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Central Excise - Difference between the recorded stock and the physical stock, Non-reversal of Cenvat credit availed on the inputs which were not held in physical stock as per the books - Demand of duty, interest, and penalties - Whether the extended period of limitation under Section 11A of the Central Excise Act, 1944, could be invoked against the appellant – HELD - Mere omission to give correct information is not 'suppression of facts' unless it was deliberate to stop the payment of duty. The burden is on the Revenue to prove suppression of fact when the extended period of limitation is invoked - In the present case, ... [Read more]

Central Excise - Difference between the recorded stock and the physical stock, Non-reversal of Cenvat credit availed on the inputs which were not held in physical stock as per the books - Demand of duty, interest, and penalties - Whether the extended period of limitation under Section 11A of the Central Excise Act, 1944, could be invoked against the appellant – HELD - Mere omission to give correct information is not 'suppression of facts' unless it was deliberate to stop the payment of duty. The burden is on the Revenue to prove suppression of fact when the extended period of limitation is invoked - In the present case, the appellant immediately paid the differential duty along with interest upon being pointed out the deficiencies, and there was nothing to suggest 'suppression' with an intent to evade duty – Further, mere admission or remittance of duty would not automatically invite the levy of penalty. The 'suppression' has to be construed strictly and mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. In the present case, the Revenue has not been able to prove any 'suppression' with an intent to evade duty on the part of the appellant - The impugned order is set aside and the appeal is allowed [Read less]

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

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

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

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

Central Excise - Limitation period for refund claim - The appellant cleared a part of the sulphuric acid to fertilizer units without payment of duty by availing exemption, and the remaining was used to manufacture phosphoric acid. The appellant was liable to maintain separate accounts for the dutiable final product (copper anodes/cathodes) and the exempted product (sulphuric acid) under the Cenvat Credit Rules, 2004. Since the appellant did not maintain separate accounts, it was liable to pay an amount equivalent to 6%/5% of the value of the exempted goods as per Rule 6(3) of the Cenvat Credit Rules. The appellant had been... [Read more]

Central Excise - Limitation period for refund claim - The appellant cleared a part of the sulphuric acid to fertilizer units without payment of duty by availing exemption, and the remaining was used to manufacture phosphoric acid. The appellant was liable to maintain separate accounts for the dutiable final product (copper anodes/cathodes) and the exempted product (sulphuric acid) under the Cenvat Credit Rules, 2004. Since the appellant did not maintain separate accounts, it was liable to pay an amount equivalent to 6%/5% of the value of the exempted goods as per Rule 6(3) of the Cenvat Credit Rules. The appellant had been reversing the credit equivalent to 6%/5% of the value of sulphuric acid - Whether the refund claim filed by the appellant for the amount paid under Rule 6(3) of the CCR, 2004 is hit by the limitation period prescribed under Section 11B of the Central Excise Act, 1944 – HELD - The refund claim filed by the appellant was not a claim for "Central Excise duty" but was related to the exempted goods under Rule 6(3) of the CCR, 2004. However, all claims for refund shall be filed, considered, and disposed of in accordance with the provisions relating to refund, and the theory of mistake of law and the consequent period of limitation cannot be invoked by an assessee taking advantage of the decision in another assessee's case - The appellant would not have filed the refund claim but for the Supreme Court's decision in Hindustan Zinc Ltd., which triggered the filing of the refund claim. The appellant must succeed or fail in its own proceedings, and the ratio of the Mafatlal Industries Ltd. case would apply to the present case as well - The appeal filed by the appellant is rejcetd upholding the partial refund granted by the First Appellate Authority, as the remaining refund claim was found to be time-barred under Section 11B of the CEA, 1944 – The appeal is dismissed [Read less]

Customs - Import of "old and used digital multifunctioning devices" with standard accessories and attachments – Revenue held that the import of second-hand photocopiers was in violation of the Foreign Trade Policy, 2015-2020 and liable for confiscation under the Customs Act, 1962. The adjudicating authority imposed redemption fines equivalent to the re-assessed values of the seized goods and penalties of Rs. 20,000 each. The appellants challenged the orders before the Commissioner (Appeals), who reduced the redemption fines to 50% of the re-determined value – Appellant case that redemption fine and penalty should be 10... [Read more]

Customs - Import of "old and used digital multifunctioning devices" with standard accessories and attachments – Revenue held that the import of second-hand photocopiers was in violation of the Foreign Trade Policy, 2015-2020 and liable for confiscation under the Customs Act, 1962. The adjudicating authority imposed redemption fines equivalent to the re-assessed values of the seized goods and penalties of Rs. 20,000 each. The appellants challenged the orders before the Commissioner (Appeals), who reduced the redemption fines to 50% of the re-determined value – Appellant case that redemption fine and penalty should be 10% and 5% respectively – HELD - The Courts and Tribunals have consistently held that the redemption fine should be imposed to offset the profit that could have accrued to the importer, and the penalty should be commensurate with the offence. The CESTAT in appellant own case, has held that the redemption fine and penalty should be limited to around 10% and 5% of the value of the goods, respectively - The power of discretion by the adjudicating authority must be exercised based on well-founded principles and should not be done in a mechanical way. The redemption fines imposed in the present case were disproportionate and unjustified - The redemption fines is reduced to around 10% of the re-determined values of the goods, while upholding the duty demands and penalties – The appeal is partly allowed by reducing redemption fine [Read less]

Customs – Duty Exemption on re-import of part of imported goods in terms of Notification No.94/96-Cus. dated 16.12.1996 - Appellant exported tractors claiming duty drawback and duty credit. The tractors were exported in Semi Knock Down (SKD) condition along with tyres and tubes procured from an Indian supplier. Some of the tyres and tubes were rejected by the buyer due to quality concerns, and the appellant filed B/E for re-importing the rejected tyres and tubes, claiming customs duty exemption under Notification No.94/96-Cus. dated 16.12.1996 - Whether the appellant is eligible for the Customs duty exemption under Notif... [Read more]

Customs – Duty Exemption on re-import of part of imported goods in terms of Notification No.94/96-Cus. dated 16.12.1996 - Appellant exported tractors claiming duty drawback and duty credit. The tractors were exported in Semi Knock Down (SKD) condition along with tyres and tubes procured from an Indian supplier. Some of the tyres and tubes were rejected by the buyer due to quality concerns, and the appellant filed B/E for re-importing the rejected tyres and tubes, claiming customs duty exemption under Notification No.94/96-Cus. dated 16.12.1996 - Whether the appellant is eligible for the Customs duty exemption under Notification No.94/96-Cus. on the re-imported tyres and tubes – HELD - The appellant has satisfactorily established the identity of the re-imported tyres and tubes as the same goods that were exported earlier along with the tractors. The notification requires the re-imported goods to be the same as the exported goods, and this condition is fulfilled even if the appellant re-imports only a part of the exported goods (i.e., the tyres and tubes) and not the entire tractor in SKD condition - The appellate authority has chosen to reject the case holding that since the goods exported were tractors and that reimported were only tyres and tubes, appellant are not the same as the goods exported. If the recipient of the goods has raised quality issues only with the tyres and tubes, it would be opposed to commercial logic to expect the entire shipment of tractor in SKD condition to be returned for the benefit of the notification to be extended - The documentary evidence, such as the invoices, packing lists, and markings on the tyres, corroborated the appellant's claim that the re-imported goods were the same as the exported goods - The impugned order is set aside granting the appellant the customs duty exemption under Notification No.94/96-Cus – The appeal is allowed [Read less]

