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Customs - Exemption Notification and Procedural Lapse – Appellant imported various goods and availed the benefit of Notification No. 50/2017-Customs dated 30.06.2017 (Sl.No.413 and 414) by paying Basic Customs Duty (BCD) @ 5%, SWS @ 10% and IGST@ 18% at the time of clearance of the goods - During the Post Clearance Audit, the Department denied the duty benefit availed by the appellant for not complying with the procedures laid down in Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 - Whether the benefit of exemption under Notification No. 50/2017-Cus can be denied to the appellant for not following the... [Read more]

Customs - Exemption Notification and Procedural Lapse – Appellant imported various goods and availed the benefit of Notification No. 50/2017-Customs dated 30.06.2017 (Sl.No.413 and 414) by paying Basic Customs Duty (BCD) @ 5%, SWS @ 10% and IGST@ 18% at the time of clearance of the goods - During the Post Clearance Audit, the Department denied the duty benefit availed by the appellant for not complying with the procedures laid down in Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 - Whether the benefit of exemption under Notification No. 50/2017-Cus can be denied to the appellant for not following the procedure set out in Rule 5 of CIGCRD – HELD - The non-compliance with CIGCRD, a procedural requirement, cannot come in the way of the appellant enjoying the benefit of the said notification so long as they are able to establish that the imported goods covered by the 27 BsOE were used only for the specified purposes. The principles laid down by the Supreme Court in Mangalore Chemicals & Fertilizers Ltd case, that a condition of the notification may be substantive, mandatory and based on considerations of policy or merely belong to the area of procedure, and it is erroneous to attach equal importance to the non-observance of all conditions of a notification irrespective of the purposes they were intended to serve - The intended purpose of Notification No. 50/2017-Cus (Sl.Nos. 413 and 414) is that the goods imported thereunder should be used for the manufacture of any commodity or provision of output service, which was fulfilled by the appellant, and the non-observance of condition No. 9 is a mere procedural lapse - The benefit of exemption cannot be denied to the appellant merely for a procedural lapse. The appeal is allowed [Read less]

Central Excise - Demand on account of Shortage of Goods - The appellant, a manufacturer of various chemical products, was found to have a shortage of Forma Solvent during a visit by the Departmental Officers. The appellant explained the shortage as either due to leakage in the storage tank or an accounting error - Whether the demand of duty on the shortage of goods can be upheld, and whether penalty under Section 11AC of the Central Excise Act, 1944 is imposable - HELD - The appellant failed to produce any evidence to substantiate its claims regarding the leakage or accounting error. The mere explanation of the shortage wi... [Read more]

Central Excise - Demand on account of Shortage of Goods - The appellant, a manufacturer of various chemical products, was found to have a shortage of Forma Solvent during a visit by the Departmental Officers. The appellant explained the shortage as either due to leakage in the storage tank or an accounting error - Whether the demand of duty on the shortage of goods can be upheld, and whether penalty under Section 11AC of the Central Excise Act, 1944 is imposable - HELD - The appellant failed to produce any evidence to substantiate its claims regarding the leakage or accounting error. The mere explanation of the shortage without any supporting evidence is not sufficient to absolve the appellant from the duty liability. The demand is upheld on the shortage of goods. However, considering the facts and circumstances of the case, where there was no suppression, fraud, or collusion, the penalty under Section 11AC of the Act is not imposable - The demand of duty is upheld, but the penalty under Section 11AC of the Act is dropped – The appeal is partly allowed [Read less]

Customs - Imposition of Penalty Under Section 112(b) of Customs Act - The appellant purchased watches from an importer and the watches were seized on the basis of an intelligence that the importer had mis-declared the Retail Sale Price (RSP) at the time of import to evade payment of appropriate customs duties. The department imposed a penalty of Rs. 20,000/- on the appellant under section 112(b) of the Customs Act – HELD – There is no evidence to suggest that the appellant knew that the importer had declared the RSP at the time of import. The appellant had clearly stated that the prices were revised as per the importer... [Read more]

Customs - Imposition of Penalty Under Section 112(b) of Customs Act - The appellant purchased watches from an importer and the watches were seized on the basis of an intelligence that the importer had mis-declared the Retail Sale Price (RSP) at the time of import to evade payment of appropriate customs duties. The department imposed a penalty of Rs. 20,000/- on the appellant under section 112(b) of the Customs Act – HELD – There is no evidence to suggest that the appellant knew that the importer had declared the RSP at the time of import. The appellant had clearly stated that the prices were revised as per the importer's price list and that they were not aware of any duty payment. In the absence of any knowledge on the part of the appellant regarding the declaration of RSP at the time of import, penalty could not have been imposed on the appellant under section 112(b) of the Customs Act – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Upward Revision of Retail Sale Price (RSP) by Authorized Dealers - Appellant, an importer, had declared RSP and discharged Customs Duty at the time of import, however, authorized dealers later revised the RSP of the imported watches - Department sought differential Customs Duty on the revised RSP alleging Appellant had knowledge and control over the revised pricing – HELD - The demand of differential Customs Duty is not justified as there is no evidence to show the Appellant altered, tampered or had knowledge of any upward revision of RSP by the authorized dealers. Once the watches were sold to the authorized d... [Read more]

Customs - Upward Revision of Retail Sale Price (RSP) by Authorized Dealers - Appellant, an importer, had declared RSP and discharged Customs Duty at the time of import, however, authorized dealers later revised the RSP of the imported watches - Department sought differential Customs Duty on the revised RSP alleging Appellant had knowledge and control over the revised pricing – HELD - The demand of differential Customs Duty is not justified as there is no evidence to show the Appellant altered, tampered or had knowledge of any upward revision of RSP by the authorized dealers. Once the watches were sold to the authorized dealers, the Appellant had no control over them and cannot be held liable for any subsequent revision in RSP by the dealers. The alteration in MRP at a later stage when the goods reached the domestic market would not mean the appellant had altered the MRP – Further, the statement of the appellant's Director under Section 108 of the Customs Act cannot be considered relevant as the procedure under Section 138B was not followed. As the demand of differential Customs Duty is not sustainable, the imposition of penalty under Section 114A is also not justified - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Exemption from Service Tax for supply of services to SEZ Units/Developers, Short payment of Service Tax on supply of services to non-SEZ Units - Whether the appellant was required to pay Service Tax on the supply of services to SEZ Units/Developers and whether there was a short payment of Service Tax on the supply of services to non-SEZ Units – HELD - The non-furnishing of various documents required for the exemption claimed by the appellant would not be a valid ground to deny the substantive benefit. if the supply has been made to the SEZ Unit/Developers non following of the various conditions or the notif... [Read more]

Service Tax - Exemption from Service Tax for supply of services to SEZ Units/Developers, Short payment of Service Tax on supply of services to non-SEZ Units - Whether the appellant was required to pay Service Tax on the supply of services to SEZ Units/Developers and whether there was a short payment of Service Tax on the supply of services to non-SEZ Units – HELD - The non-furnishing of various documents required for the exemption claimed by the appellant would not be a valid ground to deny the substantive benefit. if the supply has been made to the SEZ Unit/Developers non following of the various conditions or the notification would not be relevant in as much as said notification itself have been declared as ultra vires - However, the appellant was not able to conclusively evidence that the supply was actually made to SEZ Units. Therefore, matter is remanded back to the Commissioner (Appeals) to ascertain if the services were provided to the SEZ Units and, accordingly, decide the demand - Regarding the short payment of Service Tax on the supply of services to non-SEZ Units, the issue of the non-extension of the 75% abatement as per the Service Tax Valuation Rules was not adequately examined by the Commissioner (Appeals) - The Commissioner (Appeals) is directed to re-compute the total Service Tax liability after extending the Cum Tax benefit and the correct method of computation - The appeal is allowed by way of remand [Read less]

Central Excise - Classification of tobacco products - The appellants, manufacturers of branded chewing tobacco, started manufacturing a variety of tobacco known as "spit tobacco" and classified it under different tariff headings. The Revenue alleged that the impugned goods were chargeable to central excise duty under Section 4A and not Section 4 of the CEA, 1944 – HELD - Though the Revenue has gone into the issue of classification, the decision on classification will not have any bearing on the outcome of the case as the crux of the issue is whether the 4gm/9gm pouches are chargeable to duty under Section 4A. The 4gm/9gm... [Read more]

Central Excise - Classification of tobacco products - The appellants, manufacturers of branded chewing tobacco, started manufacturing a variety of tobacco known as "spit tobacco" and classified it under different tariff headings. The Revenue alleged that the impugned goods were chargeable to central excise duty under Section 4A and not Section 4 of the CEA, 1944 – HELD - Though the Revenue has gone into the issue of classification, the decision on classification will not have any bearing on the outcome of the case as the crux of the issue is whether the 4gm/9gm pouches are chargeable to duty under Section 4A. The 4gm/9gm pouches manufactured and cleared by the appellants do not attract the provisions of Rule 34(1)(b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and hence, the provisions of Section 4A of the Central Excise Act are not attracted - The Revenue did not provide any quantifiable data of 15gm pouches manufactured/cleared by the appellants and the applicable duty on the same - The issue of classification need not be gone into in the impugned case as the duty demand was on the basis of Section 4A. The Revenue has not made out any case to demand duty on the 04gm/ 09 gm pouches manufactured by the appellants – The appeals are allowed [Read less]

Central Excise – Misappropriation of inputs by employee, Reversal of Cenvat credit prior to utilisation, Extended period - Appellant taken Cenvat credit on input (nickel) that was found to be misappropriated by its employee. Appellant had suo moto reversed the credit prior to its utilization - Whether interest is payable on the reversed credit amount and whether extended period can be invoked to demand the full amount of credit taken – HELD - Since the credit was reversed prior to its utilization, it amounts to the appellant not having taken the credit in the first place. Therefore, no interest is payable on the revers... [Read more]

Central Excise – Misappropriation of inputs by employee, Reversal of Cenvat credit prior to utilisation, Extended period - Appellant taken Cenvat credit on input (nickel) that was found to be misappropriated by its employee. Appellant had suo moto reversed the credit prior to its utilization - Whether interest is payable on the reversed credit amount and whether extended period can be invoked to demand the full amount of credit taken – HELD - Since the credit was reversed prior to its utilization, it amounts to the appellant not having taken the credit in the first place. Therefore, no interest is payable on the reversed amount corresponding to misappropriated nickel. However, the extended period can be invoked as the appellant was aware of the misappropriation but did not immediately inform the Department or reverse the credit, amounting to suppression of facts, justifying the invocation of the extended period - The imposition of penalty is also upheld as the appellant, being a large company, should have had proper checks and balances to prevent such misappropriation by its employee, the liability cannot be avoided by claiming it was the fault of the employee - The demand is restricted to that extent and the request for refund of the appropriated amount is rejected - The appeal is partly allowed [Read less]

GST - Reversal of fake Input Tax Credit before issuance of Show Cause Notice, Initiation of proceeding based on Alert Notice of DGGI, Non-existent supplier - Invocation of proceedings under Section 74 of the CGST Act, 2017 - The petitioner had voluntarily reversed the input tax credit alleged to have been availed against fake/bogus invoices issued by a non-existent supplier, by utilizing the Electronic Credit Ledger and filing returns, before the issuance of show cause notice – HELD – The ITC could be availed erroneously or on a mistaken interpretation of law. It would not be apposite to form an opinion that in each an... [Read more]

GST - Reversal of fake Input Tax Credit before issuance of Show Cause Notice, Initiation of proceeding based on Alert Notice of DGGI, Non-existent supplier - Invocation of proceedings under Section 74 of the CGST Act, 2017 - The petitioner had voluntarily reversed the input tax credit alleged to have been availed against fake/bogus invoices issued by a non-existent supplier, by utilizing the Electronic Credit Ledger and filing returns, before the issuance of show cause notice – HELD – The ITC could be availed erroneously or on a mistaken interpretation of law. It would not be apposite to form an opinion that in each and every case where the supplier admits or defaults, it would lead to infer that the recipient fraudulently in order to evade tax has availed the input tax credit against fake/bogus invoices. No inference or presumption or assumption can be deduced that mere availability of balance in the Electronic Credit Ledger would lead to suggest there was utilization - Merely because the supplier is found to be non-existent, the Adjudicating Authority has jumped to the conclusion that the petitioner has availed the input tax credit on the basis of bogus/fake invoices - No inquiry was made by the Adjudicating Authority nor was any finding of fact returned as to the status of registration of the supplier on the date of issue of alleged invoices. There is no finding as to whether supplier was non-existent or found to be unregistered during the period when the transactions were being effected - Without independent application of mind to the allegations contained in the Alert Notice of the DGGI, the Adjudicating Authority could not proceed to exercise power under Section 74 under supposed premise that the recipient had also defrauded the Revenue - The Adjudicating Authority exceeded its jurisdiction in invoking the provisions of Section 74 for levying tax equivalent to the reversed ITC, interest under Section 50, and penalty under Section 74, in the absence of any material on record to suggest that the petitioner was involved in any fraud or wilful misstatement or suppression of facts to evade tax. The reversal of ITC by the petitioner before the issuance of SCN indicates the absence of any intention to evade tax. Further, since the Electronic Credit Ledger had a surplus balance after the reversal of ITC, no interest under Section 50 would be chargeable. The imposition of penalty under Section 74 is also unsustainable as raising demand of “tax” equivalent to the amount of “input tax credit” already reversed would tantamount to subjecting a person to double taxation - The Order-in-Original is quashed and the writ petition is allowed [Read less]

