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Customs - Refund of Extra Duty Deposit (EDD) paid against Customs Bills of Entry, Limitation period for claiming refund of EDD - Whether the appellant has passed on the incidence of EDD to other person, thereby disentitled to refund under the principle of unjust enrichment – HELD - The appellant had taken a loan from their principals to deposit the EDD and later repaid the loan. The EDD deposited was shown as recoverable from Customs Authority in the Balance Sheets. The loan transaction between the appellant and their principal is separate from the clearance of imported goods and the burden of EDD has been borne by the a... [Read more]

Customs - Refund of Extra Duty Deposit (EDD) paid against Customs Bills of Entry, Limitation period for claiming refund of EDD - Whether the appellant has passed on the incidence of EDD to other person, thereby disentitled to refund under the principle of unjust enrichment – HELD - The appellant had taken a loan from their principals to deposit the EDD and later repaid the loan. The EDD deposited was shown as recoverable from Customs Authority in the Balance Sheets. The loan transaction between the appellant and their principal is separate from the clearance of imported goods and the burden of EDD has been borne by the appellant. The findings of the lower authorities that the appellant has passed on the incidence of EDD to other person is erroneous and not sustainable. The appellant is entitled to the refund of EDD and also interest on delayed refund – Further, the EDD paid is not in the nature of customs duty but a deposit to secure any duty that may be found payable. When the allegation of under-declaration is found to be not valid, the substratum of EDD deposit no longer exists. Therefore, the limitation period for claiming refund of customs duty under Section 27 would not apply to the refund of EDD. The refund claim is within time and cannot be rejected on the ground of limitation – The impugned order is set aside and the appeal is allowed - Rejection of refund of EDD on the ground of unjust enrichment – HELD - The transaction between the appellant and their principal is a separate transaction whereby loan has been advanced by the principals to the appellant. The loan amount received by the appellant from their principal cannot be said to be the part of the transaction of clearance of the imported goods from Customs for which the burden of duty has been passed on to the recipients of the goods after clearance of the goods. In this case the recipient of the goods after clearance from the customs is the appellant-importer who has used these goods in their process of manufacture. For application of the principles of unjust enrichment, the burden should have been passed on to the party who is part of the same transaction, i.e. if the goods were sold after the importation to the buyer of the goods. As the burden of EDD deposited has been borne by the appellant as evidenced by the Certificate of chartered accountant, the impugned order whereby the refund of this amount has been rejected on the ground of unjust enrichment is quashed. [Read less]

Customs - Classification of imported goods - "Thinner, General Purpose for Synthetic Paints and Varnishes" vs "Petroleum Hydrocarbon Solvent 125/240" – Respondent-assessee classified imported goods as “Thinner, General Purpose for Synthetic Paints and Varnishes” as per IS 14317:1995, whereas according to Revenue, these goods fall under the category of “Petroleum Hydrocarbon Solvent 125/240” as per IS 1745:2018 – HELD - The test reports submitted by the Revenue were inconclusive as they did not cover all the essential parameters required under the two IS specifications. The non-examination of any product on all ... [Read more]

Customs - Classification of imported goods - "Thinner, General Purpose for Synthetic Paints and Varnishes" vs "Petroleum Hydrocarbon Solvent 125/240" – Respondent-assessee classified imported goods as “Thinner, General Purpose for Synthetic Paints and Varnishes” as per IS 14317:1995, whereas according to Revenue, these goods fall under the category of “Petroleum Hydrocarbon Solvent 125/240” as per IS 1745:2018 – HELD - The test reports submitted by the Revenue were inconclusive as they did not cover all the essential parameters required under the two IS specifications. The non-examination of any product on all the parameters laid down by the Customs authority will always lead to uncertainty and doubt, which are required to be removed when dealing with confiscatory proceedings – The Revenue is directed to ensure that proper testing facilities are made available in the appropriate laboratories for undertaking tests for all the essential parameters in the future to avoid such disputes. Considering the fact that the goods have been lying in the Customs area since August 2025, the importer is allowed to provisionally clear the goods on execution of a bond for the full value of the goods supported by a bank guarantee, pending the final determination of the classification - The matter is remanded to the Adjudicating Authority for re-testing of the samples by an appropriate Government laboratory for all the parameters prescribed under the relevant Indian Standards (IS) specifications to determine the exact nature of the goods for correct classification – The appeal is disposed of [Read less]

Central Excise - Valuation of goods cleared to related party - Appellant cleared scrap to its related party (GPIL) at a lower price than the price at which the same goods were sold to independent buyers - Department demanded central excise duty on the ground that the appellant did not follow the provisions of Rule 9 of the Valuation Rules, 2000 for clearance of goods to the related party - Whether the provisions of Valuation Rules such as Rule 9 and 10 are applicable in the case where the goods are cleared from one unit to another unit of the same legal entity – HELD - The appellant and GPIL are the same legal entity pos... [Read more]

Central Excise - Valuation of goods cleared to related party - Appellant cleared scrap to its related party (GPIL) at a lower price than the price at which the same goods were sold to independent buyers - Department demanded central excise duty on the ground that the appellant did not follow the provisions of Rule 9 of the Valuation Rules, 2000 for clearance of goods to the related party - Whether the provisions of Valuation Rules such as Rule 9 and 10 are applicable in the case where the goods are cleared from one unit to another unit of the same legal entity – HELD - The appellant and GPIL are the same legal entity post amalgamation as they share the same PAN and Corporate Identification Number. Hence, the transaction between the two units is not a "sale" under Section 2(h) of the Central Excise Act, as there are not two legal persons existed as per Section 3(42) of the General Clauses Act, 1897 for a 'sale' to happen. Since there is no transfer of ownership or consideration between two distinct persons, the provisions of Valuation Rules such as Rule 9 and 10 are not attracted in the present case - The Tribunal relied on the decision in the case of Jindal Steel and Power Ltd. vs. Commissioner of Central Tax, GST & Central Excise and held that Rule 8 of the Central Excise Valuation Rules, 2000 would be applicable for arriving at the valuation in respect of clearance of goods to own unit – Further, the demand of central excise duty is not sustainable on the ground of ‘revenue neutrality’ as the duty paid by one unit would be available as Cenvat Credit to the other unit. Additionally, the demand is not sustainable on account of limitation as there was no suppression of facts with an intent to evade payment of tax - The demand of central excise duty confirmed in the impugned order is set aside and the appeal is allowed - Irregular availment of Cenvat Credit - The appellant availed Cenvat Credit beyond the prescribed period of six months/one year from the date of invoice - Whether the denial of Cenvat Credit on the ground of procedural irregularity is justified – HELD - The receipt and utilization of the inputs in the manufacture of goods is not in dispute. The credit availed by the appellant has been denied only on the ground that it was taken beyond the prescribed period, which is a procedural requirement. The substantive benefit of Cenvat Credit, which is otherwise eligible to the appellant, cannot be denied merely because of the procedural irregularity, if any - The denial of Cenvat Credit and the consequential demand of interest and penalty is set aside [Read less]

Central Excise - Clandestine clearance of goods without payment of duty – Appellant was found to have suppressed taxable turnover based on lorry receipts (LRs) recovered from their premises. Some of the LRs matched with duty-paying invoices, but others did not have any corresponding invoices, indicating clandestine clearance of goods without payment of duty - Whether the charges of clandestine clearance and consequent demand of differential central excise duty along with interest and penalty are sustainable – HELD - The partner of the appellant firm in his statement admitted to the recovery of LRs and that some of the ... [Read more]

Central Excise - Clandestine clearance of goods without payment of duty – Appellant was found to have suppressed taxable turnover based on lorry receipts (LRs) recovered from their premises. Some of the LRs matched with duty-paying invoices, but others did not have any corresponding invoices, indicating clandestine clearance of goods without payment of duty - Whether the charges of clandestine clearance and consequent demand of differential central excise duty along with interest and penalty are sustainable – HELD - The partner of the appellant firm in his statement admitted to the recovery of LRs and that some of the sales invoices issued during 2010-11 and 2011-12 completely tallied with the description shown in the LRs, but majority of the LRs did not have any corresponding central excise invoices. He further admitted to clearing goods shown in the LRs in a clandestine manner without preparing any invoice and without payment of central excise duty, with the intent to evade duty. The confessional statement of the partner, which remained un-retracted, is admissible evidence to support the charges of clandestine clearance – The confession statement made before the Customs/Excise authorities, even if retracted later, can form the sole basis for conviction if found to be voluntary. The recovery of LRs for which there were no corresponding duty-paying invoices, coupled with the partner's confessional statement, is sufficient evidence to establish the charges of clandestine clearance - The demand of differential central excise duty along with interest and equal penalty on the appellant firm is upheld. However, the separate penalty imposed on the partner is set aside as the penalty had already been imposed on the partnership firm – The appeal is partly allowed [Read less]

Central Excise - Clandestine removal of goods - The appellant claimed that the subject goods were lying in the godown prior to obtaining registration under the Central Excise Act, and were not liable to central excise duty - Demand of central excise duty – HELD - The mere presence of goods in a godown cannot automatically lead to the conclusion that they were manufactured and cleared clandestinely - The allegation of clandestine removal of goods has not been established by the department. There is no tangible evidence to substantiate the claim of clandestine manufacture and clearance, as required under the principles lai... [Read more]

Central Excise - Clandestine removal of goods - The appellant claimed that the subject goods were lying in the godown prior to obtaining registration under the Central Excise Act, and were not liable to central excise duty - Demand of central excise duty – HELD - The mere presence of goods in a godown cannot automatically lead to the conclusion that they were manufactured and cleared clandestinely - The allegation of clandestine removal of goods has not been established by the department. There is no tangible evidence to substantiate the claim of clandestine manufacture and clearance, as required under the principles laid down by the Delhi High Court in Flevel International v. Commissioner of Central Excise - The department has merely relied on presumptions and assumptions, without producing any evidence of excess raw materials, actual instances of removal of unaccounted finished goods, discovery of such goods outside the factory, statements of buyers, proof of transportation, etc. Accordingly, the demand of central excise duty confirmed in the impugned order is not legally sustainable and is set aside. As the demand itself is not sustainable, the question of demanding interest or imposing penalty does not arise - The impugned order is set aside and the appeal filed by the appellant is allowed [Read less]

Service Tax - Demand of service tax based on financial statements - Whether the demand of service tax and imposition of penalties solely based on the figures shown in the Profit and Loss Account and Balance Sheets submitted to the Income Tax authorities can be sustained – HELD - The whole case of demand has been built up merely on the basis of figures shown in the ITR and the financial statements. The Department has not made any enquiry to ascertain the reason of difference between the figures shown in the Profit & Loss Account and Balance Sheets. I find that the demand raised by invoking the longer period of limitation ... [Read more]

Service Tax - Demand of service tax based on financial statements - Whether the demand of service tax and imposition of penalties solely based on the figures shown in the Profit and Loss Account and Balance Sheets submitted to the Income Tax authorities can be sustained – HELD - The whole case of demand has been built up merely on the basis of figures shown in the ITR and the financial statements. The Department has not made any enquiry to ascertain the reason of difference between the figures shown in the Profit & Loss Account and Balance Sheets. I find that the demand raised by invoking the longer period of limitation is solely based upon the Profit & Loss Account and Balance Sheet submitted with the Income Tax Authorities which has consistently been held to be as not proper - The Revenue’s reliance upon Profit & Loss Account are irrelevant for the purpose of confirmation of tax. Inasmuch as, the Revenue’s entire case is based upon the Profit & Loss Accounts and Balance Sheet and the Service Tax stands confirmed by invoking the longer period of limitation, the impugned order is not sustainable on limitation itself – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Levy of service tax on liquidity damages - Appellant entered into various contracts for supply of materials and services, which contained a penalty clause for recovering 'liquidity damages' from the supplier/vendor in case of delay - Department of the view that the amount received as 'liquidity damages' is consideration towards an act of tolerance, which is liable to service tax as 'declared service' under section 66E(e) of the Finance Act, 1994 w.e.f. 01.07.2012 - Whether the 'liquidity damages' collected by the appellant can be subjected to service tax as a 'declared service' under section 66E(e) – HELD -... [Read more]

Service Tax - Levy of service tax on liquidity damages - Appellant entered into various contracts for supply of materials and services, which contained a penalty clause for recovering 'liquidity damages' from the supplier/vendor in case of delay - Department of the view that the amount received as 'liquidity damages' is consideration towards an act of tolerance, which is liable to service tax as 'declared service' under section 66E(e) of the Finance Act, 1994 w.e.f. 01.07.2012 - Whether the 'liquidity damages' collected by the appellant can be subjected to service tax as a 'declared service' under section 66E(e) – HELD - The appellants were collecting certain amount, which they had declared as liquidity damages in their books of accounts from their supplier/service. These liquidity damages were charged only when the supplier or the service provider failed to deliver the goods or perform the service within the time limit specified in the contract. Appellant deducted 0.5% / 1% of the total contract value per complete week of delay or part thereof subject to maximum of 5% / 10%. Therefore, in certain cases of purchase of goods or procurement of service, they had invoked this clause and had collected liquidity damages - The issue of levying service tax on liquidity damages is no longer res integra, as in a catena of judgments, various Benches of the Tribunal have held that no service tax can be levied on liquidity damages. The ratio of such judgments is squarely applicable in the present factual matrix – The impugned order is set aside and the appeal is allowed [Read less]

Central Sales Tax Act, 1956 - Burden of proof to show transfer of goods was not by way of sale – Jurisdiction of Deputy Commissioner of Commercial Taxes to pass assessment order - The appellant failed to discharge the burden under Section 6A of the CST Act, 1956 and did not submit the documents required under Rule 14(3) of the Central Sales Tax (Andhra Pradesh) Rules, 1957 to establish that the transfer of goods from the State of Andhra Pradesh to other States was by way of consignment sales to agents and not inter-State sales – Whether the Deputy Commissioner of Commercial Taxes was the competent assessment officer fo... [Read more]

