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Service Tax - Clearance and Forwarding (C&F) Agent Service - Department of the view that the transportation charges should be included in the gross value for arriving at the service tax liability under C&F service, and raised a demand of service tax short paid. The C&F agent contested the demand - Whether the transportation charges collected by the C&F agent can be included in the gross value for arriving at the service tax liability under C&F service, or they are reimbursable expenses not exigible to service tax - HELD - The transportation charges collected by the C&F agent are reimbursable expenses and not to be included... [Read more]

Service Tax - Clearance and Forwarding (C&F) Agent Service - Department of the view that the transportation charges should be included in the gross value for arriving at the service tax liability under C&F service, and raised a demand of service tax short paid. The C&F agent contested the demand - Whether the transportation charges collected by the C&F agent can be included in the gross value for arriving at the service tax liability under C&F service, or they are reimbursable expenses not exigible to service tax - HELD - The transportation charges collected by the C&F agent are reimbursable expenses and not to be included in the gross value for arriving at the service tax liability under C&F service. The C&F agent was arranging for transportation of the principal's goods on behalf of the principal, and the transportation charges paid to the transporter were being reimbursed by the principal. The value of taxable service shall only be the gross amount charged by the service provider 'for such service' and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro quo for rendering such a service - The demand of service tax on the transportation charges and the consequential interest and penalties are set aside, while confirming the denial of Cenvat credit on outdoor catering services – The appeal is partly allowed [Read less]

Service Tax - Taxability of composite works contract - The appellant, a joint venture between M/s IJM India Infrastructure Ltd. and M/s Andhra Pradesh Housing Board, is engaged in the development of an integrated township project - Demand of service tax on consulting engineer services and construction of complex services - Whether the entire construction activity undertaken by the appellant was in the nature of composite works contract involving transfer of property in goods, and hence not taxable under other taxable categories prior to the introduction of Works Contract Service from 01.06.2007 - HELD - The demand raised u... [Read more]

Service Tax - Taxability of composite works contract - The appellant, a joint venture between M/s IJM India Infrastructure Ltd. and M/s Andhra Pradesh Housing Board, is engaged in the development of an integrated township project - Demand of service tax on consulting engineer services and construction of complex services - Whether the entire construction activity undertaken by the appellant was in the nature of composite works contract involving transfer of property in goods, and hence not taxable under other taxable categories prior to the introduction of Works Contract Service from 01.06.2007 - HELD - The demand raised under the category of Construction of Complex Service is legally not sustainable. The Hon'ble Supreme Court in the case of Larsen & Toubro Ltd. had categorically held that indivisible works contracts cannot be subjected to service tax under other taxable categories such as construction service prior to the introduction of Works Contract Service on 01.06.2007. Further, even after 01.06.2007, such composite contracts are taxable only under the specific category of Works Contract Service. Therefore, the demand related to Construction of Complex Service is set aside and the appeal is allowed - Limitation on service tax demand - The Department had earlier issued a show cause notice dated 23.10.2007 on the issue of consulting engineer services received from IJM, Berhad, Malaysia, invoking the extended period of limitation - Whether the issuance of another show cause notice invoking extended period of limitation on the same set of facts is permissible under the law - HELD - The Hon'ble Supreme Court in the case of M/s Nizam Sugar Factory had clearly held that once the Department is aware of the facts, extended period cannot be invoked repeatedly on the same issue. Since the Department had already issued a SCN on the same issue earlier, the issuance of another SCN invoking extended period is not permissible. [Read less]

Service Tax - Non-payment of service tax on advances written off, Availment of excess CENVAT credit - Whether the appellant is liable to pay service tax on the advance received and written off – HELD - The appellant had adjusted the advances received and paid service tax later. There was a small amount of advance written off by the appellant, and on this, the appellant was liable to pay service tax on 15% of the written off amount. However, this demand is also not sustainable on the ground of limitation, as the extended period of limitation cannot be invoked in this case since the department's demand was based on scrutin... [Read more]

Service Tax - Non-payment of service tax on advances written off, Availment of excess CENVAT credit - Whether the appellant is liable to pay service tax on the advance received and written off – HELD - The appellant had adjusted the advances received and paid service tax later. There was a small amount of advance written off by the appellant, and on this, the appellant was liable to pay service tax on 15% of the written off amount. However, this demand is also not sustainable on the ground of limitation, as the extended period of limitation cannot be invoked in this case since the department's demand was based on scrutiny of the appellant's records and there was no suppression of facts with intent to evade tax – The impugned order is set aside and the appeal is allowed - Whether the appellant had availed excess CENVAT credit - HELD - The closing balance of CENVAT credit as on 30.09.2007 was properly carried forward, and the credit taken in the subsequent returns was justified by the invoices received and payments made. Therefore, the demand confirmed on this count is not sustainable. [Read less]

Service Tax demand on difference between taxable value in ST-3 returns and gross income in audited balance sheet Fact - Department raised service tax demand on the appellant claiming that the appellant suppressed the taxable value by showing a lower figure in ST-3 returns compared to the gross income in the audited balance sheet - Whether the demand of service tax based solely on the difference between the taxable value in ST-3 returns and the gross income in the audited balance sheet is legally sustainable - HELD - It observed that during the period under dispute, service tax was payable on actual receipt of consideration... [Read more]

Service Tax demand on difference between taxable value in ST-3 returns and gross income in audited balance sheet Fact - Department raised service tax demand on the appellant claiming that the appellant suppressed the taxable value by showing a lower figure in ST-3 returns compared to the gross income in the audited balance sheet - Whether the demand of service tax based solely on the difference between the taxable value in ST-3 returns and the gross income in the audited balance sheet is legally sustainable - HELD - It observed that during the period under dispute, service tax was payable on actual receipt of consideration, whereas books of accounts and balance sheet are maintained on accrual basis. Therefore, the two figures cannot match by their very nature and any comparison is inherently flawed. The gross amount in the balance sheet includes reimbursable expenses such as cost of diesel supplied to clients, which do not form part of the taxable value - Demands cannot be sustained solely on the basis of mismatch between ST-3 returns and balance sheet/income tax returns without further proof. The demand based purely on differential figures between balance sheet and ST-3 is legally unsustainable and set aside - The impugned order is set aside and the appeal is allowed - Service Tax on reimbursement of wages for supply of field consultants to Directorate of Horticulture - The appellant was engaged to supply field consultants to the Directorate of Horticulture, and was paid a fixed service charge along with a separate identifiable amount towards wages of the field consultants - Whether the amount received towards wages of the field consultants is includable in the assessable value for computation of service tax liability - HELD - The wages reimbursed by the service recipient is in the nature of reimbursements and not part of the taxable value. The tribunal noted that the Directorate of Horticulture itself confirmed that out of the total payment, Rs. 72.34 lakhs was towards wages of the field consultants and only Rs. 2.88 lakhs was the service charge. The Supreme Court in Union of India vs. Intercontinental Consultants & Technocrats Pvt. Ltd. held that reimbursements are not includable in the assessable value prior to 2015. The demand of service tax on the reimbursable wage component is not sustainable and set aside - Service Tax on supply of diesel under security services - The appellant was awarded separate work orders by Reliance Infocomm, one for security services and another for supply of diesel - Whether the value of diesel supplied under the independent work order can be included in the assessable value for computation of service tax on security services - HELD - The supply of diesel is a supply of goods and cannot be clubbed with the provision of security services, as they were under distinct work orders with separately identified rates and quantities. The Notification No. 12/2003-ST exempts from service tax the value of goods and materials sold by the service provider to the recipient, subject to documentary proof. Where the value of goods and services are separately disclosed, service tax cannot be levied on the goods component. The demand of service tax on the value of diesel supplied under the independent work order is set aside - Classification of soil supply as 'Site Formation Service' - Appellant provided earth-filling/soil supply services to Reliance Infocomm for preparation of BTS tower sites - Whether the activity of supplying and unloading soil can be classified as 'Site Formation Service' under Section 65(97a) of the Finance Act, 1994 - HELD - The task of the appellant was strictly restricted to procurement and unloading of specified quantities of soil, and it had no role in any further site preparation activities like levelling, stabilisation etc. The Section 65(97a) defines 'Site Formation Services' to include activities like drilling, boring, soil stabilisation, etc. which are pre-construction site preparation activities - Mere supply of soil as a commodity does not fall within any of these categories. The CBIC Circular clarify that Site Formation Services cover preparatory activities like blasting, drilling, overburden removal, and earthmoving for making land suitable for construction, which was not the case here. The appellant's activity of delivering and unloading soil does not constitute a 'Site Formation Service' under Section 65(97a) - The demand of service tax on the soil supply activity under the category of 'Site Formation Service' is set aside. [Read less]

Customs - Request for amendment of shipping bills after export of goods – Respondent inadvertently filed certain shipping bills as "Free Shipping Bills" instead of "All India rate of Duty Drawback" due to a clerical mistake - Respondent subsequently requested the Deputy Commissioner of Customs to amend the shipping bills to claim the duty drawback - Whether the request for amendment of the shipping bills filed beyond the stipulated 3-month period as per the CBEC Circular No. 36/2010 dated 23.09.2010 is allowable – HELD - The time limit prescribed by the Board Circular is not binding as it is not a statutory provision u... [Read more]

Customs - Request for amendment of shipping bills after export of goods – Respondent inadvertently filed certain shipping bills as "Free Shipping Bills" instead of "All India rate of Duty Drawback" due to a clerical mistake - Respondent subsequently requested the Deputy Commissioner of Customs to amend the shipping bills to claim the duty drawback - Whether the request for amendment of the shipping bills filed beyond the stipulated 3-month period as per the CBEC Circular No. 36/2010 dated 23.09.2010 is allowable – HELD - The time limit prescribed by the Board Circular is not binding as it is not a statutory provision under Section 149 of the Customs Act, 1962 - The Gujarat High Court in the cases of M/s. Mahalakshmi Rubtech Ltd. Vs. Union of India held that the time limit prescribed in the Board Circular is not binding and the amendment of shipping bills can be allowed even beyond the 3-month period – Further, the substantive benefits cannot be denied for procedural non-compliance. The irregularity in not mentioning the drawback scheme code in the shipping bill was a clerical error by the Customs House Agent, which should not deprive the respondent of the substantial benefit of duty drawback - The decision of the Adjudication Authority to allow the amendment of the shipping bills is upheld and the Revenue appeal is dismissed [Read less]

Service Tax - Taxability of CRS/GDS Incentives - The appellants, who are engaged in the business of air ticket booking, received incentives from CRS/GDS companies for achieving pre-determined booking targets - Authorities alleged that these incentives were taxable under 'Business Auxiliary Service' – HELD - The larger Bench of the Tribunal, in the case of Kafila Hospitality & Travels Pvt Ltd, has overruled the earlier decisions relied upon by the impugned order and held that the air travel agent is promoting its own business and not the business of the CRS/GDS companies, and the incentives received for achieving targets ... [Read more]

