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Service Tax - Non-payment of service tax on commercial construction services. The Department relied on bank statements to determine the taxable value - Appellant argued that the bank credits included non-taxable receipts like residential construction, government works, and abandoned projects – HELD - While the assessee must cooperate by disclosing all relevant material facts, the burden is on the Department to establish taxability. The appellant failed to provide invoices and work orders despite repeated summons, shifting the onus to rebut the bank evidence. However, the department cannot simply aggregate bank credits wi... [Read more]

Service Tax - Non-payment of service tax on commercial construction services. The Department relied on bank statements to determine the taxable value - Appellant argued that the bank credits included non-taxable receipts like residential construction, government works, and abandoned projects – HELD - While the assessee must cooperate by disclosing all relevant material facts, the burden is on the Department to establish taxability. The appellant failed to provide invoices and work orders despite repeated summons, shifting the onus to rebut the bank evidence. However, the department cannot simply aggregate bank credits without analysing the nature of receipts - The matter is remitted to the original authority to provide the appellant a fresh opportunity to submit evidence and cooperate in the proceedings. The appellant's conduct of withholding material facts amounts to abuse of the adjudicatory process, disentitling it from relief, but the interest of justice requires the truth to prevail. The original authority shall adhere to principles of natural justice and pass a reasoned order after considering all the evidence - The appeal is disposed of [Read less]

GST – Reference to Larger Bench - Validity of issuance of Consolidated Show Cause Notice under Sections 73 or Section 74 of the CGST Act, 2017 – Difference of opinion between various High Courts and Co-ordinate benches of this Court - Whether consolidated show cause notice can be issued for multiple financial years/tax periods or it should be issued separately for each financial year – HELD - Although this Court would be bound by the decision of the coordinate bench in Milroc Good Earth Developers case, however, there are significant legal issues raised by the Department, including to rely on the decisions of the Sup... [Read more]

GST – Reference to Larger Bench - Validity of issuance of Consolidated Show Cause Notice under Sections 73 or Section 74 of the CGST Act, 2017 – Difference of opinion between various High Courts and Co-ordinate benches of this Court - Whether consolidated show cause notice can be issued for multiple financial years/tax periods or it should be issued separately for each financial year – HELD - Although this Court would be bound by the decision of the coordinate bench in Milroc Good Earth Developers case, however, there are significant legal issues raised by the Department, including to rely on the decisions of the Supreme Court, which deserve due consideration - There is no legislative intent to confine the authority of the proper officer to issue a show cause notice only for a specific period for which one return could be filed. The sub-section (3) of Sections 73 and 74 specifically uses the words "for any period under sub-section (1)" and "such periods other than those covered under sub-section (1)", which indicates that the legislature has not confined the operation of sub-section (1) and has empowered the proper officer to issue a show cause notice for different periods – From the conjoint reading of sub-sections (1), (2) and (3) of Sections 73/74, there is no indication that sub-section (10) of Sections 73 and 74, which prescribes the limitation period for passing an order, in any manner controls or restricts the operation of sub-section (1) read with sub-sections (2) and (3) which empower the proper officer to issue a show cause notice - Further, there is no such indication that sub-section (10) which confines itself to an order being passed under sub-section (9), when providing for limitation in that regard, in any manner controls, restricts or creates an embargo on the proper officer exercising jurisdiction to issue a SCN by clubbing the different periods – To consider a bar under sub-section (1) to issue a consolidated SCN for different periods merely because sub-section (10) provides for limitation in passing of orders would amount to an incorrect reading of sub-section (1) Sections 73/74, imposing an unwarranted restriction to the operation and its legislative intent - The decisions of the Delhi High Court in Mathur Polymers v. Union of India and Ambika Traders v. Commr. have taken a view contrary to the decision in Milroc Good Earth Developers, and the Supreme Court has dismissed the SLPs against these decisions. Accordingly, the proceedings be placed by the Registry before the Hon'ble the Chief Justice for constitution of Larger Bench to consider the correctness of the decision in Milroc Good Earth Developers and the legal issues arising thereof – Ordered accordingly [Read less]

Central Excise - Duty Evasion, Trading vs Manufacturing - The appellant company was engaged in the manufacture and re-sale of Electrical Overhead Materials/Hardware Fittings. They claimed to have availed SSI Exemption on the manufactured goods and also undertook trading activities. The department alleged that the entire quantity of goods was manufactured by the appellant and not traded, and thus denied the SSI Exemption - Whether the appellant company was entitled to the benefit of SSI Exemption on its manufactured goods or the entire quantity of goods cleared should be considered for demand of duty - HELD - The department... [Read more]

Central Excise - Duty Evasion, Trading vs Manufacturing - The appellant company was engaged in the manufacture and re-sale of Electrical Overhead Materials/Hardware Fittings. They claimed to have availed SSI Exemption on the manufactured goods and also undertook trading activities. The department alleged that the entire quantity of goods was manufactured by the appellant and not traded, and thus denied the SSI Exemption - Whether the appellant company was entitled to the benefit of SSI Exemption on its manufactured goods or the entire quantity of goods cleared should be considered for demand of duty - HELD - The department failed to conduct proper investigation to ascertain the trading activities of the appellant. No investigation was done at the supplier's end or the transporter's end to verify the appellant's claim of trading. The audited balance sheets produced by the appellant clearly showed the segregation of manufacturing sales and trading sales, which the department failed to consider. Relying on the decisions in Wintek Enterprises and Super Poly Fabriks Ltd., held that a document has to be read as a whole and the nomenclature or a particular activity cannot be decisive. Since the value of the manufactured goods fell within the SSI Exemption limit after deducting the trading sales, the demand of duty and penalties imposed on the appellant company and its director are set aside, and the appellant was held entitled to the benefit of SSI Exemption – The appeals are allowed [Read less]

GST – Anti-Profiteering - The DGAP found that the respondent had profiteered and calculated the amount of profiteering to be deposited in the Consumer Welfare Fund. The respondent challenged the DGAP's findings, contending that the increase in prices was pursuant to the orders of the High Court, and that the GST authorities lacked jurisdiction as the prices were regulated by the State Government under the Telangana Cinema (Regulation) Act, 1955 – HELD - The respondent failed to comply with the mandatory directions of the High Court to inform the authorities about the proposed price increase. The respondent's increase i... [Read more]

GST – Anti-Profiteering - The DGAP found that the respondent had profiteered and calculated the amount of profiteering to be deposited in the Consumer Welfare Fund. The respondent challenged the DGAP's findings, contending that the increase in prices was pursuant to the orders of the High Court, and that the GST authorities lacked jurisdiction as the prices were regulated by the State Government under the Telangana Cinema (Regulation) Act, 1955 – HELD - The respondent failed to comply with the mandatory directions of the High Court to inform the authorities about the proposed price increase. The respondent's increase in prices after initially reducing them to pass on the benefit of GST rate reduction amounted to profiteering under Section 171 of the CGST Act. The Tribunal accepted the DGAP's computation of the profiteered amount and directed the respondent to deposit the same along with interest from 28.06.2019 onwards in the Consumer Welfare Funds. However, no penalty was leviable as the provision for penalty was introduced after the relevant period - The report of the DGAP is accepted. The respondent is directed to deposit the profiteered amount along with interest – Ordered accordingly [Read less]

Service Tax – Payment of Service Tax on taxable services, Demand on entire turnover - Appellant provided clearing and forwarding agent services and business auxiliary services, and was paying service tax on the taxable services - Revenue authorities alleged that the appellant had received a higher turnover than what was declared in the service tax returns, and issued notice demanding additional service tax along with interest and penalties - Whether the appellant is liable to pay service tax on the entire turnover or only on the taxable services – HELD - The appellant had duly submitted the relevant documents during th... [Read more]

Service Tax – Payment of Service Tax on taxable services, Demand on entire turnover - Appellant provided clearing and forwarding agent services and business auxiliary services, and was paying service tax on the taxable services - Revenue authorities alleged that the appellant had received a higher turnover than what was declared in the service tax returns, and issued notice demanding additional service tax along with interest and penalties - Whether the appellant is liable to pay service tax on the entire turnover or only on the taxable services – HELD - The appellant had duly submitted the relevant documents during the adjudication proceedings, including copies of the audit reports, Form 26AS, income tax returns, calculation of VAT turnover, and VAT returns, which showed that the appellant was also engaged in the activity of trading of stone chips, on which service tax is not leviable. The adjudicating authority had not given any consideration to these submissions made by the appellant. Further, the invocation of the extended period of limitation is also not sustainable as there was no evidence of suppression or wilful misstatement on the part of the appellant. Accordingly, the demand of service tax, interest, and penalties confirmed in the impugned order is set aside - The appeal is allowed [Read less]

Service Tax - Whether the activity of production of coal from mines amounts to manufacture and consequently Central Excise Duty is payable or amounts to mining service on which Service Tax is payable – HELD - The activity undertaken by the appellant, which includes preparation of plans for mining, drilling, mining in open cast or underground, raising of coal, sizing, dispatching coal, exploration and other allied activities, amounts to manufacture of coal in terms of Section 2(f) of the Central Excise Act, 1944. In earlier decision in the case of M/s. Integrated Coal Mining Ltd. it was held that the activity of mining an... [Read more]

