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Service Tax - Classification of Service, Scope of Cargo Handling Service or not – Contract for design, finance, construct, own, operate and maintain a Lignite Transportation System - The appellant was responsible for end-to-end handling and transport of lignite—from removal at stockpile, loading and road transport to railway sidings, transfer via conveyors and silos into wagons, rail transport to the power plant, and final unloading and conveyance to storage or plant systems, including providing required equipment and railway sidings at both ends - Department formed a view that the activities undertaken by the appellan... [Read more]

Service Tax - Classification of Service, Scope of Cargo Handling Service or not – Contract for design, finance, construct, own, operate and maintain a Lignite Transportation System - The appellant was responsible for end-to-end handling and transport of lignite—from removal at stockpile, loading and road transport to railway sidings, transfer via conveyors and silos into wagons, rail transport to the power plant, and final unloading and conveyance to storage or plant systems, including providing required equipment and railway sidings at both ends - Department formed a view that the activities undertaken by the appellant classifiable under “Cargo Handling Service” - Whether the activities undertaken by the appellant qualify as 'Cargo Handling Service' under Section 65(23)(b) of the Finance Act, 1994 and whether the extended period of limitation was correctly invoked – HELD - For a service to be classified as 'Cargo Handling Service', it is imperative that the service provider should be engaged in the activity of "packing" together with the transportation of cargo or goods -The service of cargo handling would acquire its essential characteristic so long as the principal activity of packing is undertaken together with transportation, irrespective of whether or not the ancillary services of loading, unloading and unpacking are undertaken. If only the mere transportation of goods is undertaken along with one or more activities of loading, unloading and unpacking, then too it would not get covered under clause (b) of Section 65(23), as the main function of packing remains absent - In the absence of any evidence that the appellant undertakes the activity of packing together with the transportation of goods, the service rendered by the appellant would itself not come within the ambit of Section 65(23)(b) as “cargo handling service”. the Adjudicating Authority has erred in finding that the amendment made to Section 65(23) brings the appellant within the ambit of ‘cargo handling service’ - The impugned order is set aside and the appeal is allowed - Extended period of limitation - The extended period of limitation cannot be invoked in the absence of any positive act of the appellant which proves the intention to evade service tax. The relevant facts regarding the activities of the appellant were already within the knowledge of the Department since 2003 and mere non-filing of returns without proving the intent to evade payment of service tax cannot amount to suppression of facts. The Department itself was confused about the classification of the activities undertaken by the appellant, as evidenced by the issuance of two show cause notices proposing different categories, which precluded the invocation of the extended period of limitation. [Read less]

GST - Short payment of tax and excess availed input tax credit – HELD - The adjudicating authority disbelieved the documents submitted by the petitioner, which showed an excess payment of tax in the previous financial year (FY 2017-18). Hence, there was a short payment of tax in the FY 2018-19. The adjudicating authority and the appellate authority failed to properly examine the evidence provided by the petitioner and exercise their jurisdiction – On the issue of excess availed ITC, the appellate authority passed a cryptic order without appreciating the contentions raised by the petitioner regarding the eligibility and... [Read more]

GST - Short payment of tax and excess availed input tax credit – HELD - The adjudicating authority disbelieved the documents submitted by the petitioner, which showed an excess payment of tax in the previous financial year (FY 2017-18). Hence, there was a short payment of tax in the FY 2018-19. The adjudicating authority and the appellate authority failed to properly examine the evidence provided by the petitioner and exercise their jurisdiction – On the issue of excess availed ITC, the appellate authority passed a cryptic order without appreciating the contentions raised by the petitioner regarding the eligibility and conditions for taking ITC. The appellate authority failed to properly examine the evidence provided by the petitioner and exercise its jurisdiction - both Order-in-Original so also the order impugned passed by the appellate authority shall remain stayed until further orders – Ordered accordingly [Read less]

Service Tax - Taxability of 'business support services' and 'renting of immovable property service' - Appellant entered into an agreement with M/s. Tata Consultancy Services (TCS) to provide various facilities and services at its campus for conducting a training program – Demand of service tax under the categories of 'business support service', 'renting of immovable property service', and 'management or business consultancy service' - Whether the services provided by the appellant, such as providing infrastructure facilities, accommodation, and general requirements, fall under the category of 'Business Support Services' ... [Read more]

Service Tax - Taxability of 'business support services' and 'renting of immovable property service' - Appellant entered into an agreement with M/s. Tata Consultancy Services (TCS) to provide various facilities and services at its campus for conducting a training program – Demand of service tax under the categories of 'business support service', 'renting of immovable property service', and 'management or business consultancy service' - Whether the services provided by the appellant, such as providing infrastructure facilities, accommodation, and general requirements, fall under the category of 'Business Support Services' under Section 65(104c) of the Finance Act, 1994 – HELD – Under the definition of Business support services, the infrastructural support services include providing office along with office utilities, lounge, reception, etc. - The services provided by the appellant to TCS, including providing office space, class rooms, faculty rooms, library, computer lab, conference hall, auditorium, and accommodation, fall within the scope of 'infrastructural support services' as defined in the explanation to Section 65(104c). Therefore, the services rendered by the appellant are appropriately classifiable under the category of ‘business support services’ and liable to service tax. However, the demand pertaining to the extended period of limitation is set aside as the Revenue failed to establish any suppression of facts with the intent to evade tax - The demand of service tax under the categories of 'business support service' and 'renting of immovable property service' for the normal period of limitation, along with interest is confirmed. The demands pertaining to the extended period of limitation and the demand under the category of 'management or business consultancy service' is set aside – The appeal is partly allowed - Whether the rental income received by the appellant from Allahabad Bank and R&B Catering Services is taxable under the category of 'renting of immovable property service' under Section 65(90a) of the Finance Act, 1994 – HELD - The rental income received by the appellant is taxable under the category of 'renting of immovable property service'. However, the demand pertaining to the extended period of limitation is set aside as the issue of taxability of 'renting of immovable property service' was under litigation during the relevant period, and the appellant cannot be attributed with any mala fide intent in not paying the service tax - Whether the charges received by the appellant for conducting training programs and seminars for government departments are taxable under the category of 'management or business consultancy service' under Section 65(65) of the Finance Act, 1994 – HELD - The services rendered by the appellant for conducting training programs and seminars for government departments do not fall within the scope of the definition of 'management or business consultancy service'. Accordingly, the Tribunal set aside the demand of service tax under this category. [Read less]

Service Tax – Service of order, Limitation period for filing appeal under the Central Excise Act, 1944 – Rejection of appeal on the ground of time barred - Whether the appeal filed by the appellant was within the prescribed period of limitation under Section 35 of the Central Excise Act, 1944 – HELD - As per the provisions of Section 37C of the Central Excise Act, 1944, any order passed under the Act has to be served through Registered Post or Speed Post with acknowledgement due as proof of delivery. In the absence of such proof of delivery, the presumption that the Order-in-Original was served on the appellant canno... [Read more]

Service Tax – Service of order, Limitation period for filing appeal under the Central Excise Act, 1944 – Rejection of appeal on the ground of time barred - Whether the appeal filed by the appellant was within the prescribed period of limitation under Section 35 of the Central Excise Act, 1944 – HELD - As per the provisions of Section 37C of the Central Excise Act, 1944, any order passed under the Act has to be served through Registered Post or Speed Post with acknowledgement due as proof of delivery. In the absence of such proof of delivery, the presumption that the Order-in-Original was served on the appellant cannot be sustained. If the manner of serving the order is prescribed under the statute, the same has to be strictly complied with. Since the Department failed to produce evidence of delivery of the Order-in-Original, the date of service as mentioned by the appellant has to be accepted - The matter is remanded to Commissioner (Appeals) to decide the appeal on merits without further visiting the aspect of limitation – The appeal is allowed by way of remand [Read less]

Customs - Duty demand and penalties under Sec 28AAA of Customs Act, 1962 for obtaining Focus Market Scheme (FPS) Scrips by misclassification of goods - DRI issued show-cause notice under Section 28AAA of the Customs Act, 1962 alleging that they had mis-classified the goods under Customs Tariff Heading (CTH) 2501 00 90 meant for 'industrial salt' to avail the benefit of duty credit at 2% under the Focus Market Scheme (FPS), whereas the correct classification should have been CTH 2501 0010 for 'common salt' for which no such benefit was available - Whether the Customs duty demand and penalties imposed by the lower authoritie... [Read more]

Customs - Duty demand and penalties under Sec 28AAA of Customs Act, 1962 for obtaining Focus Market Scheme (FPS) Scrips by misclassification of goods - DRI issued show-cause notice under Section 28AAA of the Customs Act, 1962 alleging that they had mis-classified the goods under Customs Tariff Heading (CTH) 2501 00 90 meant for 'industrial salt' to avail the benefit of duty credit at 2% under the Focus Market Scheme (FPS), whereas the correct classification should have been CTH 2501 0010 for 'common salt' for which no such benefit was available - Whether the Customs duty demand and penalties imposed by the lower authorities under Section 28AAA of the Customs Act, 1962 are valid and sustainable – HELD - The actions taken by the lower authorities in issuing the demand show-cause notice and adjudicating the same are premature and contrary to the Board's Circular No. 334/1/2012-TRU dated 01.06.2012. The Circular clearly states that the recovery of duty can be initiated under Section 28AAA only after the DGFT/concerned regional Authority initiates action for cancellation of the instrument (FPS scrips), and the matter may be decided only after the instrument has been cancelled by DGFT. In the present case, it is a matter of record that the DGFT has not initiated any action for cancellation of the FPS scrips. Hence, the action taken by the lower authorities is not in line with the Board's instructions – Since the DGFT had not cancelled the scrips, the department cannot re-adjudge the classification and sit over the decision of the DGFT authorities - The penalties, redemption fine, and the duty demand imposed by the lower authorities are not sustainable and set aside – The appeals filed by the appellants are allowed [Read less]

Customs - Mis-declaration of quantity and classification of imported goods, Requirement of BIS license - Appellant is technology powered logistics company that imports spares for warranty replacement under delivered duty paid items. The appellant imported goods declared as 'Memory' and 'Power Supply'. However, the customs department found discrepancies in the quantity and classification of the imported goods - Whether the appellant had mis-declared the quantity and classification of the imported goods – HELD - The appellant's explanation regarding the quantification of the 'Memory' imported was supported by the communica... [Read more]

Customs - Mis-declaration of quantity and classification of imported goods, Requirement of BIS license - Appellant is technology powered logistics company that imports spares for warranty replacement under delivered duty paid items. The appellant imported goods declared as 'Memory' and 'Power Supply'. However, the customs department found discrepancies in the quantity and classification of the imported goods - Whether the appellant had mis-declared the quantity and classification of the imported goods – HELD - The appellant's explanation regarding the quantification of the 'Memory' imported was supported by the communication from the supplier, which clearly showed that the Chartered Engineer had erroneously counted the number of components as separate parts instead of accounting them as one part. It was obligatory on the part of the Commissioner (Appeals) to have examined the explanation offered by the appellant regarding the quantification of the ‘Memory’ imported by the appellant. The Commissioner (Appeals) failed to examine this issue and committed an error in holding that there was a misdeclaration regarding the quantity of goods imported by the appellant - With respect to the 'Power Supply', the appellant's contention that the imported goods were 'spares' for warranty replacement and did not require a BIS license is correct. The FAQ issued by the Ministry of Electronics and Information Technology, clarified that the Compulsory Registration Order applies to finished goods and not to spare parts or components used for replacement. Therefore, confiscation of 'Power Supply' with penalty under section 112 (a)(i) of the Customs Act - the order passed by the Commissioner (Appeals), except to the extent that the two ‘Power Supplies’ imported by the appellant are not liable to absolute confiscation and have to be released without imposition of penalty, is set aside and the appeal is allowed [Read less]

Central Excise - Retrospective application of Notification No.16/2009-CE(NT) dated 07.07.2009, time limit for availment of CENVAT credit - Denial of CENVAT credit on various inputs such as HR Steels, HR Coils, Plates, Sheets, Cement, TMT Bars, Channel, Beam, Welding Electrodes etc. for the period from May 2008 to August 2010 - Department sought to apply the amendment made by Notification No.16/2009-CE(NT) dated 07.07.2009, which excluded certain items like cement, angles, channels, TMT bars etc. from the definition of 'inputs' under the CENVAT Credit Rules, 2004 – HELD – In view of decision of Chhattisgarh High Court i... [Read more]

Central Excise - Retrospective application of Notification No.16/2009-CE(NT) dated 07.07.2009, time limit for availment of CENVAT credit - Denial of CENVAT credit on various inputs such as HR Steels, HR Coils, Plates, Sheets, Cement, TMT Bars, Channel, Beam, Welding Electrodes etc. for the period from May 2008 to August 2010 - Department sought to apply the amendment made by Notification No.16/2009-CE(NT) dated 07.07.2009, which excluded certain items like cement, angles, channels, TMT bars etc. from the definition of 'inputs' under the CENVAT Credit Rules, 2004 – HELD – In view of decision of Chhattisgarh High Court in Vandana Global Ltd. case, the said Notification is applicable prospectively and no demand can be sustained on the items in question prior to 07.07.2009. The appellant had correctly availed CENVAT credit on the items prior to the said date – Further, the appellant was able to show the use of the disputed items for manufacture of storage tanks and supporting structures of machines. The appellant is entitled to CENVAT credit on these items even after 07.07.2009, as they were used for fabrication of capital goods – On the issue of time limit for availment of CENVAT credit, there was no bar of time limit for availment of CENVAT credit prior to 01.09.2014 under the CENVAT Credit Rules, 2004. Therefore, the CENVAT credit availed by the appellant beyond one year of receipt of invoices cannot be denied - The impugned order and show-cause notice are set aside and the appeal is allowed [Read less]

Central Excise - Clandestine removal of excisable goods without payment of duty - Department relied solely on these private records and statements of officers/staff of third party to raise demand against the appellant company - Whether the demand of central excise duty confirmed against the appellant company based solely on the documents recovered from the premises of a third party and the statements of its officers/staff is legally sustainable – HELD - The department relied solely on the private records seized from M/s SPRML and the statements of its officers/staff, without providing copies of these documents to the app... [Read more]

Central Excise - Clandestine removal of excisable goods without payment of duty - Department relied solely on these private records and statements of officers/staff of third party to raise demand against the appellant company - Whether the demand of central excise duty confirmed against the appellant company based solely on the documents recovered from the premises of a third party and the statements of its officers/staff is legally sustainable – HELD - The department relied solely on the private records seized from M/s SPRML and the statements of its officers/staff, without providing copies of these documents to the appellant. Relying on such documents without providing them to the appellant violates the principles of natural justice - The department failed to conduct a proper investigation to substantiate the allegation of clandestine removal, such as evidence of excess raw material purchase, actual removal of unaccounted goods, receipt of sale proceeds, etc. Mere reliance on private records of a third party is not sufficient to prove clandestine removal – Further, the appellants had requested cross-examination of the persons whose statements were relied upon by the department, but this request was denied by the adjudicating authority without valid reasons. Denial of cross-examination, when the entire case is based on such statements, violates the principles of natural justice - The demand of duty, interest, and penalties confirmed against the appellant is set aside and appeal is allowed [Read less]

