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Service tax - Manpower recruitment or supply agency service - Contract for washing and servicing activities - Appellant entered into a contract for undertaking washing activities, stacking bottles in godowns, cleaning of washing areas, bottling areas, blending areas and godown servicing using the appellant's own manpower - Revenue alleged that the services rendered amounted to supply of Manpower service - Whether the provision of labour-intensive services using contractor's own personnel constitutes manpower recruitment or supply agency service within the taxable definition – HELD - The contract basically relates to prov... [Read more]

Service tax - Manpower recruitment or supply agency service - Contract for washing and servicing activities - Appellant entered into a contract for undertaking washing activities, stacking bottles in godowns, cleaning of washing areas, bottling areas, blending areas and godown servicing using the appellant's own manpower - Revenue alleged that the services rendered amounted to supply of Manpower service - Whether the provision of labour-intensive services using contractor's own personnel constitutes manpower recruitment or supply agency service within the taxable definition – HELD - The contract basically relates to provision of specific work activities namely washing, cleaning and servicing using the contractor's own manpower, and contains no obligation on the appellant to supply manpower to the service recipient - The contract explicitly prescribes performance of quality work activities rather than supply of personnel - The issue being no longer res-integra in light of consistent decisions rendered by the Tribunal in similar matters concerning the same service recipient; accordingly, the appeal is allowed and the impugned order is set aside [Read less]

Central Excise - CENVAT credit on Countervailing duty paid at concessional rate - Eligibility based on nature of duty not rate of levy - Appellant imported steam coal and sought to avail CENVAT credit on CVD paid at concessional rates of one percent and two percent under Notification No. 12/2012-Cus dated 17.03.2012 - Revenue denied the credit contending that Central Excise Notification No. 1/2011 exempts central excise duty on steam coal and therefore the additional duty of customs equivalent to such excise duty should not be allowed as credit - Whether CVD paid at concessional rates of one percent or two percent qualifie... [Read more]

Central Excise - CENVAT credit on Countervailing duty paid at concessional rate - Eligibility based on nature of duty not rate of levy - Appellant imported steam coal and sought to avail CENVAT credit on CVD paid at concessional rates of one percent and two percent under Notification No. 12/2012-Cus dated 17.03.2012 - Revenue denied the credit contending that Central Excise Notification No. 1/2011 exempts central excise duty on steam coal and therefore the additional duty of customs equivalent to such excise duty should not be allowed as credit - Whether CVD paid at concessional rates of one percent or two percent qualifies as additional duty of customs equivalent to duty of excise eligible for CENVAT credit, or whether such credit can be denied on the ground of payment at concessional rate rather than tariff rate – HELD - When more than one Notification is available, the importer is free to choose any notification and no particular notification can be pressed upon the importer. The expression equivalent to duty of excise in Rule 3(1)(vii) of CENVAT Credit Rules refers to the measure or yardstick of levy and not to the quantum or rate at which duty is paid - The countervailing duty paid under Notification No. 12/2012-Cus remains a duty under Section 3 of Customs Tariff Act and is eligible for credit irrespective of the concessional rate at which it is paid; the Rule does not impose any condition that such duty must be paid at the tariff rate or must strictly correspond to the rate of excise duty, reading such condition into the Rule would amount to importing words into the statute which is impermissible – Further, denial of credit on the basis of concessional rate would defeat the very purpose of the CENVAT scheme which is designed to avoid cascading of taxes and ensure seamless flow of credit; circulars and administrative instructions cannot override statutory provisions - The extended period cannot be invoked when the dispute relates to pure interpretation of statute and credit is claimed under bona fide belief of entitlement; accordingly, the demand for disallowance of CENVAT credit and associated penalties are set aside, though a discretionary penalty of approximately ten percent of the credit availed is imposed to meet the interest of justice – The appeal is allowed [Read less]

Customs - Classification of imported Quick Lime - Appellant imports Quick Lime classifying the same under CTH 2522 1000. Revenue department contends that the imported Quick Lime (Calcium Hydroxide) should be classified under CTH 2825 9090 and issues a Show Cause Notice proposing to recover differential duty along with interest and penalty - Whether Quick Lime imported by Appellant should be classified under CTH 2522 1000 (mineral products - lime and cement) or under CTH 2825 9090 (inorganic chemicals - other metal oxides, hydroxides and peroxides) - HELD - Quick Lime is appropriately classifiable under CTH 2522 1000 and no... [Read more]

Customs - Classification of imported Quick Lime - Appellant imports Quick Lime classifying the same under CTH 2522 1000. Revenue department contends that the imported Quick Lime (Calcium Hydroxide) should be classified under CTH 2825 9090 and issues a Show Cause Notice proposing to recover differential duty along with interest and penalty - Whether Quick Lime imported by Appellant should be classified under CTH 2522 1000 (mineral products - lime and cement) or under CTH 2825 9090 (inorganic chemicals - other metal oxides, hydroxides and peroxides) - HELD - Quick Lime is appropriately classifiable under CTH 2522 1000 and not under CTH 2825 9090. The analysis reveals that Chapter 25 covers mineral products including salt, sulphur, lime and cement, whereas Chapter 28 covers inorganic chemicals and compounds of chemical or allied industries. Chapter heading 2522 specifically provides for quicklime, slaked lime and hydraulic lime, with an exclusion for calcium oxide and hydroxide under Chapter heading 2825 - The exclusion clause indicates that quicklime as a mineral product, when subjected to certain processes converting it into separate chemical elements or chemically defined compounds, would be classified as chemical products under heading 2825. However, the imported goods in the present case are quicklime in their natural form as mineral products, not converted into separate chemical elements or chemically defined compounds. The General Interpretative Rules 2 and 3 do not apply as there is no mixture of different materials or contending classification, but rather clear mutual exclusion between the two headings - The consistent precedent from multiple CESTAT benches is that Quick Lime and Hydraulic Lime obtained by calcining limestone remain classifiable under Chapter 2522 as per the explanatory notes to heading 2522 - The order-in-appeal is set aside and Appellant's classification of Quick Lime under CTH 2522 1000 is upheld – The appeal is allowed [Read less]

Customs - Penalty under Section 114(iii) of the Customs Act, 1962 - Liability for Over-valuation of Exported Goods - The appellant was sought to be penalized for alleged over-valuation and mis-classification of goods in respect of 456 shipping bills resulting in falsely claimed drawback - Whether the appellant can be held liable under Section 114(iii) read with Section 113 of the Customs Act, 1962 when the evidence against him is confined to recorded statements only without any corroborative evidence showing his specific role in the over-valuation and mis-classification of the exported goods - HELD - The appellant merely p... [Read more]

