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Service Tax - Whether the present case pertains to determination of any question having a relation to the rate of duty or to the value of goods - Service tax liability for providing various services to Indian Railways – non-payment of service tax on the premise that the services provided to the Indian Railways were exempted as per Serial No.14 of the Notification No.25/2012 -St dated 20.06.2012 – HELD - reading the question of law framed indicates that the issue under consideration is as to whether the assessee was eligible for exception / exemption under Notification No. 25/2012-ST - The exemption if denied, would req... [Read more]

Service Tax - Whether the present case pertains to determination of any question having a relation to the rate of duty or to the value of goods - Service tax liability for providing various services to Indian Railways – non-payment of service tax on the premise that the services provided to the Indian Railways were exempted as per Serial No.14 of the Notification No.25/2012 -St dated 20.06.2012 – HELD - reading the question of law framed indicates that the issue under consideration is as to whether the assessee was eligible for exception / exemption under Notification No. 25/2012-ST - The exemption if denied, would require adjudication on rate of duty - Section 35G of the Central Excise Act, 1944, provides that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law - the present appeal would fall under the caption “not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment’ - Revenue appeal under Section 35G of CEA, 1944 is not maintainable and accordingly dismissed [Read less]

Service Tax - Assessee engaged the services of various contractors for transportation of limestone from the mines to their factory – Demand of service tax under GTA service on freight paid to various contractors for transportation of limestone - whether the payment of freight attract levy of service tax under GTA – HELD - the essential requirement is the issuance of consignment note in order to be covered under the definition of GTA and in the absence of the same, the transporters/contractors rendering transport services in mines cannot be said to be GTA and therefore, their service cannot be made amenable to the levy ... [Read more]

Service Tax - Assessee engaged the services of various contractors for transportation of limestone from the mines to their factory – Demand of service tax under GTA service on freight paid to various contractors for transportation of limestone - whether the payment of freight attract levy of service tax under GTA – HELD - the essential requirement is the issuance of consignment note in order to be covered under the definition of GTA and in the absence of the same, the transporters/contractors rendering transport services in mines cannot be said to be GTA and therefore, their service cannot be made amenable to the levy of service tax under the category of ‘transportation of goods by road’ service - demand of service tax confirmed in the impugned order cannot sustain and set aside – appeal is allowed [Read less]

GST - Section 155 of the CGST Act, 2017 - burden on the dealer for claiming input tax credit - Mismatch between GSTR 2A and GSTR 3B – Denial of input tax credit – HELD - If there is a difference between GSTR 2A and GSTR 3B, then it is for the assessee to prove its claim of input tax credit by leading cogent and credible evidence - In the present case, the petitioner, despite show cause notice, chose not to provide any evidence in respect of claim for the input tax credit, nor appeared for a hearing - When the petitioner himself has given up his right to prove his claim for the input tax credit, Court cannot help such a... [Read more]

GST - Section 155 of the CGST Act, 2017 - burden on the dealer for claiming input tax credit - Mismatch between GSTR 2A and GSTR 3B – Denial of input tax credit – HELD - If there is a difference between GSTR 2A and GSTR 3B, then it is for the assessee to prove its claim of input tax credit by leading cogent and credible evidence - In the present case, the petitioner, despite show cause notice, chose not to provide any evidence in respect of claim for the input tax credit, nor appeared for a hearing - When the petitioner himself has given up his right to prove his claim for the input tax credit, Court cannot help such an assessee by entertaining the writ petition - the writ petition is rejected [Read less]

Service Tax - Rule 3 and Rule 4 of Point of Taxation Rules, 2011 - Renting of immovable property – Receipt of part amount/earnest amount – Demand of interest due to change in rate of tax - Whether the appellant became liable to pay the entire service tax when it received the part amount/earnest amount – HELD - the Department has taken recourse to Rule 3 of the POTR, 2011 to determine the service tax liability of the appellant has applied Rule 4 of POTR, 2011 - Rule 4 of the POTR begins with the non-obstante clause clearly stating that where there is a change in the effective rate of tax, the provisions of rule 4 woul... [Read more]

Service Tax - Rule 3 and Rule 4 of Point of Taxation Rules, 2011 - Renting of immovable property – Receipt of part amount/earnest amount – Demand of interest due to change in rate of tax - Whether the appellant became liable to pay the entire service tax when it received the part amount/earnest amount – HELD - the Department has taken recourse to Rule 3 of the POTR, 2011 to determine the service tax liability of the appellant has applied Rule 4 of POTR, 2011 - Rule 4 of the POTR begins with the non-obstante clause clearly stating that where there is a change in the effective rate of tax, the provisions of rule 4 would invariably override the provisions of rule 3 - there was a change in the rate of service tax in May, 2012 - the very fact that there was a change in the rate of service tax clearly takes the appellant’s point of taxation from Rule 3 of POTR to Rule 4 of POTR - Further, as per Rule 4(b)(iii), the point of taxation would be the date of issuing of invoice, which in the instant case is October, 2012 - the actual provision of service of signing of the lease agreement, raising of the invoices and receipt of the bulk of the payment was in October, 2012, which was preceded by change in effective rate of service tax in May, 2012. This squarely supports the appellant’s contention that the point of taxation would be under Rule 4 of POTR - the service of provision of leased land was provided in October, 2012. It is also apparent that the invoices for the said provision of service were raised on 23.10.2012. The above two dates are crucial to determine the date of provision of service in the instant case, that too in terms of Rule 4 POTR - From said two dates, it is clear that the service was provided after change in effective rate of tax and the invoice also has been raised after the change in effective rate of tax, though the part payment was received before the change in effective rate of tax. Thus, the case of appellant gets squarely covered under Rule 4(b)(iii) POTR - In the given set of facts and applicability of Rule 4(b)(iii) POTR there remains no service tax liability on advance received by the assessee - the demands and penalties are not sustainable and set aside - the appeal is allowed [Read less]

GST - Cancellation of GST registration basis show cause notice which did not provide any reason for proposing cancellation of registration – Rejection of application for revocation of cancellation on the ground that the petitioner had not replied to the show cause notice within the time specified therein – HELD – the reasons for proposing to reject the petitioner’s application are vague and unintelligible - To add insult to injury, the petitioner’s application for revocation of cancellation of the GST registration was rejected on the ground that the petitioner had not replied to the show cause notice within the t... [Read more]

GST - Cancellation of GST registration basis show cause notice which did not provide any reason for proposing cancellation of registration – Rejection of application for revocation of cancellation on the ground that the petitioner had not replied to the show cause notice within the time specified therein – HELD – the reasons for proposing to reject the petitioner’s application are vague and unintelligible - To add insult to injury, the petitioner’s application for revocation of cancellation of the GST registration was rejected on the ground that the petitioner had not replied to the show cause notice within the time limit - The impugned order is equally cryptic and vague - Notwithstanding petitioner clearly spell out his case, the appeal was dismissed on the ground that the petitioner had not contested the reason as to why his registration was cancelled – since the impugned show notice fails to disclose the reason for proposing cancellation of the petitioner’s GST registration, the impugned order cancelling the petitioner’s registration falls foul of the principles of natural justice - the impugned orders and the orders cancelling the petitioner’s registration are set aside - The petition is allowed with costs [Read less]

GST - Rejection of appeal filed against the Assessment Order on the ground that the appeal was filed in manually and later e-appeal was filed with a delay of six months; and that the pre-deposit of 10% of the disputed tax has not been paid – HELD - Since the Assessment Order was not uploaded on the official website immediately petitioner was constrained to file the appeal in manual form - the reason given by the petitioner for filing the appeal in manual form can be accepted - in interregnum period the Assessment Order was uploaded on the official website and the appeal in electronic form was filed by the petitioner. Thi... [Read more]

GST - Rejection of appeal filed against the Assessment Order on the ground that the appeal was filed in manually and later e-appeal was filed with a delay of six months; and that the pre-deposit of 10% of the disputed tax has not been paid – HELD - Since the Assessment Order was not uploaded on the official website immediately petitioner was constrained to file the appeal in manual form - the reason given by the petitioner for filing the appeal in manual form can be accepted - in interregnum period the Assessment Order was uploaded on the official website and the appeal in electronic form was filed by the petitioner. This explanation also seems to be plausible as subsequently the copy of the Assessment Order was uploaded and thereby the petitioner has filed e-appeal - So far as, the second ground of rejection is concerned, the petitioner made a pre-deposit of 10% of the demanded tax at the time of manual filing of the appeal. Therefore, it can be said that the said requirement was also complied - respondent ought to have admitted the appeal filed in electronic form instead of rejecting the same under the impugned endorsement – the impugned endorsement is set aside with a direction to the respondent to register the appeal and dispose of the same in accordance with the law – writ petition is allowed [Read less]

