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Central Excise - Excess consumption of vinegar over Standard Input-Output Norms (SION) – Permissibility of excess consumption of vinegar by the EOU in the manufacture of "gherkins in vinegar" is permissible - whether customs/excise duty can be demanded on such excess – HELD - the appellant-EOU had consumed vinegar within the SION norms when the total quantity of gherkins exported, including "gherkins in brine" is taken into account. The SION norms do not distinguish between "gherkins in vinegar" and "gherkins in brine", and vinegar is used in both. The Tribunal also noted that there was no allegation of misuse or diver... [Read more]

Central Excise - Excess consumption of vinegar over Standard Input-Output Norms (SION) – Permissibility of excess consumption of vinegar by the EOU in the manufacture of "gherkins in vinegar" is permissible - whether customs/excise duty can be demanded on such excess – HELD - the appellant-EOU had consumed vinegar within the SION norms when the total quantity of gherkins exported, including "gherkins in brine" is taken into account. The SION norms do not distinguish between "gherkins in vinegar" and "gherkins in brine", and vinegar is used in both. The Tribunal also noted that there was no allegation of misuse or diversion of the excess vinegar, and the details of consumption were declared in the EOU's monthly ER-2 returns. Accordingly, the demand of customs and excise duty on the excess consumption of vinegar is set aside but demand of duty on crate trolleys on depreciated value and on HDPE barrels is confirmed - The appeal is allowed partially [Read less]

Service Tax – Rendering of professional services, Reimbursement of travel ticket by clients - The assessee, a firm of chartered accountants, incurred expenses for travel of its partners and employees, which were reimbursed by clients - Whether reimbursements should be included in the taxable value of the service provided by the assessee – HELD – In view of the Supreme Court judgment in Intercontinental Consultants & Technocrats Pvt. Ltd. v. UoI, prior to the amendment of Section 67 of the Finance Act, 1994 with effect from 14.05.2015, the levy of Service Tax on the reimbursed expenses was not envisaged. The authoriti... [Read more]

Service Tax – Rendering of professional services, Reimbursement of travel ticket by clients - The assessee, a firm of chartered accountants, incurred expenses for travel of its partners and employees, which were reimbursed by clients - Whether reimbursements should be included in the taxable value of the service provided by the assessee – HELD – In view of the Supreme Court judgment in Intercontinental Consultants & Technocrats Pvt. Ltd. v. UoI, prior to the amendment of Section 67 of the Finance Act, 1994 with effect from 14.05.2015, the levy of Service Tax on the reimbursed expenses was not envisaged. The authorities below clearly erred in including the reimbursed expenditure in the taxable value of services for the period under dispute – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Prohibition Order under CBLR, 2013 - The appellant, a customs broker, obtained a license and was operating in Mumbai Customs Commissionerate. Upon examination of goods imported through certain Bills of Entry, the Mumbai Customs noticed irregularities in description, quantity, and valuation, and passed a prohibition order prohibiting the appellant from working in all sections of Mumbai Customs Zones I, II and III for violation of various regulations under the CBLR, 2013 - Whether the prohibition order could stand independent of the inquiry proceedings under Regulation 20 of the CBLR, 2013, which were quashed by th... [Read more]

Customs - Prohibition Order under CBLR, 2013 - The appellant, a customs broker, obtained a license and was operating in Mumbai Customs Commissionerate. Upon examination of goods imported through certain Bills of Entry, the Mumbai Customs noticed irregularities in description, quantity, and valuation, and passed a prohibition order prohibiting the appellant from working in all sections of Mumbai Customs Zones I, II and III for violation of various regulations under the CBLR, 2013 - Whether the prohibition order could stand independent of the inquiry proceedings under Regulation 20 of the CBLR, 2013, which were quashed by the Madras High Court – HELD - The prohibition order can stand independent of the inquiry proceedings under Regulation 23 of the CBLR, 2013, which allows the Commissioner of Customs to prohibit a customs broker from working in one or more sections if satisfied that the broker has not fulfilled its obligations. Further, the appellant's registration with the Mumbai Customs Commissionerate had expired on 21.03.2024, and the appellant did not approach the Commissioner to continue its operations from Mumbai - The appeal is dismissed as infructuous upon expiry of the cause of action [Read less]

Customs - Waiver of cost recovery charges (CRC) - The appellant was functioning as a Custodian at ICD Dadri and had been paying CRC for the custom staff deployed at its CFS under CBEC Circular No. 52/97–CUS dated 17.10.1997. The appellant requested for exemption/waiver from payment of CRC and refund of the amount deposited by them during the period from April 2009 to November 2015 – HELD - The appellant is entitled to waiver of CRC retrospectively from the date of the application, based on the decision of the Gujarat High Court in Adani Ports & Special Economic Zone Ltd v. Union of India, which held that once the exemp... [Read more]

Customs - Waiver of cost recovery charges (CRC) - The appellant was functioning as a Custodian at ICD Dadri and had been paying CRC for the custom staff deployed at its CFS under CBEC Circular No. 52/97–CUS dated 17.10.1997. The appellant requested for exemption/waiver from payment of CRC and refund of the amount deposited by them during the period from April 2009 to November 2015 – HELD - The appellant is entitled to waiver of CRC retrospectively from the date of the application, based on the decision of the Gujarat High Court in Adani Ports & Special Economic Zone Ltd v. Union of India, which held that once the exemption is granted, it should be from the date of the application. Further, the Andhra Pradesh High Court in CBEC v. GMR Hyderabad International Airport Limited had held the Handling of Cargo in Customs Areas Regulations, 2009, under which the CRC was levied, to be ultra vires the Customs Act, 1962, as there was no express statutory provision conferring authority on the department to levy CRC. Consequently, the CRC ever collected from the appellant or any other custodian was without any authority of law. The impugned order is set aside and the appellant is entitled to the refund of CRC ever paid by them - The appeal is allowed [Read less]

Customs - Undervaluation of imported goods – Appellant imported digital receiver sets components of Chinese origin – Dept rejected the declared value as the values were much lower than the prices at which other importers had imported similar goods during the relevant period. The Commissioner confirmed the demand of duty under the extended period of limitation, imposed interest, and also imposed penalty under Section 114A of the Customs Act, 1962 – HELD - The demand of duty cannot be sustained as the transaction values declared by the appellant were already enhanced by the proper officer at the time of assessment of t... [Read more]

Customs - Undervaluation of imported goods – Appellant imported digital receiver sets components of Chinese origin – Dept rejected the declared value as the values were much lower than the prices at which other importers had imported similar goods during the relevant period. The Commissioner confirmed the demand of duty under the extended period of limitation, imposed interest, and also imposed penalty under Section 114A of the Customs Act, 1962 – HELD - The demand of duty cannot be sustained as the transaction values declared by the appellant were already enhanced by the proper officer at the time of assessment of the Bills of Entry, and the Department did not provide any evidence or reasons as to why the values determined by the proper officer were not correct – The DRI has a view different from the views of the proper officer regarding the assessable value and the Commissioner agreed with the DRI. No reasons are available as to why the values at which the goods assessed by the proper officer were wrong - The demand of duty redetermining the assessable values in the Bills of Entry cannot be sustained in the absence of any evidence or reason as to why the values determined by the proper officer assessing the Bills of Entry were not correct - Further, the statements recorded under Section 108 of the Customs Act cannot be admitted as evidence as per Section 138B and therefore, cannot be relied upon to invoke the extended period of limitation under the proviso to Section 28(1) of the Act - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Classification of Micronutrient Fertilizers - Appellant manufacturer of Insecticides, Plant Growth Regulators, Bio-fertilizer cleared as Micronutrient Fertilizers (MNF) classifying it as fertilizer under CETH 3105 9090 – Department of the view that the product is appropriately classifiable under CETH 3808 as Micronutrients are not fertilizers hence cannot fall under Chapter 31 - HELD – The Tribunal has already examined this issue and held that the impugned goods cannot be considered as Plant Growth Regulator and would be treated as fertilizers only, keeping in view the Chapter Note 6 which provides tha... [Read more]

Central Excise - Classification of Micronutrient Fertilizers - Appellant manufacturer of Insecticides, Plant Growth Regulators, Bio-fertilizer cleared as Micronutrient Fertilizers (MNF) classifying it as fertilizer under CETH 3105 9090 – Department of the view that the product is appropriately classifiable under CETH 3808 as Micronutrients are not fertilizers hence cannot fall under Chapter 31 - HELD – The Tribunal has already examined this issue and held that the impugned goods cannot be considered as Plant Growth Regulator and would be treated as fertilizers only, keeping in view the Chapter Note 6 which provides that "for the purpose of Heading 3105, the term "other fertilizers" applies only to products of a kind used as fertilizers and containing, as an essential constituent, at least one of fertilizing elements nitrogen, phosphorous and potassium" – Nothing in the Chapter note 6 to Chapter 31 which says that Nitrogen, Phosphorous & Potassium cannot be part of chelating agents or the chelating agents are not essential ingredients. Since one of these elements is available, the classification of the goods under Chapter heading 3105 is clearly sustainable. The impugned goods cannot be considered as Plant Growth Regulator and would be treated as fertilizers only – The appeals are allowed [Read less]

Central Excise - Rebate claim for NCCD paid on exported goods - The petitioner, a manufacturer of motorcycles and scooters, claimed a rebate under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-CE(NT) dated 6 September 2004 in respect of the NCCD paid on the final products exported outside India – Rejection of rebate claim on the grounds that the petitioner failed to pay interest on the delayed payment of NCCD, the rebate claim was barred under the provisions of the CGST Act and the Finance Act, and the payment of the demanded amount under protest disqualified the petitioner from claiming th... [Read more]

Central Excise - Rebate claim for NCCD paid on exported goods - The petitioner, a manufacturer of motorcycles and scooters, claimed a rebate under Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-CE(NT) dated 6 September 2004 in respect of the NCCD paid on the final products exported outside India – Rejection of rebate claim on the grounds that the petitioner failed to pay interest on the delayed payment of NCCD, the rebate claim was barred under the provisions of the CGST Act and the Finance Act, and the payment of the demanded amount under protest disqualified the petitioner from claiming the rebate – HELD - the issue of nexus between non-payment of interest on the alleged delayed payment of NCCD and rebate under Rule 18 of CER, 2002, read with Notification dated 06 September 2022, was the crucial issue before the Respondent, and this issue has not been addressed or decided in the impugned common order - In fact, the crucial issues like parity between exports made under bond and exports made on payment of duty with rebate claim, the nexus between non-payment of interest and the rebate claim, the impact of the settlement under the SVLDRS scheme, and the effect of the provisions in the CGST Act and Finance Acts were not adequately considered in the impugned order – the impugned common order is set aside and the matter is remand for deciding the Petitioner’s Revision Application afresh in accordance with law and on its own merits – Ordered accordingly [Read less]

Service Tax - Agricultural Produce - The appellant paid commission to their foreign agents for sale of their black tea. The department contended that the commission paid attracts service tax - Whether 'black tea' is an 'agricultural produce' and the services provided by the Commission Agent would be covered under the Negative List in terms of Sec.65B(5) and 66D(vii) of the Finance Act, 1994 – HELD - The processes involved in converting "green tea" into "black tea" does not alter the basic character of the tea as such and the same could not be considered as a non-agricultural product. Further, as per the CBEC Circular, cl... [Read more]

