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GST on Corporate Guarantees – Scope of Supply under Section 7 of CGST Act, 2017 – Petitioners had furnished corporate guarantees without any consideration to their subsidiaries to enable the subsidiaries to avail credit facilities from banks. Petitioners contended that corporate guarantee is not a supply as no consideration is paid, it is a contingent contract under Section 31 of Indian Contract Act and does not satisfy the four conditions of supply being activity, service, to related party and in course or furtherance of business - Revenue contended that corporate guarantee constitutes supply under Section 7 read with... [Read more]

GST on Corporate Guarantees – Scope of Supply under Section 7 of CGST Act, 2017 – Petitioners had furnished corporate guarantees without any consideration to their subsidiaries to enable the subsidiaries to avail credit facilities from banks. Petitioners contended that corporate guarantee is not a supply as no consideration is paid, it is a contingent contract under Section 31 of Indian Contract Act and does not satisfy the four conditions of supply being activity, service, to related party and in course or furtherance of business - Revenue contended that corporate guarantee constitutes supply under Section 7 read with Schedule I Article 2 and Entry 5(e) of Schedule II of CGST Act – Whether corporate guarantee furnished without consideration between holding company and subsidiary is a taxable supply under GST regime – HELD - A corporate guarantee constitutes a supply under Section 7 of the CGST Act read with Schedule I Article 2 and Entry 5(e) of Schedule II of the CGST Act. The furnishing of a corporate guarantee by a Holding Company for its Subsidiary without any consideration falls within the purview of supply contemplated under Schedule I Article 2 which deems supply of goods or services or both between related persons to be taxable supply even when made without consideration provided the supply is made in the course or furtherance of business - The execution of a corporate guarantee constitutes a transaction of agreeing to the obligation within Entry 5(e) of Schedule II. Although corporate guarantee is contingent in nature and involves no immediate cost, once it is executed it constitutes a legal obligation and hence an identifiable supply of service - The merger of the statutory provisions of CGST Act with the provisions of the Indian Contract Act through the prism of Schedule I and Schedule II demonstrates that corporate guarantee is embraced within the taxable supply framework – Corporate guarantees furnished by holding companies to subsidiaries constitute taxable supply under Section 7 read with Schedule I Article 2 and Entry 5(e) of Schedule II of CGST Act - GST - Valuation of Corporate Guarantees - Constitutional Validity of Rule 28(2) CGST Rules - flat 1% Valuation – Petitioners challenged the validity of Rule 28(2) of CGST Rules which prescribes deemed valuation of corporate guarantees at 1% of guarantee amount or actual consideration, whichever is higher. Petitioners contended that the flat 1% valuation is arbitrary, violative of Article 14 and 19(1)(g) of Constitution and deprives them of the right to declare actual value under Rules 30 and 31 - Revenue defended the rule on ground that it adopts Safe Harbor rule from Income Tax and represents minimum acceptable commission considering market rates of 0.5% to 3%. Petitioners further contended that actual charges on corporate guarantees are much lower at 0.25% to 0.3% – Whether flat 1% deemed valuation of corporate guarantees is constitutionally valid and whether expression whichever is higher operates arbitrary – HELD - The provision of Rule 28(2) of CGST Rules fixing deemed valuation at 1% of guarantee amount is Constitutionally valid as the concept of deeming fiction is well-recognized in taxation statutes where actual value cannot be ascertained. The Supreme Court in Wipro Limited has held that deeming fiction can be applied only when actual cost is not ascertainable - In case of corporate guarantees where parties may not specify any consideration, a uniform deeming fiction of 1% serves the purpose of ensuring certainty and avoiding litigation. However the expression “whichever is higher” is arbitrary and violative of Article 14 and 19(1)(g) of the Constitution. This expression compels the assessee to pay tax on 1% even when actual consideration charged or payable is lower than 1% thereby depriving the assessee of the flexibility available under Rules 30 and 31 to determine reasonable valuation. The expression operates without any nexus to actual cost and becomes confiscatory in nature. The expression whichever is higher shall accordingly be read down – Rule 28(2) of CGST Rules is constitutionally valid except the expression “whichever is higher” which is struck down as arbitrary and violative of Article 14 and 19(1)(g) of Constitution - GST - Retroactive Application of Rule 28(2) - Corporate Guarantees Executed Before Rule Introduction – Petitioners had executed corporate guarantees before 26 October 2023 when Rule 28(2) came into force. Revenue issued demands for the period since GST regime inception in July 2017 applying the 1% valuation retrospectively to all guarantees – Whether imposition of GST levy based on Rule 28(2) on corporate guarantees executed prior to 26 October 2023 is constitutionally valid and whether such retroactive application violates Articles 14 and 19(1)(g) – HELD - The introduction of Rule 28(2) w.e.f. 26 October 2023 is retroactive in nature as it applies to corporate guarantees executed prior to its introduction. While the legislature has competence to make laws retrospective or retroactive such power remains subordinate to fundamental rights enshrined in the Constitution. The retroactive application of Rule 28(2) to guarantees executed before 26 October 2023 imposes an unexpected financial burden on taxpayers who had arranged their affairs based on the prevailing law - The levy during pre-26 October 2023 period when no levy existed violates the principle of legal certainty and fairness as taxpayers could not have anticipated the future tax liability. The retroactive levy for extended periods is harsh and unfair particularly when corporate guarantees may span several years resulting in annual tax liabilities. The imposition of such levy also invokes the doctrine of unjust enrichment as Revenue had no legal basis to levy GST on corporate guarantees prior to introduction of Rule 28(2) – The levy of GST on corporate guarantees executed prior to 26 October 2023 is struck down as violative of Article 14 and 19(1)(g) of the Constitution on ground of excessive retroactive application. Levy is permissible from 26 October 2023 onwards only for the period during which guarantees continue to remain in force - GST - Invocation of Section 74 - Fraud and Suppression - Matter of Interpretation of Statutory Provisions – Revenue issued show cause notices under Section 74 of CGST Act alleging fraud and wilful suppression on ground that petitioners had not declared GST liability on corporate guarantees in their monthly returns – Whether invocation of Section 74 provisions for matters involving bonafide interpretation of complex statutory provisions of GST law is justified - HELD - The Section 74 requires strict showing of malafide intent such as fraud, willful misstatement or suppression with deliberate intention to evade tax. The Supreme Court in Uniworth Textiles has held that suppression of facts must mean correct information not deliberately disclosed to evade payment of duty. When facts are known to both parties omission by one to do what he might have done does not render it suppression - Mere failure to declare does not amount to willful suppression and there must be some positive act from side of assessee to find willful suppression. In the instant case both the petitioners and Revenue had contested the working of statutory provisions relating to taxability of corporate guarantees. This involved disputed interpretation of complex provisions of CGST Act read with Indian Contract Act and Transfer of Property Act. A bonafide legal position cannot automatically constitute fraud or suppression. While taxpayers cannot claim immunity by taking shelter under legal complexities they also cannot be held guilty of suppression when they take a position on complex statutory provisions which is later disputed by Revenue – The invocation of Section 74 of CGST Act against petitioners for not declaring GST on corporate guarantees is quashed as the matter involved disputed interpreta [Read less]

GST - Stock Transfer without e-way Bill - Penalty under Section 129 absent Supply - Registered person dealing in steel goods transported steel goods under Delivery Challan from its own registered premises to its own registered godown as stock transfer. The vehicle was intercepted and detained by Mobile Squad on the ground that no e-way bill accompanied the movement. Penalty was imposed under Section 129(3) of the CGST Act 2017 - Whether penalty under Section 129 is leviable on goods transported as stock transfer where no tax is payable – HELD - The phrase tax payable in Section 129(1) would contemplate that the transacti... [Read more]

GST - Stock Transfer without e-way Bill - Penalty under Section 129 absent Supply - Registered person dealing in steel goods transported steel goods under Delivery Challan from its own registered premises to its own registered godown as stock transfer. The vehicle was intercepted and detained by Mobile Squad on the ground that no e-way bill accompanied the movement. Penalty was imposed under Section 129(3) of the CGST Act 2017 - Whether penalty under Section 129 is leviable on goods transported as stock transfer where no tax is payable – HELD - The phrase tax payable in Section 129(1) would contemplate that the transaction is liable for tax and on which the tax becomes payable. A stock transfer between locations of the same registered person does not constitute a supply as defined under Section 7 of the CGST Act because it lacks two distinct entities and consideration. Section 7 requires the transaction to be between more than one person or entity, illustrative expressions such as sale, transfer, barter, exchange fortifying the requirement of existence of more than one person, and the supply must be for consideration as defined in the Act. Where a transaction does not fall within the definition of supply under Section 7, the charging Section 9 does not get attracted and hence no tax is payable - Penalty under Section 129 which is quantified with reference to tax payable on such goods cannot be imposed where no tax is payable. The contention that the phrase tax payable is only a measure for quantifying penalty without requiring proof of actual supply was rejected. The finding that the transaction was not genuine merely on the ground that e-way bill was not available lacked evidentiary basis and in the absence of any allegation or evidence regarding non-genuineness of the transaction, such finding was unsustainable - Penalty under section 129 of CGST Act is not leviable on the registered person, for transport of goods without e-way bill, when such transport was undertaken on account of stock transfer - The impugned Order-in-Appeal is set aside and the appeals are allowed [Read less]

GST - Reverse Charge Mechanism vs Forward Charge Mechanism - Services Rendered by Advocate as Insolvency Professional – Petitioner was appointed as Interim Resolution Professional by NCLT Delhi Bench for corporate debtor. Petitioner raised invoices for professional fees as Interim Resolution Professional. Resolution Professional called upon petitioner to issue GST compliant invoices claiming that GST is payable by Interim Resolution Professional. Petitioner contended that he is exempted from GST registration under Section 9(3) and (4) of CGST Act and Notifications 12/2017 and 13/2017 as Advocates are governed by reverse ... [Read more]

GST - Reverse Charge Mechanism vs Forward Charge Mechanism - Services Rendered by Advocate as Insolvency Professional – Petitioner was appointed as Interim Resolution Professional by NCLT Delhi Bench for corporate debtor. Petitioner raised invoices for professional fees as Interim Resolution Professional. Resolution Professional called upon petitioner to issue GST compliant invoices claiming that GST is payable by Interim Resolution Professional. Petitioner contended that he is exempted from GST registration under Section 9(3) and (4) of CGST Act and Notifications 12/2017 and 13/2017 as Advocates are governed by reverse charge mechanism for legal services and GST if payable is on reverse charge basis - Whether Advocates acting as Insolvency Professionals are governed by reverse charge mechanism applicable to legal services or forward charge mechanism applicable to Insolvency Professional services – HELD - Notification No. 12/2017 and No. 13/2017 dated 28.06.2017 provide that services rendered by Advocates are governed by RCM. However this applies to legal services rendered by Advocates in capacity as Advocates. Services rendered by person in capacity of Insolvency Professional are governed by separate statutory framework under Insolvency and Bankruptcy Code and IBBI Regulations. IBBI Regulations prescribe independent eligibility criteria and registration requirements for Insolvency Professionals - The Scheme of Classification of Services specifically classifies Insolvency and Receivership services under separate entry 998241 distinct from legal services entry 99821. Principle of specific description prevailing over general description applies. When Advocate renders services as Insolvency Professional the role is that of Insolvency Professional not Advocate - Taxability is determined by nature of services rendered not by professional qualification of person rendering service. As per Scheme of Classification, Insolvency and Receivership services are specifically covered under head 99824 and are not covered by Notification No. 13/2017 applicable to RCM. Thus Advocates acting as Insolvency Professionals are governed by forward charge mechanism applicable to all Insolvency Professionals as class and cannot claim benefit of reverse charge mechanism - Advocates enrolled with Bar Council who act as Insolvency Professionals shall be governed by forward charge mechanism. They shall be liable to obtain GST registration and comply with all consequential requirements under CGST Act and rules and notifications thereunder in same manner as applicable to Insolvency Professionals as class. Petitioner directed to furnish GST compliant invoices in respect of professional fee charged for services rendered as Interim Resolution Professional – Ordered accordingly [Read less]

Service Tax - Sale of Immovable Property - Liability on Advance Received for Sale of Plots – Service tax demand on amount returned to customers - Whether amount received as advance against sale of plots constitute sale of immovable property exempt from Service Tax under Section 65B(44)(a)(i) of Finance Act, 1994 – HELD - The appellant returned back amount regarding sale of flats due to non-viability of construction of residential towers. The said amount was not received in connection with rendering of any taxable service. Hence no Service Tax is payable on the amount returned back to customers - Even otherwise the amou... [Read more]

Service Tax - Sale of Immovable Property - Liability on Advance Received for Sale of Plots – Service tax demand on amount returned to customers - Whether amount received as advance against sale of plots constitute sale of immovable property exempt from Service Tax under Section 65B(44)(a)(i) of Finance Act, 1994 – HELD - The appellant returned back amount regarding sale of flats due to non-viability of construction of residential towers. The said amount was not received in connection with rendering of any taxable service. Hence no Service Tax is payable on the amount returned back to customers - Even otherwise the amount was received as advance against sale of plots for villas. As amounts have been received in connection with sale of immovable property, the said amount is not liable to Service Tax as per Section 65B(44)(a)(i) of Finance Act, 1994 - Service Tax is not payable on amount received in connection with sale of plots. Demand confirmed in impugned order on this amount is set aside - Service Tax - Construction of Residential Complex Service - Liability Where Service Tax Already Paid Before Show Cause Notice – Whether Service Tax can be demanded again when it has been already paid before issuance of Show Cause Notice – HELD - The Appellant paid Service Tax payable in respect of rendering of service namely Construction of Residential Complex Service before issuance of Show Cause Notice. Section 73 of Finance Act, 1994 provides that if Service Tax payable has been paid along with interest before issuance of Show Cause Notice, then there is no need to issue Notice to demand Service Tax. As Appellant has already paid Service Tax payable in this case along with interest, no demand should be made. The principle that once Service Tax is paid before issuance of Show Cause Notice with all applicable interest, no demand can be subsequently made, is settled law – No additional Service Tax demand can be made as full Service Tax has been paid before issuance of Show Cause Notice. The demand confirmed in impugned order on this amount is not sustainable - Penalty cannot be imposed where underlying demand itself is not valid or where no taxability exists. The case relates to bonafide legal interpretation and there was no intent to evade tax or commission of fraud or suppression of facts on part of Appellant – The penalty imposed in impugned order is set aside and the appeal is allowed [Read less]

GST - Service of Show Cause Notice on Common Portal - Sufficiency of Service – Whether mere uploading of Show Cause Notice on GST common portal without acknowledgement of receipt or filing of reply by assessee constitutes sufficient service of notice – HELD - Service of Show Cause Notice upon assessee cannot be deemed sufficient merely on account of its uploading on common portal unless its receipt is acknowledged or reply is filed - The Punjab and Haryana High Court in Luxmi Traders case examined the issue of service of notices through the common portal and held that mere uploading of an SCN, without acknowledgement o... [Read more]

GST - Service of Show Cause Notice on Common Portal - Sufficiency of Service – Whether mere uploading of Show Cause Notice on GST common portal without acknowledgement of receipt or filing of reply by assessee constitutes sufficient service of notice – HELD - Service of Show Cause Notice upon assessee cannot be deemed sufficient merely on account of its uploading on common portal unless its receipt is acknowledged or reply is filed - The Punjab and Haryana High Court in Luxmi Traders case examined the issue of service of notices through the common portal and held that mere uploading of an SCN, without acknowledgement of receipt or filing of a reply, cannot by itself be treated as sufficient service - the Petitioner is granted an opportunity to file a fresh application for revocation of cancellation of its GST registration - The Writ Petition is disposed of [Read less]

Central Excise – Cenvat Credit on Outward Freight Charges for clearance of final products - Whether outward freight charges for clearance of final products from place of removal qualify as input service under Rule 2(l) of CENVAT Credit Rules, 2004 and whether manufacturer is entitled to take CENVAT credit on such services - HELD – The Rule 2(l)(ii) of CENVAT Credit Rules, 2004 till 31.03.2008 expressly permitted CENVAT credit for services used for clearance of final products from place of removal and outward transportation was specifically included in the definition as abundant caution to avoid disputes. The Larger Ben... [Read more]

Central Excise – Cenvat Credit on Outward Freight Charges for clearance of final products - Whether outward freight charges for clearance of final products from place of removal qualify as input service under Rule 2(l) of CENVAT Credit Rules, 2004 and whether manufacturer is entitled to take CENVAT credit on such services - HELD – The Rule 2(l)(ii) of CENVAT Credit Rules, 2004 till 31.03.2008 expressly permitted CENVAT credit for services used for clearance of final products from place of removal and outward transportation was specifically included in the definition as abundant caution to avoid disputes. The Larger Bench decision in ABB Ltd v. Commissioner of Central Excise and Service Tax has conclusively held that services availed by manufacturer for outward transportation of final products from place of removal should be treated as input service enabling manufacturer to take credit of service tax paid on such services - Where factory is the place of removal, freight from factory to customer's premises would be covered by the expression in relation to clearance from place of removal. The non-inclusion of transportation costs in assessable value is no ground to deny CENVAT credit – The appellant is entitled to CENVAT credit of service tax paid on outward freight charges – The impugned order is set aside and the appeal is allowed - Limitation Period - Whether entire demand relating to period before 31.03.2008 attracts extended period of limitation and whether any suppression of facts attracts application of extended period - HELD - The Rule 2(l) of CENVAT Credit Rules itself allows taking of CENVAT credit for services from place of removal till 31.03.2008 and entire period under consideration is prior to this date. Appellant has provided all details of CENVAT credit taken in ER-1 returns filed with authorities. No suppression of fact or misstatement on part of Appellant has been made out and no mala fide intention to evade duty by taking wrong credit is discernible from facts - The entire subject matter was one of interpretation of CENVAT Credit Rules on which numerous judgments exist establishing the correct position. On such issues of interpretation, extended period cannot be invoked absent any evidence of deliberate concealment or fraudulent intent - Confirmed demand for extended period is legally not sustainable and is set aside on account of time bar. [Read less]

GST - Classification of composite supply of wind turbine generators and installation services – Composite supply or works contract involving immovable property – High held that the Turbine Generator is to be treated as movable property amounting to goods and the supply of services and such goods can only be treated as composite supply of goods and services and not execution of works being involved in immovable property - No grounds to interfere with the impugned judgment of the High Court. The Special Leave Petitions stand dismissed.