Service Tax - Whether the activity of production of coal from mines amounts to manufacture and consequently Central Excise Duty is payable or amounts to mining service on which Service Tax is payable – HELD - The activity undertaken by the appellant, which includes preparation of plans for mining, drilling, mining in open cast or underground, raising of coal, sizing, dispatching coal, exploration and other allied activities, amounts to manufacture of coal in terms of Section 2(f) of the Central Excise Act, 1944. In earlier decision in the case of M/s. Integrated Coal Mining Ltd. it was held that the activity of mining and production of coal is covered by the definition of 'manufacture' under the Central Excise Act and demand of service tax thereon is unsustainable. Since the appellant is discharging excise duty on the activity of production of coal, the demand of service tax on the same activity cannot be sustained. When an activity amounts to manufacture, the same cannot be subjected to service tax – The appeal is allowed on this ground - Whether the appellant is providing service to the Joint Venture Companies or not and consequently, whether the appellant is liable to pay Service Tax or not – HELD - When the Government and private enterprises enter into a joint venture for achieving a common objective and sharing the profits, the responsibility discharged by each of the co-venturers towards the venture is not by way of any service rendered to the joint venture, but in their own interest in furtherance of the common objective of the joint venture. Therefore, service tax liability cannot be fastened upon the appellant. The appellant, being a co-venturer of the Joint Venture, is not liable to pay Service Tax. [Read less]

Central Excise - Clandestine Removal of excisable goods - Appellants were charged with clandestine manufacture and clearance of excisable goods without payment of duty - Whether the allegation can be established on the basis of private records in the absence of any corroborative evidence – HELD - The allegation of clandestine removal cannot be based on assumptions and presumptions without providing any corroborative evidence. For establishing clandestine removal, there should be tangible evidence such as excess procurement of raw materials, actual removal of unaccounted finished goods, discovery of such goods outside the... [Read more]

Central Excise - Clandestine Removal of excisable goods - Appellants were charged with clandestine manufacture and clearance of excisable goods without payment of duty - Whether the allegation can be established on the basis of private records in the absence of any corroborative evidence – HELD - The allegation of clandestine removal cannot be based on assumptions and presumptions without providing any corroborative evidence. For establishing clandestine removal, there should be tangible evidence such as excess procurement of raw materials, actual removal of unaccounted finished goods, discovery of such goods outside the factory, sale of such goods to identified parties, evidence of receipt of sale proceeds, excess electricity consumption, and statements of buyers - In the present case, the investigating authority failed to bring on record any such corroborative evidence. The allegation of clandestine removal cannot be established solely on the basis of private records in the absence of any other corroborative evidence. The statements recorded during the investigation without complying with the mandatory procedure under Section 9D of the CEA, 1944 also cannot be relied upon as evidence. Similarly, the printouts generated from the pen drives and hard disks seized during the investigation cannot be treated as admissible evidence without fulfilling the conditions prescribed under Section 36B of the CEA, 1944 – Further, the allegation of shortage of stock during the course of investigation, determined solely on the basis of eye estimation and without any documentary evidence or weighment slips, cannot be a ground to allege clandestine removal of excisable goods - The impugned order demanding central excise duty along with interest and penalties is set aside and the appeal is allowed [Read less]

Service Tax - Taxability of service charges paid to service provider for excavation and processing of ferrous scrap - The appellant was engaged in the business of ferrous recycling and was awarded a contract by SAIL for excavation, processing and delivery of ferrous scrap. The appellant was also allowed to purchase a certain quantity of the processed scrap - Whether the income earned by the appellant's sister concern from the purchase of processed scrap should be included in the valuation of the service charges paid to the appellant – HELD - If there is any violation of clauses of tender or work order, only SAIL can take... [Read more]

Service Tax - Taxability of service charges paid to service provider for excavation and processing of ferrous scrap - The appellant was engaged in the business of ferrous recycling and was awarded a contract by SAIL for excavation, processing and delivery of ferrous scrap. The appellant was also allowed to purchase a certain quantity of the processed scrap - Whether the income earned by the appellant's sister concern from the purchase of processed scrap should be included in the valuation of the service charges paid to the appellant – HELD - If there is any violation of clauses of tender or work order, only SAIL can take action against the appellant for non-compliance of the condition of tender or work order. However, for the goods cleared by SAIL to the appellant's sister concern, the appellant cannot be liable for service tax as the same would amount to double taxation as the payment of excise duty and service tax are both exclusive. The excise duty paid by the SAIL on such goods, have been accepted by the Revenue. In such circumstances, the demand of service tax against the appellant is not sustainable and set aside – The appeal is allowed [Read less]

Service Tax - Refund of service tax - Appellant claimed refund of service tax paid on construction of roads and interlocking/chequered tiles work for Rajasthan Housing Board on the ground that construction of all types of roads was not taxable up to 30.06.2012 - Department held the view that the services provided by the appellant was covered under the category of "Works Contract Services" – HELD - The appellant had not provided the complete set of contract/agreements with G-Schedule, Tax Payment Particulars, ST-3 Returns which were essential documents for processing refund claims. As per the terms of the contract, the am... [Read more]

Service Tax - Refund of service tax - Appellant claimed refund of service tax paid on construction of roads and interlocking/chequered tiles work for Rajasthan Housing Board on the ground that construction of all types of roads was not taxable up to 30.06.2012 - Department held the view that the services provided by the appellant was covered under the category of "Works Contract Services" – HELD - The appellant had not provided the complete set of contract/agreements with G-Schedule, Tax Payment Particulars, ST-3 Returns which were essential documents for processing refund claims. As per the terms of the contract, the amount quoted by the appellant to the service recipient (Rajasthan Housing Board) was inclusive of service tax, and the Rajasthan Housing Board had deducted 50% of the tax from the payments made to the appellant. The remaining 50% of the tax liability was paid by the appellant. Since the appellant had passed on the burden of the service tax to the service recipient, the principle of unjust enrichment would apply. As the appellant has not been able to establish that the incidence has not been passed on to RHB, the impugned order was correct in holding that the refund, even if admissible is hit by unjust enrichment - The nature of work involved the use of material and services for the completion of the work in respect of moveable or immoveable property, and the same was appropriately covered under the definition of "Works Contract" as defined under Section 65B(54) of the Finance Act 1994. Consequently, the appellant had correctly paid the service tax during the relevant period and was not eligible for a refund – Further, the refund proceedings cannot be used to modify the assessment orders that have attained finality. Since the appellant had not assailed the self-assessments, and as per the assessments, the appellant was not entitled to any refund - The impugned order is upheld and the appeal is dismissed [Read less]

GST - Recovery of tax dues from legal heir, Violation of principles of natural justice - Whether Petitioner's bank account can be attached for recovery of deceased father's tax dues without prior adjudication of liability under Section 93 of the CGST Act, 2017 – HELD – The impugned action of attaching the Petitioner's bank account without issuance of any prior show cause notice or affording him an opportunity of hearing, to determine whether the Petitioner satisfies the statutory conditions under Section 93 of being a legal representative or person continuing the business of the deceased taxable person, violates princi... [Read more]

GST - Recovery of tax dues from legal heir, Violation of principles of natural justice - Whether Petitioner's bank account can be attached for recovery of deceased father's tax dues without prior adjudication of liability under Section 93 of the CGST Act, 2017 – HELD – The impugned action of attaching the Petitioner's bank account without issuance of any prior show cause notice or affording him an opportunity of hearing, to determine whether the Petitioner satisfies the statutory conditions under Section 93 of being a legal representative or person continuing the business of the deceased taxable person, violates principles of natural justice - Recovery powers under Section 79 are undoubtedly wide. However, the powers of recovery under Section 79 are conditional upon the existence of an established liability against the person from whom recovery is sought, which needs to be premised on materials and not presumptions. The Department cannot straightaway invoke recovery proceedings and freeze the Petitioner's bank account without first determining whether the Petitioner's proprietorship is legally distinct; whether he has, in fact, continued the business of the deceased; or whether statutory conditions under Section 93 stand satisfied - A bank account constitutes property within the meaning of Article 300A of the Constitution, and depriving the Petitioner of his property without the due process of law being followed results in a violation of his constitutional rights. The Department is directed to de-freeze the Petitioner's bank account and granted liberty to initiate appropriate proceedings against the Petitioner, if it is of the opinion that the dues of the Petitioner's deceased father are recoverable from the Petitioner as per the requirement of law including under Section 93 – The writ petition is allowed [Read less]

The distinction between an ARN and a GST registration certificate is not merely procedural, but substantive in nature. An ARN is merely an acknowledgment of pending application and it cannot be equated with a valid registration certificate.