GST – Telangana AAR – Taxability of supply of printing services to various educational institutions – HELD - The activities of service of printing of Pre-examination items like printing services viz; OMR sheets, Answer sheets, marks card etc to an educational institution; printing of post-examination items like marks card, grade card, certificates to the educational boards of up to higher secondary; and scanning and processing of results of examinations, are exempt from GST as per entry no.66 of the Notification No.12/2017-Central Tax (Rate), dtd.28-06-2017 – Ordered accordingly

Central Excise – Area-based exemption – Rejection of applications for fixation of special rate on the ground of barred by limitation; balance sheet is not in conformity with Section 211 of the Companies Act, 1956 – HELD - The first ground for denial of special rate of fixation is that the balance sheet is not in conformity with Section 211 of the Companies Act, 1956 - As per the said provisions, the profit and loss accounts and the balance sheet of the Company shall comply with the accounting standards - Section 211 of Companies Act, prescribes the form in which the Balance Sheet and Profit & Loss Account of every Co... [Read more]

Central Excise – Area-based exemption – Rejection of applications for fixation of special rate on the ground of barred by limitation; balance sheet is not in conformity with Section 211 of the Companies Act, 1956 – HELD - The first ground for denial of special rate of fixation is that the balance sheet is not in conformity with Section 211 of the Companies Act, 1956 - As per the said provisions, the profit and loss accounts and the balance sheet of the Company shall comply with the accounting standards - Section 211 of Companies Act, prescribes the form in which the Balance Sheet and Profit & Loss Account of every Company registered under the said Act is to be prepared, showing the financial position of the said Company and the balance sheet prepared by the appellants is in consolidated form, in the sense that all its Units located all over the country have been brought under the common Balance Sheet and Profit & Loss Account - Hence, the Balance Sheet prepared is very much in conformity with the provisions of Companies Act and the findings of the Ld. Commissioner that statement of value addition based on the said Balance Sheet and Profit & Loss Account is not acceptable are in conformity of law - Further, the figures in the Extract of Balance Sheets, area based on which the value addition, has been calculated, is very much in conformity with Companies Act and the Income Tax Act - Therefore, the reason for rejection of application for special rate fixation on the balance sheet is not in conformity with the Companies Act, 1956, is not correct and on the said ground, the said application cannot be rejected - the rejection of the applications of fixation of special rate by the adjudicating authority is not correct and are in violation of law - the impugned orders are set aside and appeal is allowed - Acceptability of gross sales value based on all India average rate – HELD - the products manufactured by the appellants were delivered to their depots from where the same were sold at a uniform selling price. The term uniform selling price indicates that there is uniform all India average rate prevalent at all the depots of the appellants and hence, multiplying the number of units cleared from the unit with the said all India average rate of selling price is the only and correct way of computing the gross sales value - Since different States have different rates of Sales Tax, it is not possible for the appellant to identify as to what quantity of which product, stock transferred to their Depot, is sold in which State, in order to claim the amount of Sales Tax against that particular clearance - Hence, it is not a case that a separate Balance Sheet was prepared for the purpose of special rate fixation, as held by the adjudicating authority - Rejection of application on the ground that the average rate of VAT at the rate of 12.5% is not acceptable – HELD - the appellant are entitled to claim deduction of Equalised Sales Tax from the transaction value to arrive at the assessable value - the average rate of VAT at the rate of 12.5% is equalized the basis and the same is permissible for fixation of special rate. Hence, rejection of special rate of fixation, the applications cannot be rejected on that ground - Whether inclusion of work in progress in computation of actual value addition is correct – HELD - the term “inventory” would include stock of finished goods as well as stock of unfinished goods in as much as some stock of goods may be incomplete or just few steps away from the stage of completed finished product. The said stock of incomplete/ unfinished goods, which have passed through some processes and are yet to be subjected to some processes to reach the final stage of production, are termed as ‘work-in-progress’, which are also the part of the inventory, which means that the process of production on such materials i.e. work in process is the part of inventory and the appellants have correctly included the work in process in their stock. Therefore, the work in process is to be included in the opening stock and closing stock in computation of actual value addition - Rejection of applications for fixation of special rate on the ground of barred by limitation – HELD - the application for special rate fixing for the period 2009-10 to 2016-17 were initially held that they have filed the applications for fixing special rate after 30th September of the same year and is barred by limitation - The issue has been examined by the Hon’ble Apex Court and the Hon’ble Apex Court in the case of Union of India Vs. V.V.F. Limited has held that the pending refund application shall be decided as per the subsequent notification/industrial policies, which were impugned before the respective Hon’ble High Courts and they shall be decided in accordance with the law and on merits - as all the applications were filed by the appellants before 20.04.2020, all the applications were filed within time, therefore, the applications in question cannot be rejected on limitation [Read less]

Service Tax - Classification of customized software - Excisable goods or a service - Appellants are engaged in the manufacture of “Distributed Control Systems” (DCS) comprising of both hardware and software - appellants availed exemption under Notification No. 6/2006-CE dt. 01/03/2006 under the category of Customized Software by treating the customized software as goods - After introduction of service tax on ‘Information Technology Software Services (ITSS) w.e.f. 16/05/2008, Department of the view that imported software, customized and supplied with DCS is a ‘service’ and accordingly leviable to service tax – C... [Read more]

Service Tax - Classification of customized software - Excisable goods or a service - Appellants are engaged in the manufacture of “Distributed Control Systems” (DCS) comprising of both hardware and software - appellants availed exemption under Notification No. 6/2006-CE dt. 01/03/2006 under the category of Customized Software by treating the customized software as goods - After introduction of service tax on ‘Information Technology Software Services (ITSS) w.e.f. 16/05/2008, Department of the view that imported software, customized and supplied with DCS is a ‘service’ and accordingly leviable to service tax – Confirmation of demand along with interest and penalties - Whether the imported software, customized and cleared along with DCS, classifying the same under Chapter sub-heading 85238090 of CETA, 1985 continue to be an ‘excisable goods’ or the customised software supplied on the CD is a ‘service’ and leviable to service tax w.e.f. 16/05/2008 under the taxable category of ITSS – HELD – Under the ‘scope of work’ the appellants are required to deliver at the site of the customer, the entire DCS system which includes both hardware and software and consumables - even after introduction of the service tax on the ITSS more or less on similar line of definition of ‘Information Technology software’ already present under supplementary note of Chapter 85 of CETA, 1985 and the classification of the said software under Chapter Heading 8523 of CETA, 1985 continued in the CETA, 1985 without any amendment or alteration to the same - what is necessary in a given case is to examine the true nature of transaction between the parties to the contract to ascertain whether the transaction is a sale or service – ld. Commissioner has misdirected in understanding the scope of the applicability of excise duty on manufacture of ‘Information Technology Software’ and levy of service tax on ‘Information Technology software service’ introduced w.e.f 16.5.2008 and applying the same to the facts of the present case - No doubt excise duty or service tax is leviable on the Information Technology software if sold/supplied after 16.5.2008 as an excisable goods or as a service, as the case may be, but the said levies cannot be imposed simultaneously on the same transaction - In a given case it needs to be examined whether excise duty is attracted or the activity is a pure service – in the present case, the Purchase Orders reveal that the transaction between the appellant and their customers are not for supply of software as that of a ‘service’, but it is sale of the customized software on a CD as part of the DCS; accordingly, the same should be considered as ‘excisable goods’ and not as ‘service’ under ITSS - the presence of an element of pure service as alleged by the Revenue is not the intention of the parties to the transaction - the sale of customized software by the appellant is ‘excisable goods’ and classifiable under Chapter subheading 85238090, hence leviable to excise duty, and subject to the exemption notification No. 6/2006-CE dt.1.3.2006 and 12/2012-CE dt. 17.03.2012, as the case may be, on fulfilment of laid down conditions as claimed by the appellant - the impugned orders are set aside and assessee appeals are allowed [Read less]

Service Tax – issue of Show Cause Notice invoking the extended period of limitation alleging short-payment of service tax on premium collected in respect of group insurance policies - Appellant deposited service tax in terms of clarification vide Board Circular No. 80/010 dated 17/9/2004, by obtaining the prescribed certificate from the appointed Actuary – Revenue contention that the taxable value in the case of group insurance policies is the gross premium collected from the policy holders, hence service tax is liable to be discharged on the gross premium collected – Appellant having paid the differential service ta... [Read more]

Service Tax – issue of Show Cause Notice invoking the extended period of limitation alleging short-payment of service tax on premium collected in respect of group insurance policies - Appellant deposited service tax in terms of clarification vide Board Circular No. 80/010 dated 17/9/2004, by obtaining the prescribed certificate from the appointed Actuary – Revenue contention that the taxable value in the case of group insurance policies is the gross premium collected from the policy holders, hence service tax is liable to be discharged on the gross premium collected – Appellant having paid the differential service tax along with interest before issuance of SCN, contesting levy of penalty and denial benefit of closure of mater under section 73(3) of the Finance Act, 1994 - HELD – appellant had rightly deposited the tax, as clarified by Board Circular dated 17/09/2004 - the whole case is due to interpretational issue (change of opinion) on the part of the Revenue - in the facts and circumstances of this case, the benefit of closure under section 73(3) has been wrongly denied to the assessee, and no show-cause notice was required to be issued - appellant is entitled to benefit of closure under Section 73(3) the Act - the impugned order is set aside and appeal is allowed [Read less]