Service Tax - Taxability of CRS/GDS Incentives - The appellants, who are engaged in the business of air ticket booking, received incentives from CRS/GDS companies for achieving pre-determined booking targets - Authorities alleged that these incentives were taxable under 'Business Auxiliary Service' – HELD - The larger Bench of the Tribunal, in the case of Kafila Hospitality & Travels Pvt Ltd, has overruled the earlier decisions relied upon by the impugned order and held that the air travel agent is promoting its own business and not the business of the CRS/GDS companies, and the incentives received for achieving targets are not leviable to service tax - The passengers cannot be deemed to be an audience for the promotion of the business of CRS Companies, as the passenger cannot directly use the CRS software and the travel agent is not engaging in any promotional activity before the passenger. In terms of the provisions of Section 65A of the Finance Act, the classification of the service would fall under "air travel agent" services and not 'Business Auxiliary Service' - The demand on this count is set aside - Inclusion of Fuel Surcharge in the "Basic Fare" under Rule 6(7) - The Revenue authorities alleged that the appellants were required to include the fuel surcharge in the "basic fare" for the purposes of payment of Service Tax under Rule 6(7) of the Service Tax Rules, 1994 – HELD - The issue is no longer res integra and has been decided in favour of the appellants by the Chennai Bench of the Tribunal in the case of BCD Travels India Pvt Ltd. The "basic fare" as specified in Rule 6(7) does not include the fuel surcharge and the appellants have rightly paid the Service Tax only on the basic fare by exercising the tax payment option under Rule 6(7). The demand on this count is set aside - Denial of Abatement under Notification 1/2006-ST - The Revenue authorities denied the benefit of abatement under Notification No. 1/2006-ST dated 01.03.2006 and No. 26/2012-ST dated 20.06.2012, on the ground that the appellants availed Cenvat credit on common input services – HELD - The reversal of Cenvat credit amounts to not availing the credit, as held in various judicial precedents. The Tribunal found that the appellants made reversal on a pro-rata basis, considering the taxable value of the services as a reasonable basis, as no specific method was prescribed under the law. Even after the formula was prescribed under Rule 6 of the CCR, 2004, w.e.f 01.04.2011, the Revenue authorities continued to issue Show Cause Notices in the same language as in old Show Cause Notices, without appreciating the legal and factual position. The Tribunal held that the demand is not sustainable and the appellants are eligible for the abatement under the said notifications - Adjustment of Excess Service Tax Paid under Rule 6(4A)/(4B) - The Revenue authorities alleged that the appellants made unauthorized adjustments of excess service tax paid in previous months against their service tax liability for subsequent months, without fulfilling the conditions laid down in Rule 6(4B) of the Service Tax Rules, 1994. HELD - The benefit of adjustment of excess payment of service tax cannot be denied on the grounds of procedural lapses such as non-filing of intimation, adjustment of an amount exceeding one lakh etc. The Tribunal observed that the excess payment is like an advance payment of service tax, whose incidence has not been passed on to the customers, and the Government cannot retain the excess tax paid by the assessee by refusing its adjustment against his tax liability during other months. The demand on this count is liable to be set aside - Eligibility of CENVAT Credit on Gateway Charges - The Revenue authorities alleged that the appellants wrongly availed CENVAT credit of service tax paid on gateway charges, as the charges were reimbursed by the airlines and the appellants did not bear the economic burden of the same – HELD – There is no restriction under the CENVAT Credit Rules that credit cannot be availed if the expenses are reimbursed. The moot question is whether the gateway charges are an input service for the appellants, and the same is not disputed by the Revenue authorities. The Tribunal held that the grounds on which the credit is denied have no legal backing, and the demand on this count is liable to be set aside. [Read less]

Service Tax - Works contract services - The appellant, a works contractor, provided services to a builder. The invoices issued to the builder were never booked by the builder. Based on third-party data from the Income Tax Department, the department issued a show cause notice proposing a service tax demand - Whether the service tax demand on the invoiced amount is sustainable when the services could not be completed due to the closure of the recipient's business - HELD – As per the Service Tax Rules, 1994, an invoice is required to be issued after the completion of the service. In this case, due to the closure of the reci... [Read more]

Service Tax - Works contract services - The appellant, a works contractor, provided services to a builder. The invoices issued to the builder were never booked by the builder. Based on third-party data from the Income Tax Department, the department issued a show cause notice proposing a service tax demand - Whether the service tax demand on the invoiced amount is sustainable when the services could not be completed due to the closure of the recipient's business - HELD – As per the Service Tax Rules, 1994, an invoice is required to be issued after the completion of the service. In this case, due to the closure of the recipient's business, the services provided by the appellant could not be completed. Therefore, the invoices issued by the appellant cannot be treated as proper invoices in terms of the rules, and no service tax is chargeable on the basis of such invoices - As per the provisions, service tax is chargeable on the value of services, and since no service was rendered in this case, no service tax is leviable - The service tax demand is set aside and the appeal is allowed [Read less]

Central Excise - Classification of gears and transmission shafts under Central Excise Tariff Act (CETA) - The appellants cleared gears, gearing, gear boxes, gear housings, bevel sets, spur gears, side gears etc. under the classification of parts of agricultural implements under Tariff Heading 84329090/84339000 without payment of central excise duty - Department alleged that the impugned goods are classifiable under Tariff Heading 84834000 as gears and gearing - Whether the impugned goods are classifiable under Tariff Heading 84832000 as gears and gearing or under Tariff Heading 84329090/84339000 as parts of agricultural ma... [Read more]

Central Excise - Classification of gears and transmission shafts under Central Excise Tariff Act (CETA) - The appellants cleared gears, gearing, gear boxes, gear housings, bevel sets, spur gears, side gears etc. under the classification of parts of agricultural implements under Tariff Heading 84329090/84339000 without payment of central excise duty - Department alleged that the impugned goods are classifiable under Tariff Heading 84834000 as gears and gearing - Whether the impugned goods are classifiable under Tariff Heading 84832000 as gears and gearing or under Tariff Heading 84329090/84339000 as parts of agricultural machinery - HELD - As per the General Rules of Interpretation, Section and Chapter Notes, the impugned goods being gears, gearing, gear boxes, gear housings etc. are classifiable under Tariff Heading 84834000, even if they are specifically designed and exclusively used in agricultural machinery like rotavators - The Note 2 to Section XVI of the Harmonized System of Nomenclature makes it clear that parts which have an independent entry in Chapter 84 or 85 have to be classified under the specific heading irrespective of their end use. The specific tariff entry for 'parts of agricultural machinery' under Heading 84329090 cannot override the specific entry for 'gears and gearing' under Heading 84834000. Thus, the classification adopted by the department is upheld – However, the extended period of limitation cannot be invoked in the present case. The issue involved was a bona fide dispute regarding the interpretation of the tariff entries, which was the subject matter of several judicial decisions. The appellants had been regularly filing the ER-1 returns and reversing the Cenvat credit, which indicates their bona fide belief that they were manufacturing exempted goods – Further, the department had itself raised queries regarding reversal of Cenvat credit, which shows their own uncertainty regarding the classification. Therefore, the invocation of the extended period of limitation is not justified - The impugned order is set aside and the appeal is allowed on the ground of limitation [Read less]

Central Excise – Rule 9 of CCR, 2004 - Eligibility to avail CENVAT credit on capital goods by job worker - Appellant, a job worker, availed CENVAT credit on capital goods based on invoices raised in the name of the principal manufacturer, who had purchased the goods - Whether the Appellant was eligible to avail CENVAT credit on capital goods even though the invoices were not issued in its name – HELD - The Appellant was eligible to avail CENVAT credit on the capital goods based on the invoices, as the Appellant's name and address were mentioned as the consignee on the invoices and the goods were delivered at the Appell... [Read more]

Central Excise – Rule 9 of CCR, 2004 - Eligibility to avail CENVAT credit on capital goods by job worker - Appellant, a job worker, availed CENVAT credit on capital goods based on invoices raised in the name of the principal manufacturer, who had purchased the goods - Whether the Appellant was eligible to avail CENVAT credit on capital goods even though the invoices were not issued in its name – HELD - The Appellant was eligible to avail CENVAT credit on the capital goods based on the invoices, as the Appellant's name and address were mentioned as the consignee on the invoices and the goods were delivered at the Appellant's premises as per the instructions of the principal manufacturer - The Tribunal relied on the CBEC circular and the Allahabad High Court decision in Uni Cast Pvt. Ltd. CCE Meerut, which held that a job worker is entitled to avail credit on the basis of invoices endorsed by the principal as long as the goods are received, utilized in the manufacturing process and cleared upon payment of duty - The Revenue's allegation that the Appellant had availed ineligible CENVAT credit was unsustainable and not supported by any statutory provision - The impugned orders are set aside and the appeals are allowed [Read less]

Customs AAR - Manufacture of cellular mobile phones and Printed Circuit Board Assembly - Applicability of Concessional duty exemption under Notification No. 57/2017-Customs on import of inputs and parts which subsequently scrapped during the manufacturing process - 'for use in manufacture' vs 'used' in the manufacture – Intent of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 - HELD - The benefit under Notification No. 57/2017 is available in respect of inputs and parts 'for use' in the manufacture of PCBA and mobile phones and not in respect of inputs and parts 'used' in the manufacture of PCBA and m... [Read more]

Customs AAR - Manufacture of cellular mobile phones and Printed Circuit Board Assembly - Applicability of Concessional duty exemption under Notification No. 57/2017-Customs on import of inputs and parts which subsequently scrapped during the manufacturing process - 'for use in manufacture' vs 'used' in the manufacture – Intent of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 - HELD - The benefit under Notification No. 57/2017 is available in respect of inputs and parts 'for use' in the manufacture of PCBA and mobile phones and not in respect of inputs and parts 'used' in the manufacture of PCBA and mobile phones. The usage of words 'for use in manufacture' indicates that benefit is available in respect of all inputs and parts which have been put to use for manufacturing the PCBA and mobile phones and not only in respect of inputs and parts which form part of the finished PCBA and mobile phones. This concessional duty benefit is subject to condition which mandates the importer to follow the procedure set out in IGCR - The intent of the IGCR is to provide concessional benefit where the goods have been used during the manufacturing process and not necessarily the goods which form part of the manufactured good - The extant exemption is applicable to all the goods which are placed in the assembly line for the purpose of manufacture of display assembly irrespective of whether the same get incorporated in the manufacture of PCBA and cellular mobile phone or are damaged or scrapped during manufacturing - The Notification No. 57/2017 is clear and provides that the benefit of exemption is available for all inputs and parts used to manufacture mobile phone, irrespective of the fact that the same forms part of the finished goods or are scrapped during the manufacturing process - In the present case, as both the Notification No. 57/2017 and IGCR Rules, 2022 are clear and there is no scope of doubt or ambiguity and hence both the instrument should be read "as it is" and rule of literal construction shall apply - the concessional rate of duty under Notification No. 57/2017-Customs dated 30th June 2017, as amended is available in respect of import of various input and parts for use in manufacture of PCBA and cellular mobile phone which get subsequently scrapped during the manufacturing process subject to the applicability and conditions mentioned in IGCR Rules, 2022 – Ordered accordingly [Read less]