Customs - Penalty under Section 114(iii) of the Customs Act, 1962 - Liability for Over-valuation of Exported Goods - The appellant was sought to be penalized for alleged over-valuation and mis-classification of goods in respect of 456 shipping bills resulting in falsely claimed drawback - Whether the appellant can be held liable under Section 114(iii) read with Section 113 of the Customs Act, 1962 when the evidence against him is confined to recorded statements only without any corroborative evidence showing his specific role in the over-valuation and mis-classification of the exported goods - HELD - The appellant merely performed the physical task of packing goods and handing them over to the CHA as instructed by the exporter and had no knowledge regarding the quality, value, or classification of the neckties - While the appellant admittedly helped in obtaining a fake driving licence, which is illegal and may attract criminal liability, this act alone cannot establish that he played a specific role in the over-valuation and mis-classification of goods across 456 shipping bills - Further, the only intercepted and seized consignments pertained to 16 shipping bills, whereas in respect of the remaining 440 shipping bills, the case relies purely on recorded statements without any corroborative evidence and without the mastermind being available for examination - The revenue has failed to bring any specific material to establish the appellant's direct involvement in the alleged contraventions and therefore sets aside the penalty imposed under Section 114(iii) - the Appeal stands allowed - Penalty under Section 114AA of the Customs Act, 1962 – Use of False and Incorrect Material – The appellant was also penalized for knowingly using false or incorrect material in the transaction of business - Whether the appellant can be held liable under Section 114AA when there is no allegation or evidence that he was responsible for filing, signing, or using any false or incorrect declaration, statement or document in respect of the impugned consignments - HELD - Section 114AA specifically pertains to a person who knowingly or intentionally makes, signs, or uses any declaration, statement, or document which is false or incorrect in any material particular. Since the appellant admittedly did not file, sign, or use any such document and was merely involved in the physical act of packing and handing over goods, and his involvement in obtaining a fake driving licence, though criminally culpable, does not fall within the category of contraventions specified under Section 114AA, the penalty imposed under this section is legally not sustainable and sets it aside - Penalty under Section 117 of the Customs Act, 1962 – The respondent contended that penalty under Section 117 for contravention not expressly mentioned elsewhere may be imposed - Whether the tribunal can entertain a prayer to impose penalty under Section 117 when the show cause notice did not propose such penalty and only proposed penalties under Section 114 and Section 114AA - HELD - In order to impose penalty under Section 117, the show cause notice must be issued seeking to impose a penalty under that section and must give the person an opportunity to defend against the charge under that specific section. Since the show cause notice in respect of the appellant only proposed penalties under Section 114 and Section 114AA, the revenue is procedurally precluded from raising the issue of penalty under Section 117 at the appellate stage - Therefore, the tribunal rejects the respondent's prayer to impose penalty under Section 117. [Read less]

GST - Retrospective Cancellation of Registration – Petitioner challenged the show cause notice and the consequential cancellation order retrospectively cancelling the GST registration from the original date of registration - Whether the GST registration of the petitioner can be cancelled with retrospective effect without assigning any specific reason in the cancellation order – HELD - While the respondent has placed sufficient material on record to justify cancellation of registration from a prospective date based on the field inspection report revealing that the petitioner's firm was not found existing at the declared... [Read more]

GST - Retrospective Cancellation of Registration – Petitioner challenged the show cause notice and the consequential cancellation order retrospectively cancelling the GST registration from the original date of registration - Whether the GST registration of the petitioner can be cancelled with retrospective effect without assigning any specific reason in the cancellation order – HELD - While the respondent has placed sufficient material on record to justify cancellation of registration from a prospective date based on the field inspection report revealing that the petitioner's firm was not found existing at the declared principal place of business and another entity was operating from the same premises, the absence of any specific reasons assigned for retrospective cancellation in the order is impermissible in law - The petitioner, though he admittedly did not file a reply to the show cause notice, deserves an opportunity to respond comprehensively before the proper officer and to face proceedings before deciding the question of whether cancellation should operate from 15.03.2022 or from 17.01.2025 based on fresh reasons to be recorded - The retrospective operation of the cancellation order is set aside and the matter is remitted to the proper officer to decide afresh the question of retrospective cancellation after affording the petitioner an opportunity to file a detailed reply and a hearing – The petition is disposed of [Read less]

Customs - Refund of Customs duty - Lapse of limitation period under Section 27 of Customs Act – Import of capital goods and spares – Pursuant to audit conducted by the CAG that additional duty of customs was not required to be paid, Appellant filed a refund application more than three years after the payment of duty - Whether the Appellant is eligible for refund of customs duty paid when the refund application is filed after lapse of more than three years, beyond the one-year period stipulated under Section 27 of the Customs Act, 1962 – HELD - The refund application was filed after expiry of the stipulated period of ... [Read more]

Customs - Refund of Customs duty - Lapse of limitation period under Section 27 of Customs Act – Import of capital goods and spares – Pursuant to audit conducted by the CAG that additional duty of customs was not required to be paid, Appellant filed a refund application more than three years after the payment of duty - Whether the Appellant is eligible for refund of customs duty paid when the refund application is filed after lapse of more than three years, beyond the one-year period stipulated under Section 27 of the Customs Act, 1962 – HELD - The refund application was filed after expiry of the stipulated period of one year from the date of payment of duty in terms of Section 27 of the Customs Act, 1962; no formal refund claim was filed with all the required annexures - The Larger Bench of the Tribunal in the case of ONGC has held that all refund claims except that of unconstitutional levy must be filed and adjudicated under the provisions of the Central Excise and Salt Act or the Customs Act, as the case may be. The provisions of Section 11B of the Central Excise Act, 1944 and Section 27 of the Customs Act, 1962 do constitute law within the meaning of Article 265 of the Constitution of India and to be refunded as prescribed under the statutory provisions; these acts provide a complete mechanism for correcting any errors whether of fact or law – The appeal is devoid of merit and the appeal is dismissed [Read less]

Central Excise - Procedural requirement to file appeal against Orders in Original within stipulated time - The appellant exports goods on payment of excise duty and claims rebate for such exports. The adjudicating authority grants part of the rebate as cash refund and balance as Cenvat Credit. The appellant, being dissatisfied with the portion granted as Cenvat Credit, approaches the assistant commissioner after about one year and five months requesting cash refund in lieu of Cenvat Credit. The assistant commissioner refuses the request on the ground that he becomes functus officio once the Order in Original is passed - Th... [Read more]

Central Excise - Procedural requirement to file appeal against Orders in Original within stipulated time - The appellant exports goods on payment of excise duty and claims rebate for such exports. The adjudicating authority grants part of the rebate as cash refund and balance as Cenvat Credit. The appellant, being dissatisfied with the portion granted as Cenvat Credit, approaches the assistant commissioner after about one year and five months requesting cash refund in lieu of Cenvat Credit. The assistant commissioner refuses the request on the ground that he becomes functus officio once the Order in Original is passed - The appellant then files an appeal against the letter of refusal before the Commissioner (Appeals), who dismisses it holding that the proper course for the appellant was to file an appeal against the Orders in Original within the stipulated period of ninety days from the date of communication of such order and not to approach the adjudicating authority again after the time limit has expired - Whether the appellant can approach the assistant commissioner after expiry of the appeal period to seek modification of the Order in Original granting part refund as Cenvat Credit into full cash refund - HELD - The proper remedy available to the appellant was to file an appeal before the Commissioner (Appeals) against the Orders in Original within the prescribed time limit of ninety days. The appellant's failure to exercise this remedy within the stipulated period proves fatal to the case - The adjudicating authority becomes functus officio once the Order in Original is passed and cannot sit on the same to modify or rectify it. Further, the request letter filed after such considerable delay clearly indicates that the appellant came to know that he had run out of time to file the proper appeal and hence resorted to an irregular method for which there is no provision in law - The appeal is dismissed [Read less]

Customs - Customs Broker License Revocation – Violation of Customs Brokers Licensing Regulations, 2018 – Whether Customs Broker liable for overvaluation of export goods by exporter - HELD - Customs Broker is not liable for overvaluation of export goods declared by the exporter as the value of export goods is determined through transaction between exporter and overseas buyer, and the Customs Broker has neither authority nor responsibility to determine or re-determine the value of goods under the Customs Act - The proper officer of customs has the power to assess and determine value for duty purposes through self-assessm... [Read more]