Service Tax - Agricultural Produce - The appellant paid commission to their foreign agents for sale of their black tea. The department contended that the commission paid attracts service tax - Whether 'black tea' is an 'agricultural produce' and the services provided by the Commission Agent would be covered under the Negative List in terms of Sec.65B(5) and 66D(vii) of the Finance Act, 1994 – HELD - The processes involved in converting "green tea" into "black tea" does not alter the basic character of the tea as such and the same could not be considered as a non-agricultural product. Further, as per the CBEC Circular, client processing in which the essential characteristics of the agriculture produce is retained should be considered as covered by the expression 'in relation to agriculture'. Once the black tea is found to be agricultural produce, services provided by a commission agent for sale or purchase of agricultural produce is covered by the negative list as per Section 66D of the Finance Act, 1994 and is not exigible to Service Tax – Since the black tea is held to be an agricultural produce and the services provided by the commission agent are covered under the negative list, the issue of interest and penalties becomes redundant. Accordingly, the impugned order is set aside and the appeal is allowed - Export Commission - The appellant paid export commission to foreign commission agents for export of "black tea". The department contended that the export commission is liable for service tax under Reverse Charge Mechanism - Whether the export commission paid to foreign commission agent for export of "black tea' is liable for service tax under RCM – HELD - Since the black tea is held to be an agricultural produce and the services provided by the commission agent are covered under the negative list, the issue of export commission being liable for service tax under Reverse Charge Mechanism becomes redundant. [Read less]

Service Tax - Penalty under Section 78 of Finance Act 1994 and Rule 15(3) of Cenvat Credit Rules, 2004 - Appellant failed to pay service tax and wrongly availed Cenvat credit - Whether the penalty under Section 78 of Finance Act 1994 and Rule 15(3) of Cenvat Credit Rules, 2004 was rightly imposed on the appellant – HELD - The penalty cannot be imposed unless the party acted deliberately in defiance of law or was guilty of dishonest or unconscious disregard of its obligation. In the present case, the non-payment of tax and wrong availment of credit was due to an inadvertent omission and the appellant deposited the entire ... [Read more]

Service Tax - Penalty under Section 78 of Finance Act 1994 and Rule 15(3) of Cenvat Credit Rules, 2004 - Appellant failed to pay service tax and wrongly availed Cenvat credit - Whether the penalty under Section 78 of Finance Act 1994 and Rule 15(3) of Cenvat Credit Rules, 2004 was rightly imposed on the appellant – HELD - The penalty cannot be imposed unless the party acted deliberately in defiance of law or was guilty of dishonest or unconscious disregard of its obligation. In the present case, the non-payment of tax and wrong availment of credit was due to an inadvertent omission and the appellant deposited the entire amount with interest as soon as the discrepancy was brought to its notice. Further, the appellant being a governmental authority, the grave consequence of penalty was not warranted, especially in the absence of any evidence of deliberate suppression of facts by the appellant. Accordingly, the orders imposing penalty on the appellant is set aside. The appeal was disposed of by modifying the order under challenge to the extent of setting aside the penalty – Ordered accordingly [Read less]

Service Tax - Liability for Service Tax on Ocean Freight Charges - The appellant provided logistics services and charged ocean freight charges to customers. The department sought to include the ocean freight charges in the taxable value for the purpose of service tax – HELD - The appellant is not liable to pay service tax on the ocean freight charges based on the judgment of the Supreme Court in Intercontinental Consultants and Technocrats Pvt. Ltd. case, which had set aside the relevant rule. Further, in the appellant's own case for a later period, the Department had dropped the proceedings on the same issue, and this d... [Read more]

Service Tax - Liability for Service Tax on Ocean Freight Charges - The appellant provided logistics services and charged ocean freight charges to customers. The department sought to include the ocean freight charges in the taxable value for the purpose of service tax – HELD - The appellant is not liable to pay service tax on the ocean freight charges based on the judgment of the Supreme Court in Intercontinental Consultants and Technocrats Pvt. Ltd. case, which had set aside the relevant rule. Further, in the appellant's own case for a later period, the Department had dropped the proceedings on the same issue, and this decision had attained finality. The revenue cannot take contradictory stands, and since the final decision in the appellant's favor has not been challenged, it is binding on the revenue - the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Inclusion of value of duty paid bought out items in assessable value of boilers cleared in CKD condition - Appellant cleared boilers in completely knocked down (CKD) condition from its factory after paying duty. Revenue issued notice alleging that the value of the duty paid bought out items delivered directly at the buyer's site should have been included in the assessable value of the boilers - Vide the impugned order, the CESTAT upheld the demand of duty along with interest - Whether the value of the duty paid bought out items delivered directly at the buyer's site is liable to be included in the value of... [Read more]

Central Excise - Inclusion of value of duty paid bought out items in assessable value of boilers cleared in CKD condition - Appellant cleared boilers in completely knocked down (CKD) condition from its factory after paying duty. Revenue issued notice alleging that the value of the duty paid bought out items delivered directly at the buyer's site should have been included in the assessable value of the boilers - Vide the impugned order, the CESTAT upheld the demand of duty along with interest - Whether the value of the duty paid bought out items delivered directly at the buyer's site is liable to be included in the value of the boiler cleared by the appellant from its factory in CKD condition, for the assessment of central excise duty – HELD - Merely the presence of a product in the Tariff Schedule does not determine its excisability, the first and primary inquiry must be whether the item satisfies the conditions of the charging section under Section 3 of the CEA, 1944 - The revenue has, erroneously relied upon the ‘transaction value’ derived from the ‘contract price’ to argue that the excise duty on the boiler has to be computed on the basis of the contract price. However, for the revenue to contend that the contract price would become the basis of the ‘transaction value’ for the purpose of determination of the payable excise duty, it has to first establish that the final product of the contract itself is excisable – The ‘transaction value’ under Section 4 of the CEA, 1944 merely serves as the basis for computing the quantum of excise duty payable, but cannot determine excisability. The final product that emerges as a result of performing the obligations under the contract, does not constitute excisable goods under the CEA, 1944. Consequently, the base value of the boiler on which excise duty is to be levied, cannot be equated with the total contract price – The mere size and weight of the boiler make it impossible to assemble the boiler before erection, and that the process of assembly and erection of the boiler is essentially intertwined in such a manner that such an installed boiler cannot be readily dismantled by merely removing nuts and bolts and reassembled at another site without causing extensive damage to the boiler to an extent so as to reduce its value to mere scrap. Consequently, the base value of the boiler on which excise duty is to be levied, cannot be equated with the total contract price. Therefore, for the assessment of central excise duty, the value of the duty paid bought out items delivered directly at the buyer's site is not liable to be included in the value of the boiler cleared from factory in CKD condition – The impugned order by the Tribunal is set aside and the assessee appeal is allowed - Whether the show cause notice is legal and valid under the extended limitation period as provided under the proviso to Section 11A(1) of the Central Excise Act, 1944 – HELD – The show cause notice issued under the proviso to Section 11A(1) of the Central Excise Act, 1944, invoking the extended period of limitation, is not legal and valid. There was no evidence to show that the appellant had wilfully suppressed any material information with an intention to evade payment of duty - Mere omission to give correct information does not amount to suppression of facts unless it was deliberate to evade payment of duty. in the absence of any deliberate act on the part of the assessee with an intention to evade being established by the revenue, the essential precondition of wilful suppression with intent to evade duty is not satisfied. Consequently, the invocation of the extended period of limitation under the proviso to Section 11A(1) is held to be not tenable in law. [Read less]

Service Tax – Scope of Real Estate Agent - Respondent-assessee entered into Memorandums of Understanding (MOUs) with M/s Sahara India Commercial Corporation Ltd. (SICCL) for the acquisition, development, and management of land parcels for SICCL's real estate projects – Dept imposed demand of service tax and penalties holding that the respondent's activities fell within the definition of 'Real Estate Agent' under the Finance Act, 1994. However, the Appellate Tribunal allowed the assessee’s appeal, setting aside the demand and penalties - Whether the transactions between the respondent and SICCL fall within the ambit o... [Read more]

Service Tax – Scope of Real Estate Agent - Respondent-assessee entered into Memorandums of Understanding (MOUs) with M/s Sahara India Commercial Corporation Ltd. (SICCL) for the acquisition, development, and management of land parcels for SICCL's real estate projects – Dept imposed demand of service tax and penalties holding that the respondent's activities fell within the definition of 'Real Estate Agent' under the Finance Act, 1994. However, the Appellate Tribunal allowed the assessee’s appeal, setting aside the demand and penalties - Whether the transactions between the respondent and SICCL fall within the ambit of 'Real Estate Agent' or 'Real Estate Consultant' under the Finance Act, 1994 - HELD - For a person to be covered under the definition of 'Real Estate Agent', there must be an act of rendering service. In order to fall within the ambit of Section 65(88) of the Finance Act, 1994, an individual or the entity must be engaged in rendering a service and such service must be in relation to sale, purchase, leasing or renting of a real estate and includes a real estate consultant - The mere transaction of sale and purchase of land does not bring a person within the scope of 'Real Estate Agent'. From the terms of MOUs it is found that the respondent did not act as a real estate agent or consultant, but rather as an intervening trader, bearing the procurement risk and earning or losing based on difference in sale consideration of land and the fixed price agreed upon in the MoUs - The activities undertaken by the respondent were not undertaken for service charges, commission, agency or consultancy but were plain and simple transactions of sale of land, which fall within the exception to the definition of 'Service' under Section 65B(44)(a)(i) of the Finance Act, 1994. Therefore, the respondent's activities did not fall within the purview of 'Real Estate Agent' or 'Real Estate Consultant' under the Finance Act, 1994 - the impugned judgment of the Appellate Tribunal is upheld and Revenue appeal is dismissed - Whether the appellant has established that the respondent deliberately suppressed facts, thereby justifying the invocation of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 – HELD - For the invocation of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994, the Dept-appellant must prove deliberate suppression and concealment of material facts by the respondent to evade tax liability. In the present case, the transactions were conducted through proper banking channels and duly recorded in the respondent's books of account, and there was no evidence of any wilful or deliberate suppression of facts by the respondent. Mere non-payment of tax, without any element of intent or suppression, is not sufficient to attract the extended limitation period. [Read less]

Customs - Classification of "Petroleum Hydrocarbon Solvent Grade (125/240) - The respondent imported "Petroleum Hydrocarbon Solvent Grade (125/240)" and classified it under CTH 27101990. However, the Dept reclassified the goods under CTH 27101910 as Kerosene Oil based on the CRCL test reports - Whether the imported goods could be considered "most akin" to Kerosene Oil warranting reclassification - HELD - The test reports were inconclusive as they did not examine all the essential parameters required to determine if the goods were "most akin" to Kerosene Oil as per the Supreme Court's guidelines in Gastrade International v.... [Read more]