Customs - Benefit of Customs Notification No. 125/2011 - The appellant imported goods declared as 'D&W Chicken Spicy Sausages' and classified them under CTH 16010000. The appellant claimed the benefit of Notification No. 125/2011-Cus. dated 30.12.2011, which provides for an effective rate of duty at 8% for all goods of Chapter 16. However, Note 2 of the said Notification restricted its applicability to goods specified in the Annexure, which included Heading/Sub-Heading 160100 - Whether the appellant's claim for the benefit of Notification No. 125/2011-Cus. is eligible - HELD – There is no dispute regarding the withdrawal... [Read more]

Customs - Benefit of Customs Notification No. 125/2011 - The appellant imported goods declared as 'D&W Chicken Spicy Sausages' and classified them under CTH 16010000. The appellant claimed the benefit of Notification No. 125/2011-Cus. dated 30.12.2011, which provides for an effective rate of duty at 8% for all goods of Chapter 16. However, Note 2 of the said Notification restricted its applicability to goods specified in the Annexure, which included Heading/Sub-Heading 160100 - Whether the appellant's claim for the benefit of Notification No. 125/2011-Cus. is eligible - HELD – There is no dispute regarding the withdrawal of the benefit under Note 2 of Notification No. 125/2011-Cus. for goods falling under Sub-Heading 160100. Therefore, the appellant's claim for the benefit was not in order. The appellant's alternate claim for the benefit of Notification No. 26/2000-Cus. is also rejected as the appellant failed to provide the necessary supporting documents to substantiate the claim – In the matters of exemption claims, all the conditions prescribed in the Notification must be fulfilled, and the appellant's failure to provide the required documents resulted in the rejection of the alternate claim - The appeal filed by the appellant is dismissed [Read less]

Customs - Duty liability of a goods custodian under Section 45(3) of the Customs Act, 1962 - The appellant, a public sector undertaking, was the custodian of certain imported goods that were later found to contain cement blocks instead of the declared high-value items - Department sought to recover the customs duty from the appellant under Section 45(3) of the Act, which holds the custodian liable to pay duty if the imported goods are pilfered while in its custody – HELD - Once the goods are stuffed in a container and sealed, the custodian cannot be held responsible for the contents as long as the seal is intact. If the ... [Read more]

Customs - Duty liability of a goods custodian under Section 45(3) of the Customs Act, 1962 - The appellant, a public sector undertaking, was the custodian of certain imported goods that were later found to contain cement blocks instead of the declared high-value items - Department sought to recover the customs duty from the appellant under Section 45(3) of the Act, which holds the custodian liable to pay duty if the imported goods are pilfered while in its custody – HELD - Once the goods are stuffed in a container and sealed, the custodian cannot be held responsible for the contents as long as the seal is intact. If the seal is found broken and the container is opened, and the goods are pilfered or substituted, then the custodian would be liable under Section 45(3). In this case, the examination reports signed by the customs officers and the appellant's representatives indicated that the seals were found intact and the contents were cement blocks. There was no evidence that the seals were tampered with or that the contents were substituted while the goods were in the appellant's custody. Therefore, the demand of customs duty on the appellant under Section 45(3) cannot be sustained - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Duty and interest demand on ground of forged test reports - Whether the demand of customs duty and interest is valid on the ground that the test reports submitted by the appellant are forged - HELD - As per the CBEC Circular No. 57/1997-Cus dated 31.10.1997, in case of an exporter availing benefits under the DEPB scheme has in-house testing facilities, samples may not be drawn and in-house testing results may be relied upon, for availing the said benefits. However, if such in-house test results are to be relied upon, the exporter must have been awarded with an ISO 9002 certification - The ISO certificate produced... [Read more]

Customs - Duty and interest demand on ground of forged test reports - Whether the demand of customs duty and interest is valid on the ground that the test reports submitted by the appellant are forged - HELD - As per the CBEC Circular No. 57/1997-Cus dated 31.10.1997, in case of an exporter availing benefits under the DEPB scheme has in-house testing facilities, samples may not be drawn and in-house testing results may be relied upon, for availing the said benefits. However, if such in-house test results are to be relied upon, the exporter must have been awarded with an ISO 9002 certification - The ISO certificate produced by the appellant, though showing the effective date as 2006, was actually obtained in 2009 and communicated to the Customs authorities. The ISO certificate is not a condition for advance authorization and the ISO holders are eligible for only procedural relaxation with respect to sampling and testing of export goods. Since the department has drawn samples from all the export goods, the only presumption is that they have not considered the Circular issued by the Board. The appellant has already paid a penalty of Rs. 1,00,000/- under Section 117 of the Customs Act for the same lapse/omission - The substantial right of the exporter cannot be denied on procedural non-compliances and set aside the impugned order - The appeals are allowed and the impugned orders are set aside [Read less]

Central Excise - Adjustment of refund/rebate against earlier demands - Commissioner (Appeals) order confirming adjustment of refunds/rebate sanctioned against demands of earlier years/periods against the appellant - Whether the adjustment of refund/rebate directed by the original authority lacks legal force since the alleged demand had not attained finality – HELD - The reasons attributed in the impugned orders stand set aside in view of the fact that there has been an appeal against the earlier demands and that the earlier appellate order stands set aside by the Chennai Bench. The adjustment of refund/rebate directed by... [Read more]

Central Excise - Adjustment of refund/rebate against earlier demands - Commissioner (Appeals) order confirming adjustment of refunds/rebate sanctioned against demands of earlier years/periods against the appellant - Whether the adjustment of refund/rebate directed by the original authority lacks legal force since the alleged demand had not attained finality – HELD - The reasons attributed in the impugned orders stand set aside in view of the fact that there has been an appeal against the earlier demands and that the earlier appellate order stands set aside by the Chennai Bench. The adjustment of refund/rebate directed by the original authority lacks legal force since, apparently, when the rebate sanction order was passed, followed by an order of adjusting the sanctioned rebate, there was no demand in existence since the alleged demand had not attained finality, which fact is now established by the final order of this Bench - The impugned order upholding the adjustment of sanctioned rebate against the earlier demands is set aside - The appeals are allowed [Read less]

Central Excise - Trading activity amounting to "exempted service" - Department alleged that the assessee was engaged in both manufacturing of vehicles and trading of vehicles through regional sales offices, which constituted "exempted service" under Rule 2(e) of the CENVAT Credit Rules, 2004, requiring reversal of CENVAT credit under Rule 6 – HELD - The assessee was primarily engaged in manufacturing of vehicles at its factory and clearing them on payment of central excise duty. The mere fact that the vehicles were subsequently sold through regional sales offices do not amount to "trading" activity and cannot be treated ... [Read more]

Central Excise - Trading activity amounting to "exempted service" - Department alleged that the assessee was engaged in both manufacturing of vehicles and trading of vehicles through regional sales offices, which constituted "exempted service" under Rule 2(e) of the CENVAT Credit Rules, 2004, requiring reversal of CENVAT credit under Rule 6 – HELD - The assessee was primarily engaged in manufacturing of vehicles at its factory and clearing them on payment of central excise duty. The mere fact that the vehicles were subsequently sold through regional sales offices do not amount to "trading" activity and cannot be treated as an independent "exempted service" for the purposes of Rule 6 of CCR, 2004 - The show cause notices merely proceeded on the assumption that the sale of vehicles through Regional Sales Offices amounts to trading, such presumption is insufficient to invoke the provisions of Rule 6. The Department is required to establish a clear nexus between the input services on which credit was taken and the exempted activity alleged to have been undertaken. The department failed to establish that the assessee was engaged in any trading activity or provision of exempted service using common inputs/input services, and accordingly, the provisions of Rule 6 were not applicable – The artificial bifurcation of the same manufacturing activity so as to invoke credit reversal provisions is impermissible. The demand raised under Rule 6 of the CENVAT Credit Rules is set aside and the appeal is allowed - Applicability of extended period of limitation - The department invoked the extended period of limitation under Section 11A of the Central Excise Act in the first show cause notice, alleging suppression of facts by the assessee – HELD - The relevant transactions were duly reflected in the statutory records and financial statements of the assessee, which were available to the department during audit. Mere failure to adopt a particular interpretation of law cannot be treated as suppression of facts. The invocation of extended period of limitation is not justified - The demand raised under the first show cause notice invoking the extended period of limitation is unsustainable, and consequently, the penalties imposed are also set aside. [Read less]

Service Tax - Manpower Recruitment or Supply Agency Services – Activity of transporting tractors from the manufacturer's factory to the dealers' premises – Dept alleged appellant provided Manpower Recruitment or Supply Agency Services to the manufacturer and was thus liable for service tax – HELD - The activity undertaken by the appellants did not fall within the scope of 'Manpower Recruitment or Supply Agency Services'. The terms of the contract clearly established that it was a transportation contract and not for the supply of manpower. The amount charged by the appellants was on a per kilometer basis, which indica... [Read more]

Service Tax - Manpower Recruitment or Supply Agency Services – Activity of transporting tractors from the manufacturer's factory to the dealers' premises – Dept alleged appellant provided Manpower Recruitment or Supply Agency Services to the manufacturer and was thus liable for service tax – HELD - The activity undertaken by the appellants did not fall within the scope of 'Manpower Recruitment or Supply Agency Services'. The terms of the contract clearly established that it was a transportation contract and not for the supply of manpower. The amount charged by the appellants was on a per kilometer basis, which indicated that the consideration was not linked to the number of persons supplied, as is required for a service to be classified under 'Manpower Recruitment or Supply Agency Services'. However, a penalty of Rs.10,000/- on each of the appellants is imposed for violation of the provisions of Section 70 of the Finance Act, 1994 by not getting themselves registered under the said service and not filing the returns – The appeal is partly allowed [Read less]

Central Excise - Removal of capital goods under Rule 3(5) of the CENVAT Credit Rules, 2004 - The appellant raised invoices for sale of moulds to customers but the moulds continued to remain within the factory premises and were used in the manufacture of final products - Department contended that this amounted to removal of capital goods under Rule 3(5) and the appellant was required to reverse the CENVAT credit availed on such moulds - HELD – The mere issuance of invoices without physical movement of goods from the factory does not amount to removal under Central Excise law. When capital goods remain within the factory a... [Read more]

