization, the Original Authority observed that the Appellants had realized export proceeds as per their initial declaration and in terms of the contract, and there was no evidence of mis-declaration of value. However, the Original Authority held that the CRCL report's moisture content, in terms of the bond executed by the Appellants at the time of export, would be applicable for working out the duty. On appeal, the Commissioner (Appeals) modified the order to the extent of adopting the declared Fe content by the Appellants and not as determined by either CRCL lab or CIQ test report - Whether the redetermination of FOB value for the purpose of working out the refund by adopting a different yardstick is sustainable – HELD - The bond at the time of provisional assessment is essentially to bind the Appellants to pay the differential duty at the time of final assessment and not to accept the findings of the CRCL, especially in relation to the moisture content, when there is a specific provision for determining the Fe content as well as the moisture content on the basis of the CIQ report at the discharge port. The amount of Customs duty finally payable has to be computed by the Refund Sanctioning Authority based on the value/price received by the Appellants in terms of the final commercial invoice and BRC, and the excess payments, if any, made by the Appellants at the time of provisional assessment is required to be refunded with applicable interest – The matter is remanded back to the Original Refund Sanctioning Authority to redetermine the quantum of refund and interest admissible in accordance with the law – The appeals are allowed by way of remand [Read less]

Customs – Sections 72(1)(d) and 114AA of Customs Act, 1962 – Non-accountal of goods – Demand of duty – Appellant/SEZ unit is engaged in import and processing of bulk raw sugar – Based on certain investigations, department felt that there are certain unaccounted goods at godown, which resulted in issuance of show cause notice proposing demand of duty – Adjudicating authority confirmed demand of duty and imposed penalties – Whether demand of duty confirmed against Appellant is sustainable – HELD – Entire goods which were stored in warehouse were initially imported duty free by Appellant, therefore, its acco... [Read more]

Customs – Sections 72(1)(d) and 114AA of Customs Act, 1962 – Non-accountal of goods – Demand of duty – Appellant/SEZ unit is engaged in import and processing of bulk raw sugar – Based on certain investigations, department felt that there are certain unaccounted goods at godown, which resulted in issuance of show cause notice proposing demand of duty – Adjudicating authority confirmed demand of duty and imposed penalties – Whether demand of duty confirmed against Appellant is sustainable – HELD – Entire goods which were stored in warehouse were initially imported duty free by Appellant, therefore, its accountal is necessary and any non-accountal would entail demand of duty. Demand had been made in terms of certain non-accountal of goods, which were brought inside private bonded warehouse, by Appellant to satisfaction of proper officer of Customs. Appellant had given detailed breakup to account for same, which includes loss due to cyclone, rejected goods, clearance to SEZ unit under Ex-Bond Bill of Entry duly acknowledged by SEZ authorities, etc. Reconciliation had not been done properly and this needs to be recalculated keeping in view the amount, which had actually been lost due to cyclone, or exported or ex-bonded and transported to SEZ unit, duly acknowledged, etc. To extent of explained loss due to natural cause, Appellant would be entitled for remission of duty. Entire demand is set aside. Matter is remanded back to Adjudicating Authority to re-determine amount of duty recoverable, if any – Appeal partly allowed - Imposition of penalties – Whether penalties imposed on Appellant under Sections 72(1)(d) and 114AA of the Act are sustainable – HELD – Penalty under Section 72(1)(d) of the Act would depend on having not able to properly account for goods which were initially warehoused. If Appellant is able to explain Into-Bond quantity and Ex-Bond quantity, penalty is not imposable. Unexplained quantity shall be leviable to customs duty in terms of the Act. Penalty under Section 72(1)(d) of the Act will require to be determined after proper reconciliation is done and if any unexplained quantity still remains. Penalty imposed under Section 72(1)(d) of the Act is set aside and remanded for redetermination subject to determination of duty, if any. Since goods have been exported and Appellant being SEZ unit have not claimed any export benefit on said export, penalty imposed under Section 114AA of the Act is not tenable. [Read less]

Bombay Sales Tax Rules, 1959 - Rule 41D, set-off of furnace oil – Interpretation of sub-rule 3(a) of Rule 41D of the Bombay Sales Tax Rules, 1959 - Whether full set-off is available on purchase of furnace oil used in the manufacture of goods partly sold locally and partly transferred to branches outside the State or the set-off is available after reducing 6% of the purchase price under sub-rule 3(a) - HELD - From the clear language of Rule 41D(3)(a) read with sub-rule 2(iii), the set-off on purchase of furnace oil used in the manufacture of goods partly sold locally and partly transferred to branches outside the State is... [Read more]

Bombay Sales Tax Rules, 1959 - Rule 41D, set-off of furnace oil – Interpretation of sub-rule 3(a) of Rule 41D of the Bombay Sales Tax Rules, 1959 - Whether full set-off is available on purchase of furnace oil used in the manufacture of goods partly sold locally and partly transferred to branches outside the State or the set-off is available after reducing 6% of the purchase price under sub-rule 3(a) - HELD - From the clear language of Rule 41D(3)(a) read with sub-rule 2(iii), the set-off on purchase of furnace oil used in the manufacture of goods partly sold locally and partly transferred to branches outside the State is available after reducing 6% of the purchase price, as provided in sub-rule 3(a) – The Larger Bench of the Sales Tax Tribunal in M/s. Pudumjee Pulp and Paper Mills Ltd. v. State of Maharashtra, interpreted the provisions of Rule 41D(3)(a) and held that furnace oil, being a consumable used in the manufacturing process, has a nexus with the goods dispatched to the branches, and hence the 6% reduction under sub-rule 3(a) is applicable. The expression "goods which are dispatched" in Sub-Rule 3(a) has to be read in the context of Sub-Rule 2(iii) which includes branch transfers - The Court rejected the assessee's contention that furnace oil cannot be equated with "goods which are dispatched" under the Rule, and also found no merit in the arguments regarding the impossibility of apportionment, as the Assessing Officer had already undertaken the pro-rata apportionment between local sales and branch transfers. The Larger Bench decision correctly interpreted the Rule 41D(3)(a) in a strict and contextual manner, in line with the settled principles of statutory interpretation - The questions referred are answered in favor of the Revenue and against the assessee - The reference is answered accordingly [Read less]

Central Excise - Corporate Insolvency Resolution Process, Abatement of appeals before CESTAT, Jurisdiction of Tribunal to adjudicate the issue – Challenge to final order passed by the CESTAT, holding the appeals to have abated consequent upon the Corporate Insolvency of the petitioner's erstwhile entity – Disallowance of CENVAT credit on steel structures, parts and accessories as well as cement – Petitioner’s case that notwithstanding the abatement of the appeals, the amount deposited by the erstwhile entity by way of reversal of CENVAT credit is required to be refunded as the said amount was in nature of security ... [Read more]

Central Excise - Corporate Insolvency Resolution Process, Abatement of appeals before CESTAT, Jurisdiction of Tribunal to adjudicate the issue – Challenge to final order passed by the CESTAT, holding the appeals to have abated consequent upon the Corporate Insolvency of the petitioner's erstwhile entity – Disallowance of CENVAT credit on steel structures, parts and accessories as well as cement – Petitioner’s case that notwithstanding the abatement of the appeals, the amount deposited by the erstwhile entity by way of reversal of CENVAT credit is required to be refunded as the said amount was in nature of security deposit – HELD – The CESTAT did not act irregularly or failed to have exercised jurisdiction in not adjudicating whether the payments made in relation to the adjudication orders which formed subject matter of challenge in the appeals could constitute a claim by the operational creditor, especially when the appeals were heard on the basis of orders which waived payment of the pre deposits – Further, the Tribunal being creature of the statute in absence of any express provision could not have adjudicated as to whether the voluntary deposit made by the petitioner prior to filing of the appeals would constitute a security deposit, once, the appeals had abated. Once the appeals abated, the Tribunal's jurisdiction over the matter ceased, and Tribunal became functus officio – Further, the petitioner's argument that the voluntarily reversed CENVAT credit was a pre-deposit was untenable because BSL had explicitly sought and been granted a waiver of the pre-deposit requirement, making the reversal a voluntary act and not a deposit to maintain the appeal. Since the appeals themselves ceased to exist due to abatement, the Tribunal could not adjudicate upon a consequential claim for a refund arising from those very appeals. The Tribunal's refusal to examine the effect of the resolution plan on the reversed amount was not a failure to exercise jurisdiction but a recognition of the legal consequence of abatement - The CESTAT did not act irregularly, illegally, or in violation of principles of natural justice, and thus, no jurisdictional error was identified that would warrant interference - The writ petitions are dismissed [Read less]

