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GST - Section 54(3) of the CGST Act, 2017 - SEZ unit, Refund of unutilised IGST credit distributed by ISD - As an SEZ unit, petitioner receives input services which are proportionately distributed by the Input Service Distributor. The petitioner, being a zero-rated supplier, was unable to utilize the input tax credit (ITC) lying in its Electronic Credit Ledger and hence filed refund applications under Section 54(3) of the CGST Act, 2017. The refund applications were initially allowed by the Assistant Commissioner, but later set aside by the Appellate Authority - Whether the SEZ unit is eligible to refund of input tax credi... [Read more]

GST - Section 54(3) of the CGST Act, 2017 - SEZ unit, Refund of unutilised IGST credit distributed by ISD - As an SEZ unit, petitioner receives input services which are proportionately distributed by the Input Service Distributor. The petitioner, being a zero-rated supplier, was unable to utilize the input tax credit (ITC) lying in its Electronic Credit Ledger and hence filed refund applications under Section 54(3) of the CGST Act, 2017. The refund applications were initially allowed by the Assistant Commissioner, but later set aside by the Appellate Authority - Whether the SEZ unit is eligible to refund of input tax credit on the services received while making zero rated supply - HELD - This Court in its earlier judgment in the case of Britannia Industries Limited v. Union of India, held that the ISD, as defined under Section 2(61) of the CGST Act, is an office of the supplier of goods and services which receives tax invoices and distributes the credit of IGST paid on such goods or services. Therefore, in the facts of the present case, it is not possible for the supplier of goods and services to file a refund application to claim the refund of the ITC distributed by the ISD. The stance of the department that the petitioner is not entitled to seek the refund of the ITC paid in connection with goods or services supplied to SEZ unit is not tenable - The ratio laid down in the Britannia Industries case is not disturbed and there is no stay against the order. Accordingly, the ration laid down by this Court in the case of Britannia Industries Ltd squarely applies to facts of present case, and therefore, the petition succeeds and is accordingly allowed [Read less]

Service Tax – Reversal of Cenvat Credit - The appellant is a private limited company providing various services and was audited for the period from April 2016 to June 2017. The audit raised various issues and the adjudicating authority confirmed the demands – Non-consideration of appellant’s contentions and relied upon judicial precedents – HELD - The adjudicating authority had granted certain benefits to the appellant in the impugned order. The Tribunal refrained from interfering with these findings as the revenue did not file any cross-objections. On the other issues, the appellant's contentions and relied upon j... [Read more]

Service Tax – Reversal of Cenvat Credit - The appellant is a private limited company providing various services and was audited for the period from April 2016 to June 2017. The audit raised various issues and the adjudicating authority confirmed the demands – Non-consideration of appellant’s contentions and relied upon judicial precedents – HELD - The adjudicating authority had granted certain benefits to the appellant in the impugned order. The Tribunal refrained from interfering with these findings as the revenue did not file any cross-objections. On the other issues, the appellant's contentions and relied upon judicial precedents were not considered by the adjudicating authority - It is only after the verification of the documents and evidences submitted and appreciation of the contentions raised in the replies and ascertaining the relevant facts, in the course of recording the findings on the issues in dispute, that the stage of determining the entitlement to the benefit of notification and/or applying judicial precedents to the matter would arise. Such an examination would be better left to the adjudicating authority - The matter is remanded back to the adjudicating authority for de novo adjudication on these aspects, directing the adjudicating authority to give a reasoned order after considering the evidence and documents furnished by the appellant - The appeal is partly allowed by remand [Read less]

Customs - Classification of “Side Outer Panels for Motor Vehicle”, Time-barred appeal – Revenue appeal against the order of the Commissioner (Appeals) upholding the classification of "Side Outer Panels for Motor Vehicle" under Heading 7326 1910 as "other articles of iron and steel – other for automobiles and earth moving equipment" - Department seeking reclassification of the goods under Heading 8708 9900 as "other parts and accessories for motor vehicles" which carries a higher rate of duty – Whether the appeal filed before the First Appellate was time-barred but not examined by the said Authority - HELD - The i... [Read more]

Customs - Classification of “Side Outer Panels for Motor Vehicle”, Time-barred appeal – Revenue appeal against the order of the Commissioner (Appeals) upholding the classification of "Side Outer Panels for Motor Vehicle" under Heading 7326 1910 as "other articles of iron and steel – other for automobiles and earth moving equipment" - Department seeking reclassification of the goods under Heading 8708 9900 as "other parts and accessories for motor vehicles" which carries a higher rate of duty – Whether the appeal filed before the First Appellate was time-barred but not examined by the said Authority - HELD - The issue of time-bar needs to be examined at the threshold as an authority cannot examine a matter on merits if the appeal is found time-barred. The Tribunal relied on the principles laid down by the Supreme Court that once it is held that the demand is time-barred, there would be no occasion for the Tribunal to enquire into the merits of the issues – An appellate authority cannot usurp the jurisdiction of the lower authority and decide the matter on merits if the appeal is found to be time-barred. The matter is remanded back to the first appellate authority to decide the issue of time-bar and followed the principles laid down by the Supreme Court – The appeal is disposed of [Read less]

Service Tax – Online information and data-base access and retrieval service - Demand of service tax under Reverse Charge on access of information on service providers’ website - Appellant paid subscription and membership fees to foreign associations – Dept alleged that the appellant had availed online information and database access services from the foreign entities and was liable to pay service tax - Whether the appellant was liable to pay service tax under RCM for the subscription and membership fees paid to foreign entities - HELD - There was no allegation in the show cause notice that the appellant had accessed ... [Read more]

Service Tax – Online information and data-base access and retrieval service - Demand of service tax under Reverse Charge on access of information on service providers’ website - Appellant paid subscription and membership fees to foreign associations – Dept alleged that the appellant had availed online information and database access services from the foreign entities and was liable to pay service tax - Whether the appellant was liable to pay service tax under RCM for the subscription and membership fees paid to foreign entities - HELD - There was no allegation in the show cause notice that the appellant had accessed the websites of the service providers. The demand has been confirmed merely on the basis of assumption, whereas the fact of the matter is that the appellants had made the payment through the conventional banking channels. This fact itself proves that the appellants had not logged into the websites of the service providers – Further, the situation was revenue neutral as the appellant would have been entitled to Cenvat credit of the tax paid under reverse charge mechanism. Since the issue involved interpretation of law, the extended period of limitation and penalties were not sustainable - the impugned OIA is set aside and the appeal is allowed [Read less]

Central Excise – Finished goods returned sold as scrap, Reversal of credit – Appellant received duty-paid finished goods (paper products) in their factory and took credit of the duty paid under Rule 16(1) of the Central Excise Rules, 2002 - Appellant subsequently sold these finished goods as 'scrap' after carrying out certain repair and rectification processes. Department alleged that since no manufacturing process was carried out on the returned goods, the appellant was liable to pay an amount equal to the credit of duty taken under Rule 16(2) of CER, 2002 – HELD - The dismantling, retrieving, and identifying of usa... [Read more]

Central Excise – Finished goods returned sold as scrap, Reversal of credit – Appellant received duty-paid finished goods (paper products) in their factory and took credit of the duty paid under Rule 16(1) of the Central Excise Rules, 2002 - Appellant subsequently sold these finished goods as 'scrap' after carrying out certain repair and rectification processes. Department alleged that since no manufacturing process was carried out on the returned goods, the appellant was liable to pay an amount equal to the credit of duty taken under Rule 16(2) of CER, 2002 – HELD - The dismantling, retrieving, and identifying of usable parts/components is an integral part of the manufacturing process. The dismantling/salvaging of the returned goods is part and parcel of the manufacturing process, as it is the first step in ascertaining the usability of various components for further use - The fact that the appellant paid duty on the cleared scrap items remains undisputed. When an issue is related to interpretation on which two views are possible, the mere fact that the authorities dispute the view entertained by the appellant is insufficient to conclude that there was suppression. Accordingly, the impugned order is set aside and the appeal is allowed on the ground of limitation [Read less]

Service Tax - Export of services, Air Travel Agency – Demand of service tax on overriding commission and contract fees - Whether the demand of service tax on the value of overriding commission and contract fees collected by the appellant, along with appropriate interest and imposing penalty under section 76 of the Finance Act, 1994 is tenable - HELD - The issue of service tax on overriding commission was settled in the appellant's favor in its own previous cases, as the service recipient was located outside India and the overriding commission was received in foreign currency. Further, the demand of service tax on the con... [Read more]

Service Tax - Export of services, Air Travel Agency – Demand of service tax on overriding commission and contract fees - Whether the demand of service tax on the value of overriding commission and contract fees collected by the appellant, along with appropriate interest and imposing penalty under section 76 of the Finance Act, 1994 is tenable - HELD - The issue of service tax on overriding commission was settled in the appellant's favor in its own previous cases, as the service recipient was located outside India and the overriding commission was received in foreign currency. Further, the demand of service tax on the contract fees is unsustainable, as the show cause notice did not provide any particulars of what part of the consideration received was attributable to the contract fees, and there is no defined consideration for service or contract of service in the agreement identifiable towards the said contract fee. The imposition of consequential interest and penalty under Section 76 is untenable - The impugned order in appeal is set aside and the appeal is allowed [Read less]

The electricity supplied to the township is a welfare-related activity, not integrally connected with the manufacturing or business operations. Consequently, the appellant is not entitled to ITC on the electricity consumed for the township.

GST - Section 6 of the CGST Act, 2017, Parallel Proceedings on same subject-matter, Cross-empowerment – Petitioner was subjected to tax liability determinations under Section 74 for the tax periods from December 2017 to March 2018 and August 2018 by the State Proper Officer. Subsequently, the Central Proper Officer also initiated proceedings under Section 74 for the same tax periods and subject-matter. The petitioner challenged the Order-in-Original passed by the Central Proper Officer on the ground that it was barred by the provisions of Section 6(2)(b) of the CGST Act - Whether the Central Proper Officer had the jurisd... [Read more]

GST - Section 6 of the CGST Act, 2017, Parallel Proceedings on same subject-matter, Cross-empowerment – Petitioner was subjected to tax liability determinations under Section 74 for the tax periods from December 2017 to March 2018 and August 2018 by the State Proper Officer. Subsequently, the Central Proper Officer also initiated proceedings under Section 74 for the same tax periods and subject-matter. The petitioner challenged the Order-in-Original passed by the Central Proper Officer on the ground that it was barred by the provisions of Section 6(2)(b) of the CGST Act - Whether the Central Proper Officer had the jurisdiction to initiate proceedings under Section 74 when the State Proper Officer had already initiated proceedings on the same subject-matter – HELD – The Orders passed by the State Proper Officer relates to allegation of availing ITC by way of fake invoices. All the Orders of the State Proper Officer are outcome of intelligence received or supplied to the State CT. The proceeding initiated by the Central Tax Proper Officer was based on the very same intelligence alleging input tax credit being wrongfully availed and utilised by the petitioner with respect to transactions same suppliers. It is apparent that the exercise of power under Section 74 by the State Proper Officer based on the intelligence received is before the initiation of proceeding by the Central Proper Officer under said provisions on the very same subject-matter - The petitioner ought not to have been subjected to tax again with respect to very same subject-matter by the Central Proper Officer despite the fact of determination of tax liability being made by the State Proper Officer by initiating proceeding under Section 74 at the earlier point of time - The subject-matter in both the proceedings under Section 74 being in respect of the alleged wrongful availment of input tax credit by dint of fake invoices, the latter proceeding initiated by the Central Proper Officer deserves to be quashed - The initiation of proceedings by the Central Proper Officer under Section 74 for the same tax periods and subject-matter is in violation of the provisions of Section 6(2)(b) of the CGST Act - the Show Cause Notice and the Order-in-Original passed by the Central Proper Officer are quashed – The writ petition is allowed [Read less]

Service Tax – Refund of service tax paid on manufacturing activity, Unjust Enrichment – Appellant is engaged in the activity of charging of storage batteries for manufacturer of storage batteries. The appellant paid service tax on this activity under the impression that it does not amount to manufacture. Later, the appellant opined that the activity amounts to manufacture and hence, no service tax is payable - Appellant filed refund claim for the service tax paid, which was rejected by the original authority and the impugned order upheld such rejection - Whether the processes undertaken by the appellant amount to manuf... [Read more]

Service Tax – Refund of service tax paid on manufacturing activity, Unjust Enrichment – Appellant is engaged in the activity of charging of storage batteries for manufacturer of storage batteries. The appellant paid service tax on this activity under the impression that it does not amount to manufacture. Later, the appellant opined that the activity amounts to manufacture and hence, no service tax is payable - Appellant filed refund claim for the service tax paid, which was rejected by the original authority and the impugned order upheld such rejection - Whether the processes undertaken by the appellant amount to manufacture, and hence, are not exigible to service tax - HELD - The processes undertaken by the appellant, such as filling the acid in the batteries, charging the batteries, inspection, and other related processes, amount to manufacture. The conversion of incomplete or unfinished batteries into complete or finished batteries amounts to manufacture under Note 6 of Section XVI of the Central Excise Tariff Act. Therefore, the activities undertaken by the appellant fall under the negative list under Section 66D of the Finance Act, 1994, and hence, are not exigible to service tax. The appellants are eligible to avail refund if otherwise admissible – On the issue of refund, the Commissioner (Appeals) had not given any findings on the issue of unjust enrichment - the appeal is partially allowed to the extent of stating that the processes undertaken by the appellants amount to manufacture – The matter is remand back to the Commissioner (Appeals) with a direction to give his independent findings on the admissibility of the refund on other norms including that of unjust enrichment – The appeal is partly allowed by remand [Read less]

Customs - Valuation, Payment of Royalty towards know-how, Condition of Sale, Extended Period of Limitation – Import of various Information Technology Goods from related foreign supplier – Appellant paid royalty to foreign supplier towards know-how for the manufacture of finished goods - Dept held that the royalty paid is includible in the transaction value of the imported components under Rule 10(1)(c) of the Customs Valuation (Determination of the Value of Imported Goods) Rules 2007 - Whether the royalty paid by Ericsson India to LM Ericsson Sweden towards know-how for the manufacture of finished goods is includible i... [Read more]

Customs - Valuation, Payment of Royalty towards know-how, Condition of Sale, Extended Period of Limitation – Import of various Information Technology Goods from related foreign supplier – Appellant paid royalty to foreign supplier towards know-how for the manufacture of finished goods - Dept held that the royalty paid is includible in the transaction value of the imported components under Rule 10(1)(c) of the Customs Valuation (Determination of the Value of Imported Goods) Rules 2007 - Whether the royalty paid by Ericsson India to LM Ericsson Sweden towards know-how for the manufacture of finished goods is includible in the transaction value of the imported components under Rule 10(1)(c) of the 2007 Valuation Rules – HELD - Mere inclusion of value of imported goods cannot lead to addition of royalty paid on finished goods in the transaction value of the imported goods - Where the royalty payments pertain to post-importation activities and are not a condition of sale of the imported goods, such royalty cannot be added to the value of the imported goods under Rule 10(1)(c). The Technical Agreements between the parties did not stipulate that payment of royalty is a sine qua non for import of components. The royalty was paid for technical know-how related to the manufacture/assembly of the finished goods and did not have a direct nexus with the imported components. Therefore, the royalty is not includible in the transaction value of the imported components – The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation under section 28 of the Customs Act was correctly invoked – HELD - The extended period of limitation could not have been invoked in the present case as there was no willful suppression of facts by the appelalnts with an intent to evade payment of customs duty. Ericsson India had disclosed the royalty payments in its financial statements which were submitted to the Special Valuation Branch, and its belief that the royalty was liable to service tax and not customs duty was a bona fide one - Mere non-disclosure or failure to declare does not amount to willful suppression, and there must be a positive act on the part of the assessee to evade payment of duty. In the absence of any such evidence, the extended period of limitation could not have been invoked. [Read less]

GST – Section 158 of the CGST Act, 2017 - Disclosure of Third Party Information - The petitioner filed an RTI application seeking GST returns of third parties. The respondent authorities rejected the request - Whether GST returns are exempt from disclosure under Section 8(1)(j) of the RTI Act and Section 158 of the CGST Act – HELD – The Section 158 (1) of the CGST Act specifically prohibits giving information of GST returns except as provided in sub-section 3, so also Section 8 (1) (j) of the RTI Act prohibits information which relates to personal information the disclosure of which has no relationship to any public ... [Read more]

GST – Section 158 of the CGST Act, 2017 - Disclosure of Third Party Information - The petitioner filed an RTI application seeking GST returns of third parties. The respondent authorities rejected the request - Whether GST returns are exempt from disclosure under Section 8(1)(j) of the RTI Act and Section 158 of the CGST Act – HELD – The Section 158 (1) of the CGST Act specifically prohibits giving information of GST returns except as provided in sub-section 3, so also Section 8 (1) (j) of the RTI Act prohibits information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual - the returns furnished by the industries under Section 158 (1) cannot be disclosed by the GST authorities except as provided in sub-section 3 of Section 158. GST ACT being a special enactment and a later enactment would override the RTI Act (general enactment) and the information which is prohibited to be provided under Section 158 of the GST Act cannot be disclosed under the RTI Act - The petitioner's allegations of fraud were bald and lacked prima facie evidence, and hence the larger public interest exception under Section 8(1)(j) of RTI Act is not applicable – The writ petition is dismissed [Read less]