Customs - Classification of "Petroleum Hydrocarbon Solvent Grade (125/240) - The respondent imported "Petroleum Hydrocarbon Solvent Grade (125/240)" and classified it under CTH 27101990. However, the Dept reclassified the goods under CTH 27101910 as Kerosene Oil based on the CRCL test reports - Whether the imported goods could be considered "most akin" to Kerosene Oil warranting reclassification - HELD - The test reports were inconclusive as they did not examine all the essential parameters required to determine if the goods were "most akin" to Kerosene Oil as per the Supreme Court's guidelines in Gastrade International v. Commissioner of Customs - the benefit of the earlier decision of Gastrade International vs Commissioner of Customs-Kandla was not available to the Learned Appellate Authority while deciding this matter. Extensive guidelines have been laid down by the Hon’ble Supreme Court while dealing with the matter and how the test samples and reports are to be considered vis a vis the Section Notes, Chapter Notes and their statutory provisions - The Hon’ble Supreme Court has lay down the guideline for the test of those parameters which authorities consider are of essential character to satisfy the ‘Most Akin’ test even when all parameters were not available. The same needs to be understood with the help of expert opinion. The Hon’ble Supreme Court has also stated that the expression ‘most akin’ is different from the expression ‘preponderance of probability’. Therefore, where some doubt may persist as to whether the parameters which could not be tested were or were not relevant for testing ‘most akinness’ to the alleged product, the department needs to look into the same with the assistance of an expert opinion - The matter is remanded back to the Commissioner (Appeals) to decide the issue afresh after obtaining expert opinion on whether the tested parameters establish the "most akinness" of the goods to Kerosene Oil, and affording the respondent an opportunity to cross-examine the expert - The appeals were allowed by way of remand [Read less]

While rules are required to be strictly followed for the purpose of seizure of goods and conveyances but if the intent is to defraud public exchequer and to take advantage of some loopholes, the person cannot claim any benefit in law, or in equity.

GST – Summon as a witness, Provisional attachment of bank accounts absence any investigation, alleging fraudulent availment of ITC – Whether the provisional attachment of the petitioner's bank accounts was justified and in accordance with the principles of natural justice – HELD – The petitioner was only summoned as a witness and no investigation was initiated against it. The provisional attachment order was issued even before the petitioner's official could respond to the summons. The impugned letter rejecting the petitioner's application for withdrawal of the attachment was also unreasoned and communicated to the... [Read more]

GST – Summon as a witness, Provisional attachment of bank accounts absence any investigation, alleging fraudulent availment of ITC – Whether the provisional attachment of the petitioner's bank accounts was justified and in accordance with the principles of natural justice – HELD – The petitioner was only summoned as a witness and no investigation was initiated against it. The provisional attachment order was issued even before the petitioner's official could respond to the summons. The impugned letter rejecting the petitioner's application for withdrawal of the attachment was also unreasoned and communicated to the petitioner with a substantial delay - The alleged GST evasion amount was around Rs. 3.1 crores, whereas the provisional attachment of 11 bank accounts with a total balance of over Rs. 15 crores is prima facie disproportionate - Moreover, non-communication of the impugned letter dated 25th September, 2025 till 4th November, 2025 is also a completely irregular procedure and would be violative of the principles of natural justice as the same would disable the petitioner from availing its remedies in accordance with law - the provisional attachment of the bank accounts of the Petitioner cannot be continued. Even if the case of the Department is taken at its highest for filing an appeal against any order that may be passed for fraudulent availment of ITC, the pre-deposit would only be 10% - the provisional attachment of the petitioner's bank accounts cannot be continued in the present case. The petitioner is directed to maintain a minimum balance of Rs. 1Crore in any of the attached accounts, and allowed to operate its bank accounts in the ordinary course of business – Ordered accordingly [Read less]

Customs - Fraudulent use of duty credit scrips - The appellant imported goods using manipulated Focus Product Scheme (FPS) licence and registered it fraudulently. The duty demand was confirmed under Section 28(4) of the Customs Act for collusion, wilful misstatement, and suppression of facts - Duty demand by invoking the extended period of limitation and levy of penalty under Sections 114A and 114AA of the Customs Act, 1962 – HELD - the extended period of limitation under Section 28(4) of the Customs Act was rightly invoked as the appellant had used an ab-initio invalid and non-existent license to discharge duty liabilit... [Read more]

Customs - Fraudulent use of duty credit scrips - The appellant imported goods using manipulated Focus Product Scheme (FPS) licence and registered it fraudulently. The duty demand was confirmed under Section 28(4) of the Customs Act for collusion, wilful misstatement, and suppression of facts - Duty demand by invoking the extended period of limitation and levy of penalty under Sections 114A and 114AA of the Customs Act, 1962 – HELD - the extended period of limitation under Section 28(4) of the Customs Act was rightly invoked as the appellant had used an ab-initio invalid and non-existent license to discharge duty liability, amounting to wilful misstatement and suppression of facts. Once the extended period was invoked under Section 28(4) due to fraud, the duty demand was justified. In cases of fraud, the knowledge of the buyer is irrelevant for the duty demand, and the duty liability cannot be waived - The Hon'ble Supreme Court in Munjal Showa Ltd. v. Comm'r of Customs has held that in cases of fraud, the inquiry into the knowledge of the appellant is not required for duty demand, but may be relevant for penalty. Further, The Tribunal in Mercedes Benz India Pvt. Ltd. v. Comm'r of Customs, held that the onus is on the importer to ascertain the genuineness of the licenses/scrips used, and failure to do so would render the imports liable for duty and penalties - The mandatory penalty under Section 114A is upheld as the ingredients for invoking the extended period and imposing penalty were identical. Additionally, the penalty under Section 114AA is also justified as the appellant had utilized the fraudulently registered scrips, rendering the declaration in the bill of entry as false - The appeal is dismissed [Read less]

Service Tax - Rule 6(3) of CENVAT Credit Rules, Trading activity - Whether the demand for an amount under Rule 6(3) of the CENVAT Credit Rules can be sustained for the period prior to 01.04.2011, when trading was not considered as an exempted service – HELD - As per the amendment in the definition of 'input service' vide Notification No.03/2011-CE (NT) dated 01.03.2011, trading came to be regarded as an exempted service w.e.f. 01.04.2011. The Tribunal relied on the decision in the case of Tricity Auto, wherein it was held that for the period up to 01.04.2011. The provisions of Rule 6(3) are not applicable as sale of good... [Read more]

Service Tax - Rule 6(3) of CENVAT Credit Rules, Trading activity - Whether the demand for an amount under Rule 6(3) of the CENVAT Credit Rules can be sustained for the period prior to 01.04.2011, when trading was not considered as an exempted service – HELD - As per the amendment in the definition of 'input service' vide Notification No.03/2011-CE (NT) dated 01.03.2011, trading came to be regarded as an exempted service w.e.f. 01.04.2011. The Tribunal relied on the decision in the case of Tricity Auto, wherein it was held that for the period up to 01.04.2011. The provisions of Rule 6(3) are not applicable as sale of goods was not considered as an exempted service. Accordingly, the demand prior to 01.04.2011 cannot be sustained and set aside – The appeal is allowed - Whether the denial of input tax credit on the grounds that the invoices do not mention the address of the registered premises is correct – HELD - The issue of admissibility of credit when the invoices are not in the name of the registered premises is no longer res integra, and has been decided in a plethora of cases. The Tribunal relied on various judicial precedents and held that as long as the receipt and usage of inputs and input services in the manufacture of dutiable goods or in the provision of taxable services is not disputed, credit cannot be denied for minor procedural infractions. [Read less]

Service Tax – Section 11B of Central Excise Act, 1944 – Filing of refund claim – Rejection on ground of limitation – Appellant is engaged in providing holiday and leisure services in resorts to their club members by collecting one time membership fees – Appellant filed refund claims by claiming refund of service tax paid on accrual basis on cancelled membership contracts – Original authority rejected refund claims as being hit by limitation of time in terms of provisions of Section 11B of the Act – Commissioner (Appeals) rejected appeals preferred by Appellant – Whether refund claims filed by Appellant are ... [Read more]

Service Tax – Section 11B of Central Excise Act, 1944 – Filing of refund claim – Rejection on ground of limitation – Appellant is engaged in providing holiday and leisure services in resorts to their club members by collecting one time membership fees – Appellant filed refund claims by claiming refund of service tax paid on accrual basis on cancelled membership contracts – Original authority rejected refund claims as being hit by limitation of time in terms of provisions of Section 11B of the Act – Commissioner (Appeals) rejected appeals preferred by Appellant – Whether refund claims filed by Appellant are subject to time limit prescribed under Section 11B of the Act – HELD – Refund is not a constitutional right, but a statutory right and therefore, legislature in its wisdom and through statute can decide how the refund is to be granted. All refund claims except that of an unconstitutional levy must be filed and adjudicated under refund provisions of the Act. Amounts paid as service tax, even if later found to be not payable, remain subject to time limit prescribed under Section 11B of the Act for purposes of refund. Appellant filed refund claims beyond prescribed period of one year from payment of service tax. Appellant have not satisfactorily explained the reasons for delay in filing claim, when time lines for cancellation were built into agreement with their subscribers. Time limit prescribed in Section 11B of the Act has to be strictly adhere to and even sufficient cause will not help the claim filed after a long delay. Lower authorities have taken a view which is reasonable, legal and proper. Order under challenge is sustained – Appeals dismissed [Read less]

Service Tax – Rule 3 of Export of Service Rules, 2005 – Rule 2(e) of Cenvat Credit Rules, 2004 – Providing of business auxiliary services – Demand of tax – Sustainability – Appellant is engaged in manufacture and sale of Zippers and parts thereof in India and to neighboring countries – Based on audit objections, department issued show cause notice to Appellant by proposing demand of service tax and recovery of Cenvat Credit – Commissioner confirmed demands as proposed in show cause notice – Whether Business Auxiliary Services provided by Appellant to foreign located company qualify as ‘export of service... [Read more]

Service Tax – Rule 3 of Export of Service Rules, 2005 – Rule 2(e) of Cenvat Credit Rules, 2004 – Providing of business auxiliary services – Demand of tax – Sustainability – Appellant is engaged in manufacture and sale of Zippers and parts thereof in India and to neighboring countries – Based on audit objections, department issued show cause notice to Appellant by proposing demand of service tax and recovery of Cenvat Credit – Commissioner confirmed demands as proposed in show cause notice – Whether Business Auxiliary Services provided by Appellant to foreign located company qualify as ‘export of service’ under Rule 3 of the Rules – HELD – In terms of various agreements signed by Appellant with group companies, Appellant was obligated to act as an agent of such group companies and facilitate sale of their products in India. Appellant only procures orders from Indian customers and submits these orders to group companies for making supply directly to Indian customers and in that process, Appellant receives commission in foreign currency. Service of identifying Indian customers for procurement of various goods at behest of foreign entity is the service provided by a foreign entity and such service provided by a person in India is consumed and used by a person abroad and therefore, it has to be treated as ‘export of service’. Demand of service tax under Business Auxiliary Service is not sustainable - Trading activity – Eligibility to avail credit – Whether Appellant is eligible to avail Cenvat Credit on trading activity – HELD – Commissioner had confirmed demand of credit for period 2008-09 to 2009-10. Under Rule 2(e) of the Rules, trading cannot be treated as an ‘exempted service’ for period prior to 1-4-2011 and Explanation added on 1-4-2011 was prospective and not retrospective. Demand on this account is not sustainable. Order under challenge is set aside. [Read less]