GST - Protective Order Against Arrest - Scope of Interim Relief after dismissal of Pre-Arrest Bail Application - Appellant was summoned under Section 70 of CGST Act, 2017 in connection with investigation into alleged wrongful availing and passing of Input Tax Credit. Appellant filed application for anticipatory bail before High Court which dismissed the application on ground that no order under Section 69 of CGST Act had been passed and therefore no apprehension of arrest could be established. However High Court while dismissing the application granted protection to appellant from arrest for a period of one week from date ... [Read more]

GST - Protective Order Against Arrest - Scope of Interim Relief after dismissal of Pre-Arrest Bail Application - Appellant was summoned under Section 70 of CGST Act, 2017 in connection with investigation into alleged wrongful availing and passing of Input Tax Credit. Appellant filed application for anticipatory bail before High Court which dismissed the application on ground that no order under Section 69 of CGST Act had been passed and therefore no apprehension of arrest could be established. However High Court while dismissing the application granted protection to appellant from arrest for a period of one week from date of intimation of order under Section 69 - Whether High Court can grant protective order against arrest while dismissing application for pre-arrest bail on ground that application is not maintainable - HELD - An interim relief can only be granted in aid of and as ancillary to the main relief sought in the proceedings. Once a Court finds that the main petition is not maintainable and dismisses it, the question of granting further or alternative interim relief does not arise. When an application for pre-arrest bail is dismissed on the ground that it is not maintainable or no apprehension of arrest exists, no interim protective order against arrest can be granted concurrently or subsequently as such relief would not be in aid of the main relief. The settled principle established in State of Orissa v. Madan Gopal Rungta that interim relief cannot be used as the sole or final relief when the main petition itself is dismissed remains applicable to cases of pre-arrest bail in criminal matters. Once the main application is dismissed, all interim reliefs granted during its pendency must also fall - The granting of protection from arrest for a specific period after dismissal of pre-arrest bail application is not permissible in law - The protective order granted by High Court is set aside - GST - Section 69 - Communication of Arrest Order – Commissioner did not pass any order under Section 69 of CGST Act at the time of pre-arrest bail application. Respondent contended that unless order under Section 69 is communicated to the accused he cannot apply for anticipatory bail and further that requirement of communication must be read into statute by extension of principles of natural justice and administrative action - Whether order passed under Section 69 of CGST Act must be communicated to the accused before arrest for him to seek anticipated bail and whether such communication is mandatory - HELD - An order under Section 69 of CGST Act is a sine qua non for maintaining application for anticipatory bail as it is the order that activates the alarm for apprehension of arrest and grants the status of accused to the person. The order must record reasons to believe that an offence under Section 132 of CGST Act has been committed. Such order being amenable to judicial review by Constitutional Courts must be capable of being challenged on settled principles of law. If the order is not communicated to the person sought to be arrested, he cannot apply for anticipated bail or challenge the order on its merits - Communication of the order would not obstruct the investigation but would reinforce the right of accused to seek anticipated bail - It would lead to an anomalous situation where accused can neither apply for anticipated bail till order is passed nor become aware of order to challenge it before appropriate forum if communication is not mandated. The order should be communicated through electronic means using email address and mobile number in addition to other modes permitted. Without such communication the question of arrest would not arise - The Commissioner is required to communicate the order under Section 69 of CGST Act to the respondent in the manner specified, whereafter he may pursue such remedy as advised - The criminal appeal stands disposed of [Read less]

Customs – Import of consignments of stainless steel products - Supplementary Show Cause Notice - Scope and Limitation of Fresh Proposals – Appellant received initial Show Cause Notice proposing recovery of differential Customs duty with quantum of duty demand at one amount. Subsequently a Supplementary Show Cause Notice was issued which introduced fresh proposals regarding rejection of declared value on ground of mis-declaration and denial of benefit of Notification No.46/2011-Cus dated 01.06.2011 and duty demand was substantially enhanced. Corrigenda to the SCNs were issued after considerable time lapse and were not r... [Read more]

Customs – Import of consignments of stainless steel products - Supplementary Show Cause Notice - Scope and Limitation of Fresh Proposals – Appellant received initial Show Cause Notice proposing recovery of differential Customs duty with quantum of duty demand at one amount. Subsequently a Supplementary Show Cause Notice was issued which introduced fresh proposals regarding rejection of declared value on ground of mis-declaration and denial of benefit of Notification No.46/2011-Cus dated 01.06.2011 and duty demand was substantially enhanced. Corrigenda to the SCNs were issued after considerable time lapse and were not received by Appellant even after filing replies and additional submissions. Adjudication order was passed immediately after issuance of corrigenda – Whether Supplementary Show Cause Notice introducing fresh and substantive grounds of denial of preferential exemption was issued within permissible scope of original notice and within limitation period – HELD - The Supplementary Show Cause Notice has introduced fresh and substantive ground by proposing denial of preferential exemption under Notification No.46/2011-Cus and by enhancing duty demand. Such course is beyond limited scope of supplementary notice and amounts to issuance of fresh Show Cause Notice in guise of supplementary notice. The original Show Cause Notice did not contain any proposal for denial of benefit of Notification or necessary factual foundation for such denial. Moreover Supplementary SCN was issued after one year of original Show Cause Notice. Corrigenda were issued after about two years of original SCN and approximately one year after Supplementary SCN. Appellant contended that corrigenda were not received even after filing replies and additional submissions. Impugned order has been passed in clear violation of principles of natural justice - The demands confirmed on basis of fresh proposals in Supplementary Show Cause Notice and Corrigenda are liable to be set aside on ground of limitation and not following principles of natural justice – The demands confirmed on basis of fresh proposals introduced through Supplementary Show Cause Notice are set aside - Customs - Country of Origin Certificates - Genuineness and Authentication - Retro-assessment based on Subsequent Verification – Appellant imported consignments of stainless steel products from suppliers in Malaysia and submitted Country of Origin Certificates - Goods were examined by proper officer of Customs and consignments were released after assessment and verification of COO Certificates. Subsequent to clearance by more than two years, investigation officers conducted verification and alleged COOs are fake – Whether the validity of COO Certificates can be questioned by Customs authorities at later stage – HELD - As per Rules of Origin if certificates were valid at time of import their validity cannot be questioned by Customs authorities at later stage. COOs submitted by Appellant were issued by suppliers and were authenticated by Authorized Officials of Malaysian Government whose signatures were verified by Customs officials before allowing clearance. Requirements under Notification have been met on date of import and cannot be negated by subsequent communication received from Malaysia after more than two years without details of contravention and action being taken against the issuing authority - Once COOs were found to be genuine, appellant would be eligible for benefit of Notification No.46/2011-Cus – All COO Certificates furnished by Appellant are authentic and acceptable. Appellant is eligible for benefit of exemption under Notification No.46/2011-Cus for all consignments - The findings of the Respondent with regard to levy of CVD under Notification No. 1/2017-Cus holding the goods actually of Chinese origin is not sustainable and is liable to be dropped - Customs - Classification of Imported Goods - Tariff Heading – Appellant classified goods imported namely Decorative and Design Sheet Article of Wall Panel and Decorative Design Stainless Steel Profiles under Customs Tariff Heading 7326. Department alleged that correct classification of goods should be under Customs Tariff Heading 7219 – Whether goods imported by Appellant are classifiable under CTH 7326 as claimed by Appellant and whether Department has discharged burden of producing proper evidence to support re-classification under CTH 7219 – HELD - The Proper officer has examined goods and accepted classification as declared in Bills of Entry and no objection was raised at time of clearance. If Department wants to re-classify goods imported and cleared, there must be specific reasons supported by evidence. In absence of any test report or expert opinion, finding that goods were classifiable under CTH 7219 is based merely on assumptions and presumptions and is not supported by opinion of any technical experts – The goods in question were coated with PVD (Physical Vapour Deposition) to impart desired colour. Thus, it is clear that the goods are further worked than cold rolled sheets and hence they become out of the purview of CTH 7218, 7219 or 7220 - When Department seeks different classification, it must produce proper evidence; mere assertion is not sufficient – The goods imported by appellant are appropriately classifiable under CTH 7326. Re-classification of goods under CTH 7219 is not sustainable - Customs - Valuation of Goods - Rejection of Transaction Value - Adjudicating Authority rejected declared transaction value and enhanced value on basis of contemporaneous imports – Whether declared transaction value can be rejected and re-determined without following procedure set out in Customs Valuation Rules and without evidence of undeclared payments – HELD - Valuation of goods declared by Appellant cannot be rejected and re-determined without following procedure set out in Valuation Rules. Adjudicating Authority has not followed provisions of Rule 9 of Customs Valuation Rules, 2007 for enhancement of value. There is no evidence available on record that Appellant has paid any amount over and above declared invoice prices. There is no documentary evidence available to show that Appellant has paid any amount over and above declared value. In circumstances rejection of transaction value declared by Appellant is legally not sustainable – The value declared by Appellant in Bills of Entry is acceptable and enhanced value re-determined by Revenue is set aside - Customs - Imposition of Penalties - HELD - Penalties have been imposed on allegation of mis-declaration and undervaluation of impugned goods by Appellant. Suppression of facts with intention to evade tax has not been established in this case. It has been held that allegations of mis-declaration and undervaluation of impugned goods are not sustained in view of findings regarding authenticity of COOs, proper classification of goods under CTH 7326, and acceptable declared value of goods. Therefore no penalty is imposable on Appellant for said allegations. [Read less]

Service Tax - SVLDRS Discharge Certificate - Prohibition of Reopening of matter –Appellant opted for settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme and discharge certificate was issued under Section 126 and 127 of Finance Act 2019. Revenue filed appeal challenging the Order-in-Original despite issuance of statutory discharge certificate – Whether Revenue appeal survives after issuance of discharge certificate under SVLDRS and whether Section 129 prohibits reopening of matters covered by declaration – HELD – The Section 129 of Finance Act 2019 unequivocally declares that every discharge certificat... [Read more]

Service Tax - SVLDRS Discharge Certificate - Prohibition of Reopening of matter –Appellant opted for settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme and discharge certificate was issued under Section 126 and 127 of Finance Act 2019. Revenue filed appeal challenging the Order-in-Original despite issuance of statutory discharge certificate – Whether Revenue appeal survives after issuance of discharge certificate under SVLDRS and whether Section 129 prohibits reopening of matters covered by declaration – HELD – The Section 129 of Finance Act 2019 unequivocally declares that every discharge certificate issued under Section 126 shall be conclusive regarding the matter and period covered by the declaration and the declarant shall not be liable to pay any further duty, interest or penalty and that no proceedings relating to the same matter and period shall thereafter be reopened - The SVLDRS scheme has been enacted for bringing quietus to legacy disputes. Once the statutory authorities accept the declaration and issue discharge certificate, the dispute reaches finality. The issuance of discharge certificate is not merely acknowledgment of payment but constitutes full and final statement of the tax dispute. Continuation of proceedings after issuance thereof would defeat the very object of the scheme. The legal position now stands authoritatively settled by the Bombay High Court in Astute Valuers and Consultants Pvt Ltd. – The Departmental appeal filed by the Revenue is not maintainable and is dismissed [Read less]

Service Tax - Works Contract Service - Classification and Reconciliation of Tax Payments – Commissioner (Appeals) remanded matter for de novo adjudication directing reconsideration of classification under Works Contract Service with effect from 01.06.2007 and verification of Appellant's claim regarding payment of Service Tax on GTA services. De novo authority confirmed demand with partly re-quantification - Appellant challenged that de novo authority failed to comply with remand directions and had not properly verified reconciliation statements and tax payments – Whether de novo adjudicating authority correctly complie... [Read more]

Service Tax - Works Contract Service - Classification and Reconciliation of Tax Payments – Commissioner (Appeals) remanded matter for de novo adjudication directing reconsideration of classification under Works Contract Service with effect from 01.06.2007 and verification of Appellant's claim regarding payment of Service Tax on GTA services. De novo authority confirmed demand with partly re-quantification - Appellant challenged that de novo authority failed to comply with remand directions and had not properly verified reconciliation statements and tax payments – Whether de novo adjudicating authority correctly complied with remand directions requiring proper verification of tax payments and reconciliation of records and whether demand under GTA Service was correctly determined – HELD - After introduction of Works Contract Service with effect from 01.06.2007, composite indivisible works contracts are liable to be assessed only under Works Contract Service. The de novo proceedings recognised change in classification but do not disclose any proper reconciliation of Appellant's tax payments or basis on which surviving demand was quantified - Mere recording that documents were verified without indicating payments accepted or rejected and reasons therefor does not satisfy remand directions or requirement of reasoned adjudication. The earlier remand order specifically required verification of Appellant's claim regarding payment of Service Tax under GTA Service which necessarily required reconciliation of departmental computation. De novo order merely records that documents were verified without indicating payments accepted, payments rejected or reasons therefor. Reliance on balance sheet and ST-3 returns without reconciliation with books of account, GAR-7 challans and other contemporaneous records is insufficient to sustain demand - The extended period is held to be unavailable as proceedings originated from scrutiny of statutory records and mere discrepancies noticed during audit are insufficient to invoke extended period – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Outdoor Caterer Service - Interpretation of Substantial and Satisfying Meal within the meaning of Notification No.20/2004-ST – Appellant registered as Outdoor Caterer supplied snacks and refreshments to corporate establishments and availed benefit of Notification No.20/2004-ST as amended by Notification No.1/2006-ST by discharging Service Tax on fifty percent of gross value. Department viewed that supplies comprised only beverages and snacks and did not constitute a ‘substantial and satisfying meal’ within meaning of notification and proposed recovery of differential Service Tax by invoking extended per... [Read more]

Service Tax - Outdoor Caterer Service - Interpretation of Substantial and Satisfying Meal within the meaning of Notification No.20/2004-ST – Appellant registered as Outdoor Caterer supplied snacks and refreshments to corporate establishments and availed benefit of Notification No.20/2004-ST as amended by Notification No.1/2006-ST by discharging Service Tax on fifty percent of gross value. Department viewed that supplies comprised only beverages and snacks and did not constitute a ‘substantial and satisfying meal’ within meaning of notification and proposed recovery of differential Service Tax by invoking extended period - Whether appellant is entitled to benefit of Notification No.20/2004-ST as amended and whether expression substantial and satisfying meal must be restricted to lunch or dinner or whether beverages and light refreshments qualify as substantial and satisfying meal – HELD – The Notification No.20/2004-ST as amended neither restricts the expression substantial and satisfying meal to lunch or dinner nor prescribes any quantitative or qualitative standard for determining what would constitute such a meal. The expression must receive its ordinary commercial meaning having regard to the catering arrangement as a whole and not by dissecting individual menu items. The Department has effectively read into the notification limitations which do not exist and has denied the benefit by dissecting individual menu items instead of examining the catering service in its entirety – In the present case, although it is not disputed that VAT was paid on the value of the goods supplied, no attempt was made to identify the service component or examine whether the demand included the value of goods already subjected to VAT - The appellant's claim for the benefit of Notification No.20/2004-ST as amended cannot be denied merely because beverages formed part of the catering menu. The expression "substantial and satisfying meal" must be construed in the context of the catering arrangement as a whole and not by isolating individual items supplied thereunder – The impugned order is set aside and the appeal is allowed - Extended Period of Limitation - The dispute arises entirely from the Department's interpretation of the expression "substantial and satisfying meal" occurring in Notification No.20/2004-ST as amended. The appellant, on the other hand, entertained the view that the organised pantry and catering services rendered by it satisfied the conditions of the notification. Thus, the dispute is essentially one of interpretation of an exemption notification. It is well settled that where all primary facts are within the knowledge of the Department and the dispute concerns only the interpretation of law, the extended period cannot be invoked merely because the Department subsequently forms a different legal opinion. Mere rejection of an assessee's interpretation does not constitute suppression or wilful misstatement with intent to evade payment of tax - The Show Cause Notice covering period April 2007 to August 2009 is barred by limitation as the extended period under Section 73(1) of Finance Act 1994 is not invocable. [Read less]

Customs - Classification of laser imagers - Appellant imported laser imagers classifying them under CTH 9018 90 19 ‘as other diagnostic instruments and apparatus’ while Commissioner of Customs reclassified them under residuary CTH 9033 00 00 as accessories not specified or included elsewhere in Chapter 90 – The lower authorities and CESTAT dismissed the appeal of the appellant - Whether laser imagers which are used with machines falling under CTH 9018 can be classified under CTH 9018 90 19 as diagnostic apparatus or whether they must be classified under residuary CTH 9033 00 00 as accessories suitable for use with ma... [Read more]

Customs - Classification of laser imagers - Appellant imported laser imagers classifying them under CTH 9018 90 19 ‘as other diagnostic instruments and apparatus’ while Commissioner of Customs reclassified them under residuary CTH 9033 00 00 as accessories not specified or included elsewhere in Chapter 90 – The lower authorities and CESTAT dismissed the appeal of the appellant - Whether laser imagers which are used with machines falling under CTH 9018 can be classified under CTH 9018 90 19 as diagnostic apparatus or whether they must be classified under residuary CTH 9033 00 00 as accessories suitable for use with machines falling under different tariff headings - HELD - The laser imager cannot be classified as a diagnostic apparatus under CTH 9018 90 19 as it does not possess independent diagnostic skills or capabilities and must necessarily receive inputs from diagnostic equipment to carry out its function - The laser imager is an accessory to the diagnostic equipment from which it receives inputs and is not a diagnostic instrument or apparatus in its own right. According to the definition of accessory, it is a part or sub-assembly or assembly that contributes to the effectiveness of a piece of equipment without changing its basic function. The laser imager performs the supplementary and ancillary function of transferring diagnostic data received from medical equipment onto films for preservation or further use by medical professionals and does not aid in or augment the performance of the medical equipment that it receives inputs from - According to Note 2 in Chapter 90 of the Customs Tariff, parts and accessories which are suitable for use solely or principally with a particular kind of machine or with a number of machines of the same heading are to be classified with such machines. However, the laser imagers are compatible with machines falling under multiple tariff headings including CTH 9018 and also CTH 9022 which relate to apparatus based on the use of X-rays or other ionising radiations for medical uses. Since the laser imagers can be used with machines falling under different tariff headings with different rates of tariff duties it defies logic and rationale to classify them under CTH 9018 90 19 as accessories suitable for use solely or principally with machines under CTH 9018 - The laser imagers must be classified under residuary CTH 9033 00 00 - The classification under CTH 9033 00 00 is upheld and the appeal is dismissed [Read less]

Service Tax - Intermediary Services - Nature of Consultancy Service – Providing of consultancy and guidance services to Electro Motive Diesel, USA in accordance with an agreement under which it provided various recommendations and advice - Revenue initiated proceedings proposing that respondent had provided intermediary services to EMD, USA in its business dealings with Indian Railways and therefore place of provision of service was India thereby making it taxable - Whether consultancy services provided by respondent to help a foreign company deal with Indian Railways constitutes intermediary services covered under Rule ... [Read more]

Service Tax - Intermediary Services - Nature of Consultancy Service – Providing of consultancy and guidance services to Electro Motive Diesel, USA in accordance with an agreement under which it provided various recommendations and advice - Revenue initiated proceedings proposing that respondent had provided intermediary services to EMD, USA in its business dealings with Indian Railways and therefore place of provision of service was India thereby making it taxable - Whether consultancy services provided by respondent to help a foreign company deal with Indian Railways constitutes intermediary services covered under Rule 9 of Place of Provision of Services Rules, 2012 - HELD - For a service to constitute intermediary service there must be minimum of three parties namely the supplier of principal service, the recipient of the principal service and an intermediary facilitating or arranging the supply. The concept of intermediary service involves two distinct supplies namely the main supply between two principals and an ancillary supply which is the service of facilitating or arranging the main supply between the two principals - Where an agreement exists between only two parties and the service provider provides services directly to that single party, there is no intermediary service even if the services help the recipient in dealing with some other party. The service provider must act as a go-between or facilitator between two principals for the arrangement or facilitation of the main supply - In the present case the respondent had agreement with EMD, USA only and there was no contractual relationship between respondent and Indian Railways - The respondent was not acting as a facilitator for supply between EMD and Indian Railways but was only providing advisory services to EMD as a consultant. It is well-established that intermediary services require arranging or facilitating supply between two or more principals which is distinct from providing advisory or consultancy services to a single client even if such services relate to the client's dealings with third parties - The services provided were consultancy services and not intermediary services – The impugned order is upheld and the Revenue’s appeal is dismissed [Read less]

Service Tax – Scope of Intellectual Property Rights Service - Royalty for pre-installation of Operating Software - Appellant procured license for pre-installation of operating software from Microsoft Corporation against payment of royalty under Microsoft Desktop Operating System License Agreement for OEM Customers - Department issued Show Cause Notice proposing demand of service tax alleging that activity of affixing Microsoft Windows could be treated as trademarks falling under IPR Service - Whether royalty paid for license to pre-install Microsoft Operating System in computers manufactured by appellant constitutes Inte... [Read more]

