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Central Excise - Limitation period for filing appeal – Disallowance of Cenvat credit - Petitioner filed an appeal before the Commissioner (Appeals), which was rejected as being time-barred - The petitioner challenged this order before the High Court – HELD - The applicability of the provisions of the Limitation Act has to be judged not from the terms of the Limitation Act, 1963, but by the provisions of the Central Excise Act, 1944 - The High Court has no power to condone the delay in filing the appeal beyond the statutory period of limitation. The provisions of the Limitation Act, 1963 do not apply to appeals filed be... [Read more]

Central Excise - Limitation period for filing appeal – Disallowance of Cenvat credit - Petitioner filed an appeal before the Commissioner (Appeals), which was rejected as being time-barred - The petitioner challenged this order before the High Court – HELD - The applicability of the provisions of the Limitation Act has to be judged not from the terms of the Limitation Act, 1963, but by the provisions of the Central Excise Act, 1944 - The High Court has no power to condone the delay in filing the appeal beyond the statutory period of limitation. The provisions of the Limitation Act, 1963 do not apply to appeals filed before quasi-judicial authorities. The High Court cannot supplement the statutory provisions to allow a time-barred appeal - The delay beyond the period of limitation cannot be condoned, and the writ petitions are accordingly dismissed [Read less]

The Rule 39(1)(a) is required to be interpreted in the manner that saves its Constitutionality. The distribution of credit by ISD shall be in the month in which the registered person becomes entitled to ITC in terms of Sec. 16(2).

Service Tax - Demand of Service Tax on Commission Paid to Brokers for Canvassing Voyage - Department alleged that the commission paid by the appellant to foreign agents who are not having any permanent establishment in India for canvassing voyage for ships is classifiable under Business Auxiliary Service – HELD - The SCN did not specify the particular sub-clause of the definition of BAS under which the activity falls, rendering the demand unsustainable - The SCN has not even taken care to put the Appellant to notice as to what would constitute taxable service of BAS under section 65(105)(zzb) of the Finance Act, 1994. Th... [Read more]

Service Tax - Demand of Service Tax on Commission Paid to Brokers for Canvassing Voyage - Department alleged that the commission paid by the appellant to foreign agents who are not having any permanent establishment in India for canvassing voyage for ships is classifiable under Business Auxiliary Service – HELD - The SCN did not specify the particular sub-clause of the definition of BAS under which the activity falls, rendering the demand unsustainable - The SCN has not even taken care to put the Appellant to notice as to what would constitute taxable service of BAS under section 65(105)(zzb) of the Finance Act, 1994. The Appellant has also not therefore been put to notice as to under which service their activity falls under Rule 3(iii) of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 that has been invoked in the SCN - The Department must specify the particular sub-clause of the definition under which the service is liable to tax. The impugned orders also do not detail the manner in which the alleged services received by the Appellant would satisfy the requirement to come within the ambit of Section 65(105)(zzb). The findings in the impugned orders on this count are unsustainable and set aside - The demand of service tax on commission paid to brokers under BAS is set aside – The appeal is allowed - Demand of Service Tax on Payments made to P&I Clubs - The Department alleged that the payments made by the appellant to P&I Clubs located abroad for covering third party liabilities is a taxable service being provided by an insurer under General Insurance Services - HELD - The P&I Clubs are mutual insurance associations that provide pooling of risks and representation to its members, and the relationship is premised on mutuality. It was incumbent upon the authorities below to have examined whether or not there did exist a service provider and service receiver relationship between the P & I club and its members given the conceded position that their relationship is based on mutuality without any profit motive. Therefore, the adjudicating authorities as well as the appellate authority have erred in proceeding to determine the taxability of the service rendered without examining whether or not the relationship between the P & I club and its members premised on mutuality would have a bearing on the exigibility of the services provided to service tax, particularly when the services are conceded as being rendered to its members – The Supreme Court in State of West Bengal v. Calcutta Club Ltd., held that services provided by a club or association to its own members remain outside the ambit of service tax. The P&I Clubs do not fall under the definition of 'insurer' and the payments made cannot be classified as General Insurance Services - the findings in the impugned orders that the P & I clubs are providing General Insurance Services to the Appellant and the consequent demand of service tax on the payments made by the appellant in this regard cannot sustain and set aside - Demand based on Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 - The Department alleged that the appellant had adopted the net amount instead of the gross amount and had eschewed adding the expenditure incurred, and sought to demand service tax by invoking Rule 5(1) – HELD - It is no more res integra that a demand premised on Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006, as was prevailing for the relevant period, is unsustainable for the reason that the Honourable Supreme Court has upheld the findings of the Honourable Delhi High Court striking down the said Rule 5(1) as ultravires Section 66 & 67 of the Act in the Intercontinental Consultant’s case - The demand of service tax based on Rule 5(1) is set aside - Invoking of Extended Period of Limitation - The Department invoked the extended period of limitation on the ground of wilful suppression of facts by the appellant – HELD - The SCN did not allege any positive act of wilful misstatement or suppression of facts with intent to evade payment of duty. The appellant's claim of bona fide belief is also not implausible. The Tribunal relied on various decisions that held that in such circumstances, the extended period of limitation is not invokable - The invocation of extended period of limitation is set aside. [Read less]

Service Tax - Renting of immovable property used as hotel - Whether the building leased out for use as a hotel with other facilities like a restaurant, banquet hall, conference hall, bar and health club, qualifies for the specific exclusion/exemption provided under Section 65(105)(zzzz) of the Finance Act, 1994 in respect of buildings used as hotels – HELD – The premises continue to qualify as a building used by a hotel, squarely falling within the specific exclusion provided under Section 65(105)(zzzz) of the Finance Act, 1994. The renting of a building for a hotel is covered by the exclusionary clause under Explanati... [Read more]

Service Tax - Renting of immovable property used as hotel - Whether the building leased out for use as a hotel with other facilities like a restaurant, banquet hall, conference hall, bar and health club, qualifies for the specific exclusion/exemption provided under Section 65(105)(zzzz) of the Finance Act, 1994 in respect of buildings used as hotels – HELD – The premises continue to qualify as a building used by a hotel, squarely falling within the specific exclusion provided under Section 65(105)(zzzz) of the Finance Act, 1994. The renting of a building for a hotel is covered by the exclusionary clause under Explanation 1 to Section 65(105)(zzzz) and does not amount to an "immovable property" falling within the ambit of the taxable service - The facilities like restaurant, banquet hall, conference hall, bar and health club are not stand-alone but are integral and incidental to the activity of running a hotel and are intended to cater to the needs of hotel guests. Their presence enhances the commercial viability of the hotel, commensurate with its category or class. The Explanation 2 to Section 65(105)(zzzz) is not attracted as the premises continue to qualify as a building used by a hotel, squarely falling within the specific exclusion provided under Section 65(105)(zzzz) of the Finance Act, 1994 – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Reversal of excess CENVAT Credit - Assessee cleared inputs "as such" to its sister manufacturing units and debited higher amounts in its CENVAT credit account based on internal accounting methodology, resulting in excess reversal - Whether such excess reversal amounted to "passing on excess credit" in violation of Rule 3(5) of CENVAT Credit Rules, 2004 and whether it led to recoverable demands under Section 11A and Section 11D of Central Excise Act – HELD – The Rule 3(5) of CCR, 2004 creates a statutory obligation of neutralization. It does not create a ceiling. The provision ensures that the credit ta... [Read more]