Service Tax - Applicability of Service Tax in Jammu & Kashmir – Appellate provided Passive Infrastructure Support Services to telecom operators from its branch office in Jammu & Kashmir (J&K) – Demand of service tax under categories such as Business Support Services, Management and Consultancy Services, and Manpower Security Services - Whether the services provided by the appellant in the State of J&K are subject to service tax under the Finance Act, 1994 – HELD - The services provided by the appellant in J&K are not subject to service tax under the Finance Act, 1994 as Section 64 of the Finance Act clearly provides ... [Read more]

Service Tax - Applicability of Service Tax in Jammu & Kashmir – Appellate provided Passive Infrastructure Support Services to telecom operators from its branch office in Jammu & Kashmir (J&K) – Demand of service tax under categories such as Business Support Services, Management and Consultancy Services, and Manpower Security Services - Whether the services provided by the appellant in the State of J&K are subject to service tax under the Finance Act, 1994 – HELD - The services provided by the appellant in J&K are not subject to service tax under the Finance Act, 1994 as Section 64 of the Finance Act clearly provides that the provisions of Chapter V (which deals with service tax) do not extend to the State of J&K. When the services are rendered in J&K, which falls outside the purview of the Finance Act, the application of the Place of Provision of Services (POPS) Rules is inapplicable. The POPS Rules cannot override the statutory provisions of the Finance Act. Accordingly, the demand proposed and confirmed by the Respondent in the Impugned Order based on the POPS Rules is unsustainable and quashed – The services provided by the appellant in the State of J&K are not subject to service tax under the Finance Act, 1994 - The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation can be invoked in the present case – HELD - The invocation of the extended period of limitation is not justified as the appellant had been regularly filing ST-3 Returns and disclosing the transactions as "exempted service." Further, the Department was well aware of the transactions entered into by the appellant since the proceedings were initiated based on the disclosures made by the appellant in their financial statements and service tax returns. The extended period of limitation cannot be invoked when the matter pertains to the interpretation of legal provisions. Accordingly, the invocation of the extended period of limitation is set aside. [Read less]

Customs – Regulations 10 and 11 of Customs Broker Licensing Regulations, 2013 – Suspension of customs broker licence – Order of revocation – Sustainability – Directorate of Revenue Intelligence received intelligence to effect that importer had cleared multimedia speakers by mis-declaring them as Computer Peripherals – Investigation revealed that imported had filed Bills of Entry through Respondent/Customs Broker for clearance of multimedia speakers – Proper officer suspended Customs Broker licence of Respondent for alleged violation of Regulations 10, 11(a), 11(d) and 11(e) of the Regulations – Adjudicating... [Read more]

Customs – Regulations 10 and 11 of Customs Broker Licensing Regulations, 2013 – Suspension of customs broker licence – Order of revocation – Sustainability – Directorate of Revenue Intelligence received intelligence to effect that importer had cleared multimedia speakers by mis-declaring them as Computer Peripherals – Investigation revealed that imported had filed Bills of Entry through Respondent/Customs Broker for clearance of multimedia speakers – Proper officer suspended Customs Broker licence of Respondent for alleged violation of Regulations 10, 11(a), 11(d) and 11(e) of the Regulations – Adjudicating Authority revoked order of suspension issued against Respondent – Whether revocation of suspension of Customs Broker licence issued to Respondent is justified in facts of this case – HELD – Case of Commissioner/Appellant is that Adjudicating authority had not spelt out reasons for revocation of suspension of Customs Broker licence and considering the gravity of offence committed, Adjudicating authority should have waited for outcome of inquiry before revoking suspension of Customs Broker licence. In impugned Order-in-Original, Adjudicating authority had spelt out the reason for revocation of suspension of Customs Broker Licence. While revoking suspension of Customs Broker Licence issued to Respondent, Adjudicating Authority had taken into consideration the alleged offence committed by Respondent. There is nothing in impugned order to support Appellant’s contention that Adjudicating authority had not considered enormity of offence before revoking suspension of Customs Broker licence of Respondent. During pendency of this appeal, Customs Broker Licence of Respondent was again suspended in connection with some other case, therefore, present appeal becomes infructuous – Appeal dismissed [Read less]

Customs – Section 114A of Customs Act, 1962 – Import of crude palm oil – Demand of duty – Appellant had imported Crude Palm Oil by availing benefit of Exemption Notification No.12/2012-CUS – Appellant had not used imported Crude Palm Oil in manufacture of final products due to fire accident took place in factory – Department issued show cause notice to Appellant by proposing demand of duty on imported Crude Palm Oil – Commissioner confirmed demand of duty along with interest and imposed penalty under Section 114A of the Act – Whether Appellant is liable to pay customs duty on entire quantity of imported Cru... [Read more]

Customs – Section 114A of Customs Act, 1962 – Import of crude palm oil – Demand of duty – Appellant had imported Crude Palm Oil by availing benefit of Exemption Notification No.12/2012-CUS – Appellant had not used imported Crude Palm Oil in manufacture of final products due to fire accident took place in factory – Department issued show cause notice to Appellant by proposing demand of duty on imported Crude Palm Oil – Commissioner confirmed demand of duty along with interest and imposed penalty under Section 114A of the Act – Whether Appellant is liable to pay customs duty on entire quantity of imported Crude Palm Oil – HELD – Appellant had imported Crude Palm Oil for use in manufacture of specified goods and availed benefit of Exemption Notification No.12/2012. Notification No.12/2012 exempted duty subject to condition that Crude Palm Oil is used for manufacture of Refined Oil, Vanaspati, Bakery Shortening etc. Appellant had not used imported Crude Palm Oil in manufacture of final products specified in Notification No.12/2012 in view of fire accident. Appellant had informed department claiming loss of 282.92 M.T of Crude Palm Oil, while on joint physical stock verification, 214.07 M.T. was found to have been lost. Appellant’s case is that shortage was on account of accounting error. There is no sufficient evidence to support contention of Appellant that there was an accounting error and how it had occurred. Since condition to avail benefit of Exemption Notification No.12/2012-CUS was not fulfilled, Appellant was liable to pay customs duty on entire quantity of Crude Palm Oil which was either lost in fire accident or was found short. Demand of customs duty as confirmed in impugned order along with interest needs to be upheld – Appeal partly allowed - Imposition of penalty – Sustainability – Whether penalty imposed on Appellant under Section 114A of the Act is sustainable – HELD – Section 114A of the Act provides for imposition of penalty equal to amount of customs duty, if non-payment or short payment of duty is by reason of collusion, willful mis-statement or suppression of facts. In this case, vast majority of disputed quantity was lost in fire accident. There is no evidence that Appellant had caused fire accident or that it gained anything by destroying Crude Palm Oil in fire. Penalty imposed under Section 114A of the Act cannot be sustained and needs to be set aside. [Read less]

GST - Mismatch between actual stock and declared stock. Suppression of facts, Intention to evade tax, Proceedings under Section 74 - The business premises of the petitioner was surveyed and it was alleged that there was a mismatch between the actual stock and the declared stock - Proceedings under Section 74 of the CGST Act, 2017 alleging fraud, misstatement, and suppression of facts with the intention to evade payment of tax - Whether the proceedings under Section 74 are validly initiated against the petitioner in the absence of a specific finding of fraud, misstatement, or suppression of facts with the intention to evade... [Read more]

GST - Mismatch between actual stock and declared stock. Suppression of facts, Intention to evade tax, Proceedings under Section 74 - The business premises of the petitioner was surveyed and it was alleged that there was a mismatch between the actual stock and the declared stock - Proceedings under Section 74 of the CGST Act, 2017 alleging fraud, misstatement, and suppression of facts with the intention to evade payment of tax - Whether the proceedings under Section 74 are validly initiated against the petitioner in the absence of a specific finding of fraud, misstatement, or suppression of facts with the intention to evade payment of tax – HELD - For initiating proceedings under Section 74 it is essential that the authorities make a specific finding that the taxpayer has used input tax credit by reason of fraud, misstatement, or suppression of facts with the intention to evade payment of tax. In the present case, the authorities did not record any such finding against the petitioner. The manner in which the demand is raised and quantified is not in consonance with the mandate of Section 74 of the Act - The authorities to refund any amount deposited by the petitioner along with interest at the rate of 4% per annum from the date of deposit until the date of refund – The writ petition is allowed [Read less]

Central Excise – Clearance of samples for testing purposes, Clandestine Removal of Goods – Appellant-EOU engaged in Contract Research and Manufacturing Services, was alleged to have cleared finished products disguised as testing samples without payment of duty, resulting in clandestine removal of goods - Whether the products cleared as samples for testing purposes were actually finished products cleared without payment of duty and, therefore, were removed in a clandestine removal by the appellant – HELD - The evidence showed that the appellant had cleared only testing samples to its in-house facility and not finished... [Read more]

Central Excise – Clearance of samples for testing purposes, Clandestine Removal of Goods – Appellant-EOU engaged in Contract Research and Manufacturing Services, was alleged to have cleared finished products disguised as testing samples without payment of duty, resulting in clandestine removal of goods - Whether the products cleared as samples for testing purposes were actually finished products cleared without payment of duty and, therefore, were removed in a clandestine removal by the appellant – HELD - The evidence showed that the appellant had cleared only testing samples to its in-house facility and not finished products. The samples were accompanied by covering letters, testing reports, and consumption certificates, substantiating that they were for testing purposes - The appellant had produced enough evidence to substantiate that only testing samples had been sent to the in-house facility, but the Department failed to produce any evidence to contradict the appellant's claim. The inference drawn by the impugned order that the samples were finished products based on a comparison of product names was not justified, as the appellant had explained that the names were used for identification purposes. Thus, the appellant cannot be said to have engaged in clandestine removal of goods - the impugned order was set aside, and the appeal was allowed - Dept allege that the quantity of goods shown to have been cleared was higher than what was actually cleared – HELD - This finding has been arrived at on the basis of the weight of the goods recoded in the courier agencies - The statements of staff of courier agency have been completely mis-interpreted in the impugned order. Both the persons had clarified the courier billing practices and had stated that the courier charges are calculated based on fixed weight slabs and not actual weight. They specifically stated that any parcel weighing between 1 gm and 50 gms is recorded as 50 gms, and any parcel between 201 gms and 1000 gms is recorded as 1000 gms, regardless of the actual weight for billing purpose - The department did not produce any evidence to substantiate that the weight goods was lesser than the actual weight of the products shipped - Availment of Cenvat Credit beyond the stipulated period of one year provided under Rule 4 of CCR, 2004 – HELD - The credit availed on input services beyond the one-year period was due to a delay in disclosing the availment in the returns, and not in the actual availment in the books of account. The credit reclaimed after withdrawal of refund claims and the credit on the balance 50% of capital goods were also validly claimed. Therefore, the appellant had correctly availed and utilized the CENVAT credit. [Read less]