GST – Applicable rate on supply of Solar Power Generating Systems - Assessment order seeking to tax supply of Solar Power Generating Systems at the rate of 5% for 70% of the turnover and 18% for 30% of the turnover, based on an explanation inserted in Notification No. 24/2018 to Sl.No. 234 of Notification No. 1/2017-Central Tax (Rate) - Whether the explanation inserted in Notification No. 24/2018, which deemed the supply of goods and services in relation to Solar Power Generating Systems as 70% supply of goods and 30% supply of services for the purposes of levy of GST, is valid and mandatory – HELD - The view of the De... [Read more]

GST – Applicable rate on supply of Solar Power Generating Systems - Assessment order seeking to tax supply of Solar Power Generating Systems at the rate of 5% for 70% of the turnover and 18% for 30% of the turnover, based on an explanation inserted in Notification No. 24/2018 to Sl.No. 234 of Notification No. 1/2017-Central Tax (Rate) - Whether the explanation inserted in Notification No. 24/2018, which deemed the supply of goods and services in relation to Solar Power Generating Systems as 70% supply of goods and 30% supply of services for the purposes of levy of GST, is valid and mandatory – HELD - The view of the Deputy Commissioner, that the explanation inserted in Notification No. 24/2018 created a mandatory legal fiction, resulting in higher taxation on the petitioner, is incorrect. The explanation was added to aid the suppliers of the goods mentioned in Sl.No. 234 of Notification No. 1/2017-Central Tax (Rate), and cannot be treated as a mandatory provision that would compel the suppliers to pay a higher rate of tax - The adjudicating authority had not gone into the question of whether the supplies made by the petitioner had resulted in the creation of immovable property, in which case the provisions of Section 8 of the CGST Act read with the rate of tax stipulated under Sl.No. 234 of Notification No. 1/2017 would be applicable. The authorities have not considered the petitioner's contention that the explanation introduced by Notification No. 24/2018 would only be applicable from 01.01.2019, and not retrospectively – Further, the Circular No. 163/19/2021-GST dated 06.10.2021 only extended the applicability of the explanation at the option of the taxpayer, and not as an absolute retrospective application of the explanation, which was brought into effect from 01.01.2019 - The impugned assessment order is set aside and matter is remanded back to the Deputy Commissioner to pass a fresh order of assessment, after considering the nature of the petitioner's supplies and the applicability of the explanation introduced by Notification No. 24/2018 - The writ petition is disposed of [Read less]

GST - Separate registrations of two verticals, Transfer of GST amount from one vertical to another - Petitioner is engaged in the sale of natural gas and the provision of transmission services for natural gas. For administrative convenience, petitioner obtained separate GST registrations for its trading and transmission verticals. The trading vertical collected the GST component on transmission charges from customers as a reimbursement of the amount paid by the transmission vertical - Revenue authorities issued a show cause notice under Section 76 of the CGST Act, alleging that petitioner had collected tax from customers b... [Read more]

GST - Separate registrations of two verticals, Transfer of GST amount from one vertical to another - Petitioner is engaged in the sale of natural gas and the provision of transmission services for natural gas. For administrative convenience, petitioner obtained separate GST registrations for its trading and transmission verticals. The trading vertical collected the GST component on transmission charges from customers as a reimbursement of the amount paid by the transmission vertical - Revenue authorities issued a show cause notice under Section 76 of the CGST Act, alleging that petitioner had collected tax from customers but failed to remit the same to the Government - Whether the show cause notice issued under Section 76 of the CGST Act is maintainable - HELD - The Gujarat authorities had previously examined the same issue and concluded that the GST component on transmission charges was being reimbursed by the customers and that petitioner had duly paid the tax at the applicable rate. The findings recorded in the show cause notice itself indicated that the exact amount collected from customers as the GST component was paid to the government exchequer by the transmission vertical – In this case, the payment is not claimed through another distinct entity registered in another State, but rather through one in the same State. Thus, it is claimed as a payment-and-reimbursement arrangement by the same person. The Section 76 of the CGST Act, which deals with the collection of tax but non-remittance to the Government, cannot be invoked in the present case as there was no discrepancy between the amount collected and the amount remitted. The bifurcation of petitioner’s operations into separate registrations for the trading and transmission verticals was for administrative convenience and accounting clarity. The transactions between the two verticals could not be construed as transactions between two separate persons - The show cause notice was issued without proper appreciation of the facts and the applicable legal position, and accordingly, same is quashed the same – The writ petition is allowed [Read less]

Central Excise - Refund of Revenue Deposit and Interest thereon – Respondent was issued show cause notice proposing to recover duty on the ground that it had classified its product as chewing tobacco instead of Zarda Scented Tobacco. The adjudicating authority confirmed the demand, but the Tribunal allowed the appeal of the manufacturer – Refund claim for the duty paid was partly sanctioned and partly rejected - Commissioner (Appeals) allowed the appeal, directing the revenue to pay interest on the refund amount - Whether the amount paid by the appellant was a revenue deposit and not duty and is entitled to interest on... [Read more]

Central Excise - Refund of Revenue Deposit and Interest thereon – Respondent was issued show cause notice proposing to recover duty on the ground that it had classified its product as chewing tobacco instead of Zarda Scented Tobacco. The adjudicating authority confirmed the demand, but the Tribunal allowed the appeal of the manufacturer – Refund claim for the duty paid was partly sanctioned and partly rejected - Commissioner (Appeals) allowed the appeal, directing the revenue to pay interest on the refund amount - Whether the amount paid by the appellant was a revenue deposit and not duty and is entitled to interest on the refund of such deposit – HELD - The amount paid by the Respondent was a revenue deposit and not duty, as the initial show cause notice had proposed to appropriate the amount deposited by the manufacturer under protest. The Respondent had never accepted the classification made by the revenue. The issue of classification was settled in favor of the manufacturer, as the Supreme Court had dismissed the revenue's appeal against the Tribunal's order – Further, the findings of the adjudicating authority regarding the refund being of a deposit and not duty were not challenged by the revenue, and therefore, it was not open for the revenue to dispute the same at this stage. Accordingly, the order of the Commissioner (Appeals), directing the revenue to pay interest on the refund amount to the manufacturer is upheld - The appeal filed by the revenue is dismissed [Read less]

Customs - Classification of imported goods between "condensate" and "light oil" - The imported goods were initially classified as "condensate" under Tariff Heading 27101990 by the Customs authorities, but later the Department sought to re-classify them as "light oil" under Tariff Heading 27101190 after investigation by DRI - The SCN proposed demand of differential duty jointly and severally from the importers/buyers – HELD - The department failed to discharge the burden of proving that the initial classification of the goods as "condensate" under Tariff Heading 27101990 was incorrect. The samples were not drawn in accord... [Read more]

Customs - Classification of imported goods between "condensate" and "light oil" - The imported goods were initially classified as "condensate" under Tariff Heading 27101990 by the Customs authorities, but later the Department sought to re-classify them as "light oil" under Tariff Heading 27101190 after investigation by DRI - The SCN proposed demand of differential duty jointly and severally from the importers/buyers – HELD - The department failed to discharge the burden of proving that the initial classification of the goods as "condensate" under Tariff Heading 27101990 was incorrect. The samples were not drawn in accordance with the prescribed procedures, and the test reports relied upon by the department did not conclusively establish that the goods were "light oil" classifiable under Tariff Heading 27101190 - The burden to prove the correct classification is on the department, which has not been discharged satisfactorily. Neither the test report of Kandla CRCL showing 90% distillation at 208°C nor the Intertek report showing 90% distillation at 216°C meets the criteria laid down by the Supreme Court in Krishna Technochem P. Ltd. case that 90% or more distillation should be "at" 210°C, and not merely "up to" 210°C. The initial classification by the customs authorities as "condensate" under Tariff Heading 27101990 is therefore upheld. Further, the department's case is weakened by the fact that there was revenue neutrality as the higher CVD paid would have been eligible for credit - The initial classification of the goods as "condensate" under Tariff Heading 27101990 is upheld and the appeal is allowed [Read less]

Service Tax - Limitation for Appeal - Dispatch of Order vs. Actual Receipt - The petitioner, a State Government undertaking, filed an appeal against an Order-in-Original dated April 4, 2024, which it claimed to have received only on October 10, 2024. The respondents argued that the Order was dispatched on April 9, 2024, and therefore the limitation period started from that date – HELD - Mere dispatch of the Order does not constitute effective service, especially in the case of a state government undertaking, which is a "State" within the meaning of Article 12 of the Constitution. In terms of Section 37(C) of the Central ... [Read more]

Service Tax - Limitation for Appeal - Dispatch of Order vs. Actual Receipt - The petitioner, a State Government undertaking, filed an appeal against an Order-in-Original dated April 4, 2024, which it claimed to have received only on October 10, 2024. The respondents argued that the Order was dispatched on April 9, 2024, and therefore the limitation period started from that date – HELD - Mere dispatch of the Order does not constitute effective service, especially in the case of a state government undertaking, which is a "State" within the meaning of Article 12 of the Constitution. In terms of Section 37(C) of the Central Excise Act, 1944, in the absence of any categorical material showing actual service through speed post and acknowledgment of delivery, it cannot be held that the Order-in-Original was duly served on the petitioner. Therefore, the appeal was filed within the limitation period, as it was filed after receiving the Order in October 2024. The impugned Order-in-Appeal is quashed, and the appeal of the petitioner was directed to be decided on its own merit – Ordered accordingly [Read less]

Customs - Jurisdiction of Indian Customs Authorities over Foreign Exporter, Extra-territorial Application of Customs Act Prior to 2018 Amendment - Customs authorities issued show-cause notices to a German company, which was a foreign exporter, and its Indian subsidiary, alleging that the foreign exporter had aided and abetted the Indian importers in mis-declaring the imported goods to claim duty exemption - Whether the Indian Customs authorities had the jurisdiction to issue show-cause notices to the foreign exporter for acts occurring prior to the 2018 amendment to the Customs Act, 1962 - HELD - The amendment to Section 1... [Read more]

