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GST - Exemption from GST on renting of residential property as hostel - The respondent co-owner leased out a residential property to a lessee, who in turn sub-let the property as hostel accommodation to students and working professionals - Eligibility to exemption under Entry 13 of Notification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 - High Court allowed assessee writ petition, holding that the exemption was available as the property was used as residential dwelling by the students and working professionals - Revenue in appeal - Whether the services provided by the respondent in the form of leasing of the residen... [Read more]

GST - Exemption from GST on renting of residential property as hostel - The respondent co-owner leased out a residential property to a lessee, who in turn sub-let the property as hostel accommodation to students and working professionals - Eligibility to exemption under Entry 13 of Notification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 - High Court allowed assessee writ petition, holding that the exemption was available as the property was used as residential dwelling by the students and working professionals - Revenue in appeal - Whether the services provided by the respondent in the form of leasing of the residential premises as hostel to students and working professionals falls within the ambit of Entry 13 of the Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017 and hence exempt from GST - HELD - The Entry 13 does not prescribe any condition that the lessee must itself use the property as residence for the exemption to apply. As long as the property is used as a residential dwelling, the exemption would be available, irrespective of whether the lessee or the sub-lessee uses it as residence - The Court relied on the dictionary meaning of 'residential dwelling' and judicial precedents to hold that hostel accommodation meant for long-term stay by students and working professionals would qualify as 'residential dwelling' for the purpose of the exemption - The exemption under Entry 13 is activity-specific and not person-specific. Therefore, the fact that the lessee was a company and not the end-users (students and working professionals) was irrelevant. The narrow interpretation of Entry 13 to exclude cases where the property is sub-let would defeat the legislative intent behind the exemption - The respondent is entitled to the exemption under Entry 13 of the Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017 on the rental income received from leasing the residential property as hostel accommodation - The High Court order is upheld and the Revenue appeal is dismissed [Read less]

Bombay Sales Tax Act, 1959 - Classification of processed fruits as "fresh fruits" - The Assessee is engaged in the manufacture and sale of various processed food items such as pineapple slices, pineapple tidbits, fruit cocktail preserved in sugar syrup and canned in vacuum sealed containers - Whether the processed fruits like pineapple slices, pineapple tidbits, fruit cocktail preserved in sugar syrup and canned in vacuum sealed containers can be considered as "fresh fruits" covered by the scope of Entry A-23 - HELD - The processed fruits cannot be considered as "fresh fruits" covered by Entry A-23. The Court applied the "... [Read more]

Bombay Sales Tax Act, 1959 - Classification of processed fruits as "fresh fruits" - The Assessee is engaged in the manufacture and sale of various processed food items such as pineapple slices, pineapple tidbits, fruit cocktail preserved in sugar syrup and canned in vacuum sealed containers - Whether the processed fruits like pineapple slices, pineapple tidbits, fruit cocktail preserved in sugar syrup and canned in vacuum sealed containers can be considered as "fresh fruits" covered by the scope of Entry A-23 - HELD - The processed fruits cannot be considered as "fresh fruits" covered by Entry A-23. The Court applied the "common parlance test" and observed that a customer seeking to buy "fresh fruits" would not be satisfied if offered the processed and canned fruits. The legislature's choice of the word "fresh" in the entry acts as a limitation and shows the intention to exclude fruits that are not in their natural state, such as dried, frozen, canned, or preserved foods. There is a clear and universally understood distinction between "fresh fruits", "canned fruits", and "preserved foods", and the processed fruits in question fall under the category of "canned fruits" or "preserved foods" rather than "fresh fruits". Therefore, the Tribunal was not justified in holding that the processed fruits are covered by the scope of Entry A-23 and are not liable to tax - The Tribunal's determination is set aside, and it is held that the processed fruits like pineapple slices, pineapple tidbits, fruit cocktail preserved in sugar syrup and canned in vacuum sealed containers are not "fresh fruits" covered by the scope of Entry A-23 and are liable to tax - The reference is answered accordingly [Read less]

Central Excise – Manufacture of goods – Demand of short paid duty – Appellant is engaged in manufacture of various excisable goods – Appellant cleared Sulphuric Acid to their sister unit by assessing goods for payment of excise duty at rate of 110% of cost of production of such goods – Department issued show cause notice to Appellant by proposing demand of short paid Central Excise duty – Adjudicating authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is liable to pay only differential duty after making adjus... [Read more]

Central Excise – Manufacture of goods – Demand of short paid duty – Appellant is engaged in manufacture of various excisable goods – Appellant cleared Sulphuric Acid to their sister unit by assessing goods for payment of excise duty at rate of 110% of cost of production of such goods – Department issued show cause notice to Appellant by proposing demand of short paid Central Excise duty – Adjudicating authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is liable to pay only differential duty after making adjustment of excess paid duty during a period with short paid duty during other period – HELD – There is no sale to independent buyers and only inter unit transfer of goods for captive consumption is involved. In case of inter unit transfer, valuation was adopted on basis of CAS-4. There seems nothing wrong in adopting previous financial year’s audit data to prepare CAS-4 and use same for assessing duty on inter unit transfer of goods and then reconcile duty payment figures as and when figures for current year is available. Appellant had short paid excise duty in first half of Financial Year, but had paid excess excise duty in second half of Financial Year. As there is no sale of goods, adjustment of excess payment of excise duty against short payment of duty is legally permissible. Decision of lower authorities denying adjustment of excess paid duty for some month with short payment in some months, is not proper. Impugned order passed by Commissioner (Appeals) is set aside – Appeal allowed [Read less]

Customs – Import of goods – Classification – Appellant imported Flat rolled product of Stainless Steel by classifying same under Chapter Heading 7219 – After investigation, department issued show cause notice to Appellant by proposing reclassification of imported goods under Chapter Tariff Heading 7220 and demand of differential duty – Principal Commissioner confirmed proposals made in show cause notice – Whether imported goods are classifiable under Chapter Heading 7219 as claimed by Appellant or under Chapter Heading 7220 as held in impugned order – HELD – While deciding classification, it is important to... [Read more]

Customs – Import of goods – Classification – Appellant imported Flat rolled product of Stainless Steel by classifying same under Chapter Heading 7219 – After investigation, department issued show cause notice to Appellant by proposing reclassification of imported goods under Chapter Tariff Heading 7220 and demand of differential duty – Principal Commissioner confirmed proposals made in show cause notice – Whether imported goods are classifiable under Chapter Heading 7219 as claimed by Appellant or under Chapter Heading 7220 as held in impugned order – HELD – While deciding classification, it is important to note as to what are the processes which have been carried out on imported products and either processes carried out are within permissible limits of heading. Imported goods need close scrutiny to arrive at most preferred heading irrespective of what heading had been claimed by party or has been sought in show cause notice by department. Issue is contentious and various considerations will come to root of matter to decide exact nature of imported goods such as processes it has undergone, its grade, apart from its composition. There is a scope of even going beyond the heading suggested by either party when exact nature of product gets determined. Matter is remanded to Adjudicating authority to determine classification of Cold Rolled Stainless Steel strips in coil with indicated grade. While doing so, Adjudicating authority shall be mindful of various permitted processes under various heads as per borrowing chain of processes of Explanatory Notes which are borrowing and further borrowing from various other heads of Chapter 72 – Appeals disposed of [Read less]