Customs – Duty Exemption on re-import of part of imported goods in terms of Notification No.94/96-Cus. dated 16.12.1996 - Appellant exported tractors claiming duty drawback and duty credit. The tractors were exported in Semi Knock Down (SKD) condition along with tyres and tubes procured from an Indian supplier. Some of the tyres and tubes were rejected by tCustoms - Manipulation of Focus Market Scheme Scrips, Customs duty payment using fraudulently enhanced scrip, Liability of Importer - Appellant imported goods and cleared them under Bill of Entry using a Focus Market Scheme Scrip. The scrip was fraudulently manipulated... [Read more]

Customs – Duty Exemption on re-import of part of imported goods in terms of Notification No.94/96-Cus. dated 16.12.1996 - Appellant exported tractors claiming duty drawback and duty credit. The tractors were exported in Semi Knock Down (SKD) condition along with tyres and tubes procured from an Indian supplier. Some of the tyres and tubes were rejected by tCustoms - Manipulation of Focus Market Scheme Scrips, Customs duty payment using fraudulently enhanced scrip, Liability of Importer - Appellant imported goods and cleared them under Bill of Entry using a Focus Market Scheme Scrip. The scrip was fraudulently manipulated and its value was increased fifty times from the original. The scrip was then used by three different importers, including the appellant, to pay Customs duty - Whether the importer is liable to pay the customs duty and penalty when the scrip used for payment of duty was fraudulently manipulated, even though the importer itself did not manipulate the scrip – HELD - When the exemption benefit is availed on forged/fake licenses/scrips, the importer is liable to pay the customs duty. The fraud vitiates everything, and such forged/fake scrips are void ab initio. Therefore, the Department is justified in invoking the extended period of limitation and demanding the Customs duty from the appellant, even though the appellant did not manipulate the scrip - The demand of customs duty and interest from the appellant, as well as the penalty under Section 114A of the Customs Act are upheld - The appeal is partly allowed by setting aside the penalty under Section 114AA on the appellant and upholding the rest of the impugned order - Whether the penalty under Section 114AA of the Customs Act can be imposed on the appellant – HELD - The penalty under Section 114AA can be imposed only if a person knowingly or intentionally makes, signs, or uses any declaration, statement, or document that is false or incorrect. In this case, there is no evidence that the appellant had the knowledge that the scrip was manipulated. The appellant was not the one who fraudulently manipulated the scrip. Therefore, the penalty imposed under Section 114AA cannot be sustained.he buyer due to quality concerns, and the appellant filed B/E for re-importing the rejected tyres and tubes, claiming customs duty exemption under Notification No.94/96-Cus. dated 16.12.1996 - Whether the appellant is eligible for the Customs duty exemption under Notification No.94/96-Cus. on the re-imported tyres and tubes – HELD - The appellant has satisfactorily established the identity of the re-imported tyres and tubes as the same goods that were exported earlier along with the tractors. The notification requires the re-imported goods to be the same as the exported goods, and this condition is fulfilled even if the appellant re-imports only a part of the exported goods (i.e., the tyres and tubes) and not the entire tractor in SKD condition - The appellate authority has chosen to reject the case holding that since the goods exported were tractors and that reimported were only tyres and tubes, appellant are not the same as the goods exported. If the recipient of the goods has raised quality issues only with the tyres and tubes, it would be opposed to commercial logic to expect the entire shipment of tractor in SKD condition to be returned for the benefit of the notification to be extended - The documentary evidence, such as the invoices, packing lists, and markings on the tyres, corroborated the appellant's claim that the re-imported goods were the same as the exported goods - The impugned order is set aside granting the appellant the customs duty exemption under Notification No.94/96-Cus – The appeal is allowed [Read less]

Service Tax - Appeal, Limitation period, Service of adjudication order - Based on third-party information, the Department issued a show-cause notice for non-payment of service tax. An ex-parte order was passed confirming the demand. The appellant claimed that it was unaware of the order as it was served at an old address - The appellant later obtained a copy of the order and filed an appeal, which was rejected by the Commissioner (Appeals) as barred by limitation - Whether the appeal filed by the appellant before the Commissioner (Appeals) was barred by limitation – HELD - When the complete copy of the adjudication order... [Read more]

Service Tax - Appeal, Limitation period, Service of adjudication order - Based on third-party information, the Department issued a show-cause notice for non-payment of service tax. An ex-parte order was passed confirming the demand. The appellant claimed that it was unaware of the order as it was served at an old address - The appellant later obtained a copy of the order and filed an appeal, which was rejected by the Commissioner (Appeals) as barred by limitation - Whether the appeal filed by the appellant before the Commissioner (Appeals) was barred by limitation – HELD - When the complete copy of the adjudication order was not served on the appellant initially, the date of service could not be considered as 27.10.2023, when the incomplete copy was received. The date of service should be considered as 07.12.2023, when the appellant received the complete copy of the order - Unless the complete copy of the order containing the reasons is served on the assessee, the right to challenge the order does not crystallize – Further, since Section 85(3A) uses the expression ‘month’ in contrast to ‘days’, the two months period from 08.12.2023 elapsed on the corresponding date of corresponding month i.e. on 08.02.2024 and similarly the period of month under proviso to Section 85(3A) elapsed on 08.03.2024 i.e. the date on which the appeal was presented by the appellant. Accordingly, the appeal filed by the appellant was within the condonable period of one month beyond the two-month limitation period, and the delay in filing the appeal should be condoned – The impugned order is set aside and the matter is remanded to the Commissioner (Appeals) to decide the appeal on merits - The appeal is allowed [Read less]

Service Tax - Reversal of Cenvat credit on exempted services, Calculation of Cenvat credit for reversal - Prior to March 2008, the appellant was availing and utilizing Cenvat credit on input services used in providing both taxable and exempted services, without restricting the utilization to 20% of the amount of service tax payable on the taxable output services, as required under Rule 6(3) of the Cenvat Credit Rules, 2004 – Disallowance of entire credit for wrong availment, along with interest and penalty - Whether the Cenvat credit of input services exclusively used for the provision of taxable services should be consi... [Read more]

Service Tax - Reversal of Cenvat credit on exempted services, Calculation of Cenvat credit for reversal - Prior to March 2008, the appellant was availing and utilizing Cenvat credit on input services used in providing both taxable and exempted services, without restricting the utilization to 20% of the amount of service tax payable on the taxable output services, as required under Rule 6(3) of the Cenvat Credit Rules, 2004 – Disallowance of entire credit for wrong availment, along with interest and penalty - Whether the Cenvat credit of input services exclusively used for the provision of taxable services should be considered or only the Cenvat credit of common input services should be taken into account for the purpose of calculating the Cenvat credit to be reversed under Rule 6(3A) of the CCR, 2004 – HELD - For the purpose of calculation of credit reversal under the formula in Rule 6(3A), the "total Cenvat credit" shall mean the credit of only common input services and not the input services exclusively used for the manufacture of dutiable products, on which the Cenvat credit is eligible in its entirety – The Rule 6 of the CCR Rules, 2004 should be read harmoniously and conjointly, and it is clear that the "Total Cenvat Credit" for the purpose of the formula under Rule 6(3A) is only the total Cenvat credit of common input services, and will not include the Cenvat credit on input/input services exclusively used for the provision of taxable services. The interpretation of the Revenue, which would lead to the disallowance of Cenvat credit on input services used in the provision of taxable services, is not in line with the provisions of the CCR, 2004 - The impugned order is set aside and the appeal is allowed [Read less]