Customs - Jurisdiction of Indian Customs Authorities over Foreign Exporter, Extra-territorial Application of Customs Act Prior to 2018 Amendment - Customs authorities issued show-cause notices to a German company, which was a foreign exporter, and its Indian subsidiary, alleging that the foreign exporter had aided and abetted the Indian importers in mis-declaring the imported goods to claim duty exemption - Whether the Indian Customs authorities had the jurisdiction to issue show-cause notices to the foreign exporter for acts occurring prior to the 2018 amendment to the Customs Act, 1962 - HELD - The amendment to Section 1(2) of the Customs Act was made in the year 2018, with effect from 29th March 2018. The said amendment provides that save as otherwise provided in this Act, it applies also to any offence or contravention thereunder committed outside India by any person. This amendment, therefore, would apply with effect from 29th March 2018, and specifically in cases where there is a contravention or any offence which is committed outside India by any person. Therefore, the extraterritorial applicability of the Act has been introduced by way of this amendment only post-2018 and to such limited extent - The Customs Act, 1962 did not have extra-territorial application prior to the 2018 amendment to Section 1(2), which expanded the territorial reach of the Act. The impugned show-cause notices issued by the Customs authorities to the foreign exporter (Petitioner No.1) and its Indian subsidiary (Petitioner No.2) are without jurisdiction and cannot be sustained – Further, the alleged acts of mis-declaration of imported goods by the Indian importers cannot be attributed to the foreign exporter, as the responsibility post importation rests solely with the importer under Sections 17, 46 and 111(m) of the Act. The provisions of Sections 112 and 114AA for imposing penalties are also not attracted, as there is no evidence of any act or omission on the part of the Petitioners making them liable – The show-cause notices issued to the foreign exporter and its Indian subsidiary are quashed. The writ petitions are allowed [Read less]

GST – Rejection of Refund claim based on the formula under Rule 89(5) of CGST Rules, 2017 - Notification subsequently amended the formula retrospectively to include 'Services' – HELD - The authorities had relied on the formula under Rule 89(5) of the CGST Rules which did not include the term 'Services' at the time of the rejection. However, a subsequent Notification dated 13.06.2018 amended the formula under Rule 89(5) retrospectively from 01.07.2017 to include the term 'Services'. In a similar case, the Court had directed the authorities to allow the petitioner to file a fresh application for refund and decide the sam... [Read more]

GST – Rejection of Refund claim based on the formula under Rule 89(5) of CGST Rules, 2017 - Notification subsequently amended the formula retrospectively to include 'Services' – HELD - The authorities had relied on the formula under Rule 89(5) of the CGST Rules which did not include the term 'Services' at the time of the rejection. However, a subsequent Notification dated 13.06.2018 amended the formula under Rule 89(5) retrospectively from 01.07.2017 to include the term 'Services'. In a similar case, the Court had directed the authorities to allow the petitioner to file a fresh application for refund and decide the same in accordance with the retrospective amendment in the law. Following the same reasoning, in the present case also disposed of with a direction to the respondents to pass fresh orders on the petitioner's pending application in light of the Notification, which has retrospective effect – The petition is disposed of [Read less]

GST – Change in tax regime, Continuation of tax incentive granted by subsidy relaxation and refund of VAT and CST - Withdrawal of tax incentive after enactment of GST law – Petitioner’s case that incentive extended to the petitioner was never withdrawn by the State Government therefore petitioner is still entitled to continue with the incentive and other subsidies – HELD - As per the proviso to Section 174(2)(c) of the CGST Act, 2017 the tax exemption granted as an incentive against investment through a Notification shall not continue as a privilege if the said notification is rescinded on or after the appointed da... [Read more]

GST – Change in tax regime, Continuation of tax incentive granted by subsidy relaxation and refund of VAT and CST - Withdrawal of tax incentive after enactment of GST law – Petitioner’s case that incentive extended to the petitioner was never withdrawn by the State Government therefore petitioner is still entitled to continue with the incentive and other subsidies – HELD - As per the proviso to Section 174(2)(c) of the CGST Act, 2017 the tax exemption granted as an incentive against investment through a Notification shall not continue as a privilege if the said notification is rescinded on or after the appointed day. The provisions makes it clear that tax exemption granted as incentive against an investment through a Notification shall continue, if it is not withdrawn or rescinded - In the present case, the State Government has not placed any document on record to show that the tax relaxation extended to the petitioner was ever withdrawn prior to the appointed day under the GST Act – The Supreme Court in Hero Motocorp Limited v. Union of India, held that despite a subsequent statute specifically providing for rescinding the benefits granted under an earlier statute, the doctrine of promissory estoppel cannot be used to compel the Government to stand by the representation made through the earlier notification. Accordingly, the order rejecting the petitioner's representations is quashed and the respondent authorities are directed to reconsider the representations in light of the provisions of Section 174(2)(c) of the CGST Act and the law laid down by the Supreme Court – The petition is disposed of [Read less]

Customs – Applicable rate of interest on refund of duty paid under protest - The assessee was granted refund of excess duty paid under protest, however the department rejected the claim for interest on the refund - Whether the Tribunal was correct in granting interest at 12% per annum on the refund amount – HELD - The revenue had accepted the order granting the refund without any challenge, and therefore, as a necessary consequence, the revenue should have granted interest in terms of Section 27A of the Customs Act - When the refund is automatic, the same should also follow with interest, as the payment was collected i... [Read more]

Customs – Applicable rate of interest on refund of duty paid under protest - The assessee was granted refund of excess duty paid under protest, however the department rejected the claim for interest on the refund - Whether the Tribunal was correct in granting interest at 12% per annum on the refund amount – HELD - The revenue had accepted the order granting the refund without any challenge, and therefore, as a necessary consequence, the revenue should have granted interest in terms of Section 27A of the Customs Act - When the refund is automatic, the same should also follow with interest, as the payment was collected in advance and contrary to law. The Government cannot retain such deposits, especially when the same is held to be without the authority of law, and the liability to return or refund to the person from whom it was collected commences on the day it was demanded and collected - the First Appellate Authority after going through the decisions, felt it proper to follow and allowed the claim of the Respondent by awarding interest at 12%. Considering the ratio of various decisions, do not find any infirmity in the impugned order. Accordingly, the impugned order granting interest at 12% per annum is upheld and the appeal filed by the revenue is dismissed [Read less]

Service Tax - Taxability of outbound tours provided by tour operator to Indian tourists – Demand of service tax on the grounds that the services provided by the appellant fall under the category of 'Tour Operator Service' defined under Section 65(105)(n) of the Finance Act, 1994 - Whether the outbound tours provided by the appellant to Indian tourists are liable to service tax under the category of 'Tour Operator Service' – HELD - The outbound tours provided by the appellant to Indian tourists during the relevant period from April 2010 to March 2012 are taxable under the category of 'Tour Operator Service'. The Tribuna... [Read more]

Service Tax - Taxability of outbound tours provided by tour operator to Indian tourists – Demand of service tax on the grounds that the services provided by the appellant fall under the category of 'Tour Operator Service' defined under Section 65(105)(n) of the Finance Act, 1994 - Whether the outbound tours provided by the appellant to Indian tourists are liable to service tax under the category of 'Tour Operator Service' – HELD - The outbound tours provided by the appellant to Indian tourists during the relevant period from April 2010 to March 2012 are taxable under the category of 'Tour Operator Service'. The Tribunal relied on the judgment of the Larger Bench of the Tribunal, which observed that for the period prior to the introduction of the negative list regime, as long as both the receiver and provider of the service are in India, such services are taxable. The judgments of Benches of lesser strength contrary to the ratio laid down by the Larger Bench cannot be considered as binding precedents - Since the issue involved the interpretation of law and has been referred to the Larger Bench due to conflicting views, the demand should be confined to the normal period of limitation and penalty cannot be imposed - The impugned orders are modified, confirming the demand with interest for the normal period of limitation and setting aside the penalty – The appeal is partly allowed [Read less]

Customs - Rejection of transaction value in export of iron ore fines - Whether the Authorities can reject the declared transaction value of the appellant solely based on contemporaneous export prices and CRCL report, without providing the appellant access to such crucial documents and violating the principles of natural justice – HELD - The Customs Authorities had violated the principles of natural justice by not providing the appellant access to the CRCL report and contemporaneous export data, which were relied upon to reject the transaction value. Once a violation of the principles of natural justice is established, th... [Read more]

Customs - Rejection of transaction value in export of iron ore fines - Whether the Authorities can reject the declared transaction value of the appellant solely based on contemporaneous export prices and CRCL report, without providing the appellant access to such crucial documents and violating the principles of natural justice – HELD - The Customs Authorities had violated the principles of natural justice by not providing the appellant access to the CRCL report and contemporaneous export data, which were relied upon to reject the transaction value. Once a violation of the principles of natural justice is established, the impugned order cannot be sustained – Further, the transaction value declared by the appellant, which was supported by the Bank Realisation Certificate and the contractual terms, cannot be rejected merely because some goods were exported at higher prices, without establishing similarity in quality, quantity and commercial level. During the relevant period, the export duty was ad valorem, and hence the Fe content and moisture content were irrelevant for the purpose of valuation. Accordingly, the impugned order is set aside and matter remanded back to the Adjudicating Authority for a fresh decision in accordance with the law - The appeal is allowed by way of remand [Read less]