Service Tax - Leviability of Service Tax on Route Navigation Facility Charges [RNFC] and Terminal Navigation Landing Charges [TNLC] along with the liability on certain Miscellaneous Income – Appellant was providing Route Navigation Facility Charges (RNFC) and Terminal Navigation Landing Charges (TNLC) to airlines - On the issue of leviability of service tax on RNFC, the Tribunal had earlier remanded the matter for de-novo adjudication to determine whether the entire RNFC service was provided within the airport/civil enclave. In the re-adjudication, the revenue authorities confirmed the demand on RNFC as well as TNLC sinc... [Read more]

Service Tax - Leviability of Service Tax on Route Navigation Facility Charges [RNFC] and Terminal Navigation Landing Charges [TNLC] along with the liability on certain Miscellaneous Income – Appellant was providing Route Navigation Facility Charges (RNFC) and Terminal Navigation Landing Charges (TNLC) to airlines - On the issue of leviability of service tax on RNFC, the Tribunal had earlier remanded the matter for de-novo adjudication to determine whether the entire RNFC service was provided within the airport/civil enclave. In the re-adjudication, the revenue authorities confirmed the demand on RNFC as well as TNLC since the appellant failed to provide any evidence that the RNFC service was provided outside the airport/civil enclave – HELD - The Tribunal has clearly held that only if the entire RNFC/TNLC services is provided within airport/civil enclaves, then the same can be held to be exigible to service tax - The RNFC covers communication, navigation, and surveillance services provided while an aircraft is flying through Indian airspace, including overflying flights. These services are provided throughout the route from the starting point to the destination, with the help of Aeronautical Communication Stations located every 100 kms and manned by separate personnel. Hence, the entire RNFC service is not provided within the airport/civil enclave. Consequently, the RNFC is not exigible to service tax. However, the TNLC is a charge for assisting the aircraft during the terminal landing phase and use of airport facilities, which is provided exclusively within the airport/civil enclave. Therefore, the TNLC is held to be exigible to service tax - The demand on RNFC is set aside, while the demand on TNLC is upheld and remanded only for quantification. The demand on Miscellaneous Income is set aside. The show cause notice is held to be within the normal limitation period – The appeal is partly allowed - Issue 2: Service Tax on Miscellaneous Income - The revenue authorities had also demanded service tax on the appellant's Miscellaneous Income, which included profit on sale of fixed assets, interest on staff advances, and sale of scrap. HELD - The nature of the Miscellaneous Income does not relate to the provision of any service, and hence, it is not exigible to service tax. Further, appellant being a Central Government Organization would not intentionally evade payment of legitimate dues. Hence, accept the contentions of the appellant and set-aside the demand confirmed under this head. Issue 3: Limitation Period - The revenue authorities had issued the show cause notice within one year from the date of filing of the periodical ST-3 returns by the appellant, which is within the normal limitation period as per the provisions of the Finance Act, 1994. Accordingly, the demand is held to be within the normal limitation period. [Read less]

GST - Tender condition requiring local office having GST registration - HELD - The eligibility criteria in a tender must have a rational nexus with the object sought to be achieved and should not create artificial barriers that exclude otherwise competent and financially sound bidders - the GST Registration cannot be issued in two separate districts. Once the bidder/OEM is getting the GST registration, it is valid for all over India. There cannot be two registration numbers of one firm. As regard the place of business, the authorities cannot restrict the persons to having the place of business where the tender has been iss... [Read more]

GST - Tender condition requiring local office having GST registration - HELD - The eligibility criteria in a tender must have a rational nexus with the object sought to be achieved and should not create artificial barriers that exclude otherwise competent and financially sound bidders - the GST Registration cannot be issued in two separate districts. Once the bidder/OEM is getting the GST registration, it is valid for all over India. There cannot be two registration numbers of one firm. As regard the place of business, the authorities cannot restrict the persons to having the place of business where the tender has been issued - the impugned tender condition is quashed and the authorities are directed to issue a corrigendum deleting the same – The writ petition is disposed of [Read less]

Central Excise - Admissibility of CENVAT credit on various input services – Admissibility of Cenvat Credit on insurance services, taxi services, courier services, and installation and commissioning services - HELD - The assessee could successfully demonstrate that the services in question were used in the business of the assessee and therefore, the credit is admissible. The Tribunal relied on various judicial precedents supporting the assessee's contentions and allowed the appeal filed by the appellant - The appeal filed by the appellant is allowed - Admissibility of CENVAT credit on freight services - HELD - The High Co... [Read more]

Central Excise - Admissibility of CENVAT credit on various input services – Admissibility of Cenvat Credit on insurance services, taxi services, courier services, and installation and commissioning services - HELD - The assessee could successfully demonstrate that the services in question were used in the business of the assessee and therefore, the credit is admissible. The Tribunal relied on various judicial precedents supporting the assessee's contentions and allowed the appeal filed by the appellant - The appeal filed by the appellant is allowed - Admissibility of CENVAT credit on freight services - HELD - The High Court of Himachal Pradesh has held that where the sale price is inclusive of freight charges, CENVAT credit is admissible even after the amendment in 2011 - The assessee had availed the credit after a favorable decision by the Tribunal in the assessee's own case and had duly informed the department - However, the Learned Commissioner had not given any reasons for his conclusion that the freight services were not covered within the definition of input services - Therefore, the Tribunal partially allowed the revenue's appeal and remanded the matter back to the adjudicating authority to ascertain the quantity of credit admissible to the assessee on the service tax paid on freight, after going through the relevant documents and Chartered Accountant's certificate. [Read less]

Central Excise - Manufacture - The appellant, a small-scale unit listed in DGS&D rate contract, manufactured and supplied 'Folding Cot' to Indian para-military forces. The revenue authorities raised a demand for central excise duty on the ground that the fabrication of the Folding Cot amounted to 'manufacture' under Section 2(f) of the Central Excise Act, 1944 - Whether the fabrication of Folding Cot by the appellant would amount to 'manufacture' – HELD - The process of cutting, bending, and welding of MS black pipes by the appellant to fabricate the Folding Cot resulted in a distinct and marketable product, and therefor... [Read more]

Central Excise - Manufacture - The appellant, a small-scale unit listed in DGS&D rate contract, manufactured and supplied 'Folding Cot' to Indian para-military forces. The revenue authorities raised a demand for central excise duty on the ground that the fabrication of the Folding Cot amounted to 'manufacture' under Section 2(f) of the Central Excise Act, 1944 - Whether the fabrication of Folding Cot by the appellant would amount to 'manufacture' – HELD - The process of cutting, bending, and welding of MS black pipes by the appellant to fabricate the Folding Cot resulted in a distinct and marketable product, and therefore, the activity would amount to 'manufacture' under Section 2(f) of the CEA - The folding cots are manufactured products in terms of Section 2(f) of the CEA 1944 and the duty liability worked out is required to be paid along with interest - The appellant had a bonafide belief that the fabrication of Folding Cot was not excisable, and they had neither charged nor remitted the excise duty. Considering these facts and that the major portion of the demand was set aside, the penalty imposed on both the appellant firm and its partner are set aside – The appeal is partly allowed - Value addition - The revenue authorities included the value of the 'Plywood Top' procured by the appellant and supplied along with the Folding Cot in determining the assessable value - Whether the value of the Plywood Top can be included in the assessable value of the Folding Cot – HELD - The Plywood Top was a trading item procured by the appellant from the open market and supplied as per the requirement of the buyers. The value of the bought-out items like Plywood Top cannot be included in the assessable value of the manufactured goods (Folding Cot). The demand on this count is set aside. [Read less]

Central Excise - Classification of "Sikko Fast" product as fertilizer or chemical product – Dept conducted a search and found that the appellant was clearing the "Sikko Fast" product as fertilizer, but it was actually a soil conditioner – Notice proposing classification of the product under CTH 38249090 and demanding Central Excise duty, interest, and penalty - Whether the "Sikko Fast" product manufactured by the appellant should be classified as a fertilizer under Chapter 31 or as a chemical product under Chapter 38 of the Central Excise Tariff Act, 1985 – HELD - The order of Commissioner (Appeals) discusses merit o... [Read more]

Central Excise - Classification of "Sikko Fast" product as fertilizer or chemical product – Dept conducted a search and found that the appellant was clearing the "Sikko Fast" product as fertilizer, but it was actually a soil conditioner – Notice proposing classification of the product under CTH 38249090 and demanding Central Excise duty, interest, and penalty - Whether the "Sikko Fast" product manufactured by the appellant should be classified as a fertilizer under Chapter 31 or as a chemical product under Chapter 38 of the Central Excise Tariff Act, 1985 – HELD - The order of Commissioner (Appeals) discusses merit of the case to justify redetermination of classification of the product under chapter 38 instead of CTH 3105 claimed by the appellant. This order is however silent on invocation of extended period in this case to demand duty - The Department relied on the test report to conclude classification of the product under CTH 38249090 on the ground that Low percentage of Nitrogen, Phosphorus, and Potassium does not make them essential constituent so as to classify as other fertilizers - The test report relied upon by the Department was incomplete as it did not reply to certain queries raised, and the department did not send the sample to any other government laboratory for complete testing - The Tribunal had considered the classification of "soil conditioner" in the case of Narmada Bio-chem Pvt Ltd, and the principles enumerated in that case should be applied in the present case as well. The Adjudicating Authority is directed to examine the essentiality of the unanswered queries in the test report, the minimum percentage of NPK required for classification under Chapter 31, and the availability of any certificate from the Directorate of Agriculture considering the product as a fertilizer - The impugned order is set aside and remanded the matter to the Adjudicating Authority for a fresh decision – The appeal is allowed by remand [Read less]

Central Excise - Generation and sale of electricity, Rule 6(3) of CENVAT Credit Rules 2004 - Department held that since the appellants are engaged in the manufacture of excisable goods as well as generation and sale of electricity (a non-dutiable activity), the provisions of Rule 6(3) of the CENVAT Credit Rules, 2004 are applicable, and the appellants are liable to pay 6% of the value of electricity sold to outside parties - Whether the appellants are liable to pay 6% of the value of electricity sold to outside parties under Rule 6(3) of the CENVAT Credit Rules, 2004 – HELD - The electricity produced from bagasse by the ... [Read more]

Central Excise - Generation and sale of electricity, Rule 6(3) of CENVAT Credit Rules 2004 - Department held that since the appellants are engaged in the manufacture of excisable goods as well as generation and sale of electricity (a non-dutiable activity), the provisions of Rule 6(3) of the CENVAT Credit Rules, 2004 are applicable, and the appellants are liable to pay 6% of the value of electricity sold to outside parties - Whether the appellants are liable to pay 6% of the value of electricity sold to outside parties under Rule 6(3) of the CENVAT Credit Rules, 2004 – HELD - The electricity produced from bagasse by the assessees and sold to the state electricity board cannot be subjected to the payment of an amount equal to 6% of the value of electricity sold under Rule 6(3) of the CENVAT Credit Rules, 2004 - An identical dispute in the case of M/s Vaidyanath SSK Ltd. and others came up for hearing before the Commissioner of GST, Aurangabad and the matter was adjudicated in favour of the assessees, by dropping the show-case proceedings initiated against them. The period of dispute in the present case is from March 2015 to December 2015, which is similar to the period covered in the order passed by the Commissioner of GST, Aurangabad. The order of the Commissioner of GST, Aurangabad has been accepted by the Committee of Chief Commissioners and has attained finality as no appeal was preferred against it - The electricity generated from bagasse and sold to the state electricity board cannot be subjected to the payment of an amount equal to 6% of the value of electricity sold under Rule 6(3) of the CCR, 2004 – the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Classification of 'Ready Roti/Halka Fulka' - Department conducted a visit and found that the product was partially cooked and ready to eat after heating, and thus, classified it under Central Excise Tariff Heading (CETH) 2106 90 90 which covers instant food mixes and ready-to-eat packaged foods - Whether the 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CETH 1905 90 90 (Bread and Bakery items) or CETH 2106 90 90 (Instant Food Mixes and Ready-to-Eat Packaged Foods) - HELD - The 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CET... [Read more]

Central Excise - Classification of 'Ready Roti/Halka Fulka' - Department conducted a visit and found that the product was partially cooked and ready to eat after heating, and thus, classified it under Central Excise Tariff Heading (CETH) 2106 90 90 which covers instant food mixes and ready-to-eat packaged foods - Whether the 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CETH 1905 90 90 (Bread and Bakery items) or CETH 2106 90 90 (Instant Food Mixes and Ready-to-Eat Packaged Foods) - HELD - The 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CETH 1905 90 90 chargeable to nil rate of duty. The General Rules of Interpretation, particularly Rule 2(a), states that an incomplete or unfinished article shall be taken to include a reference to the complete or finished article if it has the essential character of the complete or finished article. The 'Ready Roti/Halka Fulka' has the essential character of Roti, even though it needs further cooking before consumption – Further, Roti is considered a form of unleavened bread, and the judgment of the Kerala High Court in Modern Food Enterprises Pvt. Ltd. vs. UOI, wherein Malabar Parota was held to be classifiable under Heading 1905 as bread, should apply to Roti as well - The 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CETH 1905 90 90 chargeable to nil rate of duty. The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Availability of CENVAT credit on C&F Agents, Rent of Office/Godown after sale, and AMC of computers and air conditioners - During the relevant period of 2013-2014, the appellant availed CENVAT credit on input services like C&F Agents, Rent of Office/Godown after sale, and AMC of computers and air conditioners – Denial of appellant's claim for CENVAT credit - Whether the appellant is entitled to avail CENVAT credit on the impugned services – HELD - The issue involved in the present appeal is no longer res integra as the Tribunal as well as the Departmental Authority, for the earlier and the subsequent p... [Read more]

Central Excise - Availability of CENVAT credit on C&F Agents, Rent of Office/Godown after sale, and AMC of computers and air conditioners - During the relevant period of 2013-2014, the appellant availed CENVAT credit on input services like C&F Agents, Rent of Office/Godown after sale, and AMC of computers and air conditioners – Denial of appellant's claim for CENVAT credit - Whether the appellant is entitled to avail CENVAT credit on the impugned services – HELD - The issue involved in the present appeal is no longer res integra as the Tribunal as well as the Departmental Authority, for the earlier and the subsequent periods, have decided the issue in favour of the appellant. The Department has not filed any appeal against the previous orders passed in the appellant's favour, and therefore, the said orders have attained finality. The department cannot take a contrary view on the same issue for the same assessee - The appellant has correctly availed the CENVAT credit on the impugned services as these services are used in relation to the manufacturing of the final products - The appellant is eligible for CENVAT credit on the C&F Agents services, Rent of Office/Godown after sale, and AMC of computers and air conditioners – The appeal is allowed [Read less]

Service Tax - Export of Services, Realisation of export proceeds in Indian Rupees, Refund of Service Tax – Export of services such as quality assurance, book/journal datasets, content engineering, multimedia production, and production quality control - Refund claims under Rule 5 of the Cenvat Credit Rules, 2004 – Rejection of refund claims on the ground that the appellant had not satisfied the condition of receiving the consideration for the exported services in convertible foreign exchange as per Rule 3(2)(b) of the Export of Service Rules, 2005 - HELD - When a person receives payment in Indian rupees from the account... [Read more]

