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Central Excise - Cenvat Credit on Insurance Services for Goods Transported on FOR Basis – Denial of Cenvat Credit availed on the insurance for transportation of goods on FOR destination basis - Whether the appellant is entitled to Cenvat Credit on the insurance services for the transportation of goods on FOR basis – HELD - The period from April 2006 to February 2011, the appellant is not entitled to the Cenvat Credit on the insurance services as the demand for the same had already been confirmed by the Tribunal in its earlier order, which has attained finality. However, for the subsequent period from August 2014 to Jul... [Read more]

Central Excise - Cenvat Credit on Insurance Services for Goods Transported on FOR Basis – Denial of Cenvat Credit availed on the insurance for transportation of goods on FOR destination basis - Whether the appellant is entitled to Cenvat Credit on the insurance services for the transportation of goods on FOR basis – HELD - The period from April 2006 to February 2011, the appellant is not entitled to the Cenvat Credit on the insurance services as the demand for the same had already been confirmed by the Tribunal in its earlier order, which has attained finality. However, for the subsequent period from August 2014 to July 2015, the Cenvat Credit is allowed on the insurance services based on the Board's Circular No. 1065/4/2018-CX dated 08.06.2018. The assessees are entitled to avail Cenvat Credit on the insurance of goods while transporting the same to the customers' premises on FOR basis. The issue involved interpretation of the law and the department failed to establish any fraud, willful misstatement or suppression of facts on the part of the appellant with the intention to evade tax - Since the issue relates to interpretation and there was no mens rea on the part of the appellant, the penalty imposed is not sustainable. The appeal is partially allowed [Read less]

GST - Eligibility to interest on refund of IGST paid on ocean freight paid “under protest” – Subsequent to levy of IGST on ocean freight was held as unconstitutional and ultra vires the IGST Act, the petitioner applied for refund of the IGST paid on ocean freight, which was granted by the authorities. However, the authorities refused to grant interest on the refunded amount - Whether the petitioner is entitled to interest on the refunded IGST amount paid on ocean freight from the date of deposit till the date of actual refund – HELD - When a tax levy is found to be unconstitutional and invalid, the State cannot ret... [Read more]

GST - Eligibility to interest on refund of IGST paid on ocean freight paid “under protest” – Subsequent to levy of IGST on ocean freight was held as unconstitutional and ultra vires the IGST Act, the petitioner applied for refund of the IGST paid on ocean freight, which was granted by the authorities. However, the authorities refused to grant interest on the refunded amount - Whether the petitioner is entitled to interest on the refunded IGST amount paid on ocean freight from the date of deposit till the date of actual refund – HELD - When a tax levy is found to be unconstitutional and invalid, the State cannot retain the amount collected and must refund it to the taxpayer and in such cases, the taxpayer is entitled to interest on the refunded amount as a matter of restitution, irrespective of whether the statute provides for it explicitly – As is well-established that the law declared by the Hon’ble Supreme Court of India is the law from the inception. On the notifications based on which the IGST on “ocean freight” was levied and collected by the Revenue being struck down as invalid, the petitioner is entitled to compensation by way of award of interest on the amount retained for the period from the date of deposit till the date of its actual refund - The IGST paid by the petitioner on ocean freight was not legally exigible, as the levy was declared unconstitutional by the Courts. Therefore, the retention of this amount by the authorities was unauthorized, and the petitioner is entitled to interest on the refunded amount from the date of deposit till the date of actual refund - The provisions of Section 56 of the CGST Act dealing with “Interest on delayed refunds” is silent about grant of interest on refund when it emanates from declaration of the statutory notifications as illegal or ultra vires or the levy and collection of tax being rendered constitutionally invalid. The case of present nature could be comprehended within any of the contingencies specified under Section 56 read with Rule 89. The authorities are directed to pay simple interest at 6% per annum on the refunded IGST amount within 8 weeks, and at 9% per annum for any further delay - The writ petition is allowed [Read less]

Service Tax - Sale of Goods vs. Provision of Support Services - The appellant is a state-owned public utility undertaking that generates electricity using coal and produces fly ash as a by-product - Appellant entered into long-term supply agreements with cement manufacturers to sell the dry fly ash, describing the consideration as 'administrative charges'. Department alleged that the appellant provided 'Support Services of Business or Commerce' to the cement companies by providing infrastructure and services like water, electricity, land, roads, personnel, and security, and demanded service tax - Whether the transaction co... [Read more]

Service Tax - Sale of Goods vs. Provision of Support Services - The appellant is a state-owned public utility undertaking that generates electricity using coal and produces fly ash as a by-product - Appellant entered into long-term supply agreements with cement manufacturers to sell the dry fly ash, describing the consideration as 'administrative charges'. Department alleged that the appellant provided 'Support Services of Business or Commerce' to the cement companies by providing infrastructure and services like water, electricity, land, roads, personnel, and security, and demanded service tax - Whether the transaction constituted a sale of goods or the provision of support services – HELD - The transaction between the appellant and the cement companies was a sale of goods, not the provision of support services. The definition of 'sale' under the Sale of Goods Act, Haryana VAT Act, and the Central Excise Act, covers the transfer of possession of goods for consideration. The dominant intention of the contract was the sale of goods, and the incidental or unavoidable use of infrastructure did not convert it into a separate taxable service - The consideration received by the appellant from the cement and asbestos sheet companies for supply of Fly ash seems to be for sale of fly ash. It is not for any service provided to the persons taking delivery of Fly ash, notwithstanding the name under which, it is collected. Hence, the demand of Service Tax along with interest is not sustainable - The impugned orders are set aside and the appeal is allowed [Read less]

Service Tax - Levy of Service Tax on Threshing charges and freight amount paid to truck operators – Demand of Service Tax under the category of Business Auxiliary Service (BAS) as well as under Goods Transport Agency (GTA) service on the activity of threshing of tobacco leaves undertaken by the appellant – HELD - The issue of demand of Service Tax under the category of BAS is no longer res-integra in view of the decision of the Tribunal in the case of M.L. Agro Products Ltd., Vs Commissioner, wherein the Tribunal had set aside the demand under this category. Therefore, the demand on BAS cannot be sustained - It is a se... [Read more]

Service Tax - Levy of Service Tax on Threshing charges and freight amount paid to truck operators – Demand of Service Tax under the category of Business Auxiliary Service (BAS) as well as under Goods Transport Agency (GTA) service on the activity of threshing of tobacco leaves undertaken by the appellant – HELD - The issue of demand of Service Tax under the category of BAS is no longer res-integra in view of the decision of the Tribunal in the case of M.L. Agro Products Ltd., Vs Commissioner, wherein the Tribunal had set aside the demand under this category. Therefore, the demand on BAS cannot be sustained - It is a settled position that unless the consignment note is issued or any other similar document is issued which has the resemblance of a consignment as provided by the Statute, the service cannot be brought under GTA service. There is no evidence on record to the contrary, and accordingly, the demand under the category of GTA service cannot be sustained - the demands under both the categories of BAS and GTA service cannot be sustained and set aside [Read less]

Customs - Classification of “Squid Liver Powder / Squid Meal Powder” - The appellants imported "Squid Liver Powder" claiming classification under CTH 2301 as fish/mollusc meal unfit for human consumption. The Department reclassified the goods under CTH 2309 as "Preparations of a kind used in animal feeding", leading to demand of differential duty, interest, and penalties - Whether the impugned goods are classifiable under CTH 2301 or CTH 2309 – HELD - The impugned goods are correctly classifiable under CTH 2309 as "Preparations of a kind used in animal feeding". The goods contained substantial quantities (40-50%) of ... [Read more]

Customs - Classification of “Squid Liver Powder / Squid Meal Powder” - The appellants imported "Squid Liver Powder" claiming classification under CTH 2301 as fish/mollusc meal unfit for human consumption. The Department reclassified the goods under CTH 2309 as "Preparations of a kind used in animal feeding", leading to demand of differential duty, interest, and penalties - Whether the impugned goods are classifiable under CTH 2301 or CTH 2309 – HELD - The impugned goods are correctly classifiable under CTH 2309 as "Preparations of a kind used in animal feeding". The goods contained substantial quantities (40-50%) of soyabean meal, a vegetable-origin protein source, in addition to the squid liver paste. Relying on the composition, manufacturing process, and the intended use of the goods as feed ingredient, it is held that once the product ceases to be a simple meal obtained from animal/mollusc material and becomes a formulated mixture of animal and vegetable nutrients, it falls outside the scope of Heading 2301 and squarely classifies under Heading 2309. The decisive factor is the deliberate formulation and functional suitability of the product as compounded feed, rather than the predominance of a single ingredient – Further, the SCNs specifically identified the proposed reclassification from CTH 2301 to CTH 2309, alongwith the factual and legal reasons. The notices adequately put the appellants on notice of the Department's case and the grounds for the proposed action. The Show Cause Notice is not required to reproduce an adjudication order in advance, and that substantive compliance with principles of natural justice is sufficient – The reclassification of the imported goods under CTH 2309, the demand of differential duty, interest, and penalties are upheld - The appeals are rejected - Invocation of Extended Period of Limitation - The appellants argued that the extended period under Section 28(4) of the Customs Act cannot be invoked as the dispute was only regarding classification – HELD - The non-disclosure of the substantial soyabean content (40-50%) in the goods constituted suppression of material facts, which justified the invocation of the extended period of limitation. The composition of the goods was a determinative factor for classification, and the mere clearance under RMS did not absolve the appellants of their statutory obligation to make a true and complete declaration. The suppression of facts relating to the nature and characteristics of goods, even in matters of classification, would permit invocation of the extended period - Penalty and Confiscation - The Tribunal upheld the imposition of penalty under Section 114A and confiscation under Section 111(m) of the Customs Act. It held that once the conditions for invoking the extended period under Section 28(4) were satisfied, the penalty under Section 114A necessarily followed as a statutory consequence. Further, the mis-declaration of the composition of the goods, which had a direct bearing on classification and duty liability, rendered the goods liable to confiscation under Section 111(m). [Read less]

GST - Reversal of Input Tax Credit on exempt supply – Petitioner’s case that the question as to whether the goods dealt in by the petitioners fell under the exempted category was not raised in the show cause notice but the Proper Officer proceeded to hold that the petitioner’s product did not qualify for being treated as a goods under exempted category - Whether the adjudicating authority was justified in holding that the petitioner's product, Dicalcium phosphate (DCP), did not qualify for the exempted category, despite this not being a ground raised in the show-cause notice – HELD - The question of whether the pet... [Read more]

GST - Reversal of Input Tax Credit on exempt supply – Petitioner’s case that the question as to whether the goods dealt in by the petitioners fell under the exempted category was not raised in the show cause notice but the Proper Officer proceeded to hold that the petitioner’s product did not qualify for being treated as a goods under exempted category - Whether the adjudicating authority was justified in holding that the petitioner's product, Dicalcium phosphate (DCP), did not qualify for the exempted category, despite this not being a ground raised in the show-cause notice – HELD - The question of whether the petitioner's product fell under the exempted category was never put to the petitioner in the show-cause notice, and consequently, could not have been considered by the adjudicating authority. The adjudication order, which proceeded on a basis different from the show-cause notice, violated the provisions of Section 75(7) of the CGST Act, 2017 - It is now well-settled that a notice to show cause should clearly specify all the charges/grounds that the noticee is required to meet and answer. Since the adjudication order has proceeded on a basis absolutely different than the one indicated in the SCN, the same falls foul of the provisions of Section 75(7) of the Act - The adjudication order is set aside. The respondents are allowed to initiate fresh proceedings in accordance with law – The petition is disposed of [Read less]

GST - Availment of ITC for the period October 2018 to March 2019 beyond the time limit specified under Section 16(4) of CGST Act - HELD – The Section 16 of the CGST Act, 2017 has been amended by inserting sub-section (5), which provides that in respect of invoices or debit notes pertaining to the financial years 2017-18 to 2020-21, the registered person shall be entitled to take input tax credit in any return under Section 39 which is filed up to 30th November 2021. The CBIC Circular dated 15.10.2024 also clarify the implementation of Sections 16(5) and 16(6) of the CGST Act, 2017, which might impact the present matter ... [Read more]

GST - Availment of ITC for the period October 2018 to March 2019 beyond the time limit specified under Section 16(4) of CGST Act - HELD – The Section 16 of the CGST Act, 2017 has been amended by inserting sub-section (5), which provides that in respect of invoices or debit notes pertaining to the financial years 2017-18 to 2020-21, the registered person shall be entitled to take input tax credit in any return under Section 39 which is filed up to 30th November 2021. The CBIC Circular dated 15.10.2024 also clarify the implementation of Sections 16(5) and 16(6) of the CGST Act, 2017, which might impact the present matter - Taking cognizance of insertion of Section 16(5) of the CGST Act, 2017 and CBIC Circular dated 15.10.2024, the order in appeal is quashed and matter is remitted to the appellate authority for deciding the revenues appeal afresh and in accordance with law after considering the impact of insertion of Section 16(5) in the CGST Act, 2017 and CBIC Circular dated 15.10.2024 – The writ petition is disposed of [Read less]

Service Tax - Demand for extended period of limitation - Whether the demand for the extended period of limitation can be sustained once the issue on merits for the normal period has been decided in favor of the respondent - HELD - Once the issue on merits for the normal period is settled in favor of the assessee, the question of invocability of the extended period of limitation becomes immaterial - If the main demand is not sustainable, the extended period demand also cannot be sustained. In the present case, since the issue on merits for the normal period has already been decided in favor of the respondent, the question o... [Read more]

Service Tax - Demand for extended period of limitation - Whether the demand for the extended period of limitation can be sustained once the issue on merits for the normal period has been decided in favor of the respondent - HELD - Once the issue on merits for the normal period is settled in favor of the assessee, the question of invocability of the extended period of limitation becomes immaterial - If the main demand is not sustainable, the extended period demand also cannot be sustained. In the present case, since the issue on merits for the normal period has already been decided in favor of the respondent, the question of invoking the extended period of limitation does not survive - The findings of the Adjudicating Authority in dropping the demand towards the extended period is upheld and the Revenue appeal is dismissed [Read less]

Customs - Provisional Release of Goods – Appellant imported coriander seeds under duty exemption notification and allegedly diverted the imported goods into the domestic market without processing, violating the actual user condition - Department seized the goods and granted provisional release subject to the appellant furnishing a bond equal to the value of the goods and a bank guarantee - Whether the appellant violated the actual user condition by diverting the imported coriander seeds into the domestic market without processing – HELD - The appellant's contention that the imported coriander seeds were always processe... [Read more]