Central Excise – Manufacture, Admissibility of CENVAT Credit – Respondent-assessee undertook processes of polishing, pasting paper/plastic film on stainless steel sheets/coils and cleared the final products by paying duty – Denial of CENVAT credit on the ground that the processes undertaken did not amount to 'manufacture' and therefore, the CENVAT credit availed was inadmissible - Whether the processes undertaken by the Respondent amounted to 'manufacture' and whether the Respondent was eligible to avail the CENVAT credit on the inputs, capital goods and input services used in the process - HELD - The processes under... [Read more]

Central Excise – Manufacture, Admissibility of CENVAT Credit – Respondent-assessee undertook processes of polishing, pasting paper/plastic film on stainless steel sheets/coils and cleared the final products by paying duty – Denial of CENVAT credit on the ground that the processes undertaken did not amount to 'manufacture' and therefore, the CENVAT credit availed was inadmissible - Whether the processes undertaken by the Respondent amounted to 'manufacture' and whether the Respondent was eligible to avail the CENVAT credit on the inputs, capital goods and input services used in the process - HELD - The processes undertaken by the Respondent resulted in a commercially new product having distinct characteristics and use, and hence, amounted to 'manufacture'. Further, the Respondent had paid more central excise duty on the final products than the CENVAT credit availed by them - Since the CENVAT credit availed by the Respondent was utilized for payment of duty on the final products, the credit stands more than reversed, and therefore, the Respondent cannot be asked to reverse the credit again. The extended period of limitation cannot be invoked in the present case as there was no suppression of facts or intent to evade duty on the part of the Respondent - The impugned order of the Commissioner is upheld and the Revenue's appeal is dismissed [Read less]

Central Excise – Availment of CENVAT credit on inputs used for manufacture of exempted/non-excisable goods – Demand of amount equal to 5%/6% of the value of the non-excisable goods under Rule 6(3) of CENVAT Credit Rules, 2004, on the ground that the appellant had not maintained separate accounts for the inputs used for manufacture of dutiable and non-excisable goods - HELD - As per the Chartered Accountant's Certificate, the appellant had not availed any CENVAT credit on the inputs used for the manufacture of the non-excisable goods or on the common inputs used for the manufacture of the dutiable and non-excisable good... [Read more]

Central Excise – Availment of CENVAT credit on inputs used for manufacture of exempted/non-excisable goods – Demand of amount equal to 5%/6% of the value of the non-excisable goods under Rule 6(3) of CENVAT Credit Rules, 2004, on the ground that the appellant had not maintained separate accounts for the inputs used for manufacture of dutiable and non-excisable goods - HELD - As per the Chartered Accountant's Certificate, the appellant had not availed any CENVAT credit on the inputs used for the manufacture of the non-excisable goods or on the common inputs used for the manufacture of the dutiable and non-excisable goods. The CENVAT Credit Rules allow an assessee to avail CENVAT credit on the inputs and input services used to manufacture dutiable goods, and this entitlement comes with certain obligations under Rule 6, including not availing credit on inputs used for manufacture of exempted goods and maintaining separate accounts. However, in this case, since the appellant had not availed any CENVAT credit on the inputs used for the manufacture of non-excisable goods, the appellant had fully met its obligations under Rule 6(1) and Rule 6(2) of CCR, and therefore, the appellant does not have to pay an amount under Rule 6(3) of CCR - The impugned order is set aside and the appeal is allowed [Read less]

GST - Clubbing of show cause notice for multiple financial years/tax periods - Petitioner challenged a show cause notice issued under Section 74 of the CGST Act, 2017 by the respondent authorities, covering the period from financial years 2018-19 to 2022-23, alleging suppression of taxable value and short payment of GST - Whether the authorities can issue a consolidated show cause notice covering multiple financial years/tax periods – HELD - The Division Bench in in M/s. Milroc Good Earth Developers Vs. Union of India & Ors. case has held that the authorities cannot issue a consolidated show cause notice covering multipl... [Read more]

GST - Clubbing of show cause notice for multiple financial years/tax periods - Petitioner challenged a show cause notice issued under Section 74 of the CGST Act, 2017 by the respondent authorities, covering the period from financial years 2018-19 to 2022-23, alleging suppression of taxable value and short payment of GST - Whether the authorities can issue a consolidated show cause notice covering multiple financial years/tax periods – HELD - The Division Bench in in M/s. Milroc Good Earth Developers Vs. Union of India & Ors. case has held that the authorities cannot issue a consolidated show cause notice covering multiple financial years/tax periods under Section 74 of the CGST Act - The GST scheme is based on annual returns for each financial year, and the statute fixes a separate five-year time limit for demanding and recovering tax from the due date for furnishing the annual return for that year or from the date of erroneous return. If a consolidated notice is issued covering multiple years, it would aggregate different tax periods with different due dates and different limitations, which the statute does not permit - The judgment of the Delhi High Court in M/s Mathur Polymers Vs. Union of India & Ors., which had allowed the issuance of a consolidated notice in cases involving allegations of fraudulent availment of ITC is distinguished. The judgments of the Division Bench will prevail, as they were subsequent to the Delhi High Court judgment and have not been stayed or overruled by the Supreme Court - The impugned show cause notice is quashed and set aside. However, the respondents are at liberty to re-issue notice strictly in terms of the provisions of Section 74 of the CGST Act, if there is no other legal impediment – The petition is disposed of [Read less]

Customs - Classification of Imported Areca Nuts, Bond and Bank Guarantee for Provisional Release - Appellant imported "Areca Nuts" from Sri Lanka and classified them under CTH 08028090. The Customs Department, based on CRCL test reports, held that the goods were "Roasted Areca Nuts" and should be classified under CTH 2008. The Department issued a show cause notice proposing classification under CTH 2008, denying ISFTA benefit, and demanding customs duty - Whether the conditions imposed by the Customs authorities for provisional release of the seized goods, particularly the requirement of furnishing a bank guarantee, are ar... [Read more]

Customs - Classification of Imported Areca Nuts, Bond and Bank Guarantee for Provisional Release - Appellant imported "Areca Nuts" from Sri Lanka and classified them under CTH 08028090. The Customs Department, based on CRCL test reports, held that the goods were "Roasted Areca Nuts" and should be classified under CTH 2008. The Department issued a show cause notice proposing classification under CTH 2008, denying ISFTA benefit, and demanding customs duty - Whether the conditions imposed by the Customs authorities for provisional release of the seized goods, particularly the requirement of furnishing a bank guarantee, are arbitrary, unreasonable and onerous - HELD - The report of the CRCL, which classified the goods as "Roasted Areca Nuts" based on visual inspection, cannot be relied upon as the Chemical Examiner is not a food analyst. The classification should be based on the General Rules for Interpretation, Section Notes and Chapter Notes, not visual inspection - Further, the Customs Department from very beginning, has not acted in accordance with regulations issued by the FSSAI (Import Regulation) wherein it has been specifically provided that samples of food items should be sent to the nearest FSSAI approved laboratory. The National Food Laboratory, Ghaziabad had found the samples to be "fit for human consumption" as per the FSSAI Regulations – The Customs Department's reliance on the CBIC Circular No. 35/2017-Cus dated 16.08.2017 to impose harsh conditions for provisional release is not justified as the Circular has been struck down by the Delhi High Court in some cases - The requirement of furnishing a bank guarantee is arbitrary and unreasonable, and the same cannot be sustained - the detained goods are directed to be released, subject to fulfillment of the conditions of the impugned Provisional Release Order except requirement of furnishing the bank guarantee – The appeal is allowed [Read less]

Customs - Compliance with IGCR Rules for availing concessional Customs duty, Import of goods in excess to declared under Rule 5 of the IGCR Rules - Appellant imported goods at concessional rate of duty under Notification No. 50/2017-Cus dated 30.06.2017, subject to compliance with the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (IGCR Rules) - The Department alleged that the appellant violated Rule 5 and Rule 6 of the IGCR Rules by not declaring the actual quantity of goods imported and thus not being entitled to the concessional rate – HELD - There is no dispute about the nature of the goods import... [Read more]

Customs - Compliance with IGCR Rules for availing concessional Customs duty, Import of goods in excess to declared under Rule 5 of the IGCR Rules - Appellant imported goods at concessional rate of duty under Notification No. 50/2017-Cus dated 30.06.2017, subject to compliance with the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (IGCR Rules) - The Department alleged that the appellant violated Rule 5 and Rule 6 of the IGCR Rules by not declaring the actual quantity of goods imported and thus not being entitled to the concessional rate – HELD - There is no dispute about the nature of the goods imported, the conditions subject to which the exemption notification was available and that the Notification was available to the products manufactured by the appellant - The responsibility to ensure compliance with the IGCR Rules lies with the jurisdictional Assistant Commissioner or Deputy Commissioner of Customs and the Assistant Commissioner at the port of importation. In the absence of any evidence to show that either of the two officers committed any irregularity, the demand of duty on the appellant cannot be sustained - It is impossible that the jurisdictional Assistant Commissioner received a declaration for a lesser quantity but communicated a much larger quantity to the Assistant Commissioner at the port of import, or that the Assistant Commissioner at the port allowed clearance of goods in excess of the quantities declared by the jurisdictional Assistant Commissioner. The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Dismissal of writ petition on the ground of availability of alternative statutory remedy. The High Court also observed that the petitioner did not satisfactorily explain the inordinate delay in filing of writ petition – HELD - When the High Court had to dismiss the writ petition on the ground of alternative remedy, there was no need to make observation on delay as that might substantially affect the right of the petitioner, more so, when that aspect would have to be considered by that forum - While the dismissal of the writ petition on the ground of alternative remedy is upheld, the petitioner is granted li... [Read more]