Service Tax – Scope of Intellectual Property Rights Service - Royalty for pre-installation of Operating Software - Appellant procured license for pre-installation of operating software from Microsoft Corporation against payment of royalty under Microsoft Desktop Operating System License Agreement for OEM Customers - Department issued Show Cause Notice proposing demand of service tax alleging that activity of affixing Microsoft Windows could be treated as trademarks falling under IPR Service - Whether royalty paid for license to pre-install Microsoft Operating System in computers manufactured by appellant constitutes Intellectual Property Rights Service taxable under Section 65(55b) of Finance Act, 1994 - HELD - The definition of Intellectual Property Rights under Section 65(55a) of Finance Act, 1994 includes trademarks, designs, patents or any other similar intangible property under any law in force in India but specifically excludes copyright. The transaction in the present case involved license granted by Microsoft to pre-install copyrighted software which is software owned by Microsoft and the appellant was not granted copyright but only a license to use the software. Microsoft retained the copyright and merely transferred temporary enjoyment of the copyrighted software to appellant for pre-installation in computers and subsequent sub-licensing to buyers - Since copyright is specifically excluded from the definition of IPR under Section 65(55a), transfer or license to use copyright does not constitute IPR Service. The Show Cause Notice failed to identify or specify which intellectual property right falling within Section 65(55a) was involved and did not establish how the alleged intangible property was protected, registered or recognized under Indian law - The authority cannot demand service tax under IPR Service category without specifically identifying which intellectual property falling within Section 65(55a) is involved. From 16.05.2008, Information Technology Software Services became taxable for the first time with introduction of new provision covering right to use information technology software. Since old entry relating to IPR was not modified and new entry for ITSS was created separately covering this scope, the transaction was not covered under earlier entry prior to 16.05.2008 - The demand proposed for period prior to 16.05.2008 is set aside – The appeal is allowed - Service Tax - Extended Period of Limitation - Whether demand for service tax can be raised after expiry of normal period of limitation of one year when department was fully aware of transaction during normal period and when suppression cannot be established - HELD - When department is fully aware of relevant transactions and details during the normal period of limitation as evidenced by audit, correspondence and correspondence extending beyond the normal limitation period, it is not logical or sustainable to allege that information was suppressed by the appellant with intent to evade. The burden lies on department to prove that appellant had withheld information with intent to evade tax. When appellant is disputing liability in bona fide manner and disclosing all relevant information to department, mere fact that appellant did not take registration, file returns or pay service tax on matter that was in genuine dispute cannot constitute suppression. The extended period of limitation can only be invoked when there is proof of deliberate concealment or suppression of facts with intent to evade tax and not merely because assessment action was not taken during normal period - The demand confirmed by invoking extended period of limitation is set aside as it is beyond normal period of limitation and elements of suppression with intent to evade have not been established - Service Tax - Revenue Neutral Situation - Availability of CENVAT Credit - HELD - When service received is used in manufacture of dutiable goods and CENVAT Credit of the service tax paid would be available for discharge of Central Excise duty on such dutiable goods, the entire issue assumes a revenue neutral character. In such revenue neutral situations the intention to evade tax may be considered as absent and accordingly demand for extended period of limitation cannot be sustained as element of suppression with intent to evade is absent - Revenue cannot claim suppression with intent to evade when the financial position of both revenue and assessee would remain the same due to availment of CENVAT Credit. The circumstance of revenue neutral situation where CENVAT Credit was available forms an important consideration in determining whether suppression with intent to evade tax was present - The demand based on extended period of limitation in a revenue neutral situation is set aside. [Read less]

GST - Input Tax Credit Mismatch - Procedure under Circular 183/15/2022-GST –Show Cause Notice for alleged mismatch of Input Tax Credit between FORM GSTR-3B and FORM GSTR-2A - Petitioner contended that Circular No. 183/15/2022-GST dated 27.12.2022 mandates specific procedure before raising demand on account of ITC mismatch – Whether proper officer must follow procedure prescribed in Circular 183/15/2022-GST requiring verification of conditions of Section 16 before confirming demand on ITC mismatch – HELD - The proper officer is mandated by paragraph 4 of Circular No. 183/15/2022-GST to first seek details from register... [Read more]

GST - Input Tax Credit Mismatch - Procedure under Circular 183/15/2022-GST –Show Cause Notice for alleged mismatch of Input Tax Credit between FORM GSTR-3B and FORM GSTR-2A - Petitioner contended that Circular No. 183/15/2022-GST dated 27.12.2022 mandates specific procedure before raising demand on account of ITC mismatch – Whether proper officer must follow procedure prescribed in Circular 183/15/2022-GST requiring verification of conditions of Section 16 before confirming demand on ITC mismatch – HELD - The proper officer is mandated by paragraph 4 of Circular No. 183/15/2022-GST to first seek details from registered person regarding invoices on which ITC has been availed in FORM GSTR 3B but which are not reflecting in FORM GSTR 2A and then ascertain fulfillment of conditions of Section 16 of CGST Act - The impugned orders have been passed without adhering to procedure prescribed in paragraph 4 of the Circular – Impugned assessment and appellate orders passed without following procedure prescribed in Circular No. 183/15/2022-GST are unsustainable. Petitioner is directed to file comprehensive representation along with supporting documents before adjudicating authority who shall consider and dispose representation in light of circular by passing reasoned order after affording reasonable opportunity of hearing - writ petition is disposed of [Read less]

Central Excise - Manufacture and clearance of Nitrous Oxide I.P. - Eligibility for concessional rate under Sl. No.17 of Notification No.2/2011-CE - Appellant manufactured Nitrous Oxide I.P. (pharmacopoeia-grade anaesthetic) under valid drug licence and cleared to hospitals and licensed drug traders claiming concessional rate under exemption for anaesthetics - Department denied concession for supplies to traders alleging that appellant failed to establish goods were used exclusively for anaesthetic purposes and invoked extended period of limitation - Whether end-use condition can be read into Notification which contains pro... [Read more]

Central Excise - Manufacture and clearance of Nitrous Oxide I.P. - Eligibility for concessional rate under Sl. No.17 of Notification No.2/2011-CE - Appellant manufactured Nitrous Oxide I.P. (pharmacopoeia-grade anaesthetic) under valid drug licence and cleared to hospitals and licensed drug traders claiming concessional rate under exemption for anaesthetics - Department denied concession for supplies to traders alleging that appellant failed to establish goods were used exclusively for anaesthetic purposes and invoked extended period of limitation - Whether end-use condition can be read into Notification which contains product-based exemption for anaesthetics without prescribing end-use requirement - HELD - Anaesthetic is identified by pharmacological character and therapeutic function namely ability to produce loss of sensation and not by identity of purchaser or ultimate user - Nitrous Oxide I.P. conforming to pharmacopoeial standards and manufactured as medical anaesthetic has character as anaesthetic determined at stage of manufacture and clearance unless relevant exemption notification expressly introduces end-use condition - Sl. No.17 of Notification neither prescribes end-use condition nor requires any certification or verification thereof and such condition cannot be read into notification by implication. The eligibility determined on basis of description of goods at time of clearance and not their subsequent use - Central Excise is duty on manufacture and eligibility to exemption determined by nature and description of goods at clearance not by subsequent distribution or consumption. There is no statutory requirement in Central Excise law that exempt goods must be supplied directly to ultimate user - Once undisputed that goods cleared were Nitrous Oxide I.P. as anaesthetics covered by Sl. No.17 concession cannot be denied merely because purchaser is trader - Department's assumption that traders may divert goods for other uses purely speculative and legally irrelevant in absence of statutory end-use condition - Revenue failed to establish foundation fact of allegation that Nitrous Oxide I.P. sold to traders diverted for non-exempt purpose before onus shifted to appellant – The demand on merits unsustainable and extended period of limitation inapplicable – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Refund and Self-Credit – Benefit of special rate of value addition – Appellant availed area-based exemption under Notification No.56/2002-CE dated 14.12.2002 – Government issued Notifications No. 19/2008 dated 27.03.2008 and 34/2008 dated 10.06.2008 restricting refund of excise duty on value addition by Appellant and providing for fixation of special rate of value addition – After Supreme Court upheld validity of amending notifications in VVF case, appellant approached Department for fixing special rates of value addition for different products which were accordingly fixed by competent authority ... [Read more]

Central Excise – Refund and Self-Credit – Benefit of special rate of value addition – Appellant availed area-based exemption under Notification No.56/2002-CE dated 14.12.2002 – Government issued Notifications No. 19/2008 dated 27.03.2008 and 34/2008 dated 10.06.2008 restricting refund of excise duty on value addition by Appellant and providing for fixation of special rate of value addition – After Supreme Court upheld validity of amending notifications in VVF case, appellant approached Department for fixing special rates of value addition for different products which were accordingly fixed by competent authority – Subsequent demands were issued and confirmed by respective authorities without considering special rates of value addition fixed – Whether Appellant entitled to benefit of special rate of value addition fixed by competent authority in terms of Notification No.19 & 34/2008 – HELD – Appellant is entitled to benefit of special rate of value addition in terms of Notification No.19 & 34. The hon'ble Supreme Court in VVF Ltd. clarified that refunds are not to be granted merely as per rates already prescribed in notification and authorities should give effect to all requirements and conditions contained in amending notifications – Impugned orders were passed disregarding the special rate of valuation fixed by competent authority. The authorities are required to re-do the whole exercise of demand calculation taking into account special rates of value addition fixed by competent authority – As the demand itself is not sustainable when calculated without special rates of value addition, interest is not payable – Appeals are allowed by way of remand to appellate authority with direction to recalculate demands taking into account special rates of value addition fixed by competent authority – The appeals are allowed by remand - Central Excise – Refund and Self-Credit – Duplication of demand – Appellant availed excess self-credit as refund under exemption notification – In several appeal periods, both excess availed refund and refund taken as self-credit and utilized for subsequent clearances were demanded and confirmed simultaneously – Whether demanding both excess refund and refund taken as self-credit utilized in subsequent clearances amounts to duplication of demand and double jeopardy to assessee – HELD – On one hand self-credit availed by Appellant under exemption notification has been confirmed and on other hand excise duty paid through self-credit in subsequent clearances has also been demanded; this is erroneous practice – Department should have demanded and confirmed only one of them. Demanding both excess refund and utilization of credit amounts to causing double jeopardy to assessees – The issue of duplication of demand needs to be looked into and rectified – Appeals are allowed by way of remand with direction to consider duplication of demand and allow only one of the demands instead of both. [Read less]

Customs - Limitation - Appeal filed before wrong Forum - Appellant filed appeal against Original Import Order within the stipulated period of 60 days but inadvertently submitted the appeal papers to the office of Commissioner of Customs instead of before the Commissioner of Customs (Appeals) - Whether the period during which the appeal was pending before a wrong Forum should be excluded from the period of limitation under Section 14 of the Limitation Act, 1963 - HELD - When an appeal is filed within the stipulated time period but before a wrong Forum or wrong Commissionerate due to administrative error or inadvertence on t... [Read more]

Customs - Limitation - Appeal filed before wrong Forum - Appellant filed appeal against Original Import Order within the stipulated period of 60 days but inadvertently submitted the appeal papers to the office of Commissioner of Customs instead of before the Commissioner of Customs (Appeals) - Whether the period during which the appeal was pending before a wrong Forum should be excluded from the period of limitation under Section 14 of the Limitation Act, 1963 - HELD - When an appeal is filed within the stipulated time period but before a wrong Forum or wrong Commissionerate due to administrative error or inadvertence on the part of the appellant, the provision of Section 14 of the Limitation Act, 1963 becomes applicable to the facts of the case. The period for which the appeal was lying with the wrong Forum requires to be excluded from the period of limitation and the appeal filed before the appropriate appellate authority can be considered as filed within time - Even if delay occurs in filing before the correct Forum after being informed of the error, such delay can be condoned having regard to the fact that the original appeal was filed within time and the receiving office could have transferred the appeal papers to the proper authority instead of merely informing the appellant that the same was filed before the wrong Forum. The principle that when an appeal is filed within time but before the wrong Commissionerate the period between submission at wrong Forum and re-submission at correct Forum should be excluded for the purpose of limitation has been consistently held by Tribunal and High Courts - Appeal is allowed by way of remand to the appellate authority with a direction to decide the issue on merits - Limitation - Appeal filed through email and received through post with delay - Appellant filed appeal against Order-in-Original through email within the stipulated period of 60 days from the date of Order-in-Original and sent hard copy through speed post on the same day, but the hard copy was received by Commissioner (Appeals) through postal mail on 24.02.2025, creating a delay of 5 days from the last date for filing appeal - Whether the appeal filed through email within time is barred by limitation when hard copy received through post was delayed - HELD - When an appeal has been filed through electronic means like email within the statutory time period of 60 days and the hard copy is subsequently sent through speed post on the same day, the appeal should not be rejected merely on the ground that the hard copy was received by the appellate authority with some delay through postal mail. The submission through email on the same day as speed post establishes that the appeal was filed within time and the delay in receipt of hard copy is attributable to postal delays and not to negligence or inaction of the appellant. A delay of mere 5 days is condonable by the learned Commissioner (Appeals) and such technical delay cannot be made ground for rejection of appeal when the substantive filing was made within time - The order rejecting the appeal on the ground of limitation is not sustainable when appeal was filed through email within prescribed time - Appeal is partly allowed on the ground that there is no delay in filing of appeal - Customs - Refund of excess duty paid under protest on Bills of Entry finally assessed without challenging assessment order - Appellant importer filed 81 Bills of Entry declaring classification under Customs Tariff Heading 3824 and paid Basic Customs Duty under protest at rates applicable to CTH 3402 with an apprehension that Department may issue SCN seeking reclassification and thereby impose differential duty, interest and penalty. The Bills of Entry were finally assessed by Department as per the declaration made by the appellant under CTH 3824. Appellant filed refund application seeking refund of excess duty paid under protest which was rejected on the ground that refund can only be allowed if the assessment order is challenged before the appellate authority and re-assessment is done - Whether refund of excess duty paid under protest can be claimed without challenging the finally assessed Bills of Entry - HELD - When an importer has declared classification in a particular Customs Tariff Heading and Bills of Entry are finally assessed accordingly by Department as per the declared classification, and the importer has paid duty under protest at higher rates applicable to a different Customs Tariff Heading with an apprehension that Department may take action seeking change of classification, the importer is entitled to claim refund of excess duty paid under protest without challenging the finally assessed Bills of Entry - The duty paid under protest is a clear indication to the Department that there is no voluntary payment and the Department is required to vacate the protest by taking appropriate action like filing an appeal or issuing a demand notice. When the Department fails to do so and the assessment becomes final, the importer is entitled to refund of excess duty paid - Each Bill of Entry is a separate legal proceeding and assessment in respect of one Bill of Entry has no bearing on the assessment of other Bills of Entry. The marking of protest itself gives information to the department that there is no requirement for reassessment and the assessment cannot be said to be finalised when the assessee has marked the protest while paying duty. The Department has to initiate proceedings to vacate the protest and pass speaking order of reassessment. When the Department fails to do this, the principle of unjust enrichment cannot be invoked to deny refund of duty paid under protest - The appellant is eligible for refund of excess duty paid under protest on Bills of Entry which are finally assessed under the classification declared by the appellant notwithstanding the outcome of proceedings in respect of other Bills of Entry – The appeal is partly allowed [Read less]

Service Tax – Exemption Notification No. 33/2012-ST – Turnover limit condition – Nil turnover in preceding financial year - Whether exemption under Notification No. 33/2012-ST applies to appellant for FY 2013-2014 when Form 26AS for preceding FY 2012-2013 shows nil turnover and current year turnover is less than Rs.10,00,000/- – HELD – The Form 26AS for FY 2012-2013 is reasonable document to rely upon to determine turnover; Form 26AS shows no payments to appellant in preceding FY 2012-2013 indicating nil turnover – Since there is no turnover on record of appellant for FY 2012-2013, appellant is entitled to bene... [Read more]

Service Tax – Exemption Notification No. 33/2012-ST – Turnover limit condition – Nil turnover in preceding financial year - Whether exemption under Notification No. 33/2012-ST applies to appellant for FY 2013-2014 when Form 26AS for preceding FY 2012-2013 shows nil turnover and current year turnover is less than Rs.10,00,000/- – HELD – The Form 26AS for FY 2012-2013 is reasonable document to rely upon to determine turnover; Form 26AS shows no payments to appellant in preceding FY 2012-2013 indicating nil turnover – Since there is no turnover on record of appellant for FY 2012-2013, appellant is entitled to benefit of exemption Notification No. 33/2012-ST for FY 2013-2014 – The condition of Notification that aggregate value of taxable services from preceding financial year should not exceed Rs.10,00,000/- is satisfied when preceding year turnover is nil. Since value of taxable services rendered during FY 2013-2014 is admittedly less than Rs.10,00,000/-, appellant is entitled to benefit of exemption – Demand of service tax is set aside and the appeal is allowed [Read less]

Service Tax – Renting of Immovable Property – Wrong assessment to partnership firm – SCN dated 01.10.2013 issued to partnership firm (M/s Chitkara Institute of Competitions) for period 01.04.2008 to 31.03.2013 proposing demand of service tax on renting of immovable property; however, records indicate it was property owner (Shri Mohit Chitkara) who rented out the premises to educational trust and was the actual service provider – Whether SCN issued to partnership firm instead of property owner can be sustained – HELD – Shri Mohit Chitkara was the person who rented out premises to educational trust and was actual... [Read more]

Service Tax – Renting of Immovable Property – Wrong assessment to partnership firm – SCN dated 01.10.2013 issued to partnership firm (M/s Chitkara Institute of Competitions) for period 01.04.2008 to 31.03.2013 proposing demand of service tax on renting of immovable property; however, records indicate it was property owner (Shri Mohit Chitkara) who rented out the premises to educational trust and was the actual service provider – Whether SCN issued to partnership firm instead of property owner can be sustained – HELD – Shri Mohit Chitkara was the person who rented out premises to educational trust and was actual service provider; SCN should have been issued to property owner, not to partnership firm – Following principle established by Hon'ble Supreme Court in Alcobex Metals case, the SCN issued to wrong person is liable to be set aside – On this count alone, the SCN issued to partnership firm is liable to be set aside and appeal is liable to be allowed - Service Tax – Mega Exemption Notification – Renting of Immovable Property to educational institution – Mega Exemption Notification No. 25/2012-ST dated 01.07.2012 provided exemption at Serial No.9 for services provided for educational institution in respect of auxiliary educational services and renting of immovable property; exemption was withdrawn w.e.f. 11.07.2014 – Whether service tax is leviable for period when exemption was available in Mega Exemption Notification – HELD – Mega Exemption Notification at Sl. No.9 provides exemption for services provided for educational institution in respect of renting of immovable property – Exemption was available from 01.07.2012 onwards; service tax became leviable only w.e.f. 11.07.2014 when exemption was withdrawn – No service tax can be levied for period up to 11.07.2014 when exemption was available in Mega Exemption Notification – The demand for services in respect of renting of immovable property provided to educational institution during period when exemption was available is not sustainable and is set aside. [Read less]

Service Tax – Foreign currency expenditure on imported services – Show Cause Notice issued treating foreign currency expenditure as taxable import of services – Appellant contended SCN was vague, mechanical and unintelligible as it failed to identify underlying service received, its classification or taxability without specifying amount of foreign currency expenditure incurred on each service – Whether SCN can be termed vague and mechanical when it does not separately identify expenditure service-wise – HELD – Purpose of SCN is to inform recipient of allegations so he can meet them effectively and is not prejud... [Read more]