Central Sales Tax Act, 1956 - Burden of proof to show transfer of goods was not by way of sale – Jurisdiction of Deputy Commissioner of Commercial Taxes to pass assessment order - The appellant failed to discharge the burden under Section 6A of the CST Act, 1956 and did not submit the documents required under Rule 14(3) of the Central Sales Tax (Andhra Pradesh) Rules, 1957 to establish that the transfer of goods from the State of Andhra Pradesh to other States was by way of consignment sales to agents and not inter-State sales – Whether the Deputy Commissioner of Commercial Taxes was the competent assessment officer for the Assessment Year 2000-01 - HELD - In absence of the relevant documents, the transfer of goods had to be taken as inter-State sales. The appellant's contention that the Deputy Commissioner did not have the jurisdiction to pass the assessment order is rejected as Section 4A of the 1957 AP Sales Tax Act empowered the Deputy Commissioner to exercise the powers of subordinate officers - Even if the initial power to assess was with officers subordinate to the Deputy Commissioner, section 4A empowered the Deputy Commissioner of Commercial Taxes to exercise powers of the officers so empowered subject to any instructions issued by the Commissioner in this regard. The contention of the ld. counsel for the appellant is that the Deputy Commissioner of Commercial Taxes could have exercised power only if the Commissioner of Commercial Taxes had issued such instructions is rejected - The appeals filed by the appellant are dismissed - Limitation period for assessment - The appellant argued that the assessment order was passed beyond the limitation period. The Tribunal held that under Section 14(3) of the 1957 AP Sales Tax Act, where the dealer produced accounts and documents after inspection, the assessing authority could complete the assessment within six years from the expiry of the relevant year. Since the appellant had produced the documents after inspection, the six-year limitation period was applicable, and the assessment order was passed within this period. [Read less]

Service Tax - Defective filing of appeal before the first appellate authority - Appellant filed an appeal before the Commissioner (Appeals) challenging the Order-in-Original, which partially confirmed a demand for short payment of service tax. The Commissioner (Appeals) dismissed the appeal, noting that the appellant had failed to file the requisite 'Statement of Facts and Grounds of Appeal' along with the memorandum of appeal in the prescribed Form ST-4 - Whether the dismissal of the appeal by the Commissioner (Appeals) on the ground of defective filing of the appeal is correct – HELD - The filing of grounds of appeal i... [Read more]

Service Tax - Defective filing of appeal before the first appellate authority - Appellant filed an appeal before the Commissioner (Appeals) challenging the Order-in-Original, which partially confirmed a demand for short payment of service tax. The Commissioner (Appeals) dismissed the appeal, noting that the appellant had failed to file the requisite 'Statement of Facts and Grounds of Appeal' along with the memorandum of appeal in the prescribed Form ST-4 - Whether the dismissal of the appeal by the Commissioner (Appeals) on the ground of defective filing of the appeal is correct – HELD - The filing of grounds of appeal is not a mere procedural formality, but serves the substantive purpose of apprising the appellate authority of the specific findings in the order under challenge that are assailed, the legal or factual grounds on which the challenge is founded, and the precise relief sought. In the absence of such grounds, the appellate authority is placed in a position where it is unable to meaningfully examine or adjudicate upon the merits of the challenge - When a statute prescribes a specific form or manner for the exercise of a right, the prescribed procedure must be strictly adhered to. Therefore, there is no error in the impugned order of the Commissioner (Appeals) given the deficient state of the pleadings placed before the said authority - However, in the interest of justice and to afford the appellant a full and fair opportunity to have its case decided on merits, the impugned Order-in-Appeal is set aside and the matter is remanded to the Commissioner (Appeals) for a fresh decision. The appellant was directed to file the statement of facts and grounds of appeal in the prescribed Form ST-4, along with the relevant documentary evidence - The appeal is allowed by way of remand [Read less]

Service Tax - Demand of service tax on exhibition expenses held outside India – Department confirmed a demand of service tax on the exhibition expenses incurred by the appellant for an event held in Geneva, Switzerland - Whether service tax was leviable on the exhibition expenses incurred outside India - HELD – As per Rule 6 of the Place of Provision of Services Rules, 2012, the provision of service relating to events shall be the place where the event is actually held. Since the event was held in Switzerland, which is a non-taxable territory, no service tax is leviable on the expenses incurred for the event. The Appel... [Read more]

Service Tax - Demand of service tax on exhibition expenses held outside India – Department confirmed a demand of service tax on the exhibition expenses incurred by the appellant for an event held in Geneva, Switzerland - Whether service tax was leviable on the exhibition expenses incurred outside India - HELD – As per Rule 6 of the Place of Provision of Services Rules, 2012, the provision of service relating to events shall be the place where the event is actually held. Since the event was held in Switzerland, which is a non-taxable territory, no service tax is leviable on the expenses incurred for the event. The Appellate Authority has wrongly invoked the default Rule 3 instead of the specific Rule 6. The bona fide belief of the assessee that no service tax is payable on the expenses incurred for an event held outside India cannot be outrightly rejected - The demands of service tax is set aside and the appeal is allowed both on merits as well as on limitation - Sale of software licenses - Taxability under service tax – HELD - The demand of service tax on the income earned by the appellant on sale of software licenses to their customers is not legally sustainable. The appellant is a software product company primarily engaged in development of standardized software products catering to the needs of the travel industry. As per the End User License Agreements, the appellant was providing Information Technology Software Service in the form of sale of license along with perpetual right to use. The predominant part of the contract is the sale of software which was sold on a perpetual basis. The appellant has discharged VAT on the sale of software, considering it as the sale of goods. The appellant has also paid service tax on the service portion, if any, as mentioned in the separate schedule. An entity cannot be taxed under both service tax as well as VAT. The appellant had a bona fide belief that no service tax is payable on the sale of software. [Read less]

Customs - Confiscation of mobile phones and imposition of penalties on merchant exporter - Department alleged that the appellant had mis-declared the description of mobile phones under export as they had subjected the phones to usage prior to export by unsealing the original packaging, activating the handsets, and then repacking them - Whether the confiscation of goods and imposition of penalties on the appellants are legally sustainable - HELD - The issues raised in the present appeals are no longer res integra in view of the judgements passed by the High Court of Delhi in the case of AIMS Retail Services Pvt. Ltd. & Anr.... [Read more]

Customs - Confiscation of mobile phones and imposition of penalties on merchant exporter - Department alleged that the appellant had mis-declared the description of mobile phones under export as they had subjected the phones to usage prior to export by unsealing the original packaging, activating the handsets, and then repacking them - Whether the confiscation of goods and imposition of penalties on the appellants are legally sustainable - HELD - The issues raised in the present appeals are no longer res integra in view of the judgements passed by the High Court of Delhi in the case of AIMS Retail Services Pvt. Ltd. & Anr. and the subsequent dismissal of the Department's appeal by the Supreme Court. The High Court had observed that the unlocking/activating of mobile phones to enable their use in a particular geographical territory outside India is merely 'configuration' of the product to make it usable and does not constitute "taken into use" under the Drawback Rules - The alleged acts of the appellants of unsealing the original packaging, activating the handsets, and then repacking them do not amount to mis-declaration or suppression of facts - The impugned order is set and the appeal is allowed [Read less]

Central Excise - Eligibility of Cenvat credit on capital goods and inputs used for setting up a power plant - The appellant, a sugar mill manufacturer, availed Cenvat credit on capital goods and inputs used for setting up a power plant to generate electricity, some of which was used captively for the sugar mill operations and the rest was supplied to the electricity department - Department denied the Cenvat credit on the ground that the power plant was an exempted good and not an excisable good - Whether the appellant is eligible to avail Cenvat credit on the capital goods and inputs used for setting up the power plant - H... [Read more]

Central Excise - Eligibility of Cenvat credit on capital goods and inputs used for setting up a power plant - The appellant, a sugar mill manufacturer, availed Cenvat credit on capital goods and inputs used for setting up a power plant to generate electricity, some of which was used captively for the sugar mill operations and the rest was supplied to the electricity department - Department denied the Cenvat credit on the ground that the power plant was an exempted good and not an excisable good - Whether the appellant is eligible to avail Cenvat credit on the capital goods and inputs used for setting up the power plant - HELD - As per the definition of "capital goods" under the Cenvat Credit Rules, 2004, the goods on which credit has been taken fall within the categories listed and have been used in the factory of the appellant for manufacturing of the final products - The goods on which the credit has been taken fall within the categories of the goods listed in the definition of the capital goods and have been used for the manufacturing of final product. The fact that the capital goods are installed and become a fixed structure does not disentitle the manufacturer from availing Cenvat credit, as long as the goods satisfy the definition of "capital goods" under the Rules. The reliance by the department on the CBEC Circular and the Supreme Court decisions in Triveni Engineering and Quality Steel Tubes cases is misplaced as the issues in those cases were different from the present case – Further, the department failed to prove any positive act of suppression on the part of the appellant to invoke the extended period of limitation, and the imposition of penalty was also not warranted considering the appellant's bonafide belief and the complex interpretation of the legal provisions involved - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Classification of imported integrated drive generator and starter generator - The appellant imported integrated drive generator and starter generator for use in turboprop/turbofan engines of aircraft - Department classified the goods under CTH 8511 while the appellant claimed classification under CTH 8501 – HELD - The subject goods are classifiable under CTH 8501 as they are electrical generators used in conjunction with turboprop/turbofan engines, which are gas turbine engines and not spark-ignition or compression ignition internal combustion engines covered under CTH 8511. CTH 8501 covers all electric generat... [Read more]

Customs - Classification of imported integrated drive generator and starter generator - The appellant imported integrated drive generator and starter generator for use in turboprop/turbofan engines of aircraft - Department classified the goods under CTH 8511 while the appellant claimed classification under CTH 8501 – HELD - The subject goods are classifiable under CTH 8501 as they are electrical generators used in conjunction with turboprop/turbofan engines, which are gas turbine engines and not spark-ignition or compression ignition internal combustion engines covered under CTH 8511. CTH 8501 covers all electric generators, whereas CTH 8511 covers only those generators used in conjunction with spark-ignition or compression ignition internal combustion engines. The finding of the Department that CTH 8511 covers "internal combustion engines of any kind" and therefore the goods are classifiable under CTH 8511 is incorrect, as the term "any kind" in CTH 8511 refers to the internal design of the internal combustion engine, i.e. piston type or other types, and not to all types of internal combustion engines including gas turbine engines - Further, the extended period of limitation under section 28(4) of the Customs Act could not have been invoked as mere misclassification by the importer does not mean that the duty was short paid with an intention to evade payment. Consequently, penalty under section 114A of the Customs Act is also not imposable. The penalty imposed on the CHA under section 117 of the Customs Act is also not sustainable as the CHA acted as per the instructions of the importer - The impugned orders are set aside and the appeals are allowed - Invocation of extended period of limitation - The department invoked the extended period of limitation under section 28(4) of the Customs Act on the ground that the importer had short-paid the duty by misclassifying the goods – HELD - Mere misclassification by the importer would not mean that the duty was short paid with an intention to evade payment. The classification adopted by the importer, even if ultimately found to be incorrect, would not mean that the import by misclassifying the goods was with an intention to evade payment of duty. In the present case, the classification adopted by the appellant has been found to be correct. Therefore, the extended period of limitation was not correctly invoked - Imposition of penalty on CHA - The department imposed a penalty on the customs house agent under section 117 of the Customs Act on the ground that uniformity was not maintained by it in the classification of the goods while declaring the same in the Bills of Entry – HELD - The role of a customs house agent is confined to making entries on the basis of the documents provided by the importer and to facilitate proper filing of such documents. The customs house agent acted as per the instructions of the importer. Therefore, the penalty under section 117 of the Customs Act could not have been imposed upon the customs house agent. [Read less]

Service Tax – Taxability of Director’s remuneration - Appellant company paid performance commission and perquisites to its Directors beyond the fixed monthly salary - Department issued notice demanding service tax on such payments under RCM - Whether the remuneration paid by the appellant company to its directors beyond fixed monthly salary constitutes "service" and is liable to service tax under reverse charge mechanism - HELD - The remuneration paid by the appellant company to its whole-time Directors, which included commission, perquisites and performance incentive, is in the nature of "salary" and not "service". Th... [Read more]

Service Tax – Taxability of Director’s remuneration - Appellant company paid performance commission and perquisites to its Directors beyond the fixed monthly salary - Department issued notice demanding service tax on such payments under RCM - Whether the remuneration paid by the appellant company to its directors beyond fixed monthly salary constitutes "service" and is liable to service tax under reverse charge mechanism - HELD - The remuneration paid by the appellant company to its whole-time Directors, which included commission, perquisites and performance incentive, is in the nature of "salary" and not "service". The Directors were appointed as "whole-time" or "working" directors of the company and were considered as "employees" under the Companies Act – Further, as evident from the Form-16 certificates issued to the directors, the remuneration was subject to deduction of tax at source under the salary mechanism. Once the relationship between the company and the directors is found to be one of employer-employee, the charging provisions under the Finance Act, 1994 for levy of service tax do not get attracted – The impugned order is set aside and the appeal is allowed [Read less]

GST - Alternative Remedy – Challenge to demand order directly before the High Court under Article 226 of the Constitution, instead of availing the statutory remedy of appeal - The petitioner claimed that the impugned order was passed in violation of principles of natural justice and the STO lacked jurisdiction to initiate proceedings – Maintainability of writ petition – HELD - Where a right or liability is created by a statute which itself prescribes the remedy or procedure for enforcing such right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Arti... [Read more]