Service Tax - Dismissal of writ petition on the ground of availability of alternative statutory remedy. The High Court also observed that the petitioner did not satisfactorily explain the inordinate delay in filing of writ petition – HELD - When the High Court had to dismiss the writ petition on the ground of alternative remedy, there was no need to make observation on delay as that might substantially affect the right of the petitioner, more so, when that aspect would have to be considered by that forum - While the dismissal of the writ petition on the ground of alternative remedy is upheld, the petitioner is granted liberty to avail the alternative remedy. There shall be a stay on recovery of the demanded amount for a period of three weeks. However, this interim protection shall not operate beyond three weeks though, it will be open for the appellate forum to consider prayer, if any made, for interim relief on merits upon institution of the appeal – The special leave petition is disposed of [Read less]

Telangana Value Added Tax Act, 2005 - Pre-deposit under under proviso (2) of Section 31(1) of the TVAT Act - Entire tax liability disputed - Amount already deposited exceeding 12.5% of disputed tax - Appellant disputed the entire tax liability disallowed as Input Tax Credit. The appellant had already deposited an amount during the earlier appeal proceedings, which exceeded 12.5% of the disputed tax amount - Whether the appellant was required to make a further deposit of 12.5% of the disputed tax amount to maintain the appeal under the second proviso to Section 31(1) of the Act – HELD - When the appellant disputes the ent... [Read more]

Telangana Value Added Tax Act, 2005 - Pre-deposit under under proviso (2) of Section 31(1) of the TVAT Act - Entire tax liability disputed - Amount already deposited exceeding 12.5% of disputed tax - Appellant disputed the entire tax liability disallowed as Input Tax Credit. The appellant had already deposited an amount during the earlier appeal proceedings, which exceeded 12.5% of the disputed tax amount - Whether the appellant was required to make a further deposit of 12.5% of the disputed tax amount to maintain the appeal under the second proviso to Section 31(1) of the Act – HELD - When the appellant disputes the entire tax liability, and the amount already deposited exceeds 12.5% of the difference of the tax assessed and the tax admitted by the appellant, the requirement of the second proviso to Section 31(1) of the Act is met. The High Court overlooked the fact that the entire difference of tax was disputed by the appellant, and that the deposit already made earlier, to maintain the appeal filed earlier against the assessment order, would be available to maintain appeal against the fresh assessment order passed pursuant to the order of remand – The order of the High Court is set aside and the appellant's appeal before the Appellate Deputy Commissioner shall be restored and decided on merits. The penalty imposed is also quashed, though the respondents are given the liberty to impose penalty subject to the outcome of the appeal – The appeal is allowed [Read less]

GST - Alternative remedy, Appeal against the order of the appellate authority, Stay on recovery - Whether the petitioner can avail the alternative remedy as per the CBIC Circular dated 11.07.2024 to file an undertaking/declaration and make the pre-deposit to seek stay on recovery of the remaining amount – HELD - The CBIC has issued explicit guidelines in the Circular dated 11.07.2024 for recovery of outstanding dues in cases where the first appeal has been disposed of, till the Appellate Tribunal comes into operation. As per the circular, the taxpayer can make the payment of an amount equal to the pre-deposit and file an... [Read more]

GST - Alternative remedy, Appeal against the order of the appellate authority, Stay on recovery - Whether the petitioner can avail the alternative remedy as per the CBIC Circular dated 11.07.2024 to file an undertaking/declaration and make the pre-deposit to seek stay on recovery of the remaining amount – HELD - The CBIC has issued explicit guidelines in the Circular dated 11.07.2024 for recovery of outstanding dues in cases where the first appeal has been disposed of, till the Appellate Tribunal comes into operation. As per the circular, the taxpayer can make the payment of an amount equal to the pre-deposit and file an undertaking with the jurisdictional proper officer that he will file an appeal against the order of the appellate authority before the Appellate Tribunal, as and when it comes into operation. On providing the said undertaking and on payment of the pre-deposit, the recovery of the remaining amount of confirmed demand will stand stayed as per the provisions of the CGST Act - The petitioner is granted liberty to avail the alternative remedy by complying with the conditions of the Circular dated 11.07.2024 and if the petitioner files the undertaking and makes the pre-deposit, the recovery of the remaining amount shall remain stayed – The petitions are disposed of [Read less]

GST – Anti-profiteering Investigation, Sale of flat/villa in post-GST regime - Locus standi to challenge DGAP Report - The complainants, who purchased a villa from the respondent (builder), alleged that the respondent did not pass on the benefit of input tax credit on introduction of GST, by way of commensurate reduction in the price. The DGAP, after investigation, found that the ratio of credit availed to purchase value declined from 12.26% in the pre-GST regime to 11.02% in the post-GST regime, indicating no incremental benefit to the respondent, and hence no requirement to pass on any benefit to the complainants - Whe... [Read more]

GST – Anti-profiteering Investigation, Sale of flat/villa in post-GST regime - Locus standi to challenge DGAP Report - The complainants, who purchased a villa from the respondent (builder), alleged that the respondent did not pass on the benefit of input tax credit on introduction of GST, by way of commensurate reduction in the price. The DGAP, after investigation, found that the ratio of credit availed to purchase value declined from 12.26% in the pre-GST regime to 11.02% in the post-GST regime, indicating no incremental benefit to the respondent, and hence no requirement to pass on any benefit to the complainants - Whether the complainants have the locus standi to challenge the DGAP report, when the entire transaction, including the booking, agreement, construction and payment, took place in the post-GST regime - HELD - The Delhi High Court in Reckitt Benckiser India Pvt. Ltd. v. UOI, case held that when the flat is constructed and purchased in the post-GST regime, no benefit of ITC is required to be passed on to the buyer, as the price would have been fixed after taking into account the ITC available to the builder in the post-GST regime - In the present case, the booking, agreement, construction and payment all took place in the post-GST regime. The price was determined after factoring in the ITC available to the respondent in the post-GST regime, which was not available in the pre-GST regime. The complainants had accepted the price so fixed, without any objection. Therefore, the case of the respondent is fully covered by the judgment in Reckitt Benckiser, and the complainants have no locus standi and legal rights to contest the DGAP report - The DGAP has rightly concluded that the ratio of ITC availed to purchase value was 12.26% in the pre-GST era which declined to 11.02% in post GST period. The reduction of ITC implies that no benefit accrued to the Respondent and hence question of passing on any benefit to the recipient would not arise. The Respondent has not contravened the provision of Section 171 of CGST Act r/w Rule 129(6) of the CGST Rules – Ordered accordingly [Read less]

GST - Opportunity of personal hearing, Selection of "no personal hearing" option - Without granting any opportunity of personal hearing, the respondent passed the impugned order - Whether the respondent was required to grant petitioner the opportunities of personal hearing under Section 75(4) of the CGST Act, 2017 before passing the impugned order – HELD - The provisions of Section 75(4) mandate the grant of three personal hearings, and the option of "no personal hearing" selected by the petitioner in the reply cannot override the statutory requirement - The respondent was required to grant the petitioner three opportuni... [Read more]

GST - Opportunity of personal hearing, Selection of "no personal hearing" option - Without granting any opportunity of personal hearing, the respondent passed the impugned order - Whether the respondent was required to grant petitioner the opportunities of personal hearing under Section 75(4) of the CGST Act, 2017 before passing the impugned order – HELD - The provisions of Section 75(4) mandate the grant of three personal hearings, and the option of "no personal hearing" selected by the petitioner in the reply cannot override the statutory requirement - The respondent was required to grant the petitioner three opportunities of personal hearing under Section 75(4) of the GST Act before passing the impugned order. The failure to grant the three mandatory personal hearings amounted to a breach of the principles of natural justice - The impugned order is quashed and set aside. The matter is remanded back to the respondent authorities to pass a fresh order after granting the petitioner the three mandatory opportunities of personal hearing – The writ petition is allowed [Read less]

Customs - Provisional assessment of Shipping bills, Reduction in unit price based on contract addendum, higher duty on lumps in iron ore fines consignment - Appellant entered into an agreement with a Chinese buyer to supply iron ore fines at a unit price of USD 136 PDMT FOB. The assessment of the shipping bills was kept provisional, and later finalized based on the final commercial invoice, Bank Realization Certificate, Bill of Lading, etc. The assessing officer considered the originally declared FOB value and iron content, despite the test report finding higher iron content. The officer also levied higher rate of duty on ... [Read more]

