More Judgements

1. Home
2. More Judgements

Customs – Section 138C of Customs Act, 1962 – Import of goods – Allegation of undervaluation – Rejection of declared value – Appellant is engaged in business of import and trading of goods and is mainly importing LED TV and Drywall Screws – Department got an information about Appellant being engaged in evasion of Customs duty by way of undervaluation of imported goods – In view of the observed under-valuation, department issued show cause notice proposing rejection of declared transaction value, re-determination of value and demand of differential duty – Adjudicating Authority confirmed proposals made in sh... [Read more]

Customs – Section 138C of Customs Act, 1962 – Import of goods – Allegation of undervaluation – Rejection of declared value – Appellant is engaged in business of import and trading of goods and is mainly importing LED TV and Drywall Screws – Department got an information about Appellant being engaged in evasion of Customs duty by way of undervaluation of imported goods – In view of the observed under-valuation, department issued show cause notice proposing rejection of declared transaction value, re-determination of value and demand of differential duty – Adjudicating Authority confirmed proposals made in show cause notice – Whether rejection of declared value and re-determination by Adjudicating authority is sustainable – HELD – Impugned show cause notice had raised demand with respect to one live Bill of Entry, through which, Appellant had imported LED TV and six past Bill of Entries, through which, Appellant had imported Drywall Screws. When goods imported vide live Bill of Entry were examined by SIIB on 100% basis, goods were found to be in conformity with Bill of Entry, commercial invoice and packing list. Department had merely relied upon documents which were the print outs of retrieved data. Since department had not followed mandatory requirement provided under Section 138C of the Act, retrieved proforma invoice are not admissible into evidence. Admittedly, rejection of value declared in six Bill of Entries is based on comparison of proforma invoices issued by third party. Comparison of rates with third party is not permissible. Department failed to produce any evidence above Drywall Screws to be undervalued. Entire allegations are the result of mere presumptions and assumptions. Rejection of declared value and re-determination by Adjudicating authority is not sustainable. In light of entire above discussion arrived at with respect to one live as well as six past bills of entry, order under challenge is set aside – Appeal allowed [Read less]

Central Excise – Payment of pre-deposit – Entitlement of refund – Appellant filed refund claim of amount paid by them as pre-deposit during course of investigation – Adjudicating Authority rejected major portion of refund claim – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is entitled to refund of amount paid by them during course of investigation – HELD – Perusal of Order-in-Original which stood approved in respective impugned Order-in-Appeal revealed that rejection of portion of refund claim had been made apparently relying on report of Range Officer. Authoriti... [Read more]

Central Excise – Payment of pre-deposit – Entitlement of refund – Appellant filed refund claim of amount paid by them as pre-deposit during course of investigation – Adjudicating Authority rejected major portion of refund claim – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is entitled to refund of amount paid by them during course of investigation – HELD – Perusal of Order-in-Original which stood approved in respective impugned Order-in-Appeal revealed that rejection of portion of refund claim had been made apparently relying on report of Range Officer. Authorities cannot have control over any amount paid either as a deposit or pre-deposit or whatever mode during investigation. Revenue cannot pretend ignorance in not refunding entire amount. Reasoning spelt out in Order-in-Original, which unfortunately came to be upheld by Commissioner (Appeals) is clearly illogical. Rejection of refund is unsustainable, which deserves to be set aside. Insofar as interest claimed by Appellants are concerned, they have prayed for 12%, but it is appropriate to restrict interest at 6% in terms of provisions of statute – Appeals allowed [Read less]

GST - Wrong PIN code on e-Way Bill, Validity of proceedings under Section 129 of CGST Act for minor errors in e-way bill - Whether the proceedings under Section 129 of the CGST Act were justified when the only discrepancy was the wrong mentioning of the PIN code on the e-way bill, while the address of the consignor and consignee was correct – HELD - If the address of the consignor or consignee is correct and only the PIN code has been wrongly mentioned, the proceedings under Section 129 may not be initiated - The Clause 5(b) of the CBEC Circular No. 64/38/2018-GST dated 14.09.2018 provides that proceedings under Section ... [Read more]

GST - Wrong PIN code on e-Way Bill, Validity of proceedings under Section 129 of CGST Act for minor errors in e-way bill - Whether the proceedings under Section 129 of the CGST Act were justified when the only discrepancy was the wrong mentioning of the PIN code on the e-way bill, while the address of the consignor and consignee was correct – HELD - If the address of the consignor or consignee is correct and only the PIN code has been wrongly mentioned, the proceedings under Section 129 may not be initiated - The Clause 5(b) of the CBEC Circular No. 64/38/2018-GST dated 14.09.2018 provides that proceedings under Section 129 may not be initiated if there is an error in the PIN code but the address of the consignor and consignee is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill - In the present case, the goods were accompanied by all the requisite documents, and no other discrepancy was pointed out except the wrong mentioning of the PIN code. Since there was no intent to evade the payment of tax, the proceedings under Section 129 are not justified - The impugned order is set aside and the writ petition is allowed [Read less]

Customs – Import of garments – Demand of duty – Investigation revealed that Jatin Seth of R.K. Enterprises had imported garment accessories at Nil rate of Custom Duty as provided under Customs Notification No.21/2002 by using Importer Exporter Codes (IECs) of 15 Exporters – After investigation, department issued show cause notice to various persons including Appellants – Adjudicating authority confirmed demand as proposed in show cause notice – Whether Appellants are liable to pay duty jointly and/or severally with Jatin Seth – HELD – It is an undisputed fact that none of 15 IEC holders imported subject goo... [Read more]

Customs – Import of garments – Demand of duty – Investigation revealed that Jatin Seth of R.K. Enterprises had imported garment accessories at Nil rate of Custom Duty as provided under Customs Notification No.21/2002 by using Importer Exporter Codes (IECs) of 15 Exporters – After investigation, department issued show cause notice to various persons including Appellants – Adjudicating authority confirmed demand as proposed in show cause notice – Whether Appellants are liable to pay duty jointly and/or severally with Jatin Seth – HELD – It is an undisputed fact that none of 15 IEC holders imported subject goods for their own use. Impugned consignments have actually been imported by a trader, viz., Jatin Seth in name of various garment exporters misusing their IE Codes. Jatin Seth is the actual importer and beneficiary of subject import. Show cause notice apprehended that some of Appellants have willfully colluded with Jatin Seth and allowed their IECs and Import Certificates to be used in import of garment accessories by Jatin Seth for monetary consideration. Appellants are separate legal entities/juridical persons and therefore, there could not be any proposal in first place to demand jointly and/or severally which was unfortunately confirmed in impugned Order-in-Original. Demand of duty cannot be confirmed against various persons on “jointly and/or severally” basis. Impugned Order-in-Original is set aside. Cases remanded back to file of Original Authority to decide against whom the actual demands could be made – Appeals disposed of [Read less]

Customs AAR - Classification of Copper Cables, Capacitor, Ceramic pad, Connector, Fuse, Relay, Inductor, MOSFET/Transistor and Transformer to be used for manufacture of ‘Combo 3-in-1 (OBC+DC/DC+PDU)’, which will in turn be used in motor vehicles – HELD – HELD - Although the said products are for manufacture of the Combo 3- in-1 (OBC+DC/DC+PDU) which is classifiable under Heading 8504, the same cannot be classified as parts of the same. The subject goods are covered under specific heading of the tariff, therefore, by the virtue of GRI rule 1, Note 2(a) to Section XVI. of the Tariff ('parts of machines' falling under... [Read more]

Customs AAR - Classification of Copper Cables, Capacitor, Ceramic pad, Connector, Fuse, Relay, Inductor, MOSFET/Transistor and Transformer to be used for manufacture of ‘Combo 3-in-1 (OBC+DC/DC+PDU)’, which will in turn be used in motor vehicles – HELD – HELD - Although the said products are for manufacture of the Combo 3- in-1 (OBC+DC/DC+PDU) which is classifiable under Heading 8504, the same cannot be classified as parts of the same. The subject goods are covered under specific heading of the tariff, therefore, by the virtue of GRI rule 1, Note 2(a) to Section XVI. of the Tariff ('parts of machines' falling under Chapters 84 and 85), HSN Explanatory Notes to Note 2 of Section XVI, Note 2 to Section XVII (Chapter 86 to 89) of the Tariff and General explanatory notes of section XVII, the same are to be classified under respective Tariff Headings of the First Schedule to the Customs Tariff Act, 1975, not as parts of Combo 3-in-1 (OBC+DC/DC+PDU) - The products in question i.e. Copper cables, Capacitor, Ceramic gap pad, Connector, Fuse, Relay, Inductor, MOSFET/Transistor and Transformer, proposed to be imported by the applicant, identifiable for use in electric vehicles would attracts merit classification under the respective headings viz. Copper Cables: Heading 8544, Capacitor: Heading 8532, Ceramic pad: Heading 8547, Connector: Heading 8536, Fuse: Heading 8536, Relay: Heading 8536, Inductor: Heading 8504, MOSFET/Transistor: Heading 8541, and Transformer: Heading 8504 – Ordered accordingly [Read less]

