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The petitioner had paid legitimate tax to NOIDA, which was not deposited under the proper head and the petitioner had to face tax and penalty proceedings. NOIDA is directed to compensate the petitioner for the amount confirmed by the authorities.

Customs - Amendment of shipping bills, Price revision, Related parties, FEMA violation – Appellant was engaged in the export of 'Monsooned Coffee'. At the time of export, the appellant raised export invoices declaring the value/price of the product as per the original sales contract but later revised the export value/price pursuant to a revision in the sales contract and an increase in the export price - appellant sought amendment of shipping bills to include the revised value – Rejection of amendment of shipping bills on the grounds that sufficient documentary evidence was not produced, the transaction was between rel... [Read more]

Customs - Amendment of shipping bills, Price revision, Related parties, FEMA violation – Appellant was engaged in the export of 'Monsooned Coffee'. At the time of export, the appellant raised export invoices declaring the value/price of the product as per the original sales contract but later revised the export value/price pursuant to a revision in the sales contract and an increase in the export price - appellant sought amendment of shipping bills to include the revised value – Rejection of amendment of shipping bills on the grounds that sufficient documentary evidence was not produced, the transaction was between related parties and there was an explicit violation of the FEMA provisions - Whether the appellant is entitled to amend the shipping bills to revise the export value/price based on the revised sales contract – HELD - The Commissioner (Appeals) had gone beyond the scope of the order and made observations regarding the transaction being between related parties and the alleged FEMA violation, which were not relevant to the issue of amending the shipping bills – The Section 149 of the Customs Act, 1962 allows for the amendment of documents, including shipping bills, after the export of goods, but such amendment can only be made on the basis of documentary evidence that was in existence at the time of export. The appellant has now provided the relevant documents, including the document that was in existence at the time of export, which shows the price negotiation and the reasons for amending the shipping bill - the authorities should examine these documents and accept or reject the amendment with justifying reasons, after providing an opportunity of hearing to the appellant - the original authority is directed to examine the documents submitted by the appellant and decide on the amendment of the shipping bills as per the provisions of the law - the appeal is allowed by way of remand [Read less]

Customs - Classification, Inconclusive test report, Burden of proof - Base Oil as claimed by the importer-appellants or High Speed Diesel as determined by the Customs Authorities - Whether the imported goods are to be treated as Base Oil as claimed by the appellants or High Speed Diesel (HSD) as determined by the Customs Authorities – HELD - The Customs Authorities and the appellate forums had relied primarily on the test reports of three independent laboratories and the expert opinion to conclude that the imported goods were HSD. However, the test reports and expert opinion were not conclusive in establishing that the i... [Read more]

Customs - Classification, Inconclusive test report, Burden of proof - Base Oil as claimed by the importer-appellants or High Speed Diesel as determined by the Customs Authorities - Whether the imported goods are to be treated as Base Oil as claimed by the appellants or High Speed Diesel (HSD) as determined by the Customs Authorities – HELD - The Customs Authorities and the appellate forums had relied primarily on the test reports of three independent laboratories and the expert opinion to conclude that the imported goods were HSD. However, the test reports and expert opinion were not conclusive in establishing that the imported goods were HSD - the burden of proof as regards the classification of any goods of importation is upon the Revenue/Customs authority and the standard of proof in proceedings under the Tariff Act is not “beyond reasonable doubt” - The test reports showed non-compliance with certain parameters specified under IS 1460:2005 for HSD, particularly the flash point, which was a crucial parameter. The expert's evasive answers on the importance of the untested parameters and the significance of the flash point further cast doubt on the classification of the goods as HSD - by mere conformation to certain parameters of HSD, the samples cannot be equated with HSD. The expert opinion and the test results are as vague as these can be qua classification of the oil as HSD - in the absence of clear and conclusive evidence that the imported goods were "most akin" to HSD, the principle of "preponderance of probability" adopted by the High Court was not the appropriate test for classification under the Customs Act. The correct test would be whether the imported goods were "most akin" to HSD or any other specified goods under the Tariff Act, as provided under Rule 4 of the General Rules for Interpretation – the Customs Authority could not take action against the appellants based on the inconclusive evidence - it would be more appropriate to give the benefit of doubt to the appellants because of the inconclusive evidence, rather than directing for a fresh testing and seeking fresh expert opinion - the impugned judgement of the High Court is set aside and the proceedings against the appellants are quashed – the appeals are allowed - Non-availability of testing facilities - non-examination of any product/article/goods 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 genesis of the prolonged litigation lies in the non-availability of adequate facilities for testing all the parameters provided under Bureau of Indian Standard Specifications. Such a dispute could have been avoided had the testing facilities for all the parameters been available. Since the Authorities themselves had laid down the specific parameters for classification of goods, as in the present case by referring to classification under IS 1460:2005, it is incumbent upon the Authorities to ensure that necessary facilities are made available for testing of any disputed article on all these parameters as otherwise, laying down such parameters would be meaningless. Hence, to avoid these difficulties, doubts and uncertainties in future, the respondents are directed to ensure that proper facilities are made available in the appropriate laboratories for undertaking tests for all these parameters or at least for those parameters which the Authorities consider are of essential character to satisfy the “most akin” test without which the article in issue cannot be properly classified. [Read less]

