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Central Excise - Valuation of Compressed Natural Gas (CNG) – Appellant had entered into an agreement with M/s Hindustan Petroleum Corporation Ltd. (HPCL) for utilizing HPCL's retail outlets to sell its CNG - Department invoked the provisions of Rule 7 of the Central Excise Valuation Rules, 2000 and contended that the selling price at the CNG dispensing station installed in the HPCL retail outlet should be the normal transaction value for discharging the excise duty by appellant - Whether the commission/trade margin paid by the appellant to HPCL should be included in the assessable value on the ground that the transaction... [Read more]

Central Excise - Valuation of Compressed Natural Gas (CNG) – Appellant had entered into an agreement with M/s Hindustan Petroleum Corporation Ltd. (HPCL) for utilizing HPCL's retail outlets to sell its CNG - Department invoked the provisions of Rule 7 of the Central Excise Valuation Rules, 2000 and contended that the selling price at the CNG dispensing station installed in the HPCL retail outlet should be the normal transaction value for discharging the excise duty by appellant - Whether the commission/trade margin paid by the appellant to HPCL should be included in the assessable value on the ground that the transactions between BNGL and HPCL are not on a principal-to-principal basis and the price payable by the ultimate customer is always fixed by the appellant - HELD - The issue regarding the inclusion of commission/trade margin in the assessable value had already been decided in favor of the appellant BNGL in the Tribunal's earlier order. The Department had not raised any new grounds or allegations regarding the nature of the transaction or the relationship between appellant and HPCL in the present appeals - The Department's allegation in the SCN was based on the ground that the place of removal of the excisable goods (CNG) was the CNG dispensing stations installed in the HPCL retail outlets, and not the factory gate. The Department had relied on Section 4(1)(a) read with Section 4(3)(c) of the Central Excise Act, 1944 and Rule 7 of the Valuation Rules, 2000, and did not allege in the SCN that appellant and HPCL were related parties. Department cannot now contend that the transactions are covered under Section 4(1)(b) read with Rule 7 on the ground of appellant and HPCL being related parties, as this ground was not raised in the SCN – The impugned orders are set aside and the appeals are allowed [Read less]

Central Excise – Determination of ‘Transaction value’ - Deduction from transaction value under Section 4(3)(d) of the Central Excise Act, 1944 – Appellant was engaged in mining and selling of coal. Central excise duty was levied on the sale of coal from March 2011 - Whether certain amounts received by the appellant, such as royalty, stowing excise duty, forest transit fees, Madhya Pradesh Rural Infrastructure and Road Tax, entry tax, terminal tax, and CG Development and Environment Cess, are eligible for deduction from the "transaction value" under Section 4(3)(d) of the Central Excise Act, 1944 – HELD – The la... [Read more]

Central Excise – Determination of ‘Transaction value’ - Deduction from transaction value under Section 4(3)(d) of the Central Excise Act, 1944 – Appellant was engaged in mining and selling of coal. Central excise duty was levied on the sale of coal from March 2011 - Whether certain amounts received by the appellant, such as royalty, stowing excise duty, forest transit fees, Madhya Pradesh Rural Infrastructure and Road Tax, entry tax, terminal tax, and CG Development and Environment Cess, are eligible for deduction from the "transaction value" under Section 4(3)(d) of the Central Excise Act, 1944 – HELD – The law, as it stands today, the Royalty is not in the nature of a tax, and hence the amount received towards royalty is includible in the transaction value. Since the Royalty is not in the nature of tax and it would be includible in the transaction value. However, the demand for the extended period of limitation is set aside as the appellant had a bonafide belief that royalty was in the nature of a tax based on the earlier Supreme Court judgment in India Cement - Stowing Excise Duty, being a duty of excise levied under the Coal Mines (Conservation and Development) Act, 1974, is in the nature of "other taxes" and hence deductible from the transaction value – The Forest Transit Fees, Madhya Pradesh Rural Infrastructure and Road Tax, Entry Tax, Terminal Tax, and CG Development and Environment Cess are in the nature of "other taxes" and hence deductible from the transaction value in terms of section 4(3)(d) of the Central Excise Act - The demand of central excise duty on captive consumption of coal is not sustainable. The extended period of limitation under Section 11A of the Central Excise Act could not have been invoked as there was no willful suppression of facts by the appellant with the intent to evade payment of duty - The imposition of penalty under Section 11AC and the demand of interest are also set aside. The appeals are partly allowed [Read less]

Service Tax - Inclusion of expenses incurred by the respondent towards services provided to the foreign service provider's specialists in the taxable value for Service Tax under RCM - Respondent entered into a contract with a foreign service provider - As per the contract, the respondent was required to bear the expenses towards air travel, accommodation etc. of the foreign service provider's specialists visiting India - Whether the expenses incurred by the respondent towards the services/facilities provided to the foreign service provider's specialists are includable in the taxable value for the purpose of payment of Serv... [Read more]

Service Tax - Inclusion of expenses incurred by the respondent towards services provided to the foreign service provider's specialists in the taxable value for Service Tax under RCM - Respondent entered into a contract with a foreign service provider - As per the contract, the respondent was required to bear the expenses towards air travel, accommodation etc. of the foreign service provider's specialists visiting India - Whether the expenses incurred by the respondent towards the services/facilities provided to the foreign service provider's specialists are includable in the taxable value for the purpose of payment of Service Tax under RCM – HELD - In Toyota Kirloskar Auto Parts Pvt. Ltd. and Bhayana Builders Pvt. Ltd. cases, it was held that the expenses incurred by the service recipient in enabling the foreign service providers to perform the services in India cannot be considered as part of the value of taxable service under Section 67 of the Finance Act, 1994 - The value on which Service Tax is payable has to satisfy two key ingredients i.e. the amount should be "charged" by the service provider to the service recipient, and the amount charged should be a consideration "for such service provided". The expenses incurred by the respondent towards the foreign specialists do not meet these requirements as they were not charged by the foreign service provider and did not form part of the consideration for the consulting engineering service - the issue is no longer res-integra and therefore, no need to interfere in the impugned order – The Revenue appeal is dismissed [Read less]