Customs - Shipment Date Vs. Bill of Entry Date – Appellant imported 'Stainless Steel Cold Rolled Coils Grade-201' classified under CTH 72209090 and filed Bill of Entry dated 16.02.2017. The Department held that since the Stainless Steel Products (Quality Control Order), 2016 came into force from 07.02.2017, the imported goods required BIS certification, which was not obtained by the appellant – Levy of penalty under Section 112(a) of Customs Act, 1962 – HELD - The shipment of the goods took place on 27.01.2017, before the Quality Control Order came into force. As per the Foreign Trade Policy 2015-2020, the date of im... [Read more]

Customs - Shipment Date Vs. Bill of Entry Date – Appellant imported 'Stainless Steel Cold Rolled Coils Grade-201' classified under CTH 72209090 and filed Bill of Entry dated 16.02.2017. The Department held that since the Stainless Steel Products (Quality Control Order), 2016 came into force from 07.02.2017, the imported goods required BIS certification, which was not obtained by the appellant – Levy of penalty under Section 112(a) of Customs Act, 1962 – HELD - The shipment of the goods took place on 27.01.2017, before the Quality Control Order came into force. As per the Foreign Trade Policy 2015-2020, the date of import shall be reckoned as the date of shipment/dispatch of goods - the submission of AR that the appellant was having the full knowledge regarding provisions of Stainless Steel Products (Quality Control Order), 2016 at the time of shipment/ dispatch of the goods from the supplier country and therefore, they were duty bound to affix the BIS mark on the Stainless Steel, does not seem to have much force – Since the Stainless Steel Products (Quality Control Order) 2016 was not in force when the goods in question were shipped, the appellant was not required to affix BIS mark on the product imported by them – The appeal is allowed [Read less]

Service Tax – Appellants are engaged in the business of manufacturing of various parts of wagon, which they assemble/erect at railway site in installation and commissioning of old structures of wagons - It is the case of the appellant that the services so rendered in installation and commissioning of wagons amount to 'original work' and exempt from levy of Service Tax as provided under Serial No. 14 (a) of Notification No. 25/2012-ST dated 20.06.2012 – Demand of service tax on the grounds that the appellant's activities did not qualify as 'original works' under the exemption notification – HELD - The appellant's acti... [Read more]

Service Tax – Appellants are engaged in the business of manufacturing of various parts of wagon, which they assemble/erect at railway site in installation and commissioning of old structures of wagons - It is the case of the appellant that the services so rendered in installation and commissioning of wagons amount to 'original work' and exempt from levy of Service Tax as provided under Serial No. 14 (a) of Notification No. 25/2012-ST dated 20.06.2012 – Demand of service tax on the grounds that the appellant's activities did not qualify as 'original works' under the exemption notification – HELD - The appellant's activities of additions and alterations to the damaged railway wagons to make them workable fall within the definition of 'original works' and are therefore exempt from service tax under Notification No. 25/2012-S.T. dated 20.06.2012 - All types of additions and alterations to abandoned or damaged structures on land that are required to make them workable, fall within the ambit of 'original work’. The activities undertaken by the appellant on the Railway wagons, to make them workable, come within the purview of ‘original works’ as defined under Notification No. 25/2012-ST dated 20.06.2012 - The services rendered by the appellant being 'Original Works' to Railways, are specifically exempted vide Service Tax Mega Exemption Notification No. 25/2012-S.T. dated 20.06.2012 - Further, the Department had earlier considered the appellant's activities as a manufacturing process and demanded Central Excise duty, which further reinforces that service tax cannot be levied on the same activities. Additionally, the extended period of limitation cannot be invoked against the appellant as there was no intention to evade tax, and the entire activity was known to the Department. The demand of Service Tax along with interest confirmed in the impugned order is not sustainable and set aside. The appeal is allowed [Read less]

Service Tax - Construction of residential complex service, Short Paid Service Tax - Whether the department was justified in confirming the demand of short paid service tax based solely on the difference between the ITR and ST-3 returns, without proper inquiry – HELD - The appellant had regularly filed its service tax returns, and the returns clearly mentioned the nature of service and the appellant's entitlement to the benefit of exemption under Notification No. 25/2012-ST. The department had failed to scrutinize the returns in a timely manner and failed to establish any suppression of facts or intent to evade tax by the... [Read more]

Service Tax - Construction of residential complex service, Short Paid Service Tax - Whether the department was justified in confirming the demand of short paid service tax based solely on the difference between the ITR and ST-3 returns, without proper inquiry – HELD - The appellant had regularly filed its service tax returns, and the returns clearly mentioned the nature of service and the appellant's entitlement to the benefit of exemption under Notification No. 25/2012-ST. The department had failed to scrutinize the returns in a timely manner and failed to establish any suppression of facts or intent to evade tax by the appellant - The mere fact that the assessee had not assessed the tax liability correctly does not mean that the assessee had committed fraud or willfully misstated or suppressed any fact. The demand solely based on the comparison with Income Tax returns and Form 26AS is not sustainable without proper inquiry and analysis - The order under challenge is set aside and the appeal is allowed [Read less]

Service Tax - Demand on account of discrepancy between ITR and ST-3 returns – Validity of service tax demand solely based on the discrepancy between ITR and ST-3 returns without examining the books of accounts and other records of the appellant – HELD - The show cause notice was issued solely based on the information obtained from the Income Tax Department in Form 26AS without examining the books of accounts and records of the appellant. From Form 26AS, Revenue could have investigated into the nature of such transactions and should have established that the said transaction were in respect of the provisions of such ser... [Read more]

Service Tax - Demand on account of discrepancy between ITR and ST-3 returns – Validity of service tax demand solely based on the discrepancy between ITR and ST-3 returns without examining the books of accounts and other records of the appellant – HELD - The show cause notice was issued solely based on the information obtained from the Income Tax Department in Form 26AS without examining the books of accounts and records of the appellant. From Form 26AS, Revenue could have investigated into the nature of such transactions and should have established that the said transaction were in respect of the provisions of such services, then alone the charges of short payment of service tax could have sustained - The demands solely based on income tax returns for service tax liability are not sustainable. The Revenue did not discharge its burden to prove non payment/short payment of Service Tax – The impugned order is set aside and the appeal is allowed [Read less]

Customs – Section 138B of Customs Act, 1962 – Import of self-adhesive tapes – Rejection of declared value – Investigation revealed that certain importers have imported self-adhesive tapes by resorting to undervaluation with view to evade payment of customs duties – Investigation culminated in separate show cause notices being issued to Appellants/proprietary firm and its power of attorney holder in respect of their imports – After due process of law, Adjudicating Authority rejected declared values and after re-determining the same, confirmed demand of differential duty – Whether rejection of declared transact... [Read more]

Customs – Section 138B of Customs Act, 1962 – Import of self-adhesive tapes – Rejection of declared value – Investigation revealed that certain importers have imported self-adhesive tapes by resorting to undervaluation with view to evade payment of customs duties – Investigation culminated in separate show cause notices being issued to Appellants/proprietary firm and its power of attorney holder in respect of their imports – After due process of law, Adjudicating Authority rejected declared values and after re-determining the same, confirmed demand of differential duty – Whether rejection of declared transaction value is sustainable – HELD – When undervaluation is alleged, Department has to prove it by evidence or information about comparable imports. Casting suspicion on invoice produced by importer is not sufficient to reject it as evidence of value of imported goods. If charge of undervaluation cannot be supported either by evidence or information about comparable imports, benefit of doubt must go to importer. As procedure prescribed under Section 138B of the Act has not been adhered to, statements being denuded of their relevance cannot be relied upon in any manner. Adoption of values declared in proforma invoices/insurance documents, even dehors the disputed statement, cannot be made the basis for rejection of declared value – Appeals allowed - Demand of differential duty – Whether demand made on power of attorney holder is legally tenable or not – HELD – Demand had been made jointly on proprietary firm and its power of attorney holder. There is no finding that power of attorney holder has held himself out to be importer or he is the owner and he had in such capacity filed bill of entry jointly with proprietary firm. In absence of any notice addressed to power of attorney holder setting out that he is being made liable on ground that department cannot recover duty from owner or importer, demand made on power of attorney holder is wholly unsustainable. Impugned orders in original are set aside. [Read less]

GST - Seizure and detention of goods, Failure to pass penalty order under Section 129(3) of the CGST Act, 2017, payment of penalty under protest – Detention of goods on the ground of expired e-waybills and mismatch with the vehicle. Despite a physical verification report finding no discrepancies, the authorities issued a detention order and show-cause notice proposing penalty. The petitioner paid the penalty under protest to secure the release of the goods and vehicle. However, the authorities failed to pass a final order justifying the penalty as mandated under the law - Whether the levy and collection of penalty withou... [Read more]

GST - Seizure and detention of goods, Failure to pass penalty order under Section 129(3) of the CGST Act, 2017, payment of penalty under protest – Detention of goods on the ground of expired e-waybills and mismatch with the vehicle. Despite a physical verification report finding no discrepancies, the authorities issued a detention order and show-cause notice proposing penalty. The petitioner paid the penalty under protest to secure the release of the goods and vehicle. However, the authorities failed to pass a final order justifying the penalty as mandated under the law - Whether the levy and collection of penalty without a final order is valid – HELD - The failure of the authorities to pass a final order under Section 129(3) of the Act, justifying the penalty, despite the petitioner's clear intent to challenge it, violates the statutory mandate and the petitioner's constitutional rights - the payment of penalty was made only to secure release of goods and was under economic duress and the petitioner clearly indicated his wish to challenge the order when passed in appeal. The payment of penalty under economic duress cannot be treated as a voluntary acceptance of liability exonerating the respondents from passing an order as mandated by the later part of sub-section (3) of Section 129 justifying imposition of penalty on the petitioner - The authorities are directed to refund the penalty amount with interest and also pay costs to the petitioner for their non-compliance with the law – The writ petition is allowed [Read less]

Service Tax - Reversal of proportionate CENVAT credit - The appellant was providing both taxable and exempted services and availed common CENVAT credit. The appellant contended that it had reversed the proportionate CENVAT credit attributable to the exempted services, which tantamount to not taking the credit - Whether the demand of 6%/5% of the value of the exempted services under Rule 6(3) of the CENVAT Credit Rules, 2004 was legally sustainable - HELD - Rule 6 (3A) provides the facility for the appellant to proportionately reverse the cenvat credit if the same has been taken for taxable and exempted services. As a matte... [Read more]

Service Tax - Reversal of proportionate CENVAT credit - The appellant was providing both taxable and exempted services and availed common CENVAT credit. The appellant contended that it had reversed the proportionate CENVAT credit attributable to the exempted services, which tantamount to not taking the credit - Whether the demand of 6%/5% of the value of the exempted services under Rule 6(3) of the CENVAT Credit Rules, 2004 was legally sustainable - HELD - Rule 6 (3A) provides the facility for the appellant to proportionately reverse the cenvat credit if the same has been taken for taxable and exempted services. As a matter of fact Rule 6 (3AA) to facilitate such reversal, even if the option to reverse the proportionate cenvat credit is not exercised earlier. This amendment goes on to show that liberal approach is required to be adopted in respect of reversal being sought for the common credits - Various High Courts and Tribunals have consistently held that reversal of CENVAT credit would amount to non-availment of the same. The demand of 6% to 8% of the value of the exempted services is legally not sustainable. Further, the extended period demand is also not sustainable as the non-payment/short-payment, if any, was due to interpretational difficulties and the appellant had shown bona fides by making the payment of Service Tax along with interest – The demand confirmed as well as the extended period demand is set aside, except for the demand in respect of foreign remittance RCM, which was not contested by the appellant - The appeal stands allowed [Read less]