GST - Nature of employment of pigmy agents, Scope of "business facilitator model" - Petitioner-Bank engaged pigmy agents to collect small deposits (pigmy deposits) from the customers. The petitioner contended that the pigmy agents are employees of the Bank and hence their services are exempt from GST under Section 7(2)(a) read with Schedule III of the CGST Act – Dept issued show cause notices alleging that the pigmy agents are "business facilitators" and hence the Bank is liable to pay GST on the commissions paid to them under the reverse charge mechanism - Whether the pigmy agents engaged by the petitioner Bank can be c... [Read more]

GST - Nature of employment of pigmy agents, Scope of "business facilitator model" - Petitioner-Bank engaged pigmy agents to collect small deposits (pigmy deposits) from the customers. The petitioner contended that the pigmy agents are employees of the Bank and hence their services are exempt from GST under Section 7(2)(a) read with Schedule III of the CGST Act – Dept issued show cause notices alleging that the pigmy agents are "business facilitators" and hence the Bank is liable to pay GST on the commissions paid to them under the reverse charge mechanism - Whether the pigmy agents engaged by the petitioner Bank can be considered as employees of the Bank, and hence their services are exempt from GST, or whether they are "business facilitators" and the Bank is liable to pay GST on the commissions paid to them - HELD - The pigmy agents engaged by the petitioner Bank are employees of the Bank and not "business facilitators". The determinative factor in an employment relationship is the degree of control exercised by the employer over the manner in which the work is performed, the economic dependence of the worker on the employer, and the integration of the worker into the employer's business - The terms of the agreement between the Bank and the pigmy agents clearly demonstrate the existence of an employer-employee relationship, as the Bank exercises pervasive control over the functioning of the pigmy agents, assures them minimum remuneration, and provides them with benefits such as gratuity. The definition of "business facilitator" under the Notification No. 13/2017-Central Tax (Rate) and Notification No. 29/2018-Central Tax (Rate) dated 31-12-2018 does not encompass the pigmy agents, as they are not intermediaries appointed under the Reserve Bank of India's recognized models. Consequently, the services rendered by the pigmy agents to the petitioner Bank are in the course of their employment and are exempt from GST under Section 7(2)(a) read with Schedule III of the CGST Act, 2017. The impugned show cause notices are quashed and set aside – The writ petitions are allowed [Read less]

Customs - Alteration of MRP by distributor, Duty evasion on imported cellular phones - The appellants are engaged in import of cellular phones under 'Celkon' brand, which are distributed to various dealers for sale - Department alleged that the appellants were resorting to evasion of Customs duty by declaring Retail Sale Price (RSP) less than Rs.2,000/- at the time of import and thereafter, altering the Maximum Retail Price (MRP) printed on the label affixed to individual unit of cellular phones subsequent to the clearance from the customs, which carried MRP higher than Rs.2,000/- - Whether the differential Customs Duty ca... [Read more]

Customs - Alteration of MRP by distributor, Duty evasion on imported cellular phones - The appellants are engaged in import of cellular phones under 'Celkon' brand, which are distributed to various dealers for sale - Department alleged that the appellants were resorting to evasion of Customs duty by declaring Retail Sale Price (RSP) less than Rs.2,000/- at the time of import and thereafter, altering the Maximum Retail Price (MRP) printed on the label affixed to individual unit of cellular phones subsequent to the clearance from the customs, which carried MRP higher than Rs.2,000/- - Whether the differential Customs Duty can be demanded from the appellants on account of alleged alteration of MRP by their distributor, who is a separate legal entity – HELD - The core issue is whether the appellants have discharged CVD wrongly on the imports made by them by mis-declaring their actual RSP or otherwise. The evidence relied upon by the department, such as photographs of the label on the outer package of cellular phones and statements of certain individuals, are not sufficient to establish that the appellants themselves had intentionally mis-declared the RSP at the time of import and later on replaced the label by showing higher MRP – The alteration, if any, to some extent in respect of some models has taken place in the premises of distributor, which is an independent legal entity. There is no evidence to suggest that the appellants were engaged in the day-to-day operations or activities of distributor or that there was any flow back from the distributor to the appellants - The provisions of Rule 5 of the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 would not be applicable to the appellants as they are not the manufacturers of the goods. The demand of differential Customs Duty under the Customs Act in such cases, where the alteration of MRP has been done by the distributor, a separate legal entity, is not sustainable - The impugned order is set aside and the appeals are allowed [Read less]

Odisha Entry Tax Act, 1999 - Limitation period for reassessment under Section 10 of the Odisha ET Act, 1999 - The petitioner filed self-assessment returns for the tax periods from 01.04.2005 to 28.02.2006, which were later subjected to Audit Assessment under Section 9C of the Act. The Appellate Authority set aside the Audit Assessment order, directing the Assessing Authority to initiate proper proceedings strictly in accordance with the provisions of the Act and the Rules. Subsequently, the Assessing Authority issued notices under Section 10 of the Act for reassessment – HELD - The notices issued for reassessment under S... [Read more]

Odisha Entry Tax Act, 1999 - Limitation period for reassessment under Section 10 of the Odisha ET Act, 1999 - The petitioner filed self-assessment returns for the tax periods from 01.04.2005 to 28.02.2006, which were later subjected to Audit Assessment under Section 9C of the Act. The Appellate Authority set aside the Audit Assessment order, directing the Assessing Authority to initiate proper proceedings strictly in accordance with the provisions of the Act and the Rules. Subsequently, the Assessing Authority issued notices under Section 10 of the Act for reassessment – HELD - The notices issued for reassessment under Section 10 are time-barred as they were served beyond the prescribed period of limitation. The Assessing Authority cannot initiate reassessment proceedings under Section 10(1) and (2) after the expiry of the statutory period, even if the self-assessment returns were not communicated as "accepted" earlier - The Assessing Authority's attempt to rely on Section 49(2) of the Odisha Value Added Tax Act, 2004 read with Rule 34 of the OET Rules to overcome the limitation period is untenable, as the OET Act and Rules provide a complete code for reassessment under Section 10. The importing of provision like Section 49(2) of the OVAT Act for the purpose of reassessment under Section 10 of the OET Act is inappropriate and irrational approach – Since the self-assessment returns were not communicated to be accepted by the Department within the prescribed time, the proceedings for reassessment under Section 10(1) could not be initiated beyond the limitation period of five years from the end of the year to which the tax period relates – The impugned notices and orders are quashed. The writ petition is allowed [Read less]

Service Tax - Exemption on services provided to educational institutions and other authorities - Whether the services provided by the respondent to educational institutions and other authorities are exempt from service tax under the Notification No. 25/2012-Service Tax – HELD - The adjudicating authority had confirmed a demand for the services of assessing body under the Directorate General of Employment and Training provided in the year 2015-16, on the ground that the exemption under Entry No. 9C of the notification No. 25/2012-Service Tax dated 28.06.2012 was not available as it was inserted w.e.f. 01.03.2016 However, ... [Read more]

Service Tax - Exemption on services provided to educational institutions and other authorities - Whether the services provided by the respondent to educational institutions and other authorities are exempt from service tax under the Notification No. 25/2012-Service Tax – HELD - The adjudicating authority had confirmed a demand for the services of assessing body under the Directorate General of Employment and Training provided in the year 2015-16, on the ground that the exemption under Entry No. 9C of the notification No. 25/2012-Service Tax dated 28.06.2012 was not available as it was inserted w.e.f. 01.03.2016 However, the adjudicating authority had not given any specific findings on the nature of services rendered by the respondent to different authorities/universities/agencies, the terms and conditions of the contracts, and the documents evidencing the payments - It was not clear from the impugned order whether the adjudicating authority had gone through the various documents claimed to have been presented by the respondents, as there was neither a reference nor a finding on the same. The reasoning with which the adjudicating authority had concluded that the services rendered by the respondent are exempt in view of Entries No. 9/9A/9C of the notification No. 25/12 was not clear – The matter is remanded back to the adjudicating authority with a direction to give proper findings and reasons for its conclusions after considering all the submissions made by the respondents and the evidence on which they wish to rely upon, in the interest of natural justice – The appeal is allowed by remand [Read less]

Service Tax – Procedural lapse, Eligibility for service tax exemption under Notification No. 42/2012 - The appellants, an exporter, claimed exemption under Notification No. 42/2012 but were denied the benefit by the revenue authorities for alleged procedural lapses – HELD - The appellants have exported the goods and has realized the export proceeds. It is also on record that the appellant has paid the necessary commission to the foreign commission agent which is duly certified by the Chartered accountant. The appellant has substantially complied with the provisions of the law by exporting the goods, paying commission t... [Read more]

Service Tax – Procedural lapse, Eligibility for service tax exemption under Notification No. 42/2012 - The appellants, an exporter, claimed exemption under Notification No. 42/2012 but were denied the benefit by the revenue authorities for alleged procedural lapses – HELD - The appellants have exported the goods and has realized the export proceeds. It is also on record that the appellant has paid the necessary commission to the foreign commission agent which is duly certified by the Chartered accountant. The appellant has substantially complied with the provisions of the law by exporting the goods, paying commission to the overseas agent, and submitting the proof of such payment along with necessary declaration. While the appellants may have had some procedural infractions, these were minor in nature and did not affect their eligibility or the substantial compliance with the requirements of the notification - The procedural infractions should not be a hindrance in extending the benefit of Notification No. 42/2012 if there is substantial compliance. The appellant is entitled to the service tax exemption under the said notification – The appeal is allowed [Read less]

Service Tax - Repair/maintenance services provided to Naval Authorities - Whether services of Repair/maintenance services provided to Naval Authorities is leviable to service tax – HELD - The services provided to Naval Authorities in relation to Naval Dockyard are in relation to Naval Vessels and Navy, and therefore, cannot be subjected to service tax as these Authorities are not engaged in any commercial or industrial activity. The clarification dated 01.07.2010 and Notification No. 31/2010-ST exempted repair of ships or boats or vessels belonging to the Government of India including Navy - The demand is also hit by tim... [Read more]

Service Tax - Repair/maintenance services provided to Naval Authorities - Whether services of Repair/maintenance services provided to Naval Authorities is leviable to service tax – HELD - The services provided to Naval Authorities in relation to Naval Dockyard are in relation to Naval Vessels and Navy, and therefore, cannot be subjected to service tax as these Authorities are not engaged in any commercial or industrial activity. The clarification dated 01.07.2010 and Notification No. 31/2010-ST exempted repair of ships or boats or vessels belonging to the Government of India including Navy - The demand is also hit by time bar as there was a bonafide belief regarding non-levy of service tax on such activity and there could not be any intent or deliberate attempt on the part of the assessee to evade service tax - The penalties under Sections 76, 77 and 78 are set aside in terms of Section 80 of the Finance Act 1994 considering the factual matrix of the case – The appeal is allowed [Read less]

GST – Demand of GST upon Municipal Corporations/Local Self-Government Authorities – Maintainability of writ petitions – HELD - The writ petitions are not maintainable as the petitioners have an alternative and efficacious remedy of preferring appeals under the CGST Act, 2017 - The test of the orders being "wholly without jurisdiction" as laid down by the Supreme Court is not fulfilled, as the determination of the jurisdictional issue would require examination of factual aspects of the transactions sought to be taxed, which is better addressed by the appellate authority - Even if the levy of GST is contrary to law or ... [Read more]

GST – Demand of GST upon Municipal Corporations/Local Self-Government Authorities – Maintainability of writ petitions – HELD - The writ petitions are not maintainable as the petitioners have an alternative and efficacious remedy of preferring appeals under the CGST Act, 2017 - The test of the orders being "wholly without jurisdiction" as laid down by the Supreme Court is not fulfilled, as the determination of the jurisdictional issue would require examination of factual aspects of the transactions sought to be taxed, which is better addressed by the appellate authority - Even if the levy of GST is contrary to law or the Constitutional provisions, such issues can be raised before the appellate authority - The writ petitions are disposed of with the liberty granted to the petitioners to institute appeals and the direction to the appellate authority to hear such appeals on their own merits and in accordance with law without adverting to the issue of limitation – The writ petitions are disposed of [Read less]

Central Excise - Inclusion of freight and insurance charges in assessable value for excise duty – Appellant was charged excise duty on the value of finished goods inclusive of freight and insurance charges collected from customers for door delivery of goods. The appellant argued that the freight and insurance charges were merely reimbursements and should not be included in the assessable value - Whether the freight and insurance charges collected by the appellant from its customers for door delivery of goods should be included in the assessable value for the purpose of levying excise duty – HELD - The invoices issued b... [Read more]

Central Excise - Inclusion of freight and insurance charges in assessable value for excise duty – Appellant was charged excise duty on the value of finished goods inclusive of freight and insurance charges collected from customers for door delivery of goods. The appellant argued that the freight and insurance charges were merely reimbursements and should not be included in the assessable value - Whether the freight and insurance charges collected by the appellant from its customers for door delivery of goods should be included in the assessable value for the purpose of levying excise duty – HELD - The invoices issued by the appellant clearly mentioned "door delivery" or "godown delivery", indicating that the place of delivery of goods was the buyer's premises and not the factory gate - when the sale of goods takes place at the buyer's premises and not at the factory gate, the costs incurred up to the point of transfer of ownership, including freight and insurance, should be included in the assessable value. There is no merit in appellant's argument that the freight and insurance charges were merely reimbursements, as there was no evidence of any separate agreement or contract with the buyers to that effect - The invocation of extended period of limitation and the imposition of penalty under Section 11AC of the CEA, 1944 is upheld, as the non-inclusion of freight and insurance charges in the assessable value was discovered during the audit of the appellant's records – The impugned order is sustained and the appeal is dismissed [Read less]