GST - Delay in filing appeal and condonation of delay under Section 107(4) of the CGST Act, 2017 – Exclusion of time spent in pursuing writ petition before the High Court - Whether the Appellate authority was correct in dismissing the petitioner's appeal on the ground of delay of 15 days in filing the appeal – HELD - The limitation period for filing the appeal against the order dated 17.01.2025 was extended by 26 days, as the petitioner had spent this time in pursuing the writ petition before the High Court. Thus, the last date for filing the appeal was 12.05.2025. The Petitioner had filed the appeal on 28.05.2025, whi... [Read more]

GST - Delay in filing appeal and condonation of delay under Section 107(4) of the CGST Act, 2017 – Exclusion of time spent in pursuing writ petition before the High Court - Whether the Appellate authority was correct in dismissing the petitioner's appeal on the ground of delay of 15 days in filing the appeal – HELD - The limitation period for filing the appeal against the order dated 17.01.2025 was extended by 26 days, as the petitioner had spent this time in pursuing the writ petition before the High Court. Thus, the last date for filing the appeal was 12.05.2025. The Petitioner had filed the appeal on 28.05.2025, which was only a delay of 15 days - As per Section 107(4) of the Act, the Appellate Authority can condone the delay in filing the appeal if the appellant was prevented from presenting the appeal within the prescribed period. The grounds cited by the petitioner for the delay were neither imaginary nor fanciful, and the delay was only 15 days, which could have been condoned by the Appellate authority - The Appellate authority adopted a hyper-technical approach in dismissing the appeal on the ground that it should have been filed by 07.05.2025, which was contrary to the spirit of Section 107(4) of the Act, which allows condonation of delay within an extended one-month window - The delay in filing the appeal is condoned and the matter is remitted to Appellate authority for adjudication of the appeal on merits – The petition is disposed of [Read less]

GST - Cancellation of GST registration, Payment of GST liabilities in installments – Cancellation of registration due to non-filing of monthly returns and non-payment of GST liabilities. Subsequently, show-cause notices were issued, and the bank accounts were attached. The petitioners argued that they were willing to file the pending returns and pay the outstanding GST liabilities, but they were unable to do so due to the cancellation of the GST registration and the attachment of the bank accounts - The petitioners sought to set aside the cancellation of their GST registration – HELD - Once the GST registration is canc... [Read more]

GST - Cancellation of GST registration, Payment of GST liabilities in installments – Cancellation of registration due to non-filing of monthly returns and non-payment of GST liabilities. Subsequently, show-cause notices were issued, and the bank accounts were attached. The petitioners argued that they were willing to file the pending returns and pay the outstanding GST liabilities, but they were unable to do so due to the cancellation of the GST registration and the attachment of the bank accounts - The petitioners sought to set aside the cancellation of their GST registration – HELD - Once the GST registration is cancelled, the GST portal disables the filing of regular returns (GSTR-1 and GSTR-3B), making it impossible for the petitioners to file the pending returns. The petitioners should be given an opportunity to file an application for revocation of the GSTIN cancellation order – The petition is disposed of granting liberty to the petitioners to file an application for revocation of the GSTIN cancellation and thereafter, to file an application for allowing them to file return and also to file an application under Section 80 of the CGST Act, 2017, allowing them to clear the liability in installments and on such application being filed, the bank accounts of the petitioners shall be defreezed - The writ petition is disposed of [Read less]

Central Excise - Limitation period for show cause notice under Central Excise Act, Valid service of notice - Department had issued a show cause notice dated 11.4.2011 alleging clandestine removal of goods by the assessee during the period 1.4.2007 to 30.6.2007. The SCN was sent to the appellant's old address and when it was returned by the postal department, it was affixed on the notice board of the respondent - Whether the SCN issued by the department was time-barred – HELD - The demand of duty can be made by serving an SCN under Section 11A of the Central Excise Act, 1944 within the normal time of two years and can be ... [Read more]

Central Excise - Limitation period for show cause notice under Central Excise Act, Valid service of notice - Department had issued a show cause notice dated 11.4.2011 alleging clandestine removal of goods by the assessee during the period 1.4.2007 to 30.6.2007. The SCN was sent to the appellant's old address and when it was returned by the postal department, it was affixed on the notice board of the respondent - Whether the SCN issued by the department was time-barred – HELD - The demand of duty can be made by serving an SCN under Section 11A of the Central Excise Act, 1944 within the normal time of two years and can be made within the extended period of limitation of five years if the non-payment or short payment of duty is due to fraud or collusion or wilful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty - The appellant had changed its address and intimated the change to the department, but the SCN was sent to the old address and when it was returned by the postal department, it was pasted on the notice board of the office of the department. This cannot be termed as proper service of notice. After the order was passed, the appellant sought the SCN and it was served on 24.7.2012 beyond the period of five years from the relevant period. The Annexures to the SCN and the relied upon documents were served even later - The SCN must be served before issuing the order and not after the order has been issued, as the very purpose of issuing an SCN is to give the noticees an opportunity to show cause, which cannot be served if the order is passed without serving the SCN - The impugned order cannot be sustained because the SCN was served beyond the extended period of limitation of five years. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Clandestine removal of goods and demand of duty, interest and penalty based on electricity consumption - DGGI conducted searches at the factory, residence of the director, and premises of the clearing and forwarding agent and supplier, and found excess (unaccounted) stocks of raw material, finished goods, and other materials. The Department alleged clandestine removal of goods by the appellant and issued show cause notices demanding duty, interest and penalties - Whether the demand of duty, interest and penalties on the appellant based on the calculation of alleged clandestine removal of goods using only e... [Read more]