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

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

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

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

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

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

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

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

Central Excise - Manufacture of tailor-made goods, Marketability of goods - Revenue alleged that the respondent has manufactured and clandestinely removed the finished goods from the factory of production without payment of central excise duty - Whether the goods manufactured by the respondent are 'marketable' and hence, excisable under the Central Excise Act, 1944 - HELD - The goods manufactured by the respondent are not marketable, as they were tailor-made as per the specific requirement of the customers and were not capable of being bought and sold in the market. The unassembled parts were tailor made goods, removed in ... [Read more]

Central Excise - Manufacture of tailor-made goods, Marketability of goods - Revenue alleged that the respondent has manufactured and clandestinely removed the finished goods from the factory of production without payment of central excise duty - Whether the goods manufactured by the respondent are 'marketable' and hence, excisable under the Central Excise Act, 1944 - HELD - The goods manufactured by the respondent are not marketable, as they were tailor-made as per the specific requirement of the customers and were not capable of being bought and sold in the market. The unassembled parts were tailor made goods, removed in CKD condition and they are not goods capable of being bought and sold - For an article to be subject to excise duty, it must be capable of being marketed and known in the market as a distinct identifiable commodity. In the present case, no evidence brought on record by the Revenue to show that the goods manufactured by the respondent were capable of being marketed or bought and sold in the market. Therefore, the goods manufactured by the respondent do not satisfy the test of 'marketability' and hence, are not excisable - the order of the Commissioner (Appeals) which had dropped the demand of duty, along with interest and penalty, is upheld – The Revenue appeal is dismissed - Whether the respondent wrongfully availed Cenvat credit based on the fake invoices - HELD - The Department has not brought any evidence to establish that the respondent had availed Cenvat credit based on fake invoices. The Adjudicating Authority has stated that the respondent had not produced any concrete evidence to prove that the inputs were actually received in their factory and accounted for in their records. However, the Department had also failed to prove beyond doubt that the subject goods were not received by the respondent and that it was only a paper transaction. Therefore, the Department has not been able to prove the allegation of wrongful Cenvat credit availed by the respondent. [Read less]

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

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

GST - Powers of DGGI to issue summons under Section 70 of the CGST Act, 2017 - The petitioners case that the summons were issued in violation of the guidelines and circulars issued by the Board as no assessment had been carried out, no liability was imposed - Whether the issuance of summons under Section 70 by the DGGI officers was valid and in accordance with the law - HELD - Under Section 70 CGST Act, the officer is empowered to summon any person, whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry - For the purposes of Section 70, a summons is issued... [Read more]

GST - Powers of DGGI to issue summons under Section 70 of the CGST Act, 2017 - The petitioners case that the summons were issued in violation of the guidelines and circulars issued by the Board as no assessment had been carried out, no liability was imposed - Whether the issuance of summons under Section 70 by the DGGI officers was valid and in accordance with the law - HELD - Under Section 70 CGST Act, the officer is empowered to summon any person, whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry - For the purposes of Section 70, a summons is issued primarily for gathering information and for providing an opportunity to produce documents, etc. Hence, issuance of summons under Section 70 cannot be considered to be initiation of proceedings against the petitioners - Even otherwise, in case there is a possibility of arrest in the future, there are sufficient inherent safeguards contained in Section 69 prior to the affecting arrest of the accused persons - Mere issuance of a summons does not imply that the Department has decided to proceed against the taxpayer for recovery of liability - The writ petitions are premature and dismissed. However, the Petitioners would be at liberty to approach the appropriate forum at the appropriate stage – The petitions are dismissed [Read less]

Bihar Finance Act, 1981 - Taxation of Packing Material and Cement - Appellant contended that under the Bihar Finance Act, 1981, the rate of tax on packing materials (gunny bags and HDPE bags) should be 4% and 7% respectively, while the rate on cement should be 11% - The Dept disallowed the appellant's claim for separate taxation and held that the "sale price" on which sales tax is to be levied must be treated as a consolidated amount at 11% irrespective of the separate prices shown in the invoices - Whether the sales tax can be charged separately on packing materials and cement at different rates, or whether the "sale pric... [Read more]

Bihar Finance Act, 1981 - Taxation of Packing Material and Cement - Appellant contended that under the Bihar Finance Act, 1981, the rate of tax on packing materials (gunny bags and HDPE bags) should be 4% and 7% respectively, while the rate on cement should be 11% - The Dept disallowed the appellant's claim for separate taxation and held that the "sale price" on which sales tax is to be levied must be treated as a consolidated amount at 11% irrespective of the separate prices shown in the invoices - Whether the sales tax can be charged separately on packing materials and cement at different rates, or whether the "sale price" on which sales tax is to be levied must be treated as a consolidated amount at 11% - HELD - The levy of sales tax has always been on the sale price of the goods in question and ‘sale price’ has been separately defined in Section 2(u) of the Bihar Finance Act, 1981. As per this provision, the sale price on which tax is liable to be paid is the amount payable to a dealer as valuable consideration in respect of the sale or supply of "goods", which includes cement along with its packing material – The packing of cement in gunny/HDPE bags was carried out by the dealer either at the time of, or prior to, the delivery of the goods. Consequently, there existed an implied agreement of sale to sell the packing material along with the contents therein - The appellant has not placed any factual material on record to show the existence of a separate contract or agreement for the sale of packing materials. Accordingly, the orders of the assessing, appellate and revisional authorities for disallowance of a separate tax on packing materials is in accordance with law and warrant no interference – The appeals are dismissed [Read less]

Customs - Classification of Multimedia Speakers - During the assessment, the Assessing Officer re-classified the goods under CTH 85182200 instead of the declared CTH 85279100, as the items were not having additional features such as FM Radio or USB port playback. The appellant challenged the re-assessment order before the Commissioner of Customs (Appeals), who upheld the lower authority's decision - Whether the impugned goods, Multimedia Speakers, should be classified under CTH 85279100 as declared by the appellant-importer, or under CTH 85182200 as re-assessed by the Revenue authorities – HELD - As per the CBEC Circular... [Read more]

Customs - Classification of Multimedia Speakers - During the assessment, the Assessing Officer re-classified the goods under CTH 85182200 instead of the declared CTH 85279100, as the items were not having additional features such as FM Radio or USB port playback. The appellant challenged the re-assessment order before the Commissioner of Customs (Appeals), who upheld the lower authority's decision - Whether the impugned goods, Multimedia Speakers, should be classified under CTH 85279100 as declared by the appellant-importer, or under CTH 85182200 as re-assessed by the Revenue authorities – HELD - As per the CBEC Circular No. 27/2013-Cus. dated 01.08.2013, multimedia speakers without additional features like FM Radio or USB port playback are to be classified under CTH 85182200, while those having such additional functionalities are classifiable under CTH 85279100. In the present case, the items were simple multimedia speakers without any additional features and, therefore, correctly reclassified under CTH 85182200 by the lower authorities. The other the items having multifunctionality, are correctly classified under CTH 85279100 - The re-classification of subject goods under CTH 85182200 is upheld and the appeal is dismissed [Read less]

Service Tax - Extended period of limitation - The appellant provided IT related services and had a subsidiary in Philippines named Land Registration System Inc. (LARES). LARES hired the services of M/s IL & FS Global Financial Services Pte. Ltd. to restructure its existing debt. The appellant was appointed by LARES to supervise and coordinate the restructuring work – Appellant raised invoices on LARES for the professional fee and claimed reimbursement of fees paid to M/s IL & FS Global Financial Services Pte. Ltd - Revenue issued a notice demanding service tax on the foreign currency expenditure, alleging that the appell... [Read more]