Central Excise - Section 2(f) of the Central Excise Act, 1944 - Manufacture of Cotton Fabric by continuous series of operations across two units, including stentering with the aid of power - Whether the activities undertaken by two units, Bhagyalaxmi Processor Industry and Famous Textile Packers, in processing cotton fabrics amounted to "manufacture" under the Central Excise Act, 1944, thereby making them liable to pay excise duty - HELD - The activities undertaken by the two units formed part of a continuous chain of processes that culminated in the final product of cotton fabrics, and hence amounted to "manufacture" unde... [Read more]

Central Excise - Section 2(f) of the Central Excise Act, 1944 - Manufacture of Cotton Fabric by continuous series of operations across two units, including stentering with the aid of power - Whether the activities undertaken by two units, Bhagyalaxmi Processor Industry and Famous Textile Packers, in processing cotton fabrics amounted to "manufacture" under the Central Excise Act, 1944, thereby making them liable to pay excise duty - HELD - The activities undertaken by the two units formed part of a continuous chain of processes that culminated in the final product of cotton fabrics, and hence amounted to "manufacture" under Section 2(f) of the Act. The Apex Court relied on the definition of "manufacture" under the Act and the principles laid down in earlier decisions, noting that the individual processes undertaken by the two units were integrally connected and essential for the final product, even though the units were distinct entities - The CESTAT erred in bifurcating the continuous process of manufacture and concluding that the activities of the two units could not be clubbed together - What is relevant is the cumulative effect of the various processes, and not the distinct identities of the units undertaking them. The CESTAT order is set aside and the Order-in-Original is restored – The Revenue appeal is allowed [Read less]

Central Excise – Dropping of demand – Sustainability – Department received information to effect that Respondent had got goods manufactured at factory of Ratangarva Industries (RI) and cleared same clandestinely without payment of Central Excise duty – On completion of investigation, department issued show cause notice to Respondent by proposing demand of central excise duty – Adjudicating Authority dropped demand raised against Respondent – Whether Adjudicating Authority is justified in dropping of demand of duty raised against Respondent – HELD – Duty had been demanded from Respondent on allegation that R... [Read more]

Central Excise – Dropping of demand – Sustainability – Department received information to effect that Respondent had got goods manufactured at factory of Ratangarva Industries (RI) and cleared same clandestinely without payment of Central Excise duty – On completion of investigation, department issued show cause notice to Respondent by proposing demand of central excise duty – Adjudicating Authority dropped demand raised against Respondent – Whether Adjudicating Authority is justified in dropping of demand of duty raised against Respondent – HELD – Duty had been demanded from Respondent on allegation that Respondent had manufactured goods at premises of RI and hence, Respondent had been made responsible for alleged manufacture and clandestine clearance of goods from factory premises of RI. Respondent and RI are independent manufacturers duly registered with Central Excise Department having their independent factories located at different geographical locations. Third party statements relied upon by Revenue are not corroborated by any other documentary evidences. Once these statements are removed, there is no other evidence to substantiate allegations against Respondent. There is no corroborative evidence available on record to substantiate allegation of manufacture of goods at RI and clandestine clearance of same by Respondent. There is no infirmity in findings of Adjudicating authority in impugned order in dropping of demand. Impugned order passed by Adjudicating authority is uphold – Appeals dismissed [Read less]

Central Excise – Section 11D of Central Excise Act, 1944 – Demand of duty – Sustainability – Appellant company is engaged in manufacture of excisable goods – Department alleged that Appellant had sold excisable goods to Satabdi Pvt. Ltd. on ex-factory basis by issuing Central Excise invoices, but not sending goods actually to buyer – Department issued show cause notice proposing recovery of central excise duty from Appellant in terms of Section 11D of the Act – Commissioner confirmed demand as proposed in show cause notice – Whether demand confirmed in impugned order against Appellant under Section 11D of t... [Read more]

Central Excise – Section 11D of Central Excise Act, 1944 – Demand of duty – Sustainability – Appellant company is engaged in manufacture of excisable goods – Department alleged that Appellant had sold excisable goods to Satabdi Pvt. Ltd. on ex-factory basis by issuing Central Excise invoices, but not sending goods actually to buyer – Department issued show cause notice proposing recovery of central excise duty from Appellant in terms of Section 11D of the Act – Commissioner confirmed demand as proposed in show cause notice – Whether demand confirmed in impugned order against Appellant under Section 11D of the Act is sustainable – HELD – Authorised representative of Appellant had categorically stated that they have sold goods to Satabdi on ex-factory basis against Central Excise invoices and payments were received by Account Payee Cheques. Section 11D of the Act can be invoked to recover duty when Appellant had collected any amount as central excise duty from customers and not deposited same to Government account. Appellant had raised central excise duty in invoices raised by them to their customer (Satabdi), collected duty from customer and deposited same in government account. There is no necessity to invoke provisions of Section 11D of the Act to recover duty again, as same had already been deposited in government account. Demand confirmed against Appellant under Section 11D of the Act is not sustainable and hence, it is set aside – Appeals allowed [Read less]

Customs – Absolute confiscation of gold bars – Sustainability – Officers intercepted Appellant and recovered gold bars and Indian currency from him – After issuance of show cause notice, Adjudicating Authority ordered for absolute confiscation of gold bars and Indian Currency notes – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether order of absolute confiscation of gold bars in question is sustainable – HELD – Gold in question was seized in midst of town of Kolkata, where gold with foreign markings is freely available in market. There is no evidence available on record to prove... [Read more]

Customs – Absolute confiscation of gold bars – Sustainability – Officers intercepted Appellant and recovered gold bars and Indian currency from him – After issuance of show cause notice, Adjudicating Authority ordered for absolute confiscation of gold bars and Indian Currency notes – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether order of absolute confiscation of gold bars in question is sustainable – HELD – Gold in question was seized in midst of town of Kolkata, where gold with foreign markings is freely available in market. There is no evidence available on record to prove that gold was imported from a foreign country in contravention of provisions violating conditions prescribed for importation of gold. Mere absence of documents cannot make gold in question as smuggled gold. Department had not brought any evidence to establish smuggled nature of gold. Order of absolute confiscation of gold bars is not sustainable and hence, it is set aside – Appeal allowed - Confiscation of currency notes – Whether Indian currency notes recovered from possession of Appellant was liable for confiscation or not – HELD – Indian Currency was recovered from Appellant on allegation that said currency was sale proceeds of smuggled gold. Department had failed to prove that said Indian currency was sale proceeds of gold of foreign country origin. On contrary, Appellant had submitted photocopy of income tax returns evidencing that he had at his possession more than 2,00,000/- rupees. Appellant had placed enough evidence to substantiate licit possession of Indian currency. Indian currency was not liable for confiscation and hence, order of confiscation of said currency is set aside. Department is directed to return said currency to Appellant - Illegal seizure of currency – Entitlement of interest – Whether Appellant is entitled to claim interest for illegal seizure and subsequent confiscation of Indian currency – HELD – Since it has been established that Indian currency was not liable for confiscation, order of confiscation had been set aside. As Appellant had been deprived of licit property owned by him, it is proper to agree with claim of interest made by Appellant. Appellant is entitled to benefit of interest at applicable rate from date of seizure of Indian currency till date of its return to Appellant. [Read less]

Customs – Import of goods – Rejection of transaction value – Demand of differential duty – Investigation revealed that Appellant had imported silk fabrics from China by resorting to undervaluation of imported goods in order to avoid customs duty – Department issued show cause notice proposing rejection of transaction value declared by Appellant, re-determination of same and demand of differential duty – Adjudicating authority confirmed proposals made in show cause notice – Whether Adjudicating authority has violated principles of natural justice or not – HELD – Indisputably, impugned order had been passed... [Read more]