GST - Opportunity of Hearing, Ex-parte order – Notice for recover of alleged excess Input Tax Credit availed by the petitioners. Respondent passed an ex-parte order-in-original confirming the demand without granting the petitioners an opportunity of hearing. The petitioners were not aware of the order-in-original until their bank account was attached, after which they filed an appeal, which was rejected by the appellate authority on the ground of limitation - Whether the order-in-original passed by the respondent without granting the petitioners an opportunity of hearing is valid and legal - HELD - The impugned order-in-... [Read more]

GST - Opportunity of Hearing, Ex-parte order – Notice for recover of alleged excess Input Tax Credit availed by the petitioners. Respondent passed an ex-parte order-in-original confirming the demand without granting the petitioners an opportunity of hearing. The petitioners were not aware of the order-in-original until their bank account was attached, after which they filed an appeal, which was rejected by the appellate authority on the ground of limitation - Whether the order-in-original passed by the respondent without granting the petitioners an opportunity of hearing is valid and legal - HELD - The impugned order-in-original passed by the respondent in violation of the principles of natural justice – The Section 75(4) of the CGST Act, 2017 requires the respondent to grant an opportunity of hearing before passing an adverse order - as the impugned order is passed in violation of principles of natural justice, only on that ground same is quashed and set aside - the matter is remanded back to the respondent authority to pass fresh de novo order after giving an opportunity of hearing to the petitioners to reconcile Form GSTR 2A with that of Form GSTR 3B for the period under consideration – The petition is disposed of [Read less]

Central Excise - SSI Exemption, Exports to Nepal – Demand of duty on the ground that the total value of clearances during the FY 2012-13 exceeded the SSI exemption limit under Notification No. 08/2003-CE - Department included the value of exports made to Nepal in calculating the total value of clearances for the purpose of determining the exemption limit - Appellant contended that as per Circular No. 958/1/2012-CX dated 13.01.2012, exports to Nepal were to be treated at par with exports to other countries (except Bhutan) and hence, should not be included for calculating the SSI exemption limit - Whether the value of expo... [Read more]

Central Excise - SSI Exemption, Exports to Nepal – Demand of duty on the ground that the total value of clearances during the FY 2012-13 exceeded the SSI exemption limit under Notification No. 08/2003-CE - Department included the value of exports made to Nepal in calculating the total value of clearances for the purpose of determining the exemption limit - Appellant contended that as per Circular No. 958/1/2012-CX dated 13.01.2012, exports to Nepal were to be treated at par with exports to other countries (except Bhutan) and hence, should not be included for calculating the SSI exemption limit - Whether the value of exports made to Nepal should be included in calculating the total value of clearances for the purpose of determining the SSI exemption limit under Notification No. 08/2003-C.E - HELD - the Hon'ble Gujarat High Court in the case of M/s. Ketan Pottery Works v. Union of India had declared the portion "and Nepal" in Explanation Clause (G) of Notification No. 08/2003-C.E. as unconstitutional, on the ground that after exports to Nepal were put at par with exports to other countries w.e.f. 01.03.2012 and the continued inclusion of exports to Nepal for the purpose of computation of SSI exemption limit would be discriminatory and violative of Article 14 of the Constitution - The Central Govt had subsequently issued Notification No. 08/2016-C.E. dated 01.03.2016, omitting the reference to "and Nepal" from the said Explanation Clause, thereby indicating the legislative intent to exclude the value of exports to Nepal for the purpose of computing the SSI exemption limit - In view of the above, the value of exports made to Nepal is not includible in calculating the total value of clearances for determining the SSI exemption limit under Notification No. 08/2003-CE - the demand of duty as well as the orders of confiscation of goods and imposition of redemption fine, are set aside - the appeal is allowed [Read less]

GST - Omission of Rule 96(10) of the CGST Rules, 2017, Pending proceedings, Savings clause – Availment of benefit of automatic refund of IGST in contravention of the provisions of Rule 96(10) of the CGST Rules - Petitioner responded to the notice, but the respondent confirmed the demand – Petitioner case that since Rule 96(10) was omitted from the statute book on 8th October, 2024, the respondent had no authority to pass the order - Whether the respondent was competent to pass the order after the omission of Rule 96(10) of the CGST Rules, 2017 – HELD - The normal effect of the omission of a Rule is to obliterate it f... [Read more]

GST - Omission of Rule 96(10) of the CGST Rules, 2017, Pending proceedings, Savings clause – Availment of benefit of automatic refund of IGST in contravention of the provisions of Rule 96(10) of the CGST Rules - Petitioner responded to the notice, but the respondent confirmed the demand – Petitioner case that since Rule 96(10) was omitted from the statute book on 8th October, 2024, the respondent had no authority to pass the order - Whether the respondent was competent to pass the order after the omission of Rule 96(10) of the CGST Rules, 2017 – HELD - The normal effect of the omission of a Rule is to obliterate it from the statute book, subject to any savings clause. In the instant case, Rule 96(10) was omitted unconditionally, without any saving clause in favor of the pending proceedings - when a provision is omitted and no new provision is introduced in its place, it can be reasonably inferred that the intention of the legislature is that the pending proceedings shall not continue - there was no scope for the Respondent to pass any order by invoking the provisions of rule 96(10) of the said rules after the same was omitted on 8th October, 2024 without a saving clause in favour of the pending proceeding - the impugned order is stayed and the respondents are directed to file an affidavit-in-opposition – Ordered accordingly [Read less]

Customs - Valuation, Rejection of Declared Value, Adoption of Surrogate Value - Appellant imported cloves from Indonesia/Tanzania and the declared value was provisionally assessed and enhanced by the Customs authorities. The appellant challenged the enhancement and the matter was remanded to the original authority for finalization. Upon the appellant's failure to furnish evidence to justify the lower declared value, the authorities rejected the declared value under Rule 10A of the Customs Valuation Rules and adopted a surrogate value under Rule 8 of the Customs Valuation Rules - Whether the rejection of the declared value ... [Read more]