Customs - Provisional Release of Goods – Appellant imported coriander seeds under duty exemption notification and allegedly diverted the imported goods into the domestic market without processing, violating the actual user condition - Department seized the goods and granted provisional release subject to the appellant furnishing a bond equal to the value of the goods and a bank guarantee - Whether the appellant violated the actual user condition by diverting the imported coriander seeds into the domestic market without processing – HELD - The appellant's contention that the imported coriander seeds were always processed in the factory and never sold in the domestic market as such. The Hon'ble Supreme Court and High Court have permitted the use of imported inputs under the Advance Authorization Scheme for manufacturing finished goods which are subsequently sold in the domestic market. Therefore, the Tribunal did not conclusively determine the issue of violation of actual user condition at this stage - For provisional release of goods, the bank guarantee should be limited to 30% of the differential duty amount, and not the full duty amount. The Tribunal modified the impugned order by directing the appellant to furnish a bank guarantee only to the extent of 30% of the duty amount, in line with the above judicial precedents. The condition requiring a bank guarantee solely based on the department's circular is not legally sustainable, as circulars are administrative instructions - The impugned order is modified to the extent of the bank guarantee condition, which is reduced to 30% of the duty amount – The appeal is partly allowed [Read less]

Service Tax - Classification of services, Scope of show cause notice, Technical Testing and Analysis Services, Mining Services, Survey and Exploration of Mineral, Oil & Gas Services – Non-payment of service tax in respect of data analysis services undertaken by it. Demand of service tax on data analysis services under the category of 'Survey and Exploration of Mineral, Oil & Gas Services' - Adjudicating Authority classified the services under 'Technical Testing and Analysis Services' for the period prior to May 31, 2007 and 'Mining Services' with effect from June 1, 2007, which was different from the proposal made in the... [Read more]

Service Tax - Classification of services, Scope of show cause notice, Technical Testing and Analysis Services, Mining Services, Survey and Exploration of Mineral, Oil & Gas Services – Non-payment of service tax in respect of data analysis services undertaken by it. Demand of service tax on data analysis services under the category of 'Survey and Exploration of Mineral, Oil & Gas Services' - Adjudicating Authority classified the services under 'Technical Testing and Analysis Services' for the period prior to May 31, 2007 and 'Mining Services' with effect from June 1, 2007, which was different from the proposal made in the SCN - Whether the Adjudicating Authority can classify the services under categories other than the one proposed in the SCN - HELD - The Adjudicating Authority cannot go beyond the scope of the show cause notice to confirm the demand under a classification contrary to what was proposed therein. The SCN is the foundation in any proceedings for levy and recovery of duty, penalty and interest, and no new case could have been set-up or decided contrary to the show cause notice. The Commissioner was required to adjudicate within the scope of the show cause notice and if he was of the view that the services in question are not covered under the proposed classification, the proper course was to drop the proceedings but he could not have substituted the classification on the basis of an earlier show cause notice. The impugned order is set aside as being beyond the scope of the show cause notice - The appeal is allowed [Read less]

Service Tax – Demand of service tax on 'cash calls' received from members of Unincorporated Joint Venture (UJV) for exploration of crude oil and natural gas - The appellant has placed bids through Joint Venture Agreements entered with different parties for exploration of crude oil and natural gas blocks. As per the Production Sharing Contract (PSC) and Joint Operating Agreement (JOA), the appellant was appointed as the 'Operator' and incurred various expenses towards exploration activities, which were claimed from the other members of the UJV through 'cash calls'. The Department issued a show cause notice to the appellan... [Read more]

Service Tax – Demand of service tax on 'cash calls' received from members of Unincorporated Joint Venture (UJV) for exploration of crude oil and natural gas - The appellant has placed bids through Joint Venture Agreements entered with different parties for exploration of crude oil and natural gas blocks. As per the Production Sharing Contract (PSC) and Joint Operating Agreement (JOA), the appellant was appointed as the 'Operator' and incurred various expenses towards exploration activities, which were claimed from the other members of the UJV through 'cash calls'. The Department issued a show cause notice to the appellant demanding service tax on these 'cash calls' on the ground that the services provided by the appellant as 'Operator' to the UJV are taxable - Whether the 'cash calls' received by the appellant from the members of the UJV are liable to service tax – HELD - The issue of leviability of service tax on 'cash calls' received by the appellant from the members of the UJV is no longer res integra and has been decided in favor of the appellant in various decisions - The activities undertaken by a partnership/co-venturers for the mutual benefit of the partnership/joint venture cannot be regarded as a service rendered by one person to another for consideration and, therefore, cannot be taxed. The Tribunal in the case of B.G. Exploration & Production India Ltd. it was held that in a joint venture arrangement, whatever a partner does for the furtherance of the business, he does so for advancing his own interest as he has a stake in the venture, and there is no contractor-contractee or principal-agent relationship between the co-venturer and the joint venture, which is a pre-requisite for a service to be liable to tax under the Finance Act - The exploration and development costs incurred by the appellant are nothing but investments in anticipation of future production from the oil field, which is contingent upon the successful discovery of oil and/or gas deposits. Therefore, the 'cash calls' received by the appellant from the members of the UJV cannot be subjected to service tax - The 'cash calls' received by the appellant from the members of the UJV are not liable to service tax. The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – SEZ unit, Authorised Operation - Refund claim on rent-a-cab services, outdoor catering services, customs house agent services, security agency services - Rejection of refund claims in respect of "Rent-a-cab Operator Services", "Outdoor Caterer's Services", "Customs House Agent Services used for clearance of goods to Domestic Tariff Area" and "Services used for DTA clearance" – HELD - Once the Approval Committee has approved services as authorised operations and the assessee has paid service tax on the services utilized in connection with the authorized operations, refund of service tax cannot be denied. T... [Read more]

Service Tax – SEZ unit, Authorised Operation - Refund claim on rent-a-cab services, outdoor catering services, customs house agent services, security agency services - Rejection of refund claims in respect of "Rent-a-cab Operator Services", "Outdoor Caterer's Services", "Customs House Agent Services used for clearance of goods to Domestic Tariff Area" and "Services used for DTA clearance" – HELD - Once the Approval Committee has approved services as authorised operations and the assessee has paid service tax on the services utilized in connection with the authorized operations, refund of service tax cannot be denied. The services in question were approved by the Approval Committee as authorised operations, and therefore, the rejection of the refund claims is not justified – The services fully consumed within the SEZ cannot be denied refund. The services of "Security Agency Services" were consumed wholly within the SEZ, and therefore, the rejection of the refund claim is not justified – Further, mere mention of the wrong address on the invoices cannot disentitle the appellant from seeking refund of service tax, as the tax payment, service recipient, and use in SEZ are undisputed - The impugned order is modified to allow all refund claims of the appellant fully, except the refund claim for which invoices were not raised on the appellant's unit located – The appeal is partly allowed [Read less]

Customs - Interpretation of expression ‘date of this Notification’, Effective Date of Notification, Publication of Notification in Official Gazette - Central Government issued a notification imposing a Minimum Import Price (MIP) on certain steel products under the Foreign Trade (Development and Regulation) Act, 1992. The notification was published in the Official Gazette on 11.02.2016, but was uploaded on the DGFT website on 05.02.2016. The appellants challenged the applicability of the MIP notification to their imports covered by the letters of credit opened prior to 11.02.2016 - Whether the expression "date of this N... [Read more]

Customs - Interpretation of expression ‘date of this Notification’, Effective Date of Notification, Publication of Notification in Official Gazette - Central Government issued a notification imposing a Minimum Import Price (MIP) on certain steel products under the Foreign Trade (Development and Regulation) Act, 1992. The notification was published in the Official Gazette on 11.02.2016, but was uploaded on the DGFT website on 05.02.2016. The appellants challenged the applicability of the MIP notification to their imports covered by the letters of credit opened prior to 11.02.2016 - Whether the expression "date of this Notification" in the MIP notification can be interpreted to mean any date other than the date of its publication in the Official Gazette – HELD - The delegated legislation like the MIP notification must be published in the Official Gazette as prescribed by the parent statute, the Foreign Trade (Development and Regulation) Act, 1992, before it can acquire the force of law. The publication requirement is not a mere formality, but serves the dual constitutional purpose of ensuring accessibility and notice to those governed by the law, and accountability and solemnity in the exercise of delegated legislative power - The strict compliance with publication requirements is a condition precedent for the enforceability of delegated legislation. The "date of this Notification" cannot be interpreted as 05.02.2016 when the notification was uploaded on the DGFT website, as the statute mandates publication in the Official Gazette as the mode of promulgation - The MIP notification became operative only on 11.02.2016, the date of its publication in the Official Gazette, and the expression "date of this Notification" in paragraph 2 thereof must necessarily mean the date of such publication. Accordingly, the appellants who had opened irrevocable letters of credit prior to 11.02.2016 and complied with the procedural requirements under the Foreign Trade Policy were entitled to the benefit of the transitional provision contained in paragraph 1.05(b) of the Policy - The impugned order and judgment of the High Court is quashed and set aside. The appeals are allowed [Read less]

Service Tax – Mismatch in declared turnover in Income Tax Return (ITR)/Tax Deducted at Source (TDS) through 26AS and ST-3 return - Penalty under Section 78 of the Finance Act, 1994 for non-payment of Service Tax - Department found that the figures shown in the Income Tax Return (ITR) did not match with the ST-3 returns filed by the appellant, indicating non-declaration of the full turnover of services - Whether the imposition of penalty under Section 78 of the Finance Act, 1994 on the appellant is correct – HELD - The appellant had voluntarily paid the disputed service tax amount along with interest, much before the is... [Read more]

Service Tax – Mismatch in declared turnover in Income Tax Return (ITR)/Tax Deducted at Source (TDS) through 26AS and ST-3 return - Penalty under Section 78 of the Finance Act, 1994 for non-payment of Service Tax - Department found that the figures shown in the Income Tax Return (ITR) did not match with the ST-3 returns filed by the appellant, indicating non-declaration of the full turnover of services - Whether the imposition of penalty under Section 78 of the Finance Act, 1994 on the appellant is correct – HELD - The appellant had voluntarily paid the disputed service tax amount along with interest, much before the issuance of the show cause notice. The service tax and interest have been paid immediately upon the ascertainment of the service tax, either on the assessee's own assessment or on the basis of what was ascertained by the Central Excise Officer, the Department cannot even issue a show cause notice. The proviso to Section 73(3) of the Finance Act, 1994 provides that the Central Excise Officer shall not serve any notice under Section 73(1) in respect of the amount so paid. Therefore, in the present case, where the appellant had voluntarily paid the service tax along with interest before the issuance of the show cause notice, there was no ground to impose penalty under Section 78 of the Finance Act, 1994. Accordingly, the impugned order is set aside to the extent it had confirmed the penalties on the appellant – The appeal is allowed [Read less]

Service Tax - Taxability of 'Ocean Freight' - Appellant enters into Cost, Insurance, and Freight (CIF) contracts with the foreign exporters for the supply of goods, wherein the exporter arranges for the transportation of goods through a foreign shipping line - Appellant pays a single consideration to the foreign exporter that includes the value of the goods, insurance, and freight - Whether the appellant is liable to pay service tax on the 'Ocean Freight' component under RCM – HELD - The 'Ocean Freight' is not liable to service tax. The service of transportation of goods up to the Indian port is an extraterritorial event... [Read more]

Service Tax - Taxability of 'Ocean Freight' - Appellant enters into Cost, Insurance, and Freight (CIF) contracts with the foreign exporters for the supply of goods, wherein the exporter arranges for the transportation of goods through a foreign shipping line - Appellant pays a single consideration to the foreign exporter that includes the value of the goods, insurance, and freight - Whether the appellant is liable to pay service tax on the 'Ocean Freight' component under RCM – HELD - The 'Ocean Freight' is not liable to service tax. The service of transportation of goods up to the Indian port is an extraterritorial event occurring beyond the land mass of the country, and the Finance Act, 1994 does not empower the Central Government to levy service tax on such extraterritorial events - The ‘Ocean Freight’ is not liable to service tax and hence no liability can be fastened on the appellant - the impugned order is set aside. The appeal is allowed [Read less]

Service Tax - Adjustment of service tax paid in respect of the services provided to appellant outside India by the Service Provider located abroad, applicability of Rule 6(3) of Service Tax Rules 1994, requirement to refund value of service and service tax as per Rule 6(3) – Appellant paid service tax on technical consultancy services provided by a foreign service provider, both in India and outside India and paid service tax on it - Appellant adjusted excess service tax against its subsequent service tax liability. The department demanded this amount on the ground that such suo motu adjustment was not permitted under Ru... [Read more]

Service Tax - Adjustment of service tax paid in respect of the services provided to appellant outside India by the Service Provider located abroad, applicability of Rule 6(3) of Service Tax Rules 1994, requirement to refund value of service and service tax as per Rule 6(3) – Appellant paid service tax on technical consultancy services provided by a foreign service provider, both in India and outside India and paid service tax on it - Appellant adjusted excess service tax against its subsequent service tax liability. The department demanded this amount on the ground that such suo motu adjustment was not permitted under Rule 6(3) of Service Tax Rules, 1994 and the appellant should have filed a refund claim under Section 11B of the Central Excise Act, 1944 as made applicable to service tax - Whether the appellant's suo motu adjustment of excess service tax paid against its subsequent service tax liability under Rule 6(3) of Service Tax Rules, 1994 is valid - HELD - The Rule 6(3) applies only to a situation where the service provider has received payment for taxable services in advance, paid the service tax to the government and is then unable to provide the services wholly or partially. This scenario does not apply to the present case where the appellant, as the service recipient, had paid service tax by oversight - In the present case, the appellant should have filed a refund claim under Section 11B of the Central Excise Act, 1944 as made applicable to service tax matters by Section 83 of the Finance Act, 1994. The appellant has failed to rebut the statutory presumption under Section 12B of the CEA, 1944 (as made applicable to service tax) that the incidence of service tax has been passed on to the buyers/service recipients. The burden is on the appellant to establish that it has not passed on the incidence of service tax, which the appellant has failed to do - The impugned order confirming the demand along with applicable interest is upheld and the appeal is dismissed [Read less]