Central Excise - Reversal of excess CENVAT Credit - Assessee cleared inputs "as such" to its sister manufacturing units and debited higher amounts in its CENVAT credit account based on internal accounting methodology, resulting in excess reversal - Whether such excess reversal amounted to "passing on excess credit" in violation of Rule 3(5) of CENVAT Credit Rules, 2004 and whether it led to recoverable demands under Section 11A and Section 11D of Central Excise Act – HELD – The Rule 3(5) of CCR, 2004 creates a statutory obligation of neutralization. It does not create a ceiling. The provision ensures that the credit taken does not remain with the assessee once the inputs are removed without being used in manufacture - Rule 3(5) of CCR only mandates minimum equal reversal of credit availed, and does not prohibit higher reversal. Excess reversal leads to higher payment to Government and cannot be construed as passing on irregular benefit. Section 11D applies only when an assessee collects any amount representing duty from a buyer, which is absent in the present case of inter-unit stock transfers. Denial of CENVAT credit to recipient units is legally unsustainable as the debit at the supplier unit has not been refunded. Penalty is also not sustainable as the issue involves interpretation of law and there is no fraud or suppression. The demands and penalties are set aside – The assessee appeals are allowed and the Departmental appeal is dismissed - Denial of CENVAT Credit to Recipient Units - Supplier unit debited higher amounts in CENVAT credit account while clearing inputs "as such" to recipient units - Whether such denial of credit to recipient units is sustainable – HELD - Once the supplier unit has reversed the credit, the same has not been refunded or set aside. Therefore, denial of credit to recipient units would amount to double/excess recovery, which is against the intent of CENVAT scheme to avoid cascading of taxes – The denial of credit to recipient units is legally unsustainable and set aside. [Read less]

Central Excise - Eligibility of Cenvat Credit on Input Services – Eligibility to Cenvat Credit on input services used for construction of factory prior to April 1, 2011 – HELD - As per the definition of "input service" under the Cenvat Credit Rules prevailing at that time, the appellant was eligible to avail the Cenvat Credit on input services used for construction of factory during the relevant period prior to April 1, 2011, The definition included services used in relation to setting up, modernization, renovation or repairs of a factory. The exclusions introduced in the definition post April 1, 2011 cannot be retrosp... [Read more]

Central Excise - Eligibility of Cenvat Credit on Input Services – Eligibility to Cenvat Credit on input services used for construction of factory prior to April 1, 2011 – HELD - As per the definition of "input service" under the Cenvat Credit Rules prevailing at that time, the appellant was eligible to avail the Cenvat Credit on input services used for construction of factory during the relevant period prior to April 1, 2011, The definition included services used in relation to setting up, modernization, renovation or repairs of a factory. The exclusions introduced in the definition post April 1, 2011 cannot be retrospectively applied to the earlier period when the appellant had availed the credit - Since the credit itself has been taken correctly, therefore, there is no scope for imposition of any penalty also. The impugned order denying the Cenvat Credit and imposing penalty is set aside and appeal allowed [Read less]

Central Excise – EOU to DTA clearance; Fulfilment of condition of Exemption Notification No. 23/2003-CE - Appellant is an EOU engaged in manufacture of automotive cylinder heads from castings made in its Foundry Division in India and processed ingots manufactured by a job worker in India from scrap generated in Appellant's Machining Division - Whether Appellant satisfied the condition in Exemption Notification that goods cleared to DTA be "manufactured wholly from the raw materials produced or manufactured in India" – HELD - The immediate raw material for manufacturing automotive cylinder heads is the castings made in ... [Read more]

Central Excise – EOU to DTA clearance; Fulfilment of condition of Exemption Notification No. 23/2003-CE - Appellant is an EOU engaged in manufacture of automotive cylinder heads from castings made in its Foundry Division in India and processed ingots manufactured by a job worker in India from scrap generated in Appellant's Machining Division - Whether Appellant satisfied the condition in Exemption Notification that goods cleared to DTA be "manufactured wholly from the raw materials produced or manufactured in India" – HELD - The immediate raw material for manufacturing automotive cylinder heads is the castings made in India, and even the processed ingots were manufactured in India, therefore Appellant satisfied the condition in the Exemption Notification and was entitled to its benefit. The scrap generated during manufacturing is a technological necessity and cannot be attributed to any portion of the inputs, following the principles laid down in Supreme Court and Tribunal decisions – Further, extended period of limitation cannot be invoked as there was no suppression of facts by the appellant as it held a bona fide belief that it was correctly availing the exemption based on a reasonable interpretation of the Notification - The impugned orders denying the exemption to the Appellant is set aside and the appeal is allowed [Read less]

GST – West Bengal AAR - Eligibility to exemption to Security services provided by security agencies to Food Corporation of India - Whether the security services qualify as 'pure services' provided to a Government Entity in relation to functions entrusted under Article 243G/243W of the Constitution of India and are exempt from GST under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended – HELD - The security services provided to FCI are pure services as they do not involve any supply of goods. FCI satisfies the criteria of a 'Government Entity' under the GST law, being established by an Act of Parl... [Read more]

GST – West Bengal AAR - Eligibility to exemption to Security services provided by security agencies to Food Corporation of India - Whether the security services qualify as 'pure services' provided to a Government Entity in relation to functions entrusted under Article 243G/243W of the Constitution of India and are exempt from GST under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended – HELD - The security services provided to FCI are pure services as they do not involve any supply of goods. FCI satisfies the criteria of a 'Government Entity' under the GST law, being established by an Act of Parliament and under the full ownership and control of the Central Government. The primary function of FCI is procurement, storage, movement, transport, distribution and sale of foodgrains and other foodstuffs throughout the country for the Public Distribution System (PDS), which is covered under serial no. 28 of the Eleventh Schedule to Article 243G of the Constitution – The security services are essential for safeguarding the foodgrains and foodstuffs stored for the purpose of PDS in the depots of FCI. Therefore, the security services provided to FCI are an activity in relation to the functions entrusted under Article 243G. However, the exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) is available only to the Central Government, State Government, Union Territory or local authority, and not to a Government Entity. Consequently, the security services provided to FCI, being a Government Entity, are not exempt from GST - The security services provided by the security agencies to FCI, qualify as 'pure services' provided to a Government Entity in relation to functions entrusted under Article 243G of the Constitution of India, but are not exempt from GST – Ordered accordingly [Read less]

Centra Excise - Penalty under Rule 26 of Central Excise Rules, 2002 - The appellants were alleged to have been involved in the clearance of excisable goods without payment of duty leading to evasion of central excise duty - Whether the appellants are liable for personal penalty under Rule 26 - HELD - The allegations against the appellants are that they were in-charge of the activities of the manufacturer and were aware that the goods were liable to be classified under a different chapter, but they resorted to clandestine clearance of the goods without payment of duty. However, there was no allegation of financial enrichmen... [Read more]

