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Service Tax - Taxability of Letter of Credit charges recovered by trading company - Classification of LC charges as consideration for taxable service under banking and other financial services – Appellant recovered LC charges at fixed percentage from domestic buyers in High Seas Sale transactions along with trading margin as part of the price of imported goods sold - Whether LC charges recovered by the appellant from domestic buyers constitute taxable service under Banking and Other Financial services category or form part of price of goods sold – Demand invoking extended period of limitation - HELD - As evidenced by t... [Read more]

Service Tax - Taxability of Letter of Credit charges recovered by trading company - Classification of LC charges as consideration for taxable service under banking and other financial services – Appellant recovered LC charges at fixed percentage from domestic buyers in High Seas Sale transactions along with trading margin as part of the price of imported goods sold - Whether LC charges recovered by the appellant from domestic buyers constitute taxable service under Banking and Other Financial services category or form part of price of goods sold – Demand invoking extended period of limitation - HELD - As evidenced by the nomenclature High Seas Sale Agreement, the dominant nature of the agreement is for sale of goods and the consideration clause specifically provides that the buyer shall pay inclusive of LC charges as per seller's invoice and such amount shall present the entire amount payable and shall include all costs of the seller – Since the relationship between the appellant and HSS buyer is that of seller and buyer and not service provider and service recipient, the basic requisites for classifying activity as service are absent - The expression banking and other financial services refers to services provided by banking company or financial institution which has authority to issue letter of credit and includes services normally rendered by banks and financial institutions. The appellant being purely a trading organization is not engaged in banking and other financial services and hence cannot be categorized as a body corporate or commercial concern similar to banking institutions - Every flow of money does not have the character of consideration for service. For rendering a service there must be a relationship in nature of service provider and service recipient. Mere payment of LC charges by buyer does not imply that appellant has rendered any taxable service - The LC charges being pre-import charges form part of the transaction value of goods imported and cleared by HSS buyer. It amounts to composite supply where primary transaction is sale of goods and procuring LC is merely linked to transaction of sales and hence cannot be vivisected to charge service tax on LC charges recovered as part of price of goods sold. In a composite supply the principal supply determines the nature of taxation. The primary transaction being sale of goods to the HSS buyer it has to be treated as transaction of sales, which has already suffered the customs duty - The demand of service tax is set aside and the appeal is allowed [Read less]

Customs - Refund of interest collected on account of system-related technical glitches - Scope of Section 27 of Customs Act, 1962 - Payment of customs duty within prescribed period through the newly introduced Electronic Cash Ledger system. Due to technical glitches in the portal the amounts were debited from the bank but not immediately reflected in the E-Cash Ledger, resulting in automatic computation of interest under Section 47(2) by the system when challans were generated after the due date - Appellant paid such interest and subsequently sought refund claiming that the interest was not legally payable due to system-re... [Read more]

Customs - Refund of interest collected on account of system-related technical glitches - Scope of Section 27 of Customs Act, 1962 - Payment of customs duty within prescribed period through the newly introduced Electronic Cash Ledger system. Due to technical glitches in the portal the amounts were debited from the bank but not immediately reflected in the E-Cash Ledger, resulting in automatic computation of interest under Section 47(2) by the system when challans were generated after the due date - Appellant paid such interest and subsequently sought refund claiming that the interest was not legally payable due to system-related difficulties and that waiver orders issued by the Board covered such cases - Whether refund claim filed on 20.06.2024 for interest paid on 18.04.2023 and 22.04.2023 can be entertained beyond the period of one year prescribed under Section 27 of Customs Act - HELD - Section 27 provides that any person claiming refund of any duty or interest paid may make an application before expiry of one year from the date of payment of such duty or interest. The limitation does not apply where the duty or interest has been paid under a written protest - In the present case there was no material to establish that the interest was paid under written protest. The statutory period of one year expired on 18.04.2024 and 22.04.2024 respectively from the dates of payment, and the refund claim was admittedly filed on 20.06.2024, which was after expiry of the statutory period - The present proceeding is a refund claim filed before the statutory authority and not a writ petition invoking Constitutional Jurisdiction. The Tribunal being a creature of statute is bound by conditions and limitations prescribed under Section 27. The Administrative waiver orders themselves prescribed conditions for availing waiver including payment within the stipulated period and such orders cannot dispense with the limitation enacted by Parliament. The appellant's late knowledge of operational guidelines cannot confer jurisdiction upon the authority to condone the delay as Section 27 makes no provision for extension of the period on ground of sufficient cause or hardship. The question whether interest was otherwise leviable has relevance to substantive entitlement but before merits can be examined the claim must be maintainable under Section 27 - The refund claim is barred by limitation and cannot be entertained - The impugned order is upheld and the appeal is dismissed [Read less]

Customs - Tariff Classification of Light Emitting Diode modules - General Rules for Interpretation of Import Tariff - Appellant imported LED modules for manufacturing LED lights and fixtures declared under Chapter Tariff Heading 8541 4020 with BCD at 10 percent - Department through reassessment contended that the goods were more appropriately classifiable under CTH 9405 9900 attracting BCD at 20 percent, leading to differential duty demand and penalties - Whether the imported goods are classifiable under CTH 8541 4020 or CTH 9405 9900 and whether extended period of limitation was rightly invoked - HELD – The classificati... [Read more]

Customs - Tariff Classification of Light Emitting Diode modules - General Rules for Interpretation of Import Tariff - Appellant imported LED modules for manufacturing LED lights and fixtures declared under Chapter Tariff Heading 8541 4020 with BCD at 10 percent - Department through reassessment contended that the goods were more appropriately classifiable under CTH 9405 9900 attracting BCD at 20 percent, leading to differential duty demand and penalties - Whether the imported goods are classifiable under CTH 8541 4020 or CTH 9405 9900 and whether extended period of limitation was rightly invoked - HELD – The classification of imported goods is governed by the General Rules for Interpretation of Import Tariff and GRI 1 which gives primacy to the headings and notes is the non-negotiable starting point. GRI 2, 3 and 4 are applied sequentially only when requisite - Chapter 8539 covers light-emitting diode LED lamps which consist of glass or plastic envelope, one or more light-emitting diodes, circuitry to rectify AC power and convert voltage to a level useable by LEDs, and a base for fixing in lamp holder - Chapter 9405 covers lamps and lighting fittings not elsewhere specified or included - The impugned goods being multiple LEDs on a panel with PCB and heat sink but without the circuitry to control and convert voltage, are capable of performing as LED lamp provided electric supply is connected - The essential character of imported goods must be determined with reference to their state at the time of importation and not with reference to purpose of import. The goods cannot be classified as street lamp or searchlight of CTH 9405 as LED lamps are specifically covered under CTH 8539 - Residuary heading means not specified elsewhere in the entire tariff. The impugned goods are appropriately classifiable under CTH 8539 which also requires BCD to be paid at 10 percent. There is no case of short payment of customs duty - The impugned orders-in-original are set aside and order-in-appeal is upheld - The appeal filed by the Department is dismissed and the appeal filed by the assessee is allowed [Read less]

GST - Jurisdiction of GSTAT - Refund of unutilized CENVAT credit under Section 142(3) of CGST Act, 2017 – Appellant-Revenue preferred appeal before GSTAT against first appellate authority order upholding the respondent taxpayer's refund claim - Whether GSTAT has jurisdiction to entertain appeals on refund of accumulated and unutilized CENVAT credit availed under erstwhile CENVAT Credit Rules, 2004 – HELD – The Section 142(3) of CGST Act, 2017 explicitly provides that every claim for refund of CENVAT credit or duty under existing law shall be disposed of in accordance with the provisions of existing law. The said sect... [Read more]

GST - Jurisdiction of GSTAT - Refund of unutilized CENVAT credit under Section 142(3) of CGST Act, 2017 – Appellant-Revenue preferred appeal before GSTAT against first appellate authority order upholding the respondent taxpayer's refund claim - Whether GSTAT has jurisdiction to entertain appeals on refund of accumulated and unutilized CENVAT credit availed under erstwhile CENVAT Credit Rules, 2004 – HELD – The Section 142(3) of CGST Act, 2017 explicitly provides that every claim for refund of CENVAT credit or duty under existing law shall be disposed of in accordance with the provisions of existing law. The said section further provides that the refund shall be determined in accordance with section 11B of Central Excise Act, 1944. Accordingly the issue involved relates to refund of unutilized CENVAT credit under section 11B of CEA, 1944 which is a pre-GST enactment - Appeals against refund or credit rejection orders passed under Section 142(3) of CGST Act, 2017 lie maintainable before the CESTAT as per the larger bench ruling in M/s. Bosch Electrical Drive India Pvt. Ltd. v. Commissioner of Central Tax - The GSTAT has no jurisdiction to entertain the present appeal. The appeal is not maintainable before GSTAT and dismissed it with liberty to approach CESTAT – Ordered accordingly [Read less]

Service Tax – Validity of vivisection of indivisible composite turnkey contracts - Service tax on installation and commissioning services of ATMs at the sites identified by the respective banks - Revenue demanded service tax on 33% of gross contractual consideration treating it as consideration for installation and commissioning activities. Respondent-assessee contended that the contracts were indivisible turnkey contracts for supply of fully functional ATMs and installation and commissioning were merely incidental to this principal obligation - Whether service tax can be levied on a notional portion of composite conside... [Read more]

Service Tax – Validity of vivisection of indivisible composite turnkey contracts - Service tax on installation and commissioning services of ATMs at the sites identified by the respective banks - Revenue demanded service tax on 33% of gross contractual consideration treating it as consideration for installation and commissioning activities. Respondent-assessee contended that the contracts were indivisible turnkey contracts for supply of fully functional ATMs and installation and commissioning were merely incidental to this principal obligation - Whether service tax can be levied on a notional portion of composite consideration for supply, installation and commissioning of ATMs where contract is for single consolidated consideration – HELD - The service tax liability must flow from the charging statute itself and no tax can be imposed by implication or expansive construction - Section 66 of Finance Act, 1994 levied service tax on taxable services defined exhaustively in Section 65(105), while Section 67 prescribed the manner of determining value once charge was attracted - During the period July 2003 to April 2006, the Finance Act did not contain any express provision authorizing dissection or vivisection of an indivisible composite turnkey contract. The contracts herein were entire and indivisible embodying single commercial objective of delivery of fully functional ATMs at specified sites for single consolidated consideration without separate bargain or distinct consideration for installation and commissioning - While the Finance Act, 1994 undoubtedly authorised the levy of service tax on specified taxable services, the statute, during the period relevant to the present appeal, did not contain any express provision authorising the dissection or vivisection of an indivisible composite turnkey contract so as to extract and tax one of its constituent elements in isolation - Revenue cannot by administrative attribution or notional apportionment create a taxable event where none existed under charging provisions. Introduction of specific taxable entry for works contract service vide Finance Act, 2007 with effect from 01.06.2007 constitutes clear legislative recognition that existing taxable entries were insufficient to encompass such composite contracts - In the absence of any statutory authority permitting the artificial segregation of the installation and commissioning component from the composite transaction, the Revenue is not entitled to levy service tax by attributing a notional percentage of the total contractual consideration to the taxable category of "commissioning or installation" under Section 65(105)(zzd) of Finance Act, 1994. The conclusion reached by the CESTAT is thus in consonance with the statutory scheme of the Finance Act, 1994 and the law subsequently declared by the Apex Court in Larsen and Toubro Limited - The impugned order dated 28.11.2007 passed by the CESTAT calls for no interference - The Revenue appeals are dismissed - Statutory Provisions - The Constitution (Forty-sixth Amendment) Act, 1982 enlarged the taxing powers of States by inserting Article 366(29A), which created a legal fiction allowing the goods component in indivisible works contracts to be treated as a deemed sale for sales tax and VAT purposes. However, this amendment did not convert indivisible contracts into separate contracts; it merely permitted segregation of the goods element while the contract remained composite - The Finance Act, 1994 contained no corresponding provision authorizing the Revenue to segregate and tax the service element of indivisible composite contracts. Sections 66 and 67 of the Finance Act prescribed only how to levy service tax on enumerated taxable services and how to determine their value once the charge was attracted. Neither section expressly or impliedly authorized vivisection of indivisible turnkey contracts to isolate and tax constituent elements - The critical distinction lies between pure service contracts and indivisible composite contracts. While a contract whose dominant object is rendering a taxable service can attract service tax even if it incidentally includes goods, and while statutes explicitly providing for composite contract taxation can validly operate, the absence of statutory authority prevents the Revenue from artificially splitting an indivisible contract merely because one component element falls within an existing taxable category. [Read less]

Service Tax - Classification of work undertaken in commercial showroom fitment - Determination of abatement under Rule 2A of Service Tax Valuation Rules 2006 - Appellant, engaged in interior decoration and designing, received newly constructed commercial buildings with roof and floor and converted them into modern commercial showrooms involving making usable floors and ceiling, internal walls, HVAC, fire suppression, plumbing and other fit-outs, paying VAT on eighty percent of the work contract value as goods - Whether work undertaken by the appellant constitutes original work attracting sixty percent abatement under Rule ... [Read more]

Service Tax - Classification of work undertaken in commercial showroom fitment - Determination of abatement under Rule 2A of Service Tax Valuation Rules 2006 - Appellant, engaged in interior decoration and designing, received newly constructed commercial buildings with roof and floor and converted them into modern commercial showrooms involving making usable floors and ceiling, internal walls, HVAC, fire suppression, plumbing and other fit-outs, paying VAT on eighty percent of the work contract value as goods - Whether work undertaken by the appellant constitutes original work attracting sixty percent abatement under Rule 2A(ii)(A) or completion and finishing services attracting thirty percent abatement under Rule 2A(ii)(B) of Service Tax Valuation Rules 2006 and whether taxable service was provided by appellant in receiving forfeiture of advance and reimbursement for goods destroyed in fire - HELD - The work undertaken by the appellant which involved converting bare skeletal structures of buildings into complete showrooms including electricity, HVAC, plumbing, flooring, ceiling, air-conditioning and partitioning constitutes original work and not merely completion or finishing work. As the appellant had discharged VAT on eighty percent of the value considering the work as original work, the appellant has rightly paid service tax under Rule 2A(ii)(A) on notional basis by claiming abatement of sixty percent of the value of works contract. No demand is sustainable on this count - The forfeiture of advance paid by customer for purchase of goods which customer abandoned cannot be termed as any service provided by appellant. No service tax is payable on forfeiture of advance. The reimbursement received by appellant from commercial entity for loss of goods due to fire outbreak in showroom is against loss incurred by appellant and cannot be termed as service provided by appellant. No service tax is payable on said reimbursement. No demand is sustainable against the appellant and no penalty can be imposed - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Taxability of dealer incentives and miscellaneous receipts under Business Auxiliary Service - Appellant, an authorized dealer of motor vehicles, received various reimbursements and incentives from manufacturer under dealership arrangement including incentives on target sales, extended warranty incentives, corporate claims, exchange benefits and loyalty benefits, which were reflected under accounting head "Claim from Honda" and miscellaneous receipts in the books of account - Whether such receipts constitute taxable consideration for BAS or are merely trade discounts flowing from principal-to-principal commerc... [Read more]

Service Tax - Taxability of dealer incentives and miscellaneous receipts under Business Auxiliary Service - Appellant, an authorized dealer of motor vehicles, received various reimbursements and incentives from manufacturer under dealership arrangement including incentives on target sales, extended warranty incentives, corporate claims, exchange benefits and loyalty benefits, which were reflected under accounting head "Claim from Honda" and miscellaneous receipts in the books of account - Whether such receipts constitute taxable consideration for BAS or are merely trade discounts flowing from principal-to-principal commercial relationship - HELD - The true character of a transaction must be determined from its real substance and not from the accounting head or nomenclature assigned in the books of account. The Letter of Intent issued by manufacturer clearly envisages the appellant functioning as an authorized dealer establishing a principal-to-principal commercial relationship between manufacturer and dealer - The incentives flowing from such dealership arrangement are intrinsically connected with the sale and distribution of motor vehicles and cannot be construed as consideration received towards promotion or marketing services merely by reason of the nomenclature adopted in the books - Dealer incentives are target-linked trade discounts flowing from a principal-to-principal sale relationship and not consideration for business auxiliary service irrespective of the ledger head under which they are recorded. Miscellaneous receipts comprising diverse entries such as Road Side Assistance booklet charges, free service coupons, insurance claim amounts do not represent consideration for any taxable service except booking cancellation charges which the appellant has already paid. Mere accounting regrouping or reclassification of figures cannot be equated with receipt of fresh consideration for a taxable service and in the absence of additional inflow of consideration the confirmation of service tax on such regrouped figures is unsustainable - The demand of service tax confirmed under the category of Business Auxiliary Service is set aside – The appeal is allowed - Service Tax - Reverse charge liability for Goods Transport Agency service - Appellant raised demand for service tax under reverse charge for freight on purchase of motor vehicles, towing charges and carriage inward charges during Financial Years 2012-13 to 2014-15 - Whether statutory prerequisites for invoking reverse charge mechanism under GTA service were established and whether liability arose on the appellant – HELD - The essential ingredients for fastening liability under RCM have not been established. Under the applicable notification, liability to discharge tax arises only upon the person who pays or is liable to pay the freight to the GTA. The material on record demonstrates that transportation of vehicles from manufacturer's premises was arranged by the manufacturer which was itself liable for payment of freight to the transporter and the manufacturer had discharged the corresponding reverse charge liability as certified by it. Once evidence on record establishes that the manufacturer was the person liable to pay freight and had discharged the reverse charge liability, the same transaction cannot again be subjected to tax in the hands of the appellant - For towing charges, the Dept proceeded merely on nomenclature of the ledger entry without examining whether the statutory requirements of a Goods Transport Agency including issuance of consignment notes were satisfied. The activity cannot automatically be classified as GTA service merely because it involves movement of a vehicle from one place to another - For carriage inward expenses, the appellant consistently maintained that the ledger head represents routine administrative expenditure such as courier and postage charges and the department produced no material whatsoever to establish that the payments were made towards services rendered by a GTA. Before invoking reverse charge liability the revenue was required to establish through cogent evidence that the underlying transactions represented transportation of goods by a Goods Transport Agency within the meaning of the Finance Act - The demand of service tax confirmed under GTA service under reverse charge is set aside - Reverse charge liability for manpower supply and security services - Applicability of reverse charge mechanism based on legal status of service provider - Appellant received manpower supply and security services during Financial Years 2012-13 to 2014-15 - Department raised demand for service tax under reverse charge alleging that appellant failed to discharge tax on such services - Whether RCM liability was applicable when service providers were private limited companies and whether the statutory prerequisites for invoking reverse charge were satisfied - HELD - The liability under reverse charge in respect of manpower supply and security services is governed by the notification which during the relevant period fastened reverse charge liability only where such services were provided by an individual, Hindu Undivided Family, partnership firm or association of persons to a business entity registered as a body corporate. The very applicability of the notification is contingent upon the legal status of the service provider - In the present case the appellant consistently contended that the services were received from private limited companies and produced sample invoices issued by such entities containing their names, registered office addresses, PAN particulars and Service Tax Registration Numbers which themselves indicated the status as companies - The appellant further pointed out that payments were reflected in its books of account, tax had been deducted at source wherever applicable and the Service Tax charged by vendors had been availed as credit on the strength of invoices issued by them - Once the appellant produced material indicating that service providers were private limited companies and the Department neither disputed nor verified the same despite possessing all necessary particulars, the foundational requirement for invoking the reverse charge notification remains unestablished. The confirmation of demand merely on the basis of perceived deficiencies in copies of documents without addressing the substantive statutory requirement cannot be sustained - The demand of service tax confirmed under manpower supply and security services under reverse charge is set aside. [Read less]

Customs - Classification of Glow Plug Controller / Glow Control Unit [GCU] is used in Diesel Engine Motor Vehicles (Cars) - Tariff classification of electronic control equipment for motor vehicles - Appellant imported Glow Plug Controller for use in diesel engines and classified the same under CTH 9032 8990 as automatic regulating or controlling instruments and apparatus claiming exemption benefits - Department that the goods were appropriately classifiable under CTH 8511 as parts of glow plugs - Whether the Glow Plug Control Unit is classifiable under CTH 9032, CTH 8537 or CTH 8511 and whether extended period of limitatio... [Read more]

Customs - Classification of Glow Plug Controller / Glow Control Unit [GCU] is used in Diesel Engine Motor Vehicles (Cars) - Tariff classification of electronic control equipment for motor vehicles - Appellant imported Glow Plug Controller for use in diesel engines and classified the same under CTH 9032 8990 as automatic regulating or controlling instruments and apparatus claiming exemption benefits - Department that the goods were appropriately classifiable under CTH 8511 as parts of glow plugs - Whether the Glow Plug Control Unit is classifiable under CTH 9032, CTH 8537 or CTH 8511 and whether extended period of limitation is invokable - HELD - Chapter 90 carves out exception for apparatus for switching or controlling electrical circuits that are more specifically covered in Chapter 85 headings like 8511 and hence CTH 9032 does not apply. CTH 8537 which covers boards, panels, consoles equipped with two or more apparatus of heading 8535 or 8536 for electric control or distribution of electricity also does not apply as the GCU is a single-PCB electronic module and not structurally meeting the two or more apparatus requirement, and the function of the said product is not for electric control or distribution - Section Note 4 of Section XVI states that where a machine consists of individual components intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or 85, then the whole falls to be classified in the heading appropriate to that function - The GCU and Glow Plugs contribute together to a single defined function of electrical ignition or starting equipment for compression-ignition engines. CTH 8511 explicitly covers electrical ignition or starting equipment used for compression-ignition internal combustion engines, including glow plugs. HSN Explanatory Notes to 8511 extend this heading to electronic control units that regulate ignition or glow-plug operation based on sensor inputs - Following GRI 1, the GCU is appropriately classifiable under CTH 8511 as parts thereof. The GCU has no independent function outside of the glow plug system and is an inherent part of the glow plug system making it inseparable for safe and effective operation of the ignition equipment - As regards extended period of limitation, when the same goods were cleared by the Department without disputing their classification under CTH 9032, and the allegation of suppression or misdeclaration with intent to evade cannot be accepted. Extended period of limitation cannot be invoked and penalty under section 114A cannot be sustained - The impugned order is amended to the extent that demand for normal period only is upheld and penalty under section 114A is not sustained - The appeal is partly allowed [Read less]

GST - Maintainability of Writ Petition despite availability of statutory appeal remedy - Demand on basis of unaccounted transactions discovered during search at third party premises - Whether extraordinary jurisdiction under Article 226 of Constitution can be invoked notwithstanding availability of efficacious statutory remedy under Section 107 of CGST Act - HELD - Although statutory appellate remedy under Section 107 is available, High Court may entertain writ petition in exceptional circumstances where there is breach of fundamental rights, violation of principles of natural justice, excess of jurisdiction, or challenge ... [Read more]