Customs – Import of goods – Rejection of transaction value – Demand of differential duty – Investigation revealed that Appellant had imported silk fabrics from China by resorting to undervaluation of imported goods in order to avoid customs duty – Department issued show cause notice proposing rejection of transaction value declared by Appellant, re-determination of same and demand of differential duty – Adjudicating authority confirmed proposals made in show cause notice – Whether Adjudicating authority has violated principles of natural justice or not – HELD – Indisputably, impugned order had been passed ex-parte. Show cause notice principally relied on documents retrieved from laptop of Appellant. Appellant is stated to have made repeated requests vide letters for return of laptop seized from Appellant by contending that they are necessary for defending allegations made in show cause notice. Appellant had suffered great prejudice at time of adjudication, since most of seized records including laptop which contains relevant documents were not returned. In instant case, there has been a violation of principles of natural justice to detriment of Appellant impinging on Appellant’s right to set up an effective and appropriate defence. Interest of justice will be best served, if matter is remitted back for decision afresh. Impugned order passed by Adjudicating authority is set aside. Matter is remitted back to jurisdictional Adjudicating Authority for denovo adjudication. Concerned authorities are directed to return non-relied upon documents and laptop to Appellant – Appeal allowed [Read less]

Customs – Filing of appeal – Rejection on ground of limitation – Appellants are regularly importing Spreaders RSX40 from Malaysia – Said goods are exempted from payment of basic Customs duty under Notification No.53/201-Customs – As Appellants were not in possession of Certificate of Origin (COO) at time of filing bills of entry, they cleared goods by paying merit rate of duty – Subsequently, on receipt of said COO, Appellants requested Dy. Commissioner (Refunds) to grant refund – Dy. Commissioner informed Appellants that no re-assessment shall be allowed unless order of assessment including self-assessment i... [Read more]

Customs – Filing of appeal – Rejection on ground of limitation – Appellants are regularly importing Spreaders RSX40 from Malaysia – Said goods are exempted from payment of basic Customs duty under Notification No.53/201-Customs – As Appellants were not in possession of Certificate of Origin (COO) at time of filing bills of entry, they cleared goods by paying merit rate of duty – Subsequently, on receipt of said COO, Appellants requested Dy. Commissioner (Refunds) to grant refund – Dy. Commissioner informed Appellants that no re-assessment shall be allowed unless order of assessment including self-assessment is duly modified by way of appeal – Aggrieved, Appellants filed appeals before Commissioner (Appeals), who rejected appeals on ground of limitation – Whether time spent by Appellant pursuing a refund claim before Refund Sanctioning Officer can be excluded for purpose of limitation for filing statutory appeal before Commissioner (Appeals) – HELD – Appellant had placed on record the refund letter and subsequent reminders and correspondence showing active prosecution of administrative remedy before Refund Sanctioning Officer. After nearly two years, Appellant was informed by way of a letter that assessment had to be modified by way of filing an appeal before Commissioner (Appeals). It is a settled principle that time spent before wrong forum should not be taken into consideration while calculating the limitation. Prolonged inaction on part of Department constitutes a “sufficient cause” for excluding period under Section 14 of the Act as pleaded by Appellant. Consequent upon exclusion of said two year period, appeal filed by Appellant before Commissioner (Appeals) is to be treated as within time. Impugned order holding appeals to be time barred is set aside. Appeals are remanded to Commissioner (Appeals) for fresh consideration with a direction to pass a reasoned, speaking order after granting an opportunity to Appellant to submit his defense. Commissioner (Appeals) is directed to treat appeals as filed within time by excluding period of approximately two years spent by Appellant pursuing refund application before Refund Sanctioning Authority – Appeals allowed [Read less]

Service Tax – Demand of tax – Bar of limitation – During audit, department noticed that Appellant had received taxable value from Emerson Network Pvt. Ltd. towards provision of maintenance of UPS, however, had not paid service tax – Revenue issued show cause notice proposing demand of Service Tax to Appellant, by invoking extended period – Adjudicating Authority confirmed demand along with interest and penalty – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – There is nothing in show cause notice that shows that there was any intent on part of Appel... [Read more]

Service Tax – Demand of tax – Bar of limitation – During audit, department noticed that Appellant had received taxable value from Emerson Network Pvt. Ltd. towards provision of maintenance of UPS, however, had not paid service tax – Revenue issued show cause notice proposing demand of Service Tax to Appellant, by invoking extended period – Adjudicating Authority confirmed demand along with interest and penalty – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – There is nothing in show cause notice that shows that there was any intent on part of Appellant to evade duty. Not indicating the income in ST3 return as a result of prevailing practice and Appellant’s understanding of law does not in itself show an intention to evade payment of duty. In such circumstances, invoking of extended period of limitation is not justified and hence, demand is barred by limitation. Once it is held that demand is time barred, there would be no occasion for Tribunal to enquire into merits of issues raised by Revenue. Order under challenge is set aside – Appeal allowed [Read less]

Service Tax – Providing of services – Demand of tax – Information received from Income Tax Department revealed that Appellant had not paid service tax on taxable amount as shown in their Income Tax records – Department issued show cause notice to Appellant by proposing demand of Service Tax – Adjudicating authority confirmed demand as proposed in show cause notice – Whether Appellant is entitled to benefit of exemption under Notification No 25/2012-ST – HELD – Services provided to statutory authorities or government authorities will not be exempt from payment of service tax, till it can be shown that servic... [Read more]

Service Tax – Providing of services – Demand of tax – Information received from Income Tax Department revealed that Appellant had not paid service tax on taxable amount as shown in their Income Tax records – Department issued show cause notice to Appellant by proposing demand of Service Tax – Adjudicating authority confirmed demand as proposed in show cause notice – Whether Appellant is entitled to benefit of exemption under Notification No 25/2012-ST – HELD – Services provided to statutory authorities or government authorities will not be exempt from payment of service tax, till it can be shown that services provide are strictly falling within purview of exemption notification. In present case, Appellant had claimed exemption in respect of work contract services provided by them under various clauses of exemption Notification No.25/2012-ST. After examination of specific activities undertaken by Appellant and clauses of said exemption Notification, lower authorities have concluded that exemption under Notification No.25/2012-ST is not admissible. There is no merits in submissions made by Appellant claiming exemption under Notification No.25/2012-ST – Appeal dismissed [Read less]

Service Tax – Section 65(105)(zzzy) of Finance Act, 1994 – Rendering of services – Classification – Present appeal has been filed against Order-in-Original passed by Commissioner, wherein Commissioner had confirmed demand of service tax against Appellant along with interest and penalty – Whether demand of service tax confirmed under category of Clearing and Forwarding Agent Services is sustainable – HELD – Services provided by Appellant mostly involved unloading the material from railway sidings and then transporting same by road/railway to port for their eventual export on behalf of their clients. Services r... [Read more]