GST - Alternative Remedy – Challenge to demand order directly before the High Court under Article 226 of the Constitution, instead of availing the statutory remedy of appeal - The petitioner claimed that the impugned order was passed in violation of principles of natural justice and the STO lacked jurisdiction to initiate proceedings – Maintainability of writ petition – HELD - Where a right or liability is created by a statute which itself prescribes the remedy or procedure for enforcing such right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution - The exceptions to the rule of alternative remedy, such as violation of principles of natural justice or the order being without jurisdiction, are not attracted in the present case - The show cause notice provided the petitioner sufficient time to file a reply and attend the personal hearing, and the petitioner's failure to do so cannot be construed as a denial of opportunity of hearing. Additionally, the STO has the jurisdiction to initiate proceedings under Section 73 of the J&K GST Act based on the audit conducted under Section 65 of the CGST Act - The writ petition is dismissed as not maintainable in view of the availability of an equally efficacious statutory remedy of appeal [Read less]

GST - Opportunity of hearing before rejecting refund application – Rejection of refund application under Section 54 of the CGST Act, 2017 on the ground that it was barred by limitation – HELD - The refund rejection order was passed in gross violation of Rule 92(3) of the CGST Rules, 2017. It is not disputed that in response to the Show Cause Notice dated 06.02.2026, the petitioner in his reply submitted on 12.02.2026 sought a date for personal hearing by virtual mode, but without considering the said request and without fixing any date for hearing, the Department proceeded to pass the impugned order - The Rule 93(3) of... [Read more]

GST - Opportunity of hearing before rejecting refund application – Rejection of refund application under Section 54 of the CGST Act, 2017 on the ground that it was barred by limitation – HELD - The refund rejection order was passed in gross violation of Rule 92(3) of the CGST Rules, 2017. It is not disputed that in response to the Show Cause Notice dated 06.02.2026, the petitioner in his reply submitted on 12.02.2026 sought a date for personal hearing by virtual mode, but without considering the said request and without fixing any date for hearing, the Department proceeded to pass the impugned order - The Rule 93(3) of CGST Rules specifically provides for the grant of an opportunity of hearing before any rejection order is passed in respect of a prayer for refund. Thus, there was a clear violation of Rule 93(3) of the Rules - The impugned order is quashed and the matter is remitted back to the respondent for proceeding strictly in accordance with law - The writ petition is allowed [Read less]

Central Excise - Eligibility of CENVAT credit on hiring of chartered aircraft, club/association services and hotel services - Whether the respondent-assessee is eligible to avail CENVAT credit on the services of hiring a chartered aircraft, club/association services and hotel services - HELD - The Tribunal relied on the decision in Pepsico India Holdings Pvt Ltd v. Commissioner of Central Tax, wherein it was held that post 01.04.2011, the definition of 'input service' is wide enough to cover any service used directly or indirectly in relation to the manufacture. Further, the Department failed to issue a show cause notice t... [Read more]

Central Excise - Eligibility of CENVAT credit on hiring of chartered aircraft, club/association services and hotel services - Whether the respondent-assessee is eligible to avail CENVAT credit on the services of hiring a chartered aircraft, club/association services and hotel services - HELD - The Tribunal relied on the decision in Pepsico India Holdings Pvt Ltd v. Commissioner of Central Tax, wherein it was held that post 01.04.2011, the definition of 'input service' is wide enough to cover any service used directly or indirectly in relation to the manufacture. Further, the Department failed to issue a show cause notice to the input service distributor who had distributed the credit, and that the credit cannot be denied to the recipient unit without first denying the credit to the ISD - With respect to the club/association services and hotel services, the respondent is eligible to avail CENVAT credit on these services as they were used for business/manufacturing purposes and not for personal use - The impugned order passed by the Commissioner which had allowed the CENVAT credit on the various input services availed by the respondent is upheld and the Revenue appeal is dismissed [Read less]

GST – Tamil Nadu AAAR - Composite Supply of service or Supply of food as restaurant/food service - Appellant procures food from third party kitchens and supplies it to their corporate clients, without any preparation or serving - Whether the supply of food by the appellant should be treated as a supply of goods or a supply of service – HELD - The appellant is not merely an aggregator of food but is actively involved in finalizing the menu, ensuring quality and hygiene standards, and arranging for delivery of the food to the client's premises. The supply of food by the appellant under a contractual arrangement with the ... [Read more]

GST – Tamil Nadu AAAR - Composite Supply of service or Supply of food as restaurant/food service - Appellant procures food from third party kitchens and supplies it to their corporate clients, without any preparation or serving - Whether the supply of food by the appellant should be treated as a supply of goods or a supply of service – HELD - The appellant is not merely an aggregator of food but is actively involved in finalizing the menu, ensuring quality and hygiene standards, and arranging for delivery of the food to the client's premises. The supply of food by the appellant under a contractual arrangement with the client is not a supply of goods or a restaurant service, but rather a composite supply of service that includes the supply of food as well as logistical and quality assurance services. The dominant intention of the supply is the provision of a service, and the supply of food is an integral part of that service - The supply of food by the appellant is a composite supply of service under Para 6(b) of Schedule II of the CGST Act, 2017 and is taxable at 18% GST as per Entry 7(vi) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 – The advance ruling of the AAR is upheld and the appeal is rejected [Read less]

GST – Gujarat AAR - Classification of Autoclaved Aerated Concrete (AAC) Bricks/Blocks – Applicant is engaged in the manufacture and supply of Autoclaved Aerated Concrete (AAC) bricks/blocks, which are used in the construction industry as a substitute for conventional burnt clay bricks – Whether the product, AAC bricks/blocks would be classifiable under Heading 69041000 "Building Bricks" or under Heading 6810 "Articles of cement, of concrete or of artificial stone, whether or not reinforced" – HELD - The manufacturing process of the AAC bricks/blocks, as detailed by the applicant, draws parallel with the process men... [Read more]

GST – Gujarat AAR - Classification of Autoclaved Aerated Concrete (AAC) Bricks/Blocks – Applicant is engaged in the manufacture and supply of Autoclaved Aerated Concrete (AAC) bricks/blocks, which are used in the construction industry as a substitute for conventional burnt clay bricks – Whether the product, AAC bricks/blocks would be classifiable under Heading 69041000 "Building Bricks" or under Heading 6810 "Articles of cement, of concrete or of artificial stone, whether or not reinforced" – HELD - The manufacturing process of the AAC bricks/blocks, as detailed by the applicant, draws parallel with the process mentioned in the HSN notes to Heading 6810, except for the high temperatures (800°C to 1500°C) claimed by the applicant, which appear to be incorrect as the AAC bricks are typically subjected to temperatures of 180-220°C in the autoclave - The chemical composition of the AAC bricks/blocks, as per the test report submitted by the applicant, does not match the composition of standard ceramic bricks/blocks, indicating that the AAC bricks/blocks are not ceramic in nature and hence, do not fall under Chapter 69 - The Chapter Notes to Chapter 69 explicitly state that articles heated to temperatures less than 800°C are not considered to be "fired" and are excluded from Chapter 69, which would be the case for the AAC bricks/blocks - Based on the above analysis, it is concluded that the AAC bricks/blocks manufactured by the applicant are correctly classifiable under Heading 6810 "Articles of cement, of concrete or of artificial stone, whether or not reinforced" of the Customs Tariff Act, 1975, and not under Heading 69041000 "Building Bricks" of Chapter 69 – Ordered accordingly [Read less]

GST - Gujarat AAR - Classification and applicable GST rate on "Black Mineral Water" – Whether the product "Black Mineral Water" is classifiable under HSN 22011010 (mineral waters) or some other HSN heading – HELD - The applicant's "Black Mineral Water" product is correctly classified under HSN 22011010 (mineral waters) of the First Schedule to the Customs Tariff Act, 1975. The product, based on the laboratory report and the production process details provided by the applicant, does not contain any added sugar, sweetening matter, or flavoring, and only contains added minerals - The Chapter Notes and Explanatory Notes of... [Read more]

GST - Gujarat AAR - Classification and applicable GST rate on "Black Mineral Water" – Whether the product "Black Mineral Water" is classifiable under HSN 22011010 (mineral waters) or some other HSN heading – HELD - The applicant's "Black Mineral Water" product is correctly classified under HSN 22011010 (mineral waters) of the First Schedule to the Customs Tariff Act, 1975. The product, based on the laboratory report and the production process details provided by the applicant, does not contain any added sugar, sweetening matter, or flavoring, and only contains added minerals - The Chapter Notes and Explanatory Notes of Chapter 22 of the First Schedule to the Customs Tariff Act, 1975, treats mineral waters (natural or artificial) as covered under the sub-headings for mineral waters, and the addition of minerals does not preclude classification under HSN 22011010 as long as there is no added sugar or flavoring. The product falls under Entry No. 146 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 and liable to GST at the rate of 5% - The applicant's "Black Mineral Water" product is classifiable under HSN 22011010 (mineral waters) and is liable to GST at the rate of 5% - Ordered accordingly [Read less]

Service Tax - Taxability of grants-in-aid received from Government Departments/Ministries under scientific or technical consultancy services - Appellant, a research institute, received grants-in-aid from various Government departments and Ministries - Department alleged that these grants-in-aid are taxable under the category of 'Scientific or Technical Consultancy Services' and raised a demand for service tax - Whether the grants-in-aid received by the appellant from government departments/ministries are taxable under the category of 'Scientific or Technical Consultancy Services' - HELD - The grants-in-aid received by the ... [Read more]

Service Tax - Taxability of grants-in-aid received from Government Departments/Ministries under scientific or technical consultancy services - Appellant, a research institute, received grants-in-aid from various Government departments and Ministries - Department alleged that these grants-in-aid are taxable under the category of 'Scientific or Technical Consultancy Services' and raised a demand for service tax - Whether the grants-in-aid received by the appellant from government departments/ministries are taxable under the category of 'Scientific or Technical Consultancy Services' - HELD - The grants-in-aid received by the appellant from Government departments/Ministries are not taxable under the category of 'Scientific or Technical Consultancy Services'. A grant-in-aid is a financial assistance provided by the government to another government body, institution or individual for a specific purpose, without requiring repayment. Such grants are typically used to support specific projects, programs or services and come with specific conditions and reporting requirements. The grants-in-aid received from the government cannot be treated as 'consideration' and therefore are not taxable under the service tax. Further, the demand invoking the extended period of limitation is also unsustainable as the appellant was under a bona fide belief that they are not liable to pay service tax on the grants-in-aid received - The demand and penalty imposed on the appellant is set aside and the appeals are allowed [Read less]

Central Excise – Eligibility to interest on delayed refund under Section 11BB of Central Excise Act, 1944 – Entitlement to interest on the delayed payment of interest - HELD - As per the interpretation of Section 11BB by the Supreme Court in the case of Ranbaxy Laboratories Ltd., interest under Section 11BB becomes payable on the expiry of a period of three months from the date of receipt of the refund application. In the present case, the appellant had filed the refund/rebate claim on 15.11.2007, and hence interest becomes payable to them on the unpaid amount of refund from 15.02.2008 - The contention of the revenue t... [Read more]

Central Excise – Eligibility to interest on delayed refund under Section 11BB of Central Excise Act, 1944 – Entitlement to interest on the delayed payment of interest - HELD - As per the interpretation of Section 11BB by the Supreme Court in the case of Ranbaxy Laboratories Ltd., interest under Section 11BB becomes payable on the expiry of a period of three months from the date of receipt of the refund application. In the present case, the appellant had filed the refund/rebate claim on 15.11.2007, and hence interest becomes payable to them on the unpaid amount of refund from 15.02.2008 - The contention of the revenue that the date for computation of interest should be the date of order of the appellate authority allowing the appeal of the appellant against the order appropriating the refund amount, is rejected. However, there is no merit in the appellant's claim for interest on the delayed payment of interest, as there was no statutory provision in the Central Excise Act, 1944 for the same - The appeal is partly allowed, with the appellant being entitled to interest under Section 11BB at the prescribed rate from 15.02.2008 to 29.07.2008, but no interest on delayed payment of interest – The appeal is partly allowed [Read less]

Customs - Classification of mandarin orange concentrate - The appellant imported 'Mandarin (Kinow) Frozen Concentrate' and classified it under Tariff entry 2009 1100 (orange juice) - Department reclassified it under Tariff entry 2009 3900 (juice of any other single citrus fruit) - whether the orange/mandarin juice concentrate is classifiable under CTI 2009 1100 as per the appellants or under CTI 2009 3900 as per Revenue – HELD - The Customs Tariff makes a clear distinction between "Oranges" and "Mandarins (including tangerines and satsumas)" under Chapter 8, and this distinction extends to their juices under Chapter 20. ... [Read more]

Customs - Classification of mandarin orange concentrate - The appellant imported 'Mandarin (Kinow) Frozen Concentrate' and classified it under Tariff entry 2009 1100 (orange juice) - Department reclassified it under Tariff entry 2009 3900 (juice of any other single citrus fruit) - whether the orange/mandarin juice concentrate is classifiable under CTI 2009 1100 as per the appellants or under CTI 2009 3900 as per Revenue – HELD - The Customs Tariff makes a clear distinction between "Oranges" and "Mandarins (including tangerines and satsumas)" under Chapter 8, and this distinction extends to their juices under Chapter 20. The HSN and the Explanatory Notes also treat oranges and mandarins as distinct fruits and their juices accordingly. The application of the "common parlance" test cannot override the clear statutory scheme and the term "orange juice" under Heading 2009 must be read consistently with the meaning ascribed to "oranges" elsewhere in the Act - The mandarin orange concentrate cannot be classified under the "orange juice" sub-headings and must be classified under the residuary "juice of any other single citrus fruit" sub-heading - The appellant’s claim that Mandarin Frozen Concentrate is classifiable under Tariff Item 2009.11.00 as orange juice, is not acceptable. The classification of Mandarin Orange Juice concentrate under Tariff entry 2009 3900, by the impugned order is upheld – The appeal is answered in favour of the Revenue on the merits of classification and in favour of the appellants on the issue of limitation – The appeal is partly allowed - Extended period of limitation - The Department invoked the extended period of limitation under Section 28(4) of the Customs Act - HELD - The extended period of limitation cannot be invoked as there was no suppression or misdeclaration with intent to evade payment of duty. The appellant was a regular importer, and the classification adopted by the appellant was known to the Department. The demand arose from an audit objection, and there was no positive act by the appellant to evade payment of duty. When a demand is based on an audit objection, there cannot be any allegation of suppression. [Read less]