GST - Show cause notice not accompanied by summary thereof - Petitioner case although it has received the show cause notice proposing imposition of penalty, the summary of the proposed demand has not been communicated electronically in FORM GST DRC-01 & FORM GST DRC-02 as required under Rule 142(1) of the CGST Act,2017 – HELD – Any notice issued under the relevant sections including Section 74 of the CGST Act, 2017 is required to be accompanied by a summary thereof, electronically in FORM GST DRC-01 & FORM GST DRC-02 - Although the summary in the electronic form is required to be furnished along with the show cause no... [Read more]

GST - Show cause notice not accompanied by summary thereof - Petitioner case although it has received the show cause notice proposing imposition of penalty, the summary of the proposed demand has not been communicated electronically in FORM GST DRC-01 & FORM GST DRC-02 as required under Rule 142(1) of the CGST Act,2017 – HELD – Any notice issued under the relevant sections including Section 74 of the CGST Act, 2017 is required to be accompanied by a summary thereof, electronically in FORM GST DRC-01 & FORM GST DRC-02 - Although the summary in the electronic form is required to be furnished along with the show cause notice, furnishing of the said summary at this stage would be substantial compliance with the said provisions - petition is disposed of with the direction to the proper officer to issue a summary of the notice and demands electronically, in FORM GST DRC-01 & FORM GST DRC-02 as expeditiously as possible and preferably within a period of one week - The petition is disposed of [Read less]

Customs AAR - Classification of Nickel Hydroxide Compound (containing 92% to 100% of Nickel Hydroxide and balance of Cobalt Hydroxide and Sodium Sulphate) – HELD - in terms of the Chapter Note 1 of chapter 28 read with Rules 1, 2 and 3(a) of the General Interpretation Rules, the goods ‘Compound of Nickel Hydroxide’ is classifiable under sub-heading 28254000 – Ordered accordingly

GST - Cancellation of registration - Petitioner’s case that the reason stated in the Show Cause Notice is vague and does not refer to any particular facts so as to enable the petitioner to give reply and the show cause notice is factually incorrect – HELD - the issue is covered by the decision in the case of Aggarwal Dyeing and Printing Works which has set out procedure for cancellation of registration - The Court had held that by issuing a cryptic show cause notice, the authorities had violated the principles of natural justice. From the show cause notice, the reasons for cancellation are not decipherable therefrom - ... [Read more]

GST - Cancellation of registration - Petitioner’s case that the reason stated in the Show Cause Notice is vague and does not refer to any particular facts so as to enable the petitioner to give reply and the show cause notice is factually incorrect – HELD - the issue is covered by the decision in the case of Aggarwal Dyeing and Printing Works which has set out procedure for cancellation of registration - The Court had held that by issuing a cryptic show cause notice, the authorities had violated the principles of natural justice. From the show cause notice, the reasons for cancellation are not decipherable therefrom - the show cause notice is quashed and set aside and the petition is allowed solely on the ground of violation of principles of natural justice [Read less]

Central Excise – Irregular availment of Cenvat Credit - Appellant manufactures foam and foam products and rubberised coir products - Whether the appellant is eligible for the benefit of Notification No. 1/2011-CE dated 1.3.2011 when credit is availed is reversed along with interest on inputs and input services used in the manufacture of the final products on which the concessional rate of duty was availed – appellant defense that availment of Cenvat Credit was an inadvertent human error but since credit was reversed immediately along with interest when pointed out, they cannot be penalised with denial of benefit of the... [Read more]

Central Excise – Irregular availment of Cenvat Credit - Appellant manufactures foam and foam products and rubberised coir products - Whether the appellant is eligible for the benefit of Notification No. 1/2011-CE dated 1.3.2011 when credit is availed is reversed along with interest on inputs and input services used in the manufacture of the final products on which the concessional rate of duty was availed – appellant defense that availment of Cenvat Credit was an inadvertent human error but since credit was reversed immediately along with interest when pointed out, they cannot be penalised with denial of benefit of the Notification - HELD - the exemption Notification needs to be interpreted strictly and unless the conditions of the Notification are fulfilled, the benefit of the Notification cannot be extended - the appellant was knowing very well that they are not eligible for availing CENVAT credit for the goods that are cleared on concessional rate of duty but still they have availed CENVAT credit for almost three years - the company was aware of the fact that such availment of CENVAT credit was illegal. The irregular availment of credit came to the notice of the department only after the officers of internal audit party visited their unit and verified the records - the appellant had consciously taken CENVAT credit which was irregular. Hence, having suppressed the facts, the Commissioner was right in invoking the proviso to Section 11A of CEA, 1944 – The error committed by the ground level officers cannot be alleged to be done with the knowledge of the senior officers. Therefore, the Chairman and Managing Director of the company, the Vice President and Head of Finance cannot be penalized – Appeal in respect of the company is disposed of by way of remand only for redetermination of penalty under Rule 25 read with Section 11AC of the CEA, 1944 – Appeal is disposed of [Read less]

Central Excise - Appellant is engaged in manufacture of industrial grade gases and another firm of appellant is engaged in the marketing of various types of gases - whether appellant and M/s. Vadilal Chemicals Limited are related parties in terms of provisions of Section 4(1) of Central Excise Act, 1944 read with Rule 9 of Central Excise (Valuation) Rules, 2000 - Refund of amount deposited during the course of investigations - HELD – The issue regarding determining whether the related party transaction exist in this case or not, as per Section 4(1) (b) of Central Excise Act, 1944 read with Rule 9 of Central Excise (Valua... [Read more]

Central Excise - Appellant is engaged in manufacture of industrial grade gases and another firm of appellant is engaged in the marketing of various types of gases - whether appellant and M/s. Vadilal Chemicals Limited are related parties in terms of provisions of Section 4(1) of Central Excise Act, 1944 read with Rule 9 of Central Excise (Valuation) Rules, 2000 - Refund of amount deposited during the course of investigations - HELD – The issue regarding determining whether the related party transaction exist in this case or not, as per Section 4(1) (b) of Central Excise Act, 1944 read with Rule 9 of Central Excise (Valuation) Rules, 2000 is concerned, since the matter has already been remanded back to the original adjudicating authority by impugned order-in-appeal, the Adjudicating Authority while deciding related party issue should also re-adjudicate the matter of dutiability of the purified/ graded Hydrogen gas as per the Hon’ble Supreme Court decision in the appellant’s own case - The issue with regard to refund should also be clubbed with the main issue and need to be decided by the competent Adjudicating Authority - the appeals filed by appellants are remanded back to Adjudicating Authority for fresh decision, on all the questions which are subject matter of the SCN - appeals stand disposed of [Read less]

Service Tax - Mistaken payment of service tax in respect of insurance services provided under the Rashtriya Swasthya Bima Yojana - Refund of service tax deposited under mistake of law – Rejection of refund on the ground of Limitation and principle of unjust enrichment – Revenue appeal against the Tribunal order accepting assessee’s claims according the refund – HELD – in terms of Article 265 of the Constitution, the Union can only levy a tax which is authorized by law - Since it is conceded that the respondent was not liable to pay any service tax, it would be wholly unjust to permit the Union to retain monies wh... [Read more]

Service Tax - Mistaken payment of service tax in respect of insurance services provided under the Rashtriya Swasthya Bima Yojana - Refund of service tax deposited under mistake of law – Rejection of refund on the ground of Limitation and principle of unjust enrichment – Revenue appeal against the Tribunal order accepting assessee’s claims according the refund – HELD – in terms of Article 265 of the Constitution, the Union can only levy a tax which is authorized by law - Since it is conceded that the respondent was not liable to pay any service tax, it would be wholly unjust to permit the Union to retain monies which were not liable to be collected or were authorized by law – further, High Courts across the board have taken a consistent view that where once it is found that the assessee was not liable to be subjected to a service tax, it would not be bound by the limitation as prescribed under Section 11B of the CEA, 1944 – on the question of unjust enrichment, it is noted that the assessee had not submitted any documentary evidence to establish that the incidence of tax had not been passed on - while the CESTAT decision is liable to be upheld, the assessee would be obliged to place adequate material before the Assessing Authority, establishing that the incidence of service tax was not passed on – Revenue appeal is dismissed [Read less]

Tamil Nadu VAT Act, 2006 - Section 5(1) - Works Contract – Taxable turnover - Deduction for determining the taxable turnover in the case of Works contract under Rule 8(5) of the TNVAT Rules, 2007 – assessee estimated taxable turnover has been arrived by deducting 30% towards labour charges and like charges from the total contract income reported in the Profit & Loss Account – petition seeking refund of amount which is said to have been deposited by the Greater Chennai Corporation as TDS while paying the amounts to the petitioner under Section 13 of the TNVAT Act, 2006 – Petitioner case that respondent has wrongly d... [Read more]