Service Tax – Section 65(105)(zzzy) of Finance Act, 1994 – Rendering of services – Classification – Present appeal has been filed against Order-in-Original passed by Commissioner, wherein Commissioner had confirmed demand of service tax against Appellant along with interest and penalty – Whether demand of service tax confirmed under category of Clearing and Forwarding Agent Services is sustainable – HELD – Services provided by Appellant mostly involved unloading the material from railway sidings and then transporting same by road/railway to port for their eventual export on behalf of their clients. Services rendered by Appellant would appropriately classifiable as Cargo Handling Services rather than Clearing and Forwarding Services. Since said services were rendered by Appellant in connection with export cargo, Appellant is eligible for exemption from service tax. Demand of service tax confirmed in impugned order under category of Clearing and forwarding services is set aside – Appeal allowed - Transportation services – Tax liability – Whether Appellant is liable to pay service tax on transportation services under reverse charge mechanism – HELD – Appellant had awarded a contract to Shiv Construction for transportation of clinker from Railway siding to cement factory. Appellant made payment to transporters which included payment of service tax. Inspite of explanation offered by Appellant that service tax had been paid on transportation services, Adjudicating Authority had confirmed demand on premise that liability to pay service tax on freight charges is upon Appellant under reverse charge mechanism. Amount of service tax payable on transportation service was charged on invoices and paid by Appellant to transporter. No further service tax was required to be paid by Appellant, as demanding service tax on same service and value from Appellant as a recipient of service under reverse charge would tantamount to double taxation, which is not tenable in eyes of law - Demand of tax – Sustainability – Whether demand of service tax confirmed under category of Mining Service is sustainable – HELD – Demand had been confirmed on services of transportation of excavated iron ore/overburden from one place to another place inside iron ore mines under taxable category of Mining Service. Appellant had rendered service of transportation only. In respect of transportation service, liability to pay service tax, if any, is on service recipient under reverse charge mechanism. Appellant had not undertaken any mining activity as defined in Section 65(105)(zzzy) of the Act. Demand of service tax confirmed under category of Mining Service is not sustainable and hence, it is set aside. [Read less]

GST - Fraudulent availment of Input Tax Credit (ITC) - Whether the writ petition on issue involving fraudulent availment of ITC is maintainable, given the availability of an alternate statutory remedy of appeal under Section 107 of the CGST Act - HELD - In cases involving fraudulent availment of ITC, the Court would generally not be inclined to exercise its writ jurisdiction under Article 226. The Court observed that such cases involve complex transactions requiring factual analysis and consideration of voluminous evidence, which cannot be decided in writ jurisdiction. The Court further noted that the impugned order was an... [Read more]

GST - Fraudulent availment of Input Tax Credit (ITC) - Whether the writ petition on issue involving fraudulent availment of ITC is maintainable, given the availability of an alternate statutory remedy of appeal under Section 107 of the CGST Act - HELD - In cases involving fraudulent availment of ITC, the Court would generally not be inclined to exercise its writ jurisdiction under Article 226. The Court observed that such cases involve complex transactions requiring factual analysis and consideration of voluminous evidence, which cannot be decided in writ jurisdiction. The Court further noted that the impugned order was an appealable order under Section 107 of the CGST Act, and the persons involved in such transactions should not be allowed to try different remedies before different forums, as it would result in multiplicity of litigation and contradictory findings - The writ petition is dismissed granting the petitioner liberty to file an appeal challenging the impugned order [Read less]

GST - Gujarat AAR - Classification of Metallic/Metalized Yarn and applicable GST rate - Whether "Metalized Yarn" and "Metallic Yarn" are the same and what will be their classification - Whether the supply of Badla/Imitation Jari/Metallic Yarn made from Micro Slitting process done on Plain Polyester Film or Metalized Polyester Film or Metalized & Lacquered Film will fall under HSN 56050020 or 56050090 - If it falls under HSN 56050020, whether the applicant is eligible for the concessional rate of 5% GST - HELD - The Metalized Yarn and Metallic Yarn are the same and both would be classified under HSN 56050020. The AAR relied... [Read more]

GST - Gujarat AAR - Classification of Metallic/Metalized Yarn and applicable GST rate - Whether "Metalized Yarn" and "Metallic Yarn" are the same and what will be their classification - Whether the supply of Badla/Imitation Jari/Metallic Yarn made from Micro Slitting process done on Plain Polyester Film or Metalized Polyester Film or Metalized & Lacquered Film will fall under HSN 56050020 or 56050090 - If it falls under HSN 56050020, whether the applicant is eligible for the concessional rate of 5% GST - HELD - The Metalized Yarn and Metallic Yarn are the same and both would be classified under HSN 56050020. The AAR relied on the Customs Tariff Notes, Notification No. 01/2017-CT (Rate) dated 28.06.2017, Notification No. 09/2023-CT (Rate) dated 26.07.2023, Circular No. 205/17/2023-GST dated 31.10.2023, and the minutes of the 15th and 52nd GST Council meetings. The metallic zari thread or yarn made from metallized polyester film/plastic film known by any name in trade parlance would be covered under HSN 56050020 and be leviable to GST at the rate of 5% under Entry No. 218AA of Notification No. 1/2017-CT (Rate) dated 28.6.2017, and from 22.09.2025 onwards under Entry No. 353 of Notification No. 9/2025-CT (R) dated 17.09.2025 – Ordered accordingly [Read less]

GST - Treatment of Supply of tyres, tubes, and flaps (TTF), SCN under Section 74 of the GST Act, 2017 for alleged wrongful availment of input tax credit - The petitioner initially treated the supply of TTF in a carry strapping form as individual supplies, paying tax at the reduced rates applicable to tubes and flaps. However, later the petitioner communicated its intention to treat the supply as a "composite supply" and paid the additional tax due, along with interest, on 21.02.2019 - DGGI initiated an investigation and issued a SCN to the petitioner under Section 74 of the GST Act, alleging wrongful availment of input tax... [Read more]

GST - Treatment of Supply of tyres, tubes, and flaps (TTF), SCN under Section 74 of the GST Act, 2017 for alleged wrongful availment of input tax credit - The petitioner initially treated the supply of TTF in a carry strapping form as individual supplies, paying tax at the reduced rates applicable to tubes and flaps. However, later the petitioner communicated its intention to treat the supply as a "composite supply" and paid the additional tax due, along with interest, on 21.02.2019 - DGGI initiated an investigation and issued a SCN to the petitioner under Section 74 of the GST Act, alleging wrongful availment of input tax credit - HELD - To invoke Section 74 the Authorities ought to have traced out as to whether there is any evasion of tax in the course of payment of tax dues, the intention of fraud or provision of wilful misstatement or suppression of facts. If the aspects of fraud, misstatement or suppression of facts were not established while issuing the show cause notice, the same would be considered as issued without fulfilling the ingredients of Section 74 of the Act and such notice is liable to be set aside as the same was issued without jurisdiction - The issuance of the SCN under Section 74 is not valid as the respondents had not established the ingredients of Section 74, namely, fraud, wilful misstatement, or suppression of material facts by the petitioner. The petitioner had voluntarily communicated its intention to treat the supply as a "composite supply" and paid the additional tax due, along with interest, prior to the DGGI investigation. At the worst, petitioner's action could be considered as tax not paid or short paid due to confusion in the entire industry and that the petitioner deferred the payment of tax and paid the same, once the doubts had been cleared. The same would attract proceedings under Section 73 of the Act - Further, the question of application of Section 39(9) so as to deprive the petitioner from availing ITC, would not at all arise as the said provision would attract only in the event, if the enforcement action was initiated prior to the intimation by the petitioner to pay the short payment of tax - The petitioner's actions were not motivated by any criminal intent, but rather by the prevailing confusion in the industry regarding the treatment of the TTF supply. The respondents had wrongly invoked the provisions of Section 74 and issued the show cause notice without fulfilling the necessary requirements - The impugned show cause notice is set aside and the writ petitions are allowed [Read less]