GST - Demand of interest on delayed GST Payment - Whether the petitioner is liable to pay interest on entire output tax liability or only on net cash liability - Amendment in Section 50 of CGST Act, 2017 with Retrospective Effect – HELD - In light of the amendment inserted in Section 50 of the CGST Act, 2017 with retrospective effect from 1st July, 2017, the petitioner is required to make interest payments for delayed GST only on net cash liability and not on the entire output tax liability - The matter was remitted back to the respondent authorities to decide it afresh after affording due opportunity of hearing to the ... [Read more]

GST - Demand of interest on delayed GST Payment - Whether the petitioner is liable to pay interest on entire output tax liability or only on net cash liability - Amendment in Section 50 of CGST Act, 2017 with Retrospective Effect – HELD - In light of the amendment inserted in Section 50 of the CGST Act, 2017 with retrospective effect from 1st July, 2017, the petitioner is required to make interest payments for delayed GST only on net cash liability and not on the entire output tax liability - The matter was remitted back to the respondent authorities to decide it afresh after affording due opportunity of hearing to the petitioner, strictly in accordance with the amendment. The impugned demand notices to the extent they sought to demand interest on the entire output tax liability without allowing the reduction of valid input tax credit available to the petitioner, is quashed – The petition is disposed of [Read less]

GST – Gujarat AAR - Eligibility of Input Tax Credit on goods and services used for setting up of Continuous Catenary Vulcanization (CCV) Tower - Applicant is setting up a new factory for manufacturing of high-voltage cross-linked polyethylene (XLPE) insulated electrical cables and has engaged a third party for engineering, procurement and construction (EPC) of the CCV tower - Whether the applicant is eligible to avail ITC on the inputs and input services used for construction of the CCV tower under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 – HELD - The CCV tower is an essential structural support for the ent... [Read more]

GST – Gujarat AAR - Eligibility of Input Tax Credit on goods and services used for setting up of Continuous Catenary Vulcanization (CCV) Tower - Applicant is setting up a new factory for manufacturing of high-voltage cross-linked polyethylene (XLPE) insulated electrical cables and has engaged a third party for engineering, procurement and construction (EPC) of the CCV tower - Whether the applicant is eligible to avail ITC on the inputs and input services used for construction of the CCV tower under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 – HELD - The CCV tower is an essential structural support for the entire CCV machine line used in the manufacture of insulated cables and thus qualifies as "plant and machinery" under the explanation to Section 17(5) of the CGST Act. The CCV tower, made of specialized steel structure, is necessary to support and erect the CCV lines while maintaining the structural integrity, stability, precision and overall efficiency of the manufacturing process – When the ITC sought is on construction of foundation and structural support relating to plant and machinery, it moves out of the ambit of section 17(5)(c) and (d) even if it is on their own account. This being the case, the applicant is eligible for availing the ITC on inputs and input services used lor construction of specialised steel CCV tower to support and erect the CCV lines at the factory of the applicant for manufacture of electrical cables – Since as per CBIC Circular No.219/13/2024-GST when ITC is not restricted even in respect of ducts and manhole used in optical fibre cables under section 17(5) of the CGST Act, 2017, the ITC, on inputs and input services used for construction of steel CCV tower to support and erect the CCV lines, for manufacture of insulated electrical cables also cannot be restricted - The applicant is eligible to avail the ITC on the inputs and input services used for setting up of the CCV tower at the factory for manufacture of insulated cables – Ordered accordingly [Read less]

Service Tax - Exemption to rent-a-car services provided to SEZ unit – Non-payment of service tax on the hire charges collected for providing cars for transportation of staff to SEZ unit - Show cause notice issued demanding service tax along with interest and penalties - Whether the service of providing cars on hire by the appellant to the SEZ unit is exempt from service tax – HELD - The Special Economic Zones (SEZ) Act, 2005 is a special legislation enacted with the objective of promoting exports, and as per Section 51 of the SEZ Act, its provisions have an overriding effect over any other inconsistent law, including t... [Read more]

Service Tax - Exemption to rent-a-car services provided to SEZ unit – Non-payment of service tax on the hire charges collected for providing cars for transportation of staff to SEZ unit - Show cause notice issued demanding service tax along with interest and penalties - Whether the service of providing cars on hire by the appellant to the SEZ unit is exempt from service tax – HELD - The Special Economic Zones (SEZ) Act, 2005 is a special legislation enacted with the objective of promoting exports, and as per Section 51 of the SEZ Act, its provisions have an overriding effect over any other inconsistent law, including the Finance Act. Further, Section 26(1)(e) of the SEZ Act grants a substantive and statutory exemption from service tax on all taxable services provided to a Developer or a Unit for carrying on authorised operations in an SEZ, and this exemption is not conditional upon the place where the services are rendered - The services provided by the appellant to the SEZ unit are intrinsically connected with the authorised operations of the SEZ unit, and hence, are exempt from service tax - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Grant of interest on refund of Goods and Services (Special Importance) Tax paid inadvertently - Refund applications for refund of GSI tax paid inadvertently on import of PVC quoted cloth. The refund was sanctioned in 2018 after a long delay and the appellant was granted interest only from March 2018, instead of from three months after the date of filing of refund applications in June 2004 - Whether the appellant is entitled to interest from three months after the date of filing of refund applications in June 2004, as per the provisions of Section 27A of the Customs Act, 1962, or only from the date of personal hea... [Read more]

Customs - Grant of interest on refund of Goods and Services (Special Importance) Tax paid inadvertently - Refund applications for refund of GSI tax paid inadvertently on import of PVC quoted cloth. The refund was sanctioned in 2018 after a long delay and the appellant was granted interest only from March 2018, instead of from three months after the date of filing of refund applications in June 2004 - Whether the appellant is entitled to interest from three months after the date of filing of refund applications in June 2004, as per the provisions of Section 27A of the Customs Act, 1962, or only from the date of personal hearing, as held by the Commissioner (Appeals) - HELD - The appellant is entitled to interest from three months after the date of filing of refund applications in June 2004 till the date of refund in November 2018, as per the clear and unambiguous provisions of Section 27A of the Customs Act, 1962. The refund applications were duly filed and acknowledged by the department in 2004, and the delay in sanction of refund was solely attributable to the negligent manner in which the department handled the applications - The department's argument of treating the application as incomplete till the submission of CA's certificate in 2017 is not valid, as the statute does not distinguish between 'completed' and 'deficient' applications for the purpose of payment of interest - The order of the Commissioner (Appeals) is modified. The Department is directed to pay interest at the applicable rate from three months after June 2004 till the date of refund in November 2018 – The appeal is allowed [Read less]

Customs - Classification of imported goods as "Cold Heading Quality Alloy Steel Wire in Coils" under CTH 7229 or 7227 - Whether the imported goods are classifiable under CTH 7229 as alloy steel wire or under CTH 7227 as wire rods – HELD - The imported goods are correctly classifiable under CTH 7229 as alloy steel wire. The goods have undergone spheroidized annealing and cold drawing processes which fundamentally alters the microstructure and mechanical properties of the steel, characteristic of finished wire used in cold heading applications. The distinction between wire rods and wire is clearly recognized in the HSN exp... [Read more]

Customs - Classification of imported goods as "Cold Heading Quality Alloy Steel Wire in Coils" under CTH 7229 or 7227 - Whether the imported goods are classifiable under CTH 7229 as alloy steel wire or under CTH 7227 as wire rods – HELD - The imported goods are correctly classifiable under CTH 7229 as alloy steel wire. The goods have undergone spheroidized annealing and cold drawing processes which fundamentally alters the microstructure and mechanical properties of the steel, characteristic of finished wire used in cold heading applications. The distinction between wire rods and wire is clearly recognized in the HSN explanatory notes to Chapter 72, where wire rods are hot-rolled semi-finished products whereas wire is obtained by drawing rods through dies - Further, the BIS certification issued to the supplier described the product as steel wire. The department failed to produce any technical evidence demonstrating that the imported goods are hot-rolled wire rods rather than cold drawn wire. Accordingly, the department's order which had classified the goods under CTH 7227 and denied the benefit of the applicable exemption notification, is set aside – The appeal is allowed - Entitlement to exemption under Notification No. 152/2009-Cus - Whether the appellant is entitled to the benefit of Notification No. 152/2009-Cus – HELD - Since the Tribunal has held that the imported goods are correctly classifiable under CTH 7229, the denial of exemption and the demand of differential duty along with interest cannot be sustained. Once the assessee satisfies the conditions prescribed in the notification, the benefit thereof cannot be denied, and where the foundation of a demand fails, the entire demand must necessarily fail - Confiscation, limitation and penalties - The proposals relating to confiscation, penalties under Sections 112(a) and 114AA arise from the allegation of misclassification and wrongful availment of exemption – HELD - Since the primary allegation of misclassification itself fails, the confiscation of the goods and the penalties imposed cannot be sustained. The Tribunal also noted that there is no material on record to establish suppression, misdeclaration or wilful misstatement on the part of the appellant, and consequently the invocation of the extended period of limitation would not be sustainable. [Read less]

Customs - Seizure of gold and currency - The seizure was made on the allegation that the gold biscuits were smuggled into India and that the cash represented sale proceeds of such smuggled gold - Whether the seizure was valid and the subsequent confiscation and penalty sustainable – HELD - The seizure of the gold and currency is not valid as the proper officer did not record separate reasons for belief that the goods were liable for confiscation prior to the seizure, as required under Section 110 of the Customs Act. The power of seizure has to be exercised for valid reasons recorded prior to seizure. The CBIC instructio... [Read more]

Customs - Seizure of gold and currency - The seizure was made on the allegation that the gold biscuits were smuggled into India and that the cash represented sale proceeds of such smuggled gold - Whether the seizure was valid and the subsequent confiscation and penalty sustainable – HELD - The seizure of the gold and currency is not valid as the proper officer did not record separate reasons for belief that the goods were liable for confiscation prior to the seizure, as required under Section 110 of the Customs Act. The power of seizure has to be exercised for valid reasons recorded prior to seizure. The CBIC instruction issued later requiring separate seizure orders does not change this legal position, as the court rulings constitute binding precedent - Further, since the seizure was not valid, the burden of proof under Section 123 of the Customs Act could not be invoked. Mere foreign markings on the gold do not by themselves establish that the gold was smuggled, in the absence of any corroborative evidence. The confessional statement relied upon was retracted and not corroborated by independent evidence, hence could not be the sole basis for the confiscation - The confiscation order did not specify the relevant clause of Section 111 under which the goods were liable to confiscation, which is a serious defect and even if confiscation was justified, absolute confiscation was not warranted as gold is not a prohibited item, and the option of redemption under Section 125 should have been provided - The confiscation of the Indian currency is also set aside as there is no clear nexus established between the currency and any smuggled gold. Lastly, the imposition of penalty under Section 112 without specifying the relevant clause is also not sustainable - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Additional Excise Duty (AED) on pre-budget stock - Whether AED is leviable on goods already manufactured and lying in stock prior to the introduction of AED, but cleared after its introduction – HELD - The AED is not leviable on the goods already manufactured and lying in stock prior to the introduction of AED. The Supreme Court in CCE, Hyderabad v. Vazir Sultan Tobacco Co., has held that the levy of excise duty is on the manufacture or production of goods and not on their removal. The mere fact that the duty is collected at the stage of removal does not change the character of the tax, which remains on ... [Read more]

Central Excise - Additional Excise Duty (AED) on pre-budget stock - Whether AED is leviable on goods already manufactured and lying in stock prior to the introduction of AED, but cleared after its introduction – HELD - The AED is not leviable on the goods already manufactured and lying in stock prior to the introduction of AED. The Supreme Court in CCE, Hyderabad v. Vazir Sultan Tobacco Co., has held that the levy of excise duty is on the manufacture or production of goods and not on their removal. The mere fact that the duty is collected at the stage of removal does not change the character of the tax, which remains on the manufacture or production of goods. Once the levy is not there at the time when the goods are manufactured or produced, it cannot be levied at the stage of removal of the said goods – Further, the Department had accepted earlier orders in the appellant's favor on the same issue and had not filed any appeal against them. Therefore, the demand of AED is set aside - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Clandestine Manufacture and Removal of Gutka - The appellant was alleged to have clandestinely manufactured and cleared Gutka without payment of central excise duty - Department relied on Lorry Receipts recovered from transporters to establish the clandestine clearances – HELD - The Tribunal had earlier directed the adjudicating authority to verify all the Lorry Receipts and raise the duty demand pertaining only to the Lorry Receipts in the name of the appellant. However, the adjudicating authority did not verify the Lorry Receipts and instead relied on the re-quantification done by the DGGI. The adjudic... [Read more]

Central Excise - Clandestine Manufacture and Removal of Gutka - The appellant was alleged to have clandestinely manufactured and cleared Gutka without payment of central excise duty - Department relied on Lorry Receipts recovered from transporters to establish the clandestine clearances – HELD - The Tribunal had earlier directed the adjudicating authority to verify all the Lorry Receipts and raise the duty demand pertaining only to the Lorry Receipts in the name of the appellant. However, the adjudicating authority did not verify the Lorry Receipts and instead relied on the re-quantification done by the DGGI. The adjudicating authority was not justified in rejecting the appellant's request for inspection of the original Lorry Receipts. Further, merely on the basis of the quantity of one raw material, i.e., Scented Tobacco, the clandestine manufacture and clearance of Gutka could not be established without evidence of receipt of other raw materials required for manufacturing Gutka - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Availing Cenvat credit on input services for electricity generation - Recovery of Cenvat credit availed by the appellant on certain input services used for their captive power plant - Whether the appellant is entitled to avail Cenvat credit on the input services used for the captive power plant, as electricity is not an excisable good - HELD - Electricity cannot be treated as an excisable or exempted good for the purpose of Rule 6 of the CCR. Since the very foundation for raising the demand under Rule 6 on the basis that electricity is an excisable or exempted good is not sustainable, the impugned order is... [Read more]

