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GST - Refund of Pre-deposit to the extent of dropped demand - Finality of Appellate Proceedings - Scope of Circular No. 125/44/2019-GST - The Adjudicating Authority assessed tax liability which was challenged before the First Appellate Authority who partly allowed the appeal and dropped demand to the extent of 64 percent - Petitioner filed a refund application seeking refund of pre-deposit to the extent of demand dropped - Refund Authority relied on Circular No. 125/44/2019-GST dated 18.11.2019 and rejected the refund application on the ground that the appellate proceedings have not attained finality as the petitioner had ... [Read more]

GST - Refund of Pre-deposit to the extent of dropped demand - Finality of Appellate Proceedings - Scope of Circular No. 125/44/2019-GST - The Adjudicating Authority assessed tax liability which was challenged before the First Appellate Authority who partly allowed the appeal and dropped demand to the extent of 64 percent - Petitioner filed a refund application seeking refund of pre-deposit to the extent of demand dropped - Refund Authority relied on Circular No. 125/44/2019-GST dated 18.11.2019 and rejected the refund application on the ground that the appellate proceedings have not attained finality as the petitioner had expressed intention to challenge the appellate order before the GST Appellate Tribunal – Whether the Petitioner is entitled to refund of pre-deposit to the extent of demand dropped when the Petitioner proposes to challenge only the part of order which has gone against it and proceedings have attained finality to the extent of dropped demand - HELD - The reasoning in the impugned order that proceedings have not attained finality is erroneous as proceedings have attained finality to the extent of the demand dropped. The authority ought to have kept in mind that the petitioner proposes to challenge only that part of the order which has gone against it and to the extent of dropped demand the proceedings have attained finality. The reasoning that proceedings have not attained finality merely because the Petitioner proposes to challenge the part which has gone against it is fallacious - The Petitioner would be squarely covered by Circular dated 18th November, 2019 as refund of pre-deposit is admissible in respect of the dropped demand which has attained finality. Once the demand stood set aside a statutory right accrued in favour of the Petitioner to receive refund of the amount paid towards pre-deposit - The Order-in-Appeal is binding on the Respondent under Section 107(16) of the CGST Act, 2017 and therefore Respondent cannot refuse consequential refund of pre-deposit attributable to the demand set aside - The continued retention of such amount is wholly unauthorized and offends Article 265 of the Constitution - Pre-deposit bears the character only of a security deposit being a statutory condition precedent for hearing of the appeal and needs to be returned to the appellant whether the appellant succeeds fully or partly. The impugned order is quashed and set aside with direction to process the refund application expeditiously – The writ petition is allowed [Read less]

GST - Classification of Input Tax Credit and allocation between tax heads - ITC available under IGST availed under the CGST and SGST heads - Show cause notice issued alleging excess availment of ITC due to differences in allocation between IGST, CGST and SGST heads - Whether the discrepancy in classification of ITC between different tax heads constitutes excess availment when the aggregate eligible ITC claimed is within the eligible entitlement and no revenue loss is caused - HELD - Department has not established that the Appellant availed ITC in excess of its aggregate eligible entitlement. The discrepancy is essentially ... [Read more]

GST - Classification of Input Tax Credit and allocation between tax heads - ITC available under IGST availed under the CGST and SGST heads - Show cause notice issued alleging excess availment of ITC due to differences in allocation between IGST, CGST and SGST heads - Whether the discrepancy in classification of ITC between different tax heads constitutes excess availment when the aggregate eligible ITC claimed is within the eligible entitlement and no revenue loss is caused - HELD - Department has not established that the Appellant availed ITC in excess of its aggregate eligible entitlement. The discrepancy is essentially attributable to reporting and classification of ITC under different tax heads and the eligibility of underlying credit has not been shown to be disputed on substantive grounds – The ITC available in the electronic credit ledger should be considered as a pool of funds designated for different types of taxes such as IGST, CGST and SGST and while determining interest under Rule 88B of the CGST Rules, the entire wallet has to be taken into consideration and not just individual compartments - If the total balance combining IGST, CGST and SGST does not fall below the amount of wrongly availed credit, there is no interest liability - Once the principal demand of alleged excess ITC is found unsustainable, the consequential levy of interest and penalty cannot independently survive - The authorities shall verify that the appellant had sufficient eligible ITC available under the IGST head and upon such verification, the revenue demand shall be dropped if ITC under IGST head stands unclaimed by the appellant. The appellant shall be entitled to all consequential relief including restoration or adjustment of ITC if any, in accordance with law – The appeal is allowed [Read less]

GST - Return of own machinery from project site, Movement of goods without e-Way Bill – Violation of Rule 138 of CGST Rules, 2017 - The Appellant claimed that an excavator was being returned from a project work site to its registered place of business with a Delivery Challan and that the movement was not a taxable supply as it was return of own machinery used for job work - Department treated the transportation of goods without valid e-Way Bill as a violation of Rule 138 and imposed penalty under Section 129 - Whether movement of machinery without e-Way Bill, when claimed to be return of own goods from job work site with... [Read more]

GST - Return of own machinery from project site, Movement of goods without e-Way Bill – Violation of Rule 138 of CGST Rules, 2017 - The Appellant claimed that an excavator was being returned from a project work site to its registered place of business with a Delivery Challan and that the movement was not a taxable supply as it was return of own machinery used for job work - Department treated the transportation of goods without valid e-Way Bill as a violation of Rule 138 and imposed penalty under Section 129 - Whether movement of machinery without e-Way Bill, when claimed to be return of own goods from job work site with only a Delivery Challan, constitutes a violation of Rule 138 warranting penalty under Section 129(3) of the CGST Act, 2017 - HELD - The machinery belonging to the appellant and being returned from the project site does not by itself exempt the appellant from complying with statutory requirements relating to transportation of goods under Rule 138. Under Section 68 of the CGST Act read with Rule 138 of the CGST Rules, the prescribed documents including e-Way Bill are required for movement of goods including movement for reasons other than supply, subject to specified exemptions - The Appellant has failed to satisfactorily establish the tax treatment of consideration received for use of the machinery at the project site and though stated to be operated on hourly basis, no sufficient evidence regarding hours of operation, consideration charged and corresponding discharge of GST has been produced. The contention regarding alleged 20-kilometre exemption cannot be accepted in the absence of satisfactory evidence establishing that the present movement was specifically covered by applicable statutory exemption under Rule 138(14) or any relevant notification - The absence of e-Way Bill coupled with non-disclosure of tax treatment of consideration gives rise to reasonable inference of intention to evade tax and cannot be treated as a mere technical lapse - The judicial precedents relied upon are distinguishable on facts and circumstances. The appeal is rejected and the orders of both the original adjudicating authority and First Appellate Authority are upheld – The appeal is dismissed [Read less]

GST - Movement of goods with valid e-Way Bill - Presumption of reuse of e-Way Bill - Appellant was transporting goods with valid tax documents including invoice, e-invoice and e-Way Bill. The Department intercepted the goods and presumed that the e-Way Bill was being reused based on earlier verification of the e-Way Bill at one location and subsequent location of the vehicle at another place on the same day, without producing any independent and cogent evidence that the same goods had already completed an earlier journey - Whether goods in compliance with GST provisions can be detained and penalized on the basis of presum... [Read more]