Central Excise - Cenvat credit on goods transport agency services - Appellant is engaged in the manufacture of railways parts and wagons - Appellant paid the service tax under Reverse Charge mechanism and availed Cenvat credit - Whether the appellant is entitled to take the cenvat credit on goods transport agency services in the absence of copy of challan of service tax paid by M/s Tata Sponge Iron Limited - HELD - The M/s Tata Sponge Iron Limited has issued a Certificate certifying that they have paid the service tax on the transportation charges for the period June, 2006 to January, 2011. Further, a sample copy of the Ch... [Read more]

Central Excise - Cenvat credit on goods transport agency services - Appellant is engaged in the manufacture of railways parts and wagons - Appellant paid the service tax under Reverse Charge mechanism and availed Cenvat credit - Whether the appellant is entitled to take the cenvat credit on goods transport agency services in the absence of copy of challan of service tax paid by M/s Tata Sponge Iron Limited - HELD - The M/s Tata Sponge Iron Limited has issued a Certificate certifying that they have paid the service tax on the transportation charges for the period June, 2006 to January, 2011. Further, a sample copy of the Challan for service tax paid by M/s Tata Sponge Iron Ltd. is also provided - In view of the above, the appellant has correctly taken the cenvat credit on goods transport agency services - The cenvat credit to the appellant is allowed and no demand is sustainable against the appellant and no penalty can be imposed on the appellant - The impugned order is set aside and the appeal is allowed [Read less]

Maharashtra Municipal Corporations Act - Promissory Estoppel, Exemption from Octroi to developer of Special Economic Zone (SEZ), Refund of Octroi - Petitioner company was granted approval to set up an IT/ITES Sector specific SEZ - As per the Maharashtra Government's policy dated 12.10.2001, the developers of SEZs were entitled to exemption from all state and local taxes, including octroi – Petitioner aggrieved by denial of the Pune Municipal Corporation to grant the exemption and direction to pay octroi - Whether the petitioner is entitled to a refund of the Octroi paid by it, based on the promise of exemption made in th... [Read more]

Maharashtra Municipal Corporations Act - Promissory Estoppel, Exemption from Octroi to developer of Special Economic Zone (SEZ), Refund of Octroi - Petitioner company was granted approval to set up an IT/ITES Sector specific SEZ - As per the Maharashtra Government's policy dated 12.10.2001, the developers of SEZs were entitled to exemption from all state and local taxes, including octroi – Petitioner aggrieved by denial of the Pune Municipal Corporation to grant the exemption and direction to pay octroi - Whether the petitioner is entitled to a refund of the Octroi paid by it, based on the promise of exemption made in the Maharashtra Government's policy – HELD - The Maharashtra Government's policy dated 12.10.2001 vide Resolution No. SEZ2001/(152)/IND-2 clearly promised exemption from all State and local taxes, including octroi, to the developers of SEZs. The petitioner acted on this promise and set up the SEZ. The doctrine of promissory estoppel would squarely apply in this case, and the State Government cannot be allowed to resile from its promise - The State Government had the necessary statutory powers under the Maharashtra Municipal Corporations Act to direct the PMC to amend the Octroi Rules to give effect to the exemption promised in the policy. However, the State Government failed to take any such steps, despite being aware of the issue - It was the duty of the State Government to ensure that the Petitioner, who was an approved developer of the SEZ got benefit of exemption from levying the octroi. The State Government was bound to fulfill its own policy and the promise made under the policy to the developers of SEZs - While the PMC could not be directed to refund the octroi in the absence of any amendment to the Octroi Rules. However, the same concession cannot be given to the State of Maharashtra - The State Government is directed to refund the octroi paid by the petitioner, along with interest at the rate of 6% per annum - The writ petition is allowed [Read less]

Central Excise - Classification of granite products under Central Excise Tariff Heading (CETH) - The appellant, a 100% EOU engaged in manufacturing of granite slabs, blocks and other articles, contested the classification of its products under CETH 6802 instead of CETH 2516 as claimed by it – HELD - If the goods were merely roughly trimmed or cut without any further polishing or sizing, they may fall under CETH 2516, otherwise they would be classifiable under CETH 6802. The classification has a bearing on the levy of Central Excise duty on the clearances made by the appellant to the Domestic Tariff Area (DTA) as well as ... [Read more]

Central Excise - Classification of granite products under Central Excise Tariff Heading (CETH) - The appellant, a 100% EOU engaged in manufacturing of granite slabs, blocks and other articles, contested the classification of its products under CETH 6802 instead of CETH 2516 as claimed by it – HELD - If the goods were merely roughly trimmed or cut without any further polishing or sizing, they may fall under CETH 2516, otherwise they would be classifiable under CETH 6802. The classification has a bearing on the levy of Central Excise duty on the clearances made by the appellant to the Domestic Tariff Area (DTA) as well as to another EOU - The Tribunal remanded the matter to the adjudicating authority to re-determine the classification of the appellant's granite products based on the evidence submitted by the appellant regarding the nature and extent of processing carried out on the granite blocks quarried from the mines – The appeal is allowed by remand - Clearance of goods from EOU to another EOU - The appellant had cleared certain quantities of goods from its EOU to another EOU without obtaining prior approval from the Development Commissioner as required. This was a procedural breach and the appellant had later obtained post-facto approval from the Development Commissioner - Mere procedural lapses cannot lead to invocation of the B-17 bond, unless there is any allegation that the duty-free imported goods were not used in the manufacture of the goods in the EOU. The Tribunal directed the adjudicating authority to verify the accountal of the entire quantity cleared by the appellant to the other EOU - Denial of benefit under Notification Nos. 52/2003-Cus and 22/2003-CE - The department denied the benefit of exemption on inputs procured by the appellant under the above notifications, on the ground of procedural lapses in clearing goods from EOU to DTA and another EOU – HELD - There was no allegation that the duty-free imported goods were not used in the manufacture of goods in the EOU. The adjudicating authority is directed to verify if the appellant had fulfilled all the conditions, including achievement of Net Foreign Exchange (NFE), under the said notifications, except for the procedural lapse in clearance to another EOU. Subject to this satisfaction, the benefit of the notifications cannot be denied to the appellant. [Read less]

Central Excise - Penalty under Rule 26(2) of the Central Excise Rules, 2002 - The appellant, who was acting as an agent between the principal and the third party and was getting commission for effecting the sales between the sellers and the purchasers, was imposed a penalty of Rs. 50,000/- under Rule 26(2) of the Central Excise Rules, 2002 for his alleged act of omission and commission and for helping the traders in selling excisable invoices without supply of goods – HELD – The appellant did not have the possession of the goods at any time since he was acting as a broker between the sellers and the purchasers. The goo... [Read more]

Central Excise - Penalty under Rule 26(2) of the Central Excise Rules, 2002 - The appellant, who was acting as an agent between the principal and the third party and was getting commission for effecting the sales between the sellers and the purchasers, was imposed a penalty of Rs. 50,000/- under Rule 26(2) of the Central Excise Rules, 2002 for his alleged act of omission and commission and for helping the traders in selling excisable invoices without supply of goods – HELD – The appellant did not have the possession of the goods at any time since he was acting as a broker between the sellers and the purchasers. The goods were handled by the principal parties and the appellant was not responsible for delivery of the invoices without actual supply of the material - Further, the case of the main noticees, against whom the allegation of supplying the fake invoices without actual supply of the material was made, has already been decided by the Tribunal wherein their appeals were allowed and the impugned order was set aside. Considering these facts, no penalty can be imposed on the appellant under Rule 26 of the Central Excise Rules - The penalty imposed on the appellant is set aside and the appeal is allowed [Read less]

Customs - Import of Technical Grade Urea (TGU) - The appellant imported TGU on high sea sales basis without having a license of import from DGFT - Department initiated proceedings for confiscation of goods under Section 111(d) and imposition of penalty under Section 112(a)(i) of the Customs Act, 1962 - Whether the appellant has imported the Technical Grade Urea in violation of the provisions of Foreign Trade Policy – HELD - As per the Import Policy, import of Urea is allowed "through" State Trading Enterprises and not necessarily "by" them. So long as the purchase of Urea from the foreign supplier is effected by the Stat... [Read more]

Customs - Import of Technical Grade Urea (TGU) - The appellant imported TGU on high sea sales basis without having a license of import from DGFT - Department initiated proceedings for confiscation of goods under Section 111(d) and imposition of penalty under Section 112(a)(i) of the Customs Act, 1962 - Whether the appellant has imported the Technical Grade Urea in violation of the provisions of Foreign Trade Policy – HELD - As per the Import Policy, import of Urea is allowed "through" State Trading Enterprises and not necessarily "by" them. So long as the purchase of Urea from the foreign supplier is effected by the State Trading Enterprise and the payment is made by them, the import can be considered as "through" the State Trading Enterprise, even if the sale to the Indian buyer is on high sea basis - There was no bar in the Policy against State Trading Enterprises making high sea sales of Urea. Since the import was made in accordance with the Policy and the permission granted by the Ministry of Chemicals and Fertilizers, the goods cannot be liable for confiscation under Section 111(d) and no penalty can be imposed under Section 112(a)(i) of the Customs Act - The impugned orders are set aside and the appeals of the appellant are allowed [Read less]

Customs - Exemption from CVD for imported Manganese Ore - The appellant imported "Manganese Ore" and claimed exemption from CVD under Notification No.04/2006-CE dated 01.03.2006. However, the department denied the exemption on the ground that the imported goods were "Manganese Concentrates" and not "Manganese Ores" as the goods had undergone washing, removal of waste and sizing – HELD - In terms of the deeming provision under Chapter Note 4 to Chapter 26, the process of converting ores into concentrates would amount to "manufacture". The Tribunal relied on the judgment of the Supreme Court in the case of M/s Star Industr... [Read more]

Customs - Exemption from CVD for imported Manganese Ore - The appellant imported "Manganese Ore" and claimed exemption from CVD under Notification No.04/2006-CE dated 01.03.2006. However, the department denied the exemption on the ground that the imported goods were "Manganese Concentrates" and not "Manganese Ores" as the goods had undergone washing, removal of waste and sizing – HELD - In terms of the deeming provision under Chapter Note 4 to Chapter 26, the process of converting ores into concentrates would amount to "manufacture". The Tribunal relied on the judgment of the Supreme Court in the case of M/s Star Industries Vs CC (Imports), Raigad, wherein it was held that once the process of converting ores into concentrates is treated as "manufacture", the concentrates would be treated as a different product than ores and would not be eligible for the exemption notification which exempts only "ores" - The processes of washing, removal of waste and sizing undertaken on the imported goods would amount to "special treatments" as envisaged in the HSN explanatory notes, which would result in the emergence of "concentrates" and not "ores". Accordingly, the denial of exemption to the appellant is upheld - The appeal filed by the appellant is dismissed - Interest on delayed payment of CVD - The appellant challenged the imposition of interest on the delayed payment of CVD – HELD - In terms of the statutory provisions, when there is a delay in payment of duty due, the applicable interest is required to be paid. Therefore, the Tribunal upheld the imposition of interest on the delayed payment of CVD - The appeal is dismissed [Read less]

Customs - Classification of synthetic fabric - Respondent imported synthetic fabric and classified it under CTH 54075290 claiming duty exemption under Notification No. 137/2000-Cus. – Upon testing by CRCL Kandla, the imported goods were found to have less than 85% texturized polyester yarn – Dept of the case the imported synthetic fabric is correctly classified under CTH 54078290 – HELD - Agree with the classification confirmed by the Deputy Commissioner under CTH 54078290, as the CRCL Kandla test reports clearly showed that the imported goods had 60-63.5% texturization, which did not meet the criteria for classifica... [Read more]

Customs - Classification of synthetic fabric - Respondent imported synthetic fabric and classified it under CTH 54075290 claiming duty exemption under Notification No. 137/2000-Cus. – Upon testing by CRCL Kandla, the imported goods were found to have less than 85% texturized polyester yarn – Dept of the case the imported synthetic fabric is correctly classified under CTH 54078290 – HELD - Agree with the classification confirmed by the Deputy Commissioner under CTH 54078290, as the CRCL Kandla test reports clearly showed that the imported goods had 60-63.5% texturization, which did not meet the criteria for classification under CTH 54075290 - The test reports from CRCL Kandla were adequate to determine the correct classification of the imported goods, and there was no evidence to suggest that the department or the respondent had doubted the test reports until much later - The test reports given by CRCL Kandla gives composition of goods and thus, it is adequate to determine classification of imported goods. The classification confirmed by the Deputy Commissioner is upheld - Determination of assessable value - The department redetermined the assessable value of the imported goods based on the value of comparable goods imported by other units in Kandla SEZ – HELD – Matter is remanded to the Adjudicating Authority to provide the respondent with the documents/invoices/data relied upon for the re-determination of the value, and to afford the respondent a full opportunity to make submissions before taking a decision. The department has to first reject the transaction value declared by the respondent and then proceed to determine the value by following the Customs Valuation Rules, by providing the relied upon data/contemporary import data of goods of similar quality and characteristics - Scope of show cause notice and availability of duty exemption under Notification No. 137/2000-Cus - The respondent was operating under a Letter of Permission (LOP) issued by the Joint Development Commissioner, Kandla SEZ, which permitted the procurement of certain raw materials and the manufacture and export of finished goods - Whether the respondent was permitted to import fresh fabrics for the manufacture of readymade garments under the LOP – HELD – The matter is remanded to the Deputy Commissioner, Kandla SEZ, to seek an opinion from the office of the Development Commissioner on the LOP, and if the respondent was permitted to import fresh fabrics for the manufacture of readymade garments, the duty determination shall be done in accordance with the relevant Notifications applicable to a unit operating in the SEZ. The Deputy Commissioner not to be affected by the various aspects of the investigation conducted by the DRI, which were not part of the show cause notice, while finalizing the provisional assessment of the goods - The appeal is allowed by way of remand [Read less]

When the interim order directed authorities not to take any coercive action, the filing of the FIR against the top officials of the petitioner, without modification or cancellation of the interim order, is in clear violation of the interim order.