Customs - Valuation, Rejection of Declared Value, Adoption of Surrogate Value - Appellant imported cloves from Indonesia/Tanzania and the declared value was provisionally assessed and enhanced by the Customs authorities. The appellant challenged the enhancement and the matter was remanded to the original authority for finalization. Upon the appellant's failure to furnish evidence to justify the lower declared value, the authorities rejected the declared value under Rule 10A of the Customs Valuation Rules and adopted a surrogate value under Rule 8 of the Customs Valuation Rules - Whether the rejection of the declared value and the adoption of the surrogate value under Rule 8 was legally sustainable - HELD - The rejection of the declared value under Rule 10A was not exceptionable as the appellant had failed to furnish any evidence to justify the lower declared value. However, the manner in which the surrogate value was determined under Rule 8 was not in accordance with the provisions of the Customs Valuation Rules. The authorities had relied on prices in the 'Public Ledger' and declarations in 19 other bills of entry, which were not in conformity with the scheme of 'surrogate value' set out in Rule 8 - the authorities had failed to provide reasons for drawing the 19 bills of entry as surrogate for the transaction value in terms of Rule 8. The revision in value was without the authority of law and the facts did not support the substituted value within the framework of the Customs Valuation Rules. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Classification of Service, Construction of Complex Service or Works Contract Service, Composite Contract - Non-payment of Service Tax under the "Construction of Complex Service" for the period from December 2005 to June 2008 - Whether the appellant's activity of construction of residential projects can be classified under Works Contract Service instead of Construction of Complex Service – HELD - The appellant's activity involves a composite contract with provision of service as well as transfer of property in goods and the issue of whether service tax could be levied on such composite works contracts prio... [Read more]

Service Tax – Classification of Service, Construction of Complex Service or Works Contract Service, Composite Contract - Non-payment of Service Tax under the "Construction of Complex Service" for the period from December 2005 to June 2008 - Whether the appellant's activity of construction of residential projects can be classified under Works Contract Service instead of Construction of Complex Service – HELD - The appellant's activity involves a composite contract with provision of service as well as transfer of property in goods and the issue of whether service tax could be levied on such composite works contracts prior to the introduction of the Finance Act, 2007 was settled by the Supreme Court in Larsen & Toubro Ltd case - The Supreme Court had held that service tax was not leviable on composite works contracts prior to the Finance Act, 2007, as the charging provisions under the Finance Act, 1994 referred only to service contracts and not composite works contracts - Appellant's activities cannot be brought within the fold of "Construction of Complex" service and the demand is not sustainable - Since the issue of taxability of composite works contracts prior to the Finance Act, 2007 was a subject matter of litigation and interpretational disputes, no mala fide can be attributed to the appellant and the extended period of limitation cannot be invoked - the impugned order is set aside and the appeal is allowed [Read less]

West Bengal Taxes on Entry of Goods into the Local Areas Act, 2012 - Constitutional validity of the West Bengal Taxes on Entry of Goods into the Local Areas Act, 2012 as amended by the West Bengal Finance Act 2017 – the High Court upheld the validity of West Bengal Taxes on Entry of Goods into the Local Areas Act, 2012 as amended by the West Bengal Finance Act 2017 and the rules made thereunder including the notifications issued thereunder – HELD – The learned counsel appearing for the State of West Bengal submitted that the issue is largely covered by Court’s previous decision in the case of State of Telangana v. ... [Read more]

West Bengal Taxes on Entry of Goods into the Local Areas Act, 2012 - Constitutional validity of the West Bengal Taxes on Entry of Goods into the Local Areas Act, 2012 as amended by the West Bengal Finance Act 2017 – the High Court upheld the validity of West Bengal Taxes on Entry of Goods into the Local Areas Act, 2012 as amended by the West Bengal Finance Act 2017 and the rules made thereunder including the notifications issued thereunder – HELD – The learned counsel appearing for the State of West Bengal submitted that the issue is largely covered by Court’s previous decision in the case of State of Telangana v. Tirumala Constructions. However, the Court is of the view that we must look into the issue involved in the matter – Issue notice to the respondents - No coercive steps shall be taken against the petitioners until the matter is heard finally – Ordered accordingly [Read less]

Service Tax - Business Auxiliary Services, Reverse Charge Mechanism, Time Limit for Adjudication, Revenue Neutrality – Appellant is engaged in the development of telecommunication billing and customer care software – under the Product Export and Distribution Agreement with its 100% subsidiary company, appellant granted UCT an exclusive license to purchase the software products and further sublicense them to end customers outside India. The consideration received by the appellant from UCT was 60% of the total net revenue received by UCT from the end-users - Whether the transaction between the appellant and UCT amounted ... [Read more]