Customs - Validity of Customs Show Cause Notice take a position contrary to the DGFT – HELD - Prima facie that the SCN was issued without jurisdiction and that Customs cannot take a position contrary to the DGFT, particularly in view of Para 2.58 of the Foreign Trade Policy, 2023 - Considering the nature of the show cause notice as also the relevant extracts of the Foreign Trade Policy-2023, and the stand taken by the DGFT, although no hearing on the show cause notice is fixed after its issuance, the same needs to be deferred till further appropriate orders are passed on this petition – Ordered accordingly

Customs - Import of raw materials for the manufacture of bulk drugs by drug manufacturers. The raw materials were allowed for warehousing under Section 59 of the Customs Act, 1962, but it was alleged that the original materials were substituted with fake materials by the CHA. The substituted fake material was found to be lying in the customs bonded warehouses pending clearance. Further, it was alleged that the CHA had fabricated the Bills of Entry showing Customs duty endorsement and sent the same to the Importers - Whether the Importers-appellants are liable to pay the entire short levied Customs duty in terms of the prov... [Read more]

Customs - Import of raw materials for the manufacture of bulk drugs by drug manufacturers. The raw materials were allowed for warehousing under Section 59 of the Customs Act, 1962, but it was alleged that the original materials were substituted with fake materials by the CHA. The substituted fake material was found to be lying in the customs bonded warehouses pending clearance. Further, it was alleged that the CHA had fabricated the Bills of Entry showing Customs duty endorsement and sent the same to the Importers - Whether the Importers-appellants are liable to pay the entire short levied Customs duty in terms of the proviso to Section 28(1) of the Customs Act, 1962 and are also liable for penalty under Sections 114A/112(a) of the Customs Act, 1962 – HELD - The non-payment of duty has arisen on account of the guilty act of the CHA, and therefore, the CHA alone would be liable to pay the duty under Section 147(3) of the Customs Act, 1962. There is clear evidence that the CHA had exceeded his authority, and in the absence of any evidence to doubt the bona fides of the Importers, the demand of duty and penalties against the Importers cannot be sustained. The importers had made payment of the Customs duty by way of Demand Drafts to their CHA, and the date of presentation of the Demand Draft by the CHA to the Customs authorities would be deemed to be the date on which the Importers had paid the duty. Any further misuse of the said amounts, either by the CHA and/or with the connivance of the Customs officials, cannot result in a demand of duty or penalty on the Importers - The impugned order is set aside and the appeals are allowed [Read less]

Customs - Classification of Optical Ground Wire (OPGW) Fiber Optic Cable, Customs Tariff Heading 8544 70 90 vs 9001 00 00 – Respondents imported Optical Ground Wire (OPGW) Fiber Optic Cable classifying the same under Customs Tariff Heading (CTH) 8544 70 90 - Show Cause Notice issued alleging that the product should be classified under CTH 9001 00 00 and demanded differential duty along with interest and penalty. The Adjudicating Authority confirmed the demand for imports during 11/06/2019 to 11/06/2021, but dropped the demand for imports during 16/6/2016 to 10/06/2019 on the ground of limitation period - Whether the OPGW... [Read more]

Customs - Classification of Optical Ground Wire (OPGW) Fiber Optic Cable, Customs Tariff Heading 8544 70 90 vs 9001 00 00 – Respondents imported Optical Ground Wire (OPGW) Fiber Optic Cable classifying the same under Customs Tariff Heading (CTH) 8544 70 90 - Show Cause Notice issued alleging that the product should be classified under CTH 9001 00 00 and demanded differential duty along with interest and penalty. The Adjudicating Authority confirmed the demand for imports during 11/06/2019 to 11/06/2021, but dropped the demand for imports during 16/6/2016 to 10/06/2019 on the ground of limitation period - Whether the OPGW Fiber Optic Cable should be classified under CTH 8544 70 90 or 9001 00 00 – HELD - The issue has been under litigation for about two decades with different views taken by various Benches. The Larger Bench decision in the case of Vodafone, which held that the goods are classifiable under CTH 9001 00 00, was stayed by the Supreme Court and the issue was sub-judice - the issue of classification was a matter of interpretation and the appellant had cleared the goods by filing Bills of Entry without concealing any facts. The suppression clause cannot be applied in such cases. The Revenue's appeal against the dropping of the demand for the extended period is dismissed as the Department did not have any evidence in the form of a test report to contradict the earlier test report which was accepted by the Department - For the normal period, the appellant's claim was backed by the earlier test report accepted by the Department, and the Revenue did not have any concrete evidence in the form of a sample test report to support its argument for classification under CTH 9001 00 00. Each consignment must be assessed separately, and test reports of one consignment cannot be made applicable to other consignments - The Revenue's appeal is dismissed and the appeal filed by the importer is allowed [Read less]

Service Tax – Classification of Service - Supply of Crane and Forklift Services, Demand under Business Support Services - Appellant supplied cranes and forklifts along with a crew to their customers for shifting of big machinery/materials from one place to another on collection of charges - Department initiated proceedings and classified the services as 'Business Support Services', demanding service tax, interest, and penalty - Whether the services provided by the appellant, involving the supply of cranes and forklifts along with a crew for shifting of machinery/materials, are classifiable under 'Business Support Service... [Read more]

Service Tax – Classification of Service - Supply of Crane and Forklift Services, Demand under Business Support Services - Appellant supplied cranes and forklifts along with a crew to their customers for shifting of big machinery/materials from one place to another on collection of charges - Department initiated proceedings and classified the services as 'Business Support Services', demanding service tax, interest, and penalty - Whether the services provided by the appellant, involving the supply of cranes and forklifts along with a crew for shifting of machinery/materials, are classifiable under 'Business Support Services' under the Finance Act, 1994 – HELD - An identical issue for the previous period i.e. May 2006 to March 2009 has been decided by a Coordinate Bench of this Tribunal in favour of appellant. The judicial discipline requires us to follow the judgment of a Coordinate Bench for an earlier period, especially when the issues therein has not been distinguished on facts by Revenue - The services provided by the appellant involving the supply of cranes and forklifts for shifting of machinery/materials are not classifiable under 'Business Support Services', such services are rightly classifiable under the category of 'Supply of Tangible Goods Service' as per Section 65(105)(zzzzj) of the Finance Act, 1994, which was introduced with effect from 16.05.2008. Since the period is prior to 16.05.2008, the services were not liable to service tax – The appeal is allowed [Read less]

The wrong usage of ITC or otherwise would only entitle the authorities to initiate proceedings under Sections 73 & 74 of the CGST Act, and the coercive process under Section 75(12) of the CGST Act cannot be used in such cases.

Customs – Eligibility to Customs duty exemption on oxygen concentrator, ventilator – Rejection of claim for entitlement to Notification 20/2020-Cus dated 9th April 2020 extending the benefit of 'nil' rate of customs duties on an oxygen concentrator – Revenue of the view that the exemption notification covering "artificial respiration or other therapeutic respiration apparatus (ventilators)" was limited to conventional "ventilators" and did not extend to oxygen concentrators - Whether the exemption notification covering "artificial respiration or other therapeutic respiration apparatus (ventilators)" should be interpr... [Read more]

Customs – Eligibility to Customs duty exemption on oxygen concentrator, ventilator – Rejection of claim for entitlement to Notification 20/2020-Cus dated 9th April 2020 extending the benefit of 'nil' rate of customs duties on an oxygen concentrator – Revenue of the view that the exemption notification covering "artificial respiration or other therapeutic respiration apparatus (ventilators)" was limited to conventional "ventilators" and did not extend to oxygen concentrators - Whether the exemption notification covering "artificial respiration or other therapeutic respiration apparatus (ventilators)" should be interpreted narrowly to cover only conventional "ventilators", or whether it should be interpreted more broadly to cover other apparatuses that serve the function of therapeutic respiration, such as oxygen concentrators – HELD - The exemption notification should be interpreted broadly to cover any apparatus that serves the function of therapeutic respiration, and not be limited only to conventional "ventilators." The description in the notification should be read holistically, considering the context provided by the corresponding headings in the Customs Tariff Act. The "ventilator" is not even enumerated in the Tariff Act, and therefore the parenthetical reference to "ventilators" should not be interpreted as restricting the broader description of "artificial respiration or other therapeutic respiration apparatus." The notification was intended to provide expedient relief during the pandemic, and a narrow interpretation would be insensitive to the "humankind crisis" confronting society at the time. Accordingly, the impugned order is set aside and the appeal is allowed, holding that the oxygen concentrator imported by the appellant was eligible for the exemption benefit – the appeal is allowed [Read less]

Service Tax - Cenvat credit on professional indemnity insurance - Appellant availed professional indemnity insurance to cover the risk against losses arising from negligent acts, errors, and omissions by its employees in relation to its business – Denial of Cenvat credit of the service tax paid on the professional indemnity insurance - Whether the appellant is entitled to avail Cenvat credit of the service tax paid on professional indemnity insurance - HELD - The appellant is entitled to the Cenvat credit of the service tax paid on the professional indemnity insurance. The Tribunal in similar cases has held that professi... [Read more]

Service Tax - Cenvat credit on professional indemnity insurance - Appellant availed professional indemnity insurance to cover the risk against losses arising from negligent acts, errors, and omissions by its employees in relation to its business – Denial of Cenvat credit of the service tax paid on the professional indemnity insurance - Whether the appellant is entitled to avail Cenvat credit of the service tax paid on professional indemnity insurance - HELD - The appellant is entitled to the Cenvat credit of the service tax paid on the professional indemnity insurance. The Tribunal in similar cases has held that professional indemnity insurance helps and protects the professional advice and services provided by the officials/individuals of the appellant from bearing the full cost of damages awarded in a civil suit to the service recipient, and therefore, the service of professional indemnity insurance qualifies as an input service under the Cenvat Credit Rules. The professional indemnity insurance taken by the appellant is related to the business carried on by the appellant and there is a direct and visible nexus between the input service and the output service rendered by the appellant. Therefore, the Cenvat credit of the service tax paid on the professional indemnity insurance would be allowed to the appellant - The impugned order is set aside and the appeal is allowed [Read less]

GST - Cancellation of GST registration with retrospective effect basis vague show cause notice - Whether the cancellation of the petitioner's GST registration with retrospective effect is valid, given the vague nature of the show cause notice – HELD - The show cause notice issued to the petitioner was vague, as it did not specify the period for which the tax dues were not paid, nor the period from which the cancellation was to be effected. The vague show cause notice denies the petitioner the opportunity of hearing - While the provisions of the GST Act empower the authorities to cancel registration with retrospective eff... [Read more]

GST - Cancellation of GST registration with retrospective effect basis vague show cause notice - Whether the cancellation of the petitioner's GST registration with retrospective effect is valid, given the vague nature of the show cause notice – HELD - The show cause notice issued to the petitioner was vague, as it did not specify the period for which the tax dues were not paid, nor the period from which the cancellation was to be effected. The vague show cause notice denies the petitioner the opportunity of hearing - While the provisions of the GST Act empower the authorities to cancel registration with retrospective effect, the principles of natural justice require the authorities to provide sufficient details in the show cause notice to enable the petitioner to effectively respond. The respondents are directed to issue a modified show cause notice to the petitioner, and the petitioner is allowed to file a reply within the specified time - The orders of cancellation and dismissal of appeal are set aside – The petition is partly allowed [Read less]

GST - Bunching of show cause notice/orders, Issue of Show Cause notice under wrong provision – HELD - The GST Act permits issuance of show cause notice based on the tax period, i.e., the entire financial year. Therefore, the show cause notice cannot be clubbed and issued for more than one financial year. In the present case, the impugned order was passed for multiple financial years, which is without jurisdiction and hence, liable to be quashed – Further, the provisions of Sections 73 and 74 of the CGST Act stood omitted with effect from 01.04.2024, and only the provisions of Section 74A would apply for the financial y... [Read more]

GST - Bunching of show cause notice/orders, Issue of Show Cause notice under wrong provision – HELD - The GST Act permits issuance of show cause notice based on the tax period, i.e., the entire financial year. Therefore, the show cause notice cannot be clubbed and issued for more than one financial year. In the present case, the impugned order was passed for multiple financial years, which is without jurisdiction and hence, liable to be quashed – Further, the provisions of Sections 73 and 74 of the CGST Act stood omitted with effect from 01.04.2024, and only the provisions of Section 74A would apply for the financial years 2024-25 and 2025-26. However, the respondent had issued the show cause notice under Section 73 and passed the impugned assessment order without any jurisdiction - The impugned order is passed by the respondent in total non-application of mind, and hence, liable to be quashed on this aspect as well - The impugned assessment order and all the other consequential orders are quashed. The respondents were granted liberty to initiate separate proceedings against the petitioner for each financial year – The writ petition is disposed of [Read less]

GST – Demand of IGST on Ocean Freight, Retrospective effect of judgement in Mohit Minerals case - Petitioner argued that as per the judgment of the Supreme Court in the case of Union of India vs. Mohit Minerals (P.) Ltd., IGST was not leviable on ocean freight for import of good - Revenue authorities contended that the amendment to Notification No.10/2017, which deleted Entry 10 with effect from October 1, 2023, made the petitioner liable to pay IGST on ocean freight for the period prior to the amendment - Whether the petitioner could be held liable to pay IGST on ocean freight for imported goods for the period prior to ... [Read more]

GST – Demand of IGST on Ocean Freight, Retrospective effect of judgement in Mohit Minerals case - Petitioner argued that as per the judgment of the Supreme Court in the case of Union of India vs. Mohit Minerals (P.) Ltd., IGST was not leviable on ocean freight for import of good - Revenue authorities contended that the amendment to Notification No.10/2017, which deleted Entry 10 with effect from October 1, 2023, made the petitioner liable to pay IGST on ocean freight for the period prior to the amendment - Whether the petitioner could be held liable to pay IGST on ocean freight for imported goods for the period prior to the amendment of Notification No.10/2017 – HELD - The judgment of a Constitutional Court declaring a law applies retrospectively unless it is expressly made prospective, whereas a statute applies prospectively unless it is expressly made retrospective. Since the Supreme Court judgment in Mohit Minerals (P.) Ltd. did not indicate that it would apply prospectively, the petitioner cannot be saddled with the IGST liability for the period prior to the amendment of Notification No.10/2017 - the Proper Officer was not right in concluding that since the judgment of the Hon’ble Supreme Court in the case of Mohit Minerals (P.) Ltd. did not indicate as to whether the same would apply prospectively or retrospectively, the same should be given prospective effect - Furthermore, reliance of the Proper Officer on the amendment to the Notification No.10/2017 to impose levy on the petitioner was/is also without basis. The said Notification No.10/2017 cannot be seen as enacting a law overriding the statutory provisions - The impugned orders are set aside and the petition is allowed [Read less]

