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Customs - Import of tyres falling under CETH 4011 8000 - DRI intercepted and seized the consignments under the reasonable belief that the impugned tyres are in fact tyres used for truck and bus and fall under CETH 4011 2010 and hence require clearance from the competent authority and should adhere to the BIS specifications – Rejection of appellant’s request for provisional release of the goods pending investigation - whether the imported tyres can be released provisionally to the appellants pending investigation – HELD - It is settled principle of law that the classification of the goods is to be made with reference ... [Read more]

Customs - Import of tyres falling under CETH 4011 8000 - DRI intercepted and seized the consignments under the reasonable belief that the impugned tyres are in fact tyres used for truck and bus and fall under CETH 4011 2010 and hence require clearance from the competent authority and should adhere to the BIS specifications – Rejection of appellant’s request for provisional release of the goods pending investigation - whether the imported tyres can be released provisionally to the appellants pending investigation – HELD - It is settled principle of law that the classification of the goods is to be made with reference to the technical parameters of the goods in the condition in which they are imported and enduse or subsequent possible mis-use cannot be a criteria for the classification of the goods - as of now the Revenue’s allegation is not established and the investigation is in progress. Based on the import documents the impugned goods are liable to be classified under CTH 4011 8000 – While it is the discretion of the adjudicating authority whether or not to release the goods provisionally, there is a fine difference between ‘discretion’ and ‘discrimination’ - Allowing goods to be released to some importer as per the test report given by IRMRA, in the past, and denying even a provisional release to some importers and not obtaining the opinion of IRMRA certainly goes beyond the boundary of ‘discretion’ and borders upon ‘discrimination’ - In the instant case the goods are not established to be prohibited under any law. Moreover, if at all, the investigation is able to establish that the impugned goods are classifiable under CTH 4011 2010, they would at the most become restricted items the import of which may require BIS certification - the department has made no case for rejection of provisional release of the impugned goods - since the investigation is pending it will be in the interest of justice to accord provisional release subject to some conditions and restrictions - the impugned order is set aside and the appeals are partly allowed [Read less]

GST - Interplay between Section 129 and 130 of the CGST Act, 2017 - Circular No. 41/15/2018-GST dated 13.04.2018 clearly shows that the scheme of Sec. 129 and 130 of the CGST Act operate in two separate fields and the provisions of Sec. 130 can always be invoked independent of prior invocation of Sec. 129.

Central Excise - Leviability of the central excise duty on sale of the old machinery as scrap – Whether Rule 3(5A)(b) of Cenvat Credit Rules, 2004 is applicable only when the cenvat credit is availed on the capital good – HELD - Rule 3(5A)(b) of CCR, 2004 clearly provides that if the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on the transaction value - the provisions of Rule 3(5A)(b) of CCR, 2004 are independent of whether any cenvat credit was availed at the time of purchase of machinery unlike the provisions of Rule 3(5A)(a) - the appellant is liable ... [Read more]

Central Excise - Leviability of the central excise duty on sale of the old machinery as scrap – Whether Rule 3(5A)(b) of Cenvat Credit Rules, 2004 is applicable only when the cenvat credit is availed on the capital good – HELD - Rule 3(5A)(b) of CCR, 2004 clearly provides that if the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on the transaction value - the provisions of Rule 3(5A)(b) of CCR, 2004 are independent of whether any cenvat credit was availed at the time of purchase of machinery unlike the provisions of Rule 3(5A)(a) - the appellant is liable to pay the duty in terms of the statutory provisions of Rule 3(5A)(b) – the appeal is dismissed - Eligibility of cenvat credit of the service tax availed on outward freight under GTA services – HELD - the appellant availed the cenvat credit of service tax paid on outward transportation beyond the “factory gate? - the sale at the “factory gate? is not eligible to avail the cenvat credit of outward transportation and the appellant, therefore, wrongly utilized such credit towards payment of excise duty though the actual “place of removal? is their “factory gate? - the cenvat credit on outward freight was not admissible to the appellant and is liable to be recovered under the provisions of Rule 14 of CCR, 2014. The appellant having failed to pay the central excise duty and wrongly availed the cenvat credit is liable to pay the interest under Section 11AA of the CEA, 1944 - the extended period of limitation has also been rightly invoked and the penalty imposed thereon. [Read less]

GST - Taxability of services provided by club/association to its members - Principles of mutuality - Challenge to the levy of GST on activities/transactions of the petitioner-association with its members - Validity to provision under Section 7(1)(aa) and explanation thereto r/w Section 2(17)(e) of the CGST Act, 2017 - Petitioner’s contention that unless Article 246A is amended to provide for taxing of services by the club / association to its members, the activities of club/association could not be brought within the ambit of GST – HELD - The judgment in the case of Gannon Dunkerly does not lay down a principle that th... [Read more]

GST - Taxability of services provided by club/association to its members - Principles of mutuality - Challenge to the levy of GST on activities/transactions of the petitioner-association with its members - Validity to provision under Section 7(1)(aa) and explanation thereto r/w Section 2(17)(e) of the CGST Act, 2017 - Petitioner’s contention that unless Article 246A is amended to provide for taxing of services by the club / association to its members, the activities of club/association could not be brought within the ambit of GST – HELD - The judgment in the case of Gannon Dunkerly does not lay down a principle that the Constitution will be required to be amended for bringing every transaction involved in the supply of goods and services. Article 246-A empowers the parliament and State Legislature to enact law(s) with respect to the goods and services tax whether the supply of goods or services or both takes place. The power conferred under Article 246-A is plenary power for making laws by the parliament and State Legislature for imposing tax on the supply of goods and services and without any limitation put by the Parliament in the provision of Article 246-A - a combined reading of Article 246A and Article 366(12A) provides that goods and services tax means any tax on the supply of goods and services or both. The parliament and State Legislature have the power to make laws with respect to supply of goods and services or both - Article 246A or Article 366(12A) does not have any reference to the term Person. The tax is on activities, i.e., the supply of goods and services or both. Therefore, the Parliament as well as the State Legislature, in the exercise of their power under Article 246A r/w Article 366(12A), would be empowered to legislate for imposing tax on the supply of goods and services, irrespective of the person / individual involved - The Constitution does not put any restriction or limitation from defining a person(s) for the purpose of levy of GST. The supply of goods and services may be by club / association to its member and therefore, the principal of the mutuality will not come in a way of the Parliament or the State legislature to enact law for tax on supply of goods and services - the Parliament / State Legislature has amended Section 7(a) by inserting Section 7(aa) by the Finance Act, 2021. The amendment is neither beyond legislative competence nor offends any of the fundamental rights guaranteed under Part III of the Constitution of India nor is manifestly arbitrary or capricious. Therefore, the amendment brought in Section 7(a) by inserting Section 7(aa) is well within the legislative competence and not ultra-vires - the present writ petitions so far as the challenge to the constitutionality of Section 7(aa) is concerned, are dismissed. However, it is held that the provisions of Section 7(aa) will have prospective operation with effect from 01.01.2022 – Ordered accordingly - Whether the amendment in the CGST Act, 2017 by inserting Section 7(1)(aa) is prospective or retrospective – HELD - Before the amendment was brought in inserting Section 7(aa) by the Finance Act, 2021, the law of mutuality was well established in the principle of taxation in case of supply of goods and services by clubs/associations to its members. The GST is an indirect tax to be paid by the recipient of goods and services. When the law of mutuality, as held in the Calcutta club case, was understood by the authorities as well as the petitioner, the petitioner did not collect the GST. However, once the amendment has been brought into statute by inserting Section 7(aa) by the Finance Act 2021, the petitioners have become liable to pay the GST on the supply of goods and services to their members. Therefore, Section 7(aa) should not be given retrospective operation w.e.f. 01.07.2017 but it should be given effect from the date when it was notified i.e., 01.01.2022 - Whether all the activities undertaken by the petitioner-association involve the supply of goods and services to its members – HELD - the assessing authority is required to examine each activity independently to arrive at a conclusion as to whether such an activity involves the supply of goods and services so that the tax may or may not be imposed on such activity. [Read less]

Service Tax – Classification - Assessee entered into agreements with M/s. OIL and M/s. ONGC to carry out works for drilling operations of wells in oil fields – Respondent-assessee also carried out other associated works in relation to both exploration and exploitation of mineral, oil or gas etc. - Demand of service tax under “site formation and clearance, excavation and earth moving and demolition services” – adjudicating authority dropped the demand - Revenue contention that dropping of the demand of service tax by the adjudicating authority for the period prior to 01.06.2007 is legally not tenable - HELD - the ... [Read more]

Service Tax – Classification - Assessee entered into agreements with M/s. OIL and M/s. ONGC to carry out works for drilling operations of wells in oil fields – Respondent-assessee also carried out other associated works in relation to both exploration and exploitation of mineral, oil or gas etc. - Demand of service tax under “site formation and clearance, excavation and earth moving and demolition services” – adjudicating authority dropped the demand - Revenue contention that dropping of the demand of service tax by the adjudicating authority for the period prior to 01.06.2007 is legally not tenable - HELD - the ld. adjudicating authority has given a well-reasoned finding to arrive at the conclusion that the Respondent is not liable for payment of service tax under the category of “site formation and clearance, excavation and earth moving and demolition services”, for the period prior to 01.06.2007 - Having accepted service tax for the said services rendered by the Respondent under the category of 'mining service', the Revenue cannot demand service tax for the same services under the category of “site formation and clearance, excavation and earth moving and demolition services” for the period prior to 01.06.2007. Therefore, the services rendered by the Respondent prior to 01.06.2007 are not liable to Service Tax under the category of “site formation and clearance, excavation and earth moving and demolition services” – further, the ld. adjudicating authority has rightly extended the benefit of Section 80 of the Finance Act, 1994 and not imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994. Thus, the non-imposition of penalties in the impugned order is upheld – Revenue appeal is dismissed [Read less]

GST - Demand of GST on expenses made by the petitioners under the Motor Vehicles Act - Liability to discharge GST under Reverse Charge Mechanism on the payment made to the State Government in lieu of the permission to ply motor vehicle (passenger vehicle) in the State – HELD – the challenge is to the demand-cum-show cause notice issued by the competent authority. The appropriate course of action for the petitioners is to submit a reply and contest the matter before the said authority - The demand-cum-show cause notice having been issued by the competent authority cannot be challenged on the plea of lack of jurisdiction... [Read more]

GST - Demand of GST on expenses made by the petitioners under the Motor Vehicles Act - Liability to discharge GST under Reverse Charge Mechanism on the payment made to the State Government in lieu of the permission to ply motor vehicle (passenger vehicle) in the State – HELD – the challenge is to the demand-cum-show cause notice issued by the competent authority. The appropriate course of action for the petitioners is to submit a reply and contest the matter before the said authority - The demand-cum-show cause notice having been issued by the competent authority cannot be challenged on the plea of lack of jurisdiction. As regards, the applicability of Section 15(2) of the CGST Act, 2017, all issues raised by the petitioners are left open to be adjudicated before the competent authority - the writ petition stands dismissed [Read less]

GST - Confiscation of excess stock pursuant to inspection/survey carried out at the business premises - Validity of invoking of section 130 read with section 122 of the CGST/UPGST Act, 2017 to excess stock found at the premises at the time of survey – Petitioner of the case that once the survey was conducted and alleged excess stock was found, then the proceedings should have been initiated as per sections 73 & 74 of the Act and not under Section 130 of the Act – HELD - The issue in hand is covered by the judgement of this Court in Metenere Limited wherein it was specifically held that even if excess stock is found, th... [Read more]