Central Excise - Clandestine removal of goods and demand of duty, interest and penalty based on electricity consumption - DGGI conducted searches at the factory, residence of the director, and premises of the clearing and forwarding agent and supplier, and found excess (unaccounted) stocks of raw material, finished goods, and other materials. The Department alleged clandestine removal of goods by the appellant and issued show cause notices demanding duty, interest and penalties - Whether the demand of duty, interest and penalties on the appellant based on the calculation of alleged clandestine removal of goods using only electricity consumption can be sustained – HELD – The preliminary submission of the appellant is that since the investigation was conducted after the introduction of CGST Act in November 2017, the investigation lacks credibility. However, the savings clause in section 174(2) of the CGST Act, 2017 allows institution of any proceedings under the repealed Act (Central Excise Act, 1944) even after the appointed day of CGST Act. Therefore, on this issue, the submission of the learned counsel is rejected - The allegation of excess production and clandestine removal and consequent demand of duty, interest and penalties cannot be sustained based solely on the calculation using electricity consumption. The calculations in the SCN only considered electricity consumption and did not take into account any other parameters to determine the actual production - all that the figures and calculations show is that if the production of goods in terms of electricity consumption has been as efficient. However, the calculation does not establish that the production has, indeed, been so efficient throughout the period of dispute and part of the goods so produced was clandestinely removed without paying duty - The allegation of excess production and clandestine removal and consequent demand of duty, interest and penalties cannot be sustained and set aside – The impugned order is set aside and the appeals are allowed [Read less]

Customs – Import of ‘Cold Rolled Stainless Steel Coils’, Limitation under Section 110(2) of Customs Act - Goods seized under Section 110(1) of Customs Act with the allegation that they were imported in violation of the Ministry of Steel's circular requiring NOC for steel imports without BIS certification - Importer requested waiver of show cause notice to expedite adjudication - Department failed to pass order within 6 months from seizure as mandated under Section 110(2) - Commissioner (Appeals) vacated the seizure and ordered release of the goods on the basis of non-issuance of show cause notice or adjudication with... [Read more]

Customs – Import of ‘Cold Rolled Stainless Steel Coils’, Limitation under Section 110(2) of Customs Act - Goods seized under Section 110(1) of Customs Act with the allegation that they were imported in violation of the Ministry of Steel's circular requiring NOC for steel imports without BIS certification - Importer requested waiver of show cause notice to expedite adjudication - Department failed to pass order within 6 months from seizure as mandated under Section 110(2) - Commissioner (Appeals) vacated the seizure and ordered release of the goods on the basis of non-issuance of show cause notice or adjudication within six months from the seizure date – Dept in appeal against the impugned order – HELD - The statutory 6-month period under Section 110(2) is mandatory and not directory - The waiver of show cause notice does not override the statutory time limit and the importer cannot be held bound by such waiver after the expiry of 6 months - Failure to pass order within 6 months from seizure results in the seizure becoming illegal and the goods are liable to be released unconditionally. There is no infirmity in the order of the Commissioner (Appeals) in giving relief to the importer. The impugned order passed after the expiry of 6-month period is without jurisdiction and set aside and goods are ordered to be released - Whether the release of goods is correctly ordered - The goods imported were 'Cold Rolled Stainless Steel Coils Grade J2' which were found to be in conformity with the description and specifications based on testing - Ministry of Steel had issued NOC for similar goods imported by other parties – HELD - The circular of Ministry of Steel requiring NOC for import of goods not covered under the Steel and Steel Products (Quality Control) Order cannot be the basis for treating the imported goods as prohibited/restricted, as the circular cannot override the substantive law - For Grade J2, department has not been able to show that under which Control Order of the Ministry of Steel i.e. the Steel and Steel products (Quality Control Order) any restriction was applied on the ‘Cold Rolled Stainless Steel Coils Grade J2’ - The department failed to demonstrate that the imported goods were covered under the Quality Control Order or any BIS standards - In absence of any statutory restriction, the goods cannot be treated as prohibited and are liable to be released. [Read less]

Service Tax - Exemption from Service Tax for Construction of Roads – Denial of exemption on the ground that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests - Whether the construction of internal roads by the appellant is eligible for exemption from service tax under Notification No.25/2012-ST dated June 20, 2012 – HELD - The exemption under the notification is available for construction of a road, bridge, tunnel, or terminal for road transportation for use by general public. However, the Appellate Authority had found that the road... [Read more]

Service Tax - Exemption from Service Tax for Construction of Roads – Denial of exemption on the ground that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests - Whether the construction of internal roads by the appellant is eligible for exemption from service tax under Notification No.25/2012-ST dated June 20, 2012 – HELD - The exemption under the notification is available for construction of a road, bridge, tunnel, or terminal for road transportation for use by general public. However, the Appellate Authority had found that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests, and not for use by the general public. The appellant had not produced any document or evidence to show that these internal roads were for general public use, which is the basic requirement for availing the exemption notification - In the case of Warsi Buildcon, it was held that the exemption on payment of service tax in respect of services relating to the construction of roads was limited only to those roads which were meant to be used by the general public, and not for private use by the buyers of the builders or residents of the township. However, the present case is distinguishable from the Warsi Buildcon case, as the Work Order in the present case has been issued by the Jaipur Development Authority, which is a Government Authority. Since the exemption has been sought under Entry No.13(a) and 29(h), the relevant issue to be decided is whether the construction of road is for use by general public - The impugned order is set aside and the matter is remanded to the Original Authority to decide the issue of eligibility for exemption from service tax afresh, considering the nature of the Work Order and the evidence provided by the appellant to establish that the construction of roads was for use by the general public - The appeal is allowed by way of remand [Read less]

Service Tax - Rejection of Service Tax Voluntary Compliance Encouragement Scheme (VCES) declaration - The Designated Authority rejected the declaration on grounds that the appellant had not paid 50% of the declared tax dues by 31.12.2013 as required under Section 107(3) of the Finance Act, 2013; and that the declaration was barred under the second proviso to Section 106(1) as the appellant had been issued a show cause notice and order for the same issue for an earlier period - Whether the Designated Authority had the power to reject the declaration for non-payment of 50% of the declared tax dues by 31.12.2013 – HELD - Th... [Read more]