Central Excise - Removal of capital goods under Rule 3(5) of the CENVAT Credit Rules, 2004 - The appellant raised invoices for sale of moulds to customers but the moulds continued to remain within the factory premises and were used in the manufacture of final products - Department contended that this amounted to removal of capital goods under Rule 3(5) and the appellant was required to reverse the CENVAT credit availed on such moulds - HELD – The mere issuance of invoices without physical movement of goods from the factory does not amount to removal under Central Excise law. When capital goods remain within the factory and are used in the manufacture of final products, reversal of CENVAT credit is not required - Raising invoices for sale of moulds without physical movement of the moulds from the factory does not amount to removal of capital goods under Rule 3(5) of the CENVAT Credit Rules, 2004 – When the moulds continued to remain within the factory and were used in the manufacture of final products, the appellant was not required to reverse the CENVAT credit availed on such moulds - the impugned order is set aside and the appeal is allowed - Whether the extended period of limitation has been correctly invoked – The extended period of limitation was wrongly invoked as the issue involved interpretation of law and there was no evidence of fraud, suppression or intention to evade duty on the part of the appellant. the dispute in the present case essentially relates to interpretation of Rule 3(5) of the CENVAT Credit Rules and the meaning of the term “removal”, and when the issue is interpretational and the relevant facts are available in statutory records, invocation of the extended period of limitation is not justified - Interest and penalty - Since the demand of reversal of CENVAT credit is held to be unsustainable, the interest under Section 11AA/11AB and penalties under Section 11AC of the Central Excise Act are also not sustainable. The penalties could not be imposed as the essential ingredients of mens rea required for invoking penal provisions were absent in the present case. [Read less]

Customs - Conversion of Shipping Bills from Drawback to EPCG – Appellant seeking amendment of Shipping Bills or issuance of 'No Objection Certificate' under Section 149 of the Customs Act, 1962 to convert their exports from Drawback Shipping Bills to Drawback Shipping Bills with EPCG Authorization. The Commissioner of Customs rejected the claim for conversion, citing that the Shipping Bills in question were not under the EPCG scheme and hence, the required verification was not done - Whether the mention of EPCG license number on the Shipping Bills was mandatory or whether the appellant could seek to explain the factum of... [Read more]

Customs - Conversion of Shipping Bills from Drawback to EPCG – Appellant seeking amendment of Shipping Bills or issuance of 'No Objection Certificate' under Section 149 of the Customs Act, 1962 to convert their exports from Drawback Shipping Bills to Drawback Shipping Bills with EPCG Authorization. The Commissioner of Customs rejected the claim for conversion, citing that the Shipping Bills in question were not under the EPCG scheme and hence, the required verification was not done - Whether the mention of EPCG license number on the Shipping Bills was mandatory or whether the appellant could seek to explain the factum of export through other contemporaneous and supporting evidences – HELD - The Appellant appears to have approached the Hon’ble High Court and the Hon’ble High Court after quashing the order of Commissioner framed the legal issue to be answered and the Department did not raise any objection regarding the non-verification of the Shipping Bills or the procedure laid down under the Customs Act. Further, the Appellant had canvassed that there was no impact on the duty element as the Shipping Bills were endorsed to the Appellant through 'No Objection' letters by M/s. Glovis India Ltd., which was not examined by the Commissioner – The Circular No.36/2010 dt. 23.09.2010 and Circular No.6/2002 dt. 23.01.2002 permit the conversion of Shipping Bills from one Export Promotion Scheme to another, subject to the scale of examination prescribed. It is not the case of the Revenue that the Appellant was responsible for preventing the Customs authorities from carrying out the physical examination, as it was selected by the Risk Management System - The non-examination of Shipping Bills for some procedural requirements cannot be fatal to a bona fide claimant like the Appellant - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Classification of imported goods as "Bearing-of bore diameter exceeding 100mm" under CTH 84822090 or as "Parts and accessories of motor vehicles" under CTH 87087000 - Appellant imported goods described as "HA RR GEN 1 ASSY (BRG ASSY)", "MC FRT BRG ASSY" and "RD ASSY(BRG ASSY)" and self-assessed the classification under CTH 84822090 as "Bearing-of bore diameter exceeding 100mm" - Department proposed to reclassify the goods under CTH 87087000 as "Parts and accessories of motor vehicles" and demanded the short collected duty along with interest and penalties - Whether the imported goods are classifiable under CTH 84... [Read more]

Customs - Classification of imported goods as "Bearing-of bore diameter exceeding 100mm" under CTH 84822090 or as "Parts and accessories of motor vehicles" under CTH 87087000 - Appellant imported goods described as "HA RR GEN 1 ASSY (BRG ASSY)", "MC FRT BRG ASSY" and "RD ASSY(BRG ASSY)" and self-assessed the classification under CTH 84822090 as "Bearing-of bore diameter exceeding 100mm" - Department proposed to reclassify the goods under CTH 87087000 as "Parts and accessories of motor vehicles" and demanded the short collected duty along with interest and penalties - Whether the imported goods are classifiable under CTH 84822090 as "Bearing-of bore diameter exceeding 100mm" or under CTH 87087000 as "Parts and accessories of motor vehicles" – HELD - The impugned goods are used solely as parts of motor vehicles. The Supreme Court in G.S. Auto International Ltd. and M/s. Cast Metal Industries (P) Ltd. cases has held that for determining the classification of parts or accessories which are suitable for use solely or primarily with articles of Chapter Heading 87.08 pertaining to parts and accessories of motor vehicles, the relevant test is whether the goods are suitable for use solely or primarily with articles of Chapter Headings 87.01 to 87.05. Since the impugned goods are used solely as parts of motor vehicles, they are appropriately classifiable under CTH 87087000 - The imported goods are appropriately classifiable under CTH 87087000 as "Parts and accessories of motor vehicles". However, the penalties imposed on the appellant is set aside on the ground that the issue involved interpretation in classifying the goods and therefore, the question of imposing penalties would not arise - the substantive issue of classification is decided in favour of Revenue and against the Appellant. The issue of imposition of penalties is decided in favour of the Appellant and against Revenue - The appeal is partly allowed [Read less]

Customs - Importer status under Section 2(26) of Customs Act, Misuse of the DEEC scheme – Whether the appellants are importers when they neither filed the Bills of Entry nor took delivery of the goods and their role was confined to furnishing advance licences, end-use bonds and bank guarantees - HELD - Section 2(26) of the Customs Act defines “importer” as any owner or person holding himself out to be the importer at any time between importation and clearance for home consumption – The statutory framework of Sections 46 and 47, the person who files the Bill of Entry, subscribes to the declaration as to the truth of... [Read more]

Customs - Importer status under Section 2(26) of Customs Act, Misuse of the DEEC scheme – Whether the appellants are importers when they neither filed the Bills of Entry nor took delivery of the goods and their role was confined to furnishing advance licences, end-use bonds and bank guarantees - HELD - Section 2(26) of the Customs Act defines “importer” as any owner or person holding himself out to be the importer at any time between importation and clearance for home consumption – The statutory framework of Sections 46 and 47, the person who files the Bill of Entry, subscribes to the declaration as to the truth of its contents, and seeks out-of-charge clearance is legally treated as importer for the purposes of assessment and recovery of duty - The appellants cannot be treated as "importers" within the meaning of Section 2(26) as they did not file the Bills of Entry or subscribe to the declarations. Therefore, the duty demand under Section 28 against them cannot be sustained - However, the appellants' role in facilitating the clearance by providing non-transferable licences and irregular bank guarantees, which enabled the misuse of the DEEC scheme, warrants imposition of penalty under Section 112(a) for their contributory and fraudulent conduct, even though misdeclaration is not established against them. Accordingly, the duty demand, interest, confiscation and redemption fine are set aside, but the penalty of Rs.10,00,000/- each under Section 112(a) is sustained - the appeals are partly allowed - Misdeclaration under Section 111(m) - The investigation revealed misdeclaration of goods, but the evidence does not establish that the appellants instructed or knowingly participated in the misdescription – HELD - Misdeclaration under Section 111(m) is not established against the appellants, as the act of filing the Bills of Entry and subscribing to the declarations was done by the other entities, and there is no evidence to show the appellants' involvement in the misdescription - Confiscation and Redemption Fine - The goods are not physically available for confiscation, and the confiscability of the goods is not legally sustainable against the appellants - HELD - In the absence of sustainable confiscation under Sections 111(d), (m) or (o), the very foundation for imposition of redemption fine fails. Consequently, the redemption fine imposed under Section 125 of the Customs Act is unsustainable and is set aside. [Read less]

Chhattisgarh Molasses Control and Regulation Rules, 2022 - Statutory interpretation, Legislative competence, intoxicating liquor vs non-intoxicant substances - Petitioners challenged the Chhattisgarh Molasses Control and Regulation Rules, 2022 on the ground that they are ultra vires the Constitution as Molasses, which is not an intoxicant and is used for non-intoxicating purposes like cattle feed, gudakhu etc., has been brought under the regulatory framework of the Excise Act - Whether the State government has the legislative competence under the Excise Act to regulate the trade and use of Molasses, which is not an 'intoxi... [Read more]

Chhattisgarh Molasses Control and Regulation Rules, 2022 - Statutory interpretation, Legislative competence, intoxicating liquor vs non-intoxicant substances - Petitioners challenged the Chhattisgarh Molasses Control and Regulation Rules, 2022 on the ground that they are ultra vires the Constitution as Molasses, which is not an intoxicant and is used for non-intoxicating purposes like cattle feed, gudakhu etc., has been brought under the regulatory framework of the Excise Act - Whether the State government has the legislative competence under the Excise Act to regulate the trade and use of Molasses, which is not an 'intoxicating liquor' or 'excisable article' under the Act, and whether the Rules of 2022 are valid and intra vires the Act - HELD - The Excise Act is a legislation dealing with intoxicating liquor and intoxicating drugs, and Molasses, which is a by-product of the sugar industry and is not fit for human consumption in its raw form, cannot be equated with 'intoxicant', 'intoxicating liquor' or 'excisable article' as defined under the Excise Act. Bringing Molasses within the regulatory fold of the Excise Act, without statutory backing, amounts to over-extension of legislative power by the State - The expression "any other base" used in Section 8(c) of the Excise Act cannot be stretched to include Molasses in its raw, non-intoxicant form, as that would override the definition provisions, expand the Act beyond its object, and violate settled principles of statutory interpretation. Further, the Rules of 2022 extend control to non-intoxicant uses, impose licensing and duty, and regulate ordinary trade activity, which clearly travels beyond the scope of the Excise Act and is therefore ultra vires. The Chhattisgarh Molasses Control and Regulation Rules, 2022 are ultra vires the Constitution - The writ petitions are allowed [Read less]