GST - Confiscation of excess stock pursuant to inspection/survey carried out at the business premises - Validity of invoking of section 130 read with section 122 of the CGST/UPGST Act, 2017 to excess stock found at the premises at the time of survey – Petitioner of the case that once the survey was conducted and alleged excess stock was found, then the proceedings should have been initiated as per sections 73 & 74 of the Act and not under Section 130 of the Act – HELD - The issue in hand is covered by the judgement of this Court in Metenere Limited wherein it was specifically held that even if excess stock is found, the proceedings under section 130 of the UPGST Act cannot be initiated - entire exercise resorted to under Section 130 of the Act for assessment/ determination of the tax and the penalty is bad in law – the proceedings only on the basis of a survey by taking recourse under Section 130 of the GST Act and not taking a recourse to Section 74 is unsustainable - the impugned orders are quashed and set aside - The writ petitions are allowed [Read less]

GST - Bail Application – Offences registered under Sections 132 (1)(b) and 132 (1)(c) and 132 (5) of the CGST Act, 2017 – HELD - petitioner is in judicial custody since 09.04.2024, investigation has been completed and charge sheet has been submitted. Trial has yet to commence which shall consume considerable time. The relevant evidence of the case pertains to electronic evidence, which cannot be tampered by petitioner and other witnesses are official witnesses – considering the nature of allegation against petitioner coupled with materials available on record and period of custody of the petitioner, inclined to relea... [Read more]

GST - Bail Application – Offences registered under Sections 132 (1)(b) and 132 (1)(c) and 132 (5) of the CGST Act, 2017 – HELD - petitioner is in judicial custody since 09.04.2024, investigation has been completed and charge sheet has been submitted. Trial has yet to commence which shall consume considerable time. The relevant evidence of the case pertains to electronic evidence, which cannot be tampered by petitioner and other witnesses are official witnesses – considering the nature of allegation against petitioner coupled with materials available on record and period of custody of the petitioner, inclined to release the petitioner on bail – the bail application is allowed [Read less]

GST - Scrutiny of return – Unreconciled ITC in the annual return with the financial statement - Communication of discrepancy in the return furnished by the registered person - illegality of notice not issued in the Form ASMT-10 – HELD - the assessee was addressed with a communication to clarify on the discrepancy noticed in the Return. Though it is not headlined as Form GST ASMT-10, from the language it is identical to the model Form appended to the Rules. It was pointed out that there is a discrepancy insofar as the ITC declared in the annual return not having been reconciled with the financial statement (Table 14T of... [Read more]

GST - Scrutiny of return – Unreconciled ITC in the annual return with the financial statement - Communication of discrepancy in the return furnished by the registered person - illegality of notice not issued in the Form ASMT-10 – HELD - the assessee was addressed with a communication to clarify on the discrepancy noticed in the Return. Though it is not headlined as Form GST ASMT-10, from the language it is identical to the model Form appended to the Rules. It was pointed out that there is a discrepancy insofar as the ITC declared in the annual return not having been reconciled with the financial statement (Table 14T of Form 9C) - The assessee also replied to the notice taking the contention that uploading Form GSTR-9C was optional and that the unreconciled ITC in Column T of the Table has been auto-populated - If the unreconciled ITC in Column T was auto-populated then it was noticed by the assessee, and it was incumbent upon the assessee to offer an explanation for this, rather than take a contention that Table 14 was optional - There was a communication issued informing the discrepancy and seeking an explanation, to which the assessee also filed a reply, which was found to be unsatisfactory. However, this would not result in an assessment - The assessee would be entitled to appear and raise objections as against the show-cause notice, if the proceedings are not already concluded - The writ petition stands dismissed [Read less]

Central Excise – Distribution of credit as an ISD who is engaged in the manufacture of exempted goods – issue of SCN alleging irregular availment and distributed CENVAT Credit in violation of Rule 7(b) of the CENVAT Credit Rules, 2004 inasmuch as the appellant is engaged in production of exempted goods – demand on the ground that the appellant-mines and manufacturing units of appellant are independent entities and thus the services received by the appellant cannot be an input service for the manufacturing units – HELD - the appellant-mines are captive mines to the manufacturing units of Hindalco, making both as one... [Read more]

Central Excise – Distribution of credit as an ISD who is engaged in the manufacture of exempted goods – issue of SCN alleging irregular availment and distributed CENVAT Credit in violation of Rule 7(b) of the CENVAT Credit Rules, 2004 inasmuch as the appellant is engaged in production of exempted goods – demand on the ground that the appellant-mines and manufacturing units of appellant are independent entities and thus the services received by the appellant cannot be an input service for the manufacturing units – HELD - the appellant-mines are captive mines to the manufacturing units of Hindalco, making both as one integrated unit - the mines and the manufacturing unit belong to one legal entity, which is engaged in the manufacture of dutiable goods viz. Aluminium products. Therefore, the distribution of credit by the mines, being ISD, is in terms with the provisions of Rule 7(b) of the CENVAT Credit Rules, 2004 - the distribution of credit by the appellant as an ISD is in accordance with the provisions of law and thus the CENVAT Credit has rightly been distributed by the appellant - the demands proposed in the Show Cause Notices are set aside and the appeal is allowed [Read less]

GST - Section 54(3) of the CGST Act, 207 - Inverted-duty refund – Challenge to the Order passed by the Revisionary Authority calling for recovery of sanctioned refund on ground that the refund was time barred – Revisionary Authority of the view that extension of time granted by Supreme Court is applicable in respect of the filing of appeals before the Appellate Authorities and not to any other proceedings under CGST Act – HELD – The Revisionary Authority has revised refund sanctioning order relying upon Board Circular dated 20.07.2021 and formed an opinion that judgment of Supreme Court is not applicable to applica... [Read more]

GST - Section 54(3) of the CGST Act, 207 - Inverted-duty refund – Challenge to the Order passed by the Revisionary Authority calling for recovery of sanctioned refund on ground that the refund was time barred – Revisionary Authority of the view that extension of time granted by Supreme Court is applicable in respect of the filing of appeals before the Appellate Authorities and not to any other proceedings under CGST Act – HELD – The Revisionary Authority has revised refund sanctioning order relying upon Board Circular dated 20.07.2021 and formed an opinion that judgment of Supreme Court is not applicable to application seeking refund to quasi judicial proceedings and appellate proceedings - The impugned order was passed on 27.06.2021 whereas GST Council in its meeting held on 29.06.2022 recommended that time period from 01.03.2022 to 28.02.2022 shall be excluded from calculation of limitation period for filing refund claim - The case of petitioner is squarely covered by recommendations of GST Council – once the period from March’2020 to February’2022 is excluded from limitation period prescribed for filing refund claim, the application filed by petitioner becomes within limitation period as prescribed under Section 54(3) of the CGST Act - The impugned order is set aside and the writ petition is allowed [Read less]

GST - Payment of IGST instead of CGST and SGST on supply of manpower services – Demand of CGST/SGST by Revenue treating the supply as one of intra state supply and not inter state supply - petitioner's contention that having already paid IGST, on the same transaction CGST and SGST cannot be charged and penalty and interest on delayed payment cannot be levied – HELD - the petitioner has already paid IGST but the recipient has not taken benefit of ITC and, therefore, the dispute has not been settled as claimed by the petitioner. It would be appropriate that the appellate authority shall consider the grievance regarding p... [Read more]

GST - Payment of IGST instead of CGST and SGST on supply of manpower services – Demand of CGST/SGST by Revenue treating the supply as one of intra state supply and not inter state supply - petitioner's contention that having already paid IGST, on the same transaction CGST and SGST cannot be charged and penalty and interest on delayed payment cannot be levied – HELD - the petitioner has already paid IGST but the recipient has not taken benefit of ITC and, therefore, the dispute has not been settled as claimed by the petitioner. It would be appropriate that the appellate authority shall consider the grievance regarding payment of penalty and interest in case petitioner has made a bona fide mistake in making payments of IGST and not CGST and SGST - The petition is disposed of with the direction to the petitioner to approach the appellate authority - It is clarified that this Court has intervened at this stage only because it is of the opinion that IGST has already been paid by the petitioner and there has been no revenue loss - The dispute is with regard to the apportionment and also with regard to demand of penalty on delayed payment and on demand of interest shall be dealt by the appellate authority – the petition is disposed of [Read less]

The latter part of definition of Advanced Ruling u/s 95(a) of CGST Act does not restrict the scope of definition of applicant. There is no embargo that a person liable to pay tax on reverse charge basis cannot file an application for Advance Ruling.

GST - Inverted-duty refund - Manufacture on 100% Cotton yarn - Denial of inverted duty refund by placing reliance on para 3.2 of CBEC Circular No.135/05/2020-GST, dated 31.03.2020 – HELD - The aforesaid Circular has already been struck down as ultra vires of the provisions of the CGST Act by various High Court. Despite the same, the circular has been applied to the facts of the case to deny the benefit of the refund under Section 54(3) of the CGST Act, 2017 - The provisions of the GST enactments being applicable pan India, now the Department cannot take a different stand - the impugned order denying the benefit of the re... [Read more]

GST - Inverted-duty refund - Manufacture on 100% Cotton yarn - Denial of inverted duty refund by placing reliance on para 3.2 of CBEC Circular No.135/05/2020-GST, dated 31.03.2020 – HELD - The aforesaid Circular has already been struck down as ultra vires of the provisions of the CGST Act by various High Court. Despite the same, the circular has been applied to the facts of the case to deny the benefit of the refund under Section 54(3) of the CGST Act, 2017 - The provisions of the GST enactments being applicable pan India, now the Department cannot take a different stand - the impugned order denying the benefit of the refund on account of the Inverted Duty Structure to the petitioner is unsustainable and set aside – the writ petition is allowed [Read less]

Customs – Regulation 17(4) of Customs Broker Licensing Regulations, 2018 – Revocation of customs broker licence – Forfeiture of security deposit – Appellant/Customs Broker filed Bill of Entry for import of goods for importer – Investigation revealed that importer was a dummy firm and goods covered under Bill of Entry were undervalued, mis-declared and prohibited in nature – Alleging violations on part of Appellant, Commissioner initiated proceedings under the Regulations by issuing a notice to Appellant – On basis of inquiry report submitted by Inquiry Officer, Commissioner revoked license of Appellant and or... [Read more]

Customs – Regulation 17(4) of Customs Broker Licensing Regulations, 2018 – Revocation of customs broker licence – Forfeiture of security deposit – Appellant/Customs Broker filed Bill of Entry for import of goods for importer – Investigation revealed that importer was a dummy firm and goods covered under Bill of Entry were undervalued, mis-declared and prohibited in nature – Alleging violations on part of Appellant, Commissioner initiated proceedings under the Regulations by issuing a notice to Appellant – On basis of inquiry report submitted by Inquiry Officer, Commissioner revoked license of Appellant and ordered for forfeiture of entire security deposit and imposed penalty – Whether impugned order passed by Commissioner ordered for revocation of licence held by Appellant as Customs Broker is sustainable – HELD – Main contention of Appellant is that neither Inquiry officer nor Commissioner gave an opportunity to Appellant to bring correct facts on records by way of cross-examination of persons whose statements were relied upon by Department – Right of cross-examination has been recognized under Regulation 17(4) of the Regulations, which requires Inquiry Officer to give reasons if he intends to deny such right to Customs Broker – Despite specific request by Appellant to cross examine witnesses, no attempt was made to secure their presence in adjudication proceedings – Not allowing an opportunity to cross-examine persons examined in support of grounds forming basis of proceedings has resulted in causing serious prejudice to Appellant – Moreover, Inquiry Officer delayed issuance of his report beyond prescribed period provided under the Regulations – Time stipulated under the Regulations for issuing show cause notice as well as filing report is not directory, but it is mandatory – Proceedings are vitiated by non-compliance of time limit prescribed in the Regulations – Impugned order passed by Commissioner set aside – Appeal allowed [Read less]