Customs – Import of Roasted Areca Nuts - Department seized the goods on the basis of a laboratory report stating that the goods were not roasted areca nuts. The appellant challenged the conditions imposed for the provisional release of the seized goods, which included furnishing a bond and a bank guarantee amounting to a substantial portion of the assessable value of the goods - Whether the conditions imposed for the provisional release of the seized goods, particularly the requirement to furnish a bank guarantee, were arbitrary, unreasonable, and not sustainable in law – HELD - The Advance Ruling in favor of the appel... [Read more]

Customs – Import of Roasted Areca Nuts - Department seized the goods on the basis of a laboratory report stating that the goods were not roasted areca nuts. The appellant challenged the conditions imposed for the provisional release of the seized goods, which included furnishing a bond and a bank guarantee amounting to a substantial portion of the assessable value of the goods - Whether the conditions imposed for the provisional release of the seized goods, particularly the requirement to furnish a bank guarantee, were arbitrary, unreasonable, and not sustainable in law – HELD - The Advance Ruling in favor of the appellant, which had not been challenged by the Revenue, was binding. The test reports of the CRCL classifying the goods based on visual inspection were not permissible in law. The same laboratory had earlier declared the appellant's imports of roasted areca nuts as fit for human consumption. In such a case, the requirement of a bank guarantee amounting to a substantial portion of the assessable value is arbitrary and unreasonable and cannot be sustained - The seized goods were directed to be released subject to the fulfillment of the conditions of the provisional release order, except for the requirement to furnish the bank guarantee – The appeal is allowed [Read less]

Service Tax - Grant-in-aid as reimbursement of expenses vs. taxable service - Appellant, a rice mill company, received grant-in-aid from the Ministry of Food Processing Industries under a Government scheme for creation/expansion of food processing and preservation capacities - Department alleged that the grant-in-aid was consideration for rendering a declared service under Section 66E(e) of the Finance Act, 1994 and hence liable to service tax - Whether the grant-in-aid received by the appellant was a taxable service under the Service Tax law – HELD - The grant-in-aid received by the appellant was merely a reimbursement ... [Read more]

Service Tax - Grant-in-aid as reimbursement of expenses vs. taxable service - Appellant, a rice mill company, received grant-in-aid from the Ministry of Food Processing Industries under a Government scheme for creation/expansion of food processing and preservation capacities - Department alleged that the grant-in-aid was consideration for rendering a declared service under Section 66E(e) of the Finance Act, 1994 and hence liable to service tax - Whether the grant-in-aid received by the appellant was a taxable service under the Service Tax law – HELD - The grant-in-aid received by the appellant was merely a reimbursement of the expenditure already incurred for setting up a rice milling plant, and not consideration for any service. The Tribunal relied on various decisions of the Tribunal and the Supreme Court which have held that grant-in-aid received from the government is not a taxable service as there is no service provider-service recipient relationship and the grant is merely a reimbursement of expenses - The conditions in the sanction order were general and did not create any contractual obligations or counter obligations on the appellant. The appellant was not engaged in any research and development activities to generate intellectual property rights, but was simply a rice mill - In the absence of any consideration flowing from the government to the appellant, there was no provision of service under Section 65B(44) of the Act. The grant-in-aid was a reimbursement of capital expenditure incurred on the plant and cannot be treated as consideration for a taxable service - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Eligibility for refund of service tax paid on Legal Consultancy services under Reverse Charge mechanism – Rejection of refund claim on the ground that the appellant was not eligible for the exemption under Notification No. 25/2012-ST dated 20.06.2012, as its turnover in the preceding financial years exceeded Rs. 10 lakhs - Whether the appellant was eligible for the exemption under Notification No. 25/2012-ST and consequently entitled to the refund of service tax paid under RCM - HELD – In earlier decision in the appellant's own case, it was held that for the purpose of the said notification, the term 'tur... [Read more]

Service Tax - Eligibility for refund of service tax paid on Legal Consultancy services under Reverse Charge mechanism – Rejection of refund claim on the ground that the appellant was not eligible for the exemption under Notification No. 25/2012-ST dated 20.06.2012, as its turnover in the preceding financial years exceeded Rs. 10 lakhs - Whether the appellant was eligible for the exemption under Notification No. 25/2012-ST and consequently entitled to the refund of service tax paid under RCM - HELD – In earlier decision in the appellant's own case, it was held that for the purpose of the said notification, the term 'turnover' would include the entire proceeds of the business entity, and not just the turnover of the taxable services - The appellant's turnover, including the income from nursery sales, had exceeded Rs. 10 lakhs in the preceding financial years. Therefore, the appellant did not qualify for the threshold exemption provided under the notification – Further, the refund claim should be made within the prescribed time limit under Section 11B of the Central Excise Act, 1944. In the present case, the refund claim was filed after the expiry of the limitation period, and the appellant had also failed to establish the non-passing on of the incidence of the tax to the buyers. Consequently, the rejection of the refund claim is upheld and the appeal is dismissed [Read less]

Service Tax – Taxability of Mobilization Advances - Appellant received mobilization advances from customers for providing construction services, and adjusted these advances against subsequent RA bills on which service tax was paid - Whether service tax was leviable on the mobilization advances received prior to 01.03.2011 when the Point of Taxation Rules came into effect – HELD - Prior to 01.03.2011, there was no statutory provision requiring service providers to pay service tax in one go at the time of receipt of mobilization advances. It cannot be a case where they failed to pay Service Tax on the services provided e... [Read more]

Service Tax – Taxability of Mobilization Advances - Appellant received mobilization advances from customers for providing construction services, and adjusted these advances against subsequent RA bills on which service tax was paid - Whether service tax was leviable on the mobilization advances received prior to 01.03.2011 when the Point of Taxation Rules came into effect – HELD - Prior to 01.03.2011, there was no statutory provision requiring service providers to pay service tax in one go at the time of receipt of mobilization advances. It cannot be a case where they failed to pay Service Tax on the services provided except that they paid such Service Tax on a later date at the time of actual provision of service or raising of bills and not on the date of receipt of such advance - The appellant had discharged the entire service tax liability by paying it at the time of actual provision of service and raising of RA bills, which was as per the extant provisions under the Act and Rules. The demand of service tax is confirmed as the tax has already been paid, but the imposition of interest and penalty is set aside as there was no delay in payment of service tax during the material time. The appeal is allowed partly, with the limited remand to the Adjudicating Authority to re-quantify the interest payable, if any, based on the factual matrix – The appeal is allowed partly [Read less]

Customs – Export of iron ore, Underpayment of customs duty, false declaration of export value - Based on intelligence information, the Department found that the appellants, who exported iron ore fines, had mis-declared the value of their export consignments, resulting in non-payment of Customs duty - Department alleged that the appellants had entered into a dummy contract with M/s Pacific Global Resources Pte Ltd., Singapore (PGRPLS) at a lower price of USD 70 PDMT, while there was another contract between M/s Rotomac Global Pte Ltd., Singapore (RGPLS) and M/s Bagadiya Brothers (Singapore) Pte Ltd. (BBSPL) at a higher pr... [Read more]

Customs – Export of iron ore, Underpayment of customs duty, false declaration of export value - Based on intelligence information, the Department found that the appellants, who exported iron ore fines, had mis-declared the value of their export consignments, resulting in non-payment of Customs duty - Department alleged that the appellants had entered into a dummy contract with M/s Pacific Global Resources Pte Ltd., Singapore (PGRPLS) at a lower price of USD 70 PDMT, while there was another contract between M/s Rotomac Global Pte Ltd., Singapore (RGPLS) and M/s Bagadiya Brothers (Singapore) Pte Ltd. (BBSPL) at a higher price of USD 89 PDMT. The Department claimed that the differential amount was paid in cash to the appellants - Whether the Department has been able to conclusively establish that the appellants had received additional consideration over and above the declared value, warranting revision of the assessable value and consequent demand of differential duty – HELD - The evidence relied upon by the Department, such as the statements recorded under Section 108 of the Customs Act and the electronic documents, were either insufficient or inadmissible. The Department had denied the appellants' request for cross-examination of the key witnesses, which was a violation of the principles of natural justice. Additionally, the Department had failed to comply with the statutory provisions under Section 138C of the Customs Act for the admissibility of the electronic evidence. There was no conclusive evidence to establish how the differential amount was paid to the appellants, and the Department had not reopened or reassessed the shipping bills that were finalized based on the Bank Realization Certificate and other documents submitted by the appellants. Therefore, Department had not been able to conclusively establish the receipt of additional consideration by the appellants, warranting the revision of the declared assessable value and the consequent demand of differential duty - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Confiscation of vehicle and imposition of penalty - Customs appeal against confiscation of vehicle and imposition of penalty – HELD - The vehicle transporting the goods in question cannot be confiscated as the Revenue failed to prove that the goods are of foreign origin. Since the goods are not notified goods under Section 123 of the Customs Act, 1962, the onus lies on the Revenue to prove that the goods are of foreign origin, which it has failed to do. Accordingly, no redemption fine can be imposed and consequently, no penalty can be imposed on the appellant - The impugned order qua confiscation of the vehicle... [Read more]

Customs - Confiscation of vehicle and imposition of penalty - Customs appeal against confiscation of vehicle and imposition of penalty – HELD - The vehicle transporting the goods in question cannot be confiscated as the Revenue failed to prove that the goods are of foreign origin. Since the goods are not notified goods under Section 123 of the Customs Act, 1962, the onus lies on the Revenue to prove that the goods are of foreign origin, which it has failed to do. Accordingly, no redemption fine can be imposed and consequently, no penalty can be imposed on the appellant - The impugned order qua confiscation of the vehicle and imposition of penalty on the appellant is set aside. The appeal is allowed [Read less]

GST – Service of show cause notice - Uploading of show cause notices in the "additional notices" window, Principle of natural justice – HELD - Since the show cause notices were uploaded only in the "additional notices" window of the portal and not in accordance with the provisions of Section 169 of the CGST/KSGST Act, it amounts to a violation of the principles of natural justice - The respondents produced evidence to show that the notices were uploaded on the portal, the show cause notices were uploaded only in the "additional notices" window of the portal, which the petitioner could not access - . The assessment orde... [Read more]

GST – Service of show cause notice - Uploading of show cause notices in the "additional notices" window, Principle of natural justice – HELD - Since the show cause notices were uploaded only in the "additional notices" window of the portal and not in accordance with the provisions of Section 169 of the CGST/KSGST Act, it amounts to a violation of the principles of natural justice - The respondents produced evidence to show that the notices were uploaded on the portal, the show cause notices were uploaded only in the "additional notices" window of the portal, which the petitioner could not access - . The assessment order, to the extent there is a violation of the principles of natural justice is set aside – The petitioner is directed to file a reply to the show cause notice within three weeks, and the assessing authority to issue a fresh assessment order within one month thereafter – The review petition is allowed [Read less]

GST - Maintainability of writ petition, Non-filing of reply to show-cause notice, No request seeking opportunity of personal hearing – Challenge to order-in-original alleging violation of principles of natural justice and non-compliance with Rule 142 of the CGST Rules, 2017 which mandates uploading the summary order in FORM GST DRC-07 specifying therein the amount of tax, interest, and penalty payable – HELD - The writ petition is not maintainable as the petitioner did not participate in the inquiry under Section 73 of the CGST Act by filing a reply to the show-cause notice. The opportunity of a personal hearing as per... [Read more]

GST - Maintainability of writ petition, Non-filing of reply to show-cause notice, No request seeking opportunity of personal hearing – Challenge to order-in-original alleging violation of principles of natural justice and non-compliance with Rule 142 of the CGST Rules, 2017 which mandates uploading the summary order in FORM GST DRC-07 specifying therein the amount of tax, interest, and penalty payable – HELD - The writ petition is not maintainable as the petitioner did not participate in the inquiry under Section 73 of the CGST Act by filing a reply to the show-cause notice. The opportunity of a personal hearing as per Section 75(4) of the CGST Act is granted only upon request, and since the petitioner did not file a reply, it cannot expect the authority to provide a personal hearing - Further, the order-in-original passed by the authority specifically mentions that it is a summary order issued under Section 73 in DRC-07, and hence the petitioner should have preferred an appeal before the Appellate Authority within the limitation period. The petitioner cannot allege a violation of principles of natural justice when it did not avail the opportunity to participate in the inquiry by filing a reply to the show-cause notice - There is no violation of Section 75(4) of the CGST Act as the opportunity of personal hearing was not denied, rather the petitioner did not request for it – The writ petition is dismissed [Read less]