Service Tax – Foreign currency expenditure on imported services – Show Cause Notice issued treating foreign currency expenditure as taxable import of services – Appellant contended SCN was vague, mechanical and unintelligible as it failed to identify underlying service received, its classification or taxability without specifying amount of foreign currency expenditure incurred on each service – Whether SCN can be termed vague and mechanical when it does not separately identify expenditure service-wise – HELD – Purpose of SCN is to inform recipient of allegations so he can meet them effectively and is not prejudiced by manifestly vague notice – Notice cannot be read as legislative enactment requiring exceptional lucidity but must convey allegations clearly enabling recipient to defend himself – What is required is whether allegations made have been conveyed and set forth to enable recipient to get opportunity to defend – SCN need not identify foreign currency expenditure service-wise if it identifies all services and makes allegations clear – If SCN was unintelligible and nothing could be made of it, appellant could not have given elaborate submissions service-wise; fact that appellant could identify different services and payments and give submissions accordingly indicates SCN was not vague and unintelligible – As long as SCN makes allegations clear so appellant can file suitable reply, SCN cannot be termed vague and unintelligible; non-identification of foreign currency expenditure service-wise has not been fatal to proceedings - Service Tax – Extended period of limitation – Invocation of extended period for foreign currency expenditure on imported services – SCN dated 20.10.2011 invoked extended period under proviso to Section 73(1) of Finance Act, 1994 based on CAG audit conducted 22-11-2010 to 26-11-2010 – Appellant contended extended period was not invocable as there was no suppression, fraud or wilful mis-statement by appellant – Whether extended period can be invoked based on mere audit findings without bringing out specific acts of fraud, wilful mis-statement or suppression with intent to evade – HELD – SCN must bring out specific acts of commission or omission on part of appellant which constitute fraud, collusion, wilful mis-statement or suppression of fact with intent to evade duty to justify invocation of extended period – SCN merely mentioning Section 73 provision without bringing out ingredients required for extended period is not sufficient – Ingredients required for invoking extended period must be brought out with evidence in SCN itself – When ingredients for extended period have not been brought out with evidence in SCN, extended period cannot be invoked – Extended period cannot be invoked based on mere audit findings without specific evidence – Demands based on extended period must be restricted to normal period - Service Tax – Multiple Show Cause Notices for same period – Appellant had two SCNs issued: first SCN dated 13.10.2011 based on Service Tax audit conducted and second SCN dated 20.10.2011 dated only 7 days later based on CAG audit – First SCN invoked extended period of limitation – Second SCN again invoking extended period for overlapping period – Whether it is permissible to issue another SCN for same period invoking extended period when SCN already issued for same period invoking extended period – HELD – It is not open for Department to issue subsequent SCN for same period invoking extended period when SCN has already been issued for same period and period, as held by Hon'ble Supreme Court in Nizam Sugar Factory versus Collector of Central Excise – Double issuance of SCN for same period by Department is not permissible – When one SCN has already been issued for a period invoking extended period, subsequent SCN for same period with extended period should not have been issued - Service Tax – Secondment of employees – Payment for seconded employees from overseas entities – Appellant contended deputation of employees from overseas entities did not constitute import of service and employees were absorbed and remained under control and management of appellant – Whether service tax payable on secondment/deputation of employees from overseas entities – HELD – Principle established by Hon'ble Supreme Court in Northern Operating Systems Pvt. Ltd. is applicable – Appellant was service recipient for service of manpower recruitment and supply services by overseas entity in regard to employees seconded to appellant for duration of their deputation – Service tax is payable on secondment of employees – However, invocation of extended period of limitation in respect of secondment demand is not tenable and unreasonable – Assessee is liable to discharge service tax liability on secondment for normal period only, not extended period – Demand on secondment of employees confirmed only for normal period; demand beyond normal period is set aside - Service Tax – Adjudication – Adjudicating authority's obligation to consider appellant's submissions backed by CA certificates – Whether Adjudicating Authority can confirm demands without properly considering and rationally addressing appellant's submissions backed by CA certificates – HELD – Adjudicating Authority must have rational and reasoned approach in confirming demands against appellant and must record findings so meaning is unequivocally conveyed – Adjudicating Authority cannot rely on figures and CA certificates for computation while rejecting arguments of appellant without recording satisfactory and rational findings – Where appellant submits issue is mistake/inadvertent error and not deliberate suppression, Adjudicating Authority must address such submissions with valid reasoning – Mistake does not cease to be mistake only because it occurred multiple times; Adjudicating Authority must properly appreciate appellant's explanations and accounting practices – Adjudicating Authority failed to properly appreciate submissions and must reconsider matters on remand taking into account appellant's submissions, evidence provided, accounting standards and procedures and ratio of cases decided after impugned order. 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Service Tax – Manpower supply and manufacturing services – Taxability of manufacture on job work basis – Appellant entered into agreements with clients to manufacture goods on job work basis on per piece rate basis – Whether Appellant liable to pay service tax when activity amounted to manufacture of goods instead of provision of service – HELD – Where an activity constitutes manufacture and not supply of service, it is not chargeable to service tax as per Notification No. 25/2012-ST dated 20.6.2012 Section No. 30(i). Once it is found as matter of fact that any activity was not chargeable to service tax or was ... [Read more]

Service Tax – Manpower supply and manufacturing services – Taxability of manufacture on job work basis – Appellant entered into agreements with clients to manufacture goods on job work basis on per piece rate basis – Whether Appellant liable to pay service tax when activity amounted to manufacture of goods instead of provision of service – HELD – Where an activity constitutes manufacture and not supply of service, it is not chargeable to service tax as per Notification No. 25/2012-ST dated 20.6.2012 Section No. 30(i). Once it is found as matter of fact that any activity was not chargeable to service tax or was exempted, service tax cannot be demanded or confirmed. Even if amount has been collected as representing service tax but service tax is not payable, amount collected must be deposited with Central Government as per Section 73A of Finance Act, 1994 – However, fact that amount was collected and deposited does not create charge of service tax – Demand under Section 73 of Act is for service tax not levied, not paid, short levied or short paid; the inherent supposition is that such service tax was payable but not paid – The amount to be deposited under Section 73A is only amount wrongly collected, not service tax. Department cannot demand additional amounts as if wrongly collected – Demand of service tax on activity of manufacture undertaken by appellant for client is not chargeable to service tax and is set aside - Service Tax – Valuation – Inclusion of reimbursable expenses in value of taxable services – Appellant provided manpower to clients and charged actual wages, PF, ESI and service charge – Department demanded service tax including reimbursable expenses for period up to 13.5.2015; Appellant claimed no service tax was chargeable on reimbursable expenses – Whether service tax chargeable on reimbursable expenses before 14.5.2015 when Section 67 was later amended to include reimbursable expenses – HELD – As per Supreme Court judgment in Union of India versus Inter-continental Consultants and Technocrats Ltd., no service tax could be charged on reimbursable expenses – Charge of service tax comes from charging section; service tax has to be paid at rate specified on value as per Section 67 – If Appellant wrongly paid service tax on reimbursable expenses in some invoices, it does not give Department right to charge similarly wrong service tax on other reimbursable expenses or in other invoices – Amounts wrongly collected as representing service tax must be deposited but neither has assessee responsibility to collect more money wrongly as service tax nor can officer issue order to that effect – Demand of service tax on reimbursable expenses for period up to 13.5.2015 is not sustainable and is set aside - Service Tax – Extended period of limitation – Appropriation of amount deposited during investigation – Whether appropriation of amount deposited during investigation is permissible for period beyond five years extended period of limitation – HELD – When SCN was issued on 6.1.2020, extended period of limitation could extend to five years i.e. up to January 2015 – Demand for period beyond extended period of limitation cannot be sustained – No demand was proposed in SCN for period April 2014 to September 2014; appropriation of amount deposited for this period in adjudication proceedings was beyond scope of SCN – Appropriation was not proposed in SCN but was done by Commissioner in impugned order – Since appropriation was part of adjudication proceedings, proceedings could not have extended beyond five year period – Appropriation of amount deposited by Appellant for period beyond extended period of limitation deserves to be set aside - Service Tax – Whether refund can be denied when amount was deposited for period not covered by SCN and not proposed for appropriation in SCN – HELD – Service tax was deposited by Appellant for period April 2014 to September 2014 – SCN covered periods both before and after this period but did not issue any proposal demanding service tax for this period nor was any proposal made to appropriate amount paid – Appropriation of amount in impugned order was clearly beyond scope of SCN – SCN could not have demanded duty for this period because it was beyond normal period of limitation – Since no SCN was issued either demanding duty or proposing to appropriate amount paid during investigation, Revenue was bound to refund amount so deposited – Rejection of refund by lower authorities is not correct – Service tax deposited by Appellant must be refunded along with interest. [Read less]

Customs – Classification of Classification of Body Control Module (BCM) and Integrated Body Unit (IBU) – Electronic Control Units – Appellant classified goods under CTH 9032 8910 claiming concessional duty under Notifications No. 152/2009 and 50/2017 – Revenue took view that goods were not automatic regulators of heading 9032 but constituted parts and accessories of motor vehicles, specifically body control systems classifiable under CTH 8708 9900 – Whether BCM and IBU are classifiable as automatic regulating or controlling instruments under CTH 9032 8910 or as parts and accessories of motor vehicles under CTH 87... [Read more]

Customs – Classification of Classification of Body Control Module (BCM) and Integrated Body Unit (IBU) – Electronic Control Units – Appellant classified goods under CTH 9032 8910 claiming concessional duty under Notifications No. 152/2009 and 50/2017 – Revenue took view that goods were not automatic regulators of heading 9032 but constituted parts and accessories of motor vehicles, specifically body control systems classifiable under CTH 8708 9900 – Whether BCM and IBU are classifiable as automatic regulating or controlling instruments under CTH 9032 8910 or as parts and accessories of motor vehicles under CTH 8708 9900 – HELD – BCM and IBU are sophisticated automotive electronic control systems that receive sensor inputs, process them through microprocessor, and control actuators while functioning as power distribution centre and communication gateway. These goods actively regulate vehicle functions by comparing sensor inputs with preset values and issuing control commands; they are not mere programmable logic controllers but programmable process controllers that continuously monitor and regulate variables. They satisfy description of automatic regulating apparatus under Note 7(b) to Chapter 90 and are appropriately classifiable under CTH 9032 8910 – The functional description clearly states impugned goods are multi-faceted electronic components supporting monitoring, controlling and regulating automotive body electronics without human interface, making them automatic in nature. This conclusion is binding as per Tribunal order in appellant's own case; Revenue has not placed any judgment or order of superior judicial forum reversing or modifying said order; judicial discipline requires following said order – Classification under CTH 9032 8910 stands concluded – The impugned order confirming duty demand with interest is set aside and the appeal is allowed - Customs – Classification of Electronic Control Units – Tyre Pressure Monitoring System – Appellant classified goods under CTH 9032 8910; Revenue proposed classification under CTH 8708 9900 – Whether TPMS is classifiable as automatic regulating apparatus under CTH 9032 8910 or as parts and accessories of motor vehicles under CTH 8708 9900 – HELD – TPMS continuously monitors tyre pressure and provides real-time safety regulation; it autonomously regulates functions by measuring variables and issuing electrical impulses to maintain desired values – TPMS satisfies description of automatic regulating apparatus under Heading 9032 and Chapter 90 Notes; it performs automatic control functions and is not mere data processor – Neither SCN nor impugned order sets out functional characteristics of TPMS as part of foundational facts necessary to justify proposed classification under Tariff Item 8708 9900; impugned order contains little independent analysis of nature, functions or basis for classification – Classification of each Electronic Control Unit must be considered separately based on its specific functions; Revenue failed to discharge burden of establishing proposed classification under Tariff Item 8708 9900 – Burden of proof in classification matters lies squarely upon Revenue; if Department intends to classify goods under heading different from that claimed by assessee, Department must adduce proper evidence and discharge burden of proof – TPMS is appropriately classifiable under CTH 9032 8910 as claimed by Appellant - Customs – Demand of differential customs duty – Classification determines rate of duty and chargeability – Appellant classified goods under CTH 9032 8910 and claimed concessional duty; Revenue proposed higher duty by reclassifying under CTH 8708 9900 – Demand of differential customs duty with interest and confiscation, penalty proposed – Whether differential duty demand can be sustained when classification proposed by Revenue is not established – HELD – Classification of goods is matter relating to chargeability and burden of proof is squarely upon Revenue – Demand of differential duty with interest cannot be sustained when Revenue fails to discharge burden of establishing its proposed classification – Since BCM, IBU and TPMS stand classifiable under CTH 9032 8910, the differential duty demand cannot be sustained. [Read less]

GST – Validity of sealing of premises after the completion of search and seizure - Power and Scope to seal under Section 67(4) of the CGST Act, 2017 - Petitioner's office premises were sealed during search and seizure operations allegedly for preventing tampering of evidence and conducted an inspection under Section 67 of the CGST Act, 2017 - The Petitioner contended that the sealing was unauthorized as no access was denied and the power to seal can only be exercised when access to premises is denied - HELD - The power under Section 67(4) of the Act is not a standalone provision and is dependent upon Section 67(2) which ... [Read more]

GST – Validity of sealing of premises after the completion of search and seizure - Power and Scope to seal under Section 67(4) of the CGST Act, 2017 - Petitioner's office premises were sealed during search and seizure operations allegedly for preventing tampering of evidence and conducted an inspection under Section 67 of the CGST Act, 2017 - The Petitioner contended that the sealing was unauthorized as no access was denied and the power to seal can only be exercised when access to premises is denied - HELD - The power under Section 67(4) of the Act is not a standalone provision and is dependent upon Section 67(2) which empowers the officer to search and thereupon seize documents or books or things. The power conferred under Section 67(4) can only be exercised upon initiation of the search proceedings and so long the search proceedings are continuing. Once the search proceedings have culminated with the seizure of the goods, documents, books or things, the power under Section 67(4) ceases to exist. The said power can only be exercised where access to such premises, almirah, electronic devices, box or receptacle is denied – Further, the documents or books or things seized should have a correlation to usefulness or relevancy to any proceedings under the Act. An air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as “things” liable to confiscation under confiscation under Section 130 of the CGST Act - The sealing of the petitioner's office premises and keeping the premises under seal after the completion of search and seizure cannot be sustained in law. The records do not show that access to the Petitioner's premises was denied at any point. The power under Section 67(4) is for the purpose of carrying out the search and seizure and not for using the premises as a store for retaining the seized goods or documents or things - The sealing of the office premises is illegal and unauthorized and contrary to the mandate of Section 67(4) of the Act - The Respondents are directed to de-seal the premises and hand over possession to the petitioner forthwith - At the time of de-sealing and handing over possession of the office premises to the Petitioner, the Respondents are granted the liberty to take custody of the books or documents if the same are still necessary for examination and for any inquiry or any proceedings – The writ petition is disposed of - Scope of Section 67(2) and First Proviso thereof - Petitioner's office equipment including air conditioners, refrigerators, inverters, batteries, laptops and printers were made subject of an Order of Prohibition restricting removal or dealing with such goods - The Petitioner contended that these goods were merely office equipment used for providing tax consultancy services and were not goods liable to confiscation - HELD - The first proviso to Section 67(2) of the Act refers only to goods and not documents or books or things. The Order of Prohibition issued under the Rules is only limited to goods which are liable for confiscation. The term goods is defined in Section 2(52) of the Act to mean every kind of movable property liable to confiscation under Section 130 of the Act. The goods mentioned in the Order of Prohibition, namely, air conditioners, refrigerators, inverters, batteries, laptops and printers cannot under any circumstances be said to be goods liable for confiscation under Section 130 of the Act – An air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as documents or books or things. The goods not liable for confiscation cannot be seized or retained - Custody of Seized Documents, Books and Things - Petitioner's office documents and electronic items seized under Section 67(2) of the were handed over to the Petitioner with a direction that the Petitioner shall not remove or part with such items - HELD - Section 67(2) of the Act empowers search and seizure and upon seizure of goods or books or documents or things, the said items should remain in the custody of the Proper Officer or the Authorized Officer. Sub-section (2) permits the Proper Officer or the Authorized Officer to search and seize the documents or books or things and the custody of the seized items remain with such officers as the same would be useful for or relevant to any proceedings under the Act. The second proviso to Section 67(2) stipulates that documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under the Act - The act on the part of the officer in handing over custody of the books or documents or things seized to the Petitioner gives an impression that the documents or books or things seized were no longer necessary else the custody would not have been handed over. The custody of the books or documents or things should always remain with the Proper Officer or Authorized Officer till issuance of notice under the Act and under no circumstances beyond thirty days from the date of notice - The action of handing over custody of seized documents and books and things to the Petitioner cannot be sustained in law. [Read less]

GST - Jurisdiction for Assessment under Section 63, writ jurisdiction - Application to Registered Person – Authorities passed order under Section 63 of CGST Act, 2017 assessing petitioner for period 2017-2018 which is pre-registration period. Petitioner contended that Section 63 applies only for assessment of unregistered persons and not for unregistered periods and cannot be applied to registered person – Whether Section 63 which provides for assessment of unregistered person can be applied to assess registered person for pre-registration period – HELD – If a person is aggrieved by an order passed under Section 63... [Read more]

GST - Jurisdiction for Assessment under Section 63, writ jurisdiction - Application to Registered Person – Authorities passed order under Section 63 of CGST Act, 2017 assessing petitioner for period 2017-2018 which is pre-registration period. Petitioner contended that Section 63 applies only for assessment of unregistered persons and not for unregistered periods and cannot be applied to registered person – Whether Section 63 which provides for assessment of unregistered person can be applied to assess registered person for pre-registration period – HELD – If a person is aggrieved by an order passed under Section 63 of the 2017 Act, the statute provides for first appeal under Section 107 of CGST Act, which is otherwise and efficacious, alternative statutory remedy - To come to a conclusion whether the pre-registration transaction would be covered under the provisions of Section 63 for an existing registered person, some fact finding enquiries are required to be conducted. The impugned order does not demonstrate to be ex facie without jurisdiction unless a proper adjudication is made for which the first appellate authority is the appropriate and jurisdictional forum – The petition is disposed of [Read less]

GST - Section 140 of CGST Act, 2017 - Pre-deposit requirement in appeal before CESTAT - Mode of payment - Petitioner made mandatory pre-deposit required for entertaining appeal by debiting Electronic Credit Ledger using CENVAT credit transitioned under Section 140 of CGST Act, 2017 - CESTAT rejected the pre-deposit on ground that Section 35F mandates cash payment through designated CBIC portal only - Whether pre-deposit under Section 35F can be validly made by utilizing transitioned CENVAT credit debited from Electronic Credit Ledger - HELD - Section 35F of Central Excise Act, 1944 does not prescribe any exclusive mode of ... [Read more]

GST - Section 140 of CGST Act, 2017 - Pre-deposit requirement in appeal before CESTAT - Mode of payment - Petitioner made mandatory pre-deposit required for entertaining appeal by debiting Electronic Credit Ledger using CENVAT credit transitioned under Section 140 of CGST Act, 2017 - CESTAT rejected the pre-deposit on ground that Section 35F mandates cash payment through designated CBIC portal only - Whether pre-deposit under Section 35F can be validly made by utilizing transitioned CENVAT credit debited from Electronic Credit Ledger - HELD - Section 35F of Central Excise Act, 1944 does not prescribe any exclusive mode of payment and neither mandates payment in cash nor prohibits utilisation of available credit. Under pre-GST regime legal position was well settled that CENVAT credit could be utilised for mandatory pre-deposit - Section 140 of CGST Act was enacted with specific object of protecting vested rights of taxpayers in unutilised CENVAT credit and transition of credit into Electronic Credit Ledger did not create new credit but merely preserved existing credit in different form with legislative intent being continuity and not extinguishment of rights - Conjoint reading of Section 140 of CGST Act with Rule 142(3) of CGST Rules means that CENVAT credit transitioned could be utilised for payment of any tax, interest or penalty under new regime – The CBIC Instruction dated 28.10.2022 was issued to prescribe administrative procedure for cash payments and does not contain any provision prohibiting utilisation of transitioned credit and administrative instruction cannot curtail or override mode of payment recognised under statutory scheme - The Tribunal proceeded primarily on basis of administrative Instruction without adequately examining statutory scheme or binding judicial precedents. Pre-deposit being only portion of disputed demand intended to secure interest of Revenue, once amount debited from Electronic Credit Ledger and credited to Government, statutory requirement stands satisfied – The impugned order is quashed. Pre-deposit made by debiting Electronic Credit Ledger through Form GSTR-3B constitutes valid compliance of Section 35F of Central Excise Act, 1944 as made applicable to service tax matters - Writ petition is allowed [Read less]

Service Tax - Refund of wrongly collected tax – Payment of service tax under mistake of law - Service receiver's eligibility to claim refund when service provider did not challenge assessment – Assessee-Respondent provided crude oil extraction services under production sharing contract with ONGC and entered agreement with service provider for supply and operation of floating rigs - Service provider charged service tax under Mining Services and remitted to Department - Respondent sought refund claiming service tax for floating rigs taxable only from 16.05.2008 under Supply of Tangible Goods Service category - Original A... [Read more]

Service Tax - Refund of wrongly collected tax – Payment of service tax under mistake of law - Service receiver's eligibility to claim refund when service provider did not challenge assessment – Assessee-Respondent provided crude oil extraction services under production sharing contract with ONGC and entered agreement with service provider for supply and operation of floating rigs - Service provider charged service tax under Mining Services and remitted to Department - Respondent sought refund claiming service tax for floating rigs taxable only from 16.05.2008 under Supply of Tangible Goods Service category - Original Authority rejected on ground service provider did not raise classification dispute - Whether service receiver is eligible to claim refund of service tax collected wrongly when service provider did not challenge assessment - HELD - Creation of new entry for Supply of Tangible Goods Service and conclusive finding of Supreme Court in Indian National Shipowners Association lead to irresistible conclusion that respondent as service recipient eligible for refund of service tax paid erroneously under Mining Service classification. The payment of tax due to mistake of law and misclassification can never carry character of lawful levy to satisfy mandate of Article 265 of Constitution - Limitation prescribed under Section 11B of Central Excise Act not applicable for refund claims for service tax paid under mistake of law. The tax collected by mistake and retained by Department constitutes unjust enrichment and violates Article 265 - Concurrent findings by Appellate Authority and Tribunal that service tax was passed on to respondent and burden of unjust enrichment discharged not subject to interference – The service recipient is entitled to claim refund without relying on civil suit or writ petition when factual findings made in favour of assessee and no dispute regarding classification and passing of tax - Authorities below rightly exercised jurisdiction to grant relief as retention of tax against spirit of Constitution - The refund order is upheld and Civil Miscellaneous Appeal dismissed [Read less]