Centra Excise - Penalty under Rule 26 of Central Excise Rules, 2002 - The appellants were alleged to have been involved in the clearance of excisable goods without payment of duty leading to evasion of central excise duty - Whether the appellants are liable for personal penalty under Rule 26 - HELD - The allegations against the appellants are that they were in-charge of the activities of the manufacturer and were aware that the goods were liable to be classified under a different chapter, but they resorted to clandestine clearance of the goods without payment of duty. However, there was no allegation of financial enrichment of the appellants by this evasion. Further, as per the show cause notice, there was no proposal to confiscate the goods, and as per Rule 26, penalty can be imposed only if the goods are held liable for confiscation. In the absence of any such proposal for confiscation, the penalty on the appellants is unsustainable - The appeals filed by the revenue against the order dropping the penalty on the appellants are dismissed [Read less]

Central Excise - Classification of time attendance and access control devices and handheld data collection devices - HELD - The Adjudication Authority confirmed the demand by classifying the good as falling under Central Excise Tariff Heading (CETH) 85437099 - while importing, the goods are described as tablet devices under HSN Code 84713090 and even as per the impugned order, the devices are designed for a specific functionality relating to data collection / access control device. The goods are clearly shown to have been designed for data capturing, computing, memory, time tracking, security and payroll management - The g... [Read more]

Central Excise - Classification of time attendance and access control devices and handheld data collection devices - HELD - The Adjudication Authority confirmed the demand by classifying the good as falling under Central Excise Tariff Heading (CETH) 85437099 - while importing, the goods are described as tablet devices under HSN Code 84713090 and even as per the impugned order, the devices are designed for a specific functionality relating to data collection / access control device. The goods are clearly shown to have been designed for data capturing, computing, memory, time tracking, security and payroll management - The goods presented by the appellant have to be classified under CETH 8471 as data processing machine and not under CETH 85437099 as "electric machines and apparatus having individual functions, not specified or included elsewhere in this Chapter". The handheld computers, scanners, and other computer peripherals are classifiable under Chapter 84 as data processing machines, and not under the residual chapter 85. The demand of excise duty under CETH 85437099 is impermissible and the impugned order is set aside and the appeal is allowed - Manufacture - The appellant had imported tablets and accessories and supplied them to a job worker for certain processing activities - Whether the activities carried out by the appellant amounted to 'manufacture' - HELD - Since the appellant had paid service tax on the activities carried out by the job worker, no finding can be made that the same activity amounts to manufacture at the appellant's end. Even if it is held that it amounts to manufacture, the job worker would be liable to pay the excise duty. [Read less]

Service Tax - Refund Claim for service tax paid on 'space selling services' and 'newspaper promotion services' - Quantification of service tax paid relating to space selling activity - Bar of unjust enrichment - Whether the appellant can re-classify their services as 'sale of space or time for advertisements' and claim refund without revising their self-assessed ST3 returns - HELD - The appellant could not establish the exact quantification of service tax paid relating to space selling activity as they did not provide invoices/bills raised on the customer. The CA certificate alone is not conclusive proof to rebut the statu... [Read more]

Service Tax - Refund Claim for service tax paid on 'space selling services' and 'newspaper promotion services' - Quantification of service tax paid relating to space selling activity - Bar of unjust enrichment - Whether the appellant can re-classify their services as 'sale of space or time for advertisements' and claim refund without revising their self-assessed ST3 returns - HELD - The appellant could not establish the exact quantification of service tax paid relating to space selling activity as they did not provide invoices/bills raised on the customer. The CA certificate alone is not conclusive proof to rebut the statutory presumption that the incidence of tax has not been passed on to the ultimate customer. The matter is remanded to the RSA to re-examine the documents provided by the appellant to quantify the eligible refund and to determine if the appellant has crossed the bar of unjust enrichment – Further, the appellant cannot claim refund by re-classifying their services without revising their self-assessed ST3 returns. It is a settled position in law that refund proceedings cannot modify the original assessment. However, the appellant may be allowed to take appropriate steps for re-assessment/revision of ST3 returns, if eligible. The matter is remanded to the RSA for re-examination – The appeals are allowed by way of remand [Read less]

Service Tax - Applicability of service tax on members club - The appellant is a members club registered under the Societies Registration Act, 1860 and is a body constituted under a law for the time being in force - Whether the services rendered to its members by the club are taxable under the category of 'Club or Association Services' - HELD – The issue is no more res integra and has been settled by the Hon'ble Supreme Court in the case of State of West Bengal vs. Calcutta Club Ltd wherein the Hon'ble Supreme Court has affirmed that incorporated or registered clubs and associations were outside the scope of service tax l... [Read more]

Service Tax - Applicability of service tax on members club - The appellant is a members club registered under the Societies Registration Act, 1860 and is a body constituted under a law for the time being in force - Whether the services rendered to its members by the club are taxable under the category of 'Club or Association Services' - HELD – The issue is no more res integra and has been settled by the Hon'ble Supreme Court in the case of State of West Bengal vs. Calcutta Club Ltd wherein the Hon'ble Supreme Court has affirmed that incorporated or registered clubs and associations were outside the scope of service tax levy prior to 01.07.2012 and that the doctrine of mutuality continues to apply to such entities. Therefore, all receipts from the members of the club are not exigible to service tax under 'Club or Association Services' during the impugned period – Regarding applicability of service tax on non-members, prior to 2011, there was no provision for demanding service tax from non-members on availing the services of the club, but after the amendment introduced by Section 76 of the Finance Act, 2011 (w.e.f. 01.05.2011) that the phrase "or any other person" was inserted after the words "its members". By the said amendment, the scope of tax was widened and even the non-members were liable to pay service tax on the services rendered by the clubs or associations; but the period involved in the present case is prior to introduction of said amendment, therefore, the appellant is not liable to pay service tax on services rendered to non-members – The impugned order is set aside and the appeal is allowed - Demand on income from sponsorship - The department has demanded the service tax on income from sponsorship under the head 'Club or Association Services' - Whether the demand on income from sponsorship under the head 'Club or Association Services' is sustainable - HELD - The sponsorship service, which was primarily for sports event, was having a separate category under the head 'Sponsorship Services' introduced under Section 68(2) vide Notification No. 15/2006-ST dated 25.04.2006. But instead of demanding the service tax on sponsorship service, the SCN has raised the demand under an incorrect head 'Club or Association Services', therefore, the demand confirmed under an incorrect head is not sustainable in law. [Read less]

Service Tax - Payment of Service Tax under Reverse Charge Mechanism (RCM) - Appellant received security services from providers other than body corporates, and was liable to pay 75% of the service tax under RCM - Appellant claimed that the service providers had paid the entire service tax, which was reimbursed by the Appellant, and thus the Appellant is not liable to pay the tax again – Whether the appellants are liable to pay service tax on security services received by them to the extent of 75% of tax payable under RCM - HELD - If tax was liable to be paid under RCM but already paid by the service provider, it was not ... [Read more]