Central Excise - Availing Cenvat credit on input services for electricity generation - Recovery of Cenvat credit availed by the appellant on certain input services used for their captive power plant - Whether the appellant is entitled to avail Cenvat credit on the input services used for the captive power plant, as electricity is not an excisable good - HELD - Electricity cannot be treated as an excisable or exempted good for the purpose of Rule 6 of the CCR. Since the very foundation for raising the demand under Rule 6 on the basis that electricity is an excisable or exempted good is not sustainable, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Demand - Revenue issued a show cause notice proposing to demand service tax along with interest and penalties. The appellant submitted that during the period under dispute, the gross receipts were bifurcated into sales, works contract, and job work. It was argued that the works contract services were provided to government entities which are exempt under the Mega Exemption Notification, and the remaining amount pertained to trading of goods which is not subject to service tax – HELD - The appellant has properly accounted for and discharged the service tax liability on the job work services. Regarding the wo... [Read more]

Service Tax - Demand - Revenue issued a show cause notice proposing to demand service tax along with interest and penalties. The appellant submitted that during the period under dispute, the gross receipts were bifurcated into sales, works contract, and job work. It was argued that the works contract services were provided to government entities which are exempt under the Mega Exemption Notification, and the remaining amount pertained to trading of goods which is not subject to service tax – HELD - The appellant has properly accounted for and discharged the service tax liability on the job work services. Regarding the works contract services, since these were provided to government entities, the appellant was not required to collect any service tax. For the remaining amount pertaining to sale of goods, this would be covered under the negative list of services and hence not subject to service tax. The demand was raised without proper examination of the books of accounts and establishing that the transactions were for provision of service. The service tax demand on the appellant is not sustainable in law – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Exemption from Service Tax for Government Entity - The appellant, an entity established by the Government of Kerala for training in the field of local governance, was issued a show cause notice demanding service tax for the period from 2011-12 to 2014-15. The adjudication authority confirmed the demand with interest and penalty - Whether the appellant, being a Government of Kerala entity, is liable to pay service tax and whether the demand confirmed by the adjudication authority by invoking the extended period of limitation is sustainable – HELD - The appellant is eligible for the benefit of exemption under... [Read more]

Service Tax - Exemption from Service Tax for Government Entity - The appellant, an entity established by the Government of Kerala for training in the field of local governance, was issued a show cause notice demanding service tax for the period from 2011-12 to 2014-15. The adjudication authority confirmed the demand with interest and penalty - Whether the appellant, being a Government of Kerala entity, is liable to pay service tax and whether the demand confirmed by the adjudication authority by invoking the extended period of limitation is sustainable – HELD - The appellant is eligible for the benefit of exemption under Notification No. 25/2012-ST dated 20.06.2012 as it is an entity established by the Government of Kerala with more than 90% control and substantial interest by the Government, both in terms of financial support and administrative supervision. The certificate issued by the Principal Secretary, Local Self Government, states that the appellant is established by the State of Kerala for training in the field of local governance. As per the definition of 'governmental authority' in the exemption notification, the appellant falls within the ambit of the exemption, as it is established by the Government to carry out functions entrusted to a municipality under Article 243W of the Constitution - The demand confirmed by the adjudication authority is unsustainable. The impugned order is set aside and the appeal is allowed [Read less]

GST – Release of goods and vehicle under Sections 129 and 130 of CGST Act, 2017 - Appeal against the orders of the ld. Single Judge dismissing their interim applications seeking modification of the interim orders – Appellant seeking direction to release of the goods and vehicles subject to the appellant furnishing 25% of the demand raised and furnishing bank guarantee for the remaining 75% - Whether the ld. Single Judge was justified in dismissing the interim applications and not modifying the interim orders to allow release of the goods and vehicles on the same terms as in other similar matters, i.e. deposit of 200% o... [Read more]

GST – Release of goods and vehicle under Sections 129 and 130 of CGST Act, 2017 - Appeal against the orders of the ld. Single Judge dismissing their interim applications seeking modification of the interim orders – Appellant seeking direction to release of the goods and vehicles subject to the appellant furnishing 25% of the demand raised and furnishing bank guarantee for the remaining 75% - Whether the ld. Single Judge was justified in dismissing the interim applications and not modifying the interim orders to allow release of the goods and vehicles on the same terms as in other similar matters, i.e. deposit of 200% of the tax payable and execution of indemnity bond – HELD - The impugned interim orders passed by the ld. Single Judge is in accordance with law and did not require any modification - Once an order under Section 130 is passed and the title to the goods and the conveyance vests in the Government, the mechanism contemplated under Section 129 ceases to be available – The Co-ordinate Bench had held that once an order of confiscation is passed under Section 130 of the CGST Act, the mechanism contemplated under Section 129 ceases to be available and the adjudication with regard to confiscation, valuation, and determination of tax, penalty, interest and fine is governed exclusively by the provisions of Section 130 - In the present cases, since the orders of confiscation under Section 130 had already been passed, the release of the goods would be subject to the conditions laid down under Section 130. The impugned interim order passed by the learned Single Judge by imposing the conditions is in accordance with law and does not require any modification - The writ appeals are dismissed [Read less]

Central Excise - Valuation of Excisable Goods under Rule 7 of Central Excise Valuation Rules 2000 - Appellants are engaged in the manufacture of MS Ingots and clear goods directly as well as through their registered depot - Department ignored the actual transaction value and adopted the highest price of the week, raising a demand on the premise of "greatest aggregate value" - Whether Rule 7 of Central Excise Valuation Rules 2000 permits adoption of highest price in respect of actual transaction value – HELD - The Supreme Court in Ispat Industries case has held that the valuation of excisable goods must be determined base... [Read more]

Central Excise - Valuation of Excisable Goods under Rule 7 of Central Excise Valuation Rules 2000 - Appellants are engaged in the manufacture of MS Ingots and clear goods directly as well as through their registered depot - Department ignored the actual transaction value and adopted the highest price of the week, raising a demand on the premise of "greatest aggregate value" - Whether Rule 7 of Central Excise Valuation Rules 2000 permits adoption of highest price in respect of actual transaction value – HELD - The Supreme Court in Ispat Industries case has held that the valuation of excisable goods must be determined based on the actual transaction value and not on a hypothetical or artificial valuation. Rule 7 of the Central Excise Valuation Rules 2000 provides that the value shall be the normal transactional value at the depots. The expression "greatest aggregate quantity" refers to the price at which the maximum quantity is sold, not the highest price at which a smaller quantity is sold - The department's method of adopting the highest price arbitrarily and ignoring the bulk transactional values is legally unsustainable, as it is contrary to the settled law - The appellants have demonstrated uniform pricing at the factory and depot, with no price fluctuation or manipulation, and complete transparency in invoices. This satisfies the requirement of Rule 7 of the Central Excise Valuation Rules 2000 - The entire demand is based on recorded transactions, filed returns, and verified invoices, and there is no suppression, misstatement, or intent to evade. Therefore, the extended period and penalty are not sustainable - The impugned order is set aside and the appeal is allowed [Read less]

GST - Anti-profiteering, Passing on of benefit of additional ITC to homebuyers - DGAP alleged that the respondent failed to pass on the benefit of ITC by way of commensurate reduction in prices to homebuyers in its residential project - Whether the respondent had derived any additional benefit of ITC consequent to the introduction of GST – HELD - Upon the introduction of GST, the respondent became entitled to avail ITC on both goods and input services, unlike the pre-GST regime where credit was restricted. The comparison of ITC in the pre-GST and post-GST periods showed that an additional benefit accrued to the responden... [Read more]

GST - Anti-profiteering, Passing on of benefit of additional ITC to homebuyers - DGAP alleged that the respondent failed to pass on the benefit of ITC by way of commensurate reduction in prices to homebuyers in its residential project - Whether the respondent had derived any additional benefit of ITC consequent to the introduction of GST – HELD - Upon the introduction of GST, the respondent became entitled to avail ITC on both goods and input services, unlike the pre-GST regime where credit was restricted. The comparison of ITC in the pre-GST and post-GST periods showed that an additional benefit accrued to the respondent. In terms of Section 171 of the CGST Act 2017, such benefit is required to be passed on to the homebuyers by way of commensurate reduction in prices - The respondent's contention that ITC on input services should be excluded is rejected, as the benefit under GST includes ITC on both goods and services. The respondent had, at the time of implementation of GST, factored the anticipated ITC benefit into the pricing of flats, and to that extent, the benefit stood passed on through the pricing mechanism itself. However, the DGAP's revised computation and determined that the respondent profiteered a balance amount, which it is liable to pass on to the eligible recipients along with interest at 18% per annum - The respondent is directed to pass on the profiteered amount along with GST to the eligible homebuyers, with interest at the rate of 18% per annum from the date of collection of the higher amount till the date of refund. Penalty under Section 171(3A) of the CGST Act, 2017 is also attracted – Ordered accordingly [Read less]

GST - Legality of arrest under Section 69 of the CGST Act, 2017 - Non-supply of verbatim 'reasons to believe' recorded by Commissioner - Whether the non-recording of "reasons to believe" by the Commissioner and providing its copy to the arrestee renders the arrest illegal – HELD – The Section 69(1) of the CGST Act, 2017 empowers the Commissioner to record the 'reasons to believe' that a person has committed an offence specified under the Act which is punishable, and to authorize any officer to arrest such person. The requirement of recording 'reasons to believe' is a jurisdictional condition and the arrestee has a righ... [Read more]

GST - Legality of arrest under Section 69 of the CGST Act, 2017 - Non-supply of verbatim 'reasons to believe' recorded by Commissioner - Whether the non-recording of "reasons to believe" by the Commissioner and providing its copy to the arrestee renders the arrest illegal – HELD – The Section 69(1) of the CGST Act, 2017 empowers the Commissioner to record the 'reasons to believe' that a person has committed an offence specified under the Act which is punishable, and to authorize any officer to arrest such person. The requirement of recording 'reasons to believe' is a jurisdictional condition and the arrestee has a right to challenge the validity of the arrest by examining the 'reasons to believe'. While the Commissioner must record the 'reasons to believe' himself, the statute does not mandate that the verbatim copy of the 'reasons to believe' as signed by the Commissioner must be provided to the arrestee. The essence is that the 'reasons to believe' as recorded by the Commissioner, whether in the form of office notings or a separate document, must be furnished to the arrestee to enable him to challenge the arrest - In the present case, the 'reasons to believe' as recorded by the Additional Director General, who was authorized by the Commissioner, was substantially provided to the petitioner. The form and manner of providing the 'reasons to believe' is immaterial as long as the substance is conveyed to the arrestee, enabling him to exercise his right to challenge the arrest. The contention regarding non-supply of the verbatim copy as signed by the Commissioner is rejected as neither the provisions of the Act nor the judgments prescribe the mode and manner in which the "reasons to believe" is to be furnished - The petition is dismissed as devoid of any merits [Read less]

Customs - Issuance of show cause notice under Section 28 of Customs Act, 1962 - Demand notice for recovery of an alleged excess refund, without issuing a show cause notice as mandated under Section 28 of the Customs Act, 1962 - Whether the initiation of recovery proceedings without issuing a show cause notice in the form and manner prescribed under Section 28 is legally sustainable - HELD - The issuance of a show cause notice in the prescribed form and manner is a mandatory requirement under Section 28 of the Customs Act, 1962. The SCN serves a dual and indispensable purpose - it informs the noticee of the precise case tha... [Read more]

Customs - Issuance of show cause notice under Section 28 of Customs Act, 1962 - Demand notice for recovery of an alleged excess refund, without issuing a show cause notice as mandated under Section 28 of the Customs Act, 1962 - Whether the initiation of recovery proceedings without issuing a show cause notice in the form and manner prescribed under Section 28 is legally sustainable - HELD - The issuance of a show cause notice in the prescribed form and manner is a mandatory requirement under Section 28 of the Customs Act, 1962. The SCN serves a dual and indispensable purpose - it informs the noticee of the precise case that the Revenue seeks to establish against him, and it affords him an opportunity to be heard in his defence before any adverse order is passed. A bare demand notice that calls upon a person to deposit a sum of money, without expressly inviting the noticee to show cause against the proposed recovery, cannot be treated as a valid show cause notice. The absence of a proper show cause notice vitiates the entire proceeding at the root. The adjudication conducted without a valid show cause notice is unsustainable in law - The impugned order is set aside and the appeal is allowed - Inordinate delay in adjudication - The demand notice was issued in 1995, but the first notice of personal hearing was issued only in 2014, and the Order-in-Original was eventually passed in 2018, approximately 23 years after the demand notice - Whether the adjudication conducted after an inordinate delay of approximately twenty-three years can be sustained in law - HELD - The consequences of such delay are severe and tangible. The Appellant was prejudiced as most of the employees who had handled the relevant import transaction had since retired, and the existing staff was entirely unaware of the proceedings. Documents and records pertaining to the import transaction were no longer available. The Tribunal held that the right of a party to a fair hearing necessarily encompasses the right to have the proceeding concluded within a reasonable time, such that the party retains the ability to effectively exercise its right of defence. Adjudication after a delay of two decades irreparably erodes this right, and no party can be reasonably expected to preserve business records, maintain institutional memory of routine import transactions, or produce witnesses after the passage of nearly a quarter century. The department's inaction for approximately twenty-three years amounts to a constructive abandonment of the proceeding, and the Revenue cannot be permitted to revive and complete a proceeding that causes grave and irreparable prejudice to the Appellant - The impugned order is set aside and the appeal is allowed on the ground of inordinate delay in adjudication. [Read less]

Service Tax – CHA Service - Reimbursable expenses - Service Tax liability – HELD - The Supreme Court in the case of UOI vs Intercontinental Consultants and Technocrats Pvt Ltd, has affirmed the decision of the Delhi High Court wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was struck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. The Supreme Court held that any other amount... [Read more]

