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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Section 20 of the CGST Act is intended to ensure seamless flow and equitable distribution of ITC. The Rule 39(1)(a) of the CGST Rules, to the extent it mandates distribution of ITC within the same month, is ultra vires Section 20 and struck down.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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