Tamil Nadu VAT Act, 2006 - Section 5(1) - Works Contract – Taxable turnover - Deduction for determining the taxable turnover in the case of Works contract under Rule 8(5) of the TNVAT Rules, 2007 – assessee estimated taxable turnover has been arrived by deducting 30% towards labour charges and like charges from the total contract income reported in the Profit & Loss Account – petition seeking refund of amount which is said to have been deposited by the Greater Chennai Corporation as TDS while paying the amounts to the petitioner under Section 13 of the TNVAT Act, 2006 – Petitioner case that respondent has wrongly determined the taxable turnover under Rule 8(5)(d) of the TNVAT Rules, 2007 r/w Section 5 of the TNVAT Act, 2006 - HELD - If such amounts are not ascertainable from the Books of Account maintained and produced by the dealer before the Assessing Officer, deduction has to be allowed only at the specified percentage in the table to the aforesaid Rule - As far as Civil Works Contract is concerned, deduction is to be made at 2% - the petitioner has executed that on the works contract for the Greater Chennai Corporation and the Greater Corporation of Chennai, deducted tax at source which represented 2% of the total amount payable to the petitioner by the GCC - When law mandates a particular thing to be done in a particular manner, then it has to be done in that manner - This Principle will apply for determination of taxable turnover in the works contract under Rule 8(5) of the TNVAT Rules, 2007 - The petitioner cannot arrive at the taxable turnover arbitrarily without giving particulars of the value of the goods and value of the services and other items to claim deduction involved to arrive at an arbitrary taxable turnover contrary to scope of Rule 8(5) of the TNVAT Rules, 2007 by merely adding 15% to the value of the purchases. The petitioner was duty bound to give particulars - Since, it is the case of the petitioner that few more TDS certificate have been issued to the Petitioner by the Greater Corporation of Chennai, the petitioner is directed to furnish the same to the respondent - respondent is directed to issue a corrigendum to the impugned order by revising the tax liability after adjusting the TDS certificates - petitioner shall thereafter file an appeal before the Appellate Authority under the provisions of the TNVAT Act, 2006 who shall thereafter dispose of the appeal on merits and in accordance with law - The writ petition is dismissed [Read less]

Service Tax - Appellant undertook the activity of construction of roads - during the course of investigation, the appellants were made deposit under “protest” claiming that they have not charged any service tax to their customers - Commissioner confirmed the demand in terms of Section 73A of the Finance Act, 1994, though, giving a categorical finding that no service tax has been collected by the appellant – whether the provisions of Section 73A are attracted in the facts of the case - HELD - To apply the provisions of sub-clause 2 of Section 73A the assessee should have collected any amount, which is not required to ... [Read more]

Service Tax - Appellant undertook the activity of construction of roads - during the course of investigation, the appellants were made deposit under “protest” claiming that they have not charged any service tax to their customers - Commissioner confirmed the demand in terms of Section 73A of the Finance Act, 1994, though, giving a categorical finding that no service tax has been collected by the appellant – whether the provisions of Section 73A are attracted in the facts of the case - HELD - To apply the provisions of sub-clause 2 of Section 73A the assessee should have collected any amount, which is not required to be collected, in any manner as representing service tax - In the instant case, it is not the case of the Department that the appellants have issued invoices/ bills which indicate that service tax has been collected by the appellants from their customers - The facts of the case indicate that the appellants have not collected any amount representing as service tax from their customers, in addition to the above, there is a categorical certificate given by the customer indicating that the appellants have not charged any service tax and have not paid any amount representing as service tax to the appellants - Thus, the impugned order cannot be sustained and set aside – assessee appeal is allowed and revenue appeal is dismissed [Read less]

Central Excise - Clearance of finished goods without payment of duty by availing the benefit exemption Notification Nos. 10/97, 3/2001 and 29/2003 – Denial of exemption and duty demand on the ground that appellant has not produced certificate from the Head of the Institution at the time of clearance of the goods – HELD - the Appellant has produced necessary Certificate from the Head of the Institution after clearance of the goods. The notification envisages production of the certificate at the time of clearance of the goods - delay in submission of the certificates is only a procedural lapse - the benefit of exemption ... [Read more]

Central Excise - Clearance of finished goods without payment of duty by availing the benefit exemption Notification Nos. 10/97, 3/2001 and 29/2003 – Denial of exemption and duty demand on the ground that appellant has not produced certificate from the Head of the Institution at the time of clearance of the goods – HELD - the Appellant has produced necessary Certificate from the Head of the Institution after clearance of the goods. The notification envisages production of the certificate at the time of clearance of the goods - delay in submission of the certificates is only a procedural lapse - the benefit of exemption notification cannot be denied to the Appellant for the delayed submission of the Certificates. Accordingly, demand confirmed in the impugned order on this count is not sustainable and set aside – appeal is allowed - Clearance of Non-Conventional Energy Devices/Systems - Regarding the goods cleared without payment of duty under Notification 03/2001-CE dated 01.03.2001 superseded by Notification 6/2001-CE dated 01.03.2002 – HELD - Sl. No 237 of the said Notification exempts Non-Conventional Energy Devices/Systems specified in Serial No 21 of List 9 (Sl No. 16 of List 5 of Notification 03/2001) which are manufactured and consumed within the factory of production of Non-Conventional Energy Devices - the goods cleared have been used in the manufacture of Non-Conventional Energy Devices. Accordingly, appellants are eligible for the benefit of the notification 03/2001-CE dated 01.03.2001 superseded by Notification 6/2001-CE dated 01.03.2002. Hence, the demand confirmed in the impugned order on this count is not sustainable - Manufacture of both dutiable and exempted goods – Demand on account of non-maintenance of separate accounts for the Cenvat credit availed on the inputs used in the exempted goods – HELD - Rule 6(3) of CCR, 2004 gives two options to a manufacturer of dutiable and exempted goods, who are not maintaining separated accounts for the inputs used in dutiable goods and exempted goods – appellant have to pay either 8%/10% of the value of exempted goods or they have to pay an amount as per the formula prescribed in Rule 6(3A). The Appellant in this case has adopted the payment of 8%/10% of the value of exempted goods. Thus, appellant has complied with requirement as prescribed in Rule 6(3)(b) of CCR, 2004. But the correctness of the amount paid needs to be verified. The matter needs to be remanded for verification purpose – appeal is allowed by remand [Read less]

Central Excise – Section 11B of Central Excise Act 1944 – Rule 16 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 – Manufacture of pan masala – Closing of factory – Entitlement of refund of duty – Respondent is engaged in manufacture of Pan Masala – Respondent being working under compounded levy scheme paid duty for 25 pouch packing machines (PPMs) installed and in working condition in their factory during month of June 2011 as governed under the Rules – Respondent claimed refund of duty paid in respect of 25 PPMs which were closed and sealed during period from 25-... [Read more]

Central Excise – Section 11B of Central Excise Act 1944 – Rule 16 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 – Manufacture of pan masala – Closing of factory – Entitlement of refund of duty – Respondent is engaged in manufacture of Pan Masala – Respondent being working under compounded levy scheme paid duty for 25 pouch packing machines (PPMs) installed and in working condition in their factory during month of June 2011 as governed under the Rules – Respondent claimed refund of duty paid in respect of 25 PPMs which were closed and sealed during period from 25-6-2011 to 30-6-2011 – Refund sanctioning authority sanctioned refund to Respondent under Rule 16 of the Rules read with Section 11B of the Act –Commissioner (Appeals) upheld order of lower authority and rejected appeal filed by department – Whether Respondent is entitled to refund of duty for closing down of their factory for disputed period – HELD – Perusal of Rule 16 of the Rules make it clear that in case, a manufacturer cease to work permanently and all machines were sealed on basis of intimation given by them resulting to none of packing machines would be operating, duty if any paid, should be refunded – Respondent is a partnership firm holding valid registration certificate for manufacture of Pan Masala and they have changed constitution of said firm and has converted into Private Limited company with effect from 21-6-2011 – Respondent vide their letter dated 22-6-2011 requested for sealing of all said 25 PPMs w.e.f. 25-6-2011 and which were sealed by Range Superintendent at midnight of 24-6-2011 – On 25-6-2011, Respondent closed down their factory – After change of constitution, new company came into existence and Respondent firm (Partnership firm) has been treated as permanently ceases to works – Revenue gravely erred in contending that factory was not permanently ceased to work, as changed Private Limited Company restarted production – Even if a partnership firm ceased their operation and in place of same a Private Limited Company started operation, both being separate legal entities, it cannot be said that partnership firm has not ceased it’s production permanently – Present case is clearly covered under Rule 16 of the Rules and consequently, Respondent is legally entitled for refund of duty for closing down of their factory for disputed period – Impugned order is upheld and Revenue appeal is dismissed [Read less]