Service Tax - Payment of Service Tax under Reverse Charge Mechanism (RCM) - Appellant received security services from providers other than body corporates, and was liable to pay 75% of the service tax under RCM - Appellant claimed that the service providers had paid the entire service tax, which was reimbursed by the Appellant, and thus the Appellant is not liable to pay the tax again – Whether the appellants are liable to pay service tax on security services received by them to the extent of 75% of tax payable under RCM - HELD - If tax was liable to be paid under RCM but already paid by the service provider, it was not upon to the Department to confirm the same against the appellant - As per the provisions both service provider and recipient are required to discharge service tax liability in the case of said service in a particular proportion i.e. 25% & 75% respectively. However, if the service provider has himself has discharged the entire liability either on his own or as per the understanding between the service provider and service recipient, any further demand would lead to double taxation on the same set of services - However, the Appellant was unable to conclusively prove that the entire service tax was paid by the service provider. The matter is remanded to the Original Adjudicating Authority to examine the evidence and determine the extent to which the service tax was paid by the service provider, and the demand against the Appellant shall be limited to the remaining amount. The invocation of extended period and imposition of penalty are upheld, as the Appellant was aware of the statutory provisions for payment under RCM and failed to provide conclusive evidence - The matter is remanded to the Original Adjudicating Authority who shall satisfy himself regarding payment of service tax by the service provider themselves to the extent of 100% and to that extent the demand against the appellant would not sustain on merit. In respect of remaining amount, the demand will sustain – The appeal is disposed of [Read less]

Service Tax - Tour Operator Service - The appellant provides promotional schemes to customers which include coupons for hotel stay, transportation to tourist places, and other services for a lump-sum amount, referred to as "tour packages" - Whether the appellant's tour packages fall under the category of "Tour Operator Service" under Section 65(115) of the Finance Act, 1994 – HELD - Based on the Tribunal's earlier decision in the appellant's own case, the tour packages provided by the appellant do not fall under the definition of "Tour Operator Service" as the appellant is not engaged in the business of planning, schedul... [Read more]

Service Tax - Tour Operator Service - The appellant provides promotional schemes to customers which include coupons for hotel stay, transportation to tourist places, and other services for a lump-sum amount, referred to as "tour packages" - Whether the appellant's tour packages fall under the category of "Tour Operator Service" under Section 65(115) of the Finance Act, 1994 – HELD - Based on the Tribunal's earlier decision in the appellant's own case, the tour packages provided by the appellant do not fall under the definition of "Tour Operator Service" as the appellant is not engaged in the business of planning, scheduling, organizing or arranging tours. The appellant is only providing air travel along with certain additional services, but not planning or organizing the tours. Therefore, the appellant is not liable to pay Service Tax under the category of "Tour Operator Service" - However, on the said activity, the appellant has paid Service Tax by availing abatement. Admittedly, the appellant has collected Service Tax from its customers and paid thereof claiming abatement. Thus, the same is not refundable to the appellant - The impugned order qua confirmation of the demand, along with interest and penalties is set aside and the appeal is allowed - Airport Service - The appellant incurred expenses on behalf of its wholly-owned subsidiary AASL and claimed reimbursement - Whether the appellant's services to AASL qualify as "Airport Service" under Section 65(105)(zzm) of the Finance Act, 1994 - HELD - Based on the Tribunal's decision in Soft Touch Aviation case, the definition of "Airport Service" prior to July 1, 2010 required the services to be provided by the airport authority or a person authorized by it. In the present case, the appellant is not authorized by the airport authority to provide the services, and therefore, the appellant's services do not qualify as "Airport Service". Accordingly, the appellant is not liable to pay Service Tax under the category of "Airport Service" - The demand under the category of "Airport Service" is set aside. [Read less]

Service Tax - Divisibility of Contract, Works Contract or Pure Service – Separate contracts for supply/sale of AC systems and installation and commissioning - Department contested that the low side work/HVAC works should be treated as pure service contract and not WCS as the dominant nature of the transaction was provision of service, even though certain materials were used – HELD - The Commissioner correctly held that the low side work/HVAC works involved transfer of property in goods and were eligible for abatement under WCS. The use of substantial materials like piping, wiring, ducting etc. in the installation and c... [Read more]

Service Tax - Divisibility of Contract, Works Contract or Pure Service – Separate contracts for supply/sale of AC systems and installation and commissioning - Department contested that the low side work/HVAC works should be treated as pure service contract and not WCS as the dominant nature of the transaction was provision of service, even though certain materials were used – HELD - The Commissioner correctly held that the low side work/HVAC works involved transfer of property in goods and were eligible for abatement under WCS. The use of substantial materials like piping, wiring, ducting etc. in the installation and commissioning work could not be treated as mere incidental - Once the materials are involved in execution of installation and commissioning works, it cannot be treated as mere pure service of installation and commissioning and it would fall within the category of WCS involving both labour and material. The fact that VAT was paid on these transactions treating it as deemed sale further supported the classification as WCS. There is no ground to interfere with the Commissioner's order – The revenue appeal is dismissed [Read less]

Service Tax - Supply of Erection, Commissioning & Installation Service (ECIS) by foreign supplier of machinery - Consolidated payment to foreign supplier for machinery supply including installation - Whether service tax leviable on installation charges under reverse charge mechanism – HELD - A consolidated gross amount has been charged by the foreign supplier, which included obligation for installation and commissioning. While the foreign suppliers have admittedly undertaken installation and commissioning etc., there is no direct evidence to prove that any amount has been specifically paid for this service - The foreign ... [Read more]

Service Tax - Supply of Erection, Commissioning & Installation Service (ECIS) by foreign supplier of machinery - Consolidated payment to foreign supplier for machinery supply including installation - Whether service tax leviable on installation charges under reverse charge mechanism – HELD - A consolidated gross amount has been charged by the foreign supplier, which included obligation for installation and commissioning. While the foreign suppliers have admittedly undertaken installation and commissioning etc., there is no direct evidence to prove that any amount has been specifically paid for this service - The foreign supplier was under contractual obligation to install the machinery supplied by them, and cannot be considered as an independent "erection and commissioning agency" as per the definition of ECIS. The entire invoice value, including installation charges, was subject to customs duty assessment, and it is not permissible to artificially bifurcate the service value from the total value - No service tax is leviable on the installation charges as part of the consolidated machinery supply contract. Further, the extended period of limitation cannot be invoked as the assessee had a bonafide belief that no service tax was payable on the installation charges - The impugned order is set aside and the appeal is allowed [Read less]

GST - Principles of Natural Justice – Petitioner contention that the impugned adjudication order was passed ex parte, without affording reasonable opportunity of hearing – Rejection of petitioner's applications of rectification – HELD – The principles of natural justice require reasonable opportunity, which cannot be stretched to such an extent that statutory timelines become unworkable. The petitioner, who did not avail repeated opportunities, cannot later contend total denial of hearing - However, the adjudication order did not reflect independent adjudicatory consideration, as it uniformly recorded that the peti... [Read more]