Central Excise - Applicability of Rule 3(5B) of CENVAT Credit Rules, 2004 to inputs scrapped at the stage of work in progress, assembly/ sub-assembly - Appellant engaged in manufacturing of Oil pumps, Speedometer and PCB, wrote off rejection of raw material, sub-assembly and finished goods and showed the same under the head 'scrapping of inventory' - Revenue sought to recover CENVAT Credit availed on the same under Rule 3(5B) - Whether Rule 3(5B) is applicable to work-in-progress and finished goods that were scrapped during the manufacturing process – HELD - The Rule 3(5B) is not applicable to work-in-progress and finish... [Read more]

Central Excise - Applicability of Rule 3(5B) of CENVAT Credit Rules, 2004 to inputs scrapped at the stage of work in progress, assembly/ sub-assembly - Appellant engaged in manufacturing of Oil pumps, Speedometer and PCB, wrote off rejection of raw material, sub-assembly and finished goods and showed the same under the head 'scrapping of inventory' - Revenue sought to recover CENVAT Credit availed on the same under Rule 3(5B) - Whether Rule 3(5B) is applicable to work-in-progress and finished goods that were scrapped during the manufacturing process – HELD - The Rule 3(5B) is not applicable to work-in-progress and finished goods that were scrapped during the manufacturing process. The Chartered Accountant certificate showed that no inputs as such were written off, and the scrapping was of work-in-progress and finished goods. There was no recovery mechanism under Rule 3(5B) before the insertion of Explanation 2 w.e.f. 01.03.2013, and therefore the proceedings initiated under Rule 14 read with Rule 3(5B) are not sustainable. Further, when Commissioner (Appeals) adjudicating the appellant’s case, on the same issue, for the subsequent period dropped the demand and Revenue has not filed any appeal against such order, the Revenue cannot take a different stand for the earlier period - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Entitlement for service tax exemption on electricity and water charges – Denial of exemption on the grounds that the Notification No.31/2010-ST did not extend the benefit to "other ports" and the appellant's port was considered as an "other port" - Whether the appellant is entitled to the service tax exemption on the income received from supply of electricity and water under Notification No. 31/2010-ST - HELD - The issue was no longer res integra as it had already been decided in the appellant's own case in a previous order, wherein the Tribunal had held that the supply of electricity and water is not exigi... [Read more]

Service Tax - Entitlement for service tax exemption on electricity and water charges – Denial of exemption on the grounds that the Notification No.31/2010-ST did not extend the benefit to "other ports" and the appellant's port was considered as an "other port" - Whether the appellant is entitled to the service tax exemption on the income received from supply of electricity and water under Notification No. 31/2010-ST - HELD - The issue was no longer res integra as it had already been decided in the appellant's own case in a previous order, wherein the Tribunal had held that the supply of electricity and water is not exigible to service tax as they are "goods" and not "services". The Legislature and Board had not made any distinction in granting exemption for various services provided in a port – Further, the supply of electricity and water is not exigible to service tax as they are "goods" as defined under the Central Excise Tariff Act – The impugned order is set aside and the appeal is allowed [Read less]

GST – Evasion of tax, Release of original documents seized during the searches - GST authorities conducted investigations and searches at the premises of the petitioner and found discrepancies in the production and supply of cigarettes, leading to issuance of show-cause notices alleging evasion of GST and excise duty. The petitioner had earlier filed a writ petition seeking release of original documents seized during the searches and permission to submit reply and cross-examine witnesses, which was allowed by the High Court. The High Court order was upheld by the Supreme Court. The petitioner has now filed the present wr... [Read more]

GST – Evasion of tax, Release of original documents seized during the searches - GST authorities conducted investigations and searches at the premises of the petitioner and found discrepancies in the production and supply of cigarettes, leading to issuance of show-cause notices alleging evasion of GST and excise duty. The petitioner had earlier filed a writ petition seeking release of original documents seized during the searches and permission to submit reply and cross-examine witnesses, which was allowed by the High Court. The High Court order was upheld by the Supreme Court. The petitioner has now filed the present writ petition seeking certified copies of certain reports and permission to cross-examine the officers posted at the factory - Whether the present writ petition is maintainable, considering that the reliefs sought are identical to the previous writ petition which has already been decided - HELD - The present writ petition is not maintainable as the reliefs sought are identical to the previous writ petition which has already been decided by the High Court and upheld by the Supreme Court. The petitioner has not alleged any non-compliance of the earlier orders or any fresh cause of action. The petitioner is merely trying to delay the adjudication proceedings by filing this petition. The Court rejected the petitioner's contention that the officers' statements and records are required to be provided, as the petitioner is statutorily required to maintain such records under the GST Act and Rules - The writ petition is dismissed with costs of Rupees Two lakhs payable by the petitioner to the respondent [Read less]

Customs - Confiscation of Goods, Penalty - Appellant, a 100% EOU engaged in export of engineering equipment, filed three shipping bills for export of parts of rubber processing machines. On examination, it was found that there was a shortage of 28 sets of parts against the declared quantity in two of the shipping bills and a shortage of 353 kgs in weight. A show-cause notice was issued proposing confiscation of the goods and penalty. On adjudication, the goods were confiscated, and fines and penalties were imposed. The appellant filed an appeal against this order - Whether the goods are liable to be confiscated under Secti... [Read more]

Customs - Confiscation of Goods, Penalty - Appellant, a 100% EOU engaged in export of engineering equipment, filed three shipping bills for export of parts of rubber processing machines. On examination, it was found that there was a shortage of 28 sets of parts against the declared quantity in two of the shipping bills and a shortage of 353 kgs in weight. A show-cause notice was issued proposing confiscation of the goods and penalty. On adjudication, the goods were confiscated, and fines and penalties were imposed. The appellant filed an appeal against this order - Whether the goods are liable to be confiscated under Section 113(h)(i) of the Customs Act, 1962 - HELD - There was no physical entry of goods for exportation, and the shortage was due to an error by the appellant's internal dispatch team in packing the goods. The jurisdictional Central Excise authorities had also confirmed that the shortage was under process in the factory and not cleared in the DTA. In these circumstances, the direction for confiscation of the goods was unwarranted and not sustainable – Further, the shortage was due to a clerical error by the appellant in wrongly mentioning the quantity of items exported, and there was no omission or misdeclaration on the part of the appellant, therefore, the imposition of penalty was unwarranted in the present case - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - High Sea sales, Proportionate reversal of Cenvat credit, Taxability of trading activities, Invocation of extended period - Appellant availed Cenvat credit on various input services and to the extent of high sea sales, which the department treated as an exempted trading activity - Whether trading activities can be considered as an exempted service, requiring proportionate reversal of Cenvat credit under Rule 6(3)(ii) of the Cenvat Credit Rules, 2004 – HELD - Trading, being a pure sale of goods, cannot be considered as a service. The definition of "service" under Section 65B(44) of the Finance Act, 1994 sp... [Read more]

Central Excise - High Sea sales, Proportionate reversal of Cenvat credit, Taxability of trading activities, Invocation of extended period - Appellant availed Cenvat credit on various input services and to the extent of high sea sales, which the department treated as an exempted trading activity - Whether trading activities can be considered as an exempted service, requiring proportionate reversal of Cenvat credit under Rule 6(3)(ii) of the Cenvat Credit Rules, 2004 – HELD - Trading, being a pure sale of goods, cannot be considered as a service. The definition of "service" under Section 65B(44) of the Finance Act, 1994 specifically excludes such transfer, delivery or supply of goods which is deemed to be a sale within the meaning of Article 366(29A) of the Constitution. Several judicial precedents, including the Supreme Court's judgment in the Ganon Dunkerley case, have established that sale of goods is distinct from the provision of services, and the two cannot be equated. Therefore, the proportionate reversal of Cenvat credit under Rule 6(3)(ii) would not be applicable to the appellant's trading activities – Further, the appellant had intimated the department about the reversal of credit in 2015, and the department did not dispute the same. The extended period of limitation can only be invoked if there is a finding that the escaped duty was a result of the assessee's deception, which was not the case here - the order of the Commissioner (Appeals) is set aside by holding that the trading activities of the appellant cannot be considered as an exempted service, and the department was not justified in invoking the extended period of limitation to demand the reversal of Cenvat credit – The appeal is allowed [Read less]

Central Excise - Appropriation of amount paid under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Appellant sought settlement of the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and got Form-3 declaring the amount payable but could not pay within the stipulated 30 days. The appellant later paid the amount on 29.08.2020 but the Department did not accept the closure of the case. The Adjudicating Authority confirmed the demand along with interest and penalty, which was partly upheld by the Commissioner (Appeals) by reducing the penalty - Whether the confirmation order appropriating t... [Read more]

Central Excise - Appropriation of amount paid under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Appellant sought settlement of the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and got Form-3 declaring the amount payable but could not pay within the stipulated 30 days. The appellant later paid the amount on 29.08.2020 but the Department did not accept the closure of the case. The Adjudicating Authority confirmed the demand along with interest and penalty, which was partly upheld by the Commissioner (Appeals) by reducing the penalty - Whether the confirmation order appropriating the amount paid under the Sabka Vishwas Scheme along with interest and penalty is legally valid - HELD - Since the appellant did not pay the amount within the stipulated 30 days from the date of issuance of Form-3, the limitation period expired on 29.01.2020, which was before the COVID-19 lockdown and the subsequent relaxations provided by the Parliament. The suo-moto Writ Petition No. 3/2020 by the Supreme Court dealt with the limitation period for filing of suits, appeals and applications, and not the specific provision under Section 127(5) of the Finance Act, 2019. Therefore, the confirmation of the demand is upheld. However, the penalty confirmed under Section 11AC of the Central Excise Act, 1944 is set aside considering the appellant's willingness to settle the dispute through the Scheme – The appeal is partly allowed [Read less]

GST - Delay in payment of GST interest, Recovery proceedings under Section 79 of CGST Act, 2017, Requirement of intimation under Rule 142B of CGST Rules, 2017 - Respondent issued notices to the petitioner for short payment of interest on delayed payment of GST tax. The respondent then initiated recovery proceedings under Section 79 of the GST Act without issuing any show-cause notice. The petitioner challenged these actions - Whether the respondent authority can initiate recovery proceedings under Section 79 of the GST Act for the short payment of interest without first issuing an intimation in Form GST DRC-01D as per Rule... [Read more]

GST - Delay in payment of GST interest, Recovery proceedings under Section 79 of CGST Act, 2017, Requirement of intimation under Rule 142B of CGST Rules, 2017 - Respondent issued notices to the petitioner for short payment of interest on delayed payment of GST tax. The respondent then initiated recovery proceedings under Section 79 of the GST Act without issuing any show-cause notice. The petitioner challenged these actions - Whether the respondent authority can initiate recovery proceedings under Section 79 of the GST Act for the short payment of interest without first issuing an intimation in Form GST DRC-01D as per Rule 142B of the CGST Rules - HELD - As per the provisions of the GST Act and Rules, the respondent-authority can recover the amount of interest which has become due under Section 50(1) of the GST Act only after issuing an intimation in Form GST DRC-01D as per Rule 142B of the GST Rules. This intimation will be treated as a notice for recovery, and the petitioner will have an opportunity to file a reply before the recovery proceedings are initiated under Section 79 - The mere issuance of an advisory by the respondent authority referring to Section 79 does not empower it to directly apply the modes of recovery without following the due procedure. The notice issued by the respondent is quashed and the respondents are directed to initiate proceedings by adopting the proper procedure with issuance of notice in Form GST DRC-01D - The petition is allowed [Read less]

GST - Recovery of short-paid GST, Total Turnover of B2B and B2C sale - Department conducted a search at the petitioner's premises and issued a show cause notice alleging evasion of GST by way of misdeclaration of duty slab for HSN Code 8507 (18% instead of 28%) and short payment of GST - Whether the demand and recovery of short-paid GST can be made on the total turnover of the petitioner, instead of being limited to the turnover of the specific combo packs where the misdeclaration of the HSN Code was found - HELD – There is fundamental flaw in the approach of the Adjudicating Authority in demanding GST on the total turno... [Read more]

GST - Recovery of short-paid GST, Total Turnover of B2B and B2C sale - Department conducted a search at the petitioner's premises and issued a show cause notice alleging evasion of GST by way of misdeclaration of duty slab for HSN Code 8507 (18% instead of 28%) and short payment of GST - Whether the demand and recovery of short-paid GST can be made on the total turnover of the petitioner, instead of being limited to the turnover of the specific combo packs where the misdeclaration of the HSN Code was found - HELD – There is fundamental flaw in the approach of the Adjudicating Authority in demanding GST on the total turnover, when the actual sales of the entire combo packs, on both B2B and B2C sales, were available with the Adjudicating Authority. The tax evasion, if any, was in respect of B2B and B2C sales, and there was no reasoning given by the Adjudicating Authority as to why GST is being sought to be levied on the total turnover - The impugned order is an appealable order and the petitioner relegated to the appellate remedy. However, the pre-deposit shall be calculated and made in respect of the amounts falling under B2B and B2C sales of each of the financial years - The writ petition is disposed of [Read less]

The time period for submitting reply to the SCN is not statutorily prescribed hence, the delay in submission of reply cannot deprive the assessee of opportunity to be heard; passing the final order without considering the reply is violation of PNJ.

Central Excise - 100% EOU - Imported of capital goods and raw materials locally, availing exemption Notification No.52/2003-Cus and Notification No.22/2003-CE both dated 31.3.2003 on the condition of exporting goods or services – Denial of benefit of the Notifications on the ground that they had not exported the Technical Testing and Analysis (TTA) service, which was considered an export service under the Export of Service Rules, 2006 - Whether the concept of 'export of service' under the Export of Service Rules, 2006 can be applied to determine the eligibility for exemption notifications issued under the Customs Act, 19... [Read more]

Central Excise - 100% EOU - Imported of capital goods and raw materials locally, availing exemption Notification No.52/2003-Cus and Notification No.22/2003-CE both dated 31.3.2003 on the condition of exporting goods or services – Denial of benefit of the Notifications on the ground that they had not exported the Technical Testing and Analysis (TTA) service, which was considered an export service under the Export of Service Rules, 2006 - Whether the concept of 'export of service' under the Export of Service Rules, 2006 can be applied to determine the eligibility for exemption notifications issued under the Customs Act, 1962 and the Central Excise Act, 1944, or the term 'export' should be construed in accordance with the definition provided in the Foreign Trade (Development and Regulation) Act, 1992 - HELD - The term 'export' used in the exemption notifications issued under the Customs Act and Central Excise Act should be construed in accordance with the definition provided in the FTDR Act, and not based on the Export of Service Rules under the Finance Act. The EOU Scheme is governed by the Foreign Trade Policy, and the FTDR Act provides a specific definition of 'export' in relation to services, which includes supplying services from India into the territory of any other country or in India to the service consumer of any other country. Since the appellants had received payments in convertible foreign exchange for the services provided to recipients located outside India, they were eligible for the benefit of the exemption notifications, irrespective of the requirements under the Export of Service Rules - The impugned orders are set aside and the appeal is allowed [Read less]

Central Excise - Assessable value, Place of removal, Freight charges - Appellant is manufacturer of cement and was selling cement packed in bags of 50 kg to dealers/distributors as well as industrial/institutional customers - Department held that the appellant was paying excise duty on the value exclusive of freight, which was incurred for delivery of goods at the premises of the customers on a FOR destination basis – Demand of duty on the cost of transportation from the factory gate to the buyer's premises - Whether the freight charges collected by the appellant from the customers were liable to be included in the asses... [Read more]

Central Excise - Assessable value, Place of removal, Freight charges - Appellant is manufacturer of cement and was selling cement packed in bags of 50 kg to dealers/distributors as well as industrial/institutional customers - Department held that the appellant was paying excise duty on the value exclusive of freight, which was incurred for delivery of goods at the premises of the customers on a FOR destination basis – Demand of duty on the cost of transportation from the factory gate to the buyer's premises - Whether the freight charges collected by the appellant from the customers were liable to be included in the assessable value for payment of Duty - HELD - The admitted position is that the sales were on FOR destination basis and not ex-works. While the appellant relied on the judgment of the Supreme Court in Ispat Industries Ltd case to contend that the place of removal would always be the factory gate or the depot, the Department relied on the judgments in Roofit Industries Ltd and Emco Ltd cases to contend that the place of removal should be determined based on the facts of the case - The issue of determining the place of removal in case of FOR contract basis sales was extensively dealt with by the Larger Bench in the appellant's own case, wherein it was held that the authority needs to ascertain the place of removal by applying the relevant judgments and the Board Circular. When the sale is on FOR basis, the judgment in Roofit Industries Ltd and Emco Ltd cases would be more appropriately applicable - In the admitted factual matrix where the sale has taken place at the premises of the industrial/institutional customers, the freight element is not excludable from the assessable value/transaction value for the purpose of determination of duty - The appeals are allowed partly by way of remand to the adjudicating authority to recompute the duty liability by considering (i) any sale under RSP/MRP where the element of freight would not be applicable, and (ii) the actual transportation charges collected by the appellant from its customers - the appeals are allowed partly by way of remand [Read less]