Central Excise – Section 11A of Central Excise Act, 1944 – Invoking of extended period of limitation – Demand of differential duty – Appellant manufactures waste rubber granules and clears them after paying excise duty – Audit team scrutinized records and found that Appellant had sold goods to its parent company and paid duty on invoice values – Revenue felt that since it was a case of sale of goods to a related party, who in turn consumed goods captively, duty should have been paid at rate of 110% of cost of production as certified in CAS 4 certificates and not on invoice values – Revenue issued Show Cause N... [Read more]

Central Excise – Section 11A of Central Excise Act, 1944 – Invoking of extended period of limitation – Demand of differential duty – Appellant manufactures waste rubber granules and clears them after paying excise duty – Audit team scrutinized records and found that Appellant had sold goods to its parent company and paid duty on invoice values – Revenue felt that since it was a case of sale of goods to a related party, who in turn consumed goods captively, duty should have been paid at rate of 110% of cost of production as certified in CAS 4 certificates and not on invoice values – Revenue issued Show Cause Notice to Appellant proposing recovery of differential excise duty by invoking extended period of limitation under Section 11A of the Act – Assistant Commissioner confirmed demand of differential duty – Commissioner (Appeals) upheld order-in-original – Whether invoking of extended period of limitation is sustainable in facts and circumstances of case – HELD – Appellant is only contesting the demand on grounds of limitation – Entire period of demand is beyond normal period of limitation – Section 11A of the Act provides for a limitation of one year for issuing SCN – Said period can be extended to five years, in case, duty is not paid, short paid, not levied, short levied or erroneously refunded on account of fraud or collusion or willful statement or suppression of facts or violation of provisions of the Act with an intent to evade payment of duty – While assessee was required to self-assess duty and file ER-1 return, a check against such self-assessment was the scrutiny which officers were mandated to do – Audit is the next level of check against scrutiny by officers – If audit points out some wrong assessment which was not pointed out by officer scrutinising ER-1 return, fault lies at doorstep of officer and it does not by itself establish that assessee had suppressed any facts – If differential duty was chargeable but was not paid and it is later discovered by audit and it gets time barred under Section 11A of the Act, responsibility for it rests squarely on officers mandated to scrutinize returns in time and raise a demand in time – Since entire demand is beyond normal period of limitation, demand in impugned order or consequential interest and penalties cannot be sustained – Impugned order is set aside and appeal is allowed [Read less]

Central Excise - Payment of interest on differential duty demand confirmed in a revenue neutral situation - whether interest is payable on the demand of Central Excise duty which has been held to be revenue neutral – HELD - it is an admitted fact that it is a case of revenue neutrality, which means whatever duty has been paid by the appellant and the same is entitled as cenvat credit to the appellants themselves - No interest is payable when the situation is revenue neutral, accordingly, the demand of interest is set aside - the appeal filed by the appellant is allowed - Central Excise Appeal No.914 of 2011 - Demand of d... [Read more]

Central Excise - Payment of interest on differential duty demand confirmed in a revenue neutral situation - whether interest is payable on the demand of Central Excise duty which has been held to be revenue neutral – HELD - it is an admitted fact that it is a case of revenue neutrality, which means whatever duty has been paid by the appellant and the same is entitled as cenvat credit to the appellants themselves - No interest is payable when the situation is revenue neutral, accordingly, the demand of interest is set aside - the appeal filed by the appellant is allowed - Central Excise Appeal No.914 of 2011 - Demand of duty on the ground that the assessable value of the goods cleared to job workers ought to be computed in terms of Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 r/w Section 4(1)(b) of the Central Excise Act, 1944 – Refund claim of duty paid - HELD - The matter was adjudicated and the demand of duty was confirmed. The said order was challenged before this Tribunal and this Tribunal vide Order dated 11.06.2007, held that the appeal filed by the appellant for recovery of demand of duty was dismissed as non-maintainable and the said part of the order of this Tribunal was never challenged by the appellant - as the order of the Tribunal was never challenged by the appellant qua confirmation of demand of duty, the refund claims are not maintainable. Accordingly, the same are rejected - the appeal filed by the appellant is dismissed [Read less]

GST - Blocking of Input Tax Credit on the ground that credit transitioned from the VAT regime to the GST regime is erroneous - Issue of Show Cause Notice by relying on Circular No. F.3(429)/GST/Policy/2022/1067-1072 dated 08.03.2022 proposing demand of tax identical to the amount of ITC blocked - Petitioner seeking direction to respondents for unblocking ITC and claiming interest at 12% per annum on amount of ITC blocked – HELD – the impugned show-cause notice does not effectively provide any reasons for raising a demand. The opening sentence of the impugned show-cause notice appears to be a mechanical reproduction of ... [Read more]

GST - Blocking of Input Tax Credit on the ground that credit transitioned from the VAT regime to the GST regime is erroneous - Issue of Show Cause Notice by relying on Circular No. F.3(429)/GST/Policy/2022/1067-1072 dated 08.03.2022 proposing demand of tax identical to the amount of ITC blocked - Petitioner seeking direction to respondents for unblocking ITC and claiming interest at 12% per annum on amount of ITC blocked – HELD – the impugned show-cause notice does not effectively provide any reasons for raising a demand. The opening sentence of the impugned show-cause notice appears to be a mechanical reproduction of the statutory provision - the impugned show-cause notice cannot be sustained – the abovesaid Circular cannot be read as permitting the proper officer to mechanically create a demand. The proper officer can issue a show cause notice only if are reasons for raising any demand against the taxpayer and the said reason must specifically be stated in the show cause notice. It does, prima facie, appear that the respondent had followed the said Circular in a mechanical manner - the impugned show cause notice is liable to be set aside as the same fails to disclose any reason for proposing the recovery and is incapable of eliciting any meaningful response - The impugned show cause notice is set aside - In so far as the petitioner’s prayer for interest is concerned, there is no statutory provision for granting interest for the period when the ITC is blocked - The petition is disposed of [Read less]

Customs – Effective date and time of Notification - Determination of effective date and time of implementation of amending Notification No. 84/2017-Cus dated 08.11.2017 imposing Customs duty of 50% on import of Ukrainian Origin Yellow Peas – Bills of Entry were self-assessed and RMS facilitated on prior entry basis and grant of entry inwards was at 12:50 hours on 08.11.2017 through EDI - Amending Notification No. 84/2017-Cus dated 08.11.2017 was E-Gazetted at 22:15 hours by the proper officer – HELD – the findings recorded by the lower adjudicating authority interpreting provisions of Section 25(4) of the Customs A... [Read more]

Customs – Effective date and time of Notification - Determination of effective date and time of implementation of amending Notification No. 84/2017-Cus dated 08.11.2017 imposing Customs duty of 50% on import of Ukrainian Origin Yellow Peas – Bills of Entry were self-assessed and RMS facilitated on prior entry basis and grant of entry inwards was at 12:50 hours on 08.11.2017 through EDI - Amending Notification No. 84/2017-Cus dated 08.11.2017 was E-Gazetted at 22:15 hours by the proper officer – HELD – the findings recorded by the lower adjudicating authority interpreting provisions of Section 25(4) of the Customs Act, 1962 holding that the date of issue of the Notification is the criteria and not the time of its publication is totally contrary to the judgment of the Hon'ble Supreme Court in the case of Union of India Vs. G.S. Chatha Rice Mills wherein it was held that the time of publication in the e-gazette will have application in the determination of the rate of duty and value - the Notification No. 84/2017-Cus dated 08.11.2017 comes into effect only from 22:15 hours on 08.11.2017 – since the Bills of Entry were filed on prior entry basis and the date and time of entry inwards being 12:50 hours on 08.11.2017, the order of the Commissioner of Customs confirming demand of duty and interest, confiscation of the impugned imported peas and imposition of fine and penalty cannot sustain and set aside - As the duty demand and interest are set aside, confiscation of the imported goods and imposition of fine and penalty would not survive - The appeals are allowed [Read less]

GST - Interplay of provisions of Section 50 or Section 29 of the CGST Act, 2017 - Cancellation of GST registration on the ground of non-filing of the returns – Filing of return along with interest after four months from the date of notice - petitioner submission that once the tax along with the interest thereon is paid, registration is liable to be restored – HELD – Petitioner’s contention that once the GST amount and the interest is paid, then the petitioner cannot be held to be a defaulter for not filing the return and therefore, the proceedings for cancellation of the registration becomes non est and the order c... [Read more]