Customs - Customs Broker License Revocation – Violation of Customs Brokers Licensing Regulations, 2018 – Whether Customs Broker liable for overvaluation of export goods by exporter - HELD - Customs Broker is not liable for overvaluation of export goods declared by the exporter as the value of export goods is determined through transaction between exporter and overseas buyer, and the Customs Broker has neither authority nor responsibility to determine or re-determine the value of goods under the Customs Act - The proper officer of customs has the power to assess and determine value for duty purposes through self-assessment or re-assessment, and the Customs Broker being a stranger to the contract between importer and exporter has no locus standi to verify or challenge the transaction value - Further, mere handling of shipping bills based on documents provided by exporters does not constitute violation of regulations 10(a), 10(d), 10(e), 10(f), 10(k) and 10(n) of Customs Brokers Licensing Regulations, 2018, when the shipping bills have been assessed and let export orders have been issued by proper officers, thereby attaining finality - The findings of the Commissioner for revocation of Customs Broker license are contrary to facts on record and case law precedents establishing that Customs Broker has no obligation to advise client on drawback eligibility or to exercise due diligence in verifying value declarations made by exporter, particularly when such overvaluation is discovered through subsequent investigation years after exports were cleared in normal course. However, the appellant Customs Broker is liable for penalty under regulation 10(q) for non-participation in inquiry proceedings - the impugned order is set aside and the appeal is partly allowed [Read less]

Service Tax - Refund - Entitlement to interest on illegally collected amount - The appellant, employed as Manager-Corporate Communication, was directed to pay service tax on the ground that she was providing management or business consultancy service, which she paid under duress without any show cause notice being issued - Appellant thereafter filed a refund claim on the ground that the service tax was not payable as her annual income in each financial year was below the threshold limit, though the demand letter had wrongfully clubbed income from four years to create a fictitious liability - The adjudicating authority ulti... [Read more]

Service Tax - Refund - Entitlement to interest on illegally collected amount - The appellant, employed as Manager-Corporate Communication, was directed to pay service tax on the ground that she was providing management or business consultancy service, which she paid under duress without any show cause notice being issued - Appellant thereafter filed a refund claim on the ground that the service tax was not payable as her annual income in each financial year was below the threshold limit, though the demand letter had wrongfully clubbed income from four years to create a fictitious liability - The adjudicating authority ultimately sanctioned the refund holding that the appellant was not liable to pay service tax - Whether the appellant is entitled to interest on the illegally collected service tax amount and from what date such interest should be calculated – HELD - The appellant is entitled to interest because once the revenue determined that no service tax was payable, the collection itself was illegal ab initio, and the revenue had wrongfully retained the amount without issuing any show cause notice to appropriate it - Further, the non-issuance of SCN rendered the entire subsequent rejection of refund claim void ab initio, and the delay of more than three years in completing de-novo proceedings after remand constituted gross violation of statutory provisions and principles of natural justice - When money is unjustifiably withheld by the department in an illegal manner, the assessee is entitled to compensation by way of interest. The assessee's money which has been illegally exacted should attract interest from the date of such illegal exaction till the date of actual refund, not merely from the date of final order - Accordingly, the respondent are directed to pay interest at 6% per annum from the date of illegal payment till the date of refund grant - The appeal is allowed [Read less]

Service Tax - Refund of Pre-deposit made through DRC-03 - Validity of Challan form used for deposit – Appellant-Department, challenges the order of Commissioner (Appeals) allowing refund of pre-deposit made by the Respondent-assessee through DRC-03 challan instead of a Service Tax prescribed form on the ground that pre-deposit is paid in the manner and form prescribed for GST and not for Service Tax - Whether pre-deposit made through DRC-03 challan can be refunded when the appeal filed by the assessee is decided in its favour, despite the challan being a GST prescribed form rather than a Service Tax prescribed form - HEL... [Read more]

Service Tax - Refund of Pre-deposit made through DRC-03 - Validity of Challan form used for deposit – Appellant-Department, challenges the order of Commissioner (Appeals) allowing refund of pre-deposit made by the Respondent-assessee through DRC-03 challan instead of a Service Tax prescribed form on the ground that pre-deposit is paid in the manner and form prescribed for GST and not for Service Tax - Whether pre-deposit made through DRC-03 challan can be refunded when the appeal filed by the assessee is decided in its favour, despite the challan being a GST prescribed form rather than a Service Tax prescribed form - HELD - Once an appeal is admitted and decided in favour of the assessee by the appellate authority, it becomes conclusive that the pre-deposit was validly made, as Section 35F of the Central Excise Act makes pre-deposit mandatory for admission of appeal and the Commissioner (Appeals) never disputed or raised any objection regarding the improper challan at the time of admitting the appeal - Further, pre-deposit is merely a bank deposit slip required for depositing amount in government account and the fact that amount admittedly reached the appellant's account demonstrates valid receipt of deposit - The Board Circular dated 16.09.2014 clearly states that where appeal is decided in favour of the assessee, refund should be granted irrespective of Departmental challenge and mere deposit in wrong account cannot result in rejection of appeal on ground of defects - The order of Commissioner (Appeals) directing refund of pre-deposit with applicable interest under Section 35FF of the Central Excise Act is confirmed - The Revenue appeal is dismissed [Read less]

GST - Section 107(6) and Section 112(8) of the CGST Act, 2017 – Modification of Original Tax demand by the First Appellate Authority, Quantum of pre-deposit required to be made for admission of appeal before GSTAT - Petitioner had already made pre-deposit during the first appellate stage based on a significantly higher original demand, which was subsequently scaled down by the First Appellate Authority - Whether the Petitioner is required to make a fresh pre-deposit when the amount already deposited at the first stage exceeds the requirement for the revised demand - HELD – The ld. First Appellate Authority has reduced ... [Read more]

GST - Section 107(6) and Section 112(8) of the CGST Act, 2017 – Modification of Original Tax demand by the First Appellate Authority, Quantum of pre-deposit required to be made for admission of appeal before GSTAT - Petitioner had already made pre-deposit during the first appellate stage based on a significantly higher original demand, which was subsequently scaled down by the First Appellate Authority - Whether the Petitioner is required to make a fresh pre-deposit when the amount already deposited at the first stage exceeds the requirement for the revised demand - HELD – The ld. First Appellate Authority has reduced the original demand of tax and now the original demand of tax stands to the extent ordered by the ld. First Appellate Authority. The appellants have already made a pre-deposit of ten per cent of the original disputed tax during first appeal while preferring appeal before the First Appellate Authority, this amount now also covers the pre-deposit required for filing the present appeal before the Appellate Tribunal - The issue of pre-deposit decided by the Hon’ble Jharkhand High Court in the case of M/s Ashirwad Food Industries squarely applies to the present case of pre-deposit contested by the Appellant. Accordingly, no further pre-deposit is required to be made under the Section 112 of the Act - Upon proof of payment of the required statutory Court fees and verification of pre-deposit made during the first appeal by the appellant, the Registry shall place the matter before the Bench for Orders regarding admission of the appeal – Ordered accordingly [Read less]

GST - Validity of Service of Notices through GST Portal - Show-cause notices for non-filing of returns and subsequently for cancellation of GST registration were uploaded on the GST portal - Petitioner did not file any response to these notices nor did it seek revival of the cancelled registration or file statutory appeal within the prescribed time limit. Petitioner approached the High Court by writ petition contending that mere uploading of notices on the portal does not constitute valid service of notice and that notices should have been served physically - Whether service of SCNs through uploading on the GST portal cons... [Read more]