GST - Maintainability of Writ Petition despite availability of statutory appeal remedy - Demand on basis of unaccounted transactions discovered during search at third party premises - Whether extraordinary jurisdiction under Article 226 of Constitution can be invoked notwithstanding availability of efficacious statutory remedy under Section 107 of CGST Act - HELD - Although statutory appellate remedy under Section 107 is available, High Court may entertain writ petition in exceptional circumstances where there is breach of fundamental rights, violation of principles of natural justice, excess of jurisdiction, or challenge to vires of statute. However, petitioner has not made out case falling within recognised exceptions - Petitioner's authorised representative appeared during adjudication proceedings, participated in hearing, and filed detailed written reply which was considered by adjudicating authority – The alleged defects in service of hearing notices, once petitioner had participated and placed defence, do not constitute patent violation of natural justice. Issues relating to evidentiary foundation, admissibility of electronic data allegedly recovered from third party premises, authenticity of forensic examination report etc. are matters pertaining to correctness of adjudication and appreciation of evidence which fall squarely within exclusive domain of statutory appellate mechanism and do not warrant invocation of extraordinary writ jurisdiction - Writ petition dismissed with liberty to avail statutory remedy of appeal under the Act – The petition is dismissed [Read less]

GST - Maintainability of writ petition when alternate statutory remedy of appeal is available - The Petitioner challenged the Order-In-Original disallowing Input Tax Credit and levying tax and penalty - The Petitioner contended that the order was passed in violation of principles of natural justice as seized documents were not made available to it before passing the order - Whether principles of natural justice violation constitutes exceptional case to depart from requirement to exhaust statutory remedies – HELD - The impugned Order is appealable before the Commissioner (Appeals) under Section 107 of CGST Act. As per pre... [Read more]

GST - Maintainability of writ petition when alternate statutory remedy of appeal is available - The Petitioner challenged the Order-In-Original disallowing Input Tax Credit and levying tax and penalty - The Petitioner contended that the order was passed in violation of principles of natural justice as seized documents were not made available to it before passing the order - Whether principles of natural justice violation constitutes exceptional case to depart from requirement to exhaust statutory remedies – HELD - The impugned Order is appealable before the Commissioner (Appeals) under Section 107 of CGST Act. As per precedents of Hon'ble Supreme Court High Courts should not entertain Writ Petitions under Article 226 when alternate and efficacious remedies under statute are available. Exceptional cases to depart from this principle must be made out with proper pleadings and material on record - The petitioner has failed to specifically state which documents were not supplied to it and what prejudice was caused. The grievance regarding non-supply of documents is addressed in the impugned order which records that relied upon documents were forwarded to Petitioner's email ids on 28th June 2025 and again on 4th February 2026 - Mere bald assertions without particularization and proper pleadings are insufficient to attract extraordinary jurisdiction of the Court. Taking refuge under natural justice in every case as sheet anchor cannot justify filing writ petition without justification in manner law mandates. No exceptional case is made out warranting departure from settled judicial principle of exhausting statutory remedies - The Writ Petition is not maintainable and dismissed [Read less]

GST - Levy of Interest on self-assessed tax deposited in Electronic Cash Ledger - Recovery proceedings under Section 79 of CGST Act - Petitioner challenged garnishee notices issued for recovery of interest on self-assessed tax for financial years 2017-18 to 2021-22. The Petitioner submitted representations regarding interest computation contending that interest can be levied only up to the date of deposit in Electronic Cash Ledger. Without adjudicating the representations the Respondent initiated garnishee proceedings - Whether garnishee proceedings can be initiated for interest liability without prior adjudication under S... [Read more]

GST - Levy of Interest on self-assessed tax deposited in Electronic Cash Ledger - Recovery proceedings under Section 79 of CGST Act - Petitioner challenged garnishee notices issued for recovery of interest on self-assessed tax for financial years 2017-18 to 2021-22. The Petitioner submitted representations regarding interest computation contending that interest can be levied only up to the date of deposit in Electronic Cash Ledger. Without adjudicating the representations the Respondent initiated garnishee proceedings - Whether garnishee proceedings can be initiated for interest liability without prior adjudication under Sections 73 and 74 – HELD – The representations of the petitioner regarding computation of interest liability remain undecided and undisputed by the Respondent. There are conflicting judicial views on whether interest on self-assessed tax can be adjusted against amounts available in Electronic Cash Ledger and whether garnishee proceedings can proceed for balance interest. However, it is settled law that recovery proceedings under Section 79 of CGST Act can be initiated only after following due process of issuance of notice and confirmation of demand through adjudication - The Respondent shall decide the Petitioner's representations on their own merits in accordance with law by passing a reasoned order. Until such decision is taken the Respondent shall not take precipitative steps pursuant to the garnishee notices – The petition is disposed of [Read less]

GST - Mandatory requirement of Document Identification Number (DIN) in search authorization under Section 67 of CGST Act - Transparency and accountability in tax administration - Petitioner was subjected to search under Section 67 of CGST Act. The search warrant dated 15.08.2023 was issued without DIN - Petitioner contended that the search was illegal due to non-display of DIN as mandated by CBIC Circular No.122/41/2019-GST dated 05.11.2019 - Whether search warrant issued without DIN and DIN subsequently generated but not shared with noticee is valid – HELD - The CBIC Circular directing electronic generation of DIN for a... [Read more]

GST - Mandatory requirement of Document Identification Number (DIN) in search authorization under Section 67 of CGST Act - Transparency and accountability in tax administration - Petitioner was subjected to search under Section 67 of CGST Act. The search warrant dated 15.08.2023 was issued without DIN - Petitioner contended that the search was illegal due to non-display of DIN as mandated by CBIC Circular No.122/41/2019-GST dated 05.11.2019 - Whether search warrant issued without DIN and DIN subsequently generated but not shared with noticee is valid – HELD - The CBIC Circular directing electronic generation of DIN for all search authorizations is binding on the Department as directed under Section 168(1) of CGST Act. Display of DIN in communication is mandatory. If DIN could not be displayed for reasons set out in the Circular those reasons must be expressly mentioned in the communication itself. If failure is due to technical reasons the nature of difficulty must be recorded contemporaneously by the official in the file - The omission to generate DIN initially must be made good by generating it within 15 days. Once generated such DIN must be shared with the noticee to enable verification of genuineness - The very purpose of introducing DIN was to ensure transparency and accountability and this object is frustrated by not sharing DIN details with the noticee. In the present case, DIN was generated on 25.08.2023 but was not shared with the petitioner. Technical difficulties were not recorded in any file contemporaneously - The CBIC Circular may not expressly require the department to furnish the subsequently generated DIN post-inspection. But without DIN, the noticee cannot take any step for verifying the genuineness of the communication. Therefore the search warrant issued without DIN and the subsequent failure to share the DIN with noticee renders the search irregular - Voluntariness of payment of tax during search and inspection proceedings under Section 67 of CGST Act - Procedure to be followed for accepting voluntary payment under Section 74(5) of CGST Act - The Petitioner jewelry business entity made payment of Rs.32,62,640/- in two installments during search proceedings conducted on 16.08.2023 and 17.08.2023. The Respondents contended that this was voluntary payment made after the Petitioner realized its tax liability - The Petitioner contended that payment was made under coercion and duress – HELD - There may not be any circumstance necessitating recovery of tax dues during search proceedings though law does not bar taxpayers from voluntarily making payments. Following the directions of Gujarat High Court in M/s.Bhumi Associates assessee must be advised to make payment towards liability only after search is concluded and officers have left the premises. To ensure no element of coercion the assessee shall make self-ascertainment of liability in writing and communicate the same to proper officer. Payment made under Section 74(5) must be acknowledged in Form GST DRC-04. The assessee is entitled to receive provisional release of seized goods on execution of bond and furnishing security - In the present case payment was made immediately during search without proper self-ascertainment in writing and without informing the assessee about the option to obtain provisional release. Moreover 100% penalty was paid whereas Section 74(5) provides for only 15% penalty on self-assessed tax. Therefore the payment lacked element of voluntariness and was made under coercion. Assessee can seek refund of such involuntary payment - Whether the amount in question should be refunded to the petitioner or not will abide by the outcome of such assessment proceedings - Procedural distinctions between powers of inspection, search and seizure under Section 67 of CGST Act - Form GST INS-1 - Proper officer must have reasons to believe circumstances for invoking such powers - The Petitioner challenge was to the validity of the search warrant issued for conducting search of its business premises – HELD - Inspection, search and seizure are conceptually distinct acts. Inspection is looking closely into or examining. Search is looking for seeking out what is hidden concealed or not obvious by probing into or investigation. Seizure is taking possession by warrant or legal right with force. Section 67(1) deals with inspection under which proper officer can authorize any other officer to inspect any places of business. Section 67(2) deals with search and seizure and can be conducted by authorized officer or proper officer himself. The authorization must specifically indicate which power is being conferred - Mere mechanical repetition of statutory language in Form GST INS-1 without editing defeats the purpose of incorporating safeguards. The proper officer cannot invoke these powers arbitrarily and must have reasons to believe that circumstances specified in the respective provisions exist. Reasons must be recorded on record with a rational connection to formation of belief. Court can scrutinize through judicial review whether such reasons exist - In the present case authorization letter described as inspection warrant but contained language pertaining to search and seizure was defective as it was unclear as to exact nature of authorization conferred and whether goods were suspected to be secreted or documents stashed. [Read less]

Central Excise - Manufacture - Assembly of Imported Modules – Import of parts and modules of photocopiers in CKD or SKD form classifying as automatic data processing machines. At the warehouse, the Respondent-assessee undertook the activity of grouping and fitting together the imported modules to customer specifications, referred to as kitting, without performing any physical assembly in the warehouse - Revenue of the view that such activity amounted to manufacture under Section 2(f) of the Central Excise Act, 1944, and proposed recovery of excise duty. The Commissioner confirmed the demand. The Tribunal set aside the de... [Read more]

Central Excise - Manufacture - Assembly of Imported Modules – Import of parts and modules of photocopiers in CKD or SKD form classifying as automatic data processing machines. At the warehouse, the Respondent-assessee undertook the activity of grouping and fitting together the imported modules to customer specifications, referred to as kitting, without performing any physical assembly in the warehouse - Revenue of the view that such activity amounted to manufacture under Section 2(f) of the Central Excise Act, 1944, and proposed recovery of excise duty. The Commissioner confirmed the demand. The Tribunal set aside the demand, finding that no physical assembly took place at the warehouse, components were cleared in original packing, and the activity was mere kitting - Whether the activity of grouping and fitting together imported modules of photocopiers into complete sets as per customer specifications amounts to manufacture under Section 2(f) of the CEA, 1944 and Note 6 of Section XVI of the CETA, 1985 - HELD - Manufacture implies a transformation where a new and different article must emerge having a distinctive name, character or use. The test for determining whether an activity amounts to manufacture is- whether a distinct commercial commodity comes into existence with a different character and identity from the original, and whether the transformed goods are marketable - The goods were imported, classified and assessed as complete machines under Tariff Heading 8471. The activity undertaken was one of grouping and fitting different parts together to customer requirement, called kitting, which amounts to mere assembly of parts without any physical transformation. No physical assembly or fitting took place at the warehouse - The Revenue failed to establish that the imported modules were unfinished or semi-finished or that conversion from incomplete to complete article was undertaken. Rule 2(a) of the GRI answers only where an article is to be classified but does not answer whether a process performed upon the article amounts to manufacture - Note 6 of Section XVI requires that the article presented must be incomplete or unfinished but having essential character of the complete article and secondly that conversion of such article into the complete article was carried out by the person sought to be charged, neither of which was established. The Tribunal's findings that no manufacturing activity was undertaken and that the activity amounted only to kitting of modules are based on evidence and material on record and are not perverse - The nomenclature employed by the Respondent for the activity, by itself, is not conclusive and determinative - The activity undertaken by the Respondent does not amount to manufacture under Section 2(f) of the CEA, 1944 - The order passed by the Tribunal is upheld and the appeals filed by the Revenue are dismissed [Read less]

GST - Monetary threshold for filing appeal before GSTAT - CBIC Circular No. 207/1/2024-GST dated 26.06.2024 fixing monetary limit of Rs.20,00,000/- for filing appeals - The Appellant-Revenue preferred three consolidated appeals against the Respondent-taxpayer. The Respondent contended that the appeal was barred by the monetary limit fixed by the CBIC Circular No.207/1/2024-GST – Whether such circular is binding on the Tribunal and whether appeal is maintainable when individual appeal amount is less than threshold but total amount in composite order exceeds threshold - HELD - While CBIC Circular has statutory force and bi... [Read more]

GST - Monetary threshold for filing appeal before GSTAT - CBIC Circular No. 207/1/2024-GST dated 26.06.2024 fixing monetary limit of Rs.20,00,000/- for filing appeals - The Appellant-Revenue preferred three consolidated appeals against the Respondent-taxpayer. The Respondent contended that the appeal was barred by the monetary limit fixed by the CBIC Circular No.207/1/2024-GST – Whether such circular is binding on the Tribunal and whether appeal is maintainable when individual appeal amount is less than threshold but total amount in composite order exceeds threshold - HELD - While CBIC Circular has statutory force and binds the officers of Central tax under Section 120(1) and Section 168(1) of CGST Act, 2017, such Circular does not have binding effect on the Tribunal itself and has only persuasive role – Further, paragraph 3 clause (viii) of the Circular provides that when a composite order disposes of more than one appeal, the monetary limit shall apply on the total amount of tax, interest, penalty and late fee, and not on individual appeals. The exclusion clause in paragraph 4 clause (iv) provides that matters involving interpretation of provisions of the Act or the Rules or interpretation of Notifications or Circulars are excluded from the monetary limit. The composite order disposed of three appeals and taken together the total amount involved exceeded the monetary limit. The matter involved interpretation regarding retrospective applicability of an amended Rule. Therefore the appeal is maintainable and not barred by the monetary limit - Retrospective applicability of amendment to Rule 43 of CGST Rules excluding duty credit scrips from exempt supplies for ITC reversal purposes - Revenue sought reversal of ITC on sale of duty credit scrips for years 2017-20. The Respondent contended that the amendment to Rule 43 excluding value of supply of duty credit scrips from aggregate exempt supplies should be given retrospective effect - Whether amendment effected by Notification No.14 of 2022 dated 05.07.2022 inserting clause (d) in Explanation 1 to Rule 43 should apply retrospectively to transactions made in financial years 2017-20 – HELD - The duty credit scrips were incorporated as exempt supply vide Notification No.35 of 2017 dated 13.10.2017. At that time benefit of exclusion from aggregate exempt supplies was not available. Four years later in 2022 the Government inserted clause (d) in Explanation 1 to Rule 43 with prospective effect from 05.07.2022. From the language of Explanation 1 and clause (d), it cannot be presumed that the provision was inserted in the Rule to clarify doubts or any kind of ambiguities in the provision - The Rule framer possessed power under Section 164(3) of CGST Act to give retrospective effect but intentionally chose prospective application. Input Tax Credit being concessional in nature cannot be allowed as a vested right from retrospective date. The amendment was not clarificatory or curative in nature but was intended to provide benefit prospectively only. The First Appellate Authority was not correct in applying the said amendment in Rule 43 retrospectively in favour of the taxpayer - The amendment shall not be applied retrospectively and the Respondent-assessee is not entitled to benefit of amendment for transactions prior to 05.07.2022 - The issue is answered in favour of Revenue and against the assessee - Invocation of Section 74(1) of CGST Act, 2017 for wrongly availing Input Tax Credit - Requirement of fraud or wilful misstatement or suppression of facts to evade tax - Whether revenue can invoke Section 74(1) for availing ITC on exempt supplies without specific material evidence - The Respondent contended that there was no fraud or suppression as he had disclosed turnover regularly and submitted invoices – HELD - The Section 74(1) can be invoked only where there is fraud or wilful misstatement or suppression of facts to evade tax. The term suppression must be construed strictly and does not mean any omission but must be deliberate and wilful to evade payment of tax - In the present case, Respondent regularly filed monthly returns in GSTR Form-3B and annual returns and disclosed position. He submitted invoices of sale of duty credit scrips. No investigation was carried out and no material evidence was brought to establish fraud or wilful suppression. Respondent cannot be accused of suppression when both Respondent and department were aware that duty credit scrips were supplied – Further, as per CBIC Instruction No.05/2023-GST dated 13.12.2023, Section 74(1) can be invoked only when investigation indicates material evidence of fraud or wilful misstatement or suppression of fact to evade tax. Show-cause notice issued under Section 74(1) is not sustainable - The proper officer shall determine tax liability under Section 73 of CGST Act instead within statutory period after providing opportunity of hearing to the Respondent. [Read less]

Service Tax – Invocation of extended period of limitation under proviso to Section 73(1) of Finance Act, 1994 – Show Cause Notice issued on basis of discrepancy between Form 26AS and ST-3 Returns – Whether extended period of limitation could be invoked without establishing fraud, collusion, wilful misstatement, suppression of facts or contravention of statutory provisions with intent to evade Service Tax – HELD – The entire demand has been raised solely on basis of comparison between figures reflected in Form 26AS and those disclosed by Appellant in ST-3 Returns and material constituting very basis of demand was ... [Read more]

Service Tax – Invocation of extended period of limitation under proviso to Section 73(1) of Finance Act, 1994 – Show Cause Notice issued on basis of discrepancy between Form 26AS and ST-3 Returns – Whether extended period of limitation could be invoked without establishing fraud, collusion, wilful misstatement, suppression of facts or contravention of statutory provisions with intent to evade Service Tax – HELD – The entire demand has been raised solely on basis of comparison between figures reflected in Form 26AS and those disclosed by Appellant in ST-3 Returns and material constituting very basis of demand was never outside knowledge or reach of Department as both Form 26AS and ST-3 Returns are statutory records maintained under law and available to Department for scrutiny, verification and reconciliation in ordinary course of administration. No independent investigation preceding issuance of Show Cause Notice was undertaken except for noticing alleged difference between figures and Department has not conducted any enquiry to ascertain precise nature of receipts, taxability thereof, contractual arrangements, accounting treatment adopted by Appellant, or whether differential figures represented taxable consideration. No independent evidence has been brought on record to establish any positive act of fraud, collusion, wilful misstatement or deliberate suppression attributable to Appellant. Such approach falls substantially short of statutory threshold required for invocation of extended period as the proviso is in nature of exceptional provision and cannot be pressed into service merely because discrepancy is subsequently noticed during scrutiny of records - Mere existence of variance between Form 26AS and ST-3 Returns without anything more cannot lead to conclusion that Appellant had indulged in fraud, wilful suppression or misstatement so as to justify recourse to extended period. The normal period of limitation expired on 05.03.2020 and the SCN was issued on 30.12.2020, nearly ten months thereafter, thus the demand falls beyond normal period prescribed by law. Delays in filing certain returns though not of such magnitude as to justify inference of deliberate suppression cannot have effect of indefinitely postponing commencement of limitation and normal period in respect of all returns had expired much prior to issuance of SCN – The extended period of limitation is not invokable. The demand of Service Tax, interest and penalty are set aside - Service Tax – Mandatory requirement of pre-show cause notice consultation – Show Cause Notice dated 30.12.2020 proposing demand of Service Tax exceeding fifty lakhs issued without affording opportunity of pre-show cause notice consultation – Whether Show Cause Notice is void ab initio for non-compliance with Board Instructions dated 21.12.2015 read with Circular dated 10.03.2017 mandating pre-show cause notice consultation in all cases involving demands exceeding fifty lakhs except preventive or offence-related matters – HELD – Board Instructions dated 21.12.2015 bearing reference 1080/09/DLA/MISC/15, as clarified by Circular dated 10.03.2017 bearing reference 1053/02/2017-CX, unequivocally mandated pre-show cause notice consultation in all cases involving demands exceeding fifty lakhs save and except preventive or offence-related matters. The present proceedings do not fall within excepted category as they did not arise out of any preventive or offence-related investigation. No pre-show cause notice consultation was undertaken and no opportunity of such consultation was afforded to Appellant prior to issuance of impugned notice. No material has been brought on record evidencing compliance with binding administrative instructions holding field on relevant date - The subsequent Circular No. 1079/03/2021-CX dated 11.11.2021 whereby such consultation was dispensed with in specified suppression-related cases was issued long after issuance of impugned SCN and cannot be pressed into service to validate an action already undertaken contrary to prevailing instructions as subsequent and more onerous circular operates only prospectively – The Show Cause Notice is void ab initio. The demand of Service Tax, interest and penalty are set aside - Service Tax – Penalty under Section 77 of Finance Act, 1994 – Appellant filed certain ST-3 Returns with delay attributable to shortage of staff – Whether penalty is imposable for late filing of returns when delay does not establish fraud, collusion, wilful misstatement or suppression of facts with intent to evade Service Tax warranting invocation of extended period of limitation – HELD – The statutory obligation to furnish returns within prescribed time is independent requirement under Finance Act, 1994 and any breach thereof is amenable to consequences contemplated under Section 77 of the Act. The delay in filing returns is admitted and undisputed factual position borne out from records. Such default, though not of nature warranting invocation of extended period of limitation or sufficient to establish fraud, collusion, wilful misstatement or suppression of facts, cannot altogether be overlooked while considering levy of penalty specifically prescribed for contravention of statutory procedural requirements. The legislative intent underlying Section 77 is to ensure timely compliance with procedural obligations cast upon registered assessees independent of existence of any intention to evade tax – The penalty imposed under Section 77 of Finance Act, 1994 is upheld. [Read less]

Central Excise – Assessable value of excisable goods – Sales commission paid to selling agents – Appellant manufacturer of Refractory Products engaged selling and commission agents both in foreign countries and in India for promoting exports and domestic sales – Appellant paid sales commission to foreign agents like commission agents based outside India and domestic agents for services rendered including procuring orders for export – Department issued SCN invoking extended period of limitation proposing to demand central excise duty on sales commission – Whether sales commission paid by appellant to selling age... [Read more]

Central Excise – Assessable value of excisable goods – Sales commission paid to selling agents – Appellant manufacturer of Refractory Products engaged selling and commission agents both in foreign countries and in India for promoting exports and domestic sales – Appellant paid sales commission to foreign agents like commission agents based outside India and domestic agents for services rendered including procuring orders for export – Department issued SCN invoking extended period of limitation proposing to demand central excise duty on sales commission – Whether sales commission paid by appellant to selling agents is includable in assessable value as transaction value – HELD – It is not in dispute that buyers and sellers are unrelated parties and price is sole consideration of sale. Sales commission is not part of sale price paid or payable by buyer to seller. Transaction value is actual price paid or payable for goods when sold and includes any amount buyer is liable to pay to or on behalf of assessee by reasons of or in connection with sale – The sales commission sought to be included in transaction value is neither price paid or payable for goods when sold nor any amount buyer is liable to pay to or on behalf of assessee by reason of or in connection with sale. Sales commission is expense of appellant and there is no flow of any additional consideration or amount from buyer to appellant - Revenue has not come up with evidence to show that sales commission paid was recovered from buyer. In fact, sales commission paid by appellant is borne by appellant against sale price received from buyers. There is also no evidence on record showing appellants have received any additional consideration towards sale of goods - Sales commission is already factored into sale price on which appellant has paid duty correctly. Sales commission cannot be treated as part of transaction value or included in assessable value – The demand on account of sales commission is set aside and the appeal is allowed [Read less]