GST - Interplay of provisions of Section 50 or Section 29 of the CGST Act, 2017 - Cancellation of GST registration on the ground of non-filing of the returns – Filing of return along with interest after four months from the date of notice - petitioner submission that once the tax along with the interest thereon is paid, registration is liable to be restored – HELD – Petitioner’s contention that once the GST amount and the interest is paid, then the petitioner cannot be held to be a defaulter for not filing the return and therefore, the proceedings for cancellation of the registration becomes non est and the order cancelling registration ought to be restored, this contention is unsustainable under the law - Provisions for cancellation of registration and making payment of the tax due with interest are different. Both the provisions have different scope, purpose and intent. If an assessee fails to make payment of the full GST amount or part thereof, interest is liable to be levied for the delayed payment - if an assessee fails to file the returns for a continuous period of six months, the registration is liable to be cancelled – there is no contradiction in the provisions of Section 50 or Section 29 of the CGST Act, 2017 - petitioner did not file returns for a period of six months consecutively and therefore, the authority has no option than to cancel the registration – there is no error of law in the exercise of jurisdiction by the authority in cancelling the registration of the petitioner - writ petition is dismissed with the direction that if the petitioner applies for fresh registration, the said application shall be considered in accordance with law - the writ petition is dismissed [Read less]

GST - Denial of refund claims of IGST paid on Zero Rated Supplies - Inadvertent mistake of selecting “A” suffixed with the serial number in the drawback notification providing for higher drawback rates instead of “B” which provides for lower drawback – petitioner case since the excess drawback on account of availing of CENVAT credit facility had been repaid with interest, it is entitled to the refund of IGST - HELD – Issue raised in this petition is identical to the one decided by this Court and therefore, on this count alone in light of the decision in the case of Amit Cotton, the petition deserves to be allow... [Read more]

GST - Denial of refund claims of IGST paid on Zero Rated Supplies - Inadvertent mistake of selecting “A” suffixed with the serial number in the drawback notification providing for higher drawback rates instead of “B” which provides for lower drawback – petitioner case since the excess drawback on account of availing of CENVAT credit facility had been repaid with interest, it is entitled to the refund of IGST - HELD – Issue raised in this petition is identical to the one decided by this Court and therefore, on this count alone in light of the decision in the case of Amit Cotton, the petition deserves to be allowed - the respondents are directed to sanction the refund of IGST with simple interest of 6% from the date of the shipping bills till the date of actual refund – the petition is allowed [Read less]

GST - Relevant date for determining period of limitation for issuance notice in Form GST Mov-07 under Section 129(3) of the CGST Act, 2017 – Validity of notice issued beyond the statutory period of limitation – HELD - Section 129(3) of the CGST/TNGST Act, 2017 has not used the expression "within seven days from the date of detention or seizure" - The language in Section 129(3) clearly state that notice specifying payment of penalty has to be issued within seven days of detention or seizure of goods. Issuance of notice within seven days has to be calculated from the date on which seizure was to be effected and not from ... [Read more]

GST - Relevant date for determining period of limitation for issuance notice in Form GST Mov-07 under Section 129(3) of the CGST Act, 2017 – Validity of notice issued beyond the statutory period of limitation – HELD - Section 129(3) of the CGST/TNGST Act, 2017 has not used the expression "within seven days from the date of detention or seizure" - The language in Section 129(3) clearly state that notice specifying payment of penalty has to be issued within seven days of detention or seizure of goods. Issuance of notice within seven days has to be calculated from the date on which seizure was to be effected and not from the following date - on this ground alone the impugned notice stands quashed with direction to respondents to release the goods/conveyances of the petitioner – writ petition is allowed [Read less]

GST – Rejection of refund - Non-compliance with order passed by higher Appellate Authority – HELD - the Adjudicating Authority has passed the impugned order on remand by the higher authority by defying and in violation of the order of the higher Appellate Authority which was binding upon the Adjudicating Authority being a subordinate to the Appellate Authority, by recording that the order of the Appellate Authority is not in accordance with law and he could not comply the order of the Appellate Authority and rejected the petitioner’s claim of refund – the conduct of the Adjudicating Authority is highly deprecable a... [Read more]

GST – Rejection of refund - Non-compliance with order passed by higher Appellate Authority – HELD - the Adjudicating Authority has passed the impugned order on remand by the higher authority by defying and in violation of the order of the higher Appellate Authority which was binding upon the Adjudicating Authority being a subordinate to the Appellate Authority, by recording that the order of the Appellate Authority is not in accordance with law and he could not comply the order of the Appellate Authority and rejected the petitioner’s claim of refund – the conduct of the Adjudicating Authority is highly deprecable and if such stand is taken by an adjudicating authority, there will be administrative anarchy in the Government offices and such conduct is also beyond the norms of the quasi-judicial authority's’ function - If Adjudicating Authority was of the view that order of the Appellate Authority was not in accordance with law he could have gone to further appeal. The Commissioner of CGST shall take note of such conduct of the Adjudicating Officer and issue proper instruction for avoidance of such conduct in future - the impugned order is set aside and writ petition is allowed by remand [Read less]

Customs - Waiver of cost recovery charges - petitioner is located in the Special Economic Zone Area has been granted a Letter of Approval for providing various services including operation of a Container Freight Station – whether sanction of posts is a condition preceding to the grant of waiver of cost recovery charges – HELD – As per para 2(b) of Circular No. 34/2003 dated 24.04.2003, it was mandatory to take prior approval for posting of officers and staff on cost recovery basis in the ICD/CFS. The creation of the requisite number of posts should precede the notification and therefore an approval was sought for. No... [Read more]

Customs - Waiver of cost recovery charges - petitioner is located in the Special Economic Zone Area has been granted a Letter of Approval for providing various services including operation of a Container Freight Station – whether sanction of posts is a condition preceding to the grant of waiver of cost recovery charges – HELD – As per para 2(b) of Circular No. 34/2003 dated 24.04.2003, it was mandatory to take prior approval for posting of officers and staff on cost recovery basis in the ICD/CFS. The creation of the requisite number of posts should precede the notification and therefore an approval was sought for. Now, it is not open for the authorities to refuse request for waiver of cost recovery charges on the ground that the posts were sanctioned only on 18.03.2020 and therefore the cost recovery charges’ waiver can happen only two years thereafter from such date subject to fulfillment of conditions of the circular dated 12.09.2005 - The denial of waiver on the ground that such costs cannot be waived as the posts had not been sanctioned at the relevant point of time is arbitrary and therefore cannot be sustained - petitioners are entitled to waiver of cost recovery charges in light of circular dated 12.09.2005 with effect from 01.07.2019. Costs recovered towards posting of custom officials at the petitioners’ CFS post 01.07.2019 be refunded to the petitioners - the petition is allowed [Read less]

Customs – Opting out/exit from the EOU Scheme - excess payment of Excise duty on the stock of finished goods - Eligibility to refund of excess paid excise duty on the manufactured finished goods and waste pursuant to debonding from the EOU Scheme and subsequent removal from the factory to the domestic and export market at a reduced price – HELD – the refund is not arising out of a difference in the rate of excise duty but on account of the value adopted for the purposes of discharge of excise duty on the stock of manufactured FG and waste as in existence on the cutoff date - the letter by the appellant confirming the... [Read more]

Customs – Opting out/exit from the EOU Scheme - excess payment of Excise duty on the stock of finished goods - Eligibility to refund of excess paid excise duty on the manufactured finished goods and waste pursuant to debonding from the EOU Scheme and subsequent removal from the factory to the domestic and export market at a reduced price – HELD – the refund is not arising out of a difference in the rate of excise duty but on account of the value adopted for the purposes of discharge of excise duty on the stock of manufactured FG and waste as in existence on the cutoff date - the letter by the appellant confirming the duty discharged pursuant to their application for debonding and could not be construed as final assessment order as there was no quantification of any confirmed liability. Moreover, no provisional assessment was sought by the appellant and no order finalizing provisional assessment was passed – the goods lying in stock at the time of debonding would be liable to duty only at point of time of removal of those goods from place of manufacture - further, the reasoning advanced by the Ld. Appellate Commissioner that “value” is frozen on payment of excise duty is also not in consonance with Section 4 of the Central Excise Act as also Rule 4 of the Central Excise Rules which requires determination of value and payment of duty with respect to each removal and that there is no removal when excise duty is discharged on the stock of manufactured FG pursuant to exit bond from the EOU Scheme as the EOU Unit continues to function as a DTA Unit – the impugned order rejecting the refund claim is not sustainable and the same is set aside – assessee appeal is allowed [Read less]

Central Excise – Clearance of goods – Adoption of genuine factory gate sale price – Payment of duty – Appellant has cleared their various products to their depots and also sold same to independent third parties – Department initiated proceedings on ground that valuation adopted by Appellant for their clearances to depots were not as per prescribed statutory provisions – Adjudicating Authority set aside demand proposed in show cause notice – Commissioner (Appeals) set aside order of Adjudicating Authority and remanded matter for de-novo adjudication to Adjudicating Authority – Whether Appellant is correct in... [Read more]