GST - Principles of Natural Justice – Petitioner contention that the impugned adjudication order was passed ex parte, without affording reasonable opportunity of hearing – Rejection of petitioner's applications of rectification – HELD – The principles of natural justice require reasonable opportunity, which cannot be stretched to such an extent that statutory timelines become unworkable. The petitioner, who did not avail repeated opportunities, cannot later contend total denial of hearing - However, the adjudication order did not reflect independent adjudicatory consideration, as it uniformly recorded that the petitioner had not filed objections and proceeded to confirm the demand - Further, the scope of Section 161 is limited in scope and does not permit re-hearing on merits. The rejection of the rectification applications cannot be termed wholly illegal, as the authority may not have acted outside its jurisdiction. However, the rectification orders substantially reproduced the earlier reasoning without deeper scrutiny of the grievances raised, indicating a lack of sufficient analytical depth in the overall adjudicatory exercise. Considering the magnitude of the demand and the nature of reasoning in the adjudication order, the petitioner is granted one final opportunity to the petitioner to contest the matter on its merits, but with cost of Rs.50,000/- payable to the Karnataka State Legal Services Authorities - the impugned adjudication order is set aside and matter is remanded for fresh consideration – The writ petition is partly allowed [Read less]

Service Tax - Appellant challenged the demand for service tax for the period from January 2013 to June 2017 on the ground of limitation - Department had conducted an initial audit for the period from January 2013 to March 2014 and raised the issue of non-payment of service tax. However, no demand was raised at that time. Later, another audit was conducted covering the period after March 2015, and the impugned demand was issued invoking the extended period of limitation – HELD - Since the issue was known to the Department during the first audit, the demand issued after the second audit by invoking the extended period of l... [Read more]

Service Tax - Appellant challenged the demand for service tax for the period from January 2013 to June 2017 on the ground of limitation - Department had conducted an initial audit for the period from January 2013 to March 2014 and raised the issue of non-payment of service tax. However, no demand was raised at that time. Later, another audit was conducted covering the period after March 2015, and the impugned demand was issued invoking the extended period of limitation – HELD - Since the issue was known to the Department during the first audit, the demand issued after the second audit by invoking the extended period of limitation is not legally sustainable – Further, the services rendered by the appellant for “Linen Distribution Service” are appropriately classifiable under the category of "manpower supply service". The service tax liability for the normal period of limitation (i.e. from April 2016 to March 2017) is on the recipient of service, i.e., M/s. RailTel, under the reverse charge mechanism as per the applicable notifications - There is no evidence of any suppression of facts with intent to evade tax. Accordingly, the penalty imposed under Section 78 of the Finance Act, 1994 is set aside - The demand confirmed by invoking the extended period of limitation was set aside. The demand for the normal period of limitation was upheld, but the liability was held to be on the recipient of service, i.e., M/s. RailTel. The penalty imposed under Section 78 was set aside – The appeal is disposed of [Read less]

GST – Reasonable apprehension and bias - Challenge to Audit report, show cause notice, order-in-original, and consequential recovery proceedings on the ground that the same officer conducted the audit, issued the show cause notice, and passed the order-in-original, giving rise to a reasonable apprehension of bias – HELD – It is not in dispute that respondent No.1–Deputy Commissioner of Commercial Taxes (Audit)-2 has conducted the audit proceedings, issued the audit report, issued the show cause notice, and passed the order-in-original confirming the demand - Though the statute may not expressly prohibit such exerci... [Read more]

GST – Reasonable apprehension and bias - Challenge to Audit report, show cause notice, order-in-original, and consequential recovery proceedings on the ground that the same officer conducted the audit, issued the show cause notice, and passed the order-in-original, giving rise to a reasonable apprehension of bias – HELD – It is not in dispute that respondent No.1–Deputy Commissioner of Commercial Taxes (Audit)-2 has conducted the audit proceedings, issued the audit report, issued the show cause notice, and passed the order-in-original confirming the demand - Though the statute may not expressly prohibit such exercise, the principles of natural justice require that the adjudication must be free from reasonable apprehension of bias - An officer who conducts the audit and formulates the audit objections may be said to have already framed a prima facie opinion on the issues, and if the same officer thereafter adjudicates the very same allegations, it may give rise to a reasonable apprehension that the decision-making process is not entirely independent - The impugned order-in-original, garnishee notice are set aside and the matter is remitted to the Joint Commissioner of Commercial Tax (Administration) to assign the matter to a proper officer other than the respondent no. 1 for fresh adjudication from the stage of the reply submitted by the petitioner to the show cause notice, affording reasonable opportunity of hearing and passing a reasoned order in accordance with law - The writ petition is allowed [Read less]

GST - Cancellation of GST Registration with retrospective effect - Whether the registration could be cancelled with retrospective effect when it was not proposed in the show cause notice – HELD - While the CGST Act allows for retrospective cancellation of registration under Section 29, such power can be exercised only upon existence of specific contingencies and the order must reflect the reasons for such retrospective cancellation. It is a basic principle that the concerned authority must put the assessee on notice of the proposed action and the reasons for the same - In the present case, there was no proposal for retro... [Read more]

GST - Cancellation of GST Registration with retrospective effect - Whether the registration could be cancelled with retrospective effect when it was not proposed in the show cause notice – HELD - While the CGST Act allows for retrospective cancellation of registration under Section 29, such power can be exercised only upon existence of specific contingencies and the order must reflect the reasons for such retrospective cancellation. It is a basic principle that the concerned authority must put the assessee on notice of the proposed action and the reasons for the same - In the present case, there was no proposal for retrospective cancellation in the show cause notice, which was a violation of principles of natural justice. Further, the impugned order was non-speaking and did not indicate any application of mind by the authority. There is no reference to any material on record on the basis of which an opinion was formed by the authority regarding the reason for cancellation of petitioner’s registration. It merely stated the reference to the show cause notice without providing any reasoning for the cancellation – The impugned cancellation order is set aside granting liberty to the authorities to take necessary steps for recovery of any tax, penalty or interest, after serving proper notice and hearing the petitioner in accordance with law – The writ petition is allowed [Read less]

Service Tax - Liability of service tax on individual truck owner under Goods Transport Agency (GTA) service - Whether the appellant, being an individual truck owner, is liable to pay service tax under the GTA service – HELD - The appellant, being an individual truck owner, is not liable to pay service tax under the GTA service. The definition of "Goods Transport Agency" clearly indicates that the tax liability does not arise on an individual, but on the agency who provides the service of transportation of goods and issues a consignment note. The Mega Exemption Notification No.25/2012-ST clarifies that a truck owner is ex... [Read more]

Service Tax - Liability of service tax on individual truck owner under Goods Transport Agency (GTA) service - Whether the appellant, being an individual truck owner, is liable to pay service tax under the GTA service – HELD - The appellant, being an individual truck owner, is not liable to pay service tax under the GTA service. The definition of "Goods Transport Agency" clearly indicates that the tax liability does not arise on an individual, but on the agency who provides the service of transportation of goods and issues a consignment note. The Mega Exemption Notification No.25/2012-ST clarifies that a truck owner is exempted from any tax liability if the truck is taken on hire by the GTA - Further, the adjudication proceedings were not completed within the timelines prescribed under Section 73(4B) of the Finance Act, 1994, and therefore, the impugned order cannot be sustained - The demand of service tax along with penalties imposed on the appellant are set aside and the appeal is allowed [Read less]