Central Sales Tax Act, 1956 – Consideration of C-Form furnished belatedly - The purchaser-SAIL failed to provide the required Form C as the case of supply of material is under CBI investigation. Consequently, the Assessing Authority imposed a 5% tax on the petitioner in the absence of Form C – HELD - The purchaser (SAIL) was under an obligation to obtain and provide the Form C to the seller-petitioner), but due to unavoidable circumstances, it failed to do so, resulting in the adverse assessment order against the petitioner. The Form-C has now been provided by SAIL to the petitioner during the pendency of the writ peti... [Read more]

Central Sales Tax Act, 1956 – Consideration of C-Form furnished belatedly - The purchaser-SAIL failed to provide the required Form C as the case of supply of material is under CBI investigation. Consequently, the Assessing Authority imposed a 5% tax on the petitioner in the absence of Form C – HELD - The purchaser (SAIL) was under an obligation to obtain and provide the Form C to the seller-petitioner), but due to unavoidable circumstances, it failed to do so, resulting in the adverse assessment order against the petitioner. The Form-C has now been provided by SAIL to the petitioner during the pendency of the writ petition - The delay in submission of Form C was due to circumstances beyond the petitioner's control. The Assessing Authority is directed to decide the matter afresh after affording due opportunity of hearing to the petitioner and considering the Form C submitted - The writ petition is disposed of [Read less]

Customs - Classification of "Lauric Acid" – Appellant classified "Lauric Acid" under tariff item 29157090 and availing exemption under Notification No.12/2012-Cus. Department issued SCNs proposing to change the classification to CTH 29159090, denying the benefit of the notification and demanding differential duties - The adjudicating authority rejected the appellant's classification, ordered reclassification, and confirmed the demand of differential duty and interest. The appellant appealed against these orders. Whether the rejection of the declared classification of the goods is tenable – HELD - The Revenue is not pre... [Read more]

Customs - Classification of "Lauric Acid" – Appellant classified "Lauric Acid" under tariff item 29157090 and availing exemption under Notification No.12/2012-Cus. Department issued SCNs proposing to change the classification to CTH 29159090, denying the benefit of the notification and demanding differential duties - The adjudicating authority rejected the appellant's classification, ordered reclassification, and confirmed the demand of differential duty and interest. The appellant appealed against these orders. Whether the rejection of the declared classification of the goods is tenable – HELD - The Revenue is not precluded from resorting to Section 28(1) of the Customs Act to review the assessment for ascertaining if there has been a short levy, and such review would also cover the aspect of the correctness of the classification claimed by the appellant. The appellant has the burden to prove that the goods imported are classifiable under tariff item 29157090 as claimed, in accordance with the principles laid down by the Supreme Court in Dilip Kumar & Company case. The appellant failed to provide any documentary evidence, such as analysis certificate or composition certificate, to substantiate its claim of classification - The chapter sub-heading from 2915.11 to 2915.70 specifically cover certain saturated acyclic monocarboxylic acid and their derivatives, and lauric acid is not covered thereunder - the Lauric Acid is classifiable under Tariff Item 29159090 - The impugned order is set aside and the appeal is dismissed [Read less]

Customs – Valuation and Classification of Electric Motor Controller – Respondent imported motor controllers and electric tricycle spare parts. The Assessing Officer reassessed the importation by enhancing the CIF value and reclassifying the "Motor Controller" from CTH 8503 0090 to CTH 8708 9900. The respondent, to avoid delay and demurrage charges, cleared the goods on payment of the enhanced customs duty, under protest, and requested the lower authority to issue the order(s) of assessment under Section 17(5) of the Customs Act, 1962. The Ld. Commissioner (Appeals) subsequently set aside the orders of assessment, accep... [Read more]

Customs – Valuation and Classification of Electric Motor Controller – Respondent imported motor controllers and electric tricycle spare parts. The Assessing Officer reassessed the importation by enhancing the CIF value and reclassifying the "Motor Controller" from CTH 8503 0090 to CTH 8708 9900. The respondent, to avoid delay and demurrage charges, cleared the goods on payment of the enhanced customs duty, under protest, and requested the lower authority to issue the order(s) of assessment under Section 17(5) of the Customs Act, 1962. The Ld. Commissioner (Appeals) subsequently set aside the orders of assessment, accepted the transaction value declared by the respondent, and classified the goods as "Motor Controller" under CTH 8503 0090 - Whether the Ld. Commissioner (Appeals) erred in accepting the transaction value declared by the respondent and not enhancing the value under the Customs Valuation Rules, 2007 – HELD - The assessing officer had rejected the transaction values without any valid basis/reasons and without following the due procedure as laid down under Section 14 and Valuation Rules. There was nothing on record to suggest that the transaction values declared by the respondent were not the price actually paid for the goods when sold for export to India, or that the buyer and seller were related or the price was not the sole consideration for sale. The Department also did not adduce any evidence that the respondent had paid any amount over and above the invoice value to the foreign supplier. Accordingly, the Ld. Commissioner (Appeals)'s decision to accept the transaction value declared by the respondent is upheld – Further, the "Motor Controller" imported by the respondent is rightly classifiable under CTH 8503 0090 as it is a part suitable for use solely or principally with the machines of heading 8501 or 8502 (electric motors). The controller performs functions like starting, stopping, and regulating the speed of the motor, which are connected to the motor and principally used with it. There is no specific entry for the controller in the Customs Tariff Act, 1975, and the goods imported by the respondent did not fulfill the description of parts and accessories of e-rickshaw under CTH 8708. Therefore, the Ld. Commissioner (Appeals)'s decision to classify the "Motor Controller" under CTH 8503 0090 is upheld – The Revenue appeal is dismissed [Read less]

GST – Mandatory time gap between issue of notice under Section 73(2) and passing of order under Section 73(10) - Whether the time gap of three months between the issuance of notice under Section 73(2) and the passing of the order under Section 73(10) of the CGST Act is mandatory – HELD - The time gap of three months between the issuance of notice under Section 73(2) and the passing of the order under Section 73(10) of the CGST Act is mandatory. The purpose of the three-month time gap is to ensure that the assessee gets a meaningful opportunity to file a reply, make submissions, and obtain adjournments for personal hear... [Read more]

GST – Mandatory time gap between issue of notice under Section 73(2) and passing of order under Section 73(10) - Whether the time gap of three months between the issuance of notice under Section 73(2) and the passing of the order under Section 73(10) of the CGST Act is mandatory – HELD - The time gap of three months between the issuance of notice under Section 73(2) and the passing of the order under Section 73(10) of the CGST Act is mandatory. The purpose of the three-month time gap is to ensure that the assessee gets a meaningful opportunity to file a reply, make submissions, and obtain adjournments for personal hearing. The three month time gap is necessary to fulfill the requirements of Sections 73(3) and 73(5) of the CGST Act, which provide for the service of a statement upon the noticee with details of the demand proposed to be raised and the option for the assessee to pay the tax through self-assessment. This time gap is essential to protect the assessee's right to be heard and to obtain at least three adjournments for personal hearing, which would be rendered otiose if the assessment is to be done within a time lesser than three months - In the present case, the SCN has been issued on 27-12-2023 and final order has been passed on 22-3-2024. Thus, there was time gap of about two months 24 days. The order impugned is unsustainable and set aside - The matter was remanded back to the respondents for fresh consideration in accordance with the law and the observations made by the Court - The petition is partly allowed [Read less]

GST – Validity of clubbing of Show Cause Notice of multiple tax periods, limitation period for demand and recovery of tax – Respondent issued under Section 74 of the CGST Act, 2017 alleging suppression of taxable value and short payment of tax for the financial years 2018-19 to 2023-24 - Whether the authorities can issue a consolidated show cause notice covering multiple financial years/tax periods under Section 74 of the CGST Act – HELD - Consolidation of multiple financial years/tax periods in a show cause notice under Section 74 of the CGST Act is not permissible. The GST scheme is based on annual returns for each... [Read more]

GST – Validity of clubbing of Show Cause Notice of multiple tax periods, limitation period for demand and recovery of tax – Respondent issued under Section 74 of the CGST Act, 2017 alleging suppression of taxable value and short payment of tax for the financial years 2018-19 to 2023-24 - Whether the authorities can issue a consolidated show cause notice covering multiple financial years/tax periods under Section 74 of the CGST Act – HELD - Consolidation of multiple financial years/tax periods in a show cause notice under Section 74 of the CGST Act is not permissible. The GST scheme is based on annual returns for each financial year, and the statute fixes a separate five-year time limit for demanding and recovering tax from the due date for furnishing the annual return for that year or from the date of erroneous return. Issuing a single show cause notice covering multiple years would aggregate different tax periods with different due dates and different limitations, which the statute does not permit - Tax period is defined under Section 2(106) of the CGST Act as the period, for which the return is required to be furnished. Return can be monthly or yearly, but the statute treats each financial year as a separate tax period for the purpose of assessment and recovery - The niceties of the GST scheme were not considered by the Delhi High Court in the case of Mathur Polymers Vs. Union of India, relied upon by the respondents - The impugned order and show cause notices are quashed. The respondents were, however, granted liberty to re-issue the notices strictly in terms of the provisions of Section 74 of the CGST Act, if there was no other legal impediment – The petition is partly allowed [Read less]

Central Excise – Clearance of waste products – Refund of duty – Respondents are engaged in manufacture of Refined Bran Oil, which is exempted from payment of duty vide Notification No.3/2006-CE – During process of manufacturing of Refined Bran Oil, certain by-products namely Fatty Acids, Gums & Waxes were generated – Respondents had paid duty under protest on clearance of Fatty Acids, Gums & Waxes on plea that Fatty Acids, Gums & Waxes are exempted under Notification No.89/95-CE – Respondents filed refund claim along with copies of invoices showing duty payment under protest – Adjudicating Authority rejected ... [Read more]

Central Excise – Clearance of waste products – Refund of duty – Respondents are engaged in manufacture of Refined Bran Oil, which is exempted from payment of duty vide Notification No.3/2006-CE – During process of manufacturing of Refined Bran Oil, certain by-products namely Fatty Acids, Gums & Waxes were generated – Respondents had paid duty under protest on clearance of Fatty Acids, Gums & Waxes on plea that Fatty Acids, Gums & Waxes are exempted under Notification No.89/95-CE – Respondents filed refund claim along with copies of invoices showing duty payment under protest – Adjudicating Authority rejected refund claim filed by Respondents – Commissioner (Appeals) allowed appeals filed by Respondents and allowed refund subject to verification – Whether denial of refund claims of duty paid on clearance of Fatty Acids, Gums & Waxes generated as waste products during manufacture of Refined Rice Bran Oil is justified or not – HELD – In various decisions, Tribunal held that products generated during manufacturing process of final product shall be exempted from payment of duty being waste under Notification No.89/95-CE. Respondents have produced CA Certificate showing as to how much duty had been passed on buyers and how much duty had been borne by themselves separately, which had been noted by Commissioner (Appeals) in impugned order. Though Commissioner (Appeals) had directed department to determine extent of duty of incidence that had not been passed by Respondents to its customers within 15 days from receipt of impugned order, but no contrary evidence had been brought forward by department. Allegation of unjust enrichment is not sustainable in present case. Impugned order passed by Commissioner (Appeals) is affirmed – Appeals dismissed [Read less]

GST – Condonation of delay in filing Appeal, Manual filing of appeal - The petitioner filed the appeal before the appellate authority after a delay of 13 days over and above the period of 90 days prescribed under the provisions of Section 107(1) of the CGST Act, 2017. The appellate authority rejected the appeal solely on the ground of delay - Whether the delay in filing the appeal can be condoned – HELD - The reasons assigned by the petitioner for the delay in filing the appeal, such as the closure of the business premises and the inability to receive the order-in-original, satisfy the expression "sufficient cause" und... [Read more]

GST – Condonation of delay in filing Appeal, Manual filing of appeal - The petitioner filed the appeal before the appellate authority after a delay of 13 days over and above the period of 90 days prescribed under the provisions of Section 107(1) of the CGST Act, 2017. The appellate authority rejected the appeal solely on the ground of delay - Whether the delay in filing the appeal can be condoned – HELD - The reasons assigned by the petitioner for the delay in filing the appeal, such as the closure of the business premises and the inability to receive the order-in-original, satisfy the expression "sufficient cause" under Section 107(4) of the CGST Act. The Appellate authority should have applied its mind to the reasons provided by the petitioner and exercised its discretion to condone the delay, as the appeal was filed within the additional 30 days prescribed under the statute - The additional objection raised by the appellate authority regarding the manual filing of the appeal was unreasonable, as the Appellate authority was empowered to decide the appeal even if it was filed manually - The impugned orders are quashed and the matter is remanded to the appellate authorities for fresh consideration – The petition is allowed [Read less]

Customs – Seizure of imported goods – Order of provisional release – Imposition of conditions – Appellants imported goods declared as Stock Lot of Fabrics laminated with Thermo Plastic Polyurethane - Officers seized goods on basis of reports received from CRCL to effect that goods were mis-declared – Appellants requested Commissioner to release imported goods on execution of a bond without any bank guarantee – Commissioner ordered for provisional release of imported goods subject to furnishing of bond and a bank guarantee – Whether conditions put forth by Commissioner for provisional release of imported goods... [Read more]

Customs – Seizure of imported goods – Order of provisional release – Imposition of conditions – Appellants imported goods declared as Stock Lot of Fabrics laminated with Thermo Plastic Polyurethane - Officers seized goods on basis of reports received from CRCL to effect that goods were mis-declared – Appellants requested Commissioner to release imported goods on execution of a bond without any bank guarantee – Commissioner ordered for provisional release of imported goods subject to furnishing of bond and a bank guarantee – Whether conditions put forth by Commissioner for provisional release of imported goods are justified or not – HELD – While adjudicating authority is well within his right to impose conditions for provisional release of goods, said conditions should not be so impracticable and harsh so as to kill the importer’s business itself. CRCL had not addressed all queries raised by Appellants and have not tested all parameters as per Indian or International standards. Appellant’s averment that impugned goods cannot be actually sold in market at value arrived at by Revenue cannot be discarded. Interest of justice and also interest of Revenue will be safeguarded by seeking a bond for full value of goods and Bank Guarantee to extent of 30% of duty estimated. Other conditions for provisional release, as ordered by Commissioner need not be interfered with – Appeal partly allowed [Read less]