Central Excise – Section 11B of Central Excise Act, 1944 – Filing of refund claim – Bar of limitation – Appellant is engaged in manufacture of transformers – Appellant filed an application under Section 11B of the Act for refund of excise duty paid on goods cleared under invoices – Original Authority rejected refund claim filed by Appellant on ground of limitation – Aggrieved Appellant filed appeal before Commissioner (Appeals), which had been dismissed by impugned order – Whether refund claim filed by Appellant is barred by limitation or not – HELD – Appellant had filed refund claim for refund of excis... [Read more]

Central Excise – Section 11B of Central Excise Act, 1944 – Filing of refund claim – Bar of limitation – Appellant is engaged in manufacture of transformers – Appellant filed an application under Section 11B of the Act for refund of excise duty paid on goods cleared under invoices – Original Authority rejected refund claim filed by Appellant on ground of limitation – Aggrieved Appellant filed appeal before Commissioner (Appeals), which had been dismissed by impugned order – Whether refund claim filed by Appellant is barred by limitation or not – HELD – Appellant had filed refund claim for refund of excise duty paid by them on goods cleared under excise invoices on grounds that product cleared by them on these invoices were exempted from payment of duty vide S.No.336 of Notification No.12/2012-CE and their buyer had not paid/reimbursed excise duty to them. Section 11B(5)(B) of the Act dealt with relevant date of filing of refund claim. For purposes of clearances pertaining to refund claim, relevant date cannot be the date of adjustment of duty after final assessment and it has to the date of payment of duty. Refund claim filed by Appellant is barred by limitation period of one year as prescribed under Section 11B of the Act. Order under challenge is affirmed – Appeal dismissed [Read less]

Central Excise - Finalisation of provisional assessment, Refund of excess duty paid, Bar of unjust enrichment, Government-controlled prices - Appellant is a manufacturer of Para Chloro Meta Xylenol (PCMX), which is subject to statutory price control under the Essential Commodities Act, 1955 and the Drugs (Prices Control) Order, 1995 - For the period 2009-2010, the appellant resorted to provisional assessment under the Central Excise Valuation Rules, 2000, due to fluctuations in the exchange rate of the imported raw material. Upon finalization of the provisional assessment, it was determined that the appellant had paid exce... [Read more]

Central Excise - Finalisation of provisional assessment, Refund of excess duty paid, Bar of unjust enrichment, Government-controlled prices - Appellant is a manufacturer of Para Chloro Meta Xylenol (PCMX), which is subject to statutory price control under the Essential Commodities Act, 1955 and the Drugs (Prices Control) Order, 1995 - For the period 2009-2010, the appellant resorted to provisional assessment under the Central Excise Valuation Rules, 2000, due to fluctuations in the exchange rate of the imported raw material. Upon finalization of the provisional assessment, it was determined that the appellant had paid excess duty, and the appellant filed refund claims - Whether the refund of excess duty paid by the appellant is barred by the principle of unjust enrichment – HELD - The doctrine of unjust enrichment does not apply in the present case, as the prices of PCMX were fixed by the government under the Essential Commodities Act, 1955 and the Drugs (Prices Control) Order, 1995. The bar of unjust enrichment is inapplicable when the price of the goods is fixed or regulated by the Government - Further, the PCMX manufactured by the appellant was stock-transferred to its own sister units, and in such cases, the question of passing on the incidence of duty does not arise. The Tribunal in Pearl Polymers v. CCE, Bangalore and Banzali Engineering Polymer Ltd. v. CCE, Bhopal, held that the doctrine of unjust enrichment is inapplicable to stock-transfer transactions - The appellant is eligible for the refund of excess duty paid. The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Reversal of Cenvat credit, Rule 6(3) of Cenvat Credit Rules 2004, Non-excisable goods – Demand on the ground that the appellant cleared packing materials (used drums) without reversing the Cenvat credit at the rate of 6% as per Rule 6(3) of the Cenvat Credit Rules, 2004 - Whether the appellant is required to reverse the Cenvat credit at the rate of 6% as per Rule 6 of the CCR, 2004 amended by Notification No. 6/2015-CE (NT) dated 01.03.2015, for the clearance of packing materials (used drums) – HELD - The scope of Rule 6 is with respect to the inputs/input services used in or in relation to the manufac... [Read more]

Central Excise - Reversal of Cenvat credit, Rule 6(3) of Cenvat Credit Rules 2004, Non-excisable goods – Demand on the ground that the appellant cleared packing materials (used drums) without reversing the Cenvat credit at the rate of 6% as per Rule 6(3) of the Cenvat Credit Rules, 2004 - Whether the appellant is required to reverse the Cenvat credit at the rate of 6% as per Rule 6 of the CCR, 2004 amended by Notification No. 6/2015-CE (NT) dated 01.03.2015, for the clearance of packing materials (used drums) – HELD - The scope of Rule 6 is with respect to the inputs/input services used in or in relation to the manufacture of exempted goods along with the manufacture of non-exempted goods. Unless the exempted goods are manufactured along with non-exempted goods, the applicability of Rule 6 does not arise - The appellant is manufacturing only one kind of goods. Admittedly, the packing material- used drums as have been cleared by the appellant, irrespective for consideration, are not the goods manufactured by the appellant. The empty packaging material of cenvatable input is not liable for payment either as excise duty or as Cenvat credit under Rule 6(3) of CCR, 2004. The packing materials (used drums) cleared by the appellant are not the goods manufactured by the appellant, and therefore, the provisions of Rule 6 of CCR, 2004 are not applicable. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Rules 2(l) and 5 of CENVAT Credit Rules, 2004 – Unutilized credit – Entitlement of refund – Appellant is a 100% Export Oriented Unit engaged in providing call centre services to its overseas affiliate – Appellant filed refund claim for unutilized CENVAT credit under Rule 5 of the Rules – Deputy Commissioner rejected refund claim on ground that certain input services were not essential for providing output services and lacked direct nexus – Commissioner (Appeals) rejected appeal filed by Appellant – Whether disputed input services have any nexus with exported output services – HELD – Rules ... [Read more]

Service Tax – Rules 2(l) and 5 of CENVAT Credit Rules, 2004 – Unutilized credit – Entitlement of refund – Appellant is a 100% Export Oriented Unit engaged in providing call centre services to its overseas affiliate – Appellant filed refund claim for unutilized CENVAT credit under Rule 5 of the Rules – Deputy Commissioner rejected refund claim on ground that certain input services were not essential for providing output services and lacked direct nexus – Commissioner (Appeals) rejected appeal filed by Appellant – Whether disputed input services have any nexus with exported output services – HELD – Rules permits taking of credit of inputs and input services which are used for providing output services. Rule 5 of the Rules provides that accumulated credit which cannot be utilized can be refunded to exporter subject to stipulated conditions. Legal consultancy service is already included in definition of input services. General Insurance Services and Outdoor Catering services are eligible input service as clarified by Circular No.120/01/2010-ST. Courier Services and Scientific or Technical Consultancy Services are considered as eligible input services, as held by CESTAT Bench in case of Commissioner of Central Excise, Hyderabad Vs Deloitte Tax Services India Pvt Ltd. Architect Services, Consulting Engineer’s Services and Health & Fitness Services are input services in terms of Rule 2(l) of the Rules. Since all these input services have nexus to output services, refund of unutilized credit in respect of same has to be given in accordance with conditions and procedure prescribed – Appeals allowed [Read less]

Service Tax - Refund, Voluntary payment under Section 73(3) - Appellant paid service tax, interest and penalty on the advice of the Department, in the belief that it was payable. Later, the appellant realized that as per the Place of Provision of Services Rules, 2012, the services being received from outside India were not liable to service tax. The appellant filed a refund claim, which was rejected by the Assistant Commissioner on the ground that the refund claim was filed beyond the limitation period and the amount had been voluntarily paid by the appellant - Whether the appellant is entitled to refund of service tax, in... [Read more]