Customs - Provisional assessment of Shipping bills, Reduction in unit price based on contract addendum, higher duty on lumps in iron ore fines consignment - Appellant entered into an agreement with a Chinese buyer to supply iron ore fines at a unit price of USD 136 PDMT FOB. The assessment of the shipping bills was kept provisional, and later finalized based on the final commercial invoice, Bank Realization Certificate, Bill of Lading, etc. The assessing officer considered the originally declared FOB value and iron content, despite the test report finding higher iron content. The officer also levied higher rate of duty on 2.48% of the consignment treated as lumps - Whether the appellant has received the refund in accordance with proper assessment of the shipping bills – HELD - The contract underwent certain changes by way of an addendum due to the percentage of iron content, leading to a reduction in the unit price. The assessing officer failed to appreciate these modifications in the original contract and did not consider the revised unit price based on the actual moisture content and iron content. Further, the entire consignment should be considered as iron ore fines if the portion of lumps is within a certain limit - The order of the Commissioner (Appeals) is set aside and the matter is matter back to the original authority to finalize the assessment, taking into account the contract amendments and the relevant judgments, and sanction the refund, if any, as per law – The appeal is allowed by remand [Read less]

Service Tax - Eligibility for exemption/abatement under Reverse Charge Mechanism claimed under Notification No. 30/2012-ST for supply of Manpower to Government Hospitals and Charitable Organisations - Whether the appellant was eligible for exemption/abatement under RCM claimed under Notification No. 30/2012-ST for supply of Manpower to Government Hospitals and Charitable Organisations – HELD - The benefit of Reverse Charge mechanism under Notification No. 30/2012-ST in respect of supply of Manpower Services is guided by a rider as given under Part I(A)(v) of the same Notification, which is available only in case the serv... [Read more]

Service Tax - Eligibility for exemption/abatement under Reverse Charge Mechanism claimed under Notification No. 30/2012-ST for supply of Manpower to Government Hospitals and Charitable Organisations - Whether the appellant was eligible for exemption/abatement under RCM claimed under Notification No. 30/2012-ST for supply of Manpower to Government Hospitals and Charitable Organisations – HELD - The benefit of Reverse Charge mechanism under Notification No. 30/2012-ST in respect of supply of Manpower Services is guided by a rider as given under Part I(A)(v) of the same Notification, which is available only in case the service recipient is a business entity registered as a Body Corporate. However, the payments received by the appellant were from Government Hospitals or Charitable Organizations, which do not fall under the category of "business entity registered as a body corporate" which is essential for being eligible for abatement @ 25% under Notification No. 30/2012-ST - The appellant is not eligible to avail the benefit of exemption as provided in the said Notification 30/2012. The appellant had not contested the classification of services at the original level, and hence, the same cannot be taken at a later stage before the Tribunal - The impugned order is upheld and the appeal is dismissed [Read less]

Central Excise - Jurisdiction of Central Excise authorities to re-classify imported goods - The appellant challenged the jurisdiction of the Central Excise authorities to re-classify the imported 'Valve-Link Software' that was earlier classified under Customs Tariff Heading (CTH) 90328990, on which CVD and SAD was paid and Cenvat credit was availed - The Central Excise authorities proposed to re-classify the goods under CTH 85238020 (Information Technology Software), which was fully exempt, resulting in the Cenvat credit availed being inadmissible – HELD - When the payment of CVD and SAD was accepted and the Customs clas... [Read more]

Central Excise - Jurisdiction of Central Excise authorities to re-classify imported goods - The appellant challenged the jurisdiction of the Central Excise authorities to re-classify the imported 'Valve-Link Software' that was earlier classified under Customs Tariff Heading (CTH) 90328990, on which CVD and SAD was paid and Cenvat credit was availed - The Central Excise authorities proposed to re-classify the goods under CTH 85238020 (Information Technology Software), which was fully exempt, resulting in the Cenvat credit availed being inadmissible – HELD - When the payment of CVD and SAD was accepted and the Customs classification was not disputed by the Customs authorities and the legal consequences of such classification had been accepted by one wing of the Department as well as the assessee-taxpayer, it is very strange and uncomfortable for another wing of the same Department to call into question the classification of the same goods. This amounts to doubting or suspecting the other wing of the same Department, which is not in good taste and certainly not in the interest of the public - The recovery of the allegedly wrongly availed Cenvat credit by the Central Excise Department is not in accordance with the law, as the Cenvat credit availed in the case relates to CVD/SAD levied under the Customs Tariff Act on the import of goods and is not Excise Duty on the goods manufactured in India – The impugned order is set aside and the appeal is allowed [Read less]

GST - Time limit for issuing show cause notice and passing penalty order under Section 129 of CGST Act, 2017 - Whether the timelines prescribed under Section 129(3) for issuance of show cause notice within 7 days and passing of penalty order within 7 days are mandatory or directory – HELD - The timeline of 7 days prescribed under Section 129(3) of the CGST Act for issuing show cause notice and passing penalty order is directory and not mandatory. The provision is procedural in nature and does not provide for any consequence of non-compliance with the timeline - While the Proper Officer must ensure that the notice is issu... [Read more]

GST - Time limit for issuing show cause notice and passing penalty order under Section 129 of CGST Act, 2017 - Whether the timelines prescribed under Section 129(3) for issuance of show cause notice within 7 days and passing of penalty order within 7 days are mandatory or directory – HELD - The timeline of 7 days prescribed under Section 129(3) of the CGST Act for issuing show cause notice and passing penalty order is directory and not mandatory. The provision is procedural in nature and does not provide for any consequence of non-compliance with the timeline - While the Proper Officer must ensure that the notice is issued and the order is passed within the prescribed timelines to maintain procedural efficiency and discipline, any delay beyond the timelines does not render the proceedings invalid or time-barred. However, the Proper Officer must record the reasons for the delay in the order sheet and any habitual or regular delays should be dealt with by the superior administrative authorities – In absence of any consequence provided under the Act either that no show-cause notice may be issued beyond 7 days from the date of detention of goods or that proceedings initiated on the strength of any such notice, may not be continued beyond 7 days from the date of issuance of such notice, the Court is unable to hold that the provisions of Section 129(3) are mandatory. The Court is unable to subscribe the view taken by the Patna High Court, the Gujarat High Court and the Orissa High Court and respectfully, disagree with the same - The petitioner is entitled to the release of the goods and vehicle upon furnishing security equal to the penalty amount under Section 129(1)(a) of the CGST Act - The writ petition is partly allowed - Release of goods and vehicle - HELD - The petitioner claims to be a bona fide owner of the goods as it was a registered dealer at the time of the transaction. Since the registration was subsequently suspended, the petitioner is entitled to the release of the goods and vehicle upon furnishing security equal to the penalty amount under Section 129(1)(a) of the CGST Act. The penalty order remains open to challenge by the petitioner through other statutory remedies. [Read less]

Customs – Enhancement in assessable value - Appellant imported a consignment of fishing net from Malaysia with a unit price of USD 5.20 per kg. - Department initiated proceedings on the ground that the assessable value adopted by the appellant was lower than the assessable value of comparable goods. The adjudicating authority enhanced the assessable value to USD 7.07 per kg, and the appellant paid the differential duty and interest under protest - Whether the enhancement of assessable value was in accordance with the Customs Valuation Rules, 2007 - HELD - The Department failed to follow the procedure prescribed under the... [Read more]

Customs – Enhancement in assessable value - Appellant imported a consignment of fishing net from Malaysia with a unit price of USD 5.20 per kg. - Department initiated proceedings on the ground that the assessable value adopted by the appellant was lower than the assessable value of comparable goods. The adjudicating authority enhanced the assessable value to USD 7.07 per kg, and the appellant paid the differential duty and interest under protest - Whether the enhancement of assessable value was in accordance with the Customs Valuation Rules, 2007 - HELD - The Department failed to follow the procedure prescribed under the Customs Valuation Rules, 2007. The Department did not provide any plausible explanation as to why the transaction value declared by the appellant should be discarded, which is the first and foremost requirement under the Valuation Rules. The department's own data showed that in 12 out of 13 comparable consignments, the unit rate per kg was ranging between USD 4.01 to USD 4.40, which was much lower than the rate adopted by the appellant. The Customs Valuation Rules have to be followed sequentially, and the transaction value cannot be rejected without proper reasons - The Department's own letter stated that the goods were found as per the declaration, and hence, the argument of the Department regarding the quality of the goods was not sustainable – The impugned order is set aside and the department is directed to refund the differential duty and interest paid by the appellant, along with applicable interest – The appeal is allowed [Read less]

GST – Suppression of material facts and misleading statements - Petition seeking to quash and set aside the show cause notice, order of detention, confiscation order, and consequent demand order - Whether the impugned orders issued by the respondent authorities should be quashed and set aside - HELD - The petitioner had voluntarily paid the penalty and the goods and conveyance were released on 26.07.2025, as evidenced by the release order in Form GST MOV-05, which was duly signed by the petitioner. The confiscation order in Form GST MOV-11, dated 26.07.2025, was physically tendered to the petitioner and bore his signatur... [Read more]