GST - Demand GST with retrospective effect on supply of insurance policies to SEZ units - Demand premised on the basis that, by virtue of the Finance Act, 2021, as notified by the Central Government under Notification No. 27/2023-Central Tax dated 27 July 2023, the appointed day as fixed was 1 October 2023 for the amendment to Section 16 of the IGST Act, 2017 to be brought into force - Whether the proper officer had the jurisdiction to issue the impugned show cause notices to retrospectively demand tax prior to the amendment to Section 16 with effect from 01 October 2023 – HELD – Prima facie, there is much substance in... [Read more]

GST - Demand GST with retrospective effect on supply of insurance policies to SEZ units - Demand premised on the basis that, by virtue of the Finance Act, 2021, as notified by the Central Government under Notification No. 27/2023-Central Tax dated 27 July 2023, the appointed day as fixed was 1 October 2023 for the amendment to Section 16 of the IGST Act, 2017 to be brought into force - Whether the proper officer had the jurisdiction to issue the impugned show cause notices to retrospectively demand tax prior to the amendment to Section 16 with effect from 01 October 2023 – HELD – Prima facie, there is much substance in the contention of the petitioners that the designated officer would not have jurisdiction to retrospectively levy tax on the petitioners in respect of the supply in question, namely the sale of insurance policies to the SEZ units – Further, in view of the fact that Section 2(93) of the CGST Act defines the "recipient" of supply of goods or services or both, to be the person who is liable to pay the consideration for such supply. In the present case, it is the SEZ units which have subscribed to the policies of the petitioners, albeit for the benefit of their employees, who are integral to the SEZ unit and the overall SEZ scheme - Arguable issues are raised by the petitioners, which would require consideration at the final hearing. The petitioners would be required to be granted interim protection. Pending the hearing and final disposal of the petitions, the impugned order arising from the show cause notices in question in all these petitions shall remain stayed – Ordered accordingly [Read less]

Customs - Confiscation of imported vehicle declared as used but found to be new - The respondent imported a Toyota Land Cruiser Prado TZ-G Right-Hand Drive vehicle which was declared as a used vehicle in the import documents. Upon examination, the vehicle was found to be brand new and unused - Department concluded that the vehicle had been mis-declared and that the conditions prescribed under the Import Policy, Motor Vehicles Act, 1988 and Central Motor Vehicles Rules, 1989 for import of new vehicles were not complied with - Whether the imported vehicle, which was declared as used but found to be new and imported without c... [Read more]

Customs - Confiscation of imported vehicle declared as used but found to be new - The respondent imported a Toyota Land Cruiser Prado TZ-G Right-Hand Drive vehicle which was declared as a used vehicle in the import documents. Upon examination, the vehicle was found to be brand new and unused - Department concluded that the vehicle had been mis-declared and that the conditions prescribed under the Import Policy, Motor Vehicles Act, 1988 and Central Motor Vehicles Rules, 1989 for import of new vehicles were not complied with - Whether the imported vehicle, which was declared as used but found to be new and imported without complying with the relevant regulatory requirements, is liable for confiscation under Section 111(d) of the Customs Act, 1962 or the goods should be released on payment of redemption fine and applicable duties - HELD - While the imported vehicle is liable for confiscation under Section 111(d) of the Customs Act, 1962 since it was imported in violation of the regulatory requirements, the order of absolute confiscation is excessive and disproportionate. The goods cannot be treated as prohibited goods in the strict sense, but at best as goods imported in violation of regulatory conditions. In such cases, the adjudicating authority should ordinarily grant an option for redemption under Section 125 of the Customs Act, unless there are exceptional reasons to deny such an option. The order of absolute confiscation is set aside and the respondent are directed be given an option to redeem the vehicle on payment of appropriate redemption fine and applicable customs duties and interest - The confiscation of the imported vehicle under Section 111(d) of the Customs Act, 1962 is upheld, but set aside the order of absolute confiscation with an option to redeem the vehicle on payment of a redemption fine along with applicable customs duties and interest – The appeal is partly allowed [Read less]

GST - Cancellation of GST Registration for non-filing of GST returns for a continuous period of six months – HELD - As per the proviso to Rule 22(4) of the CGST Rules, 2017, if the person who has been served with a show-cause notice under Section 29(2)(c) is ready and willing to furnish all the pending returns and make full payment of the tax dues along with applicable interest and late fee, the officer can drop the proceedings and pass an order for restoration of the GST registration - Considering the fact that cancellation of registration entails serious civil consequences, the respondent authorities are directed to co... [Read more]

GST - Cancellation of GST Registration for non-filing of GST returns for a continuous period of six months – HELD - As per the proviso to Rule 22(4) of the CGST Rules, 2017, if the person who has been served with a show-cause notice under Section 29(2)(c) is ready and willing to furnish all the pending returns and make full payment of the tax dues along with applicable interest and late fee, the officer can drop the proceedings and pass an order for restoration of the GST registration - Considering the fact that cancellation of registration entails serious civil consequences, the respondent authorities are directed to consider the case of the petitioners on receipt of an application and all the required documents, seeking restoration of the GST registration. The petitioners shall be liable to make payment of all the arrears, i.e., tax, penalty, interest and late fee - The writ petition is disposed of [Read less]

Entry Tax - Exemption from Entry Tax for goods imported into Special Economic Zone (SEZ) - Whether the goods imported by the petitioner's unit situated in the SEZ are eligible for exemption from entry tax – HELD - The Commissioner has now decided that the goods in question, having been imported by the petitioner's unit situated in the Falta Special Economic Zone for authorized operations, are eligible for exemption from entry tax under Section 27(i) read with Section 30 of the West Bengal Special Economic Zone Act, 2003. In view of this decision, nothing further is required to be adjudicated - The original order of asses... [Read more]

Entry Tax - Exemption from Entry Tax for goods imported into Special Economic Zone (SEZ) - Whether the goods imported by the petitioner's unit situated in the SEZ are eligible for exemption from entry tax – HELD - The Commissioner has now decided that the goods in question, having been imported by the petitioner's unit situated in the Falta Special Economic Zone for authorized operations, are eligible for exemption from entry tax under Section 27(i) read with Section 30 of the West Bengal Special Economic Zone Act, 2003. In view of this decision, nothing further is required to be adjudicated - The original order of assessment against the petitioner would not survive and the same is set aside along with all demand notices. In SLP(C) No. 15952/2025, the petition is dismissed as not pressed with liberty to avail the remedy under the amended Settlement under West Bengal Sales Tax (Settlement of Dispute) (Amendment) Act, 2025 – Ordered accordingly [Read less]

Central Excise – Input Service Distributor, Denial of CENVAT credit on input services - Manufacturer of dutiable and exempted goods - Eligibility of CENVAT credit under Rule 6(5) of CENVAT Credit Rules, 2004 - Appellants manufacturers of both dutiable and exempted goods, availed CENVAT credit of service tax paid on various input services, including those services covered under Rule 6(5) of the CENVAT Credit Rules, 2004 - Department denied credit taken on the ground that the appellants did not maintain separate accounts for dutiable and exempted goods, as required under Rule 6(3) of the Rules – Whether the appellants ar... [Read more]

Central Excise – Input Service Distributor, Denial of CENVAT credit on input services - Manufacturer of dutiable and exempted goods - Eligibility of CENVAT credit under Rule 6(5) of CENVAT Credit Rules, 2004 - Appellants manufacturers of both dutiable and exempted goods, availed CENVAT credit of service tax paid on various input services, including those services covered under Rule 6(5) of the CENVAT Credit Rules, 2004 - Department denied credit taken on the ground that the appellants did not maintain separate accounts for dutiable and exempted goods, as required under Rule 6(3) of the Rules – Whether the appellants are eligible to avail CENVAT credit on the disputed input services, which are covered under Rule 6(5) of the CCR 2004 - HELD - The disputed input services, such as garden maintenance, car rental, clearing and forwarding, EPABX repairs and maintenance, computer maintenance, software development, and lift maintenance, are covered under the category of "management, maintenance or repair services" specified in Rule 6(5) of the CCR 2004. The Rule 6(5) contains a non-obstante clause, which provides that the restrictions or conditions under Rule 6(3) are not applicable to the services covered under Rule 6(5). Therefore, the appellants are entitled to avail the entire CENVAT credit of service tax paid on the disputed input services, even if they were used for the manufacture of both dutiable and exempted goods - Further, the appellants had already reversed the CENVAT credit on certain disputed services out of abundant caution, which should have been considered by the department under the retrospective amendment made to the CCR 2004 through the Finance Act, 2010 - The impugned order confirming the demand of 10% of the value of exempted goods under Rule 6(3)(b) of the CCR 2004 is not sustainable. The appellants are eligible to avail the CENVAT credit on the disputed input services covered under Rule 6(5) of the CCR 2004 – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Fraudulently obtaining SEIS scrips - The appellant (a company) obtained SEIS scrips by mis-declaring the nature of services it provided as "Management Consulting Services" under CPC 86503, when the services were actually "Information Technology and IT Enabled Services" under CPC Division 84. The DGFT later cancelled the SEIS scrips. The Department initiated proceedings under Section 28AAA of the Customs Act to recover the customs duty relatable to the utilization of the fraudulently obtained SEIS scrips – HELD - The provisions of Section 28AAA of the Customs Act are squarely applicable in the present case. Once... [Read more]

Customs - Fraudulently obtaining SEIS scrips - The appellant (a company) obtained SEIS scrips by mis-declaring the nature of services it provided as "Management Consulting Services" under CPC 86503, when the services were actually "Information Technology and IT Enabled Services" under CPC Division 84. The DGFT later cancelled the SEIS scrips. The Department initiated proceedings under Section 28AAA of the Customs Act to recover the customs duty relatable to the utilization of the fraudulently obtained SEIS scrips – HELD - The provisions of Section 28AAA of the Customs Act are squarely applicable in the present case. Once the DGFT had cancelled the SEIS scrips void ab-initio, it is conclusive that the instrument was never valid, as the appellant had wilfully mis-stated the nature of services in the application filed before the DGFT - The Tribunal in the decisions in Fashion Accessories and Jeena & Company, held that the Customs authorities can initiate action under Section 28AAA after the DGFT has cancelled the scrips. The confiscation of goods under Section 111(m) and 111(o) and the imposition of penalties under Sections 112(a), 114AB and 114AA is upheld considering the appellant's attempt to evade customs duty by fraudulently obtaining the SEIS scrips. However, the penalties imposed on the Chief Financial Officer is set aside in view of his voluntary disclosure and cooperation during the investigation – Ordered accordingly [Read less]

Service Tax - Requirement of authorization from port authority for provision of port services prior to 01.07.2010 - Appellant was providing various services such as stevedoring, cargo handling, supply of equipment, etc. within the port premises. The department sought to levy service tax on these services under the category of "Port Services" - Whether the appellant was required to have specific authorization from the port authority to provide these services prior to the amendment in the definition of "Port Services" w.e.f. 01.07.2010 - HELD - Prior to the amendment in the definition of "Port Services" w.e.f. 01.07.2010, sp... [Read more]