Customs Broker Licensing Regulations, 2018 – Suspension of License – Mandatory Procedure under Regulation 16(2) – Whether the respondent authority can legally continue the suspension under Regulation 16(2) when the mandatory post-decisional hearing, which was to be held within fifteen days from the date of suspension, was conducted beyond the prescribed statutory period entirely at the instance of the respondent authority itself – HELD – The expression "shall, within fifteen days" contained in Regulation 16(2) unmistakably indicates that the timeline is mandatory and not merely directory, constituting an importan... [Read more]

Customs Broker Licensing Regulations, 2018 – Suspension of License – Mandatory Procedure under Regulation 16(2) – Whether the respondent authority can legally continue the suspension under Regulation 16(2) when the mandatory post-decisional hearing, which was to be held within fifteen days from the date of suspension, was conducted beyond the prescribed statutory period entirely at the instance of the respondent authority itself – HELD – The expression "shall, within fifteen days" contained in Regulation 16(2) unmistakably indicates that the timeline is mandatory and not merely directory, constituting an important procedural safeguard against arbitrary or prolonged suspension. The legislature has mandated that the Customs Broker shall be afforded a post-decisional hearing within fifteen days from the date of suspension, recognising that the initial suspension is ordered without granting a prior hearing on account of the urgency of the situation. The statutory safeguard cannot be diluted by administrative convenience or procedural delays attributable to the licensing authority - A timeline prescribed by law cannot be modified by administrative action. The respondent could not enlarge or extend a statutory period fixed by the delegated legislation. Acceptance of such a proposition would render the safeguard contained in Regulation 16(2) wholly illusory and would defeat the legislative intent underlying the provision. The conduct of the respondent itself, by postponing the hearing beyond the prescribed period, belies the existence of compelling urgency as would be required to invoke Regulation 16(1). The rule of law demands equal fidelity to both substantive powers and procedural safeguards – The impugned order is set aside. The continuation of suspension of the appellant's Customs Broker Licence stands revoked – The appeal is allowed [Read less]

GST – Uttarakhand AAR - Exemption of uncoated paper used for exercise books and notebooks - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 - Whether the supply of such uncoated paper qualifies for exemption from GST under Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) or is exigible to GST under Schedule-II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 - HELD - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 exempts uncoated paper and paperboard of a kind used for writing printing or other graphic purposes in rolls or rectangular... [Read more]

GST – Uttarakhand AAR - Exemption of uncoated paper used for exercise books and notebooks - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 - Whether the supply of such uncoated paper qualifies for exemption from GST under Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) or is exigible to GST under Schedule-II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 - HELD - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 exempts uncoated paper and paperboard of a kind used for writing printing or other graphic purposes in rolls or rectangular sheets used for exercise books graph books laboratory notebooks and notebooks from the whole of central tax leviable thereon. The legislative scheme undoubtedly creates a use-based distinction within Heading 4802 whereby uncoated paper is exempt when used for exercise books and notebooks but attracts 18% GST when used for other purposes - The expression used for in Entry No. 128 denotes a factual relationship between the goods and the specified use and at the point when the supplier effects the supply the future utilization of the paper by the purchaser has not yet occurred - The CGST Act 2017 and the Rules made thereunder and the notifications dated 17.09.2025 do not prescribe any statutory procedure mechanism or documentary requirements for determining end-use verification. However, no provision recognizes purchaser declarations purchase orders or contractual stipulations as conclusive proof of fulfillment of the end-use condition. The Authority cannot rewrite or supplement the notification by introducing additional conditions creating procedural safeguards or prescribing evidentiary standards absent from the law - The application is answered to the extent that Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) exempts uncoated paper used for exercise books and notebooks however no advance ruling can be pronounced on the procedure or manner for availing the exemption being outside the purview of Section 97(2) of the CGST Act 2017 – Ordered accordingly [Read less]

Service Tax – Business Support Services – Reimbursement of operating costs of employees by Group companies – Appellant's employees worked for Group companies and Appellant raised debit notes on Group companies for reimbursement of operating costs of such employees – Whether such reimbursement amounts to 'Business Support Service' requiring 'outsourcing' of business functions – HELD – For any activity to be covered under Business Support Service, the service recipient must be a business entity using services in relation to business or commerce and must have 'outsourced' its functions to the service provider. In ... [Read more]

Service Tax – Business Support Services – Reimbursement of operating costs of employees by Group companies – Appellant's employees worked for Group companies and Appellant raised debit notes on Group companies for reimbursement of operating costs of such employees – Whether such reimbursement amounts to 'Business Support Service' requiring 'outsourcing' of business functions – HELD – For any activity to be covered under Business Support Service, the service recipient must be a business entity using services in relation to business or commerce and must have 'outsourced' its functions to the service provider. In the present case, Group companies had not 'outsourced' any of their business functions to the Appellant; rather Appellant had excess manpower which was utilized by performing activities in relation to business functions of Group companies – Since there is no 'outsourcing' of activities or business functions involved, merely sharing of expenses or cost relating to employees performing common activities cannot be categorized as rendering of Business Support Service – Further, no Service Tax is payable on reimbursement of expenses – The demand of service tax confirmed on 'reimbursement of employee costs' under the category of Business Support Services is not sustainable and is set aside – The appeal is allowed - Service Tax – 'Deemed Sale' of goods – Appellant entered into contractual arrangements with entities wherein multi-function printers installed by Appellant remained in possession of customers for their use throughout contract period – Appellant charged customers on basis of number of prints or copies at pre-determined per page price and was responsible for supplying toner and consumables – Whether transaction involving transfer of right to use goods amounts to 'deemed sale' beyond purview of service tax – HELD – A transaction involving transfer of right to use goods would amount to 'deemed sale' which is beyond the purview of service tax – Appellant satisfied all five attributes for transfer of right to use goods as laid down in Supreme Court judgment. Once the printers were delivered to customers and installed at their location, there was exclusion of transferor – Merely because maintenance of equipment was undertaken by Appellant, absence of effective control or right to use by customers cannot be presumed – Further, Notification No. 12/2003-ST dated 20.6.2003 provides exemption from Service Tax to value equivalent to value of goods and materials sold by service provider to service recipient – In present case, Appellant transferred possession and property in spare parts, toner, consumables during maintenance of multi-function printers and regularly discharged VAT on said materials. The value of goods and materials supplied is thus exempted from Service Tax under Notification No. 12/2003-ST – The demand of service tax confirmed on consideration received for provision of print services is not sustainable and is set aside - Service Tax – Commercial Training and Coaching Services – Supply of course material – Appellant engaged independent service providers to impart courses and operate Career Development Centers – Students approached service providers, enrolled and paid fees directly to them – Appellant merely sold course material to independent service providers as evidenced by Agreement dated 1.12.2010 and invoices – Whether Appellant was engaged in providing 'Commercial Training or Coaching Service' or was merely selling course material – HELD – Appellant is not engaged in providing Commercial Training or Coaching Service – Instead it merely sold course material to independent service providers – The transaction is between student and service provider and Appellant is not party to it. Even if it were assumed that Appellant is engaged in providing Commercial Training or Coaching Service, the value of goods sold in course of provision of such service is liable to be excluded from value of such services – This view is supported by decision in Cerebral Learning Solutions Pvt Limited case wherein it was held that value of books or course material supplied by assessee to students is required to be included in value of taxable service but Notification No. 12/2003-ST dated 20.6.2003 exempts so much of value of taxable services as is equal to value of goods and material sold by service provider – The demand of service tax confirmed on value of course material supplied under category of Commercial Training or Coaching Service is not sustainable - Service Tax – Advertising Agency Service – Display of Intel logo on computers – Appellant merely displayed logo of Intel on computers manufactured by it – Logos were provided by Intel and Appellant did not design or make such logos – Whether activity of mere printing, displaying of Intel logo qualifies as 'Advertising Agency Service' – HELD – Term 'Advertising Agency' is not defined under Section 65B of Act prevailing under negative list regime. Under positive list regime prevailing till 30.6.2012, scope of 'advertising agency' covered making, preparation, display or exhibition of advertisement – The CBIC vide Circular No. 345/4/97-TRU dated 16.8.1999 clarified that if assessees were engaged in designing, visualizing and conceptualizing advertisements, then only they would be liable to pay service tax – Thus, Circular has interpreted 'Advertising Agency Service' as something more than mere printing of advertisement – In present case, Appellant is merely displaying logo of Intel on computers manufactured by it. Such logos are provided by Intel and Appellant does not design or make such logos – Appellant has not rendered any service in relation to conceptualizing, visualizing or designing advertisement – Activity of mere printing, displaying of Intel logo does not qualify as 'Advertising Agency Service' and no service tax is leviable on said transaction - Service Tax – Comprehensive Service and Maintenance Contracts – Abatement under Notification No. 12/2003-ST – Appellant provided Comprehensive Service and Maintenance Contracts services supplying toner, developer, spares during provision of maintenance services and paid appropriate sales tax on value of materials and goods involved – Commissioner denied benefit of abatement under Notification No. 12/2003-ST on ground that Appellant did not provide details relating to value of goods used for providing services – Whether Appellant entitled to benefit of abatement under Notification No. 12/2003-ST when VAT already paid on goods supplied – HELD – It is undisputed fact that Appellant provided goods like toner, developer, spares during provision of maintenance service and paid appropriate VAT on value of materials and goods involved as per State sales tax legislations, evidenced by invoices and Chartered Accountant certificate – Appellant has not availed any CENVAT credit on such spare parts, toner, consumables – Appellant has been regularly discharging VAT liability on spare parts, toner, consumables supplied during provision of CSMC services. Thus, Appellant fulfilled all conditions prescribed in Notification 12/2003-ST for goods supplied in course of provision of CSMC services – Appellant entitled to avail benefit of abatement under Notification No. 12/2003-ST – Once VAT or Sales Tax has been paid on said transaction, demand of service tax on same transaction is untenable – The demand of service tax confirmed on CSMC services is not legally sustainable and is set aside - Service Tax – Extended Period of Limitation – Time bar – SCN issued on 23.10.2015 for period July 2010 to June 2015 – Demand raised for period up to September 2014 is beyond normal period of limitation – Special audit conducted approximately 3.5 years prior to issuance of SCN; relevant documents and information available with Department since 2012 – Whether demand for period up to September 2014 is time-barred and whether inordinate delay of 3 years in issuing [Read less]

GST – Condonation of delay in filing of appeal on medical ground - Discretion of Appellate Authority under Section 107 of the GST Act - Petitioner filed appeal after the stipulated period of three months. The delay was due to petitioner being under medical treatment - The Appellate Authority rejected the appeal without affording opportunity to the petitioner to explain the delay - Whether the rejection order was proper when the petitioner had not been given opportunity to justify that the delay occurred due to circumstances beyond control - HELD - The Appellate Authority should have considered such delay liberally invoki... [Read more]

GST – Condonation of delay in filing of appeal on medical ground - Discretion of Appellate Authority under Section 107 of the GST Act - Petitioner filed appeal after the stipulated period of three months. The delay was due to petitioner being under medical treatment - The Appellate Authority rejected the appeal without affording opportunity to the petitioner to explain the delay - Whether the rejection order was proper when the petitioner had not been given opportunity to justify that the delay occurred due to circumstances beyond control - HELD - The Appellate Authority should have considered such delay liberally invoking discretion in terms of sub-section (4) of Section 107 as the appeal has been filed within condonable period. There appears sufficient cause for the petitioner to file appeal beyond the period stipulated under sub-section (1) of Section 107. There is no evidence put forth to establish that the contentions of the petitioner are not genuine and germane. The petitioner is required to be given one opportunity to justify that the delay occurred due to circumstance beyond control - The impugned rejection order is set aside and petitioner is directed to appear before the Appellate Authority and file response to the show-cause notice and the authority concerned shall consider the same by affording opportunity of hearing to the petitioner – The petition is disposed of [Read less]

GST - Cancellation of registration - Revocation of cancellation order on filing of returns and payment of taxes and late fee - Denial of opportunity of personal hearing before passing ex-parte cancellation order - Petitioner filed application for revocation of cancellation which was rejected citing non-payment of late fee at time of rejection - Whether ex-parte cancellation order without opportunity of hearing and subsequent rejection of revocation application are valid despite petitioner's subsequent compliance - HELD - Once petitioner filed returns paid taxes and deposited late fee competent authority must consider reque... [Read more]

GST - Cancellation of registration - Revocation of cancellation order on filing of returns and payment of taxes and late fee - Denial of opportunity of personal hearing before passing ex-parte cancellation order - Petitioner filed application for revocation of cancellation which was rejected citing non-payment of late fee at time of rejection - Whether ex-parte cancellation order without opportunity of hearing and subsequent rejection of revocation application are valid despite petitioner's subsequent compliance - HELD - Once petitioner filed returns paid taxes and deposited late fee competent authority must consider request for revocation of cancellation order. Permanent cancellation of registration inflicts civil death to livelihood of petitioner as he cannot do business - Petitioner filed return within 15 days from date of cancellation paid taxes and deposited late fee and case deserves reconsideration - Competent authority should consider application for revocation of cancellation and not merely remand to Appellate Authority - Instead of remanding the matter to the Appellate Authority, it would be just and proper to remit the matter to the respondent-authority who is competent to consider the request of the petitioner for revocation of the order of cancellation of registration - The impugned orders rejecting revocation application set aside and matter remitted to competent authority for fresh consideration - Assistant Commissioner directed to consider application for revocation of cancellation and pass appropriate order – The petition stands allowed [Read less]

Customs - Mis-declaration and mis-classification of optical network terminals and MODAMs imported as subscriber equipment - Appellant imported optical network terminals, modems and OLTs and classified them as subscriber and E&D equipments under different CTH seeking exemption under Notification No.24/2005-Cus and Notification No.57/2017-Cus - Department alleged evasion of customs duty through mis-declaration and mis-classification and claimed the goods attracted higher duty - Whether the extended period of limitation is applicable when the classification dispute was not earlier challenged - HELD - The appellant had full kn... [Read more]

Customs - Mis-declaration and mis-classification of optical network terminals and MODAMs imported as subscriber equipment - Appellant imported optical network terminals, modems and OLTs and classified them as subscriber and E&D equipments under different CTH seeking exemption under Notification No.24/2005-Cus and Notification No.57/2017-Cus - Department alleged evasion of customs duty through mis-declaration and mis-classification and claimed the goods attracted higher duty - Whether the extended period of limitation is applicable when the classification dispute was not earlier challenged - HELD - The appellant had full knowledge of the technical features of the products conforming to the correct classification but chose to classify them under different tariff headings inconsistently and deliberately. The inconsistency in adoption of classification by the appellant is not an innocuous consequence but pre-meditated tactics to avail ineligible exemptions and evade applicable duty - The appellant uploaded an Equipment Type Approval certificate on e-sanchit which stated the equipment type as GPON ONT and made no mention of subscriber end equipment, showing the appellant was fully aware of the incorrect classification and claim of ineligible exemption - The appellant failed to exercise due diligence while making self-assessment of duties in the Bills of Entry as mandated and the appellant had continued to classify items under the claimed heading and avail exemption benefit. The mala fides and intent to evade customs duty is evident from the conduct of the appellant - The extended period of limitation applies as the case involves intentional availment of exemption benefits with intent to evade duty - The appeals are dismissed [Read less]

Customs - Penalty and confiscation for smuggling of gold - Imposition of penalty under Section 112(b) and confiscation under Section 115 of Customs Act, 1962 on vehicle driver and hotel proprietors merely on the basis of association with passengers found carrying smuggled gold - HELD - Merely plying a vehicle and carrying passengers who were engaged in smuggling of gold cannot be said to mean that the driver was engaged in the activity of smuggling. No corroborative statement or evidence has been placed by the Revenue on record to establish the involvement of the driver in smuggling activity - The Revenue has failed to pro... [Read more]

Customs - Penalty and confiscation for smuggling of gold - Imposition of penalty under Section 112(b) and confiscation under Section 115 of Customs Act, 1962 on vehicle driver and hotel proprietors merely on the basis of association with passengers found carrying smuggled gold - HELD - Merely plying a vehicle and carrying passengers who were engaged in smuggling of gold cannot be said to mean that the driver was engaged in the activity of smuggling. No corroborative statement or evidence has been placed by the Revenue on record to establish the involvement of the driver in smuggling activity - The Revenue has failed to produce any evidence on record that the hotel proprietors had any knowledge or relation with the activity of the persons who were apprehended - No evidence has been produced to show that the appellants were involved in the activity of smuggling of gold - Penalty imposed on the driver and hotel proprietors are not sustainable and accordingly dropped - The vehicle confiscated during the course of seizure of gold is not liable for confiscation and directed to be released. The appeals are allowed [Read less]

Customs - Classification of Tab. Mapelein - Eligibility for exemption under Notification No.21/2002-Cus - Appellant imported 10 kgs of Tab. Mapelein classifying it under CTH 3302.1090 claiming exemption under Notification No.21/2002-Cus dated 01.03.2002 Sl. No.119 - Department denied benefit observing that the goods are compound alcoholic preparations with alcoholic content exceeding 0.5 percent by volume and hence fall within the excluded category under the notification - Whether the goods qualify for exemption under the notification - HELD - The benefit of exemption under Sl. No.119 of the notification is available to al... [Read more]

Customs - Classification of Tab. Mapelein - Eligibility for exemption under Notification No.21/2002-Cus - Appellant imported 10 kgs of Tab. Mapelein classifying it under CTH 3302.1090 claiming exemption under Notification No.21/2002-Cus dated 01.03.2002 Sl. No.119 - Department denied benefit observing that the goods are compound alcoholic preparations with alcoholic content exceeding 0.5 percent by volume and hence fall within the excluded category under the notification - Whether the goods qualify for exemption under the notification - HELD - The benefit of exemption under Sl. No.119 of the notification is available to all goods except compound alcoholic preparations of a kind used for the manufacture of beverages with alcoholic strength exceeding 0.5 percent by volume - The exclusion applies only to goods that are compound alcoholic preparations of a kind used for the manufacture of beverages and unless the Revenue proves the above conditions the benefit cannot be denied - Revenue relied on previous test report for different import without drawing any test report for the present consignment to deny the benefit. The previous decision of the Tribunal in the appellant's own case held that beverage flavours used for manufacture of beverages are not eligible for exemption but categorically stated that for flavours not sold to manufacture of beverages it must be established that they are of a kind used for manufacture of beverages - The Revenue failed to categorically establish that the goods in the present case were of a kind used for manufacture of beverages - The purchase order was placed by M/s. Godfrey Phillips India Ltd. who are major manufacturers of tobacco products establishing that goods were not sold to beverage manufacturers - The Revenue has failed to conclusively prove that the goods were used in the manufacture of beverages which is a condition precedent to deny the benefit of notification - The impugned order is set aside and benefit of notification is extended to the appellant – The appeal is allowed [Read less]

GST – West Bengal AAR - Pure Agent Service - Exclusion of Reimbursement from Value of Supply - Applicant is acting as facilitator for arranging hotel accommodation through third-party agents and charging separate facilitation fee besides recovering actual hotel cost as reimbursement without GST - Whether applicant qualifies as Pure Agent under Rule 33 of CGST Rules, 2017 and can exclude actual hotel accommodation cost from taxable value of supply - HELD – The Rule 33 and the Explanation thereto prescribe four mandatory cumulative conditions for qualifying as Pure Agent namely the supplier must enter into contractual ag... [Read more]