Customs – Section 14 of Customs Act, 1962 – Rules 3, 6 and 8 of Customs Valuation (Determination of Price of Imported goods) Rules, 1988 – Import of scrap – Allegation of undervaluation – Rejection of declared value – Demand of differential duty – Appellant imported Aluminium scrap and Zinc scrap of various grades – Directorate of Revenue Intelligence received intelligence that Appellant was indulging in undervaluation of imported goods with intent to evade payment of customs duty – On conclusion of investigation, Commissioner rejected declared value of goods and re-determined same under Section 14 of the... [Read more]

Customs – Section 14 of Customs Act, 1962 – Rules 3, 6 and 8 of Customs Valuation (Determination of Price of Imported goods) Rules, 1988 – Import of scrap – Allegation of undervaluation – Rejection of declared value – Demand of differential duty – Appellant imported Aluminium scrap and Zinc scrap of various grades – Directorate of Revenue Intelligence received intelligence that Appellant was indulging in undervaluation of imported goods with intent to evade payment of customs duty – On conclusion of investigation, Commissioner rejected declared value of goods and re-determined same under Section 14 of the Act read with Rules 3, 6 and 8 of the Rules and confirmed demand of differential Customs Duty – Whether impugned order rejecting declared value and re-determining value of imported scrap items is sustainable – HELD – Appellant had entered into contract with overseas suppliers for importation of scrap items in question – Pursuant to contractual norms, goods were supplied by overseas entities under cover of commercial invoices bearing reference of description of goods, quantity, price etc. – There is no evidence to show that Appellant had paid any amount over and above invoice price to foreign suppliers – Department has not placed on record any credible evidence, for rejection of declared transaction value – Adjudicating authority has proceeded to re-determine value of imported scrap on basis of Circular No.14/2005 issued by Director General of Valuation (DGOV) without considering and overlooking contemporaneous data available before him on record – If value of contemporaneous imports are available, same shall be the basis for re-determination of value – Price declared by Appellant should be considered as the transaction value for purpose of payment of customs duty, inasmuch as, imports made by those contemporaneous importers are at same commercial level at which Appellant had imported impugned goods – Impugned order re-determining value of imported scrap on basis of DGOV Circular cannot be upheld and value declared by Appellant cannot be rejected – Adjudged demands confirmed against Appellant are not sustainable – Impugned order passed by Commissioner set aside – Appeals allowed [Read less]

Service Tax – Installation of machines – Demand of tax – Dropping of demand – Respondent are engaged in manufacturing of Draw Texturising machines and are also providing installation and commissioning service of said machine to their customers – Case of department is that erection, commissioning and installation activity of machines manufactured and supplied by Respondent is taxable service and same is liable to service tax – Department issued show cause notices proposing demand of service tax – Adjudicating authority dropped demand proposed in show cause notices – HELD – There is no dispute to fact that ... [Read more]

Service Tax – Installation of machines – Demand of tax – Dropping of demand – Respondent are engaged in manufacturing of Draw Texturising machines and are also providing installation and commissioning service of said machine to their customers – Case of department is that erection, commissioning and installation activity of machines manufactured and supplied by Respondent is taxable service and same is liable to service tax – Department issued show cause notices proposing demand of service tax – Adjudicating authority dropped demand proposed in show cause notices – HELD – There is no dispute to fact that Respondent is a manufacturer of Draw Texturising machines and as per contract, they have supplied goods along with Erection, Commissioning and Installation at buyer’s site – On entire activity, right from manufacturing upto commissioning of machinery at buyer’s site, total value is towards sale of goods – Sale value includes all elements and there is no separate consideration received by Respondent on account of service related to erection, commissioning and installation – There is no bifurcation of value in sale of goods and service of erection, installation and commissioning – When there is a manufacturing and sale of goods on a particular sale price which involves incidental service, no service tax can be demanded – Impugned orders passed by Adjudicating authority dropping demand proposed in show cause notices are upheld – Appeals dismissed [Read less]

GST - Cancellation of the registration – issue of notice on the ground that no activity at the principal place of business nor the books of account were produced at the time of survey - cancellation of registration on the ground different than the one mentioned in the notice and also not contemplated in section 29(2) of the CGST/UPGST Act, 2017 – non-supply of adverse material relied upon by respondent before proceeding with cancellation of registration – HELD - On the basis of some information, a view has been drawn against the petitioner that the petitioner is indulging only in wrong availment of ITC, but before ta... [Read more]

GST - Cancellation of the registration – issue of notice on the ground that no activity at the principal place of business nor the books of account were produced at the time of survey - cancellation of registration on the ground different than the one mentioned in the notice and also not contemplated in section 29(2) of the CGST/UPGST Act, 2017 – non-supply of adverse material relied upon by respondent before proceeding with cancellation of registration – HELD - On the basis of some information, a view has been drawn against the petitioner that the petitioner is indulging only in wrong availment of ITC, but before taking an adverse inference against the petitioner neither any notice nor any opportunity was given to the petitioner to rebut the said finding – Once some adverse material is to be used against the dealer, it should be put to notice before using the same. In the case in hand, the petitioner was never put to notice for material use adversely against it, which is in violation of the principle of natural justice - Further, the grounds for cancellation of registration is provided under Section 29(2) (a) to (e) of the UPGST Act, 2017 - Neither there is any violation of the said section nor any finding has been recorded for cancelling the registration of the petitioner as contemplated in Section 29(2) of the Act - the registration can only be cancelled in accordance with the provisions as contemplated in section 29(2) of the UPGST Act and not otherwise - the petitioner has been unnecessarily dragged into the litigation. Therefore, a cost of Rs. 10,000/- is imposed upon the respondent concerned, which shall be paid to the petitioner within a month - the writ petition is allowed [Read less]

Central Excise – Rule 6(3)(i) of Cenvat Credit Rules, 2004 – Manufacture of goods – Availment of credit in respect of inputs – Admissibility – Appellant is engaged in manufacture of final products such as Copper Cathode, Continuous Cast Copper Rods etc. and was availing facility of Cenvat credit in respect of inputs, capital goods and input services in terms of the Rules – Department viewed that certain inputs as well as input services have been used for exempted final products and therefore, Cenvat credit taken by Appellant should have been reversed as per provisions of Rule 6(3)(i) of the Rules – After due ... [Read more]

Central Excise – Rule 6(3)(i) of Cenvat Credit Rules, 2004 – Manufacture of goods – Availment of credit in respect of inputs – Admissibility – Appellant is engaged in manufacture of final products such as Copper Cathode, Continuous Cast Copper Rods etc. and was availing facility of Cenvat credit in respect of inputs, capital goods and input services in terms of the Rules – Department viewed that certain inputs as well as input services have been used for exempted final products and therefore, Cenvat credit taken by Appellant should have been reversed as per provisions of Rule 6(3)(i) of the Rules – After due process of law, Commissioner confirmed demand of credit – Whether demand of Cenvat credit pertaining to use of sulphuric acid/phosphoric acid for manufacturing Di-Ammonium Phosphate (DAP) is sustainable – HELD – Common point in all show cause notices is that Appellant have availed Cenvat credit on inputs which have been used in manufacture of exempted sulphuric acid and DAP as well as dutiable copper products – It is an accepted fact that sulphuric acid is unintended product which emerges during process of copper concentrate while manufacturing various types of copper products – As per settled decisions, disputed goods which are not consciously manufactured by Appellant and which emerged unavoidably in process of manufacture of other goods cannot be considered as goods manufactured by Appellant – Sulphuric acid which is an unintended by-product has been used by Appellant for manufacture of phosphoric acid and same has further found use in manufacturing of DAP which is chargeable to 1% rate of Central Excise duty as provided in Notification No.12/2012-CE – Production of Sulphuric Acid cannot be held to be manufacture of exempted goods – Demand of Cenvat credit pertaining to use of sulphuric acid/phosphoric acid for manufacturing DAP is not sustainable – Appeals allowed [Read less]

GST – Tamil Nadu AAR - Section 16 and Section 17(5)(b) of the CGST Act, 2017 - Eligibility of input tax credit on leasing/renting/hiring of motor vehicles to provide transportation facility to staff/women employees - whether tax paid on input services in respect of leasing/renting/hiring of motor vehicles to provide transportation facility to women employees as per Tamil Nadu Shops and Establishments Act, 1947 is eligible as input tax credit – HELD - In terms of Section 17(5) of the CGST Act, 2017 input tax credit on services of leasing, renting or hiring of motor vehicles shall not be available as the same falls under... [Read more]

GST – Tamil Nadu AAR - Section 16 and Section 17(5)(b) of the CGST Act, 2017 - Eligibility of input tax credit on leasing/renting/hiring of motor vehicles to provide transportation facility to staff/women employees - whether tax paid on input services in respect of leasing/renting/hiring of motor vehicles to provide transportation facility to women employees as per Tamil Nadu Shops and Establishments Act, 1947 is eligible as input tax credit – HELD - In terms of Section 17(5) of the CGST Act, 2017 input tax credit on services of leasing, renting or hiring of motor vehicles shall not be available as the same falls under the category of blocked credit, unless where it is obligatory for an employer to provide the same to its employees under any law for the time being in force - as per the provisions of the Tamil Nadu Shops and Establishment Act 1947, it is obligatory on the part of the applicant to provide transport facilities to women employees working beyond 8.00 PM – accordingly, the applicant is eligible to avail input Services in respect of leasing/renting/hiring of motor vehicles to provide transportation facility to ensure safety and security of women employees as per Tamil Nadu Shops and Establishments Act, 1947 subject to satisfying and fulfilling the eligibility and conditions provided under Section 16 of the CGST Act, 2017 - Whether the entire ITC be availed by the applicant for providing the transport facility – HELD - in the instant case the Input tax credit shall be available to the applicant, only on the tax paid on services of leasing, renting or hiring of motor vehicles for providing transport facilities to women employees alone who are arriving or leaving workplace between 8.00 P.M to 6.00 A.M. as the same has been made obligatory vide the Notification of Government of Tamil Nadu - Whether can ITC be availed for services received from the date of introduction of proviso to Section 17(5)(b)(iii) of CGST Act, 2017 for the periods up to March 2022 – HELD – the clause (b) of sub-section (5) of Section 17 has been substituted, as per CGST (Amendment) Act, 2018 (No. 31 of 2018) dated 29.08.2018, and brought into effect from 01.02.2019, vide notification no 02/2019 dated 29.01.2019 - the Government of Tamil Nadu had mandated the obligation on the employers to provide transportation facilities to women employees working in shifts vide Notification dated 28.05.2019. Hence, the input tax credit on leasing, renting or hiring of motor vehicles shall be available to the applicant from 28.05.2019 onwards, however the same shall be subject to satisfying and fulfilling the eligibility and conditions provided under Section 16 of the CGST Act, 2017. [Read less]

Customs - Export of goods - Allegation of mis-declaration - Imposition of penalty - Investigation revealed that Exporter had exported Muriate of Potash (MOP) in guise of Cobalt Sulphate through Custom House Agents/Appellants - Department issued SCN to Appellants seeking to impose penalties under Section 114(i) of the Act - Adjudicating authority imposed penalties under Section 114(i) of the Customs Act, 1962 - Whether penalties under Section 114(i) of the Act imposed upon Appellants are sustainable - HELD - Cases are mainly made out on basis of statements of various persons - Appellants had sought cross examination of witn... [Read more]

Customs - Export of goods - Allegation of mis-declaration - Imposition of penalty - Investigation revealed that Exporter had exported Muriate of Potash (MOP) in guise of Cobalt Sulphate through Custom House Agents/Appellants - Department issued SCN to Appellants seeking to impose penalties under Section 114(i) of the Act - Adjudicating authority imposed penalties under Section 114(i) of the Customs Act, 1962 - Whether penalties under Section 114(i) of the Act imposed upon Appellants are sustainable - HELD - Cases are mainly made out on basis of statements of various persons - Appellants had sought cross examination of witnesses, but said request has been summarily discarded - Since entire case is based on statements and no cross examination has been provided, same cannot be relied as evidence - While allegation of substitution of samples has been made, there are no details available in show cause notice or in impugned orders as to how substitution of samples took place - Impugned order does not examine facts of case or evidence therein, but summarily come to conclusion that samples have been replaced and Appellants are involved in such substitution - Revenue has failed to identify how the samples were replaced - In these circumstances, there is no merit in impugned orders, as it lacks evidence, and same are set aside - the appeals are allowed [Read less]