Service Tax - Determination of Service Tax Liability - Real Estate Agent Services and Construction of Residential Complex services - Whether the appellant is entitled to the claim of cum-duty benefit under Section 67(2) of the Finance Act, 1994 and whether the demand and penalty imposed by the Adjudicating Authority are justified - HELD – The appellant is entitled to the claim of cum-duty benefit as per Section 67(2) of the Finance Act, 1994, which stipulates that where the gross amount charged by a service provider for the service provided is inclusive of service tax payable, the value of such taxable service shall be s... [Read more]

Service Tax - Determination of Service Tax Liability - Real Estate Agent Services and Construction of Residential Complex services - Whether the appellant is entitled to the claim of cum-duty benefit under Section 67(2) of the Finance Act, 1994 and whether the demand and penalty imposed by the Adjudicating Authority are justified - HELD – The appellant is entitled to the claim of cum-duty benefit as per Section 67(2) of the Finance Act, 1994, which stipulates that where the gross amount charged by a service provider for the service provided is inclusive of service tax payable, the value of such taxable service shall be such amount as with the addition of tax payable is equal to the gross amount charged – Further, the appellant has adduced various documents through a miscellaneous application, which were not considered by the Adjudicating Authority. The matter is remanded back to the Adjudicating Authority for de novo adjudication, directing the Authority to consider the documents submitted by the appellant, recompute the tax and interest liabilities by granting the cum-duty benefit, and determine the applicable penalties, if any, after providing the appellant with a reasonable opportunity of personal hearing and adhering to the principles of natural justice - The appeal is partly allowed by way of remand [Read less]

Service Tax - Renting of immovable property for residential purpose – Appellant was providing renting of immovable property service for commercial purpose and did not pay service tax on the consideration received - Department issued notice alleging that the VCES declaration filed by the appellant was substantially false and proposed demand of service tax on the ground that the property was rented out for commercial purpose, contrary to the claim made by the appellant that it was for residential purpose - Whether the appellant has sufficiently proved that the premises was let out for residential purposes so as to exclude ... [Read more]

Service Tax - Renting of immovable property for residential purpose – Appellant was providing renting of immovable property service for commercial purpose and did not pay service tax on the consideration received - Department issued notice alleging that the VCES declaration filed by the appellant was substantially false and proposed demand of service tax on the ground that the property was rented out for commercial purpose, contrary to the claim made by the appellant that it was for residential purpose - Whether the appellant has sufficiently proved that the premises was let out for residential purposes so as to exclude the said property from the ambit of "immovable property" under Section 65(105)(zzzz) of the Finance Act, 1994 – HELD - It is not the case of the Department that the premises is not a standalone Building or that it is a building that is party used in the course or furtherance of business or commerce - The Adjudicating Authority erred in merely assuming that just because the lease was entered into by the company, the premises is not for the residential purposes of the Managing Director, more so, in the absence of any evidence that it was not being so used as claimed - The lease agreement clearly indicated that the appellant had agreed to demise the property for use as a residence by the Managing Director of the company. There is no reason to disbelieve the notarised affidavit filed by the appellant averring to this fact and its usage for residential purposes – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Refund claim on excess payment of excise duty – Denial of refund claim on grounds of unjust enrichment – HELD - The appellant has since collected and collated the necessary documents required to satisfy the authorities below that the appellant has not passed on the duty to its customers and can now adduce evidence that it has overcome the bar of unjust enrichment - The interest of justice would be served if the appellant is granted one more opportunity to let in evidence as available with him and to the satisfaction of the jurisdictional adjudicating authority that the appellant has overcome the bar of... [Read more]

Central Excise - Refund claim on excess payment of excise duty – Denial of refund claim on grounds of unjust enrichment – HELD - The appellant has since collected and collated the necessary documents required to satisfy the authorities below that the appellant has not passed on the duty to its customers and can now adduce evidence that it has overcome the bar of unjust enrichment - The interest of justice would be served if the appellant is granted one more opportunity to let in evidence as available with him and to the satisfaction of the jurisdictional adjudicating authority that the appellant has overcome the bar of unjust enrichment and is consequently entitled to the refund. Therefore, without expressing any opinion on the merits of the claim for refund, the impugned orders are set aside and the matters are remanded back to the jurisdictional authority for adjudication afresh – The appeal is allowed by remand [Read less]

Central Excise - Duty liability on goods manufactured by contract manufacturer on job work basis, finished goods cleared without undertaking any manufacturing activity - Appellant entered into an agreement with job-worker for manufacture of car seat sets on contract manufacturing/job-work basis. The raw materials were provided by the appellant to the contract manufacturer, who was availing the area-based exemption. The finished goods were cleared to the appellant, who sold the same to automobile manufacturer without undertaking any manufacturing activity - SCN proposing to recover excise duty from the appellant on the grou... [Read more]

Central Excise - Duty liability on goods manufactured by contract manufacturer on job work basis, finished goods cleared without undertaking any manufacturing activity - Appellant entered into an agreement with job-worker for manufacture of car seat sets on contract manufacturing/job-work basis. The raw materials were provided by the appellant to the contract manufacturer, who was availing the area-based exemption. The finished goods were cleared to the appellant, who sold the same to automobile manufacturer without undertaking any manufacturing activity - SCN proposing to recover excise duty from the appellant on the ground that as the principal manufacturer, it was liable to pay the excise duty on the goods manufactured by the contract manufacturer - Whether the appellant is liable to pay excise duty on the goods manufactured by the contract manufacturer on job work basis - HELD - Various decisions of the Supreme Court and the Tribunal have laid down the principle that the job worker who has undertaken the manufacturing activity is the "manufacturer" and is liable to pay the excise duty. As per the agreement between the parties, the relationship was that of independent contractors and the manufacturing activity took place at the premises of the contract manufacturer by employing its own resources, labour and machinery, without any control and supervision of the appellant. Applying the ratio of the law laid down by the Apex Court, the contract manufacturer is the "manufacturer" of the goods and is liable to pay the excise duty - The appellant cannot be said to be the manufacturer of the goods and it is the contract manufacturer, who is the manufacturer of the goods and, therefore, liable to pay the excise duty - The impugned order is set aside and the appeal is allowed [Read less]

GST - Provisional Attachment of Bank Accounts - Petitioner challenged the impugned orders of provisional attachment of its bank accounts on the grounds that the requirements of Section 83 of the MGST/CGST Act, 2017 were not followed as the designated officer did not form any opinion on the basis of tangible material before ordering the attachment – HELD - The impugned attachment orders are in violation of the law and an abuse of the powers vested with the authorities under the Act. When such drastic power is conferred, the authorities have an onerous duty to adhere to the provisions of law and the procedure so establishe... [Read more]

GST - Provisional Attachment of Bank Accounts - Petitioner challenged the impugned orders of provisional attachment of its bank accounts on the grounds that the requirements of Section 83 of the MGST/CGST Act, 2017 were not followed as the designated officer did not form any opinion on the basis of tangible material before ordering the attachment – HELD - The impugned attachment orders are in violation of the law and an abuse of the powers vested with the authorities under the Act. When such drastic power is conferred, the authorities have an onerous duty to adhere to the provisions of law and the procedure so established. The designated officer has seriously breached the civil rights of the Petitioner without following the due procedure of law. The requirements of Section 83 of the Act have been conveniently overlooked - Following the principles laid down by the Supreme Court, the action of the designated officer is found to be high-handed, arbitrary and in breach of the mandatory requirements of law. While setting aside the impugned attachment orders, the designated officer is directed to deposit costs of Rs. 25,000 with the Maharashtra State Legal Services Authority. The officer is also directed to issue a fresh show cause notice to the Petitioner if there is any tangible material for recovery, and the same be taken to the logical conclusion in accordance with law – The petition is allowed [Read less]

GST – Demand on account of failure to produce supporting documents - Whether the entire liability can be fastened on the petitioner primarily on account of non-production of supporting documents – HELD - While noting that the petitioner did not initially avail the opportunity to produce documents, the petitioner had uploaded a reply one day prior to the passing of the impugned assessment order. Though the petitioner did not properly avail the opportunity initially, he was sufficiently vigilant in submitting a reply prior to the passing of the order - An opportunity ought to be granted to the petitioner, especially in l... [Read more]

GST – Demand on account of failure to produce supporting documents - Whether the entire liability can be fastened on the petitioner primarily on account of non-production of supporting documents – HELD - While noting that the petitioner did not initially avail the opportunity to produce documents, the petitioner had uploaded a reply one day prior to the passing of the impugned assessment order. Though the petitioner did not properly avail the opportunity initially, he was sufficiently vigilant in submitting a reply prior to the passing of the order - An opportunity ought to be granted to the petitioner, especially in light of the plea that a portion of the turnover relates to exempted transportation of agricultural goods and another portion relates to stage carriage operations. It appears that the entire liability has been fastened on the petitioner primarily on account of non-production of supporting documents. Considering the overall facts and circumstances of the case, the impugned order of assessment is set aside and matter is remanded to the file of the respondent for fresh consideration – The petition is disposed of [Read less]

GST - Taxability of services rendered as "Intermediary" – Petitioner challenged the orders of the Advance Ruling Authority and Appellate Authority for Advance Ruling, which held that the services rendered by the Petitioner qualify as "intermediary services" under the IGST Act - While the AAAR and AAR orders are under challenge in the present proceedings, a separate show cause notice was issued and proceedings culminated in an adjudication order confirming the demand against the petitioner on the ground that the services rendered qualify as “intermediary services” – HELD - The AAAR had not adjudicated all the issues... [Read more]

GST - Taxability of services rendered as "Intermediary" – Petitioner challenged the orders of the Advance Ruling Authority and Appellate Authority for Advance Ruling, which held that the services rendered by the Petitioner qualify as "intermediary services" under the IGST Act - While the AAAR and AAR orders are under challenge in the present proceedings, a separate show cause notice was issued and proceedings culminated in an adjudication order confirming the demand against the petitioner on the ground that the services rendered qualify as “intermediary services” – HELD - The AAAR had not adjudicated all the issues raised by the petitioner on the ground of lack of jurisdiction. These issues, including the interpretation of the term "intermediary services" and the constitutional validity of Section 13(8)(b) of the IGST Act, need to be decided by the Appellate Tribunal in the appeal filed by the petitioner. The issues may be agitated by the petitioner in the appeal, which shall be decided on its own merits and in accordance with law, without being influenced by the orders passed by the AAAR - The petitioner to pursue the issues in the appeal proceedings before the Appellate Tribunal - All contentions of the parties in such proceedings are expressly kept open – The petition is disposed of [Read less]

GST - Blocking of Input Tax Credit, Unregistered supplier – Issue of show cause notices/intimation notices proposing block of available ITC, alleging that the suppliers were unregistered entities and that the petitioners availed fraudulent ITC on the strength of bogus invoices without actual movement of goods or services – HELD - The CGST Act, along with the Rules framed thereunder, constitutes a complete code governing the framework within which the Department is required to act. Blocking of ITC undoubtedly has adverse consequences and affects the right of registered persons to carry on business activities. However, e... [Read more]

GST - Blocking of Input Tax Credit, Unregistered supplier – Issue of show cause notices/intimation notices proposing block of available ITC, alleging that the suppliers were unregistered entities and that the petitioners availed fraudulent ITC on the strength of bogus invoices without actual movement of goods or services – HELD - The CGST Act, along with the Rules framed thereunder, constitutes a complete code governing the framework within which the Department is required to act. Blocking of ITC undoubtedly has adverse consequences and affects the right of registered persons to carry on business activities. However, each case must be examined on its own facts to determine whether the action proposed by the Department is based on tangible material and whether there exists a rational basis for invoking the statutory machinery. Situations involving fake or bogus ITC cannot be countenanced under the provisions of law governing the utilization of input tax credit - Insofar as the show cause notices or pre-intimation notices are concerned, they are required to be decided on the facts of each individual case. A collective adjudication on merits of individual issues is certainly not possible - It would be premature to entertain the challenge to the validity of Section 16(2)(c) of the CGST Act at this stage, before the adjudication of the show cause notices. The petitioners shall be permitted to file their replies to the show cause notices and the notices shall thereafter be adjudicated in accordance with law, after considering all contentions raised by the petitioners. In cases where only a pre-show cause intimation has been issued, the concerned authority shall grant an opportunity of hearing to the petitioners and take an appropriate decision - In regard to the challenge to the vires of Section 16(2)(c) of the CGST Act is concerned, all contentions of the petitioners in that regard are kept open to be agitated, if the need so arises, in appropriate proceedings – The writ petition is disposed of [Read less]

GST - Vague and incorrect Show Cause Notice purportedly issued based on the findings of a Special Audit conducted by the Comptroller and Auditor General (CAG) of India - Whether the show cause notice is sustainable given the factual inaccuracy and vagueness of the allegations made therein – HELD - The SCN is not based on an audit conducted by the CAG, as stated, but by the State GST Department. The report of the Audit was never supplied to the petitioner. Further, the SCN failed to provide the basis for the various allegations made, such as excess input tax credit availed, mismatch in input tax credit, and undischarged t... [Read more]