Service Tax - Rejection of Service Tax Voluntary Compliance Encouragement Scheme (VCES) declaration - The Designated Authority rejected the declaration on grounds that the appellant had not paid 50% of the declared tax dues by 31.12.2013 as required under Section 107(3) of the Finance Act, 2013; and that the declaration was barred under the second proviso to Section 106(1) as the appellant had been issued a show cause notice and order for the same issue for an earlier period - Whether the Designated Authority had the power to reject the declaration for non-payment of 50% of the declared tax dues by 31.12.2013 – HELD - The Designated Authority had the inherent power to reject the declaration for non-compliance with the mandatory requirement of Section 107(3) to pay 50% of the declared tax dues by 31.12.2013. Where a power is conferred by a statute, it carries with it the power to do all such acts as are reasonably necessary for its execution – Further, the Scheme does not provide either the Revenue or the Declarant to amend or alter the time lines specified therein or the respective quantum of payment to be made, at their discretion. Therefore, these provisions have to be strictly interpreted, and the time limit specified in the Scheme have to be strictly adhered to by the declarant - The non-payment of fifty percent of the declared tax dues by the specified date of 31.12.2013 would in itself disentitle the appellant from availing the benefit of the VCES Scheme. The rejection of VCES declarations for non-payment of the 50% dues by the due date is upheld – The impugned order does not warrant any interference. The appeal is dismissed - Whether the declaration was barred under the second proviso to Section 106(1) of the Finance Act, 2013 – HELD - The appellant had been issued a show cause notice and order for non-payment of service tax on service charges for the period from January 2009 to June 2009. The declaration filed by the appellant under VCES was for the period from April 2010 to December 2012, which was a subsequent period to the one for which the earlier order was issued. Therefore, the declaration was rightly rejected by the Designated Authority under the second proviso to Section 106(1), which prohibits a declaration for a subsequent period on the same issue for which a notice or order has been issued. [Read less]

GST - Seizure of documents, books of accounts and the CPU, Non-supply of seized documents and records - The petitioner alleged that during a search and seizure operation, certain documents, books of accounts, and the CPU were seized. Despite repeated requests, the respondent did not provide the petitioner with copies of the seized documents or return the seized CPU, depriving the petitioner of a fair opportunity to contest the adjudication proceedings - Whether the denial of access to the seized documents and CPU violated the principles of natural justice – HELD - The petitioner was deprived of a fair opportunity to cont... [Read more]

GST - Seizure of documents, books of accounts and the CPU, Non-supply of seized documents and records - The petitioner alleged that during a search and seizure operation, certain documents, books of accounts, and the CPU were seized. Despite repeated requests, the respondent did not provide the petitioner with copies of the seized documents or return the seized CPU, depriving the petitioner of a fair opportunity to contest the adjudication proceedings - Whether the denial of access to the seized documents and CPU violated the principles of natural justice – HELD - The petitioner was deprived of a fair opportunity to contest the adjudication proceedings as the documents and records based on which the petitioner could have prepared its defense were not available to it. Without the documents and records, the petitioner would also not be in a position to prefer a proper appeal before the appellate authority - The impugned order should not be given effect to and the matter is remanded to the proper officer for fresh consideration after providing the petitioner with the seized documents or copies thereof, and the seized CPU, and affording the petitioner an opportunity of hearing in accordance with the principles of natural justice - the impugned order was treated as an additional show-cause notice, allowing the petitioner to file a composite reply within two weeks from the date of receiving the seized documents or copies thereof and the seized CPU - The writ petition is disposed of [Read less]

GST – Proceedings for excess availment of Input Tax Credit, Non-filing of GSTR-3B return by the Supplier, grounds not raised in SCN – Issue of notice alleging excess availment of ITC on the ground that the petitioner's supplier had not filed Form GSTR-3B for the period August 2019 to October 2019 - The adjudicating authority gave credit to the petitioner for August and September 2019 but confirmed the demand for October 2019. The appellate authority rejected the appeal questioning the genuineness of the petitioner's transactions and holding that the petitioner failed to produce evidence of receiving the goods - Whether... [Read more]

GST – Proceedings for excess availment of Input Tax Credit, Non-filing of GSTR-3B return by the Supplier, grounds not raised in SCN – Issue of notice alleging excess availment of ITC on the ground that the petitioner's supplier had not filed Form GSTR-3B for the period August 2019 to October 2019 - The adjudicating authority gave credit to the petitioner for August and September 2019 but confirmed the demand for October 2019. The appellate authority rejected the appeal questioning the genuineness of the petitioner's transactions and holding that the petitioner failed to produce evidence of receiving the goods - Whether the appellate authority was justified in rejecting the appeal on grounds not mentioned in the show cause notice – HELD - The only issue raised in the SCN was the non-filing of the supplier's return in Form GSTR-3B. Once the supplier filed the return for October 2019 during the pendency of the appeal, the appellate authority should have adopted the same standard as the adjudicating authority and dropped the demand for that month. The appellate authority, however, tried to upset the petitioner's case on grounds not mentioned in the notice to show cause, which was not permissible under the law. The appellate authority should have afforded the petitioner an opportunity to rebut any new grounds it intended to rely upon. By not doing so, the appellate authority acted arbitrarily - The appellate order is set aside and the matter is remanded to the appellate authority for a fresh decision after affording the petitioner an opportunity of hearing on all points the appellate authority may have contemplated against the petitioner in accordance with law – The petition is disposed of [Read less]

Service Tax - Admissibility of CENVAT credit on input services used for construction of immovable property for providing renting service - Whether the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property which was subsequently let out under the "Renting of Immovable Property Service" – HELD - The definition of "input service" under the CENVAT Credit Rules, 2004 covers services used directly or indirectly in relation to the provision of output service. The renting service cannot be provided without constructing and maintaining the building, and therefore the inp... [Read more]