Service Tax - Refund of service tax paid on transportation of goods for export – Payment of service tax pursuant to Audit objection - Time limit for filing refund claim – Refund of service tax paid on Courier Agency Services - HELD - The appellant had paid the service tax pursuant to an audit objection and immediately filed the refund claims within 3 months from the date of payment. The refund claims were filed within the prescribed time limit of one year from the date of payment of tax and hence are admissible - The appellant had produced all the relevant documents and cured the minor defects/deficits pointed out by t... [Read more]

Service Tax - Refund of service tax paid on transportation of goods for export – Payment of service tax pursuant to Audit objection - Time limit for filing refund claim – Refund of service tax paid on Courier Agency Services - HELD - The appellant had paid the service tax pursuant to an audit objection and immediately filed the refund claims within 3 months from the date of payment. The refund claims were filed within the prescribed time limit of one year from the date of payment of tax and hence are admissible - The appellant had produced all the relevant documents and cured the minor defects/deficits pointed out by the department subsequently. The substantial benefit of refund cannot be denied for such initial minor infractions which were rectified later. Therefore, the appellant is eligible for the refund of service tax paid on Courier Agency Services. Decision - The impugned orders are set aside and the appeals are allowed [Read less]

Service Tax – Termination of contract, Refund of service tax paid in excess, Limitation Period - Appellant paid service tax in respect of the invoices issued to M/s Hospira; however, Hospira terminated the contract w.e.f. 31.08.2017 and confirmed that the value of invoice and applicable service tax would be paid up to 31.08.2017 – Since the appellant paid excess service tax, it filed a refund claim which was rejected by the adjudicating authority on the ground of limitation prescribed under Section 11B of the Central Excise Act, 1944 - Whether the appellant is entitled to the refund of service tax paid during the finan... [Read more]

Service Tax – Termination of contract, Refund of service tax paid in excess, Limitation Period - Appellant paid service tax in respect of the invoices issued to M/s Hospira; however, Hospira terminated the contract w.e.f. 31.08.2017 and confirmed that the value of invoice and applicable service tax would be paid up to 31.08.2017 – Since the appellant paid excess service tax, it filed a refund claim which was rejected by the adjudicating authority on the ground of limitation prescribed under Section 11B of the Central Excise Act, 1944 - Whether the appellant is entitled to the refund of service tax paid during the financial year 2015-16, consequent to termination of contract w.e.f. 31.08.2017 under Section 142(5) of the CGST Act, 2017 - HELD - The Section 142(5) of the CGST Act, 2017 provides that the refund claim of service tax paid under the existing law (Central Excise Act, 1944) in respect of services not provided shall be disposed of under the existing law and has to be paid in cash. It states that such refund is subject to provisions of sub-section (2) of Section 11B of the Central Excise Act, 1944 only - The contract having been annulled on 31.08.2017, it cannot be expected of the appellant to file the refund claim within a period of one year from the date of payment of service tax – The section 11B of erstwhile CEA, 1944 cannot at all be invoked, specifically the time bar therein, to rejected the refund claim filed under Section 142 (5) of the CGST Act - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Reversal of proportionate Cenvat Credit, Taxable/Exempted Services, Trading Activity, Demand invoking extended period of Limitation, Penalty - Department held that the Appellant did not follow the provisions of Rule 6(2) and 6(3) of the Cenvat Credit Rules, 2004 in relation to the utilization of Cenvat credit on common input services used for both excisable goods and taxable/exempted services – Demand for recovery of the irregularly availed Cenvat credit along with equal penalty - Whether trading activity can be considered as an exempted service for the purpose of applying the provisions of Rule 6(2) and ... [Read more]

Service Tax – Reversal of proportionate Cenvat Credit, Taxable/Exempted Services, Trading Activity, Demand invoking extended period of Limitation, Penalty - Department held that the Appellant did not follow the provisions of Rule 6(2) and 6(3) of the Cenvat Credit Rules, 2004 in relation to the utilization of Cenvat credit on common input services used for both excisable goods and taxable/exempted services – Demand for recovery of the irregularly availed Cenvat credit along with equal penalty - Whether trading activity can be considered as an exempted service for the purpose of applying the provisions of Rule 6(2) and 6(3) of the CCR - HELD - Though the appellants had utilized more credit, which was in excess of the cap of 20%, still there was no provision during the material time for it to lapse and therefore, they could have again re-utilized the same during the subsequent period and hence, at best, they will be liable for payment of interest only to the extent they had exceeded the cap of 20% for discharge of service tax liability - Prior to the amendment in Rule 2(e) of the CCR with effect from 01.04.2011, trading activity could not be considered as an exempted service. The Tribunal relied on the judgments in Lally Automobiles Pvt Ltd and Bharat Heavy Electricals Ltd, which held that trading activity is neither a service nor a manufacture, and therefore, the provisions of Rule 6(2) and 6(3) of the CCR would not apply. The appellant is required to reverse the proportionate Cenvat credit utilized for the trading activity along with applicable interest – The demand for the period prior to 01.04.2008 is set aside, as the appellant is liable to pay only interest on the excess credit utilized. For the period after 01.04.2008, the appeal is remanded back to the Original Authority only for the limited purpose of computation of amount of credit required to be recovered along with interest and applicable penalty thereon – The appeal is partly allowed - Whether the extended period of limitation was correctly invoked by the Department - HELD - The findings regarding the invocation of the extended period are pure findings of fact based on the facts of each case. The Appellant was aware of the issue of reversal of credit/payment of amount under Rule 6(2) and 6(3) of the CCR since 2008, and had themselves started reversing the proportionate credit from 01.04.2010, indicating that they did not have a genuine belief that they could claim the credit for the trading activity. [Read less]

Service Tax - Cenvat credit, IPR services, Technical inspection and certification services - Admissibility of Cenvat credit availed prior to registration and service tax paid using such credit - Liability of service tax on IPR services received from a non-resident provider - HELD – There is no bar on the appellant taking Cenvat credit in respect of input services received prior to registration, as per the statutory provisions and settled case laws. Since the appellant was otherwise registered under service tax, the mere fact that it was not registered for the specific output service during the relevant period would not m... [Read more]

Service Tax - Cenvat credit, IPR services, Technical inspection and certification services - Admissibility of Cenvat credit availed prior to registration and service tax paid using such credit - Liability of service tax on IPR services received from a non-resident provider - HELD – There is no bar on the appellant taking Cenvat credit in respect of input services received prior to registration, as per the statutory provisions and settled case laws. Since the appellant was otherwise registered under service tax, the mere fact that it was not registered for the specific output service during the relevant period would not make the credit inadmissible. Accordingly, the demand related to Cenvat credit and service tax paid using such credit was set aside - The demand for service tax on IPR services needs to be verified whether the services were provided before or after 18.04.2006, as the liability for service tax on such services from a non-resident provider would arise only from that date. The matter is remanded back to the adjudicating authority for a fresh determination on this issue - The demands related to Cenvat credit, service tax paid using such credit, and technical inspection and certification services are set aside. The matter related to IPR services was remanded back for fresh consideration – The appeal is partly allowed - Liability of service tax on technical inspection and certification services - HELD – Appellants were providing certain technical advice, assistance and scientific farm practices to be adopted for proper cultivation, production and harvesting of hybrid seeds and for which consideration was paid by the farmers/ growers to the appellant - merely because appellants were providing certain advice without any certification to the farmers, the said activities cannot be brought under the ambit of technical inspection and certification services under section 65(105)(zzi) - The department has failed to establish that the appellant was providing 'technical inspection and certification services' to the farmers, as the evidence only showed that the appellant was providing technical advice without issuing any certificates. Therefore, the demand for service tax under this category is set aside. [Read less]

Customs - Export Duty, FOB Value, CUM Duty Price - For the purpose of assessment of export duty, the Department has taken the FOB value as such, whereas the appellant contends that the FOB value should have been considered as CUM duty price for assessment, and the duty amount should have been deducted before computing export duty - Whether the FOB value should be considered as CUM duty price for the purpose of assessment of export duty - HELD - The FOB price of the goods is the price actually paid or payable by the importer to the exporter in respect of goods exported, and the assessable value cannot be brought down by ext... [Read more]

Customs - Export Duty, FOB Value, CUM Duty Price - For the purpose of assessment of export duty, the Department has taken the FOB value as such, whereas the appellant contends that the FOB value should have been considered as CUM duty price for assessment, and the duty amount should have been deducted before computing export duty - Whether the FOB value should be considered as CUM duty price for the purpose of assessment of export duty - HELD - The FOB price of the goods is the price actually paid or payable by the importer to the exporter in respect of goods exported, and the assessable value cannot be brought down by extending the benefit of CUM duty price. The Tribunal in the case of Sesa Goa Ltd. vs. Commissioner of Central Excise, Goa, held that the FOB value cannot be treated as CUM duty value for the purpose of arriving at the value for computing export duty in view of the statutory provision under Section 14 of the Customs Ac – There is no infirmity in the order passed by the Commissioner (Appeals). Accordingly, appeals are dismissed [Read less]

Central Excise - Assessable value, Freight charges - Appellant had been selling their goods through their consignment agents and the consignment agents were raising bills on ultimate customers at a higher value which included transportation charges from the factory to consignment agent premises, loading and unloading charges, agency commission etc. - Whether the freight amount realized by the appellant from the buyers at the consignment agent's depot was includible in the assessable value – HELD - The issue is no longer res integra as it stands decided by the Tribunal in the appellant's own previous cases. The Tribunal r... [Read more]

Central Excise - Assessable value, Freight charges - Appellant had been selling their goods through their consignment agents and the consignment agents were raising bills on ultimate customers at a higher value which included transportation charges from the factory to consignment agent premises, loading and unloading charges, agency commission etc. - Whether the freight amount realized by the appellant from the buyers at the consignment agent's depot was includible in the assessable value – HELD - The issue is no longer res integra as it stands decided by the Tribunal in the appellant's own previous cases. The Tribunal relied on its earlier decisions wherein it was held that there was no dispute that the goods were cleared by the manufacturer to its consignment agent at a different place and there was no dispute on the valuation of such goods. The only dispute was whether the freight realized from the buyers at the consignment agent's depot was includible in the assessable value - The law relating to excise being revenue-elastic in its character, the elasticity of Revenue has not been jeopardized. There was no flow back of the freight aspect proved by the Revenue showing that the same has come to the manufacturer in disguise. In the absence of such proof, the assessable value declared by the appellant remained untouched – The impugned orders are set aside and the appeals are allowed [Read less]

Customs – Export of iron ore, Rejection of transaction value, Moisture content - The appellant was engaged in exporting iron ore under a contract with certain terms and conditions regarding Fe percentage, moisture content, etc. - Department provisionally assessed the exports and later finalized the assessment by considering the moisture content as per the CRCL report, which was higher than what was declared by the appellant - Whether the Adjudicating Authority was correct in recomputing the export quantity on the basis of moisture content as per the CRCL report, instead of the CIQ report and the transaction value reflect... [Read more]

Customs – Export of iron ore, Rejection of transaction value, Moisture content - The appellant was engaged in exporting iron ore under a contract with certain terms and conditions regarding Fe percentage, moisture content, etc. - Department provisionally assessed the exports and later finalized the assessment by considering the moisture content as per the CRCL report, which was higher than what was declared by the appellant - Whether the Adjudicating Authority was correct in recomputing the export quantity on the basis of moisture content as per the CRCL report, instead of the CIQ report and the transaction value reflected in the final invoices - HELD - The export value has to be determined as per the transaction value reflected in the final invoices and supported by the BRC and the Department cannot discard the transaction value without any valid grounds. Wherever the transaction value is doubted, due process is to be undertaken for deciding as to what should be the value for the purpose the computing the customs duty. Admittedly, no grounds have been adduced for discarding the transaction value as reflected in terms of the final invoices - in terms of contract various parameters were to be determined on the basis of CIQ report and thereafter only the final price was to be finalised and accordingly the invoices were issued and payment were received. Therefore, there was no ground for the Adjudicating Authority to discard the transaction value in the first place – In the present case, the moisture content as per the CIQ report, based on which the invoices were raised, should be considered for arriving at the DMT quantity, and not the CRCL report - The matter is remanded back to the original Adjudicating Authority to re-work the admissible refund based on the transaction value - The appeal is allowed by way of remand [Read less]

Service Tax - Deemed Sale vs Supply of Tangible Goods Service, Transfer of Right to Use and Effective Control of Goods - Appellant entered into an agreement with Fortis Healthcare Ltd (FHL) for providing a Laser Revolix Laser equipment and related services to FHL for performing laser procedures on patients - Department considered this as a Supply of Tangible Goods (SOTG) service under the Finance Act 1994 and not a deemed sale, and hence raised a service tax demand - Whether the transaction between the appellant and FHL involves a transfer of the legal right to possess and effective control of the equipment, amounting to a... [Read more]

Service Tax - Deemed Sale vs Supply of Tangible Goods Service, Transfer of Right to Use and Effective Control of Goods - Appellant entered into an agreement with Fortis Healthcare Ltd (FHL) for providing a Laser Revolix Laser equipment and related services to FHL for performing laser procedures on patients - Department considered this as a Supply of Tangible Goods (SOTG) service under the Finance Act 1994 and not a deemed sale, and hence raised a service tax demand - Whether the transaction between the appellant and FHL involves a transfer of the legal right to possess and effective control of the equipment, amounting to a deemed sale, or is it a case of SOTG service without such transfer - HELD - The transaction does not satisfy the criteria for a deemed sale. While the agreement provided for the appellant to install the equipment in FHL's premises and FHL to bear certain responsibilities, the overall arrangement indicates that the appellant retained the effective control and right to use the equipment, making it a case of hiring of equipment rather than a transfer of the right to use. The invoicing also showed the charges were on a per-procedure basis, further supporting the finding that it was a SOTG service and not a deemed sale. Therefore, the transaction between the appellant and FHL is a Supply of Tangible Goods (SOTG) service and not a deemed sale, as the appellant did not transfer the legal right to possess and effective control of the equipment to FHL - The appeal is devoid of merit and is accordingly, dismissed [Read less]

Service Tax - Advertisement in Magazine, Exemption for Print Media - Appellant was getting certain advertisements published in foreign magazine to promote the export of their product 'polished granite slab' - Department considered this service as falling under the category of advertisement in magazine under section 65(105)(zzzm) of the Finance Act and demanded service tax for the period 2008-09 to 2010-11 - Whether the advertisement published by the appellant in the foreign magazine is exempt from service tax as it falls under the category of 'print media' under section 65(105)(zzzm) of the Finance Act - HELD - The letter ... [Read more]

Service Tax - Advertisement in Magazine, Exemption for Print Media - Appellant was getting certain advertisements published in foreign magazine to promote the export of their product 'polished granite slab' - Department considered this service as falling under the category of advertisement in magazine under section 65(105)(zzzm) of the Finance Act and demanded service tax for the period 2008-09 to 2010-11 - Whether the advertisement published by the appellant in the foreign magazine is exempt from service tax as it falls under the category of 'print media' under section 65(105)(zzzm) of the Finance Act - HELD - The letter issued in the course of adjudication would be in the nature of corrigendum to the SCN and such infirmity in the SCN itself and then confirmation of demand under a different heading, which was not even disclosed at the time of issuing SCN itself cannot become basis for confirmation of demand. Therefore, on this ground itself, the demand would not be sustainable – Further, the Tribunal in Fertiplant Engg. Co Pvt Ltd Vs CCE, Raigad held that advertisement in a foreign magazine would be covered within the definition of 'book' and excluded from service tax liability – In the instant case, the magazine 'Stone World' also contained various articles on technology relating to the stone industry, news on stone technology for the benefit of the stone industry, and therefore, it does not get excluded from the definition of 'books'. Accordingly, the advertisement published by the appellant in the magazine 'Stone World' is exempt from service tax – The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation under proviso to section 73(1) of the Finance Act is invokable in the present case - HELD - The Commissioner (Appeals) had set aside the penalty under section 78 on the ground that the appellant had not paid the service tax due to a bona fide belief that the service received by them was not taxable. However, the Commissioner (Appeals) had upheld the invocation of the extended period of limitation under proviso to section 73(1). The stand is contradictory, as when there was no intention to evade payment of tax, the extended period of limitation should also not be invokable. Therefore, the demand would not sustain on the ground of limitation as well. [Read less]