Customs – SAFTA Certificate of Origin – Preferential duty claim – Goods obtained from ship breaking in Bangladesh imported with valid Certificate of Origin issued by designated authority of exporting country under SAFTA rules – Appellant filed Bill of Entry claiming preferential duty under Notification 99/2011 but after prolonged detention of more than one month with mounting demurrage charges, under coercive circumstances, wrote letter dated 04.07.2022 foregoing SAFTA benefit and willing to pay full duty – Customs authorities disallowed SAFTA benefit without following prescribed procedure and imposed differentia... [Read more]

Customs – SAFTA Certificate of Origin – Preferential duty claim – Goods obtained from ship breaking in Bangladesh imported with valid Certificate of Origin issued by designated authority of exporting country under SAFTA rules – Appellant filed Bill of Entry claiming preferential duty under Notification 99/2011 but after prolonged detention of more than one month with mounting demurrage charges, under coercive circumstances, wrote letter dated 04.07.2022 foregoing SAFTA benefit and willing to pay full duty – Customs authorities disallowed SAFTA benefit without following prescribed procedure and imposed differential duty, ordered confiscation with redemption fine and penalty – Whether the letter foregoing SAFTA benefit was voluntary and whether Appellant lost right to file appeal and whether goods were eligible for SAFTA benefit – HELD – The letter was not written voluntarily but was written under forced circumstances of prolonged detention and mounting demurrage which forced the Appellant to write the letter so that goods urgently required for manufacturing could be cleared and demurrage reduced. The circumstances of prolonged detention cannot be envisaged as the circumstances mentioned under Section 28DA(4) of the Customs Act, 1962 for relinquishment of claim and the Appellant has not lost their right to file appeal against the assessment order - The goods imported from Bangladesh were accompanied with Certificate of Origin issued by the designated authority in Bangladesh in terms of Article 1 of Annexure-B of Determination of Origin of Goods under SAFTA. The SAFTA certificate is complete and in accordance with format prescribed by Rules of Origin with no alteration and was produced within validity period. The Customs (Administration of Rules of Origin under Trade Agreement) Rules, 2020 incorporate Rules of Origin notified for trade agreements and SAFTA is a Trade Agreement for which Rules of Origin as notified under Notification No.75/2006-Customs (NT) dated 30.06.2006 have duly been complied with by production of SAFTA certificate issued by Competent Authority - No such step as prescribed under Determination of Origin of Goods under SAFTA agreement has been followed by investigation before denying benefit of duty exemption - There was no misdeclaration or fraud established against Appellant warranting confiscation under Section 111(o) and 111(m) of Customs Act, 1962. The differential duty, confiscation, redemption fine and penalty imposed are not sustainable – The appeal is allowed. The differential duty of assessed amount with interest is set aside. The confiscation order is set aside. The redemption fine is set aside. The penalty under Section 112(a)(ii) is set aside. [Read less]

Service Tax - Duplicate appeal registrations - Appellant filed service tax appeals against the same impugned order dated 11.12.2023 and due to technical and procedural error in the Registry, three additional appeal numbers were inadvertently generated and assigned against the exact same impugned order resulting in four separate appeal numbers filed by the appellant against the single impugned order - HELD - The three duplicate appeal registrations resulted from a procedural error in the Registry and serve no independent purpose as the dispute is already being agitated in the main appeal. Mere technical and procedural error... [Read more]

Service Tax - Duplicate appeal registrations - Appellant filed service tax appeals against the same impugned order dated 11.12.2023 and due to technical and procedural error in the Registry, three additional appeal numbers were inadvertently generated and assigned against the exact same impugned order resulting in four separate appeal numbers filed by the appellant against the single impugned order - HELD - The three duplicate appeal registrations resulted from a procedural error in the Registry and serve no independent purpose as the dispute is already being agitated in the main appeal. Mere technical and procedural errors in registration causing duplicate filings which do not raise any independent issue cannot be entertained and rendered infructuous - The three duplicate appeal numbers are dismissed as infructuous. The main appeal shall proceed on merits in accordance with law – Ordered accordingly [Read less]

Service Tax - Vagueness of Show Cause Notice - Identification of taxable services and service recipients - Department issued Show Cause Notice invoking extended period of limitation raising demand on unbilled revenue reflected in balance sheet and difference between ST-3 returns and Income Tax returns - Whether Show Cause Notice is vague for not identifying category of services, service recipients and consideration and whether it is permissible to raise demand merely based on figures appearing in balance sheet and difference between tax returns - HELD - It is settled principle that for levying service tax, the category of ... [Read more]

Service Tax - Vagueness of Show Cause Notice - Identification of taxable services and service recipients - Department issued Show Cause Notice invoking extended period of limitation raising demand on unbilled revenue reflected in balance sheet and difference between ST-3 returns and Income Tax returns - Whether Show Cause Notice is vague for not identifying category of services, service recipients and consideration and whether it is permissible to raise demand merely based on figures appearing in balance sheet and difference between tax returns - HELD - It is settled principle that for levying service tax, the category of services and recipient of services must be identified precisely with clarity. The SCN merely sets out audit objections and correspondence between parties without mentioning what service was provided, to whom and what was the consideration. The SCN does not specify the service rendered or the recipients thereof - A public sector company like the appellant would not intentionally withhold information with intent to evade payment of service tax. The correspondence made by the department with the appellant dwells on discrepancies in figures and there are no queries regarding nature of services - Merely because the appellant had registered itself for multiple service categories does not eliminate the obligation of the Department to identify specific services rendered. Though the revenue alleges non-cooperation by the appellant, it is difficult to believe that the department could not verify the nature of service rendered. The SCN cannot be sustained on a vague and non-committal basis without making even a remotely credible attempt to identify services and recipients. It is incumbent upon the department to identify services rendered and recipients thereof before fixing tax liability – Further, demand cannot be raised merely on the basis of figures in balance sheet or difference between tax returns without corroborative evidence establishing that such amounts are attributable to provision of services - The Show Cause Notice is not sustainable and the impugned order passed on basis thereof is set aside - The appeal is allowed [Read less]

Central Excise - Retrospective change in classification of goods - Absence of statutory provision for issuing Show Cause Notice for reclassification - Appellant manufactures various kinds of mobile lifting machinery including Hydraulic Truck Cranes and Rough-terrain Hydraulic Truck Cranes and has been clearing them for several years since introduction of 8-digit tariff entry in February 2005 by classifying the same under Central Excise Tariff Item 8426 12 00 - Department formed opinion that cranes were being mis-classified under CETI 8426 12 00 when they should have been classified under CETI 8426 41 00 as other machinery ... [Read more]

Central Excise - Retrospective change in classification of goods - Absence of statutory provision for issuing Show Cause Notice for reclassification - Appellant manufactures various kinds of mobile lifting machinery including Hydraulic Truck Cranes and Rough-terrain Hydraulic Truck Cranes and has been clearing them for several years since introduction of 8-digit tariff entry in February 2005 by classifying the same under Central Excise Tariff Item 8426 12 00 - Department formed opinion that cranes were being mis-classified under CETI 8426 12 00 when they should have been classified under CETI 8426 41 00 as other machinery self-propelled on tyres and issued Show Cause Notice with retrospective effect proposing change of classification - Whether a Show Cause Notice can be issued for change in classification of goods without invoking proper provisions of Central Excise Act and whether classification can be changed retrospectively - HELD - There is no provision in the Central Excise Act 1944 under which a SCN can be issued for mere change in classification of goods declared by an assessee. Only under Section 11A of the Central Excise Act, 1944 the Proper Officer can issue SCN proposing change in classification of goods in cases of short or non-payment of duty. The impugned Show Cause Notice has not invoked any such provision. No such statutory authority exists for changing classification retrospectively - Show Cause Notice issued for mere change in classification without invoking any statutory provision cannot be sustained in the eyes of law - The Show Cause Notice is not sustainable and the impugned order passed thereon is set aside - The appeal is allowed [Read less]

GST - Assessment based on Seized Documents - Maintainability of Writ Petition - During an inspection, notepads containing rough estimates and cash memos were seized. Authorities treated these rough estimates as sales memos and issued a demand for tax, interest - The petitioner petition alleging violation of natural justice, arguing that the same officer who authorized the inspection later heard the appeal as Appellate Authority - Whether the High Court should exercise jurisdiction under Article 226 of the Constitution to quash the assessment order when the statutory machinery provides for appeal - HELD - The GST Act provid... [Read more]

GST - Assessment based on Seized Documents - Maintainability of Writ Petition - During an inspection, notepads containing rough estimates and cash memos were seized. Authorities treated these rough estimates as sales memos and issued a demand for tax, interest - The petitioner petition alleging violation of natural justice, arguing that the same officer who authorized the inspection later heard the appeal as Appellate Authority - Whether the High Court should exercise jurisdiction under Article 226 of the Constitution to quash the assessment order when the statutory machinery provides for appeal - HELD - The GST Act provides a complete self-contained appellate machinery. When a statute creates a right and provides a special forum for its enforcement, the machinery created by the statute must ordinarily be resorted to - The High Court should not entertain a writ petition under Article 226 when an alternative remedy is available through statutory machinery which provides an equally efficacious remedy - The allegation of violation of natural justice has not been established as authorization for inspection is distinct from adjudicatory functioning and no material evidence of bias has been placed. The actions taken by the Proper Officer under Section 2(91) read with Sections 3 and 5 of the CGST Act, 2017 cannot be held irregular or illegal - The dispute in the instant case is essentially factual in nature, involving examination of whether the seized notepads represent actual suppressed sales or were mere estimates, whether the goods fall within 5 to 12 percent slab or 18 percent slab, and whether bank deposits and GST returns can be reconciled with seized materials. These questions require elaborate examination and appreciation of documentary and testimonial evidence and cannot be decided purely on questions of law - The principle that writ jurisdiction should not be exercised merely because it is lawful to do so. The statute provides for alternate remedies in the form of appeal before the GSTAT - The writ petition is dismissed. However, the petitioner is permitted to take recourse to alternate remedy for appeal before the GST Appellate Tribunal – The petition is dismissed [Read less]

GST – Gujarat AAR – Classification of Service and applicable GST rate - Job Work Services - Composite Supply or not - Applicant is engaged in providing offset printing services on Kraft Paper and Duplex Paper supplied by packaging industries and corrugated box manufacturers under delivery challan in accordance with specifications and instructions provided by the principals. Upon completion of offset printing, the processed papers are returned to the principals - Applicable GST rate on the job work services on the job work services of offset printing provided on Kraft Paper and Duplex Paper supplied by the Corrugated bo... [Read more]

GST – Gujarat AAR – Classification of Service and applicable GST rate - Job Work Services - Composite Supply or not - Applicant is engaged in providing offset printing services on Kraft Paper and Duplex Paper supplied by packaging industries and corrugated box manufacturers under delivery challan in accordance with specifications and instructions provided by the principals. Upon completion of offset printing, the processed papers are returned to the principals - Applicable GST rate on the job work services on the job work services of offset printing provided on Kraft Paper and Duplex Paper supplied by the Corrugated box manufacturer or Packaging Industries - Whether the job work services of offset printing on Kraft Paper and Duplex Paper constitute a composite supply - HELD - The activities undertaken by the applicant are interconnected with each other and are naturally bundled and supplied in conjunction with each other in the ordinary course of business. These activities constitute a composite supply as defined under Section 2(30) of the CGST Act, 2017, where offset printing is the principal supply and all pre-offset printing and post-offset printing activities are ancillary to the principal supply of offset printing – As per Section 8(a) of the CGST Act, 2017, a composite supply shall be treated as a supply of the principal supply. Entry 26(ii)(f) of Notification No.11/2017-Central Tax (Rate) specifies that GST rate of 5% is applicable on job work services in relation to printing of goods falling under Chapter 48 or 49 of the Customs Tariff Act, 1975 which attract GST at 5% or NIL - Kraft Paper and Duplex Paper are classifiable under CTH 4804 and 4810 respectively and are chargeable at 18% GST under Notification No.09/2025-Central Tax (Rate) dated 17.09.2025 - Since the job work is performed on goods chargeable at 18% GST and not at 5% or NIL, Entry 26(ii)(f) does not apply. Instead, Entry 26(iv) which covers job work services other than those specified in Entry 26(i), (ii) and (iii) becomes applicable, with GST rate of 18% - Ordered accordingly [Read less]

Service Tax – Relevant date of assignment of the mining rights, Royalty to the State Government for Mining Lease - Point of Taxability - Extended Period of Limitation - Demand-cum-Show Cause Notice alleging that appellant received taxable service of assignment of right to use natural resources but wilfully failed to discharge Service Tax under reverse charge - Appellant contended that issue was interpretational and contentious at the time, extended period of limitation was not invocable, and the mine allotment being prior to 01.04.2016, no Service Tax was leviable - Whether Service Tax can be demanded under extended peri... [Read more]

Service Tax – Relevant date of assignment of the mining rights, Royalty to the State Government for Mining Lease - Point of Taxability - Extended Period of Limitation - Demand-cum-Show Cause Notice alleging that appellant received taxable service of assignment of right to use natural resources but wilfully failed to discharge Service Tax under reverse charge - Appellant contended that issue was interpretational and contentious at the time, extended period of limitation was not invocable, and the mine allotment being prior to 01.04.2016, no Service Tax was leviable - Whether Service Tax can be demanded under extended period of limitation when the issue relating to taxability of royalty was contentious and interpretational in nature, and no suppression or intent to evade was established - HELD - Extended period of limitation cannot be invoked when the issue was interpretational and highly contentious. No allegation of suppression, fraud, collusion, wilful misstatement or intent to evade can be sustained. Appellant paid royalty to the State Government and duly filed statutory VAT returns disclosing transactions - A bona fide belief that no Service Tax was payable cannot constitute suppression with intent to evade. The taxable event is when service is provided or agreed to be provided. The right to use natural resources was allotted and agreed to be provided prior to 01.04.2016, when such services were covered by the negative list. The formal lease deed executed on 29.08.2016 was merely a continuation of the already concluded arrangement. Service Tax cannot be fastened on allotment made prior to 01.04.2016 even if consideration was paid thereafter - In the present case since the right has crystallized on the date when the mining is assigned to the Appellant, in principle, that date is to be taken as the date of assignment of the mining rights to the Appellant - The demand confirmed in the impugned order is set aside on the ground of limitation and also on merits – The appeal is allowed [Read less]

GST – Gujarat AAR - Classification and applicable GST rate on washing and laundry soap in bar or cake form - Applicant contended products are toilet soaps or fall under toiletry definition as per Medicinal and Toilet Preparations (Excise Duties) Act 1955 and claimed 5% GST rate - Whether laundry soap and toilet soap fall under common heading or separate tariff heading and applicable HSN codes and GST rates - HELD - The definition of one statute having different object, purpose and scheme cannot be applied mechanically to another statute. The definition in Medicinal and Toilet Preparations (Excise Duties) Act 1955 cannot ... [Read more]

GST – Gujarat AAR - Classification and applicable GST rate on washing and laundry soap in bar or cake form - Applicant contended products are toilet soaps or fall under toiletry definition as per Medicinal and Toilet Preparations (Excise Duties) Act 1955 and claimed 5% GST rate - Whether laundry soap and toilet soap fall under common heading or separate tariff heading and applicable HSN codes and GST rates - HELD - The definition of one statute having different object, purpose and scheme cannot be applied mechanically to another statute. The definition in Medicinal and Toilet Preparations (Excise Duties) Act 1955 cannot be imported for interpreting goods under Customs Tariff Act 1975 – The meaning of terms should be referred to as available in common parlance. Toilet soap in common parlance means mild soap designed specifically for personal hygiene such as washing face, hands and body rather than for laundry or household cleaning; typically contains higher Total Fatty Matter of 60-80 percent and is potassium salt of fatty acids whereas laundry soap is sodium salt of fatty acids used to clean clothes, remove stains and deodorize textiles – The applicant's products are semi-detergent oil base soaps and detergent soaps containing fillers ranging from 30 to 70 percent and designed to remove stains and provide fragrance to apparel for body hygiene through clean textiles; these do not fall within definition of toilet soaps – The subject products are classifiable as laundry soap under sub-heading 34011942 of First Schedule to CTA, 1975. The entry No.66 of Schedule-II of Notification No.09/2025-Central Tax (Rate) dated 17.09.2025 covers said products and attracts GST of 18% – Ordered accordingly [Read less]

GST – Gujarat AAR - Classification and applicable GST Rate on Papad Khar - Food processing ingredient - Whether Papad Khar should be classified under HSN 2501 (Common Salts) at 5% or HSN 2102 (Prepared Food Additives) at 5% or should qualify for exemption under Notification 2/2017 - The applicant contended that Papad Khar is a traditional alkaline salt with composition of 70% sodium chloride, 15% sodium carbonate and 15% sodium bicarbonate used as food ingredient and should be classified under HSN 2501 or 2102 at 5% rate – HELD - Papad Khar does not qualify for HSN 2501 classification because its chemical composition ... [Read more]

GST – Gujarat AAR - Classification and applicable GST Rate on Papad Khar - Food processing ingredient - Whether Papad Khar should be classified under HSN 2501 (Common Salts) at 5% or HSN 2102 (Prepared Food Additives) at 5% or should qualify for exemption under Notification 2/2017 - The applicant contended that Papad Khar is a traditional alkaline salt with composition of 70% sodium chloride, 15% sodium carbonate and 15% sodium bicarbonate used as food ingredient and should be classified under HSN 2501 or 2102 at 5% rate – HELD - Papad Khar does not qualify for HSN 2501 classification because its chemical composition differs materially from common salt which contains 100% sodium chloride and rock salt which contains 90-98% sodium chloride. Further the product is obtained through mixing and processing beyond that permitted under Chapter 25 notes which exclude products obtained by mixing or subjected to processing beyond that mentioned in each heading. The product does not fall under HSN 2102 because yeasts have different constituents and baking powder serves different culinary purposes from Papad Khar. However Papad Khar as mixture of sodium carbonate and sodium bicarbonate with sodium chloride falls squarely under HSN 28362090 covering carbonates and bicarbonates - The product does not qualify for exemption under Notification 2/2017 because GST classification and rates of raw materials and finished products are determined independently based on their specific tariff entries, not automatically on the basis that the finished product is exempt - Papad Khar is correctly classifiable under HSN 28362090 and liable to GST at 18% - Ordered accordingly. [Read less]

Central Excise - Manufacture of Compressed Natural Gas - Compression for Transportation - Appellant is engaged in extraction of natural gas from coal bed methane wells. The natural gas is compressed and transported to customer premises in cascades where Pressure Reducing Skids are installed to decompress the gas. Decompressed natural gas is then delivered to customers at normal pressure. No excise duty was paid on clearances made in cascades – Demand of duty alleging that the activity amounts to manufacture of Compressed Natural Gas under Section 2(f) of the Central Excise Act, 1944 - Appellant contended that compression... [Read more]

Central Excise - Manufacture of Compressed Natural Gas - Compression for Transportation - Appellant is engaged in extraction of natural gas from coal bed methane wells. The natural gas is compressed and transported to customer premises in cascades where Pressure Reducing Skids are installed to decompress the gas. Decompressed natural gas is then delivered to customers at normal pressure. No excise duty was paid on clearances made in cascades – Demand of duty alleging that the activity amounts to manufacture of Compressed Natural Gas under Section 2(f) of the Central Excise Act, 1944 - Appellant contended that compression was only for ease of transportation and that the gas is sold as natural gas at normal pressure, not as CNG - Whether compression of natural gas for transportation purpose amounts to manufacture of CNG under Section 2(f) of the CEA, 1944 and Chapter Note 5 to Chapter 27 - HELD - Chapter Note 5 to Chapter 27 states that compression of natural gas for purpose of marketing as CNG amounts to manufacture. However, the provision must be read to mean that only compression undertaken for purpose of marketing gas as CNG amounts to manufacture - In the present case, the gas is decompressed at customer premises and sold as natural gas at normal pressure, not as CNG. The compression undertaken is only for purpose of transportation through pipelines. The contracts with industrial consumers clearly show that purchase of gas is to be at normal pressure and sales take place at buyer's premises. Marketing of goods is done not as CNG but as natural gas at normal pressure - The process of compression and carriage to premises of industrial consumers is only for ease of transportation and does not amount to manufacture. The Tribunal earlier decision in appellant's own case decided same issue in favor of appellant - The confirmed demand for excise duty, interest and penalty is set aside. The penalties imposed on the Chairman and Chief Executive Director are also set aside as the main demand has been set aside on merits – The appeals are allowed [Read less]

Customs – Levy of Penalty on CHA - Role and Liability of Customs House Agent - Mismatch in the description of goods in the Bill of Entry as against the actual goods imported. Upon observing this mismatch, the appellant-CHA returned the import documents without effecting clearance of goods and intimated the Customs authority of such returning of documents. The appellant was subsequently penalized under Section 112A of the Customs Act, 1962 - Whether a Customs House Agent or G Card holder can be penalized under Section 112A when the agent returned the documents upon observing mismatch in the cargo and goods were not cleare... [Read more]

Customs – Levy of Penalty on CHA - Role and Liability of Customs House Agent - Mismatch in the description of goods in the Bill of Entry as against the actual goods imported. Upon observing this mismatch, the appellant-CHA returned the import documents without effecting clearance of goods and intimated the Customs authority of such returning of documents. The appellant was subsequently penalized under Section 112A of the Customs Act, 1962 - Whether a Customs House Agent or G Card holder can be penalized under Section 112A when the agent returned the documents upon observing mismatch in the cargo and goods were not cleared through the agency, and the agent intimated the Customs Department of such action - HELD - The role of a Customs House Agent or G Card holder is restricted to breaking the seal to identify goods after submission of Bills of Entry and necessary payment of duty. When the agent observes mismatch in the description of goods and returns the documents without pursuing clearance of goods and intimates the Customs Department of such returning of documents without clearance, the agent cannot be considered to have done or omitted or abated in doing any act that would render the goods liable for confiscation under Section 111 so as to attract the penal provision contained in Section 112A - The mere belief that the agent had knowledge of illegal import based on cash transactions in the personal account, when such amounts were paid towards duty, transportation and logistic support as per established practice, is just a presumption and cannot be the sole basis for penalty - The penalty imposed is set aside and the appeal is allowed [Read less]

Customs - Classification of Made-up Textile Articles - Extended Period of Limitation - Appellant imported umbrella panel fabric cut in triangular shape and size through various Bills of Entry, classifying the goods under Chapter Tariff Heading 6307 as made-up textile articles. The classification was accepted by Customs officers at the time of assessment. Approximately two years later, an Audit Consultative Letter was issued alleging misclassification and proposing reclassification under CTH 5407 as woven fabrics of synthetic filament yarn - Whether umbrella panel fabric cut in triangular shape and size should be classified... [Read more]