GST - Provisional Attachment under Section 83 of CGST Act, 2017 - Petitioner, a technology service provider, had a current bank account used for facilitating financial transactions for a client, M/s. Digihub Unique Tech Solutions Pvt. Ltd. - Authorities issued provisional attachment order under Section 83 of the CGST Act attaching the petitioner's bank account, alleging that Digihub was involved in online gaming and betting activities, resulting in GST evasion - Whether the respondent authorities were justified in attaching the petitioner's bank account under Section 83 of the CGST Act – HELD - The petitioner has failed ... [Read more]

GST - Provisional Attachment under Section 83 of CGST Act, 2017 - Petitioner, a technology service provider, had a current bank account used for facilitating financial transactions for a client, M/s. Digihub Unique Tech Solutions Pvt. Ltd. - Authorities issued provisional attachment order under Section 83 of the CGST Act attaching the petitioner's bank account, alleging that Digihub was involved in online gaming and betting activities, resulting in GST evasion - Whether the respondent authorities were justified in attaching the petitioner's bank account under Section 83 of the CGST Act – HELD - The petitioner has failed to verify the credentials of Digihub and allowed its platform to be used for illegal activities of online gaming and betting, resulting in loss of Government revenue. Merely because the petitioner is called for an undertaking by Digihub cannot satisfied the requirement of law - From the documentary evidence, it is noticed that there is list of 35,064 bank accounts in which the payouts were made by the petitioner. The investigation is still ongoing and the authorities were in the process of analyzing the bank accounts of all those involved in the alleged scam - Considering the enormity of the transactions involved and the stage of the investigation, the Court is not inclined to de-freeze the petitioner's bank account at this stage – The petition is dismissed [Read less]

GST - Mandatory issuance and uploading of Form GST DRC-07 – Expiry of E-way bill - To ensure the immediate release of the goods and avoid business disruptions, the petitioner paid the penalty. However, the respondent failed to issue or upload the summary of the order in Form GST DRC-07 on the common portal due to which, the petitioner was unable to exercise the statutory right to file an appeal before the Appellate Authority - Whether the tax authorities are legally obligated to upload the summary of the penalty order in Form GST DRC-07 despite the payment of the penalty – HELD – In terms of Rule 142(5) of the CGST R... [Read more]

GST - Mandatory issuance and uploading of Form GST DRC-07 – Expiry of E-way bill - To ensure the immediate release of the goods and avoid business disruptions, the petitioner paid the penalty. However, the respondent failed to issue or upload the summary of the order in Form GST DRC-07 on the common portal due to which, the petitioner was unable to exercise the statutory right to file an appeal before the Appellate Authority - Whether the tax authorities are legally obligated to upload the summary of the penalty order in Form GST DRC-07 despite the payment of the penalty – HELD – In terms of Rule 142(5) of the CGST Rules, 2017, it is mandatory for the proper officer to upload a summary of orders issued under various sections, including Section 129, electronically in Form GST DRC-07. Even if a payment is made by the taxpayer, whether voluntarily or otherwise, the tax official is not absolved of the statutory obligation to pass a reasoned order and upload the corresponding summary - The failure to upload the summary order effectively frustrates the statutory right to appeal and contravenes the principles of procedural fairness and tax adjudication - The respondents are directed to issue Form GST DRC-07 to the petitioner to facilitate the filing of an appeal before the Appellate Authority - The Writ Petition is disposed of [Read less]

GST - Blocking of Input Tax Credit creating a negative balance in Electronic Credit Ledger - Whether the respondents can block the ITC in excess of the ITC available in the ECL of the petitioner – HELD - The High Courts in various decisions have held that the power under Rule 86A of the CGST Rules, 2017 can only be exercised if the ITC is available in the ECL of the registered person - View expressed by High Courts of Gujarat, Delhi, Telangana and Bombay was endorsed by this Court to the effect that there is no ambiguity in the plain language of Rule 86A of 2017 Rules and neither does literal construction of this Rule le... [Read more]

GST - Blocking of Input Tax Credit creating a negative balance in Electronic Credit Ledger - Whether the respondents can block the ITC in excess of the ITC available in the ECL of the petitioner – HELD - The High Courts in various decisions have held that the power under Rule 86A of the CGST Rules, 2017 can only be exercised if the ITC is available in the ECL of the registered person - View expressed by High Courts of Gujarat, Delhi, Telangana and Bombay was endorsed by this Court to the effect that there is no ambiguity in the plain language of Rule 86A of 2017 Rules and neither does literal construction of this Rule lead to any absurdity - Blocking the ITC in excess of the available ITC in the ECL is not permissible. The impugned orders are set aside to the extent that they disallowed debit from the ECL of the petitioner in excess of the ITC available therein at the time of passing of the said decisions. The respondents are, however, at liberty to undertake and resort to remedies available to them for recovery in accordance with the law – The writ petition is allowed [Read less]

GST - Right to Travel Abroad - Petitioner was accused of fraudulent availment and utilization of Input Tax Credit based on bogus invoices, resulting in a loss to the public exchequer. The Trial Court rejected the petitioner's application for permission to travel abroad for business and personal purposes - Whether the Trial Court's order rejecting the petitioner's application for permission to travel abroad was justified, given the nature of the allegations against the petitioner – HELD - The right to travel abroad is a fundamental right under Articles 14 and 21 of the Constitution of India. This right can only be deprive... [Read more]

GST - Right to Travel Abroad - Petitioner was accused of fraudulent availment and utilization of Input Tax Credit based on bogus invoices, resulting in a loss to the public exchequer. The Trial Court rejected the petitioner's application for permission to travel abroad for business and personal purposes - Whether the Trial Court's order rejecting the petitioner's application for permission to travel abroad was justified, given the nature of the allegations against the petitioner – HELD - The right to travel abroad is a fundamental right under Articles 14 and 21 of the Constitution of India. This right can only be deprived through a fair and reasonable procedure established by law. The mere fact that the petitioner was accused of a serious economic offence and penalties were imposed on the companies he managed, does not justify the denial of his fundamental right to travel abroad. There is no material on record to suggest that the petitioner posed a flight risk or was likely to abscond. The guilt of the accused is yet to be adjudicated, and the denial of permission to travel abroad cannot be based solely on the gravity of the allegations. Considering the petitioner's roots in the society and the purpose of the intended travel, the petitioner is granted permission to travel abroad, subject to certain conditions to ensure his return to India - The writ petition is allowed [Read less]

Customs - Classification of imported "Joss Powder" - Appellant classified it under CTH 44050000, assessed to BCD at 5% under Notification No.46/2011. The adjudicating authority reclassified the goods under CTH 12119039, resulting in demanding differential duty – HELD - The Note 1(a) to Chapter 44 excludes only wood in powdered form that is used primarily in perfumery, and the "Joss Powder" in question did not have any perfumery effect or medical properties to be classified under CTH 1211. The goods are correctly classified under CTH 44050000 – Further, the SCN was issued after one year from the relevant period. The ext... [Read more]

Customs - Classification of imported "Joss Powder" - Appellant classified it under CTH 44050000, assessed to BCD at 5% under Notification No.46/2011. The adjudicating authority reclassified the goods under CTH 12119039, resulting in demanding differential duty – HELD - The Note 1(a) to Chapter 44 excludes only wood in powdered form that is used primarily in perfumery, and the "Joss Powder" in question did not have any perfumery effect or medical properties to be classified under CTH 1211. The goods are correctly classified under CTH 44050000 – Further, the SCN was issued after one year from the relevant period. The extended period of limitation under Section 28 of the Customs Act is not applicable as there is no collusion, wilful misstatement or suppression of facts by the appellant - The demand is also barred by limitation - The impugned order is set aside and the appeals are allowed [Read less]