Service Tax - Requirement of authorization from port authority for provision of port services prior to 01.07.2010 - Appellant was providing various services such as stevedoring, cargo handling, supply of equipment, etc. within the port premises. The department sought to levy service tax on these services under the category of "Port Services" - Whether the appellant was required to have specific authorization from the port authority to provide these services prior to the amendment in the definition of "Port Services" w.e.f. 01.07.2010 - HELD - Prior to the amendment in the definition of "Port Services" w.e.f. 01.07.2010, specific authorization from the port authority was a mandatory requirement for a person to be liable to pay service tax under this category. A license or permission to operate within the port premises does not amount to authorization by the port authority. The appellant was not authorized by the port to provide the services, and therefore, the services provided by the appellant cannot be classified as "Port Services" for the period prior to 01.07.2010 – The extended period of limitation cannot be invoked in this case as there was widespread confusion in the trade regarding the interpretation of the relevant legal provisions - The demand of service tax, interest and penalties are set aside and the appeal is allowed [Read less]

Kerala Value Added Tax Act, 2003 – Taxability of income from transfer of patent rights - Revenue of case transfer of rights constituted income from the transfer of patent rights - Whether the income received by the respondent from the transfer of rights over certain brand names and product formulas is taxable under Entry 68 of the 3rd Schedule of the Kerala VAT Act – HELD – The factual aspects of the case require closer examination. While the agreement referred to the assessee as the 'legal brand owner' of 'Musli Power Xtra', it was not clear if the other brand names were also covered by any patents or trademarks hel... [Read more]

Kerala Value Added Tax Act, 2003 – Taxability of income from transfer of patent rights - Revenue of case transfer of rights constituted income from the transfer of patent rights - Whether the income received by the respondent from the transfer of rights over certain brand names and product formulas is taxable under Entry 68 of the 3rd Schedule of the Kerala VAT Act – HELD – The factual aspects of the case require closer examination. While the agreement referred to the assessee as the 'legal brand owner' of 'Musli Power Xtra', it was not clear if the other brand names were also covered by any patents or trademarks held by the assessee. The Deputy Commissioner's order had referred to a patent certificate issued to the assessee, but this was not considered by the Tribunal – Further, the drafting of the agreement is ambiguous, particularly regarding the duration of the rights transferred to LMP. The factual aspects required closer examination to determine whether the income received by the original assessee was indeed taxable under the provisions of Entry 68 of the 3rd Schedule of the Kerala VAT Act - Considering the nebulous nature of the facts, the Tribunal order is set aside and matter is remanded back to the Tribunal for a fresh consideration – The petition is allowed by remand [Read less]

Kerala Value Added Tax Act, 2003 - Tax exemption for village industries - The petitioner, a cooperative society recognized and financed by the Kerala Khadi and Village Industries Board, is engaged in manufacturing 'earthen roofing tiles'. The authorities sought to tax the products at 4% under the 'Kiln-burnt flooring, roofing and earthen tiles' category, instead of granting exemption under the 'pottery' category as claimed by the petitioner - Whether the products of the petitioner, being recognized and financed by the Khadi Board, are eligible for exemption from VAT under Entry No.55 of the First Schedule of the Kerala VAT... [Read more]

Kerala Value Added Tax Act, 2003 - Tax exemption for village industries - The petitioner, a cooperative society recognized and financed by the Kerala Khadi and Village Industries Board, is engaged in manufacturing 'earthen roofing tiles'. The authorities sought to tax the products at 4% under the 'Kiln-burnt flooring, roofing and earthen tiles' category, instead of granting exemption under the 'pottery' category as claimed by the petitioner - Whether the products of the petitioner, being recognized and financed by the Khadi Board, are eligible for exemption from VAT under Entry No.55 of the First Schedule of the Kerala VAT Act, 2003 as 'pottery', or whether they should be taxed under Entry No.18 of the Third Schedule as 'Kiln-burnt flooring, roofing and earthen tiles' – HELD - The Entry No.55 of the First Schedule, which provides exemption for products notified by the Khadi and Village Industries Commission and manufactured by units approved by the Khadi Board, should be interpreted liberally to further the objective of promoting village industries. The word 'pottery' has a wide meaning encompassing all objects made of clay and hardened by heat, including the petitioner's 'earthen roofing tiles' - The primary purpose of Entry No.55 is to support and develop Khadi and Village Industries, which would be undermined if a narrow interpretation is adopted - The petitioner entitled to exemption from tax under Entry No.55 of the First Schedule of the KVAT Act, 2003 for its 'earthen roofing tiles' as 'pottery' – The impugned orders are set aside and the revisions are allowed [Read less]

Service Tax – Issue of SCN without pre-show cause notice consultation - Mandatory requirements under Sections 37B and 37C of the Central Excise Act, 1944 - Petitioner, a company running non-air-conditioned rooftop restaurants, received a show cause notice demanding service tax. The petitioner challenged the notice, contending that it was issued without complying with the mandatory requirements under Sections 37B and 37C of the Central Excise Act, 1944 and the circulars issued by the CBEC requiring pre-show cause notice consultation - HELD – The impugned show cause notice was issued in clear breach of the mandatory requ... [Read more]

Service Tax – Issue of SCN without pre-show cause notice consultation - Mandatory requirements under Sections 37B and 37C of the Central Excise Act, 1944 - Petitioner, a company running non-air-conditioned rooftop restaurants, received a show cause notice demanding service tax. The petitioner challenged the notice, contending that it was issued without complying with the mandatory requirements under Sections 37B and 37C of the Central Excise Act, 1944 and the circulars issued by the CBEC requiring pre-show cause notice consultation - HELD – The impugned show cause notice was issued in clear breach of the mandatory requirements under Sections 37B and 37C of the Central Excise Act, 1944 and the circulars issued by the CBEC. The circulars made pre-show cause notice consultation mandatory for demands above Rs. 50 lakhs, except for preventive or offence-related cases - The respondent has completely overlooked the requirements of the circulars while issuing the impugned notice. The impugned show cause notice is quashed and the respondent is directed to grant the petitioner an opportunity of a hearing by adopting a pre-consultation process before issuing any fresh show cause notice - The writ petition is allowed [Read less]

GST - Applicability of reverse charge liability under Notification No. 13/2017-Central Tax (Rate) on payment made to Government of Kerala under Section 27A of Kerala Conservation of Paddy Land and Wetland Act 2018 – Petitioner filed an application for Advance Ruling seeking ruling on whether the Reverse Charge liability under Notification No. 13/2017-CT (Rate) dated 28.06.2017 is attracted on the payment made to the Govt of Kerala under Section 27A of Kerala Conservation of Paddy Land and Wetland Act 2018 for change of description of land from wetland to ordinary land and for permission for construction of office complex... [Read more]

GST - Applicability of reverse charge liability under Notification No. 13/2017-Central Tax (Rate) on payment made to Government of Kerala under Section 27A of Kerala Conservation of Paddy Land and Wetland Act 2018 – Petitioner filed an application for Advance Ruling seeking ruling on whether the Reverse Charge liability under Notification No. 13/2017-CT (Rate) dated 28.06.2017 is attracted on the payment made to the Govt of Kerala under Section 27A of Kerala Conservation of Paddy Land and Wetland Act 2018 for change of description of land from wetland to ordinary land and for permission for construction of office complex – Petitioner contends that the lower Authorities erred in holding that the petitioner’s activity cannot be treated as 'neither a supply of goods nor a supply of service' in terms of Notification No. 14/2017-CT (Rate) dated 28.06.2017 as amended - HELD - The Authority for Advance Ruling and the Appellate Authority for Advance Ruling had not adequately considered the first limb of the petitioner's argument, i.e., whether the payment made under Section 27A of the Kerala Conservation of Paddy Land and Wetland Act 2018 falls within the ambit of Section 7(1) of the CGST Act - While the authorities had answered the second limb, i.e., the exemption under the notification, the question of whether the activity falls within the purview of Section 7(1) of the CGST Act was not properly addressed - The orders of the Kerala Authority for Advance Ruling and the Appellate Authority for Advance Ruling are set aside and the matter is remitted back to the Authority for Advance Ruling to reconsider the petitioner's application, addressing both the issues raised – The writ petition is allowed [Read less]

GST – Reliance on missing documents seized during investigation – HELD - Respondents have failed to furnish the seized documents of the missing files to enable the petitioner to submit a detailed and effective reply for proper and unbiased adjudication after fair opportunity of hearing to the petitioner. The missing files, originals of which are not available with the department, cannot be relied upon in the adjudication proceedings. The Department will rely on the remaining files that were handed over to the petitioner earlier - The grievance of the petitioner relating to adjudication proceedings relying upon certain ... [Read more]

GST – Reliance on missing documents seized during investigation – HELD - Respondents have failed to furnish the seized documents of the missing files to enable the petitioner to submit a detailed and effective reply for proper and unbiased adjudication after fair opportunity of hearing to the petitioner. The missing files, originals of which are not available with the department, cannot be relied upon in the adjudication proceedings. The Department will rely on the remaining files that were handed over to the petitioner earlier - The grievance of the petitioner relating to adjudication proceedings relying upon certain seized documents, originals of which are missing with the department, has been duly addressed. The adjudication proceedings can continue on the basis of other available materials with the department, of course with due opportunity to the petitioner to furnish its reply and compliance of the opportunity of hearing - The writ petition is disposed of [Read less]

GST - "Governmental Authority" or "Governmental Entity" - Applicable GST rate on work contracts executed for Tirumala Tirupati Devasthanams (TTD) - Dept contention that the applicable GST rate is 18% after July 1, 2022, whereas the petitioners-contractors claimed the rate should be 12% throughout the period from July 1, 2017 to July 1, 2022 - Whether the TTD can be considered a "Governmental Authority" or "Governmental Entity" under Notification No.11 of 2017, thereby entitling the contractors to the reduced 12% GST rate on the work contracts executed for TTD - HELD - The TTD is established by an Act of the State Legislatu... [Read more]