Customs - Classification of Made-up Textile Articles - Extended Period of Limitation - Appellant imported umbrella panel fabric cut in triangular shape and size through various Bills of Entry, classifying the goods under Chapter Tariff Heading 6307 as made-up textile articles. The classification was accepted by Customs officers at the time of assessment. Approximately two years later, an Audit Consultative Letter was issued alleging misclassification and proposing reclassification under CTH 5407 as woven fabrics of synthetic filament yarn - Whether umbrella panel fabric cut in triangular shape and size should be classified as made-up textile articles under CTH 6307 or as woven fabrics under CTH 5407 and whether extended period of limitation can be invoked for classification disputes without evidence of suppression - HELD - The goods are cut in triangular shape which falls within Section Note 7 of Section XI of the Customs Tariff Act, 1975, defining made-up articles as those cut otherwise than into squares or rectangles. Once fabric is cut into triangular panels, it acquires a distinct identity and character. The essential character of the goods is umbrella panels and not textile fabric. In commercial understanding, the goods are known as and sold as umbrella panels, not as textile fabrics. CTH 6307 specifically covers made-up textile articles whereas CTH 5407 is a general heading for woven fabrics - As per General Rules of Interpretation, a specific heading must be preferred over a general heading. The prior decision of the Tribunal in Karnataka Umbrella Manufacturers directly supports this classification – Further, the extended period of limitation cannot be invoked for classification disputes when there is no suppression or misdeclaration. All imports were made through Bills of Entry, goods were fully described and classification was openly declared. Customs assessed goods without raising any objection at the time of assessment. Show Cause Notice issued after significant time lapse is not sustainable under Section 28(4) of the Customs Act - The impugned order is set aside on both merits and on the ground of limitation. The demand for customs duty, interest and penalty is set aside – The appeal is allowed [Read less]

Central Excise – Classification of Weld Mesh parts of Poultry Battery Cages – Appellant engaged in manufacture of Weld Mesh which are parts of Poultry Battery Cages namely Upper Portion, Bottom Part and Side Portions manufactured using Galvanized Iron Wire of size 2mm to 4mm using Wire Welding Machines – Appellant classified goods under CETH 84369100 as parts of Poultry Keeping Machinery or Poultry Incubators and Brooders – Department through Show Cause Notice dated 07.07.2017 rejected declared classification and proposed re-classification under CETH 73089090 as structures and parts of structures of iron or steel �... [Read more]

Central Excise – Classification of Weld Mesh parts of Poultry Battery Cages – Appellant engaged in manufacture of Weld Mesh which are parts of Poultry Battery Cages namely Upper Portion, Bottom Part and Side Portions manufactured using Galvanized Iron Wire of size 2mm to 4mm using Wire Welding Machines – Appellant classified goods under CETH 84369100 as parts of Poultry Keeping Machinery or Poultry Incubators and Brooders – Department through Show Cause Notice dated 07.07.2017 rejected declared classification and proposed re-classification under CETH 73089090 as structures and parts of structures of iron or steel – Whether goods which are exclusively used in Poultry Battery Cages and are parts of Poultry Keeping equipment should be classified under CETH 84369100 or CETH 73089090 – HELD – The goods under dispute are Top Mesh Part, Side Partition Part, Bottom Mesh Part, Door Part and Centre Partition part for Poultry Battery Cages made from Galvanized Iron Wire and are exclusively used only in Poultry Battery Cages for Poultry keeping and rearing - The goods are identifiable parts of poultry cages and have been manufactured specifically for such use as per customer specifications. The goods are supplied to clients to set up Poultry Farms and are used in three stages of Poultry Cage system. Battery Cage as such is not machinery as it does not have any mechanical functions of its own but Battery Cage is an equipment meant only for Poultry keeping and rearing and hence the goods which are integral components of such equipment should be classified as parts of Poultry Keeping Machinery - The Department seriously erred in rejecting declared classification without proper justification and without placing on record conceivable and convincing reasons as to how goods could become structures or parts under CETH 7308 when goods are made of Galvanized Iron Wire of size 2mm to 4mm exclusively used in Poultry Cages and not used in construction of structures like bridges, lock-gates, towers or roofing wherein heavy iron rods are used. The Department has not demonstrated how tiny Galvanized Iron Wire could be used for such large structures. The competing entries are user specific and industry specific and goods in question are exclusively used for Poultry keeping equipment and not for general structural purposes – The declared classification under CETH 84369100 is correct. The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – CENVAT Credit on Proforma Invoice – Whether CENVAT credit can be taken on Proforma Invoice which does not fall within specified documents under Rule 9 of CENVAT Credit Rules, 2004 – HELD – When all documents are harmoniously read, there is no dispute that relevant Service Tax has been properly paid by service provider and same has been taken as CENVAT credit by Appellant and credit has also been reflected in ER-1 Return. As long as factual details and provision of service is not in dispute and basic details of Service Tax Registration, service rendered details and Service Tax amount are reflected i... [Read more]

Central Excise – CENVAT Credit on Proforma Invoice – Whether CENVAT credit can be taken on Proforma Invoice which does not fall within specified documents under Rule 9 of CENVAT Credit Rules, 2004 – HELD – When all documents are harmoniously read, there is no dispute that relevant Service Tax has been properly paid by service provider and same has been taken as CENVAT credit by Appellant and credit has also been reflected in ER-1 Return. As long as factual details and provision of service is not in dispute and basic details of Service Tax Registration, service rendered details and Service Tax amount are reflected in invoices, CENVAT credit cannot be denied - Rule 9 of CCR, 2004 clarifies that CENVAT credit on documents as mentioned in Sub Rule (1) shall be available if and only if all particulars as prescribed under respective statute are contained in said documents. Conjoint reading of rules makes it clear that it is not merely specific documents in sub rule but any similar document which may provide all statutory particulars that same shall be admissible for permitting availment of CENVAT credit – The documents required under Rule 9 are not confined to merely invoices but may be any documents like bill or challan as issued in terms of applicable rules. Rule specifies amount of information as required in particular documents for availment of CENVAT credit and any such documents as required can be document under Rule 9 for entitlement of availing CENVAT credit. There is no denial that entire information as required under Rule 9 was available in Proforma invoices on which credit was availed by Appellant. Denial of availment of CENVAT credit on Proforma invoices is absolutely wrong and set aside – The appeal is allowed - CENVAT Credit – Limitation period for issuing Show Cause Notice – Appellant took CENVAT credit in March 2011 and reflected same in ER-1 Return for that month – Department conducted audit during which alleged contravention was quantified – Whether SCN issued after more than three years from taking of credit without further investigation or verification is barred by limitation – HELD – Appellant had taken credit in March 2011 and reflected same in ER-1 Return. Even under self-assessment regime, Tribunal and High Courts have been consistently holding that scrutiny of Return is still to be undertaken by Range Officials. There is nothing to show that any query was raised by Range Officials after taking up ER-1 Return for scrutiny – Further, audit was conducted in 2012 as evident from Audit Report and alleged contravention and Service Tax taken as CENVAT credit has already been quantified in Report itself. However, Department has taken more than three years to issue SCN while there is no evidence that any further investigation or verification was taken up in this case - When no objection was raised by Range Officials during normal course of scrutiny and credit was already quantified during audit in 2012 but SCN was issued only after three years gap, the Department has lost the opportunity to proceed within normal limitation period and cannot rely on extended period of limitation – The entire demand is set aside on account of time bar [Read less]

GST - Applicability of Notification No.53/2023-Central Tax to appeal against Order-in-Original passed under Section 74 of CGST Act – The appeal filed beyond period of limitation prescribed under Section 107 of CGST Act, appellate authority rejected appeal solely on ground of delay - Government issued Notification No.53/2023-Central Tax dated 02.11.2023 following recommendations of GST Council to permit filing of appeals in exceptional cases - Whether notification extends to appeals which though pending were not yet rejected at time of issuance of Notification and which were filed after issuance of notification but before... [Read more]

GST - Applicability of Notification No.53/2023-Central Tax to appeal against Order-in-Original passed under Section 74 of CGST Act – The appeal filed beyond period of limitation prescribed under Section 107 of CGST Act, appellate authority rejected appeal solely on ground of delay - Government issued Notification No.53/2023-Central Tax dated 02.11.2023 following recommendations of GST Council to permit filing of appeals in exceptional cases - Whether notification extends to appeals which though pending were not yet rejected at time of issuance of Notification and which were filed after issuance of notification but before cut-off date of 31.01.2024 – HELD - The Notification No.53/2023-Central Tax applies to taxpayers who could not file appeal within prescribed period and whose appeals have been rejected on ground of delay, as well as to appeals pending before appellate authorities before issuance of notification which fulfill conditions of payment prescribed in paragraph 3 of notification - Proviso to paragraph 2 of notification manifests that appeal pending before appellate authority prior to issuance of notification dated 02.11.2023, fulfills conditions specified in paragraph 3 - The taxpayer who files appeal before extended cut-off date of 31.01.2024 and meets payment conditions cannot be put at lower pedestal compared to those taxpayers whose appeals were filed and got rejected on ground of delay and still permitted to file fresh appeals under the said Notification - When the impugned appellate order dated 11.06.2024 was passed, the Appellate authority was supposed to consider the Notification dated 02.11.2023, however Appellate authority is silent on the Notification and no cognizance of the Notification has been taken - The appellate authority cannot wait for the taxpayer to point out the provisions of the notification issued by the Government and it is to be presumed that any Notification issued by the Government will be known to the Appellate authority, more particularly, when it regulates the provision under Section 107 of the Act - The impugned Notice and Order are hereby quashed and set aside. The matter is remanded to the appellate authority to decide the same on merits in accordance with law – The petition is allowed [Read less]

GST - Bail Application in GST Fraud Case - Fraudulent availment and passing on of ITC without actual supply of goods or services - Whether applicant entitled to bail despite serious economic offence involving Government loss of Rs.293.68 Crores and cognizable non-bailable offence under Section 132 of CGST Act - HELD - At pre-conviction stage there is presumption of innocence and object of keeping person in custody is to ensure availability at trial and to receive sentence not to be punitive. Article 21 of Constitution guarantees that no person shall be deprived of liberty except by procedure established by law which must b... [Read more]

GST - Bail Application in GST Fraud Case - Fraudulent availment and passing on of ITC without actual supply of goods or services - Whether applicant entitled to bail despite serious economic offence involving Government loss of Rs.293.68 Crores and cognizable non-bailable offence under Section 132 of CGST Act - HELD - At pre-conviction stage there is presumption of innocence and object of keeping person in custody is to ensure availability at trial and to receive sentence not to be punitive. Article 21 of Constitution guarantees that no person shall be deprived of liberty except by procedure established by law which must be just, fair and reasonable - Even if prima facie case is made out, Constitutional Court considering bail application must examine whether it is reasonable to keep accused in custody during trial and in only exceptional cases like heinous crime can bail be denied - Detention pending trial has substantial punitive content and Courts should not refuse bail as mark of disapproval. Supreme Court in multiple cases held that in GST cases involving maximum punishment of five years imprisonment, when investigation is completed, charge is yet to be framed and trial not commenced, bail should ordinarily be granted unless exceptional circumstances exist - Applicant in custody since 13.02.2026, investigation completed and complaint filed, no charge framed, no previous criminal history, no evidence of tampering with evidence or witness intimidation. Maximum punishment for alleged offence is five years. Trial is by Magistrate. Evidence is documentary and electronic with minimal risk of tampering - Bail application is allowed on subject to conditions - The bail application is allowed [Read less]

Central Excise - CENVAT credit on inputs procured from manufacturers availing exemption notification - Applicability of Rule 12 of CCR, 2004 - Department took the view that CENVAT credit on inputs cleared by exempted units was not admissible before the amendment in Rule 12 by way of Notification No.02/2014-CE dated 20.01.2014 - SCN invoking extended period of limitation demanding denial of CENVAT credit - Appellant contended that Rule 12 does not restrict availment of credit under Rule 3, the amendment is merely a clarification and should apply retrospectively - Whether CENVAT credit is admissible on inputs procured from m... [Read more]

Central Excise - CENVAT credit on inputs procured from manufacturers availing exemption notification - Applicability of Rule 12 of CCR, 2004 - Department took the view that CENVAT credit on inputs cleared by exempted units was not admissible before the amendment in Rule 12 by way of Notification No.02/2014-CE dated 20.01.2014 - SCN invoking extended period of limitation demanding denial of CENVAT credit - Appellant contended that Rule 12 does not restrict availment of credit under Rule 3, the amendment is merely a clarification and should apply retrospectively - Whether CENVAT credit is admissible on inputs procured from manufacturers availing exemption notification before the amendment in Rule 12 dated 20.01.2014 - HELD - The scheme of CENVAT credit has to be read in a harmonious manner and not in isolation with reference to one or two Rules. The scheme of CENVAT credit provides that credit of inputs or input service shall be admissible to the manufacturer under the following conditions: the input or input service has suffered duty, such input or input service are used in the manufacture of final products, and such credit is received under the cover of prescribed invoice or document. In the instant case, none of these conditions are disputed - CENVAT credit cannot be denied merely because express provision for credit from exempted supplies came at a later date by amendment. Before the amendment in Rule 12 there was no express prohibition in the CENVAT Credit Rules to deny credit availed by the appellant. The absence of an express permission at an earlier date cannot be construed to mean that credit is only admissible from the date of amendment - The amendment to Rule 12 is in the nature of clarification and does not create a new permission but merely clarifies what was permitted by the scheme - Regarding invocation of extended period, where the issue arises on basis of audit and involves legal interpretation of statutory provisions, extended period cannot be invoked. The fact that Department conducted audits regularly and processed refund claims shows Dept had knowledge of the facts. The appellant succeeds both on merits and on the question of limitation - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Place of removal, Inclusion of transportation cost in assessable value in FOR destination sales - Appellant manufactured and supplied goods to customers on FOR destination basis. Audit revealed that the Appellant had not paid central excise duty on the value of transportation of goods from its factory to buyers' premises resulting in short payment of duty - Whether the place of removal for goods sold on FOR destination basis is the buyer's premises or factory gate - HELD - When goods are sold on FOR destination basis, the place of delivery is the buyer's premises and the cost of transportation up to the bu... [Read more]

Central Excise - Place of removal, Inclusion of transportation cost in assessable value in FOR destination sales - Appellant manufactured and supplied goods to customers on FOR destination basis. Audit revealed that the Appellant had not paid central excise duty on the value of transportation of goods from its factory to buyers' premises resulting in short payment of duty - Whether the place of removal for goods sold on FOR destination basis is the buyer's premises or factory gate - HELD - When goods are sold on FOR destination basis, the place of delivery is the buyer's premises and the cost of transportation up to the buyer's premises has to be included in the assessable value for the purpose of excise duty. However, during the relevant period there were conflicting decisions regarding the place of removal and therefore it was perfectly possible for the Appellant to have entertained a belief that the cost of transportation of goods from its premises to the buyer's premises was not includable in the assessable value. No mala fide can be attributed to the Appellant. It cannot be said that the non-payment or short payment of duty was due to fraud or collusion or willful misstatement or suppression of fact or violation of any Act or Rules with an intent to evade payment of duty - When a SCN was earlier issued for a prior period covering the same issue and all relevant facts were in the knowledge of the Department, the same facts cannot be taken as suppression of facts by the Appellant in a subsequent Notice as these facts were already in the knowledge of the authorities. The entire period of demand is beyond the normal period of limitation and accordingly the demand is barred by limitation - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Business Auxiliary Services – Appellant engaged in air travel agency services issued air travel tickets on behalf of domestic and international airlines. When appellant purchased tickets from other GSA/IATA agents, they received commissions or discounts from airlines - Revenue demanded service tax on commission retained by appellant, contending that commission was consideration for BAS rendered by appellant to other GSA/IATA agents - Whether commission retained from purchase of air travel tickets through other GSA/IATA agents constitutes taxable service under Service Tax provisions - HELD – Issue had be... [Read more]

Service Tax – Business Auxiliary Services – Appellant engaged in air travel agency services issued air travel tickets on behalf of domestic and international airlines. When appellant purchased tickets from other GSA/IATA agents, they received commissions or discounts from airlines - Revenue demanded service tax on commission retained by appellant, contending that commission was consideration for BAS rendered by appellant to other GSA/IATA agents - Whether commission retained from purchase of air travel tickets through other GSA/IATA agents constitutes taxable service under Service Tax provisions - HELD – Issue had been previously decided by same Bench for appellant for period 2006-07 to 2010-11. Statutory definition of Air Travel Agency Services covers any activity in relation to booking of passage by air travel agent whether ticket is bought directly from airline or through GSA, making no difference to the nature of service. Appellants are not rendering any service to other GSA/IATA operators. Commission earned by appellants is not exigible to service tax – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Levy of Social Welfare Surcharge when Basic Customs Duty is exempted - Whether appellant is liable to pay Social Welfare Surcharge when Basic Customs Duty is exempted in terms of Exemption Notifications No.24/2015-Cus and No.25/2015-Cus both dated 08.04.2015 - HELD - The said issue has already been settled by this Tribunal in its own case wherein it was held that since the Circular No.3/2022-Cus dated 01.02.2022 has clarified that the amount of Social Welfare Surcharge payable would be Nil in cases where the aggregate of Customs duties which form the base for computation of SWS is zero. Law does not require compu... [Read more]

Customs - Levy of Social Welfare Surcharge when Basic Customs Duty is exempted - Whether appellant is liable to pay Social Welfare Surcharge when Basic Customs Duty is exempted in terms of Exemption Notifications No.24/2015-Cus and No.25/2015-Cus both dated 08.04.2015 - HELD - The said issue has already been settled by this Tribunal in its own case wherein it was held that since the Circular No.3/2022-Cus dated 01.02.2022 has clarified that the amount of Social Welfare Surcharge payable would be Nil in cases where the aggregate of Customs duties which form the base for computation of SWS is zero. Law does not require computation of SWS on notional customs duty calculated. If aggregate customs duty payable is zero on account of exemption, the SWS shall be computed as 10 percent of the value equal to Nil. The appellant is not liable to pay SWS as debited to MEIS/SEIS or paid in cash and the same is required to be refunded - The impugned orders are set aside and the appeals are allowed [Read less]

GST - Prosecution of Director for company's offence - Vicarious liability and requirement to implead company - A complaint was filed against Petitioner, a Director, under Section 132 of CGST Act, 2017 for wrongfully availing Input Tax Credit. The Department alleged that M/s NIPL, a registered person and company of which Petitioner was Director, had availed fraudulent ITC without receipt of goods through invoices of dummy firms. Though the Department had issued Show Cause Notice to M/s NIPL and the company had filed appeal, the complaint was filed against the Petitioner individually without arraigning M/s NIPL as an accused... [Read more]

GST - Prosecution of Director for company's offence - Vicarious liability and requirement to implead company - A complaint was filed against Petitioner, a Director, under Section 132 of CGST Act, 2017 for wrongfully availing Input Tax Credit. The Department alleged that M/s NIPL, a registered person and company of which Petitioner was Director, had availed fraudulent ITC without receipt of goods through invoices of dummy firms. Though the Department had issued Show Cause Notice to M/s NIPL and the company had filed appeal, the complaint was filed against the Petitioner individually without arraigning M/s NIPL as an accused. Petitioner contended that prosecution against him without impleading the company was not maintainable - Whether a Director of a company can be prosecuted individually under Section 137 of CGST Act without the company being arraigned as an accused - HELD - Section 137 of CGST Act use the term ‘person’ and refer it to a Company. Applying strict construction of penal statutes and consistent with binding precedent of the Apex Court, the commission of offence by the company is an express condition precedent to attract vicarious liability of others - The words “as well as the company” appearing in Section 137 make it clear that when the company can be prosecuted, only then the persons mentioned in other categories could be vicariously liable. Commission of offence by the company-M/s NIPL is an express condition precedent to attract the vicariously liability of the petitioner, who was the Director of M/s NIPL at the relevant time – Further, it is M/s NIPL, which is a registered person within the meaning of Section 2(94) of the CGST Act. It is M/s NIPL which has availed the ITC fraudulently. It is also the admitted position that demand-cum-show cause notice was issued to M/s NIPL and it was M/s NIPL which filed an appeal before the Appellate Authority – The prosecution of the Director in personal capacity without arraigning the company cannot proceed against settled principles of law - The complaint against petitioner is quashed and all subsequent proceedings are set aside. The respondent is at liberty to proceed for the offence under Section 132 of CGST Act in accordance with law - The petition is allowed [Read less]

GST – Jurisdiction of Tribunal to examine transitioned ITC - Proceedings under pre-GST regime versus GST regime - Appellant transitioned ITC balance by filing Form GST TRAN-1 under Section 140 of CGST Act including credits of CENVAT credit of eligible duties and VAT credit on stock-in-trade goods. Department issued Notice disputing the transitioned ITC alleging non-production of relevant evidence to substantiate eligibility under GST law - Appellant contended that credits were never disputed under erstwhile regime and cannot be questioned under CGST regime - Whether CGST authorities can initiate proceedings under Section... [Read more]

GST – Jurisdiction of Tribunal to examine transitioned ITC - Proceedings under pre-GST regime versus GST regime - Appellant transitioned ITC balance by filing Form GST TRAN-1 under Section 140 of CGST Act including credits of CENVAT credit of eligible duties and VAT credit on stock-in-trade goods. Department issued Notice disputing the transitioned ITC alleging non-production of relevant evidence to substantiate eligibility under GST law - Appellant contended that credits were never disputed under erstwhile regime and cannot be questioned under CGST regime - Whether CGST authorities can initiate proceedings under Section 74 of CGST Act to question admissibility of ITC transitioned from pre-GST regime when such credits were never challenged under erstwhile law - HELD - Section 142(6)(a) and Section 174(2)(e) of CGST Act make it clear that recovery proceedings related to inadmissible credit under erstwhile laws can be initiated only under provisions of erstwhile laws even after enactment of CGST Act. The CGST authorities are not empowered to initiate proceedings under CGST Act for determining correctness of credits availed and transitioned from erstwhile regime - Following the ratio of High Court of Jharkhand in Usha Martin Ltd and in Steel Authority of India Ltd cases, the proceedings initiated by respondents to deny transitioned ITC on ground that such credits were inadmissible under erstwhile laws are beyond jurisdictional powers vested under CGST Act - An Appellant under Section 140(1) is entitled to carry forward CENVAT credit of eligible duties reflected in returns preceding 01.07.2017 subject to conditions specified. Since credit was never disputed or challenged under erstwhile regime, same cannot be questioned under CGST Act. Examination of correctness and eligibility of credit availed under erstwhile law under guise of powers under Section 140 is without authority of law - Reliance of the revenue on Section 174 of the CGST Act is also of no avail inasmuch as it only authorizes continuation of the proceedings initiated under the erstwhile law. However, it doesn’t authorize the officers appointed under the CGST Act to examine correctness of ITC availed by the appellant under the erstwhile regime - The ITC transitioned by the appellant is in accordance with law and same is held to be eligible. The impugned order is set aside and the appeal is allowed - Transition of Krishi Kalyan Cess (KKC) – HELD - The Appellant had transitioned the same into the GST regime by filing Form GST TRAN-1. However, due to lack of clarity regarding the availability of ITC in respect of KKC, the Appellant, out of abundant caution, reversed the amount under protest – As per the ratio of Godrej & Boyce Mfg Co Ltd judgment, transitional credit of Krishi Kalyan Cess is in order. Merely because the revenue is before the Hon’ble Supreme Court that cannot be sole reason to hold our decision, particularly when the Apex Court has not granted the stay from the operation of the Bombay High Court judgment. Moreover, the view on the issue of transition of KKC is not only based on the judgment in the case of Godrej & Boyce but also on our independent interpretation of the provision and Board’s Circular dated 02.01.2019. The transition of Krishi Kalyan Cess by the Appellant is in order - Transitioned VAT Credit under Section 140(6) – HELD - With respect to VAT credit transitioned into the GST regime, the Appellant had provided all the details required to claim VAT credit on Stock-in-Trade goods lying in stock as on 30.06.2017. There is no finding to the contrary to deny this amount of transitioned credit. Without giving any specific objection for denial of this credit, the lower authorities have rejected this credit considering it to be part and parcel of the other credits. Thus, in the absence of contrary findings, denial of this credit cannot be countenanced. Moreover, the revenue has not brought any material evidence on record to justify denial of VAT credit and consequent transition thereof to GST regime – Further, certain other reasons given to deny transitional credit such as incorrect address on the invoice, description of service not mentioned, copies of invoice or credit register not produced, etc are not sustainable at this stage especially when at the stage of claiming credit such objections were not raised. [Read less]