GST – West Bengal AAR - Pure Agent Service - Exclusion of Reimbursement from Value of Supply - Applicant is acting as facilitator for arranging hotel accommodation through third-party agents and charging separate facilitation fee besides recovering actual hotel cost as reimbursement without GST - Whether applicant qualifies as Pure Agent under Rule 33 of CGST Rules, 2017 and can exclude actual hotel accommodation cost from taxable value of supply - HELD – The Rule 33 and the Explanation thereto prescribe four mandatory cumulative conditions for qualifying as Pure Agent namely the supplier must enter into contractual agreement with recipient to act as pure agent to incur expenditure in course of supply, must neither intend to hold nor hold any title to goods or services procured, must not use for own interest the goods or services procured and must receive only actual amount incurred plus amount for services provided on own account. All four conditions must be satisfied simultaneously and cumulatively - In the present case the applicant fails to satisfy condition (a) as there is no contractual agreement between applicant and end customer authorizing applicant to incur expenditure as pure agent in course of supply of booking service - The applicant further fails condition (b) as the third-party agent issues invoice in the name of applicant not in name of end customer which creates scenario where applicant holds title to services procured from third-party agent - The applicant also fails condition (c) as by holding title to services it is using services for own interest of providing services to end customer. Further the applicant receives amount incurred for hotel room booking as well as for intermediary services of third-party agent without prior knowledge or authorization of end customer thus failing condition (d) - In absence of a contractual agreement specifically authorizing incurrence of expenditure as pure agent in course of supply, the agent loses its status as pure agent. Mere bifurcation of invoice showing reimbursement and facilitation fee separately does not confer pure agent status if mandatory conditions are not satisfied - The applicant does not qualify as pure agent and provisions of Rule 33 do not apply. Service of booking of hotel room falls under SAC 998552 for reservation services for accommodation, cruises and package tours attracting 18% GST on entire consideration - Ordered accordingly [Read less]

GST – Gujarat AAR Classification of PTFE braided gland packing - Tariff classification under HSN 59119090 (Textile products and articles for technical uses) versus HSN 39209949 (Other articles of plastics) - Applicable GST rate - Applicant engaged in manufacture of PTFE braided gland packing by interlocked or cross-plaited braiding of pure PTFE fibre yarn on braiding machines into flexible packing of square or round cross-section supplied in coils for use as stuffing-box packing in industrial pumps and valves - Whether PTFE braided gland packing should be classified as textile product under HSN 59119090 or as plastic art... [Read more]

GST – Gujarat AAR Classification of PTFE braided gland packing - Tariff classification under HSN 59119090 (Textile products and articles for technical uses) versus HSN 39209949 (Other articles of plastics) - Applicable GST rate - Applicant engaged in manufacture of PTFE braided gland packing by interlocked or cross-plaited braiding of pure PTFE fibre yarn on braiding machines into flexible packing of square or round cross-section supplied in coils for use as stuffing-box packing in industrial pumps and valves - Whether PTFE braided gland packing should be classified as textile product under HSN 59119090 or as plastic article under HSN 39209949 and what is the applicable GST rate - HELD – The PTFE braided gland packing is entirely made from Polytetrafluroethylene (PTFE), a plastic material classifiable under heading 39046100 of Chapter 39 which covers plastics and articles thereof - Note 1(g) of Section XI specifically excludes monofilament of plastics whose cross-sectional dimension exceeds 1mm from Section XI (Textile and Textile Articles) and directs such goods to Chapter 39, and since the applicant's product has cross-sectional dimensions of 3mm to 25mm, far exceeding 1mm, the goods are excluded from Section XI at the threshold and heading 5911 is out of bounds regardless of how closely the product matches the notes for that heading in Chapter 59 - Under the Textiles Committee Act, 1963, textile is defined as any fabric or cloth or yarn or garment made wholly or in part of cotton, wool, silk, artificial silk or other fibre, and nowhere in the said definition of fibre or textile, plastic has been mentioned as a commodity to be included in the definition of textile - The Hon'ble High Court of Madhya Pradesh in M/s. Raj Packwell Ltd. v. UOI has authoritatively held that HDPE woven sacks made from plastic strips are articles of plastic and not textile articles, despite being woven like fabric. The said principle applies to PTFE braided gland packing which, although obtained by interlocking or cross-plaiting braiding of pure PTFE fibre yarn, is made entirely of plastic material and therefore constitutes an article of plastic irrespective of the braiding process employed - Classification of goods under GST must be determined in accordance with relevant tariff entries, chapter notes, section notes and explanatory notes based on the actual nature and composition of goods, and classification adopted by other manufacturers cannot be relied upon to justify classification of similar products - The product is appropriately classified under sub-heading 39209949 of the First Schedule to the Customs Tariff Act, 1975 as it is an article of plastic and not textile - The product falls under Entry No. 121 of Schedule-II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 and is liable to 18% GST – Ordered accordingly [Read less]

Service Tax - CENVAT Credit - Availment of CENVAT credit on input service invoices with address mismatch with registration certificate - Whether CENVAT credit can be denied merely on the ground that the address mentioned in input service invoices does not tally with the address in the Form-ST2 registration certificate if invoices otherwise contain all prescribed particulars - HELD - The issuance of invoices by the service provider with an address that differs from the registered address in Form-ST2 does not by itself make the invoices invalid documents for purposes of claiming CENVAT credit if the invoices contain all othe... [Read more]

Service Tax - CENVAT Credit - Availment of CENVAT credit on input service invoices with address mismatch with registration certificate - Whether CENVAT credit can be denied merely on the ground that the address mentioned in input service invoices does not tally with the address in the Form-ST2 registration certificate if invoices otherwise contain all prescribed particulars - HELD - The issuance of invoices by the service provider with an address that differs from the registered address in Form-ST2 does not by itself make the invoices invalid documents for purposes of claiming CENVAT credit if the invoices contain all other particulars required under Rule 4A of the Service Tax Rules, 1994 and Rule 9(2) of the CENVAT Credit Rules, 2004 – Dept cannot reject CENVAT credit on mere technicality of address mismatch without appreciating the substantive aspects of whether the conditions for availment of CENVAT credit have been satisfied. When an invoicing discrepancy results from administrative lapse or inadvertence in the accounting system of the service provider and not from fraudulent intent or intentional violation, such technical non-compliance cannot be the sole ground for denying CENVAT credit if the invoices otherwise fulfill all material requirements of law - The fact that audit team had accepted the invoices for a period of more than four years demonstrates that the invoices were not considered invalid during the audit process and the belated action of the authority cannot be based on mere technicality. The authority is required to record reasoned findings by addressing the contentions raised by the assessee instead of deciding the matter on mere technicalities without application of mind to the merits - The order denying CENVAT credit and imposing penalty is set aside and the matter is remanded to the authority for fresh consideration with proper application of law – The petition is allowed [Read less]

Customs – Classification of Polyester Quilt Covers – Goods imported declared as Polyester Quilt Covers under CTH 63022200 with transaction value of USD 1.20 to USD 1.25 per piece – Department formed opinion that goods were folded polyester fabrics capable of being converted into bed sheets by removing stitches and rejected classification – Whether goods can be re-characterized merely because they are capable of subsequent conversion into bed sheets – HELD – Imported goods must be assessed in the condition in which they are presented to Customs; Classification is based on goods as imported, not on what they may ... [Read more]

Customs – Classification of Polyester Quilt Covers – Goods imported declared as Polyester Quilt Covers under CTH 63022200 with transaction value of USD 1.20 to USD 1.25 per piece – Department formed opinion that goods were folded polyester fabrics capable of being converted into bed sheets by removing stitches and rejected classification – Whether goods can be re-characterized merely because they are capable of subsequent conversion into bed sheets – HELD – Imported goods must be assessed in the condition in which they are presented to Customs; Classification is based on goods as imported, not on what they may become after further processing – Examination report revealed imported articles were folded and stitched and were presented as quilt covers ready for use. Department misread Note 7 to Section XI which speaks of goods produced in finished condition requiring only separation by cutting dividing threads; De-stitching cannot be wrongly equated with cutting dividing threads – Imported articles were already stitched articles ready for use and therefore answered statutory definition of made-up articles – Textile Committee, the designated expert body, had opined in identical matter that similar goods are Polyester Woven Printed Quilt Covers classifiable under Heading 6302 – Adjudicating authority ignored expert evidence completely. It is settled principle that goods are classifiable according to their condition at the time of clearance and made-up textile articles cannot be treated merely as fabrics because further processing is possible – The goods imported by appellant are Polyester Woven Printed Quilt Covers appropriately classifiable under CTH 6302 - Customs – Valuation – Rejection of Transaction Value – Appellant imported goods at declared transaction value of USD 1.20 to USD 1.25 per piece CIF – Department rejected declared transaction value under Rule 12 of Customs Valuation Rules, 2007 solely on basis of comparison with contemporaneous imports of bed sheets - Whether transaction value can be enhanced solely on basis of contemporaneous imports without satisfying mandatory requirements of Customs Valuation Rules – HELD – The Rule 12 of Valuation Rules permits rejection of transaction value only where Customs possesses reasonable doubt supported by objective evidence. In present case no evidence of additional remittance, no evidence of relationship between parties, no evidence of fabricated invoices, no evidence that declared price was false. The contemporaneous goods cited by Revenue were not legally comparable; Department merely relied on imports of bed sheets without comparison regarding manufacturer, quality, GSM, fabric construction, brand, finish, commercial level or quantity – Declared transaction value cannot be rejected without legal grounds; burden to establish undervaluation lies entirely on Revenue – Invoice value is to be accepted unless Customs proves otherwise with positive evidence – Previous acceptance of identical invoice values is relevant circumstance in favour of importer – Transaction Value declared by Appellant cannot be rejected - Customs – Confiscation and Redemption Fine – Goods confiscated under Section 111(m) on allegation of mis-classification and undervaluation and redemption fine imposed – Whether confiscation under Section 111(m) and redemption fine under Section 125 can survive when mis-classification and undervaluation are not legally established – HELD – Once allegations of mis-classification and undervaluation are not established and proved, there is no foundation for invoking Section 111(m) for effecting confiscation of goods – Section 111(m) provides for confiscation only when goods are mis-declared as to value or otherwise mis-declared; confiscation cannot be sustained when mis-classification and undervaluation allegations are not proved – Once order of confiscation is not sustained, imposing Redemption fine in lieu of confiscation as provided under Section 125 is not warranted – Order of confiscation as well as redemption fine imposed is set aside - Customs – Penalty imposed on allegation of mis-classification and undervaluation of goods – Whether penalty under Section 112(a) is sustainable when allegations of mis-classification and undervaluation are not legally established – HELD – Ingredients required for imposing penalty under Section 112(a) of Customs Act do not exist when allegations against importer are not established – Penalty under Section 112(a) is imposable only when there is contravention of Customs law including mis-declaration as to value; once allegations against Appellant are not established, foundation for imposing penalty is absent – Penalty imposed under Section 112(a) of Customs Act, 1962 is not sustainable and is set aside. [Read less]

Central Excise - Denial of Cenvat credit and recovery of duty on alleged irregular availment of credit without actual physical receipt of inputs - Department based case on verification of vehicle registration numbers through VAHAN portal showing certain vehicles incapable of transporting goods and statements recorded during investigation - Whether the Revenue has established by cogent evidence that inputs were not received and transactions were paper transactions - HELD - The appellant had received disputed inputs under cover of valid Central Excise invoices issued by duly registered dealer with invoices disclosing particu... [Read more]

Central Excise - Denial of Cenvat credit and recovery of duty on alleged irregular availment of credit without actual physical receipt of inputs - Department based case on verification of vehicle registration numbers through VAHAN portal showing certain vehicles incapable of transporting goods and statements recorded during investigation - Whether the Revenue has established by cogent evidence that inputs were not received and transactions were paper transactions - HELD - The appellant had received disputed inputs under cover of valid Central Excise invoices issued by duly registered dealer with invoices disclosing particulars of original manufacturers and duty paid thereon - Consideration for transactions was discharged through recognized banking channels including RTGS and account-payee cheques with corresponding ledger accounts reflecting realization of sale proceeds. Service tax on GTA services was duly discharged under reverse charge mechanism and reflected in statutory ST-3 Returns - These contemporaneous statutory records lend considerable assurance to bona fides of transactions and cannot be brushed aside without convincing evidence to the contrary - Department nowhere alleged or established that appellant procured non-duty-paid scrap from any undisclosed source - Mere verification of vehicle registration numbers without independent investigation of actual transportation chain is insufficient to sustain serious allegation of fraudulent availment. The investigation remained conspicuously incomplete with no investigation at transporters' end, no verification at suppliers' premises, no physical stock discrepancy and no evidence regarding diversion of inputs elsewhere - Isolated discrepancies in vehicle numbers regarding handful of cases out of more than 150 consignments and nearly 80 transport vehicles cannot justify inference that entire series of transactions was fictitious - Statements recorded do not contain categorical admission of non-receipt and do not inspire confidence with internal contradictions considerably eroding evidentiary value - No evidence of fraud, collusion, wilful misstatement or suppression of facts necessary to invoke extended period of limitation. The entire proceedings barred by limitation - The impugned order is set aside and appeals are allowed [Read less]

Central Excise - Denial of Cenvat credit on alleged non-receipt of inputs based on vehicle registration discrepancies - Department initiated action alleging non-receipt of inputs on the ground that certain vehicles shown in invoices were registered as buses, tractors, passenger three-wheelers and other categories incapable of transporting such quantities, and certain vehicle numbers were non-existent in the VAHAN database - Department proposed recovery of CENVAT Credit with penalties invoking extended period under Section 11A(4) - Whether the Revenue has established by cogent evidence that inputs were never received - HELD... [Read more]

Central Excise - Denial of Cenvat credit on alleged non-receipt of inputs based on vehicle registration discrepancies - Department initiated action alleging non-receipt of inputs on the ground that certain vehicles shown in invoices were registered as buses, tractors, passenger three-wheelers and other categories incapable of transporting such quantities, and certain vehicle numbers were non-existent in the VAHAN database - Department proposed recovery of CENVAT Credit with penalties invoking extended period under Section 11A(4) - Whether the Revenue has established by cogent evidence that inputs were never received - HELD - Mere verification of vehicle registration numbers through VAHAN portal without independent investigation is wholly insufficient to establish non-receipt of inputs. The Department failed to investigate suppliers themselves, record statements from suppliers or verify their records to ascertain whether disputed inputs had been sold and dispatched to the appellant - The appellant manufactured substantial quantities of finished excisable goods during the relevant period and discharged applicable central excise duty thereon, which undisputed production cannot be reconciled with the allegation that over 6383 MT of inputs were never received - The appellant produced contemporaneous records including transport documents, transporters' invoices, carriage inward accounts, ledger accounts evidencing payments and statutory records maintained in ordinary course of business - The evidentiary basis adopted by the Revenue suffers from serious infirmities including data reflected on VAHAN portal containing technical inaccuracies and deficiencies – The communications received from alleged vehicle owners relate only to an insignificant fraction and were obtained years after alleged transportation without compliance with Section 14 requirements - No cogent and convincing evidence has been brought on record establishing fraud, collusion, wilful misstatement or suppression of facts necessary to invoke extended period of limitation - The impugned order does not merit judicial sustenance and is set aside – The appeals are allowed [Read less]

GST - Issuance of show cause notices for re-examination of settled issues - Petitioner sought to quash show cause notice regarding classification of tobacco product as ‘manufactured tobacco’ whereas an earlier show cause notice for similar period and similar issue had already been set aside by the High Court which decided that the product is unmanufactured tobacco - HELD - The very allegations regarding use of machines and addition of aroma and menthol had already been specifically considered in the Advance Ruling - The issuance of show cause notices reflects an attempt to reopen issues which have already attained fina... [Read more]

GST - Issuance of show cause notices for re-examination of settled issues - Petitioner sought to quash show cause notice regarding classification of tobacco product as ‘manufactured tobacco’ whereas an earlier show cause notice for similar period and similar issue had already been set aside by the High Court which decided that the product is unmanufactured tobacco - HELD - The very allegations regarding use of machines and addition of aroma and menthol had already been specifically considered in the Advance Ruling - The issuance of show cause notices reflects an attempt to reopen issues which have already attained finality without any legal basis and such exercise is contrary to the scheme of the statute - A subordinate authority is bound by the findings of a higher or competent authority unless such findings are set aside in accordance with law and principles of judicial discipline require that orders of higher appellate authorities must be followed unreservedly by subordinate authorities - The mere fact that the order of appellate authority is not acceptable to the department and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court - The controversy already stands adjudicated by the Division Bench and there is no reason to take a different view - The impugned show cause notices are quashed and set aside as being without jurisdiction – The writ petition is allowed [Read less]

GST - Show Cause Notice - Jurisdiction and Limitation – The earlier Show Cause Notice was quashed by writ court which granted liberty to issue fresh Show Cause Notice under Section 74 if jurisdictional ingredients of fraud or wilful misstatement or suppression of facts to evade tax exist - Petitioner challenged fresh Show Cause Notice on ground that it was issued beyond limitation period - Whether fresh Show Cause Notice under Section 74 can be issued by revenue authorities beyond normal limitation period on basis of writ court's direction and whether the Revenue lost jurisdiction due to withdrawal of earlier notice unde... [Read more]

GST - Show Cause Notice - Jurisdiction and Limitation – The earlier Show Cause Notice was quashed by writ court which granted liberty to issue fresh Show Cause Notice under Section 74 if jurisdictional ingredients of fraud or wilful misstatement or suppression of facts to evade tax exist - Petitioner challenged fresh Show Cause Notice on ground that it was issued beyond limitation period - Whether fresh Show Cause Notice under Section 74 can be issued by revenue authorities beyond normal limitation period on basis of writ court's direction and whether the Revenue lost jurisdiction due to withdrawal of earlier notice under Section 73 - HELD - The writ court's order dated 27.09.2024 quashing earlier SCN and granting specific liberty to revenue to initiate fresh proceedings under Section 74 has attained finality as neither party challenged the same before Supreme Court. The writ court's order is not shown to have reached any finding that jurisdiction to initiate proceeding under Section 74 did not exist but by making direction conditional on existence of jurisdictional ingredients of fraud or willful misstatement or suppression of facts, positive direction was issued allowing fresh adjudication - Section 75(3) of the Act provides that where any order is issued in pursuance of direction of Court, such order shall be issued within two years from communication of that direction. Though Section 75(3) contemplates remand after adjudication order, by virtue of specific writ court direction, limitation to pass fresh order existed upto two years from communication of order dated 27.09.2024. Applying this principle the impugned notice dated 22.07.2026 is issued within prescribed limitation. The fact that earlier notice under Section 73 was withdrawn does not deprive revenue of jurisdiction to issue notice under Section 74 as both sections operate in different fields – While Section 73 covers wrongly availed ITC for reasons other than fraud or wilful misstatement, Section 74 covers cases involving fraud or wilful misstatement or suppression of facts. These are distinct jurisdictional bases and proceedings under one section do not preclude proceedings under the other section - However, impugned notice is set aside due to element of prejudice discernible from observations made by adjudicating authority. Matter remitted for issuance of fresh notice if jurisdictional facts exist by different officer and proceedings to be concluded expeditiously – The Writ petition is disposed of [Read less]

GST – Passing of adjudication order day before scheduled hearing - Disallowance of ITC on alleged wrongful availment - Violation of natural justice and principles of due process - Department informed petitioner by e-mail dated 03.02.2026 that matter fixed for personal hearing on 11.02.2026 but adjudication orders passed on 10.02.2026 day before scheduled hearing in absence of petitioner's representative - Whether adjudication order passed in violation of natural justice and statutory requirements - HELD – The petitioner was denied opportunity of personal hearing which amounts to gross violation of principles of natural... [Read more]

GST – Passing of adjudication order day before scheduled hearing - Disallowance of ITC on alleged wrongful availment - Violation of natural justice and principles of due process - Department informed petitioner by e-mail dated 03.02.2026 that matter fixed for personal hearing on 11.02.2026 but adjudication orders passed on 10.02.2026 day before scheduled hearing in absence of petitioner's representative - Whether adjudication order passed in violation of natural justice and statutory requirements - HELD – The petitioner was denied opportunity of personal hearing which amounts to gross violation of principles of natural justice besides being contrary to statutory requirements of CGST Act - Order passed in wholly mechanical manner without application of mind appearing to be cut and pasted from another case as opening portion records order passed in another case even though cause title names petitioner-company – The impugned order is vitiated by violation of Section 75(4) of CGST and non-application of mind. The order passed in absence of petitioner's representative without proper hearing constitutes jurisdictional error - Respondent authorities required to pass fresh order after affording petitioner opportunity of personal hearing upon issuing fresh notice fixing next date of hearing - The impugned order is set aside and the writ petition is allowed [Read less]