Service Tax - Cenvat Credit on Manpower Supply Service, Repair and Maintenance of Motor Vehicles, Commission Paid to Post Offices, and Capital Goods (DG Set) - HELD - The Tribunal held that the appellant is entitled to avail Cenvat credit on Manpower Supply Service, Commission Paid to Post Offices, and Capital Goods, based on the judicial precedents relied upon by the appellant. However, denial of Cenvat credit on Repair and Maintenance of Motor Vehicles is sustained, as the vehicles were used only for transporting staff, which is not an eligible service for availing credit - The appeal is partly allowed - Cenvat Credit on... [Read more]

Service Tax - Cenvat Credit on Manpower Supply Service, Repair and Maintenance of Motor Vehicles, Commission Paid to Post Offices, and Capital Goods (DG Set) - HELD - The Tribunal held that the appellant is entitled to avail Cenvat credit on Manpower Supply Service, Commission Paid to Post Offices, and Capital Goods, based on the judicial precedents relied upon by the appellant. However, denial of Cenvat credit on Repair and Maintenance of Motor Vehicles is sustained, as the vehicles were used only for transporting staff, which is not an eligible service for availing credit - The appeal is partly allowed - Cenvat Credit on DG Set – The Cenvat credits on capital goods which are undisputedly going to be put to use directly or indirectly by the assessee for providing their output service, cannot be denied only on the grounds that the impugned equipments have been imported by their head office who in turn have distributed the Cenvat credit by way of a M.R.O - The Cenvat credit on the capital goods (DG Set) is allowed [Read less]

Service Tax - Cost Sharing Among Group Companies - The appellant reimbursed expenses to its foreign group company for their share of expenses for events/conferences held outside India – Demand of service tax under Business support services on the reimbursement - Whether the sharing of expenses among group companies amounts to provision of service under BSS - HELD - The appellant had reimbursed expenses to its group company abroad for their share of the expenses for various events held outside India and the said expenses have been shared on cost-to-cost basis. In the present case, the expenses are shared for common benefi... [Read more]

Service Tax - Cost Sharing Among Group Companies - The appellant reimbursed expenses to its foreign group company for their share of expenses for events/conferences held outside India – Demand of service tax under Business support services on the reimbursement - Whether the sharing of expenses among group companies amounts to provision of service under BSS - HELD - The appellant had reimbursed expenses to its group company abroad for their share of the expenses for various events held outside India and the said expenses have been shared on cost-to-cost basis. In the present case, the expenses are shared for common benefit of all and no service has been provided by one entity to another entity. There is no provision of service at all in this arrangement, therefore, the same are not liable to service tax - The sharing of expenses between group companies does not result into provision of any service and hence no service tax is payable - The demand of service tax on the cost sharing among group companies is set aside and the appeal is allowed - Reimbursement of Expenses - The appellant reimbursed the expenses to its foreign group company - Whether the reimbursement of expenses can be considered as a 'consideration' for providing the service - HELD - The reimbursement made by the appellant cannot be regarded as consideration flowing from the appellant towards the foreign entities, rather the same is towards the reimbursement of cost incurred for organizing the events. Such reimbursement by the appellant is not a consideration in lieu of receiving any service from its associated enterprises. The confirmation of demand by including reimbursable expenses in taxable value is not sustainable - Business Support Services - The scope of Business Support Services was clarified vide Circular No. 334/4/2006-TRU dated 28.02.2006 which clarified that the purpose behind the business support service was to tax all such outsourced services that are required by business entities in their business or commerce. In the present case, there is no outsourcing of any services, therefore, the demand under business support service is not sustainable. The department failed to establish how the arrangement between the appellant and the foreign entities falls within the meaning of "operational or administrative assistance in any manner" - The appellant did not receive any services in the form of BSS till 30.06.2012 - Revenue Neutral - The entire exercise is revenue neutral because even if the appellant is liable to pay service tax, it would be entitled to avail the cenvat credit of service tax paid and can utilize the same for paying service tax on the taxable output services provided by the appellant - Invocation of Extended Period - When the demand is proposed on the basis of an audit, the extended period of limitation cannot be invoked as the department had all the facts in its knowledge. [Read less]

GST – Non-consideration of reply to SCN, unreasoned order, non-application of mind - The appellate authority dismissed the petitioners' appeal without independent reasoning – HELD - The appellate authority had not applied its mind to the facts and arguments presented by the petitioners, and had simply dittoed the order of the adjudicating authority without any independent reasoning - The appellate order lacked the requisite reasoning to support its conclusion, as mandated under Section 74(12) of the CGST/WBGST Act, 2017 - the appellate order is set aside and matter is remanded back to the appellate authority for fresh ... [Read more]

GST – Non-consideration of reply to SCN, unreasoned order, non-application of mind - The appellate authority dismissed the petitioners' appeal without independent reasoning – HELD - The appellate authority had not applied its mind to the facts and arguments presented by the petitioners, and had simply dittoed the order of the adjudicating authority without any independent reasoning - The appellate order lacked the requisite reasoning to support its conclusion, as mandated under Section 74(12) of the CGST/WBGST Act, 2017 - the appellate order is set aside and matter is remanded back to the appellate authority for fresh consideration in accordance with law – The petition is disposed of [Read less]

Customs – Import of goods – Denial of benefit of concessional duty – Appellant imported goods declared as HDPE Granules and claimed concessional rate of duty under Customs Notification No.10/2008 – Adjudicating authority denied benefit of concessional duty provided under Notification No.10/2008-Cus to Appellant on ground that imported goods did not carry any marks to show Country of Origin and manufacturer details – Commissioner (Appeals) upheld order passed by Adjudicating authority – Whether customs authorities were justified in denying benefit of Notification No.10/2008-Cus claimed on ground that imported go... [Read more]

Customs – Import of goods – Denial of benefit of concessional duty – Appellant imported goods declared as HDPE Granules and claimed concessional rate of duty under Customs Notification No.10/2008 – Adjudicating authority denied benefit of concessional duty provided under Notification No.10/2008-Cus to Appellant on ground that imported goods did not carry any marks to show Country of Origin and manufacturer details – Commissioner (Appeals) upheld order passed by Adjudicating authority – Whether customs authorities were justified in denying benefit of Notification No.10/2008-Cus claimed on ground that imported goods are not co-relatable with Certificate of Origin accompanying them – HELD – Notification No.10/2008-Cus provided for exemption of duty of customs for goods of origin of Republic of Singapore. Certificate of country of origin had been issued by competent authority of Singapore Government after due satisfaction of issuing authority. In said certificate, manufacturer had made a declaration that goods were produced in Singapore. Issuing authority had taken all measures to ensure correctness of certificate of origin prior to export of goods from originating country. Said certificate had neither been recalled nor cancelled by issuing authority. There is no evidence that certificate of origin is forged or obtained fraudulently. Inspite of presence of valid certificate of origin issued by competent authority, customs authorities are not right in denying benefit of exemption notification. Order under challenge is set aside – Appeal allowed [Read less]