Service Tax - Export of Services, Realisation of export proceeds in Indian Rupees, Refund of Service Tax – Export of services such as quality assurance, book/journal datasets, content engineering, multimedia production, and production quality control - Refund claims under Rule 5 of the Cenvat Credit Rules, 2004 – Rejection of refund claims on the ground that the appellant had not satisfied the condition of receiving the consideration for the exported services in convertible foreign exchange as per Rule 3(2)(b) of the Export of Service Rules, 2005 - HELD - When a person receives payment in Indian rupees from the account of a bank situated in any country outside India maintained with an authorized dealer, such payment in rupees shall be deemed to have repatriated the realized foreign exchange to India - In the present case, the payment in Indian rupees was received from foreign countries through the appellant's bank account, which is equivalent to the receipt of foreign exchange. Therefore, the mere receipt of consideration in Indian currency does not disentitle the appellant from the export benefits when the remittance originates from abroad through authorized banking channels and is evidenced by Foreign Inward Remittance Certificates (FIRCs) - The impugned orders are set aside and the appeals are allowed [Read less]

Customs - Valuation of goods, Two different invoices for the same consignment - The Commissioner rejected the declared value under the Customs Valuation Rules and re-determined the value under Rule 9. The Commissioner also imposed confiscation of goods under Section 111(f) and 111(m) of the Customs Act, 1962, redemption fines, and penalties - Whether the Commissioner was justified in rejecting the declared value and re-determining the value under Rule 9 of the Customs Valuation Rules - HELD - The Commissioner had reasonable doubt about the truth and accuracy of the declared value, as appellant had produced two different in... [Read more]

Customs - Valuation of goods, Two different invoices for the same consignment - The Commissioner rejected the declared value under the Customs Valuation Rules and re-determined the value under Rule 9. The Commissioner also imposed confiscation of goods under Section 111(f) and 111(m) of the Customs Act, 1962, redemption fines, and penalties - Whether the Commissioner was justified in rejecting the declared value and re-determining the value under Rule 9 of the Customs Valuation Rules - HELD - The Commissioner had reasonable doubt about the truth and accuracy of the declared value, as appellant had produced two different invoices showing vastly different values for the same consignment. Therefore, the Commissioner was justified in rejecting the declared value under Rule 12 and re-determining the value under Rule 9 – The re-assessment of the Bill of Entry is upheld. However, the penalty imposed is reduced - The case is not covered under Section 111(f), as the dispute was regarding the invoices produced by the importer and not about the goods mentioned in the IGM. Further, in the absence of any reference to a Bill of Entry, the confiscation under Section 111(m) could not be sustained. Accordingly, the confiscation of goods and the redemption fines imposed are set aside – The appeal is partly allowed [Read less]

Customs - Undervaluation of imported goods - Rejection of declared value under Rule 12 and sequential redetermination under Rules 3 to 9 of CVR, 2007 - The Customs Department issued a Show Cause Notice proposing rejection of the declared value under Rule 12 of the Customs Valuation Rules, 2009, and redetermination of value under Rules 3, 4, and 9 - Whether the Department has discharged its burden of proving the undervaluation of the imported goods – HELD - The Customs Valuation Rules, 2007 prescribe transaction value as the primary basis for valuation under Rule 3(1), subject to Rule 12. Once the proper officer entertain... [Read more]

Customs - Undervaluation of imported goods - Rejection of declared value under Rule 12 and sequential redetermination under Rules 3 to 9 of CVR, 2007 - The Customs Department issued a Show Cause Notice proposing rejection of the declared value under Rule 12 of the Customs Valuation Rules, 2009, and redetermination of value under Rules 3, 4, and 9 - Whether the Department has discharged its burden of proving the undervaluation of the imported goods – HELD - The Customs Valuation Rules, 2007 prescribe transaction value as the primary basis for valuation under Rule 3(1), subject to Rule 12. Once the proper officer entertains reasonable doubt as to the truth or accuracy of the declared value, Rule 12 is triggered. In the present case, the Department has established a prima facie case of mis-declaration of value through documentary evidence, including email correspondence and account statements. The burden then shifted to the importer to provide a credible explanation, which the importer failed to do. The Department has, therefore, discharged its burden of proving the undervaluation of the goods - The redetermination of the assessable value is upheld the confiscation of goods, fine, and penalty imposed are set aside – The appeal is partly allowed - Issue 2 - Whether the Department can issue a demand under Section 28 of the Customs Act prior to the finalization of provisional assessment – HELD - The assessment of the goods was done provisionally following the orders of the Madras High Court. The penal provisions under Sections 111(m) and 112(a) of the Customs Act are not attracted in such cases. However, the issuance of the Show Cause Notice has not caused any prejudice to the appellant, as the appellant failed to participate in the proceedings for finalization of the assessment - Issue 3: Rejection of demand for cross-examination of witnesses - The Department relied on the statements of certain witnesses whose statements were recorded during the investigation. The appellant requested cross-examination of these witnesses, which was denied by the adjudicating authority - Whether the appellant has a right to cross-examine the witnesses whose statements were relied upon by the Department – HELD - The right to cross-examine a witness is not an absolute right and the assessee must make out a case for cross-examination by providing specific reasons. A blanket request to cross-examine all persons whose statements have been recorded cannot be sustained. In the present case, the appellant did not question the veracity of the data retrieved from the electronic devices and the statements of the appellant themselves corroborated the findings. Therefore, the request for cross-examination was rightly denied and did not cause any prejudice to the appellant - The denial of the request for cross-examination of the witnesses by the appellant is upheld [Read less]

Central Excise - Denial of Cenvat Credit on input services received for job work - Appellant availed Cenvat Credit on inputs and input services used for the manufacture of excisable goods - Whether the appellant is entitled to avail Cenvat Credit on the input services received for job work services for printing of metal sheets, even though the said services were held to be covered under the negative list under Section 66D(f) of the Finance Act, 1994 – HELD - In the instant case disputed invoices were raised by the job worker under a belief, may be erroneous, that such service was taxable and it had paid the tax that was ... [Read more]

Central Excise - Denial of Cenvat Credit on input services received for job work - Appellant availed Cenvat Credit on inputs and input services used for the manufacture of excisable goods - Whether the appellant is entitled to avail Cenvat Credit on the input services received for job work services for printing of metal sheets, even though the said services were held to be covered under the negative list under Section 66D(f) of the Finance Act, 1994 – HELD - In the instant case disputed invoices were raised by the job worker under a belief, may be erroneous, that such service was taxable and it had paid the tax that was appropriated by the Department under self-assessment provision - The quantum of tax already determined by the Jurisdictional office of the supplier unit (the service provider) cannot be contested or challenged by the Officer-in-Charge of the recipient unit (the appellant) - Once the taxes are paid by the service tax provider, the manufacture of the excisable final product is allowed to take Cenvat Credit of the duties and taxes enumerated under the Cenvat Credit Rules 2004. The error, if any, is not on the part of the appellant but on the part of the service provider (job worker) who issued the invoices through which payment of service tax was not denied, nor receipt of the same by the Department, nor even use of such service by the appellant, which is the main criteria for allowing Cenvat Credit on input services - The denial of Cenvat Credit is set aside and the appeal is allowed [Read less]

The decisions of Delhi High Court upholding the validity of consolidated SCNs for multiple assessment years, which were subsequently upheld by Supreme Court by dismissing the SLPs, are not speaking orders and do not constitute binding precedents.

Service Tax - Exemption from Service Tax on Horticulture Services - The appellant was engaged in providing horticulture services such as upkeep of gardens by watering, sweeping, fertilization, spraying of insecticides, etc. The Department issued a Show Cause Notice demanding Service Tax based on alleged differences between Form 26AS and ST-3 returns - Whether the horticulture services provided by the appellant are exempt from Service Tax - HELD - The term "agriculture" is of wide compass and covers horticulture, which in turn covers gardening activities. The appellant's activities of cultivation of plants, their protection... [Read more]

Service Tax - Exemption from Service Tax on Horticulture Services - The appellant was engaged in providing horticulture services such as upkeep of gardens by watering, sweeping, fertilization, spraying of insecticides, etc. The Department issued a Show Cause Notice demanding Service Tax based on alleged differences between Form 26AS and ST-3 returns - Whether the horticulture services provided by the appellant are exempt from Service Tax - HELD - The term "agriculture" is of wide compass and covers horticulture, which in turn covers gardening activities. The appellant's activities of cultivation of plants, their protection, and related operations fall under the definition of "horticulture" and are part of agricultural activity, which is exempt from Service Tax - The horticulture services provided by the appellant, such as garden maintenance, watering, and allied services, are exempt from Service Tax - The demand of Service Tax relating to horticulture services is set aside on merits and on account of time bar - Service Tax – Short-payment of tax on Manpower Supply Services - Whether the appellant is liable to pay Service Tax on the manpower supply/recruitment services - HELD - The appellant had partly discharged the Service Tax liability during the relevant period, but there remained a short payment of tax. The plea of limitation is not acceptable in respect of this amount, as it emanates from improper calculation of the tax by the appellant, who had been paying the Service Tax in the normal course for rendering this service. However, there is no evidence of deliberate suppression or wilful misstatement with intent to evade payment of tax, and therefore, while the appellant is liable to pay the balance Service Tax along with applicable interest, the imposition of penalty is not warranted. [Read less]

Central Excise - Section 35G & Section 35L of the Central Excise Act, 1944 - Deemed Manufacture - Activities involving packing or repacking of goods, labelling or re-labelling of containers including the declaration or alteration of retail sale price, and other treatment on the goods to render the product marketable - Department contended that such activities amounted to \"deemed manufacture\" under Section 2(f)(iii) of the Central Excise Act, 1944 – HELD - This appeal should be preferred before the Hon’ble Supreme Court under Section 35L Sub-section (2) of the Act - The appeal preferred by the department is dismissed

Customs - Classification of scrap/waste - The appellant filed Bills of entry for clearance of scrap of alloy steel, claiming classification under tariff heading 7204 2990 of the Customs Tariff Act, 1975 - Customs authorities obtained the opinion of a Chartered Engineer, and seized the goods under the belief that they were mis-declared. The authorities reclassified the goods under heading 7224 9099 as alloy steel bars, imposed a redemption fine, and levied a penalty - Whether the impugned goods should be classified as 'waste and scrap' under the relevant section and chapter notes of the Customs Tariff Act, or as 'alloy stee... [Read more]

Customs - Classification of scrap/waste - The appellant filed Bills of entry for clearance of scrap of alloy steel, claiming classification under tariff heading 7204 2990 of the Customs Tariff Act, 1975 - Customs authorities obtained the opinion of a Chartered Engineer, and seized the goods under the belief that they were mis-declared. The authorities reclassified the goods under heading 7224 9099 as alloy steel bars, imposed a redemption fine, and levied a penalty - Whether the impugned goods should be classified as 'waste and scrap' under the relevant section and chapter notes of the Customs Tariff Act, or as 'alloy steel bars' under heading 7224 9099 - HELD - The authorities had grossly ignored the relevant section and chapter notes defining 'waste and scrap' under the Customs Tariff Act. The Chartered Engineer's report clearly stated that the impugned goods were off-specification and unsuitable for the intended use, and could only be used for melting purposes. The authorities had failed to provide any reliable evidence to establish that the goods were 'alloy steel bars' and not 'waste and scrap'. The goods should be classified as 'waste and scrap' under the relevant provisions of the Customs Tariff Act – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Determining the transaction value under Section 4 of the Central Excise Act, 1994 - Revenue found that the appellant had sold its entire production to a single buyer at lower than the cost of production - Revenue concluded that the value declared by the appellant is not the transaction value under Section 4 of the Central Excise Act, 1994 and the value needs to be re-determined under Rule 11 of the Central Excise Valuation Rules, 2010 - Whether the buyers are "related persons" within the meaning of Section 4(3)(b) of the Central Excise Act, 1994 and, therefore, the transaction value declared by the appella... [Read more]

Central Excise - Determining the transaction value under Section 4 of the Central Excise Act, 1994 - Revenue found that the appellant had sold its entire production to a single buyer at lower than the cost of production - Revenue concluded that the value declared by the appellant is not the transaction value under Section 4 of the Central Excise Act, 1994 and the value needs to be re-determined under Rule 11 of the Central Excise Valuation Rules, 2010 - Whether the buyers are "related persons" within the meaning of Section 4(3)(b) of the Central Excise Act, 1994 and, therefore, the transaction value declared by the appellant is not the proper – HELD - Revenue has not clearly brought out in the impugned orders how the appellant and its buyers are related. The only allegation made by the Revenue is that the original promoters of the appellant are also the promoters of M/s Thapar Finance Ltd. and M/s Hindustan Overseas Ltd., but the Revenue did not specify who were such initial promoters. Therefore, the show cause notice is vague and without any legal backing – Further, the Revenue did not establish that the appellant and its buyers are under the same management, as required under the Monopolies and Restrictive Trade Practices Act, 1969, to be considered as "inter-connected undertakings". The appellant and its buyers are private limited companies. The Revenue has not made any efforts to arrive at the costing data of the product and has simply assumed the sale price to be the cost of production and proceeded to recover duty at 110% of such price, which is not in accordance with the law - The impugned orders are set aside and the appeal is allowed [Read less]

Service Tax - Appeal challenging the Order-in-Original, which was passed ex parte and had raised a demand of service tax along with penalty. The petitioner claimed that the notices were served upon an outgoing partner who failed to communicate the same to the firm - HELD - Department has afforded number of opportunities to petitioner to do the needful but apparently no amount of pre-deposit, even as per its own calculation was ever made by the petitioner. This clearly reflects adversely on the conduct of petitioner - While there is no limitation for filing a writ petition, it is a settled position that a writ petition shou... [Read more]

Service Tax - Appeal challenging the Order-in-Original, which was passed ex parte and had raised a demand of service tax along with penalty. The petitioner claimed that the notices were served upon an outgoing partner who failed to communicate the same to the firm - HELD - Department has afforded number of opportunities to petitioner to do the needful but apparently no amount of pre-deposit, even as per its own calculation was ever made by the petitioner. This clearly reflects adversely on the conduct of petitioner - While there is no limitation for filing a writ petition, it is a settled position that a writ petition should be filed within a reasonable time. The Supreme Court has held that a right not exercised for a long time is non-existent, and the doctrine of delay and laches as well as acquiescence are applied to non-suit the litigants who approach the court/appellate authorities belatedly without any justifiable explanation for the delay - In the present case, the petitioner had not provided any explanation, let alone a plausible explanation, for the delay of almost two years in filing the writ petition - The writ petition is dismissed for being devoid of any merit [Read less]

GST - Conversion of Order from Section 74 to Section 73 of CGST Act, 2017 – Petitioner seeking conversion of an order passed under Section 74 of the CGST Tax Ac to an order under Section 73 - Whether the petitioner was entitled to the benefit of conversion of the order from Section 74 to Section 73 of the CGST Act in the absence of production of relevant documents – HELD - For conversion of the order from Section 74 to Section 73, the petitioner was required to provide supporting documents to demonstrate that the order-in-original passed under Section 74 deserved to be converted. However, the petitioner failed to produ... [Read more]