GST - Cross empowerment, Adjudication by Bureau of Investigation officers - Adjudication order was passed by Deputy Commissioner posted at Bureau of Investigation, State GST, holding that ITC claimed on inward supplies from five suppliers was ineligible - Petitioner contention that respondent officer being vested at Bureau of Investigation Unit lacks jurisdiction to adjudicate and that State Tax Authorities have no jurisdiction when petitioner is administratively assigned to Central Authorities without corresponding notification under Section 6 of CGST Act - Whether officers posted at Bureau of Investigation have power of ... [Read more]

GST - Cross empowerment, Adjudication by Bureau of Investigation officers - Adjudication order was passed by Deputy Commissioner posted at Bureau of Investigation, State GST, holding that ITC claimed on inward supplies from five suppliers was ineligible - Petitioner contention that respondent officer being vested at Bureau of Investigation Unit lacks jurisdiction to adjudicate and that State Tax Authorities have no jurisdiction when petitioner is administratively assigned to Central Authorities without corresponding notification under Section 6 of CGST Act - Whether officers posted at Bureau of Investigation have power of adjudication under Section 74 of CGST Act, 2017 - HELD - A jurisdictional issue questioning the competence of an authority to exercise power raised in a writ petition may be entertained even when alternative remedy exists if such issue is a pure question of law and does not involve adjudication of disputed facts - The order of adjudication was passed by officer posted at Bureau of Investigation who is vested with enforcement activity and investigation including ITC investigation but it prima facie appears such officers may lack jurisdiction to make adjudication under Section 74. There is divergence of opinion among High Courts on cross empowerment issue - The Madras High Court held that State authorities have no jurisdiction when assessee is administratively assigned to Central authority without corresponding notification under Section 6. However Kerala and Jammu and Kashmir High Courts held that cross empowerment is automatic by legislative mandate and no separate notification is required. Since various jurisdictional issues are involved and have not been decided by the adjudicating authority, the matter should be remanded to allow petitioner to raise all jurisdictional issues - The adjudication order and appellate order and all consequential steps were set aside and quashed. Liberty granted to petitioner to submit comprehensive reply to SCN raising all points including jurisdictional issues. The adjudicating authority was directed to fix date of hearing after expiry of reply period and decide jurisdictional issue as first issue and thereafter other issues afresh in accordance with law - The writ petition is allowed [Read less]

GST - Application of amended pre-deposit requirement in cases involving only penalty - Petitioners were issued Show Cause Notice proposing penalties under Section 122(1A) of CGST Act, 2017. Order-in-Original dated 16.12.2025 imposed penalties without accompanying tax demand. By Finance Act 2025 effective 01.10.2025, the proviso to Section 107(6) was substituted to require 10% deposit of penalty in orders demanding only penalty - Petitioners contended the deposit requirement should not apply as proceedings commenced before 01.10.2025 when no such requirement existed - Whether the amended proviso to Section 107(6) requiring ... [Read more]

GST - Application of amended pre-deposit requirement in cases involving only penalty - Petitioners were issued Show Cause Notice proposing penalties under Section 122(1A) of CGST Act, 2017. Order-in-Original dated 16.12.2025 imposed penalties without accompanying tax demand. By Finance Act 2025 effective 01.10.2025, the proviso to Section 107(6) was substituted to require 10% deposit of penalty in orders demanding only penalty - Petitioners contended the deposit requirement should not apply as proceedings commenced before 01.10.2025 when no such requirement existed - Whether the amended proviso to Section 107(6) requiring 10% deposit of penalty applies to appeals where adjudicatory proceedings were initiated before 01.10.2025 but final order was passed after that date - HELD - The right of appeal is substantive and vests when the lis commences with initiation of formal adjudicatory proceedings. In tax matters, the lis commences when the Department formulates and asserts a definite proposition of liability and places it for statutory adjudication by issuing SCN - The amended condition cannot burden the pre-existing appellate right. The substituted proviso operates after 01.10.2025 but does not apply retrospectively to pending adjudicatory proceedings. Since SCN issued on 25.06.2025, no 10% deposit requirement existed on the date the lis commenced. Subsequent steps including replies submission and hearing after 01.10.2025 do not postpone the commencement of proceedings - The substituted proviso to Section 107(6) can operate fully in respect of proceedings initiated on or after 01.10.2025 without applying to earlier proceedings - Petitioners are not required to deposit 10% of penalties as condition precedent for filing appeals – The writ petitions are allowed [Read less]

Service Tax – Exemption for sub-contractor providing Works Contract Services – Appellant engaged as sub-contractor to main contractor for execution of earth work, site formation and earth excavation for construction of dam and canals for Government of Andhra Pradesh project – Appellant did not take service tax registration nor file any service tax returns – Department issued Show Cause Notice proposing demand of Service Tax for activities classified as Site Formation Services – Whether appellant qualified for exemption under Section No.29(h) when main contractor was providing exempt WCS and whether extended perio... [Read more]

Service Tax – Exemption for sub-contractor providing Works Contract Services – Appellant engaged as sub-contractor to main contractor for execution of earth work, site formation and earth excavation for construction of dam and canals for Government of Andhra Pradesh project – Appellant did not take service tax registration nor file any service tax returns – Department issued Show Cause Notice proposing demand of Service Tax for activities classified as Site Formation Services – Whether appellant qualified for exemption under Section No.29(h) when main contractor was providing exempt WCS and whether extended period of limitation was invokable – HELD – The twin criteria under Section No.29(h) are that sub-contractor is providing WCS to main contractor and main contractor is also providing exempt WCS. There is no dispute that main contractor was executing work of construction of dam and canals to Government which is covered by exemption at Section No.12(d) of Notification No. 25/2012-ST and hence main contractor was executing exempt WCS. The essential nature of work awarded to appellant was not simple contract of service but composite contract involving machinery, fuel and materials to be provided by sub-contractor for execution of earth work - Definition of WCS provides that where transfer of property in goods involved in execution of contract is leviable to tax as sale of goods, such contract is WCS. The term used is leviable to VAT not subjected to VAT. If goods or materials leviable to VAT were used in course of execution of contract, said contract is treated as WCS - The fact that VAT was not charged by appellant was because VAT amount was deducted by main contractor from RA bills and later reimbursed and such reimbursement does not mean work was not leviable as WCS. It was leviable as WCS but exempted under applicable VAT laws during material time. Mere reimbursement of deducted VAT does not tantamount to not paying VAT on work. Scope of work clearly prescribed removal of over burden, excavation including cost of machinery, labour, fuel required for finished item of work and included cost of all materials, machinery and labour - It is not necessary that goods transferred in execution of WCS must be transferred in original form but can be transferred in any other form as long as there is clear indication that goods have been actually used for execution of work. Property in materials used in execution of WCS pass to recipient in any form including where goods are incorporated, chemically altered or consumed during execution. In the facts of case, services of site formation and earth work are in nature of WCS and appellant is entitled for benefit under Section No.29(h) of Notification No. 25/2012-ST in respect of work executed to main contractor – Appellant is eligible for exemption under Section No.29(h) - On merit as well as on the ground of limitation, the impugned order cannot be sustained and set aside – The appeal is allowed - Service Tax – Extended period of limitation – Invokability based on bonafide belief – Appellant sub-contractor did not take service tax registration nor file periodical returns based on understanding that services did not attract service tax – Adjudicating Authority invoked extended period holding that appellant deliberately suppressed facts and had intent to evade service tax – Whether extended period of limitation can be invoked when appellant had bonafide belief about interpretation of tax exemptions and statutory provisions – HELD – In given facts there was genuine bonafide belief that work was covered under exemption and reasonable belief could have been formed by appellant about not being required to pay service tax -Provision under VAT laws existed to exempt them from payment of VAT and because of that they were not required to pay VAT and were exempted. Reimbursement was only because of initial deduction by main contractor but subsequently when pointed out that they were exempted from payment of VAT under State VAT laws, said amount was reimbursed. Deduction by main contractor supports view that work was treated as WCS by main contractor and hence he deducted VAT as no VAT was apparently paid. All these facts indicate different interpretations and conflicting views about applicability of VAT - Whole issue is that of interpretation and there was bonafide belief that appellant was not leviable to any service tax and that is why they had not taken registration nor paid any service tax - Case is one where there has been complex interpretation of tax exemptions and statutory entries and in absence of any other strong and cogent grounds, extended period cannot be invoked. SCN has been issued beyond normal period of limitation applicable during material time – Extended period of limitation is not invokable. [Read less]

Service Tax – Taxability of forfeiture of insurance premiums – Declared Service under Section 66E(e) – Appellant Life Insurance Corporation engaged in provision of life insurance services regularly paid service tax on premium amount received from policy holders – Department identified that where policy holders failed to pay premium for initial three-year period and policies were not revived within two years from first unpaid premium, forfeited premium amounts had not been subjected to service tax – Department interpreted forfeited amount as consideration for tolerating policy holder's breach and classified same a... [Read more]

Service Tax – Taxability of forfeiture of insurance premiums – Declared Service under Section 66E(e) – Appellant Life Insurance Corporation engaged in provision of life insurance services regularly paid service tax on premium amount received from policy holders – Department identified that where policy holders failed to pay premium for initial three-year period and policies were not revived within two years from first unpaid premium, forfeited premium amounts had not been subjected to service tax – Department interpreted forfeited amount as consideration for tolerating policy holder's breach and classified same as declared service under Section 66E(e) – Whether amount forfeited due to non-payment of premium or mis-declaration by policy holder constitutes taxable consideration for declared service under Section 66E(e) – HELD – Under Insurance Act, 1938 if policy lapses due to non-payment of premium and is not revived then policy does not acquire any surrender value and nothing is payable to policy holder. Similarly, in case of mis-representation by policy holder, insurer can reject claim or terminate policy without any obligation to pay benefit or surrender value. These forms part of regular insurance business between insurer and policy holder and do not involve any specific contract for repudiation or retention of surrender value of premiums paid - Forfeiture of insurance policy is not a separate service but part of insurance contract which becomes void ab initio. There is no service of nature involving arrangement where appellant agreed to obligation to tolerate breach of agreement – CBIC Circular No. 214/1/2023-Service Tax dated 28.02.2023 clarifies that activities contemplated under Section 66E(e) are activities where agreement specifically refers to such activity and there is flow of consideration for such activity. In absence of any contractual obligation or flow of consideration for specific act of tolerating act etc., amount forfeited cannot be treated as another taxable service under declared service category. Forfeiture cannot lead to double taxation as service tax was already paid on original life insurance service – The extended period of limitation is not invokable. Demand of service tax, interest and penalty under Sections 77 and 78 are not sustainable – The impugned order is set aside and appeal is allowed [Read less]

Service Tax – Reverse Charge Mechanism on Legal Services – Revenue Neutrality – Appellant engaged in hiring construction machinery is registered with service tax authorities for STGU service – During audit department observed that appellant had received legal services from advocates but had not discharged service tax liability on such services under reverse charge mechanism as prescribed in Notification No. 30/2012-ST dated 20.06.2012 – Whether service tax demand on legal services received under reverse charge mechanism is sustainable when appellant is registered for taxable service and is eligible for CENVAT cre... [Read more]

Service Tax – Reverse Charge Mechanism on Legal Services – Revenue Neutrality – Appellant engaged in hiring construction machinery is registered with service tax authorities for STGU service – During audit department observed that appellant had received legal services from advocates but had not discharged service tax liability on such services under reverse charge mechanism as prescribed in Notification No. 30/2012-ST dated 20.06.2012 – Whether service tax demand on legal services received under reverse charge mechanism is sustainable when appellant is registered for taxable service and is eligible for CENVAT credit on input services – HELD – In respect of services provided by individual advocate or firm of advocates by way of legal services is a taxable service under Sections 65B(44) and 66B of Finance Act, 1994. Payment of service tax was shifted from service provider to service recipient in terms of entry at Section No.5 of Notification No. 30/2012-ST dated 20.06.2012 for administrative expediency. However, appellant is eligible to take CENVAT credit of input services availed in respect of providing taxable output services. Revenue neutral situation arises when service tax is paid on reverse charge mechanism and entire service tax is available as CENVAT credit to registered person. Where appellant could have availed CENVAT credit of service tax paid on reverse charge mechanism, revenue neutral situation arises wherein appellant pays tax and takes credit. By applying principle of revenue neutrality, which is settled in catena of judgments, no demand is sustainable where credit is available to assessee himself as the duty payable is modvatable and there is no revenue implication. Extended period of limitation cannot be invoked based solely on audit objection without establishing suppression of facts or malafide intention. Once demand is not sustainable, interest and penalty under Section 78 of Finance Act, 1994 are not imposable. In case of revenue neutrality, no penalty is imposable under Section 78 – The service tax demand is not sustainable. The impugned order is set aside and the appeal is allowed. [Read less]

Service Tax - Scope of Entry No. 9(b) of Notification No. 25/2012-ST dated 20.06.2012 - Services relating to conduct of examination - Appellant conducted various National Level Talent Search Examinations and Olympiad and claimed exemption under Entry No. 9(b) of Notification No. 25/2012-ST as services provided to an educational institution by way of services relating to conduct of examination by such institution - Recovery of service tax on ground that the examinations conducted were optional talent search examinations not forming part of prescribed curriculum of schools and therefore not covered under exemption notificati... [Read more]

Service Tax - Scope of Entry No. 9(b) of Notification No. 25/2012-ST dated 20.06.2012 - Services relating to conduct of examination - Appellant conducted various National Level Talent Search Examinations and Olympiad and claimed exemption under Entry No. 9(b) of Notification No. 25/2012-ST as services provided to an educational institution by way of services relating to conduct of examination by such institution - Recovery of service tax on ground that the examinations conducted were optional talent search examinations not forming part of prescribed curriculum of schools and therefore not covered under exemption notification - Whether the services rendered by appellant are covered under Entry No. 9(b) of Notification No. 25/2012-ST or exemption can be denied by importing a condition that examinations should necessarily form part of prescribed curriculum or be Board Examinations - HELD - The Notification uses the expression "services relating to conduct of examination" and not narrower expressions like "services relating to conduct of curriculum examinations" or "Board Examinations". Plain reading shows the legislature consciously employed broad language. The Adjudicating Authority erred in importing an additional condition that examinations should form part of prescribed curriculum which amounts to judicial legislation - The words "relating to" are of wide amplitude and have consistently been interpreted by Courts to include all activities having direct and proximate nexus with principal activity. Preparation of question papers, printing and supply of examination material, OMR sheets, evaluation of answer scripts, tabulation of marks and declaration of results are all integral components of the process of conducting an examination. Once these services are rendered to an educational institution for conducting examinations, they fall squarely within Entry No. 9(b) - The schools are the recipients of service as they identify participating students, collect examination fees, forward list of students, conduct examinations within their premises and deduct tax at source. Merely because benefit of examination ultimately accrues to students cannot alter identity of recipient of service. Recipient is determined by contractual and commercial relationship and not by identifying ultimate beneficiary – Further, the optional nature of participation does not alter identity of recipient of service where educational institution itself engages the service provider for conducting examinations - The exemption notification is beneficial in nature and must be given liberal construction in accordance with object sought to be achieved. When exemption notification speaks of services relating to conduct of examination and not of examinations conducted pursuant to statutory mandate, interpretation limiting its scope is not permissible - The services rendered by appellant are covered by Entry No. 9(b) of Notification No. 25/2012-ST as services provided to educational institutions relating to conduct of examinations. The finding recorded by the Adjudicating Authority denying the exemption is set aside – The appeal is allowed - Service Tax - Extended period of limitation - Invocation on allegation of suppression of facts with intent to evade payment - Whether the extended period of limitation under Section 73(1) of the Finance Act, 1994 was validly invoked on the allegation of suppression of facts with intent to evade payment of Service Tax – HELD - For the Department to invoke extended period of limitation, there must be an active and deliberate act on part of the assessee to evade payment of tax. Mere non-payment of tax without element of intent or suppression is not sufficient to attract extended limitation period - The appellant had maintained regular books of accounts, disclosed receipts in financial statements and Income Tax Returns, and furnished requisite information during investigation. The entire demand was worked out from records maintained by the appellant itself – Further, during the relevant period, divergent judicial opinions existed regarding taxability of examination-related services and the issue travelled to various High Courts. Such divergence of legal opinion itself demonstrates that the dispute was interpretational in nature. Mere adoption of a legal interpretation subsequently found to be incorrect does not amount to suppression of facts or willful mis-statement so as to justify invocation of extended period - The extended period of limitation was wrongly invoked. The demand extending beyond the normal period is liable to be set aside - Service Tax - Penalty - Validity when underlying tax demand is not sustainable - Penalties were imposed under Section 78 (equivalent to tax amount), Section 77 and upon the director of the appellant based on allegation of suppression with intent to evade payment of tax - Whether the penalties imposed under Sections 77 and 78 can survive when the underlying tax demand itself is found to be not sustainable and the extended period invocation is found to be without authority of law - HELD - The penalty under Section 78 was entirely founded upon the allegation of suppression with intent to evade payment of tax. The penalties under Section 77 and upon the Director are only consequential to the principal demand. When the tax demand itself is liable to be set aside, the penalties automatically fall. The material on record clearly establishes that the appellant entertained bonafide belief regarding the applicability of exemption notification. The dispute concerns interpretation of statutory provisions and exemption notifications. There is nothing on record to suggest any deliberate attempt to evade tax. Therefore, even on independent ground, penal consequences would not have been justified - The penalties imposed under Section 77 and 78 as well as upon the Director are not sustainable - Once the demand itself is held to be not sustainable, the penalty cannot survive. [Read less]

Service Tax - Manpower supply service - Classification of contract as labour contract or job work - Appellant was engaged to operate plant and machinery and execute the entire manufacturing process by deploying its own labour for production of goods - Whether the activity undertaken by appellant was manpower supply service or contract for job work or manufacture of goods – HELD - The work order must be examined in entirety and not in isolation. Reading the various clauses of the work order as a whole leaves no manner of doubt that it was a work order for labour contract - Though the measure of consideration was on per MT... [Read more]

Service Tax - Manpower supply service - Classification of contract as labour contract or job work - Appellant was engaged to operate plant and machinery and execute the entire manufacturing process by deploying its own labour for production of goods - Whether the activity undertaken by appellant was manpower supply service or contract for job work or manufacture of goods – HELD - The work order must be examined in entirety and not in isolation. Reading the various clauses of the work order as a whole leaves no manner of doubt that it was a work order for labour contract - Though the measure of consideration was on per MT basis, the bills were explicitly stated to be labour bills to be submitted every month and to be paid every month - The settlement of contract clearly reflects consensus ad idem that appellant was appointed as labour contractor. The dominant nature of activity continues to be supply of manpower even when payment is linked to output or productivity - The activity undertaken by appellant constitutes manpower supply service which is taxable under service tax - The impugned order is upheld and the appeal is dismissed - Service Tax - Invocation of extended period on ground of suppression and intent to evade payment - Appellant was well aware of the nature of the contract being labour supply but chose not to disclose and pay service tax - Department seeks to validate demand on basis of Form 16A - Whether extended period of limitation was justified and whether penalty under Section 78 can be upheld - HELD - The appellant was well aware of the nature of contract as labour supply and there was no doubt of any kind. The fact that appellant did not come clean and produce all records justifies that investigation was to be done on basis of accounts available. Form 16A shows that appellant was paid certain sums and tax was deducted from them. The nature of business of appellant is clear from the contract. If the sums received were not for rendering taxable services but for some other purpose, it was for appellant to say so. No such indication was found in the submissions and synopsis of the appellant. The invocation of extended period of limitation was justified as there was willful non-payment of tax with intention to evade. The penalty under Section 78 is also justified - The extended period of limitation was rightly invoked. The penalty under Section 78 imposed by the Adjudicating Authority is sustainable. The impugned order upholding the demand with interest and penalty is upheld. [Read less]

Service Tax - Beneficiation of coal - Taxability of Activity of beneficiation and washing of coal undertaken by respondent prior to 01.06.2007 - Whether the activity undertaken by respondent is taxable under "Business Auxiliary Service" prior to 01.06.2007 - HELD - It is settled by judicial pronouncements that the activity of beneficiation and washing of coal is a taxable service in relation to mining of minerals only w.e.f. 01.06.2007. Prior to 01.06.2007 the activity undertaken by respondent does not fall under the category of BAS as the same is classified under Mining Service w.e.f. 01.06.2007. Following the principle t... [Read more]

Service Tax - Beneficiation of coal - Taxability of Activity of beneficiation and washing of coal undertaken by respondent prior to 01.06.2007 - Whether the activity undertaken by respondent is taxable under "Business Auxiliary Service" prior to 01.06.2007 - HELD - It is settled by judicial pronouncements that the activity of beneficiation and washing of coal is a taxable service in relation to mining of minerals only w.e.f. 01.06.2007. Prior to 01.06.2007 the activity undertaken by respondent does not fall under the category of BAS as the same is classified under Mining Service w.e.f. 01.06.2007. Following the principle that introduction of a new entry and inclusion of certain services in that entry would presuppose that earlier there was no entry covering the said service, the activity could not have been categorised under BAS prior to 01.06.2007 - The demand under the category of Business Auxiliary Service prior to 01.06.2007 is not sustainable and set aside - The impugned order dropping proceedings is upheld and the Revenue appeal is dismissed [Read less]

Customs – Majority Order - Valuation of Imported Goods, Renegotiated price – Determination of Transaction Value - Respondent imported polyester chips originally consigned by overseas exporter to another importer at agreed price but the said importer did not clear goods or honour bank letter of credit. Respondent then purchased same goods from overseas exporter at renegotiated price after first import attempt failed. Respondent filed bill of entry declaring assessable value based on price actually paid - Department rejected declared value and assessed goods at original price agreed between overseas exporter and first im... [Read more]