GST - Vague and incorrect Show Cause Notice purportedly issued based on the findings of a Special Audit conducted by the Comptroller and Auditor General (CAG) of India - Whether the show cause notice is sustainable given the factual inaccuracy and vagueness of the allegations made therein – HELD - The SCN is not based on an audit conducted by the CAG, as stated, but by the State GST Department. The report of the Audit was never supplied to the petitioner. Further, the SCN failed to provide the basis for the various allegations made, such as excess input tax credit availed, mismatch in input tax credit, and undischarged tax liability - The purpose of a Show Cause Notice is to make the assessee aware of the department's intent and enable them to effectively respond, which a vague and non-specific notice does not fulfil - Serving of a non-specific notice is nothing but an empty formality which does not fulfil the afore object and is even otherwise, violative of the principles of natural justice. Not only should the notice be specific and detailed, the material which forms the basis of the notice, should also be supplied to the assesee alongwith the notice – The Section 73(3) of the CGST Act, 2017 makes it clear that “details” of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised have to be brought to the assesse’s notice through the SCN. In the case in hand, the impugned show cause notice is not only based on a wrong premise but is also found to be utterly vague and bereft of any details as are required to be furnished under Section 73(3) of the Act - The impugned notice is set aside with liberty to the authorities to proceed against the petitioner, in accordance with law – The petition is disposed of [Read less]

Customs - Revocation of Customs Broker license and levy of penalty - Whether the appellant had violated Regulations 10(d), 10(e) and 10(n) of the CBLR 2018 – HELD - The department failed to prove any violation of the regulations by the appellant. Regarding Regulation 10(d). The department did not provide any evidence to show that the appellant had not advised the exporter to comply with the provisions of the Act and Rules. The appellant had produced a letter from the exporter confirming that it was advised, which the Commissioner had unjustifiably dismissed. On Regulation 10(e), the department did not specify what incorr... [Read more]

Customs - Revocation of Customs Broker license and levy of penalty - Whether the appellant had violated Regulations 10(d), 10(e) and 10(n) of the CBLR 2018 – HELD - The department failed to prove any violation of the regulations by the appellant. Regarding Regulation 10(d). The department did not provide any evidence to show that the appellant had not advised the exporter to comply with the provisions of the Act and Rules. The appellant had produced a letter from the exporter confirming that it was advised, which the Commissioner had unjustifiably dismissed. On Regulation 10(e), the department did not specify what incorrect information was provided by the appellant to the exporter – There is contradictions in the Commissioner's findings on this regulation vis-à-vis the other regulations. Regarding Regulation 10(n), the appellant had fulfilled its obligations. The impugned order revoking the appellant's Customs Broker license, forfeiting the security deposit and imposing the penalty is set aside - The appeal is allowed [Read less]

Customs - Classification of imported meters as "gas meters" under CTI 9028 10 00 or "flow meters" under CTI 9026 10 10 - The appellant imported goods declared as "Rotary Gas Meter-FMR G025 (Flow Meter)" and classified them under CTI 9026 10 10 as flow meters, claiming the benefit of Notification No. 24/2005-Cus. The Department contended that the meters were actually "Gas Meters" classifiable under CTI 9028 10 00 – HELD – From examining the product brochure, the type of customers, and the meter readings, it is found that the meters were meant to measure the total volume of gas transferred, which is the function of gas m... [Read more]

Customs - Classification of imported meters as "gas meters" under CTI 9028 10 00 or "flow meters" under CTI 9026 10 10 - The appellant imported goods declared as "Rotary Gas Meter-FMR G025 (Flow Meter)" and classified them under CTI 9026 10 10 as flow meters, claiming the benefit of Notification No. 24/2005-Cus. The Department contended that the meters were actually "Gas Meters" classifiable under CTI 9028 10 00 – HELD – From examining the product brochure, the type of customers, and the meter readings, it is found that the meters were meant to measure the total volume of gas transferred, which is the function of gas meters under CTI 9028 10 00, and not just the rate of flow. The meters were not meant to check the pressure or rate of flow, which is the function of flow meters under CTI 9026 10 10. The classification of the meters under CTI 9028 10 00 and the consequent denial of the exemption benefit claimed by the appellant is upheld – However, no evidence of collusion or willful misstatement or suppression of facts, as the appellant had filed all the documents and merely claimed a wrong classification and an ineligible exemption notification. Accordingly, the invocation of the extended period of limitation is set aside - The appeal is partly allowed by setting aside the demand for extended period of limitation and penalty under Section 114A, while upholding the classification of the imported meters under CTI 9028 10 00 and the consequent demand within the normal period of limitation – Ordered accordingly [Read less]

Service Tax - Display of company names below traffic signal timer devices without any design, conceptualization, or creative input - Whether it constitutes "Advertising Agency Service" under Section 65(3) of the Finance Act, 1994 – HELD - The display of company names simpliciter does not amount to Advertising Agency Service. As per the clarification issued by the CBEC, service tax applies only where services of making, preparation, display or exhibition of advertisement are rendered, involving activities such as designing, visualizing, or conceptualizing advertisements. Mere sale of space does not attract tax as 'Adverti... [Read more]

Service Tax - Display of company names below traffic signal timer devices without any design, conceptualization, or creative input - Whether it constitutes "Advertising Agency Service" under Section 65(3) of the Finance Act, 1994 – HELD - The display of company names simpliciter does not amount to Advertising Agency Service. As per the clarification issued by the CBEC, service tax applies only where services of making, preparation, display or exhibition of advertisement are rendered, involving activities such as designing, visualizing, or conceptualizing advertisements. Mere sale of space does not attract tax as 'Advertising Agency Service' - The appellant's activity of merely displaying company names below the timer devices, without any creative input, does not fall under the definition of 'Advertising Agency Service' under Section 65(3) - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Real estate agent service - Demand for service tax invoking extended period of limitation under Section 73 of Finance Act, 1994 – HELD - The Revenue has failed to establish the ingredients required for invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994. Mere non-payment of tax, without any element of intent or suppression, is not sufficient to attract the extended limitation period. The Revenue must prove positive acts of fraud, collusion, wilful misstatement or suppression of facts with intent to evade payment of tax. In the absence of such proof, the invocation of the ... [Read more]

Service Tax - Real estate agent service - Demand for service tax invoking extended period of limitation under Section 73 of Finance Act, 1994 – HELD - The Revenue has failed to establish the ingredients required for invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994. Mere non-payment of tax, without any element of intent or suppression, is not sufficient to attract the extended limitation period. The Revenue must prove positive acts of fraud, collusion, wilful misstatement or suppression of facts with intent to evade payment of tax. In the absence of such proof, the invocation of the extended period of limitation is unsustainable - The Revenue has not deemed it fit to put the appellant to notice in the SCN as to how the relevant date for invoking the extended period of limitation has been determined and also has chosen not to explain in the notice as to how the SCN demanding the alleged service tax is within the extended period of limitation. - The show cause notice issued beyond the one-year limitation period is time-barred. The impugned order upholding the demand along with interest and penalty is set aside and the appeal is allowed [Read less]

Service Tax - Reimbursable expenses or not - Appellant was a Clearing and Forwarding (C&F) Agent who incurred various expenses in performing their functions but claimed to have been reimbursed by their principal - Whether such reimbursable expenditure paid to the appellant by the principal is liable to service tax – HELD - There is an agreement between the principal and the appellant to act as a C&F Agency for the principal, which obligated the appellant to perform certain functions. While performing said functions, they were incurring various expenses and according to the appellant they were getting those expenses reimb... [Read more]

Service Tax - Reimbursable expenses or not - Appellant was a Clearing and Forwarding (C&F) Agent who incurred various expenses in performing their functions but claimed to have been reimbursed by their principal - Whether such reimbursable expenditure paid to the appellant by the principal is liable to service tax – HELD - There is an agreement between the principal and the appellant to act as a C&F Agency for the principal, which obligated the appellant to perform certain functions. While performing said functions, they were incurring various expenses and according to the appellant they were getting those expenses reimbursed from the principal. The issue as to whether any amount, which is being incurred by a C&F agency and later on certain amount is getting reimbursed or repaid by the principal has been subject matter of various orders passed by the Coordinate Benches - Only when the service recipient has a legal or contractual obligation to pay certain amount to a third party and the service provider pays that amount on behalf of the recipient, the question of reimbursement arises. The claim for reimbursement towards rent, telephone charges, stationery, etc. amounts to a claim by the service provider that they can render services in a vacuum, and such costs for input services and inputs used in rendering services cannot be treated as reimbursable costs - However, the agreement provided that in case the C&F agent uses their own transport for delivery of goods, such transportation charges shall be reimbursed by the principal. This element was a reimbursement and should not be included in the gross value for charging service tax. For the rest of the expenses, they were incurred in relation to performing the C&F agent's obligations and functions, and hence should be part of the gross value - The matter was remanded back to the Original Adjudicating Authority to re-compute the demand after allowing the exclusion of reimbursable expenses for transportation charges, if found to be on actual cost basis. If it is on notional basis, then the said amount cannot be considered as reimbursable expenses and hence includible – The impugned order is set aside and the appeal is allowed by way of remand [Read less]

Customs – Violation of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017, Allegation of excess import – Appellant imported super absorbent polymers and untreated fluff pulp for manufacture of baby diapers – Dept case that the appellant had not followed the procedure prescribed under IGCR rules and, therefore, was not entitled to the benefit of concessional rate of duty under Notification No. 50/2017-Cus dated 30.06.2017 – HELD - The responsibility for any excess clearance of goods lies with the jurisdictional Assistant Commissioner or the Assistant Commissioner at the port of import, who were respo... [Read more]

Customs – Violation of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017, Allegation of excess import – Appellant imported super absorbent polymers and untreated fluff pulp for manufacture of baby diapers – Dept case that the appellant had not followed the procedure prescribed under IGCR rules and, therefore, was not entitled to the benefit of concessional rate of duty under Notification No. 50/2017-Cus dated 30.06.2017 – HELD - The responsibility for any excess clearance of goods lies with the jurisdictional Assistant Commissioner or the Assistant Commissioner at the port of import, who were responsible for allowing clearance based on the declarations made by the appellant. In the absence of any evidence showing which of the two officers committed the irregularity, the demand of duty and penalty on the appellant cannot be sustained, as it could only be presumed that the concerned officers were satisfied with the quantities declared and cleared the goods accordingly - Rule 8 of IGCR Rules provides for recovery of duty if the importer fails to use the goods for the purpose indicated. In this case, there is no dispute that the goods were used for the purpose for which they were imported. The only case of the department is that the appellant had imported goods in excess of the declarations made before the jurisdictional Assistant Commissioner of Deputy Commissioner, which is not possible - In the absence of any recording as to which of the two Assistant Commissioners committed the irregularity, the demand of duty on the appellant cannot be confirmed. It can only be presumed that the jurisdictional Assistant Commissioner and the Assistant Commissioner of Customs at the port of import were satisfied about the quantities declared cleared the goods accordingly - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Overvaluation of export goods – Export of goods claiming benefit of Merchandise Exports from India Scheme (MEIS) and Drawback - The Department found the goods to be overvalued and re-determined the value, leading to confiscation of the goods and imposition of penalties - Whether the Department was correct in re-determining the value of the exported goods and restricting the export incentives accordingly – HELD - The Export Valuation Rules under Section 14 of the Customs Act do not empower the Department to alter the transaction value. The Drawback and other export incentive schemes are based on the FOB value ... [Read more]

Customs - Overvaluation of export goods – Export of goods claiming benefit of Merchandise Exports from India Scheme (MEIS) and Drawback - The Department found the goods to be overvalued and re-determined the value, leading to confiscation of the goods and imposition of penalties - Whether the Department was correct in re-determining the value of the exported goods and restricting the export incentives accordingly – HELD - The Export Valuation Rules under Section 14 of the Customs Act do not empower the Department to alter the transaction value. The Drawback and other export incentive schemes are based on the FOB value and not on the value determined by the Department under the Export Valuation Rules. The Commissioner committed illegality in ordering reduction of export incentives as he had no authority under the Customs Act or the Foreign Trade (Development and Regulation) Act, 1992 to do so - The Department cannot re-determine the Free on Board (FOB) value declared by the appellant, which is the transaction value between the exporter and the buyer. The Department has no authority to override the Drawback schedule notified by the Central Government or the Foreign Trade Policy which prescribes the MEIS benefits based on the FOB value. The Department can only re-determine the value for the purpose of Customs duty, but that does not affect the export incentives which are linked to the transaction value (FOB value) - The statements recorded by the Department under Section 108 of the Customs Act cannot be used as evidence without following the procedure under Section 138B of the Act. The market enquiry report relied upon by the Department was also not a proper method for re-determining the value under the Export Valuation Rules - The order of confiscation and penalties are set aside and the Department is directed to grant the export incentives based on the FOB value declared by the appellant - The appeal is allowed [Read less]

Central Excise – Valuation, Import of plastic granules and sale of job-worked finished goods - The appellants imported plastic granules duty-free through the Target Plus Scheme and sent them to job workers for conversion into various plastic products. The finished goods were then sold to the job workers themselves - Department rejected the transaction value declared by the appellants and redetermined the assessable value under Rule 11 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Whether the transaction value declared by the appellants on sale of job-worked finished goods to th... [Read more]