Service Tax - Works Contract Service, Construction of Residential Complex Service - Appellant undertook construction of Married Accommodation Project for Military Engineering Services (MES), involving construction of residential quarters for military personnel during the period January 2007 to March 2011 and April 2011 to March 2012 - Department imposed service tax on the appellant under the categories of 'Construction of Residential Complex Service' (CRCS) and 'Works Contract Service' (WCS) for the respective periods - Whether the construction services provided by the appellant are leviable to service tax under CRCS or WC... [Read more]

Service Tax - Works Contract Service, Construction of Residential Complex Service - Appellant undertook construction of Married Accommodation Project for Military Engineering Services (MES), involving construction of residential quarters for military personnel during the period January 2007 to March 2011 and April 2011 to March 2012 - Department imposed service tax on the appellant under the categories of 'Construction of Residential Complex Service' (CRCS) and 'Works Contract Service' (WCS) for the respective periods - Whether the construction services provided by the appellant are leviable to service tax under CRCS or WCS - HELD - The appellant was providing services as a sub-contractor to the main contractor. In view of decision of the Larger Bench in the case of CST, New Delhi Vs Melange Developers Private Limited, the sub-contractors are required to pay service tax. However, there was a bonafide belief on the part of the appellant that they were providing services to MES and that no service tax was leviable on such services. Hence, the imposition of penalty under Section 78 is not justified - For the period post July 1, 2010, the demand would sustain for the normal period only, and penalty under Section 78 would not be invokable – The appeal is partially allowed by way of remand [Read less]

Service Tax - Cenvat Credit of CVD paid on import of 'Self Propelled Trailer Suction Hopper Dredger, Capital Goods – Disallowance of CENVAT credit on the ground that the dredger is not covered under the definition of 'inputs' or 'capital goods' in the CCR, 2004 - Whether the imported dredger can be considered as 'input' for the purpose of providing output service i.e. dredging service or it has to be treated as 'capital good' despite it not being explicitly covered within the definition of 'capital goods' under Rule 2(a) of the CCR, 2004 - HELD – The dredger, though not explicitly covered under the definition of 'capit... [Read more]

Service Tax - Cenvat Credit of CVD paid on import of 'Self Propelled Trailer Suction Hopper Dredger, Capital Goods – Disallowance of CENVAT credit on the ground that the dredger is not covered under the definition of 'inputs' or 'capital goods' in the CCR, 2004 - Whether the imported dredger can be considered as 'input' for the purpose of providing output service i.e. dredging service or it has to be treated as 'capital good' despite it not being explicitly covered within the definition of 'capital goods' under Rule 2(a) of the CCR, 2004 - HELD – The dredger, though not explicitly covered under the definition of 'capital goods' in Rule 2(a) of the CCR, has to be considered as an 'input' under Rule 2(k)(iv) as it is used for providing the output service of dredging. The definition of 'capital goods' in Rule 2(a) is restrictive and does not cover all possible capital goods, and the expression "unless the context otherwise requires" in the definitions allows for a broader interpretation considering the context. Further, the definition of 'capital goods' under a different statute cannot be relied upon to interpret the term under the CCR, as the CCR has its own definitions - The mere fact that the dredger is capitalized in the books of account and claimed for depreciation under the Income Tax Act does not preclude it from being considered as an 'input' under the CCR. Accordingly, the order disallowing the CENVAT credit claimed by the appellant is set aside and the appeal is allowed [Read less]

Central Excise - Cenvat credit on HR Plates, HR Sheets, and HR Plates - Whether the goods used by the appellant for repair and maintenance of storage tanks are eligible for Cenvat credit as 'inputs' under Rule 2(k) of the CCR or 'capital goods' under Rule 2(a) – HELD – The goods used for repair and maintenance of storage tanks are eligible for Cenvat credit as 'inputs' under Rule 2(k) of the CCR. The storage tanks are covered under the scope of 'capital goods' and the activity of repair and maintenance cannot be treated as mere repairs, but amounts to the manufacture of capital goods. Therefore, the credit on the goods... [Read more]

Central Excise - Cenvat credit on HR Plates, HR Sheets, and HR Plates - Whether the goods used by the appellant for repair and maintenance of storage tanks are eligible for Cenvat credit as 'inputs' under Rule 2(k) of the CCR or 'capital goods' under Rule 2(a) – HELD – The goods used for repair and maintenance of storage tanks are eligible for Cenvat credit as 'inputs' under Rule 2(k) of the CCR. The storage tanks are covered under the scope of 'capital goods' and the activity of repair and maintenance cannot be treated as mere repairs, but amounts to the manufacture of capital goods. Therefore, the credit on the goods used for such repair and maintenance activities is admissible to the appellant - the impugned order is set aside and the appeal is allowed [Read less]

GST - IGST refund, Fraudulent ITC, Limitation period for appeal – Refund of IGST on export of readymade garments – The refund was withheld by the Department due to an order passed raising a demand for fraudulent availment of Input Tax Credit – Petitioner seeking permission to file a statutory appeal against the Order-in-Original raising the demand for fraudulent ITC – HELD - the Petitioner plea for condonation of delay in filing the appeal against the Order-in-Original cannot be accepted. The power to condone delay in filing an appeal under Section 107 of the CGST Act is limited and cannot exceed the jurisdictional... [Read more]

GST - IGST refund, Fraudulent ITC, Limitation period for appeal – Refund of IGST on export of readymade garments – The refund was withheld by the Department due to an order passed raising a demand for fraudulent availment of Input Tax Credit – Petitioner seeking permission to file a statutory appeal against the Order-in-Original raising the demand for fraudulent ITC – HELD - the Petitioner plea for condonation of delay in filing the appeal against the Order-in-Original cannot be accepted. The power to condone delay in filing an appeal under Section 107 of the CGST Act is limited and cannot exceed the jurisdictional powers under the statute. Since the Petitioner had participated in the proceedings before the Order-in-Original was passed and the order was duly communicated to it, the delay in filing the appeal cannot be condoned. The Court dismissed the Petitioner's writ petition seeking permission to file the statutory appeal - The refund order be passed and the same be adjusted against the demand raised against the petitioner under the Order-in-Original – The writ petition is dismissed [Read less]

GST – Export of goods on payment of IGST, Omission of Rule 96(10) and its application to pending proceedings – Petitioner exported goods on payment of IGST, which were refunded. Subsequently, the authorities issued a notice alleging that the petitioner had procured goods under the Advance Authorization Scheme and therefore, as per Sub-rule (10) of Rule 96 of the CGST Rules, 2017, the petitioner could not have paid IGST on the exported goods - Whether the proceedings were pending when Notification No. 20/2024 dated 8th October, 2024 was issued, which omitted Rule 96(10) of the CGST Rules, 2017 prospectively, and therefo... [Read more]

GST – Export of goods on payment of IGST, Omission of Rule 96(10) and its application to pending proceedings – Petitioner exported goods on payment of IGST, which were refunded. Subsequently, the authorities issued a notice alleging that the petitioner had procured goods under the Advance Authorization Scheme and therefore, as per Sub-rule (10) of Rule 96 of the CGST Rules, 2017, the petitioner could not have paid IGST on the exported goods - Whether the proceedings were pending when Notification No. 20/2024 dated 8th October, 2024 was issued, which omitted Rule 96(10) of the CGST Rules, 2017 prospectively, and therefore, the demand raised against the petitioner should be set aside – HELD - As per the decision in the case of M/s. Adwrap Packaging Ltd., the Notification No. 20/2024 dated 8th October, 2024, which omitted Rule 96(10) of the CGST Rules, 2017 prospectively, would be applicable to all pending proceedings/cases where final adjudication has not taken place. Since the appeal filed by the petitioner was pending for final adjudication before the Appellate Authority on the date of the notification, the case of the petitioner would be covered by the said notification. Accordingly, the impugned orders are quashed and set aside [Read less]

Delhi Value Added Tax Act, 2004 - Non-payment of tax by selling dealer, Eligibility to Input Tax Credit - Whether the benefit of Input Tax Credit is available to the registered purchaser dealers who paid taxes to registered seller dealers in terms of invoices raised by them, even though those seller dealers did not deposit the collected tax with the Government – HELD - In the case of On Quest Merchandising India Pvt. Ltd. vs. Government of NCT of Delhi, the Delhi High Court had held that the expression "dealer or class of dealers" in Section 9(2)(g) of the DVAT Act should be interpreted as not including a purchasing deal... [Read more]

Delhi Value Added Tax Act, 2004 - Non-payment of tax by selling dealer, Eligibility to Input Tax Credit - Whether the benefit of Input Tax Credit is available to the registered purchaser dealers who paid taxes to registered seller dealers in terms of invoices raised by them, even though those seller dealers did not deposit the collected tax with the Government – HELD - In the case of On Quest Merchandising India Pvt. Ltd. vs. Government of NCT of Delhi, the Delhi High Court had held that the expression "dealer or class of dealers" in Section 9(2)(g) of the DVAT Act should be interpreted as not including a purchasing dealer who has bona fide entered into purchase transactions with validly registered selling dealers. The Special Leave Petition challenging the aforesaid decision of the High Court was disposed of without interfering with the order of the High Court – Since there is no dispute regarding the selling dealer being registered on the date of the transaction, and the transactions and invoices were not doubted, the respondent-assessee, as a bona fide purchasing dealer, is entitled to the ITC benefit after due verification of the invoices – The Revenue appeal is dismissed [Read less]

GST - Blocking of Electronic Credit Ledger on the ground that the supplier was found to be non-functional - Whether the blocking of the petitioner's electronic credit ledger by invoking Rule 86A of the CGST Rules is sustainable – HELD - At this stage, it would not be appropriate to make any observation on the factual aspect, as the investigation by the DGGI regarding the transactions between the petitioner and the named suppliers was still ongoing - It is apparent that the investigation is undertaken to verify the ITC, initiate demand and recovery proceeding, identify circular trading and arrest further leakage of revenu... [Read more]

GST - Blocking of Electronic Credit Ledger on the ground that the supplier was found to be non-functional - Whether the blocking of the petitioner's electronic credit ledger by invoking Rule 86A of the CGST Rules is sustainable – HELD - At this stage, it would not be appropriate to make any observation on the factual aspect, as the investigation by the DGGI regarding the transactions between the petitioner and the named suppliers was still ongoing - It is apparent that the investigation is undertaken to verify the ITC, initiate demand and recovery proceeding, identify circular trading and arrest further leakage of revenue, etc. The petitioner had provided explanations and documents and the appropriate authority was seized of the matter - Any observations on facts made by this Court at this juncture may not be justified as finding of facts is the domain of the statutory authority vested with power - the writ petition is dismissed being misconceived and premature [Read less]

GST – Exemption to Pilot Training Institute, Educational Institution – Petitioner is a DGCA-approved training organization engaged in providing training to commercial pilots, including ground school and aircraft simulator training, for extension of Aircraft Training Ratings (ATRs) on their existing commercial pilot licenses - Petitioner sought an Advance Ruling on whether the supply of such education and training services would be covered under the GST exemption for educational institutions under Notification No. 12/2017 – The AAR and AAAR ruled that the petitioner’s education and training services do not qualify f... [Read more]

GST – Exemption to Pilot Training Institute, Educational Institution – Petitioner is a DGCA-approved training organization engaged in providing training to commercial pilots, including ground school and aircraft simulator training, for extension of Aircraft Training Ratings (ATRs) on their existing commercial pilot licenses - Petitioner sought an Advance Ruling on whether the supply of such education and training services would be covered under the GST exemption for educational institutions under Notification No. 12/2017 – The AAR and AAAR ruled that the petitioner’s education and training services do not qualify for exemption from GST - Whether the supply of education and training services by the petitioner for extension of ATRs on commercial pilot licenses would be covered under the GST exemption for educational institutions under Notification No. 12/2017 - HELD – The Authority for Advance Ruling had denied the benefit on the ground that petitioner is not covered under definition of 'educational institution' as given in notification no. 12/2017-CT(R) at Serial No. 66(a) - The CBIC Circular dated 11.10.2024 clarified that the DGCA-approved flying training courses conducted by DGCA-approved Flying Training Organizations, wherein the DGCA mandates the requirement of a completion certificate, are covered under the GST exemption for educational institutions under Notification No. 12/2017 – The impugned orders are set aside and the matter is remitted back to Advance Ruling Authority to reconsider the petitioner's application in light of the clarificatory circular – The writ petition stands partly allowed [Read less]

Customs - Refund of Special Additional Duty (SAD), Limitation period for filing refund claim - Whether the limitation period of one year for filing the refund claim should be reckoned from the date of payment of SAD or from the date of sale of the imported goods - HELD - The limitation period of one year cannot be reckoned from the date of payment of SAD, as the right to claim refund accrues only upon completion of sale of the imported goods. The Notification No. 102/2007-Cus. dated 14.09.2007 was intended to allow refund of SAD incurred by the importer, which was meant to counter-balance the sales tax/VAT paid on sale of ... [Read more]

Customs - Refund of Special Additional Duty (SAD), Limitation period for filing refund claim - Whether the limitation period of one year for filing the refund claim should be reckoned from the date of payment of SAD or from the date of sale of the imported goods - HELD - The limitation period of one year cannot be reckoned from the date of payment of SAD, as the right to claim refund accrues only upon completion of sale of the imported goods. The Notification No. 102/2007-Cus. dated 14.09.2007 was intended to allow refund of SAD incurred by the importer, which was meant to counter-balance the sales tax/VAT paid on sale of the imported goods. Therefore, the limitation period of one year should be reckoned from the date of sale of the imported goods, and not the date of payment of SAD - the order rejecting the refund claim on the ground of limitation is set aside and the appeal is allowed [Read less]

Service Tax – SEZ Unit, Payments made to branch office situated outside India, Place of provision, Intermediary services - Respondent incurred expenditure in foreign currency, but had not paid service tax under the reverse charge mechanism on such expenditure – Demand of service tax on various heads of expenditure incurred by the respondent in foreign exchange for export of software solutions - Whether the expenditure incurred by the respondent in foreign exchange for reimbursing the marketing and sales promotion expenses and other expenses through its branch office located outside India is taxable under service tax un... [Read more]

Service Tax – SEZ Unit, Payments made to branch office situated outside India, Place of provision, Intermediary services - Respondent incurred expenditure in foreign currency, but had not paid service tax under the reverse charge mechanism on such expenditure – Demand of service tax on various heads of expenditure incurred by the respondent in foreign exchange for export of software solutions - Whether the expenditure incurred by the respondent in foreign exchange for reimbursing the marketing and sales promotion expenses and other expenses through its branch office located outside India is taxable under service tax under RCM - HELD – All the expenditure incurred by the Head office in India/respondent in foreign exchange for reimbursing the marketing and sales promotion expenses and other expenses through the branch office and all the services rendered by the foreign agents were all done through the branch office at UK, i.e. out of India are fully covered under Rule 9(c) of POPS, 2012 as ‘intermediary services’. Further, the invoices placed on record shows that the expenditure is including all local taxes which intermediary agents or consultants rendered, performed and consumed services out of India. Thus, the respondent is having its independent branch in UK, who are facilitating and providing services to their various clients and the respondent merely reimburses the expenditure to the branch, which do not fall in the category of taxable services under RCM - The expenditure incurred by the respondent in foreign exchange for reimbursing the marketing and sales promotion expenses and other expenses through its branch office in the United Kingdom is not taxable under service tax - The impugned order is affirmed and the appeal filed by the Revenue is dismissed - Whether the respondent, being a SEZ unit during the relevant period, is eligible for the exemption from payment of service tax - HELD - The respondent was registered as a SEZ unit until August 2012, and the provisions of the SEZ Act provide for an overriding effect over any other law. Further, the Central Government had issued notifications to provide unconditional exemption to services provided in relation to authorized operations in SEZ. Considering these provisions, the liability of service tax cannot be imposed on the respondent during the period it existed as a SEZ unit. [Read less]

Customs - Import of duty-free gold, Nominated agencies, Fraudulent diversion, Extended period of limitation, Penalty - Import of duty-free gold by nominated agencies under the Scheme of Exporters of Gems and Jewellery under Foreign Trade Policy 2015–20. The gold was procured by an exporter who failed to export the gold jewellery made from the duty-free gold and instead diverted it into the domestic market without payment of applicable customs duty - violation of the conditions under the exemption Notification No.57/2000-Cus dated May 5, 2000 read with Circular No.27 of 2016–CUS dated June 10, 2016 - Whether the nominat... [Read more]