Customs/DGFT - Challenge to Notification No. 20/2023 amending Export Policy of Non-basmati rice under HS Code 1006 30 90 from Free to Prohibited - Whether the impugned Notification is in conformity with the Foreign Trade Policy and if not, the same is liable to be set aside – HELD – a conjoint reading of the statutory provisions, the Notifications and the Foreign Trade Policy would go to show that the Central Government is empowered to formulate and announce the Foreign Trade Policy and amend the existing policy and the same is not in dispute - the contention advanced on behalf of the petitioners that the impugned Noti... [Read more]

Customs/DGFT - Challenge to Notification No. 20/2023 amending Export Policy of Non-basmati rice under HS Code 1006 30 90 from Free to Prohibited - Whether the impugned Notification is in conformity with the Foreign Trade Policy and if not, the same is liable to be set aside – HELD – a conjoint reading of the statutory provisions, the Notifications and the Foreign Trade Policy would go to show that the Central Government is empowered to formulate and announce the Foreign Trade Policy and amend the existing policy and the same is not in dispute - the contention advanced on behalf of the petitioners that the impugned Notification is not in conformity with the Foreign Trade Policy-2023 has no merit in as much as the statutory provision coupled with Para 1.02 of the Foreign Trade Policy-2023 empowers the Central Government to amend, change its Foreign Trade Policy from time to time - In the present case, as is evident from the impugned Notification, the existing policy with regard to export of Non-Basmati White Rice is changed in “public interest? and the export of the same is prohibited by carving out certain exceptions. Therefore, the impugned Notification cannot be held to be contrary to the Foreign Trade Policy - the impugned Notification shall have prospective effect only, in so far as the Writ petitioners are concerned, and the same shall not impede the petitioners’ export of Non-Basmati White Rice in fulfillment of their contractual obligations with the foreign buyers, provided the Letters of Credit are issued in their favour prior to 20.07.2023 – the writ petitions are disposed of - Whether the policy can be given retrospective effect and allowed to take away the vested rights – HELD – the petitioners claim that Letters of Credit were issued in their favour by the foreign buyers prior to the issuance of the impugned Notification and the same is not in dispute - pursuant to the agreement / contracts entered with the foreign buyers petitioners have procured the Non-Basmati White Rice and therefore vested rights accrued to them in terms of the Foreign Trade Policy 2023, which provides import / export on or after the date of the regulation / restriction will be allowed for importer / exporter, who has a commitment through an irrevocable Commercial Letter of Credit before the date of imposition of such restriction / regulation - the impugned Notification cannot have the retrospective effect. The Foreign Trade (Development and Regulation) Act, 1992 does not confer any right to the authorities or enable them to issue any Notification which has the effect of imposing prohibition with retrospective effect or take away the vested rights accrued to the petitioners by virtue of the Foreign Trade Policy, 2023 prior to the issuance of the impugned Notification. Point No.2 is answered accordingly - Whether the policy decision can be set aside, if the same is found arbitrary or violative of Fundamental Rights – HELD - The conditions imposed in the impugned Notification are clearly distinctive and enables the exporters who have already made arrangements for shipment of Non-Basmati White Rice in fulfillment of their contractual obligations. In the present set of cases, the petitioners are still at the stage of procurement of the NonBasmati White Rice and they cannot be equated with those of exporters who made all arrangements for shipment. Therefore, the contention that the action of the respondents is arbitrary and hit by Article 14 of the Constitution of India cannot be accepted. The Point No.3 is accordingly answered - Whether the policy decision can be interfered with, if the same is violative of principles of natural justice or Doctrine of Legitimate Expectation – HELD - In the light of the expression of the Hon’ble Supreme Court that the legitimate expectation is not a legal right and that shall yield to the public interest, the point No.4 is answered against the petitioners and no prior notice need be issued. [Read less]

Central Excise - Rules 7 and 15(1) of Cenvat Credit Rules, 2004 - Disallowance of input service credit - Appellant is engaged in manufacture of Electrostatic Precipitators, Industrial Fans, etc. - Appellant availed input service credit based on invoices issued by their Input Service Distributor (ISD) namely Cost Centres - Department issued show cause notice to Appellant proposing to deny credit availed on input services - After due process of law, Adjudicating authority disallowed credit and confirmed demand along with interest and imposed penalty under Rule 15(1) of the Rules - Whether disallowance of input service credit... [Read more]

Central Excise - Rules 7 and 15(1) of Cenvat Credit Rules, 2004 - Disallowance of input service credit - Appellant is engaged in manufacture of Electrostatic Precipitators, Industrial Fans, etc. - Appellant availed input service credit based on invoices issued by their Input Service Distributor (ISD) namely Cost Centres - Department issued show cause notice to Appellant proposing to deny credit availed on input services - After due process of law, Adjudicating authority disallowed credit and confirmed demand along with interest and imposed penalty under Rule 15(1) of the Rules - Whether disallowance of input service credit availed by Appellant based on invoices issued by ISD is sustainable - HELD - Only allegation raised in SCN to disallow input service credit is that Appellant has not established that services availed on invoices distributed by ISD have been used directly or indirectly or in relation to manufacturing of final products - Show cause notice does not make any specific allegation with respect to particular input service - On perusal of impugned order, other than alleging that these services are not used directly or indirectly or in relation to manufacture of final products, there is no specific finding to deny credit - ISDs are subject to verification and audit by jurisdictional authorities - There has been no dispute raised against ISDs alleging that they have availed ineligible credit - There is no allegation that provisions of Rule 7 of the Rules for distribution of credit has not been complied - When there is no dispute raised by jurisdictional authorities against input service distribution centres for availing credit and distributing same, department cannot deny credit at end of manufacturing unit on very vague allegations - Impugned order passed by Adjudicating authority is set aside and the appeal is allowed [Read less]

Service Tax - Rules 6(3) and 14 of CENVAT Credit Rules, 2004 - Appellant is engaged in provision of stock broker services and other banking and financial services - In lieu of services provided to investors, Appellant charged brokerage/commission from investors and discharged Service Tax on same - National Stock Exchange (NSE) provided various services to investors and collected charges from investors through Appellant and recovered Service Tax on aforesaid charges from Appellant - Appellant availed Cenvat Credit on service tax paid to NSE, since services provided by NSE were Input Services for business of Appellant - Depa... [Read more]

Service Tax - Rules 6(3) and 14 of CENVAT Credit Rules, 2004 - Appellant is engaged in provision of stock broker services and other banking and financial services - In lieu of services provided to investors, Appellant charged brokerage/commission from investors and discharged Service Tax on same - National Stock Exchange (NSE) provided various services to investors and collected charges from investors through Appellant and recovered Service Tax on aforesaid charges from Appellant - Appellant availed Cenvat Credit on service tax paid to NSE, since services provided by NSE were Input Services for business of Appellant - Department issued show cause notice to Appellant proposing demand of wrongly availed credit - Commissioner confirmed demand of cenvat credit - Whether Appellant is entitled for CENVAT Credit on input service which is attributed to output service - HELD - Demand of CENVAT Credit was raised under Rule 14 of the CCR, 2004 - On plain reading of Rule 14 of the Rules, it is clear that CENVAT Credit can be recovered under Rule 14 of the Rules only in case where such CENVAT Credit was availed wrongly - Appellant is engaged in providing output service, i.e stock brokerage service and other financial service - Appellant’s output service is taxable service which is provided on payment of Service Tax - Assessee is allowed to avail CENVAT Credit on all input and input services - If any part of service is attributed to exempted output service, recovery mechanism is provided under Rule 6(3) of the Rules - Admittedly, provisions of Rule 6(3) of the Rules was neither invoked in show cause notice nor invoked for recovery of CENVAT Credit, therefore, availment of credit is in is in order - Demand of CENVAT Credit is not tenable - Demand is also not sustainable on ground of time bar - Impugned order is set aside and appeal is allowed [Read less]

Service Tax - Section 65(105)(zzzzj) of Finance Act, 1994 - Hiring of containers - Payment of lease rentals - Appellant had taken containers on lease from foreign companies to transport cargo for import as well as export - Appellant paid lease rent charges in foreign currency to service providers located abroad - Revenue issued SCN to Appellant demanding service tax under category of ‘Supply of Tangible Goods Services’ - After due process of law, Adjudicating authority confirmed demand of tax - Whether lease rentals paid by Appellant to foreign company (Lessor) for hiring the containers is subject to levy of service ta... [Read more]

Service Tax - Section 65(105)(zzzzj) of Finance Act, 1994 - Hiring of containers - Payment of lease rentals - Appellant had taken containers on lease from foreign companies to transport cargo for import as well as export - Appellant paid lease rent charges in foreign currency to service providers located abroad - Revenue issued SCN to Appellant demanding service tax under category of ‘Supply of Tangible Goods Services’ - After due process of law, Adjudicating authority confirmed demand of tax - Whether lease rentals paid by Appellant to foreign company (Lessor) for hiring the containers is subject to levy of service tax under category of Supply of Tangible Goods Services - HELD - Section 65(105)(zzzzj) of the Act defines ‘Supply of Tangible Goods Services’ as any services provided to any person by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances - It is only if supply is without transferring right to possession and effective control of machinery, equipment and appliances, activity would fall under definition of Supply of Tangible Goods Services - Containers are delivered to Appellant by lessor for transportation of cargo - Appellant has legal right to use container and has all permissions/licenses in their name for compliance with customs formalities as well as courier formalities - Appellant has full right to use containers during lease period to exclusion of lessor - On perusal of agreement, it is seen that lessor does not reserve any right to transfer right to use to others during lease period - There is transfer of possession as well as effective control of containers to Appellant by foreign supplier - Activity of leasing containers would fall under transfer of right to use goods/deemed sale and therefore is not chargeable to service tax under category of Supply of Tangible Goods Services as defined under Section 65(105)(zzzzj). Consequently, demand of service tax cannot sustain - Impugned order is set aside and appeal is allowed [Read less]

GST – Payment of pre-deposit for filing of appeal - Technical glitches in making online payment under the head APL-01 - Payment of pre-deposit under the head DRC-03 - Appellate Authority refused to accept the payment made under DRC-03 as a pre-deposit made under APL-01 – Petitioner challenge rejection of appeal on the ground of non-payment of required pre-deposit – HELD – In the earlier round of litigation, the Hon’ble Division Bench had directed the Appellate Authority to consider the question of whether there was a technical difficulty in making payment under APL-01 and to pass orders thereafter. This would mea... [Read more]

GST – Payment of pre-deposit for filing of appeal - Technical glitches in making online payment under the head APL-01 - Payment of pre-deposit under the head DRC-03 - Appellate Authority refused to accept the payment made under DRC-03 as a pre-deposit made under APL-01 – Petitioner challenge rejection of appeal on the ground of non-payment of required pre-deposit – HELD – In the earlier round of litigation, the Hon’ble Division Bench had directed the Appellate Authority to consider the question of whether there was a technical difficulty in making payment under APL-01 and to pass orders thereafter. This would mean that the Appellate Authority was required to ascertain whether there was a technical glitch which prevented the petitioners from making the necessary pre-deposits and to accept the payment made under DRC-03 as payment under APL-01 - the Appellate Authority, without going into the question as to whether there was a technical glitch or not, had simply decided that, payment made under a wrong head is not sufficient compliance of the requirements of Rule 108 of the CGST/SGST Rules, 2017 r/w Section 107 of the CGST/SGST Act, 2017 - the manner of disposing the appeals is not in compliance with the directions of the Hon’ble Division Bench of this Court – the impugned orders are set aside and the matters are remanded back to the Appellate Authority for fresh consideration – the writ petition is allowed [Read less]