Customs – Majority Order - Valuation of Imported Goods, Renegotiated price – Determination of Transaction Value - Respondent imported polyester chips originally consigned by overseas exporter to another importer at agreed price but the said importer did not clear goods or honour bank letter of credit. Respondent then purchased same goods from overseas exporter at renegotiated price after first import attempt failed. Respondent filed bill of entry declaring assessable value based on price actually paid - Department rejected declared value and assessed goods at original price agreed between overseas exporter and first importer who did not take delivery - Whether value should be determined on basis of original contract price between overseas exporter and initial importer who did not take delivery, or on basis of price actually paid by respondent who took actual delivery and cleared goods from port – HELD – Section 14 of Customs Act, 1962 requires that transaction value shall be price actually paid or payable for goods when sold for export to India for delivery at time and place of importation where buyer and seller are not related and price is sole consideration. Following Supreme Court judgment in Chaudhary Ship Breakers Vs. Commissioner of Customs, Ahmedabad, the adjudicating authority is bound to accept price actually paid or payable as transaction value except where exceptions enumerated in Rule 4(2) are attracted - In present case all parameters of transaction value were satisfied only in transaction between overseas supplier and respondent as initial importer never took delivery, never paid any price to exporter and never filed any bill of entry. Since, the concept of ‘transaction value’ was brought into the statute book w.e.f. 10.10.2007, and the dispute involved in the present case relates to the period January, 2009, it is proper and justifiable in law, that the concept of ‘transaction value’ alone should be adopted for the purpose of ascertaining the customs duty liability. In the case in hand, since all the parameters laid down in the amended Section 14 of the Act of 1962 had been complied with by the respondent, the price actually paid to the overseas supplier for the imported goods should be considered as transaction value. In other words, no interpretation can be placed to upset the declared value as the price paid by the respondent to the overseas supplier is the sole consideration for the sale of the disputed imported goods - The impugned order is upheld and appeal filed by Revenue is dismissed [Read less]

Customs – Customs Broker License Revocation – Violation of Regulations 10(d) and 10(e) of CBLR, 2018 – Appellant Customs Broker holding regular license and customs pass filed B/E for import of goods declared as Yellow Peas under HS Code 0713 1010 with concessional duty – DRI investigation found goods were actually Green Peas which are restricted for import under DGFT Notification dated 18.12.2019 and permitted only through Kolkata port with Minimum Import Price of Rs.200 per Kg CIF – Department initiated action against CB alleging violation of Regulation 10(d) for abetting and colluding with importer to evade DGF... [Read more]

Customs – Customs Broker License Revocation – Violation of Regulations 10(d) and 10(e) of CBLR, 2018 – Appellant Customs Broker holding regular license and customs pass filed B/E for import of goods declared as Yellow Peas under HS Code 0713 1010 with concessional duty – DRI investigation found goods were actually Green Peas which are restricted for import under DGFT Notification dated 18.12.2019 and permitted only through Kolkata port with Minimum Import Price of Rs.200 per Kg CIF – Department initiated action against CB alleging violation of Regulation 10(d) for abetting and colluding with importer to evade DGFT restrictions and of Regulation 10(e) for failing to exercise due diligence – Commissioner of Customs revoked CB license and ordered forfeiture of security deposit along with penalty – HELD – The Appellant-CB filed Bills of Entry as per documents given by importers and approved by them, which included invoices and bill of lading describing goods as Yellow Peas under HS Code 0713 1010. CB cannot be held liable for misdeclaration when filing BOE based on documents provided and approved by importer - Regarding Regulation 10(e), CB did not impart information to clients about description; rather, such information was provided by importers to CB as reflected in invoice and bill of lading. Therefore CB cannot be held liable for failure to exercise due diligence in imparting information as CB merely acted on documents provided by importer - The restrictions on various types of peas created doubts in understanding of import policy; while initially all peas were restricted, subsequently import policy for Yellow Peas was made free subject to IMS registration but other peas remained restricted; such changes through series of amendments could have created doubts in minds of importers or CBs. The misdeclaration was discovered by DRI during investigation after clearance and was not identified by customs officers at port of import prior to clearance, demonstrating that such violation was not identifiable at time of customs clearance by CB or port authorities - CB was not expected to be equipped with knowledge of all DGFT import restrictions and cannot be expected to verify every provision of Foreign Trade Policy beyond documents provided by importer. The impugned order contained inconsistencies with references to different SCN dates and inquiry report dates showing lack of proper appreciation of facts – Violation of Regulation 10(d) is not sustainable. Violation of Regulation 10(e) is not sustainable. Revocation of CB license is set aside. Forfeiture of security deposit and penalty is set aside – The appeal is allowed [Read less]

Central Excise – Refund of Pre-deposit and Interest Entitlement – Appellant had deposited amount as pre-deposit in year 2009 under Section 35FF of Central Excise Act, 1944. After Tribunal passed final order, appellant sought refund of deposited amount along with interest in January 2025. Original authority and Commissioner (Appeals) sanctioned principal refund amount but denied interest. Ground for denial of interest was that only pre-deposits made on or after 06.08.2014 are entitled to interest from date of deposit, and since refund was paid within three months from date of refund application, no interest was payable ... [Read more]

Central Excise – Refund of Pre-deposit and Interest Entitlement – Appellant had deposited amount as pre-deposit in year 2009 under Section 35FF of Central Excise Act, 1944. After Tribunal passed final order, appellant sought refund of deposited amount along with interest in January 2025. Original authority and Commissioner (Appeals) sanctioned principal refund amount but denied interest. Ground for denial of interest was that only pre-deposits made on or after 06.08.2014 are entitled to interest from date of deposit, and since refund was paid within three months from date of refund application, no interest was payable - Whether pre-deposits made prior to amendment of Section 35FF are governed by unamended provisions and whether such pre-deposits are entitled to interest on refund – HELD – The Pre-deposits made prior to 06.08.2014 are governed by unamended provisions of Section 35FF. The proviso to Section 35FF post-amendment clearly states that amounts deposited prior to commencement of Finance Act, 2014, shall continue to be governed by provisions of Section 35FF as it stood before commencement. Under unamended provisions of Section 35FF, interest is payable only if pre-deposit amount is not refunded within period of three months from date of communication of order of adjudicating authority. As refund was sanctioned within three months of refund application in present case, no interest was payable - The impugned order is upheld and the appeal is dismissed [Read less]

Customs - Courier service - Liability for connivance in movement of contravened goods - Whether the courier service can be held liable for having connived with movement of contravened goods – HELD - Investigation revealed that three persons were masterminds behind entire smuggling operations and they admitted their role in matter. No evidence has been brought on record to implicate the courier service. The accused persons have not at any stage alleged that the authorized courier was aware of presence of gold in consignment - The contraband could be found out only when subjected to X-ray test on arrival at courier cell of... [Read more]

Customs - Courier service - Liability for connivance in movement of contravened goods - Whether the courier service can be held liable for having connived with movement of contravened goods – HELD - Investigation revealed that three persons were masterminds behind entire smuggling operations and they admitted their role in matter. No evidence has been brought on record to implicate the courier service. The accused persons have not at any stage alleged that the authorized courier was aware of presence of gold in consignment - The contraband could be found out only when subjected to X-ray test on arrival at courier cell of Customs Department. Except when consignment was subjected to such non-invasive probe, no one other than person who devised such ingenious method could have any idea of concealment. The authorized courier could not have noticed the concealment on his own given that declaration filed reflected innocent goods. The courier acted on bonafide belief that consignment was devoid of any contraband and cargo was genuine - No case for imposing penalty has been made out against the courier service. The courier is not at fault and did not commit any offence to warrant punitive measures. The impugned order dropping proceedings against the respondent is upheld. The appeal filed by Revenue is dismissed [Read less]

GST - Applicability of certification requirement under Rule 89(2)(m) of CGST Rules, 2017 to refund claims for interest on principal amounts already refunded - Claim for interest over amount already refunded in terms of Section 56 of CGST Act - Refund sanctioning authority raised Deficiency Memos insisting upon certification under Rule 89(2)(m) of CGST Rules - Whether certification requirement under Rule 89(2)(m) prescribing that incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person applies to claims for interest component over principal amounts already refunded and sanc... [Read more]

GST - Applicability of certification requirement under Rule 89(2)(m) of CGST Rules, 2017 to refund claims for interest on principal amounts already refunded - Claim for interest over amount already refunded in terms of Section 56 of CGST Act - Refund sanctioning authority raised Deficiency Memos insisting upon certification under Rule 89(2)(m) of CGST Rules - Whether certification requirement under Rule 89(2)(m) prescribing that incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person applies to claims for interest component over principal amounts already refunded and sanctioned - HELD - The Rule 89(2)(m) requires certificate by Chartered Accountant or Cost Accountant only in cases where amount of refund claimed exceeds two lakh rupees to establish that incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person. However, when entire refund amount has been disbursed pursuant to order-in-original or order-in-appeal for respective periods, interest claimed thereafter after sanction of refund could not have been passed on to any end consumer as principal refund has already reached refund recipient - Insistence upon certification under Rule 89(2)(m) in respect of interest component over already sanctioned and paid principal refund is unnecessary and unwarranted as interest in such cases cannot be passed on to third party by definition - Interest component should be computed till date of disbursement in terms of Section 56 of CGST Act. Requirement to provide certification as per Rule 89(2)(m) should not apply to interest refund claims relating to already sanctioned principal refunds - Writ petitions are disposed with direction to Proper Officer to scrutinise and sanction interest claim without insisting upon certification under Rule 89(2)(m) on basis of summary sheet containing details of refund claims allowed – The petitions are disposed of [Read less]

Customs – Classification and duty rate on Iron Ore Fines export – Determination of Fe (iron) content – Appellant exported Iron Ore Fines via shipping bills declaring Fe content below 62% and paid concessional export duty as per applicable notification – Revenue initiated proceedings for demanding differential duty alleging misdeclaration in Fe content and produced test reports showing Fe content above 62% – Whether determination of Fe content should be based on test reports conducted months after export on dry basis or on condition of goods as exported at the time of shipment – HELD – The issue is no more res... [Read more]

Customs – Classification and duty rate on Iron Ore Fines export – Determination of Fe (iron) content – Appellant exported Iron Ore Fines via shipping bills declaring Fe content below 62% and paid concessional export duty as per applicable notification – Revenue initiated proceedings for demanding differential duty alleging misdeclaration in Fe content and produced test reports showing Fe content above 62% – Whether determination of Fe content should be based on test reports conducted months after export on dry basis or on condition of goods as exported at the time of shipment – HELD – The issue is no more res integra and settled by Supreme Court judgment in Union of India Vs. Gangadhar Narsingdas Aggarwal wherein it is held that percentage of iron content must be determined in the condition in which goods were exported and duty is relatable to weight of commodity at relevant point of time. Determination of Fe content must be on basis of weight of goods as they existed at time of export and not after ignoring moisture. When goods are tested after considerable lapse of time from export date, moisture content in iron ore gradually evaporates and percentage of iron content would increase, making such delayed test reports unreliable. Test reports conducted on dry basis at considerable time gap after export cannot be accepted as they do not reflect condition of goods at time of export - Appellant had submitted certificates from reputed organizations accredited by NABL which were tested on moist basis and showed Fe content less than 62% at time of export. Test reports from destination port also corroborated Fe content below 62% - Revenue should have accepted test certificates submitted by appellant from recognized testing organizations. Denial of request for re-test was denial of principles of Natural Justice. Assessment should be based on credible test reports corresponding to export goods in condition goods were exported. Revenue has failed to establish that Fe content was above 62% at time of export. Tribunal's earlier decision in Mineral Enterprises Ltd. case on same facts and issues established that test reports should reflect condition of goods as exported – The differential duty demand is not sustainable. The impugned order is set aside and the appeal is allowed [Read less]

GST - Anti-Profiteering - Non-passing of benefit of Input Tax Credit in Real Estate Project - Applicability of Anti-profiteering provisions despite subsequent notification curtailing fresh requests - Complainant purchased flat in residential project "Morning Raaga" developed by appellant and alleged that appellant charged complete twelve percent GST in 2017 without passing on benefit of ITC through commensurate reduction in price - Whether appellant has contravened provisions of Section 171(1) of CGST Act by failing to pass on ITC benefit and whether proceedings maintainable in light of Notification No.19/2024-Central Tax ... [Read more]

GST - Anti-Profiteering - Non-passing of benefit of Input Tax Credit in Real Estate Project - Applicability of Anti-profiteering provisions despite subsequent notification curtailing fresh requests - Complainant purchased flat in residential project "Morning Raaga" developed by appellant and alleged that appellant charged complete twelve percent GST in 2017 without passing on benefit of ITC through commensurate reduction in price - Whether appellant has contravened provisions of Section 171(1) of CGST Act by failing to pass on ITC benefit and whether proceedings maintainable in light of Notification No.19/2024-Central Tax dated 30.09.2024 - HELD - The Section 171(1) casts statutory obligation on every registered person to pass on benefit of ITC to recipients by way of commensurate reduction in prices. Investigation revealed that during pre-GST period no eligible CENVAT credit was available but in post-GST period appellant became entitled to avail ITC of GST on inputs and input services used in construction - DGAP determined that appellant availed ITC amounting to Rs.1,73,84,508 representing 10.63 percent of purchase value during post-GST period. Upon applying additional ITC benefit of 10.63 percent to purchase value and apportioning on basis of saleable area the benefit worked out to Rs.80.94 per square foot resulting in base profiteered amount of Rs.84,94,491. After addition of GST at 12 percent total profiteered amount was Rs.95,13,829 - Appellant failed to place material on record demonstrating error in revised computation or that quantified benefit was actually passed on to homebuyers. Notification No.19/2024 merely restricts acceptance of new requests after specified date and does not affect proceedings already commenced before competent authority. Mere pendency of challenge to constitutional validity before higher forum does not operate as stay of proceedings unless competent court issues specific stay order. Appellant has neither challenged provisions before any court nor obtained interim order or stay against present proceedings - Appellant is held to have contravened Section 171(1) and is directed to pass on profiteered amount along with 18% interest to eligible homebuyers. No penalty imposed as period of contravention does not extend beyond 01.01.2020 – Ordered accordingly [Read less]

Customs - Penalty for mis-declaration and fraudulent importation - Role and liability of Customs Broker - Customs Broker and its G-Card Holder filed Bills of Entry for consignments of baby garments imported by a trader – DRI alleged mis-declaration with respect to quantity of the declared goods and fraudulent importation. The appellant-Customs Broker was proposed for penal action under Sections 112(a), 112(b) and 114AA of the Customs Act, 1962 - Whether penalties under Section 112(a)(ii) of the Customs Act, 1962 could be imposed on the Customs Broker for its role in the alleged mis-declaration and fraudulent importation ... [Read more]

Customs - Penalty for mis-declaration and fraudulent importation - Role and liability of Customs Broker - Customs Broker and its G-Card Holder filed Bills of Entry for consignments of baby garments imported by a trader – DRI alleged mis-declaration with respect to quantity of the declared goods and fraudulent importation. The appellant-Customs Broker was proposed for penal action under Sections 112(a), 112(b) and 114AA of the Customs Act, 1962 - Whether penalties under Section 112(a)(ii) of the Customs Act, 1962 could be imposed on the Customs Broker for its role in the alleged mis-declaration and fraudulent importation of goods - HELD - The role of the Customs Broker and its G-Card Holder was to get clearance of the consignment by processing the import documents and filing Bills of Entry on the basis of documents furnished by the importer. The appellants were not in possession of prior knowledge about the mis-declaration of the quantity of the goods in question - The Revenue failed to bring on record any corroborative evidence with regard to the appellants having prior information as to mis-declaration of the quantity of the goods imported by the importer. In the absence of such facts, it cannot be alleged that the appellants were involved in aiding and abetting customs duty evasion by mis-declaring the quantity of goods imported by the importer. There was no evidence that the appellant and importer were sharing benefits out of fraudulent imports - The Customs Broker and its G-Card Holder being mere processors of documents cannot be held liable for the alleged mis-declaration - The penalties imposed on the appellants under Section 112(a)(ii) of the Customs Act, 1962 are set aside and the appeals are allowed [Read less]

GST – Karnataka AAR - Classification of Service of loading of Ballast into Railway Wagons – Works Contract or Composite Supply – Applicant engaged in executing contracts for Indian Railways including supply and loading of ballast stacked adjacent railway tracks into railway wagons using JCB loader - Whether activity of loading ballast already owned by Railways into railway wagons constitutes works contract or composite supply with ballast, or is independent service subject to separate classification and rate – HELD – The definition of works contract under Section 2(119) of CGST Act, 2017 requires activity to invo... [Read more]

GST – Karnataka AAR - Classification of Service of loading of Ballast into Railway Wagons – Works Contract or Composite Supply – Applicant engaged in executing contracts for Indian Railways including supply and loading of ballast stacked adjacent railway tracks into railway wagons using JCB loader - Whether activity of loading ballast already owned by Railways into railway wagons constitutes works contract or composite supply with ballast, or is independent service subject to separate classification and rate – HELD – The definition of works contract under Section 2(119) of CGST Act, 2017 requires activity to involve building, construction, fabrication, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property with transfer of property in goods. Activity of supplying and loading ballast does not involve any such activity in relation to immovable property and therefore does not satisfy essential conditions of works contract - Supply of ballast and loading activity are separate and independently identifiable supplies since Letter of Acceptance prescribes separate rates for each item, separate invoices are raised at different points in time – The ownership of ballast transferred to Railways at delivery after which applicant has no custody or liability for ballast, and loading activity is executed subsequently only on separate instructions from Railways – The Composite supply under Section 2(30) requires supplies to be naturally bundled and supplied in conjunction with each other in ordinary course of business and one to be principal supply. In the present case, the supplies fail to satisfy requirement of being naturally bundled as contractual arrangement itself treats activities as separate obligations with distinct rates, separate consideration, and separate execution – The activity of ballast at Railway depot or nominated location and loading of Railway’s ballast collected at yard/depot into Railway wagons using Mechanical Loader constitute separate and independent supplies and cannot be regarded as a composite supply merely because both activities emanate from the same work order - From the nature of the activity, the scope of Heading 9967, and the Explanatory Notes to Group 99671 relating to cargo handling services, the activity of loading ballast into Railway wagons by using JCBs is appropriately classifiable under SAC 996719– “Other cargo and baggage handling services” falling under Heading 9967 as “Supporting services in transport”. The said service is liable to GST at the rate of 18% in terms of Entry No. 11 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended – Ordered accordingly [Read less]

GST - Input Tax Credit Fraud - Bail Application - Custodial Detention - Applicant was arrested in connection with investigation into alleged Input Tax Credit fraud relating to availing and passing on of fake ITC - Applicant applied for regular bail contending that essential ingredients of offence are not made out, investigation is complete, final complaint has been filed, entire case is based on documentary evidence already in custody of Department, and no further custodial detention is warranted - Whether regular bail should be granted when investigation is completed, final complaint is filed, and entire prosecution case ... [Read more]

GST - Input Tax Credit Fraud - Bail Application - Custodial Detention - Applicant was arrested in connection with investigation into alleged Input Tax Credit fraud relating to availing and passing on of fake ITC - Applicant applied for regular bail contending that essential ingredients of offence are not made out, investigation is complete, final complaint has been filed, entire case is based on documentary evidence already in custody of Department, and no further custodial detention is warranted - Whether regular bail should be granted when investigation is completed, final complaint is filed, and entire prosecution case is based on documentary and electronic evidence already in custody of the Department - HELD - Taking into consideration the nature and gravity of allegations, the fact that investigation has been completed and final complaint has already been filed, the fact that entire case is based on documentary and electronic evidence already in custody of Department, the period of custody of applicant since 22.01.2026, and the likelihood of trial taking considerable time to conclude, further custodial detention of applicant is not warranted at this stage - Considering the overall facts and circumstances of case and without expressing any opinion on merits of matter, the applicant deserves to be released on bail. - Applicant is enlarged on bail on personal bond. Order shall remain in force till disposal of case – Ordered accordingly [Read less]

IGST/Customs - Subsequent demand for differential duty and penalty after payment of differential duty pursuant to audit objections - Appellant imported motor vehicle parts and claimed benefit of lower IGST rate of 18% under Serial No.452L of Schedule III to Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017 - Department contended goods were classifiable under Serial No.170 attracting IGST at 28% - Whether proceedings under Section 28(4) of Customs Act could be initiated after appellant had already paid entire differential duty with interest pursuant to audit objections and whether proceedings were barred by lim... [Read more]

IGST/Customs - Subsequent demand for differential duty and penalty after payment of differential duty pursuant to audit objections - Appellant imported motor vehicle parts and claimed benefit of lower IGST rate of 18% under Serial No.452L of Schedule III to Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017 - Department contended goods were classifiable under Serial No.170 attracting IGST at 28% - Whether proceedings under Section 28(4) of Customs Act could be initiated after appellant had already paid entire differential duty with interest pursuant to audit objections and whether proceedings were barred by limitation – HELD - Section 28(1) of the Customs Act, 1962 applies where duty has not been levied, short-levied or short-paid for reasons other than collusion, wilful misstatement or suppression of facts. Section 28(4) applies only where short levy or short payment is by reason of such conduct - In present case relevant date is when audit objections were treated as closed after appellant paid entire differential duty with interest. Even assuming Section 28(1) applies, SCN ought to have been issued within prescribed period but was issued more than three years later making proceedings clearly barred by limitation under Section 28(1) - Section 28(2) further provides that where person pays duty with applicable interest under Section 28(1) and informs proper officer of such payment, no show cause notice shall thereafter be issued in respect of duty, interest or any penalty relating thereto. Show cause notice does not contain specific allegation of wilful misstatement, collusion or suppression of material facts but merely states appellant wrongly availed benefit of lower IGST rate - Absence of essential ingredients required under Section 28(4) means extended period cannot be invoked. Plea of suppression raised for first time in counter affidavit cannot supplement contents of show cause notice - Existence of alternative remedy of appeal under Section 128 is not absolute bar to writ jurisdiction where impugned proceedings are without jurisdiction or barred by limitation - Impugned order is set aside and writ petition is allowed [Read less]

GST - Condonation of delay in filing statutory appeal - Non-communication of order and denial of personal hearing - Whether delay in filing statutory appeal beyond prescribed period can be condoned when impugned order was not effectively communicated to the taxpayer and mandatory personal hearing was denied - HELD - While the Appellate Authority is bound by statutory provisions of limitation provided under Section 107 of CGST Act 2017, considering the reasons for non-filing of appeal being beyond the control of the petitioner, non-adjudication of the appeal on merits would cause grave injury and prejudice. The delay is bon... [Read more]

GST - Condonation of delay in filing statutory appeal - Non-communication of order and denial of personal hearing - Whether delay in filing statutory appeal beyond prescribed period can be condoned when impugned order was not effectively communicated to the taxpayer and mandatory personal hearing was denied - HELD - While the Appellate Authority is bound by statutory provisions of limitation provided under Section 107 of CGST Act 2017, considering the reasons for non-filing of appeal being beyond the control of the petitioner, non-adjudication of the appeal on merits would cause grave injury and prejudice. The delay is bona fide and occurred solely due to absence of effective communication of the impugned order and failure of respondents to afford the mandatory opportunity of personal hearing under Section 75(4) of CGST Act 2017. Immediately upon acquiring knowledge of the impugned order, the petitioner took prompt steps to seek legal recourse - Following the consistent view taken by this Court in similar cases, sufficient cause for delay has been demonstrated. Non-adjudication on merits would be against principles of justice and fair play - The writ petition is allowed to the extent of condoning the delay. The Appellate Authority is directed to entertain the appeal of the petitioner and adjudicate the same on merits – The petition is allowed [Read less]

Central Excise – Valuation of Goods Cleared to Related Parties - During relevant period, Appellant cleared granulated slag to joint venture at lower rates than rates charged from independent buyers. Department issued EA-2000 audit and deficiency memo alleging that Appellant cleared granulated slag at lower rates to joint venture. Subsequently Show Cause Notice was issued invoking extended period of limitation proposing demand alleging that Rule 10(b) of Central Excise Valuation Rules applicable only when goods solely cleared to interconnected units and since Appellant cleared goods to both joint venture and independent b... [Read more]