GST - Conversion of Order from Section 74 to Section 73 of CGST Act, 2017 – Petitioner seeking conversion of an order passed under Section 74 of the CGST Tax Ac to an order under Section 73 - Whether the petitioner was entitled to the benefit of conversion of the order from Section 74 to Section 73 of the CGST Act in the absence of production of relevant documents – HELD - For conversion of the order from Section 74 to Section 73, the petitioner was required to provide supporting documents to demonstrate that the order-in-original passed under Section 74 deserved to be converted. However, the petitioner failed to produce any documentary evidence such as tax invoices, debit notes, or other relevant records to substantiate its claim - The adjudicating authority had categorically recorded that the petitioner failed to produce the documents prescribed for availment of Input Tax Credit under Rule 36 of the CGST Rules, 2017, and had concluded that there was a fraudulent act on the part of the petitioner in availing the ITC without receipt of goods or services. In the absence of any documentary evidence, no direction can be issued to convert the order from Section 74 to Section 73 of the CGST Act - The order passed under Section 73 for another financial year, where the petitioner had produced relevant documents, cannot assist the petitioner in the present case - The prayer for conversion of Order from Section 74 to Section 73 is rejected and the petition is dismissed [Read less]

GST – West Bengal AAR – Applicable GST Rates on Tobacco Leaves - Applicant seeking Advance Ruling on the applicable GST rates on various activities relating to the sale of tobacco leaves - Applicable rate of GST on tobacco leaves sold to other traders by the applicant as they are purchased from farmers after sun curing in the fields, without undertaking any processing except the storage or stocking of the leaves – HELD – The tobacco leaves do not lose their character of leaves as such even after undergoing the process of curing. It is during and after the process of stemming or stripping the tobacco leaf loses its ... [Read more]

GST – West Bengal AAR – Applicable GST Rates on Tobacco Leaves - Applicant seeking Advance Ruling on the applicable GST rates on various activities relating to the sale of tobacco leaves - Applicable rate of GST on tobacco leaves sold to other traders by the applicant as they are purchased from farmers after sun curing in the fields, without undertaking any processing except the storage or stocking of the leaves – HELD – The tobacco leaves do not lose their character of leaves as such even after undergoing the process of curing. It is during and after the process of stemming or stripping the tobacco leaf loses its character of leaf as such - The tobacco leaves purchased from farmers after sun curing in the fields, without any further processing except storage or stocking, are covered under Tariff item no. 240110 and Entry no. 162 of Schedule I of the GST Rate Notification. Accordingly, the supply of such tobacco leaves would be taxed at 5% GST – Ordered accordingly - Issue 2: Applicable rate of GST if the applicant segregates the tobacco into grades depending on their size (width), colour/shade, length, texture of the leaf etc. and sells such graded tobacco leaf – HELD - Even after being graded based on various physical parameters, the tobacco leaves remain as "tobacco leaves as such" and are covered under Tariff item no. 240110 and Entry no. 162 of Schedule I. Accordingly, the supply of such graded tobacco leaves would also be taxed at 5% GST - Issue 3: What will be the applicable rate of GST if the tobacco leaves are sold to other traders after removing the butts to avoid damage to leaves during transportation – HELD - The removal of the tough, stem-like edge or butt of the tobacco leaf, leaving only the pliable lamina, does not cause the tobacco leaf to lose its character as a "tobacco leaf". Therefore, such tobacco leaves, after butting, are also covered under Tariff item no. 240110 and Entry no. 162 of Schedule I, and would be taxed at 5% GST. [Read less]

GST – West Bengal AAR - Taxability of amounts received by applicant pursuant to Arbitration Award, additional consideration on account of upward revision of price – Applicant entered into three agreements with THDC India Ltd for execution of work for the construction of Hydro Power Plants. Disputes arose during the execution of the work, and the matter was referred to Arbitration. The Arbitral Tribunal passed awards in favor of the applicant, allowing claims for extra expenditure, differential cost of cement, reimbursement of expenses, and refund of excess deductions. The applicant received the payment pursuant to Conc... [Read more]

GST – West Bengal AAR - Taxability of amounts received by applicant pursuant to Arbitration Award, additional consideration on account of upward revision of price – Applicant entered into three agreements with THDC India Ltd for execution of work for the construction of Hydro Power Plants. Disputes arose during the execution of the work, and the matter was referred to Arbitration. The Arbitral Tribunal passed awards in favor of the applicant, allowing claims for extra expenditure, differential cost of cement, reimbursement of expenses, and refund of excess deductions. The applicant received the payment pursuant to Conciliation Proceedings and a Settlement Agreement in 2024 - Whether the claims allowed by the Arbitral Tribunal vide the Arbitration Awards constitute "liquidated damages" under GST or or whether they should be treated as additional consideration for the supply already made – HELD – The amounts awarded by the Arbitration Tribunal under different heads for the three packages can be categorised broadly under twelve heads - The claims allowed for extra expenditure due to change in the methodology, payment of price adjustment on extra items, deduction or deletion from final bill, extra expenditure for excavation of compressors and receiver's room, payment of cost of materials for pre-stressed anchor work, and extra expenditure for backfilling behind walls of TRT outlet, as well as the claims allowed as refund of rebate wrongfully recovered or deducted, are to be considered as "supply" under GST. On the other hand, the claims allowed for extra expenditure incurred in purchasing materials, operating private quarries, cost difference for use of higher grade cement, and reimbursement of expenditure for shifting of infrastructure facility are considered as "liquidated damages" and not taxable under GST – Ordered accordingly - Issue 3: Whether GST would be applicable for the cost of arbitration allowed vide Arbitration Award and received vide the Settlement Agreement – HELD - The arbitration as service has been provided by the Arbitration Tribunal to the applicant - Arbitration service will fall under Legal and Accounting services under heading no. 9982 and group no. 99821. The specific service is covered by service code no. 998215 - the cost of arbitration is taxable under reverse charge mechanism, as the applicant is the recipient of the arbitration services provided by the Arbitral Tribunal. The applicable GST rate would be 18% - The place of supply of such service is guided by Clause (a) of Section 12(2) of the IGST Act, 2017. Hence, the place of supply of arbitration service will be the location of the applicant i.e. West Bengal [Read less]

GST – West Bengal AAR - Principles of classification of goods - Classification and applicable GST rate of medical devices and accessories -Applicant is engaged in the manufacture and supply of medical-use gloves, personal protective equipment (PPE), imaging accessories, laparoscopy accessories, intraoperative cable covers, patient overcovering (procedure drapes), and patient undercovering (drape sheets). All these products are designed, manufactured, and supplied exclusively for use in hospitals, clinics, and healthcare institutions - Whether the medical-use gloves, PPE, sterile covers, drapes and undercovers manufacture... [Read more]

GST – West Bengal AAR - Principles of classification of goods - Classification and applicable GST rate of medical devices and accessories -Applicant is engaged in the manufacture and supply of medical-use gloves, personal protective equipment (PPE), imaging accessories, laparoscopy accessories, intraoperative cable covers, patient overcovering (procedure drapes), and patient undercovering (drape sheets). All these products are designed, manufactured, and supplied exclusively for use in hospitals, clinics, and healthcare institutions - Whether the medical-use gloves, PPE, sterile covers, drapes and undercovers manufactured by the applicant can be classified under HSN Code 9018 or HSN Code 6210, instead of classification under HSN Code 3926 - HELD - The principles of classification as per the General Interpretative Rules of the Harmonized System emphasize that the material composition of the goods is a decisive factor, and the end-use alone cannot determine the tariff placement - The products in question are primarily made of plastic co-polymers, and the mere fact that they are used in the medical/healthcare sector does not automatically qualify them for classification under HSN 9018 or HSN 6210 - The sterile aprons, OT shoe covers, procedural drapes and drape sheets cannot be classified under HSN 6210, as they are not made of the specific textile fabrics mentioned in that heading, and they also do not possess the intrinsic character of a garment. Similarly, the Clearprobe endocavity/transvaginal probe cover, ultrasound cover, laparoscopy camera cover and intraoperative cable cover, while used as accessories to medical equipment, cannot be considered as "instruments or appliances" under HSN 9018, as they are merely covers or protective sheaths and do not have the essential character of a tool, device or machine – The Handcare sterile and non-sterile EVA gloves classifiable under HSN 39262011 and 39262019 - Wearon sterile apron, Cleancare OT shoe cover, Drape sheet, Cleansheet procedure drape are classifiable under HSN 39262029 and 39269099 – The Clearprobe endocavity/transvaginal probe cover, General purpose ultrasound probe cover, Laparoscopy camera cover, Intraoperative cable cover are classifiable under HSN 90330000 – All the subject products are liable to 18% GST - Ordered accordingly [Read less]

GST – West Bengal AAR - Classification and taxability of shaving cream and shaving foam after the change of GST rates in terms of Notification No. 09/2025 - Central Tax (Rate) dated 17.09.2025 - Whether "Shaving Foam" and "Shaving Cream" are the same product and classifiable under HSN Code 33071010 and liable to 5% GST as per Notification No. 09/2025 – Central Tax (Rate) dated 17.09.2025 - HELD - The shaving cream and shaving foam are not the same products. Composition wise shaving cream contains rich emulsion of oils (coconut, argan), fatty acids (stearic acid), soaps/surfactants, glycerine, and skin conditioners (she... [Read more]

GST – West Bengal AAR - Classification and taxability of shaving cream and shaving foam after the change of GST rates in terms of Notification No. 09/2025 - Central Tax (Rate) dated 17.09.2025 - Whether "Shaving Foam" and "Shaving Cream" are the same product and classifiable under HSN Code 33071010 and liable to 5% GST as per Notification No. 09/2025 – Central Tax (Rate) dated 17.09.2025 - HELD - The shaving cream and shaving foam are not the same products. Composition wise shaving cream contains rich emulsion of oils (coconut, argan), fatty acids (stearic acid), soaps/surfactants, glycerine, and skin conditioners (shea butter, lanolin) etc. On the other hand, shaving foam contains Liquid soap/detergent base with water, often glycerine, plus flammable hydrocarbon propellants (butane, propane, isobutene etc.) to force the creamy liquid out as foam. So chemically the two are not the same products. In common parlance also shaving cream and shaving foam is not the same product - While both are included under tariff heading 3307, shaving cream is covered under tariff item 33071010, while shaving foam is covered under the residual tariff item 33071090. The two products differ in their formulation, physical form, and method of application, even though they serve the same functional purpose - The 5% GST rate under Notification No. 09/2025 is applicable only to shaving cream, shaving lotion, and aftershave lotion, which are covered under tariff item 33071010. Other pre-shave, shaving or after-shave preparations, including shaving foam, which fall under the residual tariff item 33071090, are subject to 18% GST – Ordered accordingly [Read less]

Service Tax – Classification of taxable service - Whether the services of deployment of Ex-Railway staff for rack movement provided by the appellant should be classified as 'Cargo Handling Services' or 'Manpower Recruitment/Supply Agency Services' – HELD - The definition of 'Cargo Handling Service' requires the activity to involve a cargo, transportation from a freight terminal, and the service to be provided by a specialized agency. In the present case, the appellant was awarded a contract for "Deployment of Ex-Railway Staff for Rake Movement" and was required to deploy adequate personnel to carry out the job smoothly... [Read more]

Service Tax – Classification of taxable service - Whether the services of deployment of Ex-Railway staff for rack movement provided by the appellant should be classified as 'Cargo Handling Services' or 'Manpower Recruitment/Supply Agency Services' – HELD - The definition of 'Cargo Handling Service' requires the activity to involve a cargo, transportation from a freight terminal, and the service to be provided by a specialized agency. In the present case, the appellant was awarded a contract for "Deployment of Ex-Railway Staff for Rake Movement" and was required to deploy adequate personnel to carry out the job smoothly. The services provided by the appellant would appropriately be classified under 'Manpower Recruitment/Supply Agency Services' based on the clear and specific nature of the work order - The services provided by the appellant should be classified as 'Manpower Recruitment/Supply Agency Services' and not 'Cargo Handling Services' - The impugned order is set aside and the appeal is allowed - Demand based on difference in Form 26AS and ST-3 returns – HELD - Revenue cannot raise demand on the basis of such difference without establishing that the entire amount received by the Appellant as reflected in the said returns and Form 26AS being consideration for services provided and without examining whether the difference was because of any exemption or abatement - For arriving at amount of service tax not paid or not levied arriving at correct value of taxable service which has not suffered service tax needs to be determined as the first step. Further, there are services where entire or part of service tax is to be paid by service recipient. In addition, mega exemption Notification No. 25/2012-ST dated 20.06.2012 has provided exemption to various activities from the levy of service tax. Therefore, unless the data is examined with reference to all the above stated aspects, no one can come to a conclusion about the exact value which has not suffered service tax. Such exercise has not been undertaken in the present case. [Read less]

Customs - Relevance and admissibility of statements recorded under Section 108 of the Customs Act and Section 14 of the Central Excise Act, 1944 – Appellant-CHA was imposed penalties under Sections 112(a)(i) and 112(a)(ii) of the Customs Act based on his statements and the statements of third party recorded under Section 108 of the Customs Act. The appellant challenged the penalties on the ground that the statements cannot be relied upon as the procedure under Section 138B of the Customs Act was not followed - Whether the penalties imposed on the appellant solely on the basis of the statements recorded under Section 108 ... [Read more]

Customs - Relevance and admissibility of statements recorded under Section 108 of the Customs Act and Section 14 of the Central Excise Act, 1944 – Appellant-CHA was imposed penalties under Sections 112(a)(i) and 112(a)(ii) of the Customs Act based on his statements and the statements of third party recorded under Section 108 of the Customs Act. The appellant challenged the penalties on the ground that the statements cannot be relied upon as the procedure under Section 138B of the Customs Act was not followed - Whether the penalties imposed on the appellant solely on the basis of the statements recorded under Section 108 of the Customs Act can be sustained – HELD - The statements recorded under Section 108 of the Customs Act cannot be considered as relevant evidence unless the procedure prescribed under Section 138B of the Customs Act is followed. Section 138B(1)(b) requires that the person who made the statement must be examined as a witness before the adjudicating authority, and the authority must form an opinion that the statement should be admitted in evidence in the interests of justice. This procedure was not followed in the present case - The provisions of Section 138B(1)(b) of the Customs Act and Section 9D(1)(b) of the Central Excise Act are mandatory provisions. The rationale behind this elaborate procedure is to ensure that statements recorded during investigation are not obtained under coercion or compulsion and to provide the opportunity of cross-examination to the person against whom the statement is used. Since the mandatory procedure was not followed in the present case, the penalties imposed solely on the basis of the statements recorded under Section 108 of the Customs Act cannot be sustained and set aside – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Refund of CVD/SAD under Section 27 of Customs Act - Appellant filed refund claim for CVD/SAD paid on excess import quantity of raw materials under Advance Authorization License - Whether the appellant is entitled to refund of CVD/SAD under Section 27 of Customs Act or under Section 142(3) and 142(6)(a) of CGST Act, 2017 – HELD - the appellant filed refund claim under Section 27 of the Customs Act towards CVD paid on MEIS Scrips under the provisions of Para 3.02 of Foreign Trade Policy 2015-20, on excess import quantity of raw materials imported under Advance Authorisation Licenses. After 01.07.2017, in GST regi... [Read more]