Service Tax - Refund, Voluntary payment under Section 73(3) - Appellant paid service tax, interest and penalty on the advice of the Department, in the belief that it was payable. Later, the appellant realized that as per the Place of Provision of Services Rules, 2012, the services being received from outside India were not liable to service tax. The appellant filed a refund claim, which was rejected by the Assistant Commissioner on the ground that the refund claim was filed beyond the limitation period and the amount had been voluntarily paid by the appellant - Whether the appellant is entitled to refund of service tax, interest and penalty paid on services received from a foreign service provider – HELD - The service tax amount was paid by the appellant during the course of an inquiry initiated against them by the Department. The appellant had voluntarily opted for concluding the inquiry proceedings against them under Section 73(3) of the Finance Act, 1994. The Tribunal in the case of Amar Engineering Company held that once the assessee opts for voluntary payment of service tax and interest and intimates the Department, the matter stands closed and the Department has no liberty to issue any show cause notice - The appellant had voluntarily paid the service tax, interest and penalty and had relinquished their right to challenge the assessment of tax under the proceedings, and hence, the appellant is not entitled to the refund claimed - The impugned order is upheld and the appeal is dismissed [Read less]

Service Tax – Rules 2(l) and 5 of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is a global IT services company engaged in development of software & exporting thereof through internet to various customers situated outside India – On scrutiny of documents submitted by Appellant, department observed that Appellant had irregularly availed Cenvat credit of service tax paid on inadmissible services – Department issued show cause notice proposing demand of inadmissible credit by invoking extended period of limitation – Commissioner confirmed demand of inadmissi... [Read more]

Service Tax – Rules 2(l) and 5 of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is a global IT services company engaged in development of software & exporting thereof through internet to various customers situated outside India – On scrutiny of documents submitted by Appellant, department observed that Appellant had irregularly availed Cenvat credit of service tax paid on inadmissible services – Department issued show cause notice proposing demand of inadmissible credit by invoking extended period of limitation – Commissioner confirmed demand of inadmissible credit – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – Appellant was taking credit of various input services received by them and they were also filing ST-3 returns for claiming credit. Proceedings were initiated on basis of refund claims filed by Appellant under Rule 5 of the Rules. When all facts were being made known to department in form of credit declared in ST-3 return and also in form of refund claims filed, there cannot be a valid ground for invocation of extended period of limitation. Demand beyond normal period of limitation cannot be upheld – Appeal partly allowed - Disallowance of credit – Whether demand raised within normal period of limitation is sustainable – HELD – As outdoor catering service have been put in specific exclusion in Rule 2(l) of the Rules defining input services. CENVAT Credit availed by Appellant on outdoor catering services is disallowed. Credit taken against invoices on which no proper description of service is mentioned on invoice is also disallowed. In respect of CENVAT Credit availed by Appellant against Gym Equipment Services, there is no merit in submissions made by Appellant for reason that these services are meant for person use of employees and hence fall under excluded category. Impugned order rejected submission made by Appellant with regard to demand being made twice in respect of same credit in a very simple manner without going into the details. Question of fact as to either demand had been made twice in respect of same credit, needs to be verified before Original Authority. For this very limited purpose of verification, matter is remanded back to Original Authority [Read less]

Service Tax - Cenvat credit on Insurance Policy - Appellant entered into an agreement with Reliance Infocomm Ltd (RIC) to provide Business Auxiliary Services, which included providing comprehensive surveillance and maintenance support services for RIC's telecom networks – Appellant had taken insurance policies to cover the risk of default in payment by telecom subscribers of RIC and mobile handsets given to such subscribers. These insurance policies were valid from May/June 2003 for a period of 3 years - Admissibility of Cenvat credit on the insurance services received prior to July 1, 2003, when the BAS became taxable -... [Read more]

Service Tax - Cenvat credit on Insurance Policy - Appellant entered into an agreement with Reliance Infocomm Ltd (RIC) to provide Business Auxiliary Services, which included providing comprehensive surveillance and maintenance support services for RIC's telecom networks – Appellant had taken insurance policies to cover the risk of default in payment by telecom subscribers of RIC and mobile handsets given to such subscribers. These insurance policies were valid from May/June 2003 for a period of 3 years - Admissibility of Cenvat credit on the insurance services received prior to July 1, 2003, when the BAS became taxable - Whether Cenvat credit is admissible on insurance services received during the period when the output service (BAS) was out of the tax net – HELD - It is not forthcoming from the agreement as to who was the owner of Mobile hand sets and under what terms and conditions were these provided to the subscribers. The agreement between Appellant-RIL and RIC did not clearly indicate the ownership of the mobile handsets and the terms and conditions under which these were provided to the subscribers. The details regarding the relation of the insurance services to the output services provided by RIL and the consumption of these services on or after July 1, 2003 are not clear. These aspects need to be verified by the Adjudicating Authority to determine the allowability of the disputed Cenvat credit - The credit availer (appellant) is obliged to satisfy the jurisdictional authorities as to how the insurance services were related to the output services provided and were indeed consumed on or after July 1, 2003. The matter is remanded back for a limited purpose to verify these aspects and take a decision on the allowability of the disputed Cenvat credit - The appeal is disposed of by way of remand [Read less]

Central Excise – Area-Based exemption, Classification of dietary supplements, Exemption under Notification No. 49/2003-CE – Appellant manufactured dietary supplements and cleared it without paying excise duty claiming benefit of exemption under Notification No. 49/2003-CE - Department found that the appellant was manufacturing dietary supplements, which were not covered under the exemption notification, and instead classified them under CETH 21069099 - Whether the dietary supplements manufactured by the appellant were correctly classified under CETH 21069099 and excluded from Chapter 30 of the Central Excise Tariff - H... [Read more]

Central Excise – Area-Based exemption, Classification of dietary supplements, Exemption under Notification No. 49/2003-CE – Appellant manufactured dietary supplements and cleared it without paying excise duty claiming benefit of exemption under Notification No. 49/2003-CE - Department found that the appellant was manufacturing dietary supplements, which were not covered under the exemption notification, and instead classified them under CETH 21069099 - Whether the dietary supplements manufactured by the appellant were correctly classified under CETH 21069099 and excluded from Chapter 30 of the Central Excise Tariff - HELD - The Chapter Note 1(a) to Chapter 30 of the Central Excise Tariff clearly excludes "food or beverages (such as diabetic, diabetic or fortified food, food supplements, tonic beverages and mineral waters), other than nutritional preparation for intravenous administration" from the purview of Chapter 30 – The food supplements other than nutritional preparations for intravenous administration will not fall under Chapter 30. The Chapter note 1(a) to Chapter 30 of the Central excise Tariff excludes dietary supplements from its purview - The dietary supplements manufactured by the appellant are correctly classified under CETH 21069099 and not under CETH 3003 as claimed by the appellant – Since the dietary supplements are correctly classified under CETH 21069099 and not under CETH 3003 as claimed by the appellant, the appellant is not entitled to the benefit of exemption under Notification No. 49/2003-CE, which was limited to specified goods, which did not include dietary supplements – The impugned order is upheld and the appeal is dismissed - Whether the extended period of limitation was correctly invoked and penalty under Section 11AC was rightly imposed - HELD - The appellant had intentionally mis-declared the dietary supplements as "Pharmaceutical products falling under CETH 30.04" to claim the benefit of exemption under Notification No. 49/2003-CE. The appellant's conducts clearly show an intention to evade duty, and therefore, the extended period of limitation is correctly invoked, and the penalty under Section 11AC is rightly imposed. [Read less]

GST - Violation of Section 6(2)(b) of CGST Act, 2017 - Petitioner contended that the entire proceeding was in violation of Section 6(2)(b) of the said Act as the show-cause notice issued by the CGST authorities and the show-cause notice issued by the SGST authorities (in a separate matter) were on the same issue arising in respect of the same financial year/period – HELD - Upon a prima facie comparison, a case had been made out by the petitioners to suggest a possible violation of Section 6(2)(b). If the case is answered in favor of the petitioners, the entire proceeding may be held to be illegal. Accordingly, the CGST a... [Read more]

GST - Violation of Section 6(2)(b) of CGST Act, 2017 - Petitioner contended that the entire proceeding was in violation of Section 6(2)(b) of the said Act as the show-cause notice issued by the CGST authorities and the show-cause notice issued by the SGST authorities (in a separate matter) were on the same issue arising in respect of the same financial year/period – HELD - Upon a prima facie comparison, a case had been made out by the petitioners to suggest a possible violation of Section 6(2)(b). If the case is answered in favor of the petitioners, the entire proceeding may be held to be illegal. Accordingly, the CGST authorities are directed not to proceed to recover any sum from the petitioners on the strength of the impugned order until the end of January 2026 or until further orders, whichever is earlier. The CGST authorities to file a report in the form of an affidavit indicating their stand on the petitioners' contention – Ordered accordingly [Read less]

Customs - Confiscation, Re-export of hazardous waste – Appellant purchased Rubber Process Oil (RPO) on high seas sales basis. The Department detained the goods and sent the samples for testing to the CRCL, which concluded that the sample did not meet the requirement of petroleum-based process oil for the rubber industry as per IS:15078:2001 and it merited classification under the category of hazardous waste - The adjudicating authority confiscated the goods absolutely and imposed a penalty - Whether the absolute confiscation of the goods and their disposal in accordance with the Hazardous Waste Management Act is justifie... [Read more]