Service Tax - Business Auxiliary Services, Reverse Charge Mechanism, Time Limit for Adjudication, Revenue Neutrality – Appellant is engaged in the development of telecommunication billing and customer care software – under the Product Export and Distribution Agreement with its 100% subsidiary company, appellant granted UCT an exclusive license to purchase the software products and further sublicense them to end customers outside India. The consideration received by the appellant from UCT was 60% of the total net revenue received by UCT from the end-users - Whether the transaction between the appellant and UCT amounted to the appellant providing 'Business Auxiliary Services' to UCT, thereby making the appellant liable to pay service tax under the reverse charge mechanism – HELD - The agreement between the appellant and UCT was for the supply and sale of software and related services, and not for UCT to act as a commission agent for procuring orders on behalf of the appellant. The consideration received by the appellant from UCT was for the supply of software and related services, and not in the nature of commission – Further, the agreement clearly stated that UCT was not an agent of the appellant, and both parties were independent contractors. Therefore, the transaction did not amount to the appellant providing 'Business Auxiliary Services' to UCT, and thus, the demand under the reverse charge mechanism was not sustainable - the Order-in-Original is also set aside on the grounds of delay in passing the order and revenue neutrality – The appeal is allowed - Whether the extended period of limitation for issuing the show cause notice and passing the order was correctly invoked by the revenue authorities – HELD - The Tribunal, relying on the decisions in Kopertek Metals Pvt. Ltd. v. Commissioner of CGST (West) and IDFC First Bank Ltd. v. Union of India, held that the time limit prescribed under Section 73(4B) of the Finance Act, 1994 for passing the order is mandatory and not directory. The Tribunal observed that the Order-in-Original was passed after the expiry of the one-year time limit, and the revenue authorities failed to provide any justification for the delay. Accordingly, the Tribunal set aside the Order-in-Original on the ground of the delay in passing the order - Whether the demand raised under the reverse charge mechanism was sustainable on the ground of revenue neutrality – HELD - The Tribunal, relying on the decisions in Jet Airways (I) Ltd. v. CST Mumbai and Eldyne Electro System Pvt. Ltd. v. Commissioner of Service Tax, held that since the services in question were input services for the appellant, the service tax paid, if any, under the reverse charge mechanism would be eligible for Cenvat credit. Therefore, the Tribunal concluded that it was a case of revenue neutrality, and the extended period of limitation could not be invoked by the revenue authorities. [Read less]

Service Tax - Refund of service tax paid on loading and unloading of chemical fertilizers, Limitation period – Petitioner paid service tax for providing loading and unloading services of chemical fertilizers during 2013-14, 2014-15 and 2015-16. However, the service recipient refused to pay the service tax on the ground that transportation of chemical fertilizers by goods transportation agencies was exempt from service tax under Notification No.3/2013 dated 01.03.2013 - Petitioner filed applications for refund of the wrongly paid service tax, but the same were rejected by the respondents on the ground that the application... [Read more]

Service Tax - Refund of service tax paid on loading and unloading of chemical fertilizers, Limitation period – Petitioner paid service tax for providing loading and unloading services of chemical fertilizers during 2013-14, 2014-15 and 2015-16. However, the service recipient refused to pay the service tax on the ground that transportation of chemical fertilizers by goods transportation agencies was exempt from service tax under Notification No.3/2013 dated 01.03.2013 - Petitioner filed applications for refund of the wrongly paid service tax, but the same were rejected by the respondents on the ground that the applications were filed beyond the limitation period under Section 11B(1) of the Central Excise Act, 1944 - Whether the limitation prescribed under Section 11B(1) of the CEA, 1944 would strictly apply to a claim for refund of service tax wrongly paid or whether the petitioner is entitled to a refund notwithstanding the delay in filing the application – HELD - the limitation prescribed under Section 11B of the CEA,1944 would not strictly apply to a claim for refund of service tax wrongly paid and a writ petition under Article 226 of the Constitution of India is maintainable. In such an event, the principles of restitution as provided under Section 72 of the Contract Act, 1872, is applicable and the respondent is bound to refund it notwithstanding the delay in filing the application for refund - the respondent authority is directed to consider the case of the petitioner and if the transportation of chemical fertilizers by goods transportation agencies was indeed exempt from service tax under Notification No.3/2013, the respondent shall allow the petitioner's claim for refund of the wrongly paid service tax, irrespective of the delay in filing the application - The writ petition is allowed [Read less]

Customs - Undervaluation of imported goods, Duty evasion - Redetermination of the transaction value of imported goods (slack wax and residue wax) by the original adjudicating authority and consequent demand of differential customs duty and imposition of penalties under Sections 114A and 114AA of the Customs Act, 1962 – HELD - The proper officer has not complied with the two-step verification and examination exercise as mandated by the Supreme Court in Century Metal Recycling case. The proper officer has not followed the procedure under sub-rule (2) of Rule 12 of the Customs Valuation Rules, 2007 which requires the proper... [Read more]

Customs - Undervaluation of imported goods, Duty evasion - Redetermination of the transaction value of imported goods (slack wax and residue wax) by the original adjudicating authority and consequent demand of differential customs duty and imposition of penalties under Sections 114A and 114AA of the Customs Act, 1962 – HELD - The proper officer has not complied with the two-step verification and examination exercise as mandated by the Supreme Court in Century Metal Recycling case. The proper officer has not followed the procedure under sub-rule (2) of Rule 12 of the Customs Valuation Rules, 2007 which requires the proper officer to intimate the importer in writing the grounds for doubting the truth or accuracy of the declared value and provide a reasonable opportunity of being heard before making the final decision on the transaction value. The request of the appellants for cross-examination of certain witnesses was also denied, which showed a challenge to procedural fairness - the impugned order is set aside and appeal is allowed - Whether the valuation of the goods under Rule 9 of the Customs Valuation Rules, 2007 based on the value declared in the statement of proprietor of the appellant entities, is in accordance with the provisions of the Customs Act, 1962 and the Customs Valuation Rules, 2007 – HELD - the valuation of the goods under Rule 9 of the Customs Valuation Rules, 2007 based on the value declared in the statement of proprietor is not in accordance with the provisions of the Customs Act, 1962 and the Customs Valuation Rules, 2007. The Tribunal observed that Rule 9 cautions against adopting arbitrary or fictitious values and that the Rules are subservient to the Act and cannot deviate from the provisions of the parent Act. [Read less]