Customs - Refund of CVD/SAD under Section 27 of Customs Act - Appellant filed refund claim for CVD/SAD paid on excess import quantity of raw materials under Advance Authorization License - Whether the appellant is entitled to refund of CVD/SAD under Section 27 of Customs Act or under Section 142(3) and 142(6)(a) of CGST Act, 2017 – HELD - the appellant filed refund claim under Section 27 of the Customs Act towards CVD paid on MEIS Scrips under the provisions of Para 3.02 of Foreign Trade Policy 2015-20, on excess import quantity of raw materials imported under Advance Authorisation Licenses. After 01.07.2017, in GST regime, no credit of such duty was available, therefore, the Appellant filed refund claim for same - As per the settled legal position under Section 142(3) and 142(6)(a) of CGST Act, 2017, the appellant is entitled to refund of CVD/SAD paid on excess import quantity, even though credit of such duty was not available under the GST regime - The appellant is legally entitled to refund of CVD/SAD under Section 142(3) of CGST Act, 2017, as the duty was paid during the pre-GST regime when Cenvat credit was available – Further, the concept of unjust enrichment is not applicable in the present case as the appellant had submitted a certificate from a Chartered Accountant that the incidence of CVD paid on excess import quantity was not passed on to any other person. Accordingly, the Department is directed to refund the CVD/SAD amount to the appellant – The appeal is allowed [Read less]

Central Excise - Compounded levy under Section 3A of Central Excise Act, 1944 on filter khaini sachets/pillows packed manually into pouches - Respondent is manufacturer of branded chewing tobacco falling under tariff item No.24039910 and was paying Central Excise duty in terms of Section 3A of the Central Excise Act, 1944 on the basis of annual capacity - Department alleged that the process of putting filter pillow sachets into pouches manually at the intermediate stage does not render the goods as being not notified under Section 3A of the Act - Whether the filter khaini sachets/pillows packed manually into pouches are re... [Read more]

Central Excise - Compounded levy under Section 3A of Central Excise Act, 1944 on filter khaini sachets/pillows packed manually into pouches - Respondent is manufacturer of branded chewing tobacco falling under tariff item No.24039910 and was paying Central Excise duty in terms of Section 3A of the Central Excise Act, 1944 on the basis of annual capacity - Department alleged that the process of putting filter pillow sachets into pouches manually at the intermediate stage does not render the goods as being not notified under Section 3A of the Act - Whether the filter khaini sachets/pillows packed manually into pouches are required to be considered as notified goods under Section 3A of the Central Excise Act, 1944 and subjected to compounded levy – HELD - As per Explanation 5 to Notification 16/2010-CE dated 27.02.2010, the words "with the aid of packing machine" are used only for the activity of packing the filter khaini sachets/pillows into pouches, and not for the activity of packing the chewing tobacco into sachets/pillows. Since the respondent packed the sachets/pillows manually into pouches, the same would not be covered under the compounded levy scheme. The Board's clarification in letter dated 05.03.2010, clarified that manual packing of pouches and their sealing would not come within the purview of compounded levy scheme – Further, the filter khaini sachets/pillows packed with the aid of machines cannot be considered as notified goods under the Capacity Determination Rules as they do not bear the requisite information like brand name, MRP, health warnings etc. Hence, the order of the Commissioner is upheld and the appeals filed by the Revenue are dismissed [Read less]

GST - Condonation of delay in filing an appeal against GST order - Petitioner claimed that it did not receive the show cause notices as they were sent to the email address accessed by the Chartered Accountant (CA) handling the accounts, who did not inform the petitioner about the notices - Petitioner came to know about the notices and order only when the CA asked the petitioner to deposit the tax for filing the GSTR 3B return for October 2025, resulting in a delay of over 366 days in filing the appeal - Petitioner argued that the delay should be condoned as it was not at fault and the notices and order were also uploaded o... [Read more]

GST - Condonation of delay in filing an appeal against GST order - Petitioner claimed that it did not receive the show cause notices as they were sent to the email address accessed by the Chartered Accountant (CA) handling the accounts, who did not inform the petitioner about the notices - Petitioner came to know about the notices and order only when the CA asked the petitioner to deposit the tax for filing the GSTR 3B return for October 2025, resulting in a delay of over 366 days in filing the appeal - Petitioner argued that the delay should be condoned as it was not at fault and the notices and order were also uploaded on the 'Additional Notices and Orders Tab' on the GST Portal, due to which they did not come to the knowledge of the petitioner - Whether the delay in filing the appeal against the GST order should be condoned in the given circumstances - HELD - Once the Department had discharged its duty by sending the show cause notices to the email address provided by the petitioner, there was no ground for interference. The impugned order specifically mentioned that the show cause notices were duly served, and despite opportunities, the petitioner did not file any reply or deposit the amount in question. The argument regarding the notices and order being uploaded on the 'Additional Notices and Orders Tab' of the GST Portal to be an afterthought and of no consequence in the given factual matrix. The petitioner cannot be absolved of the responsibility for the negligence of its CA, and no exceptional or extraordinary circumstances were pointed out to warrant the Court's interference - The writ petition was dismissed, with the liberty to the petitioner to avail any other remedy available to it in accordance with law [Read less]

GST - Levy of GST on affiliation fees collected by a University from affiliated colleges – Petitioner-University contended that the affiliation fees are exempt from GST as they are for services provided to educational institutions, which admit students and conduct examinations for courses recognised under law. The respondent revenue authorities argued that the affiliation fees are not exempt as they are not for services provided to students in connection with admission or conduct of examinations - Whether the affiliation fees collected by a University from affiliated colleges is amenable to levy of GST – HELD – While... [Read more]

GST - Levy of GST on affiliation fees collected by a University from affiliated colleges – Petitioner-University contended that the affiliation fees are exempt from GST as they are for services provided to educational institutions, which admit students and conduct examinations for courses recognised under law. The respondent revenue authorities argued that the affiliation fees are not exempt as they are not for services provided to students in connection with admission or conduct of examinations - Whether the affiliation fees collected by a University from affiliated colleges is amenable to levy of GST – HELD – While the Madurai Kamaraj University judgment had taken a liberal interpretation and held that the affiliation fees are exempt from GST as they are for services relating to educational institutions. However, the Manonmaniam Sundaranar University judgment and the Bombay High Court's Goa University judgment took a strict interpretation of the exemption notification and held that the affiliation fees are not exempt – As per the definition of 'service' under the GST Act and the exemption notification No.12/2017-CT(Rate), the exemption is restricted to services relating to admission of students and conduct of examinations by educational institutions, and does not cover services for affiliation of colleges – The Circular No. 234/28/2024 GST-dated 11.10.2024 stated that the activity of affiliation by educational boards or councils is not a service related to admission of students or conduct of examinations, and hence is liable to GST. Thus, it is clear that the fees collected for affiliation and for inspection of colleges applied for affiliation, fall beyond the scope of service connected with admission of students and conduct of examination - The extended meaning cannot be given to the expression 'services relating to admission or conduct of examination' to cover the affiliation fees collected by the University. The affiliation process is independent of the admission of students and conduct of examinations - In the earlier judgment rendered in Madurai Kamarajar University, the learned Judge had no occasion to consider Circular No. 234/28/2024 GST-dated 11.10.2024. The view expressed in the subsequent judgment namely, Pondichery University's case declares the correct legal position - The affiliation fees collected by the University from affiliated colleges is amenable to levy of GST, as it is not covered under the exemption notification for services relating to admission of students or conduct of examinations - the order of reference is answered accordingly [Read less]

GST - Quashing of Assessment Order, Dropping of demand in earlier proceedings - Whether the assessment order is sustainable when the demand on account of under-declaration of tax payable and excess claim of ITC was dropped in the earlier proceedings – HELD - The demand on account of under-declaration of tax payable and excess claim of ITC was dropped in the earlier proceedings. Therefore, there cannot be a duplication of demand on these two counts in the impugned assessment order – Further, the petitioner was not directly communicated about the impugned assessment order and that the petitioner became aware of the order... [Read more]

GST - Quashing of Assessment Order, Dropping of demand in earlier proceedings - Whether the assessment order is sustainable when the demand on account of under-declaration of tax payable and excess claim of ITC was dropped in the earlier proceedings – HELD - The demand on account of under-declaration of tax payable and excess claim of ITC was dropped in the earlier proceedings. Therefore, there cannot be a duplication of demand on these two counts in the impugned assessment order – Further, the petitioner was not directly communicated about the impugned assessment order and that the petitioner became aware of the order only after the recovery proceedings were initiated - The matter is remitted to the State Tax Officer to pass a fresh order on merits, subject to the petitioner depositing 10% of the disputed tax confirmed in the impugned order and filing a reply to the show cause notice. The respondents to keep the further recovery proceedings in abeyance and lift the bank attachment, provided the petitioner complies with the stipulations – The petition is disposed of [Read less]

Customs – Classification of poly vinyl chloride resins – Vide the impugned order the Tribunal held that the Department has re-classified goods imported under CTH 3904 1090 on the basis of inconclusive Test Report; the Tariff Item 3904 21 10 is specific for Poly vinyl chloride resins, whereas Tariff Item 3904 10 90 covers 'Others' which is a residuary entry and hence, same cannot be preferred over a specific entry. The imported goods are appropriately classifiable under CTH 3904 21 10 as claimed by the importer – Aggrieved, Revenue filed instant appeal – SC HELD – There is no grounds to interfere with the impugned... [Read more]

Customs – Classification of poly vinyl chloride resins – Vide the impugned order the Tribunal held that the Department has re-classified goods imported under CTH 3904 1090 on the basis of inconclusive Test Report; the Tariff Item 3904 21 10 is specific for Poly vinyl chloride resins, whereas Tariff Item 3904 10 90 covers 'Others' which is a residuary entry and hence, same cannot be preferred over a specific entry. The imported goods are appropriately classifiable under CTH 3904 21 10 as claimed by the importer – Aggrieved, Revenue filed instant appeal – SC HELD – There is no grounds to interfere with the impugned judgment and order. Hence, the appeal stands dismissed [Read less]

Customs - Reduction of assessable value and imposition of Anti-Dumping Duty (ADD) – Import of melamine were subjected to investigation alleging that the appellants had deliberately declared the value of the melamine to neutralize the ADD - Department reduced the assessable value of the imported melamine from the declared value and imposed ADD on the differential amount as specified in the relevant notification. Penalties and redemption fines were also imposed on the appellants and their Directors - Whether the reduction of the assessable value and the imposition of ADD on the differential amount is justified – HELD - U... [Read more]

Customs - Reduction of assessable value and imposition of Anti-Dumping Duty (ADD) – Import of melamine were subjected to investigation alleging that the appellants had deliberately declared the value of the melamine to neutralize the ADD - Department reduced the assessable value of the imported melamine from the declared value and imposed ADD on the differential amount as specified in the relevant notification. Penalties and redemption fines were also imposed on the appellants and their Directors - Whether the reduction of the assessable value and the imposition of ADD on the differential amount is justified – HELD - Under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, the proper officer can raise doubts on the truth or accuracy of the declared value only if there are certain specific reasons, such as the value being significantly higher than the value at which identical or similar goods are imported, or the presence of abnormal discounts or reductions. In the present case, the declared value was higher than the value determined by the Department, and the Department had relied on data published in a periodic journal (ICIS) to determine the value, without establishing the authenticity and reliability of such data – Though certain efforts have been initiated by the Department to establish over-valuation of the goods imported but that can’t itself give rise to a finding that inflating of price was made for the purpose of evading ADD - The imposition of ADD is a remedial and protective measure to counter unfair international trade practices that cause material injury to the domestic industry, and not a measure to generate revenue - When no lower price of dump imports is referred as transaction value in substitution of usual home market price, one price range published by a periodic journal can’t be taken as transaction value only for the purpose of levy of ADD which would be contrary to the procedure referred in Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - The reduction of the assessable value and the imposition of ADD are not justified – The impugned order is set aside and the appeals are allowed [Read less]

GST - Cancellation of registration on ground not mentioned in show cause notice - Petitioner argued that the show cause notice was issued on the ground of the registration being obtained by fraud, willful misstatement, or suppression of facts, but the order cancelling the registration was passed on the ground of the petitioner being involved in circular trading and not paying any cash tax - Whether the cancellation of the petitioner's GST registration on a ground not mentioned in the SCN is valid – HELD - It is a settled position that a show cause notice is the foundation of further proceedings. An opportunity has to be ... [Read more]

GST - Cancellation of registration on ground not mentioned in show cause notice - Petitioner argued that the show cause notice was issued on the ground of the registration being obtained by fraud, willful misstatement, or suppression of facts, but the order cancelling the registration was passed on the ground of the petitioner being involved in circular trading and not paying any cash tax - Whether the cancellation of the petitioner's GST registration on a ground not mentioned in the SCN is valid – HELD - It is a settled position that a show cause notice is the foundation of further proceedings. An opportunity has to be afforded to the noticee to answer and show cause notice but in case a particular issue has not even been mentioned in the show cause notice, the assessee/noticee has no occasion to respond - In the present case, the order of cancellation was passed on a ground that was not even mentioned in the show cause notice, and the petitioner had no occasion to respond to it - The passing an order on a premise not put to the assessee in the show cause notice is clearly unjustified and unsustainable. The impugned orders are set aside with liberty to the respondent-department to initiate a fresh process by issuing a detailed show cause notice, allowing the petitioner to file its reply, and then passing appropriate speaking orders – The writ petition is allowed [Read less]

GST - Rectification of Assessment Order – Challenge to order passed under Section 161 of the CGST Act, 2017 rejecting the application for rectification of the order passed under Section 73 of the GST Act. The petitioner had contended that it had already submitted the reconciliation statement and details of credit notes issued by suppliers, which were available on the GST portal, but the authority had rejected the application without considering these documents and without affording an opportunity of hearing - HELD - The order rejecting the application for rectification is not valid as it did not contain any reasons for n... [Read more]

GST - Rectification of Assessment Order – Challenge to order passed under Section 161 of the CGST Act, 2017 rejecting the application for rectification of the order passed under Section 73 of the GST Act. The petitioner had contended that it had already submitted the reconciliation statement and details of credit notes issued by suppliers, which were available on the GST portal, but the authority had rejected the application without considering these documents and without affording an opportunity of hearing - HELD - The order rejecting the application for rectification is not valid as it did not contain any reasons for not accepting the documents submitted by the petitioner and for declining to verify the evidence available on the portal – The petitioner had submitted a detailed reply alongwith the ITC reconciliation statement and credit note reversal statement, which were available in the assessment records. However, the Asst. Commissioner had rejected the application for rectification without considering these documents and without providing an opportunity of hearing to the petitioner – Further, the authorities have not afforded an adequate opportunity to the petitioner to present its case and explain the facts and figures with supporting documents during the proceedings under Section 73 - The order rejecting the rectification application is set aside and the matter is remanded back with the direction to dispose of the application for rectification after considering the documents and records submitted by the petitioner and providing an opportunity of hearing - The writ petition is disposed of [Read less]