Customs - Confiscation, Re-export of hazardous waste – Appellant purchased Rubber Process Oil (RPO) on high seas sales basis. The Department detained the goods and sent the samples for testing to the CRCL, which concluded that the sample did not meet the requirement of petroleum-based process oil for the rubber industry as per IS:15078:2001 and it merited classification under the category of hazardous waste - The adjudicating authority confiscated the goods absolutely and imposed a penalty - Whether the absolute confiscation of the goods and their disposal in accordance with the Hazardous Waste Management Act is justified, or whether the goods should be allowed to be re-exported as proposed in the show cause notice – HELD - The CRCL's report cannot be solely relied upon to determine the hazardous nature of the RPO, as the CRCL does not hold recognized accreditation for hazardous waste characterization. Further, the Department had proposed re-export of the goods in the show cause notice, but later confiscated the goods absolutely, which was contrary to the SCN - Since the Department had offered the option of re-export in the SCN and the appellant was willing to re-export the goods, the absolute confiscation was not justified. The order of absolute confiscation is set aside and the Department is directed to allow the re-export of the goods after obtaining an undertaking from the appellant that the same goods will not be re-imported - The appeal is allowed [Read less]

Customs - Refund of deposit amount in e-auction of seized/confiscated cigarettes - Appellant was declared the highest bidder and deposited the requisite amounts as per the auction terms. However, the appellant later sought refund of the deposited amounts as the cigarette packets did not comply with the labelling and packaging requirements under the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008. The department refused to refund the deposit amount - Whether the appellant is entitled to refund of the deposit amount since the seized/confiscated cigarettes could not be released for home consumption... [Read more]

Customs - Refund of deposit amount in e-auction of seized/confiscated cigarettes - Appellant was declared the highest bidder and deposited the requisite amounts as per the auction terms. However, the appellant later sought refund of the deposited amounts as the cigarette packets did not comply with the labelling and packaging requirements under the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008. The department refused to refund the deposit amount - Whether the appellant is entitled to refund of the deposit amount since the seized/confiscated cigarettes could not be released for home consumption as they did not comply with the applicable laws – HELD - The CBIC had issued a Circular on 29.03.2017 stating that cigarette packets which do not comply with the provisions of law, such as the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008, should not be released for home consumption and should be destroyed. Since the cigarette packets put up for auction did not comply with these requirements, they could not have been released to the appellant - Though the Circular dated 29.03.2017 was issued after the e-auction notice was issued on 25.01.2017, but it would be applicable in the present case as the goods had not been released to the appellant when the Circular was issued - In similar circumstances, the Assistant Commissioner of Customs, Cochin had ordered refund of the deposit amount to another auction purchaser. The appellant's request for refund is justified and that the department's decision to forfeit the deposit amount is not correct - The Department is directed to refund the deposit amount to the appellant with 6% interest per annum from the date of deposit till the date of payment - The appeal of the appellant is allowed [Read less]

Service Tax - Export of Service, Procuring of export order for foreign company, Taxation on Commission Received - Demand of service tax on the commission received from foreign company for procuring orders in India - Department of the view that the activity of the appellant amounts to a taxable service under Business Auxiliary Services - Whether the appellant's activity of procuring export orders for the foreign company amounts to export of service – HELD - The appellant's activity of procuring orders on behalf of the foreign company and passing them on to the overseas manufacturer, without having any right to settle the ... [Read more]

Service Tax - Export of Service, Procuring of export order for foreign company, Taxation on Commission Received - Demand of service tax on the commission received from foreign company for procuring orders in India - Department of the view that the activity of the appellant amounts to a taxable service under Business Auxiliary Services - Whether the appellant's activity of procuring export orders for the foreign company amounts to export of service – HELD - The appellant's activity of procuring orders on behalf of the foreign company and passing them on to the overseas manufacturer, without having any right to settle the order in the name of the appellant, amounts to export of service. The entire transaction culminates in supplies to the Indian customers, but the rendering of services, if any, by the appellant is towards the foreign or overseas manufacturer - When the service provided by a person in India is consumed and used by a person abroad, it would constitute export of service under the Export of Service Rules, 2005 – Further, since the subject matter of the present appeal revolves around the interpretation of the Export of Service Rules, 2005, the extended period of limitation could not have been invoked, as the appellant had a bona fide belief that its activities constituted export of services - The impugned order to the extent it had sustained the demand and penalty on the appellant is set aside – The appeal is allowed [Read less]

Service Tax - Air Travel Agent service, Demand of service tax Overriding Commission paid under General Sales Agency Agreement - The terms of remuneration for GSA provided for payment of overriding commission (ORC) by SAL to the appellant - Department issued notice alleging that the services provided by the appellant was Business Auxiliary Services on which the appellant was liable to pay service tax and denied the appellant's claim for exemption from payment of service tax stating that the services were provided within the specified territory in India and not delivered outside India - Whether the appellant's services by wa... [Read more]

Service Tax - Air Travel Agent service, Demand of service tax Overriding Commission paid under General Sales Agency Agreement - The terms of remuneration for GSA provided for payment of overriding commission (ORC) by SAL to the appellant - Department issued notice alleging that the services provided by the appellant was Business Auxiliary Services on which the appellant was liable to pay service tax and denied the appellant's claim for exemption from payment of service tax stating that the services were provided within the specified territory in India and not delivered outside India - Whether the appellant's services by way of its activity as the GSA for SAL amounts to export of service and thereby exempted from payment of service tax - HELD - The activity carried out by the appellant under General Sales Agency Agreement, on behalf of a foreign airline amounts to export of service. The overriding commission received by the appellant on account of the services rendered under the GSA Agreement with Sri Lankan Airlines amounts to export of service and is therefore exempted from payment of service tax. The consideration retained by the Indian party under the General Sales Agency Agreement is to avoid two-way traffic of money and therefore it amounts to receipt of convertible foreign exchange. As regards the allegations pertaining to contract fees received, the demand on this count is unsustainable as the SCN has not made any quantification in respect of the same and the demand quantified pertains only to the overriding commission - The impugned order is set aside and the appeal is allowed [Read less]

Madhya Pradesh VAT Act, 2002 - Penalty proceedings under Section 52 of MPVAT Act - Whether penalty proceedings can be initiated before the assessment order attains finality – HELD – Until the assessment is finalised, the penalty cannot be imposed - From conjoint reading of the provision of the MPVAT, it is clear that the penalty may be imposed after assessment of tax liability because the penalty calculated on the basis of the assessment, its mean until the assessment is not finalized penalty cannot be imposed - Once an appeal is pending before the Second Appellate Authority, it is not proper for the assessing officer ... [Read more]

Madhya Pradesh VAT Act, 2002 - Penalty proceedings under Section 52 of MPVAT Act - Whether penalty proceedings can be initiated before the assessment order attains finality – HELD – Until the assessment is finalised, the penalty cannot be imposed - From conjoint reading of the provision of the MPVAT, it is clear that the penalty may be imposed after assessment of tax liability because the penalty calculated on the basis of the assessment, its mean until the assessment is not finalized penalty cannot be imposed - Once an appeal is pending before the Second Appellate Authority, it is not proper for the assessing officer to initiate proceedings for imposition of penalty under Section 52 of the MPVAT Act, once the appeal is pending consideration in second appeal and the assessment order had not attained finality - The impugned order is quashed and the petition is allowed [Read less]

Central Excise – Section 11B(2)(d) of Central Excise Act, 1944 – Payment of excess duty – Entitlement of refund – Appellant is engaged in manufacture of MS Ingots – As per industry practice, Appellant offered various types of discounts to its dealers to boost sale of goods – Appellant claimed refund of excess duty paid on account of cash discount/turnover discount – Assistant Commissioner rejected refund claims filed by Appellant on ground of unjust enrichment – Lower Appellate Authority dismissed appeal filed by Appellant – Whether refund claims filed by Appellant are hit by unjust enrichment in terms of... [Read more]