Central Excise – Clearance of goods – Adoption of genuine factory gate sale price – Payment of duty – Appellant has cleared their various products to their depots and also sold same to independent third parties – Department initiated proceedings on ground that valuation adopted by Appellant for their clearances to depots were not as per prescribed statutory provisions – Adjudicating Authority set aside demand proposed in show cause notice – Commissioner (Appeals) set aside order of Adjudicating Authority and remanded matter for de-novo adjudication to Adjudicating Authority – Whether Appellant is correct in adopting independent third party factory gate price for making payment of Excise Duty when goods are cleared to their depots – HELD – This is third round of litigation on this issue – During last round of litigation, Tribunal remanded matter to Adjudicating Authority to reconsider issue by specifically holding that if a genuine factory gate sale price is available, same should be applied for valuation of clearances in question – Procedure adopted by Appellant right through April 1991 to September 1996 remained same for value adopted by them for clearances to their depots which is based on factory gate sales done by them, for which they have produced documentary evidence before Lower Authorities – Appellant has been able to establish that they have genuine factory gate sales by clearing these goods to various unrelated third parties – Adjudicating Authority, after proper verification of all documentary evidence placed before him, dropped demand proposals, however, Department continued to pursue appeal before Commissioner (Appeals) – Even after finding that Appellant had produced all records to show that genuine factory gate sale price exists, Commissioner (Appeals) has gone ahead and remanded matter to Adjudicating Authority – Impugned order is set aside and appeal is allowed [Read less]

Service Tax - Input tax credit in respect of insurance premium paid to Deposit Insurance Service provided by Deposit Insurance and Credit Guarantee Corporation (DICGC) – impugned order of the CESTAT followed the decision of the Larger Bench of the CESTAT, South Zonal Bench, Bangalore and observed that the issue is no more res-integra being fully covered by the decision of the Larger Bench – Revenue case that CESTAT, Mumbai ought not to have followed the Larger Bench decision in allowing the appeals of the respondents – HELD – the issue in the present proceedings is certainly not different which has fell for conside... [Read more]

Service Tax - Input tax credit in respect of insurance premium paid to Deposit Insurance Service provided by Deposit Insurance and Credit Guarantee Corporation (DICGC) – impugned order of the CESTAT followed the decision of the Larger Bench of the CESTAT, South Zonal Bench, Bangalore and observed that the issue is no more res-integra being fully covered by the decision of the Larger Bench – Revenue case that CESTAT, Mumbai ought not to have followed the Larger Bench decision in allowing the appeals of the respondents – HELD – the issue in the present proceedings is certainly not different which has fell for consideration of the Larger Bench in the case of South Indian Bank - the Larger Bench has taken into consideration the statutory scheme of DICGC as also the mandatory requirement under the Reserve Bank of India directives to be complied by the bank like the assessee and the compliances of which were mandatory. It is in the course of availing such insurance service for the benefit of the depositors, the petitioner was required to pay the premium on which service tax was paid, and of which, ITC was sought to be availed - the CESTAT has rightly observed that the issue stands squarely covered by the decision of the Larger Bench - no substantial question of law arises in the Revenue appeals – the appeals are dismissed [Read less]

Service Tax - Taxability of notional interest received towards security deposit against renting of immovable property – HELD - since the consideration for leasing of the property is rent, so what can be levied to service tax is only rent and notional interest on the security deposit cannot be subjected to levy of service tax - service tax could not have been levied on the notional interest calculated by the department on the interest fee security deposit collected by the appellant from tenants - the impugned orders are set aside and appeal is allowed

GST - Cancellation of registration – Defective show cause notice – HELD - no material whatsoever referred in the show cause notice as to why the petitioner was being labelled of having obtained registration by means of fraud, wilful misstatement or suppression of facts - the impugned order is held to be illegal not only on the ground of the same being in breach of the principles of natural justice but also on the ground of total non application of mind, as the same is bereft of any reasons whatsoever which the law would recognize to justify cancellation of the registration of the petitioner - It is well settled princip... [Read more]

GST - Cancellation of registration – Defective show cause notice – HELD - no material whatsoever referred in the show cause notice as to why the petitioner was being labelled of having obtained registration by means of fraud, wilful misstatement or suppression of facts - the impugned order is held to be illegal not only on the ground of the same being in breach of the principles of natural justice but also on the ground of total non application of mind, as the same is bereft of any reasons whatsoever which the law would recognize to justify cancellation of the registration of the petitioner - It is well settled principles of law that cancellation of registration certainly meets the assessee with a civil consequence. The petitioner’s registration could not have been cancelled without any reason, as no reasons were neither set out in the show cause notice nor set out in the impugned order. The show cause notice and the impugned order suffered from an incurable defects - If the case of the department is that there is substantial revenue involved, in such event, the designated officer should have been more careful and could not have been so careless in issuing such defective show cause notice - The concerned Commissionerate needs to take a serious view of such approach of the concerned Officers who are not following the law in issuing appropriate show cause notices more particularly when the issues are serious – the writ petition is disposed of [Read less]

GST - Refund of IGST - Error in mentioning correct tariff code in shipping bill – Petitioner aggrieved by denial of amendment of shipping bill to substitute HSN Code 3907-A by 3907-B – HELD - the duty drawback rate under HSN Code 3907-A and 3907-B is same and therefore it is not a case of higher duty drawback - Secondly, the CHA in affidavit has admitted the mistake in preparing the shipping bills on which instead of mentioning 3907-B, they have mentioned 3907-A – The reliance is placed on Circular dated 9th October, 2018, whereas the export was made much before the date of Circular. It is a settled position that the... [Read more]

GST - Refund of IGST - Error in mentioning correct tariff code in shipping bill – Petitioner aggrieved by denial of amendment of shipping bill to substitute HSN Code 3907-A by 3907-B – HELD - the duty drawback rate under HSN Code 3907-A and 3907-B is same and therefore it is not a case of higher duty drawback - Secondly, the CHA in affidavit has admitted the mistake in preparing the shipping bills on which instead of mentioning 3907-B, they have mentioned 3907-A – The reliance is placed on Circular dated 9th October, 2018, whereas the export was made much before the date of Circular. It is a settled position that the circular cannot be made applicable retrospectively. Even otherwise, the circular proceeds on a footing of claim of higher duty drawback and not where the rate of drawback is same and furthermore, the circular also does not deal with the rectification of mistake if suffix (A) is mentioned instead of suffix (B), while mentioning the HSN Code, which the facts in the instant case - The Respondents are directed to refund the IGST paid in respect of the zero rated supply under shipping bills in question alongwith interest as per the IGST Act - The Petition is allowed [Read less]

Service Tax – Liability to service tax on machining charges received from the service recipient for activity relating to machining work on the forged wheels under the category of “Business Auxiliary Service” – HELD – the issue has been settled by this Tribunal in the case of Ferro Scrap Nigam Limited wherein it has been held that during the impugned period, such activity was not liable to pay service tax under the category of BAS - the appellant is not liable to pay service tax on the activity of machineries and accordingly, the impugned order is set aside and the appeal is allowed

Service Tax – Valuation - Works Contract Service – Includability of value of the free supplied materials purpose of discharging service tax liability under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 – HELD – as per the provisions of Section 67 of Finance Act, 1994 for the valuation of service on which service tax is to be charged, any consideration flown from the service recipient to the service provider either in the monetary form or in any other form which is not ascertainable such benefit which flow back to the service provider need to be included in the gross amount charged for l... [Read more]

Service Tax – Valuation - Works Contract Service – Includability of value of the free supplied materials purpose of discharging service tax liability under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 – HELD – as per the provisions of Section 67 of Finance Act, 1994 for the valuation of service on which service tax is to be charged, any consideration flown from the service recipient to the service provider either in the monetary form or in any other form which is not ascertainable such benefit which flow back to the service provider need to be included in the gross amount charged for levy of service tax - the consideration which is not received by the service provider shall not form part of taxable value under the term gross amount charged under Section 67 for levy of service tax - the issue is no longer res integra as the matter has already been decided by Hon’ble Apex Court – the impugned order is set aside and appeal is allowed [Read less]

Customs - Section 27 of the Customs Act, 1962 - Import of coal – Simultaneous benefit of Notification No. 46/2011-Cus dated 01/06/2011 and exemption Notification No. 12/2012-Cus dated 17/03/2012 - during the period March 2013 to September 2013, due to technical glitches in the Customs EDI system, simultaneous benefit of duty exemption vide Notification No. 46/2011-Cus and Notification No. 12/2012-Cus was not accessible - respondent paid the BCD component under protest at the time of the clearance of imported goods and sought refund later on – Dept appeal seeking to deny the refund on the ground that refund application ... [Read more]