Customs – Regulation 20(1) of Customs Broker Licensing Regulations, 2013 – Contravention of provisions – Forfeiture of security deposit – Docks Intelligence Unit, in course of investigation into a case of attempted smuggling of Red Sanders in guise of Mild Steel Round Pipes, found that Appellant had acted as a customs broker for clearance of said export shipment – Licensing authority suspended customs broker licence issued to Appellant for contravention of provisions of the Regulations – Commissioner revoked order of suspension, but ordered for forfeiture of full amount of security deposit – Whether impugned ... [Read more]

Customs – Regulation 20(1) of Customs Broker Licensing Regulations, 2013 – Contravention of provisions – Forfeiture of security deposit – Docks Intelligence Unit, in course of investigation into a case of attempted smuggling of Red Sanders in guise of Mild Steel Round Pipes, found that Appellant had acted as a customs broker for clearance of said export shipment – Licensing authority suspended customs broker licence issued to Appellant for contravention of provisions of the Regulations – Commissioner revoked order of suspension, but ordered for forfeiture of full amount of security deposit – Whether impugned order forfeiting security deposit of Appellant is sustainable – HELD – Regulation 20(1) of the Regulations stipulates that Commissioner shall issue a notice in writing to Customs Broker within a period of ninety days from date of receipt of offence report, stating the grounds on which it is proposed to revoke licence or impose penalty. Time limit prescribed under Regulation 20(1) of the Regulations is mandatory. Show cause notice is not proven to be issued within period of limitation prescribed under Regulation 20(1) of the Regulations and hence, consequent proceedings are liable to be set aside to extent they have resulted in findings detrimental to Appellant/customs broker. Impugned order in original cannot be sustained to extent it forfeits security deposit of Appellant and it is liable to be set aside to that extent – Appeal allowed [Read less]

Customs – Section 28 of Customs Act, 1962 – Demand of differential duty – Bar of limitation – Appellant imported external and internal TV tuners by declaring them as computer accessories and classifying them under CTH 8473 3099 – After issuance of show cause notice by invoking extended period of limitation under Section 28 of the Act, Adjudicating Authority classified imported goods under Heading 8528 7100 (reception apparatus for television) and demanded differential duty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether invoking of extended period of limitation is justified ... [Read more]

Customs – Section 28 of Customs Act, 1962 – Demand of differential duty – Bar of limitation – Appellant imported external and internal TV tuners by declaring them as computer accessories and classifying them under CTH 8473 3099 – After issuance of show cause notice by invoking extended period of limitation under Section 28 of the Act, Adjudicating Authority classified imported goods under Heading 8528 7100 (reception apparatus for television) and demanded differential duty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – There was a lack of clarity even in department about correct classification of goods. In Appellants own case, Tribunal examined Appellant’s classification of External VGA Board under CTH 8473 3030 as against revenue’s classification under CTH 8529 9090 and held that classification under Chapter 84 is more appropriate than under Chapter 85. When there are genuine disputes over interpreting legal provisions, it is unjustified to apply an extended limitation period simply because assessee's position is considered not bona fide. Under such circumstances, charge of mis-declaration will not hold good and show cause notice could not have invoked extended period. Show cause notice in issue is barred by limitation of time. Once it is held that demand is time barred, there would be no occasion for Tribunal to enquire into merits of issues. Impugned order is set aside – Appeals disposed of [Read less]

Service Tax – Use of services for exports – Payment of tax – Eligibility to claim refund – Appellant filed a rebate claim in terms of Notification No.41/2012-ST for rebate of service tax paid on specified services used by them for exports – Adjudicating authority rejected rebate claim filed by Appellant – Lower Appellate Authority rejected appeal filed by Appellant against Order-in-Original – Whether impugned services used by Appellant for exports are Specified Services or not – HELD – In Appellant’s own case, Tribunal held that taxable services used beyond factory for export of goods are specified serv... [Read more]

Service Tax – Use of services for exports – Payment of tax – Eligibility to claim refund – Appellant filed a rebate claim in terms of Notification No.41/2012-ST for rebate of service tax paid on specified services used by them for exports – Adjudicating authority rejected rebate claim filed by Appellant – Lower Appellate Authority rejected appeal filed by Appellant against Order-in-Original – Whether impugned services used by Appellant for exports are Specified Services or not – HELD – In Appellant’s own case, Tribunal held that taxable services used beyond factory for export of goods are specified services and are eligible for rebate under Notification No.41/2012-ST. Judicial discipline requires that said judgment of this Tribunal should be followed. Impugned services used by Appellant are specified services, in as much as, said services were used beyond factory of production or manufacture of Appellant’s export goods. Appellant is eligible for refund as claimed. Impugned Order-in-Appeal is ordered to be set aside – Appeal allowed [Read less]

Service Tax – Section 65(105)(zn) of Finance Act, 1994 – Receipt of despatch money – Tax liability – Appellant is engaged in manufacture of various products, for which, it imported raw materials on CIF contracts – Under agreements, Appellant was to unload the cargo from vessel in a particular period of time. If goods were unloaded faster than time provided for in contract, Appellant became entitle to receive despatch money – Department issued show cause notice proposing to subject this despatch money to service tax under category of Port Service – Commissioner confirmed demand as proposed in show cause notice... [Read more]

Service Tax – Section 65(105)(zn) of Finance Act, 1994 – Receipt of despatch money – Tax liability – Appellant is engaged in manufacture of various products, for which, it imported raw materials on CIF contracts – Under agreements, Appellant was to unload the cargo from vessel in a particular period of time. If goods were unloaded faster than time provided for in contract, Appellant became entitle to receive despatch money – Department issued show cause notice proposing to subject this despatch money to service tax under category of Port Service – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant has rendered any taxable service in respect of despatch money – HELD – Port Service under Section 65(82) of the Act means “any service rendered within a port or other port in any manner”. Word “service” occurring in Section 65(82) of the Act does not connote a taxable service, but merely a service. No party to agreement under consideration, that is, neither importer nor transporter performed any activity which would fall within meaning of word “service” as occurring in definition of term “Port Service” under Section 65(82) of the Act. Payment of demurrage or despatch money were not consideration for rendering a service, but represented only a condition to contract of purchase. Appellant would not be said to have rendered any taxable service in respect of both demurrage and despatch money. In view of these conclusions, levy does not survive for any part of tax periods for which the adjudication was made. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Service Tax – Section 65B(44) of Finance Act, 1994 – Rules 2(e) and 6 of Cenvat Credit Rules, 2004 – Construction of residential complex – Demand of reversal of credit – Sustainability – Appellant is carrying on activity of construction services of residential complex at New York City Project – Department opined that after issuance of completion certificate, Appellant was covered under provisions of Rule 6 of the Rules as amended vide Notification No.13/2016-CE and therefore, Appellant was liable to reverse credit of input services pertaining to unsold unit – Adjudicating Authority confirmed demand of rever... [Read more]

Service Tax – Section 65B(44) of Finance Act, 1994 – Rules 2(e) and 6 of Cenvat Credit Rules, 2004 – Construction of residential complex – Demand of reversal of credit – Sustainability – Appellant is carrying on activity of construction services of residential complex at New York City Project – Department opined that after issuance of completion certificate, Appellant was covered under provisions of Rule 6 of the Rules as amended vide Notification No.13/2016-CE and therefore, Appellant was liable to reverse credit of input services pertaining to unsold unit – Adjudicating Authority confirmed demand of reversal of credit – Whether Appellant is required to reverse CENVAT Credit on account of completion certificate with respect to units completed but not booked/unsold as on date of receipt of completion certificate – HELD – On date of completion certificate, 558 units were completed and remaining units were still under construction or had not commenced work. Appellant had availed only eligible credit after issuance of completion certificate. Appellant had placed on record the Chartered Accountant’s Certificate duly certifying that Appellant had reversed proportionate credit towards completed unsold units and availed credit only relating to taxable portion of project after completion date. Notification No.13/2016 inserted Explanation 3 that “exempted service? under Rule 2(e) of the Rules to include an activity which is not a service as defined under Section 65B(44) of the Act had been held to be prospective and therefore, no reversal was required to be made for period till 31-3-2016. No reversal of eligible past credits is permissible under Rule 6 of the Rules by reason of output services becoming non-taxable. Once it is held that reversal is not legally permissible, Appellant is consequently entitled to refund of amount which has been wrongly reversed by wrong interpretation placed by Department. Order under challenge is set aside – Appeals allowed [Read less]