GST – Tamil Nadu AAAR - Scope of Entry No.1 of Schedule III of the CGST Act, 2017 – Meaning of ‘perquisite’ - Applicability of GST on car facility extended to the employees by the employer in the course of employment – Appellant contention that the facility of car lease provided to the employees under the employment contract will qualify as a perquisite under the Income Tax Act, and accordingly would be exempt from payment of GST in view of Entry 1 of Schedule III of the CGST Act, 2017 – HELD – the appellant pays the lease premium directly to car leasing company, and the overall salary cost of the related emp... [Read more]

GST – Tamil Nadu AAAR - Scope of Entry No.1 of Schedule III of the CGST Act, 2017 – Meaning of ‘perquisite’ - Applicability of GST on car facility extended to the employees by the employer in the course of employment – Appellant contention that the facility of car lease provided to the employees under the employment contract will qualify as a perquisite under the Income Tax Act, and accordingly would be exempt from payment of GST in view of Entry 1 of Schedule III of the CGST Act, 2017 – HELD – the appellant pays the lease premium directly to car leasing company, and the overall salary cost of the related employees will get reduced to the extent of cost incurred by company in relation car facility provided to the employees - in respect of the services relating to car lease provided by the applicant to its employees, the provisions of Entry 1 of Schedule III to the CGST Act applies only to the value of the actual benefit in monetary terms extended to the employees, and not on the value of car lease premium charged and recovered on actual terms from the employees - in the instant case, having paid the lease premium directly to car leasing company, the appellant admittedly deducts the exact amount from the salary of the employees concerned, i.e., to the extent of cost incurred towards the leasing of cars by the Company - mere extending the car lease facility does not qualify as a perquisite; a value in monetary terms is required to be extended to the employees; and the value of perquisite for consideration is restricted to the value of actual monetary gain extended as in Form 12BA. The contention of the appellant that extending the facility of car lease is nothing but a benefit extended to the employees, is not sustainable - the view of the appellant that the car lease amount is not recovered from the employee and is part of the overall compensation/CTC and that the cost of such facility is eventually borne by the company, is partly misconstrued and misplaced - a ‘perquisite’ is not just about providing a car facility and claiming back or recovering the cost of the car or the leasing of car. Rather, it is about providing facilities free of charge or on concessional basis, so that the facilities extended are seen as benefits at the hands of the employees - only the actual value in monetary terms extended to the employee concerned in the course of or in relation to employment, qualifies as a ‘perquisite’ whereas the car lease amount recovered in actual terms by the appellant-company while extending the facility of car to its employees, cannot be considered as a ‘perquisite’ and accordingly liable to GST – the AAR order is modified accordingly [Read less]

Customs - Classification Issue - Challenge to assessment order on the ground for failure to address substantial contentions and its lack of adequate reasoning – Petitioner case that despite providing detailed responses and additional submissions by the petitioner, the impugned order was issued without sufficiently addressing the arguments presented – HELD - The petitioner had classified certain goods, namely a smart key and lock system for motor vehicles, under Chapter 83 of the Customs Tariff Act, which deals with locks and keys of base metal. The petitioner argued that this classification was consistent with the Gene... [Read more]

Customs - Classification Issue - Challenge to assessment order on the ground for failure to address substantial contentions and its lack of adequate reasoning – Petitioner case that despite providing detailed responses and additional submissions by the petitioner, the impugned order was issued without sufficiently addressing the arguments presented – HELD - The petitioner had classified certain goods, namely a smart key and lock system for motor vehicles, under Chapter 83 of the Customs Tariff Act, which deals with locks and keys of base metal. The petitioner argued that this classification was consistent with the General Rules for Interpretation (GRI) and the Explanatory Notes to the Harmonized System of Nomenclature (HSN). According to the petitioner, Rule 3(a) of the GRI, which prefers the most specific description over a more general one, and Rule 3(b), which emphasizes the material that imparts essential character to the goods, were not considered in the impugned order. The order instead classified the goods under CTH 8708, leading to a higher tax rate - the impugned order failed to address the key contentions such as the application of GRI and did not fully comply with principles of natural justice - To balance the revenue interest, the petitioner deposit Rs.1.75 crore within four weeks of receiving the order. Upon receipt of the deposit, the assessing officer is directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months – the writ petition is disposed of [Read less]

GST – Interception and seizure of goods and vehicle – Levy of penalty on ground that the vehicle was not on the route of its destination and on the basis that the driver made statement that goods were to be unloaded at the place which is not mentioned in the tax invoice – HELD - Admittedly, the goods in question were sold by the registered dealer along with genuine documents i.e. tax invoices and e-way bills. At the time of interception it is alleged that driver of the vehicle made statement that goods were to be unloaded at the place which is not mentioned in the tax invoice but in the GST MOV-01, not a single word ... [Read more]

GST – Interception and seizure of goods and vehicle – Levy of penalty on ground that the vehicle was not on the route of its destination and on the basis that the driver made statement that goods were to be unloaded at the place which is not mentioned in the tax invoice – HELD - Admittedly, the goods in question were sold by the registered dealer along with genuine documents i.e. tax invoices and e-way bills. At the time of interception it is alleged that driver of the vehicle made statement that goods were to be unloaded at the place which is not mentioned in the tax invoice but in the GST MOV-01, not a single word has been whispered in respect of the goods in question to be unloaded at the place which has not been shown in the tax invoice accompanying the goods – Further, under the GST Act, there is no specific provision which bounds the selling dealer to disclose the route to be taken during transportation of goods or while goods are in transit however there was a provision under VAT Act to disclose the route during transportation of goods to reach its final destination. Once the legislature itself in its wisdom has chosen to delete the said provision, the authorities were not correct in passing the seizure order even if the vehicle was not on regular route or on different route - The power of detention as well as seizure can be exercised only when the goods were not accompanying with the genuine documents provided under the Act. Once the documents accompanying the goods were found to be genuine the goods ought not be have been seized – the impugned order cannot be sustained in the eyes of law and is quashed – the writ petition is allowed [Read less]

GST – Tamil Nadu AAR - Section 2(31) & 7(1) of the CGST Act, 2017 - Taxability to grant received by the applicant in convertible Foreign Exchange from an overseas Non-Profit Organisation (Food & Agriculture Organisation of United Nation) - Whether the grant from the Food and Agriculture Organisation of UN is a supply in accordance with the provisions of the GST Act – HELD - The incidence to pay tax on goods or services or both arise at the time of supply and ‘supply is the taxable event as far as GST law is concerned. For levying GST on a particular transaction, it has to first fall under the scope of ‘Supply’ de... [Read more]

GST – Tamil Nadu AAR - Section 2(31) & 7(1) of the CGST Act, 2017 - Taxability to grant received by the applicant in convertible Foreign Exchange from an overseas Non-Profit Organisation (Food & Agriculture Organisation of United Nation) - Whether the grant from the Food and Agriculture Organisation of UN is a supply in accordance with the provisions of the GST Act – HELD - The incidence to pay tax on goods or services or both arise at the time of supply and ‘supply is the taxable event as far as GST law is concerned. For levying GST on a particular transaction, it has to first fall under the scope of ‘Supply’ defined under Section 7(1) of the CGST Act, 2017 - in the transaction between the applicant and the FAO of UN, nothing will be supplied to the FAO of UN for the grant given by them. It is purely a gratuitous grant from the overseas UN linked autonomous and Non-Profit Organisation for the use of the applicant - there is no supply of goods or services to the grant providing organization, and hence the activities undertaken by the applicant in lieu of receipt of the grant from FAO is not covered under the meaning of ‘scope of supply’ – Further, the term ‘consideration’ refers to payment made towards supply of goods or services or both. However in the instant case, there is no supply of goods or services or both involved in the transaction between the applicant and the FAO, therefore, the amount received by the applicant cannot be held as consideration – Accordingly, neither the grant received by the applicant can be construed to be consideration under the provisions of the GST law nor the activities to be undertaken by the applicant, as per the work plan developed and agreed upon jointly by the FAO and the applicant qualify to be supply under the provisions of GST law – Ordered accordingly [Read less]

Central Excise – Section 11AC of Central Excise Act, 1944 – Allegation of clandestine clearance of goods – Demand of duty – Sustainability – Appellant is engaged in manufacture of various packaging items – Appellant also undertook job work on behalf of other principal manufacturers – Appellant has not paid central excise duty on goods cleared under job work challans – Department issued show cause notice to Appellant alleging that Appellant had surreptitiously manufactured excisable goods and removed same without payment of duty under guise of job work – Commissioner confirmed demand of duty along with int... [Read more]

Central Excise – Section 11AC of Central Excise Act, 1944 – Allegation of clandestine clearance of goods – Demand of duty – Sustainability – Appellant is engaged in manufacture of various packaging items – Appellant also undertook job work on behalf of other principal manufacturers – Appellant has not paid central excise duty on goods cleared under job work challans – Department issued show cause notice to Appellant alleging that Appellant had surreptitiously manufactured excisable goods and removed same without payment of duty under guise of job work – Commissioner confirmed demand of duty along with interest and imposed penalty under Section 11AC of the Act – Whether department has established charge of clandestine removal against Appellant beyond doubt – HELD – Charge of clandestine removal being a serious charge is required to be proved beyond doubt on basis of affirmative evidence and burden of proof in this regard is on department – Appellant undertook job work on behalf of other principal manufacturers and due intimation in this regard was given to Superintendent of Central Excise vide letter – Appellant had specified nature of activities undertaken by them on materials received by them for job work – For purpose of job work, Appellant received paper boards supplied by principal manufacturers under cover of their job challans – Challans submitted by Appellant indicate that they have undertaken only 'printing' work, which does not amount to 'manufacture' – Goods returned by Appellant were in nature of semi-finished goods for further processing, such as punching, pasting, sorting and packing, etc., by principal manufacturers at their factory to make finished goods – Department has not brought any evidence to substantiate allegation that Appellant has actually manufactured finished goods and cleared same under guise of job challans – In absence of any evidence to substantiate allegation of clandestine clearance, demand of duty is not sustainable – Since demand of duty is not sustainable, question of demanding interest and imposing penalty on Appellant does not arise – Impugned order passed by Commissioner set aside – Appeals allowed [Read less]

Service Tax – Rule 2(l) of CENVAT Credit Rules, 2004 – Receipt of manpower service – Tax liability – Appellants are registered with Department for rendering various taxable services – On completion of investigation initiated on basis of intelligence, Revenue issued show cause notice to Appellant proposing demand of Service Tax under various heads – Commissioner confirmed demands proposed in show cause notice – Whether Appellant is liable to discharge service tax under reverse charge mechanism for services received under category of Manpower Supply Agency Service – HELD – Appellant had entered into a servi... [Read more]