Central Excise – Valuation, Import of plastic granules and sale of job-worked finished goods - The appellants imported plastic granules duty-free through the Target Plus Scheme and sent them to job workers for conversion into various plastic products. The finished goods were then sold to the job workers themselves - Department rejected the transaction value declared by the appellants and redetermined the assessable value under Rule 11 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Whether the transaction value declared by the appellants on sale of job-worked finished goods to the job workers should be determined under Rule 10A(i) or Rule 11 of the Central Excise Valuation Rules - HELD - The method of valuation to be adopted in the present case, where the finished goods are sold to the job workers, is Rule 10A(i) of the Central Excise Valuation Rules. This rule provides that where the excisable goods are produced or manufactured by a job-worker on behalf of a principal manufacturer, and the goods are sold by the principal manufacturer to the buyer who is not related and the price is the sole consideration, the value shall be the transaction value. There was no bar under the Rules to sell the finished goods to the job worker after charging the full price, which includes the cost of material, conversion charges and margin of profit as agreed. The price charged by the appellants was duly supported by CAS-4 certificates, and the addition of profit margin by the Department by adopting lowest purchase price and highest selling price to determine the margin of profit cannot be sustained being not supported by the law laid for valuation or supported by the accounting principles - The impugned order is set aside and the appeal is allowed [Read less]

GST - Temporary discontinuance of business - Cancellation of GST registration on the ground that the firm was non-operational, as no business activities were found to be carried out at the registered address of the principal place of the business, Lack of reasons in show-cause notices and orders - Petitioner's business found non-operational due to proprietor's ill-health - Authorities cancelled registration without considering submissions – HELD – The cancellation orders are arbitrary and in breach of principles of natural justice. Authorities failed to consider the genuine reasons for temporary business discontinuance... [Read more]

GST - Temporary discontinuance of business - Cancellation of GST registration on the ground that the firm was non-operational, as no business activities were found to be carried out at the registered address of the principal place of the business, Lack of reasons in show-cause notices and orders - Petitioner's business found non-operational due to proprietor's ill-health - Authorities cancelled registration without considering submissions – HELD – The cancellation orders are arbitrary and in breach of principles of natural justice. Authorities failed to consider the genuine reasons for temporary business discontinuance due to proprietor's medical condition. Show-cause notices were defective for not providing adequate reasons, and the consequential orders failed to discuss the petitioner's submissions - The Authorities must follow due procedure and principles of natural justice, and cannot act in a high-handed or casual manner while exercising powers to cancel registration, as it directly affects the Petitioner's constitutional rights – The Respondents are directed to initiate fresh proceedings, if any, after providing proper notice and opportunity of hearing to the Petitioner – The impugned orders set aside are set aside and the writ petitions are allowed [Read less]

GST - Export of services, IGST refund - The petitioner is engaged in the business of providing ship management services, had entered into an agreement with foreign company to provide ship management services - Prior to the introduction of GST, the petitioner's applications for refund of service tax paid on such "export of services" were favorably considered. However, under the GST regime, the Department rejected the petitioner's claims for refund of IGST paid on the ground that the services were provided on a principal-agent basis and not on a principal-to-principal basis, and therefore the services were considered as "int... [Read more]

GST - Export of services, IGST refund - The petitioner is engaged in the business of providing ship management services, had entered into an agreement with foreign company to provide ship management services - Prior to the introduction of GST, the petitioner's applications for refund of service tax paid on such "export of services" were favorably considered. However, under the GST regime, the Department rejected the petitioner's claims for refund of IGST paid on the ground that the services were provided on a principal-agent basis and not on a principal-to-principal basis, and therefore the services were considered as "intermediary services" not qualifying as "export of services" under Section 2(6) of the IGST Act - Whether the petitioner's transactions were "export of services" within the meaning of Section 2(6) of the IGST Act, 2017, entitling the petitioner to refund of IGST paid – HELD - The Appellate Authority had not adequately considered the terms of the agreement in the context of the nature of services provided by the petitioner - The Appellate Authority should have examined the petitioner's contentions regarding the applicability of the relevant provisions of the IGST Act and the Circulars in the context of the agreement - The impugned orders are set aside and the matter is remanded to the Appellate Authority for a de novo consideration and a fresh order to be passed in accordance with law, after hearing the parties – The petition is disposed of [Read less]

GST - Cancellation of Registration on the ground of availing of ineligible Input Tax Credit from certain suppliers whose Registrations were subsequently cancelled - HELD – The petitioner had furnished relevant documents, which include copies of tax invoices, e-way bills, ledger statements, bank statements etc. - Mere cancellation of the suppliers' registrations cannot, by itself, constitute a sufficient ground to cancel the registration, unless it is corroborated by tangible materials that the petitioner in some manner was a beneficiary of an established illegality qua the ITC benefit claimed by it– Fraud in the availm... [Read more]

GST - Cancellation of Registration on the ground of availing of ineligible Input Tax Credit from certain suppliers whose Registrations were subsequently cancelled - HELD – The petitioner had furnished relevant documents, which include copies of tax invoices, e-way bills, ledger statements, bank statements etc. - Mere cancellation of the suppliers' registrations cannot, by itself, constitute a sufficient ground to cancel the registration, unless it is corroborated by tangible materials that the petitioner in some manner was a beneficiary of an established illegality qua the ITC benefit claimed by it– Fraud in the availment of ITC is a serious conduct, prejudicial to not only the overall interest of trade and commerce but also against the public policy. The Proper Officer was required to record the entire trail of any such illegal involvement in order to establish the petitioner's liability, which was lacking in the present case – The matter is remanded back to the Superintendent for a fresh order in accordance with law, after granting an opportunity of hearing to the petitioner and recording specific findings on the validity of the ITC claimed by the petitioner – The petition is disposed of [Read less]

Customs - Provisional Attachment of Bank Accounts beyond six months - Petitioners challenging the provisional attachment of their bank accounts by the DRI under Section 110(5) of the Customs Act, 1962 - Whether the provisional attachment orders passed by the DRI have lapsed by operation of law as the Principal Commissioner of Customs or Commissioner of Customs did not extend the attachment for a further period of six months as mandated under the proviso to Section 110(5) – HELD - The proviso to Section 110(5) clearly mandates that if the Principal Commissioner or Commissioner of Customs is of the opinion that the provisi... [Read more]

Customs - Provisional Attachment of Bank Accounts beyond six months - Petitioners challenging the provisional attachment of their bank accounts by the DRI under Section 110(5) of the Customs Act, 1962 - Whether the provisional attachment orders passed by the DRI have lapsed by operation of law as the Principal Commissioner of Customs or Commissioner of Customs did not extend the attachment for a further period of six months as mandated under the proviso to Section 110(5) – HELD - The proviso to Section 110(5) clearly mandates that if the Principal Commissioner or Commissioner of Customs is of the opinion that the provisional attachment needs to be extended beyond the initial period of six months, they have to pass a reasoned order extending it for a further period not exceeding six months, and inform the account holder of such extension before the expiry of the initial six-month period - In the present case, the Principal Commissioner or Commissioner of Customs failed to pass any such order extending the provisional attachment before the expiry of the initial six-month period. Consequently, the provisional attachment orders dated 8 July 2025 have lapsed by operation of law and are rendered illegal and invalid. The petitioners are therefore free to operate their bank accounts - The impugned provisional attachment orders are set aside and the writ petition is partly allowed [Read less]

GST – Initiation of recovery proceedings before expiry of appeal period, Validity of Notification issued under Section 168A of CGST Act extending the period for passing an order under Section 73(10) of CGST Act - Whether recovery proceedings initiated before expiry of appeal period valid – HELD – The substantive challenge to the validity of the CGST notifications was already pending before the High Court in a similar matter. The legal issues involved were also pending consideration before the Supreme Court in another case. Considering the similarity of the issues, the petitioner would be required to be granted interi... [Read more]

GST – Initiation of recovery proceedings before expiry of appeal period, Validity of Notification issued under Section 168A of CGST Act extending the period for passing an order under Section 73(10) of CGST Act - Whether recovery proceedings initiated before expiry of appeal period valid – HELD – The substantive challenge to the validity of the CGST notifications was already pending before the High Court in a similar matter. The legal issues involved were also pending consideration before the Supreme Court in another case. Considering the similarity of the issues, the petitioner would be required to be granted interim reliefs - The recovery action taken by the Department by debiting the petitioner's electronic credit ledger was contrary to the Notification dated 17th September 2025 issued by the Government of India, which had prescribed the outer date for filing appeals. The recovery action was also not in compliance with the provisions of Section 78 of the CGST Act, which provided a period of three months from the date of service of the order before any recovery proceedings could be initiated. The Department failed to record reasons to justify the departure from the statutory period of three months prescribed under Section 78 - The impugned recovery proceedings are stayed and the Department is directed to re-credit the amount debited from the petitioner's electronic credit ledger – Ordered accordingly [Read less]

Customs - Eligibility for Concessional Rate of Duty on import of "Cisco Catalyst 3850 Series Ethernet Switches" – Appellant claimed the benefit of concessional rate of Basic Customs Duty (BCD) at 10% under Notification No. 57/2017-Cus. dated 30.06.2017 - Department denied this benefit, holding that the basic rate of duty at 20% should be applicable - Whether the imported goods are eligible for the benefit of concessional rate of BCD under the said Notification – HELD - The issue regarding entitlement to the concessional rate of duty on the identical goods was earlier decided in favor of the appellant by the Tribunal as... [Read more]

Customs - Eligibility for Concessional Rate of Duty on import of "Cisco Catalyst 3850 Series Ethernet Switches" – Appellant claimed the benefit of concessional rate of Basic Customs Duty (BCD) at 10% under Notification No. 57/2017-Cus. dated 30.06.2017 - Department denied this benefit, holding that the basic rate of duty at 20% should be applicable - Whether the imported goods are eligible for the benefit of concessional rate of BCD under the said Notification – HELD - The issue regarding entitlement to the concessional rate of duty on the identical goods was earlier decided in favor of the appellant by the Tribunal as well as the High Court - Since the issue arising out of the present dispute, with regard to availment of the benefit of concessional rate of duty on the subject goods is no more open for any debate, the impugned order, denying the benefits of concessional rate of duty to the appellants cannot stand for judicial scrutiny. Therefore, the appeals filed by the appellants are allowed by setting aside the impugned order pertaining to assessed B/E against which the order was passed by the learned Commissioner (Appeals) - Maintainability of appeal before the Tribunal in absence of appealable order under Section 128A of the Customs Act - Payment of duty under protest - The Commissioner (Appeals) passed the impugned order in disposing of 3 assessed Bills of Entry (B/Es). However, the appellant filed 41 appeals before the Tribunal - Maintainability of appeal – HELD - The Customs Act provides for filing of appeal before the Commissioner (Appeals) against any 'decision' or 'order' passed by the officer of Customs lower in rank than a Principal Commissioner or Commissioner of Customs – The payment of duty amount under protest cannot be treated as a ‘decision’ taken or ‘order’ passed by the competent authority under the statute. In the present case, the appellant failed to prove that they had filed appeals before the Commissioner (Appeals) against the remaining 38 assessed B/Es. Further, the impugned order did not consider any such appeals. Therefore, the remaining 38 appeals filed by the appellant are not maintainable as no orders were passed by the Commissioner (Appeals) under Section 128A of the Customs Act in respect of those 38 assessed B/Es - the impugned order passed in respect of three (3) appeals being Nos. C/87546/ 2022, C/87558/2022 and C/87568/2022 is set aside and the appeals are allowed in favour of the appellants. The remaining 38 appeals filed by the appellant are dismissed as not maintainable. [Read less]

GST – Karnataka AAR - Applicability of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 on charitable activities - Whether the services in relation to conducting emergency care and life support courses for medical, nursing, and allied healthcare students qualify as "charitable activities" by way of "public health through public awareness of preventive health" and exempt from GST – HELD - The Authority held that the activities undertaken by the applicant do not qualify as "public health by way of public awareness of preventive health" under paragraph 2(r) of the notification, which defines "charitable activi... [Read more]

GST – Karnataka AAR - Applicability of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 on charitable activities - Whether the services in relation to conducting emergency care and life support courses for medical, nursing, and allied healthcare students qualify as "charitable activities" by way of "public health through public awareness of preventive health" and exempt from GST – HELD - The Authority held that the activities undertaken by the applicant do not qualify as "public health by way of public awareness of preventive health" under paragraph 2(r) of the notification, which defines "charitable activities". The courses offered by the applicant, though aimed at imparting emergency care skills, are in the nature of structured professional training and skill development programmes for a specific and identifiable class of beneficiaries, namely medical, nursing, and allied healthcare students. Such activities cannot be equated with general public awareness campaigns or preventive health education envisaged under the notification. The fact that the trained professionals may, in the course of their future practice, contribute to improved health outcomes or awareness constitutes only an indirect or consequential benefit, which cannot be equated with direct public awareness activities - Further, the applicant does not satisfy the definition of "educational institution" under the notification to avail exemption under Entry No. 66. Accordingly, the services provided by the applicant are liable to GST at the rate of 18% under Commercial Training and Coaching Services – Ordered accordingly - Exemption under Entry 1 of Notification No. 12/2017-Central Tax (Rate) - Whether the BCLS course offered by the Applicant to students other than medical students qualifies as "charitable activities" – HELD - The activity does not qualify as "charitable activities" under the notification as it involves structured professional training and skill development for a specific class of beneficiaries (students), rather than dissemination of general public awareness. The Applicant also does not satisfy the definition of "educational institution" under the notification to avail exemption under Entry 66. Accordingly, the BCLS course offered to students other than medical students is liable to GST at 18%. [Read less]