GST - "Governmental Authority" or "Governmental Entity" - Applicable GST rate on work contracts executed for Tirumala Tirupati Devasthanams (TTD) - Dept contention that the applicable GST rate is 18% after July 1, 2022, whereas the petitioners-contractors claimed the rate should be 12% throughout the period from July 1, 2017 to July 1, 2022 - Whether the TTD can be considered a "Governmental Authority" or "Governmental Entity" under Notification No.11 of 2017, thereby entitling the contractors to the reduced 12% GST rate on the work contracts executed for TTD - HELD - The TTD is established by an Act of the State Legislature and is controlled by the Government of Andhra Pradesh with 100% participation. Further, the TTD was entrusted with the functions of a Gram Panchayat under the Andhra Pradesh Panchayat Raj Act, 1994. Therefore, the TTD meets the requirements to be categorized as a "Governmental Authority" or "Governmental Entity" under the relevant GST notifications. However, the question of whether the specific works executed by the petitioners are of the nature covered under the notifications for the reduced 12% GST rate is a question of fact that needs to be examined by the Assessing Authorities - The matters are remanded back to the respective Assessing Authorities to provide an opportunity of hearing to the petitioners and determine if they are entitled to the benefit of the 12% GST rate as per the GST Notifications - The writ petitions are disposed of [Read less]

GST - Extension of limitation period for filing appeal under Notification No.53/2023-CT, dated 02.11.2023 - Petitioner filed an appeal after the expiry of the statutory time limit, relying on a notification extending the time limit for filing appeals – Rejection of appeal on the ground that the extension was only applicable if the appeal involved a tax dispute, and not just a dispute over penalty and interest – HELD – The Notification No.53/2023 does not stipulate that an appeal filed, under the extended period of time, would be maintainable only if the tax amounts are disputed or that the tax amounts also should be ... [Read more]

GST - Extension of limitation period for filing appeal under Notification No.53/2023-CT, dated 02.11.2023 - Petitioner filed an appeal after the expiry of the statutory time limit, relying on a notification extending the time limit for filing appeals – Rejection of appeal on the ground that the extension was only applicable if the appeal involved a tax dispute, and not just a dispute over penalty and interest – HELD – The Notification No.53/2023 does not stipulate that an appeal filed, under the extended period of time, would be maintainable only if the tax amounts are disputed or that the tax amounts also should be disputed. As there is no such stipulation, the view taken by the Appellate Authority is not maintainable - The order of rejection of appeal by the Appellate Authority, is set aside. The appellate authority to consider the petitioner's appeal on merits. Since the appeal filed by the petitioner was found to be maintainable within the extended time limit, the garnishee proceedings are set aside – The writ petition is allowed [Read less]

The denial of concessional tax rate on account of wrongful availment of input tax credit is not justified. The authorities are not expected to impose a higher tax liability merely due to an inadvertent mistake by the assessee.

GST – Maharashtra AAR - Supply of printed books and study materials – Applicant produces and supplies textbooks, teachers' handbooks, workbooks, dictionaries, supplementary books, journals, integrated and bilingual textbooks, and other educational materials - Whether the printing and supply of textbooks in other languages, big books or large printed textbooks, where the bureau does not hold the copyright, amounts to supply of goods or services, and the applicable tax rate - HELD - The taxability of the supplies by the applicant depends on whether the content/intellectual property rights of the books and materials are o... [Read more]

GST – Maharashtra AAR - Supply of printed books and study materials – Applicant produces and supplies textbooks, teachers' handbooks, workbooks, dictionaries, supplementary books, journals, integrated and bilingual textbooks, and other educational materials - Whether the printing and supply of textbooks in other languages, big books or large printed textbooks, where the bureau does not hold the copyright, amounts to supply of goods or services, and the applicable tax rate - HELD - The taxability of the supplies by the applicant depends on whether the content/intellectual property rights of the books and materials are owned by the applicant or provided by the customer. If the content of the book i.e. its Intellectual property rights are with the printer/publisher and they print the said books/pamphlets with their own paper, ink and other materials and supplies the same in the market, it would be considered as a supply of goods and classified under the respective HSN. Since the applicant does not hold the copyright over the content, the principal supply is the printing service, and not the supply of goods - The supply will be treated as supply of services under SAC 9989 and chargeable to 18% GST – Ordered accordingly - Whether the printing and supply of online admission booklets on the orders of the Directorate of Education amounts to supply of goods or services, and the applicable tax rate – HELD - The supply will be treated as supply of printing services under SAC 9989 and chargeable to 18% GST, as the content is provided by the customer, and the applicant is only providing the printing service - Whether the sale/supply of books under open book sales or any books or study materials or special editions other than textbooks, where the content is owned by others or the applicant, results in supply of goods or services, and the applicable tax rate – HELD - If the content is owned by the applicant, the supply would be treated as supply of goods and exempt from GST under Notification 2/2017 CT (Rate). If the content is provided by the customer, the supply will be treated as supply of printing services under SAC 9989 and chargeable to 18% GST. [Read less]

GST – Maharashtra AAR - Taxability of recoveries made from employees towards canteen facilities and transportation services provided by employer - Applicant provides canteen and transportation services to its employees. The applicant pays the entire consideration to the respective service providers and then recovers a certain portion of the cost from the employees - Whether the GST would be payable on the recoveries made from the employees towards providing canteen facility at subsidized rates and recoveries made from the employees towards providing bus transportation facility – HELD - The supply of canteen services an... [Read more]

GST – Maharashtra AAR - Taxability of recoveries made from employees towards canteen facilities and transportation services provided by employer - Applicant provides canteen and transportation services to its employees. The applicant pays the entire consideration to the respective service providers and then recovers a certain portion of the cost from the employees - Whether the GST would be payable on the recoveries made from the employees towards providing canteen facility at subsidized rates and recoveries made from the employees towards providing bus transportation facility – HELD - The supply of canteen services and transportation services by the applicant to its employees would constitute a supply of services under Section 7(1) of the CGST Act, as these activities are in connection with or incidental or ancillary to the principal activity of the applicant and hence fall within the definition of 'business' under Section 2(17) of the CGST Act - The recoveries made from the employees for these services would be liable to GST, as it is a consideration received by the applicant for the supply of these services. However, the portion of the value of these services provided to the employees as 'perquisites' in terms of the contractual agreement between the employer and employee would not be subjected to GST, as it is in lieu of the services provided by the employee to the employer in the course of employment, and hence covered under Schedule III of the CGST Act - The GST would be payable on the recovered amount from the employees for the canteen and transportation services provided by the applicant, however, the portion of the value of these services provided as 'perquisites' to the employees would not be subject to GST – Ordered accordingly - Taxability of notice pay recoveries made from employees - The applicant recovers notice pay from the employees who resign without serving the full notice period as per the employment contract - Whether the GST would be payable on the notice pay recoveries made from the employees on account of not serving the full notice period – HELD - The CBIC Circular No. 178/10/2022-GST dated 3rd August 2022, clarified that the notice pay recoveries made by the employer from the employees are not taxable as the amounts are recovered not as a consideration for tolerating the act of premature quitting of employment, but as penalties to discourage non-serious candidates from taking up employment - The GST would not be payable on the notice pay recoveries made from the employees on account of not serving the full notice period. [Read less]

GST – Maharashtra AAR - Classification of "Pooja Oil" - Applicant intends to manufacture "Pooja Oil" by mixing 99% of vegetable oils such as Palm, Rice Bran, Soya with 1% Sesame (Til) Oil - Whether the "Pooja Oil" proposed to be manufactured by the applicant should be classified under Entry 87 of Schedule I (taxable at 5% GST) or Entry 27 of Schedule II (taxable at 12% GST) of the Notification No.9/2025 Central Tax (Rate) dated 17.9.2025 – HELD - The "Pooja Oil" proposed to be manufactured by the applicant is a mixture of various edible vegetable oils, which are not chemically modified. However, the applicant intends t... [Read more]

GST – Maharashtra AAR - Classification of "Pooja Oil" - Applicant intends to manufacture "Pooja Oil" by mixing 99% of vegetable oils such as Palm, Rice Bran, Soya with 1% Sesame (Til) Oil - Whether the "Pooja Oil" proposed to be manufactured by the applicant should be classified under Entry 87 of Schedule I (taxable at 5% GST) or Entry 27 of Schedule II (taxable at 12% GST) of the Notification No.9/2025 Central Tax (Rate) dated 17.9.2025 – HELD - The "Pooja Oil" proposed to be manufactured by the applicant is a mixture of various edible vegetable oils, which are not chemically modified. However, the applicant intends to label the product as "Pooja Oil" and explicitly state "Not for Human Consumption" on the packaging, thereby classifying it as inedible for regulatory and commercial purposes - The "Pooja Oil" would be appropriately classifiable under Chapter Heading 15.18 of the Customs Tariff, which covers inedible mixtures or preparations of vegetable fats or oils or of fractions of different fats or oils. Accordingly, the product would be chargeable to tax at the rate of 5% GST as per Entry No. 96 of Schedule I of the GST rate notification – Ordered accordingly [Read less]

GST – Maharashtra AAR - Taxability of recovery of canteen services made from employees - Applicant is a manufacturing company that provides canteen facility to its employees as per the Factories Act, 1948. The applicant recovers a portion of the canteen expenses from the employees' salary - Whether the recoveries made from employees for the canteen facility are taxable under GST - HELD - The canteen facility provided to employees is in connection with or incidental to the principal business activity of the applicant, and hence falls within the definition of "business" under Section 2(17) of the CGST Act, 2017 - the crite... [Read more]

GST – Maharashtra AAR - Taxability of recovery of canteen services made from employees - Applicant is a manufacturing company that provides canteen facility to its employees as per the Factories Act, 1948. The applicant recovers a portion of the canteen expenses from the employees' salary - Whether the recoveries made from employees for the canteen facility are taxable under GST - HELD - The canteen facility provided to employees is in connection with or incidental to the principal business activity of the applicant, and hence falls within the definition of "business" under Section 2(17) of the CGST Act, 2017 - the criteria of ‘business’, ‘consideration’ are met in the transaction of supply of canteen services by Applicant to the employees. Thus, there is supply of canteen services from the Applicant to the employees under Section 7(1) of CGST Act, 2017 - In respect of the canteen services provided by the applicant to its employees, the exemption provided in Entry 1 of Schedule III to the CGST Act, 2017 applies only to the concession part extended to the employees and not to the value charged to the employees - The recoveries made from the employees are liable to levy of tax, except for the value of the canteen services provided as a "perquisite" to the employees in lieu of their services to the employer, which is excluded from the scope of supply under Schedule III of the CGST Act - GST is payable on the recoveries made from the employees' salary towards the canteen facility, except for the value of the canteen services provided as a perquisite to the employees – Ordered accordingly - Whether ITC of tax paid to Canteen Service Provider for Canteen Services is available – HELD - The flow of the transaction is that the Canteen Contractor is providing service to the Applicant, which is classifiable as Restaurant Service and the Applicant himself is also providing same service to its workers as mandated in the Factories Act, 1948. The Restaurant Service compulsorily attracts rate of 5% without ITC in a non-specified premises and the Applicant’s premises is not ‘specified premises’ in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Therefore, though the Section 17(5) of the CGST Act, 2017 does not block availment of ITC, however, availment of ITC is barred in terms of provisions of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended vide Notification No. 20/2019-C.T. (Rate) dated 30.09.2019 - ITC is not available to the Applicant on GST charged by the Canteen Service Provider - Notice Pay Recoveries - The applicant recovers notice pay from employees who leave the employment without serving the full notice period - Whether the notice pay recoveries are taxable under GST - HELD - The notice pay recoveries are not for tolerating the act of premature quitting of employment, but as penalties to discourage non-serious employees from taking up employment. The employee does not receive anything in return from the employer for such payments. Therefore, the notice pay recoveries are not taxable as consideration for any service under the GST law. The notice pay recovery made from the employees are not liable to GST. [Read less]