GST – Mismatch in GSTR-1 and GSTR-3B, Attachment of Over Draft account (OD Account) - HELD - Since the petitioner was unaware of the passing of the impugned order and became aware only after the attachment of its bank account, it should be given an opportunity to contest the case on merits - The bank account maintained by the petitioner is an OD account, there cannot be any attachment of such an account. However, the respondent is at liberty to proceed against the assets, including the movable and immovable assets, which might have been offered by the petitioner as security, subject to the rights of the second respondent... [Read more]

GST – Mismatch in GSTR-1 and GSTR-3B, Attachment of Over Draft account (OD Account) - HELD - Since the petitioner was unaware of the passing of the impugned order and became aware only after the attachment of its bank account, it should be given an opportunity to contest the case on merits - The bank account maintained by the petitioner is an OD account, there cannot be any attachment of such an account. However, the respondent is at liberty to proceed against the assets, including the movable and immovable assets, which might have been offered by the petitioner as security, subject to the rights of the second respondent pursuant to the outcome of the appeal to be filed by the petitioner - The writ petition is disposed of granting the petitioner the liberty to challenge the impugned order before the Appellate Authority within 30 days, subject to the deposit of 50% of the disputed tax – Ordered accordingly [Read less]

GST - Limitation Period for Appeals against cancellation order - Petitioner filed an appeal against the cancellation order after a delay of around 6 months – The Appellate Authority rejected the appeal of the petitioner on the ground of delay - Whether the High Court can condone the delay in filing the appeal and entertain the petition – HELD - Section 107 (4) of the CGST Act grants discretion to the Appellate Authority, to allow additional one month in case he/she is satisfied that the appellant was prevented by “sufficient cause” from presenting the appeal after 90 days, but within a period of 30 days. Thus, the ... [Read more]

GST - Limitation Period for Appeals against cancellation order - Petitioner filed an appeal against the cancellation order after a delay of around 6 months – The Appellate Authority rejected the appeal of the petitioner on the ground of delay - Whether the High Court can condone the delay in filing the appeal and entertain the petition – HELD - Section 107 (4) of the CGST Act grants discretion to the Appellate Authority, to allow additional one month in case he/she is satisfied that the appellant was prevented by “sufficient cause” from presenting the appeal after 90 days, but within a period of 30 days. Thus, the discretion of the Appellate authority ends on the completion of additional 30 days. Such discretion does not extend to powers under Article 226 of the Constitution on India as well as it would be inconsistent with the legislative intent behind the statutory limitation period. The reasons provided by the petitioner, such as lack of access to login credentials, are not sufficient to condone the delay - The tax payers are supposed to remain vigilant of all the proceedings and have to timely verify the orders on the portal. The taxing statutes operate in very strict time frame, and any relaxation or easing of limitation period will have cascading effect on the functioning of the revenue – The petition is dismissed [Read less]

GST - Consolidation in Show Cause Notice under Section 74 of CGST Act, 2017 - Whether the authorities can issue consolidated Show cause notice for multiple financial years/tax periods – HELD - There is no scope for consolidating various financial years/tax period while issuing show cause notice under Section 74 of the CGST Act – It is true that the contrary view taken by the Delhi High Court in M/s Mathur Polymers v. Union of India has attained finality with the Supreme Court declining to interfere with the impugned judgment, however, concept of merger of judgment will not apply here because the Hon’ble Supreme Court... [Read more]

GST - Consolidation in Show Cause Notice under Section 74 of CGST Act, 2017 - Whether the authorities can issue consolidated Show cause notice for multiple financial years/tax periods – HELD - There is no scope for consolidating various financial years/tax period while issuing show cause notice under Section 74 of the CGST Act – It is true that the contrary view taken by the Delhi High Court in M/s Mathur Polymers v. Union of India has attained finality with the Supreme Court declining to interfere with the impugned judgment, however, concept of merger of judgment will not apply here because the Hon’ble Supreme Court has dismissed the petition in limine and not on merit - Since this Court has, subsequent to decision of the Delhi High Court, taken a different view, the authorities below will be bound by the subsequent judgments in Milroc Good Earth Developers and Rite Water Solutions (India) Ltd. cases - The consolidated SCNs are quashed and set aside. The authorities are allowed to re-issue a notice in terms of Section 74 for each relevant financial year, if there is no other legal impediment - The petition is partly allowed [Read less]

GST – Tamil Nadu AAR – Healthcare Service, Composite supply, Exemption of supplies of medicines, consumables, implants, and medical items to inpatients and outpatients as part of healthcare services - Whether the supply of medicines, consumables, implants, and medical items to inpatients as part of the treatment provided by the hospital is exempt under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as a composite supply of healthcare services - HELD - The complete gamut of activities required for the well-being of a patient from admission till discharge, provided by a hospital under the di... [Read more]

GST – Tamil Nadu AAR – Healthcare Service, Composite supply, Exemption of supplies of medicines, consumables, implants, and medical items to inpatients and outpatients as part of healthcare services - Whether the supply of medicines, consumables, implants, and medical items to inpatients as part of the treatment provided by the hospital is exempt under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as a composite supply of healthcare services - HELD - The complete gamut of activities required for the well-being of a patient from admission till discharge, provided by a hospital under the direction of medical doctors is a composite supply of service and is covered under ‘Inpatient services’ classifiable under SAC 999311 - The services provided to inpatients, including medical, pharmaceutical, and paramedical services, rehabilitation services, nursing services, and laboratory and technical services, until the patient is discharged, constitute a composite supply of healthcare services. The clarification provided in Circular No. 32/06/2018-GST, dated 12.02.2018, states that the entire amount charged by hospitals from patients, including the fee/payments made to the doctors, etc., is towards the healthcare services provided by the hospitals to the patients are exempt from GST - The applicant-hospital is a ‘Clinical Establishment and the supply of medicines, consumables, implants, and other medical items to inpatients as part of the treatment provided by the hospital is exempt under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as a composite supply of healthcare services – Ordered accordingly - Whether the supply of medicines, consumables, implants, and medical items to outpatients as part of the treatment provided by the hospital is exempt under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as a composite supply of healthcare services - HELD - While providing healthcare-related services to outpatients, the medicines and consumables prescribed by the doctor are of an advisory nature, the outpatients are not mandated to procure them only from the hospital's pharmacy. Therefore, except for the exempted healthcare service, all other supplies, including medicines, implants, consumables, etc., in the case of supplies to outpatients, are taxable to GST - The consultation service provided to outpatients is exempt under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. However, the supply of medicines, consumables, implants, and medical items to outpatients attracts payment of GST. [Read less]

Gujarat Value Added Tax Act, 2003 - Classification of 'Mint Orange 2022' as aromatic chemical and compound vs. residuary good – Revenue appeal against the order of the Tax Tribunal, which held that "Mint Orange 2022" is an aromatic chemical and compound falling under Entry 226 of Schedule II of the GVAT Act, 2003, and not a residuary good under Entry 87 - Whether 'Mint Orange 2022' can be classified as an 'aromatic chemical and compound product' meant for industrial usage, and not as a residuary good – HELD - The Tribunal had rightly considered the documentary evidence, including the laboratory reports and certificates... [Read more]

Gujarat Value Added Tax Act, 2003 - Classification of 'Mint Orange 2022' as aromatic chemical and compound vs. residuary good – Revenue appeal against the order of the Tax Tribunal, which held that "Mint Orange 2022" is an aromatic chemical and compound falling under Entry 226 of Schedule II of the GVAT Act, 2003, and not a residuary good under Entry 87 - Whether 'Mint Orange 2022' can be classified as an 'aromatic chemical and compound product' meant for industrial usage, and not as a residuary good – HELD - The Tribunal had rightly considered the documentary evidence, including the laboratory reports and certificates, which established that "Mint Orange 2022" is an industrial input, being a mixture of odoriferous substance of aromatic chemical and compound, and is used for various industrial purposes like pharma, beverages, cosmetics, ice-cream, etc. - The Supreme Court in Mayuri Yeast India Pvt Ltd. v. State of U.P., held that if there is a conflict between two entries and one entry can satisfactorily accommodate the product, the specific entry should be preferred over the residuary entry. In the present case, the "Mint Orange 2022" can be accommodated in Entry 226 of aromatic chemical and compound under Entry 42A of Schedule II, and therefore, it cannot be classified under the residuary Entry 87 – The Tribunal order is confirmed and the appeal stands dismissed [Read less]

Central Excise - Limitation period for rebate claim under Central Excise Rules - The petitioner had manufactured and exported galvanized transmission tower and parts of prefabricated steel structure. The goods were exported between October 2007 and December 2007 under 32 ARE-1 applications by paying duty. The rebate claim was made on 05.02.2009, which was rejected by the authorities - Whether the limitation period prescribed under Section 11B of the Central Excise Act, 1944 is applicable to the rebate claim filed by the petitioner under Rule 18 of the Central Excise Rules, 2002 - HELD - The Supreme Court in Sansera Enginee... [Read more]

Central Excise - Limitation period for rebate claim under Central Excise Rules - The petitioner had manufactured and exported galvanized transmission tower and parts of prefabricated steel structure. The goods were exported between October 2007 and December 2007 under 32 ARE-1 applications by paying duty. The rebate claim was made on 05.02.2009, which was rejected by the authorities - Whether the limitation period prescribed under Section 11B of the Central Excise Act, 1944 is applicable to the rebate claim filed by the petitioner under Rule 18 of the Central Excise Rules, 2002 - HELD - The Supreme Court in Sansera Engineering Ltd. v. Deputy Commissioner LTU Bengaluru had categorically held that the limitation period prescribed under Section 11B of the CEA, 1944 is applicable to a claim for rebate under Rule 18 of the Central Excise Rules, 2002. The judgment in Mafatlal Industries Ltd. v. Union of India, which dealt with the issue of refund of excess duty collected during provisional assessment, did not address the specific question of applicability of limitation period to rebate claims under Rule 18. Therefore, the Supreme Court's judgment in Sansera case, which answered this specific question, is binding. Accordingly, the petitioner's rebate claim was made beyond the limitation period of one year from the relevant date, i.e., the date on which the goods left India, and hence, the rejection of the claim by the authorities was correct - The writ petition filed by the petitioner is dismissed [Read less]

Customs - Customs Brokers Licensing Regulations, 2018 – Imposition of penalty on Customs Broker on the ground that the imported goods were overvalued and misclassified – Commissioner imposed penalties on the petitioner under Sections 112(a), 112(b) and 114AA of the Customs Act, 1962 for alleged failure to fulfill obligations under the CBLR, 2018 - Whether the ingredients of Sections 112(a), 112(b) and 114AA of the Customs Act are established against the petitioner – HELD - The respondent authority categorically found that the petitioner might not have knowledge of the overvaluation, misclassification or misdeclaratio... [Read more]

Customs - Customs Brokers Licensing Regulations, 2018 – Imposition of penalty on Customs Broker on the ground that the imported goods were overvalued and misclassified – Commissioner imposed penalties on the petitioner under Sections 112(a), 112(b) and 114AA of the Customs Act, 1962 for alleged failure to fulfill obligations under the CBLR, 2018 - Whether the ingredients of Sections 112(a), 112(b) and 114AA of the Customs Act are established against the petitioner – HELD - The respondent authority categorically found that the petitioner might not have knowledge of the overvaluation, misclassification or misdeclaration and had merely filed the Bills of Entry based on the documents provided by the importer. The act of "not advising the importer" will not attract the ingredients of Section 112(a) as it is a civil obligation directly connecting the importer, and cannot be extended to the Customs Broker unless it is proven that the Broker's advice or act/omission led to the goods being liable for confiscation. The provisions of Section 112(a), 112(b) and 114AA require mens rea, which was not established against the petitioner. Therefore, the imposition of penalties under these provisions is illegal - Before imposing the penalty on the petitioner, the respondent-authority had the option to suspend, revoke the license under the Regulation 14, and 16 of CBLR, 2018, in case the act of the petitioner deserved such action looking to his conduct. However, such steps are not resorted. Thus, the respondent authority by invoking the provisions of 112(a), 112(b) and 114AA of the Customs Act, 1962 has committed a jurisdictional error by misapplying the statutory provisions. The impugned order is ser aside and the writ petition is allowed [Read less]

GST – Tamil Nadu AAR - Fixed establishment, Requirement of Registration – Applicant manufacture precast structures at their premises and transport them to construction sites in other States for assembling into buildings - Whether the applicant is required obtain registration in the other States where they execute works contract using the precast structures, when they do not have a "fixed establishment" in such States – HELD - A "fixed establishment" means a place (other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and techn... [Read more]

GST – Tamil Nadu AAR - Fixed establishment, Requirement of Registration – Applicant manufacture precast structures at their premises and transport them to construction sites in other States for assembling into buildings - Whether the applicant is required obtain registration in the other States where they execute works contract using the precast structures, when they do not have a "fixed establishment" in such States – HELD - A "fixed establishment" means a place (other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs - Even though the applicant does not have a permanent establishment at the construction site and only 6-7 of their personnel are present there temporarily, the construction site would still qualify as a "fixed establishment" within the meaning of Section 2(50) of the CGST Act, 2017, as there is a sufficient degree of permanence and the applicant utilises human and technical resources at the site. Therefore, the applicant needs to get registered in the State where the construction site is located – Whenever the applicant undertakes assembling of the precast structures at a construction site situated in Tamil Nadu, where the applicant has a principal place of business, they may add such sites as ‘additional places of business’. In case, the construction site is located in another State, they are required to get registered in the State where the construction site is located - Ordered accordingly - Supply of Goods/Services - Whether the transportation of material used for erecting the precast structures at the construction sites in other states would amount to a supply, in the absence of consideration and two different parties involved – HELD - The activity undertaken by the applicant, i.e. supply of goods or services without consideration falls in Schedule I and consequently under the scope of supply as per Section 7 of the CGST Act, 2017. Even though the activity undertaken by the applicant does not involve two different parties, as per clauses 4 and 5 of Section 25 of the CGST Act, the applicant is considered as a distinct person. Thus, even when there is no consideration and in the absence of involvement of two different parties, the transportation of material used in erection of the precast structures in the construction sites in other States amounts to supply. [Read less]

Service Tax - Applicability of Service Tax on Construction of Residential Complexes - Construction of commercial or industrial buildings and residential buildings - Based on Circular No. 108/02/2009-ST dated 29.01.2009, the appellant stopped discharging service tax - Department issued show-cause notices holding the appellant liable to discharge service tax during the disputed period from February 2009 to May 2010 - Whether the appellant is liable to discharge service tax on the construction of residential complexes prior to 01.07.2010 – HELD - The Commissioner in the impugned orders has denied the benefit of Board Circul... [Read more]