GST - Movement of goods with valid e-Way Bill - Presumption of reuse of e-Way Bill - Appellant was transporting goods with valid tax documents including invoice, e-invoice and e-Way Bill. The Department intercepted the goods and presumed that the e-Way Bill was being reused based on earlier verification of the e-Way Bill at one location and subsequent location of the vehicle at another place on the same day, without producing any independent and cogent evidence that the same goods had already completed an earlier journey - Whether goods in compliance with GST provisions can be detained and penalized on the basis of presumption or inference without producing cogent material evidence that the e-Way Bill was actually being reused - HELD - The material placed on record does not establish any discrepancy in description, quantity, value or ownership of the goods. The goods were accompanied by relevant tax documents including invoice, e-invoice and e-Way Bill - The finding that goods were re-transported is based principally on inference from earlier verification or location of the e-Way Bill and no independent and cogent evidence has been produced to establish that the same goods had already completed an earlier journey and had been delivered - If movement of goods is in compliance with provisions of GST Act, the same cannot be detained on basis of presumptions and assumptions. Presumption cannot take the place of evidence and strong suspicion, strange coincidences and grave doubt cannot take place of legal proof. Intention cannot be presumed merely from suspicion and presumption of tax evasion cannot take place of proof - The appeal is allowed and the appellate order and original order are set aside [Read less]

GST - Procedural Due Process - Notice of Hearing - Petitioner received show-cause notice and filed reply, but last three notices for dates fixed for personal hearing namely 27.01.2026, 16.03.2026 and 25.03.2026 were not uploaded on Common Portal and Petitioner had no knowledge of proceedings; ex-parte order passed without affording opportunity of personal hearing – Whether order can be sustained when petitioner was not intimated about last three dates of hearing in violation of Section 75(4) of CGST Act, 2017 – HELD - The failure to upload notices on Common Portal and absence of intimation to Petitioner about last thre... [Read more]

GST - Procedural Due Process - Notice of Hearing - Petitioner received show-cause notice and filed reply, but last three notices for dates fixed for personal hearing namely 27.01.2026, 16.03.2026 and 25.03.2026 were not uploaded on Common Portal and Petitioner had no knowledge of proceedings; ex-parte order passed without affording opportunity of personal hearing – Whether order can be sustained when petitioner was not intimated about last three dates of hearing in violation of Section 75(4) of CGST Act, 2017 – HELD - The failure to upload notices on Common Portal and absence of intimation to Petitioner about last three dates of proceedings is a violation of principles of natural justice. Every taxpayer has fundamental right to be heard before an order adverse to Petitioner is passed. Where notices of hearing are not uploaded on portal and Petitioner has no knowledge about proceedings, the resulting ex-parte order is vitiated and cannot be sustained – The requirement of Section 75(4) of CGST Act, 2017 has been flouted. The impugned order is set aside; matter remitted to authority concerned to pass fresh order after giving fresh opportunity of hearing to Petitioner with advance notice of at least 15 days – the present writ petitions are disposed of [Read less]

Central Excise - Place of Removal and Assessable Value - FOR Sales versus Ex-Factory Sales - Transportation and Loading Charges - Department alleged that the place of removal in respect of sales made by the respondent is the customer's premises and hence, exclusion of transportation and loading charges from the assessable value was not in conformity with Section 4 of the Central Excise Act, 1944 - Whether the supply should be treated as FOR basis including transportation charges in assessable value or as ex-factory sale excluding such charges - HELD - The classification of sales as FOR basis or ex-factory basis depends on ... [Read more]

Central Excise - Place of Removal and Assessable Value - FOR Sales versus Ex-Factory Sales - Transportation and Loading Charges - Department alleged that the place of removal in respect of sales made by the respondent is the customer's premises and hence, exclusion of transportation and loading charges from the assessable value was not in conformity with Section 4 of the Central Excise Act, 1944 - Whether the supply should be treated as FOR basis including transportation charges in assessable value or as ex-factory sale excluding such charges - HELD - The classification of sales as FOR basis or ex-factory basis depends on examination of purchase orders and terms and conditions of sale applicable to each buyer. The adjudicating authority examined the relied upon purchase orders and appropriately distinguished them into two categories viz. those where sales are on FOR basis and those treated as ex-factory sales based on whether freight charges were integral to the price or separately mentioned - Where purchase orders indicate freight charges separately and material is inspected after receipt at buyer's premises, the sale is treated as ex-factory sale and not on FOR basis - The criteria for FOR sales as decided in CCE Versus Roofit Industries Ltd were met only in respect of certain customers where price was consolidated and inclusive of freight - The Department failed to examine all purchase orders and relied only on sample purchase orders specifically mentioned in the SCN and therefore the adjudicating authority was justified in examining only those relied upon documents – The impugned order is upheld and the appeal filed by the department is dismissed - Invocation of extended period - Regarding invocation of extended period, the department was aware of the fact relating to transportation and inclusion or exclusion of charges from assessable value in view of repeated audit visits. The entire issue of whether transportation cost can be included and whether place of removal can be buyer's premises was subject matter of conflicting judgments and differing interpretations of law - Due to conflicting views and alternative interpretations available before the relevant date, extended period could not have been invoked. The CBIC Circular No. 1065/4/2015-CX dated 08.06.2018 clarified that extended period should not be invoked in cases where an alternative interpretation was taken by the assessee before the date of Supreme Court judgment as the issue is in the nature of interpretation of law. Since extended period could not be invoked, penalty under Section 11AC was also not imposable. [Read less]

Customs - Tariff Classification of imported goods declared as "Mixed Lot of Polyester Knitted Fabric” - Tariff Item No. 6006 9000 versus 6006 3200 - The appellant imported polyester knitted fabrics declared as Mixed Lot of Polyester Knitted Fabric and classified under Customs Tariff Item No. 6006 9000, claiming benefit of concessional Basic Customs Duty under Notification No. 82/2017-Customs. The Revenue reclassified the goods under Customs Tariff Item No. 6006 3200 as knitted fabrics of synthetic fibres, attracting duty at 20% rate and demanded differential duty along with interest and penalty - Whether the goods merite... [Read more]

Customs - Tariff Classification of imported goods declared as "Mixed Lot of Polyester Knitted Fabric” - Tariff Item No. 6006 9000 versus 6006 3200 - The appellant imported polyester knitted fabrics declared as Mixed Lot of Polyester Knitted Fabric and classified under Customs Tariff Item No. 6006 9000, claiming benefit of concessional Basic Customs Duty under Notification No. 82/2017-Customs. The Revenue reclassified the goods under Customs Tariff Item No. 6006 3200 as knitted fabrics of synthetic fibres, attracting duty at 20% rate and demanded differential duty along with interest and penalty - Whether the goods merited classification under Customs Tariff Item No. 6006 9000 as claimed by the Appellant or under Customs Tariff Item No. 6006 3200 as re-determined by the Revenue - HELD - Once the Proper Officer has assessed the Bills of Entry and allowed the classification claimed therein, the same cannot be departed from merely on the basis of a subsequent change of opinion without establishing any mala fides or wilful suppression on the part of the importer - The material composition of textile goods, particularly mixed textile materials, cannot be determined merely from the invoice, packing list or visual examination. The Department had the statutory powers to examine goods, subject them to physical examination or draw representative samples for testing at the time of original assessment but the record does not disclose that any such laboratory testing was undertaken. Without affirmative evidence establishing that the goods in their actual composition necessarily merited classification under Customs Tariff Item No. 6006 3200, a subsequent change in the classification cannot furnish a sufficient basis for unsettling the assessment originally accepted by the proper officer - The fact that the Department had raised queries and enhanced the declared assessable value cannot obviate the necessity of establishing the correct tariff classification by appropriate evidence. The contemporaneous practice of accepting the classification under Customs Tariff Item No. 6006 9000 in respect of identical goods imported by other importers constitutes a relevant circumstance to be taken into consideration. The reclassification under Customs Tariff Item No. 6006 3200 is set aside and the classification of the goods under Customs Tariff Item No. 6006 9000 is upheld - The demand of differential Customs Duty together with applicable interest is set aside. The penalty imposed under Section 114A of the Customs Act, 1962 is set aside - The appeal is allowed [Read less]

Customs – Deliberate change in Classification with intent to evade duty – Classification of Balloons - CTH 9503 versus CTH 4016 versus CTH 9505 - Functional and Specific Classification versus Material-Based Classification - Appellants imported balloons made of natural rubber latex declared as Decorative or Festival Balloons and classified under CTH 40169590 and 95059090, availing concessional rate of duty under Notification No. 50/2018-Customs. Prior investigations and prior imports by the appellants indicated classification under CTH 95030090 - Department alleged that goods were toy balloons correctly classifiable und... [Read more]