Service Tax – Rule 2(l) of CENVAT Credit Rules, 2004 – Receipt of manpower service – Tax liability – Appellants are registered with Department for rendering various taxable services – On completion of investigation initiated on basis of intelligence, Revenue issued show cause notice to Appellant proposing demand of Service Tax under various heads – Commissioner confirmed demands proposed in show cause notice – Whether Appellant is liable to discharge service tax under reverse charge mechanism for services received under category of Manpower Supply Agency Service – HELD – Appellant had entered into a service agreement with overseas company for providing personnel to work with Appellant and salaries are agreed to be paid in convertible foreign currency – Deputed personnel under employment with Appellant was not in any way subjected to any kind of instruction or control or direction or supervision of overseas company and they would report only to Appellant’s management – There is no employer-employee relationship between overseas company and dispatched personnel – Service tax is applicable on amount paid by Appellant to overseas company for receiving manpower service – In absence of any suppression on part of Appellant, demand is restricted to normal period of limitation – Appeals disposed of - Management consultancy services – Demand of tax – Whether demand confirmed under category of Management Consultancy Services is sustainable – HELD – For demand raised on account of said services, Appellant claimed that these are in nature of reimbursable expenses – Appellant vehemently argued that reimbursable expenses could not be included in gross tax value – Commissioner has not recorded any specific finding about true nature of said expenses as claimed by Appellant – Matter remanded to Commissioner, to verify claim of Appellant and decide issue in accordance with law - Collection of amount from unsuccessful bidders – Tax liability – Whether amount collected from unsuccessful bidders is liable to service tax under category of Airport Services – HELD – Appellant has collected amount from unsuccessful bidders who participated in tender process floated by Appellant in connection with various services like cargo handling, aviation fuel facility, ground handling, flight catering, etc. in course of providing Airport Services – Amounts so collected and retained by Appellant are in no way connected to rendering of Airport Services, as there is no relationship of service receiver and service provider between Appellant and unsuccessful bidders – Amount collected as a pre-bid offer from unsuccessful bidders cannot be considered as a consideration for rendering Airport Services and accordingly not leviable to Service Tax - Admissibility of credit – Whether CENVAT Credit availed by Appellant on various input services are admissible – HELD – On issue of availing CENVAT Credit on various input services, namely, photography and videography services, asset hiring, landscaping services, office rent, civil and interior work, etc., Appellant has argued that these services are held to be ‘input services’ and duty paid is admissible to credit – All these services satisfy definition of “input service” as prescribed under Rule 2(l) of the Rules, hence, Cenvat Credit availed on various input services are admissible – Demand raised under this head set aside. [Read less]

GST - Cancellation of registration on account of failure to file tax returns for six consecutive months – non-submission of reply to show cause notice and non-appearance on the date of personal hearing – Rejection of appeal on ground of time-barred - Jurisdiction to condone delay in filing of appeal – HELD - if an order of the First Authority is passed on the ground that the assessee did not tender appropriate documents or relevant documents for proper adjudication, an opportunity to tender such documents and participate in the hearing afresh, could be granted - Section 30 of the CGST Act, 2017 also permits revocatio... [Read more]

GST - Cancellation of registration on account of failure to file tax returns for six consecutive months – non-submission of reply to show cause notice and non-appearance on the date of personal hearing – Rejection of appeal on ground of time-barred - Jurisdiction to condone delay in filing of appeal – HELD - if an order of the First Authority is passed on the ground that the assessee did not tender appropriate documents or relevant documents for proper adjudication, an opportunity to tender such documents and participate in the hearing afresh, could be granted - Section 30 of the CGST Act, 2017 also permits revocation of cancellation of registration subject to such conditions as may be prescribed - if the impugned order is sustained, the Petitioner would not be in a position to conduct his business and he would then have to move the appropriate authority for a fresh registration. If the Petitioner can be permitted to seek a re-hearing before the State Tax Officer, subject to certain conditions for the lapse on its part, ends of justice would be met - token cost of Rs. 5,000/- imposed upon the Petitioner - On the condition that the Petitioner will deposit costs of Rs.5000/- with STO, on or before 01.08.2024, the impugned orders stand quashed and set aside - The proceedings are remitted to Respondent-Authority who would consider the records and by following the due procedure laid down in law, pass an appropriate order – the writ petition is partly allowed [Read less]

Central Excise - Classification DPE/PP Woven Bags/Sacks and Flexible Intermediate Bulk Container (FIBC) bags - Appellant is engaged in manufacture of HDPE/PP Woven Bags/Sacks and Flexible Intermediate Bulk Container (FIBC) bags - Appellant classified FIBC Bags under CET Item 6305 32 00 and HDPE/PP Woven Bags/Sacks under Heading 3923 90 90 - After due process of law, Adjudicating authority classified these goods under Heading 3923 90 90 and 3923 29 90 respectively - Commissioner (Appeals) upheld order passed by Adjudicating authority - Whether Appellant has rightly classified FIBC bags under Heading 6305.32? - Held - Appell... [Read more]

Central Excise - Classification DPE/PP Woven Bags/Sacks and Flexible Intermediate Bulk Container (FIBC) bags - Appellant is engaged in manufacture of HDPE/PP Woven Bags/Sacks and Flexible Intermediate Bulk Container (FIBC) bags - Appellant classified FIBC Bags under CET Item 6305 32 00 and HDPE/PP Woven Bags/Sacks under Heading 3923 90 90 - After due process of law, Adjudicating authority classified these goods under Heading 3923 90 90 and 3923 29 90 respectively - Commissioner (Appeals) upheld order passed by Adjudicating authority - Whether Appellant has rightly classified FIBC bags under Heading 6305.32? - Held - Appellant had filed detailed reply explaining process of manufacturing of FIBC bags - Appellant classified this product under Heading 6305 32 00 - Item "Flexible Intermediate Bulk Containers" is specifically and consciously mentioned under Chapter sub heading 6305 32 00 - Department proposes to classify item under Chapter heading 3923 which covers ‘articles for conveyance of packing of goods and plastics, lids, caps’ - FIBC bags has been correctly classified by Appellant under heading 6305.32 - Appeal is partly allowed - Classification of woven bags - Whether HDPE/PP woven bags/sacks would fall under Heading 3923 29 90 as classified by department - HELD - Appellant has classified these items under Chapter Heading 3923 90 90, whereas department is of view that goods fall under Chapter Heading 3923 29 90 - HDPE/PP woven bags/sacks are articles of plastics - HDPE granules are used as raw materials for manufacture of woven sacks - Case of Appellant is that goods fall under 3923 90 90 which follows heading corresponding to aseptic bags - Appellant has not been able to establish any process undertaken to make the bags aseptic - Bags being made of plastics would be more appropriate to classify under Heading 3923 29 90 - HDPE/PP Woven Bags would fall under Heading 3923 29 90 as classified by department. [Read less]

GST - Refund of IGST paid on export of goods – While the petitioner made mistake in showing correct amount of refund in Form GSTR-3B, the refund was delayed due to technical glitches in the system – Whether the petitioner is entitled to claim of interest on delayed refund – HELD - if delay was due to technical glitch, there is no evidence as to what was the technical glitch and how long it prevailed. Moreover, once the High Court passed the direction for grant of refund, the technical glitch mysteriously vanished and petitioner was given the refund. The refund was given only after the Court directed respondents to co... [Read more]

GST - Refund of IGST paid on export of goods – While the petitioner made mistake in showing correct amount of refund in Form GSTR-3B, the refund was delayed due to technical glitches in the system – Whether the petitioner is entitled to claim of interest on delayed refund – HELD - if delay was due to technical glitch, there is no evidence as to what was the technical glitch and how long it prevailed. Moreover, once the High Court passed the direction for grant of refund, the technical glitch mysteriously vanished and petitioner was given the refund. The refund was given only after the Court directed respondents to consider petitioner’s representation. Therefore, the delay in grant of refund cannot be attributed to petitioner since respondents have admitted that the delay was on account of technical glitch in their portal which processed the refund - Inaction on the part of revenue is certainly contrary to the provisions of the Act and on general principles, petitioner ought to be compensated for such deprivation – Respondents are directed to pay interest @6% for the delayed period – the writ petition is allowed [Read less]

Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 - appropriation of amount of pre-deposit with tax dues - error in determination of the amount payable by the petitioner by considering the pre-deposit as an appropriation instead of deposit – HELD – The respondent has calculated the amount payable by the petitioner under the SVLDR Scheme contrary to the Scheme - the amount of pre-deposit made by the petitioner, at the time of filing of appeal, cannot be said to be an amount paid towards the amount in arrears as such amount is only a deposit. The Legislature has stipulated in sub-section (2) of section 124 that relief... [Read more]

Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 - appropriation of amount of pre-deposit with tax dues - error in determination of the amount payable by the petitioner by considering the pre-deposit as an appropriation instead of deposit – HELD – The respondent has calculated the amount payable by the petitioner under the SVLDR Scheme contrary to the Scheme - the amount of pre-deposit made by the petitioner, at the time of filing of appeal, cannot be said to be an amount paid towards the amount in arrears as such amount is only a deposit. The Legislature has stipulated in sub-section (2) of section 124 that relief calculated under sub-section (1) shall be subject to the condition that amount paid as pre-deposit at any stage of appeal proceedings under the indirect tax enactment or as deposit during the inquiry etc. shall be deducted when issuing the statement indicating amount payable by the declarant. Meaning thereby that, at the time of calculation of the amount payable the amount of pre-deposit is not required to be deducted but the same is required to be deducted while issuing the statement indicating amount payable by the declarant - CBIC has also clarified that the relief available under section 124(1)(c) is to be applied to the net outstanding amount of tax dues in arrears after deducting the amount already paid in form of pre-deposit appropriated or paid subsequently by the tax payers voluntarily against the outstanding demand. It is also further clarified that money paid before appropriation is in nature of deposit only - the declaration made by the petitioner for availing the benefit of SVLDRS by computing amount payable is in accordance with the provisions of the scheme read with circular issued by the CBIC – the petition is allowed [Read less]

Service Tax - Exemption under Mega Exemption Notification No.25/2012, dated 20.06.2012 on services rendered to State Departments - Dismissal of claim of exemption on the ground that adequate documents were not placed on record to indicate that the firm was eligible for exemption – Condonation of delay in filing appeal before the appellate authority – HELD – In Sanjeev Suresh Desai case, this Court has recorded that the Appellate Authority cannot be blamed since it did not have the power to condone the delay. It was also recorded that the Court was inclined to exercise its jurisdiction under Article 226 of the Constit... [Read more]

Service Tax - Exemption under Mega Exemption Notification No.25/2012, dated 20.06.2012 on services rendered to State Departments - Dismissal of claim of exemption on the ground that adequate documents were not placed on record to indicate that the firm was eligible for exemption – Condonation of delay in filing appeal before the appellate authority – HELD – In Sanjeev Suresh Desai case, this Court has recorded that the Appellate Authority cannot be blamed since it did not have the power to condone the delay. It was also recorded that the Court was inclined to exercise its jurisdiction under Article 226 of the Constitution particularly in view of Article 300A of the Constitution. We deem it appropriate to adopt the same course - the Petitioner’s case stands on a better footing in comparison to the facts emerging in Sanjeev Desai case. The Petitioner was totally unconnected with the proprietary firm, which was operated by her husband. The circumstances in which her husband passed away, created mental agony - in the peculiar facts and circumstances of the case, it is partly allowed with direction that the pending appeal, belatedly filed by the Petitioner shall stand disposed of from the file of the Appellate Court, the impugned order is quashed and set aside by granting liberty to the petitioner to place all such documents before Respondent and the Respondent shall pass a reasoned order on the merits of the case – the writ petition is partly allowed [Read less]

Customs - Valuation - Appellant had imported brushless DC/Axial fans by making a declaration in bills of entry that goods are meant for use in electronic industry for manufacturing electronic equipment like medical equipment, inverters, control panels, etc -Department commenced investigation regarding method of valuation adopted while clearing goods on ground that Appellant had short paid Countervailing Duty by considering transaction value as per Section 4 of the Central Excise Act, 1944 instead of Section 4A of the Act - Adjudication Authority confirmed demand of duty by assessing value of goods under Section 4A of the A... [Read more]