Service Tax – Section 73 of Finance Act, 1994 – Providing of chartering service – Tax liability – Respondent arranged for shipping of goods by Public Sector Undertakings (PSUs) and Government departments and charged 1% of freight, demurrage, etc. as chartering charges for this service – Department issued show cause notice to Respondent by proposing demand of service tax on chartering service charges by invoking extended period of limitation – Principal Commissioner dropped proceedings initiated under show cause notice – Whether chartering service provided by Respondent is chargeable to service tax or not – ... [Read more]

Service Tax – Section 73 of Finance Act, 1994 – Providing of chartering service – Tax liability – Respondent arranged for shipping of goods by Public Sector Undertakings (PSUs) and Government departments and charged 1% of freight, demurrage, etc. as chartering charges for this service – Department issued show cause notice to Respondent by proposing demand of service tax on chartering service charges by invoking extended period of limitation – Principal Commissioner dropped proceedings initiated under show cause notice – Whether chartering service provided by Respondent is chargeable to service tax or not – HELD – Main contention of Revenue is that nature of service rendered by Respondent was not a sovereign function of Ministry of Shipping and it was rendered as per a contract and for a consideration of 1% of freight, demurrage, etc. Services rendered by Respondent were to support PSUs and others to charter space on ships for their exports for a commission of 1%. Mere fact that participating shipping lines would bear this cost will make no difference to taxability of activity. Chartering service rendered by Respondent was taxable – Appeal partly allowed - Invoking of extended period of limitation – Whether extended period of limitation can be invoked to raise demand – HELD – If service tax is not paid or short paid, show cause notice can be issued within one year as prescribed under Section 73 of the Act. If such non-payment or short payment is by reason of fraud, collusion, willful misstatement or suppression of facts with intent to evade payment of service tax, show cause notice can be issued within five years as per proviso to Section 73 of the Act. There is no evidence that Respondent had any intent to evade paying service tax. Respondent simply felt that service tax was not payable and hence did not pay service tax. There is no justification to invoke extended period of limitation. Demand can only be confirmed within normal period of limitation with consequential interest. [Read less]

Service Tax – Rule 2(l) of CENVAT Credit Rules, 2004 – Amendment of provisions – Prospective effect – During scrutiny of ST-3 returns filed by Appellant, department noticed that Appellant had availed ineligible CENVAT credit of Service Tax paid on vehicle repair bills issued by Authorised Service Stations (ASS) – Department issued show cause notice proposing demand of credit wrongly availed by Appellant – Adjudicating authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether amendment made to Rule 2(l) of the Rules vide Not... [Read more]

Service Tax – Rule 2(l) of CENVAT Credit Rules, 2004 – Amendment of provisions – Prospective effect – During scrutiny of ST-3 returns filed by Appellant, department noticed that Appellant had availed ineligible CENVAT credit of Service Tax paid on vehicle repair bills issued by Authorised Service Stations (ASS) – Department issued show cause notice proposing demand of credit wrongly availed by Appellant – Adjudicating authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether amendment made to Rule 2(l) of the Rules vide Notification No.3/2011-CE effective from 1-4-2011 operates retrospectively or prospectively – HELD – Pre-amended definition of input service was wide and inclusive, covering any service used directly or indirectly in or in relation to manufacture of final products or for providing output service, including activities relating to business. Effective from 1-4-2011, definition of input service under Rule 2(l) of the Rules was drastically changed to narrow its scope. Key change was deletion of phrase "activities relating to business". CBEC Circular No.943/4/2011 clarifies that amendment shall be applicable prospectively. Substitution of Rule 2(l) of the Rules by Notification No.3/2011-CE(NT) effective from 1-4-2011 is prospective in operation. Since services were delivered to Appellant on or before 31-3-2011, amended provisions will not apply in this case – Appeal allowed - Repair of vehicle – Payment of tax – Eligibility to avail credit – Whether Appellant is eligible to avail CENVAT credit of Service Tax paid on vehicle repair/claim bills issued by ASS – HELD – Service of repair of vehicle belonging to customer is an eligible input service as per Rule 2(l) of the Rules, using which, Appellant fulfils its obligation of providing insurance service to their clients. Appellant is eligible to avail credit of service tax paid on ASS services received by them. CENVAT Credit availed by Appellant is in order and disallowance of same in impugned order is not tenable and is set aside - Violation of principle of natural justice – Whether impugned order and order-in-original have traversed beyond allegations made in show cause notice – HELD – Order-in-Original had invoked exclusion clause to Rule 2(l) of the Rules to deny credit to Appellant. Show cause notice had not invoked said provision for fastening liability on Appellant. Adjudicating authority cannot make out a new case which was not put to notice of Appellant. Any finding or reasoning that travels beyond scope of show cause notice violates principles of natural justice, as assessee is deprived of an opportunity to meet those new allegations. Order-in-Original and Order-in-Appeal have traversed beyond scope of show cause notice. Such action is beyond jurisdiction and violates settled principles of natural justice. Impugned order is liable to be set aside. [Read less]

Mere non-payment or short payment of tax or evasion of tax by itself is not sufficient to invoke the extended period of limitation u/s 74. The presence of fraud, wilful misstatement or suppression of facts, is essential condition for invoking Sec.74.

Service Tax - The appellant is engaged in distributing the products of Amway India Enterprises Limited (Amway) and earning commission on sales - Whether the commission earned by the appellant on the sale of Amway products is liable to service tax as business auxiliary service – HELD - The SCN did not specify the relevant sub-clause of the definition of BAS under which the department intended to cover the appellant's activity. It is imperative for the Department to specify the precise service being provided in the show-cause notice, as the noticee should be aware of the exact liability under the statute. Further, the Comm... [Read more]

Service Tax - The appellant is engaged in distributing the products of Amway India Enterprises Limited (Amway) and earning commission on sales - Whether the commission earned by the appellant on the sale of Amway products is liable to service tax as business auxiliary service – HELD - The SCN did not specify the relevant sub-clause of the definition of BAS under which the department intended to cover the appellant's activity. It is imperative for the Department to specify the precise service being provided in the show-cause notice, as the noticee should be aware of the exact liability under the statute. Further, the Commissioner (Appeals) had relied on material downloaded from Amway's website, which was not part of the show-cause notice and not disclosed to the appellant, violating the principles of natural justice - On the merits, the Tribunal in Charanjit Singh Khanuja has held that the sale of goods by a distributor who had purchased the goods from the principal (Amway) cannot be treated as the sale of goods belonging to the principal, and hence, the commission earned by the distributor is not liable to service tax – Further, the extended period of limitation could not have been invoked as the appellant had a bona fide belief that his activity was not taxable, and the department failed to establish any positive act of suppression or willful misstatement with the intent to evade tax - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Classification of service – Appellant is constituent unit of the Council of Scientific and Industrial Research (CSIR), carried out various projects on earth sciences and research, survey and exploration into mineral resources, etc. – Dept of the view that the service provided by the appellant are covered under the category of Scientific or Technical Consultancy Service (STC) and not Survey and Map Making (SMM) service - HELD - Department is claiming that activities undertaken by Appellant would specifically covered under category of STC, whereas Appellant is submitting that it would fall within ambit of S... [Read more]