Service Tax - Extended period of limitation - The appellant provided IT related services and had a subsidiary in Philippines named Land Registration System Inc. (LARES). LARES hired the services of M/s IL & FS Global Financial Services Pte. Ltd. to restructure its existing debt. The appellant was appointed by LARES to supervise and coordinate the restructuring work – Appellant raised invoices on LARES for the professional fee and claimed reimbursement of fees paid to M/s IL & FS Global Financial Services Pte. Ltd - Revenue issued a notice demanding service tax on the foreign currency expenditure, alleging that the appellant had received services of banking and financial services from M/s IL & FS Global Financial Services Pte. Ltd. - Whether the extended period of limitation can be invoked to demand service tax – HELD - The extended period of limitation cannot be invoked in the present case. The relevant facts were in the knowledge of the Department as the appellant had filed the returns for the year 2012-13 and there was a series of correspondence between the appellant and the Revenue. The SCN was issued based on the Audit conducted in 2017. The extended period cannot be invoked in cases where the show cause notice is based on audit. There is nothing on record to prove that the appellant was involved in any suppression of facts, mis-declaration or collusion with an intent to evade payment of duty – the impugned order is set aside and the appeal is allowed on limitation [Read less]

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

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

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

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

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

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

GST - Grant of bail in economic offence under CGST Act – Arrest in connection with allegations that petitioner had claimed and received a refund and ITC from non-existent/inoperative suppliers on account of bogus invoices - Whether the petitioner is entitled to be released on bail considering the facts and circumstances of the case – HELD - The petitioner has been in custody since 08.07.2025, i.e., for more than 5 months, and the investigation is already complete. The petitioner has been cooperating with the authorities, has made voluntary payments of tax and GST, and has no criminal antecedents - The grant of bail is ... [Read more]

GST - Grant of bail in economic offence under CGST Act – Arrest in connection with allegations that petitioner had claimed and received a refund and ITC from non-existent/inoperative suppliers on account of bogus invoices - Whether the petitioner is entitled to be released on bail considering the facts and circumstances of the case – HELD - The petitioner has been in custody since 08.07.2025, i.e., for more than 5 months, and the investigation is already complete. The petitioner has been cooperating with the authorities, has made voluntary payments of tax and GST, and has no criminal antecedents - The grant of bail is the general rule and incarceration is an exception. The right to speedy trial under Article 21 of the Constitution cannot be denied to an under-trial prisoner - Considering the totality of the circumstances and the settled principles of law, the petitioner is directed to be released on bail on furnishing personal bond and surety bond(s) to the satisfaction of the trial court, subject to certain conditions – The petition is allowed [Read less]

GST – Applicable GST rate on Government construction contracts - Construction of commercial complex for Tamil Nadu Housing Board (TNHB) - The TNHB applied a reduced GST rate of 12% instead of the statutory rate of 18% as per the GST notification, resulting in an underpayment of 6% GST for the petitioner's work from July 1, 2017 onwards - The DGGI issued notice to the petitioner demanding payment of interest and penalty for the underpaid GST - Whether the petitioner is entitled to the difference in GST paid at 12% instead of the statutory rate of 18% as per the Notification No.11/2017 Central Tax (Rate) – HELD - The Gov... [Read more]

GST – Applicable GST rate on Government construction contracts - Construction of commercial complex for Tamil Nadu Housing Board (TNHB) - The TNHB applied a reduced GST rate of 12% instead of the statutory rate of 18% as per the GST notification, resulting in an underpayment of 6% GST for the petitioner's work from July 1, 2017 onwards - The DGGI issued notice to the petitioner demanding payment of interest and penalty for the underpaid GST - Whether the petitioner is entitled to the difference in GST paid at 12% instead of the statutory rate of 18% as per the Notification No.11/2017 Central Tax (Rate) – HELD - The Government of Tamil Nadu had issued notifications in 2017, which established that the liability under the GST regime shall be borne by the procuring entity (in this case, the TNHB). The notifications laid down detailed guidelines for evaluating the net change in tax liability on contracts due to the introduction of GST, and directed all Departments to make on-account payments to contractors restricting it to the value due as per the existing contract agreement, until the notification of guidelines - The TNHB, through its own board resolution, had resolved to adopt the GST rate of 18% for saleable projects from July 1, 2017. However, it had continued to apply the reduced 12% GST rate in its payment certifications to the petitioner, resulting in an underpayment of 6% GST - Since the GST liability is to be borne by the procuring entity as per the Government notifications, the TNHB is liable to pay the petitioner the difference in GST paid at 12% instead of the statutory 18% rate - The TNHB is directed to consider the petitioner's representation on its own merits and pass appropriate orders in accordance with the law – The writ petition stands disposed of [Read less]

Service Tax - Cenvat credit on Rent-a-cab service, Extended period of Limitation - Whether the rent-a-cab service availed by the appellant for providing pick-up and drop facility to its employees during working hours is an 'input service' eligible for Cenvat credit - HELD - The amendment to CCR 2004 w.e.f. April 1, 2012 expressly excluded 'services provided by way of renting of a motor vehicle' from the definition of 'input service' – Further, the Supreme Court in Solar Industries India Limited case held that providing transportation service to employees cannot be considered as 'input service' as it has no relation to th... [Read more]

Service Tax - Cenvat credit on Rent-a-cab service, Extended period of Limitation - Whether the rent-a-cab service availed by the appellant for providing pick-up and drop facility to its employees during working hours is an 'input service' eligible for Cenvat credit - HELD - The amendment to CCR 2004 w.e.f. April 1, 2012 expressly excluded 'services provided by way of renting of a motor vehicle' from the definition of 'input service' – Further, the Supreme Court in Solar Industries India Limited case held that providing transportation service to employees cannot be considered as 'input service' as it has no relation to the manufacture of goods. The appellant's reliance on the earlier judgments was misplaced as they pertained to the period prior to the amendment of the CCR 2004 – On the issue of time-barred, as per the provisions of Section 73(1) of the Finance Act, 1994, the department can issue a notice within 30 months from the relevant date, which is the date of filing of the return by the appellant. Since the notices were issued within this period, there is no merit in the appellant's contention regarding limitation - The denial of Cenvat credit on rent-a-cab services on merits is upheld. However, the matter is remanded to the Commissioner (Appeals) to examine the aspect of limitation – The appeal is partly allowed [Read less]

GST - Bail Application – Arrest in connection with offences under Section 132(1)(b)&(c) read with Sections 132(1(i) and 135(5) of the CGST Act, 2017 – Availment of Input Tax Credit based on fake invoices - The petitioner filed the present bail application, contending that the search proceedings were illegal, the arrest was delayed by over 24 hours, and the grounds of arrest were not properly serve – HELD - The offence of the petitioner is triable by a Judicial Magistrate with maximum punishment of 5 years, the investigation is complete and there is no evidence to suggest that the petitioner will tamper with the evide... [Read more]

GST - Bail Application – Arrest in connection with offences under Section 132(1)(b)&(c) read with Sections 132(1(i) and 135(5) of the CGST Act, 2017 – Availment of Input Tax Credit based on fake invoices - The petitioner filed the present bail application, contending that the search proceedings were illegal, the arrest was delayed by over 24 hours, and the grounds of arrest were not properly serve – HELD - The offence of the petitioner is triable by a Judicial Magistrate with maximum punishment of 5 years, the investigation is complete and there is no evidence to suggest that the petitioner will tamper with the evidence or influence the witnesses - The delay in producing the accused before the Court within 24 hours of arrest amounts to a violation of the petitioner's fundamental rights. Once the fundamental rights of the accused are found to be violated, the Court is duty-bound to grant bail - The petitioner is allowed to be released on bail subject to furnishing personal bond and surety, and other conditions to secure his presence and participation in the trial – The application is allowed [Read less]