Central Excise – Section 11A of Central Excise Act, 1944 – Invocation of extended period of limitation – Demand of erroneous refund – Appellant was engaged in manufacture of Copper Ingots and was clearing same on payment of excise duty by availing benefit of Notification No.56/2002-CE by way of self credit of duty paid through PLA – On basis of audit, department issued show cause notice, proposing demand of erroneous refund, to Appellant by invoking extended period of limitation under Section 11A of the Act – Adjudicating Authority confirmed recovery of self credit taken by Appellant – Commissioner (Appeals) ... [Read more]

Central Excise – Section 11A of Central Excise Act, 1944 – Invocation of extended period of limitation – Demand of erroneous refund – Appellant was engaged in manufacture of Copper Ingots and was clearing same on payment of excise duty by availing benefit of Notification No.56/2002-CE by way of self credit of duty paid through PLA – On basis of audit, department issued show cause notice, proposing demand of erroneous refund, to Appellant by invoking extended period of limitation under Section 11A of the Act – Adjudicating Authority confirmed recovery of self credit taken by Appellant – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether erroneous refund which was sanctioned under Notification No.56/2002-CE can be recovered under Section 11A of the Act by invoking extended period of limitation – HELD – It is an undisputed fact that Appellant was selling their goods to their buyers on FOR basis and cost of outward freight was included in assessable value and excise duty was paid accordingly and same was claimed as a refund under Notification No.56/2002. Original Authority after considering the Exemption Notification No.56/2002 allowed refund and said refund was not reviewed and no appeal was filed against the same. Consequently, order of refund has become final and refund amount cannot be recovered by issuing a show cause notice under Section 11A of the Act by invoking extended period of limitation. Invocation of extended period of limitation is bad, because department has not been able to establish any of essential ingredients for invoking extended period of limitation as provided in provisions of Section 11A of the Act. Order under challenge is not sustainable in law, therefore, it is set aside – Appeal allowed [Read less]

GST – Gujarat AAR - Input Tax Credit on Lease rental, Construction of Immovable property Facts -Applicant entered into a lease agreement with the Government of Gujarat for a duration of 50 years to use a plot of land for the purpose of carrying out their business activities including industrial construction. The applicant would use the land for setting up a factory for manufacturing of battery cells for motor vehicles - Eligibility of ITC on the GST paid under reverse charge on the annual lease rental - Whether the applicant is eligible to ITC of the GST charged on the lease rental, where the factory building would be co... [Read more]

GST – Gujarat AAR - Input Tax Credit on Lease rental, Construction of Immovable property Facts -Applicant entered into a lease agreement with the Government of Gujarat for a duration of 50 years to use a plot of land for the purpose of carrying out their business activities including industrial construction. The applicant would use the land for setting up a factory for manufacturing of battery cells for motor vehicles - Eligibility of ITC on the GST paid under reverse charge on the annual lease rental - Whether the applicant is eligible to ITC of the GST charged on the lease rental, where the factory building would be constructed on the lease land - HELD - This authority in the cases of M/s Bayer Vapi Pvt Ltd. and M/s GACL-NALCO Alkalies and Chemicals Pvt Ltd. has held that the services received in the form of leasehold rights to land are used for the construction of immovable property, and hence, the ITC on such services is blocked under Section 17(5)(d) of the CGST Act - The AAR rejected the applicant's arguments that the term 'for' used in Section 17(5)(d) should be interpreted narrowly to cover only those services which have a direct nexus to construction, and not the services indirectly or remotely related to construction activities. The term 'for' has a wider connotation and includes all services required for the construction of immovable property, including the land lease services - The applicant is not eligible to avail the ITC of the GST charged on the lease rental – Ordered accordingly - Whether the ITC of GST charged on the lease rental paid would be available for the period prior to and after the construction of the factory building - HELD - The applicant would not be eligible for ITC of GST charged on the lease rental for the period prior to and after the construction of the factory building. The AAR noted that the land has been leased out specifically for the purpose of industrial construction, and hence, the services related to the land are blocked under Section 17(5)(d) irrespective of the stage of construction - The applicant is not eligible for ITC of GST charged on the lease rental for the period prior to and after the construction of the factory building - Whether ITC of GST paid on lease rental would be available when the repairs, maintenance, and renovation activities are undertaken on the factory building - HELD – The applicant would not be eligible for ITC of GST paid on lease rental for the repairs, maintenance, and renovation activities undertaken on the factory building. The expression 'construction' used in Section 17(5)(d) includes reconstruction, renovation, additions, or alterations or repairs to the extent of capitalization, and hence, the ITC on such services would also be blocked - The applicant is not eligible for ITC of GST paid on lease rental for the repairs, maintenance, and renovation activities undertaken on the factory building - Whether ITC of GST paid on lease rental would be available with respect to the area of the land on which no immovable property is constructed, i.e., the vacant portion of the land - HELD - The applicant would not be eligible for ITC of GST paid on lease rental with respect to the vacant portion of the land. The entire land has been leased out for industrial purposes, and any portion of the land, including the vacant portion, would be considered as used for the construction of immovable property, and hence, the ITC on the lease rental for such portion would also be blocked under Section 17(5)(d) - The applicant is not eligible for ITC of GST paid on lease rental with respect to the vacant portion of the land. [Read less]

Service Tax – Section 67 of Finance Act, 1994 – Reimbursable expenses – Tax liability – Appellant is engaged in providing Customs House Agent (CHA) service – During course of audit, department noticed that Appellant had collected various charges from their clients in course of rendering CHA service, but did not pay service tax on same by claiming that said charges being reimbursable expenditure are not leviable to tax – Department issued show cause notice to Appellant by proposing demand of Service Tax on aforesaid charges – Adjudicating Authority dropped proceedings initiated in show cause notice – Commiss... [Read more]

Service Tax – Section 67 of Finance Act, 1994 – Reimbursable expenses – Tax liability – Appellant is engaged in providing Customs House Agent (CHA) service – During course of audit, department noticed that Appellant had collected various charges from their clients in course of rendering CHA service, but did not pay service tax on same by claiming that said charges being reimbursable expenditure are not leviable to tax – Department issued show cause notice to Appellant by proposing demand of Service Tax on aforesaid charges – Adjudicating Authority dropped proceedings initiated in show cause notice – Commissioner (Appeals) allowed appeal preferred by Revenue and set aside order passed by Adjudicating Authority – Whether Appellant is liable to pay Service Tax on reimbursable expenses – HELD – Appellant is in business of providing service as a CHA and has discharged service tax on consideration received for providing CHA services. While computing value of taxable income, Appellant had excluded reimbursable charges. Since expenses were reimbursed by client on actual basis, Appellant did not discharge service tax on reimbursable expenses, as it is not a consideration for any services rendered. Section 67 of the Act dealing with valuation of taxable services, does not include reimbursable expenses. Service charges received as consideration for services provided or to be provided would form part of taxable value for purposes of service tax and reimbursements are not liable to tax. Impugned order in appeal cannot sustain and hence, it is set aside – Appeals allowed [Read less]

Central Excise – Valuation - Appellant cleared finished products to its customers and separately charged 0.25% of the clearance value as transit insurance. Out of this, the appellant incurred only 0.019% towards actual transit insurance cost, while the remaining amount was retained as profit - Demand for differential duty on the ground that the appellant did not consider the actual freight element for determining the assessable value - Whether the amount charged as transit insurance should be included in the assessable value for the purpose of Central Excise duty - HELD - The issue is no more res integra, in view of the ... [Read more]

Central Excise – Valuation - Appellant cleared finished products to its customers and separately charged 0.25% of the clearance value as transit insurance. Out of this, the appellant incurred only 0.019% towards actual transit insurance cost, while the remaining amount was retained as profit - Demand for differential duty on the ground that the appellant did not consider the actual freight element for determining the assessable value - Whether the amount charged as transit insurance should be included in the assessable value for the purpose of Central Excise duty - HELD - The issue is no more res integra, in view of the judgment delivered by the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Chennai-II Vs. Aeons Construction Products Ltd., wherein the Supreme Court held that if the ownership of the goods has already passed to the buyer at the factory gate, the transportation charges incurred by the seller at the instance of the buyer cannot be included in the assessable value for the purpose of Central Excise duty - In the present case, the appellant had sold the vehicles to its customers at the agreed price, on which the Central Excise duty was paid. The appellant only facilitated the transportation of the goods and incurred the cost of transit insurance, which should not be considered as 'additional consideration' for inclusion in the assessable value - The impugned order is set aside and the appeal is allowed [Read less]

GST - Ex parte Order - Reply to SCN on email, Transfer of Adjudicating Authority - Petitioner's grievance that the impugned assessment order was passed ex parte despite the petitioner having submitted replies to the show cause notices through emails to the designated email ID of the Adjudicating Authority - HELD – The SCN itself required the petitioner to furnish its reply to the Adjudicating Authority on his e-mail ID and not on the common portal. Once that exception to the general scheme of the Act has been made by the Adjudicating Authority, the petitioner cannot be faulted for complying with that direction issued by ... [Read more]

GST - Ex parte Order - Reply to SCN on email, Transfer of Adjudicating Authority - Petitioner's grievance that the impugned assessment order was passed ex parte despite the petitioner having submitted replies to the show cause notices through emails to the designated email ID of the Adjudicating Authority - HELD – The SCN itself required the petitioner to furnish its reply to the Adjudicating Authority on his e-mail ID and not on the common portal. Once that exception to the general scheme of the Act has been made by the Adjudicating Authority, the petitioner cannot be faulted for complying with that direction issued by the Adjudicating Authority - In the present case, a patent error of procedure had been committed by the Adjudicating Authority in passing the ex parte order despite the replies furnished by the petitioner being on record - Once replies are seen to have been furnished, merely because the petitioner did not or could not appear on the date fixed may not absolve the Adjudicating Authority of its duty to consider the replies furnished and to pass the adjudication order, thereafter. The failure to consider the replies amounted to a complete denial of the principles of natural justice - Once the mistake of procedure had been established by the petitioner the Adjudicating Authority may not have passed an ex parte order even on the date fixed. The rectification application ought to have been allowed. The impugned order is set aside and the matter is remitted back to the Adjudicating Authority to pass a fresh order after considering the replies filed by the petitioner – The writ petition is allowed [Read less]

Central Excise – Duty demand on captively consumed Sugar Syrup – Appellant captively consumed the sugar syrup produced for the manufacture of the exempt biscuits - Whether the sugar syrup was marketable and classifiable under sub-heading 1702 90 90 as "sugar syrup blends containing in the dry stage 50% by weight of fructose", thereby attracting excise duty – HELD - For classification under sub-heading 1702 90 90, the Department must establish through chemical testing that the fructose content in the dry stage was at least 50% by weight. In the absence of such evidence, the classification under 1702 90 90 was not sust... [Read more]