Service Tax - Classification of service – Appellant is constituent unit of the Council of Scientific and Industrial Research (CSIR), carried out various projects on earth sciences and research, survey and exploration into mineral resources, etc. – Dept of the view that the service provided by the appellant are covered under the category of Scientific or Technical Consultancy Service (STC) and not Survey and Map Making (SMM) service - HELD - Department is claiming that activities undertaken by Appellant would specifically covered under category of STC, whereas Appellant is submitting that it would fall within ambit of SMM - While the service of SMM is restricted to carrying out survey and making maps and presenting the plain result of the same, however, in the same context, if any specific expert view or definite opinion, etc., are given by an expert or technocrat of this field, then it would not be covered under SMM - If an activity has to fall under STC, there has to be some element of consultation, expert advice or technical assistance. Appellant is a scientific institution and service is being provided by scientists and technocrats to carryout various activities, keeping in view the scope of work awarded to them by their clients. There is no dispute that Appellant is an expert body and for giving any opinion or advice, they have to carry out various surveys, map making, data analysis, etc. - Where the survey is of prime importance, a survey report or a map based on such survey would not have any element of any expert opinion - In so far as merit of demand on classification is concerned, the quantification of demand has to be based on above findings. However, the final demand, if any, would be dependent on decision by the adjudicating authority on the issue of limitation - Appeal allowed partly by way of remand - Denovo proceedings – Non-compliance of order – Whether Adjudicating Authority has complied with order passed by Tribunal – HELD – Impugned order has been passed in remand proceedings in terms of order passed by Tribunal. No findings have been given by Adjudicating Authority in his denovo proceedings on issue of limitation, though demand has been confirmed under proviso to Section 73 of the Act. While adjudicating authority had complied with order of Tribunal in so far as substantive issue on merit was concerned, he has not given any findings on plea of limitation as directed by Tribunal. Matter is remanded to Adjudicating authority to quantify demand based on merit of case and examine the issue of limitation. [Read less]

GST – Interception of goods, non-generation of Part-B of e-Way Bill - The goods in question were intercepted and seized on the ground that Part B of the E-way bill accompanying the goods was not generated - Whether the penalty under Section 129(3) of the CGST Act is leviable for non-filling of Part B of the E-way bill, when there was no intention to evade payment of tax - HELD - The record shows that the stand of the petitioner was that due to technical glitch, Part - B of the e-way fill could not be filled, but there was no intention to evade payment of tax. The non-filling of E-way bill will not attract penalty under S... [Read more]

GST – Interception of goods, non-generation of Part-B of e-Way Bill - The goods in question were intercepted and seized on the ground that Part B of the E-way bill accompanying the goods was not generated - Whether the penalty under Section 129(3) of the CGST Act is leviable for non-filling of Part B of the E-way bill, when there was no intention to evade payment of tax - HELD - The record shows that the stand of the petitioner was that due to technical glitch, Part - B of the e-way fill could not be filled, but there was no intention to evade payment of tax. The non-filling of E-way bill will not attract penalty under Section 129(3) of the Act - In the absence of any finding by the authorities regarding an intention to evade tax, the penalty under Section 129(3) is not leviable - The impugned orders is quashed and the authorities are directed to refund any amount deposited by the petitioner in pursuance of the proceedings initiated against it - The writ petition is allowed [Read less]

Service Tax – Section 65(105)(zzzza) of Finance Act, 1994 – Providing of works contract service – Demand of tax – Dropping of proceedings – Respondent is engaged in providing works contract service to Bangalore Metropolitan Transport Corporation (BMTC) for construction of Traffic and Transit Management Centers (TTMC) – After investigation, department issued show cause notice to Respondent by proposing demand of service tax – Adjudicating authority dropped proceedings initiated under show cause notice – Whether impugned order dropping all proceedings initiated vide show cause notice is tenable – HELD – A... [Read more]

Service Tax – Section 65(105)(zzzza) of Finance Act, 1994 – Providing of works contract service – Demand of tax – Dropping of proceedings – Respondent is engaged in providing works contract service to Bangalore Metropolitan Transport Corporation (BMTC) for construction of Traffic and Transit Management Centers (TTMC) – After investigation, department issued show cause notice to Respondent by proposing demand of service tax – Adjudicating authority dropped proceedings initiated under show cause notice – Whether impugned order dropping all proceedings initiated vide show cause notice is tenable – HELD – As per definition of taxable service of Works Contract Service under Section 65(105)(zzzza) of the Act, works contract in respect of roads, airport, railways, transport terminals, bridges, tunnels and dams are specifically excluded from purview of taxable service. Construction of TTMCs for BMTC by Respondent falls within exclusion category of definition of taxable service of Works Contract Service and hence, said activity is not liable to service tax. Mere fact that TTMC contains commercial areas let out does not divest TTMC of its essential character of a transport terminal. Adjudicating authority had passed a well-reasoned order by dropping all proceedings initiated vide show cause notice that warrants no interference – Appeal dismissed [Read less]

Customs - Classification of Water Meter - Whether 'Ipearl DN 15 Water meter' imported by the appellant is classifiable under tariff item 9028 2000 of the First Schedule to the Customs Tariff Act, 1975 or under tariff item 9026 1090 - HELD – The heading 9028 acquires more significance in light of the exclusion from heading 9026. However, the lower authorities had not had the benefit of the Tribunal's previous decisions in Larsen & Toubro Limited and Anjali Enterprises, which had provided finality on the scope of heading 9028. In these circumstances, the impugned order is set aside and matter is remanded back to the adjudi... [Read more]

Customs - Classification of Water Meter - Whether 'Ipearl DN 15 Water meter' imported by the appellant is classifiable under tariff item 9028 2000 of the First Schedule to the Customs Tariff Act, 1975 or under tariff item 9026 1090 - HELD – The heading 9028 acquires more significance in light of the exclusion from heading 9026. However, the lower authorities had not had the benefit of the Tribunal's previous decisions in Larsen & Toubro Limited and Anjali Enterprises, which had provided finality on the scope of heading 9028. In these circumstances, the impugned order is set aside and matter is remanded back to the adjudicating authority for a fresh decision, considering the conformity of the descriptions of the goods in the earlier Tribunal decisions with the impugned goods - The appeal is allowed by way of remand [Read less]

Customs - Self-assessment, High Sea Sale - Appellant imported non-coking coal in bulk through MMTC under a High Seas Sale agreement. While self-assessing the customs duty, appellant mistakenly added a notional High Sea sale charges to the CIF value instead of the actual as per the Purchase order – Appellant later filed refund claims for the excess duty paid, which were rejected by the authorities on the ground that the issue was not raised during the assessment - Whether the appellant can be allowed to amend the Bill of Entry under Section 149 of the Customs Act, 1962 to rectify the error in self-assessment - HELD - This... [Read more]

Customs - Self-assessment, High Sea Sale - Appellant imported non-coking coal in bulk through MMTC under a High Seas Sale agreement. While self-assessing the customs duty, appellant mistakenly added a notional High Sea sale charges to the CIF value instead of the actual as per the Purchase order – Appellant later filed refund claims for the excess duty paid, which were rejected by the authorities on the ground that the issue was not raised during the assessment - Whether the appellant can be allowed to amend the Bill of Entry under Section 149 of the Customs Act, 1962 to rectify the error in self-assessment - HELD - This is a case of self-assessment where the appellant subsequently claimed refund on the ground that they had mistakenly added a notional 2% as High Sea sale charges to the CIF value instead of the actual Rs.33 per MT as per the Purchase order which was also available to the department at the time of assessment - The actual high-seas-sale-contract price paid by the last buyer would constitute the transaction value under Rule 4 of Customs Valuation Rules, 1988 and inclusion of commission on notional basis may not be appropriate. However, the refund claimed by the appellant on the said ground was rejected as they had not challenged the self-assessment made. The appellant has now taken an additional plea before us to permit correction of an error in the BOE as per section 149 of Customs Act - The proper function of an appellate court is to correct an error in the judgment or proceedings of the authority below. Considering the facts and the legal principles, the order is set aside and the matter is remanded to the Original Authority to examine the request for amendment of the Bill of Entry under Section 149 of the Customs Act, with all issues remaining open - The appeal is disposed of [Read less]