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

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

Customs - Violation of Customs Notification conditions, duty evasion charges, regularization by DGFT - Appellant imported PP Granules under Advance Authorisation without payment of Customs duty but could not utilise them for manufacture and export of goods – The adjudicating authority confiscated the goods, confirmed the duty demand with interest, and imposed equal penalty under Section 114A - Whether the appellant is entitled to the benefit of Sections 28(2) and 28(10B) of the Customs Act, 1962 and if the imposition of penalty under Section 114A is justified - HELD - The appellant had paid the duty and interest on their... [Read more]

Customs - Violation of Customs Notification conditions, duty evasion charges, regularization by DGFT - Appellant imported PP Granules under Advance Authorisation without payment of Customs duty but could not utilise them for manufacture and export of goods – The adjudicating authority confiscated the goods, confirmed the duty demand with interest, and imposed equal penalty under Section 114A - Whether the appellant is entitled to the benefit of Sections 28(2) and 28(10B) of the Customs Act, 1962 and if the imposition of penalty under Section 114A is justified - HELD - The appellant had paid the duty and interest on their own before the issuance of the notice and also got the matter regularized with the DGFT. By virtue of Section 28(10B) of the Customs Act, the show cause notice is deemed to be issued under Section 28(1) as the charges of collusion or wilful misstatement were not established. Further, under Section 28(2), since the appellant had paid the duty and interest, the show cause notice should not have been issued - The proviso to Section 28(2) provides that no penalty shall be levied if the duty and interest are paid within 30 days of the receipt of the notice. Considering these provisions, the imposition of penalty under Section 114A is unjustified - The imposition of penalty under Section 114A of the Customs Act is set aside and the appeal is allowed [Read less]

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

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

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

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

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

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

SVLDRS, 2019 – Demand of Interest post issue of Discharge Certificate - The petitioner filed a declaration under the SVLDRS and paid the requisite amount. The Designated Committee issued a Discharge Certificate to the petitioner, certifying full and final settlement of tax dues - Whether the issuance of Show Cause Notice demanding interest on the delayed payment of service tax, after the petitioner had been issued a Discharge Certificate, is legally sustainable – HELD - the issuance of Discharge Certificate is not just conclusive of the amount but also of the full and final settlement of tax dues - This is not a case w... [Read more]

SVLDRS, 2019 – Demand of Interest post issue of Discharge Certificate - The petitioner filed a declaration under the SVLDRS and paid the requisite amount. The Designated Committee issued a Discharge Certificate to the petitioner, certifying full and final settlement of tax dues - Whether the issuance of Show Cause Notice demanding interest on the delayed payment of service tax, after the petitioner had been issued a Discharge Certificate, is legally sustainable – HELD - the issuance of Discharge Certificate is not just conclusive of the amount but also of the full and final settlement of tax dues - This is not a case where the Respondents allege any falsity, misstatement, misdeclaration, suppression or the like in the voluntary disclosure made in the declaration filed by the petitioner, under the SVLDRS. In such situation, when a discharge certificate for the settlement of all tax dues has been issued, the demands raised by the show cause notices issued would be ex facie contrary to law - The issuance of SCNs demanding interest on the delayed payment of service tax is contrary to the provisions of the Finance Act, 2019, and without authority in law. The Discharge Certificate issued by the Designated Committee was conclusive as to the matter and time period covered, and the petitioner was not liable to pay any further duty, interest, or penalty with respect to the same – The writ petition is allowed - Whether the petitioner was entitled to have its declaration under the SVLDRS considered under the "enquiry, investigation or audit" category, instead of the "arrears" category – HELD - Merely because the Petitioner had incorrectly filed its declaration under arrears category and not under audit, enquiry, investigation category would not deprive the Petitioner to claim relief which is available to the Petitioner eligible under the statutory framework of the Finance Act, 2019 - The petitioner is eligible to file its declaration under the "enquiry, investigation or audit" category, as the total tax dues against the petitioner were quantified before the cut-off date of 30 June 2019, as stipulated under Section 125(1)(e) of the Finance Act, 2019. The petitioner had already paid a significant portion of the quantified amount before the cut-off date, and the petitioner is entitled to the deduction of the same under Section 124(2) of the Finance Act, 2019. The respondents are directed to consider the petitioner's declaration under the "investigation" category and grant the petitioner the benefit of amount paid by the petitioner to avail the benefit under the scheme. [Read less]

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

Customs – Import under Advance License, Non-fulfilment of minimum value addition condition - Respondents had obtained an Advance license for import of certain components for manufacturing and exporting complete electronic ventilation systems to Russia – The Authorities found that instead of importing components, Respondents had imported complete equipment in CKD-SKD condition and no further processing and manufacturing were carried out in India - Customs authorities issued a show-cause notice alleging that the assembly and testing undertaken on the imported goods did not constitute 'manufacture' - Whether the import ef... [Read more]

Customs – Import under Advance License, Non-fulfilment of minimum value addition condition - Respondents had obtained an Advance license for import of certain components for manufacturing and exporting complete electronic ventilation systems to Russia – The Authorities found that instead of importing components, Respondents had imported complete equipment in CKD-SKD condition and no further processing and manufacturing were carried out in India - Customs authorities issued a show-cause notice alleging that the assembly and testing undertaken on the imported goods did not constitute 'manufacture' - Whether the import effected by the respondents under the licenses issued by DGFT and the export obligations carried out by them were in violation of the license conditions and policy decision of the DGFT - HELD - As per the EXIM Policy 1997-2002, for export of goods against payment in Indian Rupees, a minimum value addition of 33% was required. However, the Tribunal itself had found that the actual value addition done by the respondents was only 5.18%, which was much below the required threshold. When the value addition was only 5.18% as recorded by the Tribunal, which was much below 33% for export of goods against payment in Indian Rupee under paragraph 11.7 of the EXIM policy, it could not be said that there was any increase in the intrinsic value of the export product by the Respondent - It is settled principles of law that an assessee claiming the benefit of an exemption notification must strictly comply with the conditions prescribed therein. The exemption provision has to be construed strictly, and the burden is on the assessee to establish that it satisfies the eligibility criteria. In the present case, since the Respondents failed to achieve the minimum value addition as mandated, they were not entitled to the exemption from payment of customs duty - The respondents had misrepresented the facts to the JDGFT while obtaining the Advance License, as the supporting manufacturer declared by them did not have the requisite manufacturing facilities. This would also disentitle them from the exemption under Sections 111(m) and 111(o) of the Customs Act - The impugned order of the CEGAT is set aside and the Revenue appeal is allowed [Read less]

GST – Validity of issuance of consolidation of Show Cause Notices across multiple Financial Years – Petitioner aggrieved by SCN alleging tax evasion and ineligible input tax credit claims over a period of multiple FYs from 2019-20 to 2023-24 - The petitioner contends that the consolidation of multiple financial years in a single Show Cause Notice is impermissible under the CGST Act - Whether the consolidation of show cause notices across multiple financial years is valid under the CGST Act – HELD - The CGST Act is structured around financial-year-specific assessment, with every stage, registration, maintenance of acc... [Read more]