GST - Validity of Service of Notices through GST Portal - Show-cause notices for non-filing of returns and subsequently for cancellation of GST registration were uploaded on the GST portal - Petitioner did not file any response to these notices nor did it seek revival of the cancelled registration or file statutory appeal within the prescribed time limit. Petitioner approached the High Court by writ petition contending that mere uploading of notices on the portal does not constitute valid service of notice and that notices should have been served physically - Whether service of SCNs through uploading on the GST portal constitutes valid and sufficient service of notice under the GST Act – HELD – The service of notice by uploading on the GST portal is a valid mode of service of notice as provided under the GST Act. Although the Madras High Court had identified issues with the portal architecture where notifications were placed under different tabs making it difficult for taxpayers to notice them, the portal has since been redesigned to address these concerns - Once the show-cause notices have been duly served through a valid mode, they cannot be challenged on the ground of insufficiency of service, particularly when the assessee fails to demonstrate reasonable diligence. A writ petition under Article 226 cannot be invoked by a person who was not vigilant about his rights and who failed to avail of alternative statutory remedies available under the GST Act and Rules, including the right to revive cancelled registration under the statute and the right to file statutory appeal within prescribed time - The strict limitation period for filing statutory appeals and the mandatory pre-deposit requirement cannot be bypassed by invoking writ jurisdiction, especially when the petitioner's delay in approaching the court is due to its own negligence - The writ petition is dismissed [Read less]

GST - Reimbursement of tax on account of change in tax regime – Petitioners were awarded contracts for construction work when the tax regime was governed by the VAT Act and Finance Act - During the execution of the contract, the GST enactments were implemented; Petitioners sought reimbursement of the increased tax component based on the General Conditions of Contract and Government Orders, which Respondent rejected - Whether the Petitioners are entitled to reimbursement of the additional tax burden arising from the change in the tax regime during the subsistence of the contract – HELD - As per the relevant clause of th... [Read more]

GST - Reimbursement of tax on account of change in tax regime – Petitioners were awarded contracts for construction work when the tax regime was governed by the VAT Act and Finance Act - During the execution of the contract, the GST enactments were implemented; Petitioners sought reimbursement of the increased tax component based on the General Conditions of Contract and Government Orders, which Respondent rejected - Whether the Petitioners are entitled to reimbursement of the additional tax burden arising from the change in the tax regime during the subsistence of the contract – HELD - As per the relevant clause of the General Conditions of Contract, the project manager shall adjust the contract price if taxes, duties, and other levies are changed between the date 28 days before the submission of bids and the date of the last completion certificate. The change in the tax regime from the VAT to GST law entitles the Petitioners to reimbursement in terms of the principle akin to Section 64A of the Sale of Goods Act. The relevant Government Order also states that the entire tax of the supply will have to be finally borne by the purchaser; since the tax regime changed post-award, the amount of tax due to the change has to be reimbursed as it was not reflected in the contract price. Accordingly, Respondent is directed to refund the tax component - Refund of retention amounts and impact of audit objections - Petitioners completed the works under the respective contracts and sought the return of the retention amounts; Respondent rejected the request for refund on the ground that retention amounts could not be released due to pending audit objections related to the work packages - Whether the pendency of audit objections is a valid ground for Respondent to withhold the refund of retention amounts – HELD - The retention amounts are to be refunded back unless there are reasons for appropriating the same on account of the works executed by the Petitioners under the contract; merely because audit objections were raised by the Audit General would not be a ground for not processing the amount claimed by the Petitioners for refund of the retention amounts. The existence of audit objections does not justify the withholding of amounts due for work already executed; accordingly, Respondent is directed to refund the retention amounts with interest at commercial rate. [Read less]

Service tax - Export of service - Refund of unutilized CENVAT credit on investment advisory services provided to overseas entity - Appellant provided investment advisory services including identifying investment opportunities, analyzing financial and economic intelligence, monitoring portfolio companies and providing advisory services to an overseas entity located outside India - Appellant availed CENVAT credit on input services and sought refund of unutilized credit under Rule 5 of CENVAT Credit Rules 2004 and Notification No. 5/2006; original authority sanctioned the refund but Commissioner (Appeals) rejected the refund ... [Read more]

Service tax - Export of service - Refund of unutilized CENVAT credit on investment advisory services provided to overseas entity - Appellant provided investment advisory services including identifying investment opportunities, analyzing financial and economic intelligence, monitoring portfolio companies and providing advisory services to an overseas entity located outside India - Appellant availed CENVAT credit on input services and sought refund of unutilized credit under Rule 5 of CENVAT Credit Rules 2004 and Notification No. 5/2006; original authority sanctioned the refund but Commissioner (Appeals) rejected the refund claim, holding that services were provided in relation to Indian investment opportunities and their effective use and enjoyment was possible only in India - Whether investment advisory services provided to an overseas service recipient constitutes export of service – HELD - The services provided to an overseas entity on principal-to-principal basis, invoiced in foreign currency with no agreement for provision of services to Indian customers of the overseas entity, constitute export of service within the meaning of Rule 3(1)(iii) of Export of Service Rules 2005. The fact that analysis and research relates to Indian investment opportunities does not change the character of export when the service recipient is located outside India and has paid consideration in convertible foreign exchange. The location of the service recipient and the mode of payment of service charges are determinative of the export character of service rather than the subject matter of the service or the location of service delivery - The consistent Tribunal decisions establish that investment advisory services provided to overseas entities qualify as export of service – The appellant is entitled for refund of accumulated CENVAT credit. The impugned order is set aside and the appeal is allowed [Read less]

GST – Validity of Simultaneous Passing of separate Assessment Orders for Multiple Assessment Years – Petitioner challenges five separate assessment orders passed by the assessing authority for the financial years 2018-19 to 2022-23, all issued simultaneously – Petitioner contending that the practice of issuing composite notices and passing composite assessment orders is unsustainable in law in view of law established in the cases of M/s. Lakshmi Mobiles Accessories and Tharayil Medicals - Whether passing of separate orders for different assessment years simultaneously amounts to illegality – HELD - In the absence o... [Read more]

GST – Validity of Simultaneous Passing of separate Assessment Orders for Multiple Assessment Years – Petitioner challenges five separate assessment orders passed by the assessing authority for the financial years 2018-19 to 2022-23, all issued simultaneously – Petitioner contending that the practice of issuing composite notices and passing composite assessment orders is unsustainable in law in view of law established in the cases of M/s. Lakshmi Mobiles Accessories and Tharayil Medicals - Whether passing of separate orders for different assessment years simultaneously amounts to illegality – HELD - In the absence of any statutory prohibition, passing of separate orders for different assessment years simultaneously cannot be held to be illegal. As far as the observations made in Lakshmi Mobiles Accessories and Tharayil Medicals are concerned, the same addressed the prejudice that are likely to cause to the assessee when the proceedings of assessment for various assessment years are clubbed together and a common order is passed. In this case, the aforesaid principles cannot be made applicable, as the assessing authority has issued separate notices and separate orders - The mere fact that the orders were issued simultaneously, by itself cannot be a reason to interfere with the said order, so long as the petitioner was extended an opportunity to submit its objection in response to the separate notices issued – The writ petition is dismissed without prejudice to the right of the petitioner to invoke the statutory remedies if any, available [Read less]

Service Tax - Interest on Refund - The Appellant deposited an amount under protest during investigation. Subsequent SCNs proposed recovery of service tax which was ultimately set aside by the Tribunal - Appellant sought refund of the deposited amount along with interest and contended that it was entitled to interest at 12% per annum - Whether an assessee is entitled to interest at a rate higher than the statutory rate of 6% per annum on an amount deposited during investigation and subsequently refunded following setting aside of the demand – HELD - There is no dispute that the amount deposited by the Appellant became ref... [Read more]