GST - Violation of Principles of Natural Justice - Reliance on Electronic Evidence and Kachcha Parchis - Maintainability of Writ Petition - HELD - The orders-in-original are appealable under Section 107 of the CGST Act and the appellate remedy constitutes a complete efficacious and comprehensive statutory mechanism for redressal of grievances and the appellate authority is vested with wide powers to examine both questions of fact and law re-appreciate the material placed on record scrutinise the findings and determine the legality as well as correctness of the orders - Questions relating to appreciation of evidence adequac... [Read more]

GST - Violation of Principles of Natural Justice - Reliance on Electronic Evidence and Kachcha Parchis - Maintainability of Writ Petition - HELD - The orders-in-original are appealable under Section 107 of the CGST Act and the appellate remedy constitutes a complete efficacious and comprehensive statutory mechanism for redressal of grievances and the appellate authority is vested with wide powers to examine both questions of fact and law re-appreciate the material placed on record scrutinise the findings and determine the legality as well as correctness of the orders - Questions relating to appreciation of evidence adequacy of material correctness of factual findings compliance with procedure relating to personal hearing admissibility of electronic evidence denial of cross-examination and correctness of findings are matters relating to the merits of adjudication appropriately examined by the appellate authority - The procedural grievances urged by the petitioners are not uniform across the batch and to the extent they arise in individual cases require examination with reference to the respective adjudication records and the prejudice if any caused to the concerned petitioner - None of the circumstances disclosed disclose circumstances warranting bypass of the statutory appellate mechanism - The writ petitions are dismissed leaving it open to the concerned petitioners to avail the statutory remedy of appeal [Read less]

GST - Maintainability of Writ Petition - Alternative Remedy - Petitioner challenge the impugned order contending that two simultaneous orders have been passed in respect of the same period and the proceedings were barred by Section 6(2)(b) of the CGST Act - Whether the Court ought to entertain a writ petition when an efficacious statutory remedy of appeal exists - HELD - The Show Cause Notice under Section 74 of the CGST Act was issued on 22-03-2023 whereas the notices by the State GST Authorities came subsequently on 25-09-2023, 05-12-2023 and 29-03-2024 - The chronology placed before the Court demonstrates that the conte... [Read more]

GST - Maintainability of Writ Petition - Alternative Remedy - Petitioner challenge the impugned order contending that two simultaneous orders have been passed in respect of the same period and the proceedings were barred by Section 6(2)(b) of the CGST Act - Whether the Court ought to entertain a writ petition when an efficacious statutory remedy of appeal exists - HELD - The Show Cause Notice under Section 74 of the CGST Act was issued on 22-03-2023 whereas the notices by the State GST Authorities came subsequently on 25-09-2023, 05-12-2023 and 29-03-2024 - The chronology placed before the Court demonstrates that the contention based on Section 6(2)(b) of the CGST Act does not disclose such a jurisdictional infirmity as would warrant bypassing the statutory remedy of appeal - The order dated 06-09-2022 pertained to proceedings relating to goods seized during search whereas the order dated 11-01-2025 came to be passed after investigation and consideration of the reply - The two proceedings cannot merely on that basis be treated as parallel adjudication of the same subject matter - The availability of an alternative remedy does not render a writ petition not maintainable - The petitioner is relegated to the statutory remedy of appeal under Section 107 of the CGST Act – The writ petition is disposed of [Read less]

Customs – Misdeclaration of country of origin – Evidentiary value of unauthenticated overseas customs documents – Appellants imported dry dates declared as originating from Saudi Arabia; Department obtained Transshipment Bill of Entry documents from Federal Customs Authority, UAE showing goods originated from Pakistan and were transshipped through Dubai; Department relied on unauthenticated photocopies of documents alleged to be obtained from overseas customs authority to establish misdeclaration – Whether unauthenticated documents obtained from overseas customs authority without proper authentication and without s... [Read more]

Customs – Misdeclaration of country of origin – Evidentiary value of unauthenticated overseas customs documents – Appellants imported dry dates declared as originating from Saudi Arabia; Department obtained Transshipment Bill of Entry documents from Federal Customs Authority, UAE showing goods originated from Pakistan and were transshipped through Dubai; Department relied on unauthenticated photocopies of documents alleged to be obtained from overseas customs authority to establish misdeclaration – Whether unauthenticated documents obtained from overseas customs authority without proper authentication and without supply of copies to appellants can be relied upon as conclusive evidence to establish country of origin – HELD – Whether unauthenticated overseas customs documents or COIN reports can be used as reliable evidence depends entirely on strength of facts and how well they are corroborated – Raw, unverified intelligence or unauthenticated photocopies are not sufficient to reject declared transaction or establish allegation; such reports treated merely as starting point for investigation, not final proof of violation – When foreign authorities provide specific, verified investigative report backed by strong independent facts and completely corroborated, evidence becomes reliable and admissible – In present case, documents are not authenticated; documents do not bear stamps and seals of overseas customs authority; manner of obtaining and procuring documents not explained satisfactorily; copy of forwarding letter by which officer posted abroad claimed to have sent report was not provided to appellants – Documents being merely printouts from website which are not stamped or signed cannot be treated as conclusive evidence – Unauthenticated photocopies forwarded by officer posted in Dubai cannot be treated as gospel truth to establish allegation against appellants – Allegation of misdeclaration of country of origin not established by credible authentic evidence - Customs – Country of Origin of imported goods – Verification of country of origin certificate – Whether country of origin can be determined without conducting formal verification with certificate issuing authority as per Rule 6 of Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 – HELD – In absence of verification from country of declared origin, allegation of misdeclaration of country of origin does not survive – Where country of origin and country of re-export are different, phytosanitary certificate for re-export along with attested copy of phytosanitary certificate from country of origin is mandatory – Custom authorities cannot challenge or reject country of origin certificate issued by government authorities of other country without conducting verification from certificate issuing authority – Authenticity of certificate must be enquired from issuing country; certificate cannot be discarded without checking authenticity – When certificate of origin, phytosanitary certificate and markings on bags all show same country of origin and no enquiry was conducted from exporting country to prove certificate false, mere suspicion is not enough to discard documents – Conclusion on country of origin cannot be arrived at without causing authentic enquiry on authenticity of certificate issued by country authorities – In present case, genuineness of certificate not enquired from issuing country; allegation that country of origin is Pakistan not established conclusively - Customs – Confiscation – Goods imported and already cleared for home consumption – Whether goods already cleared for home consumption and seized cease to be imported goods and can be confiscated – HELD – Goods once imported and cleared for home consumption cease to be imported goods as per Section 2(f) of Customs Act, 1962 – It is not open for revenue to propose confiscation of goods which have been imported and cleared by authorities for home consumption after due examination and after satisfying themselves as to whether conditions required for clearance are met – Clearing of goods by customs officers including by SIIB after due examination creates presumption of proper clearance; confiscation cannot be based on allegations which were not conclusively established through authentic evidence – However, goods which were seized and not cleared by appellants for violation of Phytosanitary certificate requirements can be confiscated as such goods are still imported goods and were not cleared for home consumption – Confiscation of goods already cleared for home consumption is not sustainable and is set aside - Customs – Confiscation – Violation of Phytosanitary certificate requirements –Whether goods can be confiscated and redemption fine imposed for violation of phytosanitary requirements when goods were not cleared by customs – HELD – Goods imported in violation of mandatory phytosanitary certificate requirements are prohibited goods under Section 2(33) of Customs Act and are liable to be confiscated under Section 111 – Where goods were seized and not cleared by appellants and phytosanitary certificates were not produced, goods cannot be released and are liable to be confiscated – However, when confiscation is proposed, redemption fine imposed under Section 125 should be reasonable and should take into consideration facts of case, profit margin and detention and demurrage charges that may have to be borne by appellants – In present case, goods seized for violation of phytosanitary requirements are liable to be confiscated; however, appellants given option to redeem goods on payment of reasonable redemption fine subject to submission of necessary phytosanitary certificate - Customs – Penalty – Imposition of penalty not proposed in show cause notice - Whether penalty can be imposed when same was not proposed in show cause notice – HELD – Penalty under Section 112 can be imposed only when proposed in show cause notice; imposition of penalty beyond purview of show cause notice is not permissible and is contrary to principles of natural justice – Adjudicating authority must confine itself to issues and grounds raised in show cause notice; expanding scope of demand or penalty beyond show cause notice denies assessee opportunity to respond to fresh allegations – In present case, penalty under Section 112 was not proposed in show cause notices but was imposed by adjudicating authority which is beyond permissible scope; imposition of penalty not proposed in SCN is set aside. 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Service Tax - Exemption from payment of Service Tax - Services relating to construction and repair of public infrastructure - Department raised demand of Service Tax on basis of information received from Income Tax Department on gross receipts shown in ITR - Whether construction services for repair of roads and civil structures provided to Zila Panchayat are exempt under Notification No.25/2012-ST as amended by Notification No.09/2016-ST dated 01.03.2016 - HELD - The matter with regards to availability of exemption needs to be re-examined by authorities below as the documents provided by Appellant relating to services rend... [Read more]

Service Tax - Exemption from payment of Service Tax - Services relating to construction and repair of public infrastructure - Department raised demand of Service Tax on basis of information received from Income Tax Department on gross receipts shown in ITR - Whether construction services for repair of roads and civil structures provided to Zila Panchayat are exempt under Notification No.25/2012-ST as amended by Notification No.09/2016-ST dated 01.03.2016 - HELD - The matter with regards to availability of exemption needs to be re-examined by authorities below as the documents provided by Appellant relating to services rendered in respect of repair and maintenance of road goes to the root of the matter - Exemptions from Service Tax are conditional and require strict compliance with stipulated conditions. The onus is entirely on the assessee to prove eligibility through clear, cogent and admissible documentary evidence - The Original Authority decided the case without examining the nature of the services in detail and the documents provided by Appellant require proper evaluation for determining exemption – The appeal is allowed by remand [Read less]

Customs – Duty Free Import Authorisation Scheme – Entitlement of wheat gluten to exemption from Basic Customs Duty as wheat flour – Petitioner imported Vital Wheat Gluten claiming exemption from BCD under DFIA Scheme on the basis of authorisation permitting duty-free import of wheat flour – Seizure memo was issued on the ground that wheat gluten is commercially and technically distinct from wheat flour and therefore not entitled to the benefit of exemption – Whether wheat gluten is covered by the expression wheat flour for the purposes of the DFIA Scheme and whether seizure memo based on suspended Public Notice i... [Read more]

Customs – Duty Free Import Authorisation Scheme – Entitlement of wheat gluten to exemption from Basic Customs Duty as wheat flour – Petitioner imported Vital Wheat Gluten claiming exemption from BCD under DFIA Scheme on the basis of authorisation permitting duty-free import of wheat flour – Seizure memo was issued on the ground that wheat gluten is commercially and technically distinct from wheat flour and therefore not entitled to the benefit of exemption – Whether wheat gluten is covered by the expression wheat flour for the purposes of the DFIA Scheme and whether seizure memo based on suspended Public Notice is sustainable – HELD – Wheat gluten is wheat flour with specific technical characteristics and qualifies for exemption under the DFIA Scheme. This issue had already been examined by the CESTAT which held that wheat gluten is nothing but wheat flour having specific technical characteristics and therefore is entitled to the benefit available under the DFIA Scheme. A Coordinate Bench of this Court concluded that wheat flour and wheat gluten fall under the same description for the purpose of the DFIA Scheme. These decisions have attained finality - The principal basis for issuing the impugned seizure memo is the Public Notice dated 02.11.2016 which had been suspended on 26.08.2025 prior to the import. Once the public notice stands suspended, it ceases to operate prospectively - The Circular dated 24.07.2025 clarifies that no technical correlation is required to establish between imported goods and export product in cases like the present one. The power of seizure can be exercised only when the proper officer has reason to believe that the goods are liable to confiscation and such belief must be based on relevant and legally sustainable material. It cannot be founded on material which has ceased to have legal force or which is contrary to binding judicial decisions. The respondents had no legally sustainable material before them to form the requisite reason to believe that the imported goods were liable to confiscation – The impugned seizure memo is quashed and the bank guarantee furnished by the petitioner is directed to be discharged – The writ petition is allowed [Read less]

GST – Gujarat AAR - Classification and applicable GST rate on Ophthalmic Binocular Surgical Microscope - Tariff classification under CTH 9018 versus competing headings 9011 and 9012 - Whether the product should be classified under CTH 9018 (Instruments and appliances used in medical, surgical, dental or veterinary sciences) or under CTH 9011 (Compound optical microscopes) or CTH 9012 (Microscopes other than optical microscopes) - HELD - The product is an instrument used in medical and surgical sciences and is specifically designed and used exclusively by ophthalmologists for performing complex surgeries on the eye - Comp... [Read more]

GST – Gujarat AAR - Classification and applicable GST rate on Ophthalmic Binocular Surgical Microscope - Tariff classification under CTH 9018 versus competing headings 9011 and 9012 - Whether the product should be classified under CTH 9018 (Instruments and appliances used in medical, surgical, dental or veterinary sciences) or under CTH 9011 (Compound optical microscopes) or CTH 9012 (Microscopes other than optical microscopes) - HELD - The product is an instrument used in medical and surgical sciences and is specifically designed and used exclusively by ophthalmologists for performing complex surgeries on the eye - Compound optical microscopes classified under CTH 9011 are generic in nature used by amateurs, teachers, and for industrial and research laboratory use providing only two-dimensional magnification whereas the Ophthalmic Binocular Surgical Microscope provides three-dimensional stereoscopic view with multi-directional coaxial illumination and specialized features for precise eye surgery - HSN notes to heading 9011 specifically exclude ophthalmic binocular-type microscopes and expressly refer such instruments to heading 9018 - Microscopes under CTH 9012 including electron microscopes, proton microscopes and electron diffraction apparatus are used in forensic science, biological research, industrial analysis, nanotechnology and material science studies and cannot be used for eye surgeries - The Ophthalmic Binocular Surgical Microscope possesses all the attributes of an instrument within the meaning prescribed in the Oxford dictionary as a tool or device used for special, delicate or scientific work and is identifiable as being for medical or surgical use - The product ‘Ophthalmic Binocular Surgical Microscope’ is appropriately classified under tariff heading 9018 of the First Schedule to the Customs Tariff Act, 1975 - The product falls within Sr. No. 483 of Schedule-I of Notification No. 9/2025-CT (Rate) dated 17.09.2025 which covers Instruments and appliances used in medical, surgical, dental or veterinary sciences attracting 5% GST – Ordered accordingly [Read less]

Central Excise - Liability for payment of Clean Energy Cess on coal by producer and purchaser - Appellant tea producing companies purchased coal and were demanded to pay Clean Energy Cess on the coal purchased by them - Whether liability for payment of Central Excise Cess on coal can be passed on the purchaser who is the consumer and not the producer of coal - HELD - Section 2(f), 2(h), Section 3 and Section 4 of the Clean Energy Cess Rules, 2010 clearly provides that it is only a producer of raw coal, raw lignite and raw peat who is to pay cess on removal of the specified goods from a mine and not the purchaser. The defin... [Read more]

Central Excise - Liability for payment of Clean Energy Cess on coal by producer and purchaser - Appellant tea producing companies purchased coal and were demanded to pay Clean Energy Cess on the coal purchased by them - Whether liability for payment of Central Excise Cess on coal can be passed on the purchaser who is the consumer and not the producer of coal - HELD - Section 2(f), 2(h), Section 3 and Section 4 of the Clean Energy Cess Rules, 2010 clearly provides that it is only a producer of raw coal, raw lignite and raw peat who is to pay cess on removal of the specified goods from a mine and not the purchaser. The definition of producer under the rules means any person engaged in the production of specified goods and includes an owner or agent as defined under Section 2 of the Mines Act, 1952 - The appellants herein are all tea producing companies who have purchased coal from the seller and therefore in terms of the above provisions of the Clean Energy Cess Rules, 2010 made pursuant to Section 84 of the Finance Act, 2010, the appellants are not liable to pay any cess on the coal purchased by them. The cess liability cannot be shifted from the producer to the purchaser merely on account of the purchaser using the coal - The impugned orders by the CESTAT are set aside to the extent that appellants have been made liable to pay penalty for release of the confiscated raw coal - The demand for payment of cess by the purchasers of coal is set aside and the liability for cess payment remains only with the producer of coal - The appeals are allowed - Penalty: Whether the appellant (Tea Companies) are liable to pay penalty, due to the confiscation of their purchased coal under Section 34 of the Central Excise Act, 1944 r/w Rule 25 of the Central Excise Rule, 2002 – HELD – The Rule 25 of the Central Excise Rules, 2002 is clearly not applicable to the case of the appellants herein, as it is not the case of the respondents that they come within the meaning of producer, manufacturer, registered person of a ware house or an importer or a registered dealer of the coal purchased by them - The conditions required for paying penalty, for keeping possession of goods which has escaped payment of cess, requires the person in whose possession it is found, to have known or had reason to believe that the said goods were liable to confiscation. There is nothing records to show that the authorities had come to a definite finding that the appellants had the knowledge or had reason to believe, that the coal that they had purchased, were liable to confiscation under the Central Excise Act, 1944 or the Central Excise Rules, 2002 - There was no question of payment of fines/ penalty for the confiscated goods by the appellants-purchasers. [Read less]

Central Excise Act - Manufacture of goods - Dilution and repackaging of Styrene Butadiene Latex with addition of preservatives – Respondent purchased duty paid Styrene Butadiene Latex and Organic Bromine Biocide preservative, diluted the latex with water, added preservative, and repackaged the resultant product under brand names and cleared for sale - Whether the process of adding water and preservatives to the inputs classifiable under tariff heading 40.02 and thereafter, packaging the same and marketing it as ‘Sika Latex’ and ‘Sika Latex Power’ will amount to “manufacture” under Section 2(f) of the Central ... [Read more]

Central Excise Act - Manufacture of goods - Dilution and repackaging of Styrene Butadiene Latex with addition of preservatives – Respondent purchased duty paid Styrene Butadiene Latex and Organic Bromine Biocide preservative, diluted the latex with water, added preservative, and repackaged the resultant product under brand names and cleared for sale - Whether the process of adding water and preservatives to the inputs classifiable under tariff heading 40.02 and thereafter, packaging the same and marketing it as ‘Sika Latex’ and ‘Sika Latex Power’ will amount to “manufacture” under Section 2(f) of the Central Excise Act, 1944 - HELD - The chemical composition of the inputs and the final diluted and repackaged materials remain identical. As per the principle laid down by the Supreme Court, there must be a transformation and a new and different article must emerge having a distinctive name, character or use for a process to amount to manufacture - Different tests conducted indicated that the raw material as well as the impugned goods are having same chemical characters - The process of dilution of inputs does not result in emergence of a new product to qualify as manufacturing - The classification adopted by the Appellant is correct and the goods cleared merit classification as claimed – The issues have been settled by the Tribunal in the respondent’s own case for the prior period as well as for its other unit - The Department cannot take a contrary view for subsequent periods when it has already accepted a particular legal position in the Appellant's case for the prior period - The appeal filed by Revenue is without merit and accordingly dismissed [Read less]

Central Excise - Eligibility for credit on Service Tax paid on rental charges for company depot used for storage and sale of goods - Appellant took CENVAT Credit for Service Tax charged by the landlord on rental of depot from where sales were taking place - Department denied CENVAT Credit on ground that Appellant not eligible - Whether CENVAT Credit is eligible for Service Tax paid on rental charges of depot - HELD - Rule 2(l) of CENVAT Credit Rules, 2004 provides that input service includes services used for storage upto the place of removal. The Appellant's depot is the place of removal where goods are stored and sold. T... [Read more]