Service Tax – CHA Service - Reimbursable expenses - Service Tax liability – HELD - The Supreme Court in the case of UOI vs Intercontinental Consultants and Technocrats Pvt Ltd, has affirmed the decision of the Delhi High Court wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was struck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. The Supreme Court held that any other amount which is calculated not for providing such taxable service cannot be a part of the valuation as that amount is not calculated for providing such 'taxable service'. The Department could not have invoked the extended period of limitation as the issue was one of interpretation - The impugned Order-in-Appeal is set aside and the appeal is allowed [Read less]

GST – West Bengal AAAR - Classification of Transportation services for goods exclusively by road to customers purchasing such goods from Electronic Commerce Operator (ECO) portals – Transportation services involving multiple transit points, namely Source Mother Hub, Destination Mother Hub, Delivery Hub and the end customer, including last-mile delivery through independent delivery partners - The impugned order by the AAR held that the proposed activity satisfies the essential features of GTA service and such GTA services, when provided to unregistered end-customers, are exempt from GST under Sl. No. 21A of Notification... [Read more]

GST – West Bengal AAAR - Classification of Transportation services for goods exclusively by road to customers purchasing such goods from Electronic Commerce Operator (ECO) portals – Transportation services involving multiple transit points, namely Source Mother Hub, Destination Mother Hub, Delivery Hub and the end customer, including last-mile delivery through independent delivery partners - The impugned order by the AAR held that the proposed activity satisfies the essential features of GTA service and such GTA services, when provided to unregistered end-customers, are exempt from GST under Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) – Revenue filed instant appeal before Appellate Authority for Advance Ruling - Whether the activities undertaken by the respondent constitute an independent GTA service supplied to end customers or an integrated e-commerce fulfillment/courier service – HELD - The substance of the transaction must be examined to ascertain whether the end customer is in fact receiving an independent GTA service, or whether the activity forms part of an integrated e-commerce fulfilment, logistics or delivery arrangement. Mere contractual description of the respondent as a transporter or GTA, or the description of the amount recovered from the end customer as transportation charges/GT charges, cannot be treated as conclusive for determining classification under GST. The mere recovery of an amount described as “transportation charges” from the end customer cannot, by itself, establish that the end customer has received an independent GTA service - The end customer does not independently contract for transportation with the respondent, and the alleged movement thereafter on account of the end customer is only a contractual fiction and not supported by the real conduct of the parties. Consequently, the end customer cannot be treated as having received an independent Goods Transport Agency service from the respondent. The activities undertaken by the respondent, including hub-based collection, sorting, transshipment, tracking, last-mile delivery and doorstep handover, substantially resemble organised courier/logistics fulfillment service rather than conventional GTA service. Accordingly, the respondent's activity cannot be classified as GTA service supplied to unregistered end customers, and the exemption under Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, as amended, is not available – Ordered accordingly - Requirement of a valid consignment note - Whether mere issuance of a document styled as a consignment note is determinative of classification – HELD - Issuance of a valid consignment note is an essential requirement for classification as GTA service. However, such condition cannot be read in isolation or treated as a mere matter of nomenclature. Classification under GST cannot depend solely upon the description adopted by the supplier in its documents. The true character of the service has to be determined from the substance of the transaction and the actual legal and commercial relationship between the parties. In the present case, the purported consignment note does not contain the relevant vehicle details, and the use of modes like two-wheelers or electric-operated vehicles which may not qualify as "goods carriage" is a relevant factor for determining whether the activity can be treated as conventional GTA service. [Read less]

Customs - Reassessment of Duty - Appellant claimed reassessment of B/E on the ground of short shipment of the imported goods - Whether the authorities were correct in rejecting the appellant's request for reassessment of the bill of entry under Sections 17(4) and 17(5) of the Customs Act, 1962 – HELD - The appellant had self-assessed the goods and cleared them on payment of customs duty in March 2019. The relevant documents like invoice and packing list available at the time of assessment showed the quantity as 30 numbers. The appellant claimed short shipment only in 2021, which was beyond the appealable period of 60 day... [Read more]

Customs - Reassessment of Duty - Appellant claimed reassessment of B/E on the ground of short shipment of the imported goods - Whether the authorities were correct in rejecting the appellant's request for reassessment of the bill of entry under Sections 17(4) and 17(5) of the Customs Act, 1962 – HELD - The appellant had self-assessed the goods and cleared them on payment of customs duty in March 2019. The relevant documents like invoice and packing list available at the time of assessment showed the quantity as 30 numbers. The appellant claimed short shipment only in 2021, which was beyond the appealable period of 60 days from the date of assessment – Further, in cases of self-assessment, the assessment order is appealable, and the importer cannot directly seek refund without challenging the assessment. The provisions of Section 17(5) for reassessment cannot be invoked in the present case as the self-assessment was not found to be incorrect at the time of clearance of goods. The appellant cannot through a refund claim reopen the assessment nor can reassessment be entertained beyond the appealable period - the Commissioner (Appeals) was right in rejecting the reassessment since the appellant had not challenged the originally self-assessed B/E and even if the present challenge is to be considered as an appeal before the Commissioner (Appeals), he was right in stating that it was beyond the condonable period as provided in the Act – The impugned order is confirmed and the appeal is dismissed [Read less]

GST – Cancellation of Registration for failure to file returns for a continuous period of six months – Non-speaking order - HELD - The impugned order of cancellation is not a speaking order and does not assign any reasons for the cancellation - The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice or did not appear before the Proper Officer, when he was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality - The Proper Officer is obligated to r... [Read more]

GST – Cancellation of Registration for failure to file returns for a continuous period of six months – Non-speaking order - HELD - The impugned order of cancellation is not a speaking order and does not assign any reasons for the cancellation - The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice or did not appear before the Proper Officer, when he was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality - The Proper Officer is obligated to record reasons in the cancellation order, as it is an order that brings adverse consequences for the registered person. The absence of reasons in the order is a violation of the statutory prescription and renders the order illegal. While the petitioner's delayed approach in challenging the order is noted, the vulnerability of the order due to statutory non-compliance outweighs the delay. The matter is remanded to the stage of issuance of show cause notice, and the petitioner is granted one month to either submit a reply or furnish all pending returns and make full payment of tax dues along with interest and penalty, upon which the Proper Officer shall pass an appropriate order in accordance with the procedure prescribed under the Section 29 of the CGST Act and Rule 22 of the CGST Rules – The petition is allowed [Read less]

Service Tax - Demand on works contract services and supply of tangible goods services - Works contract services rendered as a sub-contractor to the SEZ units - HELD - The services have been rendered by the appellant as a sub-contractor to the main contractor who are the authorised contractor to render services to the SEZ units. The only objection by the Revenue is that the appellant has provided services to contractors, who are neither SEZ developers nor SEZ units but the contractors for SEZ unit/developer - As per Notification No. 4/2004-S.T., dated 31-3-2004, the services provided by a sub-contractor to the main contract... [Read more]

Service Tax - Demand on works contract services and supply of tangible goods services - Works contract services rendered as a sub-contractor to the SEZ units - HELD - The services have been rendered by the appellant as a sub-contractor to the main contractor who are the authorised contractor to render services to the SEZ units. The only objection by the Revenue is that the appellant has provided services to contractors, who are neither SEZ developers nor SEZ units but the contractors for SEZ unit/developer - As per Notification No. 4/2004-S.T., dated 31-3-2004, the services provided by a sub-contractor to the main contractor, who is rendering services to the SEZ unit, are also eligible for exemption from service tax - Where the services are rendered to SEZ or a unit in SEZ, as long as it is rendered for consumption in a Special Economic Zone, the services are exempt - the impugned order to the extent of denying the benefit of the Notification only because the appellant happens to be a sub-contractor cannot be sustained and the same is set aside - The appeal is disposed of by way of remand - Whether the denial of cenvat credit by the Commissioner on the ground of belated claim and discrepancies in the invoices can be sustained - HELD - The ground of time limit for availing cenvat credit is rejected as there was no time limit during the disputed period. The cenvat credit should be allowed as long as the tax has been paid by the appellant on the service. However, the issue of eligibility of cenvat credit is remanded to the extent of verification of documents as the Commissioner had noted certain discrepancies in the documents - Whether the service tax demand on the works contract services rendered outside the SEZ can be sustained - HELD - The service tax demand is confirmed on the works contract services rendered outside the SEZ. The appellant is eligible to adjust the eligible cenvat credit against the balance service tax payable after verifying the payments made by the appellant. [Read less]

Service Tax - Availing of Rent-a-Cab Services – Non-payment of service tax to the tune of 40% of taxable amount on unabated value of services received in terms of Notification No. 30/2012-ST dated 20.06.2012 – Payment of service tax on being pointed out by CERA Audit - Whether the SCN is sustainable when the payment of service tax and interest by the appellant was before the issuance of the Show-Cause Notice – HELD - As per the provisions of Section 73(3) of the Finance Act, if any service tax has not been levied or paid or has been short-levied or short-paid, and the person chargeable with the service tax pays the a... [Read more]

Service Tax - Availing of Rent-a-Cab Services – Non-payment of service tax to the tune of 40% of taxable amount on unabated value of services received in terms of Notification No. 30/2012-ST dated 20.06.2012 – Payment of service tax on being pointed out by CERA Audit - Whether the SCN is sustainable when the payment of service tax and interest by the appellant was before the issuance of the Show-Cause Notice – HELD - As per the provisions of Section 73(3) of the Finance Act, if any service tax has not been levied or paid or has been short-levied or short-paid, and the person chargeable with the service tax pays the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and informs the Central Excise Officer of such payment in writing, the Central Excise Officer, on receipt of such information, shall not serve any notice under sub-section (1) in respect of the amount so paid - In the present case, the appellant had paid the service tax and interest before the issuance of the Show-Cause Notice and had informed the Department about the same. Therefore, the SCN is unsustainable in law, and any proceedings initiated on the basis of the said Show-Cause Notice is a nullity - The order passed by the Commissioner (Appeals) is set aside and the appeal is allowed [Read less]

Customs - Classification of Automatic Soap Dispenser - The appellant imported automatic soap dispensers and declared them under Customs Tariff Item (CTI) 9616 10 20 - Department classified them under CTI 8424 89 90 - Whether the automatic soap dispensers should be classified under CTI 8424 89 90 as claimed by the appellant or under CTI 9616 10 20 as claimed by the Department – HELD – The automatic soap dispenser imported by the appellant disperses liquid soap in the form of foam and does not spray liquids. Therefore, it is appropriately covered under CTI 8424 89 90 dealing with mechanical appliances for dispersing liqu... [Read more]

Customs - Classification of Automatic Soap Dispenser - The appellant imported automatic soap dispensers and declared them under Customs Tariff Item (CTI) 9616 10 20 - Department classified them under CTI 8424 89 90 - Whether the automatic soap dispensers should be classified under CTI 8424 89 90 as claimed by the appellant or under CTI 9616 10 20 as claimed by the Department – HELD – The automatic soap dispenser imported by the appellant disperses liquid soap in the form of foam and does not spray liquids. Therefore, it is appropriately covered under CTI 8424 89 90 dealing with mechanical appliances for dispersing liquids, and not under CTI 9616 10 20 which deals with sprays – The Chapter Heading 9616 deals with sprays of different kinds, including scent sprays and similar toiletry sprays. The words “dispersing” and “spraying” have both been used in Chapter Heding 8424. It is, therefore, clear that there is a difference between “disperser of liquids” and “spraying of liquids”. In such a situation, the product imported by the appellant cannot fall under Chapter Heading 9616 since it does not spray liquids. The Chapter Heading 9616 specifically excludes dispersing or spraying appliances covered under Chapter 8424 - The automatic soap dispensers imported by the appellant should be classified under CTI 8424 89 90 - The appeal is allowed [Read less]

Customs – Demand of IGST on import of Software in the CD, Invocation of extended period of limitation - The appellant is a PSU engaged in manufacturing of electronic products for defence purposes and imported a CD containing software claimed to be an integral part of the LRSAM system - Department invoked the extended period of limitation under section 28(4) of the Customs Act to demand IGST on the imported CD, alleging that the appellant had intentionally mis-declared the goods to evade duty – HELD - The Serial No. 21 of Notification No. 19/2019-Cus. dated 06.07.2019 provides that the specified goods when imported into... [Read more]

Customs – Demand of IGST on import of Software in the CD, Invocation of extended period of limitation - The appellant is a PSU engaged in manufacturing of electronic products for defence purposes and imported a CD containing software claimed to be an integral part of the LRSAM system - Department invoked the extended period of limitation under section 28(4) of the Customs Act to demand IGST on the imported CD, alleging that the appellant had intentionally mis-declared the goods to evade duty – HELD - The Serial No. 21 of Notification No. 19/2019-Cus. dated 06.07.2019 provides that the specified goods when imported into India by Ministry of Defence or Defence Forces or the Defence Public Sector Units or other Public Sector Units or any other entities for Defence Forces, shall be exempt from whole of duty of customs. Merely because the appellant had retained the CD and had not supplied it to the Ministry of Defence cannot be made a ground to deny exemption from payment of duty under the Exemption Notification – Further, merely because the software was embedded in the LRSAM system initially and the appellant later imported a CD containing the same software for providing support services, it cannot be said that the appellant had deliberately mis-represented or concealed any material facts with the intention to evade payment of duty. The appellant had clearly indicated the details of the imported CD in the B/E, the Department could have sought further information if it had any doubts. The extended period of limitation is not justified in the facts and circumstances of the case, as there was no evidence to show that the appellant had any intention to evade payment of duty - The demand raised for the extended period and the imposition of penalty under section 114A of the Customs Act is set aside - The appeal is allowed [Read less]

Service Tax - Taxability of service charges deducted by foreign banks from export proceeds - The appellant is a manufacturer and exporter of knitted garments. The foreign banks deducted their specified charges from the export sales proceeds due to the appellant before transferring the balance amount to the appellant's Indian bank account - Department alleged that such amounts deducted were the consideration paid by the appellant for the taxable service of "Banking and other Financial Services" provided by the foreign banks and hence the appellant was liable to pay service tax under reverse charge mechanism - Whether the am... [Read more]