GST – Karnataka AAR – Taxability of Corpus Fund Contributions - The applicant is an apartment owners' association that collects monthly maintenance charges from its members and also collects corpus fund contributions for future contingencies - Whether the corpus fund contributions are treated as "consideration" under the CGST Act, 2017 and attract GST – HELD - The applicant’s contention that “the members and the association are the same person” based on the doctrine of mutuality cannot be accepted. The applicant and its members are to be treated as distinct persons under the Explanation to Section 7(1) of the C... [Read more]

GST – Karnataka AAR – Taxability of Corpus Fund Contributions - The applicant is an apartment owners' association that collects monthly maintenance charges from its members and also collects corpus fund contributions for future contingencies - Whether the corpus fund contributions are treated as "consideration" under the CGST Act, 2017 and attract GST – HELD - The applicant’s contention that “the members and the association are the same person” based on the doctrine of mutuality cannot be accepted. The applicant and its members are to be treated as distinct persons under the Explanation to Section 7(1) of the CGST Act, 2017 - The amounts collected towards the corpus fund are indisputably in the nature of advances for future supply of service and not deposits. The corpus fund collected by the applicant for future contingencies constitutes consideration for a future supply of services and, therefore, attracts GST in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, under SAC 999598 - The corpus fund contributions collected by the applicant for future contingencies constitute "consideration" as advances meant for the future supply of services to members and therefore attract GST – Ordered accordingly - Whether the corpus fund can be treated separately and independently from monthly maintenance charges for GST applicability – HELD - The corpus fund is distinct in character and purpose from the monthly maintenance charges, as the former is a contribution toward future capital expenditures while the latter is consideration for ongoing services. Therefore, the corpus fund can be treated separately and independently from monthly maintenance charges for GST applicability - Time of Supply – HELD – The corpus or sinking fund contributions are collected in advance to meet future contingencies. The GST is payable at the time of collection/receipt of the corpus fund, as the time of supply is triggered on the date of receipt of the advance amounts, in terms of Section 13(2)(a) of the CGST Act. [Read less]

GST – Karnataka AAR - Buy and sale of used motor vehicles, Eligibility to avail Input Tax Credit on inward supplies other than purchase of used motor vehicles - The applicant, a dealer engaged in the business of buying and selling of used motor vehicles, entitled to ITC on direct and indirect expenses (other than vehicle purchase) incurred in the business of selling used motor vehicles while availing benefits under Notification No. 8/2018-Central Tax (Rate) dated 25.01.2018, as amended – HELD - The restriction on availing ITC under Notification No. 08/2018-CGST (Rate) applies only to the ITC on the used motor vehicles ... [Read more]

GST – Karnataka AAR - Buy and sale of used motor vehicles, Eligibility to avail Input Tax Credit on inward supplies other than purchase of used motor vehicles - The applicant, a dealer engaged in the business of buying and selling of used motor vehicles, entitled to ITC on direct and indirect expenses (other than vehicle purchase) incurred in the business of selling used motor vehicles while availing benefits under Notification No. 8/2018-Central Tax (Rate) dated 25.01.2018, as amended – HELD - The restriction on availing ITC under Notification No. 08/2018-CGST (Rate) applies only to the ITC on the used motor vehicles themselves and does not extend to ITC on any other inputs or input services used in the course or furtherance of business. The expression "such goods" in the notification refers only to the used motor vehicles listed therein, and not to any other goods or input services - There is no restriction under Section 16 or Section 17(5) of the CGST Act, 2017 on claiming ITC on the other input services and capital goods used by the applicant. The expenses incurred by the applicant on refurbishment, marketing, professional fees, administrative overheads etc. are essential for the smooth functioning of the used car business and directly linked to the enhancement of the sale value of the vehicles. Accordingly, the applicant is eligible to avail ITC on these inward supplies, subject to fulfilment of the conditions prescribed under the CGST Act and Rules – Ordered accordingly [Read less]

Customs - Transaction Value - The appellant exported Iron Ore Fines and filed shipping bills for the export – Rejection of declared transaction value of USD 115 PDMT FOB and Dept adopted a higher value of USD 128 PDMT FOB based on contemporaneous export prices of other exporters - Whether the department was justified in rejecting the declared transaction value and adopting a higher value – HELD - The Department cannot reject the declared transaction value without raising any doubt about its truth or accuracy and without following the procedure prescribed under the Customs Valuation Rules. The transaction value as refle... [Read more]

Customs - Transaction Value - The appellant exported Iron Ore Fines and filed shipping bills for the export – Rejection of declared transaction value of USD 115 PDMT FOB and Dept adopted a higher value of USD 128 PDMT FOB based on contemporaneous export prices of other exporters - Whether the department was justified in rejecting the declared transaction value and adopting a higher value – HELD - The Department cannot reject the declared transaction value without raising any doubt about its truth or accuracy and without following the procedure prescribed under the Customs Valuation Rules. The transaction value as reflected in the BRC and corroborated by sale/purchase contract cannot be rejected without substantive evidence that the export price was not true or genuine. The adjudicating authority has not raised any doubt about the transaction value or the BRC, and has not given any reasons to reject the declared transaction value. The department has merely adopted the highest of the contemporaneous prices without making any adjustments as required under the Rules - The impugned order is set aside and the case is remanded to the Assessing Officer to finalize the assessment as per the declared transaction value reflected in the BRC – The appeal is allowed by way of remand [Read less]

Customs - Admissibility of Electronic Records - The appellant challenged the penalties imposed on him under Section 114AA of the Customs Act, 1962 based on electronic records in the form of a DVD which was allegedly seized during the investigation, but was found to be broken and unavailable for verification – HELD - The electronic records cannot be treated as admissible evidence in the absence of verification of their genuineness, veracity or reliability from the original electronic device by/from which these were created, as required under Section 138C of the Customs Act. The Supreme Court in Anvar P.V. case held that ... [Read more]

Customs - Admissibility of Electronic Records - The appellant challenged the penalties imposed on him under Section 114AA of the Customs Act, 1962 based on electronic records in the form of a DVD which was allegedly seized during the investigation, but was found to be broken and unavailable for verification – HELD - The electronic records cannot be treated as admissible evidence in the absence of verification of their genuineness, veracity or reliability from the original electronic device by/from which these were created, as required under Section 138C of the Customs Act. The Supreme Court in Anvar P.V. case held that without fulfilling the statutory requirements under Section 138C, the electronic records cannot be relied upon to impose penalty under Section 114AA - The electronic records in the form of the DVD cannot be relied upon as evidence to impose penalty on the appellant under Section 114AA - the penalties imposed on the appellant under Section 114AA of the Customs Act, 1962 are set aside and the appeal is allowed - Reliance on Retracted Statements – Apart from reliance placed by the Revenue on the retracted statements of a co-accused to implicate the appellant, no other concrete or corroborative evidence was placed on record by the Revenue to substantiate the allegations against the appellant. Relying on the decision in Jeen Bhavani International, the Tribunal held that the retracted statements cannot be the sole basis to implicate the appellant without any independent and cogent evidence. HELD that the retracted statements of Shri Jyoti Biswas cannot be relied upon to impose penalty on the appellant under Section 114AA. [Read less]