Central Excise – Section 11B(2)(d) of Central Excise Act, 1944 – Payment of excess duty – Entitlement of refund – Appellant is engaged in manufacture of MS Ingots – As per industry practice, Appellant offered various types of discounts to its dealers to boost sale of goods – Appellant claimed refund of excess duty paid on account of cash discount/turnover discount – Assistant Commissioner rejected refund claims filed by Appellant on ground of unjust enrichment – Lower Appellate Authority dismissed appeal filed by Appellant – Whether refund claims filed by Appellant are hit by unjust enrichment in terms of Section 11B(2)(d) of the Act – HELD – Appellant offer various promotional schemes in form of turnover discount, cash discount etc. to its dealers to boost sale of goods and to increase prompt payment from dealers network. Adjudicating Authority admitted fact that Appellant had issued credit notes to buyers or dealers who had avail provisional scheme by way of turnover discount and cash discount. Certificate issued by one of dealer certified that duty incidence had not passed on buyers. Dealers are not registered with Central Excise department, therefore, they cannot take Cenvat Credit of duty paid of goods in question. Consequently, duty cannot be passed on by dealers. Buyers/dealers of Appellant had not borne the duty component. Appellant had passed the bar of unjust enrichment. Appellant is entitled for refund claims filed by them. Impugned order passed by Lower Appellate Authority is set aside – Appeals allowed [Read less]

Customs - Joint and several liability - DRI found that branded glass chatons were imported by misclassifying the item description and value, and using fictitious and non-existing Import Export Codes (IECs) - DRI issued a Show Cause Notice to various parties, including the appellants - Whether the duty can be demanded jointly and severally from more than one person – HELD – The Article 265 of the Constitution requires any tax to be levied or collected by the authority of law. While the Customs Act primarily casts the liability on the importer under Section 28, Section 147 allows the dues to be collected from a person ot... [Read more]

Customs - Joint and several liability - DRI found that branded glass chatons were imported by misclassifying the item description and value, and using fictitious and non-existing Import Export Codes (IECs) - DRI issued a Show Cause Notice to various parties, including the appellants - Whether the duty can be demanded jointly and severally from more than one person – HELD – The Article 265 of the Constitution requires any tax to be levied or collected by the authority of law. While the Customs Act primarily casts the liability on the importer under Section 28, Section 147 allows the dues to be collected from a person other than the actual importer in certain circumstances - The concept of joint and several liability is recognized in various statutes like the Indian Contract Act, the Indian Partnership Act, and the Income Tax Act. The EXIM Policy and Customs Notifications also provide for joint and several liability in certain schemes. However, the original order did not discuss this legal issue in depth - The decision of the Tribunal in the earlier cases cited by the appellants were not detailed on the issue of joint and several liability and hence had limited precedential value. The portion of the impugned order pertaining to the appellants is set aside and the matter is remanded to the original authority to decide the issue of joint and several liability afresh in de novo proceedings - The appeals are disposed of [Read less]

Customs – Import of capital goods – Demand of differential duty – Dropping of demand – Respondent is engaged in manufacture of motor vehicles – In course of its business, Respondent had imported various capital goods by availing benefit of concessional rate of duty under Export Promotion Capital Goods (EPCG) Scheme in terms of Customs Notifications – Investigation culminated in issuance of show cause notice to Respondent by proposing demand of differential duty – Chief Commissioner dropped demand as proposed in show cause notice – Whether Respondent has violated conditions of notifications to merit demand o... [Read more]

Customs – Import of capital goods – Demand of differential duty – Dropping of demand – Respondent is engaged in manufacture of motor vehicles – In course of its business, Respondent had imported various capital goods by availing benefit of concessional rate of duty under Export Promotion Capital Goods (EPCG) Scheme in terms of Customs Notifications – Investigation culminated in issuance of show cause notice to Respondent by proposing demand of differential duty – Chief Commissioner dropped demand as proposed in show cause notice – Whether Respondent has violated conditions of notifications to merit demand of differential duty – HELD – Adjudicating Authority had gone on to examine requirement of endorsement of supporting manufacturers in corresponding authorisations. Examining the validity of allegation that capital goods have been moved to premises of vendors without valid endorsements, it has been found that in respect of ten vendors, names were already endorsed in eight EPCG licences prior to issue of subject notice. All impugned capital goods continue to remain in rightful ownership of Respondent despite being installed in various vendor’s premises. Capital goods satisfy the actual user condition till such time of completion of export obligation. Remaining conditions of notifications are only guardrails to ensure compliance of main condition of fulfilment of export obligation. When there is no allegation about non-fulfilment of two substantial conditions of Notifications/EPCG Scheme, viz., completion of export obligation and non-alienation of capital goods, demand of duty cannot be legally sustained. Impugned order-in-original is uphold – Appeal dismissed [Read less]

GST - Waiver of interest and penalty under Section 128A of CGST Act, 2017 - During the pendency of the appeal, Section 128A of the CGST Act, 2017, providing for waiver of interest and penalty, was notified on November 1, 2024. The petitioner sought to avail the benefit of this provision for the Financial Year 2018-19, however, the application for waiver was rejected citing non-submission of the reply to the show-cause notice and the non-furnishing of the copy of Form DRC-03A - Whether the petitioner was entitled to the benefit of waiver of interest and penalty under Section 128A of the CGST Act, 2017 for the FY 2018-19 - H... [Read more]

GST - Waiver of interest and penalty under Section 128A of CGST Act, 2017 - During the pendency of the appeal, Section 128A of the CGST Act, 2017, providing for waiver of interest and penalty, was notified on November 1, 2024. The petitioner sought to avail the benefit of this provision for the Financial Year 2018-19, however, the application for waiver was rejected citing non-submission of the reply to the show-cause notice and the non-furnishing of the copy of Form DRC-03A - Whether the petitioner was entitled to the benefit of waiver of interest and penalty under Section 128A of the CGST Act, 2017 for the FY 2018-19 - HELD - The Appellate authority and the Proper officer had failed to properly consider the petitioner's application for availing the benefit of waiver of interest and penalty under Section 128A of the Act - The petitioner had notified the Appellate authority of his intent to avail the benefit of waiver under Section 128A well in advance, i.e., on March 31, 2025, and had provided proof of payment of tax for the relevant period. However, the Appellate authority had ignored these documents and proceeded to reject the petitioner's appeal without considering his application for waiver - Similarly, the Proper officer had failed to consider the petitioner's reply to the SCN and had wrongly cited the non-submission of the reply and the non-furnishing of the copy of Form DRC-03A as grounds for rejecting the petitioner's application for waiver - The appellate order is set aside to the extent it rejected the petitioner's appeal for the FY 2018-19 and the Appellate authority is directed to revisit the petitioner's case and his application for availing the benefit of waiver under Section 128A of the CGST Act in light of the Board Circular dated March 27, 2025 – The petition is disposed of [Read less]

GST - Denial of Input Tax Credit - Whether the appellant can be denied the ITC on the ground that the supplier had some bogus transactions, even though the appellant had verified the supplier's registration and remitted the taxes on the transactions – HELD - The appellant has an effective alternate remedy available under Section 107 of the CGST Act to challenge the impugned order - The contentions raised by the appellant, including the reliance on the judgment in M. Trade Links case, which held that ITC cannot be denied if the conditions under Section 16 of the CGST Act are fulfilled by the purchasing dealer, can be cons... [Read more]

GST - Denial of Input Tax Credit - Whether the appellant can be denied the ITC on the ground that the supplier had some bogus transactions, even though the appellant had verified the supplier's registration and remitted the taxes on the transactions – HELD - The appellant has an effective alternate remedy available under Section 107 of the CGST Act to challenge the impugned order - The contentions raised by the appellant, including the reliance on the judgment in M. Trade Links case, which held that ITC cannot be denied if the conditions under Section 16 of the CGST Act are fulfilled by the purchasing dealer, can be considered in the statutory appeal - The writ appeal filed by the appellant is dismissed [Read less]

Customs – Regulations 1 and 10 of Customs Brokers Licensing Regulations, 2018 – Violation of regulations – Revocation of customs broker licence – Appellant filed shipping bills in name of Shivam Enterprises to export mangoes and pomegranates – On basis of specific intelligence, officers examined consignments and found it to contain onions, whose export was prohibited – Commissioner revoked Customs Broker licence of Appellant and forfeited its security deposit and also imposed penalty on Appellant – Whether Appellant had violated Regulations 1(4), 10(a), 10(d), 10(e) and 10(n) of the Regulations – HELD – I... [Read more]

Customs – Regulations 1 and 10 of Customs Brokers Licensing Regulations, 2018 – Violation of regulations – Revocation of customs broker licence – Appellant filed shipping bills in name of Shivam Enterprises to export mangoes and pomegranates – On basis of specific intelligence, officers examined consignments and found it to contain onions, whose export was prohibited – Commissioner revoked Customs Broker licence of Appellant and forfeited its security deposit and also imposed penalty on Appellant – Whether Appellant had violated Regulations 1(4), 10(a), 10(d), 10(e) and 10(n) of the Regulations – HELD – It is undisputed that an attempt was made to export prohibited goods (onions) by mis-declaring them as mangoes and pomegranates. It is not the case of Appellant that they were engaged by Shivam Enterprises to file Shipping Bills. Admittedly, neither Appellant nor his G Card holder even contacted exporter and obtaining any authorization from him. Appellant was not engaged by exporter to file shipping bill, but he filed shipping bills in name of exporter at behest of Jadeja and for a consideration. It is clearly a case of Appellant sub-letting its licence to others for monetary gains. Appellant had violated Regulations 1(4), 10(a), 10(d) and 10(n) of the Regulations in filing benami shipping bills in name of Shivam Enterprises who never engaged Appellant. Revocation of licence, forfeiture of security deposit and penalty imposed on Appellant are proportionate to offence committed. Impugned order passed by Commissioner is upheld – Appeal dismissed [Read less]