Customs – Deliberate change in Classification with intent to evade duty – Classification of Balloons - CTH 9503 versus CTH 4016 versus CTH 9505 - Functional and Specific Classification versus Material-Based Classification - Appellants imported balloons made of natural rubber latex declared as Decorative or Festival Balloons and classified under CTH 40169590 and 95059090, availing concessional rate of duty under Notification No. 50/2018-Customs. Prior investigations and prior imports by the appellants indicated classification under CTH 95030090 - Department alleged that goods were toy balloons correctly classifiable under CTH 95030090 attracting Basic Customs Duty at 60% - Whether natural rubber latex balloons are classifiable as toy balloons under CTH 9503 or as other articles of vulcanised rubber under CTH 4016 9590 or as festive decoration articles under CTH 9505 9090 - HELD - Once toy balloons are specifically covered under CTH 9503 as per HSN Explanatory Notes, there is no reason to resort to any general or residual entry. HSN Explanatory Notes constitute a safe and internationally accepted guide for interpretation of tariff entries and have consistently been relied upon - Rule 1 of General Rules of Interpretation provides that classification shall be determined according to terms of headings and any relative section or chapter notes. Where tariff itself provides an unambiguous appropriate entry, resorting to interpretative rules does not arise - Classification under Chapter 40 is material-based classification whereas Chapter 95 provides specific functional classification for toys. Functional and specific classification prevails over material-based residual classification. Since imported goods are specifically recognised as toy balloons under Chapter 95, classification under Chapter 40 is not acceptable – Further, the HSN Explanatory Notes to heading 9505 nowhere include toy balloons made of natural rubber latex. Explanation to CTH 40169590 and 40169990 inserted vide Notification No.02/2021-Customs dated 1-2-2021 provides that this entry does not include toy balloons made of natural rubber latex as toy balloons are classified under Customs tariff heading 9503. Once a product is specifically covered under a specific heading, recourse to a general heading is not permitted - Change in classification from CTH 9503 to CTH 4016 was carried out with intent to avoid BIS compliance and avail exemption and pay lower duty. Such actions reveal malafide intent. Prior imports classified under CTH 95030090 establishing deliberate change from correct to incorrect classification with intent to evade duty. Statements under Section 108 coupled with conduct establishing clear malafide intent justifying penal consequences – The classification under CTH 95030090 is upheld and classification under CTH 4016 9590 is rejected - The impugned orders are upheld and the appeals stand dismissed [Read less]

GST - Transportation of goods without E-Way Bill - Substantive non-compliance versus procedural lapse - During transportation of iron goods under tax invoice, the vehicle was intercepted by Mobile Squad. As E-Way Bill was not available with the driver at that time, tax and an equal penalty were imposed under Section 129(3) of CGST Act - Whether the absence of E-Way Bill at the time of interception constitutes substantive non-compliance establishing intention to evade tax, or whether it is merely a procedural lapse that can be cured by subsequent production of E-Way Bill - HELD - It is an admitted fact that no E-Way accompa... [Read more]

GST - Transportation of goods without E-Way Bill - Substantive non-compliance versus procedural lapse - During transportation of iron goods under tax invoice, the vehicle was intercepted by Mobile Squad. As E-Way Bill was not available with the driver at that time, tax and an equal penalty were imposed under Section 129(3) of CGST Act - Whether the absence of E-Way Bill at the time of interception constitutes substantive non-compliance establishing intention to evade tax, or whether it is merely a procedural lapse that can be cured by subsequent production of E-Way Bill - HELD - It is an admitted fact that no E-Way accompanied the goods at the time of transportation. The requirement of carrying an E-Way Bill during transportation is mandatory under Rule 138(1) of the GST Rules. The E-Way Bill is an integral part of the statutory mechanism for monitoring movement of taxable goods. The non-generation of an E-Way Bill leaves scope for subsequent manipulation of the books of accounts at the convenience of the taxpayer - The E-way bill generation is an online process, whereas the tax-invoice is issued manually by the taxpayer. If the trader generated the E-way bill online, it would have appeared in his outward supply records preventing him from manipulating his books of accounts at his convenience. This fact established the trader's intention to evade tax - Transportation of goods without an E-Way Bill constitutes substantive non-compliance and establishes an intention to evade tax - The original order passed under Section 129(3) imposing tax and penalty is restored - The appeal filed by the revenue is allowed [Read less]

GST - Interlocutory Applications for early hearing of appeals - The appellants filed 21 appeals before the Tribunal claiming refund involving a huge sum of money. The appellants contended that the pendency of such appeals is likely to prejudice their financial interest and urged the tribunal to hear those appeals on priority basis for ends of justice - HELD - Each of the 21 interlocutory applications have been supported by affidavit sworn by the authorized signatory of the appellants and the applications include all the information prescribed in GSTAT FORM-01. The appellants have contended that if their appeals claiming re... [Read more]

GST - Interlocutory Applications for early hearing of appeals - The appellants filed 21 appeals before the Tribunal claiming refund involving a huge sum of money. The appellants contended that the pendency of such appeals is likely to prejudice their financial interest and urged the tribunal to hear those appeals on priority basis for ends of justice - HELD - Each of the 21 interlocutory applications have been supported by affidavit sworn by the authorized signatory of the appellants and the applications include all the information prescribed in GSTAT FORM-01. The appellants have contended that if their appeals claiming refund are not heard on priority basis, they are likely to suffer from huge financial loss - All the 21 appeals are listed together after three weeks for hearing. The interlocutory applications for early hearing are allowed [Read less]

GST – Allegation of reuse of e-Way Bill based on presumption - Reuse of E-Way Bills - During transportation of goods by vehicle, the goods were checked at 01:27 p.m. and again at the same location at 09:52 p.m. on the same day. The officer of Mobile Squad drew inference that the papers were being reused for another transaction to evade tax. A demand including penalties was created - Whether goods can be presumed to be re-transported and liable to penalty on the sole basis of an inference drawn from earlier verification of E-Way Bill without cogent evidence of actual re-transportation - HELD - The finding that the goods w... [Read more]

GST – Allegation of reuse of e-Way Bill based on presumption - Reuse of E-Way Bills - During transportation of goods by vehicle, the goods were checked at 01:27 p.m. and again at the same location at 09:52 p.m. on the same day. The officer of Mobile Squad drew inference that the papers were being reused for another transaction to evade tax. A demand including penalties was created - Whether goods can be presumed to be re-transported and liable to penalty on the sole basis of an inference drawn from earlier verification of E-Way Bill without cogent evidence of actual re-transportation - HELD - The finding that the goods were being “re-transported” is based principally on an inference from the earlier verification of the E-Way Bill. No independent and cogent evidence has been produced to establish that the same goods had already completed an earlier journey and had been delivered - The facts on record do not establish any discrepancy in description, quantity, value or ownership of goods. The goods were accompanied by relevant tax documents including invoice, e-invoice and E-Way Bill. It is settled law that presumption cannot take the place of evidence - Department has not established any cogent material such as crossing of a toll plaza during course of transportation that goods actually underwent an earlier completed transportation or that same goods were being re-transported. The respondent failed to establish that the bill for repairing the concerned vehicle is fake or forged - The appellate order and the original order passed under Section 129 are set aside. The amount deposited by the appellant is refunded in accordance with law – The appeal is allowed [Read less]

Customs duty on pilfered goods - Custody of imported goods under Major Port Trusts Act and Customs Act - Interaction between saving clause in Section 45(1) and non obstante clause in Section 45(3) of Customs Act - Whether the Notification dated 11.10.2000 approving respondent-Port Trust as the custodian of the notified customs area under Section 45(1) of the Customs Act is valid and consequently whether liability for pilfered goods could be fastened on the respondent in terms of Section 45(3) of the Customs Act - HELD - The saving clause in Section 45(1) operates only where another law for the time being in force itself fa... [Read more]