Service Tax - Admissibility of CENVAT credit on input services used for construction of immovable property for providing renting service - Whether the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property which was subsequently let out under the "Renting of Immovable Property Service" – HELD - The definition of "input service" under the CENVAT Credit Rules, 2004 covers services used directly or indirectly in relation to the provision of output service. The renting service cannot be provided without constructing and maintaining the building, and therefore the input services used for construction of the building have a direct nexus with the output service of renting. The 'includes' clause of the definition of 'input service' expressly covers services used in relation to setting up of the premises of an output service provider, which would include the construction services utilized by the appellant – Further, various judicial precedents, including the judgment of the Hon'ble Punjab & Haryana High Court in the case of the appellant's sister concern, have allowed the CENVAT credit on input services used for construction of immovable property which is subsequently let out. Accordingly. the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property – The impugned order is set aside and the appeal is allowed [Read less]

GST – Challenge to validity of CBIC Circular No. 3/3/2017 dated 05.07.2017 assigning functions to Proper Officers - The petitioner challenged the validity of Circular No. 3/3/2017 which assigned duties to certain officers as "proper officers" under the CGST Act, 2017. The petitioner argued that the Board lacked the authority to issue such a Circular and that the power to assign duties to proper officers vested exclusively with the "Commissioner in the Board" under the CGST Act – HELD - While the Circular used the term "Board" to assign the duties, the fact that the Commissioner is a part of the Board, and the proposal ... [Read more]

GST – Challenge to validity of CBIC Circular No. 3/3/2017 dated 05.07.2017 assigning functions to Proper Officers - The petitioner challenged the validity of Circular No. 3/3/2017 which assigned duties to certain officers as "proper officers" under the CGST Act, 2017. The petitioner argued that the Board lacked the authority to issue such a Circular and that the power to assign duties to proper officers vested exclusively with the "Commissioner in the Board" under the CGST Act – HELD - While the Circular used the term "Board" to assign the duties, the fact that the Commissioner is a part of the Board, and the proposal to assign duties must have been routed through the Commissioner in the Board and approved by the Board, as required under Section 168(2) of the CGST Act. There is no reason to infer that while issuing the Circular dated 5th July, 2017, the proposal was not mooted through the Commissioner in the Board, or that the same was not approved by the Board as defined under sub-section (16) of Section 2 and sub-section (25) of Section 2 of the CGST Act – The legal presumption is in favor of the validity of subordinate legislation and the burden is on the petitioner to establish that the Circular was issued without proper authority or approval, which the petitioner failed to do. Accordingly, the challenge to the validity of the Circular fails - The writ petition is allowed to the extent of rescheduling the date, however, the challenge to the Circular fails and to that extent, the petition stands dismissed – Ordered accordingly [Read less]

Kerala VAT Act, 2003 – Jurisdiction of assessing authority, Implementation of Appellate Order - Assessment for Unaccounted Sales - The assessing authority passed an assessment order holding the petitioner liable for an unaccounted sales turnover and demanding the output tax along with interest. The petitioner appealed against this order, contending that the transactions were actually carried out by her son, who had obtained a fresh registration after the deceased's death. The appellate authority allowed the appeal, finding that the sales turnover belonged to the son's new firm and directed the assessing authority to modi... [Read more]

Kerala VAT Act, 2003 – Jurisdiction of assessing authority, Implementation of Appellate Order - Assessment for Unaccounted Sales - The assessing authority passed an assessment order holding the petitioner liable for an unaccounted sales turnover and demanding the output tax along with interest. The petitioner appealed against this order, contending that the transactions were actually carried out by her son, who had obtained a fresh registration after the deceased's death. The appellate authority allowed the appeal, finding that the sales turnover belonged to the son's new firm and directed the assessing authority to modify the assessment by deleting the said sales turnover - Whether the assessing authority was justified in issuing a fresh assessment order restoring the original assessment, despite the appellate authority's clear directions – HELD - The appellate authority had allowed the appeal filed by the petitioner directing the assessing authority to modify the assessment by “deleting the sales turnover” from the assessment. The appellate authority also found that such an order is required since turnover actually belongs to another dealer - The assessing authority could not have issued notices to the petitioner demanding further documents, as the appellate order had already made a positive finding that the sales turnover in question belonged to the son's new firm. The assessing authority should have simply implemented the appellate order by issuing a fresh assessment order accepting the directions. The assessing authority's action in restoring the original assessment order is not justified - The assessment order passed by the assessing authority is set aside and the writ petition is allowed [Read less]

GST - Mismatch in ITC, Condonation of delay in filing appeal – HELD - The petitioner had acted under the genuine belief that the mismatch in the ITC would be rectified by the supplier. The delay is filing of appeal was due to the lack of professional assistance and limited awareness of the procedural requirements. The delay in preferring the appeal deserved to be condoned, and the matter required consideration on the merits by the appellate authority in accordance with the relevant GST Circulars - The writ petition is allowed

Service Tax - Rejection of application for rectification of mistake under Section 74 of the Finance Act, 1994 – Vide the impugned order the High Court dismissed the writ petition holding that the scope of section 74 of the Act is confined to correction of patent errors which may be clerical, arithmetical or legal and has to be noticed from the face of the record and it is not intended to reopen concluded findings or enable substitution of one view for another – aggrieved, the assessee in appeal – SC HELD - No good ground and reason to interfere with the impugned judgment passed by the High Court. The special leave pe... [Read more]

Service Tax - Rejection of application for rectification of mistake under Section 74 of the Finance Act, 1994 – Vide the impugned order the High Court dismissed the writ petition holding that the scope of section 74 of the Act is confined to correction of patent errors which may be clerical, arithmetical or legal and has to be noticed from the face of the record and it is not intended to reopen concluded findings or enable substitution of one view for another – aggrieved, the assessee in appeal – SC HELD - No good ground and reason to interfere with the impugned judgment passed by the High Court. The special leave petition is dismissed [Read less]