GST - Reblocking of Input Tax Credit (ITC) - Whether the re-blocking of ITC after the expiry of one year from the initial blocking was valid under the law - HELD - The re-blocking of ITC after the expiry of one year from the initial blocking was unsustainable - In view of Rule 86A(3) of the CGST Rules, 2017 and the judgment of the Supreme Court in Kesari Nandan Mobile v. Office of Assistant Commissioner of State Tax (2), the Court, the restriction on the use of ITC shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction. No further proceedings had been initiated agains... [Read more]

GST - Reblocking of Input Tax Credit (ITC) - Whether the re-blocking of ITC after the expiry of one year from the initial blocking was valid under the law - HELD - The re-blocking of ITC after the expiry of one year from the initial blocking was unsustainable - In view of Rule 86A(3) of the CGST Rules, 2017 and the judgment of the Supreme Court in Kesari Nandan Mobile v. Office of Assistant Commissioner of State Tax (2), the Court, the restriction on the use of ITC shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction. No further proceedings had been initiated against the petitioner and there was no fresh ground for the re-blocking of ITC. Consequently, the re-blocking of the petitioner's ITC after the expiry of one year is set aside - The writ petition is allowed [Read less]

GST - Computation of limitation period for filing appeal under GST Act - Deposit of tax under protest towards IGST on ocean freight under RCM. After the Supreme Court held the ocean freight RCM levy to be unconstitutional, the petitioner filed a refund application which was rejected by the Proper Officer. The petitioner filed an appeal before the Appellate Authority, which was dismissed as time-barred - HELD - The Appellate Authority had erred in computing the period of limitation. The order-in-original was passed on 24.01.2024 and communicated on 01.02.2024. The appeal was filed on 01.06.2024. As per the CGST Act, the per... [Read more]

GST - Computation of limitation period for filing appeal under GST Act - Deposit of tax under protest towards IGST on ocean freight under RCM. After the Supreme Court held the ocean freight RCM levy to be unconstitutional, the petitioner filed a refund application which was rejected by the Proper Officer. The petitioner filed an appeal before the Appellate Authority, which was dismissed as time-barred - HELD - The Appellate Authority had erred in computing the period of limitation. The order-in-original was passed on 24.01.2024 and communicated on 01.02.2024. The appeal was filed on 01.06.2024. As per the CGST Act, the period of limitation for filing an appeal is three months, which can be extended by one month, if the appellant presents satisfactory cause for the delay - The day on which the order is passed/communicated has to be treated as Day Zero (0) for the purpose of computing the limitation period. Therefore, the period of three months would expire on 01.05.2024, and the additional one month extension would make the last date of filing the appeal as 01.06.2024, which was the date on which the appeal was filed by the petitioner. The impugned order is set aside and the matter is remanded to the Appellate Authority to decide the same afresh on merits after affording the parties an opportunity of hearing - The writ petition was disposed of accordingly [Read less]

Customs – Import of gold pendants – Classification – Appellant imported gold pendants from Indonesia vide Bill of Entry and classified them under CTH 7113 1910 – Since goods imported were of Indonesian origin and covered under ASEAN-India Foreign Trade Agreement, Appellant claimed exemption from payment of customs duty – Department issued show cause notice to Appellant by proposing reclassification of impugned goods under CTH 7108 1300 and demand of duty – Commissioner confirmed proposals made in show cause notice – Whether subject goods are classifiable under CTH 7108 1300 as decided by Lower Authority or un... [Read more]

Customs – Import of gold pendants – Classification – Appellant imported gold pendants from Indonesia vide Bill of Entry and classified them under CTH 7113 1910 – Since goods imported were of Indonesian origin and covered under ASEAN-India Foreign Trade Agreement, Appellant claimed exemption from payment of customs duty – Department issued show cause notice to Appellant by proposing reclassification of impugned goods under CTH 7108 1300 and demand of duty – Commissioner confirmed proposals made in show cause notice – Whether subject goods are classifiable under CTH 7108 1300 as decided by Lower Authority or under CTH 7113 1910 as declared by Appellant – HELD – CTH 7108 covers various unwrought, semi-manufactured or powder form of gold or gold alloys. Imported goods are oval in shape and equipped with a hook to enable insertion of chain for purpose of wearing around the neck, therefore, goods are finished goods/jewellery as requires under CTH 7113. As per clarification issued by DGFT, there are no restrictions on goods imported under CTH 7113. Subject goods are not classifiable under CTH 7108 as per impugned order, but are classifiable under CTH 7113 as classified by Appellant. Impugned order passed by Commissioner is not sustainable and therefore, same is set aside – Appeal allowed [Read less]

Service Tax – Section 65(27) of Finance Act, 1994 – Providing of training program – Tax liability – Appellant is engaged in providing training program called Short Term Executive Program and Reach Out Program which are designed to needs of plantation and associated Agri-Business Sector – Revenue observed that this training falls under category of Commercial Coaching or Training Services which are liable to service tax – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of Commercial Training or Coaching Service as defined under Secti... [Read more]

Service Tax – Section 65(27) of Finance Act, 1994 – Providing of training program – Tax liability – Appellant is engaged in providing training program called Short Term Executive Program and Reach Out Program which are designed to needs of plantation and associated Agri-Business Sector – Revenue observed that this training falls under category of Commercial Coaching or Training Services which are liable to service tax – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of Commercial Training or Coaching Service as defined under Section 65(27) of the Act – HELD – As per Section 65(27) of the Act, commercial training or coaching centre means any institute providing commercial training or coaching for imparting skill or knowledge on any subject or field other than sports, but does not include institute which issues any certificate recognised by law. As per above definition, any institute or establishment which issues any certificate or degree or any educational qualification recognized by law was excluded from purview of Service Tax. Appellant was providing short term courses to planter of officials of various Commodity Boards, for which, consideration is received. Since there is nothing on record to show that Appellant is issuing any certificate recognized by law, they do not fall under exclusion clause, and hence, they are liable to discharge service tax. Considering the fact that these are interpretation issues, question of invoking extending period of limitation does not arise. Demand is confirmed for normal period only – Appeal partly allowed [Read less]

Central Excise – Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – Import of goods – Order of absolute confiscation – Appellant challenged order passed by Commissioner (Appeals) upholding order passed by Additional Commissioner, who ordered for absolute confiscation of goods imported by Appellant and imposed penalties upon Appellant – Whether order confiscating the goods and imposing penalties upon Appellant can be sustained, when in respect of same investigation, demand of central excise duty have been settled under 2019 Scheme – HELD – During pendency of adjudication of second show cause notice, Appe... [Read more]

Central Excise – Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – Import of goods – Order of absolute confiscation – Appellant challenged order passed by Commissioner (Appeals) upholding order passed by Additional Commissioner, who ordered for absolute confiscation of goods imported by Appellant and imposed penalties upon Appellant – Whether order confiscating the goods and imposing penalties upon Appellant can be sustained, when in respect of same investigation, demand of central excise duty have been settled under 2019 Scheme – HELD – During pendency of adjudication of second show cause notice, Appellant had filed a declaration in Form SVLDRS-1. Discharge Certificate in Form SVLDRS-4 was issued to Appellant for full and final settlement of tax dues. Once Discharge Certificate had been issued, matter stood concluded and Appellant was not liable to pay any duty, interest or penalty. Order confiscating goods with option to pay redemption fine cannot be sustained, since demand of central excise duty and imposition of penalties upon Appellant have been settled under 2019 Scheme. Impugned order passed by Commissioner (Appeals) is set aside – Appeals allowed [Read less]