Customs duty on pilfered goods - Custody of imported goods under Major Port Trusts Act and Customs Act - Interaction between saving clause in Section 45(1) and non obstante clause in Section 45(3) of Customs Act - Whether the Notification dated 11.10.2000 approving respondent-Port Trust as the custodian of the notified customs area under Section 45(1) of the Customs Act is valid and consequently whether liability for pilfered goods could be fastened on the respondent in terms of Section 45(3) of the Customs Act - HELD - The saving clause in Section 45(1) operates only where another law for the time being in force itself fastens liability in respect of pilfered goods upon the custodian. The Major Port Trusts Act does not create any specific liability on the Port Trust for customs duty on pilfered goods and deals only with the bailee's civil liability towards the owner of goods under Sections 42 and 43 thereof - The liability under Section 43 of the Major Port Trusts Act is fundamentally different from the liability created under Section 45(3) of the Customs Act - Section 45(3), inserted by Act 22 of 1995 with effect from 26.05.1995, deliberately employed a non obstante clause so as to give it an overriding effect to the liability created thereunder, notwithstanding the saving clause contained in sub-section (1). The expression used in the non obstante clause, notwithstanding anything contained in any law for the time being in force, necessarily includes the Major Port Trusts Act. Pilferage of goods is distinct from general loss or destruction of goods - Section 13 of the Customs Act absolves the importer from liability in respect of pilfered goods, and it is precisely to address the lacuna that Parliament introduced sub-section (3) of Section 45, thereby fastening the liability to pay duty on the person approved under sub-section (1). Section 45(2) of the Customs Act imposes statutory duties upon the custodian to maintain proper records and prevent removal of goods except with permission of proper officer, regardless of the legal source of custody. Pilferage is a consequence of breach of these statutory obligations, and it is for this reason that liability is fastened on the approved custodian for pilfered goods. The Commissioner of Customs was fully justified in issuing the Notification dated 11.10.2000 approving the respondent-Port Trust as custodian under Section 45(1) of the Customs Act. There is no conflict between Section 45 of the Customs Act and Sections 42 and 43 of the Major Port Trusts Act - The fact that the Board may have contractual or statutory rights of indemnity or recovery against another person responsible for the loss does not detract from its primary statutory liability under Section 45(3) of the Customs Act to discharge the customs duty payable to the revenue - The Notification dated 11.10.2000 issued by the Commissioner of Customs (Import) in exercise of the powers conferred under Section 45(1) of the Customs Act is valid. The impugned judgment of the High Court to the extent it held otherwise and quashed the said Notification is set aside - The challenge to the show cause-cum-demand notices pertaining to the period prior to the date of the Notification dated 11.10.2000 is not pressed by appellants as no liability under Section 45(3) could have arisen in the absence of an approval under Section 45(1). Accordingly, the impugned judgment to the extent it quashed the show cause-cum-demand notices prior to 11.10.2000 is not interfered with. The appeal is disposed of accordingly [Read less]

Customs - Detention and seizure of imported vehicle - Distinction between detention and seizure under Customs Act - Petitioner purchased a Toyota Land Cruiser and upon arrival, Bill of Entry was filed with assessable value of 54,000 USD. The petitioner paid applicable customs duty - DRI conducted a search at residential premises and prepared a Panchnama directing petitioner not to deal with the car. A seizure memo under Section 110(1) was issued only on 17.04.2026, i.e., after more than one year, and thereafter show-cause notice was issued on 08.05.2026 under Section 124 of the Act - Whether detention of goods without a pr... [Read more]

Customs - Detention and seizure of imported vehicle - Distinction between detention and seizure under Customs Act - Petitioner purchased a Toyota Land Cruiser and upon arrival, Bill of Entry was filed with assessable value of 54,000 USD. The petitioner paid applicable customs duty - DRI conducted a search at residential premises and prepared a Panchnama directing petitioner not to deal with the car. A seizure memo under Section 110(1) was issued only on 17.04.2026, i.e., after more than one year, and thereafter show-cause notice was issued on 08.05.2026 under Section 124 of the Act - Whether detention of goods without a proper seizure order under Section 110(1) is valid and whether the limitation period under Section 110(2) for issuance of show cause notice applies from the date of detention or from the date of formal seizure order - HELD - Section 110 of the Customs Act uses the expression "reason to believe" that any goods are liable to confiscation, the proper officer may seize the goods. The first proviso uses the expression "where it is not practicable to remove, transport, the proper officer may give custody on execution of an undertaking". The second proviso further mentions "where it is not practicable to seize the goods". In either scenario, the proper officer is legally bound to satisfy a two-fold statutory obligation before passing a seizure order: first, he must explicitly record reasons that the goods are liable for confiscation, and second, he must record clear satisfaction by passing the order regarding the nature of goods under the respective provisos - The Panchnama cannot satisfy the ingredients of Section 110 of the Act, and an order is mandatory under the proviso to Section 110 for paving way for issuance of notice under Section 124 within a period of six months unless extended. The proper officer cannot consume a considerable period, such as over one year, to pass the seizure order under Section 110(1) after Panchnama was prepared by continuing the detention of the vehicle. When the seizure memo travels beyond the period of one year, the time limit of six months as mentioned in Section 110(2) and the further period of six months as envisaged under the proviso to sub-section (2) of Section 110 will get consumed – The respondents have detained the car vide Panchnama dated 07.02.2025, and in fact the seizure order under Section 110(1) has been passed after a period of one year on 17.04.2026, and in order to escape the limitation of six months, the Notice for confiscation under Section 124(a) of the Act has been issued on 08.05.2026. The order of provisional release dated 18.05.2026 is also illegal, as the conditions mentioned are premised on paragraph No. 2 of Circular No. 35/2017 dated 16.08.2017, which has been struck down by the Delhi High Court - The respondents are directed to release the vehicle. Costs of 10,000 rupees are imposed on the respondents – The petition is allowed [Read less]

Service Tax - Invocation of Extended Period of Limitation – Demand based on Third-Party Data from Income Tax Department - Whether invocation of extended period of limitation was sustainable when the demand is based entirely on third-party data obtained from the Income Tax Department and no evidence of suppression, mis-statement, fraud or collusion has been put forth - HELD - Where the demand is merely on the basis of data obtained from Income Tax Department, it cannot be alleged that there was suppression or any wrongful conduct justifying the invocation of extended period - The demand is not sustainable in law as the ex... [Read more]

Service Tax - Invocation of Extended Period of Limitation – Demand based on Third-Party Data from Income Tax Department - Whether invocation of extended period of limitation was sustainable when the demand is based entirely on third-party data obtained from the Income Tax Department and no evidence of suppression, mis-statement, fraud or collusion has been put forth - HELD - Where the demand is merely on the basis of data obtained from Income Tax Department, it cannot be alleged that there was suppression or any wrongful conduct justifying the invocation of extended period - The demand is not sustainable in law as the extended period of limitation cannot be invoked on the basis of third-party data obtained from Income Tax Department without independent evidence of suppression of facts with intent to evade payment of service ta - The appeal is allowed on limitation, without going into the merits of the case [Read less]

Service Tax - Selling of Space for Advertisement - Local Body not Covered under Definition of Person - Statutory Levy versus Service Consideration – Appellant-Municipal Corporation engaged in the selling of space for advertisement to different parties - Whether a sovereign local body is a person liable to pay service tax on selling of space for advertisement and whether licence fee collected under Municipal Corporation Act constitutes consideration for taxable service - HELD - The period involved is from April 2012 to June 2012 and during that time no definition of person was provided in the Service Tax Laws and local bo... [Read more]