Central Excise - Refund of pre-deposit amount along with interest – Rejection of refund balance on the ground that the appellant could only get a refund of 7.5% of the amount involved in the appeal and not the entire deposited amount - Whether the appellant is entitled to get a refund of the entire deposited amount along with applicable interest, or only 7.5% of the amount involved in the appeal as held by the Commissioner (Appeals) – HELD - The Commissioner (Appeals) erred in allowing the refund only to the extent of 7.5% of the amount involved in the appeal, and not the entire deposited amount. As per the CESTAT's ea... [Read more]

Central Excise - Refund of pre-deposit amount along with interest – Rejection of refund balance on the ground that the appellant could only get a refund of 7.5% of the amount involved in the appeal and not the entire deposited amount - Whether the appellant is entitled to get a refund of the entire deposited amount along with applicable interest, or only 7.5% of the amount involved in the appeal as held by the Commissioner (Appeals) – HELD - The Commissioner (Appeals) erred in allowing the refund only to the extent of 7.5% of the amount involved in the appeal, and not the entire deposited amount. As per the CESTAT's earlier order, the entire demand had been set aside, and therefore the appellant was entitled to the refund of the entire deposited amount along with applicable interest under Section 35FF of the Central Excise Act, 1944 – Further, the Circular No. 984/08/2014-CX dated 16.09.2014 clarified that submission of original TR-6 challans is not mandatory for refund purpose, and the onus to maintain deposit records lies with the department. The denial of refund solely on the ground that the bank records were unavailable is not legally sustainable, especially when the department had failed to maintain or verify the records - The Department is directed to refund the entire deposited amount to the appellant along with applicable interest under Section 35FF of the Central Excise Act, 1944 – The appeal is allowed [Read less]

Central Sales Tax Act, 1956 – Eligibility to exemption under Section 6(2) of the CST Act, 1956 on second-sale where the first sale is exempt – Vide the impugned order the High Court held that when the conditions specified in Section 6(2), whether in the main provision or in the provisos, are satisfied, the dealer would be entitled to exemption. There is provision which indicates that the exemption under Section 6(2) in respect of a subsequent sale cannot be granted where the first sale has had the benefit of an exemption – Revenue in appeal against the High Court Order – SC HELD – There is no good reason to inter... [Read more]

Central Sales Tax Act, 1956 – Eligibility to exemption under Section 6(2) of the CST Act, 1956 on second-sale where the first sale is exempt – Vide the impugned order the High Court held that when the conditions specified in Section 6(2), whether in the main provision or in the provisos, are satisfied, the dealer would be entitled to exemption. There is provision which indicates that the exemption under Section 6(2) in respect of a subsequent sale cannot be granted where the first sale has had the benefit of an exemption – Revenue in appeal against the High Court Order – SC HELD – There is no good reason to interfere in the impugned judgment and order passed by the High Court. Accordingly, the Revenue appeal is disposed of [Read less]

Maharashtra Industrial Promotion Subsidy (IPS) Claim - Petitioner had set up a project for manufacture of BOPP Films, Thermal Lamination Films, Coated Films and Metalized Films in Shendra Industrial Area, Aurangabad under D Zone, and was granted approval for the Package Incentive Scheme 2013 which made it eligible for IPS equivalent to 100% of eligible investments - Petitioner claim of subsidy was rejected by a one-line order that the claim was not admissible for the year 2013-14 – HELD - The one-line order rejecting the petitioner's claim cannot be justified by the additional reasons provided in the affidavit filed by t... [Read more]

Maharashtra Industrial Promotion Subsidy (IPS) Claim - Petitioner had set up a project for manufacture of BOPP Films, Thermal Lamination Films, Coated Films and Metalized Films in Shendra Industrial Area, Aurangabad under D Zone, and was granted approval for the Package Incentive Scheme 2013 which made it eligible for IPS equivalent to 100% of eligible investments - Petitioner claim of subsidy was rejected by a one-line order that the claim was not admissible for the year 2013-14 – HELD - The one-line order rejecting the petitioner's claim cannot be justified by the additional reasons provided in the affidavit filed by the respondent. The IPS is to be clearly worked out in terms of the communication, but without citing any reason, the same to be rejected in case of the Petitioner for the year 2013-14 and also for the subsequent two years - The impugned communication is quashed and matter is remanded back to the Additional Director of Industries for reconsideration of the petitioner's claim for IPS. The petitioner's unit was a running unit, and it would be convenient to consider the benefits of exemption which it was entitled to avail under the Package Incentive Scheme, 2013 – Ordered accordingly [Read less]

Customs - Import of Calcium Nitrate with Boron Fertilizer - Appellant imported 'Calcium Nitrate with Boron' and classified it under CTH 3102 6000, claiming exemption from basic customs duty under Notification No.12/2012-Cus dated 17.03.2012 – Dept denied the benefit of the exemption, holding that the imported product is not a 100% water-soluble calcium nitrate fertilizer and does not meet the specifications under the Fertilizer Control Order, 1985 (FCO) - Whether the appellant is eligible for the benefit of the exemption notification on the imported 'Calcium Nitrate with Boron' product – HELD - The imported product, 'Y... [Read more]