GST – Maharashtra AAR - Taxability of recovery of canteen services made from employees - Applicant is a manufacturing company that provides canteen facility to its employees as per the Factories Act, 1948. The applicant recovers a portion of the canteen expenses from the employees' salary - Whether the recoveries made from employees for the canteen facility are taxable under GST - HELD - The canteen facility provided to employees is in connection with or incidental to the principal business activity of the applicant, and hence falls within the definition of "business" under Section 2(17) of the CGST Act, 2017 - the crite... [Read more]

GST – Maharashtra AAR - Taxability of recovery of canteen services made from employees - Applicant is a manufacturing company that provides canteen facility to its employees as per the Factories Act, 1948. The applicant recovers a portion of the canteen expenses from the employees' salary - Whether the recoveries made from employees for the canteen facility are taxable under GST - HELD - The canteen facility provided to employees is in connection with or incidental to the principal business activity of the applicant, and hence falls within the definition of "business" under Section 2(17) of the CGST Act, 2017 - the criteria of ‘business’, ‘consideration’ are met in the transaction of supply of canteen services by Applicant to the employees. Thus, there is supply of canteen services from the Applicant to the employees under Section 7(1) of CGST Act, 2017 - The value of the outward supply of canteen service can be considered as having two parts. First part is the amount of recovery that is made from the employees, and second part is balance value of the services provided by the employer as perquisite which is in the lieu of the services provided by employees to the employer. In respect of the canteen services provided by the applicant to its employees, the exemption provided in Entry 1 of Schedule III to the CGST Act, 2017 applies only to the concession part extended to the employees and not to the value charged to the employees - The recoveries made from the employees are liable to levy of tax, except for the value of the canteen services provided as a "perquisite" to the employees in lieu of their services to the employer, which is excluded from the scope of supply under Schedule III of the CGST Act - GST is payable on the recoveries made from the employees' salary towards the canteen facility, except for the value of the canteen services provided as a perquisite to the employees – Ordered accordingly - Notice Pay Recoveries - The applicant recovers notice pay from employees who leave the employment without serving the full notice period - Whether the notice pay recoveries are taxable under GST - HELD - The notice pay recoveries are not for tolerating the act of premature quitting of employment, but as penalties to discourage non-serious employees from taking up employment. The employee does not receive anything in return from the employer for such payments. Therefore, the notice pay recoveries are not taxable as consideration for any service under the GST law. The notice pay recovery made from the employees are not liable to GST. [Read less]

GST – Maharashtra AAR - Taxability of recoveries made from employees towards canteen facilities and transportation services provided by employer - Applicant provides canteen and transportation services to its employees. The applicant pays the entire consideration to the respective service providers and then recovers a certain portion of the cost from the employees - Whether the GST would be payable on the recoveries made from the employees towards providing canteen facility at subsidized rates and recoveries made from the employees towards providing bus transportation facility – HELD - The supply of canteen services an... [Read more]

GST – Maharashtra AAR - Taxability of recoveries made from employees towards canteen facilities and transportation services provided by employer - Applicant provides canteen and transportation services to its employees. The applicant pays the entire consideration to the respective service providers and then recovers a certain portion of the cost from the employees - Whether the GST would be payable on the recoveries made from the employees towards providing canteen facility at subsidized rates and recoveries made from the employees towards providing bus transportation facility – HELD - The supply of canteen services and transportation services by the applicant to its employees would constitute a supply of services under Section 7(1) of the CGST Act, as these activities are in connection with or incidental or ancillary to the principal activity of the applicant and hence fall within the definition of 'business' under Section 2(17) of the CGST Act - The recoveries made from the employees for these services would be liable to GST, as it is a consideration received by the applicant for the supply of these services. However, the portion of the value of these services provided to the employees as 'perquisites' in terms of the contractual agreement between the employer and employee would not be subjected to GST, as it is in lieu of the services provided by the employee to the employer in the course of employment, and hence covered under Schedule III of the CGST Act - The recoveries made from the employees are liable to levy of tax as it is consideration against canteen services and transportation services provided by the Applicant to the employees – Ordered accordingly - Whether the services of transportation of employees to and from factory by non-air-conditioned buses will be covered under “transportation of passengers by non-air-conditioned contract carriage” which is exempted as per Sl. No. 15(b) of Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 – HELD - The Applicant is providing contract carriage service to its employees. The transportation services provided by the Applicant to its employees are not covered by entry 15(b) of the Notification No. 12/2017 CT(R) dated 28.06.2027. The services provided by the applicant squarely fall under transport of passengers under SAC 9964 and taxable at 5% without ITC or 12% (18% w.e.f. 22.09.2025) with ITC (If ITC is not blocked by other provisions) under entry No. 8 (vi) of Not. No. 11/2017 CT(R) dated 28.06.2017, as amended - Whether ITC is available to the Applicant on GST charged by the Transport Service Providers for providing the non-air-conditioned bus transportation services – HELD - Section 17(5)(g) of CGST Act 2017 states that input tax credit shall not be available in respect of goods or services or both used for personal consumption - Provision of service of transportation of employees from residence to factory or office premises has been used for personal consumption or comfort of employees. The applicant is not under any statutory obligation to provide these services to his employees and the services provided comes under category of personal consumption which makes the applicant ineligible to avail ITC on transporter for transportation of employees as per Section 17(5)(g) of CGST Act 2017 - Valuation in respect of canteen and transportation services – HELD - Though the employer and employee are related parties, the value on which tax is a liable to be paid is only the recovered amount from the employee as the remaining part of the value is the perquisite provided by the employer which is not liable to tax. [Read less]

GST - Cargo transportation services - Classification of services and eligibility for exemption - Petitioner provides transportation services by air and sea, claiming exemption under Notification No.12/2017-Central Tax (Rate) dated 28.06.2017. The respondents issued a demand notice alleging misclassification of services and short payment of GST – HELD - The proper officer had duly considered the petitioner's reply and additional submissions, and had dealt with the issues of classification of services, eligibility for exemption, and valuation of services in a comprehensive manner – There was no violation of principles of... [Read more]

GST - Cargo transportation services - Classification of services and eligibility for exemption - Petitioner provides transportation services by air and sea, claiming exemption under Notification No.12/2017-Central Tax (Rate) dated 28.06.2017. The respondents issued a demand notice alleging misclassification of services and short payment of GST – HELD - The proper officer had duly considered the petitioner's reply and additional submissions, and had dealt with the issues of classification of services, eligibility for exemption, and valuation of services in a comprehensive manner – There was no violation of principles of natural justice, as the petitioner was granted adequate opportunity, and its defense were duly taken into consideration. The Court is not inclined to interfere with the order as the petitioner has efficacious alternative remedy of appeal available - The petitioner is at liberty to approach the appellate authority with statutory deposit – The writ petition is dismissed [Read less]

GST - Delay in filing appeal against assessment order - Petitioner asserted that the proceedings were never brought to its knowledge due to suppression by the concerned Director. By the time the company acquired actual knowledge of the order, the limitation period for filing an appeal had expired - Whether the delay in filing the appeal against the assessment order can be condoned, and whether the challenge to the constitutional validity of Section 107(4) of the CGST Act, which restricts the power to condone delay beyond the prescribed period, is maintainable – HELD - The court is not convinced by the explanation offered... [Read more]

GST - Delay in filing appeal against assessment order - Petitioner asserted that the proceedings were never brought to its knowledge due to suppression by the concerned Director. By the time the company acquired actual knowledge of the order, the limitation period for filing an appeal had expired - Whether the delay in filing the appeal against the assessment order can be condoned, and whether the challenge to the constitutional validity of Section 107(4) of the CGST Act, which restricts the power to condone delay beyond the prescribed period, is maintainable – HELD - The court is not convinced by the explanation offered in the writ petition regarding the alleged internal feud among the Directors as the cause of the delay in filing the appeal. The representative Director of the company accorded greater priority to other matters rather than considering the possibility of filing an appeal against the assessment order or seeking appropriate legal advice in that regard. The assessment order was initially accepted without challenge, and the present writ petition was filed belatedly in 2026 as an afterthought, without preferring any appeal, which was now clearly barred by limitation - The writ petition is dismissed [Read less]

GST – Reading down of Section 16(2)(c) of the CGST Act, 2017, Benefit of ITC to bonafide recipient – Challenge to Constitutional validity of Section 16(2)(c) of the CGST/KGST Act, 2017 and Rule 36(4) of the CGST/KGST Rules, 2017 contending that the impugned provisions cast an impossible burden on purchasing dealer for claiming Input Tax Credit to ensure payment of tax by the suppliers and ensuring timely filing of the returns by the supplier – HELD – The Division Bench of Tripura High Court in Sahil Enterprises, while coming to the conclusion that the impugned provisions were not violative of Articles 14, 19(1)(g),... [Read more]

GST – Reading down of Section 16(2)(c) of the CGST Act, 2017, Benefit of ITC to bonafide recipient – Challenge to Constitutional validity of Section 16(2)(c) of the CGST/KGST Act, 2017 and Rule 36(4) of the CGST/KGST Rules, 2017 contending that the impugned provisions cast an impossible burden on purchasing dealer for claiming Input Tax Credit to ensure payment of tax by the suppliers and ensuring timely filing of the returns by the supplier – HELD – The Division Bench of Tripura High Court in Sahil Enterprises, while coming to the conclusion that the impugned provisions were not violative of Articles 14, 19(1)(g), 265 and 300A of the Constitution of India, held that Section 16(2)(c) ought not to be interpreted to deny ITC to bonafide purchasers and it should be read down and applied only where the transaction is found not to be bonafide or is a collusive fraudulent transaction to defraud the Revenue - Respectfully agreeing with the view taken by the Division Bench of the Tripura High Court in the case of M/s Sahil Enterprises Vs. Union of India and others, the present petition also deserves to be disposed of in terms of the said judgment as well as the earlier judgment of the Gauhati High Court in National Plasto Moulding case - The provisions of Section 16(2)(c) of the CGST Act/KGST Act and Rule 36(4) of the CGST/KGST Rules are read down in a manner that allows the benefit of ITC to bonafide recipients who have complied with all other conditions under Section 16(2) despite any fault / lapse or non-payment of tax to the Government by the suppliers – The petition is disposed of [Read less]