Service Tax - Selling of Space for Advertisement - Local Body not Covered under Definition of Person - Statutory Levy versus Service Consideration – Appellant-Municipal Corporation engaged in the selling of space for advertisement to different parties - Whether a sovereign local body is a person liable to pay service tax on selling of space for advertisement and whether licence fee collected under Municipal Corporation Act constitutes consideration for taxable service - HELD - The period involved is from April 2012 to June 2012 and during that time no definition of person was provided in the Service Tax Laws and local body was not covered under the definition of person provided under Section 2(42) of the General Clauses Act. Accordingly, the activity rendered by the Appellant does not fall under the definition of taxable service – The issue involved in the present appeal is no longer res integra as the Tribunal has already dropped the demand of the impugned service in the Appellant’s own case for the earlier period - The impugned order is set aside and the appeal is allowed [Read less]

GST - Writ Appeal against dismissal of Writ Petition - Assessment order challenge - Appellant filed a writ petition challenging the assessment order. The Writ Court dismissed the Writ Petition and granted liberty to file appeal against the assessment order - Whether the direction under order dismissing the writ petition would be effective with the observations on merits made by the Writ Court or whether clarification is needed that those observations would not influence the appellate authority's decision - HELD - The appellant does not very seriously object to the conclusion of the Writ Court directing them to file an appe... [Read more]

GST - Writ Appeal against dismissal of Writ Petition - Assessment order challenge - Appellant filed a writ petition challenging the assessment order. The Writ Court dismissed the Writ Petition and granted liberty to file appeal against the assessment order - Whether the direction under order dismissing the writ petition would be effective with the observations on merits made by the Writ Court or whether clarification is needed that those observations would not influence the appellate authority's decision - HELD - The appellant does not very seriously object to the conclusion of the Writ Court directing them to file an appeal. In order that the direction be effective, it is necessary that the observations on merits made by the Writ Court are set aside or at least a direction given to the appellate authority that those observations would not influence the decision in appeal - The direction under order dated 08.06.2026 relegating the appellant to appellate remedy is confirmed with clarification that the observations of the Writ Court on the merits of the assessment shall not stand in the way of an independent adjudication of the appeal in accordance with law - The Writ Appeal is dismissed [Read less]

GST - Imposition of penalty not proposed in show cause notice - Confusion of penalties between taxpayer and handler/operator - Show cause notice proposed penalty against the petitioner under Section 122(1)(ii) and 122(1)(vii) of the CGST Act. A separate penalty under Section 122(1A) was specifically proposed against the handler/operator. However, in the impugned order, the adjudicating authority has imposed both the penalties including that of the handler/operator under Section 122(1A) on the petitioner, which was never proposed in the show cause notice - Whether the penalty imposed on the petitioner is in accordance with ... [Read more]

GST - Imposition of penalty not proposed in show cause notice - Confusion of penalties between taxpayer and handler/operator - Show cause notice proposed penalty against the petitioner under Section 122(1)(ii) and 122(1)(vii) of the CGST Act. A separate penalty under Section 122(1A) was specifically proposed against the handler/operator. However, in the impugned order, the adjudicating authority has imposed both the penalties including that of the handler/operator under Section 122(1A) on the petitioner, which was never proposed in the show cause notice - Whether the penalty imposed on the petitioner is in accordance with the show cause notice and whether the petitioner is liable for penalties never proposed against him. - HELD - The show cause notice specifically proposed separate penalty on the handler/operator under Section 122(1A) of the CGST Act. However, in the impugned order in original, the adjudicating authority has imposed both the penalties including that of the handler/operator under Section 122(1A) on the petitioner - The respondents have not specifically controverted the facts of mixing up the proposed penalties as specified in show-cause notice while passing the final order in the case of the petitioner. In the similar matter of the handler/operator, this Court has set aside the impugned order of penalty and matter is remanded to the respondent authorities for fresh consideration - The impugned order is quashed and set aside. The matter is remanded back to the adjudicating authority to pass a fresh order, after hearing the petitioner – The petition is disposed of [Read less]

Service Tax - Security Agency Services – Determination of Taxable Value - Exclusion of Exempted, Non-Taxable Services and Reimbursable Expenses - Appellant engaged in providing Security Agency Services had claimed that substantial amounts were liable to be excluded from taxable value on account of exempted services, non-taxable services and reimbursable expenses, which were not subjected to any meaningful independent verification before being discarded by the Revenue - Whether amounts which are exempted or non-taxable in nature can be mechanically included in taxable value without proper examination of underlying transac... [Read more]

Service Tax - Security Agency Services – Determination of Taxable Value - Exclusion of Exempted, Non-Taxable Services and Reimbursable Expenses - Appellant engaged in providing Security Agency Services had claimed that substantial amounts were liable to be excluded from taxable value on account of exempted services, non-taxable services and reimbursable expenses, which were not subjected to any meaningful independent verification before being discarded by the Revenue - Whether amounts which are exempted or non-taxable in nature can be mechanically included in taxable value without proper examination of underlying transactions – HELD - A receipt cannot be subjected to service tax merely because it finds reflection in the books of account; what is material is its true legal character and its nexus with consideration for a taxable service. Where a substantial portion of proposed taxable turnover is disputed on the ground that it comprises exempted or non-taxable receipts, the adjudicating authority is required to examine the nature of those receipts and record a reasoned finding as to their taxability - Amounts which are genuinely attributable to exempted or non-taxable services cannot, merely by reason of their reflection in the books of account, be brought within the taxable value of service tax levy. To include receipts which are outside the statutory charging provision would be to travel beyond the four corners of the taxing statute and would be antithetical to the settled principle that a taxing liability must have clear statutory foundation - The legal position concerning reimbursable expenses came to be authoritatively considered by the Hon'ble Supreme Court in Union of India v. Intercontinental Consultants and Technocrats Pvt. Ltd. wherein it was held that the value of taxable service could not, during the period prior to the statutory amendment, be enlarged so as to include amounts which were merely reimbursed expenses and did not represent consideration for the service provided. The entire period covered was anterior to the amendment which came into effect on 14.05.2015. The Revenue was required to undertake a proper verification of the constituent elements of the receipts and thereafter determine the taxable value in accordance with law. In the absence of such exercise and without considering reconciliation statements furnished by the Appellant, the computation suffers from a fundamental infirmity – The matter is remanded for re-quantification with directions that exempted and non-taxable services and reimbursable expenses be excluded from taxable value upon proper verification in accordance with law - Service Tax - CENVAT Credit - Denial on Assumptions - Appellant claimed that substantial CENVAT credit was legitimately available and had already been adjusted towards discharge of service tax liability but the same was not given due credit while determining demand, and Revenue proceeded on premise that Appellant had not incurred expenditure on sub-contracting services and that expenditure was predominantly in nature of salary payments - Whether CENVAT credit can be denied without proper examination of Appellant's comprehensive audited financial records showing substantial administrative and office expenses – HELD - The Revenue's approach was unduly restrictive and not borne out by comprehensive examination of Appellant's audited financial records. The Appellant had placed reliance upon audited books to demonstrate that apart from employee-related expenditure, it had incurred substantial administrative and other office expenses in course of carrying on taxable business - Selective reliance upon one part of financial record while completely overlooking another material component thereof cannot furnish a sound basis for determination of tax liability. There was inherent incongruity in Department's approach wherein allegations concerning exemption and CENVAT credit were directed towards particular components yet Department proceeded to recompute entire turnover without demonstrating nexus between particular alleged irregularities and wholesale re-computation - Mere fact that Appellant incurred substantial expenditure towards salaries cannot lead to converse inference that no other expenditure was incurred or that Appellant could not have availed eligible CENVAT credit. CENVAT credit is a substantive statutory benefit and cannot be denied merely on assumptions or generalized conclusions unsupported by cogent evidence. Admissibility of credit must necessarily be determined upon proper verification of underlying records. The substantive benefit of CENVAT Credit, in facts and circumstances of case, must be allowed – The demand necessarily requires to be reworked after giving due effect to eligible CENVAT credit adjustment - Service Tax - Extended Period of Limitation - Invocation without Suppression - Whether extended period can be invoked when foundation of demand itself is drawn from disclosed financial records and facts were within Department's knowledge – HELD - The very figures utilised by Department for raising demand have been substantially drawn from Appellant's audited financial statements, Profit and Loss Accounts, Balance Sheets and other statutory records maintained in ordinary course of business. Such records were not clandestine documents discovered through independent investigation rather they constituted very source from which impugned computation was made - The financial records of Appellant were statutorily maintained and audited and relevant financial particulars were available in ordinary course before competent statutory authorities. In such circumstances, mere circumstance that Appellant had not filed statutory returns cannot without more be elevated into finding of deliberate suppression of material facts with intent to evade service tax. Non-filing of returns may attract consequences specifically provided by law but procedural lapse cannot by automatic process of reasoning be converted into suppression of facts or deliberate intention to evade tax - The extended period invoked cannot be sustained; demand if otherwise found payable can survive only for normal period of limitation - Service Tax - Best Judgment Assessment - Resort Despite Availability of Actual Financial Records - Whether best judgment assessment under Section 72 can be invoked as matter of course despite Department's possession of audited financial statements and actual financial records – HELD - Section 72 embodies machinery for best judgment assessment in circumstances where statutory conditions for invocation stand satisfied but it is not a charter for Department to abandon primary material on record and proceed upon conjecture or estimation for administrative convenience. The expression best judgment cannot in law be equated with best guess - In present case impugned demands for respective periods have been arrived at by resorting to methodologies including applying assumed percentage increase over preceding year's taxable value and adopting highest taxable value of preceding years as basis for determination of liability. Such methodology requires much greater scrutiny before it can constitute legally sustainable best judgment assessment. An assessment even when made to best judgment of assessing authority must bear reasonable nexus with material available on record and cannot rest upon figures which are merely hypothetical or arbitrarily extrapolated - Section 72 power is circumscribed by material available and requirement of rational determination; it cannot be employed to replace actual financial data with artificial mathematical projection without first demonstrating why primary records were incapable of being relied upon or verified - Department had access to or was admittedly aware of substantial financial and statutory material pertaining to Appellant. The impugned order does not satisfactorily explain why such material could not be examined [Read less]