Service Tax - Interest on Refund - The Appellant deposited an amount under protest during investigation. Subsequent SCNs proposed recovery of service tax which was ultimately set aside by the Tribunal - Appellant sought refund of the deposited amount along with interest and contended that it was entitled to interest at 12% per annum - Whether an assessee is entitled to interest at a rate higher than the statutory rate of 6% per annum on an amount deposited during investigation and subsequently refunded following setting aside of the demand – HELD - There is no dispute that the amount deposited by the Appellant became refundable consequent upon the order of the Tribunal setting aside the demand. The Tribunal has treated the amount deposited during investigation as being in the nature of a pre-deposit for the purposes of Section 35FF of the Act. The Appellant has not been able to demonstrate that the Tribunal committed any error in applying Section 35FF of the Act or the notification issued thereunder - Where Parliament has enacted a complete statutory mechanism governing payment of interest and authorized the Central Government to notify the applicable rate, the entitlement of an assessee must necessarily be determined in accordance with the statutory framework. It is settled law that where the statute itself creates the right to interest and prescribes the rate at which such interest is payable, the entitlement cannot ordinarily travel beyond the statute itself - Once it is found that interest has been granted strictly in accordance with Section 35FF of the Act and the notification issued thereunder, this Court cannot, in exercise of appellate jurisdiction under Section 35G of the Act, enhance the statutory rate of interest, merely because the Appellant considers it to be inadequate - The reliance placed on Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune is misplaced as that decision has been explained by the Supreme Court in Commissioner of Income Tax, Gujarat v. Gujarat Fluoro Chemicals Ltd., wherein it was clarified that an assessee is entitled only to such interest as is provided under the statute and that Sandvik Asia did not lay down any general principle entitling an assessee to claim interest dehors the statutory provisions - The appeal is dismissed [Read less]

Service Tax - Appellant, engaged in providing vocational training services in spoken English language, claims exemption under Notification Nos. 09/2003 and 24/2024 on the ground that it is a vocational training institute - Whether the appellant is eligible to claim exemption from service tax under the said notifications without producing documentary evidence of approval by the National Skill Development Corporation or the Sector Skill Council - HELD - While Notification No. 09/2003 exempts taxable services provided in relation to commercial training or coaching by vocational training institutes that impart skills to enable... [Read more]

Service Tax - Appellant, engaged in providing vocational training services in spoken English language, claims exemption under Notification Nos. 09/2003 and 24/2024 on the ground that it is a vocational training institute - Whether the appellant is eligible to claim exemption from service tax under the said notifications without producing documentary evidence of approval by the National Skill Development Corporation or the Sector Skill Council - HELD - While Notification No. 09/2003 exempts taxable services provided in relation to commercial training or coaching by vocational training institutes that impart skills to enable trainees to seek employment, the eligibility conditions require specific affiliations or approvals - Further, Notification No. 25/2012 also provides similar exemption but restricts it to services provided by the National Skill Development Corporation; Sector Skill Council approved by the National Skill Development Corporation; assessment agencies approved by the Sector Skill Council or National Skill Development Corporation, or training partners approved by either the National Skill Development Corporation or Sector Skill Council - The appellant, not being any of the prescribed authorities, can only be covered under the category of training partner provided it proves approval by the competent authorities. Since the appellant has admittedly not produced any such evidence despite ample opportunities, the appellant does not qualify for exemption under any exemption notification - The demand for the normal period is upheld and the appeal is partially allowed only to the extent of setting aside the demand for the extended period which is barred by limitation [Read less]

GST - Parallel Proceedings – Petitioner challenges issuance of multiple communications and show cause notice by various tax authorities on the same subject matter regarding availment of fake input tax credit – HELD - The Supreme Court in M/s Armour Security (India) Ltd. has laid down binding directions regarding the scope of initiation of proceedings and the interrelationship between Central and State GST authorities and held where Show Cause Notice has been issued, the Authority, which has issued Show Cause Notice, shall have precedence to continue and complete the proceedings and all other proceeding shall follow the... [Read more]

GST - Parallel Proceedings – Petitioner challenges issuance of multiple communications and show cause notice by various tax authorities on the same subject matter regarding availment of fake input tax credit – HELD - The Supreme Court in M/s Armour Security (India) Ltd. has laid down binding directions regarding the scope of initiation of proceedings and the interrelationship between Central and State GST authorities and held where Show Cause Notice has been issued, the Authority, which has issued Show Cause Notice, shall have precedence to continue and complete the proceedings and all other proceeding shall follow the outcome of the proceedings initiated in furtherance to SCN on the same subject matter - In the present case, for the first time SCN has been issued on 11.03.2025, therefore, petitioner is directed to file detailed reply to the said SCN and all other proceedings initiated or proposed to be initiated on the same subject matter shall not be proceeded further, rather information, if any, shall be forwarded by such Authorities to the Authority, which has issued the SCN on 11.03.2025, with prior intimation to the petitioner so as to enable the petitioner to respond to such information related to the same subject matter - The writ petition stands disposed of [Read less]

Central Excise - Classification of Dry Mix Plaster and Putty and eligibility for exemption notification - The appellant manufactures Dry Mix Plaster and Putty and claims that these goods are classifiable under Chapter 2505/2520 of the Central Excise Tariff Act, 1985 and benefit of Notification No. 8/2003 dated 01.03.2003 - Whether the goods in question are classifiable under Chapter 2505/2520 or Chapter Heading No. 3214 - HELD - The goods manufactured by the appellant are correctly classifiable under Chapter Heading No. 3214 and not under Chapter 2505/2520 as claimed by the appellant, inasmuch as no chemical testing was co... [Read more]

Central Excise - Classification of Dry Mix Plaster and Putty and eligibility for exemption notification - The appellant manufactures Dry Mix Plaster and Putty and claims that these goods are classifiable under Chapter 2505/2520 of the Central Excise Tariff Act, 1985 and benefit of Notification No. 8/2003 dated 01.03.2003 - Whether the goods in question are classifiable under Chapter 2505/2520 or Chapter Heading No. 3214 - HELD - The goods manufactured by the appellant are correctly classifiable under Chapter Heading No. 3214 and not under Chapter 2505/2520 as claimed by the appellant, inasmuch as no chemical testing was conducted on the said goods to ascertain their classification under the chapters claimed by the appellant - Further, the appellant is not eligible for the benefit of Notification No. 8/2003 dated 01.03.2003 because the appellant had used the brand name "ROOFIT" belonging to another person while clearing the goods to their customers, which renders them ineligible for the exemption benefit under the said notification - Both the factual and legal aspects have been properly dealt with by the commissioner (appeals) in arriving at the conclusion that the appeal lacks merit - The order of the commissioner (appeals) is sustained and the appeal is dismissed [Read less]

GST - Withdrawal of Best Assessment Order - Respondent passed an assessment order under Section 62 of the CGST Act, 2017. The petitioner subsequently filed the required statement and return by paying the entire tax liability along with applicable interest and late fees - Whether an assessment order passed under Section 62 of the CGST Act can be deemed to have been withdrawn when the taxpayer files the statutory returns after the prescribed time limit but within the subsequently extended time limit, while paying the entire tax, interest and late fees – HELD - The assessment orders shall be deemed to have been withdrawn on... [Read more]

GST - Withdrawal of Best Assessment Order - Respondent passed an assessment order under Section 62 of the CGST Act, 2017. The petitioner subsequently filed the required statement and return by paying the entire tax liability along with applicable interest and late fees - Whether an assessment order passed under Section 62 of the CGST Act can be deemed to have been withdrawn when the taxpayer files the statutory returns after the prescribed time limit but within the subsequently extended time limit, while paying the entire tax, interest and late fees – HELD - The assessment orders shall be deemed to have been withdrawn once returns are filed within the prescribed time or beyond the prescribed time along with payment of late fees. When a taxpayer substantively complies with statutory requirements by filing the returns and discharging all tax dues including interest and late fees, the assessment order becomes inoperative and stands withdrawn. The fact that the petitioner paid not only the tax but also interest and late fees demonstrates sufficient compliance with the statutory requirements - The impugned assessment order is declared to be deemed withdrawn, and the respondent is directed that no steps for recovery of tax and dues can be initiated or continued – The writ petition is allowed [Read less]