GST – Condonation of delay in filing statutory appeal - The petitioner filed an appeal challenging the demand order belatedly after 284 days. The appellate authority rejected the appeal on the ground of delay - Whether the delay in filing the appeal can be condoned by the Court under its powers under Article 226 of the Constitution of India – HELD - High Court cannot condone the delay in filing the appeal beyond the maximum period prescribed under the statute. The Court cannot disregard the statutory period for redressal of the grievance and entertain a writ petition even if filed after the expiry of the maximum limita... [Read more]

GST – Condonation of delay in filing statutory appeal - The petitioner filed an appeal challenging the demand order belatedly after 284 days. The appellate authority rejected the appeal on the ground of delay - Whether the delay in filing the appeal can be condoned by the Court under its powers under Article 226 of the Constitution of India – HELD - High Court cannot condone the delay in filing the appeal beyond the maximum period prescribed under the statute. The Court cannot disregard the statutory period for redressal of the grievance and entertain a writ petition even if filed after the expiry of the maximum limitation period, as it would be inconsistent with the legislative intent and render the statutory provision otiose - The statute grants discretion to the Appellate Authority to condone the delay up to 30 days beyond the initial 90 days, but this discretion does not extend to the powers of the High Court under Article 226 – Further, the reason assigned by the petitioner for the delay, i.e. lack of knowledge of computers by the petitioner and its accountant, as not palatable in the present era. Even if the petitioner had a valid reason and sufficient cause explaining the delay, the Court cannot condone the delay beyond 120 days as the taxing statutes operate in a strict time frame and any relaxation or easing of the limitation period will have a cascading effect on the functioning of the revenue - The writ petition is dismissed [Read less]

GST – West Bengal AAR - Classification of supply of CKD e-rickshaw and the applicable GST rate - To optimize logistics and facilitate sales through authorized dealers/assemblers, the applicant intends to supply electric three-wheeler passenger and goods transport vehicles (e-rickshaws) in a Completely Knocked Down (CKD) condition - Whether the supply of a complete set of components of an electric three-wheeler vehicle (e-rickshaw) in a Completely Knocked Down (CKD) form, necessary and sufficient for the assembly of the finished vehicle, should be classified as (a) the finished vehicle itself or (b) a set of parts – HEL... [Read more]

GST – West Bengal AAR - Classification of supply of CKD e-rickshaw and the applicable GST rate - To optimize logistics and facilitate sales through authorized dealers/assemblers, the applicant intends to supply electric three-wheeler passenger and goods transport vehicles (e-rickshaws) in a Completely Knocked Down (CKD) condition - Whether the supply of a complete set of components of an electric three-wheeler vehicle (e-rickshaw) in a Completely Knocked Down (CKD) form, necessary and sufficient for the assembly of the finished vehicle, should be classified as (a) the finished vehicle itself or (b) a set of parts – HELD - The Rule 2(a) of the General Rules for the Interpretation of the Harmonized System (GIR) and the Office Order issued by the Commissioner of Customs, ICD, TKD, New Delhi, identified five essential components of an e-rickshaw. The presence of the motor and any three of the other four essential components satisfies the "essential character" test under Rule 2(a) for classifying the CKD supply as the finished vehicle - If the CKD parts contain the motor and any three of the four essential components (transmissions, axles, chassis and controller) in proportionate numbers capable of building complete e-rickshaws, then the supply should be classified as the finished vehicle itself and be taxed at 5% GST under HSN code 87038040 and serial no. 441 of Schedule I of the GST notification - However, if the supply does not include either the motor or any two of the other four essential components, then it should be classified as a set of parts and taxed at 18% GST under the respective HSN codes for the individual parts – Ordered accordingly [Read less]

GST – West Bengal AAR - ITC on food and beverages in event management services - The applicant is engaged in event management and tourism services. The hotels provide bundled services to the applicant, including room accommodation, conference space, and food, sometimes issuing a single invoice and sometimes separate invoices. The applicant charges the client a consolidated event management fee - Whether the applicant is eligible to claim ITC on the inward supply of food and beverages used in providing the outward taxable bundled services - HELD - Event management involves supply of various kinds of goods and services in ... [Read more]

GST – West Bengal AAR - ITC on food and beverages in event management services - The applicant is engaged in event management and tourism services. The hotels provide bundled services to the applicant, including room accommodation, conference space, and food, sometimes issuing a single invoice and sometimes separate invoices. The applicant charges the client a consolidated event management fee - Whether the applicant is eligible to claim ITC on the inward supply of food and beverages used in providing the outward taxable bundled services - HELD - Event management involves supply of various kinds of goods and services in a bundled form. The event management service provided by the applicant is a composite supply under section 2(30) of the CGST Act, 2017, where the provision of food and beverages is an ancillary component of the principal supply of event management services. The proviso to Section 17(5)(b)(i) of the CGST Act allows ITC on inward supply of goods or services that are used as an element of a taxable composite or mixed supply. Since the applicant's outward supply is a taxable composite supply, the inward supply of food and beverages falls within the exception and is eligible for ITC - The applicant is eligible ITC on food and beverage services under the proviso to Section 17(5) for carrying out event management services which includes supply of foods and beverages – Ordered accordingly - Requirement of separate invoices for claiming ITC on food and beverages - Whether separate invoices from the hotel vendors are required for claiming ITC on food and beverage services - HELD – A separate invoices are not required for claiming ITC on food and beverages. Since the supply from the hotel is a composite supply, the individual elements lose their separate identity. The GST law does not mandate separate invoicing for each component of a composite supply. A single, consolidated invoice from the hotel, clearly detailing the charges for room rent, conference hall, and food, is sufficient for the applicant to claim ITC on all components, provided the invoice complies with the requirements of Section 16(2) of the CGST Act - ITC when food invoice is raised by hotel with margin charged by applicant - The hotel raises an invoice to the applicant for the food and beverages, and the applicant charges the client a margin over the hotel's invoice and issues its own invoice - Whether the applicant is eligible to claim ITC when the food and beverage invoice is raised by the hotel to the applicant, and the applicant charges the client a margin over it and issues its own invoice - HELD - The applicant is eligible to claim ITC in this scenario. The act of re-invoicing the food and beverage cost (plus margin) to the client demonstrates clear commercial re-supply, eliminating the "personal consumption" barrier. The transaction meets the requirement of being an "element of a taxable composite supply" under the proviso to Section 17(5)(b)(i) of the CGST Act - ITC on inseparable charges for conference hall and food - The hotel issues a single invoice under a combined heading such as "conference package" or "banquet package," without separate line items for food and hall rent - Whether the applicant is eligible to avail ITC on the entire value of such invoice where the charges for the conference hall and food are inseparable - HELD - The applicant is eligible to avail ITC on the entire value of the "conference package" invoice. Since the bundle constitutes a single inward Composite Supply to the applicant, and the input food and beverages are procured solely as an integral element of this service and used entirely for the applicant's outward taxable supply, the full input tax is eligible for credit under the proviso to Section 17(5)(b)(i) of the CGST Act. [Read less]

Customs – Customs duty on re-imported goods – Respondent-assessee exported certain consignments to Kenya Medical Supply Agency (KEMSA), which were not accepted by KEMSA on the grounds that the drugs were delisted by the USFDA and hence no longer eligible for procurement using USAID Funds - The respondent sought to re-import the goods for destruction, as the DCGI informed that the goods had less than 60% shelf life and could not be used domestically. The adjudicating authority allowed the re-importation without payment of customs duty, holding that the goods were meant for destruction and had no commercial value - Wheth... [Read more]

Customs – Customs duty on re-imported goods – Respondent-assessee exported certain consignments to Kenya Medical Supply Agency (KEMSA), which were not accepted by KEMSA on the grounds that the drugs were delisted by the USFDA and hence no longer eligible for procurement using USAID Funds - The respondent sought to re-import the goods for destruction, as the DCGI informed that the goods had less than 60% shelf life and could not be used domestically. The adjudicating authority allowed the re-importation without payment of customs duty, holding that the goods were meant for destruction and had no commercial value - Whether the re-imported goods were liable to customs duty or were exempt from duty payment – HELD - The re-importation of goods attracts Customs duty under Section 20 of the Customs Act, as the re-imported goods are subject to the same conditions and restrictions as goods of like kind and value imported for the first time. The Tribunal observed that there is no specific exemption notification that exempts goods from levy of customs duty at the time of re-importation. The reliance placed by the adjudicating authority on provisions related to 100% EOUs for destruction of goods without payment of duty was misplaced, as those provisions do not apply in the present case. The proper course of action would have been for the respondent to pay the applicable customs duty at the time of re-importation and then seek remission of duty under Section 23 of the Customs Act, which deals with remission of duty on lost, destroyed or abandoned goods. Matter remanded the matter back to the adjudicating authority to decide the issue of customs duty payable on the re-imported goods - The appeal filed by the Department is allowed by way of remand to the adjudicating authority to decide the issue of customs duty payable on the re-imported goods – The appeal is allowed by way of remand [Read less]

Customs – Import of jewellery – Denial of exemption – Demand of duty – Appellant had imported gold jewellery from Thailand and cleared same by availing exemption benefits under Notification No.85/2004-Cus – After investigation, Principal Commissioner denied exemption benefits and demanded payment of duty on goods cleared under bills of entry – Whether gold jewellery imported from Thailand is eligible for exemption benefit in terms of Notification No.85/2004-Cus – HELD – As per Notification No.85/2004-Customs availed by Appellant, duty concession was extended to certain specified goods when imported into cou... [Read more]

Customs – Import of jewellery – Denial of exemption – Demand of duty – Appellant had imported gold jewellery from Thailand and cleared same by availing exemption benefits under Notification No.85/2004-Cus – After investigation, Principal Commissioner denied exemption benefits and demanded payment of duty on goods cleared under bills of entry – Whether gold jewellery imported from Thailand is eligible for exemption benefit in terms of Notification No.85/2004-Cus – HELD – As per Notification No.85/2004-Customs availed by Appellant, duty concession was extended to certain specified goods when imported into country from Thailand subject to condition that such goods are of origin of Thailand in accordance with provisions of Interim Rules of Origin. Case of Appellant is that demand and its confirmation made under show cause notice and Order-in-Original is premature, as admittedly, Country of Origin certificate issued by statutory authority had been questioned and a reference had been made to designated authority of Kingdom of Thailand through Director General, DRI. Matter requires to be decided afresh on merits. Matter is remanded to Original Authority to re-examine issue after making available the outcome of reference made to designated authority of kingdom of Thailand – Appeal disposed of [Read less]

Central Sales Tax Act, 1956 - Sale in the course of import - Petitioner received purchase orders for supply of medical equipment, accessories and installation. As per the terms of the purchase orders, the petitioner was required to procure the equipment from its counterpart in Germany and not from its stock in India - The petitioner placed a purchase order on the foreign supplier and the goods were imported and ultimately sold to the 4th respondent - Petitioner claimed exemption under Section 5(2) of the CST Act for the sale to the equipment as a "sale in the course of import". Respondent imposed a penalty on the petitione... [Read more]

Central Sales Tax Act, 1956 - Sale in the course of import - Petitioner received purchase orders for supply of medical equipment, accessories and installation. As per the terms of the purchase orders, the petitioner was required to procure the equipment from its counterpart in Germany and not from its stock in India - The petitioner placed a purchase order on the foreign supplier and the goods were imported and ultimately sold to the 4th respondent - Petitioner claimed exemption under Section 5(2) of the CST Act for the sale to the equipment as a "sale in the course of import". Respondent imposed a penalty on the petitioner under Section 67 of the KVAT Act for the assessment year 2016-17, on the ground that the transaction was not eligible for exemption - Whether the transaction between the petitioner and the 4th respondent is eligible for exemption under Section 5(2) of the CST Act as a "sale in the course of import" – HELD - Where there is an inextricable link between the purchase order, import, and the ultimate sale, the transaction would qualify as a "sale in the course of import" under Section 5(2) of the CST Act - In the present case, there was a clear link between the purchase order placed by the 4th respondent (Hospital), the import effected by the petitioner, and the ultimate sale to the customer in the State. The assessment of the petitioner for the relevant year had been completed by the Deputy Commissioner (Assessment) accepting the petitioner's claim of exemption, in line with the Court's earlier judgment - Further, the penalty under Section 67 of the KVAT Act cannot be imposed as the petitioner had declared the transaction in its return, claiming exemption, and there was no suppression of any material facts - The order imposing the penalty under Section 67 of the KVAT Act is set aside and the writ petition is allowed [Read less]

Central Excise - Duty refund, Area-based exemption - The appellant was availing the benefit of exemption under the cash refund scheme as provided under Para 4(a) of Notification No. 01/2010-CE dated 06.02.2010 - Whether the delay in filing the statements by the appellant is a violation of the condition of the Notification No. 01/2010-CE dated 06.02.2010, and on that basis, can the refund be rejected – HELD - The condition 5(d) of Notification No. 01/2010-CE dated 06.02.2010 is procedural in nature, and the delay in compliance therewith is not fatal to the appellant's claim for the exemption. The appellant had fulfilled a... [Read more]

Central Excise - Duty refund, Area-based exemption - The appellant was availing the benefit of exemption under the cash refund scheme as provided under Para 4(a) of Notification No. 01/2010-CE dated 06.02.2010 - Whether the delay in filing the statements by the appellant is a violation of the condition of the Notification No. 01/2010-CE dated 06.02.2010, and on that basis, can the refund be rejected – HELD - The condition 5(d) of Notification No. 01/2010-CE dated 06.02.2010 is procedural in nature, and the delay in compliance therewith is not fatal to the appellant's claim for the exemption. The appellant had fulfilled all the substantive conditions of the Notification, and the delay in filing the statements was merely a procedural lapse. The denial of exemption on account of a procedural lapse would defeat the object of granting incentives to the backward areas. Accordingly, the impugned orders are set aside and the appeal is allowed [Read less]

Customs - Seizure of Goods under Customs Act - Appellant challenged the seizure as being without jurisdiction, lack of "reason to believe", and motivated by corruption - Requirement of "Reason to Believe" under Section 110(1) of the Customs Act - The appellant contended that the seizure lacked "reason to believe" that the goods were smuggled foreign betel nuts, as the seizure memo/inventory failed to record any facts, material or circumstances forming the officer's belief, despite the driver producing valid GST invoice and e-Way Bill – HELD - The "reason to believe" under Section 110(1) of the Customs Act requires only t... [Read more]