Central Excise – Duty demand on captively consumed Sugar Syrup – Appellant captively consumed the sugar syrup produced for the manufacture of the exempt biscuits - Whether the sugar syrup was marketable and classifiable under sub-heading 1702 90 90 as "sugar syrup blends containing in the dry stage 50% by weight of fructose", thereby attracting excise duty – HELD - For classification under sub-heading 1702 90 90, the Department must establish through chemical testing that the fructose content in the dry stage was at least 50% by weight. In the absence of such evidence, the classification under 1702 90 90 was not sustainable. Further, the marketability of the sugar syrup manufactured by the appellant specifically for use in the biscuits of Parle could not be presumed based on the marketability of "invert sugar syrup" produced by other manufacturers, as the two products were not identical. Hence, the sugar syrup is not a marketable product and therefore, not excisable – Further, the show cause notice is time-barred as the appellant had been regularly filing its monthly returns disclosing the manufacture and clearance of the exempted biscuits. There was no suppression of facts on the part of the appellant to justify the extended time limit for issuing the show cause notice – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Renting of Immovable Property Service - The appellant is engaged in the business of execution of movies and has been receiving exhibitor's share of the income for rendering services to the distributors. The Commissioner demanded service tax from the appellant for permitting the use of the theatre for exhibition of films under the category of 'Renting of Immovable Property Service' – HELD - When the agreement is on sharing of revenue by the owner of the theatre and the distributor, the question of payment of service tax under the category of 'Renting of Immovable Property Service' does not arise. The CBEC Ci... [Read more]

Service Tax - Renting of Immovable Property Service - The appellant is engaged in the business of execution of movies and has been receiving exhibitor's share of the income for rendering services to the distributors. The Commissioner demanded service tax from the appellant for permitting the use of the theatre for exhibition of films under the category of 'Renting of Immovable Property Service' – HELD - When the agreement is on sharing of revenue by the owner of the theatre and the distributor, the question of payment of service tax under the category of 'Renting of Immovable Property Service' does not arise. The CBEC Circular No.109/03/2009 clarified that only when the theatre owner gets a fixed rent from the distributor for screening the movies, the liability arose - In the instant case, since the distribution of income is based on the sale of tickets, there is no liability to pay service tax. The revenue sharing arrangement does not necessarily imply provision of services, unless the service provider and service recipient relationship is established - the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Eligibility for CENVAT Credit on Iron and Steel Items Used for Fabrication and Erection of Capital Goods - The appellant, a manufacturer of steel products, utilized various iron and steel items such as MS Flats, Beams, Channels, Plates, Angles, MS Bar & Rods, structures, rounds, etc. for fabrication and erection of capital goods in its factory premises - Department denied the credit, relying on the Larger Bench decision in Vandana Global Ltd. v. CCE, Raipur, which held that goods used for constructing the foundation or support structure of capital goods cannot be treated as spares, components or accessorie... [Read more]

Central Excise - Eligibility for CENVAT Credit on Iron and Steel Items Used for Fabrication and Erection of Capital Goods - The appellant, a manufacturer of steel products, utilized various iron and steel items such as MS Flats, Beams, Channels, Plates, Angles, MS Bar & Rods, structures, rounds, etc. for fabrication and erection of capital goods in its factory premises - Department denied the credit, relying on the Larger Bench decision in Vandana Global Ltd. v. CCE, Raipur, which held that goods used for constructing the foundation or support structure of capital goods cannot be treated as spares, components or accessories of capital goods, as well as inputs - Whether the appellant is eligible to avail CENVAT Credit on the iron and steel items used for erection and fabrication of capital goods – HELD – The decision of the Larger Bench in Vandana Global Ltd. has been overruled by the Chhattisgarh High Court, which held that goods used in fabrication of structures embedded to earth should be treated as 'inputs' for capital goods and CENVAT Credit cannot be denied - The iron and steel items used for fabrication and erection of capital goods are eligible for CENVAT Credit as 'inputs'. The items in question were not used for foundation, construction of factory or support structure, but for fabrication of capital goods, which is an integral part of the manufacturing process. Therefore, the appellant is eligible to avail CENVAT Credit on the iron and steel items used for fabrication and erection of capital goods – The impugned order is set aside and the appeal is allowed [Read less]

GST - Blocking of Input Tax Credit, Reasons to believe, Recording of reasons in writing - Blocking of ITC basis alert notice received from the DGGI, Raipur Zonal Unit stating one of the suppliers of the petitioner is found to be non-operational and had passed on fraudulent ITC without any supply of goods - Whether the respondent had fulfilled the mandatory requirement under Rule 86A of the UPGST Rules, 2017 to record the 'reasons to believe' in writing before blocking the ITC of the petitioner - HELD - The respondent has not fulfilled the mandatory requirement of recording the 'reasons to believe' in writing as required un... [Read more]

GST - Blocking of Input Tax Credit, Reasons to believe, Recording of reasons in writing - Blocking of ITC basis alert notice received from the DGGI, Raipur Zonal Unit stating one of the suppliers of the petitioner is found to be non-operational and had passed on fraudulent ITC without any supply of goods - Whether the respondent had fulfilled the mandatory requirement under Rule 86A of the UPGST Rules, 2017 to record the 'reasons to believe' in writing before blocking the ITC of the petitioner - HELD - The respondent has not fulfilled the mandatory requirement of recording the 'reasons to believe' in writing as required under Rule 86A(1) of the UPGST Rules. The mere statement that the "supplier found non-functioning" did not reflect any application of mind or specific reasons for the belief that the petitioner's ITC was fraudulent. The communication from the DGGI, Raipur Zonal Unit also only reflected a generic conclusion about the supplier's transactions, and did not establish that the transactions between the petitioner and the supplier were bogus - The requirement to record the 'reasons to believe' in writing is a non-negotiable and mandatory condition and mere doubt or suspicion alone is not sufficient to block the ITC, as that would disrupt the entire value addition chain and tax payments. Therefore, the action taken by the respondent to block the petitioner's ITC is set aside and the blocked ITC is directed to be unblocked forthwith - The writ petition is allowed [Read less]

GST - Statutory right of filing appeal online, Procedural technicalities - Petitioner had paid the disputed tax amount prior to the impugned order being passed – The online portal did not allow the petitioner to file the appeal as it was showing the disputed tax amount as 'Nil' - the grievance of the petitioner that its right to file statutory appeal against the order passed under Section 74, cannot be denied for reason of the disputed amount of tax deposited prior to the impugned order being passed - HELD - The appeal is a creature of statute and once the statute has provided the aggrieved party the right to appeal, tha... [Read more]

GST - Statutory right of filing appeal online, Procedural technicalities - Petitioner had paid the disputed tax amount prior to the impugned order being passed – The online portal did not allow the petitioner to file the appeal as it was showing the disputed tax amount as 'Nil' - the grievance of the petitioner that its right to file statutory appeal against the order passed under Section 74, cannot be denied for reason of the disputed amount of tax deposited prior to the impugned order being passed - HELD - The appeal is a creature of statute and once the statute has provided the aggrieved party the right to appeal, that right cannot be denied on technicalities or procedural rules - Once the statute has given a person aggrieved, a right to appeal against an order may not be denied or obstructed on technicalities or rules of procedure - the GSTN is directed to modify the online portal to allow filing of appeals even where the disputed tax amount is shown as 'Nil', with a note that the issue of maintainability of the appeal will be examined by the appellate authority - Since filing of the appeal cannot be held hostage to the correction that is necessary to be made by the GSTN, in its technical processes, in the interest of justice, the petitioner may file his appeal through physical mode before the appropriate Appeal Authority – The writ petition is disposed of - Whether the practice of fixing the date of personal hearing prior to the date of filing reply - HELD – This practice creates an incurable defect in the proceedings and directed the GSTN to introduce a modification in the portal to ensure that the date of personal hearing is never fixed prior to the date of filing reply. The GSTN assured that the necessary correction would be made on priority. [Read less]

GST - Delivery of notices/intimations/orders in Junk folder, ex-parte order - Petitioner contended that it was not aware of the notices/intimations/orders as they were delivered under the Junk folder and not appearing in the inbox – HELD - The petitioner's assertion regarding its inability to submit replies and contest the proceedings due to bonafide reasons, unavoidable circumstances and sufficient cause is reasonable – The impugned order is set aside and matter remitted the matter back to the respondent for fresh consideration from the stage of the petitioner submitting a reply to the show-cause notice, providing the... [Read more]

GST - Delivery of notices/intimations/orders in Junk folder, ex-parte order - Petitioner contended that it was not aware of the notices/intimations/orders as they were delivered under the Junk folder and not appearing in the inbox – HELD - The petitioner's assertion regarding its inability to submit replies and contest the proceedings due to bonafide reasons, unavoidable circumstances and sufficient cause is reasonable – The impugned order is set aside and matter remitted the matter back to the respondent for fresh consideration from the stage of the petitioner submitting a reply to the show-cause notice, providing the petitioner with a reasonable opportunity to submit replies and documents and to be heard – The petition is allowed [Read less]

Central Sales Tax Act, 1956 - Exemption under Industrial and Investment Policy of Assam, 2008 - Petitioner was granted an Eligibility Certificate for claiming incentives under the policy, including exemption from tax under the Assam Industries (Tax Exemption) Scheme, 2009 – Rejection of claim for exemption for failure to submit C-Forms - Whether the petitioner is entitled to the tax exemption under the Industrial and Investment Policy of Assam, 2008 and the CST Act, 1956, even without fulfilling the requirement of submitting the C-Forms as per Section 8(4) of the Act - HELD - The submission of C-Forms as per Section 8(4)... [Read more]

Central Sales Tax Act, 1956 - Exemption under Industrial and Investment Policy of Assam, 2008 - Petitioner was granted an Eligibility Certificate for claiming incentives under the policy, including exemption from tax under the Assam Industries (Tax Exemption) Scheme, 2009 – Rejection of claim for exemption for failure to submit C-Forms - Whether the petitioner is entitled to the tax exemption under the Industrial and Investment Policy of Assam, 2008 and the CST Act, 1956, even without fulfilling the requirement of submitting the C-Forms as per Section 8(4) of the Act - HELD - The submission of C-Forms as per Section 8(4) of the Central Sales Tax Act, 1956 is a mandatory requirement to claim the exemption under Section 8(5) of the Act. Unless the conditions mentioned in Section 8(4) are fulfilled, there would be no application of the provisions of Section 8(5) - The Eligibility Certificate is merely with regard to the production, date, etc. and it is the fulfillment of the conditions which are necessary and mandatory to claim the rebate in accordance with the Policy - the tax statutes should be interpreted strictly, and the benefit of ambiguity must be in favor of the revenue. The petitioner is not entitled to the tax exemption as it had failed to fulfill the mandatory requirement of submitting the C-Forms - The writ petition is dismissed [Read less]