GST - Condonation of Delay in Filing Appeal – Petitioner, a party in person without legal assistance, files appeal before appellate authority after 6 days of prescribed 90-day period without condonation application and proper grounds – Whether appellate authority erred in dismissing appeal by refusing to condone delay – HELD - The appellate authority has clearly committed an error in failing to appreciate that the petitioner being a party in person was not in a position to urge proper grounds and file an application for condonation of delay on his part, which was due to bonafide reasons, unavoidable circumstances and... [Read more]

GST - Condonation of Delay in Filing Appeal – Petitioner, a party in person without legal assistance, files appeal before appellate authority after 6 days of prescribed 90-day period without condonation application and proper grounds – Whether appellate authority erred in dismissing appeal by refusing to condone delay – HELD - The appellate authority has clearly committed an error in failing to appreciate that the petitioner being a party in person was not in a position to urge proper grounds and file an application for condonation of delay on his part, which was due to bonafide reasons, unavoidable circumstances and sufficient cause - Considering that the petitioner who was originally a party in person in the appeal now intends to engage the services of counsel and prosecute the appeal properly in accordance with law, the impugned appellate order is set aside and the matter is remitted back to the appellate authority for reconsideration afresh. The appellate authority is directed to permit the petitioner to amend grounds, plead additional grounds with the assistance of counsel and dispose of the appeal on merits – The writ petition allowed by remand [Read less]

Customs - Burden of proof regarding smuggled nature of exotic wildlife not notified under Section 123 of the Customs Act, Absolute confiscation under Section 111 of the Customs Act - Appellant was apprehended for possession of exotic birds and mammals seized from a domestic air cargo terminal and residential premises; Department alleged they were smuggled items of foreign origin, while Appellant claimed they were procured through domestic suppliers within the country - Whether the onus lies on the Revenue or the Appellant to prove the smuggled nature of exotic birds and mammals which are not notified under Section 123 of t... [Read more]

Customs - Burden of proof regarding smuggled nature of exotic wildlife not notified under Section 123 of the Customs Act, Absolute confiscation under Section 111 of the Customs Act - Appellant was apprehended for possession of exotic birds and mammals seized from a domestic air cargo terminal and residential premises; Department alleged they were smuggled items of foreign origin, while Appellant claimed they were procured through domestic suppliers within the country - Whether the onus lies on the Revenue or the Appellant to prove the smuggled nature of exotic birds and mammals which are not notified under Section 123 of the Customs Act – HELD - The exotic birds and mammals are not notified items within the meaning of Section 123 of the Customs Act; therefore, the onus lies on the Revenue to prove that the exotic birds and mammals in question are of foreign origin and that the Appellant has smuggled the same into the country through illicit means; the Appellant has discharged their onus regarding procurement of the exotic birds and mammals through licit means within the domestic area; the burden is cast on the Revenue to prove by means of tangible and corroborative evidence that the said exotic birds and mammals have been procured through illegal or illicit means in violation of the relevant Act or Rules, which the Revenue has failed to prove; accordingly, the burden of proof is held to lie on the Revenue - As the exotic birds and mammals in question are not notified under Section 123 of the Customs Act, the burden lies on the Revenue to prove that the Appellant has procured the same through illicit means and are smuggled in nature; the Revenue failed to establish the allegation of smuggling with any cogent evidence; internal trade within the country of exotic species is not found in any schedule of the Wildlife Protection Act and was never prohibited; mere acquisition, purchase or possession of exotic birds and mammals does not violate provisions under the Customs Act; it is only at the entry point, at the time of import, that any consignment of exotic birds and mammals intercepted upon establishing violation of the statutory provisions would be liable for confiscation; the Revenue failed to prove their case through tangible and corroborative evidence; accordingly, the confiscation of the exotic birds and mammals is set aside – The appeals are disposed of - Sustainability of penalties under Section 112 of the Customs Act - Whether penalties can be sustained when the Revenue fails to prove the illicit importation of the goods – HELD - As the Revenue has failed to prove their case regarding the smuggled nature of the goods, no penalty can be imposed on the Appellant in the facts and circumstances of the case; the Tribunal found no infirmity in the setting aside of the penalty imposed on the Respondent as the Revenue could not establish the illegal procurement or smuggling of the exotic birds and mammals; accordingly, the penalty imposed on the Appellant is set aside and the setting aside of the penalty on the Respondent is upheld - Liability of a vehicle for confiscation under Section 115 of the Customs Act - Vehicle was seized and ordered for confiscation on the belief it was used for the carriage of smuggled exotic birds and mammals from a domestic air cargo terminal - Whether the vehicle is liable for confiscation when the goods carried are not proved to be smuggled – HELD - The vehicle in question is not liable for confiscation because the Revenue failed to prove their case regarding the illicit nature of the goods transported; the Tribunal directed the release of the vehicle without the imposition of any redemption fine thereon; accordingly, the confiscation of the vehicle is set aside and the vehicle is directed to be released. [Read less]

Central Excise - Determination of Date of export - Appellant exported goods vide Are-1 with Bill of lading on the same date and filed the Export General Manifest within one month thereof, but the Customs Preventive Officer delayed certification of the export details by approximately nine months, resulting in certification occurring beyond the six-month period from the date of factory clearance - Revenue issued show cause notice and demand excise duty payment on such exported consignment - Whether the actual date of export as evidenced by contemporaneous documents or the delayed date of certification by the Customs Preventi... [Read more]

Central Excise - Determination of Date of export - Appellant exported goods vide Are-1 with Bill of lading on the same date and filed the Export General Manifest within one month thereof, but the Customs Preventive Officer delayed certification of the export details by approximately nine months, resulting in certification occurring beyond the six-month period from the date of factory clearance - Revenue issued show cause notice and demand excise duty payment on such exported consignment - Whether the actual date of export as evidenced by contemporaneous documents or the delayed date of certification by the Customs Preventive Officer determines excise duty liability – HELD - The date of issuance of the Let Export Order, being coincident with the date of factory clearance, constitutes the date of export and the Export General Manifest filed within one month thereafter provides documentary evidence that the goods were exported within the statutory period prescribed - The delayed certification by the Customs Preventive Officer does not alter the factual position regarding the actual date of export and cannot form the basis for imposing a duty demand where contemporaneous documentary evidence establishes compliance with the statutory requirements – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Taxability of Road Cutting charges and Rural Electrification Services - The appellant is implementing IT projects involving laying of optical fibre cables in rural areas, receives road cutting and rural electrification services from government and local authorities – Demand of service tax on payments made towards road cutting charges, electrical inspection fees, and other charges, contending that the gross amount charged exceeds the exemption threshold prescribed under Notification No. 25/2012-ST as amended by Notification No. 22/2016-ST - Whether the services rendered fall within the exemption notificati... [Read more]