Central Excise – Valuation of Goods Cleared to Related Parties - During relevant period, Appellant cleared granulated slag to joint venture at lower rates than rates charged from independent buyers. Department issued EA-2000 audit and deficiency memo alleging that Appellant cleared granulated slag at lower rates to joint venture. Subsequently Show Cause Notice was issued invoking extended period of limitation proposing demand alleging that Rule 10(b) of Central Excise Valuation Rules applicable only when goods solely cleared to interconnected units and since Appellant cleared goods to both joint venture and independent buyers, Rule 10(b) inapplicable - Whether extended period of limitation was invocable in facts and circumstances of case – HELD – Tribunal in case of Kirloskar Brothers Ltd. held in identical factual situation that when EA-2000 audit team had requisite details from books of accounts maintained by assessee and rectification entries were put up before them, such conduct does not point to suppression. When reputed public limited company maintains proper books of accounts and rectifies mistakes by passing proper counter entries, extended period of limitation is not invocable. Facts in present case are similar to Kirloskar Brothers Ltd. case. Audit team had full access to records and entries were available. No suppression attributable to Appellant – Extended period of limitation is not invocable. Impugned proceedings not sustainable and set aside – The appeal is allowed [Read less]

Customs - Revocation of Customs Broker License and forfeiture of security deposit for alleged violations of KYC and due diligence requirements under Customs Brokers Licensing Regulations – Overvaluation of export goods to avail undue benefits under the MEIS and Duty Drawback Scheme - Whether the Customs Broker License could be revoked and security deposit forfeited for alleged violations of Regulations 10(d), 10(e), 10(m) and 10(n) CBLR, 2018 in relation to alleged overvaluation of exported goods by the exporter - HELD - There is no valid offence report as contemplated under Regulation 17 of CBLR, 2018 and in the absence... [Read more]

Customs - Revocation of Customs Broker License and forfeiture of security deposit for alleged violations of KYC and due diligence requirements under Customs Brokers Licensing Regulations – Overvaluation of export goods to avail undue benefits under the MEIS and Duty Drawback Scheme - Whether the Customs Broker License could be revoked and security deposit forfeited for alleged violations of Regulations 10(d), 10(e), 10(m) and 10(n) CBLR, 2018 in relation to alleged overvaluation of exported goods by the exporter - HELD - There is no valid offence report as contemplated under Regulation 17 of CBLR, 2018 and in the absence of a valid offence report, the revocation proceedings initiated under CBLR, 2018 are not sustainable. There is no evidence brought on record showing connivance, knowledge or involvement of the Appellant in the alleged overvaluation - A Customs Broker cannot be expected to function as an investigating agency and verify whether the valuation adopted by the Customs Broker for the goods exported are proper or not. The Customs Broker filed export documents before the Customs authorities on the basis of the documents furnished by the exporter. The shipping bills were assessed by Customs officers and Let Export Orders were issued after examination and clearance by the Customs authorities. The Customs Broker cannot be held responsible if at a later stage, the goods exported were found to be overvalued - The Customs Broker cannot be penalized merely because at a later stage, the exporter is alleged to have indulged in irregularities, particularly when the Appellant had completed KYC verification and acted upon documents appearing genuine on their face. The Customs Broker is a processing agent of documents and is not an inspector to weigh the genuineness of the transaction - The appellant has not violated any of the provisions of Regulations 10(d), 10(e), 10(m) and 10(n) of the CBLR, 2018 - The impugned order revoking the License, forfeiting the security deposit and imposing penalty on the appellant is set aside and the appeal is allowed [Read less]

GST - Pre-deposit requirement in cases involving only penalty, Validity of Retrospective application of amendment to Section 112(8) of CGST Act, 2017 to period prior to 01.10.2025 - Appellant preferred appeal before Tribunal but Registry pointed defects and raised question of statutory pre-deposit requirement. Appellant contended that the impugned order involved only penalty without any tax demand, and that pre-deposit requirement under proviso to Section 112(8) was introduced by Finance Act 2025 effective from 01.10.2025 whereas impugned order was issued on 12.01.2024, prior to such amendment - Whether statutory pre-depos... [Read more]

GST - Pre-deposit requirement in cases involving only penalty, Validity of Retrospective application of amendment to Section 112(8) of CGST Act, 2017 to period prior to 01.10.2025 - Appellant preferred appeal before Tribunal but Registry pointed defects and raised question of statutory pre-deposit requirement. Appellant contended that the impugned order involved only penalty without any tax demand, and that pre-deposit requirement under proviso to Section 112(8) was introduced by Finance Act 2025 effective from 01.10.2025 whereas impugned order was issued on 12.01.2024, prior to such amendment - Whether statutory pre-deposit is required under Section 112(8) of CGST Act for an appeal against order demanding only penalty when such order was issued prior to 01.10.2025 - HELD – The proviso to Section 112(8) was effective from 01.10.2025 vide Finance Act, 2025 dated 29.03.2025, wherein pre-deposit was prescribed in cases where issue involved is only the penalty - In the present case, the SCN was issued on 29.09.2022, Order-in-Original was issued on 28.08.2023 and impugned order was issued on 12.01.2024. Thus, the impugned order was issued very much before the amendment became effective i.e. 01.10.2025 - The requirement of pre-deposit in cases involving only penalty before the amendment became effective was decided by the High Court of Calcutta which held that where the appeal is carried against an order pertaining only to penalty and there is no amount of tax in dispute, no requirement for making any pre-deposit exists - When a statute provides for a right to prefer appeal, conditions can limit such right but non-existent conditions affecting substantive rights cannot be imported into statute by any authority. The amendment to proviso of Section 112(8) by Finance Act 2025 effective from 01.10.2025 did not indicate any retrospective application or necessary implication - As the impugned order was issued much before 01.10.2025, the requirement of pre-deposit shall not be applicable - No pre-deposit is required to be made for admission of the appeal in the present case – Ordered accordingly [Read less]

GST – Service of Notice on Common Portal – Petitioner contended that notices issued by uploading in common portal in terms of Section 169(1)(d) of the CGST Act, 2017 were not validly served as common portal was not specifically notified under Section 146 of CGST Act for purpose of serving notice under Section 169(1)(d) - Whether notices uploaded on common portal without specific notification under Section 146 of CGST Act identifying portal for service of notice under Section 169(1)(d) constitute valid service of notice – HELD – Section 169(1)(d) provides for service of notice through common portal but Section 146 o... [Read more]

GST – Service of Notice on Common Portal – Petitioner contended that notices issued by uploading in common portal in terms of Section 169(1)(d) of the CGST Act, 2017 were not validly served as common portal was not specifically notified under Section 146 of CGST Act for purpose of serving notice under Section 169(1)(d) - Whether notices uploaded on common portal without specific notification under Section 146 of CGST Act identifying portal for service of notice under Section 169(1)(d) constitute valid service of notice – HELD – Section 169(1)(d) provides for service of notice through common portal but Section 146 of CGST Act requires notification of such portal with specific reference to purpose for which portal is to be used. Punjab and Haryana High Court in Luxmi Traders case held that notification under Section 146 must contain reference to requirement of service of notice under Section 169(1)(d) and mere general notification of common portal without specific identification of service of notice as purpose is not sufficient. Review of notifications issued under Section 146 reveals none contain specific reference to service of notice under Section 169(1)(d) - Prima facie case established in favor of petitioner that service of notice through portal without proper statutory notification under Section 146 for that specific purpose is not valid – Interim stay granted on further proceedings for period of two months – Ordered accordingly [Read less]

Haryana General Sales Tax Rules, 1975 - Tax Concession – New Industrial Unit vs Expansion Unit – Classification and Eligibility – Appellant established manufacturing unit in 2000-2001 for manufacturing switches and other automobile parts. Appellant applied for tax concession claiming to be a new industrial unit under Rule 28C of the Haryana General Sales Tax Rules, 1975. Department rejected claim on ground that Appellant already had existing unit at Sonepat established in 1989 and that Gurugram unit was expansion of existing unit rather than new unit - Whether separate manufacturing unit at different location manufac... [Read more]

Haryana General Sales Tax Rules, 1975 - Tax Concession – New Industrial Unit vs Expansion Unit – Classification and Eligibility – Appellant established manufacturing unit in 2000-2001 for manufacturing switches and other automobile parts. Appellant applied for tax concession claiming to be a new industrial unit under Rule 28C of the Haryana General Sales Tax Rules, 1975. Department rejected claim on ground that Appellant already had existing unit at Sonepat established in 1989 and that Gurugram unit was expansion of existing unit rather than new unit - Whether separate manufacturing unit at different location manufacturing both same items and different items can be treated as new industrial unit or should be classified as expansion of existing unit – HELD – The Rule 28C(3)(f) defines expansion as industrial capacity set up during operative period creating additional production facilities for manufacture of same product as unit before expansion with additional fixed capital investment exceeding 25% of fixed capital investment of unit before expansion at same or new location. Rule 28C(k) defines new industrial unit as unit set up in State which has come into commercial production during operative period or having come into commercial production under prior Rule has not started availing any tax concessions - Appellant had existing unit at Sonepat since 1989 but had not availed any tax exemption for said unit. The mere fact that Appellant had existing unit earlier does not preclude it from being treated as new industrial unit for purposes of tax concession if it had not availed concession for existing unit. The application was considered on merits and accepted but classified as expansion rather than new unit. Tribunal erred in affirming view restricting tax exemption by treating appellant as existing unit undertaking expansion – The impugned order is set aside and matter is remitted to Tribunal for fresh adjudication - The appeal succeeds and allowed [Read less]

Customs – Valuation of Imported Goods – Related Parties and Administrative Control – Respondent imported bioceramics from Malaysia. Department alleged that Conybio Malaysia was real supplier and had administrative and financial control over Respondent company despite imports shown as from third party suppliers - Respondent contended aborted investment proposal did not materialize and no shares were ever allotted. Whether correspondence and requests for share certificates establish that Conybio Malaysia had administrative and financial control over Respondent – HELD – Adjudicating authority's finding that Conybio ... [Read more]

Customs – Valuation of Imported Goods – Related Parties and Administrative Control – Respondent imported bioceramics from Malaysia. Department alleged that Conybio Malaysia was real supplier and had administrative and financial control over Respondent company despite imports shown as from third party suppliers - Respondent contended aborted investment proposal did not materialize and no shares were ever allotted. Whether correspondence and requests for share certificates establish that Conybio Malaysia had administrative and financial control over Respondent – HELD – Adjudicating authority's finding that Conybio Malaysia had active participation rested entirely on correspondence requesting share certificates. In absence of evidence on record that share certificates were actually allotted or requests were complied with, mere requests cannot establish allotment of shares. Assumption that request for share certificate would arise only upon allotment of shares lacks evidentiary foundation. Being limited company registered under Companies Act, it would not be difficult to ascertain whether Malaysian personnel were shareholders if they actually were. Correspondence constituted part of aborted investment proposal which did not fructify and allotted no shares. Finding that Conybio Malaysia had administrative and financial control has no basis – The finding is set aside - Valuation of Imported Goods – Actual Supplier and Parallel Invoices – Department contended that Conybio Malaysia was actual supplier of goods imported and showed as from Bryncoch Malaysia, and alleged that parallel invoices at fifty percent higher prices proved undervaluation. Respondent submitted that parallel invoices were proforma invoices raised during aborted investment proposal and payment was made only to Bryncoch at invoiced prices without any excess remittance - Whether parallel invoices without evidence of actual payment or share allotment can constitute valid evidence of undervaluation – HELD – Adjudicating authority accepted parallel invoices as evidence despite allegation that undervaluation would be adjusted through share allotment which never occurred. Allegations that payments made for suppressed value lack supporting evidence of any remittances in excess of invoiced prices. Tribunal in Oswal Metal Works held that proforma invoices can never be basis for alleging undervaluation without supporting evidence of flowback of consideration. Charge of undervaluation based on proforma invoices without evidence of actual payment or share transfer is not sustainable. Business was at incipient stage and certain mix-ups cannot question legitimacy of transactions without evidence. Non-audited Statement of Accounts cannot lend authenticity to transactions – Confirmation of demand based on parallel invoices is not sustainable - Valuation of Imported Goods – Related Parties – Artificial Persons vs Natural Persons – Department alleged that directors of Rekamacro Resources were brother and mother of Respondent's president and concluded parties were related family members. Respondent contended that concept of members of same family under Rule 2(2)(viii) applies only to natural persons and not to artificial persons. Whether artificial persons like limited companies and Respondent can be related parties based on family connections of their individual directors and shareholders – HELD – Supreme Court in Alembic Glass Industries held that limited company is juridical person separate from its shareholders and directors and common directorship is no ground to treat companies as related. Cooper Pharma case held that limited company cannot be treated as related person based only on blood relations of shareholders/directors. Rule 2(2)(viii) concept of family members applies only to natural persons and not artificial persons. Relationship between Respondent and Malaysian companies through family connections of individuals is not sufficient to establish parties as related under Rule 2(2). Department failed to establish relationship under any clause of Rule 2(2) – Finding that Reka Network and Rekamacro Resources are related parties is not legally sustainable - Customs – Valuation – Retail Selling Price – Post-Import Redetermination – Respondent declared RSP for imported goods but Department redetermined RSP claiming misdeclaration. Respondent submitted details of invoices on which revised RSP was based were not furnished and prior to March 2008 no statutory provision existed for post-import redetermination of RSP. Whether Department can redetermine RSP post-import without statutory mechanism and without furnishing supporting documents to importer – HELD – No statutory machinery existed for redetermining RSP of imported goods prior to 01.03.2008. Section 4A Subsection 4 ascertaining or redetermining RSP was introduced only from 14.05.2003 and prescribed rules were notified only on 01.03.2008. During period prior to March 2008 no methodology was available for reassessing or redetermining RSP. Documentary evidence on which RSP was adopted/revised was not furnished to Respondent despite specific request, causing serious prejudice and negating principles of natural justice. Tribunal in Acer India case held there is no machinery or provisions for ascertaining RSP when RSP not declared by importer on imported articles. Demand based on RSP is unsustainable – Demand for Additional Duty based on RSP is set aside - Classification of Goods – Medicament vs Skin-Care Product – Department reclassified product Cony Takara from CTH 3004 (Medicament) to CTH 3304 (Skin-Care Product). Respondent contended that product possessed therapeutic and curative attributes being a foot-care sheet that promotes blood circulation and detoxification, placing it on skin, thereby meriting classification as medicament. Whether product with curative attributes for treating pain and promoting blood circulation should be classified as skin-care product – HELD – HSN Explanatory Notes for CTH 3004 specifically cover measured doses including in transdermal administrative form as patches for direct application to skin for therapeutic or prophylactic use. Supreme Court in Ciens Labs case held that when product contains pharmaceutical ingredients with therapeutic or curative properties, curative attributes render product a medicament not cosmetic. Product's primary function is cure not care and contains curative ingredients, it must be branded medicament. Adjudicating authority's finding that product is foot-care sheet with therapeutic attributes but classified as skin-care product lacks reasoning and explanation. Product used when person is in pain to ease pain and activate blood circulation is medicament for cure not skin-care product. Reclassification under CTH 3304 is not correct – Product Cony Takara merits classification under CTH 3004 as Medicament - Customs – Cross-Objections – Scope and Maintainability under Customs Act – Appellant Principal Commissioner of Customs challenged non-imposition of redemption fine in common order. Respondent importer filed cross-objections contesting substantive portions of order including charges of undervaluation and reclassification. Revenue raised preliminary objection that cross-objection scope is restricted to points raised in revenue appeal and cannot challenge entire order. Whether cross-objections filed under Section 129A(4) of Customs Act can be used to challenge substantive portions of adjudicating authority order beyond points raised in appeal filed by other party – HELD – Section 129A(4) clearly provides that Respondent in an appeal filed by other party can file cross-objections against any part of order appealed against within 45 days and CESTAT is obliged to dispose of cross-objection as if it were an appeal. Statutory provision employs clear and categorical language conferring right to contest order as whole or part thereof in addition to contesting grounds raised in appeal memorandum. Trib [Read less]

GST – Dismissal of Appeal due to shortfall in statutory Pre-deposit - Procedural Defect - Petitioner preferred an appeal before Appellate Authority. However, there was shortfall of pre-deposit of 10%. Petitioner deposited the shortfall amount within the grace period of one month prescribed under statute. Notwithstanding the completion of pre-deposit within the grace period, the Appellate Authority dismissed the appeal on the sole ground that pre-deposit was not made at the time of filing of appeal - Whether an appeal can be dismissed solely on the ground of failure to make statutory pre-deposit of 10% under Section 107(6... [Read more]

GST – Dismissal of Appeal due to shortfall in statutory Pre-deposit - Procedural Defect - Petitioner preferred an appeal before Appellate Authority. However, there was shortfall of pre-deposit of 10%. Petitioner deposited the shortfall amount within the grace period of one month prescribed under statute. Notwithstanding the completion of pre-deposit within the grace period, the Appellate Authority dismissed the appeal on the sole ground that pre-deposit was not made at the time of filing of appeal - Whether an appeal can be dismissed solely on the ground of failure to make statutory pre-deposit of 10% under Section 107(6)(b) of the CGST Act, 2017 when the shortfall has been made good within the grace period before the order is passed - HELD – The procedural requirements cannot be the sole ground for dismissing an appeal without giving an adequate opportunity to the appellant to rectify the procedural defects - The Appellate Authority ought to have issued a defect memo calling upon the petitioner to produce proof of pre-deposit so as to give adequate opportunity for curing the procedural defect. Since the shortfall of pre-deposit had been made good by the petitioner before the order was passed, the appeal deserves to be heard on merits. Dismissing the appeal in a mechanical manner without giving adequate opportunity to explain the stand is contrary to the principle of natural justice - The Order-in-Appeal is set aside and the appeal is restored. The Appellate Authority shall issue fresh notice to the petitioner and proceed to dispose of the appeal on merits by a reasoned order after giving adequate opportunity of being heard to the petitioner – The writ petition is allowed [Read less]

Tamil Nadu VAT Act, 2006 - Penalty for wilful suppression of turnover - Invokability of penalty provision without specific mention of expression "wilfully suppressed" in assessment order - Appellant submitted turnover in Form-WW but omitted the same from monthly returns filed throughout the financial year, which omission was discovered only after inspection of records by authorities after deemed assessment was completed - Whether penalty under Section 27(3)(b) of TNVAT Act for wilful suppression of turnover can be invoked when assessment order does not specifically use the expression "wilfully suppressed" but facts reflect... [Read more]

Tamil Nadu VAT Act, 2006 - Penalty for wilful suppression of turnover - Invokability of penalty provision without specific mention of expression "wilfully suppressed" in assessment order - Appellant submitted turnover in Form-WW but omitted the same from monthly returns filed throughout the financial year, which omission was discovered only after inspection of records by authorities after deemed assessment was completed - Whether penalty under Section 27(3)(b) of TNVAT Act for wilful suppression of turnover can be invoked when assessment order does not specifically use the expression "wilfully suppressed" but facts reflect suppression and escaped turnover - HELD - Mere replication or specific mention of the expression "wilfully suppressed" in the assessment order is not a necessary pre-condition for invoking penalty provisions for wilful suppression. If the material on record clearly discloses wilful suppression then penalty imposed by invoking Section 27(3)(b) cannot be questioned - In the present case despite showing turnover in Form-WW, the appellant admittedly and conveniently omitted it from monthly returns. Form-WW was filed after the due date for deemed assessment and turnover was not truly reflected in monthly returns, which clearly proves intention of appellant to suppress the turnover - The omission in monthly returns was never explained by appellant throughout proceedings. The fact that assessment went through process of deemed assessment and thereafter inspection revealed discrepancies between Form-WW and monthly returns, establishes wilfulness - The findings of the Assessing Officer imposing penalty were rightly made based on documentary evidence even though specific expression "wilfully suppressed" was not used - The Tax Case is dismissed and order of Assessing Officer imposing penalty is upheld. Order of Appellate Authority setting aside the penalty is set aside – The appeal is dismissed [Read less]

GST – Validity of issue of Composite Notice for Multiple Assessment Years – Whether single consolidated Show Cause Notice covering multiple assessment years can be legally issued or separate notices are required for each assessment year – HELD – In Joint Commissioner (Intelligence & Enforcement) Vs. M/s. Lakshmi Mobiles Accessories and Tharayil Medicals Vs. Deputy Commissioner, Audit Division, Division Bench of Kerala High Court held that issuance of composite notice for multiple assessment years is not legally sustainable. Separate Show Cause Notice is required to be issued for each assessment year - The consolida... [Read more]

GST – Validity of issue of Composite Notice for Multiple Assessment Years – Whether single consolidated Show Cause Notice covering multiple assessment years can be legally issued or separate notices are required for each assessment year – HELD – In Joint Commissioner (Intelligence & Enforcement) Vs. M/s. Lakshmi Mobiles Accessories and Tharayil Medicals Vs. Deputy Commissioner, Audit Division, Division Bench of Kerala High Court held that issuance of composite notice for multiple assessment years is not legally sustainable. Separate Show Cause Notice is required to be issued for each assessment year - The consolidated Show Cause Notice issued by the respondents for multiple financial years are quashed granting liberty to the respondent to issue separate notices for the relevant assessment years – The petition is disposed of [Read less]

Service Tax – Liability of Sub-contractor, Applicability of Extended Period of Limitation – Whether sub-contractor is liable to pay service tax on services provided to main contractor when principal contractor has already discharged service tax liability and whether extended period of limitation under Section 73(1) proviso can be invoked – HELD – On merits the issue is covered by decision of Larger Bench in CST New Delhi vs Melange Developers Pvt Limited establishing that even if main contractor has discharged service tax liability, it does not discharge sub-contractor of its independent obligation of paying tax on... [Read more]

Service Tax – Liability of Sub-contractor, Applicability of Extended Period of Limitation – Whether sub-contractor is liable to pay service tax on services provided to main contractor when principal contractor has already discharged service tax liability and whether extended period of limitation under Section 73(1) proviso can be invoked – HELD – On merits the issue is covered by decision of Larger Bench in CST New Delhi vs Melange Developers Pvt Limited establishing that even if main contractor has discharged service tax liability, it does not discharge sub-contractor of its independent obligation of paying tax on portion of consideration received by sub-contractor – Sub-contractor is essentially taxable service provider as services provided are used by main service provider for completion of work and does not alter fact of provision of taxable service by sub-contractor – Master Circular No. 96/7/2007-ST dated 23.08.2007 clarified that sub-contractor must discharge service tax liability while providing taxable service to main or principal contractor and cannot escape liability on plea that payment would amount to double taxation – However on issue of invocation of extended period of limitation, Department has not produced any substantive evidence to prove existence of ingredients for invoking extended period and in absence thereof cannot be said that appellant willfully suppressed facts to evade payment of tax – Issue of liability of sub-contractor to pay service tax was an interpretational issue which was settled by decision of Larger Bench and before that there were contradictory views – Extended period cannot be used against appellant in interpretational issues – The Show Cause Notice is time barred and demand is not sustainable – Impugned order modified to that extent – The appeal is allowed [Read less]