Customs - Valuation - Appellant had imported brushless DC/Axial fans by making a declaration in bills of entry that goods are meant for use in electronic industry for manufacturing electronic equipment like medical equipment, inverters, control panels, etc -Department commenced investigation regarding method of valuation adopted while clearing goods on ground that Appellant had short paid Countervailing Duty by considering transaction value as per Section 4 of the Central Excise Act, 1944 instead of Section 4A of the Act - Adjudication Authority confirmed demand of duty by assessing value of goods under Section 4A of the Act - Whether goods imported by Appellant are excisable to Countervailing Duty on transaction value in terms of Section 4 of the Act or under Section 4A of the Act - HELD - As per law laid down by Apex Court in matter of Jayanthi Food processing, valuation under Section 4A of the Act can be adopted only if there is a requirement under the Rules to declare MRP of goods on packaging - As per Rule 6 of the Rules, exemption is given to importers who are importing goods for institutional or industrial consumers - Even after selling product to various customers over a period of time without affixing MRP, Authority entrusted under the Rules to ensure compliance of said provision of law has not raised any objection - Goods sold by Appellant cannot be considered as goods falling under the Rules to adopt method of valuation as per Section 4A of the Act as held by Adjudication Authority - Impugned order is set aside and appeal is allowed [Read less]

Central Excise – Section 4 and 4A of Central Excise Act, 1944 – Supply of medicaments – Assessment of value – Whether medicaments supplied to institutional buyer such as Hospitals are liable for valuation under Section 4 of the Act as per Appellant’s claim or under Section 4A of the Act as claimed by Revenue – HELD – There is no dispute on fact that pack of medicaments supplied for hospital use does not bear MRP and also bear inscription as “Hospital Supply-Not for Retail Sale” – Issue is no longer res integra, as has been decided in various judgments that in case, medicaments are supplied for use of in... [Read more]

Central Excise – Section 4 and 4A of Central Excise Act, 1944 – Supply of medicaments – Assessment of value – Whether medicaments supplied to institutional buyer such as Hospitals are liable for valuation under Section 4 of the Act as per Appellant’s claim or under Section 4A of the Act as claimed by Revenue – HELD – There is no dispute on fact that pack of medicaments supplied for hospital use does not bear MRP and also bear inscription as “Hospital Supply-Not for Retail Sale” – Issue is no longer res integra, as has been decided in various judgments that in case, medicaments are supplied for use of institution and no retail sale price is affixed on pack of medicament, assessment of value for purpose of payment of excise duty shall be done under Section 4 of the Act – Since Tribunal has already taken a consistent view that medicament supplied to hospitals shall be valued in terms of Section 4 of the Act, there is no merit in Revenue's allegation that such medicaments are liable to be assessed under Section 4A of the Act – Valuation of goods in fact of present case is governed by Section 4 of the Act, consequently, demand is not sustainable – Appeal allowed [Read less]

Central Excise – Section 11BB of Central Excise Act, 1944 – Payment of differential excise duty – Delayed refund – Entitlement of interest – Appellant is engaged in manufacture of readymade garments – Appellant cleared goods from their Export Oriented Unit to Domestic Tariff Area and claimed exemption of excise duty equivalent to CVD vide Notification No.30/2004-CE – Pursuant to audit objection, Appellant paid differential excise duty under protest – On basis of order passed by Appellate Authority, Appellant claimed refund of differential excise duty – Assistant Commissioner sanctioned refund, but without... [Read more]

Central Excise – Section 11BB of Central Excise Act, 1944 – Payment of differential excise duty – Delayed refund – Entitlement of interest – Appellant is engaged in manufacture of readymade garments – Appellant cleared goods from their Export Oriented Unit to Domestic Tariff Area and claimed exemption of excise duty equivalent to CVD vide Notification No.30/2004-CE – Pursuant to audit objection, Appellant paid differential excise duty under protest – On basis of order passed by Appellate Authority, Appellant claimed refund of differential excise duty – Assistant Commissioner sanctioned refund, but without interest – Whether Appellant is entitled to interest on delayed refund – HELD – Appellant prayed to direct department to grant interest at rate of 12% per annum instead of 6% per annum as per relevant notification issued under Section 11BB of the Act from expiry of 3 months of date of receipt of refund application up to date of receipt of refund – Payment of monies by Appellant was the result of an objection raised by internal Audit Wing of department – Payment under protest against a quantified short payment cannot be stated to be a ‘deposit’ and it has to be treated as a payment of duty – Interest on refund will have to be considered only in terms of Section 11BB of the Act and in manner as prescribed by said section – Appellant is eligible for interest on delayed refund from date immediately after expiry of three months from date of order-in-appeal in terms of Section 11BB of the Act – Interest rate applicable on delayed refund would be as per relevant notification issued under Section 11BB of the Act – Appellant would only be eligible for interest at effective rate as per notification issued under Section 11BB of the Act and not at any higher rate – Appeal disposed of [Read less]

Service tax liability on rendering of Security service by State Police – Discharge of statutory functions - Whether the petitioner who represents the Tamil Nadu Police is required to pay service tax for the services rendered by them to various Banks while transportation of cash from currency chest to ATMs of the respective Banks – HELD - the Writ Petition is disposed of by giving liberty to the petitioner to file statutory appeal before the - Recovery proceedings, if any initiated, is directed to be lifted. In case the petitioner fails to file such appeal before the CESTAT, Chennai, within the time, the respondents are... [Read more]

Service tax liability on rendering of Security service by State Police – Discharge of statutory functions - Whether the petitioner who represents the Tamil Nadu Police is required to pay service tax for the services rendered by them to various Banks while transportation of cash from currency chest to ATMs of the respective Banks – HELD - the Writ Petition is disposed of by giving liberty to the petitioner to file statutory appeal before the - Recovery proceedings, if any initiated, is directed to be lifted. In case the petitioner fails to file such appeal before the CESTAT, Chennai, within the time, the respondents are at liberty to proceed against the petitioner as if no liberty is granted and the impugned order is scrutinized the lability - the Writ Petition stands disposed of [Read less]

Service Tax – Transfer of right to use goods – Payment of sales tax – Demand of service tax – Sustainability – During course of audit of records of Appellant, audit party observed that Appellant had received payments against supply of tangible goods under agreement entered into with Fresenius Kabi Oncology Ltd (FKOL) – Revenue issued show cause notice proposing demand of Service Tax under category of supply of tangible goods service – Joint Commissioner confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld Order-in-Original – Whether Appellant is liable to pay Service Tax under... [Read more]

Service Tax – Transfer of right to use goods – Payment of sales tax – Demand of service tax – Sustainability – During course of audit of records of Appellant, audit party observed that Appellant had received payments against supply of tangible goods under agreement entered into with Fresenius Kabi Oncology Ltd (FKOL) – Revenue issued show cause notice proposing demand of Service Tax under category of supply of tangible goods service – Joint Commissioner confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld Order-in-Original – Whether Appellant is liable to pay Service Tax under category of supply of tangible goods service – HELD – Exclusive possession with right to use goods was given by Appellant to FKOL, who were free to use goods – Clause 2.7 of agreement provides that even if Appellant decides to sell or transfer its right, title or interest in goods during term or extended term for right to use granted, Appellant shall take prior consent from FKOL and further ensure that right to use of FKOL under agreement are not disturbed and their interest is not prejudicially effected – Appellant had granted exclusive right to use goods without disturbance or encumbrance to their client – Appellant had rightly paid Sales Tax/VAT on transfer of right to use goods to their customer, which is a transaction of deemed sale and accordingly, service tax is not attracted – Impugned order passed by Commissioner (Appeals) set aside – Appeal allowed [Read less]

GST - Challenge to validity of Circular No.9 dated 24.05.2019 – Power of inspecting authority to adjudicate - Validity of Circular No.9 dated 24.05.2019 has been challenged on the ground that the 4th respondent has no authority to delegate the power of adjudication by way of a circular contrary to Section 167 of the Act which contemplates a notification being issued and that the assessing authority was the inspecting authority and permitting the very same authority to adjudicate would fall foul of the maxim “No man can be a judge of his own cause” – HELD - both the above grounds had arisen for consideration on earl... [Read more]

GST - Challenge to validity of Circular No.9 dated 24.05.2019 – Power of inspecting authority to adjudicate - Validity of Circular No.9 dated 24.05.2019 has been challenged on the ground that the 4th respondent has no authority to delegate the power of adjudication by way of a circular contrary to Section 167 of the Act which contemplates a notification being issued and that the assessing authority was the inspecting authority and permitting the very same authority to adjudicate would fall foul of the maxim “No man can be a judge of his own cause” – HELD - both the above grounds had arisen for consideration on earlier occasions and stands rejected. With regard to the 1st ground that the authorisation ought to have been made only by way of a Notification as contemplated under Section 167 of the TNGST Act, 2017, the same is misplaced inasmuch as the Circular is apparently traceable to Section 2(91) of the TNGST Act and not Section 167 of the Act, thus, issuance of a notification may not be necessary for authorising/ assigning proper officers with power of adjudication - the challenge to Circular No.9 of 2019 on the ground that the authorisation of power of adjudication by way of Circular is impermissible is liable to be rejected - merely because a person during inspection or a raid was able to get at and collect some material warranting or justifying reassessment he would not become disqualified on the ground of bias to exercise the powers of reassessment - the challenge to Circular No.9 of 2019 that the inspecting authority if authorised to carryout adjudication would be vitiated on the ground of bias, is without merit - the writ petition challenging Circular No.9 of 2019 and the assessment orders are rejected – the writ petition is dismissed - Reopening of proceeding for reverse ITC on the ground that the earlier proceedings were wrongly dropped in the absence of documents proving genuineness of the transaction - Petitioner grievance that having already demonstrated the genuineness of the transactions with the said suppliers, the impugned orders rejecting claim of ITC on the premise that the transactions were not genuine is bad in law – HELD - With regard to the challenge to the assessment orders, not inclined to entertain the writ petition inasmuch the question whether the transactions are genuine or not and entitlement of the petitioner to ITC with regard to motor vehicles and its spare parts involves disputed questions of fact. Furthermore, in the present case a question arises as to whether the document was furnished and if so, whether the same was adequate - It is trite law that adjudication of disputed questions of fact falls outside the purview of Article 226 of the Constitution of India. [Read less]

Central Excise - Entitlement to CENVAT Credit on capital goods received under the works contract on sale basis - Denial of CENVAT Credit on capital goods on the ground that supplier had opted for payment of service tax on all the contracts under ‘works contract service’ wherein supplier is restricted from availing CENVAT Credit on the ‘inputs’ used in works contract service – Revenue alleged that the capital goods on which the appellant had availed CENVAT Credit becomes the inputs for supplier who is restricted from availing CENVAT Credit and thus, appellant is not entitled to avail CENVAT Credit on such goods - ... [Read more]

Central Excise - Entitlement to CENVAT Credit on capital goods received under the works contract on sale basis - Denial of CENVAT Credit on capital goods on the ground that supplier had opted for payment of service tax on all the contracts under ‘works contract service’ wherein supplier is restricted from availing CENVAT Credit on the ‘inputs’ used in works contract service – Revenue alleged that the capital goods on which the appellant had availed CENVAT Credit becomes the inputs for supplier who is restricted from availing CENVAT Credit and thus, appellant is not entitled to avail CENVAT Credit on such goods - whether appellants are entitled to take CENVAT Credit on capital goods – HELD - the capital goods have been procured by the appellant/Tata under a separate contract, on payment, which has become the property of the appellant and the same has been handed over by Tata to L&T for installation and commissioning. L&T paid Service Tax on the said activity without taking CENVAT Credit on inputs used in providing the said service. In these circumstances, the goods remain the property of the appellant namely, Tata during the impugned period – the said capital goods which were installed in the factory of the appellant have been used for manufacturing of their final product. Therefore, appellant-Tata steel has correctly taken CENVAT Credit on the capital goods procured by them which have been ultimately used in the manufacture of final products - the denial of CENVAT Credit is not sustainable and set aside - As the appellant-Tata has taken CENVAT Credit correctly, no penalty is imposable on the appellants. Consequently, the penalties imposed on all the appellants is set aside - the appeals are allowed [Read less]