GST – Refund of GST paid under wrong head, Payment of IGST instead of CGST+SGST, Rejection of refund on ground of Limitation – Petitioner provided intermediary services to foreign entities – The petitioner, under the bonafide belief that the services provided to the foreign entity qualified as export of services, paid IGST in GSTR-3B returns - Petitioner later having realized that the services were not inter-State supply but intra-State supply, paid SGST and filed refund applications before the Central authorities seeking refund of the IGST paid – Rejection of refund on the ground that the applications were time-ba... [Read more]

GST – Refund of GST paid under wrong head, Payment of IGST instead of CGST+SGST, Rejection of refund on ground of Limitation – Petitioner provided intermediary services to foreign entities – The petitioner, under the bonafide belief that the services provided to the foreign entity qualified as export of services, paid IGST in GSTR-3B returns - Petitioner later having realized that the services were not inter-State supply but intra-State supply, paid SGST and filed refund applications before the Central authorities seeking refund of the IGST paid – Rejection of refund on the ground that the applications were time-barred under Section 54 of the CGST Act, 2017 - Whether the period of limitation prescribed under Rule 89(1A) of the CGST Rules, 2017 and Section 54 of the CGST Act, for filing refund applications is mandatory or directory in nature – HELD - A plain reading of Section 77(1) of the CGST Act clearly indicate that the taxpayer who pays tax to the Central Authority by oversight, inadvertence and erroneously, would be entitled to refund of the amount of taxes so paid. A similar provision exists in the IGST Act which relates to Inter-State supply – The payment in excess made by the petitioner to the Central Authorities has not been disputed by the Authorities. The petitioner had made payment to the State GST Authorities subsequent to the payment made to the Central GST Authorities. It is therefore clear that respondents have admitted that the petitioner had made such payment in favour of the Central GST Authorities towards IGST prior to making similar payment to the State GST Authorities – By the judgements of High Court of Madras and the High Court of Andhra Pradesh, the Section 54 of the CGST Act and Rule 89(1A) of the CGST Rules, 2017 have been held to be directory and not mandatory. Further, having regard to Article 265 of the Constitution, the respondent-Central GST authorities are not entitled to collect IGST from the petitioner, who was not liable to pay the same and consequently, upon the petitioner paying the same amount to the State GST authorities subsequently, the respondent-Centre authorities is not entitled to retain the IGST and by applying the principles of restitution and unjust enrichment, the respondents are obligated to refund IGST back to the petitioner - the impugned orders holding that the refund claim is barred by limitation is contrary to facts and law and the same is set aside by holding that the refund application of the petitioner is within time and is not barred by limitation – The matter is remitted back to the respondent-authorities to consider the petitioner's refund applications on merits and in accordance with law – The writ petition is allowed [Read less]

GST - Show Cause Notice issued to wrong GSTIN/ID - Tax demand higher than proposed in the Show Cause Notice - HELD - The Show Cause Notice was issued with reference to GSTIN/ID 09AHZPA5029R1ZC (not belonging to the petitioner) and the Adjudication Order was passed with reference to yet another GSTIN/ID 09ABLFS0522M1ZV (also not referable to the petitioner) – Further, the Adjudication Order has created a tax demand much higher than the amount proposed in the SCN. Considering these glaring mistakes apparent on record, the impugned Adjudication Order and the Show Cause Notices are quashed - the Adjudicating Authority is gra... [Read more]

GST - Show Cause Notice issued to wrong GSTIN/ID - Tax demand higher than proposed in the Show Cause Notice - HELD - The Show Cause Notice was issued with reference to GSTIN/ID 09AHZPA5029R1ZC (not belonging to the petitioner) and the Adjudication Order was passed with reference to yet another GSTIN/ID 09ABLFS0522M1ZV (also not referable to the petitioner) – Further, the Adjudication Order has created a tax demand much higher than the amount proposed in the SCN. Considering these glaring mistakes apparent on record, the impugned Adjudication Order and the Show Cause Notices are quashed - the Adjudicating Authority is granted liberty to issue a fresh Show Cause Notice, if required, within a month from the date of the order – The writ petition is disposed of [Read less]

GST – Voluntary Payment or Payments under duress and coercion during inspection proceedings – Petitioner seeking refund of amount paid under duress during inspection proceedings by GST Intelligence and Anti-Evasion officers – Rejection of refund applications on the ground of deficiencies in the applications in so far as failure to submit any documents substantiating the claims that the payments have been made under coercion or under duress - Whether the payments made by the petitioner during the inspection proceedings can be considered as voluntary payments under Section 74(5) of the CGST Act, 2017 - HELD - The Refun... [Read more]

GST – Voluntary Payment or Payments under duress and coercion during inspection proceedings – Petitioner seeking refund of amount paid under duress during inspection proceedings by GST Intelligence and Anti-Evasion officers – Rejection of refund applications on the ground of deficiencies in the applications in so far as failure to submit any documents substantiating the claims that the payments have been made under coercion or under duress - Whether the payments made by the petitioner during the inspection proceedings can be considered as voluntary payments under Section 74(5) of the CGST Act, 2017 - HELD - The Refund applications submitted by the petitioner seeking refund were in tune with what is necessary as all the documents are placed on record by the petitioner. Therefore, the applications ought to have merited appropriate consideration at the hands of the respondents – Further, in the light of the judgments rendered by the Apex Court and different High Courts, the payments made by the petitioner cannot be construed as voluntary under Section 74(5) of the CGST Act - The recovery of taxes during investigation without adjudication was contrary to law and in violation of the Constitution. The petitioner had claimed the payments were made under duress and threat of adverse consequences. The respondents have failed to establish that the payments were voluntary self-ascertainment by the petitioner - The petitioner is entitled to a refund of the payments made as they were not voluntary under Section 74(5) of the Act - The deficiency memos issued by the respondents are quashed and the Respondents are directed to process the petitioner's refund applications in accordance with law – The writ petition is allowed [Read less]

Customs - Waiver of mandatory pre-deposit – Petitioner seeking a direction to CESTAT to not to insist on the pre-deposit amount and admit the appeal - Whether the High Court can waive the mandatory pre-deposit requirement under Section 129E of the Customs Act, 1962 - HELD - The pre-deposit requirement under Section 129E of the Customs Act, 1962 is mandatory and the CESTAT cannot entertain an appeal without the pre-deposit. While the High Court has the discretion under Article 226 of the Constitution to waive the pre-deposit requirement in rare and deserving cases where a clear justification is made out, the present case ... [Read more]

Customs - Waiver of mandatory pre-deposit – Petitioner seeking a direction to CESTAT to not to insist on the pre-deposit amount and admit the appeal - Whether the High Court can waive the mandatory pre-deposit requirement under Section 129E of the Customs Act, 1962 - HELD - The pre-deposit requirement under Section 129E of the Customs Act, 1962 is mandatory and the CESTAT cannot entertain an appeal without the pre-deposit. While the High Court has the discretion under Article 226 of the Constitution to waive the pre-deposit requirement in rare and deserving cases where a clear justification is made out, the present case of the financially robust petitioner does not warrant such an interference. The plea that the petitioner is in financial distress, and that the pre-deposit therefore deserves to be waived, is a contention that cannot be countenanced - The legislative mandate cannot be diluted to suit the convenience or inconvenience of the petitioner, and the pre-deposit requirement does not operate as a denial of access to justice but represents a statutory discipline that applies to all appellants - The High Court declines to entertain the technical contentions raised by the petitioner regarding the classification of goods and leave it to the appropriate authorities to decide the same in accordance with law - The writ petition filed by the petitioner is dismissed [Read less]