Service Tax - Construction of Residential Complex, Tax Refund - Construction of a colony of individual residential duplexes and being more than 12 in number with common facilities - Appellant paid the tax and interest under protest and later filed a refund claim, which was rejected - Whether the appellant's residential project consisting of independent residential duplex houses, falls under the definition of 'Residential Complex' under Section 65(91a) of the Finance Act, 1994 and is thus liable to service tax – HELD - The definition of 'Residential Complex' under Section 65(91a) clearly provides that it should comprise a... [Read more]

Service Tax - Construction of Residential Complex, Tax Refund - Construction of a colony of individual residential duplexes and being more than 12 in number with common facilities - Appellant paid the tax and interest under protest and later filed a refund claim, which was rejected - Whether the appellant's residential project consisting of independent residential duplex houses, falls under the definition of 'Residential Complex' under Section 65(91a) of the Finance Act, 1994 and is thus liable to service tax – HELD - The definition of 'Residential Complex' under Section 65(91a) clearly provides that it should comprise a building or buildings having more than twelve residential units. In the present case, the appellant had constructed independent duplex houses having only one residential unit each. Even if the appellant had constructed more than 12 such independent buildings, the nature of the activity would not be 'Construction of Residential Complex' and therefore, service tax cannot be levied - This issue is no more res integra as it has been settled by the Tribunal in the case of Macro Marvel Projects Ltd. v. Commissioner of Service Tax, Chennai, which was affirmed by the Supreme Court. The Tribunal followed the ratio of the Macro Marvel case and held that construction of individual residential units is not intended to be covered under the definition of 'Residential Complex' and is thus not liable to service tax - the appellant is entitled to the refund of the amount deposited under protest as it was not liable to pay service tax on the construction of independent residential duplex houses - The order rejecting the refund claim is set aside – the appeal is allowed - Service Tax - Unjust Enrichment, Burden of Tax - The Department had also rejected the refund claim on the ground of the bar of unjust enrichment, contending that the appellant had not discharged the tax liability and there was no evidence to show that the burden of tax was not passed on to the customers - Whether the refund claim can be rejected on the ground of unjust enrichment in the absence of any evidence that the burden of tax was passed on to the customers - HELD - The appellant had consistently contended since the beginning that it had not charged any service tax from its customers. The Department had ignored this contention and applied the bar of unjust enrichment without any evidence. The refund of service tax paid under protest cannot be rejected on the ground of unjust enrichment when there is no evidence that the burden of tax was passed on to the customers. [Read less]

Service Tax - Export of Services, Rebate Claim, Limitation, Relevant Date - Appellant made claim for rebate on 02.02.2009 under Rule 5 of Export of Service Rules, 2005 read with Notification No.11/2005 dated 19.04.2005 for the service tax paid for the taxable services exported from 01.04.2007 to 30.09.2007. The rebate claim was rejected by the department on the grounds that the claim was barred by limitation and there was no correlation regarding inward remittances - Whether the rebate claim filed by the appellant is barred by limitation and whether the relevant date for claiming the rebate is the date of payment of servic... [Read more]

Service Tax - Export of Services, Rebate Claim, Limitation, Relevant Date - Appellant made claim for rebate on 02.02.2009 under Rule 5 of Export of Service Rules, 2005 read with Notification No.11/2005 dated 19.04.2005 for the service tax paid for the taxable services exported from 01.04.2007 to 30.09.2007. The rebate claim was rejected by the department on the grounds that the claim was barred by limitation and there was no correlation regarding inward remittances - Whether the rebate claim filed by the appellant is barred by limitation and whether the relevant date for claiming the rebate is the date of payment of service tax or the date of receipt of payment – HELD - The issue of relevant date for claiming rebate is no longer res integra. Relying on the decision of the Tribunal in the matter of Volkswagen India Pvt. Ltd and the decision of the Commissioner (Appeals) in the appellant's own case for the subsequent period, the Tribunal held that the relevant date for claiming the rebate is the date of payment of service tax - For the period from April 2007 to June 2007, the appellant had paid the service tax on 05.01.2008, and the rebate claim was filed on 02.02.2009, which was beyond the one-year limitation period. Hence, the rebate claim for this period was held to be barred by limitation - However, for the period from July 2007 to September 2007, the due date for filing the rebate claim was 05.02.2009 and the appellant had filed the claim on 02.02.2009, which was within the time limit - the appellant is eligible for the rebate claimed for the period from July 2007 to September 2007 - The appeal is partially allowed [Read less]

GST - Bail, Ineligible Input Tax Credit, Criminal Prosecution – Applicant was arrested for allegedly availing ineligible ITC from fake firms. Applicant was booked under Sections 132(1)(c) and 132(1)(i) of the CGST Act, 2017 - Whether the applicant should be granted regular bail considering the nature of the offense and the investigation stage – HELD - The entire case of the prosecution is based on documentary evidence and the alleged ineligible ITC is part of the tax returns filed by the applicant's firm. The applicant's account was initially attached but later liberated and the proceedings for the recovery of tax have... [Read more]