Customs - Seizure of Goods under Customs Act - Appellant challenged the seizure as being without jurisdiction, lack of "reason to believe", and motivated by corruption - Requirement of "Reason to Believe" under Section 110(1) of the Customs Act - The appellant contended that the seizure lacked "reason to believe" that the goods were smuggled foreign betel nuts, as the seizure memo/inventory failed to record any facts, material or circumstances forming the officer's belief, despite the driver producing valid GST invoice and e-Way Bill – HELD - The "reason to believe" under Section 110(1) of the Customs Act requires only the officer's prima facie satisfaction based on the material available at the time of seizure, without necessitating a detailed analysis or dissection of those reasons by the Court. The Court can only assess whether the proper officer formed a reasonable belief from the contemporaneous circumstances, such as the interception near the Indo-Bangladesh border and route deviation, which aroused suspicion of smuggling. Mere absence of detailed reasons in the seizure memo does not invalidate the action if prima facie grounds exist on record, as affirmed in precedents -Since the Customs authorities had prima facie "reason to believe" based on the suspicious circumstances, and the Customs authorities had the necessary jurisdiction to intercept the consignment – The appeal is dismissed - Jurisdiction of Customs Authorities - The appellant contended that the seizure occurred at an inland location, Chikanpara on Gaighata-Thakurnagar Road, which is not a notified customs checkpoint, and the Customs authorities lacked jurisdiction over the domestic goods of Indian origin. The respondents argued that the preventive powers under Section 110 of the Customs Act extend to inland areas proximate to borders for anti-smuggling activities, and the interception at Gaighata-Thakurnagar Road activated the jurisdiction – HELD - The preventive powers under Section 110 of the Customs Act extend to inland areas near the borders for anti-smuggling activities, and the interception at Gaighata-Thakurnagar Road, which is proximate to the Indo-Bangladesh border, did not constitute a jurisdictional defect. [Read less]

Service Tax – Section 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Sustainability – Appellant is engaged in providing various taxable services – On basis of information received from Income Tax department, Revenue issued show cause notice proposing demand of differential service tax by invoking extended period of limitation – Adjudicating authority confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether demand confirmed by invoking extended period of limitation under proviso to Section 73(1) of the Ac... [Read more]

Service Tax – Section 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Sustainability – Appellant is engaged in providing various taxable services – On basis of information received from Income Tax department, Revenue issued show cause notice proposing demand of differential service tax by invoking extended period of limitation – Adjudicating authority confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether demand confirmed by invoking extended period of limitation under proviso to Section 73(1) of the Act is sustainable – HELD – Admittedly, Appellant had suppressed values of services received and provided in their ST-3 returns filed for relevant period and had deliberately declared lower value to evade payment of due taxes. From perusal of ST-3 returns, it is evident that Appellant was well aware of his liability to pay service tax and method of computation of same. Clear case made out against Appellant is of suppression of taxable value in ST-3 return with intention to evade payment of service tax. Department had rightly invoked extended period of limitation. Demand of service tax confirmed by invoking extended period of limitation is sustained – Appeal dismissed [Read less]

Service Tax - Jurisdiction to pass Order against deceased person - Dept passed an ex parte Order-in-Original raising a demand of service tax under Sections 73, 75, 77 and 78 of Chapter-V of the Finance Act, 1994 pertaining to Financial Years 2015-16 and 2016-17 - Whether the Assistant Commissioner was justified in passing the Order-in-Original against the deceased - HELD - The Order-in-Original passed against the deceased is non est in the eye of law and a nullity. The Supreme Court judgment in Shabina Abraham v. Collector of Central Excise and Customs, held that in the absence of any statutory provision to continue procee... [Read more]

Service Tax - Jurisdiction to pass Order against deceased person - Dept passed an ex parte Order-in-Original raising a demand of service tax under Sections 73, 75, 77 and 78 of Chapter-V of the Finance Act, 1994 pertaining to Financial Years 2015-16 and 2016-17 - Whether the Assistant Commissioner was justified in passing the Order-in-Original against the deceased - HELD - The Order-in-Original passed against the deceased is non est in the eye of law and a nullity. The Supreme Court judgment in Shabina Abraham v. Collector of Central Excise and Customs, held that in the absence of any statutory provision to continue proceedings against a non-existing person, the proceedings stand abated. The definition of "assessee" under Section 65(7) of the Finance Act, 1994 includes a "person" and "his agent", but does not extend to the legal heirs of the deceased person. The legal heir cannot be construed as a "person liable to pay service tax" or "his agent" under the Act, and hence the proceedings under Section 73 could not have been continued after the death of the service provider. In the absence of any provision empowering the authority to continue the proceedings after the death of the service provider, the Order-in-Original passed against the deceased person is not maintainable - The Order-in-Original as well as the subsequent Letter initiating recovery proceedings under Section 87 of the Finance Act, 1994 – The writ petition is allowed [Read less]

Service Tax – Sections 65B(44) and 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Sustainability – Appellant is registered with Service Tax Department for providing taxable services as defined under Section 65B(44) of the Act – On basis of third party information received from Income Tax Department, Revenue issued show cause notices proposing demand of Service Tax by invoking extended period of limitation under proviso to Section 73(1) of the Act – Adjudicating Authority dropped demands proposed in show cause notice – Commissioner (Appeals) set aside order passed by... [Read more]

Service Tax – Sections 65B(44) and 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Sustainability – Appellant is registered with Service Tax Department for providing taxable services as defined under Section 65B(44) of the Act – On basis of third party information received from Income Tax Department, Revenue issued show cause notices proposing demand of Service Tax by invoking extended period of limitation under proviso to Section 73(1) of the Act – Adjudicating Authority dropped demands proposed in show cause notice – Commissioner (Appeals) set aside order passed by Adjudicating Authority – Whether demand made by invoking extended period of limitation is sustainable – HELD – Entire matter had been made on basis of show cause notices issued by making demand by invoking extended period of limitation on basis of differences noticed between figures declared by Appellant in their income tax return and ST-3 return. Records of Appellant were duly audited earlier and matter in respect of short payments was also adjudicated against Appellant. In such circumstances, show cause notice could not have been issued by invoking extended period of limitation. In number of decisions, Tribunal held that extended period of limitation could not have been invoked for making demand when Appellant was registered and was duly audited. In such circumstances, invocation of extended period of limitation under Section 73 of the Finance Act is wholly unwarranted. Impugned order passed by Commissioner (Appeals) is set aside – Appeal allowed [Read less]

UP VAT Act, 2008 - Taxability of Question Papers - Whether the question papers sold by the dealer are correctly classified as 'work-book' under Schedule 1, Entry No. 7 and exempt from tax, or whether they should be treated as printing material liable to tax under Schedule 2A, Entry No. 100 – HELD - The lower authorities had only relied on the fact that the question papers contained 12 pages and were stitched together to classify them as 'work-book', without examining their functional characteristics. The Supreme Court has emphasized that for an item to be considered a 'book', it must not only have the physical characteri... [Read more]

UP VAT Act, 2008 - Taxability of Question Papers - Whether the question papers sold by the dealer are correctly classified as 'work-book' under Schedule 1, Entry No. 7 and exempt from tax, or whether they should be treated as printing material liable to tax under Schedule 2A, Entry No. 100 – HELD - The lower authorities had only relied on the fact that the question papers contained 12 pages and were stitched together to classify them as 'work-book', without examining their functional characteristics. The Supreme Court has emphasized that for an item to be considered a 'book', it must not only have the physical characteristics of a book, but must also be functionally useful for the purpose of the assessee's business or profession, and must enhance the ability and understanding of the users - The lower authorities had failed to examine these functional aspects of the question papers. The matter is remanded to the Tribunal for fresh consideration on the issue of whether the question papers sold by the dealer can be classified as 'work-book' exempt from tax, or should be treated as printing material liable to tax, in light of the functional characteristics of the question papers as laid down by the Supreme Court - The impugned order passed by the Tribunal is set aside and the revisions are allowed by remand [Read less]

Service Tax – Sections 102 and 103 of Finance Act, 1994 – Payment of tax – Entitlement of refund – Appellant is engaged in providing services relating to resurfacing of runway at Air Force Station, but did not pay service tax on said services in view of exemption under Entry 12(a) of Notification No.25/2012-ST – Due to omission of said entry vide Notification No.6/2015-ST, Appellant paid service tax – With introduction of Section 102 and 103 in the Act, exemption which was withdrawn was restored retrospectively and allowing refund of service tax paid – Appellant claimed refund of service tax paid on aforesaid... [Read more]

Service Tax – Sections 102 and 103 of Finance Act, 1994 – Payment of tax – Entitlement of refund – Appellant is engaged in providing services relating to resurfacing of runway at Air Force Station, but did not pay service tax on said services in view of exemption under Entry 12(a) of Notification No.25/2012-ST – Due to omission of said entry vide Notification No.6/2015-ST, Appellant paid service tax – With introduction of Section 102 and 103 in the Act, exemption which was withdrawn was restored retrospectively and allowing refund of service tax paid – Appellant claimed refund of service tax paid on aforesaid services – Adjudicating Authority rejected refund claim filed by Appellant – Whether services rendered by Appellant are covered under provisions of Section 102 or Section 103 of the Act – HELD – There is no dispute to fact that services were provided by Appellant to Air Force Station and no service tax was paid in view of exemption under existing Entry 12(a) of Exemption Notification No.25/2012. Department never raised any objection to applicability of Exemption Notification No.25/2012 on services rendered by Appellant. It is not the case of Revenue that services provided by Appellant when Sl.No.12(a) was prevalent had undergone any change. When same services have been continued to be provided by Appellant, there is no reason to deny exemption on ground that they are not covered under services referred in the entry. Revenue had not pointed out any justification for taking a different view. Department cannot take contrary stand during different periods when subject matter is identical and had been assessed earlier. Appellant is entitled to refund as claimed. Order under challenge is set aside – Appeal allowed [Read less]

GST – Best Judgement assessment, Delay in filing GST returns, Passing of adjudication orders under Section 62 of the CGST Act, 2017 - The petitioner contended that the returns were filed belatedly due to bonafide reasons - Whether the delay in filing the returns by the petitioner can be condoned and the adjudication orders passed under Section 62 of the CGST Act be set aside – HELD - The adjudication orders were passed under Section 62 of the GST Act on the premise that the petitioner had not filed the returns. The petitioner had filed the returns belatedly, after the respective adjudication orders were passed. The adj... [Read more]

GST – Best Judgement assessment, Delay in filing GST returns, Passing of adjudication orders under Section 62 of the CGST Act, 2017 - The petitioner contended that the returns were filed belatedly due to bonafide reasons - Whether the delay in filing the returns by the petitioner can be condoned and the adjudication orders passed under Section 62 of the CGST Act be set aside – HELD - The adjudication orders were passed under Section 62 of the GST Act on the premise that the petitioner had not filed the returns. The petitioner had filed the returns belatedly, after the respective adjudication orders were passed. The adjudication orders were passed with a condition that if the returns were filed within 30 days, the orders would stand withdrawn - In view of the purport of Section 62 of the CGST Act and the fact that the adjudication orders were not based on the returns filed, it would be appropriate to afford the petitioner another chance by taking the belatedly filed returns on record and proceed to adjudicate the same in terms of Sections 73 or 74 of the CGST Act, as the case may be, in accordance with law. Considering the lapse on the part of the petitioner in filing the returns belatedly, the petitioner is directed to pay a cost of Rs. 25,000/- to the High Court Legal Services Authority - The adjudication orders are quashed and the authorities are directed to take the belatedly filed returns on record and proceed to adjudicate the same in accordance with law – The petition is disposed of [Read less]

GST - Anticipatory bail, Offence under Sections 132(1)(b), 132(1)(c), 132(5) of CGST Act, 2017 - ITC fraud, non-existent entities, fake invoices – Petition seeking anticipatory bail in a case filed by the DGGI under Sections 132(1)(b), 132(1)(c) read with Section 132(5) of the CGST Act, 2017 - The investigation revealed that four GST registered companies, in which the petitioner was a partner/director, had availed, utilized and passed on ineligible Input Tax Credit in excess of the credit actually reflected in their GSTR-2B returns and issued invoices without any underlying supply of goods or services, thereby illegally ... [Read more]

GST - Anticipatory bail, Offence under Sections 132(1)(b), 132(1)(c), 132(5) of CGST Act, 2017 - ITC fraud, non-existent entities, fake invoices – Petition seeking anticipatory bail in a case filed by the DGGI under Sections 132(1)(b), 132(1)(c) read with Section 132(5) of the CGST Act, 2017 - The investigation revealed that four GST registered companies, in which the petitioner was a partner/director, had availed, utilized and passed on ineligible Input Tax Credit in excess of the credit actually reflected in their GSTR-2B returns and issued invoices without any underlying supply of goods or services, thereby illegally availing ITC - Whether the petitioner is entitled to anticipatory bail – HELD - There are specific and serious allegations against the petitioner who had allegedly managed two firms and floated fictitious firms, thereby passing off fake ITC to the tune of Rs.8.24 crores by showing fictitious inward supplies and issuing fake invoices. The inquiry is at its nascent stage and the petitioner had not cooperated with the investigation so far. A proper and thorough inquiry is required to be conducted, and there is a possibility of the petitioner misusing the concession of pre-arrest bail, enabling him to avoid custodial interrogation, tamper with evidence, or manipulate records by taking undue advantage of legal and procedural loopholes. The petitioner may also influence the persons who were aware of the transactions and delay the investigation by avoiding personal appearance. Considering the facts and circumstances, the petition for anticipatory bail is rejected [Read less]

Central Excise - Proof of export, Demand of duty in respect of the goods cleared under ARE-1 - The appellant cleared the readymade garments for export under Rule 19 of the erstwhile Central Excise Rules, 2002. The Department alleged that 16 consignments cleared under ARE-1 forms were not exported and demanded excise duty, interest, and penalty - Whether the appellant had proved the export of the goods in question – HELD - The appellant had submitted sufficient documentary evidence, including the ARE-1 forms with Customs officer's endorsement, shipping bills, bank realization certificates, and a chart showing the details ... [Read more]