Service Tax - Shifting of manufacturing unit, surrender of registration, Transfer of credit - Appellant surrendered their registration in Delhi and shifted their manufacturing unit to Sahibabad, UP - The appellant requested to transfer the Cenvat credit to their Sahibabad unit. Denial of transfer of credit stating that the credit was not available to the appellant prior to the surrender of registration - Whether the appellant was eligible to avail the Cenvat credit on the input services received prior to the surrender of registration – HELD - The appellant was required to demonstrate that the credit in question was avail... [Read more]

Service Tax - Shifting of manufacturing unit, surrender of registration, Transfer of credit - Appellant surrendered their registration in Delhi and shifted their manufacturing unit to Sahibabad, UP - The appellant requested to transfer the Cenvat credit to their Sahibabad unit. Denial of transfer of credit stating that the credit was not available to the appellant prior to the surrender of registration - Whether the appellant was eligible to avail the Cenvat credit on the input services received prior to the surrender of registration – HELD - The appellant was required to demonstrate that the credit in question was available to them prior to the surrender of registration. The appellant submitted various invoices and documents to support their claim, but these documents are insufficient to show that the input services mentioned in the invoices were actually received and utilized by the appellant before the date of surrender of registration - The e-challans and ledger extracts provided by the appellant did not match the details of the invoices, and there is no evidence to show that the services were used in the manufacture of the appellant's final products - The documents filed before the adjudicating authorities below and before this Tribunal are insufficient to justify this claim of additional amount of Cenvat credit to the appellant. In the absence of adequate documentary evidence, the denial of the Cenvat credit claimed by the appellant is upheld - The appeal filed by the appellant is dismissed [Read less]

GST - E-way bill, Bill-to-ship transaction – While the goods were transported in a vehicle with the e-way bill and other documents, the journey was delayed due to the illness of the truck driver, causing the e-way bill to expire. The goods were intercepted, and penalty proceedings were initiated under Section 129 of the CGST Act, 2017 - Whether the intention to evade tax can be attributed to the petitioner solely on the ground that the e-way bill had expired - HELD - The mere expiry of the e-way bill does not automatically imply an intention to evade tax, as the movement of goods was duly covered by the tax invoice and e... [Read more]

GST - E-way bill, Bill-to-ship transaction – While the goods were transported in a vehicle with the e-way bill and other documents, the journey was delayed due to the illness of the truck driver, causing the e-way bill to expire. The goods were intercepted, and penalty proceedings were initiated under Section 129 of the CGST Act, 2017 - Whether the intention to evade tax can be attributed to the petitioner solely on the ground that the e-way bill had expired - HELD - The mere expiry of the e-way bill does not automatically imply an intention to evade tax, as the movement of goods was duly covered by the tax invoice and e-way bills. In the absence of any other material evidence against the dealer, the intention to evade tax cannot be attributed solely on the ground of the expiry of the e-way bill – Further, the petitioner had provided evidence of the driver's illness, which prevented the timely completion of the journey - The proceedings under Section 129 of the Act cannot be initiated solely on the ground of the expired e-way bill. The impugned orders are quashed and the writ petition is allowed [Read less]

Service Tax - Construction and renting of immovable property, Use of residential flats for commercial purposes, Demand under CICS - Appellant had constructed nine residential flats and sold six of them, while retaining three. The buyers subsequently used their flats for commercial purposes – Demand of service tax for 'Commercial or industrial construction services' for the period September 2004 to September 2006 and for 'renting of immovable property service' for the period June 2007 to March 2009 - HELD - The Department has not brought any evidence to indicate that the appellant's services were engaged or contracted by ... [Read more]

Service Tax - Construction and renting of immovable property, Use of residential flats for commercial purposes, Demand under CICS - Appellant had constructed nine residential flats and sold six of them, while retaining three. The buyers subsequently used their flats for commercial purposes – Demand of service tax for 'Commercial or industrial construction services' for the period September 2004 to September 2006 and for 'renting of immovable property service' for the period June 2007 to March 2009 - HELD - The Department has not brought any evidence to indicate that the appellant's services were engaged or contracted by the buyers to whom the six flats were sold, to construct the said building to be used for, or to be occupied primarily with, or engaged primarily in, commerce or industry or work intended for commerce or industry - The appellant had only constructed residential units as per the approved plan and the fact that the buyers subsequently used the flats for commercial purposes cannot be a reason to construe that the appellant had provided "commercial or industrial construction service" and foist the liability to service tax under the said service on the appellant - The appellant's activity was covered under works contract service, which was accepted by the appellate authority but rejected on the ground that the said service has come into force only after the relevant period. However, the period prior to 01.06.2007, the services provided by the appellant in respect of the projects executed by them being in the nature of composite works contract, cannot be brought within the fold of commercial or industrial construction service or construction of complex service – The impugned order is set aside and the appeal is allowed [Read less]

GST - Blocking of Electronic Credit Ledger under Rule 86A of the CGST Rules, 2017 – Validity of negative blocking of the Electronic Credit Ledger (ECL) - The petitioners argued that the respondents exceeded their power under Rule 86-A by blocking the ITC in excess of the credit available in Electronic Credit Ledger - Whether Rule 86-A of the CGST Rules permits the Revenue to block a taxpayer's ECL by an amount exceeding the credit available at the time of issuance of the order - HELD - The plain language of Rule 86-A of the CGST Rules clearly indicates that the power to block the ECL can only be exercised if the credit o... [Read more]

GST - Blocking of Electronic Credit Ledger under Rule 86A of the CGST Rules, 2017 – Validity of negative blocking of the Electronic Credit Ledger (ECL) - The petitioners argued that the respondents exceeded their power under Rule 86-A by blocking the ITC in excess of the credit available in Electronic Credit Ledger - Whether Rule 86-A of the CGST Rules permits the Revenue to block a taxpayer's ECL by an amount exceeding the credit available at the time of issuance of the order - HELD - The plain language of Rule 86-A of the CGST Rules clearly indicates that the power to block the ECL can only be exercised if the credit of input tax is available in the Electronic Credit Ledger. The Court agrees with the decisions of the Gujarat High Court and Delhi High Court, which held that the blocking of ECL under Rule 86-A is limited to the available balance or amount already present in the ECL. The Court respectfully disagree with the view and interpretation expressed by the High Courts of Calcutta, Allahabad and Andhra Pradesh - The impugned orders/entries are set aside to the extent that they disallowed debit from the respective ECLs of the petitioners in excess of the ITC available therein at the time of passing the decision. The respondents are at liberty to undertake and resort to remedies available for recovery in accordance with the law – The writ petitions are allowed [Read less]

GST - Recovery of GST on cancelled invoice - Recovery proceeding under Section 79 of the CGST Act for the recovery of IGST. The petitioner claimed that the recipient had failed to honor the contract and therefore the petitioner was not liable to pay tax as no service was provided - The petitioner had recorded the transaction in Form GSTR-1 but did not reflect it in Form GSTR-3B, claiming there was no concluded contract - Petitioner contended that the invoices were cancelled and payment was not received from the vendor but respondent initiated the recovery proceedings – HELD - The petitioner's reply to the Form GST DRC-01... [Read more]

GST - Recovery of GST on cancelled invoice - Recovery proceeding under Section 79 of the CGST Act for the recovery of IGST. The petitioner claimed that the recipient had failed to honor the contract and therefore the petitioner was not liable to pay tax as no service was provided - The petitioner had recorded the transaction in Form GSTR-1 but did not reflect it in Form GSTR-3B, claiming there was no concluded contract - Petitioner contended that the invoices were cancelled and payment was not received from the vendor but respondent initiated the recovery proceedings – HELD - The petitioner's reply to the Form GST DRC-01B was incomplete and therefore the impugned recovery proceeding was initiated. If the petitioner had indeed provided the service but not received payment, the petitioner would still be liable to pay tax under the GST law. The Petitioner ought to have given a proper reply by substantiating the same with the Annual Books of Account. If the amounts are shown in the Annual Books of Account are receivable, mere cancellation of the invoices unilaterally at a later point of time is of no avail - The matter is remanded back to the respondent to pass a fresh order within 30 days and the petitioner is directed to provide a proper reply with supporting evidence. If the petitioner fails to file such a reply within the given time, the writ petition will be deemed to have been dismissed - The writ petition is disposed of [Read less]