GST – West Bengal AAR - Passenger Transportation Service - Place of supply and taxability of passenger transportation services on international passenger air transportation where passenger boards from outside India and travels to India – Applicant contended that where a passenger boards from Dhaka, Bangladesh and travels to Kolkata, India, the place of embarkation is outside India and therefore the supply is not taxable in India - Whether the place of supply being outside India, the transaction falls outside the charging provisions of the GST Acts - HELD - The place of supply of passenger transportation service is dete... [Read more]

GST – West Bengal AAR - Passenger Transportation Service - Place of supply and taxability of passenger transportation services on international passenger air transportation where passenger boards from outside India and travels to India – Applicant contended that where a passenger boards from Dhaka, Bangladesh and travels to Kolkata, India, the place of embarkation is outside India and therefore the supply is not taxable in India - Whether the place of supply being outside India, the transaction falls outside the charging provisions of the GST Acts - HELD - The place of supply of passenger transportation service is determined with reference to Section 13(10) of the IGST Act, 2017 where the location of the supplier or recipient is outside India. The place of supply is the place where the passenger embarks on the conveyance for a continuous journey. In this scenario, the place of embarkation is outside India. Since the place of supply is outside India, the transaction does not fall within the ambit of the GST charging provisions. No GST is leviable in India on such supplies – Accordingly, no GST is applicable on passengers boarding from outside India and coming to India - GST - Place of supply and taxability of passenger transportation services - Whether GST is leviable on international passenger air transportation where passenger boards from India and travels to foreign country - Petitioner contended that where a passenger boards from Kolkata, India and travels to Dhaka, Bangladesh, the supply originates in India through the Indian branch and the place of embarkation is Kolkata - Whether the place of supply being within India, CGST and SGST are leviable - HELD - Section 12(9) of the IGST Act, 2017 applies where both the supplier and recipient are located in India. The place of supply is the place where the passenger embarks on the conveyance for a continuous journey, which in this case is Kolkata, West Bengal. Since the location of the supplier and the place of supply are both in West Bengal, the supply is treated as an intra-state supply under Section 8 of the IGST Act. The supply is accordingly liable to CGST and SGST at the applicable rate - For a passenger travelling in economy class where the supplier does not avail the corresponding input tax credit, the applicable tax rate is 5% GST. For a passenger travelling in any class other than economy class, the applicable rate is 18% GST - The Advance Ruling is issued holding that CGST and SGST are applicable on passengers boarding from India for flights to foreign countries - GST - Place of supply and taxability of passenger transportation services - Continuous journey with single ticket - Whether GST is leviable on international passenger air transportation where passenger holds a single ticket from a foreign country to India with a transit stop in an intermediate location - HELD - Section 13(10) of the IGST Act, 2017 applies where either the supplier or the recipient is located outside India. The place of supply is determined with reference to the place where the passenger embarks on the conveyance for a continuous journey - A transit stop for a short duration does not constitute a stopover as defined in the explanation clause to Section 2(3) of the IGST Act. A stopover involves a break in the journey with a change of aircraft and transshipment of luggage, whereas a transit stop is an intermediate landing where the aircraft briefly stops without the passenger disembarking to leave the airport. The transit stop does not break the continuity of the journey undertaken by the passenger from the point of embarkation to the final destination. Since the first point of embarkation is London, which is outside India, the place of supply is outside India. The transaction does not fall within the ambit of the GST charging provisions and no tax is leviable - The Advance Ruling is issued holding that no GST is applicable on passengers on continuous journey with single ticket from a foreign country to India with a transit stop - GST - Place of supply and taxability of passenger transportation services - Continuous journey with single ticket - Whether GST is leviable on international passenger air transportation where passenger holds a single ticket from India to a foreign country with a transit stop in an intermediate location - HELD - Section 12(9) of the IGST Act, 2017 applies where both the supplier and the recipient are located in India. The place of supply is determined with reference to the place where the passenger embarks on the conveyance for a continuous journey - A transit stop for a short duration does not break the continuity of the journey. It cannot be equated with stopover as defined in the explanation clause to Section 2(3) of the IGST Act. The transit stop in no way breaks the continuity of the journey undertaken by the passenger from Kolkata to London. The first point of embarkation is Kolkata, which is within West Bengal, India. The place of supply is accordingly Kolkata. Since the location of the supplier and the place of supply are both in the same State, the supply is treated as an intra-state supply under Section 8 of the IGST Act. The supply is accordingly liable to CGST and SGST at the applicable rate - For a passenger travelling in economy class where the supplier does not avail the corresponding input tax credit, the applicable rate is 5% GS. For a passenger travelling in any class other than economy class, the rate is 18% GST - The Advance Ruling is issued holding that CGST and SGST are applicable on passengers on continuous journey with single ticket from India to a foreign country with a transit stop - GST - Place of supply and taxability of passenger transportation services - Continuous journey with single ticket - Whether GST is leviable on international passenger air transportation where passenger holds a single ticket from one foreign country to another foreign country with a transit stop in India - HELD - Section 13(10) of the IGST Act, 2017 applies where either the supplier or the recipient is located outside India. The place of supply is determined with reference to the place where the passenger embarks on the conveyance for a continuous journey. A transit stop for a short duration does not constitute a stopover as defined in the explanation clause to Section 2(3) of the IGST Act. The transit stop in no way breaks the continuity of the journey undertaken by the passenger from Dhaka to London. Here both the supplier and the recipient are located outside India. The place of supply is the place of embarkation, namely Dhaka, which is outside India's taxable territory. The transaction does not fall within the ambit of the GST charging provisions and no tax is leviable - The Advance Ruling is issued holding that no GST is applicable on passengers on continuous journey with single ticket between two foreign countries with a stop in India - GST – Scope of Supply - Transportation of human remains by air - Whether transportation of human remains falls within the definition of supply under Section 7 of the CGST Act, 2017 - HELD - Section 7 of the CGST Act, 2017 includes all forms of supply for consideration in the course or furtherance of business. Schedule III appended to the CGST Act, 2017 specifies activities or transactions which shall be treated neither as a supply of goods nor a supply of services. Clause 4 of Schedule III refers to services of funeral, burial, crematorium or mortuary including transportation of the deceased. The services mentioned in Clause 4 are all related to services offered to a person after he passes away. It includes transportation of the deceased - Since transportation of the deceased is neither a supply of goods nor a supply of services, it does not come under the ambit of Section 7(1) of the CGST Act, 2017 and hence there is no question of any tax being imposed on such services - Transportation of human remains does not constitute a supply within the mea [Read less]