Service Tax – Taxability of Road Cutting charges and Rural Electrification Services - The appellant is implementing IT projects involving laying of optical fibre cables in rural areas, receives road cutting and rural electrification services from government and local authorities – Demand of service tax on payments made towards road cutting charges, electrical inspection fees, and other charges, contending that the gross amount charged exceeds the exemption threshold prescribed under Notification No. 25/2012-ST as amended by Notification No. 22/2016-ST - Whether the services rendered fall within the exemption notification and whether service tax is liable to be discharged under the reverse charge mechanism - HELD - The activity of road cutting falls squarely within Entry 13 of the mega exemption notification which exempts services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a road for use by general public - Further, the services also satisfy the conditions stipulated under Entry 60 of the notification, which exempts services provided by government or local authority in relation to functions entrusted to a Panchayat under Article 243G of the Constitution. The provisions of Article 243G specifically provide for roads and rural electrification, which directly correspond to the services received by the appellant - However, the benefit is restricted by applying Notification No. 22/2016, which limits the exemption to cases where the gross amount charged does not exceed a monetary threshold. Since the payments made by the appellant exceed this permissible limit, the exemption notification cannot be extended - The tribunal sets aside the demand raised invoking the extended period of limitation, holding that an issue pertaining to the applicability of exemption notification being an interpretational matter does not justify invocation of extended period, and no malafide intention can be attributed to a government undertaking - The impugned order is set aside except to the extent of applicability of the Notification No. 22/2016-ST - The appeal is disposed of [Read less]

GST - Refund of accumulated Input Tax Credit - Jurisdiction of Writ Court to entertain appeal against appellate order – Petitioner claimed refund of accumulated ITC on account of inverted duty structure under Section 54(3) of the CGST Act read with Rule 89(5) of the CGST Rules. The refund was initially sanctioned but subsequently recovered by invoking Section 73 of the Act following amendments to Rule 89(5) - The Petitioner challenged the Order-in-Appeal by way of writ petition, contending that the amendment to Rule 89(5) vide Notification dated 05.07.2022 was clarificatory in nature and should apply retrospectively - HE... [Read more]

GST - Refund of accumulated Input Tax Credit - Jurisdiction of Writ Court to entertain appeal against appellate order – Petitioner claimed refund of accumulated ITC on account of inverted duty structure under Section 54(3) of the CGST Act read with Rule 89(5) of the CGST Rules. The refund was initially sanctioned but subsequently recovered by invoking Section 73 of the Act following amendments to Rule 89(5) - The Petitioner challenged the Order-in-Appeal by way of writ petition, contending that the amendment to Rule 89(5) vide Notification dated 05.07.2022 was clarificatory in nature and should apply retrospectively - HELD - The petitioner seeks a declaration that Circular dated 10.11.2022 issued by the CBIC would be applicable prospectively. The apprehension of the petitioner that the GST Appellate Tribunal would be bound by the CBIC Circular No.181/13/2022-GST dated 10.11.2022 and unable to clarify the statutory position is unfounded. GST Appellate Tribunal is competent to adjudicate not only the disputed fact emanating from the Order-in-Appeal but also question of law vis-à-vis applicability of Rule 89(5) of the GST Rules as amended with specific reference to the Circulars or Notifications issued in this regard - The principle established in Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries is that Circulars and instructions issued by the Board represent merely the Executive's understanding of statutory provisions and are not binding upon the Court or the Appellate Tribunal, which is competent to adjudicate both disputed facts and questions of law regarding the applicability of Rule 89(5) of the CGST Rules as amended - The Court declines to entertain the writ petition and reserved liberty for the Petitioner to file an appeal before the GST Appellate Tribunal - The writ petition stands dismissed [Read less]

Central Excise - Valuation of Prototype Vehicles – Applicability of Rule 8 versus Rule 4 of Central Excise Valuation Rules – The appellant, engaged in manufacture of prototype commercial vehicles, removed goods to its other manufacturing unit for testing and computed Central Excise duty liability under Rule 4 of the Central Excise Valuation Rules, 2000 -Department contended that the value should be determined under Rule 8 at 110% of the cost of production. The original order dropped the Department's proposals, but the Commissioner (Appeals-I) allowed the Revenue's appeal and set aside the original order – Whether Rul... [Read more]

Central Excise - Valuation of Prototype Vehicles – Applicability of Rule 8 versus Rule 4 of Central Excise Valuation Rules – The appellant, engaged in manufacture of prototype commercial vehicles, removed goods to its other manufacturing unit for testing and computed Central Excise duty liability under Rule 4 of the Central Excise Valuation Rules, 2000 -Department contended that the value should be determined under Rule 8 at 110% of the cost of production. The original order dropped the Department's proposals, but the Commissioner (Appeals-I) allowed the Revenue's appeal and set aside the original order – Whether Rule 8 or Rule 4 of Central Excise Valuation Rules, 2000 applies to the valuation of prototype vehicles removed for testing purposes – HELD – The Rule 8 is not applicable as the primary condition for its invocation is consumption of goods in manufacture of another article. Prototype vehicles subject to testing under Rule 126 of the Central Motor Vehicle Rules, 1989, cannot be said to be consumed in further manufacture, as commercially manufactured similar vehicles are copies of prototypes. The value of comparable goods under Rule 4 of the Central Excise Valuation Rules, 2000, therefore applies. The issue being identical to an issue already decided by the Co-ordinate Bench in an earlier case, the matter was no more res integra and different interpretation could not be placed – The impugned order is set aside and the appeals are allowed [Read less]

Service Tax – Taxability of Corporate Guarantee without Consideration - The Appellant furnished corporate guarantees on behalf of its associated enterprises without charging any monetary consideration, commission, or fees. The Original Authority and Commissioner (Appeals) confirmed a demand of service tax on a notional and assumed amount of commission, contending that the issuance of corporate guarantee amounts to a service taxable under Section 65B(44) and Section 66B of the Finance Act, 1994 - Whether furnishing of corporate guarantee for group companies without any consideration constitutes a 'service' liable to servi... [Read more]

Service Tax – Taxability of Corporate Guarantee without Consideration - The Appellant furnished corporate guarantees on behalf of its associated enterprises without charging any monetary consideration, commission, or fees. The Original Authority and Commissioner (Appeals) confirmed a demand of service tax on a notional and assumed amount of commission, contending that the issuance of corporate guarantee amounts to a service taxable under Section 65B(44) and Section 66B of the Finance Act, 1994 - Whether furnishing of corporate guarantee for group companies without any consideration constitutes a 'service' liable to service tax - HELD - Consideration is a critical and essential element for determining whether an activity qualifies as a 'service' under the statutory definition. The statute requires both a 'provider' and a flow of 'consideration' for an activity to be taxable as a service; the absence of either element precludes taxability – The issue has already been conclusively settled by the Hon'ble Supreme Court in the case of Edelweiss Financial Services Ltd, wherein it was held that no service tax should be levied where the assessee has not received any consideration while providing corporate guarantee to group companies - No service tax is payable on corporate guarantees provided without any consideration, as the demand based on assumed or notional benefits cannot override the fundamental requirement of actual consideration in the definition of service - The impugned order is set aside and appeals are allowed [Read less]

Service Tax - Construction of multi-level parking for local authority – Demand of service tax on construction of a multi-level parking built for Municipal Corporation to provide parking facilities to the public – Revenue case that the activity was commercial in nature and not covered by Notification No. 25/2012 whereas Respondent contended the construction was for public benefit and fell within the exemption provisions for services provided to local authorities for construction of original works meant for use other than commerce, industry or business - Whether construction of a multi-level parking for a local authority... [Read more]

Service Tax - Construction of multi-level parking for local authority – Demand of service tax on construction of a multi-level parking built for Municipal Corporation to provide parking facilities to the public – Revenue case that the activity was commercial in nature and not covered by Notification No. 25/2012 whereas Respondent contended the construction was for public benefit and fell within the exemption provisions for services provided to local authorities for construction of original works meant for use other than commerce, industry or business - Whether construction of a multi-level parking for a local authority for providing public parking facilities constitutes a taxable service or qualifies for exemption under the notification – HELD - The construction of a multi-level parking by a local authority for providing parking facilities to the public at large is not a commercial activity and therefore not subject to service tax. Providing public parking facilities is one of the main objectives of a Municipal Corporation and constitutes a welfare measure for public convenience aimed at public benefit rather than profit generation. Even though nominal fee may be collected from users, such collection does not convert the activity into a commercial undertaking as providing public amenity cannot be for generating profit – The services provided to a local authority for construction of original works meant predominantly for use other than for commerce, industry or business are expressly exempted under para 12A of Notification No. 25/2012 - The issue is well-settled by consistent Tribunal decisions in similar cases involving construction of multi-level parking for development authorities - The impugned order of Commissioner (Appeals) is upheld and the Revenue's appeals are dismissed [Read less]