Service Tax - Taxability of service charges deducted by foreign banks from export proceeds - The appellant is a manufacturer and exporter of knitted garments. The foreign banks deducted their specified charges from the export sales proceeds due to the appellant before transferring the balance amount to the appellant's Indian bank account - Department alleged that such amounts deducted were the consideration paid by the appellant for the taxable service of "Banking and other Financial Services" provided by the foreign banks and hence the appellant was liable to pay service tax under reverse charge mechanism - Whether the amounts deducted by foreign banks towards bank charges on export proceeds while transferring the same to the appellant's Indian bank account are exigible to service tax at the hands of the appellant under RCM - HELD - The demand is unsustainable as the department has merely made an assumption without any evidence to show the existence of a service provider and service recipient relationship between the appellant and the foreign banks. It is settled that demand cannot be based on assumptions and presumptions. Further, there is no privity of contract between the appellant and the foreign remitting bank, and the foreign bank acted on the instructions of the foreign buyer to fulfil the buyer's obligation to remit payment. The Tribunal relied on its own prior rulings and held that the liability, if any, would rest with the Indian bank as the entity receiving the "remittance service" from the foreign bank, and not with the appellant exporter - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Recovery of duty drawback - Applicability of recovery provisions under Drawback Rules, 1995 after repeal – HELD - The recovery of duty drawback amount under Rule 16 and Rule 16A of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 is not maintainable after the enactment of the Customs and Central Excise Duties Drawback Rules, 2017 - The 1995 Drawback Rules ceased to operate with the commencement of the 2017 Drawback Rules, and the savings clause under Rule 20(2) of the 2017 Drawback Rules does not cover the proceedings under rule 16 or rule 16A of the 1995 Drawback Rules. The applicability... [Read more]

Customs - Recovery of duty drawback - Applicability of recovery provisions under Drawback Rules, 1995 after repeal – HELD - The recovery of duty drawback amount under Rule 16 and Rule 16A of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 is not maintainable after the enactment of the Customs and Central Excise Duties Drawback Rules, 2017 - The 1995 Drawback Rules ceased to operate with the commencement of the 2017 Drawback Rules, and the savings clause under Rule 20(2) of the 2017 Drawback Rules does not cover the proceedings under rule 16 or rule 16A of the 1995 Drawback Rules. The applicability of the General Clauses Act would require an examination of the language of the new enactment to see whether it expresses a different intention from the earlier Act. The 2017 Drawback Rules have expressed a different intention by not saving the recovery provisions under Rule 16 and Rule 16A of the 1995 Drawback Rules, and hence, the Department cannot resort to these rules for recovering the drawback amount from the appellant - The impugned order is set aside and the appeal is allowed - Confiscation of goods and imposition of penalty – HELD - The goods could not have been confiscated under Section 113 of the Customs Act as it applies to goods which are to be taken out of India and not to goods which have already been taken out of India. As the goods could not have been confiscated, the penalty under section 114 of the Customs Act could not have been imposed upon the appellant. The penalty under section 114AA of the Customs Act could not have been imposed upon the appellant as the appellant had not knowingly or intentionally made, signed or used any declaration, statement or document which is false or incorrect in the transaction of any business for the purposes of the Customs Act. The penalty imposed on the appellant and its partner under sections 114 and 114AA of the Customs Act is set aside. [Read less]

GST - Cancellation of GST Registration - Petitioner received a show cause notice for cancellation of GST registration on grounds of fraud, misstatement, non-existence of business premises, issuing invoices without supply of goods, availing of fake ITC - Whether the SCN is violative of principles of natural justice and in compliance with Rule 22 of the CGST Rules, 2017 – HELD - The SCN is violative of principles of natural justice as it does not provide any physical verification report, details of cancellation of major suppliers' registration, or specifics on how the petitioner is availing/passing fake ITC without actual ... [Read more]

GST - Cancellation of GST Registration - Petitioner received a show cause notice for cancellation of GST registration on grounds of fraud, misstatement, non-existence of business premises, issuing invoices without supply of goods, availing of fake ITC - Whether the SCN is violative of principles of natural justice and in compliance with Rule 22 of the CGST Rules, 2017 – HELD - The SCN is violative of principles of natural justice as it does not provide any physical verification report, details of cancellation of major suppliers' registration, or specifics on how the petitioner is availing/passing fake ITC without actual movement of goods. The notice also fails to comply with Rule 22 of the CGST Rules as it does not serve the purpose behind its issuance - The show cause notice is set aside with liberty to the respondents to proceed afresh against the petitioner in accordance with law. The petition is allowed [Read less]

GST - Bar under Section 6(2) of the CGST Act, Order for provisional attachment - The petitioner claimed that the proceedings initiated by the Central authorities were barred under Section 6(2) of the CGST Act as the State GST authorities had already commenced proceedings on the same subject matter - HELD - There is no evidence of the State authorities having issued a show cause notice or commenced any adjudicatory proceedings. In the absence of such foundational material, the plea of statutory bar under Section 6(2) of the Act could not be examined in the abstract. A writ court cannot proceed on bald and unsubstantiated av... [Read more]

GST - Bar under Section 6(2) of the CGST Act, Order for provisional attachment - The petitioner claimed that the proceedings initiated by the Central authorities were barred under Section 6(2) of the CGST Act as the State GST authorities had already commenced proceedings on the same subject matter - HELD - There is no evidence of the State authorities having issued a show cause notice or commenced any adjudicatory proceedings. In the absence of such foundational material, the plea of statutory bar under Section 6(2) of the Act could not be examined in the abstract. A writ court cannot proceed on bald and unsubstantiated averments, particularly when jurisdictional objections are raised. The petitioner, who asserts the bar, is required to demonstrate by cogent material that proceedings have been formally initiated by State authorities and the subject matter is identical. In the absence of such material, the Court is unable to record even a prima facie finding on the applicability of Section 6(2) of the Act. Therefore, the contention of the petitioner that the impugned proceedings are barred under Section 6(2) of the Act was rejected as being premature, unsupported and devoid of material particulars - The plea of bar under Section 6(2) of the CGST Act is not substantiated by any material and cannot be examined at this stage, and the impugned action is not vitiated for want of pre-decisional hearing – The writ petition is dismissed - Violation of principles of natural justice - The petitioner contended that the impugned provisional attachment order was vitiated due to the violation of principles of natural justice, particularly when the petitioner was in judicial custody and no opportunity was afforded prior to passing the attachment order – HELD - The issue stood authoritatively settled by the Division Bench of the High Court in the case of Principal Commissioner of Central Tax v. Narasimhan Engineering Contractors Pvt. Ltd. The Court held that Section 83 of the CGST Act does not contemplate a pre-decisional hearing, and the statutory scheme provides a post-decisional remedy under Rule 159(5) of the CGST Rules - The Supreme Court in Radha Krishan Industries v. State of Himachal Pradesh has also clarified that provisional attachment is a protective measure and that safeguards are provided by way of objection and hearing post attachment. The contention of the petitioner that the absence of prior notice, particularly during the period of custody, vitiates the impugned action cannot be accepted, as the statutory framework itself contemplates immediate protective action followed by an opportunity of hearing, and the petitioner is not left remediless but is at liberty to invoke the said mechanism for redressal. [Read less]

GST - Ex parte order, Communication of notice addressed to email-id which could not be accessed as it was a paid e-mail account – Cancellation of registration due to discrepancy in Form ASMT-10 and petitioner was required to furnish export invoices and also reconciliation statement of export invoices and corresponding FIRC / BRC - Petitioner submitted that he was unable to access the email account where the notice was sent and was not able to reply to the show cause notice – HELD – The petitioner is in possession of the relevant documents and would meet the grounds raised in the show cause notice - The impugned order... [Read more]

GST - Ex parte order, Communication of notice addressed to email-id which could not be accessed as it was a paid e-mail account – Cancellation of registration due to discrepancy in Form ASMT-10 and petitioner was required to furnish export invoices and also reconciliation statement of export invoices and corresponding FIRC / BRC - Petitioner submitted that he was unable to access the email account where the notice was sent and was not able to reply to the show cause notice – HELD – The petitioner is in possession of the relevant documents and would meet the grounds raised in the show cause notice - The impugned order is set aside and the matter is remitted back to the stage of reply to the show cause notice, considering the petitioner's submission that he has relevant documents to reconcile the export invoices and corresponding FIRC/BRC. The respondent to restore the petitioner's GST registration forthwith – The petition is disposed of [Read less]

GST - Refund Claim for Export of Services – Providing of software development and related services to its associated enterprises located outside India – Rejection of refund claim on the ground that the petitioner was providing intermediary services, and not export of services - Whether the petitioner was providing export of services and was eligible for the refund claim, or whether the respondent authority was justified in rejecting the refund claim on the ground that the petitioner was providing intermediary services – HELD - The impugned order rejecting the refund claim was non-speaking and did not consider the sub... [Read more]

GST - Refund Claim for Export of Services – Providing of software development and related services to its associated enterprises located outside India – Rejection of refund claim on the ground that the petitioner was providing intermediary services, and not export of services - Whether the petitioner was providing export of services and was eligible for the refund claim, or whether the respondent authority was justified in rejecting the refund claim on the ground that the petitioner was providing intermediary services – HELD - The impugned order rejecting the refund claim was non-speaking and did not consider the submissions made by the petitioner. The petitioner had contended that it was not a broker or an agent of any of the foreign entities and was providing services to the foreign entities on a principal-to-principal basis, and therefore the services provided by the petitioner would qualify as export of services under Section 2(6) of the IGST Act - The respondent authority had failed to record any specific finding on these contentions before rejecting the refund claim. The impugned order is quashed and matter is remanded back to adjudicating authority to issue a fresh show-cause notice, grant a personal hearing to the petitioner, and pass a fresh and reasoned order after considering the submissions and documents of the petitioner - The petition is disposed of [Read less]

GST - Odisha AAR - Classification of supply – Classification of supply of user license service - Supply of Coursera User License to Odisha Skill Development Authority (OSDA) - Whether the supply is classifiable under Heading 9992 (Education Service), Heading 9973 (Leasing or Rental Services), or Heading 9984 (Online Content Services) – HELD - The supply is not classifiable under Heading 9992 (Education Service) as the applicant does not provide any education or training service, but only facilitates access to third-party educational content on Coursera's proprietary platform. The supply is more appropriately classifiab... [Read more]

GST - Odisha AAR - Classification of supply – Classification of supply of user license service - Supply of Coursera User License to Odisha Skill Development Authority (OSDA) - Whether the supply is classifiable under Heading 9992 (Education Service), Heading 9973 (Leasing or Rental Services), or Heading 9984 (Online Content Services) – HELD - The supply is not classifiable under Heading 9992 (Education Service) as the applicant does not provide any education or training service, but only facilitates access to third-party educational content on Coursera's proprietary platform. The supply is more appropriately classifiable under Heading 9973, specifically under SAC 997331 ("Licensing services for the right to use computer software and databases"), as it involves the grant of a non-exclusive right to access Coursera's intellectual property-based platform - The specific classification under Heading 9973 is preferred over the more general Heading 9984 (Online Content Services). The exemption under Sl. No. 72 of Notification No. 12/2017-Central Tax (Rate) is not applicable as the supply is not classifiable under Heading 9992 (Education Service), OSDA is not the "State Government", and the supply does not qualify as a "training programme" in the strict sense of the term. The applicant correctly charged GST at the rate of 18% on the supply of Coursera User Licenses to OSDA – Ordered accordingly [Read less]

GST - Export of services, refund of IGST - Petitioner claimed a refund of GST paid on the export of services – Revenue directed the Petitioner to submit suitable explanation and proof evidencing that the Petitioner and service recipient were not merely establishments of distinct persons – Rejection of refund by non-speaking order - HELD - No specific finding has been recorded in the impugned order before rejecting the refund application. The impugned order is a non-speaking order and did not adequately address the submissions made by the petitioner regarding the distinct nature of the petitioner and the service recipie... [Read more]

GST - Export of services, refund of IGST - Petitioner claimed a refund of GST paid on the export of services – Revenue directed the Petitioner to submit suitable explanation and proof evidencing that the Petitioner and service recipient were not merely establishments of distinct persons – Rejection of refund by non-speaking order - HELD - No specific finding has been recorded in the impugned order before rejecting the refund application. The impugned order is a non-speaking order and did not adequately address the submissions made by the petitioner regarding the distinct nature of the petitioner and the service recipient - The impugned order is quashed and set aside and the matter is remanded back to the authorities for a fresh consideration, after providing the assessee with an opportunity to be heard. The petitioner's contentions regarding the distinct nature of the petitioner and the service recipient should be considered by the adjudicating authority in a reasoned and speaking order, in accordance with the principles of natural justice – The petition is disposed of [Read less]

Customs - Customs Broker's Liability for Overvalued Export Goods - Failure by Customs Broker to exercise due diligence - Whether the Customs Broker is liable for penalty under Section 114(iii) of the Customs Act, 1962 for failure to exercise due diligence in accepting export documents from an unauthorized person and for not verifying the exporter's address, which resulted in the export of grossly overvalued goods - Whether the customs broker can be held liable for misdeclaration or overvaluation of export goods, and Whether the CHA is obligated to physically verify the exporter's address under the Customs Broker Licensing ... [Read more]