GST – Gujarat AAR - Liquidated Damages, Payment of penalty for breach of Contract - As per the Concession Agreement the applicant is liable to pay liquidated damages for various material defaults, breaches or failures in performing its obligations under the agreement - Whether the liquidated damages paid by the applicant for various material defaults, breaches or non-performance of obligations under the Concession Agreement are subject to GST - HELD - The CBIC Circular No. 178/10/2022-GST dated 3-8-2022 clarified that where the amount paid as damages is only to compensate for injury, loss or damage suffered by the aggrie... [Read more]

GST – Gujarat AAR - Liquidated Damages, Payment of penalty for breach of Contract - As per the Concession Agreement the applicant is liable to pay liquidated damages for various material defaults, breaches or failures in performing its obligations under the agreement - Whether the liquidated damages paid by the applicant for various material defaults, breaches or non-performance of obligations under the Concession Agreement are subject to GST - HELD - The CBIC Circular No. 178/10/2022-GST dated 3-8-2022 clarified that where the amount paid as damages is only to compensate for injury, loss or damage suffered by the aggrieved party due to breach of the contract, and there is no agreement, express or implied, by the aggrieved party to refrain from or tolerate an act or to do anything for the party paying the liquidated damages, such payments do not constitute consideration for a supply and are not taxable - The Concession Agreement between the applicant and SSL clearly stipulates the liquidated damages as a genuine pre-estimated loss and damage likely to be suffered and incurred by SSL due to the applicant's breach of the contract. There is no evidence that SSL is tolerating any act of the applicant by recovering the damages. The damages are merely a compensation for the injury, loss or damage suffered by SSL due to the applicant's breach of the contract terms - The liquidated damages paid by the applicant to SSL for various material defaults, breaches or non-performance of obligations under the Concession Agreement are not liable to GST – Ordered accordingly [Read less]

GST – Eligibility of Input Tax Credit, Delay in filing GSTR-3B Returns, Extension of Time Limit under Section 16(5) of CGST Act, 2017 - Denial of input tax credit for the FY 2018-2019 on the ground that the petitioner had failed to submit the GSTR-3B returns for the period from July 2018 to March 2019 within the time limit prescribed under Section 16(4) of the CGST Act - Whether the petitioner is entitled to claim the input tax credit under Section 16(5) of the CGST Act, despite the delay in filing the GSTR-3B returns beyond the time limit prescribed under Section 16(4) - HELD - The petitioner had filed the GSTR-3B retur... [Read more]

GST – Eligibility of Input Tax Credit, Delay in filing GSTR-3B Returns, Extension of Time Limit under Section 16(5) of CGST Act, 2017 - Denial of input tax credit for the FY 2018-2019 on the ground that the petitioner had failed to submit the GSTR-3B returns for the period from July 2018 to March 2019 within the time limit prescribed under Section 16(4) of the CGST Act - Whether the petitioner is entitled to claim the input tax credit under Section 16(5) of the CGST Act, despite the delay in filing the GSTR-3B returns beyond the time limit prescribed under Section 16(4) - HELD - The petitioner had filed the GSTR-3B returns for the relevant period within the extended time limit of 30.11.2021 as per the provisions of Section 16(5) of the CGST Act. The Section 16(5) contains a non-obstante clause against the time limit stipulated in Section 16(4) of the Act. Accordingly, the petitioner is entitled to the input tax credit, as the returns were filed within the extended time limit prescribed under Section 16(5) - The order denying the input tax credit is quashed and the assessing authority is directed to pass a fresh order, considering the provisions of Section 16(5) and granting the input tax credit if the petitioner is otherwise eligible - The writ petition is disposed of [Read less]

Central Excise - Duty Assessment, Price List Approval - Appellant is a manufacturer of Medium Density Fibre Board (MDF) who filed price lists before the jurisdictional Assistant Collector of Central Excise. The Assistant Collector approved the appellant's price lists based on the ex-factory sale prices, even though a small percentage of the goods were cleared to third parties. The Department later issued a show cause notice demanding differential excise - Whether the Department was justified in demanding differential excise duty when the price lists had already been approved by the Assistant Collector – HELD - The Assist... [Read more]

Central Excise - Duty Assessment, Price List Approval - Appellant is a manufacturer of Medium Density Fibre Board (MDF) who filed price lists before the jurisdictional Assistant Collector of Central Excise. The Assistant Collector approved the appellant's price lists based on the ex-factory sale prices, even though a small percentage of the goods were cleared to third parties. The Department later issued a show cause notice demanding differential excise - Whether the Department was justified in demanding differential excise duty when the price lists had already been approved by the Assistant Collector – HELD - The Assistant Collector had given a detailed finding in his Order-in-Original that even if a small portion of the finished goods were cleared to third parties, the prices adopted in respect of such parties can be accepted for all the clearances. The issue of the correctness of the price lists had already reached finality as the Revenue did not appeal against the Assistant Collector's order approving the price lists - The Department had no basis to investigate the matter or demand differential duty for the period from 1988 to 1992, as the price list approval order had attained finality. Additionally, the show cause notice was time-barred, as it was issued beyond the five-year period from the last date of the dispute period. The impugned order is set aside on both merits and grounds of time-bar – The appeal is allowed [Read less]

Haryana General Sales Tax Act, 1973 – Solar Cells vs Dry Cells - Petitioner purchased solar cells and sold them within the State. The petitioner filed returns and made RD sales against Form ST-15 without charging any tax – Dept revised the assessment orders, holding that solar cells were taxable at the first stage under Entry 19 of the notification dated 30.12.1987 - Whether solar cells fall within the definition of 'dry cells/batteries' under Entry 19 of the notification dated 30.12.1987 issued under Section 18 of the HGST Act, 1973 - HELD – There is a fundamental and functional distinction between solar cells and d... [Read more]

Haryana General Sales Tax Act, 1973 – Solar Cells vs Dry Cells - Petitioner purchased solar cells and sold them within the State. The petitioner filed returns and made RD sales against Form ST-15 without charging any tax – Dept revised the assessment orders, holding that solar cells were taxable at the first stage under Entry 19 of the notification dated 30.12.1987 - Whether solar cells fall within the definition of 'dry cells/batteries' under Entry 19 of the notification dated 30.12.1987 issued under Section 18 of the HGST Act, 1973 - HELD – There is a fundamental and functional distinction between solar cells and dry cells. While dry cells store electricity, solar cells are used to generate electricity from sunlight. The common and business parlance also treats solar cells as a distinct commodity from dry cells. The expression 'all kinds of' in Entry 19 does not include solar cells, as the legislature has used the specific term 'dry cells/batteries' and not 'all kinds of cells' – Further, the fact that the State of Tamil Nadu has separately included 'solar cells of all kinds' in its notification, indicating that solar cells are distinct from dry cells. Therefore, the solar cells do not fall within the description of 'all kinds of dry cells' under Entry 19 of the notification - In the present case, the petitioner had furnished the Form ST-15 received from its customers, indicating that the buyers had accepted the liability to pay tax. The respondent authorities had created a demand against the first-stage dealer establishing that it was the responsibility of the first-stage dealer to pay the tax - The second-stage dealer cannot be held liable for the non-payment of tax by the first-stage dealer. Accordingly, the petitioner, being a second-stage dealer, was not liable to pay the tax - The orders of the Sales Tax Tribunal is set aside and the writ petition is allowed [Read less]