Service Tax - Exemption to railway projects - Liability of project management consultant acting as agent - Appellant was engaged as project management consultant and power of attorney holder for a public sector undertaking to supervise construction of a railway siding by executing agencies - Department issued a show cause notice contending that services relating to railway infrastructure provided by contractor to the public sector undertaking, with Appellant acting as intermediary, constitute taxable services and Appellant is liable to service tax - Whether a project management consultant acting as power of attorney holder... [Read more]

Service Tax - Exemption to railway projects - Liability of project management consultant acting as agent - Appellant was engaged as project management consultant and power of attorney holder for a public sector undertaking to supervise construction of a railway siding by executing agencies - Department issued a show cause notice contending that services relating to railway infrastructure provided by contractor to the public sector undertaking, with Appellant acting as intermediary, constitute taxable services and Appellant is liable to service tax - Whether a project management consultant acting as power of attorney holder on behalf of a disclosed principal for railway construction activities is liable to service tax – HELD - Service tax is not leviable on railway projects and the exemption from tax is available to railways irrespective of whether the railway is for public or private purpose. There is no distinction between railway for private purpose and railway for public service in the Finance Act, 1994, and any such distinction cannot be artificially contrived to suit tax administration. The term ‘railways’ in Notification No. 25/2012 is to be understood according to common parlance as there is no definition provided in the Finance Act or Notification, and definitions from other statutes such as the Railways Act, 1989 cannot be imported. The use of public includes use by PSUs and corporations and not merely individuals. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Applicability of Rule 6 of Central Excise Valuation Rules to Related-Party Transactions – Receipt of Lump Sum Compensation – The appellant received a lump sum compensation from its related subsidiary company for development of market and business transfer purposes. The Department contended that such compensation should be treated as additional consideration on which Central Excise duty was payable under Rule 6 of the Central Excise Valuation Rules, 2000, and confirmed a demand of excise duty - Whether Rule 6 of the Central Excise Valuation Rules, 2000 applies to lump sum compensation received in a rela... [Read more]

Central Excise - Applicability of Rule 6 of Central Excise Valuation Rules to Related-Party Transactions – Receipt of Lump Sum Compensation – The appellant received a lump sum compensation from its related subsidiary company for development of market and business transfer purposes. The Department contended that such compensation should be treated as additional consideration on which Central Excise duty was payable under Rule 6 of the Central Excise Valuation Rules, 2000, and confirmed a demand of excise duty - Whether Rule 6 of the Central Excise Valuation Rules, 2000 applies to lump sum compensation received in a related-party transaction under Section 4(1)(b) of the Central Excise Act, 1944, when no specific goods are identified as being attributable to such compensation – HELD – The Rule 6 Valuation Rules, 2000, by its express terms, applies only to cases governed under Section 4(1)(a) of the Central Excise Act, 1944, and therefore cannot be applied to related-party transactions which fall under Section 4(1)(b). Additionally, since excise duty is a duty levied on the manufacture of excisable goods, and the Department had failed to identify the specific goods against which the lump sum compensation was made, the valuation rules cannot apply. A one-time lump sum payment cannot be attributed to any particular goods for purposes of determining transaction value – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Excisability of Waste/By-product - The Appellant, engaged in manufacture of malt-based food products, generated barley husk as an inevitable residue during the manufacturing process. The barley husk was cleared without further processing and the department demanded payment equivalent to 5% or 6% of the clearing value of barley husk under Rule 6(3) of the CCR, 2004, contending that barley husk is classifiable under Tariff Heading 2302.40.00 and qualifies as exempted goods, thus requiring separate maintenance of accounts and apportionment of credit - Whether a waste/by-product emerges inevitably during the m... [Read more]

Central Excise - Excisability of Waste/By-product - The Appellant, engaged in manufacture of malt-based food products, generated barley husk as an inevitable residue during the manufacturing process. The barley husk was cleared without further processing and the department demanded payment equivalent to 5% or 6% of the clearing value of barley husk under Rule 6(3) of the CCR, 2004, contending that barley husk is classifiable under Tariff Heading 2302.40.00 and qualifies as exempted goods, thus requiring separate maintenance of accounts and apportionment of credit - Whether a waste/by-product emerges inevitably during the manufacture of a principal product without any conscious or independent manufacturing activity is liable to excise duty and whether Rule 6 of the Cenvat Credit Rules applies to such products - HELD - Manufacture requires transformation of inputs into a distinct commercial commodity having a separate name, character and use, and mere marketability or tariff classification does not dispense with the requirement of manufacture. The deeming fiction under the Explanation to Section 2(d) of the Central Excise Act comes into operation only after it is established that an article has been manufactured within the meaning of Section 2(f) of the Act - Since barley husk is neither the intended output of the manufacturing process nor brought into existence through any independent manufacturing activity, it does not qualify as a manufactured product and Rule 6 of the Cenvat Credit Rules has no application where the product in question is not manufactured and consequently is not exigible to duty - the impugned order is set aside and the appeal is allowed [Read less]

Gujarat Sales Tax Act, 1969 - Reduction of Penalty imposed under Section 45(5) and Section 45(6) of the Gujarat Sales Tax Act - The appellant-Revenue challenges the Tribunal's reduction of penalty from 90% to 10% under Section 45(6) and deletion of penalty under Section 45(4) - Whether the Tribunal is justified in reducing the penalty to 10% instead of maintaining it at 90% - HELD - The Assessing Officer committed an error in computing the difference between tax payable and tax paid by considering only the amount shown in the return and ignoring the actual tax paid by the assessee, which is an undisputed fact. The assessee... [Read more]

Gujarat Sales Tax Act, 1969 - Reduction of Penalty imposed under Section 45(5) and Section 45(6) of the Gujarat Sales Tax Act - The appellant-Revenue challenges the Tribunal's reduction of penalty from 90% to 10% under Section 45(6) and deletion of penalty under Section 45(4) - Whether the Tribunal is justified in reducing the penalty to 10% instead of maintaining it at 90% - HELD - The Assessing Officer committed an error in computing the difference between tax payable and tax paid by considering only the amount shown in the return and ignoring the actual tax paid by the assessee, which is an undisputed fact. The assessee was engaged in selling agricultural equipment at subsidized rates with subsidy to be received from the State Government, and upon receipt of such subsidy paid the additional tax due within the prescribed period. The Tribunal correctly considered that the Assessing Officer ought to have included the total amount of tax actually paid for computing whether penalty was leviable under Section 45(5). However, neither the Assessing Officer nor the Tribunal has assigned any reason for reducing the penalty. The Court declines to substitute its discretion for the authorities' exercise of discretion in penalty matters – Further, the Tribunal has not interfered with the levy of interest on late payment of tax as the assessee admittedly paid late - Both the appeals filed by the Revenue and the cross-objections filed by the assessee are dismissed. The questions of law raised in the appeals are answered in affirmative in favour of the assessee and against the Revenue, while the question raised in the cross-objections is answered in favour of the Revenue and against the assessee. The impugned order of the Tribunal reducing the penalty to 10% and deleting penalties under Section 45(4) is upheld without interference – Ordered accordingly [Read less]