Customs - Import of Calcium Nitrate with Boron Fertilizer - Appellant imported 'Calcium Nitrate with Boron' and classified it under CTH 3102 6000, claiming exemption from basic customs duty under Notification No.12/2012-Cus dated 17.03.2012 – Dept denied the benefit of the exemption, holding that the imported product is not a 100% water-soluble calcium nitrate fertilizer and does not meet the specifications under the Fertilizer Control Order, 1985 (FCO) - Whether the appellant is eligible for the benefit of the exemption notification on the imported 'Calcium Nitrate with Boron' product – HELD - The imported product, 'Yaraliva Nitrabor', which is a boronated calcium nitrate fertilizer, does not fall under the category of water-soluble calcium nitrate fertilizers covered by the exemption notification. The FCO specifically includes 'Calcium Nitrate with Boron' under the category of 'Fortified Fertilizers', with different specifications than the water-soluble calcium nitrate fertilizers - The Fertilizer Control Order, under the category of Fortified Fertilizers at Sl.No.9 Calcium Nitrate with Boron is mentioned wherein under the specifications column water soluble calcium is 17.1% and Boron by weight is 0.250. In the instant case, the Boron content in the product imported by the appellant is to the extent of 0.3% and as claimed by the Revenue, it appears that the product is rightly classifiable under the category of Fortified Fertilizers - The exemption notification should be strictly interpreted, and the words cannot be included into the notification. Since the notification clearly mentions only 'calcium nitrate' and not 'boronated calcium nitrate', the benefit of the notification cannot be extended to the appellant's imported product - The impugned order is upheld and the appeal is dismissed [Read less]

Service Tax - Copyright Assignment as Goods vs. Service Tax – Receipt of payments from broadcasters for recorded commercial productions of which the appellant is the copyright owner - Department alleged that this activity of production on behalf of others and assigning of copyright of programmes produced by the appellant to the broadcasters amounted to 'Sale of Programmes' which is a taxable service covered under 'TV or Radio Programme Producer Service' - Whether the assignment of copyright of television programs produced by the appellant to broadcasters amounted to a 'sale of goods' liable to VAT or a 'service' liable t... [Read more]

Service Tax - Copyright Assignment as Goods vs. Service Tax – Receipt of payments from broadcasters for recorded commercial productions of which the appellant is the copyright owner - Department alleged that this activity of production on behalf of others and assigning of copyright of programmes produced by the appellant to the broadcasters amounted to 'Sale of Programmes' which is a taxable service covered under 'TV or Radio Programme Producer Service' - Whether the assignment of copyright of television programs produced by the appellant to broadcasters amounted to a 'sale of goods' liable to VAT or a 'service' liable to Service Tax – HELD - The appellant produced the television programs on its own, without any involvement of the broadcasters. In such a situation, the activity would not attract Service Tax as the very concept of rendering of "service" implies two entities, one who renders the "service", and the other, who is the recipient thereof - Copyrights are intangible property without a physical existence, and an intangible activity need not necessarily mean it is a service. The assignment of copyright in the television programs by the appellant to the broadcasters was in the nature of a 'sale of goods' liable to VAT, and not a 'service' liable to Service Tax. The payment of service tax and VAT are mutually exclusive, and if sale of goods is involved and VAT has been paid correctly, the activity would be outside the preview of Service Tax - The transfer of copyright in these programs to the broadcasters do not constitute a 'service' under the definition of 'TV or Radio Programme Production Service' in the Finance Act, 1994 - The demand for Service Tax, interest, and penalty are set aside and the appeal is allowed [Read less]

Service Tax - Liability of service tax on expenses incurred for Marketing and Promotion of Music Rights - Appellant had entered into agreements with film producers, copyright holders, and individual artists to acquire the rights to distribute and monetize songs and music videos. As per the agreements, the appellant was required to incur certain expenses for the marketing and promotion of the assigned music rights - Whether the activities undertaken by the appellant in marketing and promoting the assigned music rights can be considered as a taxable service under Section 65B(44) of the Finance Act, 1994 – HELD - The appell... [Read more]

Service Tax - Liability of service tax on expenses incurred for Marketing and Promotion of Music Rights - Appellant had entered into agreements with film producers, copyright holders, and individual artists to acquire the rights to distribute and monetize songs and music videos. As per the agreements, the appellant was required to incur certain expenses for the marketing and promotion of the assigned music rights - Whether the activities undertaken by the appellant in marketing and promoting the assigned music rights can be considered as a taxable service under Section 65B(44) of the Finance Act, 1994 – HELD - The appellant is not in a service provider-client relationship with the assignors, and the marketing and promotion expenses are incurred for the purpose of commercially exploiting the rights acquired by the appellant, rather than for providing any service to the assignors. The promotion or marketing of music cannot be equated with the promotion or marketing of films, and the appellant's activities are aimed at promoting the music rights acquired by it, not the films produced by the assignors. The activities undertaken by the appellants would not promote viewing of films and thus cannot be treated as service rendered to Film Production Companies/assignors in order to attract the levy of service tax. The appellant's activities do not fall within the definition of "service" under Section 65B(44) of the Finance Act, 1994 – The impugned order is set aside and the appeal is allowed - Whether the obligation of the appellant to incur marketing and promotion expenses as per the agreement can be considered as "agreeing to an obligation to do an act" under Section 66E(e) of the Finance Act, 1994, thereby making it a taxable service – HELD - The appellant's obligation to incur marketing and promotion expenses cannot be considered as "agreeing to an obligation to do an act" under Section 66E(e) of the Finance Act, 1994. For the provisions of Section 66E(e) to apply, there must be a specific agreement for the appellant to obligate itself to do an act or to tolerate an act, and a consideration involved for such an act. In the present case, the marketing and promotion expenses incurred by the appellant are not in the nature of consideration for any service provided to the assignors, but are rather for the appellant's own commercial exploitation of the acquired music rights. [Read less]

Customs - Admissibility of Statements Recorded Under Section 108 of the Customs Act to record a finding regarding mis-declaration and under-valuation of the goods, Retraction of Statements – Levy of penalties for alleged undervaluation and mis-declaration of imported goods - Whether the statements recorded under Section 108 of the Customs Act could be relied upon without following the procedure under Section 138B, and whether the printouts of emails were admissible without complying with the requirements of Section 138C – HELD - The statements recorded under Section 108 could not be relied upon without first examining ... [Read more]