Customs - Exemption Claim under Notification No. 12/2012-Cus - The respondent imported various poultry feed supplements and claimed exemption under Sl. No. 98 of Notification No. 12/2012-Cus as "Veterinary drugs and other goods specified in List 2" - Revenue issued Demand-cum-Show Cause Notices alleging that the goods are preparations used in animal feeding and not eligible for the claimed exemption but should be classified under Sl. No. 106 with a higher rate of duty – HELD - The Revenue wants to challenge the impugned order on the ground that the exemption benefit under the said Notification has been wrongly claimed by... [Read more]

Customs - Exemption Claim under Notification No. 12/2012-Cus - The respondent imported various poultry feed supplements and claimed exemption under Sl. No. 98 of Notification No. 12/2012-Cus as "Veterinary drugs and other goods specified in List 2" - Revenue issued Demand-cum-Show Cause Notices alleging that the goods are preparations used in animal feeding and not eligible for the claimed exemption but should be classified under Sl. No. 106 with a higher rate of duty – HELD - The Revenue wants to challenge the impugned order on the ground that the exemption benefit under the said Notification has been wrongly claimed by the respondent, but have not come on the issue as to whether without challenging the assessment of the impugned Bills of Entry, proceedings could have been initiated against the respondent or not - Admittedly, the assessments of the Bills of Entry in question have never been challenged, and in such circumstances, proceedings against the respondent to demand higher duty are not sustainable - The respondent was eligible for the exemption claim under Sl. No. 98 of the Notification as the goods fall under Chapter 23 and are specifically mentioned in List 2. The impugned order of the Commissioner (Appeals) upholding the exemption claim is affirmed and the appeals filed by the Revenue are dismissed [Read less]

Customs - Import Restrictions and BIS Certification - Consignments of stainless steel strips were intercepted and proceeded against for absolute confiscation on the grounds that they were imported in breach of the Steel and Steel Products (Quality Control) Order, 2020, for lacking Bureau of Indian Standards (BIS) certification - Whether the imported goods falling under Tariff Item 7220 2029 were subject to mandatory BIS certification or required an online waiver for clearance under the prevailing policy - HELD - The specific tariff item (7220 2029) was not enumerated in the tables appended to the Steel and Steel Products (... [Read more]

Customs - Import Restrictions and BIS Certification - Consignments of stainless steel strips were intercepted and proceeded against for absolute confiscation on the grounds that they were imported in breach of the Steel and Steel Products (Quality Control) Order, 2020, for lacking Bureau of Indian Standards (BIS) certification - Whether the imported goods falling under Tariff Item 7220 2029 were subject to mandatory BIS certification or required an online waiver for clearance under the prevailing policy - HELD - The specific tariff item (7220 2029) was not enumerated in the tables appended to the Steel and Steel Products (Quality Control) Order dated 22nd December 2020, nor were the goods listed as inputs requiring certification for pipes and tubes - The requirement for an online waiver was a policy prescription introduced by a circular that post-dated the shipments in question. Consequently, the goods could not be charged with being non-compliant with BIS requirements in the absence of a specific finding referencing the Order's schedules. The invocation of Section 111(d) of the Customs Act, 1962, for the import of prohibited goods is held to be without legal sanction – The impugned order is set aside and the bills of entry as self-assessed entitled to be presented for clearance under section 47 of Customs Act, 1962 - The appeals are allowed - Customs - Misdeclaration and Classification - The importer declared the goods as 'end cut rejects' and 'defective,' but the department re-described them as 'prime' stainless steel strips and alleged misdeclaration under Section 111(m) of the Customs Act, 1962, based on a Chartered Engineer’s observation that the goods lacked rust or decay - Whether the variation in thickness and surface characteristics justified the classification of goods as 'defective' and whether the department's re-description was supported by competent expert evidence - HELD - The test reports confirmed the articles had uneven surfaces and varying thicknesses, which aligns with the Ministry of Steel’s criteria for 'defective' steel. The Tribunal criticized the department’s reliance on a Chartered Engineer whose specialization was in electronics, finding him incompetent to evaluate the metallurgical characteristics of steel strips. A 'pedestrian' observation regarding the absence of rust was insufficient to categorize the goods as 'prime.' As the classification under the Customs Tariff Act remained unchanged despite the description, the charge of misdeclaration with intent to evade duty was not established - Customs - Valuation and Expert Reports - The Revenue rejected the declared transaction value and enhanced it significantly by invoking Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, relying solely on the valuation report provided by an electronics engineer acting as a Chartered Engineer - Whether the transaction value can be redetermined using the report of an expert who lacks domain expertise and without following the sequential application of the Valuation Rules – HELD - The redetermined value did not survive the test of law as the Revenue failed to follow the mandatory sequence under Rule 12 and Rule 3(4) of the Valuation Rules. The role of a Chartered Engineer is not recognized within the statutory scheme of the 2007 Valuation Rules for determining the value of imported goods, except in specific cases involving used capital goods for depreciation purposes. Since the department failed to benchmark the rejection of the transaction value through credible evidence or appropriate procedural rules, the enhancement of value is unsustainable. [Read less]

GST - Expired e-way bill, auto-population of incorrect distance in e-way Bill – Transportation of consignment of motor vehicle chassis - The consignment was covered by a tax invoice and an e-way bill. However, the Part-B of e-way bill wrongly mentioned the distance as 170 kilometers instead of the actual distance of over 800 kilometers, resulting in the e-way bill expiring before the goods reached the destination. The goods were intercepted and seized on the ground that the e-way bill had expired. The authorities imposed a penalty on the petitioner under Section 129(3) of the CGST Act, 2017 - HELD - The goods in question... [Read more]

GST - Expired e-way bill, auto-population of incorrect distance in e-way Bill – Transportation of consignment of motor vehicle chassis - The consignment was covered by a tax invoice and an e-way bill. However, the Part-B of e-way bill wrongly mentioned the distance as 170 kilometers instead of the actual distance of over 800 kilometers, resulting in the e-way bill expiring before the goods reached the destination. The goods were intercepted and seized on the ground that the e-way bill had expired. The authorities imposed a penalty on the petitioner under Section 129(3) of the CGST Act, 2017 - HELD - The goods in question are motor vehicle chassis which were duly accompanied with tax invoice, e-way bill, sale certificate and temporary registration as per the Central Motor Vehicle Rules, 1989. It is a matter of common knowledge that motor vehicles cannot be sold except after getting due registration with the Motor Vehicle Department. - The petitioner had complied with all the legal requirements for the transportation of the goods, including having a tax invoice, trade certificate, and temporary registration for the chassis. The expiry of the e-way bill was due to a technical glitch in the auto-populated distance field, which was beyond the control of the petitioner. The expiry of an e-way bill alone cannot be attributed to an intention to evade tax - The impugned order is quashed and the writ petition is allowed [Read less]