Service Tax – Transfer of right in immovable property – Receipt of premium – Demand of tax – During audit, department noticed that Appellant had received premium on account of transfer of right in immovable property and commission for supply of Indian raw cotton, but had not paid service tax on same – Department issued show cause notice to Appellant by proposing demand of service tax on premium and commission amount – Assistant Commissioner confirmed demands as proposed in show cause notice – Commissioner (Appeals) upheld order passed by lower authority – Whether Appellant is liable to pay Service Tax on pr... [Read more]

Service Tax – Transfer of right in immovable property – Receipt of premium – Demand of tax – During audit, department noticed that Appellant had received premium on account of transfer of right in immovable property and commission for supply of Indian raw cotton, but had not paid service tax on same – Department issued show cause notice to Appellant by proposing demand of service tax on premium and commission amount – Assistant Commissioner confirmed demands as proposed in show cause notice – Commissioner (Appeals) upheld order passed by lower authority – Whether Appellant is liable to pay Service Tax on premium income received on account of transfer of right in immovable property – HELD – Agreement to sale/banakhat was entered into between Appellant and Navnitlal. As per condition in said agreement, seller was to obtain permission of Non Agricultural land within 6 months and then only, agreement to sale was to be executed by making payment of saleable price. It is on record that Appellant had received an amount from new purchaser Sri Ravishankar Vidyamandir Trust, but it is not clear if same was received after execution of banakhat. As documents for receipt of permission by seller and execution of banakhat are not before this Tribunal, matter is remitted to Adjudicating Authority to examine relevant aspects with reference to laws/regulations of Gujarat State before deciding service tax liability on premium income received by Appellant. In remand proceedings, Appellant is given liberty to submit documentary evidences before authority – Appeals disposed of - Supply of cotton – Receipt of commission – Tax liability – Whether impugned order confirming demand of Service Tax on commission amount received by Appellant is sustainable – HELD – There is no dispute that Appellant had received commission income from Raja Exports, which they claim to be exempt on ground that said commission income is on account of sale of Indian Raw Cotton which was further exported to Bangladesh. In support of their claim, Appellant produced copy of debit letters addressed to Raja Exports. Said debit letters were not found sufficient by lower authorities to support claim of Appellant in absence of any agreement between Appellant and Raja Exports. While arguing their case before this bench, Appellant could not produce any other documents in support of receipt of commission from sale of Indian raw cotton. Impugned order passed by Commissioner (Appeals) is uphold to extent of confirming service tax demand on commission amount received by Appellant. [Read less]

Service Tax – Sections 65B(44) and 66B of Finance Act, 1994 – Rule 4 of Place of Provision of Services Rules, 2012 – Payments made to subsidiary – Demand of tax – During audit, department noticed that Appellant had not paid Service Tax under Reverse Charge Mechanism on certain payments made to its subsidiary located outside taxable territory – Based on audit findings, department issued show cause notice proposing demand of Service Tax – Adjudicating authority confirmed demands as proposed in show cause notice – Whether foreign subsidiaries/licensees have rendered any service to Appellant within meaning of S... [Read more]

Service Tax – Sections 65B(44) and 66B of Finance Act, 1994 – Rule 4 of Place of Provision of Services Rules, 2012 – Payments made to subsidiary – Demand of tax – During audit, department noticed that Appellant had not paid Service Tax under Reverse Charge Mechanism on certain payments made to its subsidiary located outside taxable territory – Based on audit findings, department issued show cause notice proposing demand of Service Tax – Adjudicating authority confirmed demands as proposed in show cause notice – Whether foreign subsidiaries/licensees have rendered any service to Appellant within meaning of Section 65B(44) of the Act – HELD – Section 65B(44) of the Act requires an activity by one person for another for a consideration. None of agreements create an activity performed for Appellant. Department had not produced a single document evidencing any service obligation owed by licensee to Appellant. First and foundational requirement of a taxable service is absent in this case – Appeal partly allowed - Making of payments – Whether payments made to licensees constitute “consideration” for any imported service – HELD – Department placed reliance on debit notes, which does not represent consideration for any service rendered by licensee. Impugned remittances are not any consideration, but mere settlement of inter-company commercial arrangements. Revenue sharing arrangements do not involve provision of service by one person to another - Import of services – Tax liability – Whether alleged activities are taxable in India in terms of Section 66B of the Act and the Rules – HELD – Undisputed facts show that all implementation activity by licensees is performed at foreign customer sites. Implementation is a performance based service and so covered under Rule 4 of the Rules and place of provision is the place where the service is actually performed. Alleged activity is performed outside India and not covered under Section 66B of the Act, which taxes only services provided in taxable territory. Impugned Order-in-Original confirming demand of Service Tax under alleged category of import of services is set aside - Demand of short paid service tax – Sustainability – Whether impugned order confirming demand of service tax allegedly short paid towards service provided to SEEC Asia is sustainable in view of admitted clerical error and full tax payment – HELD – Appellant is not disputing the liability for service tax payment, but he is repeatedly affirming that payment had been made, but due to clerical mistake, tax was not reflected in ST-3 returns. Appellant had submitted a reconciliation statement to demonstrate that actual Service Tax liability stood fully discharged. Reconciliation statement relating to payment of service tax needs verification. Issue is remanded for carrying out such verification with a notice to Appellant. After verification, if service tax payment is already paid as repeatedly submitted by Appellant, demand would not survive. [Read less]

In the absence of any express or implied exclusion, the object of Sec.14 of the Limitation Act, affirming that party is not prejudiced for pursuing a proceeding in good faith before a wrong forum, would apply even to proceedings under the GST Act.

GST - Voluntary Cancellation of GST registration - Cancellation of registration ab initio – Revenue contention that intention of the petitioner to have the registration cancelled is a mala fide intention, in order to evade the proceedings which may occur due to the activities undertaken by the petitioner, from the date of inception of the Company – HELD – The impugned orders of rejection are non-speaking orders as they merely stating that the petitioner’s replies were not found to be satisfactory. Such cryptic orders without proper reasons are not in accordance with law. The High Court therefore quashed and set asi... [Read more]

GST - Voluntary Cancellation of GST registration - Cancellation of registration ab initio – Revenue contention that intention of the petitioner to have the registration cancelled is a mala fide intention, in order to evade the proceedings which may occur due to the activities undertaken by the petitioner, from the date of inception of the Company – HELD – The impugned orders of rejection are non-speaking orders as they merely stating that the petitioner’s replies were not found to be satisfactory. Such cryptic orders without proper reasons are not in accordance with law. The High Court therefore quashed and set aside the impugned orders – By calling upon the petitioner to show-cause as to why the cancellation of the registration should not be done ab initio, it cannot be held that the matter has become infructuous as the lacuna of non-speaking order still remains - The petitioner is requesting to cancel its registration from the date of Agreement whereas the department is directing the petitioner to show-cause as to why the number should not be cancelled ab initio. The petitioner can very well reply the issue which is pending for adjudication vide notice - The petitioner is free to raise all contentions in the proceedings initiated pursuant to the SCN - The petition is allowed to the extent of quashing the impugned orders, with the petitioner being at liberty to contest the subsequent proceedings for cancellation of registration - The petition is partly allowed [Read less]

GST – Supply to SEZ Unit, Refund of Unutilised Input Tax Credit of Compensation Cess – Petitioner paid Compensation Cess on the purchase of coal, which was used as an input in the manufacturing process. The petitioner made claims for refund of the unutilized ITC of the Compensation cess on zero-rated – Rejection of refund on the ground that the petitioner had exported the goods on payment of IGST whereas, as per the Circular No. 45/19/2018-GST dated 30.05.2018, a supplier cannot claim refund of compensation cess in case of zero-rated supplies made on payment of IGST - Whether the petitioner is entitled to claim refun... [Read more]