GST – Suppression of material facts and misleading statements - Petition seeking to quash and set aside the show cause notice, order of detention, confiscation order, and consequent demand order - Whether the impugned orders issued by the respondent authorities should be quashed and set aside - HELD - The petitioner had voluntarily paid the penalty and the goods and conveyance were released on 26.07.2025, as evidenced by the release order in Form GST MOV-05, which was duly signed by the petitioner. The confiscation order in Form GST MOV-11, dated 26.07.2025, was physically tendered to the petitioner and bore his signature – The petitioner's contention that the confiscation order was not provided to him was a false and incorrect statement, as the order was uploaded on the portal and the petitioner had failed to locate it due to his own negligence. The petitioner had transported the goods without an e-way bill, which was the illegality committed by him - The writ petition is devoid of any merit and the it is rejected [Read less]

Central Sales Tax Act, 1956 - Deduction from Turnover for Discount - The Petitioner-dealer claimed deduction from the turnover towards discounts extended to customers through credit notes, which was disallowed by the Assessing Authority for lack of sufficient documentary evidence - Whether the discounts were eligible for deduction under Section 2(h) of the Central Sales Tax Act, 1956 as "cash discount" or they were merely "trade discounts" – HELD - The entitlement of exemption from tax is subject to production of Forms 'C', 'F' and 'H' and the other declarations contemplated under the Act. The petitioner had failed to pr... [Read more]

Central Sales Tax Act, 1956 - Deduction from Turnover for Discount - The Petitioner-dealer claimed deduction from the turnover towards discounts extended to customers through credit notes, which was disallowed by the Assessing Authority for lack of sufficient documentary evidence - Whether the discounts were eligible for deduction under Section 2(h) of the Central Sales Tax Act, 1956 as "cash discount" or they were merely "trade discounts" – HELD - The entitlement of exemption from tax is subject to production of Forms 'C', 'F' and 'H' and the other declarations contemplated under the Act. The petitioner had failed to produce the necessary documents at the first instance before the Assessing Authority and was producing documents in a piecemeal manner at various stages of the proceedings. The Courts cannot allow the petitioner to take its own time to file documents at every stage of the dispute to improve its case - The Trade Discount and Cash Discount are distinct concepts under the Central Sales Tax Act, and the petitioner has failed to prove that the deduction claimed is in the nature of Cash Discount and not Trade Discount. In the absence of material evidence to prove the entitlement of tax deduction, the plea of the petitioner fails. Accordingly, the Tax Cases is dismissed - Production of Declaration Forms - The petitioner claimed concessional rate of tax on interstate sales under the Central Sales Tax Act, 1956, but failed to file the required declaration Forms 'C', 'F' and 'H' – HELD - The dealer who claims concessional rate under the CST Act must satisfy the required conditions incorporated in the Act and Rules. Without complying with the said requirement, a dealer cannot claim concessional rate, and the local tax will be levied. The petitioner having failed to produce the necessary declaration Forms despite ample opportunities cannot claim that it was prevented from furnishing the supporting documents due to sufficient and reasonable cause. The Tribunal's decision to dismiss the appeal for non-submission of the balance declaration Forms is upheld. [Read less]

Customs – Validity of seizure of goods by Customs Authorities - Goods identified as of Indian origin - Lack of material to form "reason to believe" goods are of foreign origin - Whether the seizure of areca nuts by the customs authorities was correct in law and based on any foundational "reason to believe" that the goods were of foreign origin – HELD - The first laboratory report clearly indicated the goods were of Indian origin and fit for human consumption. The second report was unable to ascertain the country of origin due to lack of testing facilities. However, the authorities continued to detain the goods without ... [Read more]

Customs – Validity of seizure of goods by Customs Authorities - Goods identified as of Indian origin - Lack of material to form "reason to believe" goods are of foreign origin - Whether the seizure of areca nuts by the customs authorities was correct in law and based on any foundational "reason to believe" that the goods were of foreign origin – HELD - The first laboratory report clearly indicated the goods were of Indian origin and fit for human consumption. The second report was unable to ascertain the country of origin due to lack of testing facilities. However, the authorities continued to detain the goods without any material to form a "reason to believe" that the goods were of foreign origin - In the present case, the proceedings under the Customs Act are without jurisdiction. The curtailment of free trade requires credible material and objective consideration by the authorities to form a "reason to believe" before assuming jurisdiction to seize goods - In the absence of any objective material or reasons to believe the goods were of foreign origin, the seizure was arbitrary and malafide. The seizure orders are quashed and the authorities are directed to release the goods to the petitioners – The petitions are disposed of [Read less]

Customs - Classification of imported industrial oil, Release of restricted commodity - Petitioners, importers of industrial oil, challenged the action of DRI in seizing the goods under Section 110 of the Customs Act. The DRI contended that the actual product imported by the petitioners is Automotive Diesel Fuel (ADF) / High-Speed Diesel (HFHSD), which is a restricted commodity classifiable under CTH 2710 1944 and conforming to IS 1460 and IS 16861. The test reports indicated that the sample is adulterated with lighter hydrocarbons and is most akin to HFHSD or adulterated HFHSD - Whether the action of the DRI in seizing the... [Read more]

Customs - Classification of imported industrial oil, Release of restricted commodity - Petitioners, importers of industrial oil, challenged the action of DRI in seizing the goods under Section 110 of the Customs Act. The DRI contended that the actual product imported by the petitioners is Automotive Diesel Fuel (ADF) / High-Speed Diesel (HFHSD), which is a restricted commodity classifiable under CTH 2710 1944 and conforming to IS 1460 and IS 16861. The test reports indicated that the sample is adulterated with lighter hydrocarbons and is most akin to HFHSD or adulterated HFHSD - Whether the action of the DRI in seizing the goods is justified based on the test reports – HELD - The test reports clearly indicate that the imported goods are most akin to HFHSD or adulterated HFHSD, which is a restricted commodity. The Supreme Court in Gastrade International v. Commissioner of Customs, emphasized the application of the "most akin test" for classification of goods. The test reports provide a definitive opinion that the imported goods are "most akin" to HFHSD, which is different from the inconclusive reports in the Gastrade International case - The flash point, which is a critical parameter, has been lowered by adulteration with lighter hydrocarbons, as per the test reports. The fact that the samples were tested in two different laboratories does not invalidate the test reports, as long as they cover the 21 parameters prescribed by the Supreme Court - The action of the DRI in seizing the goods is justified, as the imported goods are found to be a restricted commodity, i.e., ADF/HFHSD, and not the industrial oil as declared by the petitioners. In view of the settled legal position that prohibited or restricted goods cannot be ordered to be released, the seized goods cannot be released - The action of the DRI in seizing the goods is upheld and writ petitions are dismissed [Read less]

Service Tax - Construction of residential flats for BPL families for Haryana Housing Board - Whether service tax is leviable on such activity prior to 01.07.2012 - HELD - The activity of construction of residential flats for BPL families for Haryana Housing Board is a "taxable service" under the category of "Construction of Residential Complex Services" prior to 01.07.2012 and the Appellant was liable to pay service tax on the same during the relevant period from 2009-10 to June 2012 - The appellant had paid the service tax accordingly and later filed a refund claim on the ground that the activity was exempted from service... [Read more]

Service Tax - Construction of residential flats for BPL families for Haryana Housing Board - Whether service tax is leviable on such activity prior to 01.07.2012 - HELD - The activity of construction of residential flats for BPL families for Haryana Housing Board is a "taxable service" under the category of "Construction of Residential Complex Services" prior to 01.07.2012 and the Appellant was liable to pay service tax on the same during the relevant period from 2009-10 to June 2012 - The appellant had paid the service tax accordingly and later filed a refund claim on the ground that the activity was exempted from service tax after the judgment of the Punjab & Haryana High Court which held that no service tax is leviable on such contracts from 01.07.2012 onwards. However, the said judgment is not applicable to the present case as the period involved here is prior to 01.07.2012. Therefore, the order of the Commissioner (Appeals) rejecting the refund claim of the Appellant is upheld and the appeal is dismissed [Read less]

Service Tax – Payment of service tax along with interest before the issuance of the show cause notice - Penalty under Section 78 and benefit under Section 73(3) of the Finance Act, 1994 - The appellant, an engaged in manufacture of automobile, exhaust catalyst and provision of services, was issued show cause notices by the revenue for various service tax issues. The appellant had promptly paid the applicable service tax along with interest before the issuance of the show cause notices. The Commissioner imposed penalty under Section 78 - HELD - Since the appellant had paid the service tax along with interest before the is... [Read more]

Service Tax – Payment of service tax along with interest before the issuance of the show cause notice - Penalty under Section 78 and benefit under Section 73(3) of the Finance Act, 1994 - The appellant, an engaged in manufacture of automobile, exhaust catalyst and provision of services, was issued show cause notices by the revenue for various service tax issues. The appellant had promptly paid the applicable service tax along with interest before the issuance of the show cause notices. The Commissioner imposed penalty under Section 78 - HELD - Since the appellant had paid the service tax along with interest before the issuance of the show cause notices, the provisions of Section 73(3) of the Finance Act, 1994 are available to the appellant. The revenue should not have issued the SCNs on these issues as the appellant had already paid the tax. Further, the extended period was invoked as a routine without any substantial evidence to justify it. Therefore, the penalty under Section 78 cannot be imposed on the appellant – Further, looking into the conduct of the appellant, other penalties are also not imposable. The impugned order is modified and all the penalties imposed on the appellant are set aside – The appeal is disposed of [Read less]