Customs - Section 27 of the Customs Act, 1962 - Import of coal – Simultaneous benefit of Notification No. 46/2011-Cus dated 01/06/2011 and exemption Notification No. 12/2012-Cus dated 17/03/2012 - during the period March 2013 to September 2013, due to technical glitches in the Customs EDI system, simultaneous benefit of duty exemption vide Notification No. 46/2011-Cus and Notification No. 12/2012-Cus was not accessible - respondent paid the BCD component under protest at the time of the clearance of imported goods and sought refund later on – Dept appeal seeking to deny the refund on the ground that refund application being time barred and on the ground of non-challenge to the assessment order – HELD – the refund claim arose as a result of non-acceptance of admissible exemption notification benefits because of certain systems related dysfunction and non-upgradation thereof, at the relevant time of filing of the Bills of Entry - the adjudicating authority failed to take cognizance thereof and thus summarily rejected the refund claims as being time barred, as well as for non-filing of appeal, challenging the original assessment order - since the payment of duty was under protest, limitation clause is held not to be applicable in this case – the issue of non-challenge to the assessment order if of no material consequence for the present matter as it is an undisputed fact that the duty in respect of the subject import was paid under protest at the time of assessment of the bill of entry - The very fact that the duty was paid under protest itself implies that the assessment was disputed and unacceptable and therefore under challenge by the importer. Obviously therefore a question of a fresh challenge to the assessment order is uncalled for - there is no requirement of challenging the assessment separately once wherever the duty is paid under protest - the order of the lower authority is maintained and the appeal filed by the revenue is dismissed [Read less]

Customs AAR - Classification of ‘Foil Balloons’ which are used for party decoration and for entertainment purposes – HELD – if the “Foil Balloons” are made of Nylon/HDPE not of Latex/Rubber and imported for the purpose of party decoration or entertainment, the same merit classification under the heading 9505 and specifically under sub-heading 9505 9090 of the First Schedule to the Customs Tariff Act, 1975 – Ordered accordingly

Service Tax - Payment of service tax on lease deeds of more than 30 years executed with Industrial Development Corporation/Undertaking - Refund claim under Section 104 of the Finance Act, 1994, inserted by Finance Act 2017 – Denial of refund claim on the ground of limitation – HELD - Section 104 of the Finance Act, 1994 inserted by Finance Act, 2017 is a special provision and all the conditions prescribed therein need to be strictly followed and there is no scope for any other interpretation - since there is an express provision in Section 104(3) of the Finance Act, 1994 prescribing a specific timeline for filing of th... [Read more]

Service Tax - Payment of service tax on lease deeds of more than 30 years executed with Industrial Development Corporation/Undertaking - Refund claim under Section 104 of the Finance Act, 1994, inserted by Finance Act 2017 – Denial of refund claim on the ground of limitation – HELD - Section 104 of the Finance Act, 1994 inserted by Finance Act, 2017 is a special provision and all the conditions prescribed therein need to be strictly followed and there is no scope for any other interpretation - since there is an express provision in Section 104(3) of the Finance Act, 1994 prescribing a specific timeline for filing of the refund, time limit need to be strictly adhered irrespective of whatsoever reason may be the cause for delay in filing the refund claim - refund application submitted by the appellant is rightly rejected as the same is beyond the period of limitation – the appeal is dismissed [Read less]

Kerala Value Added Tax Act, 2003 - Classification of products namely, Elastopan CS 9500 C-B and Lupranate 137/29 – Assessee stand that the products in question merited classification under heading 3909.30.90 of the Schedule to the Customs Tariff Act and therefore, under Entry 118 (9) of List A of Schedule III to the KVAT Act - The Appellant-State contention that when the assessee itself had classified the products in earlier years under Heading 2929.10.90, in the absence of any change in the products there was no basis for a change in classification during the assessment year in question – HELD - while the Revenue argu... [Read more]

Kerala Value Added Tax Act, 2003 - Classification of products namely, Elastopan CS 9500 C-B and Lupranate 137/29 – Assessee stand that the products in question merited classification under heading 3909.30.90 of the Schedule to the Customs Tariff Act and therefore, under Entry 118 (9) of List A of Schedule III to the KVAT Act - The Appellant-State contention that when the assessee itself had classified the products in earlier years under Heading 2929.10.90, in the absence of any change in the products there was no basis for a change in classification during the assessment year in question – HELD - while the Revenue argued that the report of the IIT relied on by the Tribunal does not contain cogent reasons to support the findings therein as regards the nature of the product, we find ourselves unable to accept the said argument in the absence of any material produced behalf of the State to dislodge the scientific findings in the report of the IIT. It is trite that this Court cannot lightly brush aside scientific evidence, and they must be given due weightage while adjudicating classification issues in tax matters - When the Revenue has not made any attempt to discredit or rebut the genuineness and correctness of the reports given by experts such as the IIT, Court cannot brush side the said report in favour of a suggestion made by the Revenue with regard to the correct classification to be accorded to the product - the test report of the IIT New Delhi clearly finds that the product dealt with by the assessee merited classification as polyurethane in primary form, and therefore, nothing turned on the alternate classification suggested by the learned Government Pleader - Revisions are disposed by answering the questions of law raised therein against the Revenue and in favour of the assessee [Read less]

Tamil Nadu VAT Act, 2006 – Input Tax Credit on Capital goods - Eligibility of input tax credit on generator, folk lift and crane hoist – HELD - Prima facie, it appears that the items in question viz., generators, folk lifts and crane hoist are capital goods within the meaning of Section 2(11) of TNVAT Act, 2006 and therefore input tax credit availed by the petitioner are in order. To deny the input tax credit on “capital goods” there should be materials available before the respondents to substantiate that these goods do not satisfy the definition of “capital goods” and were not used for manufacturing of final ... [Read more]

Tamil Nadu VAT Act, 2006 – Input Tax Credit on Capital goods - Eligibility of input tax credit on generator, folk lift and crane hoist – HELD - Prima facie, it appears that the items in question viz., generators, folk lifts and crane hoist are capital goods within the meaning of Section 2(11) of TNVAT Act, 2006 and therefore input tax credit availed by the petitioner are in order. To deny the input tax credit on “capital goods” there should be materials available before the respondents to substantiate that these goods do not satisfy the definition of “capital goods” and were not used for manufacturing of final products - The input tax credit on “capital goods” under the TNVAT Act 2006 are inspired for Cenvat credit Rules 2004 framed under the Central Excise Act, 1944 - The Supreme Court has been liberal in allowing the input tax credit and on the capital goods under the provisions before the erstwhile Central Excise Act, 1944 and thereafter under the provisions of the CENVAT Rules, 2004 - Unless the department establishes that these goods were not used in the manufacturing of final products or was used in the manufacturer is exempted, denial input tax credit to the petitioner cannot be justified - considering the facts that the impugned orders were passed without reasons, the impugned orders are set aside and matter remanded back to the respondents to pass appropriate orders on merits and in accordance with law - The respondents may depute an officer to examine whether these goods were indeed put to use for in the manufacture of final products for the purpose specified in Section 2(11) of TNVAT Act - the writs petitions are allowed by way of remand [Read less]

Customs - Section 28 of the Customs Act, 1962 - Freezing of bank accounts and sealing of the office premises of the purchaser of the imported goods - Validity of detention of imported goods at the end of subsequent purchasers once the goods are cleared for home consumption and enter the domestic market for sale – HELD - once the goods are cleared for home consumption and enter the domestic market for sale, such goods cannot be seized from the subsequent purchasers and that too if the third person against whom action is initiated has already sold the goods in open market - In the present case, the goods imported by M/s ST... [Read more]

Customs - Section 28 of the Customs Act, 1962 - Freezing of bank accounts and sealing of the office premises of the purchaser of the imported goods - Validity of detention of imported goods at the end of subsequent purchasers once the goods are cleared for home consumption and enter the domestic market for sale – HELD - once the goods are cleared for home consumption and enter the domestic market for sale, such goods cannot be seized from the subsequent purchasers and that too if the third person against whom action is initiated has already sold the goods in open market - In the present case, the goods imported by M/s ST Electricals were initially cleared for home consumption by the said importer and the said goods have changed hands in open market and is also out of the possession of the petitioner - the impugned action in detaining the goods in question is contrary to the provisions of the Act, more so when same is not pursuant to any recovery of pending dues of the petitioner or proceedings pending against the petitioner under the Act - Section 28 of the Customs Act, which deals with recovery of duties, would not empower the respondents to justify the detention of the goods under consideration and the attachment of the bank account in the petitioner - Section 28 nowhere provides for detention of the goods and attachment of the bank accounts more so in the absence of any demand of any duty or penalty or any proceedings pending against the petitioner - Section 110(1) of the Customs Act also would not assist the case of the respondents - Further the provision of Section 111 provides for confiscation of improperly imported goods, prima facie, the petitioner being a third party purchaser of the goods in question, this provision also may not be applicable - if the case of the respondent is accepted, that the department can detain any goods in the hands of subsequent purchaser of the goods who has purchased them from the open market, then it would lead to an anomalous and chaotic situation - the impugned action of the respondents in detaining the goods in question and attaching the bank account of the petitioner without there being any demand due from the petitioner or any proceedings pending is without jurisdiction and without any authority of law - detention of the goods shall be revoked and respondents shall defreeze savings account of the petitioner - The petition is allowed [Read less]