GST – Validity of imposition of penalty exceeding tax demand – Penalty under Sections 74 and 122(1)(vii) of the KGST Act, 2017 - Petitioner contended that the penalty imposed was illegal and arbitrary as it exceeded the tax demand and was contrary to the provisions of Sections 74 and 75 of the CGST/KGST Act, 2017 – HELD - While the tax and interest as demanded in the SCN has been reduced in the impugned order, the penalty as demanded in the SCN has been increased in the impugned order - Under Section 74(1), the penalty cannot be more than the tax demand, the penalty has to be a maximum equivalent to the tax specified... [Read more]

GST – Validity of imposition of penalty exceeding tax demand – Penalty under Sections 74 and 122(1)(vii) of the KGST Act, 2017 - Petitioner contended that the penalty imposed was illegal and arbitrary as it exceeded the tax demand and was contrary to the provisions of Sections 74 and 75 of the CGST/KGST Act, 2017 – HELD - While the tax and interest as demanded in the SCN has been reduced in the impugned order, the penalty as demanded in the SCN has been increased in the impugned order - Under Section 74(1), the penalty cannot be more than the tax demand, the penalty has to be a maximum equivalent to the tax specified in the notice. Further, under Section 74(9), the proper officer has to consider the representation made by the person and determine the tax, interest, and penalty due from such person. Additionally, Section 75(7) prohibits the authorities from demanding any penalty from the petitioner in excess of the amount specified in the notice, and no demand shall be confirmed on grounds other than the grounds specified in the notice – Further, the Section 75(13) operates as a bar for the respondents to impose penalty for the same act or omission on the same person under any other provision of the Act where penalty is imposed under Sections 73 or 74 of the Act. The Respondents had not only demanded a higher penalty than what was specified in the SCN but had also invoked Section 122 of the Act, which is not permissible - the impugned orders are set aside only to the extent of the demand and confirmation of higher penalty – The petition is partly allowed by remand [Read less]

GST - Blocking of Electronic Credit Ledger on the ground on the ground of purchases from non-existent dealer - Issue of notices on the ground that the petitioner had availed input tax credit on the basis of invoices raised by non-existing dealers - Whether the respondents were justified in blocking the Electronic Credit Ledger of the petitioner – HELD - The Delhi High Court, in its order in the case of Karuna Rajendra Ringshia vs Commissioner of CGST & Ors., had held that the respondents were entitled to proceed under Sections 73 and 74 of the GST enactments for determination of the amount due, and that Rule 86A(1) of th... [Read more]

GST - Blocking of Electronic Credit Ledger on the ground on the ground of purchases from non-existent dealer - Issue of notices on the ground that the petitioner had availed input tax credit on the basis of invoices raised by non-existing dealers - Whether the respondents were justified in blocking the Electronic Credit Ledger of the petitioner – HELD - The Delhi High Court, in its order in the case of Karuna Rajendra Ringshia vs Commissioner of CGST & Ors., had held that the respondents were entitled to proceed under Sections 73 and 74 of the GST enactments for determination of the amount due, and that Rule 86A(1) of the Rules did not contemplate an order, the effect of which is to require a taxpayer to replenish his Electronic Credit Ledger with valid availment of ITC, to the extent of ITC used in the past - Since the matter would require further consideration, and considering the fact that petitioner is required to discharge tax liabilities to the extent of Rs.23,75,480.00 for the given period, there shall be a partial stay of the impugned order, limited to 50% of the petitioner's aforesaid tax liability - The petitioner is allowed to debit a sum of Rs.11,87,740/- alone from the blocked credit and required to replenish the said blocked credit before the next due date for payment of tax for the ensuing month. The respondents to pass orders under Rule 86A and under Sections 73/74 of the GST enactments, as the case may be, within a period of 30 days - The writ petition is disposed of [Read less]

GST – Assessment, Bar of Limitation - Petitioner argued that the impugned proceedings were barred by limitation under Section 73(10) of the KGST Act, 2017 - Whether the impugned proceedings initiated pursuant to the show cause notice are barred by limitation under Section 73(10) of the KGST Act - HELD - The period of limitation was extended by the respondents through various notifications, such as Notification No. 13/2022 dated 05.07.2022, Notification Nos. 9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively. However, the validity of these notifications was pending adjudication before the Supreme Court. The imp... [Read more]

GST – Assessment, Bar of Limitation - Petitioner argued that the impugned proceedings were barred by limitation under Section 73(10) of the KGST Act, 2017 - Whether the impugned proceedings initiated pursuant to the show cause notice are barred by limitation under Section 73(10) of the KGST Act - HELD - The period of limitation was extended by the respondents through various notifications, such as Notification No. 13/2022 dated 05.07.2022, Notification Nos. 9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively. However, the validity of these notifications was pending adjudication before the Supreme Court. The impact and bearing of the Supreme Court's decision on the SLP would have a bearing on the impugned proceedings, and hence, it is appropriate to grant one more opportunity to the petitioner by setting aside the impugned orders and remitting the matter back to the respondent for reconsideration afresh in accordance with law after the disposal of the SLP by the Supreme Court – The petition is allowed by remand [Read less]

GST – Validity of assessment order basis difference between GSTR-3B and GSTR-2A - Demand on the ground of difference between input tax credit claimed in GSTR-3B and GSTR-2A. The petitioner filed an appeal against the assessment order with a delay of 12 days which was rejected by the appellate authority on the ground of limitation – HELD - The petitioner had provided an explanation for the difference between GSTR-3B and GSTR-2A, stating that the difference was due to the credit notes issued by the supplier being accounted as output tax liability instead of reduction in input tax credit. The adjudicating authority had no... [Read more]

GST – Validity of assessment order basis difference between GSTR-3B and GSTR-2A - Demand on the ground of difference between input tax credit claimed in GSTR-3B and GSTR-2A. The petitioner filed an appeal against the assessment order with a delay of 12 days which was rejected by the appellate authority on the ground of limitation – HELD - The petitioner had provided an explanation for the difference between GSTR-3B and GSTR-2A, stating that the difference was due to the credit notes issued by the supplier being accounted as output tax liability instead of reduction in input tax credit. The adjudicating authority had not considered this explanation and had passed the assessment order in a cryptic manner – The maxim of Audi Alteram Partem is broad enough to include the rule against bias since a fair hearing is must for it to be unbiased hearing. The essential ingredients of fair hearing is that a person should be served with a proper notice and should be given a right to hearing - The impugned assessment order and appellate order are quashed and the matter is remanded to the adjudicating authority to pass a fresh order after considering the petitioner's explanation on the difference between GSTR-3B and GSTR-2A and providing an opportunity of hearing to the petitioner – The petition is disposed of [Read less]

GST - Issue of Notices to Amalgamated entity - M/s. Harita Fehrer Limited was amalgamated with the petitioner – Respondent had issued several show cause notices to the erstwhile company – Petitioner seeking quashing of SCN contending that the notices were contrary to law and without jurisdiction since the company no longer existed after the amalgamation - Whether the show cause notices issued to the non-existent erstwhile company can be maintained against the petitioner after the amalgamation - HELD - Since M/s. Harita Fehrer Limited had ceased to exist after the amalgamation with the petitioner, the impugned show caus... [Read more]

GST - Issue of Notices to Amalgamated entity - M/s. Harita Fehrer Limited was amalgamated with the petitioner – Respondent had issued several show cause notices to the erstwhile company – Petitioner seeking quashing of SCN contending that the notices were contrary to law and without jurisdiction since the company no longer existed after the amalgamation - Whether the show cause notices issued to the non-existent erstwhile company can be maintained against the petitioner after the amalgamation - HELD - Since M/s. Harita Fehrer Limited had ceased to exist after the amalgamation with the petitioner, the impugned show cause notices issued to the erstwhile company are without jurisdiction. The respondent had also issued a subsequent notice to the petitioner, which the petitioner was at liberty to contest - the impugned SCNs are quashed and the petitioner is granted liberty to take recourse to available legal remedies against the subsequent notice – The petition is allowed [Read less]

UP VAT Act, 2008 – Reassessment of Escaped Turnover, Change of Opinion – Validity of reassessment in the absence of permission/sanction granted by the Additional Commissioner to reopen the completed assessment - Reassessment proceedings involving change of opinion - Whether the Tribunal was justified in holding that there was no permission/sanction granted by the Additional Commissioner to reopen the completed assessment – HELD - The Tribunal's finding that there was no permission/sanction for reopening the assessment is perverse and against the material on record. The original records clearly showed that the order o... [Read more]

UP VAT Act, 2008 – Reassessment of Escaped Turnover, Change of Opinion – Validity of reassessment in the absence of permission/sanction granted by the Additional Commissioner to reopen the completed assessment - Reassessment proceedings involving change of opinion - Whether the Tribunal was justified in holding that there was no permission/sanction granted by the Additional Commissioner to reopen the completed assessment – HELD - The Tribunal's finding that there was no permission/sanction for reopening the assessment is perverse and against the material on record. The original records clearly showed that the order of the Additional Commissioner, granting permission to reopen the assessment. The Tribunal's finding in this regard was without any basis - The provisions of the UP VAT Act, specifically Section 29(7), expressly empower the assessing authority to make reassessment even if it involves a change of opinion, within a period of eight years from the end of the assessment year. The Tribunal's reliance on judgments related to the trade/sales tax provision of Section 21(2) is misplaced, as the present case involved provision of Section 29(7) of the UPVAT Act - Once the provisions of the Act empowers for making reassessment, which may involve change of opinion, the Tribunal was not justified in holding that the reassessment proceedings have been initiated, which involved change of opinion and set aside the assessment order. The impugned order cannot be sustained and set aside - The revision is allowed [Read less]

GST - Detention of goods and vehicle under Section 129 of CGST Act, 2017 – Interception of goods and vehicles in transit. Authorities passed order of detention under Section 129(1) of the CGST Act – Challenge to the validity of detention order on the ground that the authorities failed to issue a notice and pass an order within the time prescribed under Section 129(3) of the GST Act – HELD - The provisions of Section 129(3) of the Act are mandatory and the failure to comply with the same would render the detention order invalid. The respondent authorities were required to issue a notice within 7 days from the date of ... [Read more]

GST - Detention of goods and vehicle under Section 129 of CGST Act, 2017 – Interception of goods and vehicles in transit. Authorities passed order of detention under Section 129(1) of the CGST Act – Challenge to the validity of detention order on the ground that the authorities failed to issue a notice and pass an order within the time prescribed under Section 129(3) of the GST Act – HELD - The provisions of Section 129(3) of the Act are mandatory and the failure to comply with the same would render the detention order invalid. The respondent authorities were required to issue a notice within 7 days from the date of detention specifying the penalty payable and pass an order within 7 days from the date of service of such notice. In the present case, the respondents failed to issue the notice within the prescribed time limit and the show-cause notice in Form GST MOV-10 was issued beyond the time limit – The impugned detention order is set aside and the respondents are directed to release the goods and the conveyances forthwith. The petitioner is directed to reply to the notice issued in Form GST MOV-10 and provide an undertaking to pay the fine in lieu of confiscation of the goods and conveyance, if any order under Section 130 of the CGST Act - The petition is disposed of [Read less]