GST – Validity of issuance of consolidation of Show Cause Notices across multiple Financial Years – Petitioner aggrieved by SCN alleging tax evasion and ineligible input tax credit claims over a period of multiple FYs from 2019-20 to 2023-24 - The petitioner contends that the consolidation of multiple financial years in a single Show Cause Notice is impermissible under the CGST Act - Whether the consolidation of show cause notices across multiple financial years is valid under the CGST Act – HELD - The CGST Act is structured around financial-year-specific assessment, with every stage, registration, maintenance of accounts, filing of returns, reconciliation, determination of liability, adjudication and limitation, being independent for each Financial Year. The Sections 73 and 74 of the CGST Act prescribe specific time limits for issuance of SCNs and passing of orders, which are tied to the due date of filing Annual Returns for the relevant Financial Year – Further, various High Courts have consistently held that the issuance of a consolidated SCN covering multiple Financial Years is in violation of the statutory scheme and framework of the CGST Act - The assessee is entitled to give year-wise explanations, year-wise reconciliations, and year-wise legal defences. A single notice covering five years deprives the assessee of this opportunity and violates natural justice. When the entire statutory scheme i.e., from registration to accounts, from returns to annual reconciliation, from assessment to limitation, all operates on a financial-year basis, there is no scope for issuing a consolidated SCN covering multiple unrelated financial years – The clubbing/ consolidation/ bunching/ combining of multiple tax periods/financial years in a Single/Composite Show cause notice issued under Section 73/74 of the CGST Act is illegal, invalid, impermissible and without jurisdiction or authority of law and contrary to the provisions of the Act - The impugned show cause notice and all further proceedings initiated thereunder are quashed, while granting liberty to the revenue authorities to initiate fresh proceedings in accordance with law – The writ petition is allowed [Read less]

Customs - Refund of Customs Duty paid in excess – Due to a technical glitch in the EDI system, the petitioner could not claim the exemption at the time of filing the Bill of Entries and had to pay a higher amount of Customs Duty – Denial of refund of the excess amount paid stating that the refund claim was premature and the petitioner must first seek re-assessment of the Bill of Entries - Whether the petitioner is entitled to a refund of the excess Customs Duty paid due to the technical glitch in the EDI system, without the requirement of prior re-assessment of the Bill of Entries – HELD - The petitioner's goods were... [Read more]

Customs - Refund of Customs Duty paid in excess – Due to a technical glitch in the EDI system, the petitioner could not claim the exemption at the time of filing the Bill of Entries and had to pay a higher amount of Customs Duty – Denial of refund of the excess amount paid stating that the refund claim was premature and the petitioner must first seek re-assessment of the Bill of Entries - Whether the petitioner is entitled to a refund of the excess Customs Duty paid due to the technical glitch in the EDI system, without the requirement of prior re-assessment of the Bill of Entries – HELD - The petitioner's goods were clearly covered by the exemption notification, and the benefit of the exemption ought to have been extended to the petitioner. The Department had not provided any response to the allegation of a technical glitch in the EDI system, which prevented the petitioner from claiming the exemption at the time of filing the Bill of Entries – Though refund cannot be directly issued without the re-assessment of the Bill of Entries, however, in the present case, where the petitioner's goods were clearly exempt, the amount cannot be held back, and the Bill of Entries should be re-assessed to facilitate the refund to the petitioner - Department is directed to re-assess the Bill of Entries within two months and, after completing the re-assessment, to issue the refund to the petitioner in terms of Notification 1/2016-Infrastructure Cess dated 01-03-2016 – The petition is allowed [Read less]

Madhya Pradesh Value Added Tax Act, 2002 – Repeal of MPVAT Act, 2002 - Imposition of penalty for the assessment year 2008-09 – Petitioner case that after the MPVAT Act and MPET Act stood omitted, the power to levy VAT, Entry Tax etc., on goods also stood omitted. Hence, the Respondent did not have the power to issue the Impugned Orders/Show Cause Notice - Whether the SCN issued under the repealed MP VAT Act in 2020 is valid and maintainable – HELD - The issue involved in the present case had already been addressed by the Supreme Court in the case of State of Telangana and Ors v. Trimula Constructions. The Supreme Cou... [Read more]

Madhya Pradesh Value Added Tax Act, 2002 – Repeal of MPVAT Act, 2002 - Imposition of penalty for the assessment year 2008-09 – Petitioner case that after the MPVAT Act and MPET Act stood omitted, the power to levy VAT, Entry Tax etc., on goods also stood omitted. Hence, the Respondent did not have the power to issue the Impugned Orders/Show Cause Notice - Whether the SCN issued under the repealed MP VAT Act in 2020 is valid and maintainable – HELD - The issue involved in the present case had already been addressed by the Supreme Court in the case of State of Telangana and Ors v. Trimula Constructions. The Supreme Court had held that the Constitution (101st Amendment) Act, 2016, which introduced the GST regime, had the effect of continuing the operation of inconsistent State-level VAT laws for a limited duration. This was part of the transitional arrangement to facilitate the implementation of GST - The impugned show cause notice issued under section 52 of the MPVAT Act is quashed. However, liberty is granted to the respondent to proceed in accordance with law, if so advised – The writ petitions are allowed [Read less]

GST - Reimbursement of differential GST on Works Contracts - The petitioner was awarded several works contracts by various government agencies and authorities prior to the implementation of the GST regime. After the implementation of GST, the petitioner became liable to pay GST on these works contracts, which resulted in an additional tax burden - Whether the respondent authorities are required to reimburse the petitioner for the differential tax amount between the pre-GST KVAT regime and the post-GST regime – HELD - The tax component is an independent component which the petitioner does not retain as profit, but is a st... [Read more]

GST - Reimbursement of differential GST on Works Contracts - The petitioner was awarded several works contracts by various government agencies and authorities prior to the implementation of the GST regime. After the implementation of GST, the petitioner became liable to pay GST on these works contracts, which resulted in an additional tax burden - Whether the respondent authorities are required to reimburse the petitioner for the differential tax amount between the pre-GST KVAT regime and the post-GST regime – HELD - The tax component is an independent component which the petitioner does not retain as profit, but is a statutory payment that the respondents must honor. The respondents to follow a specific procedure to calculate the tax difference, which involves assessing the works executed pre-GST under the KVAT regime, deriving the rates of materials and KVAT items required for the balance works, deducting the KVAT amount, and adding the applicable GST - The respondents to sign a supplementary agreement with the petitioner for the revised GST-inclusive work value, and to reimburse the petitioner for the differential tax amount – The petition is disposed of [Read less]

Customs – Import of cement, adoption of contemporaneous domestic RSP – Appellant imported Ordinary Portland Cement of Pakistan origin. Two Bills were classified under Sl. No. 1C of Notification No. 4/2006-CE for cement other than that cleared in packaged form, and one Bill under Sl. No. 1A(ii) for cement in packaged form with RSP exceeding Rs.190 - Department alleged that the cement was imported in 50-kg bags with RSP printed, and thus the Appellant had wrongly availed the benefit of Sl. No. 1C of Notification No. 4/2006-CE - Whether cement imported and sold exclusively to industrial/institutional consumers is eligible... [Read more]