GST – Supply to SEZ Unit, Refund of Unutilised Input Tax Credit of Compensation Cess – Petitioner paid Compensation Cess on the purchase of coal, which was used as an input in the manufacturing process. The petitioner made claims for refund of the unutilized ITC of the Compensation cess on zero-rated – Rejection of refund on the ground that the petitioner had exported the goods on payment of IGST whereas, as per the Circular No. 45/19/2018-GST dated 30.05.2018, a supplier cannot claim refund of compensation cess in case of zero-rated supplies made on payment of IGST - Whether the petitioner is entitled to claim refund of the unutilized input tax credit of the Compensation cess paid on the inputs (coal) used in the manufacturing of goods exported as zero-rated supplies under the Cess Act – HELD - The Gujarat Court in the cases of Patson Papers Private Limited v. Union of India and Others and Atul Limited and Another v. Union of India and Others, has held that the petitioner is entitled to claim the refund of the unutilized input tax credit of the Compensation cess paid on the inputs (coal) used in the manufacturing of goods exported as zero-rated supplies under the Cess Act - The goods exported by the petitioner were non-taxable supplies under the Cess Act, and therefore, the petitioner was not required to pay any compensation cess on such exports. In such a scenario, the petitioner is eligible to claim the refund of the unutilized ITC of Compensation cess paid on the inputs used in the manufacturing of the exported goods, which were zero-rated supplies - The impugned orders are set aside and the matter is remanded to the original authority to take a fresh decision in accordance with law after providing an opportunity of hearing to the petitioner – The Writ Petitions are disposed of [Read less]

When the statute itself vests discretion in the Appellate Authority to examine whether sufficient cause has been shown for condonation of delay, the doctrine of deemed service of order/notice cannot be applied mechanically or punitively.

Punjab/Haryana VAT Act - Taxability of sunglasses under VAT laws – Challenge to the orders passed by the authorities and Tribunals in Punjab and Haryana classifying the product ‘sunglasses’ as unclassified items under the residual entry - Whether sunglasses could be considered as "spectacles" for the purpose of taxation under the VAT laws, and hence be taxed at the lower rate applicable to spectacles, or whether they should be taxed at the higher residuary rate – HELD - The term 'spectacles' is an exhaustive and restrictive entry, and does not include sunglasses within its ambit. The Court relied on the common parl... [Read more]

Punjab/Haryana VAT Act - Taxability of sunglasses under VAT laws – Challenge to the orders passed by the authorities and Tribunals in Punjab and Haryana classifying the product ‘sunglasses’ as unclassified items under the residual entry - Whether sunglasses could be considered as "spectacles" for the purpose of taxation under the VAT laws, and hence be taxed at the lower rate applicable to spectacles, or whether they should be taxed at the higher residuary rate – HELD - The term 'spectacles' is an exhaustive and restrictive entry, and does not include sunglasses within its ambit. The Court relied on the common parlance test and in common understanding, spectacles and sunglasses are distinct products used for different purposes- spectacles for vision correction and sunglasses for protection from sun glare - The Court rejected the argument that with technological advancements, the distinction between the two has diminished, stating that even if a product like photochromic lenses blurs the line, it would still be covered under spectacles as it is primarily for vision correction – Further, the subsequent amendment to include sunglasses in the entry for spectacles in the Punjab VAT Act in fact indicated that sunglasses were not originally covered under the term 'spectacles' - The authorities are justified in not giving a broad interpretation to include sunglasses under the entry for 'spectacles' for the purpose of taxation - The orders of the authorities and Tribunals, which had classified sunglasses under the residuary entry for taxation at the higher rate, and not under the entry for spectacles are upheld and the appeals are dismissed - Interpretation of taxation entries - When the language used in the statute is clear, the intention must be gathered from the language used, and a construction requiring addition or substitution of words must be avoided. The principles of statutory interpretation laid down by the Supreme Court is, when the general words follow specific words, the general words must be construed as referring to things of the same kind as the specific words, unless there is a clear manifestation of a contrary intention. Since the entry specifically mentioned 'spectacles', it cannot be expanded to include sunglasses, which are a distinct product – The authorities are justified in not giving a broad interpretation to include sunglasses under the entry for 'spectacles' for the purpose of taxation. [Read less]

GST - Claim for Input Tax Credit under wrong head – Petitioner wrongly claimed input tax credit under the IGST head instead of CGST or SGST heads - Whether the petitioner could be denied the ITC solely on the ground that it was claimed under the wrong head – HELD - The electronic credit ledger has to be treated as a pool of funds designated for different types of taxes, and since the petitioner had availed the credit under the CGST and SGST instead of IGST and utilized the same for payment of GST, the benefit of the Kerala High Court's decision in Rejimon Padickapparambil's case was applicable to the petitioner - The i... [Read more]

GST - Claim for Input Tax Credit under wrong head – Petitioner wrongly claimed input tax credit under the IGST head instead of CGST or SGST heads - Whether the petitioner could be denied the ITC solely on the ground that it was claimed under the wrong head – HELD - The electronic credit ledger has to be treated as a pool of funds designated for different types of taxes, and since the petitioner had availed the credit under the CGST and SGST instead of IGST and utilized the same for payment of GST, the benefit of the Kerala High Court's decision in Rejimon Padickapparambil's case was applicable to the petitioner - The impugned order is set aside and the respondents are directed to reconsider the petitioner's reply to the SCN bearing in mind the legal proposition laid down in the Kerala High Court judgment – The petition is disposed of [Read less]

GST - Confiscation of goods and vehicle – Challenged to notice issued under Section 130 of the CGST Act, 2017, proposing confiscation of goods and vehicle along with imposition of penalty and CESS - Whether the respondent could have initiated action under Section 130 without first following the procedure under Section 129 of the Act - HELD - The officer adjudging the issue would have the option to either follow the procedure under Section 129 or Section 130 of the Act. There is no necessity to initiate action under Section 129 and then proceed under Section 130 - Under Section 130(2), the officer adjudging should come to... [Read more]

GST - Confiscation of goods and vehicle – Challenged to notice issued under Section 130 of the CGST Act, 2017, proposing confiscation of goods and vehicle along with imposition of penalty and CESS - Whether the respondent could have initiated action under Section 130 without first following the procedure under Section 129 of the Act - HELD - The officer adjudging the issue would have the option to either follow the procedure under Section 129 or Section 130 of the Act. There is no necessity to initiate action under Section 129 and then proceed under Section 130 - Under Section 130(2), the officer adjudging should come to a conclusion that the goods require confiscation, fix the quantum of fine, and then give an option to the owner of the goods to pay the fine in lieu of confiscation. In the present case, the respondent has issued a SCN under Form GST MOV-10, proposing the fine and calling upon the petitioner to show cause as to why the goods should not be confiscated - It would be open to the petitioner to respond to this SCN, both on the question of confiscation and the quantum of fine, and the respondent would have to take a decision on these issues and pass necessary orders - The writ petition is disposed of [Read less]

GST – Refund of excess tax paid – Rejection of refund application on grounds not mentioned in Show-cause notice - HELD - The rejection of the refund application on grounds not contained in the show-cause notice was a violation of the principles of natural justice. While the reply affidavit of the appellant was accepted and the existence of excess payment was acknowledged in the impugned order, the final order relied on a new ground not mentioned in the SCN. This violated the principles of natural justice, as the appellant was not given an opportunity to address the new ground - The matter requires a revisit by the resp... [Read more]

GST – Refund of excess tax paid – Rejection of refund application on grounds not mentioned in Show-cause notice - HELD - The rejection of the refund application on grounds not contained in the show-cause notice was a violation of the principles of natural justice. While the reply affidavit of the appellant was accepted and the existence of excess payment was acknowledged in the impugned order, the final order relied on a new ground not mentioned in the SCN. This violated the principles of natural justice, as the appellant was not given an opportunity to address the new ground - The matter requires a revisit by the respondent, as the reasons relied upon in the final order were not contained in the show-cause notice – The petition is allowed by remand [Read less]

Customs AAR - Classification of various parts, sub-parts, inputs or raw materials for manufacture of Lithium-ion cells – HELD – The ‘Cathode coated foil’ are classifiable under tariff item 8507 90 90 of the First Schedule to the Customs Tariff Act, 1975 – The ‘Anode coated foil’ are classifiable under tariff item 8507 90 90 – The ‘Separator’ (microporous film) are classifiable under tariff item 8507 90 10 – The ‘LC breaker’ (circuit-protection device) are classifiable under tariff item 8536 30 00 of the First Schedule to the Customs Tariff Act, 1975 – Since the above goods, being parts/sub-parts... [Read more]