GST - Bail, Ineligible Input Tax Credit, Criminal Prosecution – Applicant was arrested for allegedly availing ineligible ITC from fake firms. Applicant was booked under Sections 132(1)(c) and 132(1)(i) of the CGST Act, 2017 - Whether the applicant should be granted regular bail considering the nature of the offense and the investigation stage – HELD - The entire case of the prosecution is based on documentary evidence and the alleged ineligible ITC is part of the tax returns filed by the applicant's firm. The applicant's account was initially attached but later liberated and the proceedings for the recovery of tax have not yet been initiated – Further, the alleged offenses are triable by a Magistrate and provide for a maximum punishment of five years imprisonment and the trial is likely to consume considerable time. Considering the nature of the trial, the period of six months the applicant has already spent in judicial custody and the fact that the prosecution witnesses are official witnesses, the court deemed it appropriate to extend the concession of regular bail to the applicant - Detention of the applicant behind bars would not serve any useful purpose and the confession of the applicant or the statements of the other proprietors of the fake firms would be tested in the context of evidentiary value by the trial court during the trial, which is yet to commence - The applicant is ordered to be released on regular bail subject to the furnishing of requisite bail bonds and surety bonds to the satisfaction of the trial court - The bail application is allowed [Read less]

GST - Cancellation of GST registration, Duty to assign reasons, Non-speaking order – Cancellation of Registration without assigning any reason - Non-filing of returns for a continuous period of six months – HELD - As per Rule 22(3) of the CGST Rules, the Proper Officer is required to pass a speaking order in Form GST REG-19 while cancelling the GST registration, giving reasons for the cancellation. However, the impugned order was a non-speaking order without assigning any reason for the cancellation - The obligation to record reasons in the cancellation order is a necessary check against arbitrary action by the adjudic... [Read more]

GST - Cancellation of GST registration, Duty to assign reasons, Non-speaking order – Cancellation of Registration without assigning any reason - Non-filing of returns for a continuous period of six months – HELD - As per Rule 22(3) of the CGST Rules, the Proper Officer is required to pass a speaking order in Form GST REG-19 while cancelling the GST registration, giving reasons for the cancellation. However, the impugned order was a non-speaking order without assigning any reason for the cancellation - The obligation to record reasons in the cancellation order is a necessary check against arbitrary action by the adjudicating authority and is a part of fair procedure, especially when the decision affects the rights of the person concerned - The absence of reasons in the cancellation order is a violation of the statutory prescription under Rule 22(3) and renders the order illegal - the cancellation order is set aside and matter reverted back to the stage of issuance of the show cause notice. The petitioner was granted one month to either submit a reply to the show cause notice or furnish all pending returns and make full payment of tax dues along with interest and late fee, pursuant to which the Proper Officer was directed to pass an appropriate order either in Form GST REG-19 or Form GST REG-20, as the case may be – The writ petition is allowed [Read less]

GST – Refund of Input Tax Credit - Rejection of refund claim on export of goods basis extraneous material and without providing opportunity of hearing to the petitioner or submission of explanation on such material information - Whether the order rejecting the refund claim and the Appellate Authority's order upholding it are liable to be set aside – HELD – The refund sanctioning authority had taken into consideration certain extraneous material while passing the refund rejection order, without providing the petitioner an opportunity to explain such material. This is in violation of principles of natural justice and t... [Read more]

GST – Refund of Input Tax Credit - Rejection of refund claim on export of goods basis extraneous material and without providing opportunity of hearing to the petitioner or submission of explanation on such material information - Whether the order rejecting the refund claim and the Appellate Authority's order upholding it are liable to be set aside – HELD – The refund sanctioning authority had taken into consideration certain extraneous material while passing the refund rejection order, without providing the petitioner an opportunity to explain such material. This is in violation of principles of natural justice and the duty to provide reasons for the decision – The impugned refund rejection order be treated as a further show-cause notice to the petitioner and petitioner is directed to furnish his explanation along with documents, if any, within a period of eight weeks. Thereafter, Joint Commissioner of State Tax is directed to pass a detailed speaking order – The petitions are partly allowed [Read less]

Central Excise - Condonation of delay, Pendency of appeal - Appellant preferred an appeal against the CESTAT order after a delay of 546 days against prescribed period of 180 days under Section 35G of the Central Excise Act, 1944 - Appellant sought condonation of the delay, arguing that the issue involved in the present appeal was also pending before the High Court in a separate case, which was decided on 13-9-2017, and that it filed the present appeal within the limitation period after the judgment in the other case – HELD - The Court must not start with the merits of the main matter while considering the plea for condon... [Read more]

Central Excise - Condonation of delay, Pendency of appeal - Appellant preferred an appeal against the CESTAT order after a delay of 546 days against prescribed period of 180 days under Section 35G of the Central Excise Act, 1944 - Appellant sought condonation of the delay, arguing that the issue involved in the present appeal was also pending before the High Court in a separate case, which was decided on 13-9-2017, and that it filed the present appeal within the limitation period after the judgment in the other case – HELD - The Court must not start with the merits of the main matter while considering the plea for condonation of delay. The Court's duty is to first ascertain the bona fides of the explanation offered by the party seeking condonation. It is only if the sufficient cause assigned by the litigant and the opposition of the other side is equally balanced that the court may bring into aid the merits of the matter for the purpose of condoning the delay - in the present case, the appellant did not show sufficient cause for the delay as it took more than nine months to file the appeal even after the judgment in the other case was delivered on 13-9-2017 - the appellant has shown sufficient cause for condoning the delay of 546 days in filing the appeal and consequently, the application for condonation of delay in filing the appeal is rejected [Read less]