Customs – Import of cement, adoption of contemporaneous domestic RSP – Appellant imported Ordinary Portland Cement of Pakistan origin. Two Bills were classified under Sl. No. 1C of Notification No. 4/2006-CE for cement other than that cleared in packaged form, and one Bill under Sl. No. 1A(ii) for cement in packaged form with RSP exceeding Rs.190 - Department alleged that the cement was imported in 50-kg bags with RSP printed, and thus the Appellant had wrongly availed the benefit of Sl. No. 1C of Notification No. 4/2006-CE - Whether cement imported and sold exclusively to industrial/institutional consumers is eligible for Sl. No. 1C benefit, irrespective of packaging and RSP printing - HELD - At the relevant time, there was no self-assessment; hence the out-of-charge (OOC) order under Section 47 was an assessment order - Once an out-of-charge order is made without self-assessment, it functions as an assessment order and cannot be reopened by a simple show-cause notice. To revise such an assessment, customs authorities must use specific legal procedures outlined in the Customs Act, such as a review under Section 129D or reassessment proceedings. Accordingly, the SCN itself is without jurisdiction, rendering the demand void – Further, the fact that the cement was imported in 50 kg packaged bags does not disentitle the Appellant from the benefit of Sl. No. 1C, as the essential criterion is the nature of the buyer (industrial/institutional), not the form of packaging - Even cement in 50 kg retail-type bags qualifies for Sl. No. 1C so long as the buyers are industrial/institutional consumers and the fact that goods are in bags does not convert Industrial Sale into Retail Sale - The essential criterion for Sl. No. 1C is the nature of the buyer (industrial/institutional), not the form of packaging, and this condition is fully satisfied. Accordingly, the lower authorities erred in rejecting the exemption merely because the cement was packaged or had printed MRP - The Appellant is eligible for the benefit of Sl. No. 1C of Notification No. 4/2006-CE. The impugned order is set aside and the appeal is allowed - Whether Revenue can adopt contemporaneous RSP of domestic cement to re-fix RSP of imported cement - HELD - The Revenue's attempt to substitute the importer's declared RSP (lower) with the domestic cement manufacturers' RSP (higher) as the contemporaneous import price is impermissible. The RSP must be the RSP of the imported goods, not domestic goods, and there was no evidence of the importer selling the goods at a higher RSP than declared – The adoption of indigenous RSP for imported goods has been held impermissible. Thus, the demand based on enhanced RSP is factually baseless and legally untenable - Whether extended period under proviso to Section 28 is invokable - HELD – The invocation of the extended period is unsustainable, as there was no evidence of deliberate suppression, fraud, or wilful misstatement. The dispute, at best, concerned the interpretation of the Notification, for which invoking the extended period is impermissible - Once the extended period fails, the penalty under Section 114A automatically fails. Further, the Appellant acted based on an interpretation consistent with earlier Tribunal decisions, and hence, the equal penalty under Section 114A cannot survive. [Read less]

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

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

Service Tax - Advertising Agency, Taxability of Performance Incentives under BAS – Respondent-assessee is an advertising agency that provides services to clients and books advertising space and slots in print and electronic media - Dept issued notice alleging that the performance incentives received by the respondent from media houses constitute a ‘Business Auxiliary Service’ and are therefore liable to service tax - Whether the performance incentives received by the advertising agency from media houses are liable to service tax - HELD - The advertising agency merely renders services to its clients as per their appro... [Read more]

Service Tax - Advertising Agency, Taxability of Performance Incentives under BAS – Respondent-assessee is an advertising agency that provides services to clients and books advertising space and slots in print and electronic media - Dept issued notice alleging that the performance incentives received by the respondent from media houses constitute a ‘Business Auxiliary Service’ and are therefore liable to service tax - Whether the performance incentives received by the advertising agency from media houses are liable to service tax - HELD - The advertising agency merely renders services to its clients as per their approved advertising plans and does not render any additional service to the media houses. Achieving revenue targets or benchmarks is part of the existing service and does not constitute a separate or additional service - The advertising agency has no agreement with the media houses to meet any target, nor is there any obligation on the media houses to provide incentives or discounts. The advertising agency clients are the advertisers who decide and approve the media plans suggested by the agency. Therefore, the advertising agency cannot have any obligation to the media houses. The incentives paid by the media houses are merely for achieving a particular target while carrying out the business for its clients – Further, the CBEC Circular No. 214/1/2023-ST clarified that for Section 66E(e) of the Finance Act, 1994 to apply, there must be a contractual agreement where one party agrees to do or abstain from doing something in exchange for consideration from the other party. In the present case, the advertising agency does not have any such independent contractual arrangement with the media houses - The concurrent findings of the lower authorities that the performance incentives received by the advertising agency are not liable to service tax, is upheld – The Revenue appeal is dismissed [Read less]

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

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

Customs – Under-Valuation, Confiscation of goods, Penalty under Customs Act - Appellant accepted the charge that the design charges for the imported goods should have formed part of the assessable value under the Customs Valuation Rules. An Order-in-Original was passed rejecting the declared value, redetermining the assessable value, confiscating the goods, and imposing a redemption fine and penalty on the appellant - Whether the Dept can confiscate the imported goods merely on account of non-declaration of the value of a portion of the imported goods, which otherwise complied with the tariff entries – HELD - The recor... [Read more]

Customs – Under-Valuation, Confiscation of goods, Penalty under Customs Act - Appellant accepted the charge that the design charges for the imported goods should have formed part of the assessable value under the Customs Valuation Rules. An Order-in-Original was passed rejecting the declared value, redetermining the assessable value, confiscating the goods, and imposing a redemption fine and penalty on the appellant - Whether the Dept can confiscate the imported goods merely on account of non-declaration of the value of a portion of the imported goods, which otherwise complied with the tariff entries – HELD - The records clearly indicate the series of errors committed by the assessee in arriving at the proper assessable value. The value reflected in the B/E had been incorrect, and when confronted, the appellant conceded to the error. Subsequent investigations revealed further errors in the valuation of the consignment that also the appellant acceded to. Ultimately the valuation was rejected and the proper assessable value determined by the authorities and accepted by the appellant – Further, The Nil rate is in relation to a separate assessable commodity being ‘plans, drawings and designs’, and cannot be interpolated to mean design charges in respect of the Dryers, Heater and Cooler imported by the assessee, that constitute a distinct, separate assessable commodity - As the value reflected in the Bill of Entry did not correspond to the proper valuation determined by the authorities, the confiscation is valid under Section 111(m) of the Customs Act. The appellant had accepted the errors in valuation and paid the duty as per the enhanced value determined by the Dept. Therefore, Section 111(m) was clearly attracted and the confiscation is justified – The appeal is dismissed - Whether the Department was justified in imposing a redemption fine and penalty as a condition precedent for redeeming the goods, whose importation was otherwise permissible – HELD - The imposition of redemption fine and penalty was justified under Sections 125 and 112(a) of the Customs Act, respectively. Since the appellant had accepted the errors in valuation, the scope for discretion in imposing the penalty was limited. [Read less]

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

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

GST - Pre-SCN consultative notice under Rule 142(1A) of CGST Rules, 2017 - Whether the impugned Show Cause Notice (SCN) and the Order-in-Original are not tenable due to the lack of a pre-SCN consultative notice in terms of Rule 142 (1A) of the CGST Rules, 2017 – HELD - The amended Rule 142(1A) of the 2017 Rules, which came into effect on 15th October, 2020, replaced the word 'SHALL' with 'MAY' with respect to the issuance of a pre-SCN consultative notice. After this amendment, the issuance of a pre-SCN consultative notice is not mandatory, especially in cases of large-scale fraudulent availment of ITC involving multiple ... [Read more]