Customs - Import of duty-free gold, Nominated agencies, Fraudulent diversion, Extended period of limitation, Penalty - Import of duty-free gold by nominated agencies under the Scheme of Exporters of Gems and Jewellery under Foreign Trade Policy 2015–20. The gold was procured by an exporter who failed to export the gold jewellery made from the duty-free gold and instead diverted it into the domestic market without payment of applicable customs duty - violation of the conditions under the exemption Notification No.57/2000-Cus dated May 5, 2000 read with Circular No.27 of 2016–CUS dated June 10, 2016 - Whether the nominated agencies, being the importers of the duty-free gold, are liable to pay the customs duty on the gold diverted by the exporter into the domestic market - HELD - The nominated agencies, being the importers of the duty-free gold, are liable to pay the customs duty on the gold diverted by the exporter into the domestic market. The incidence of Customs duty is a charge on the imported goods themselves, rather than being a personal liability of a specific individual. The liability to pay duty is intrinsically linked to the goods and arises irrespective of the identity of the importer. The nominated agencies had executed bonds at the time of importation, undertaking to pay the customs duty in the event the exporter fails to export the gold jewellery within the prescribed period. Therefore, the nominated agencies are liable to pay the customs duty on the diverted gold - the order of confiscation and redemption fine, and the penalty imposed on the nominated agencies are set aside – The appeal is partly allowed - Whether the extended period of limitation under Section 28(4) of the Customs Act can be invoked against the nominated agencies - HELD - Since there is no evidence of collusion or fraud on the part of the nominated agencies, the extended period of limitation under Section 28(4) cannot be invoked against them. The case was initiated as one of fraudulent diversion, and it was only after investigation that the liability of the nominated agencies was determined. Therefore, the normal period of limitation shall apply - Whether penalty can be imposed on the nominated agencies under Section 112(a) of the Customs Act - HELD - The Adjudicating Authority had specifically found that there is no evidence of the nominated agencies colluding with the exporter or submitting any willful misstatement. The nominated agencies cannot be penalized for the illegal acts of the exporter, and they had no reason to suspect any malafide since the customs officials had processed the shipping bills and export invoices. [Read less]

GST - Bunching of Show Cause Notices for Different Financial Years – Petitioners aggrieved by the issuance of consolidated SCNs covering multiple Financial Years from 2017-18 to 2023-24, demanding GST, reversal of input tax credit, and other dues - HELD - The issuance of consolidated Show Cause Notices covering multiple Financial Years, making a composite demand for multiple years without separate adjudication per year, is impermissible under the Scheme of the CGST Act. The Act contemplates assessment and levy of tax based on the filing of returns for each tax period, which is either monthly or annual. The provisions for... [Read more]

GST - Bunching of Show Cause Notices for Different Financial Years – Petitioners aggrieved by the issuance of consolidated SCNs covering multiple Financial Years from 2017-18 to 2023-24, demanding GST, reversal of input tax credit, and other dues - HELD - The issuance of consolidated Show Cause Notices covering multiple Financial Years, making a composite demand for multiple years without separate adjudication per year, is impermissible under the Scheme of the CGST Act. The Act contemplates assessment and levy of tax based on the filing of returns for each tax period, which is either monthly or annual. The provisions for assessment, limitation, and recovery of tax dues are structured around the tax period, which is typically a Financial year. The term "tax period" is defined to mean the period for which the return is required to be furnished - The provisions for determination of tax liability under Sections 73 and 74 of the CGST Act also refer to the "financial year" and prescribe separate limitation periods for each financial year. The proper officer has to issue separate SCNs for each financial year as the limitation period and other statutory safeguards are applicable independently for each year - Relying on the decisions of the Madras High Court and other High Courts, it is held that the bunching of SCNs for multiple Financial years frustrates the limitation scheme, prevents the assessee from giving year-specific rebuttals, and amounts to jurisdictional overreach by the authorities. The fact involved before the Delhi High Court in Ambika Traders case, being distinct and revolving around the wrongfully claimed ITC, which was prescribed for the subsequent years, is quite distinct from the facts of instant case. In any case, the SLP was withdrawn by Ambika Traders before the Apex Court and the said decision will not apply to facts in the present case - The consolidated show cause notices issued by the revenue authorities are quashed and the writ petitions are allowed [Read less]

GST – Cancellation of GST registration, Opportunity of personal hearing - Whether the cancellation of the petitioner's GST registration by the 1st respondent without providing an opportunity of personal hearing as mandated under Section 29(2) of the CGST Act violated the principles of natural justice – HELD - The contention of the petitioner that no personal hearing was granted could not be accepted as the notice for personal hearing was given and an authorized representative of the petitioner appeared before the authority on the date mentioned in the notice. The fact that the authorized representative of the petitione... [Read more]

GST – Cancellation of GST registration, Opportunity of personal hearing - Whether the cancellation of the petitioner's GST registration by the 1st respondent without providing an opportunity of personal hearing as mandated under Section 29(2) of the CGST Act violated the principles of natural justice – HELD - The contention of the petitioner that no personal hearing was granted could not be accepted as the notice for personal hearing was given and an authorized representative of the petitioner appeared before the authority on the date mentioned in the notice. The fact that the authorized representative of the petitioner had chosen to hand over the written explanation on that day strengthened the version of the respondents that no adjournment or postponement was sought. The petitioner's reply was not a clear request for a further date and only a request for hearing if the authority found it necessary. The authority had passed the order without finding any necessity to seek any further clarification, and hence, there is no reason to interfere with the impugned order - The Writ Petition is dismissed [Read less]

GST – Tamil Nadu AAAR - Payment of differential duties through TR-6 challans, Eligibility to input tax credit of duty paid through TR-6 challan, Duty paying document - The appellant sought Advance Ruling on eligibility to avail ITC on the IGST paid through TR-6 challans – Vide the impugned the AAR held that TR-6 challan cannot be considered as an eligible document for the purpose of availment of ITC - Whether the appellant can avail ITC of the import IGST paid through TR-6 Challan in terms of Section 16(2) of the CGST Act read with Rule 36 of CGST Rules, 2017 - HELD - Neither a TR-6 challan as such, nor a TR-6 challan ... [Read more]

GST – Tamil Nadu AAAR - Payment of differential duties through TR-6 challans, Eligibility to input tax credit of duty paid through TR-6 challan, Duty paying document - The appellant sought Advance Ruling on eligibility to avail ITC on the IGST paid through TR-6 challans – Vide the impugned the AAR held that TR-6 challan cannot be considered as an eligible document for the purpose of availment of ITC - Whether the appellant can avail ITC of the import IGST paid through TR-6 Challan in terms of Section 16(2) of the CGST Act read with Rule 36 of CGST Rules, 2017 - HELD - Neither a TR-6 challan as such, nor a TR-6 challan read with the SVB order and letters issued by the tax authorities, can be considered as an eligible document for the purpose of availment of ITC – The phrase “a bill of entry or any similar document” in Rule 36(1)(d) of the CGST Rules, 2017 means that apart from being similar to a Bill of Entry, the document should also be a prescribed one under the Customs Act, 1962 or the rules made thereunder. The TR-6 challan is not a document prescribed under the Customs Act, 1962 or the rules made thereunder, unlike a bill of entry which is a prescribed document for assessment of integrated tax on imports under Rule 36(1)(d) of the CGST Rules - he contention of the appellant about a TR-6 challan to be treated as a document similar to a ‘Bill of Entry’ or a ‘TR-6 challan along with the SVB order and letter issued by the tax authorities to pay duty under Section 28(1)(b) of Customs Act’, to be treated as a document similar to a ‘Bill of Entry’, lacks legal backing and is not sustainable – The Ruling passed by the Authority for Advance Ruling is upheld and the appeal is rejected - Whether the time limit under Section 16(4) applies to ITC on IGST paid through TR-6 challans - HELD - Since TR-6 challan is not an eligible document for ITC, the question of whether the time limit under Section 16(4) applies to such ITC does not arise - Whether the time limit under Section 16(4) applies to ITC on re-assessed Bills of Entry - HELD - The time limit prescribed under Section 16(4) of the CGST Act, which applies to ITC on invoices and debit notes, is also applicable to ITC on bills of entry, by virtue of the 'mutatis mutandis' application of the CGST Act provisions to the IGST Act under Section 20 of the IGST Act. Therefore, the ITC on re-assessed bills of entry is also subject to the time limit under Section 16(4). [Read less]

Service Tax – Challenge to levy of service tax under section 65(105)(zzq), section 65(105)(zzzh) and Entry (zzzzu) in section 65(105) of the Finance Act, 1994 - The petitioners challenge the levy of service tax under provisions of the Finance Act, 1994, as amended by the Finance Act, 2010, purported to bring the activity of any commercial or industrial construction or construction of residential complex done prior to obtaining the completion certificate under the caption of “deemed service” and levy service tax on special services provided by the builders to the prospective buyers providing preferential location etc.... [Read more]

Service Tax – Challenge to levy of service tax under section 65(105)(zzq), section 65(105)(zzzh) and Entry (zzzzu) in section 65(105) of the Finance Act, 1994 - The petitioners challenge the levy of service tax under provisions of the Finance Act, 1994, as amended by the Finance Act, 2010, purported to bring the activity of any commercial or industrial construction or construction of residential complex done prior to obtaining the completion certificate under the caption of “deemed service” and levy service tax on special services provided by the builders to the prospective buyers providing preferential location etc. - Whether the provisions relating to the levy of service tax on commercial or industrial construction and construction of residential complexes are unconstitutional and beyond the legislative competence of Parliament - HELD – The Bombay High Court in similar matter, in the case of Maharashtra Chamber of Housing Industry and another v. Union of India held that there is no merit in the Constitutional challenge raised in the petition as the tax continues to be a tax on rendering of a service by the builder to the buyer and there is no vagueness and uncertainty as the legislative prescription is clear – The Hon’ble Bombay Court considered the history of the provisions of Finance Act, 1994 and assigned reasons for rejecting the Constitutional validity of the explanation as well as clauses inserted by the Finance Act of 2010 - Respectfully agreeing with the reasons assigned by Hon’ble Bombay High Court and adopting the same, these petitions are also dismissed on the ground that there is no merit in the constitutional challenge raised in these petitions – The petitions are dismissed [Read less]

Customs – 100% EOU, DTA Clearance of LPG - Respondent-assessee was a 100% EOU during the period from 01.10.2007 to 23.10.2007 and had imported various inputs and raw materials for consumption by foregoing the duty liability either of Customs or Excise – Respondent produced LPG and had intention to export the same, which could not materialise due to absence of clearance from the Govt. The respondent had to sell the LPG produced in the DTA for public distribution to various Public Sector Undertakings and Oil Companies by availing the benefit of exemption Notifications - Whether the Tribunal committed error in applying Se... [Read more]

Customs – 100% EOU, DTA Clearance of LPG - Respondent-assessee was a 100% EOU during the period from 01.10.2007 to 23.10.2007 and had imported various inputs and raw materials for consumption by foregoing the duty liability either of Customs or Excise – Respondent produced LPG and had intention to export the same, which could not materialise due to absence of clearance from the Govt. The respondent had to sell the LPG produced in the DTA for public distribution to various Public Sector Undertakings and Oil Companies by availing the benefit of exemption Notifications - Whether the Tribunal committed error in applying Section 28(2B) of the Customs Act, 1962 and Section 11A(2B) of the Central Excise Act, 1944 to hold that there was no need to issue any show-cause notice to the respondent as the duty liability and interest were voluntarily discharged by it - HELD - The Tribunal was justified in applying Section 28(2B) of the Customs Act, 1962 and Section 11A(2B) of the Central Excise Act, 1944 to hold that no show-cause notice was required to be issued as the respondent had discharged the duty foregone along with interest voluntarily without any intimation from the Department. The respondent had clearly indicated the clearance of LPG in the returns as being cleared to DTA by claiming exemption under specific Notifications. The Tribunal rightly observed that the show-cause notice did not bring forth any situation wherein it could be concluded that there was suppression of facts with intention to evade duty. The calculation of duty as per the respondent's own computation was found to be correct and the Tribunal, therefore, held that the extended period of limitation could not have been invoked - The Tribunal has not committed any error in applying the provisions of Section 28(2B) of the Customs Act, 1962 and Section 11A(2B) of the Central Excise Act, 1944, and in holding that the extended period of limitation could not have been invoked in the absence of any suppression of material information by the respondent - The appeals filed by the Revenue are dismissed [Read less]

Service Tax - CENVAT credit, Deduction of R&D cess, Unregistered premises – SCN issued alleging that the appellant had paid service tax on technical know-how and royalty payments on reverse charge basis without availing the deduction on account of R&D cess paid, resulting in excess availment of CENVAT credit, and had also availed CENVAT credit on the strength of invoices raised in the name of an unregistered premises - Whether the appellant was entitled to avail CENVAT credit of the full service tax paid on technical know-how and royalty payments under reverse charge mechanism, without deducting the R&D cess paid - HELD ... [Read more]

Service Tax - CENVAT credit, Deduction of R&D cess, Unregistered premises – SCN issued alleging that the appellant had paid service tax on technical know-how and royalty payments on reverse charge basis without availing the deduction on account of R&D cess paid, resulting in excess availment of CENVAT credit, and had also availed CENVAT credit on the strength of invoices raised in the name of an unregistered premises - Whether the appellant was entitled to avail CENVAT credit of the full service tax paid on technical know-how and royalty payments under reverse charge mechanism, without deducting the R&D cess paid - HELD - The appellant was eligible to take CENVAT credit of the full duty paid, irrespective of whether such duty was payable or not. The exemption under Notification No. 17/2004 was not an absolute exemption but a conditional one, and the appellant could not be forced to avail the exemption. The situation was revenue neutral as the appellant would be eligible for CENVAT credit of the service tax paid on reverse charge basis - The appellant cannot be denied the credit on this ground – Further, the non-registration of the recipient premises is at best a procedural lapse, and CENVAT credit cannot be disallowed on this ground. In the absence of a statutory provision prescribing registration as a mandatory condition for availing CENVAT credit, the same cannot be denied - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Customs House Agent Services, Pure Agent - Supply of crane, material handling equipment, Demand under Business Support Services - Appellant collected certain charges along with the CHA service charges, but excluded these charges while computing the assessable value for service tax. It was also alleged that the Appellant had collected charges for providing crane and forklift services which should be classified as 'Business Support Services' - Whether the various expenses incurred by the Appellant on behalf of their clients can be excluded from the taxable value as 'Pure Agent' services under Rule 5(2) of the S... [Read more]

Service Tax - Customs House Agent Services, Pure Agent - Supply of crane, material handling equipment, Demand under Business Support Services - Appellant collected certain charges along with the CHA service charges, but excluded these charges while computing the assessable value for service tax. It was also alleged that the Appellant had collected charges for providing crane and forklift services which should be classified as 'Business Support Services' - Whether the various expenses incurred by the Appellant on behalf of their clients can be excluded from the taxable value as 'Pure Agent' services under Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006 - HELD - The Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006, which required inclusion of all expenditure incurred by the service provider in the course of providing taxable service in the assessable value, has been struck down by the Hon'ble Delhi High Court and the Supreme Court as being ultra vires Sections 66 and 67 of the Finance Act, 1994. Consequently, reliance on Rule 5(2) for 'Pure Agent' services cannot come to the rescue of the Department as the parent provision, i.e. Rule 5(1), has been held to be invalid. Therefore, the demands relating to inclusion of the charges collected by the Appellant along with the CHA service in the assessable value are set aside – On the issue of charges collected charges for providing crane and forklift services, the services provided by the Appellant involving supply of cranes, forklifts etc. are classifiable under 'Supply of Tangible Goods' service and not under 'Business Support Services'. Since the demand pertained to the period prior to the introduction of 'Supply of Tangible Goods' service, the same is not taxable. Accordingly, the demand relating to 'Business Support Services' is also set aside – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Receipt of manpower supply service – Demand of tax – Dropping of demand – Respondent is a part of Oriental Consultants Company Ltd., Japan, (OC, Japan), which is engaged in providing engineering and consultancy services – OC, Japan entered into an agreement with various Indian parties for provision of services through project offices – Respondent is one of project offices of OC, Japan and is registered as a foreign company in India – Department issued show cause notice to Respondent, by proposing demand of Service Tax on Manpower Supply Service provided by OC, Japan to Respondent – Adjudicatin... [Read more]

Service Tax – Receipt of manpower supply service – Demand of tax – Dropping of demand – Respondent is a part of Oriental Consultants Company Ltd., Japan, (OC, Japan), which is engaged in providing engineering and consultancy services – OC, Japan entered into an agreement with various Indian parties for provision of services through project offices – Respondent is one of project offices of OC, Japan and is registered as a foreign company in India – Department issued show cause notice to Respondent, by proposing demand of Service Tax on Manpower Supply Service provided by OC, Japan to Respondent – Adjudicating Authority dropped demand as proposed in show cause notice – Whether Adjudicating Authority has erred in dropping demand raised in respect of Manpower Supply Service provided by OC, Japan to Respondent – HELD – OC, Japan is a company incorporated in Japan under provisions of Japanese laws and is engaged in execution of various turnkey project, for which, they have established Project Offices in India, which undertakes execution of contracts and receives considerations from Indian customers. Profit remaining in project office at year end are repatriated to OC, Japan. Respondent and OC, Japan are one and same company, as Respondent is merely a Project Office which is registered as a foreign company in India. Respondent being a Project Office cannot be treated as a separate legal entity from OC, Japan and therefore, no tax can be levied on services received by Respondent from OC Japan, as it amounts to “service to self’. Impugned order passed by Adjudicating Authority is uphold – Appeal dismissed [Read less]