Central Excise - Proof of export, Demand of duty in respect of the goods cleared under ARE-1 - The appellant cleared the readymade garments for export under Rule 19 of the erstwhile Central Excise Rules, 2002. The Department alleged that 16 consignments cleared under ARE-1 forms were not exported and demanded excise duty, interest, and penalty - Whether the appellant had proved the export of the goods in question – HELD - The appellant had submitted sufficient documentary evidence, including the ARE-1 forms with Customs officer's endorsement, shipping bills, bank realization certificates, and a chart showing the details of the exports. The Customs officer had duly signed and stamped the Part-B of the ARE-1 forms, which showed that the export of goods was certified, even if the shipping bill details were not mentioned - The appellant cannot be blamed for the Customs officer's failure to mention the shipping bill details in the ARE-1 forms. If the Custom Officer while making assessment of the shipping bills at the time of export of goods had not mentioned the details of shipping bills in part B of ARE-1, the appellant cannot be blamed and demand of duty cannot be made on account of the failures of the Custom Officer to do his duty. The Custom Officer has signed and stamped part B of each ARE-1 which clearly shows that goods have been exported under each ARE-1 and the entire demand appears to be based on assumptions and presumptions which is not sustainable in law - The adjudicating authority had not properly considered the documents submitted by the appellant and had solely relied on the report of the Customs officer. Accordingly, the impugned order is set aside and the matter is remanded back to the adjudicating authority with a direction to consider all the evidence produced by the appellant and pass a reasoned order after affording the appellant an opportunity of hearing – The appeal is allowed by remand [Read less]

Central Excise - Penalties under Rule 26(2) of the Central Excise Rules, 2002; Allegation of irregular transfer of CENVAT Credit – Penalty under Rule 26(2) of the Central Excise Rules, 2002 for allegedly irregular transfer of CENVAT Credit to the appellants - Whether the penalties imposed on the appellants under Rule 26(2) of the Central Excise Rules, 2002 were justified – HELD - Under Rule 26(2), a person who issues invoices or any document enabling the user to avail irregular CENVAT Credit is liable to be penalized. In the present case, the Revenue's allegation was that the goods had not been moved. In such circumsta... [Read more]

Central Excise - Penalties under Rule 26(2) of the Central Excise Rules, 2002; Allegation of irregular transfer of CENVAT Credit – Penalty under Rule 26(2) of the Central Excise Rules, 2002 for allegedly irregular transfer of CENVAT Credit to the appellants - Whether the penalties imposed on the appellants under Rule 26(2) of the Central Excise Rules, 2002 were justified – HELD - Under Rule 26(2), a person who issues invoices or any document enabling the user to avail irregular CENVAT Credit is liable to be penalized. In the present case, the Revenue's allegation was that the goods had not been moved. In such circumstances, the transporter could not be held liable for the penalty under Rule 26(2), as it was not involved in issuing any invoice or document - There penalties on buyer-appellants are also not imposable under Rule 26(2) of the Central Excise Rules, 2002 - The penalties imposed on all the appellants are set aside and the appeal is allowed [Read less]

GST – Payment of CGST+SGST instead of IGST payment, Levy of penalty for payment of tax under wrong head – Petitioner mistakenly deposited the tax amount that was to be paid under the IGST head, under the CGST and SGST heads – Levy of penalty for non-payment of tax under the IGST head instead of under CGST and SGST – HELD - There should be a mechanism to transfer the tax deposited in the wrong head to the correct head. The petitioner has paid the total tax amount, but in the wrong heads. The authorities are directed to consider the matter afresh, taking into account the tax deposited under the CGST and SGST heads, a... [Read more]

GST – Payment of CGST+SGST instead of IGST payment, Levy of penalty for payment of tax under wrong head – Petitioner mistakenly deposited the tax amount that was to be paid under the IGST head, under the CGST and SGST heads – Levy of penalty for non-payment of tax under the IGST head instead of under CGST and SGST – HELD - There should be a mechanism to transfer the tax deposited in the wrong head to the correct head. The petitioner has paid the total tax amount, but in the wrong heads. The authorities are directed to consider the matter afresh, taking into account the tax deposited under the CGST and SGST heads, and transfer the same to the IGST head - The impugned orders imposing liability on the petitioner for non-payment of IGST are quashed and set aside. The writ petition is disposed of [Read less]

Service Tax - Import of Business Support Services, Service Tax demand from Representative Office, Separate Person - Appellant is a 100% owned subsidiary of Indian entity and is engaged in basic and detailed engineering and project management. It has established a representative office in Saudi Arabia to undertake the execution of projects abroad, including contract implementation, tender participation, and liaison with local authorities. The representative office incurs various expenditures in operating and maintaining the office which are reimbursed by the appellant - Whether the appellant is liable to pay service tax und... [Read more]

Service Tax - Import of Business Support Services, Service Tax demand from Representative Office, Separate Person - Appellant is a 100% owned subsidiary of Indian entity and is engaged in basic and detailed engineering and project management. It has established a representative office in Saudi Arabia to undertake the execution of projects abroad, including contract implementation, tender participation, and liaison with local authorities. The representative office incurs various expenditures in operating and maintaining the office which are reimbursed by the appellant - Whether the appellant is liable to pay service tax under the Reverse Charge Mechanism on the expenses reimbursed to the foreign representative office, which is alleged to be an import of Business Support Services – HELD - The appellant and its overseas representative office are part of the same legal entity and are not two separate legal persons. In such an event, the overseas representative office cannot be treated as a distinct person for the purposes of taxing any transactions between the two. The transactions between the representative office and the appellant do not satisfy the pre-conditions for the levy of service tax, which requires the presence of two persons and the element of 'consideration' - This Tribunal in the case of Torrent Pharmaceuticals Ltd., held that the permanent establishment of a business person abroad cannot be treated as a separate person from the head office in India for the purpose of service tax. The transactions within the same company cannot be considered as a service, and therefore, no service tax can be levied on such transactions – Further, the expenditure incurred by the representative office is reimbursed by the appellant, and there is no agreed consideration charged by the representative office for carrying out their activities. No service tax can be levied on the transactions between the appellant and its representative office, as they are part of the same legal entity and the transactions do not involve the element of 'consideration' required for the levy of service tax – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Cenvat credit on construction services - Proceedings for recovery of wrongly availed Cenvat credit along with interest by invoking the extended period of limitation - Whether the respondent-assessee was required to be registered with the department before availing the Cenvat credit on input services, Cenvat credit on commercial construction – HELD - Obtaining registration is not necessary for claiming Cenvat credit or even for claiming refund of Cenvat credit under the Cenvat Credit Rules, 2004. This issue is no longer res integra and has been settled in favor of the assessee - The Cenvat credit availed by ... [Read more]

Service Tax - Cenvat credit on construction services - Proceedings for recovery of wrongly availed Cenvat credit along with interest by invoking the extended period of limitation - Whether the respondent-assessee was required to be registered with the department before availing the Cenvat credit on input services, Cenvat credit on commercial construction – HELD - Obtaining registration is not necessary for claiming Cenvat credit or even for claiming refund of Cenvat credit under the Cenvat Credit Rules, 2004. This issue is no longer res integra and has been settled in favor of the assessee - The Cenvat credit availed by the respondent on various input services used for setting up the premises of the hotel falls within the definition of "input service" as defined under Rule 2(l) of the Cenvat Credit Rules, 2004, prior to the amendment effective from 01.04.2011 - Cenvat credit cannot be denied on the input services used for setting up the premises. The respondent had availed Cenvat credit during the period of April 2011 to December 2011, which was after the amendment in the definition of "input service". The ld. Commissioner had clarified that this credit did not pertain to the construction service, which was excluded from the definition of "input service" w.e.f. 01.04.2011 - The impugned order is upheld and the appeal filed by the Revenue is dismissed [Read less]

Tamil Nadu General Sales Tax Act, 1959 - Dispute over tax rate on sale of car audio systems, Whether 12.5% as domestic product or 20% as imported goods - For the assessment year 2003-04, assessee had offered to tax the turnover from sales of car audio systems at the rate of 12.5% under Entry 14(vi)/Part D/First Schedule of the TNGST Act, 1959. However, the assessing authority revised the assessment proposing to levy 20% tax plus surcharge on the ground that the product sold under the 'Kenwood car audio' logo constitutes an imported product - Whether the car audio systems sold by the assessee should be taxed at the rate of ... [Read more]

Tamil Nadu General Sales Tax Act, 1959 - Dispute over tax rate on sale of car audio systems, Whether 12.5% as domestic product or 20% as imported goods - For the assessment year 2003-04, assessee had offered to tax the turnover from sales of car audio systems at the rate of 12.5% under Entry 14(vi)/Part D/First Schedule of the TNGST Act, 1959. However, the assessing authority revised the assessment proposing to levy 20% tax plus surcharge on the ground that the product sold under the 'Kenwood car audio' logo constitutes an imported product - Whether the car audio systems sold by the assessee should be taxed at the rate of 12.5% as a domestic product or 20% as an imported good - HELD - The assessee had entered into a license agreement with Kenwood Corporation, Japan to manufacture and assemble the car audio systems in India. While some key components were imported from Kenwood, the final product was an amalgamation of both imported and domestically sourced materials. The assessee is a manufacturing concern and the car audio systems had been cleared after remittance of excise duty. The parts imported by the assessee were distinct, commercially saleable goods in their own right, and did not by themselves constitute a complete car audio system as contemplated under the higher tax rate for imported goods. What was ultimately sold was a complete car audio system, which fell under the entry for domestic sound equipment attracting 12.5% tax - The order of the first appellate authority is confirmed answering the substantial questions of law in favour of the assessee and against the Revenue – The revision is allowed [Read less]

GST – Denial of Input Tax Credit for the financial year 2019-20 under sub-section (4) of Section 16 of the CGST Act, 2017 - Whether the petitioner is now entitled to the benefit of ITC under the newly notified sub-section (5) of Section 16 of the CGST Acts – HELD - The contention of the petitioner's counsel that the notification of sub-section (5) of Section 16 of the CGST/SGST Acts entitles the petitioner to the input tax credit that was earlier denied under sub-section (4) – The impugned order is set aside to the extent that it denied input tax credit to the petitioner under Section 16(4) and the competent authorit... [Read more]

GST – Denial of Input Tax Credit for the financial year 2019-20 under sub-section (4) of Section 16 of the CGST Act, 2017 - Whether the petitioner is now entitled to the benefit of ITC under the newly notified sub-section (5) of Section 16 of the CGST Acts – HELD - The contention of the petitioner's counsel that the notification of sub-section (5) of Section 16 of the CGST/SGST Acts entitles the petitioner to the input tax credit that was earlier denied under sub-section (4) – The impugned order is set aside to the extent that it denied input tax credit to the petitioner under Section 16(4) and the competent authority is directed to pass fresh orders, taking into account the provisions of Section 16(5) and after providing an opportunity of hearing to the petitioner - The writ petition is disposed of [Read less]

Central Excise - Admissibility of self-credit of Education Cess under Notification No. 56/2002-CE - Appellants have availed self-credit of Education Cess. Revenue authorities held that such credit is not admissible in terms of the Notification - Whether the self-credit of Education Cess availed by the appellants under Notification No. 56/2002-CE is admissible – HELD - The issue is settled in favour of the Revenue by the Hon'ble Supreme Court in the case of M/s Unicorn Industries. The Supreme Court, while dealing with Notification No.71/2003-CE dated 09.09.2003 which is pari materia with the impugned notification i.e. 56/... [Read more]

Central Excise - Admissibility of self-credit of Education Cess under Notification No. 56/2002-CE - Appellants have availed self-credit of Education Cess. Revenue authorities held that such credit is not admissible in terms of the Notification - Whether the self-credit of Education Cess availed by the appellants under Notification No. 56/2002-CE is admissible – HELD - The issue is settled in favour of the Revenue by the Hon'ble Supreme Court in the case of M/s Unicorn Industries. The Supreme Court, while dealing with Notification No.71/2003-CE dated 09.09.2003 which is pari materia with the impugned notification i.e. 56/2002 dated 14.11.2002, held that the exemption notification could not have contemplated the inclusion of education cess and secondary and higher education cess as they were imposed by the Finance Acts of 2004 and 2007, which were not in vogue at the relevant time. The Supreme Court further held that in the absence of a notification containing an exemption to such additional duties in the nature of education cess and secondary and higher education cess, they cannot be said to have been exempted – The impugned order is confirmed and the appeal is dismissed [Read less]

Service Tax - Taxability of supply of cooked food (Mid-Day Meals) under 'Outdoor Catering Service' - Whether the supply of cooked food (Mid-Day Meals) by the appellant to the Education Department would fall under the category of 'Outdoor Catering Service' and hence taxable under the Finance Act, 1994 – HELD - The appellant merely cooked the food which is being picked up by the staff assigned by Education Department and stationed at the appellant's institute. The cooked meals are picked up by the Education Department through its contracted transported agencies and transported from appellant's premises. Since the appellant... [Read more]

Service Tax - Taxability of supply of cooked food (Mid-Day Meals) under 'Outdoor Catering Service' - Whether the supply of cooked food (Mid-Day Meals) by the appellant to the Education Department would fall under the category of 'Outdoor Catering Service' and hence taxable under the Finance Act, 1994 – HELD - The appellant merely cooked the food which is being picked up by the staff assigned by Education Department and stationed at the appellant's institute. The cooked meals are picked up by the Education Department through its contracted transported agencies and transported from appellant's premises. Since the appellant was preparing midday meals in their Institute and not in the schools where the meals are served and are not involved in serving of the meals in any manner, they are not covered by the definition of 'outdoor caterer' and hence the activity of preparing and supplying meals for midday scheme would not be covered by the definition of taxable service under Section 65(106(zzt) - The supply of Mid-Day Meal by the appellant to the Education Department does not fall in the definition of 'Outdoor Catering Services' - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Demand of service tax on player fees received by a cricketer from IPL franchise - Appellant had entered into contracts with Knight Riders Sports Private Limited, an IPL franchise, to play cricket matches in the IPL tournament – Dept of the view that the appellant had received certain amounts from the franchisee for providing the taxable service under the category of Business Support Service (BSS), but did not pay service tax on such provision of service - Whether the activities of the appellant, such as wearing the team clothing supplied by the IPL franchise containing display of badge, mark, logo etc., and... [Read more]