GST - Pre-SCN consultative notice under Rule 142(1A) of CGST Rules, 2017 - Whether the impugned Show Cause Notice (SCN) and the Order-in-Original are not tenable due to the lack of a pre-SCN consultative notice in terms of Rule 142 (1A) of the CGST Rules, 2017 – HELD - The amended Rule 142(1A) of the 2017 Rules, which came into effect on 15th October, 2020, replaced the word 'SHALL' with 'MAY' with respect to the issuance of a pre-SCN consultative notice. After this amendment, the issuance of a pre-SCN consultative notice is not mandatory, especially in cases of large-scale fraudulent availment of ITC involving multiple entities. In such complex transactions worth crores of Rupees, a pre-consultative notice would be meaningless, and parties usually do not voluntarily deposit the illegally obtained amounts even when searches are conducted. Therefore, the lack of a pre-SCN consultative notice does not render the impugned SCN and Order-in-Original as not tenable - The challenge to Notification No.79/2022-Central Tax is already pending before the Court in a separate writ petition and the decision in that case would bind the further proceedings in the present case - The writ petition is disposed of [Read less]

GST – Refund of IGST, Intermediary services, Activity of recruiting and facilitating students in India for admission into foreign universities – Denial of refund of the IGST on the ground that the petitioner is an intermediary - Whether the petitioner's services qualify as intermediary services – HELD - The petitioner's services do not qualify as intermediary services. The Court relied on the judgments of the Bombay High Court, Rajasthan High Court, and the CESTAT, New Delhi, in the petitioner's own case, which have held that the petitioner is not an intermediary - The CESTAT, New Delhi, in its judgment, observed tha... [Read more]

GST – Refund of IGST, Intermediary services, Activity of recruiting and facilitating students in India for admission into foreign universities – Denial of refund of the IGST on the ground that the petitioner is an intermediary - Whether the petitioner's services qualify as intermediary services – HELD - The petitioner's services do not qualify as intermediary services. The Court relied on the judgments of the Bombay High Court, Rajasthan High Court, and the CESTAT, New Delhi, in the petitioner's own case, which have held that the petitioner is not an intermediary - The CESTAT, New Delhi, in its judgment, observed that the petitioner has an agreement only with IDP Australia and does not have a direct contract with the foreign universities - The petitioner is merely a sub-contractor of IDP Australia and receives commission from it, and therefore, cannot be considered an intermediary - The impugned order is quashed and the respondents are directed to grant the refund to the petitioner along with applicable interest – The writ petition is allowed [Read less]

GST - Rectification of GSTR-3B Returns – Rectification of errors wherein outward supplies were wrongly declared as B2B instead of B2C - The petitioner sought to rectify these errors, but the Respondent issued notice stating petitioner is not entitled to make such corrections - Whether the petitioner entitled to rectify the errors in its GSTR-3B returns, even after the due date stipulated under the law – HELD - The errors are bona fide and inadvertent, and also there is no loss of revenue. The provisions of the GST law should be interpreted purposively to allow rectification of genuine errors, without getting bogged dow... [Read more]

GST - Rectification of GSTR-3B Returns – Rectification of errors wherein outward supplies were wrongly declared as B2B instead of B2C - The petitioner sought to rectify these errors, but the Respondent issued notice stating petitioner is not entitled to make such corrections - Whether the petitioner entitled to rectify the errors in its GSTR-3B returns, even after the due date stipulated under the law – HELD - The errors are bona fide and inadvertent, and also there is no loss of revenue. The provisions of the GST law should be interpreted purposively to allow rectification of genuine errors, without getting bogged down by technical restrictions. The rigid adherence to time limits would defeat the very purpose of maintaining accurate GST returns, which have a cascading effect - The respondents are directed to allow the petitioner to make the necessary corrections to its GSTR-3B returns, either online or manually, and not to initiate any coercive action pursuant to the show-cause notice - The writ petition is allowed [Read less]

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

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

Customs - Section 138B of Customs Act, 1962 - Relevance of witness statements, Opportunity to cross-examine witnesses - The Dept relied on the statements of three witnesses who did not appear for cross-examination, while ignoring the evidence of three other witnesses who deposed in favor of the petitioners after cross-examination - Whether the Revenue approach of relying on the statements of the witnesses who did not appear for cross-examination, while ignoring the evidence of the witnesses who deposed in favor of the petitioners after cross-examination, was in line with the provisions of Section 138B of the Customs Act, 1... [Read more]

Customs - Section 138B of Customs Act, 1962 - Relevance of witness statements, Opportunity to cross-examine witnesses - The Dept relied on the statements of three witnesses who did not appear for cross-examination, while ignoring the evidence of three other witnesses who deposed in favor of the petitioners after cross-examination - Whether the Revenue approach of relying on the statements of the witnesses who did not appear for cross-examination, while ignoring the evidence of the witnesses who deposed in favor of the petitioners after cross-examination, was in line with the provisions of Section 138B of the Customs Act, 1962 and the principles of natural justice – HELD - Under Section 138B(1)(a) of the Customs Act, 1962, the statements of witnesses who are not available for cross-examination can be considered as relevant evidence only if the circumstances mentioned in the provision are established, and the assessee is given an opportunity to respond to the statements. However, the respondent had simply relied on the statements of the three witnesses who did not appear for cross-examination, without following the due process laid down in the provision - Under Section 138B(1)(b), the statements of witnesses who are available for cross-examination can be admitted in evidence only if the court is of the opinion that it is in the interest of justice to do so. In the present case, the respondent had ignored the evidence of the three witnesses who deposed in favor of the petitioners after cross-examination, which was in violation of the principles of natural justice and fair play - The impugned order is set aside and matter is remanded back to the respondent for fresh adjudication – The petition is disposed of [Read less]

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

Central Excise - Eligibility for CENVAT credit on use of Naphtha as fuel for generation of electricity within the factory - Appellant used Naphtha and furnace oil for generating electricity through gas turbine generators and steam turbine generators. The entire electricity generated from the gas turbine generator was used within the factory, while a small portion of the electricity generated from the steam turbine generator was wheeled out to the company's sister concerns - Whether the appellant is eligible for CENVAT credit on the Naphtha used as fuel for generation of electricity, including the portion wheeled out to sis... [Read more]

Central Excise - Eligibility for CENVAT credit on use of Naphtha as fuel for generation of electricity within the factory - Appellant used Naphtha and furnace oil for generating electricity through gas turbine generators and steam turbine generators. The entire electricity generated from the gas turbine generator was used within the factory, while a small portion of the electricity generated from the steam turbine generator was wheeled out to the company's sister concerns - Whether the appellant is eligible for CENVAT credit on the Naphtha used as fuel for generation of electricity, including the portion wheeled out to sister concerns - HELD - It is not disputed by the Department that the electricity generated through the steam turbine is used for manufacture of final products within the factory premises. The definition of "input" under the CENVAT Credit Rules, 2001 includes goods used as fuel within the factory of production - Naphtha, when used in the first instance for generating electricity in the gas turbine generator, would fall within the contours of the definition of “input,” which includes goods used as fuel within the factory of production. However, the waste emerging from such usage viz. steam, which is again used for generating electricity, and a small quantity of which is wheeled outside the premises, would not attract the said definition - The emergence of by-products or waste products during the manufacturing process does not disentitle the manufacturer from availing CENVAT credit on the inputs used. Accordingly, the small quantity of electricity wheeled out to sister concerns was generated from the steam turbine, which was run on the waste steam generated during the use of Naphtha in the gas turbine generator, and hence, the credit on Naphtha cannot be denied on this ground - The CESTAT was incorrect in denying the CENVAT credit on Naphtha used as fuel for electricity generation within the factory – The Tribunal order is set side and the appeal is allowed [Read less]

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

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

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

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

The retrospective cancellation of the registration of the supplier cannot be the ground for denial of ITC to purchaser. The authorities failed to consider the documents evidencing genuineness of the transactions and the physical movement of goods.

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

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

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

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