Service Tax – Refund of excess service tax, Limitation period for review order - Respondent filed an application seeking refund of the excess tax paid, which was granted by the adjudicating authority. The Commissioner passed a review order directing the Department to file an appeal against the original order granting the refund - Whether the review order passed by the Commissioner was within the limitation period under Section 84(2) of the Act - HELD - The limitation period for the review order starts from the date of communication of the original order to the reviewing authority, which was April 10, 2017. The review ord... [Read more]

Service Tax – Refund of excess service tax, Limitation period for review order - Respondent filed an application seeking refund of the excess tax paid, which was granted by the adjudicating authority. The Commissioner passed a review order directing the Department to file an appeal against the original order granting the refund - Whether the review order passed by the Commissioner was within the limitation period under Section 84(2) of the Act - HELD - The limitation period for the review order starts from the date of communication of the original order to the reviewing authority, which was April 10, 2017. The review order was passed on October 9, 2017, which was beyond the 3-month period prescribed under Section 84(2) of the Act - The decision of the Commissioner (Appeals) holding that the review order is time-barred is upheld – The Revenue appeal is dismissed [Read less]

Central Excise – Sections 2(f), 11A and 35 of Central Excise Act, 1944 – Manufacture of plastic laminates – Entitlement of benefit of notification – Appellants are engaged in manufacture of Plastic Laminates and was availing benefit of Notification No.56/2002-CE – Department issued show cause notices seeking to deny refund by way of self-credit and seeking to deny CENVAT credit availed by Appellants – Commissioner confirmed duty demand and denied CENVAT credit – Whether processes undertaken by Appellants to make Plastic Laminates amounts to manufacture or not – HELD – Section 2(f) of the Act provides that... [Read more]

Central Excise – Sections 2(f), 11A and 35 of Central Excise Act, 1944 – Manufacture of plastic laminates – Entitlement of benefit of notification – Appellants are engaged in manufacture of Plastic Laminates and was availing benefit of Notification No.56/2002-CE – Department issued show cause notices seeking to deny refund by way of self-credit and seeking to deny CENVAT credit availed by Appellants – Commissioner confirmed duty demand and denied CENVAT credit – Whether processes undertaken by Appellants to make Plastic Laminates amounts to manufacture or not – HELD – Section 2(f) of the Act provides that manufacture includes any process incidental or ancillary to completion of a manufactured product. Appellants are transforming laminated/metallised plastic sheets into packing material. Processes involved in impugned cases are not that of mere lamination. Two or more layers are glued together and left in a hot room, so that they bond together better. End product does not remain a mere laminated film. Distinct new product emerges as a result of processes undertaken by Appellants. Processes undertaken by Appellants in converting laminated/metallised laminates into packaging material amounts to manufacture. As processes undertaken by Appellants amounts to manufacture, there is no infirmity in availment of benefit of Notification No.56/2002 by Appellants – Appeals allowed - Recovery of self-credit – Whether Revenue could have issued show cause notices to recover allegedly wrongly availed self-credit in terms of Notification No.56/2002-CE without a challenge to assessment orders – HELD – Appellants have taken self-credit and submitted to department on a month to month basis. For entire impugned period, refund availed by Appellants remains unchallenged. Though erroneously refunded amounts can be recovered in terms of Section 11A of the Act, no authority has held that refunds availed are erroneous. It is not open to department to proceed with recovery of so called erroneous refund, unless order of assessment or self-assessment as the case may be is appealed against under provisions of Section 35 of the Act - Eligibility to take credit – Whether Appellants are eligible to take CENVAT Credit – HELD – Appellants were paying duty and were filing statutory monthly returns. No objection was ever taken by department at any stage. Once department collected central excise duty, subsequently they cannot turn around and contend or that Appellants were not entitled to avail/utilise CENVAT credit. It is held in a number of cases that when final product is cleared on payment of duty, CENVAT credit would be available, if otherwise eligible. Impugned order seeks to deny CENVAT Credit for reason that processes undertaken by Appellants do not amount to manufacture. Processes undertaken by Appellants in converting laminated/metallised laminates into packaging material amounts to manufacture. Department has not alleged any other reasons for denial of credit. Appellants are eligible to avail CENVAT Credit and denial of same is not sustainable. Orders under challenge are set aside. [Read less]

Customs – Clearance of prohibited goods, Adherence to legal procedures and principles of natural justice – Petitioner imported dry dates. The goods were cleared by the Customs authorities after following due verification - The sixth respondent, Intelligence Officer, received information that the goods may have originated from Pakistan, which is prohibited by DGFT Notification No. 06/2025-26 dated 2 May 2025. Without following any formal legal procedure, respondents contacted the Customs broker and transporter and allegedly forced them to bring the already cleared goods back to the customs facility - Whether the actions... [Read more]

Customs – Clearance of prohibited goods, Adherence to legal procedures and principles of natural justice – Petitioner imported dry dates. The goods were cleared by the Customs authorities after following due verification - The sixth respondent, Intelligence Officer, received information that the goods may have originated from Pakistan, which is prohibited by DGFT Notification No. 06/2025-26 dated 2 May 2025. Without following any formal legal procedure, respondents contacted the Customs broker and transporter and allegedly forced them to bring the already cleared goods back to the customs facility - Whether the actions of the sixth respondent in forcing the return of the cleared goods were legal and in accordance with the provisions of the Customs Act - HELD - The goods had been cleared by a proper officer under Section 47 of the Customs Act after due verification. The sixth respondent-Intelligence Officer, instead of following the legal procedure of issuing a show-cause notice or adopting other statutory means to revoke the clearance, arbitrarily forced the return of the goods without any contemporaneous recording of reasons or adherence to principles of natural justice - The actions of the Intelligence Officer were not backed by any specific provisions of the Customs Act, particularly Sections 47 and 106. The lack of any written record of the reasons for his belief that the goods were of Pakistani origin, despite the initial clearance, was a significant infirmity. The statutory powers must be exercised in accordance with the law and that the ends cannot justify the means, especially when dealing with civil consequences for a party - It is well settled that principles of natural justice and fairness must be followed before any party is subjected to serious civil consequences. Even such principles do not appear to have been followed even minimally in the present case. The respondents are directed to issue a show-cause notice to the petitioner within four weeks and dispose of the same within six weeks. If the respondents fail to do so, the goods are to be released upon the petitioner furnishing a bank guarantee to secure the payment of a redemption fine, if any – The writ petition is disposed of [Read less]

GST - Overlap of proceedings, Jurisdiction of Officers – Challenge of show cause notice and notice issued by the central authorities proposing to deny the petitioner's credit under the CGST Act for the period from 2017-2018 to 2022-2023 - The petitioner contended that for the years 2017-2018 and 2018-2019, State authorities had already issued notices and passed adjudication orders, which the petitioner has appealed - Whether the Central authorities have jurisdiction to assess the period of 2017-2018 and 2018-2019 which was already covered by the State proceedings – HELD - Prima facie, the Supreme Court decision in Armo... [Read more]

GST - Overlap of proceedings, Jurisdiction of Officers – Challenge of show cause notice and notice issued by the central authorities proposing to deny the petitioner's credit under the CGST Act for the period from 2017-2018 to 2022-2023 - The petitioner contended that for the years 2017-2018 and 2018-2019, State authorities had already issued notices and passed adjudication orders, which the petitioner has appealed - Whether the Central authorities have jurisdiction to assess the period of 2017-2018 and 2018-2019 which was already covered by the State proceedings – HELD - Prima facie, the Supreme Court decision in Armour Security (India) Ltd. supports the petitioner's contention regarding the years 2017-2018 and 2018-2019. However, the impugned notices cover a larger period beyond these two years, which cannot be said to be entirely covered by the State proceedings. The petitioner is directed to provide the details of the State proceedings and pending appeals, and it is expected that the Central authorities consider these contentions in accordance with law and on their own merits. However, the jurisdictional bar under Section 6(2)(b) of the CGST Act would not apply to the remaining two years not covered by the State proceedings, and the Central authorities would be at liberty to dispose of the impugned notices relating to those years without any impediment, though on their own merits and in accordance with law - The writ petition is disposed of [Read less]

GST – Expiry of E-Way Bill, Detention of goods, Levy of penalty, intent to evade tax or not – During transit of goods that vehicle developed a break down and the goods were transported in another vehicle and during the said process, the earlier e-way bill was expired, but new e-way bill was generated - HELD - The goods in question were moving pursuant to the agreement entered in between the petitioner and National Geo-Spatial Data Centre, Department of Surveyor General of India, Government of India. It is also not in dispute that the goods were accompanying with genuine tax invoice and e-way bill, but the e-way bill wa... [Read more]

GST – Expiry of E-Way Bill, Detention of goods, Levy of penalty, intent to evade tax or not – During transit of goods that vehicle developed a break down and the goods were transported in another vehicle and during the said process, the earlier e-way bill was expired, but new e-way bill was generated - HELD - The goods in question were moving pursuant to the agreement entered in between the petitioner and National Geo-Spatial Data Centre, Department of Surveyor General of India, Government of India. It is also not in dispute that the goods were accompanying with genuine tax invoice and e-way bill, but the e-way bill was expired before reaches its destination. The respondents have not disputed the stand taken by the petitioner that the vehicle developed a break down, which delayed the movement of goods. It is also not in dispute that the petitioner has generated a new e-way bills before passing of an order under section 129(3) of the GST Act – Mere expiry of e-way bill will not attribute to intention to evade payment of tax - The impugned orders are quashed and the petition is allowed [Read less]

Central Excise – Section 11AC of Central Excise Act, 1944 – Export of cotton yarn – Availment of exemption – Appellant is engaged in manufacture of cotton yarn – Appellant cleared cotton yarn for export by availing exemption under Notification No.30/2004-CE – Appellant took CENVAT credit of service tax paid on input services and utilized it towards payment of duty on clearance of final products – Department issued show cause notice alleging that there was short payment (reversal) of CENVAT credit attributable to common input services used in manufacture of exempted goods and proposed to recover said amount wi... [Read more]

Central Excise – Section 11AC of Central Excise Act, 1944 – Export of cotton yarn – Availment of exemption – Appellant is engaged in manufacture of cotton yarn – Appellant cleared cotton yarn for export by availing exemption under Notification No.30/2004-CE – Appellant took CENVAT credit of service tax paid on input services and utilized it towards payment of duty on clearance of final products – Department issued show cause notice alleging that there was short payment (reversal) of CENVAT credit attributable to common input services used in manufacture of exempted goods and proposed to recover said amount with interest – Joint Commissioner confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Joint Commissioner – Whether value of clearances for export made by Appellant under Duty drawback scheme for which exemption under Notification No.30/2004 has been availed has to be included for reversal of credit – HELD – It is not the case of department that goods have not been exported or Appellant did not have relevant documents for availing credit or inputs have not been used for manufacture of exported goods. Credit is eligible on duty paid on inputs and input services used in manufacture of exempted goods which are exported. Demand alleging that Appellant has to reverse credit after including value of export clearances was not proper – Appeal allowed - Value of waste yarn – Admissibility of credit – Whether value of yarn waste without payment of duty can be included for reversal of credit – HELD – Department is of view that credit on inputs contained in waste is not eligible and has to be reversed by Appellant. CENVAT credit is admissible so long as inputs are used in or in relation to manufacture of final products. CENVAT credit is admissible in respect of amount of inputs contained in any of waste, reuse or bye product. Value of waste yarn cannot be included in value of exempted turnover - Clearance of yarn for job work – Whether value of cotton yarn cleared for job work for manufacture of grey fabric has to be considered for reversal of credit – HELD – Appellant had sent cotton yarn to job worker's premises for conversion into either grey fabric or doubled yarn and received back the job worked goods. After carrying out necessary processes, grey fabric/doubled yarn was cleared for domestic consumption without payment of duty by availing exemption under Notification No.30/2004-CE. Appellant had already included value of goods so cleared under category of "exempted goods" for working out quantum of credit to be reversed. Therefore, to include the value of goods cleared for job work would tantamount to double jeopardy and is not sustainable in law. Impugned order passed by Commissioner (Appeals) is set aside [Read less]

Andhra Pradesh General Sales Tax Act, 1957 - Levy of sales tax on the Rural Development Cess component - Whether the collection of sales tax levied on the Rural Development Cess component was enforceable in terms of Government Orders dated 10.09.2003 - HELD - The two Government Orders (G.O.Ms.Nos.951 and 952, dated 10.09.2003) clearly provided for exemption from the levy of sales tax on the Rural Development Cess component of the purchase value of paddy by the rice millers, and also waived the outstanding arrears towards sales tax on the Rural Development Cess component - The Court agrees with the Tribunal's finding that t... [Read more]

Andhra Pradesh General Sales Tax Act, 1957 - Levy of sales tax on the Rural Development Cess component - Whether the collection of sales tax levied on the Rural Development Cess component was enforceable in terms of Government Orders dated 10.09.2003 - HELD - The two Government Orders (G.O.Ms.Nos.951 and 952, dated 10.09.2003) clearly provided for exemption from the levy of sales tax on the Rural Development Cess component of the purchase value of paddy by the rice millers, and also waived the outstanding arrears towards sales tax on the Rural Development Cess component - The Court agrees with the Tribunal's finding that the effect of these Government Orders was to grant exemption or waiver for the previous years as well – The petitioner-State Government is unable to show that the Tribunal's finding was contrary to the intention of the Government in issuing the aforementioned Government Orders, nor were there any other Government Orders issued by the Government that could have allowed the levy or recovery of sales tax on the Rural Development Cess component - The Tax Revision Cases are rejected [Read less]

Service Tax - Refund, Nexus with output service – Appellant exported crew-requirement services to overseas principals and claimed refund of unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004 - Whether the service tax paid on the additional rent for early termination of the leave and license agreement is eligible for refund as input service credit – HELD - The adjudicating authority had observed that the renting of the immovable property had a direct nexus with the output services rendered by the appellant. The CBEC Circular dated 16.03.2012 dispensed with the requirement of co-relation between indiv... [Read more]

Service Tax - Refund, Nexus with output service – Appellant exported crew-requirement services to overseas principals and claimed refund of unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004 - Whether the service tax paid on the additional rent for early termination of the leave and license agreement is eligible for refund as input service credit – HELD - The adjudicating authority had observed that the renting of the immovable property had a direct nexus with the output services rendered by the appellant. The CBEC Circular dated 16.03.2012 dispensed with the requirement of co-relation between individual input services and exports for the formula-based refund under Rule 5 of the CENVAT Credit Rules, 2004 – Further, without invoking the provisions of Rule 14 of the CENVAT Credit Rules, 2004 for recovery of the allegedly inadmissible credit, the credit cannot be denied at the time of grant of refund. Moreover, the additional rent paid was in the nature of compensation for early vacation of the premises, and not a penalty, and therefore, had a nexus with the output service – The refund on account of service tax paid towards the termination of the lease rental agreement is allowed - The impugned order is set aside and the appeal is allowed [Read less]

Customs – Import of goods – Amendment of documents – Appellant shipped goods to India – Goods, according to import manifest, were consigned to Venture Impex, who after filing bill of entry did not take their purported interests any further – Appellant, being aggrieved by alleged non-fulfillment of contractual obligation, found alternative consignee and sought amendment of a ‘line’ in a particular import – Proper officer allowed amendment sought by Appellant – First appellate authority set aside order passed by Proper officer and allowed appeals filed by department and Venture Impex – Whether First appel... [Read more]

Customs – Import of goods – Amendment of documents – Appellant shipped goods to India – Goods, according to import manifest, were consigned to Venture Impex, who after filing bill of entry did not take their purported interests any further – Appellant, being aggrieved by alleged non-fulfillment of contractual obligation, found alternative consignee and sought amendment of a ‘line’ in a particular import – Proper officer allowed amendment sought by Appellant – First appellate authority set aside order passed by Proper officer and allowed appeals filed by department and Venture Impex – Whether First appellate authority is justified in setting aside of amendment allowed by Proper officer – HELD – Amendment was set aside on grounds of procedural non-compliance. Documentary deficiency upon which interference with amendment ordered by proper officer was sought for by jurisdictional Commissioner and allowed by First appellate authority was the ‘non-negotiable’ bill of lading, against which, consignment had purportedly been shipped. Non-negotiable bill of lading is provided for fulfillment of landing and customs formalities. In absence of evidence of permission by competent authority, locus standi of Venture Impex vis-à-vis bill of entry should have been determined and their entitlement to file appeal against any order pertaining to goods is questionable. In these circumstances, rejection of amendment in impugned order should not be allowed to stand. Impugned order passed by First appellate authority is set aside. Dispute remanded to First appellate authority for determination of competence to entertain appeal and on factum of nature of bill of lading as ‘non-negotiable’ or otherwise – Appeal allowed [Read less]

Customs – Sections 112 and 114AA of Customs Act, 1962 – Imposition of penalties – Sustainability – Department received intelligence to effect that an importer is indulging in mis-declaration and undervaluation of their imports – Detailed investigation revealed that goods were imported and cleared in name of importer through Appellant/courier company – After following due process of law, Adjudicating authority imposed penalties on Appellants under Sections 112 and 114AA of the Act – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether penalties under Sections 112 and 114AA of the ... [Read more]