Service Tax - Applicability of Service Tax on Construction of Residential Complexes - Construction of commercial or industrial buildings and residential buildings - Based on Circular No. 108/02/2009-ST dated 29.01.2009, the appellant stopped discharging service tax - Department issued show-cause notices holding the appellant liable to discharge service tax during the disputed period from February 2009 to May 2010 - Whether the appellant is liable to discharge service tax on the construction of residential complexes prior to 01.07.2010 – HELD - The Commissioner in the impugned orders has denied the benefit of Board Circular No.108/02/2009-ST dated 29.01.2009 and Circular No. 151/2/2012-ST dated 10.02.2012 only on the ground that it is applicable only to the services provided by the service providers under 'construction of residential complex service and not to the service providers under 'works contract service. This issue is no longer relevant in as much as the liability to pay service tax prior to 01.07.2010 is settled by various decisions of the Tribunals - The appellant is not liable to discharge service tax on the construction of residential complexes prior to 01.07.2010, in view of the Board Circulars No. 108/02/2009-ST dated 29.01.2009 and No. 151/2/2012-ST dated 10.02.2012. The liability to pay service tax on construction of residential complexes prior to 01.07.2010 does not arise, as the activity was in the nature of "self-service" and the explanation expanding the scope of "construction of complex service" was prospective in nature - Since the appellant is not liable to pay service tax, the Cenvat credit availed by the appellant needs to be reversed. The matter is remanded to the original authority to re-determine the reversal of Cenvat credit in accordance with the Cenvat Credit Rules, 2004 - Appeals are disposed of by way of remand [Read less]

Customs - Maintainability of appeal under section 129A of the Customs Act against order revoking registration of authorized courier under the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 - Whether the appeal filed by the appellant under section 129A of the Customs Act against the order of the Commissioner revoking its registration as an authorized courier is maintainable – HELD - The 2010 Regulations, framed under section 157 of the Customs Act, provide for a representation by the authorized courier against the order of the Commissioner revoking the registration to the Chief Commi... [Read more]

Customs - Maintainability of appeal under section 129A of the Customs Act against order revoking registration of authorized courier under the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 - Whether the appeal filed by the appellant under section 129A of the Customs Act against the order of the Commissioner revoking its registration as an authorized courier is maintainable – HELD - The 2010 Regulations, framed under section 157 of the Customs Act, provide for a representation by the authorized courier against the order of the Commissioner revoking the registration to the Chief Commissioner of Customs. The section 129A of the Customs Act provides for an appeal against the decision or order passed by the Commissioner of Customs as an adjudicating authority, and the Commissioner's order in the present case was not passed under the Customs Act, but under the 2010 Regulations – Further, even otherwise, the order passed by the Chief Commissioner while deciding the representation filed by the appellant under the 2010 Regulations would merge the Commissioner's order, and section 129A of the Customs Act does not provide for an appeal against the order of the Chief Commissioner. The appeal against an order revoking the courier registration under the 2010 Regulations does not lie to the Tribunal under section 129A of the Customs Act - The appeal filed by appellant under section 129A of the Customs Act is dismissed as not maintainable and dismissed [Read less]

GST – Andhra Pradesh AAAR - Consideration versus Subsidy/Grant - The appellant received grant-in-aid from the Central Council for Research in Ayurvedic Sciences (CCRAS) to undertake Research & Development activities under the Ayurgyan Scheme – Vide the impugned order the AAR held that the R&D activities undertaken by the appellant under a grant-in-aid arrangement are taxable under the CGST Act, 2017 and are not eligible for exemption under Notification No. 12/2017-Central Tax (Rate) - Whether the grant received by the appellant constitutes "consideration" under Section 2(31) of the CGST Act or is a "subsidy" excluded f... [Read more]

GST – Andhra Pradesh AAAR - Consideration versus Subsidy/Grant - The appellant received grant-in-aid from the Central Council for Research in Ayurvedic Sciences (CCRAS) to undertake Research & Development activities under the Ayurgyan Scheme – Vide the impugned order the AAR held that the R&D activities undertaken by the appellant under a grant-in-aid arrangement are taxable under the CGST Act, 2017 and are not eligible for exemption under Notification No. 12/2017-Central Tax (Rate) - Whether the grant received by the appellant constitutes "consideration" under Section 2(31) of the CGST Act or is a "subsidy" excluded from the definition – HELD - The amounts received by the appellant from the Central Council for Research in Ayurvedic Sciences under the AYURGYAN Scheme are consideration within the meaning of Section 2(31) of the CGST Act, 2017, being payments made in respect of identifiable supplies of goods and services undertaken by the appellant pursuant to defined project obligations. The appellant and CCRAS are distinct taxable persons, and the activities carried out by the appellant constitute supplies made in the course or furtherance of business under Section 7 of the CGST Act - The research and development activities undertaken by the appellant are correctly classifiable under Heading 9981, and the manufacture and supply of extracts constitute taxable supplies of goods - The appellant's research and development activities constitute taxable supply under the CGST Act, 2017, and the appellant is not eligible for exemption under Entry 3 or 3A of Notification No. 12/2017-CT (Rate) or Notification No. 8/2024-CT (Rate) - The appeal is dismissed - Supply Between Distinct Persons - The appellant was appointed as a Sub-Nodal Agency by CCRAS to carry out the research activities. The appellant contended that this was an "intra-departmental" arrangement without a supply between distinct persons. However, the appellant is a separate legal entity from CCRAS with its own registration, accounts, and statutory existence. The fact that the appellant followed government guidelines like PFMS and GFR does not negate its independent legal personality. The activities were undertaken pursuant to approved proposals with defined deliverables, establishing a clear functional nexus akin to a contractual arrangement, satisfying the requirements of "supply" under Section 7 - Exemption under Entry 3 and 3A of Notification No. 12/2017 - The appellant claimed exemption under Entry 3 or 3A of Notification No. 12/2017-CT (Rate), which exempt services provided to local authorities "in relation to any function entrusted" to them under Articles 243G and 243W. The services were not provided to a Panchayat or Municipality, nor were they directly in relation to the functions entrusted to such local bodies. The appellant's activities were undertaken for and on behalf of the central autonomous body CCRAS, not under any decentralized governance framework. Merely aligning the activities with a subject like "public health" in the Twelfth Schedule is not sufficient to avail the exemption. [Read less]

GST - Tamil Nadu AAR - Sale of Used Car, Valuation - Applicant had purchased a new car for the personal use of the proprietor in April 2025 and capitalized it in their business account. They did not claim ITC on the purchase or depreciation on the car. The applicant now intends to sell the car as a used car - Whether the GST is applicable on the full sale value of the used car or only on the profit/margin - HELD – The sale of the used car by the applicant is a 'supply' of goods under the GST law, as the car is a movable property being sold for a consideration in the course of the applicant's business. However, the provis... [Read more]

GST - Tamil Nadu AAR - Sale of Used Car, Valuation - Applicant had purchased a new car for the personal use of the proprietor in April 2025 and capitalized it in their business account. They did not claim ITC on the purchase or depreciation on the car. The applicant now intends to sell the car as a used car - Whether the GST is applicable on the full sale value of the used car or only on the profit/margin - HELD – The sale of the used car by the applicant is a 'supply' of goods under the GST law, as the car is a movable property being sold for a consideration in the course of the applicant's business. However, the provisions of Rule 32 of the CGST Rules, 2017, read with Notification No. 8/2018-Central Tax (Rate) dated 25.01.2018, which allows valuation of used goods based on the margin of the supplier, are not applicable in the present case as the applicant is not a dealer in buying and selling of second-hand/used goods and the car was originally purchased as a new car - The applicant is liable to pay GST on the full sale value of the used car, as per the transaction value under Section 15(1) of the CGST Act and not on the profit/margin – Ordered accordingly [Read less]

GST – Tamil Nadu AAR - Supply of services for agreeing to refrain from competition - As part of the sale, the applicant entered into a non-compete agreement with the purchasers wherein it agreed to refrain from competing with the business of purchasers and cannot do business in all the places where the purchasers are operating. The applicant was paid a non-compete fee for this service - Whether the place of supply of the service rendered by the applicant is outside India – HELD - As per Clause 5 (c) of Schedule II of CGST Act, 2017, the activity of agreeing to the obligation to refrain from an act shall be treated as �... [Read more]

GST – Tamil Nadu AAR - Supply of services for agreeing to refrain from competition - As part of the sale, the applicant entered into a non-compete agreement with the purchasers wherein it agreed to refrain from competing with the business of purchasers and cannot do business in all the places where the purchasers are operating. The applicant was paid a non-compete fee for this service - Whether the place of supply of the service rendered by the applicant is outside India – HELD - As per Clause 5 (c) of Schedule II of CGST Act, 2017, the activity of agreeing to the obligation to refrain from an act shall be treated as ‘Supply of Services’. In the instant case, the applicant has agreed to not do business or compete in the places where the purchasers do business i.e., the applicant has agreed to ‘refrain from doing an act’. As such, the activity of the applicant agreeing not to do business amounts to a ‘Supply of Service’. As the activity of the applicant to refrain from performing an act falls under Supply of Service, same is taxable under GST as per Section 9(1) of CGST Act, 2017 - Based on the facts, the place of supply of the service rendered by the applicant to M/s. RFXCEL Corporation, which is located outside India, is outside India as per Section 13(2) of the IGST Act, 2017. On the other hand, the ‘Place of Supply’ of Service in respect of services rendered to M/s. SmartPoint Technologies and M/s. Antares Vision India is within India - Whether the service rendered by the applicant can be deemed to be 'export of services' under in Section 2(6) of the IGST Act, 2017 and therefore be a zero-rated supply – HELD - The service rendered by the applicant to M/s. RFXCEL Corporation, which is located outside India, satisfies all the conditions as per Section 2(6) of IGST Act, 2017 and hence gets covered as “export of services”. As a result, the activity would be zero-rated supply, attracting ‘Nil’ rate of GST - Whether the service rendered by the applicant shall attract payment of any GST and if yes, then the amount of GST that is payable by the Applicant considering the fact that major portion of the service is rendered outside India – HELD - The service rendered by the applicant to M/s. SmartPoint Technologies and M/s. Antares Vision India, both of which are located in India, would fall under either 'Inter-state' supply or 'Intra-state' supply and would accordingly attract applicable GST. The applicant had segregated the non-compete fee based on the domestic and export supply of M/s. SmartPoint Technologies, and the Authority accepted that 98.57% of the non-compete fee received by the applicant would fall under 'export of services' and attract zero-rated GST, while the balance 1.43% would attract applicable GST as inter-state and/or intra-state supply. [Read less]

Central Excise - Availing Cenvat Credit on Input Services by availed by another unit - Appellant's Engineering and Design Centre located at Pune entered into a Development Agreement with Toyota Motor Corporation, Japan (TMC) for delivery of drawings and designs for seating systems - The Pune unit raised invoices on TMC towards provision of design and drawing services and discharged service tax. The appellant (Bangalore unit) availed cenvat credit of the service tax paid by the Pune unit on the ground that the designs and drawings were used as 'input service' towards manufacturing seating systems at its Bangalore unit - Whe... [Read more]

Central Excise - Availing Cenvat Credit on Input Services by availed by another unit - Appellant's Engineering and Design Centre located at Pune entered into a Development Agreement with Toyota Motor Corporation, Japan (TMC) for delivery of drawings and designs for seating systems - The Pune unit raised invoices on TMC towards provision of design and drawing services and discharged service tax. The appellant (Bangalore unit) availed cenvat credit of the service tax paid by the Pune unit on the ground that the designs and drawings were used as 'input service' towards manufacturing seating systems at its Bangalore unit - Whether the appellant was eligible to avail cenvat credit on the service tax paid by the another unit for the design and drawing services provided – HELD - The invoices issued by the Pune unit clearly mentioned that the service tax paid was for services to be used as input service by the Bangalore unit of the appellant. It is not in dispute that the Pune Unit has not availed cenvat credit against the said invoices. The appellant had availed cenvat credit against these two invoices and the value of the drawings and design charges amortized and included in the cost of the component - The appellant had also intimated the Department about availing the cenvat credit through a letter and had also reflected the cenvat credit in their ER-1 returns. The department has not denied receipt of the said letter but only it is contended that it was addressed to service tax authorities and not to the Central Excise authorities - The appellant has not suppressed any fact from the department and hence, the extended period of limitation could not be invoked to confirm the demand - The demand and penalties imposed on the appellant are set aside and the appeal is allowed [Read less]

Service Tax - Collection of toll by private contractor under fixed bid arrangement - Whether the collection of toll under a fixed bid arrangement with South Delhi Municipal Corporation (SDMC) would be subject to service tax – HELD - When a contractor collects toll on a principal-to-principal basis against payment of a fixed bid amount to the Government body, regardless of the ultimate quantum of toll collected, the contractor cannot be considered as an agent acting on behalf of the government body. Rather, the contractor is collecting toll in the course of its own business, and the excess amount retained after paying the... [Read more]

Service Tax - Collection of toll by private contractor under fixed bid arrangement - Whether the collection of toll under a fixed bid arrangement with South Delhi Municipal Corporation (SDMC) would be subject to service tax – HELD - When a contractor collects toll on a principal-to-principal basis against payment of a fixed bid amount to the Government body, regardless of the ultimate quantum of toll collected, the contractor cannot be considered as an agent acting on behalf of the government body. Rather, the contractor is collecting toll in the course of its own business, and the excess amount retained after paying the fixed bid amount cannot be subjected to service tax. In such arrangements, the contractor is not rendering any service to the government body, but is collecting toll in its own right - The collection of toll by the appellant under the fixed bid arrangement with SDMC is not subject to service tax – The impugned order is set aside and the appeal is allowed [Read less]

GST – Andhra Pradesh AAR - Classification and applicable GST rate on Paddle Wheel Aerator and its Parts - Applicant is engaged in manufacturing and supply of Paddle Wheel Aerators and their parts used exclusively in aquaculture ponds for shrimp, fish, crab, and related farming activities - Whether the Paddle Wheel Aerator is correctly classified under HSN 8436 80 90 – HELD - The Paddle Wheel Aerator is correctly classifiable under HSN 84798999 as "Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter", as it aligns with the mechanical function of water agita... [Read more]

GST – Andhra Pradesh AAR - Classification and applicable GST rate on Paddle Wheel Aerator and its Parts - Applicant is engaged in manufacturing and supply of Paddle Wheel Aerators and their parts used exclusively in aquaculture ponds for shrimp, fish, crab, and related farming activities - Whether the Paddle Wheel Aerator is correctly classified under HSN 8436 80 90 – HELD - The Paddle Wheel Aerator is correctly classifiable under HSN 84798999 as "Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter", as it aligns with the mechanical function of water agitation and oxygen transfer, rather than being reclassified under HSN 8436 which targets land-based agricultural, horticultural, or poultry machinery - Paddle wheel aerators warrant continued classification under HSN 84798999 at the applicable GST rate rather than a shift to HSN 84368090 post issuance of Notification No. 9/2025-Central Tax (Rate), dated 17th September 2025 - The correct GST rate applicable on the Paddle Wheel Aerator is 18% - Ordered accordingly - Whether the exclusive parts of the Paddle Wheel Aerator are correctly classifiable under HSN 8436 99 90 at 5% GST – HELD – The parts like Float Assembly, Paddle Wheel Impellers, Frame and Rods, Power train, and Protective Dome Cover, which are designed and used exclusively as parts of the Paddle Wheel Aerator, classify under their material/function (e.g., 8479 parts if tied to 8479 machines), not automatically with a proposed 8436 heading unproven for the complete unit. Exclusive use requires the principal machine's classification, preserving 18% where 8436 does not apply. [Read less]