Service Tax - Demand of service tax on player fees received by a cricketer from IPL franchise - Appellant had entered into contracts with Knight Riders Sports Private Limited, an IPL franchise, to play cricket matches in the IPL tournament – Dept of the view that the appellant had received certain amounts from the franchisee for providing the taxable service under the category of Business Support Service (BSS), but did not pay service tax on such provision of service - Whether the activities of the appellant, such as wearing the team clothing supplied by the IPL franchise containing display of badge, mark, logo etc., and allowing himself to be photographed, filmed, televised etc. during the IPL league matches, amount to promotion or marketing of brand/logo/mark involving taxable services as defined under Section 65(105)(zzzzq) of the Finance Act, 1994 - HELD - The nature of activities performed by the appellant as per the contracts entered are primarily for playing the cricket game in IPL League matches. The activities of wearing team clothing supplied by the IPL Franchisee which contain display of badge, mark, logo etc., is not with the exclusive intent of promotion or marketing, as such clothing is worn during the time of playing the cricket game and other related activities. Therefore, it would not strictly fit into the taxable category of promotion and marketing services as per the definition provided under Section 65(105)(zzzzq) - The remuneration received by the cricket players from the IPL franchisee is not liable to service tax levy under the category of Business Support Service, as the players were engaged as professional cricketers and under the full control of the franchisee - the impugned order is set aside and the appeal is allowed [Read less]

GST - Export of services by subsidiary company or Intermediary, Location of supply of services – Petitioner is a subsidiary to foreign entity provides information system products and services to customers based on software licenses of 'SAP'. The petitioner filed refund applications for unutilized input tax credit, claiming that the services provided to its parent company qualify as 'export of services' - The Assistant Commissioner initially sanctioned the refund, but the Principal Commissioner and the Joint Commissioner, CGST, on appeal, rejected the refund claim on the ground that the petitioner was acting as an agent/i... [Read more]

GST - Export of services by subsidiary company or Intermediary, Location of supply of services – Petitioner is a subsidiary to foreign entity provides information system products and services to customers based on software licenses of 'SAP'. The petitioner filed refund applications for unutilized input tax credit, claiming that the services provided to its parent company qualify as 'export of services' - The Assistant Commissioner initially sanctioned the refund, but the Principal Commissioner and the Joint Commissioner, CGST, on appeal, rejected the refund claim on the ground that the petitioner was acting as an agent/intermediary of its parent company - Whether the services provided by the petitioner to its parent company qualify as 'export of services' under the IGST Act, entitling the petitioner to a refund of unutilized input tax credit – HELD - Although the appellate authority had considered certain clauses of the service agreement between the petitioner and its parent company, in light of the decision in Sundyne Pumps and Compressors India Pvt. Ltd. v. Union of India and the applicability of the relevant circulars, the matter would require appropriate examination by the appellate authority on all the points urged on behalf of the petitioner - The Division Bench in Sundyne Pumps had examined the terms of the agreement and concluded that the petitioner therein was not acting as an agent of the parent company. Further, the Circulars issued by the CBIC clarified that transactions between sister/group companies or holding/subsidiary companies are not covered under the definition of 'intermediary' under the IGST Act - Considering the different clauses of the service agreement, the issues require a deeper scrutiny and examination by the appellate authority. The impugned order is set aside and the matter is remanded to the appellate authority for a de novo consideration – The petition is disposed of [Read less]

Service Tax - Short payment of service tax, Demand based on Income tax data - A show cause notice was issued to the appellant demanding service tax, along with interest, penalty, and late fee - Whether the demand of service tax can be raised on the basis of a third-party (Income Tax) data, which has been rectified by the appellant – HELD - The entire case against the appellant was made based on the differences observed in the figures in the ST-3 returns and the Form 26AS. However, the appellant produced the revised Form 26AS for the relevant period, which showed the details against the services provided as identical to t... [Read more]

Service Tax - Short payment of service tax, Demand based on Income tax data - A show cause notice was issued to the appellant demanding service tax, along with interest, penalty, and late fee - Whether the demand of service tax can be raised on the basis of a third-party (Income Tax) data, which has been rectified by the appellant – HELD - The entire case against the appellant was made based on the differences observed in the figures in the ST-3 returns and the Form 26AS. However, the appellant produced the revised Form 26AS for the relevant period, which showed the details against the services provided as identical to the figures declared in the ITR. The total value of receipts towards the provision of services during the period of 2016-17 was Rs. 26,11,508/-, and the service tax was required to be paid on this amount - The appellant is required to pay the differential amount along with the interest due on the same amount - The appellant had short paid the service tax by suppressing the correct value of the services provided. The intention to evade payment of tax by suppressing the value of services is evident - The late fee imposed upon the appellant for late/non-filing of the service tax return under Section 70 of the Finance Act, read with Rule 7 of the Service Tax Rules, 1994, and the penalty imposed under Rule 7 of the Service Tax Rules, 1994, read with Section 77(1)(c) of the Finance Act, 1994 are upheld - The impugned order modified and the appeal is disposed of [Read less]

Customs - Anti-dumping duty, Territorial jurisdiction of High Court, violation of principles of natural justice - Petition challenging the Final Findings rendered by the DGTR (the Designated Authority) recommending the imposition of anti-dumping duty on imports of Mono Ethylene Glycol originating in or exported from Kuwait, Saudi Arabia and Singapore – The petitioner alleges that the Designated Authority has conducted a unilateral analysis, ignored information related to other known domestic producers, and failed to disclose the essential facts and methodology used for determining the dumping margin - Whether the High Co... [Read more]

Customs - Anti-dumping duty, Territorial jurisdiction of High Court, violation of principles of natural justice - Petition challenging the Final Findings rendered by the DGTR (the Designated Authority) recommending the imposition of anti-dumping duty on imports of Mono Ethylene Glycol originating in or exported from Kuwait, Saudi Arabia and Singapore – The petitioner alleges that the Designated Authority has conducted a unilateral analysis, ignored information related to other known domestic producers, and failed to disclose the essential facts and methodology used for determining the dumping margin - Whether the High Court at Calcutta has the territorial jurisdiction to entertain this writ petition under Article 226(2) of the Constitution – HELD - The facts pleaded in the writ petition do not constitute an integral part of the cause of action arising within the territorial jurisdiction of the High Court at Calcutta. The challenge to the Final Findings of the Designated Authority is primarily based on the alleged violation of the principles of natural justice and the petitioner's right to fair treatment, which occurred in Delhi, outside the territorial jurisdiction of this Court. The fact that the petitioner's business may be adversely affected if a notification imposing anti-dumping duty is issued is not a relevant fact for granting the relief sought in the writ petition. Therefore, the High Court lacks the territorial jurisdiction to entertain this writ petition - The writ petition is dismissed for lack of territorial jurisdiction [Read less]

GST – Tamil Nadu AAAR - Eligibility of Input Tax Credit (ITC) on Fire-Fighting System and Public Health Equipment - The Appellant had entered into a contract for design and construction of a new factory, which included procurement of fire-fighting system and public health engineering - The Authority for Advance Ruling (AAR) ruled that the ITC on fire-fighting system and public health engineering is not eligible as they are blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 - Whether the fire-fighting system and public health equipment qualify as 'plant and machinery' under the GST law, thereby making the ... [Read more]

GST – Tamil Nadu AAAR - Eligibility of Input Tax Credit (ITC) on Fire-Fighting System and Public Health Equipment - The Appellant had entered into a contract for design and construction of a new factory, which included procurement of fire-fighting system and public health engineering - The Authority for Advance Ruling (AAR) ruled that the ITC on fire-fighting system and public health engineering is not eligible as they are blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 - Whether the fire-fighting system and public health equipment qualify as 'plant and machinery' under the GST law, thereby making the ITC on such procurements eligible – HELD - Unless the commodity or an installation gets covered under the expression “plant and machinery” as defined in the explanation under Section 17 of the CGST Act, 2017, the input tax credit on the said commodity or installation stands blocked in view of the clauses (c) as well as clause (d) of Section 17(5) of the Act - The fire-fighting system and public health equipment, though movable in nature, get assimilated into the immovable property (the factory building) upon installation and lose their independent identity. Further, these installations are not directly used for making outward supply of goods or services, but rather aid in the overall functioning of the factory, and hence do not qualify as 'plant and machinery' under the GST law. Accordingly, the ITC on the procurements related to fire-fighting system and public health equipment is not eligible under Sections 17(5)(c) and 17(5)(d) of the CGST Acts - The ruling pronounced by the AAR is upheld and the appeal is dismissed [Read less]

GST – Tamil Nadu AAAR - Eligibility of input tax credit on electrical works for factory expansion – Appellant aggrieved by the impugned AAR order holding that the ITC is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 as the electrical works constitute construction of an immovable property - Whether the input tax credit is eligible on the electrical works carried out for the expansion of the factory – HELD - For ITC to be eligible under Section 16(1) of the CGST Act, the goods or services should be used or intended to be used in the course or furtherance of business. However, Section 17(5)(c) and 1... [Read more]

GST – Tamil Nadu AAAR - Eligibility of input tax credit on electrical works for factory expansion – Appellant aggrieved by the impugned AAR order holding that the ITC is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 as the electrical works constitute construction of an immovable property - Whether the input tax credit is eligible on the electrical works carried out for the expansion of the factory – HELD - For ITC to be eligible under Section 16(1) of the CGST Act, the goods or services should be used or intended to be used in the course or furtherance of business. However, Section 17(5)(c) and 17(5)(d) of the CGST Act block the ITC on works contract services and goods/services received for construction of an immovable property, except for plant and machinery - The electrical installations like LT panels, bus ducts, electrical works, etc. do not qualify as 'apparatus, equipment or machinery' fixed to the earth. These installations, though movable in nature, are meant for the permanent beneficial enjoyment of the land and therefore constitute immovable property. Once the electrical installations are attached to the earth or fastened to anything attached to the earth, they become part of the immovable property, even if they can be detached and moved - Further, these installations do not have an independent existence and are tailor-made for the factory, and hence are not marketable. Therefore, the ITC on the electrical works contract is not eligible as it is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act - The ruling of the AAR is upheld and the appeal is dismissed [Read less]

GST – Intermediary or export of service - Refund of accumulated input tax credit (ITC) for export of services – HELD - The petitioner is not an \'intermediary\' and is entitled to the refund of accumulated / unutilized ITC on account of the export of services without payment of IGST - The petitioner was providing export of services as per the Service Agreement entered into between the petitioner and the parent company - The respondents are directed to grant the refund of accumulated / unutilized ITC to the petitioner within a period of three months along with the applicable interest – The petition is allowed

GST – Tamil Nadu AAAR - Classification of Interactive Flat Panels Display – Appellant aggrieved by the impugned AAR order holding that Various models of ACER Interactive flat Panels with additional features are classifiable under 85285900 and liable to 28% GST – Whether the IFPDs supplied by the appellant should be classified under tariff heading 84714190 as 'Automatic Data Processing (ADP) machine' attracting a GST rate of 18%, or under tariff heading 85285900 as 'Monitors' attracting a GST rate of 28% - HELD - Though the IFPDs contain certain features of an ADP machine, the primary function of the product is for di... [Read more]

GST – Tamil Nadu AAAR - Classification of Interactive Flat Panels Display – Appellant aggrieved by the impugned AAR order holding that Various models of ACER Interactive flat Panels with additional features are classifiable under 85285900 and liable to 28% GST – Whether the IFPDs supplied by the appellant should be classified under tariff heading 84714190 as 'Automatic Data Processing (ADP) machine' attracting a GST rate of 18%, or under tariff heading 85285900 as 'Monitors' attracting a GST rate of 28% - HELD - Though the IFPDs contain certain features of an ADP machine, the primary function of the product is for display and viewing, and the other features are only ancillary in nature. The Chapter Notes 6(A) and 8 of Chapter 84 of the Customs Tariff, state that a machine incorporating features of an ADP machine but performing a specific function other than data processing should be classified according to its principal function or under the residual heading. The principal function of the IFPDs is for display and viewing, and hence, they are rightly classifiable under tariff heading 85285900 as 'Monitors' attracting a GST rate of 28% - Further, the Circular No. 12/2025-Customs dated 7th April, 2025, was intended to alleviate the confusion among trade and industry in classifying IFPDs under tariff heading 85285900. The various case laws and Customs Advance Ruling decisions cited by the appellant were pronounced before the issuance of the Notification and Circular by the CBIC on this issue, and hence, are not applicable in the present case - The ruling of the AAR is upheld and the appeal is dismissed [Read less]

Customs - Jurisdiction of DRI to issue show cause notice, cancellation of DFRC, flexibility in using inputs under SION - During 2004-05, the petitioner exported bicycle parts under the Duty Free Replenishment Certificate (DFRC) scheme. The DRI conducted a search at the petitioner's premises and formed an opinion that the petitioner had utilized Hot Rolled (HR) sheets as input, whereas DFRC was obtained for Cold Rolled Closed Annealed (CRCA) sheets. The DRI issued show cause notices to the petitioner and the importers, demanding the duty foregone at the time of import of CRCA against the DFRC - Whether the DRI had the juris... [Read more]

Customs - Jurisdiction of DRI to issue show cause notice, cancellation of DFRC, flexibility in using inputs under SION - During 2004-05, the petitioner exported bicycle parts under the Duty Free Replenishment Certificate (DFRC) scheme. The DRI conducted a search at the petitioner's premises and formed an opinion that the petitioner had utilized Hot Rolled (HR) sheets as input, whereas DFRC was obtained for Cold Rolled Closed Annealed (CRCA) sheets. The DRI issued show cause notices to the petitioner and the importers, demanding the duty foregone at the time of import of CRCA against the DFRC - Whether the DRI had the jurisdiction to issue the show cause notices in the absence of cancellation of the DFRC by the DGFT, the competent authority under the Foreign Trade (Development and Regulation) Act, 1992 – HELD - The DGFT, through its policy circulars and letters, had clarified that as per the Standard Input Output Norms (SION), both HR sheets and CRCA sheets were interchangeable inputs for the manufacture of bicycle parts, and the exporter had the flexibility to use either of the two inputs. The Supreme Court's judgment in Titan Medical Systems (P) Ltd. Versus Collector of Customs, held that unless the license or scrip is questioned by the licensing authority, the Customs authorities cannot refuse the exemption on the ground of misrepresentation. In the present case, the DGFT had not taken any steps to cancel the DFRC, and instead had supported the petitioner's case. Therefore, the DRI was not competent to issue the show cause notices raising the demand of duty that was waived at the time of import of inputs against the DFRC - the DRI did not have the jurisdiction to issue the SCNs in the absence of cancellation of the DFRC by the DGFT - The impugned show cause notices issued by the DRI are set aside and the writ petitions are allowed [Read less]