Customs – Sections 112 and 114AA of Customs Act, 1962 – Imposition of penalties – Sustainability – Department received intelligence to effect that an importer is indulging in mis-declaration and undervaluation of their imports – Detailed investigation revealed that goods were imported and cleared in name of importer through Appellant/courier company – After following due process of law, Adjudicating authority imposed penalties on Appellants under Sections 112 and 114AA of the Act – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether penalties under Sections 112 and 114AA of the Act imposed on Appellants are sustainable – HELD – Penalty under Section 112 of the Act can be imposed only when evidence available on record indicate that Appellants did or omitted to do an act rendering the goods liable for confiscation or abetted such act or knowingly dealt with such goods. Mere filing of courier bills of entry based on importer’s documents cannot constitute abatement by itself. Section 114AA of the Act provides for imposition of penalty on a person who knowingly or intentionally make, sign, uses or causes to be made any declaration, statement or documents, which is false in any material particular in transaction of any business under the Act. Knowledge and intentions are sine qua non for attracting penal provisions. Penalty cannot be levied without establishing that violations were within Appellant’s knowledge. Manipulation in documents was done by importer. There is no evidence to link Appellants with such manipulation. Appellant was not aware about mis-declaration or undervaluation of imports. Department has failed to establish knowledge, intention or abetment by Appellants. Penalties imposed on Appellants are not sustainable and hence, impugned order passed by Commissioner (Appeals) is set aside – Appeals allowed [Read less]

Service Tax - Renting of Immovable Property, Association of Persons (AOP) – Appellants entered into a tripartite agreement with State Bank of India and M/s Luminous Group to obtain a loan for construction of premises, which were later leased out to various entities - Revenue entertained an opinion that these four persons formed an "Association of Persons" (AOP) and were liable to pay service tax on the rental income - Whether the appellants should be treated as an AOP for the purpose of service tax liability on the rental income, or should the service tax liability be determined based on the individual rental income of e... [Read more]

Service Tax - Renting of Immovable Property, Association of Persons (AOP) – Appellants entered into a tripartite agreement with State Bank of India and M/s Luminous Group to obtain a loan for construction of premises, which were later leased out to various entities - Revenue entertained an opinion that these four persons formed an "Association of Persons" (AOP) and were liable to pay service tax on the rental income - Whether the appellants should be treated as an AOP for the purpose of service tax liability on the rental income, or should the service tax liability be determined based on the individual rental income of each co-owner - HELD - The properties were co-owned by the individual owners in their individual capacities. Where the property is jointly owned, the service tax liability should be confined to the individual rental income of the co-owners, and they cannot be treated as an AOP – Further, the individual co-owners obtained central excise registration and started paying service tax from October 2011 whereas the show cause notice was issued on 17.10.2013. Under the circumstances, it is not understood as to how Revenue attempted to tax the AOP – The adjudicating authorities were not clear in their approach. On the one hand, they seek to recover service tax from a non-existent AOP and other hand, seek to appropriate the service tax paid by the individual owners. No case has been made by the Department to demand service tax from the alleged AOP - the impugned order is set aside and the appeal is allowed [Read less]

Customs – Import of goods – Allegation of undervaluation – Appellant imported goods from various Chinese suppliers and filed bills of entry for clearance – After investigation, department issued show cause notice alleging that Appellant had declared lower values in documents submitted to Customs Authorities – Commissioner confirmed allegations made in show cause notice – Whether impugned order passed by Commissioner is sustainable – HELD – Impugned order has been passed ex-parte, while Appellant was in process of challenging denial of their request for cross examination and had preferred a Writ Petition bef... [Read more]

Customs – Import of goods – Allegation of undervaluation – Appellant imported goods from various Chinese suppliers and filed bills of entry for clearance – After investigation, department issued show cause notice alleging that Appellant had declared lower values in documents submitted to Customs Authorities – Commissioner confirmed allegations made in show cause notice – Whether impugned order passed by Commissioner is sustainable – HELD – Impugned order has been passed ex-parte, while Appellant was in process of challenging denial of their request for cross examination and had preferred a Writ Petition before Madras High Court in this regard, which is stated to have been listed for completion of pleadings. Right of Appellant to cross examine is a valuable right and cannot be denied in a perfunctory manner. Interest of justice will be served, if matter is remitted for denovo consideration afresh. Matter is remitted to Adjudicating Authority for fresh adjudication – Appeal allowed [Read less]

Gujarat Sales Tax Act, 1969 - Sales Tax Exemption, Collection of tax on exempted goods, Levy of Penalty - Respondent-assessee had obtained sales tax exemption certificate under section 49(2) of the Gujarat Sales Tax Act, 1969. Dept issued a show-cause notice alleging that the assessee had collected sales tax on the exempted goods, in violation of section 56(1) of the Gujarat Sales Tax Act -The Tribunal allowed the assessee’s appeals by setting aside the orders passed by the Assessing Officer as well as the First Appellate Authority - Whether the assessee had collected sales tax on the exempted goods, in violation of sect... [Read more]

Gujarat Sales Tax Act, 1969 - Sales Tax Exemption, Collection of tax on exempted goods, Levy of Penalty - Respondent-assessee had obtained sales tax exemption certificate under section 49(2) of the Gujarat Sales Tax Act, 1969. Dept issued a show-cause notice alleging that the assessee had collected sales tax on the exempted goods, in violation of section 56(1) of the Gujarat Sales Tax Act -The Tribunal allowed the assessee’s appeals by setting aside the orders passed by the Assessing Officer as well as the First Appellate Authority - Whether the assessee had collected sales tax on the exempted goods, in violation of section 56(1) of the Gujarat Sales Tax Act – HELD - The Revenue has issued the show-cause notice by making assumption that the sale price fixed by the respondent-assessee to for its product was inclusive of the sales tax amount though the sale of the goods was exempted from payment of sales tax - The Tribunal, after considering the evidence on record, held that there was no direct or implied evidence to show that the assessee had collected any amount by way of tax from the distributors, retailers, or customers. The Tribunal relied on the fact that the sales invoices showed 'Nil' tax, the assessee had continued the same practice even after the expiry of the exemption period, and the accounts maintained under IGAAP did not show any collection of tax - The Assessing Officer and the Appellate Authority had committed an error in appreciation of the evidence on record resulting into wrong finding that the assessee had collected some amount by way of tax from the distributors and retailers – The Supreme Court's in Hindustan Lever Limited case has held that when an assessee is not liable to pay tax and has not passed on the tax liability, the sale consideration received should not be bifurcated and divided on the basis of any assumption that the sale price included the tax - Since the assessee had not collected any amount by way of tax, the provisions of section 56 of the Gujarat Sales Tax Act could not be attracted - The appeals filed by the Revenue are dismissed [Read less]

Customs – Ex-bond clearance, Jurisdiction to demand differential duty, Warehoused goods – Respondents imported petroleum products at Vadinar Port, Gujarat. The respondent filed Into-Bond Bills of Entry with Customs House Vadinar, Jamnagar for warehousing the imported goods at their private licensed warehouse tanks. Subsequently, the respondent executed a bond under Section 67 of the Customs Act to transport the warehoused goods without payment of duty through pipeline to their refineries. The respective Customs Authorities finally assessed the duty at the refineries. The Commissioner of Customs having jurisdiction over... [Read more]

Customs – Ex-bond clearance, Jurisdiction to demand differential duty, Warehoused goods – Respondents imported petroleum products at Vadinar Port, Gujarat. The respondent filed Into-Bond Bills of Entry with Customs House Vadinar, Jamnagar for warehousing the imported goods at their private licensed warehouse tanks. Subsequently, the respondent executed a bond under Section 67 of the Customs Act to transport the warehoused goods without payment of duty through pipeline to their refineries. The respective Customs Authorities finally assessed the duty at the refineries. The Commissioner of Customs having jurisdiction over Vadinar Port later passed an Order-in-Original confirming the differential duties along with interest and penalty - Whether the Commissioner of Customs at Jamnagar had the jurisdiction to reassess the Into-Bond Bills of Entry and demand differential duty in respect of clearances effected by the respondent from the private bonded warehouses situated at various locations – HELD - The larger bench of the Tribunal in case of Ferro Alloys has rightly held that the jurisdiction to raise demand of duty on exempted goods found to be not utilized as per the terms of exemption by importers can be done only by the officer having jurisdiction over the warehouse – In the present case, the Tribunal was justified in referring to the decision of the Larger Bench rendered in case of Ferro Alloys Corporation Ltd to hold that the Commissioner at Jamnagar having jurisdiction over Vadinar Port could not have issued the show-cause notice and carried out the reassessment proceedings and pass the Order-in-Original or levy of varying differential duties – Further, the assessment made at the time of filing the Into-Bond Bills of Entry was only provisional to secure the duty payable by the importer on the clearance of the goods later. The final assessment and reassessment, if any, could only be done by the proper officer having administrative jurisdiction over the respective refineries where the goods were removed under Section 67 of the Customs Act - The jurisdiction for raising demand for short payment of duty would lie with the Customs House through which the goods had been cleared and only the proper officer granting Ex-bond clearance can raise the demand for short levy or refund on reassessment of the duty – The impugned order is affirmed and the Department appeal is dismissed [Read less]

Central Excise – Section 36B of Central Excise Act, 1944 – Manufacture of excisable goods – Allegation of clandestine clearance – Demand of differential duty – Appellant is engaged in manufacture and clearance of excisable goods, namely, polybags – After investigation, department issued show cause to Appellant by proposing demand of duty on account of alleged clandestine clearances and denial of SSI Exemption – Adjudicating authority confirmed demands as proposed in show cause notice – Whether department has established allegation of clandestine removal of excisable goods against Appellant with sufficient e... [Read more]

Central Excise – Section 36B of Central Excise Act, 1944 – Manufacture of excisable goods – Allegation of clandestine clearance – Demand of differential duty – Appellant is engaged in manufacture and clearance of excisable goods, namely, polybags – After investigation, department issued show cause to Appellant by proposing demand of duty on account of alleged clandestine clearances and denial of SSI Exemption – Adjudicating authority confirmed demands as proposed in show cause notice – Whether department has established allegation of clandestine removal of excisable goods against Appellant with sufficient evidence – HELD – Allegation of clandestine clearances is primarily based on a pen drive recovered from residential premises of a partner of Appellant. Data contained in said pen drive was retrieved by Indian Automation and Technologies Private Limited, which is not a notified agency as Examiner of Electronic Evidence under Section 45A of Evidence Act. Pendrive has not met the mandatory protocols set out under Section 36B of the Act including requirement of a certificate under Section 36B(4) of the Act. Pen drive has not been considered as a valid evidence and hence, any demand based on such evidence cannot be sustained – On issue of consumption of electricity, Adjudicating authority has not considered any of submissions made by Appellant with respect to various factors and reasons attributable to difference in power consumption including difference in usage of virgin materials vis-a-vis reprocessed materials. It is natural that making polybags from reprocessed materials results in more electricity consumption. Any demand of differential duty, merely based on power consumption, cannot stand scrutiny of law. Revenue has not discharged their onus to establish any excess production by Appellant nor clandestine removal thereof. Demand of differential duty, on account of clandestine clearances, as confirmed in impugned order is set aside – Appeals allowed - Clubbing of value of clearances – Denial of exemption – Whether denial of SSI Exemption on account of clubbing of value of clearances of Appellant and other units is legally tenable or not – HELD – Appellant have placed on record that all disputed units had source of capital investments either by way of their savings or through loans from banking channels, which remains undisputed as evidenced by their financial records. Appellants have successfully demonstrated the independent existence and also independent machinery and infrastructure to manufacture the goods. Sharing of few common resources would not be a ground to club value of clearances between units. Department has not alleged any beneficial interest at hands of disputed units to constitute a mutuality. Denial of SSI Exemption and consequential demand of duty by clubbing value of clearances of Appellant and other units shall fail the scrutiny of law because of their independent existence. Order under challenge is set aside. [Read less]

Service Tax – Rules 4 and 9(1) of Cenvat Credit Rules, 2004 – Input services – Eligibility to avail cenvat Credit – Appellant is engaged in providing taxable service falling under category of Cable Operator Service – After following due process of law, Adjudicating authority extended benefit of Cenvat credit to Appellant – Commissioner (Appeals) set aside order passed by Adjudicating authority and allowed appeal filed by department – Whether Adjudicating authority has rightly extended benefit of Cenvat credit to Appellant – HELD – Appellant is in appeal only for allowing Cenvat credit of input services be... [Read more]

Service Tax – Rules 4 and 9(1) of Cenvat Credit Rules, 2004 – Input services – Eligibility to avail cenvat Credit – Appellant is engaged in providing taxable service falling under category of Cable Operator Service – After following due process of law, Adjudicating authority extended benefit of Cenvat credit to Appellant – Commissioner (Appeals) set aside order passed by Adjudicating authority and allowed appeal filed by department – Whether Adjudicating authority has rightly extended benefit of Cenvat credit to Appellant – HELD – Appellant is in appeal only for allowing Cenvat credit of input services beyond period of 1 year. Cenvat Credit of service tax in respect of input services shall not be allowed after stipulated period of six months or one year from date of issue of duty paying documents specified under Rule 9(1) of the Rules. Benefit of Cenvat credit was neither reflected in ST-3 returns nor been availed within specified time limit as per Rule 4(1) of the Rules. Adjudicating authority has extended benefit of Cenvat credit at time of adjudication of case without appreciating statutory provisions of Rule 4(1) of the Rules. It is not proper to allow benefit of Cenvat credit availed in respect of documents which are more than one year beyond from date of issuance. Impugned order passed by Commissioner (Appeals) is affirmed – Appeal dismissed [Read less]

Service Tax – Section 65B(44) of Finance Act, 1994 – Transfer of tenancy right – Receipt of consideration – Tax liability – During audit of records of Appellant, audit officers found that Appellant had transferred Tenancy and Occupancy Right of building for a consideration, but did not pay service tax on consideration amount – Department issued show cause notice, proposing recovery of service tax, to Appellant – Adjudicating authority confirmed demand of Service Tax – Commissioner (Appeals) upheld order of lower authority and rejected appeal filed by Appellant – Whether transfer of occupancy and tenancy r... [Read more]

Service Tax – Section 65B(44) of Finance Act, 1994 – Transfer of tenancy right – Receipt of consideration – Tax liability – During audit of records of Appellant, audit officers found that Appellant had transferred Tenancy and Occupancy Right of building for a consideration, but did not pay service tax on consideration amount – Department issued show cause notice, proposing recovery of service tax, to Appellant – Adjudicating authority confirmed demand of Service Tax – Commissioner (Appeals) upheld order of lower authority and rejected appeal filed by Appellant – Whether transfer of occupancy and tenancy rights in respect of immovable property is covered within definition of Service as defined under Section 65B(44) of the Act – HELD – As per Section 65B(44) of the Act, Service means any activity carried out by a person for another for consideration and includes a declared service, but shall not include an activity which constitutes merely a transfer of title in goods or immovable property by way of sale, gift or in any other manner. Appellant submitted a copy of their declaration, which mentions receipt of consideration for surrendering and relinquishing their Tenancy and Occupancy Rights in respect of building. Said consideration is a sort of compensation received by Appellant from owner for surrendering and relinquishing Tenancy and Occupancy Rights. Activity of transfer of tenancy and occupancy rights in respect of immovable property does not come within definition of ‘service’ as defined under Section 65B(44) of the Act. Consequently, amount received in lieu of transfer of tenancy and occupancy right is not liable to service tax. Order under challenge is set aside – Appeal allowed [Read less]

Service Tax - Abatement, Demand on the basis of information received from the Income Tax - Whether the Appellant is entitled to abatement on the taxable value for the construction services provided to the Nagar Panchayat - HELD - The Appellant had rendered construction services along with materials, therefore, the services rendered by the Appellant come under Works Contract Services. Accordingly, the Appellant is entitled to an abatement of 60% on the gross value in terms of Rule 2A(i)(A) of the Service Tax (Determination of Value) Rules, 2006 – Further, The Department has not made any enquiry to ascertain the reason of ... [Read more]

Service Tax - Abatement, Demand on the basis of information received from the Income Tax - Whether the Appellant is entitled to abatement on the taxable value for the construction services provided to the Nagar Panchayat - HELD - The Appellant had rendered construction services along with materials, therefore, the services rendered by the Appellant come under Works Contract Services. Accordingly, the Appellant is entitled to an abatement of 60% on the gross value in terms of Rule 2A(i)(A) of the Service Tax (Determination of Value) Rules, 2006 – Further, The Department has not made any enquiry to ascertain the reason of difference between the figures shown in the Profit & Loss Account and Form-26AS statement. The demand was solely based on the figures shown in the Profit & Loss Account and Form-26AS statement submitted with the Income Tax Authorities. Revenue's reliance on the Profit & Loss Account and Form-26AS is not proper for confirming the tax demand and invoking the longer period of limitation – The impugned order is set aside and the appeal is allowed on Limitation [Read less]