Service Tax - Rejection of Refund on new ground – Refund of service tax deposited on sale of flats which were cancelled - Tribunal allowed the appeal and held that the refund applications were proper, that refund was a right that had accrued in favour of the petitioner - When matter came back before adjudicating authority for processing the refund, a fresh impugned order was passed rejecting the refund on a different ground altogether. This ground was never put to the petitioner by way of show cause notice - Whether after Tribunal has decided the substantive issue and directed refund with consequential relief, the adjudi... [Read more]

Service Tax - Rejection of Refund on new ground – Refund of service tax deposited on sale of flats which were cancelled - Tribunal allowed the appeal and held that the refund applications were proper, that refund was a right that had accrued in favour of the petitioner - When matter came back before adjudicating authority for processing the refund, a fresh impugned order was passed rejecting the refund on a different ground altogether. This ground was never put to the petitioner by way of show cause notice - Whether after Tribunal has decided the substantive issue and directed refund with consequential relief, the adjudicating authority can reject the refund on a new ground not previously communicated to the assessee - HELD - Once the Tribunal has held that refund was eligible on merits and directed consequential relief, the adjudicating authority cannot reject the refund on a new ground that was not put forward before the assessee by way of show cause notice. The assessee could not have replied to such ground, thereby violating the principles of natural justice. The adjudicating authority has to process the refund in accordance with the Tribunal's directions and cannot introduce new grounds of rejection at the implementation stage - The impugned order is quashed and set aside. The authority concerned is directed to issue a fresh show cause notice to the petitioner with regard to the ground relating to payment of tax on abated value. The petitioner shall be granted opportunity of hearing before passing any reasoned order - The writ petition is disposed of [Read less]

GST - Section 29(2) of the CGST Act, 2017 - Cancellation of registration for filing of NIL returns – Validity of cancellation of registration on the ground of filing NIL returns for several months - HELD – The powers to cancel the registration can be exercised only in the circumstances enumerated under Sub-Section (2) of Section 29, which does not contemplate cancelation of the registration on the ground of filing of NIL return – Since the filing of NIL returns is not a circumstance contemplated by sub-section (2) of section 29 for cancellation of registration, the show-cause notice and the order cancelling registrat... [Read more]

GST - Section 29(2) of the CGST Act, 2017 - Cancellation of registration for filing of NIL returns – Validity of cancellation of registration on the ground of filing NIL returns for several months - HELD – The powers to cancel the registration can be exercised only in the circumstances enumerated under Sub-Section (2) of Section 29, which does not contemplate cancelation of the registration on the ground of filing of NIL return – Since the filing of NIL returns is not a circumstance contemplated by sub-section (2) of section 29 for cancellation of registration, the show-cause notice and the order cancelling registration are quashed - The writ petition is allowed [Read less]

Central Excise – Manufacture, CENVAT credit of Customs Duty and Countervailing Duty paid through DEPB scrips, Plea of revenue neutrality – Excisability of process of placing imported ready-to-use film rolls in printed cartons with brand name and maximum retail price amounts to manufacture and whether the extended period of limitation is invocable - HELD - The issue of excisability of goods is intrinsically connected with the rate of duty and the question of manufacture was the primary issue raised. The Respondent-assessee having not assailed the findings of the Original Authority on the issue of manufacture and excisab... [Read more]

Central Excise – Manufacture, CENVAT credit of Customs Duty and Countervailing Duty paid through DEPB scrips, Plea of revenue neutrality – Excisability of process of placing imported ready-to-use film rolls in printed cartons with brand name and maximum retail price amounts to manufacture and whether the extended period of limitation is invocable - HELD - The issue of excisability of goods is intrinsically connected with the rate of duty and the question of manufacture was the primary issue raised. The Respondent-assessee having not assailed the findings of the Original Authority on the issue of manufacture and excisability and having only confined its challenge before the Tribunal to the alternate plea of revenue neutrality, thereby accepting the finding on manufacture, the excisability of goods is no longer an issue for determination - For the period upto 31.08.2004, CENVAT credit could not be availed for Customs Duty and Countervailing Duty paid through debit of DEPB scrips and unless duty was paid in cash, CENVAT credit was not available. The value of DEPB scrip, once used, gets extinguished and there would be no question of seeking CENVAT credit thereafter - Since the Respondent pleaded revenue neutrality, the burden was on the Respondent to place supporting materials to establish that CENVAT credit of Customs Duty and Countervailing Duty paid through DEPB scrips was equal to or exceeded the amount of duty demanded. The findings of the Original Authority on deliberate suppression of facts with intention to evade payment of duty and that plea of bona fide belief was not made out are based on evidence and material on record. The extended period of limitation under Section 11A of the Central Excise Act was correctly invoked - The Tribunal's finding that the demand was barred by limitation is patently unreasonable and unsustainable. Penalty and interest imposed by the Original Authority are sustainable - The order passed by the Tribunal is set aside. The Final Order of the Original Authority confirming the demand for Central Excise Duty, interest and penalty is confirmed – The Revenue appeal is allowed [Read less]

GST – Reply of SCN after prescribed due date, Opportunity of Hearing under Section 75(4) of the CGST Act – Petitioner filed reply to Show Cause Notice after due date and requested personal hearing. Authority passed assessment order without considering reply or granting personal hearing, proceeding on ground that no reply was filed within stipulated time - Whether opportunity of personal hearing must be granted where reply and request for hearing are received after prescribed due date but before order is passed – HELD – The Section 75(4) of CGST Act provides that opportunity of hearing shall be granted where written... [Read more]

GST – Reply of SCN after prescribed due date, Opportunity of Hearing under Section 75(4) of the CGST Act – Petitioner filed reply to Show Cause Notice after due date and requested personal hearing. Authority passed assessment order without considering reply or granting personal hearing, proceeding on ground that no reply was filed within stipulated time - Whether opportunity of personal hearing must be granted where reply and request for hearing are received after prescribed due date but before order is passed – HELD – The Section 75(4) of CGST Act provides that opportunity of hearing shall be granted where written request is received from person chargeable with tax or where adverse decision is contemplated. The issuance of Show Cause Notice itself indicates contemplation of adverse proceedings – The plain reading of Section 75(4) provides that written request is not even required in case where adverse decision is contemplated as contemplation of adverse decision triggers duty to grant hearing - The DRC-01 Form attached to SCN contemplates personal hearing even after due date for submission of reply and no material on record shows that date was fixed for personal hearing before written request was made. Impugned order does not refer to any date fixed for personal hearing and proceeds on false premise that no reply was filed, though reply was actually filed well before the assessment order. Authority failed to apply mind to proceedings and did not consider reply filed by assessee – The assessment order is set aside and fresh proceedings shall be initiated from stage of consideration of reply and after providing opportunity of personal hearing as required by law. Exemplary costs of Rs.10,000 imposed on respondent authority – The writ petition is allowed [Read less]

GST - Discrepancy in place of delivery in E-Way Bill - Evidentiary value of statement of driver not recorded in Form GST MOV-01 – During transit, the vehicle was intercepted by the respondent authorities on the ground that the place of delivery mentioned in the E-Way Bill was different from the place where the goods were being transported - Seizure order was passed under Section 129(1) of the CGST Act, 2017 and a show cause notice was issued under Section 129(3) for imposing penalty - The petitioner contended that the discrepancy was a technical error occurred due to a glitch in the software system and that the statement... [Read more]

GST - Discrepancy in place of delivery in E-Way Bill - Evidentiary value of statement of driver not recorded in Form GST MOV-01 – During transit, the vehicle was intercepted by the respondent authorities on the ground that the place of delivery mentioned in the E-Way Bill was different from the place where the goods were being transported - Seizure order was passed under Section 129(1) of the CGST Act, 2017 and a show cause notice was issued under Section 129(3) for imposing penalty - The petitioner contended that the discrepancy was a technical error occurred due to a glitch in the software system and that the statement of the driver relied upon by the authorities was not recorded in the prescribed Form GST MOV-01 and therefore has no evidentiary value - Whether a statement of the driver recorded on a plain sheet of paper and not in the prescribed statutory Form GST MOV-01 can be relied upon to support findings against the taxpayer - HELD - A statement recorded otherwise than in the prescribed Form GST MOV-01 is of very little evidentiary value and cannot be relied upon for making findings adverse to the taxpayer. The statutory scheme specifically prescribes Form GST MOV-01 for recording the statement of the owner, driver or the person in charge of the goods and conveyance. A statement recorded on a plain sheet of paper lacks the prescribed statutory format and sanctity. Such statements devoid of any evidentiary value inasmuch as the statutory scheme specifically prescribes the form for recording such statements - The impugned orders suffered from manifest procedural irregularity and warrant interference - The impugned order is set aside and the matter is remitted to the appellate authority for fresh decision – The petition is allowed - GST - Obligation of the Appellate authority to consider and deal with grounds raised in memorandum of appeal - Petitioner raised specific grounds in the memorandum of appeal assailing the detention and penalty order, including that the discrepancy was a bona fide technical error, there was no intention to evade tax, and the statement of driver had no evidentiary value as it was not recorded in Form GST MOV-01 - Whether the appellate authority was obliged to consider and deal with the grounds raised by the petitioner in the memorandum of appeal - HELD - Once specific grounds are raised in the memorandum of appeal, the appellate authority is duty-bound to accord due consideration to each of them. The authority may either accept or reject the contentions on merits, but it cannot brush them aside without assigning reasons - The right of appeal is a valuable statutory right and the appellate authority is obliged to deal with every material contention raised by the appellant by passing a reasoned and speaking order. The appellate authority cannot conveniently overlook and fail to deal with the grounds raised while affirming the order of the Original Authority. Failure to consider and address the grounds raised constitutes a grave procedural irregularity - The appellate order which failed to deal with the grounds raised warranted interference by the court. The matter is remitted to the appellate authority to pass fresh orders after affording an opportunity of hearing to the petitioner and after taking into consideration each and every contention raised. [Read less]

GST - Initiation of proceedings under Section 73 and 74 of GST Acts in respect of credits avail credits availed under erstwhile VAT regime - HELD - The controversy raised in present petitions has been conclusively determined by Division Bench of Jharkhand High Court in Usha Martin Limited. The judgment in Steel Authority of India Limited case followed the same reasoning and was also upheld by Supreme Court when SLP was dismissed. Court is in respectful agreement with view taken in Usha Martin Limited. Initiation of proceedings in respect of credits availed in erstwhile VAT regime cannot be adjudicated – The writ petition... [Read more]

GST - Initiation of proceedings under Section 73 and 74 of GST Acts in respect of credits avail credits availed under erstwhile VAT regime - HELD - The controversy raised in present petitions has been conclusively determined by Division Bench of Jharkhand High Court in Usha Martin Limited. The judgment in Steel Authority of India Limited case followed the same reasoning and was also upheld by Supreme Court when SLP was dismissed. Court is in respectful agreement with view taken in Usha Martin Limited. Initiation of proceedings in respect of credits availed in erstwhile VAT regime cannot be adjudicated – The writ petitions are allowed and disposed of [Read less]

Customs - Duty Drawback on importing nuts, bolts, washer, hand tools, etc., that fall under ‘scaffolding items’ - Classification of Scaffolding Items - Limitation Period - Petitioner imported nuts, bolts, washers, hand tools classified under Chapter Headings 7318, 8205, 3926 of Customs Tariff Act and claimed duty drawback. Show cause notice by DRI alleging mis-declaration and wrong classification of goods under Chapter Heading 7308 instead of the claimed headings - Whether show cause notice can be issued after expiry of three years from the date of payment of duty drawback when the proper officer had already cleared th... [Read more]

Customs - Duty Drawback on importing nuts, bolts, washer, hand tools, etc., that fall under ‘scaffolding items’ - Classification of Scaffolding Items - Limitation Period - Petitioner imported nuts, bolts, washers, hand tools classified under Chapter Headings 7318, 8205, 3926 of Customs Tariff Act and claimed duty drawback. Show cause notice by DRI alleging mis-declaration and wrong classification of goods under Chapter Heading 7308 instead of the claimed headings - Whether show cause notice can be issued after expiry of three years from the date of payment of duty drawback when the proper officer had already cleared the goods and the assessment had attained finality - HELD – The Rule 16 of the Drawback Rules though does not prescribe period of limitation, a reasonable period of limitation must be read into the said Rule. Once the proper officer has assessed the shipping bills and the assessment has attained finality, an aggrieved party having any issue on classification needs to approach the appellate authority instead of reopening the assessment by issuing show cause notice. Show cause notice issued after three years from the date of payment of duty drawback cannot be sustained. The DRI cannot initiate action after the proper officer has cleared the goods - The impugned show cause notice is quashed and set aside. Any drawback amount withheld shall be released - The petition is allowed [Read less]

Service Tax – Taxability of Leasing of equipment - Deemed sale or supply of taxable service - Appellant collected lease rental charges from dealers and distributors on account of supply of computerized tinting machines used for mixing base paint with colour shades - Department interpreted the leasing activity as taxable service under category of Banking and Other Financial Services for leasing of equipment and raised service tax demand invoking extended period of limitation - Whether the leasing of tinting machines to dealers and distributors constitutes a taxable service or a deemed sale not liable to service tax - HELD... [Read more]

Service Tax – Taxability of Leasing of equipment - Deemed sale or supply of taxable service - Appellant collected lease rental charges from dealers and distributors on account of supply of computerized tinting machines used for mixing base paint with colour shades - Department interpreted the leasing activity as taxable service under category of Banking and Other Financial Services for leasing of equipment and raised service tax demand invoking extended period of limitation - Whether the leasing of tinting machines to dealers and distributors constitutes a taxable service or a deemed sale not liable to service tax - HELD - For determining whether a transaction involves transfer of right to use goods, the five-point criteria established by the Supreme Court in BSNL case must be examined. The agreement entered into by the appellant with dealers and distributors satisfied all five conditions laid down by the Supreme Court - The lease agreement specifically provided that goods are identified and delivered to lessee with acknowledgment of receipt, lessee uses equipment without intervention of lessor in daily activities, lease rentals are paid by lessee to lessor, equipment is kept and used only at lessee's premises and is returned upon completion of lease period in same condition - The CBIC Circular No. 198/08/2016-ST dated 17.08.2016 clarified that where goods or equipment is given under lease arrangement wherein both possession and effective control have been handed over to lessee, it would be categorised as deemed sale leviable to VAT and service tax will not be charged on such activities. The fact that VAT was already paid by the Appellant on lease rental charges and reflected in periodical VAT returns acknowledged that these activities are in nature of deemed sale not taxable service - In present case operating lease constitute deemed sale. The activities undertaken by appellant do not amount to taxable service under Finance Act, 1994. Extended period of limitation cannot be invoked for interpretation of law issues. Penalty cannot be imposed when service tax demand is not sustainable on merits - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Demand of amount of 6% of the value of generated electricity - Department initiated proceedings treating electricity as exempted goods and demanded payment of amount equal to six percent of value of electricity sold under Rule 6(3) of CENVAT Credit Rules, 2004 - Whether electricity produced from bagasse and sold should attract payment of six percent under Rule 6(3) of CENVAT Credit Rules, 2004 – HELD – An identical dispute had been decided by the Commissioner in order passed wherein it was held that electricity produced from bagasse by assessees and sold cannot be subjected to payment of amount equal... [Read more]

Central Excise – Demand of amount of 6% of the value of generated electricity - Department initiated proceedings treating electricity as exempted goods and demanded payment of amount equal to six percent of value of electricity sold under Rule 6(3) of CENVAT Credit Rules, 2004 - Whether electricity produced from bagasse and sold should attract payment of six percent under Rule 6(3) of CENVAT Credit Rules, 2004 – HELD – An identical dispute had been decided by the Commissioner in order passed wherein it was held that electricity produced from bagasse by assessees and sold cannot be subjected to payment of amount equal to six percent of the value of electricity sold under Rule 6(3) of the CENVAT Credit Rules, 2004 - The Supreme Court in case of Union of India Vs. DSCL Sugar Ltd., Allahabad High Court in case of Balrampur Chini Mills Ltd. and Delhi High Court in case of Commissioner of Central Excise and S. Tax LTU, Delhi Vs. Nangalamal Sugar Complex, had all held that electricity produced and sold to such authority cannot be subjected to payment under Rule 6(3). The said order was accepted by the Committee of Chief Commissioners and no appeal was preferred against it, thus the issue attained finality - The impugned order confirming the adjudged demands cannot be sustained - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Foreign bank charges and place of provision of service - Appellant had not paid service tax on foreign bank charges and finance cost paid in foreign currency during period 2015 to March 2017 - Department issued notice demanding service tax under Section 66A, 68, 69 and 70 of Finance Act, 1994 - Whether foreign bank charges paid by exporter constitute taxable service in India and leviable under Reverse Charge Mechanism - HELD - The foreign bank of the buyer provided service to its client i.e. the buyer who has a letter of credit facility with the foreign bank after retaining its charges and commission, the net... [Read more]

Service Tax - Foreign bank charges and place of provision of service - Appellant had not paid service tax on foreign bank charges and finance cost paid in foreign currency during period 2015 to March 2017 - Department issued notice demanding service tax under Section 66A, 68, 69 and 70 of Finance Act, 1994 - Whether foreign bank charges paid by exporter constitute taxable service in India and leviable under Reverse Charge Mechanism - HELD - The foreign bank of the buyer provided service to its client i.e. the buyer who has a letter of credit facility with the foreign bank after retaining its charges and commission, the net amount is remitted to the appellant's bank in India where the appellant has facility of letter of credit. The appellant has received service if any from its bank in India with whom all documents were negotiated. The appellant does not have any direct connection or nexus with the foreign bank of the buyer. No service provider and service recipient relationship exists between the foreign bank and the appellant. The service provider and service recipient relationship exist between the foreign bank and the buyer. Both the foreign bank and the buyer are located outside India. When the provider of service i.e. the foreign bank and recipient of service i.e. the buyer both are located outside India, there is no question of taxing such service in India as the said service has been provided outside the taxable territory and outside the purview of Section 66B which is the charging section for levy of service tax - As per Circular No. 180/06/2014-ST, no service tax is leviable as place of provision of service is outside India. The issue has been settled in the appellant's own case for the earlier period and is no more res integra. The foreign bank has not supplied any service to the appellant in India. The appellant is not liable to pay any service tax under RCM - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Manufacture - Scope of remand by CESTAT - Petitioner filed appeals before CESTAT challenging levy of excise duty on activity of putting together components of CNG/LPG kit and packing such parts in a box and selling such items under description of automobile conversion kit - CESTAT after hearing the parties on merits, held that the Appellant is entitled to benefit of duty price and remanded the matter to adjudicating authority for re-quantifying the demand, without examining whether the levy of duty itself was justified - Whether the CESTAT can remand the matter for quantification when the levy of the duty ... [Read more]

Central Excise - Manufacture - Scope of remand by CESTAT - Petitioner filed appeals before CESTAT challenging levy of excise duty on activity of putting together components of CNG/LPG kit and packing such parts in a box and selling such items under description of automobile conversion kit - CESTAT after hearing the parties on merits, held that the Appellant is entitled to benefit of duty price and remanded the matter to adjudicating authority for re-quantifying the demand, without examining whether the levy of duty itself was justified - Whether the CESTAT can remand the matter for quantification when the levy of the duty itself was contested on merits by citing legal precedent - HELD - When the Appellant contests the levy of excise duty on merits before CESTAT by placing reliance on judgments and legal precedent, the CESTAT cannot ignore the vital aspect that the levy of duty itself was contested on merits and remand the matter merely for quantification. The remand directing the adjudicating authority to quantify the demand without examining the quintessential issue about whether the levy of duty was justified is uncalled for and arbitrary. The CESTAT ought to have restrained itself in remanding the matter for quantification when the levy of duty itself was contested on merits by citing legal precedent - The impugned order of CESTAT is quashed and set aside. The matter is remanded to CESTAT to decide the appeals afresh on merits after hearing the parties – The petition is allowed [Read less]

Central Excise - Determination of status as manufacturer vs trader - Applicability of representations made to secure business orders - The appellants were engaged in the business of trading and supplying goods and represented themselves to Power Supply Corporations as manufacturers for the purpose of securing orders – Dept alleged that the appellants were actual manufacturers and demanded duty invoking extended period - Whether the appellants were manufacturers or traders of the goods in question and whether Central Excise duty should be demanded from them based on their representations as manufacturers to Power Supply C... [Read more]

Central Excise - Determination of status as manufacturer vs trader - Applicability of representations made to secure business orders - The appellants were engaged in the business of trading and supplying goods and represented themselves to Power Supply Corporations as manufacturers for the purpose of securing orders – Dept alleged that the appellants were actual manufacturers and demanded duty invoking extended period - Whether the appellants were manufacturers or traders of the goods in question and whether Central Excise duty should be demanded from them based on their representations as manufacturers to Power Supply Corporations - HELD - The determination of whether a person is a manufacturer must be based on the definition under Section 2(f) of the Central Excise Act, 1944 and not merely on the basis of representations made to procure business. The representations made to Power Supply Corporations were made only for the purpose of securing orders and did not reflect actual manufacturing activity. The job workers were the actual manufacturers of the goods - The appellants did not have the infrastructure to manufacture the goods as evidenced by the inventory and an independent Chartered Engineer also confirmed that the machinery had been lying unused for many years and the commodities could not be manufactured using such equipment - The activities undertaken by the appellants would not amount to manufacture and hence the demand of duty in the normal period itself was not sustainable. The question of invoking extended period for demanding duty did not arise. The allegations of suppression could not be sustained and no penalty was imposable on the appellant company or its authorized representative - The demand of duty, interest and penalty against the appellant company are set aside and the appeals are allowed [Read less]

Service Tax – Limitation and Condonation of Delay, Exclusion of period of insanity – Commissioner (Appeals) rejected appeal on grounds that appeal was filed with delay that could not be condoned as permissible delay of thirty days had also been exhausted - Appellant furnished certificate of Psychiatrist and supporting medical prescriptions, death certificate of Director's mother and WHO guidelines on mental and neurological illness - Whether period of mental incapacity constitutes legal disability under Section 6 of Indian Limitation Act and can be excluded from computation period for condonation of delay – HELD – ... [Read more]

Service Tax – Limitation and Condonation of Delay, Exclusion of period of insanity – Commissioner (Appeals) rejected appeal on grounds that appeal was filed with delay that could not be condoned as permissible delay of thirty days had also been exhausted - Appellant furnished certificate of Psychiatrist and supporting medical prescriptions, death certificate of Director's mother and WHO guidelines on mental and neurological illness - Whether period of mental incapacity constitutes legal disability under Section 6 of Indian Limitation Act and can be excluded from computation period for condonation of delay – HELD – Mental incapacity constitutes legal disability and period of mental insanity can be deducted from period of computation in terms of Section 6 of Indian Limitation Act. Supreme Court in M.P. Steel Corporation has held that spirit of principle laid down in Indian Limitation Act for extension of limitation period upon contingencies enumerated between Sections 6 and 24 is to be pressed into service in advancing substantial justice - By excluding period of mental incapacity from computation, appeal is to be treated as filed within prescribed period and any remaining delay is condonable. The order disposing appeal only on ground of limitation without going into merits requires matter to be sent back for re-determination at Commissioner (Appeals) level – The appeal is allowed by way of remand [Read less]