GST - Cancellation of GST registration - Limitation in filing appeal - Whether cancellation of registration can be upheld on the ground of delay in filing appeal beyond 30 days when the Commissioner has no power to condone delay - HELD - The provisions of GST enactment cannot be interpreted so as to deny right to carry on trade and commerce to any citizen. The Constitutional guarantee is unconditional and unequivocal and must be enforced regardless of shortcomings in the scheme of GST enactment - The right to carry on trade or profession cannot be curtailed contrary to the Constitutional guarantee under Article 19(1)(g) an... [Read more]

GST - Cancellation of GST registration - Limitation in filing appeal - Whether cancellation of registration can be upheld on the ground of delay in filing appeal beyond 30 days when the Commissioner has no power to condone delay - HELD - The provisions of GST enactment cannot be interpreted so as to deny right to carry on trade and commerce to any citizen. The Constitutional guarantee is unconditional and unequivocal and must be enforced regardless of shortcomings in the scheme of GST enactment - The right to carry on trade or profession cannot be curtailed contrary to the Constitutional guarantee under Article 19(1)(g) and Article 21 of the Constitution of India. If the person is not allowed to revive the registration, the State would suffer loss of revenue and the ultimate goal under GST regime will stand defeated - Since it is merely a matter of cancellation of registration, the question of limitation should not bother the court since it cannot be said that any right has accrued to the State which would rather be adversely affected by cancellation - The orders canceling the GST registration are quashed and set aside. The registration is valid from 29.02.2024 onwards subject to the condition that the petitioner files up to date GST returns and deposits entire pending dues along with applicable interest, penalty, late fees in terms of Rule 23(1) of the MGST Rules 2017 – The Writ Petition is allowed [Read less]

Customs - Recovery of drawback erroneously paid - Limitation period for recovery of drawback - Whether recovery proceedings initiated more than ten years after drawback was availed can be sustained when no statutory period of limitation is prescribed in Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules - HELD - It is a settled principle of law that fraud vitiates all solemn acts and that a person cannot be permitted to take advantage of his own fraud, irrespective of the passage of time. However, in the present case, there is no allegation that petitioner fraudulently obtained the drawback or suppres... [Read more]

Customs - Recovery of drawback erroneously paid - Limitation period for recovery of drawback - Whether recovery proceedings initiated more than ten years after drawback was availed can be sustained when no statutory period of limitation is prescribed in Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules - HELD - It is a settled principle of law that fraud vitiates all solemn acts and that a person cannot be permitted to take advantage of his own fraud, irrespective of the passage of time. However, in the present case, there is no allegation that petitioner fraudulently obtained the drawback or suppressed any material facts. The only allegation is that petitioner had not produced proof of realisation of export proceeds - Where the statute does not prescribe a period of limitation, the proceedings must nevertheless be initiated within a reasonable time. What constitutes a reasonable time would depend upon the facts and circumstances of each case. The drawback was availed during the period from 2004 to 2007 and last payment was made on 28.12.2007. The show cause notice was allegedly issued only in 2018 and the impugned order was passed in 2022. No reason has been assigned for the delay in initiating the recovery proceedings. There is also no explanation for the considerable delay between the alleged issue of the show cause notice and passing of the impugned order - Recovery proceedings initiated after such an inordinate delay cannot be sustained - The impugned order passed for recovery of drawback is set aside. Consequently, the attachment of the petitioner's bank account is also set aside - The Writ Petition is allowed [Read less]

U.P. VAT Act, 2008 - Imposition of penalty despite acceptance of Books of Account - Appellant was engaged in manufacturing welding electrodes and goods were seized on ground that Column No. 6 of Form-38 was blank; penalty proceedings initiated solely on ground of technical omission in Form-38 - Whether penalty can be sustained merely on account of technical discrepancy when books of account and turnover have been accepted in assessment order – HELD - Once books of account and disclosed turnover of Appellant have been accepted by assessing authority and no other material has been brought on record to establish mens rea on... [Read more]

U.P. VAT Act, 2008 - Imposition of penalty despite acceptance of Books of Account - Appellant was engaged in manufacturing welding electrodes and goods were seized on ground that Column No. 6 of Form-38 was blank; penalty proceedings initiated solely on ground of technical omission in Form-38 - Whether penalty can be sustained merely on account of technical discrepancy when books of account and turnover have been accepted in assessment order – HELD - Once books of account and disclosed turnover of Appellant have been accepted by assessing authority and no other material has been brought on record to establish mens rea on part of Appellant to evade payment of tax or to suppress tax liability, penalty proceedings cannot be sustained merely on account of technical discrepancy. It is settled that existence of mere technical or procedural irregularity, in absence of any material demonstrating an intention to evade tax, cannot by itself justify imposition of penalty - Once assessment order was passed after due consideration of books of account, disclosed turnover and penalty proceedings initiated against Appellant, and no adverse finding was recorded with regard to turnover or genuineness of transactions, no adverse inference could thereafter have been drawn against Appellant in penalty proceedings - The non-filling of Column No. 6 of Form-38 was attributable to urgency of requirement of goods and not due to any deliberate intention to evade tax. The goods were found to constitute raw material used in manufacturing process and authorities never found that said goods were sold by Appellant – The impugned penalty order is not sustainable and quashed – The revision is allowed [Read less]

Customs - Undervaluation of Imported Goods - Evidentiary Value of Export Documents -The appellants imported cigarettes and declared value at USD 5 per thousand sticks on the basis of contract with supplier in Hong Kong. The Department proposed enhancement to USD 18 per thousand sticks based on Certificate of Origin and shipping bills allegedly obtained from port of export - Whether the Department can reject declared transaction value and enhance it based on unauthenticated export documents obtained from third parties in the absence of contemporaneous price evidence - HELD - Before rejecting the invoice price, the Departmen... [Read more]

Customs - Undervaluation of Imported Goods - Evidentiary Value of Export Documents -The appellants imported cigarettes and declared value at USD 5 per thousand sticks on the basis of contract with supplier in Hong Kong. The Department proposed enhancement to USD 18 per thousand sticks based on Certificate of Origin and shipping bills allegedly obtained from port of export - Whether the Department can reject declared transaction value and enhance it based on unauthenticated export documents obtained from third parties in the absence of contemporaneous price evidence - HELD - Before rejecting the invoice price, the Department has to give cogent reasons for such rejection and the Department has to find out whether there are any imports of any identical goods or similar goods at a higher price around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value - Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. There is a valid contract between the appellant and supplier in Hong Kong with agreed upon price of USD 5 per 1000 sticks. Appellants have not sought any preferential treatment or exemption benefit warranting production of country-of-origin certificate - The Certificate of Origin was neither specifically produced by the Appellant nor was any claim for exemption made based on said certificate and same was not part of any declaration by the party nor obtained officially by the Department from authorities issuing such origin certificate. Hence reliance placed on said document per se is not tenable – The statements under Section 108 are relevant and admissible but need to be corroborated by other admissible and urgent evidence. Documents procured from foreign customs authorities must be authenticated. Xerox copies or export declarations not even attested would not make such genuine declarations – The export declaration value cannot be made basis for increasing value of goods in India when value is derived from Section 14(1). No evidence from side of Department showing contemporaneous imports at higher price - Department has not been able to produce cogent and substantive evidence in support of wrong declaration of transaction value to reject the same - The impugned order is set aside and the appeal is allowed [Read less]