Customs - Customs Broker's Liability for Overvalued Export Goods - Failure by Customs Broker to exercise due diligence - Whether the Customs Broker is liable for penalty under Section 114(iii) of the Customs Act, 1962 for failure to exercise due diligence in accepting export documents from an unauthorized person and for not verifying the exporter's address, which resulted in the export of grossly overvalued goods - Whether the customs broker can be held liable for misdeclaration or overvaluation of export goods, and Whether the CHA is obligated to physically verify the exporter's address under the Customs Broker Licensing Regulations, 2018 – HELD – The liability for misdeclaration or overvaluation of export goods lies with the exporter, and the Customs broker cannot be held responsible for the same. The customs broker's duty is limited to verifying the authenticity of documents and information provided by the client, not the accuracy of the declared value. The adjudicating authority failed to consider the binding precedent in World Cargo Movers v. Commissioner of Customs, which held that it is not the job of the customs broker to compare the invoice price with market price - Regarding the physical verification of the exporter's address, the Customs Broker Licensing Regulations, 2018 do not mandate physical verification, and only require the customs broker to verify the client's identity and functioning at the declared address using reliable documents and information - The Customs Broker is not required to physically verify the premises of the exporter or compare the declared value with the market price. The adjudicating authority failed to consider the submissions made by the Customs Broker and the binding precedents cited by him. The impugned order is set aside and the matter is remanded back to the adjudicating authority to take a fresh reasoned decision after affording due opportunity to the Customs Broker and considering all the material on record – The petition is disposed of [Read less]

GST - Cancellation of registration and issuance of notice after long delay - Notice under Section 73(1) of the CGST Act, 2017 for the financial year 2018-19 was issued after almost five years by means of being uploaded on the GST portal – HELD - The registration of the petitioner was cancelled on 13.8.2018, whereas the notice under Section 73(1) for the financial year 2018-19 was issued after almost five years on 10.1.2024 by means of being uploaded on the GST portal - The petitioner could not be expected to regularly check the GST portal for such a long period of five years to ascertain whether any notice has been uploa... [Read more]

GST - Cancellation of registration and issuance of notice after long delay - Notice under Section 73(1) of the CGST Act, 2017 for the financial year 2018-19 was issued after almost five years by means of being uploaded on the GST portal – HELD - The registration of the petitioner was cancelled on 13.8.2018, whereas the notice under Section 73(1) for the financial year 2018-19 was issued after almost five years on 10.1.2024 by means of being uploaded on the GST portal - The petitioner could not be expected to regularly check the GST portal for such a long period of five years to ascertain whether any notice has been uploaded. Merely uploading the notice on the portal does not fulfill the requirements of Section 169, which mandates at least two modes of service. Since the notice was not served through any other mode prescribed under Section 169, the petitioner was not granted appropriate opportunity of hearing, which amounts to violation of principles of natural justice - The impugned order is quashed and the matter is remanded back to Assistant Commissioner for fresh consideration - The writ petition is allowed [Read less]

Service Tax - Taxability of transportation services under the Finance Act, 1994 - The petitioner was engaged in the business of transportation of goods by road, which was specifically excluded from the definition of 'taxable service' under Section 66D of the Finance Act, 1994 – Dept treated the entire receipts of the petitioner as receipts from 'taxable service' and proceeded to demand service tax along with interest and penalty – HELD - The demand of service tax, interest and penalty imposed on the petitioner is found to be contrary to the provisions of the Finance Act, 1994. The Adjudicating authority failed to consi... [Read more]

Service Tax - Taxability of transportation services under the Finance Act, 1994 - The petitioner was engaged in the business of transportation of goods by road, which was specifically excluded from the definition of 'taxable service' under Section 66D of the Finance Act, 1994 – Dept treated the entire receipts of the petitioner as receipts from 'taxable service' and proceeded to demand service tax along with interest and penalty – HELD - The demand of service tax, interest and penalty imposed on the petitioner is found to be contrary to the provisions of the Finance Act, 1994. The Adjudicating authority failed to consider that the services provided by the petitioner were specifically excluded from the levy of service tax under Section 66D(i)(A) of the Finance Act, 1994. The Adjudicating authority could not have treated the entire receipts of the petitioner as receipts from 'taxable service' without any evidence that the services provided were not covered under the exclusion provided in Section 66D(i)(A) – Further, the invocation of the extended period of limitation under Section 73(1) is also invalid as there was no finding by the Addl. Commissioner that the case of the petitioner fell under any of the conditions specified in the proviso to Section 73(1), which is a pre-requisite for invoking the extended period of limitation – For the Revenue to invoke the extended period of limitation under Section 73(1), there must be a conclusive finding that the petitioner had wilfully and deliberately evaded or neglected to pay the service tax, which was not evident from the impugned order. The revenue authorities had assumed jurisdiction under Section 73(1) without fulfilling the necessary pre-conditions prescribed by the statute, and therefore, their assumption of jurisdiction was contrary to the provisions of the law - The demand of service tax, interest and penalty imposed on the petitioner is set aside and the writ petition is allowed - Maintainability of writ petition - The Writ Court can interfere any arbitrary action notwithstanding the availability of alternative remedy when the authorities acts within jurisdiction or in exercise of jurisdiction or there is a procedural irregularity or were the order is high handed and is palpably illegal order in as much the same would amount to violation of Article 14 of the Constitution of India - In an ordinary course of proceedings seeking recovery of tax demanded, the normal course would be to avail of the statutory remedies. However, before the authorities invoke their jurisdiction under section 73(1), it is the mandate of the statute that the authorities must come to a specific conclusion that the jurisdiction conferred on the revenue authorities under Section 73(1) can be invoked in the facts and circumstances of the present case - While demand and recovery of taxes as ordinarily prescribed under the provisions of the Act requires careful consideration of the facts and circumstances and satisfaction of all the parameters prescribed upon, the demand and recovery under the extended period of limitation under section 73(1) being an exception to the General Rule, requires a higher degree of responsibility and diligence on the part of the revenue authorities before they can proceed to invoke the powers conferred under section 73(1) - It is under these circumstances that notwithstanding the availability of statutory alternative remedy, this Court considers it an appropriate case to invoke its jurisdiction under Article 226 to interfere with the impugned order in original and to set aside and quash the order-in-original. [Read less]

M.P. Value Added Tax Act, 2002 - Best Judgment Assessment - Assessing Officer invoked the principle of best judgment assessment on the ground that the appellant failed to furnish the VAT audit report in Form No.41-A and determined the turnover by making additions to the declared figures and imposed VAT at the rate of 13% and 5% on various components - Appellant contended that the invocation of best judgment assessment was unjustified as the appellant had maintained regular books of accounts reflecting the true nature of transactions - HELD - The Authorities found that the appellant had failed to maintain correct accounts o... [Read more]

M.P. Value Added Tax Act, 2002 - Best Judgment Assessment - Assessing Officer invoked the principle of best judgment assessment on the ground that the appellant failed to furnish the VAT audit report in Form No.41-A and determined the turnover by making additions to the declared figures and imposed VAT at the rate of 13% and 5% on various components - Appellant contended that the invocation of best judgment assessment was unjustified as the appellant had maintained regular books of accounts reflecting the true nature of transactions - HELD - The Authorities found that the appellant had failed to maintain correct accounts of sales and purchases and did not produce the audit books of accounts to establish its claims. Under Sections 39 and 20 of the MPVAT Act, every dealer must maintain a correct account of sales and purchases, and if he fails to do so, the Assessing Officer has the power to pass a best judgment order under Section 20(5) of the Act. The Assessing Officer had the power to pass the best judgment order, and the finding that the appellant's accounts were not reliable was a concurrent finding of fact by the Authorities – Further, the Authorities found that the appellant failed to produce reliable documentary evidence to substantiate its claim regarding the alleged lower turnover taxable at 13%. The burden of proof lies on the appellant to establish the correctness of its returns and classification of goods, which it failed to discharge. The findings of the Authorities regarding the incorrect maintenance of accounts and the application of tax rates were concurrent findings of fact based on an appreciation of the evidence, which are not liable to be interfered with in an appeal under Section 53 of the VAT Act - The VAT appeal is dismissed [Read less]

GST – Liability to collect Tax Collection at Source (TCS) on supplies made through e-commerce portal, Applicability of Section 17(2) and Section 52 of CGST Act, 2017, Invocation of Section 74 – DGGI issued a show cause notice under Section 74 alleging violation of Sections 52 and 17(2) of the CGST Act and proposed tax demand – Applicability of Section 52 of CGST Act - Whether the petitioner, being an e-commerce operator, is liable to collect TCS under Section 52 of the CGST Act – HELD – In terms of Section 52, the TCS obligation arises only when the e-commerce operator collects payment/consideration with respect ... [Read more]

GST – Liability to collect Tax Collection at Source (TCS) on supplies made through e-commerce portal, Applicability of Section 17(2) and Section 52 of CGST Act, 2017, Invocation of Section 74 – DGGI issued a show cause notice under Section 74 alleging violation of Sections 52 and 17(2) of the CGST Act and proposed tax demand – Applicability of Section 52 of CGST Act - Whether the petitioner, being an e-commerce operator, is liable to collect TCS under Section 52 of the CGST Act – HELD – In terms of Section 52, the TCS obligation arises only when the e-commerce operator collects payment/consideration with respect to supplies made through its platform. Section 52 which provides for the e-commerce operator to collect TCS would not apply unless payment / consideration is collected. The petitioner does not collect any payment/consideration with respect to the supplies in question and hence, the provisions of Section 52 are not applicable to the petitioner – Further, there is no provision in the CGST Act to treat the petitioner as an assessee in default and also, there is no provision to issue a notice to the person who has not collected the tax to pay such tax. The impugned SCN alleging that the petitioner had violated Section 52 of the CGST Act, since they failed to collect TCS @ 1% of the net value of the taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator is illegal, arbitrary and without jurisdiction or authority of law and contrary to the provisions of the CGST and the same is quashed – The writ petition is allowed - Promotional activity vs Exempt supply - Applicability of Section 17(2) of CGST Act - Whether the petitioner has violated Section 17(2) of the CGST Act by failing to restrict availment of ITC – HELD – The Section 17(2) restricts exempt supplies which would cover only services attracting nil rate of tax or are wholly exempt from tax. Doing promotional activities which benefit the petitioner and other suppliers cannot be construed or treated as exempt supplies and consequently, in the absence of any specific exemption or the services being levied with “nil” rate of tax, the same cannot qualify as exempt supply leading to the sole conclusion that Section 17(2) would not be applicable to the facts of the instant case - The activities undertaken by the petitioner, i.e., promotion of its own platform along with the services provided therein, are not 'free supplies' and are undertaken for the benefit of the petitioner's own business. The mere non-charging of consideration to enhance footfall on the online portal cannot be construed as 'free or non-taxable or exempt supplies' so as to attract Section 17(2) – The provisions of Section 17(2) would be applicable only to a registered person using goods or services or both partly for effecting taxable supplies including zero rated supplies and partly for effecting exempt supplies. In the absence of any material to show that the petitioner is partly effecting taxable supplies and partly effecting exempt supplies, Section 17(2) has no application. The impugned show cause notice alleging violation of Section 17(2) is illegal and without jurisdiction - Whether the impugned show cause notice issued under Section 74 of the CGST Act is valid and maintainable – HELD - The foundational jurisdictional facts to trigger/invoke Section 74 of the CGST Act, i.e., existence of wilful suppression to evade/avoid payment of GST, are not satisfied in the present case. In the instant case, Section 74 could not have been invoked for any non-compliance of Section 52 as the transactions on which demand is sought to be raised are not the supplies of the petitioner. It is the sellers / service providers who undertook such supplies that are required to discharge GST - Mere omission to mention the value of services correctly in the returns and/or apply the correct GST rate would not amount to wilful suppression, in the absence of any intention to evade payment of tax. Further, when the facts are known to both the parties and the issue of classification itself is in a state of flux, the assessee cannot be attributed with any suppression or misstatement of facts with intent to evade duty. The impugned show cause notice fails to satisfy the mandatory requirements and parameters for invocation of Section 74(1) of the CGST Act. Accordingly, the impugned show cause notice is quashed. [Read less]

GST - Penalty under Section 122(1) of the CGST Act, 2017, Waiver of pre-deposit of 10% of penalty under Section 107 - Petitioners were alleged to be involved in circular trading and have availed ineligible input tax credit – Imposition of penalty equivalent to the Input Tax Credit availed on circular trading – Petitioners contend that the maximum penalty that could have been imposed could only be restricted to Rs.10,000/- and the impugned orders imposing penalty under Section 122(1)(ii) and Section 122(1)(vii) is unjustified - Whether the penalties imposed on the petitioners under Sections 122(1)(ii) and 122(1)(vii) ar... [Read more]

GST - Penalty under Section 122(1) of the CGST Act, 2017, Waiver of pre-deposit of 10% of penalty under Section 107 - Petitioners were alleged to be involved in circular trading and have availed ineligible input tax credit – Imposition of penalty equivalent to the Input Tax Credit availed on circular trading – Petitioners contend that the maximum penalty that could have been imposed could only be restricted to Rs.10,000/- and the impugned orders imposing penalty under Section 122(1)(ii) and Section 122(1)(vii) is unjustified - Whether the penalties imposed on the petitioners under Sections 122(1)(ii) and 122(1)(vii) are justified or disproportionate – HELD - The language of Section 122(1) does not give any discretion to the Assessing Officer to levy lesser of the amount i.e., Rs.10,000/- as the expression used is “whichever is higher” - The impugned Orders cannot be found fault as adequate reasons have been given and shows application of mind by the Assessing Officers while passing the impugned Orders - The decisions relied upon by the Petitioners, which dealt with different statutory provisions, are distinguished as the present case is governed by the specific language of the GST Enactments. The impugned orders have adequately reasoned and recorded the Petitioners' involvement in circular trading and availing of ineligible input tax credit to boost their business turnover - The Petitioners cannot short-circuit the statutory appellate mechanism prescribed under the GST Enactments by directly approaching the High Court. The petitioners are granted liberty to file appeals before the Appellate Authority - Since pre-deposit of huge penalty as prescribed under Section 107 of the will cause undue hardship to the petitioners and make the appellate remedy illusory, the pre-deposit of 10% of penalty is dispensed with at the time of filing the appeals before the Appellate Authority - The writ petitions are dismissed with the liberty granted to the petitioners to file appeals before the Appellate Authority without pre-deposit of 10% of the penalty – Ordered accordingly [Read less]