Central Excise – Rules 7 and 11 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Clearance of goods – Allegation of undervaluation – Demand of short paid duty – Appellant is engaged in manufacture of CR galvanized/colour coated coils/sheets – Department issued show cause notice alleging that goods cleared by Appellant to depots were undervalued and duty on such goods was required to be paid on basis of depot Price List in terms of Rule 7 of the Rules – Commissioner confirmed demand of short paid duty – Whether Commissioner is justified in determining the value shown in d... [Read more]

Central Excise – Rules 7 and 11 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Clearance of goods – Allegation of undervaluation – Demand of short paid duty – Appellant is engaged in manufacture of CR galvanized/colour coated coils/sheets – Department issued show cause notice alleging that goods cleared by Appellant to depots were undervalued and duty on such goods was required to be paid on basis of depot Price List in terms of Rule 7 of the Rules – Commissioner confirmed demand of short paid duty – Whether Commissioner is justified in determining the value shown in depot price list as the assessable value – HELD – Rule 7 of the Rules provides that value shall be the normal transaction value of goods sold from depot at or about same time or at time nearest to time of removal of goods. Purpose of Rule 7 of the Rules is that if actual transaction value is not available, as there were no sale at time of removal of goods from factory, value of contemporaneous sale of goods from depot can be used as assessable value. Methodology adopted by Appellant for payment of differential duty, in case where goods were sold from depots at prices higher than that declared at time of clearance of goods from factory, was closer to valuation of goods under Rule 7 of the Rules. Depot price list gave indicative prices and could not have formed basis for valuation either under Rule 7 or under Rule 11 of the Rules. Impugned order passed by Commissioner cannot be sustained and is set aside – Appeals allowed [Read less]

Bombay Sales Tax Act, 1959 - Classification of "Nescafe Premix" - The Commissioner had classified the product under Entry C-II-18(2) which attracted a higher tax rate of 16%, while the Tribunal had classified it under the more specific Entry C-II-3 which attracted a lower tax rate of 8% for "Instant Coffee" - Whether the Tribunal was correct in holding that the "Nescafe Premix" should be classified under Entry C-II-3 as "Instant Coffee" rather than Entry C-II-18(2) - HELD - The Court upheld the Tribunal's decision, relying on the Supreme Court's principles that the classification should be based on the common parlance test... [Read more]

Bombay Sales Tax Act, 1959 - Classification of "Nescafe Premix" - The Commissioner had classified the product under Entry C-II-18(2) which attracted a higher tax rate of 16%, while the Tribunal had classified it under the more specific Entry C-II-3 which attracted a lower tax rate of 8% for "Instant Coffee" - Whether the Tribunal was correct in holding that the "Nescafe Premix" should be classified under Entry C-II-3 as "Instant Coffee" rather than Entry C-II-18(2) - HELD - The Court upheld the Tribunal's decision, relying on the Supreme Court's principles that the classification should be based on the common parlance test and not on the technical or scientific composition. Even though the coffee powder was only 8.5% of the premix, the final product obtained by adding hot water was essentially "Instant Coffee" in common parlance. The specific Entry C-II-3 for "Instant Coffee" would prevail over the general Entry C-II-18(2) for powders from which non-alcoholic beverages are prepared - The classification should be based on the common understanding of the product rather than a rigid, technical interpretation of the composition - The reference is answered the reference in favor of the respondent assessee and against the Department [Read less]

Customs – Export of goods – Classification – Appeal has been filed by Appellant against Order-in-Original passed by Commissioner, wherein, Commissioner has allowed conversion of shipping bills from Duty Exemption Entitlement Certificate (DEEC) Scheme to Drawback Scheme and determined admissible drawback claim on basis of classification of goods determined by him – Whether classifications adopted by Adjudicating authority in impugned order are sustainable – HELD – Adjudicating authority had classified goods exported by Appellant under various sub headings such as CTHs 6102, 6103, 6104, 6105 and 6106 without givi... [Read more]

Customs – Export of goods – Classification – Appeal has been filed by Appellant against Order-in-Original passed by Commissioner, wherein, Commissioner has allowed conversion of shipping bills from Duty Exemption Entitlement Certificate (DEEC) Scheme to Drawback Scheme and determined admissible drawback claim on basis of classification of goods determined by him – Whether classifications adopted by Adjudicating authority in impugned order are sustainable – HELD – Adjudicating authority had classified goods exported by Appellant under various sub headings such as CTHs 6102, 6103, 6104, 6105 and 6106 without giving any proper reason for such classification and determined different rates of drawback. Goods exported being knitted readymade garments have to be classified under any of Tariff Sub-headings of Chapter 61. All knitted readymade garments exported by Appellant under shipping bills in question are classifiable under CTH 6102 and drawback rate for said goods are to be fixed as per entry corresponding to CTH 6102. Classifications adopted by Adjudicating authority in impugned order are factually incorrect – Appeal disposed of - Delayed sanction of drawback – Entitlement of interest – Whether Appellant is entitled for interest on delayed sanction of drawback – HELD – Appellant had applied for conversion of DEEC shipping bills into Drawback shipping bills. Proper officer passed order rejected request for conversion of all shipping bills. Said rejection was set aside by this Tribunal vide Final Order. Vide Order-in-Original, Adjudicating authority allowed conversion of shipping bills in terms of order passed by Tribunal, however, he has not granted any interest for delayed sanction of drawback. Date of allowing conversion of shipping bills by Tribunal has to be considered as the ‘relevant date’ for computation of interest. Appellant should be eligible for interest after three months from date of passing of Tribunal’s order. [Read less]

Service Tax – Section 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Appellant is engaged in business of construction related activities – In terms of buyer agreement, Appellant recovers various charges from buyer – After audit, department noticed that Appellant had not paid service tax on amount received towards car parking charges – Department issued show cause notice to Appellant by proposing demand of service tax on car parking charges by invoking extended period of limitation – Adjudicating authority confirmed demand as proposed in show cause notice – Commiss... [Read more]

Service Tax – Section 73(1) of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Appellant is engaged in business of construction related activities – In terms of buyer agreement, Appellant recovers various charges from buyer – After audit, department noticed that Appellant had not paid service tax on amount received towards car parking charges – Department issued show cause notice to Appellant by proposing demand of service tax on car parking charges by invoking extended period of limitation – Adjudicating authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether Commissioner (Appeals) is justified in holding that extended period of limitation was correctly invoked – HELD – For invoking extended period of limitation under proviso to Section 73(1) of the Act, tax should not have been paid because of fraud, collusion, wilful mis-statement, suppression of fact or contravention of any provision. Mere failure to pay tax is not sufficient to attract extended period of limitation. If facts come to notice only when audit is carried out, it does not mean that there was an intent to evade payment of service tax. Commissioner (Appeals) was not justified in holding that extended period of limitation was correctly invoked. Impugned order passed by Commissioner (Appeals) upholding invocation of extended period of limitation under proviso to Section 73(1) of the Act cannot be sustained and is set aside – Appeal allowed [Read less]

GST – Demand of GST for alleged wrong availment of exemption under Sr. No. 54(e) of Notification No. 12/2017 by Container Freight Station for handling of agricultural produce – HELD - Prima facie the issue stands covered by the decision in the case of Naga Ltd., General Manager Finance & Accounts vs Puducherry AAR - There shall be an order of interim stay of the impugned order – Ordered accordingly

Customs – Section 112(b) of Customs Act, 1962 – Imposition of penalty – Sustainability – Importer being High Sea Sales Buyer filed Bill of Entry for clearance of goods declaring same as Light Weight Coated (LWC) paper rolls and availed exemption from Basic Customs Duty under Customs Notification No.12/2012 – Investigation revealed that importer had diverted and sold imported LWC paper to brokers at higher prices – Department issued show cause notice alleging that importer had colluded with High Sea Sale Sellers/Appellants in misusing exemption and thereby evading customs duty – Adjudicating Authority imposed ... [Read more]