GST – Karnataka AAR - Classification of Supply, Development of residential villa project under Joint Development Agreement - Whether the agreement entered into by the applicant with the customers for construction of villa results in a supply of goods or services, when the entire construction is proposed to be outsourced to a contractor - HELD - The agreement for construction of villa constitutes a supply of service under the provisions of the CGST Act, 2017, notwithstanding the fact that the actual construction activity is outsourced to a third-party contractor - Further, works contracts relating to immovable property ha... [Read more]

GST – Karnataka AAR - Classification of Supply, Development of residential villa project under Joint Development Agreement - Whether the agreement entered into by the applicant with the customers for construction of villa results in a supply of goods or services, when the entire construction is proposed to be outsourced to a contractor - HELD - The agreement for construction of villa constitutes a supply of service under the provisions of the CGST Act, 2017, notwithstanding the fact that the actual construction activity is outsourced to a third-party contractor - Further, works contracts relating to immovable property have been expressly classified as a supply of services under paragraph 6(a) of Schedule II to the CGST Act. The existence of a sub-contractor or the outsourcing of construction activity does not dilute or negate the Applicant’s independent supply to the customers, as each supply is liable to tax in the hands of the respective supplier – The agreement entered into by the Applicant with the buyers for construction of villas constitutes a taxable supply of construction service under GST, and the applicant cannot avoid tax liability on the ground that the construction activity has been entirely outsourced to a contractor – Ordered accordingly - Whether the supply undertaken by the applicant in respect of construction of villas is classifiable under Heading 9954(xii) and chargeable to 18% GST under Sl. No. 3 of Notification No. 11/2017-CT(R) dated 28.06.2017, as amended, or classifiable under Heading 9954(ia) and chargeable to GST at 7.5% under the said notification – HELD - The Applicant is engaged in the development of a residential villa project under a Joint Development Agreement and enters into agreements with prospective buyers prior to completion of construction. The Applicant receives consideration from the buyers linked to construction milestones and undertakes to deliver completed residential villas. Such activity squarely falls within the scope of construction of residential units intended for sale, where consideration is received before issuance of completion certificate - While transfer of title in land is covered under Schedule III to the CGST Act, 2017 and is not exigible to GST, the agreements are executed in pursuance of a single economic objective, namely, supply of a completed residential villa to the buyer. The sale of land and construction of villa are naturally bundled and supplied in conjunction with each other in the ordinary course of business. Therefore, the transaction qualifies as a composite supply in terms of Section 2(30) of the CGST Act, 2017, with construction service being the principal supply - The supply is classifiable under Heading 9954(ia) of the Scheme of Classification of services and is liable to GST at the rate of 7.5% under Sl. No. 3 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. The value of supply shall be determined by deeming one-third of the total amount charged (including consideration towards land and construction) as the value of land, and the remaining amount as the taxable value of construction services, as per the valuation mechanism prescribed under the relevant rate notification. [Read less]

Kerala Value Added Tax Act, 2003 - Imposition of penalty – Petitioner is engaged in providing credit facilities on the security of gold ornaments was issued notices proposing to impose penalty under Section 67 of the KVAT Act alleging that the petitioner had substantial sales of non-performing asset (NPA) gold as detected by the Income Tax Department, which were not fully disclosed in the returns filed under the KVAT Act – HELD - The order did not discuss the various contentions raised by the petitioner in its reply, indicating a non-application of mind by the respondent. As for the order for the year 2016-17, the resp... [Read more]

Kerala Value Added Tax Act, 2003 - Imposition of penalty – Petitioner is engaged in providing credit facilities on the security of gold ornaments was issued notices proposing to impose penalty under Section 67 of the KVAT Act alleging that the petitioner had substantial sales of non-performing asset (NPA) gold as detected by the Income Tax Department, which were not fully disclosed in the returns filed under the KVAT Act – HELD - The order did not discuss the various contentions raised by the petitioner in its reply, indicating a non-application of mind by the respondent. As for the order for the year 2016-17, the respondent had brushed aside the petitioner's detailed contentions merely on the ground of non-production of "attested copies" of VAT returns, without making any effort to verify the same from the respective states. The insistence on "attested copies" of VAT returns, when the petitioner had produced "non-attested copies", was not justified, and the respondent should have contacted the counterparts in other states to verify the returns – Further, the impugned penalty orders were based on the original proposals made by the Income Tax Department, without considering the subsequent completion of the income tax assessments, which may have taken into account the petitioner's objections/explanations - The impugned penalty orders are set aside and the respondents are directed to reconsider the matter, taking into account the objections filed by the petitioner and the principles laid down in the U.K. Monu Timbers case – The petition is disposed of [Read less]

Customs - Tariff Classification of "Roasted Areca Nuts" – Petitioner filed B/E claiming classification under Tariff Heading 2008 1920 - Respondent authorities assessed the goods as "Raw/Dried Areca Nuts" under Tariff Heading 0802 80 and seized the consignment. - Whether the imported goods are rightly classifiable under Chapter 20 as "Roasted Areca Nuts" or under Chapter 8 as "Raw/Dried Areca Nuts" HELD - The process of "roasting" is distinct from "drying" under the Customs Tariff and the specific entry under Chapter 20 would prevail over the general entry under Chapter 8. The HSN Explanatory Notes also cover "roasted are... [Read more]

Customs - Tariff Classification of "Roasted Areca Nuts" – Petitioner filed B/E claiming classification under Tariff Heading 2008 1920 - Respondent authorities assessed the goods as "Raw/Dried Areca Nuts" under Tariff Heading 0802 80 and seized the consignment. - Whether the imported goods are rightly classifiable under Chapter 20 as "Roasted Areca Nuts" or under Chapter 8 as "Raw/Dried Areca Nuts" HELD - The process of "roasting" is distinct from "drying" under the Customs Tariff and the specific entry under Chapter 20 would prevail over the general entry under Chapter 8. The HSN Explanatory Notes also cover "roasted areca/betel nuts" under Chapter 20, which is a safe guide for classification. The subject goods are "Roasted Areca Nuts" and merit classification under Tariff Heading 2008 1920 of Chapter 20. The tariff classification adopted by the respondents is contrary to facts and law - The writ petitions are allowed by quashing the seizure, the provisional assessment order, the Show Cause Notice. The respondents are directed to release the subject imported goods in favor of the petitioner – The petitions are allowed - Valuation - The respondents sought to re-assess the value of the imported goods based on the DGFT notifications prescribing a minimum import price, without following the mandatory procedure under Section 14 and Rule 12 of the Customs Valuation Rules. - Whether the respondents were justified in rejecting the declared transaction value and carrying out a re-assessment – HELD - The respondents failed to follow the prescribed procedure under Section 14 and Rule 12 for rejecting the declared transaction value. In the absence of any material to doubt the truth or accuracy of the declared value, the transaction value declared by the petitioner must be accepted. The subsequent DGFT notifications prescribing a minimum import price cannot override the statutory provisions on valuation - Provisional Assessment and Show Cause Notice - The respondents issued a Show Cause Notice proposing duty demands and confiscation even before completing the provisional assessment under Section 18 - Whether the issuance of the Show Cause Notice was premature and contrary to the provisions of the Customs Act – HELD - The proceedings under Section 28 are subsequent to the completion of the assessment process under Section 17. The respondents failed to follow the prescribed procedure under Sections 17 and 18 before issuing the Show Cause Notice under Section 28. Accordingly, the impugned Show Cause Notice and all further proceedings pursuant thereto, including confiscation, are premature, illegal and warrant interference. [Read less]

GST - Challenge to intimation of Tax Demand - Whether the impugned intimation issued under Section 74(5) of the CGST Act read with Rule 142(1A) of the CGST Rules was correctly issued to the Petitioner raising a demand – HELD - Considering that the challenge is only to the impugned intimation notice, the filing of the present writ petition is a premature - The special audit under Section 66 of the CGST Act as directed by the Court in the previous writ petition has been carried out, and the benefit of that report can be taken into consideration for adjudicating the demand if any payable by the Petitioner. This is a fact-fi... [Read more]

GST - Challenge to intimation of Tax Demand - Whether the impugned intimation issued under Section 74(5) of the CGST Act read with Rule 142(1A) of the CGST Rules was correctly issued to the Petitioner raising a demand – HELD - Considering that the challenge is only to the impugned intimation notice, the filing of the present writ petition is a premature - The special audit under Section 66 of the CGST Act as directed by the Court in the previous writ petition has been carried out, and the benefit of that report can be taken into consideration for adjudicating the demand if any payable by the Petitioner. This is a fact-finding process which the Court is not inclined to carry out in the present writ proceedings - The right course of action in the present proceedings is for the Department to issue a show-cause notice and adjudicate the issue, and post which, once an order is passed on the show-cause notice, the same can be subject matter of challenge in appellate proceedings under Section 107 of the CGST Act - The Respondents are directed to issue a show-cause notice to the Petitioner, grant a personal hearing, and pass a reasoned and speaking order as expeditiously as possible – The writ petition is disposed of [Read less]

GST – Maharashtra AAR - Recovery of amount towards Canteen facility and transportation facility provided by employer to employees - Whether the recovery of nominal amount from employees towards the cost of canteen and transportation facilities provided by the applicant amounts to 'supply' under the GST law and whether GST is applicable on such recoveries - Whether the applicant is eligible to avail ITC on the GST paid to the canteen service provider and transport service providers - HELD - The provision of canteen and transportation facilities by the applicant to its employees, though mandated under the Factories Act, 19... [Read more]

GST – Maharashtra AAR - Recovery of amount towards Canteen facility and transportation facility provided by employer to employees - Whether the recovery of nominal amount from employees towards the cost of canteen and transportation facilities provided by the applicant amounts to 'supply' under the GST law and whether GST is applicable on such recoveries - Whether the applicant is eligible to avail ITC on the GST paid to the canteen service provider and transport service providers - HELD - The provision of canteen and transportation facilities by the applicant to its employees, though mandated under the Factories Act, 1948, would be considered as 'supply' within the meaning of Section 7(1)(a) of the CGST Act, 2017 as it is an activity or transaction in connection with or incidental or ancillary to the main business activity of the applicant. Further, the recovery of nominal amount from the employees towards the cost of such facilities would amount to 'consideration' for such supply – The supply of food or transportation services by an employer to its employees for a consideration is taxable under GST. The exemption provided under Schedule III of the CGST Act regarding 'services by an employee to the employer' does not apply to the present case as the supply is from the employer to the employee and not vice versa - However, as per the clarification provided in the CBIC Circular No. 172/04/2022-GST, the perquisites provided by the employer to the employee in terms of the employment contract are not subject to GST. Thus, the portion of the canteen and transportation facility costs borne by the applicant and provided as perquisite to the employees would not be subject to GST - The ITC on the GST paid to the canteen service provider would not be available to the applicant as the restaurant services are mandatorily chargeable at a concessional rate of 5% without ITC as per the relevant notification. However, the ITC on the GST paid to the transport service provider would be available to the applicant as the services of transportation of passengers in non-air conditioned contract carriage are not blocked under Section 17(5) of the CGST Act – Ordered accordingly [Read less]

GST – Tamil Nadu AAR - Classification of services - The applicant is a service provider of Municipal Solid Waste Management Solutions and is executing a project under Swachh Bharat Mission (Urban) 2.0 for "Reclamation of Existing Dump Yard located at Compost Yard by Removing the Legacy Waste in Ariyalur Municipality" - Whether the services provided by the applicant should be classified under SAC 9994 "Sewage and Waste Collection, treatment and disposal and other environmental Protection Services" - HELD – The applicant is involved in ‘Waste treatment and disposal services’, and ‘Site Remediation Services’ - The... [Read more]

GST – Tamil Nadu AAR - Classification of services - The applicant is a service provider of Municipal Solid Waste Management Solutions and is executing a project under Swachh Bharat Mission (Urban) 2.0 for "Reclamation of Existing Dump Yard located at Compost Yard by Removing the Legacy Waste in Ariyalur Municipality" - Whether the services provided by the applicant should be classified under SAC 9994 "Sewage and Waste Collection, treatment and disposal and other environmental Protection Services" - HELD – The applicant is involved in ‘Waste treatment and disposal services’, and ‘Site Remediation Services’ - The services provided by the applicant, which involve bio-mining of waste and remediation of site, gets covered under SAC 9994, attracting GST at 18% - The applicant's operation can be broadly categorized under heading 9994, which includes 'Site remediation' under Group 99944, and 'Hazardous waste treatment and disposal services' and 'Non-Hazardous waste treatment and disposal services' under Group 99943, attracting 18% GST - Whether the services provided by the applicant to the Ariyalur Municipality are exempted under Sl.No.3 of Notification No. 12/2017-CT(Rate) dated 28.06.2017 as amended - HELD - The services rendered by the applicant in the instant case are 'Pure Services' provided to Ariyalur Municipality, which is a 'Local Authority', by way of any activity in relation to any function entrusted to a Municipality under article 243W of the Constitution. The services in question are covered under Sl.No.6 of Article 243W of the Constitution, i.e., 'Public health, sanitation conservancy and solid waste management'. Accordingly, the services provided by the applicant to the Ariyalur Municipality are exempted under Sl.No.3 of Notification 12/2017-CT(R) dated 28.07.2017, as amended. [Read less]