Central Excise - Double taxation with reference to central excise duty - Manufacture of goods using tools supplied free of charge by the buyer – appellant had collected the cost of tools from the buyer-customers by raising excise invoices but the value of the same were neither included in the cost of production nor amortized for payment of duty on the final products manufactured by using such tools – confirmation of demand for duty in terms of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – whether the cost of tools supplied by the buyer free of charge back to the appe... [Read more]

Central Excise - Double taxation with reference to central excise duty - Manufacture of goods using tools supplied free of charge by the buyer – appellant had collected the cost of tools from the buyer-customers by raising excise invoices but the value of the same were neither included in the cost of production nor amortized for payment of duty on the final products manufactured by using such tools – confirmation of demand for duty in terms of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – whether the cost of tools supplied by the buyer free of charge back to the appellant, includible as an amortised cost, when the said tools are used in the appellants factory for manufacture of components for the said buyers, in terms of Rule 6 of CVR 2000 - HELD - The fact whether the tools were manufactured in the appellants factory or was outsourced by the appellant from another company would not change the legal position as per CVR 2000 so long as they were paid for by the buyer-customer. The tools manufactured and used for production of components at the cost of the buyer and against purchase orders, needs to be included in the cost of production and amortized for payment of duty on the final products manufactured by the appellant using such tools - Double taxation with reference to central excise duties on goods means levying central excise taxes twice on the very same excisable product, which is not the case here. In this case the appellant pays central excise duty first on the tools, which are capital goods as defined in CENVAT Credit Rules, 2004 manufactured for the buyers. Subsequently duty is paid on the final products, manufactured by using the capital goods. Both are two separate set of excisable goods. Had they purchased the tools from the market its price would have automatically entered the price of the final product sold by them. Hence the question of double taxation does not arise – however, appellant are eligible for the benefit of Notification No.67/95 – CE dated 16.03.1995 for the tools captively manufactured for the buyer and used in their factory for the manufacture of final products for the buyer. The excise duty element would hence not form a part of the amortised value of the tools and it needs to be re-worked out suitably – appeal is partly allowed - Appellant has collected certain payments towards ‘development NVH project charges’. However, the amount collected towards rendering the services were neither included in the cost of production nor amortised for the payment of duty on the final products manufactured using the services – HELD – Appellant claims that excise invoice were raised by mistakes since it was a standard format, therefore, the service provided falls out of the ambit of excise duty since service tax is discharged - the issue again is not whether tax has been discharged, but whether the value of goods or services which has been paid for by the buyer and used for development of the buyers tools that has been further used by the appellant for the manufacture of the final product for the said buyer has been amortised. Amortisation is understood as an accounting method for spreading out the costs of an asset over the expected period the said asset will provide value. Amortizing the value of tools viz., jigs and fixtures, molds and dies will include amortizing its total monetary value (i.e. both of the tools manufactured and services rendered to the buyer for the manufacture of the tools). The cost incurred by the buyer in such cases would have to form part of the amortised cost of the final product (less the duty exemption eligible on the tools). The issue of double taxation is not a valid argument - Whether the extended time limit could have been invoked in this case – HELD - the requirement of law is that mere failure or negligence in adopting the correct value and making the correct payment of duty cannot be considered as suppression of fact with intention to evade payment of duty, especially when the issue was complex. Something more is required to show that there was a positive intention to evade payment of duty. We do not find any such reason or finding in the impugned order – No grounds to invoke the extended period and the demand for the larger period must fail. [Read less]

Customs - Escapement of anti-dumping duty - Goods cleared into the domestic tariff area which were not entitled to be cleared at the concessional rate of duty available to EoU - imposition of penalty on the Appellant under Section 112(a) of the Customs Act, 1962 – HELD – In the Order-in-Original, the Commissioner has given a finding of fact that appellants being the original importer of goods (before sales of the same on High Sea Basis) were very much aware of and has actively colluded in the scheme to manipulate the law by contravening the permissions by feigning the manufacturing activity on imported raw material whi... [Read more]

Customs - Escapement of anti-dumping duty - Goods cleared into the domestic tariff area which were not entitled to be cleared at the concessional rate of duty available to EoU - imposition of penalty on the Appellant under Section 112(a) of the Customs Act, 1962 – HELD – In the Order-in-Original, the Commissioner has given a finding of fact that appellants being the original importer of goods (before sales of the same on High Sea Basis) were very much aware of and has actively colluded in the scheme to manipulate the law by contravening the permissions by feigning the manufacturing activity on imported raw material which actually was final product - The Commissioner has also given a finding of fact that appellants have played active role in perpetrating the fraud until the clearance of import goods through EOU route circumventing payment of customs duty and anti-dumping duty - The Commissioner further has given a finding that appellant had, in collusion with others, facilitated clearance of Ascorbic Acid in the guise of Ascorbic Acid (feed bread) resulting in substantial loss to Government Revenue. These findings have been confirmed by the CESTAT - the finding arrived at by the Commissioner as well as the Tribunal was on facts that appellant had abetted evasion of duty. Therefore, no substantial question of law arises - Appeals are dismissed [Read less]

GST – Chhattisgarh AAAR - Taxability of amount paid to Forest Department as Abhivahan Permission Shulk which is levied on extraction of coal from coal mine situated in forest area – Whether the Authority for Advance ruling erred in holding that the amount paid by appellant to the Forest department as “Abhivahan Shulk” for obtaining permission for transit of coal from the forest area, is liable to GST at the applicable rate and is not liable to NIL rate of tax – HELD - the Abhivahan Shulk as collected by the Forest Department from the appellant is in lieu of granting permission for movement of Forest produce viz. ... [Read more]

GST – Chhattisgarh AAAR - Taxability of amount paid to Forest Department as Abhivahan Permission Shulk which is levied on extraction of coal from coal mine situated in forest area – Whether the Authority for Advance ruling erred in holding that the amount paid by appellant to the Forest department as “Abhivahan Shulk” for obtaining permission for transit of coal from the forest area, is liable to GST at the applicable rate and is not liable to NIL rate of tax – HELD - the Abhivahan Shulk as collected by the Forest Department from the appellant is in lieu of granting permission for movement of Forest produce viz. coal from the forest area of Chhattisgarh State. The permit charges collected by forest department is used by the forest officials keep a watch on the mining activity and also to assess the quantity and type of mineral being quarried to carry out survey and also keep constant watch on the movement of the produce, and is not related to “Urban forestry, protection of the environment and promotion of the ecological aspect” or “Social forestry or farm forestry” under Article 243W or under Article 243G of the Constitution of India - the contention of the appellant that the services of permitting transit through the forests of Chhattisgarh by the Forest Department comes under the ambit of functions covered under the Article 243G and 243W of the Constitution being functions entrusted to the Municipality and Panchayat, is misplaced and devoid of merit - the “Abhivahan permission shulk” paid by the appellant is not eligible for NIL rate of GST, as provided under Sl. No. 4 & 5 of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017 – the appeal is dismissed - Classification of Supply – HELD - the appellant is a power generating company. The main raw material for generation of power is coal. The coal mines are situated in a forest area, and the appellant is paying Transit Fees or Abhivahan Shulk throughout the year on recurring basis to the Forest Department for issuance of transit pass whenever the Coal is cleared from the forest area. This is not a single transaction rather it’s a supply of the entire coal regularly to their power plants from the said coal block located in the forest and for which permission is granted by the Forest department. It is just for administrative convenience that vehicle wise Abhivahan Permission Shulk or Transit Fee is being paid by the applicant to the Forest Department. Therefore, the said service squarely falls under the category of “supply of continuous service” as per Section 2(33) of CGST Act, 2017. [Read less]

GST – Kerala AAR - Status of Kerala State Transport Project (KSTP) in GST viz, Government Authority or Government Entity or Government Department – Applicable GST rate on the works contract services for construction of Roads and bridges for public use provided by a Government Contractor to KSTP – HELD - No ruling can be provided for status of the applicant as the question is not in respect of any of the subject matters enlisted under sub-section (2) of section 97 of the CGST Act – the works contract services provided by the applicant to KSTP by way of construction of roads and bridges is for the use of the general ... [Read more]

GST – Kerala AAR - Status of Kerala State Transport Project (KSTP) in GST viz, Government Authority or Government Entity or Government Department – Applicable GST rate on the works contract services for construction of Roads and bridges for public use provided by a Government Contractor to KSTP – HELD - No ruling can be provided for status of the applicant as the question is not in respect of any of the subject matters enlisted under sub-section (2) of section 97 of the CGST Act – the works contract services provided by the applicant to KSTP by way of construction of roads and bridges is for the use of the general public - the works contract services provided by the applicant by way of construction of roads and bridges for public use will be taxable at 12% GST if the time of supply as determined in accordance with section 14 of the CGST Act falls any date prior to 18.07.2022, otherwise it will be taxable at 18% GST – Ordered accordingly [Read less]

GST – Taxability of Differential Dealer Margin provided by the petroleum companies to its retail dealers - Whether differential dealer margin provided by the petroleum companies to its retail dealers are taxable under GST as a supply of service – HELD - the differential dealer margin is provided by petroleum companies when the sales volume decreases below a mutually agreed level so that the applicant does not close down his petrol pump due to such loss. Thus the amount paid as differential dealer margin is in the nature of a consideration in return of the applicant agreeing to run the dealership despite low sales volum... [Read more]

GST – Taxability of Differential Dealer Margin provided by the petroleum companies to its retail dealers - Whether differential dealer margin provided by the petroleum companies to its retail dealers are taxable under GST as a supply of service – HELD - the differential dealer margin is provided by petroleum companies when the sales volume decreases below a mutually agreed level so that the applicant does not close down his petrol pump due to such loss. Thus the amount paid as differential dealer margin is in the nature of a consideration in return of the applicant agreeing to run the dealership despite low sales volume - Differential Dealer Margin is in the nature of a consideration received for agreeing to the obligation to refrain from an act, and squarely falls under clause (e) of Sl. No: 5 of Schedule II of the CGST Act, 2017 and hence taxable to GST - the applicant’s supply of petrol/diesel to end customer is not taxable to GST. However, the supply in the present case is that of the service of agreeing to the obligation to refrain from an act, classified under Heading 9997 and taxable at 18% GST – Ordered accordingly [Read less]

GST – Kerala AAR - Applicant is notified accredited agency for general civil construction works and land development works as Project Management Consultant - Applicable rate of tax of the works executed by the applicant solely for and on behalf of the Government of Kerala for the period from 01.01.2022 to 17.07.2022 – whether GST @12% is applicable for the works executed by the applicant for the period 01.01.2022 to 17.07.2022 - HELD – In the Clause 4 of SGST Circular No. 01/2022 dated 19.01.2022, it is clarified that w.e.f. 01.01.2022, the benefit of the reduced tax rate, i.e., 12% instead of 18% on works contract s... [Read more]

GST – Kerala AAR - Applicant is notified accredited agency for general civil construction works and land development works as Project Management Consultant - Applicable rate of tax of the works executed by the applicant solely for and on behalf of the Government of Kerala for the period from 01.01.2022 to 17.07.2022 – whether GST @12% is applicable for the works executed by the applicant for the period 01.01.2022 to 17.07.2022 - HELD – In the Clause 4 of SGST Circular No. 01/2022 dated 19.01.2022, it is clarified that w.e.f. 01.01.2022, the benefit of the reduced tax rate, i.e., 12% instead of 18% on works contract supplied to a Governmental Authority or a Government Entity regarding the works contract services mentioned in the corresponding entry, stands discontinued. It is evident that the works contract services supplied to the applicant being a Govt. entity are liable for the taxable rate of 18% w.e.f. 01.01.2022 - Further, the services rendered by the applicant do not fall under the 12% rate of tax – the applicant is liable to pay GST @ 18% for the period 01.01.22 to 17.07.2022 – Ordered accordingly [Read less]