Customs – Section 112(b) of Customs Act, 1962 – Imposition of penalty – Sustainability – Importer being High Sea Sales Buyer filed Bill of Entry for clearance of goods declaring same as Light Weight Coated (LWC) paper rolls and availed exemption from Basic Customs Duty under Customs Notification No.12/2012 – Investigation revealed that importer had diverted and sold imported LWC paper to brokers at higher prices – Department issued show cause notice alleging that importer had colluded with High Sea Sale Sellers/Appellants in misusing exemption and thereby evading customs duty – Adjudicating Authority imposed penalty under Section 112(b) of the Act on Appellants – Whether imposition of penalty upon Appellants under Section 112(b) of the Act is sustainable – HELD – Department had not produced any evidence on record to show that Appellants either as High Sea Sale Sellers or as Job worker was aware of fraud committed by importer or at any point colluded with importer to evade duty or to claim undue benefit under Customs and Central Excise Notification. Appellants cannot be expected to know in advance as to importer's fraudulent intention when effecting High Sea Sale. Imposition of penalty under Section 112(b) of the Act cannot be justified in absence of any evidence to show that Appellants had aided and abetted the fraud committed by importer. Penalties imposed against Appellants are set aside – Appeals allowed [Read less]

GST - Gujarat AAR - Supply of Goods to Municipal Authority - Applicant is providing door-to-door garbage collection services. The applicant had won a bid for supply of "Fresh Waste Processing Machinery" to the Anand Nagarpalika (local authority). After installing the machinery, the applicant raised invoices charging GST on the supply of machinery - Whether the supply of goods (machinery) to the Nagarpalika (local authority) is exempt from GST - HELD - The exemption under Notification No. 12/2017-CT(R) is available only for "pure services" or "composite supply of goods and services" where the value of goods does not exceed ... [Read more]

GST - Gujarat AAR - Supply of Goods to Municipal Authority - Applicant is providing door-to-door garbage collection services. The applicant had won a bid for supply of "Fresh Waste Processing Machinery" to the Anand Nagarpalika (local authority). After installing the machinery, the applicant raised invoices charging GST on the supply of machinery - Whether the supply of goods (machinery) to the Nagarpalika (local authority) is exempt from GST - HELD - The exemption under Notification No. 12/2017-CT(R) is available only for "pure services" or "composite supply of goods and services" where the value of goods does not exceed 25% of the total supply. Since, in the present case, the supply is solely of goods (machinery), the exemption provisions are not applicable - The supply of goods (machinery) to the Nagarpalika (local authority) attracts GST at the rate of 18% on the various machineries supplied - Ordered accordingly [Read less]

Customs – Sections 114 and 114AA of Customs Act, 1962 – Imposition of penalty – Sustainability – Laxmi Fabrics, a proprietorship firm, obtained Duty Free Import Authorisation to import goods duty free – Investigation revealed that said firm was mis-using licenses by diverting imported duty free silk fabrics to local market without using same in manufacture and export of resultant products, and instead were exporting cheap rags by mis-declaring export goods as silk fabrics – Department issued show cause notice alleging that Appellants while working as Air Cargo Helpers have actively involved in violations of pro... [Read more]

Customs – Sections 114 and 114AA of Customs Act, 1962 – Imposition of penalty – Sustainability – Laxmi Fabrics, a proprietorship firm, obtained Duty Free Import Authorisation to import goods duty free – Investigation revealed that said firm was mis-using licenses by diverting imported duty free silk fabrics to local market without using same in manufacture and export of resultant products, and instead were exporting cheap rags by mis-declaring export goods as silk fabrics – Department issued show cause notice alleging that Appellants while working as Air Cargo Helpers have actively involved in violations of provisions of the Act committed by Laxmi Fabrics – Adjudicating Authority confirmed duty demands made on Laxmi Fabrics and imposed penalties on Appellants – Whether penalties imposed on Appellants under Sections 114 and 114AA of the Act are tenable – HELD – Section 114 of the Act has a penal character of being a penalty in personam. Burden of proof is on Customs authorities to bring home the guilt with respect to a person alleged to have done or omitted to do an act or abetted the doing or omission of doing an act in relation to goods liable to confiscation by adducing satisfactory evidence. Neither show cause notice nor impugned order discusses as to how Appellants have abetted Laxmi Fabrics in alleged mis declaration of goods in shipping bills. Penalties imposed on Appellants under Section 114 of the Act are unsustainable. Although Appellants have been imposed with a penalty under Section 114AA of the Act, it is surprised to notice a complete absence of a finding in impugned order that Appellants are liable for penalty under Section 114AA of the Act. Imposition of penalty under Section 114AA of the Act without rendering a specific finding in this regard is indicative of a non-application of mind. Impugned order in original to extent it imposes penalties on Appellants cannot be sustained and is liable to be set aside to that extent – Appeals allowed - Customs – Section 125 of Customs Act, 1962 – Non imposition of redemption fine – Whether Adjudicating Authority has erred in not imposing redemption fine on goods imported availing benefit of applicable notifications, on ground that goods are physically unavailable – HELD – Section 125 of the Act empowers authorities after adjudication to release goods to person from whose possession the same has been seized on collection of redemption fine in lieu of confiscation. Admittedly, in instant case, imported goods are not physically available. In absence of any evidence that bond, if any executed, is still live and bank guarantee, if any, is still valid in respect of goods, it cannot be stated that authorities have any lien or effective control over said goods so as to confiscate same and to impose redemption fine on such goods, when these goods are not physically available. Adjudicating Authority had fairly exercised his discretion in refraining from imposing redemption fine on imported goods that are unavailable – Appeal dismissed [Read less]

GST - Gujarat AAR - Classification of PVC/Plastic Raincoats under GST - Whether the PVC/plastic raincoats supplied by the applicant should be classified under Chapter 39 as "Other articles of plastics" attracting 18% GST or under Chapter 62 as "Articles of apparel and clothing accessories" attracting 5% GST - HELD - Though the Chapter 62 specifically mentions "raincoats", the explanatory notes to HSN 3926 also cover "articles of apparel and clothing accessories made by sewing or sealing sheets of plastics, e.g., aprons, bells, babies' bibs, raincoats, dress-shields, etc." The Chapter 39 covers polymers and chemically modif... [Read more]

GST - Gujarat AAR - Classification of PVC/Plastic Raincoats under GST - Whether the PVC/plastic raincoats supplied by the applicant should be classified under Chapter 39 as "Other articles of plastics" attracting 18% GST or under Chapter 62 as "Articles of apparel and clothing accessories" attracting 5% GST - HELD - Though the Chapter 62 specifically mentions "raincoats", the explanatory notes to HSN 3926 also cover "articles of apparel and clothing accessories made by sewing or sealing sheets of plastics, e.g., aprons, bells, babies' bibs, raincoats, dress-shields, etc." The Chapter 39 covers polymers and chemically modified polymers, including polyvinyl chloride (PVC) used in the manufacture of the applicant's raincoats - The PVC raincoats are not woven fabrics, but are made by heat welding or chemical bonding of PVC sheets, and therefore do not fall under the scope of Chapter 62 - The PVC/plastic raincoats supplied by the applicant should be classified under HSN 3926 and fall under Entry No. 127 of Notification No. 9/2025-CT(R) dated 17.09.2025, which attracts 18% GST - Ordered accordingly [Read less]