Customs - Import of Petroleum Products in Flexi-bags - Refusal to release the consignment on the ground that petroleum products cannot be imported in Flexi-bags as per a public notice issued by the respondent - The petitioner challenged the validity of the public notice 27.09.2024, arguing that as per the Petroleum Rules, 2002, only the Chief Controller can approve the specifications of the containers for petroleum products, and the respondent authorities could not have issued the public notice based on the clarification of Petroleum and Explosives Safety Organization - HELD - The petitioner had placed the order and made t... [Read more]

Customs - Import of Petroleum Products in Flexi-bags - Refusal to release the consignment on the ground that petroleum products cannot be imported in Flexi-bags as per a public notice issued by the respondent - The petitioner challenged the validity of the public notice 27.09.2024, arguing that as per the Petroleum Rules, 2002, only the Chief Controller can approve the specifications of the containers for petroleum products, and the respondent authorities could not have issued the public notice based on the clarification of Petroleum and Explosives Safety Organization - HELD - The petitioner had placed the order and made the payment for the import of the goods prior to the issuance of the public notice, and therefore, the import made by the petitioner should have been permitted. The Facility Notice No. 02/2024 dated 01.11.2024 should have extended the cases of import where the orders had already been placed and payment had been made, instead of applying the public notice to the goods gated-in on 27.09.2024 only - The respondent authorities are directed to permit the petitioner to transfer the goods from Flexi-bags to the containers under the supervision and guidance of the officers of PESO, in accordance with the Petroleum Act and the Rules made therein. The Respondent to reimburse the actual cost incurred by the petitioner for the transfer of the material – The petition is disposed of [Read less]

GST - Compliance with bail conditions, Deposit of tax amount in Electronic Cash Ledger – Applicant seeking cancellation of bail granted to the respondent-accused on the ground that the accused had not complied with the bail condition of depositing Rs. 90 lakhs. The accused had deposited the amount in Electronic Cash Ledger but had not debited it from the ledger through Form GST DRC-03 to credit it to the Government exchequer - Whether the bail granted to the accused should be cancelled for non-compliance of the bail condition – HELD – In view of provisions of Section 49 of the CGST Act, 2017 and the judgment in Arya ... [Read more]

GST - Compliance with bail conditions, Deposit of tax amount in Electronic Cash Ledger – Applicant seeking cancellation of bail granted to the respondent-accused on the ground that the accused had not complied with the bail condition of depositing Rs. 90 lakhs. The accused had deposited the amount in Electronic Cash Ledger but had not debited it from the ledger through Form GST DRC-03 to credit it to the Government exchequer - Whether the bail granted to the accused should be cancelled for non-compliance of the bail condition – HELD – In view of provisions of Section 49 of the CGST Act, 2017 and the judgment in Arya Cotton Industries case, the date of credit to the Government account is deemed to be the date of deposit in the Electronic Cash Ledger. The accused had deposited the amount on 01.11.2024, which was within the 7-day period stipulated by the Court, and the amount was credited to the Government's account - The tax liability of the accused stood discharged on the date of deposit, and the mere non-filing of Form GST DRC-03 would not mean non-compliance of the bail condition. Further, the accused was ready to give an undertaking not to use or claim refund of the deposited amount. Therefore, there is no reason to cancel the bail - The application for cancellation of bail is rejected [Read less]

GST – Tamil Nadu AAR – Exemption to hostel run by Charitable trust - Whether the hostels run by charitable trusts for poor and middle-class students are exempt from GST – HELD – The hostels run by Trusts can claim exemption under Sl. No. 12A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, provided the conditions prescribed therein are fulfilled. The Notification does not categorize the recipients as poor, middle or high class, and the exemption is available to all hostels run by Trusts irrespective of the economic status of the students, subject to the conditions under Sl. No. 12A �... [Read more]

GST – Tamil Nadu AAR – Exemption to hostel run by Charitable trust - Whether the hostels run by charitable trusts for poor and middle-class students are exempt from GST – HELD – The hostels run by Trusts can claim exemption under Sl. No. 12A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, provided the conditions prescribed therein are fulfilled. The Notification does not categorize the recipients as poor, middle or high class, and the exemption is available to all hostels run by Trusts irrespective of the economic status of the students, subject to the conditions under Sl. No. 12A – Ordered accordingly - Whether the leasing of premises by the applicant to another educational institution for hostel accommodation is a taxable supply – HELD - The leasing out of the premises by the applicant to the recipient college is a taxable supply of service and attracts GST. The leasing of premises is not one of the services listed as exempted under the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, and the agreement is between the two educational institutions, and not directly between the service provider and the students - Whether the supply of food by the applicant to the students of the other educational institution residing in the applicant's hostel is exempt from GST - HELD - The supply of food by the applicant to the students of the other educational institution imparting higher education is a taxable supply of service and attracts GST. The Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, provides conditional exemption to catering services only when the recipient educational institution is engaged in providing pre-school education and education up to higher secondary school or equivalent. [Read less]

GST - Tamil Nadu AAR - Classification of product 'Mahara Jyothi', which is refined rice bran oil of edible grade but marketed as lamp oil - Whether the refined rice bran oil marketed as 'Mahara Jyothi' lamp oil should be classified under Tariff Heading 1515 90 40 of the Customs Tariff Act, 1975 dealing with 'other fixed vegetable or microbial fats and oils (including jojoba oil) and their fractions whether or not refined, but not chemically modified' – HELD - The classification can be done only as per the contents of the item and not as per the end use, unless it is specifically mentioned so in the Tariff - The test resu... [Read more]

GST - Tamil Nadu AAR - Classification of product 'Mahara Jyothi', which is refined rice bran oil of edible grade but marketed as lamp oil - Whether the refined rice bran oil marketed as 'Mahara Jyothi' lamp oil should be classified under Tariff Heading 1515 90 40 of the Customs Tariff Act, 1975 dealing with 'other fixed vegetable or microbial fats and oils (including jojoba oil) and their fractions whether or not refined, but not chemically modified' – HELD - The classification can be done only as per the contents of the item and not as per the end use, unless it is specifically mentioned so in the Tariff - The test results of the product 'Mahara Jyothi' were well within the parameters set by the Prevention of Food Adulteration Rules, 1955 for rice bran oil to be of edible grade, and the applicant had a valid FSSAI license as a re-packer of Vegetable oil and for processing unit of Refined Rice Bran Oil under the food category of 'Fats and oils and fat emulsions' - The rice bran oil, without any additives or mixture of other oils, marketed by the applicant as lamp oil under the trade name 'Mahara Jyothi' is classifiable under Tariff Heading 1515 90 40 of the Customs Tariff Act, 1975 – Ordered accordingly [Read less]

GST – Tamil Nadu AAR - Liquidated Damages, Minimum Guaranteed Off-take (MGO) Charges – Applicant is engaged in the manufacture and supply of crude oil and natural gas, which are supplied through pipelines located at delivery points across India – Applicant entered into a Gas Sales and Transportation Agreement with GAIL (India) Limited wherein in case GAIL fails to off-take 90% of the agreed contracted quantity, the applicant imposes Minimum Guaranteed Off-take (MGO) charges on GAIL - Whether the MGO charges imposed for short-lifting the contracted quantity of natural gas is liable to GST - HELD - The MGO charges are ... [Read more]

GST – Tamil Nadu AAR - Liquidated Damages, Minimum Guaranteed Off-take (MGO) Charges – Applicant is engaged in the manufacture and supply of crude oil and natural gas, which are supplied through pipelines located at delivery points across India – Applicant entered into a Gas Sales and Transportation Agreement with GAIL (India) Limited wherein in case GAIL fails to off-take 90% of the agreed contracted quantity, the applicant imposes Minimum Guaranteed Off-take (MGO) charges on GAIL - Whether the MGO charges imposed for short-lifting the contracted quantity of natural gas is liable to GST - HELD - The MGO charges are in the nature of liquidated damages for breach of contract and do not constitute consideration for any supply - The intended purpose of the contract is only for execution of the agreement and not for its breach. MGO charges/Liquidated damages cannot be said to be a consideration received for tolerating the breach or non-performance of contract - The MGO charges/liquidated damages is nothing but a penalty imposed and not the desired outcome of the contract. By charging and accepting the MGO charges/liquidated damages, the applicant aggrieved by breach of contract cannot be said to have permitted or tolerated the deviation or non-fulfilment of the promise by GAIL - The CBIC Circular No. 178/10/2022-GST clarified that liquidated damages for breach of contract are not liable to GST as they do not represent consideration for any supply. The MGO charges are merely a flow of money from GAIL to applicant to compensate for the loss or damage suffered due to the breach of contract and do not represent the object of the contract between the parties. Therefore, the MGO charges are not liable to GST - The Minimum Guaranteed Off-take charges imposed for short-lifting the contracted quantity of natural gas is not liable to GST – Ordered accordingly [Read less]

Karnataka Value Added Tax Act, 2003 - TDS credit, Transfer of TDS credit, Rule 44(3)(f) of the Karnataka Value Added Tax Rules, 2005 - Appellant is a sub-contractor who executed civil works contracts for NPCC Ltd. for the contract awarded by Hindustan Aeronautics Limited. NPCC Ltd. deducted TDS under Section 9A of the Karnataka VAT Act and issued a TDS certificate in Form VAT-156 in its own name – Appellant claimed the TDS credit, but the Prescribed Authority denied it, applying Rule 44(3)(f) of the Karnataka VAT Rules, 2005, which prohibits transfer of TDS credit from one person to another - The First Appellate Authorit... [Read more]

Karnataka Value Added Tax Act, 2003 - TDS credit, Transfer of TDS credit, Rule 44(3)(f) of the Karnataka Value Added Tax Rules, 2005 - Appellant is a sub-contractor who executed civil works contracts for NPCC Ltd. for the contract awarded by Hindustan Aeronautics Limited. NPCC Ltd. deducted TDS under Section 9A of the Karnataka VAT Act and issued a TDS certificate in Form VAT-156 in its own name – Appellant claimed the TDS credit, but the Prescribed Authority denied it, applying Rule 44(3)(f) of the Karnataka VAT Rules, 2005, which prohibits transfer of TDS credit from one person to another - The First Appellate Authority allowed the assessee's appeal and directed the transfer of TDS credit from NPCC Ltd. to the assessee. The Revisional Authority invoked Section 64 of the KVAT Act and set aside the order of the First Appellate Authority, holding that the transfer of TDS credit was contrary to Rule 44(3)(f) - Whether the assessee-subcontractor is entitled to claim the TDS credit reflected in the TDS certificate (Form VAT-156) issued in the name of the main contractor NPCC Ltd – HELD - The assessee is not entitled to claim the TDS credit reflected in the TDS certificate (Form VAT-156) issued in the name of the main contractor NPCC Ltd. The Rule 44(3)(f) of the KVAT Rules specifically prohibits the transfer of TDS credit from one person to another. The TDS credit has already been claimed by NPCC Ltd. and accounted for by the Prescribed Authority. Once the TDS has been allowed as credit, it cannot be transferred or claimed again, as doing so would result in double credit of the same amount – Further, the direction of the First Appellate Authority to transfer the TDS credit from NPCC Ltd. to the assessee was contrary to the statutory provisions and hence erroneous and prejudicial to the interest of the Revenue - The appeal filed by the Appellant-sub-contractor is dismissed [Read less]

GST – Appeal, Payment of Pre-deposit – Dismissal of appeal on the ground that the Appellate Authority had become "functus officio" and had no power to make changes in its earlier decision - The petitioner had initially filed an appeal before the Appellate Authority against the order-in-original, which was dismissed solely on the ground that the petitioner had failed to make the pre-requisite mandatory deposit of 7.5% of the duty amount before filing the appeal. The petitioner later deposited the required amount and approached the Appellate Authority again, requesting it to decide the appeal on merits - Whether the Appe... [Read more]

GST – Appeal, Payment of Pre-deposit – Dismissal of appeal on the ground that the Appellate Authority had become "functus officio" and had no power to make changes in its earlier decision - The petitioner had initially filed an appeal before the Appellate Authority against the order-in-original, which was dismissed solely on the ground that the petitioner had failed to make the pre-requisite mandatory deposit of 7.5% of the duty amount before filing the appeal. The petitioner later deposited the required amount and approached the Appellate Authority again, requesting it to decide the appeal on merits - Whether the Appellate Authority was right in dismissing the appeal on the ground that it had become "functus officio" and had no power to make changes in its earlier decision – HELD - The reasoning given by the Appellate Authority in its order is absolutely fallacious and based on a complete misunderstanding of the law. The appeal at the earlier occasion was dismissed solely on the ground that the petitioner had failed to make the pre-requisite mandatory deposit of 7.5% of the duty amount before filing the appeal and not on merits. Therefore, once the appeal had not been decided on merits but had, in fact, not been entertained, there was no question of the Appellate Authority having become "functus officio" after the deposit of 7.5% of the duty amount as alleged by the petitioner - The impugned order passed by the Commissioner (Appeals) is set aside and the appeal is restored to its original number for the Appellate Authority to proceed to decide the appeal in accordance with law after verifying the pre-deposit of 7.5% of the duty amount alleged to have been deposited by the petitioner – The writ petition is allowed [Read less]

GST – Delhi AAR - Discharge of sovereign and statutory functions, Government Authority - Whether the CPCB (An autonomous body of the Ministry of Environment, Forest and Climate Change of Govt. of India) is liable to charge GST on the amount collected by it in the Course of discharge of its sovereign and statutory functions/duties under Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981 and Environment (Protection) Act, 1986 – HELD – The Applicant-M/s Central Pollution Control Board (CPCB) is a Government Authority/Local Authority in terms of the definit... [Read more]

GST – Delhi AAR - Discharge of sovereign and statutory functions, Government Authority - Whether the CPCB (An autonomous body of the Ministry of Environment, Forest and Climate Change of Govt. of India) is liable to charge GST on the amount collected by it in the Course of discharge of its sovereign and statutory functions/duties under Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981 and Environment (Protection) Act, 1986 – HELD – The Applicant-M/s Central Pollution Control Board (CPCB) is a Government Authority/Local Authority in terms of the definition under Notification No.31/2017 - Central Tax (Rate) dated 13.10.2017 and Section 2(69) of CGST Act, 2017 - With regard to the applicability of GST on the fee collected by the applicant in the course of discharge of statutory functions under Water (Prevention and control of Pollution) Act, 1974, Air (Prevention and control of Pollution) Act, 1981 and Environment (Protection) Act, 1986, the activities such as issuing various licenses and or granting consent/registration to various Business entities and Operating in-house labs for sample testing of water under an specific arrangement with Ministry of Jai Shakti (Govt. of India), are the statutory functions entrusted to the applicant under the respective Acts and no liability of GST arises on the fee collected by the applicant in respect of said activity as the same is exempted service in terms of Notification No. 12/2017-Central Tax (Rate), dated 28th June 2017 – Ordered accordingly [Read less]

Central Excise – Imposition of mandatory penalty, Validity of Rules 96ZO, 96ZP and 96ZQ of Central Excise Rules, 1944 - Appellant was availing the Compound Levy Scheme prescribed under Section 3A of the Central Excise Act, 1944 read with Rule 96ZO(3) of the Central Excise Rules, 1944. Due to financial difficulties, the appellant discontinued the production activities from 17.12.1997 onwards - Dept issued show-cause notices for levy of duty along with interest and penalty under Rule 96ZO read with Section 11AC of the Central Excise Act, 1944 - Whether the provisions of Rule 96ZO, 96ZP and 96ZQ of the Central Excise Rules,... [Read more]

Central Excise – Imposition of mandatory penalty, Validity of Rules 96ZO, 96ZP and 96ZQ of Central Excise Rules, 1944 - Appellant was availing the Compound Levy Scheme prescribed under Section 3A of the Central Excise Act, 1944 read with Rule 96ZO(3) of the Central Excise Rules, 1944. Due to financial difficulties, the appellant discontinued the production activities from 17.12.1997 onwards - Dept issued show-cause notices for levy of duty along with interest and penalty under Rule 96ZO read with Section 11AC of the Central Excise Act, 1944 - Whether the provisions of Rule 96ZO, 96ZP and 96ZQ of the Central Excise Rules, 1944 imposing mandatory penalty equal to the amount of duty can be sustained - HELD - The Supreme Court in the case of Shree Bhagwati Steel Rolling Mills v. Commissioner of Central Excise held that the provisions of Rule 96ZO, 96ZP and 96ZQ of the Central Excise Rules, 1944 imposing mandatory penalty equal to the amount of duty are unconstitutional and violative of Articles 14 and 19(1)(g) of the Constitution. The penalty provisions under these Rules are arbitrary and excessive when contrasted with the penalty provisions under Section 37 of the Central Excise Act, 1944 which provide for a much lower penalty. The imposition of mandatory penalty under these Rules is without authority of law - The penalty levied on the appellant under Rule 96ZO of the CER, 1944 read with Section 11AC of the CEA, 1944 cannot be sustained. The impugned order of the Tribunal upholding the penalty is quashed and set aside - The appeal of the appellant is allowed [Read less]