Tamil Nadu Value Added Tax Act, 2006 - Assessment, limitation period, Natural justice - Raid was conducted on the assessee's premises in 2015, based on which a notice was issued under Section 22(4) of the TNVAT Act, 2006, which did not result in any demand. In 2021, the assessing officer issued a notice under Section 27 of the TNVAT Act alleging suppressed inter-state purchases of ceramic tiles - Whether the proceedings under Section 27 were time-barred – HELD - The limitation period of 6 years for proceedings under Section 27 would start from the date of re-assessment under Section 22(4), which could be done even after ... [Read more]

Tamil Nadu Value Added Tax Act, 2006 - Assessment, limitation period, Natural justice - Raid was conducted on the assessee's premises in 2015, based on which a notice was issued under Section 22(4) of the TNVAT Act, 2006, which did not result in any demand. In 2021, the assessing officer issued a notice under Section 27 of the TNVAT Act alleging suppressed inter-state purchases of ceramic tiles - Whether the proceedings under Section 27 were time-barred – HELD - The limitation period of 6 years for proceedings under Section 27 would start from the date of re-assessment under Section 22(4), which could be done even after the deemed assessment under Section 22(2). The 2016 proceedings were a re-assessment, so the limitation period would start from there and not the deemed assessment date of 31.10.2013. Therefore, the proceedings under Section 27 initiated in 2021 were within the limitation period – However, the notice issued was found to be vague as it did not provide specific details of the alleged inter-state purchases and merely stated that it was "proved" that the assessee had suppressed such purchases. This indicated pre-determination on the part of the assessing officer, without giving the assessee a reasonable opportunity to defend itself - the notice should have disclosed full particulars to enable the assessee to adequately respond, in accordance with the principles of natural justice - the Single Judge's order setting aside the assessment order is confirmed but granting liberty to the department to proceed afresh as per law within 2 months, after which the assessee cannot raise the plea of limitation – Petition is partly allowed [Read less]

Central Excise - CENVAT Credit on Furnace Oil, Exempted Goods - Non-reversal of CENVAT Credit on Furnace Oil used in the manufacture of both dutiable and exempted goods - Whether the appellant is required to reverse the CENVAT Credit availed on Furnace Oil used in the manufacture of exempted goods under the provisions of Rule 6 of the CENVAT Credit Rules, 2004 - HELD - Since Rule 6(2) of the CCR, 2004 does not deal with 'fuel' inputs, the appellant is required to reverse the CENVAT Credit availed on Furnace Oil used in the manufacture of exempted goods under the provisions of Rule 6(1) of the CENVAT Credit Rules. However, ... [Read more]

Central Excise - CENVAT Credit on Furnace Oil, Exempted Goods - Non-reversal of CENVAT Credit on Furnace Oil used in the manufacture of both dutiable and exempted goods - Whether the appellant is required to reverse the CENVAT Credit availed on Furnace Oil used in the manufacture of exempted goods under the provisions of Rule 6 of the CENVAT Credit Rules, 2004 - HELD - Since Rule 6(2) of the CCR, 2004 does not deal with 'fuel' inputs, the appellant is required to reverse the CENVAT Credit availed on Furnace Oil used in the manufacture of exempted goods under the provisions of Rule 6(1) of the CENVAT Credit Rules. However, the appellant had in fact reversed the CENVAT Credit on a pro-rata basis in respect of the Furnace Oil used for manufacture of the exempted goods, as evidenced from the letter dated 24.08.2012 addressed by the appellant to the jurisdictional Central Excise Commissionerate – Further, the charges of suppression, mis-statement etc. cannot be fastened on the appellant as they had maintained proper records to demonstrate the actual quantity of Furnace Oil used in the manufacture of the exempted goods and had also furnished the same to the jurisdictional authorities. Accordingly, the matter remanded to the original authority for the limited purpose of verification of the MODVAT/CENVAT Credit reversed by the appellant and if found to be correct, the CENVAT Credit should be allowed by the original authority at the time of de novo adjudication proceedings - The appeals are disposed of [Read less]

Central Excise - Assessable value, Includability of freight and insurance charges, FOR sale – Levy of additional excise duty on the freight and insurance charges separately shown in the invoices - The appellant was supplying equipment like electric transformers to various customers including State Electricity Boards under tenders where the price was quoted ex-works and freight and insurance charges were shown separately - Department held that the freight and insurance charges should be included in the assessable value for the purpose of excise duty payment - Whether the freight and insurance charges separately shown in t... [Read more]

Central Excise - Assessable value, Includability of freight and insurance charges, FOR sale – Levy of additional excise duty on the freight and insurance charges separately shown in the invoices - The appellant was supplying equipment like electric transformers to various customers including State Electricity Boards under tenders where the price was quoted ex-works and freight and insurance charges were shown separately - Department held that the freight and insurance charges should be included in the assessable value for the purpose of excise duty payment - Whether the freight and insurance charges separately shown in the invoices are required to be included in the assessable value for the purpose of payment of excise duty - HELD - In the present case, the sale is on "FOR basis" as per the terms of the purchase order which clearly states "free at destination". Therefore, the place of removal would be the destination i.e. the buyer's premises and the freight and insurance charges are required to be included in the assessable value for the purpose of payment of excise duty - The Tribunal distinguished the Supreme Court judgment in Ispat Industries case, which dealt with ex-works sale, from the present case of FOR sale. The Tribunal relied on the larger bench decision in Ramco Cement Ltd. case, which held that in case of FOR sale, the buyer's premises can be considered as the place of removal, and the freight and insurance charges are required to be included in the assessable value - Merely showing the freight and insurance charges separately in the invoice does not change the nature of the sale - the orders of the adjudicating authorities are upheld and the appeal is dismissed [Read less]