GST - Tamil Nadu AAR - Taxability of rent received for storing agricultural produce (Paddy) in a godown - Whether the rent received by the proprietor for the godown used for storage of paddy is taxable under GST - HELD - As per the relevant GST notifications, services relating to the storage or warehousing of agricultural produce attract a nil rate of GST. The paddy, being the raw, unprocessed form of rice that is typically grown in flooded fields, satisfies the criteria to be considered as an 'agricultural produce'. Paddy is the product of cultivation, and any processing done by the cultivator to remove the husk retains t... [Read more]

GST - Tamil Nadu AAR - Taxability of rent received for storing agricultural produce (Paddy) in a godown - Whether the rent received by the proprietor for the godown used for storage of paddy is taxable under GST - HELD - As per the relevant GST notifications, services relating to the storage or warehousing of agricultural produce attract a nil rate of GST. The paddy, being the raw, unprocessed form of rice that is typically grown in flooded fields, satisfies the criteria to be considered as an 'agricultural produce'. Paddy is the product of cultivation, and any processing done by the cultivator to remove the husk retains the essential characteristics of paddy and makes it marketable in the primary market. Therefore, the godown rented for the storage of paddy is covered under the exemption for services relating to the storage or warehousing of agricultural produce, and hence the rent received is not taxable under GST - Ordered accordingly [Read less]

GST - Tamil Nadu AAR - Classification and GST Rate on Quick Lime with 90% purity and Hydrated Lime with 85% to 95% purity - Whether the Quick Lime and Hydrated Lime supplied by the applicant fall under Heading 2522 or Heading 2825 of the Customs Tariff Act, 1975 - HELD - The Quick Lime and Hydrated Lime supplied by the applicant, containing 10-15% impurities in the form of Calcium Carbonate and Silica, fall under Heading 2522 of the Customs Tariff Act, 1975 and not under Heading 2825. Heading 2522 covers "Quicklime, slaked lime and hydraulic lime, other than calcium oxide and hydroxide of heading 2825", which includes impu... [Read more]

GST - Tamil Nadu AAR - Classification and GST Rate on Quick Lime with 90% purity and Hydrated Lime with 85% to 95% purity - Whether the Quick Lime and Hydrated Lime supplied by the applicant fall under Heading 2522 or Heading 2825 of the Customs Tariff Act, 1975 - HELD - The Quick Lime and Hydrated Lime supplied by the applicant, containing 10-15% impurities in the form of Calcium Carbonate and Silica, fall under Heading 2522 of the Customs Tariff Act, 1975 and not under Heading 2825. Heading 2522 covers "Quicklime, slaked lime and hydraulic lime, other than calcium oxide and hydroxide of heading 2825", which includes impure calcium oxide and hydroxide. In contrast, Heading 2825 covers pure calcium oxide and hydroxide containing negligible impurities - As per the Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017, which was continued even in the subsequent Notification No. 9/2025 - Central Tax (Rate) dated 17.09.2025, the Quick Lime and Hydrated Lime falling under Heading 2522 attract GST at the rate of 5%. Therefore, the GST rate applicable on the Quick Lime and Hydrated Lime supplied by the applicant is 5% - Ordered accordingly [Read less]

GST - Tamil Nadu AAR - Non-monetary benefits received by a dealer as consideration for promoting sales - The applicant is a wholesale and retail dealer for paints and related products who obtained a franchise from paint manufacturers. The manufacturers provided the applicant with non-monetary benefits in the form of free gifts, compliments, and tour packages for the applicant and its customers (painters) who bought their products. The manufacturers deducted TDS under Section 194R of the Income Tax Act on the value of these non-monetary benefits. The applicant raised tax invoices for the value of the non-monetary benefits a... [Read more]

GST - Tamil Nadu AAR - Non-monetary benefits received by a dealer as consideration for promoting sales - The applicant is a wholesale and retail dealer for paints and related products who obtained a franchise from paint manufacturers. The manufacturers provided the applicant with non-monetary benefits in the form of free gifts, compliments, and tour packages for the applicant and its customers (painters) who bought their products. The manufacturers deducted TDS under Section 194R of the Income Tax Act on the value of these non-monetary benefits. The applicant raised tax invoices for the value of the non-monetary benefits and charged CGST and SGST. However, the manufacturers were of the view that the applicant need not raise any tax invoice as such transactions are not considered "supply" under the GST Act - Whether the tax invoices raised by the applicant for the non-monetary benefits/perquisites received are valid under the GST Act - HELD - The tax invoices raised by the applicant are valid under the GST Act. The non-monetary benefits received by the applicant are considered "consideration" for the "supply of support services" rendered by the applicant to the manufacturers in the form of sales promotion and augmentation. The transaction between the applicant and the manufacturers falls within the definition and scope of "supply" under Section 7 of the CGST Act - the tax invoices raised by the applicant are valid under the GST Act, and the value on which TDS is deducted under Section 194R of the Income Tax Act should be considered as "supply" under the GST Act. The applicant is required to issue invoices for the "supply of support services" and can charge GST inclusive of tax for the consideration received in the form of gifts/perquisites/tour packages – Ordered accordingly - Whether the value on which TDS is deducted under Section 194R of the Income Tax Act should be considered as "supply" under the GST Act - HELD - The value on which TDS is deducted under Section 194R of the Income Tax Act should be considered as "supply" under the GST Act. Since TDS is deducted on the value of the non-monetary benefits received by the applicant, the value of such gifts/perquisites/tour packages is income to the applicant for the services rendered and hence, should be considered as "supply" under the GST Act. [Read less]

GST - Tamil Nadu AAR - GST Exemption on Escrow Account/Current Account used solely to facilitate transfer of freight amounts - The applicant operates an online portal to facilitate connecting shippers and carriers across India without directly undertaking any responsibility for physical movement of goods. After shippers pay major portions of freight directly to carriers, they deposit the balance amounts into the applicant's account for forwarding it in full to the carrier's accounts upon delivery fulfillment. The applicant's role is limited to facilitating this transfer of funds as received, without any charge, markup, ded... [Read more]

GST - Tamil Nadu AAR - GST Exemption on Escrow Account/Current Account used solely to facilitate transfer of freight amounts - The applicant operates an online portal to facilitate connecting shippers and carriers across India without directly undertaking any responsibility for physical movement of goods. After shippers pay major portions of freight directly to carriers, they deposit the balance amounts into the applicant's account for forwarding it in full to the carrier's accounts upon delivery fulfillment. The applicant's role is limited to facilitating this transfer of funds as received, without any charge, markup, deduction or utilization, as part of their subscription-based obligations. They sought advance ruling on whether this freight amount deposit is liable for GST - Whether the applicant is liable to pay GST on the balance freight amounts deposited by shippers into the applicant's account for onward transfer to carriers - HELD - The freight amount held by the applicant cannot be considered as 'consideration' from the applicant's perspective, as it does not represent payment for any supply of goods or services by the applicant. The proviso to Section 2(31) of CGST Act clarifies that a deposit is not to be treated as consideration unless the supplier applies it as such. Furthermore, the activity of the applicant in holding and transferring the freight amounts does not constitute a 'supply' under Section 7 of CGST Act, as it is merely a facilitating role without any consideration accruing to the applicant - Since the freight amount does not represent consideration for a supply, and the applicant's activity does not amount to a supply, the applicant is not liable to pay GST on such freight amounts - The applicant is not liable to pay GST on the balance freight amounts deposited by shippers into the applicant's current account, which is meant to be forwarded to the carriers without any deduction – Ordered accordingly [Read less]