GST – Scope of Section 161 of the CGST Act, 2017 - Denial of Opportunity to be Heard, Consideration to reply in rectification order - Ex-Parte Order - Petitioner was issued show-cause notice under Section 74 and submitted replies on 13.07.2021 and 18.07.2021; wholly ex-parte order came to be passed on 30.01.2025 without offering any consideration to replies furnished; subsequently order dated 05.02.2025 passed under Section 161 purporting to rectify error by offering ex-parte consideration to replies – Whether Adjudicating Authority can offer ex-parte consideration to reply in rectification order when fundamental error... [Read more]

GST – Scope of Section 161 of the CGST Act, 2017 - Denial of Opportunity to be Heard, Consideration to reply in rectification order - Ex-Parte Order - Petitioner was issued show-cause notice under Section 74 and submitted replies on 13.07.2021 and 18.07.2021; wholly ex-parte order came to be passed on 30.01.2025 without offering any consideration to replies furnished; subsequently order dated 05.02.2025 passed under Section 161 purporting to rectify error by offering ex-parte consideration to replies – Whether Adjudicating Authority can offer ex-parte consideration to reply in rectification order when fundamental error was denial of opportunity to be heard – HELD - When show-cause notice is issued, fundamental principle of natural justice requires that Petitioner be afforded meaningful opportunity to place its case on record and be heard. Denial of opportunity of hearing vitates proceedings beyond cure - Where Adjudicating Authority admits that replies were furnished by Petitioner and had not been considered in original order, the order suffered from fundamental procedural defect. Once fundamental error of denial of consideration to Petitioner's replies is noted, the power of rectification under Section 161 cannot be exercised to offer ex-parte merit review or to pass order creating tax demand without notice. The appropriate course was to recall original order and pass fresh order after issuing fresh notice to Petitioner for personal hearing. To allow ex-parte consideration in rectification order would amount to conceding power to review order on merits without issuing notice. Principles of natural justice are violated where Adjudicating Authority passes second ex-parte order after noticing that first order failed to consider Petitioner's submissions. The third proviso to Section 161 regarding non-prejudicial rectification does not apply where rectification involves fundamental procedural error – The impugned order is set aside; matter remitted to Adjudicating Authority to pass fresh order after affording opportunity of hearing to petitioner – The petition is allowed [Read less]

GST - Issuance of show cause notice and demand order against deceased taxpayer - Validity of proceedings against dead person - Whether show cause notices and demand orders issued against a deceased taxpayer on GSTN portal only can bind the legal heir when the legal heir was unaware and not involved in the business - HELD - The petitioner is a housewife of the deceased assessee who passed away during Covid Pandemic on 03.05.2021. The petitioner was not remotely connected to the proprietorship and ultimately, the registration was cancelled on 16.07.2021 of the proprietorship. After the period of almost three years, on 14.06.... [Read more]

GST - Issuance of show cause notice and demand order against deceased taxpayer - Validity of proceedings against dead person - Whether show cause notices and demand orders issued against a deceased taxpayer on GSTN portal only can bind the legal heir when the legal heir was unaware and not involved in the business - HELD - The petitioner is a housewife of the deceased assessee who passed away during Covid Pandemic on 03.05.2021. The petitioner was not remotely connected to the proprietorship and ultimately, the registration was cancelled on 16.07.2021 of the proprietorship. After the period of almost three years, on 14.06.2024, the respondent authority issued the pre-show cause notice intimation to the deceased assessee under the provisions of Section 73(5) of the CGST Act intimating about the proposed tax liability. Thereafter, the proceedings further continued and the notices were issued and affixed at the factory premises of the deceased assessee. Since no one appeared, as the taxpayer was deceased, the respondent authority passed the impugned order confirming the demands - It is true that the respondent authority was not aware about the death of the husband, who was connected with the business activities of the proprietorship. However, the petitioner, being a housewife, was not even remotely connected with the business and was unaware of the niceties of the GSTN portal - The show cause notices as well as the impugned orders passed thereafter are quashed and set aside. It will be open for the respondent to initiate proper proceedings in accordance with law against the petitioner for the outstanding demand - The present petition is allowed [Read less]

GST - Jurisdiction of Proper officer - Competency of Officer to issue Show-Cause Notice - Petitioner challenged show-cause notice issued under Section 122 of UPGST Act on ground that officer issuing notice lacked jurisdiction as proper officer was not clearly defined and notice was issued by Deputy Commissioner though penalty proposed was above monetary limit for which Additional Commissioner should have issued it – Whether show-cause notice issued by Deputy Commissioner can be quashed on ground of lack of jurisdiction – HELD - The State Circulars dated 11.12.2018 and 10.05.2022 clarify that Deputy Commissioner has bee... [Read more]

GST - Jurisdiction of Proper officer - Competency of Officer to issue Show-Cause Notice - Petitioner challenged show-cause notice issued under Section 122 of UPGST Act on ground that officer issuing notice lacked jurisdiction as proper officer was not clearly defined and notice was issued by Deputy Commissioner though penalty proposed was above monetary limit for which Additional Commissioner should have issued it – Whether show-cause notice issued by Deputy Commissioner can be quashed on ground of lack of jurisdiction – HELD - The State Circulars dated 11.12.2018 and 10.05.2022 clarify that Deputy Commissioner has been vested with power to issue show-cause notice under Section 122 and has pecuniary jurisdiction in cases involving amount exceeding Rs. 2.5 crores. The question of jurisdiction can be raised at any stage, however writ jurisdiction under Article 226 of Constitution is discretionary and required to be exercised judiciously - Where petitioner did not raise objection regarding jurisdiction when notice was issued but appeared before officer and advanced submissions on merits. Having suffered the impugned order, the petitioner has now taken a volte-face and challenged the impugned order on the ground of lack of jurisdiction - The authority which issued show-cause notice was not lacking in jurisdiction. The writ petition is disposed of; liberty granted to Petitioner to avail statutory appellate remedy under Act – The petition is disposed of [Read less]

Customs AAR - Classification of “Window Glass” or “CG - Window”, a critical component of an electronic device Display Assembly – HELD - Window Glass as being imported by the applicant is designed for use solely and principally in the Display Assembly, it satisfies the criteria laid down in Note 2(b) of Section XVI and, therefore, merits classification under CTH 8529. Even if it is considered that the Window Glass could be covered within the scope of “safety glass” under CTH 7007, the final classification would still fall under CTH 8529 by application of Rule 3(c) of the General Rules for the Interpretation (G... [Read more]

Customs AAR - Classification of “Window Glass” or “CG - Window”, a critical component of an electronic device Display Assembly – HELD - Window Glass as being imported by the applicant is designed for use solely and principally in the Display Assembly, it satisfies the criteria laid down in Note 2(b) of Section XVI and, therefore, merits classification under CTH 8529. Even if it is considered that the Window Glass could be covered within the scope of “safety glass” under CTH 7007, the final classification would still fall under CTH 8529 by application of Rule 3(c) of the General Rules for the Interpretation (GRI) – The Rule 3(c) stipulates that when classification cannot be determined under Rules 3(a) or 3(b), the product shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. Hence, even if the product could arguably fit both under CTH 7007 and CTH 8529, it would still merit classification under CTH 8529, as this heading occurs later in numerical order – The product ‘Window Glass’ are classifiable under Tariff item 8529 90 90 of the First Schedule to the Customs Tariff Act, 1975 – Ordered accordingly [Read less]