Service Tax - Sub-contractor, Works Contract Service, Extended Period of Limitation - Appellant is sub-contractor who undertook activities of construction service along with materials for refractory work - Department demand service tax on 33% of the gross amount received by the appellant, classifying the service under "Commercial or Industrial Construction Service". The appellant contended that the services rendered by them are composite in nature and are appropriately classifiable under the category of "Works Contract Service" - Whether the sub-contractor is liable to pay service tax when the main contractor has discharge... [Read more]

Service Tax - Sub-contractor, Works Contract Service, Extended Period of Limitation - Appellant is sub-contractor who undertook activities of construction service along with materials for refractory work - Department demand service tax on 33% of the gross amount received by the appellant, classifying the service under "Commercial or Industrial Construction Service". The appellant contended that the services rendered by them are composite in nature and are appropriately classifiable under the category of "Works Contract Service" - Whether the sub-contractor is liable to pay service tax when the main contractor has discharged the service tax liability - HELD - The Tribunal relied on the clarification issued by the Board vide Circular No. 96/7/2007-S.T. dated 23.08.2007, which stated that even if the main contractor pays Service Tax, the sub-contractor is still liable to pay Service Tax on the services rendered by them to the main contractor. However, the Tribunal also noted that the Larger Bench of the Tribunal in the case of CST, New Delhi V. M/s. Melange Developers Pvt. Ltd. had overruled the contrary view and held that a sub-contractor would be liable to pay Service Tax even if the main contractor has discharged Service Tax liability – Further, during the period under dispute, Trade Notice No.53-C.E (service Tax) /97 dated 04.07.1997 was in existence, which clarified that the sub-contractor is not liable to pay service tax when the main contractor discharges service tax on the entire value. The appellant cannot be held responsible for non-payment of service tax for the period under dispute - the impugned order set aside and appeal is allowed - Whether the extended period of limitation can be invoked to demand service tax - HELD – Tribunal observed that the appellant has not suppressed any information from the department and has regularly filed ST-3 returns declaring that they have not paid service tax as a sub-contractor as the principal contractor paid service tax. The departmental audit conducted in 2008 also did not raise any objection for non-payment of service tax. The Tribunal held that the demand of service tax by invoking the extended period of limitation is not sustainable - Whether the services rendered by the appellant are classifiable under "Works Contract Service" - HELD - The contracts awarded to the appellant are composite in nature, involving the provision of services along with materials. The Tribunal held that the services rendered by the appellant are appropriately classifiable under the category of "Works Contract Service" as defined in Section 65(105)(zzzza) of the Finance Act, 1994. The Tribunal further held that prior to June 01, 2007, no service tax is payable by the appellant as they have rendered the services with materials, and for the period post June 01, 2007 also, the demand of service tax can be made only under works contract services. [Read less]

Service Tax - Event Management Service, Club or Association Service, Mutuality Doctrine – Appellant is affiliated with the Board of Control for Cricket in India (BCCI) and is engaged in organizing, conducting and promoting cricket matches and tournaments in the State of Karnataka - Whether the amounts received by the KSCA from BCCI and other sources for conducting cricket matches and tournaments are taxable under the category of "Event Management Service" under the Finance Act, 1994 - HELD - The services provided by the KSCA to BCCI for conducting cricket matches and tournaments cannot be considered as "Event Management ... [Read more]

Service Tax - Event Management Service, Club or Association Service, Mutuality Doctrine – Appellant is affiliated with the Board of Control for Cricket in India (BCCI) and is engaged in organizing, conducting and promoting cricket matches and tournaments in the State of Karnataka - Whether the amounts received by the KSCA from BCCI and other sources for conducting cricket matches and tournaments are taxable under the category of "Event Management Service" under the Finance Act, 1994 - HELD - The services provided by the KSCA to BCCI for conducting cricket matches and tournaments cannot be considered as "Event Management Service" within the meaning of Section 65(40) of the Finance Act, 1994. The clarifications issued by the CBEC in its circulars, which provide that for a service to be considered as "Event Management Service", there must be an event manager who is hired to execute an event and use his expertise and ideas to manage the event. In the present case, the KSCA is merely allotted the cricket matches by BCCI on a rotational basis and BCCI pays hosting fees to the KSCA for conducting such matches. The KSCA does not play the role of an "Event Manager" as envisaged under the law - the sporting organizations like BCCI and KSCA, which are interested in promoting the sport, cannot be treated as commercial organizations - the amounts received by the appellant from BCCI and its members are not taxable under the categories of "Event Management Service" and "Club or Association Service" respectively – The appeal is allowed - Whether the amounts received by the KSCA from its members for providing various facilities and services are taxable under the category of "Club or Association Service" under the Finance Act, 1994 - HELD - The amounts received by the KSCA from its members for providing various facilities and services are not taxable under the category of "Club or Association Service" under the Finance Act, 1994. The Tribunal relied on the judgment of the Supreme Court in the case of State of West Bengal vs. Calcutta Club Limited, wherein it was held that the services provided by a registered society to its members are not taxable under the doctrine of mutuality. The Tribunal observed that the KSCA is a registered society under the Karnataka Societies Registration Act and is providing services to its members against the collection of membership fees, and hence, the doctrine of mutuality applies. [Read less]