Central Excise - Eligibility for credit on Service Tax paid on rental charges for company depot used for storage and sale of goods - Appellant took CENVAT Credit for Service Tax charged by the landlord on rental of depot from where sales were taking place - Department denied CENVAT Credit on ground that Appellant not eligible - Whether CENVAT Credit is eligible for Service Tax paid on rental charges of depot - HELD - Rule 2(l) of CENVAT Credit Rules, 2004 provides that input service includes services used for storage upto the place of removal. The Appellant's depot is the place of removal where goods are stored and sold. The CENVAT Credit for Service Tax paid on rental charges of storage cannot be denied - The matter is identical to the previous period for 2013-14 wherein the Tribunal held that appellant would be eligible for CENVAT Credit of Service Tax paid on rental charges. No reason to take a different view as the matter concerns the same appellant with identical facts - The impugned order is set aside and the appeal is allowed [Read less]

Gujarat Value Added Tax Act, 2003 - Composition Permission - Reassessment based on Change of Opinion on rate of tax – Assessee engaged in restaurant business and resale of liquor obtained composition permission for restaurant business under Section 14D of VAT Act and paid normal tax rate on liquor resale purchased from outside the State as it could not be produced in the State. Audit assessment accepted this position. Subsequently reassessment notice was issued to withdraw composition benefit – Whether reassessment order initiated on change of opinion about tax rate without proper evidence is valid and whether composit... [Read more]

Gujarat Value Added Tax Act, 2003 - Composition Permission - Reassessment based on Change of Opinion on rate of tax – Assessee engaged in restaurant business and resale of liquor obtained composition permission for restaurant business under Section 14D of VAT Act and paid normal tax rate on liquor resale purchased from outside the State as it could not be produced in the State. Audit assessment accepted this position. Subsequently reassessment notice was issued to withdraw composition benefit – Whether reassessment order initiated on change of opinion about tax rate without proper evidence is valid and whether composition permission can be withdrawn when goods cannot be produced in the State due to legal constraints – HELD - After the retrospective amendment to Rule 28C(6) of the VAT Rules purchase of goods from outside the State is permissible by a dealer enjoying composition permission where such goods could not be produced in the State due to legal constraints and tax is paid at normal rate on resale - The assessee had determined the turnover of liquor separately and paid tax at normal Schedule Rate which was accepted in the Audit assessment order. The provision of Section 14D read with amended proviso to Rule 28C(6) stipulates that a dealer is entitled to the benefit of composition permission if goods are not capable of being produced in the State of Gujarat for any reason and tax is paid at normal rate on such goods. The amendment is retrospective in nature - The reassessment order ignoring the composition permission and raising demand on the entire turnover at normal rate was wrongly confirmed by the First Appellate Authority without considering merit of the case. The reassessment was carried on based on merely change of opinion about the rate of tax - The Tax Appeal by Revenue stands dismissed [Read less]

Gujarat VAT Act, 2003 - Exemption of seeds used for sowing purposes under Government Notification dated 29.04.2006 - Levying of purchase tax under Section 9(1) of the VAT Act on certified seeds prepared under research and development program – Petitioner-Revenue sought to levy purchase tax on seeds procured, processed and used for sowing purposes by the Respondent-assessee through a research and development program wherein the Respondent provided basic seeds to farmers for cultivation, supervised the process through Agriculture Supervisors, conducted quality tests including germination test, grow out test and genetic tes... [Read more]

Gujarat VAT Act, 2003 - Exemption of seeds used for sowing purposes under Government Notification dated 29.04.2006 - Levying of purchase tax under Section 9(1) of the VAT Act on certified seeds prepared under research and development program – Petitioner-Revenue sought to levy purchase tax on seeds procured, processed and used for sowing purposes by the Respondent-assessee through a research and development program wherein the Respondent provided basic seeds to farmers for cultivation, supervised the process through Agriculture Supervisors, conducted quality tests including germination test, grow out test and genetic test, and repurchased the certified seeds - Whether certified seeds so prepared fall within the exemption notification dated 29.04.2006 which exempts seeds of all types other than imported seeds used for sowing purpose from tax - HELD - The Government Notification dated 29.04.2006 clearly exempts seeds of all types other than imported seeds used for sowing purpose from tax - The Respondent is not importing any seeds and the seeds in question are used only for sowing purposes - The certified seeds are prepared under the research and development program of the Respondent wherein the Respondent remains present in the farms and undertakes proper research such as germination test, grow out test and genetic test to produce certified seeds which are packed and sold with compensation paid on kilo rate basis - Such seeds which are prepared through research and development program cannot be said to be seeds of business and purchase warranting levy of purchase tax under Section 9(1) of the Act - The subsequent determination order in case of M/s. King and Queen Seeds Corporation wherein the determining authority held that seeds prepared under research and development program cannot be said to be of business and purchase is applicable to the case of the Respondent - The earlier determination order in case of M/s. Green India Farm Biotech is distinguishable as no one remained present before the determining authority in that case and hence the decision taken was that purchase tax was leviable - The Revision Application filed by the Respondent challenging the revisional order which sought to levy purchase tax is allowed and the revisional order is set aside - The writ petition challenging the Tribunal's order is dismissed [Read less]

GST - Section 128A - Amnesty Scheme - Applicability to Self-Assessed Tax - Interpretation of Section 128A in relation to Section 75(12) of the CGST Act, 2017 - Petitioners applied for waiver of interest or penalty under Section 128A in respect of demands relating to belated filing and payment of GSTR-3B returns containing self-assessed tax - Revenue contended that Section 128A by necessary implication excludes cases falling within the scope of Section 75(12) relying on the non obstante clause in Section 75(12) and Circular No.238 - Whether Section 128A applies to self-assessed tax or is impliedly excluded from its scope - ... [Read more]

GST - Section 128A - Amnesty Scheme - Applicability to Self-Assessed Tax - Interpretation of Section 128A in relation to Section 75(12) of the CGST Act, 2017 - Petitioners applied for waiver of interest or penalty under Section 128A in respect of demands relating to belated filing and payment of GSTR-3B returns containing self-assessed tax - Revenue contended that Section 128A by necessary implication excludes cases falling within the scope of Section 75(12) relying on the non obstante clause in Section 75(12) and Circular No.238 - Whether Section 128A applies to self-assessed tax or is impliedly excluded from its scope - HELD – The Section 128A opens with a wider non obstante clause than Section 75(12) reading "notwithstanding anything to the contrary contained in this Act" and if Parliament intended to exclude self-assessed tax from Section 128A, it would have inserted a qualifying phrase such as "other than cases falling within Section 75(12)" similar to the exclusion in Section 80. The absence of such exclusion coupled with the width of the non obstante clause indicates Parliament did not intend to exclude self-assessed tax from Section 128A - The initiation of proceedings under Section 73 is a sine qua non for filing an application under Section 128A and once the Revenue decides to determine liability under Section 73, whether in relation to self-assessed tax or otherwise, it is open to the taxable person to file an application under Section 128A. The Circular No.238 cannot curtail the scope and ambit of the statute as a Circular issued by CBIC cannot override statutory provisions. The Explanation to Section 75(12) is not applicable to proceedings pertaining to the period from 01.07.2017 to 31.03.2020 - The implied exclusion of cases relating to self-assessed tax cannot be read into Section 128A and petitioners are entitled to waiver benefits under Section 128A if they satisfy the substantive conditions thereof – Ordered accordingly - Time Limits under Rule 164 of the CGST Rules, 2017 - Mandatory or Directory - Petitioners applied for waiver of interest and penalty under Section 128A but some applications were filed after the stipulated deadline of three months from the notified date - Revenue contended that the time limit prescribed in sub-rule (6) of Rule 164 is directory in nature and not mandatory and the doctrine of substantial compliance applies - Whether the time limits prescribed in Rule 164 are mandatory or directory - HELD – The Sub-rule (6) opens with the phrase "Any person who wishes to file an application" which shows the taxable person has an option of filing or not filing the application, however if the taxable person opts to file such application the time limit becomes applicable. Upon holistic consideration of Rule 164, the entire process of consideration and disposal of waiver applications is time bound with prescribed time limits for issuance of show cause notices under sub-rule (8), responses under sub-rule (9) and approval or rejection orders under sub-rule (13). Sub-rule (14) prescribes the drastic consequence of deemed approval and conclusion of proceedings if an order is not issued within the prescribed period. These are clear indications that the time limits form part of the substance of the scheme - The time limit for filing an application forms part of the substance and not a procedural or directory requirement. The doctrine of substantial compliance may apply to formal or procedural defects in filing the application but not to the substantive requirement of filing within the prescribed time limit. - The time limits prescribed in Rule 164 including that in sub-rule (6) are mandatory and not directory and applications filed after the expiry of the prescribed time limit are liable to be rejected - Void Orders - Conditions for Issuance - When can Form GST SPL-05 Approval Orders be declared Void - In some cases, the proper officer issued an order in Form GST SPL-05 accepting the waiver application and subsequently issued another order declaring the earlier Form GST SPL-05 order to be void on the ground that the applicant was not eligible for waiver under Section 128A - The petitioners contended that such void orders were issued without authority under the statute or rules - Whether approval orders issued in Form GST SPL-05 can be declared void by issuing a separate void order - HELD – The Sub-rules (16) and (17) of Rule 164 are the only provisions that prescribe when orders issued in Form GST SPL-05 or Form GST SPL-06 become void. Sub-rule (16) applies when the taxpayer fails to pay additional amounts of tax liability as per the second proviso to sub-section (1) of Section 128A within the prescribed time. Sub-rule (17) applies when the taxpayer fails to pay interest or penalty relating to erroneous refund or demands pertaining to periods other than 01.07.2017 to 31.03.2020 within three months from the date of issuance of the order in Form GST SPL-05 or SPL-06. Except in these situations specified in sub-rules (16) and (17), neither the statute nor the rule enables the issuance of a separate void order after accepting the application and issuing an order in Form GST SPL-05 – The issuance of void orders by invoking Section 161 or otherwise in circumstances other than those enumerated in sub-rules (16) and (17) is unauthorized and without jurisdiction – The void orders issued in cases where the conditions in sub-rules (16) and (17) do not apply are invalid and liable to be set aside and the original Form GST SPL-05 approval orders shall remain valid - Deemed Approval - Conclusion of Proceedings - Non-issuance of Order within Prescribed Time - Sub-rule (14) of Rule 164 prescribes consequences when proper officer fails to issue approval or rejection order within prescribed time - If application for waiver is not disposed of within the time limits specified in sub-rule (13) then the application shall be deemed to be approved and proceedings shall be deemed to be concluded - Whether deemed approval operates unconditionally or is subject to satisfaction of substantive conditions of Section 128A - HELD - The benefit of deemed approval and conclusion of proceedings under sub-rule (14) shall only accrue to an applicant for waiver who satisfies the substantive conditions stipulated in Section 128A. Any other construction would allow a subordinate legislation to override a provision in the parent statute which is impermissible. The deemed approval operates as an incentive for the proper officer to expedite disposal and for taxpayers to file applications within the prescribed time and satisfy the substantive requirements of Section 128A – The applications shall be deemed to be approved and proceedings concluded only when the applicant has complied with all substantive conditions of Section 128A and the proper officer fails to issue an order within the prescribed time limit. [Read less]

Customs - Adjudication Limitation - Scope of Expression "Where it is Possible to Do So" –Show Cause Notice issued under Section 28(4) of Customs Act, 1962 which mandated adjudication within one year from date of notice "where it is possible to do so". Petitioner contended that the expression does not confer power on adjudicating authority to keep assessment pending for unreasonable period and adjudication must be completed within one year or demonstrate that completion was impracticable – Whether the expression "where it is possible to do so" as it existed at time of issuance of Show Cause Notice permits adjudicating a... [Read more]

Customs - Adjudication Limitation - Scope of Expression "Where it is Possible to Do So" –Show Cause Notice issued under Section 28(4) of Customs Act, 1962 which mandated adjudication within one year from date of notice "where it is possible to do so". Petitioner contended that the expression does not confer power on adjudicating authority to keep assessment pending for unreasonable period and adjudication must be completed within one year or demonstrate that completion was impracticable – Whether the expression "where it is possible to do so" as it existed at time of issuance of Show Cause Notice permits adjudicating authority to keep proceedings indefinitely pending or whether it carries obligation to complete adjudication within stipulated period – HELD - The expression "where it is possible to do so" indicates that it is incumbent on officer concerned to demonstrate that it was not practicable to complete adjudication within stipulated period of one year from date of issuance of notice. The phrase "where it is possible to do so" means that adjudication is possible or practicable within one year. The expression cannot be understood as enabling or conferring power on adjudicating authority to keep assessment pending for an unreasonable period - Any attempt to construe the expression in such manner would defeat very purpose and object of prescribing limitation which is to extinguish stale demands and may render provision vulnerable to challenge on ground of being arbitrary thereby falling foul of Article 14 of Constitution. Even where no limitation is prescribed for taking any action including adjudication, it must be made within a reasonable time. Failure to complete adjudication within reasonable period would suffer from vice of arbitrariness thereby falling foul of Article 14 of Constitution – The expression "where it is possible to do so" mandates adjudication within one year from date of notice unless impracticability is demonstrated - The impugned order is set aside as barred by limitation – The petition stands disposed of - Customs - Adjudication Limitation - Applicability of Amendment to Section 28(9) via Finance Act 2018 to Proceedings Initiated Before Amendment – Petitioner contended that amendment should not apply to proceedings initiated before amendment and even if amendment applies, adjudication must be completed within two years from date of amendment – Whether amendment to Section 28(9) vide Finance Act 2018 applies to proceedings initiated prior to amendment and whether adjudication order passed beyond extended period of two years from date of amendment is sustainable – HELD - Limitation is part of procedural law and thus normally retrospective in nature with one condition superadded namely that an extended period of limitation would not revive dead claim. A claim which was time-barred before an amending Act with a larger period of limitation comes into force cannot be revived. When Show Cause Notice was issued on 05.08.2009, adjudication ought to be completed within one year i.e. by 05.08.2010 under expression "where it is possible to do so". The amendment to Section 28(9) was made after 9 years from date of notice which by itself is unreasonable to keep adjudication pending. By that time the claim had already become dead as it was barred under the law existing at time of notice. The amendment only enables adjudication to be made within period of two years from date of notice which if applied from date of amendment i.e. 29.03.2018 would expire by 29.03.2020. However impugned order is passed on 19.02.2024, almost four years thereafter. In any view the amended provision cannot rescue adjudication which had become barred by limitation under original provision – The amendment to Section 28(9) vide Finance Act 2018 does not apply to proceedings initiated prior to amendment as the claim had become dead before amendment came into force. Adjudication order passed on 19.02.2024 is barred by limitation - In any view, the delay of 14 years in adjudicating show cause notice is unreasonable, thereby suffers from the vice of arbitrariness and falls foul of Article 14 of the Constitution of India, thus unsustainable. [Read less]

GST – Tamil Nadu AAR - Classification of Compostable Bags and Packing Materials made from Polymer Blend - Applicant engaged in manufacturing compostable bags and packing materials made from blend of Poly Lactic Acid (PLA) and Poly Butylene Adipate Terephthalate (PBAT) certified under IS/ISO 17088 standards by CIPET and certified by CPCB. Applicant classified products under Chapter heading 3923 as articles for conveyance or packing of goods attracting 18% GST - Whether compostable bags made from PLA-PBAT blend are classifiable under Chapter 39 for plastic articles or Chapter 48 for paper articles and appropriate HSN - HEL... [Read more]

GST – Tamil Nadu AAR - Classification of Compostable Bags and Packing Materials made from Polymer Blend - Applicant engaged in manufacturing compostable bags and packing materials made from blend of Poly Lactic Acid (PLA) and Poly Butylene Adipate Terephthalate (PBAT) certified under IS/ISO 17088 standards by CIPET and certified by CPCB. Applicant classified products under Chapter heading 3923 as articles for conveyance or packing of goods attracting 18% GST - Whether compostable bags made from PLA-PBAT blend are classifiable under Chapter 39 for plastic articles or Chapter 48 for paper articles and appropriate HSN - HELD - The material composition of the compostable bag as revealed by test report is a blend of Poly Lactic Acid (PLA) and Poly Butylene Adipate Terephthalate (PBAT) which are plastic or polymer materials and not paper. Compostable bags made from polymer blends are therefore classifiable under Chapter 39 ‘Plastics and Articles Thereof’ and more specifically under Chapter heading 3923 2990 which covers articles for conveyance or packing of goods of other plastics including sacks and bags. The classification is determined by actual material composition of the goods and the test report clearly establishes the material to be plastic or polymer based and not paper based. Therefore, products should be classified under Chapter 39 HSN 3923 2990 and not under Chapter 48 - Compostable bags are classifiable under Chapter 39, specifically HSN 3923 2990 – Ordered accordingly - GST - Rate of Tax - Biodegradable Bags - Whether supplies of compostable bags made from PLA-PBAT blend and certified under IS/ISO 17088 are covered by entry for biodegradable bags in Notification 9/2025-CTR attracting concessional rate of 5% GST - HELD - Entry 319 of Notification 9/2025-CTR provides concessional rate of 5% for paper sacks and bags and biodegradable bags subject to condition that goods are biodegradable. To qualify as biodegradable bags within meaning of this notification the products must conform to IS/ISO 17899 T:2022 prescribed for biodegradable plastics under Rule 10(3) and Rule 10(4) of Plastic Waste Management Rules, 2016 as amended - The applicant's compostable bags cannot be classified as biodegradable bags for purposes of Notification 9/2025-CTR as they are specifically excluded from scope of biodegradable standards. Press release or legislative intent regarding rate reduction cannot override the statutory definitions and certification requirements prescribed under Plastic Waste Management Rules which specifically distinguish between compostable and biodegradable plastics. Compliance with statutory norms including CPCB certification under IS/ISO 17899 T:2022 is fundamental requirement and not merely procedural technicality – The supply of compostable bags are not covered by entry 319 for biodegradable bags in Notification 9/2025-CTR and 18% GST remains applicable. [Read less]

Service Tax - Invocation of extended period of Limitation on ground of fraud, collusion, wilful misstatement or suppression of facts - Respondent classified services under CICS head both before and after introduction of WCS on 01.06.2007 without opting for Works Contract Composition Scheme and instead discharged VAT to State of Rajasthan - Department in audit found shortfall and raised Show Cause Notice beyond normal period of limitation proposing reclassification under WCS head - CESTAT set aside on ground of limitation holding no proof of intent to evade - Whether extended period of limitation can be invoked merely on ba... [Read more]

Service Tax - Invocation of extended period of Limitation on ground of fraud, collusion, wilful misstatement or suppression of facts - Respondent classified services under CICS head both before and after introduction of WCS on 01.06.2007 without opting for Works Contract Composition Scheme and instead discharged VAT to State of Rajasthan - Department in audit found shortfall and raised Show Cause Notice beyond normal period of limitation proposing reclassification under WCS head - CESTAT set aside on ground of limitation holding no proof of intent to evade - Whether extended period of limitation can be invoked merely on basis of misclassification without proof of fraud, collusion, wilful misstatement or suppression with intent to evade payment of tax - HELD - Respondent entertained bona fide belief that it was correctly discharging tax liabilities by classifying services under CICS head as no SCN was issued within normal period of limitation despite Department's audit - Mere inaction, omission or classification of services under incorrect head does not amount to fraud, collusion, wilful misstatement or suppression of facts. Something positive other than mere inaction or failure or conscious deliberate withholding of information with knowledge otherwise is required to invoke extended period - Suppression means failure to disclose full information with intent to evade payment of duty and has to be construed strictly being deployed in company of strong words as fraud and collusion - Incorrect statement cannot be equated with wilful misstatement as latter implies making statement with knowledge it was not correct - Department failed to adduce cogent evidence of positive act by respondent evincing intent to evade payment of tax - Respondent had throughout filed returns classifying services under CICS head and Revenue never objected within ordinary period of limitation - Burden cast upon Department to prove suppression of fact with intent to evade tax. Extended period of limitation cannot be invoked merely on basis of misclassification without establishing fraud, collusion, wilful misstatement or suppression with intent to evade – The Ld. CESTAT correctly held no element of fraud, collusion, wilful misstatement or suppression of facts was established – The findings of CESTAT is upheld and the Revenue appeal is dismissed [Read less]