Customs AAR - Classification of various parts, sub-parts, inputs or raw materials for manufacture of Lithium-ion cells – HELD – The ‘Cathode coated foil’ are classifiable under tariff item 8507 90 90 of the First Schedule to the Customs Tariff Act, 1975 – The ‘Anode coated foil’ are classifiable under tariff item 8507 90 90 – The ‘Separator’ (microporous film) are classifiable under tariff item 8507 90 10 – The ‘LC breaker’ (circuit-protection device) are classifiable under tariff item 8536 30 00 of the First Schedule to the Customs Tariff Act, 1975 – Since the above goods, being parts/sub-parts/inputs/raw materials for use in the manufacture of lithium-ion cells (CTI 8507 60 00), they are eligible for benefit of Serial No. 314 of Notification No. 45/2025-Customs dated 24.10.2025 subject to compliance with Condition No. 3 (IGCR Rules, 2022) and verification of end-use. The benefit shall have no effect after the 31st March, 2026 – Ordered accordingly [Read less]

Customs AAR - Classification of ‘Oven Toaster Griller (OTG)’ spare parts/components – HELD – The goods proposed to be imported by the Applicant, namely CKD/component kits for OTG appliances, do not constitute incomplete or unfinished OTG appliances having the essential character of the finished appliance within the meaning of Rule 2(a) of the GRI. Accordingly, the goods merit classification under Tariff Heading 8516 and specifically under CTI 8516 90 00 as \"Parts of electro-thermic domestic appliances\" – Ordered accordingly

GST – Generation of one e-Way Bill for goods transported in two trucks - Since the goods (sorter machine) could not be accommodated in a single truck, they were loaded in two trucks, and the e-way bill mentioned both the truck numbers as well as the use of multiple vehicles. However, the goods were seized, and an order under Section 129(3) of the GST Act was passed - Whether the seizure of the goods was justified when the details of the multiple vehicles used for transportation were duly disclosed in the e-way bill – HELD - It is a matter of common knowledge that once the goods cannot be accommodated in one truck, thou... [Read more]

GST – Generation of one e-Way Bill for goods transported in two trucks - Since the goods (sorter machine) could not be accommodated in a single truck, they were loaded in two trucks, and the e-way bill mentioned both the truck numbers as well as the use of multiple vehicles. However, the goods were seized, and an order under Section 129(3) of the GST Act was passed - Whether the seizure of the goods was justified when the details of the multiple vehicles used for transportation were duly disclosed in the e-way bill – HELD - It is a matter of common knowledge that once the goods cannot be accommodated in one truck, though issued by one tax invoice, can always be accommodated in two trucks and the e-way bill for each truck should have been generated, but in the case in hand, only one e-way bill was generated specifically mentioning both the truck numbers, which were in transit and the goods in question were loaded as well as on the e-way bill, multi vehicle was also mentioned. Once the disclosure has duly been made in the e-way bill, no intention to evade payment of tax can be attributed - There was no contravention of the law as all true and correct disclosures were made in the e-way bill. The fact that the goods could not be accommodated in a single truck and were therefore transported in two trucks, with both the truck numbers mentioned in the e-way bill, clearly demonstrated the petitioner's intention to comply with the legal requirements - When the details of the goods are duly disclosed in the e-way bill, no intention to evade payment of tax can be attributed to the taxpayer - The impugned orders are set aside and the petition is allowed [Read less]

GST – Rejection of Refund, Non-reasoned order - Whether the petitioner is eligible to claim refund under Section 54 of the CGST Act, 2017 for the excess tax paid on transactions which were not taxable under GST – HELD – Despite the detailed order passed by the adjudicating authority, rejecting the refund application of the petitioner, the First Appellate Authority has misconstrued the refund rejection order and has summarily dismissed the petitioner’s appeal as not maintainable - The order of the Appellate Authority, there is no finding recorded on merits by the Appellate Authority, which has proceeded to summarily... [Read more]

GST – Rejection of Refund, Non-reasoned order - Whether the petitioner is eligible to claim refund under Section 54 of the CGST Act, 2017 for the excess tax paid on transactions which were not taxable under GST – HELD – Despite the detailed order passed by the adjudicating authority, rejecting the refund application of the petitioner, the First Appellate Authority has misconstrued the refund rejection order and has summarily dismissed the petitioner’s appeal as not maintainable - The order of the Appellate Authority, there is no finding recorded on merits by the Appellate Authority, which has proceeded to summarily reject the appeal on the erroneous premise that no refund rejection order was passed, which is factually incorrect and contrary to the material on record - The impugned order is set aside and the matter is remitted back to the First Appellate Authority for reconsideration of the matter afresh, in accordance with law – The petition is allowed by remand [Read less]

Customs AAR - Whether the various parts and components which are used in the manufacturing of mobile phones are eligible for concessional rate of Basic Customs Duty at 10% under Serial No. 6D (xi) and (xii) of Notification No. 57/2017-Cus., dated 30.06.2017, as amended by Notification No. 09/2024-Cus., dated 30.01.2024 – HELD – While the purpose of the notification is to benefit the mobile phone manufacturing industry, a purposive interpretation cannot override the specific language used by the legislature. The notification deliberately creates different categories for different types of goods (e.g., "mechanical items"... [Read more]

Customs AAR - Whether the various parts and components which are used in the manufacturing of mobile phones are eligible for concessional rate of Basic Customs Duty at 10% under Serial No. 6D (xi) and (xii) of Notification No. 57/2017-Cus., dated 30.06.2017, as amended by Notification No. 09/2024-Cus., dated 30.01.2024 – HELD – While the purpose of the notification is to benefit the mobile phone manufacturing industry, a purposive interpretation cannot override the specific language used by the legislature. The notification deliberately creates different categories for different types of goods (e.g., "mechanical items" under 6D, "films" under 6F). Interpreting "mechanical items" to subsume all other categories would render the specific entries redundant, violating the settled principle of statutory interpretation that every word in a statute must be given meaning – The items- Plastic and Metal Supports, Brackets, and Fixed Supports (e.g., Main Board Support, Antenna Support, Camera Module Support, Various Button Supports, BTB Support, USB Socket Fixed Support), Stoppers: (e.g., Card Column Stopper, Front Cover Stopper), SIM Card Tray Hole Pushrod, and Gasket /block/ baffle (metal) - SIM Card Tray Plectrum are eligible for the benefit of BCD at 10% under the relevant entries of Serial No. 6(D) of Notification No. 57/2017-Cus., as amended - The items- Diffusion Films, Photosensitive Diffusion Films, Waterproof Breathable Membranes, Protective Films, Light Pipes, Light Guides, Flash Lamp Cover, Steel Vapor Chamber, and Shielding Case (Metal) do not meet the criteria of "mechanical items" as intended by the notification and are therefore not eligible for the exemption under Sr. No. 6D (xi) or (xii) of Notification No. 57/2017-Cus., as amended – Ordered accordingly [Read less]

Customs AAR - Classification Spectrum Analyser - Whether the Spectrum Analyser are rightly classifiable under CTI 9030 40 00 – HELD – The Spectrum Analysers, as presented with telecom standard applications (3GPP/LTE/5G NR), cellular band coverage, measurement functions such as ACLR, EVM, phase noise and harmonic distortion, and integration into telecommunication test and production environments, are "specially designed for telecommunications" and therefore merit classification under CTI 9030 40 00 of the First Schedule to the Customs Tariff Act, 1975, subject to verification by the field formations regarding the instru... [Read more]

Customs AAR - Classification Spectrum Analyser - Whether the Spectrum Analyser are rightly classifiable under CTI 9030 40 00 – HELD – The Spectrum Analysers, as presented with telecom standard applications (3GPP/LTE/5G NR), cellular band coverage, measurement functions such as ACLR, EVM, phase noise and harmonic distortion, and integration into telecommunication test and production environments, are "specially designed for telecommunications" and therefore merit classification under CTI 9030 40 00 of the First Schedule to the Customs Tariff Act, 1975, subject to verification by the field formations regarding the instruments' design, features and functionality at the time of import – Ordered accordingly [Read less]

Customs AAR - Classification of Wired Remote Control for Air-Conditioning systems – HELD – The impugned product performs logic-based electrical control using a microcontroller and executes programmed instructions. The ability to set schedules, group controls, and monitor faults shows that the controller exercises functional control over the machine. Therefore, the goods possess the essential character of an electrical control console – The “Wired Remote Controllers” for air-conditioning systems are classifiable under heading 8537, sub-heading 8537 10, more specifically under tariff item 8537 10 90 ("Other") of th... [Read more]

Customs AAR - Classification of Wired Remote Control for Air-Conditioning systems – HELD – The impugned product performs logic-based electrical control using a microcontroller and executes programmed instructions. The ability to set schedules, group controls, and monitor faults shows that the controller exercises functional control over the machine. Therefore, the goods possess the essential character of an electrical control console – The “Wired Remote Controllers” for air-conditioning systems are classifiable under heading 8537, sub-heading 8537 10, more specifically under tariff item 8537 10 90 ("Other") of the First Schedule to the Customs Tariff Act, 1975 – Ordered accordingly [Read less]