GST – Rajasthan AAR - Classification and Rate of GST on Biodegradable Bags – HELD – The applicant has submitted a certificate issued by a notified agency indicating that the product is “compostable”. However, the mere submission of such a certificate does not authorize this Authority to make any scientific, technical or environmental determination regarding the actual biodegradability or compostability of the product - The determination of biodegradability or compostability falling within the jurisdiction of the environmental authorities and not within the scope of this Authority under Section 97(2) of the CGST A... [Read more]

GST – Rajasthan AAR - Classification and Rate of GST on Biodegradable Bags – HELD – The applicant has submitted a certificate issued by a notified agency indicating that the product is “compostable”. However, the mere submission of such a certificate does not authorize this Authority to make any scientific, technical or environmental determination regarding the actual biodegradability or compostability of the product - The determination of biodegradability or compostability falling within the jurisdiction of the environmental authorities and not within the scope of this Authority under Section 97(2) of the CGST Act – Without determining whether the applicant’s product is biodegradable or compostable, if the bags supplied by the applicant are biodegradable, then the benefit of Entry No. 319 of Schedule I to Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025, would be available and GST would be payable at the rate of 5%. If the product is not biodegradable, then the concessional rate would not apply, and the applicable rate under the general classification for plastic bags under Chapter 39 would apply – Ordered accordingly [Read less]

GST – Rajasthan AAR - Classification and GST Rate of Paper Bags - Whether the 'Paper Bags' manufactured and supplied by the Applicant, classifiable under Heading 4819 of the Customs Tariff Act, 1975 – HELD - The Entry 319 of Schedule I prescribes a GST rate of 5% for "Paper Sacks/Bags and bio-degradable bags" under Chapters 39 and 48. However, its wording does not extend to ordinary paper bags falling under Heading 4819 unless the goods specifically qualify as biodegradable bags - No material was submitted by the applicant to establish that their product is a biodegradable bag or that it falls within an environmentally... [Read more]

GST – Rajasthan AAR - Classification and GST Rate of Paper Bags - Whether the 'Paper Bags' manufactured and supplied by the Applicant, classifiable under Heading 4819 of the Customs Tariff Act, 1975 – HELD - The Entry 319 of Schedule I prescribes a GST rate of 5% for "Paper Sacks/Bags and bio-degradable bags" under Chapters 39 and 48. However, its wording does not extend to ordinary paper bags falling under Heading 4819 unless the goods specifically qualify as biodegradable bags - No material was submitted by the applicant to establish that their product is a biodegradable bag or that it falls within an environmentally-classified category under the said entry. Further, Entry 322 of Schedule I, which grants 5% rate only to "Cartons, boxes and cases" of corrugated or non-corrugated paper or paperboard, is not applicable as the applicant manufactures "bags" and not cartons or cases - The Entry 185 of Schedule II, covers "All goods" of Heading 4819 except those falling under subheadings 4819 10 and 4819 20. Since the applicant's product is neither a corrugated carton (4819 10) nor a non-corrugated carton (4819 20), the product falls under the residual category of Heading 4819. Entry 185 therefore applies, attracting GST at 18% - The 'Paper Bags' manufactured and supplied by the Applicant, classifiable under Heading 4819 of the Customs Tariff Act, 1975, are covered under Entry No. 185 of Schedule II to Notification No. 09/2025-Central Tax (Rate), attracting 18% GST – Ordered accordingly [Read less]

GST – Tamil Nadu AAR – Taxability of supply of food services, Eligibility of input tax credit and charging GST on outward supply of food, Supply of goods or supply of services – Applicant is engaged in the business of supplying food and beverages to corporate entities. The applicant procures cooked food from empaneled kitchens and coordinates the delivery to the corporate clients through outsourced logistics providers. The applicant does not have its own kitchen or prepare the food themselves - Whether the applicant liable to GST on the outward supply of food – HELD - The applicant undertakes to deliver food items ... [Read more]

GST – Tamil Nadu AAR – Taxability of supply of food services, Eligibility of input tax credit and charging GST on outward supply of food, Supply of goods or supply of services – Applicant is engaged in the business of supplying food and beverages to corporate entities. The applicant procures cooked food from empaneled kitchens and coordinates the delivery to the corporate clients through outsourced logistics providers. The applicant does not have its own kitchen or prepare the food themselves - Whether the applicant liable to GST on the outward supply of food – HELD - The applicant undertakes to deliver food items at the client’s location. Apart from this, the applicant is also involved in the overall logistics relating to the delivery of food to the client - The activity of the applicant cannot be considered as a mere ‘supply of goods’, but as the applicant is involved in providing a composite supply, with supply of logistics services along with supply of food, the same is liable to be treated as a ‘supply of service’ as laid down in clause (b) to para 6 of Schedule II to the CGST Act, 2017 - The overall supply of food services rendered by the Applicant falls rightly under the SAC 996337 – The activity of supply of food undertaken by the applicant falls under entry No.7(vi) of the service rate Notification No. 11/2017-CT(Rate), dated 28.06.2017, as amended, being the residual entry, thereby attracting 18% GST - The applicant cannot charge GST according to the nature of food being supplied by them, and they are liable to charge GST at 18% on the supply of service involving food to their clients, as per Sl. No. 7(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended - the applicant is eligible to avail ITC on the inward supply of goods/service – Ordered accordingly - Whether the applicant is eligible to avail ITC on the inward supply of goods/service – HELD – The sl. No. 7(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended, does not have any condition for the availment of ITC, unlike the other entries from Sl. Nos. 7(ii) to 7(v) of the said notification. Further, the proviso to Section 17(5)(b)(i) of the CGST Act, 2017 allows the availment of ITC where the inward supply of goods/service is used by the registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply. Since the applicant's inward supply of goods/service is used for making an outward composite supply of food and service, in the same line of business, the applicant is eligible to avail ITC. [Read less]

GST – Tamil Nadu AAR - Admissibility of Input Tax Credit on Construction of Immovable Property for Rental Purposes - The applicant is engaged in the business of constructing commercial buildings and leasing them out to various tenants - Whether the applicant is eligible to claim ITC on goods and services used for the construction of an immovable property (commercial building) which is intended to be used for the purpose of letting out on rental basis – HELD - The provisions of Section 17(5)(d) of the CGST Act, 2017 blocks the ITC in respect of goods or services received for construction of an immovable property (other ... [Read more]

GST – Tamil Nadu AAR - Admissibility of Input Tax Credit on Construction of Immovable Property for Rental Purposes - The applicant is engaged in the business of constructing commercial buildings and leasing them out to various tenants - Whether the applicant is eligible to claim ITC on goods and services used for the construction of an immovable property (commercial building) which is intended to be used for the purpose of letting out on rental basis – HELD - The provisions of Section 17(5)(d) of the CGST Act, 2017 blocks the ITC in respect of goods or services received for construction of an immovable property (other than plant and machinery) on the taxable person's own account, even when used in the course or furtherance of business. The construction of a mall or commercial complex would fall under the category of an 'immovable property' and not 'plant and machinery', and hence, the restriction under Section 17(5)(d) would apply – Further, the recent amendment to Section 17(5) to replace the phrase 'plant or machinery' with 'plant and machinery', with retrospective effect from July 1, 2017, effectively settles the issue and precludes the interpretation of a building as 'plant' for the purposes of ITC. The phrase 'on own account' in Section 17(5)(d) should be interpreted to include construction intended for leasing out, and hence, the applicant is not eligible for ITC on the construction of the commercial building - The applicant is not eligible to claim Input Tax Credit on goods and services used for the construction of an immovable property (commercial building) which is intended to be used for the purpose of letting out on rental basis – Ordered accordingly [Read less]

GST – Andhra Pradesh AAAR - Taxability of assignment of leasehold rights, Applicability of Gujarat High Court judgment in M/s Gujarat chamber of Commerce and Industry case - Appeal against the Advance Ruling Order which held that the assignment of leasehold rights is a supply of service liable to GST, and that the recovery of land development costs by the appellant from the transferee is also a taxable supply of service under GST - Appellant contended that the assignment of leasehold rights should be treated as a 'sale of land' and therefore not liable to GST. The appellant also challenged the AAR's findings on the taxab... [Read more]

GST – Andhra Pradesh AAAR - Taxability of assignment of leasehold rights, Applicability of Gujarat High Court judgment in M/s Gujarat chamber of Commerce and Industry case - Appeal against the Advance Ruling Order which held that the assignment of leasehold rights is a supply of service liable to GST, and that the recovery of land development costs by the appellant from the transferee is also a taxable supply of service under GST - Appellant contended that the assignment of leasehold rights should be treated as a 'sale of land' and therefore not liable to GST. The appellant also challenged the AAR's findings on the taxability of land development costs – HELD - The AAR correctly concluded that the assignment of leasehold rights is a supply of service under the GST law, as it involves the grant of right to use immovable property for consideration – The Section 7 read with Paragraph 2(a) of Schedule II unequivocally classifies the grant of right to use immovable property for consideration, as a supply of service. As correctly held in the AAR’s order, what is transferred in the present case is only the right to use the demised premises for the remaining period of the lease, and not ownership of the land itself - Further, the AAR has correctly observed that the view taken by the Hon’ble Gujarat High Court namely, that the assignment of leasehold rights in land constitutes a transfer of immovable property and is therefore outside the scope of GST, may not be consistent with the statutory framework of the GST regime. In view of the fact that the Departmental appeal against the said decision has been admitted by the Hon’ble Supreme Court, the Gujarat High Court decision relied by the appellant has not attained any finality - The AAR has correctly concluded, the intention of the GST law is to tax all transactions involving transfer of rights in immovable property that do not transfer title. The assignment of leasehold rights, even when long-term or for substantial consideration, does not change the nature of the transaction from a service to a sale of land - In light of the clear statutory mandate, persuasive advance rulings from other States, and CBIC Circular No. 44/18/2018-CGST dated 02.05.2018, which confirms taxability of leasehold assignments, the AAR’s conclusion that GST is applicable on the consideration payable by the transferee, is legally sound and requires no interference - The Advance Ruling Order is upheld and the appeal filed by the appellant is dismissed - Taxability of land development cost – HELD - The activities undertaken by the appellant to develop the land, such as formation of roads, drainage, levelling etc., enhance the usability and value of the demised premises, and therefore constitute an independent taxable service supply. The recovery of land development costs by the appellant represents a distinct and identifiable supply of construction services, which is taxable under GST - Moreover, the reimbursement of amount made by the transferee is separately identifiable, distinct from the consideration for leasehold rights, and represents consideration for services rendered by the appellant. The AAR rightly concluded that such recovery constitutes supply of services under Section 7 and attracts GST at the appropriate rate. [Read less]

GST – Rajasthan AAR - Classification of Condenser Fan and Blower - The Condenser Fan is designed for use in heavy-duty bus rooftop and engine applications to force hot air away from the condenser coil or radiator. The Blower is a compact automotive-grade DC blower assembly designed for high airflow applications in demanding environments - Whether the Condenser Fan and Blower manufactured and supplied by the applicant is appropriately classifiable under Heading 8414 of the GST Tariff as industrial fans and blowers, specifically under HSN 8414.59.30, or whether it is classifiable under any other heading – HELD - The "Con... [Read more]

GST – Rajasthan AAR - Classification of Condenser Fan and Blower - The Condenser Fan is designed for use in heavy-duty bus rooftop and engine applications to force hot air away from the condenser coil or radiator. The Blower is a compact automotive-grade DC blower assembly designed for high airflow applications in demanding environments - Whether the Condenser Fan and Blower manufactured and supplied by the applicant is appropriately classifiable under Heading 8414 of the GST Tariff as industrial fans and blowers, specifically under HSN 8414.59.30, or whether it is classifiable under any other heading – HELD - The "Condenser Fan" and "Blower" manufactured and supplied by the applicant, when supplied as a component of or for use with air-conditioning machines such as bus rooftop air-conditioning systems, is classifiable under Heading 8415 90 (Parts of air-conditioning machines). Even the applicant described the application of the Condenser Fan as specific to rooftop bus air-conditioning systems for expelling hot air from the condenser section as well as engine compartment in certain heavy vehicles. Similarly, the applicant emphasized that the Blower is designed for forced air circulation in automotive and off-highway vehicle HVAC (Heating, Ventilation, and Air Conditioning) systems and is primarily intended for integration into HVAC systems across a wide range of vehicle segments. Therefore, these products, when used as components in air-conditioning machines, should be classified under Heading 8415 90 (Parts of air-conditioning machines) and not under Heading 8414 as industrial fans and blowers - The Condenser Fan and Blower manufactured and supplied by the applicant are classifiable under Heading 8415 90 (Parts of air-conditioning machines) and not under Heading 8414 as industrial fans and blowers – Ordered accordingly [Read less]

GST - Andhra Pradesh AAR - Pre-packaged and labelled goods - Taxability of pre-packaged frozen shrimp - Whether the export of processed frozen shrimps, which are packaged in individual printed pouches/boxes and placed inside printed master cartons (up to 25 kg), is subject to GST - HELD - Neither the Notification no 6/2022-CT(Rate) dated 13.07.2022, nor the Legal Metrology Act, 2009 makes any differentiation with regard to applicability of GST on exports of goods/ mentioning of declarations or pre packed commodities for export - In the instant case, the supply of shrimps in pouches or boxes of upto 25kg, which are duly pre... [Read more]

GST - Andhra Pradesh AAR - Pre-packaged and labelled goods - Taxability of pre-packaged frozen shrimp - Whether the export of processed frozen shrimps, which are packaged in individual printed pouches/boxes and placed inside printed master cartons (up to 25 kg), is subject to GST - HELD - Neither the Notification no 6/2022-CT(Rate) dated 13.07.2022, nor the Legal Metrology Act, 2009 makes any differentiation with regard to applicability of GST on exports of goods/ mentioning of declarations or pre packed commodities for export - In the instant case, the supply of shrimps in pouches or boxes of upto 25kg, which are duly pre-packaged and labelled as per Legal Metrology Act, 2009 is a taxable supply which is neither exempted nor nil rated supply - As per the Notification No. 06/2022-CT (Rate), dated 13th July 2022, GST is applicable on supply of such 'pre-packaged and labelled' commodities attracting provisions of Legal Metrology Act, 2009. Therefore, where the quantity involved is 25Kgs or less in respect of specified commodities including shrimps which are pre-packed, they would mandatorily get covered within the ambit of Legal Metrology Act, 2009, and the rules made thereunder. Accordingly, GST would be applicable on the supply of 'pre-packaged and labelled' shrimps, weighing upto 25 kgs, and it will be liable for 5% GST, irrespective of the fact whether it is for domestic supply or for export outside the country - Ordered accordingly [Read less]