Customs - Admissibility of Statements Recorded Under Section 108 of the Customs Act to record a finding regarding mis-declaration and under-valuation of the goods, Retraction of Statements – Levy of penalties for alleged undervaluation and mis-declaration of imported goods - Whether the statements recorded under Section 108 of the Customs Act could be relied upon without following the procedure under Section 138B, and whether the printouts of emails were admissible without complying with the requirements of Section 138C – HELD - The statements recorded under Section 108 could not be relied upon without first examining the persons who made the statements as witnesses before the adjudicating authority and obtaining the authority's opinion that the statements should be admitted in the interests of justice, as required under Section 138B – In the instant case, the statements of persons recorded under section 108 of the Customs Act could not have been relied upon by the Principal Commissioner for rejecting the transaction value and re-determining the same – Further, the printouts of emails could not be relied upon without the certificate required under Section 138C - The elaborate procedures in these sections are meant to safeguard against the possibility of statements being recorded under coercion or compulsion during the investigation stage. Since the mandatory procedures under these provisions were not followed, the impugned orders are set aside and the appeals are allowed [Read less]

Customs - EPCG Scheme, Fulfilment of Export Obligation, Cancellation of EODC - Appellants obtained EPCG licenses to import various luxury cars and claimed to have fulfilled the export obligation under these licenses and obtained Export Obligation Discharge Certificates (EODCs) from the DGFT - DRI initiated an investigation and seized the imported cars, alleging that the export obligation was not fulfilled - Whether the Customs Authorities could have confirmed the demand for duty and imposed penalties on the appellants in the absence of any adjudication by the DGFT cancelling the EODCs earlier issued by it, certifying that ... [Read more]

Customs - EPCG Scheme, Fulfilment of Export Obligation, Cancellation of EODC - Appellants obtained EPCG licenses to import various luxury cars and claimed to have fulfilled the export obligation under these licenses and obtained Export Obligation Discharge Certificates (EODCs) from the DGFT - DRI initiated an investigation and seized the imported cars, alleging that the export obligation was not fulfilled - Whether the Customs Authorities could have confirmed the demand for duty and imposed penalties on the appellants in the absence of any adjudication by the DGFT cancelling the EODCs earlier issued by it, certifying that the export obligation had been fulfilled by the appellants – HELD - The Customs Authorities could not have confirmed the demand and imposed penalties on the appellants in the absence of any adjudication by the DGFT cancelling the EODCs earlier issued by it - The EODCs issued by the DGFT are determinative of the fulfilment of the export obligation, and the Customs Authorities do not have the jurisdiction to sit in judgment over the EODC issued by the DGFT. Once the DGFT authorities exercise their jurisdiction and satisfy themselves that the export obligation was fulfilled by the appellants within the stipulated time and redeemed the bank guarantee, the Customs Department does not have any jurisdiction to question the validity of the EODC - The impugned order is set aside and the appeals are allowed [Read less]

GST – Odisha AAAR - Admissibility of input tax credit on procurement of goods (pipes) and services (works contract) for construction/laying of underground cross-country pipeline used for transportation of natural gas - Appellant procured pipes and availed works contract services for construction/laying of underground cross-country pipeline as per authorization from Petroleum and Natural Gas Regulatory Board (PNGRB) – Vide the impugned ruling the AAR held that laying of cross-country pipelines meant for supply of natural gas does not fall under the definition of plant and machinery and hence ITC on such pipe lines are i... [Read more]

GST – Odisha AAAR - Admissibility of input tax credit on procurement of goods (pipes) and services (works contract) for construction/laying of underground cross-country pipeline used for transportation of natural gas - Appellant procured pipes and availed works contract services for construction/laying of underground cross-country pipeline as per authorization from Petroleum and Natural Gas Regulatory Board (PNGRB) – Vide the impugned ruling the AAR held that laying of cross-country pipelines meant for supply of natural gas does not fall under the definition of plant and machinery and hence ITC on such pipe lines are in-admissible - Whether ITC is admissible under Section 16 of the CGST Act, 2017 on procurement of pipes and works contract service for construction/laying of underground cross-country pipeline – HELD - The pipelines laid by the appellant are considered as immovable property and not 'plant and machinery' as per the explanation to Section 17(5) of the CGST Act. The Section 17(5)(c) and 17(5)(d) restrict the availment of ITC on goods and services used for construction of immovable property, other than plant and machinery – Since the statute specifically bars availment of ITC on works contract services when supplied for construction of immovable property and the cross-country pipeline being an immovable property, the appellant is not entitled to avail ITC on works contract services provided for construction of such pipeline for transportation of natural gas - Further, clause (d) of Section 17(5) bars entitlement to ITC in respect of goods or services used for construction of immovable property on own account - The cross-country pipeline being an immovable property, the appellant is not entitled to avail ITC on goods or services received for construction and laying of such pipeline for transportation of natural gas – The appeal is rejected - Whether cross-country pipeline is “Plant & Machinery” – HELD - The pipelines laid cross-country by the Appellant on the direction of PNGRB do not form part of “plant and machinery” as these are laid outside the factory premises meant for processing the LNG, RLNG or CNG and therefore fall under the restriction clause as prescribed under Section 17(5) (c) and (d) of CGST Act – The underground pipelines laid by the Appellant as per the requirement of the PNGRB, do not form part of plant and machinery as such pipelines laid outside factory premises are excluded from the definition of plant and machinery. The expression “pipelines outside the factory” signifies that the pipeline is to transport some product from the factory to the end user. In the instant case, the gasified natural gas is transported through the pipeline which is outside the factory. Hence, the said pipeline is a “pipeline outside the factory” for which the appellant cannot avail ITC by treating pipelines as “plant & machinery” - Whether cross-country pipeline is covered under “apparatus, equipment, machinery” – HELD - To call ‘pipeline’ an “apparatus, equipment or machinery” would be a distortion of the meaning when the appellant himself described it as a pipeline. While construing a word which occurs in a statute or a statutory instrument in the absence of any definition in that very document, it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with subject matter understand it. Thus, in common parlance, a pipeline cannot be treated as an apparatus, equipment or machinery. When a specific description is available, it is not justified to bring a pipeline within a meaning of “apparatus, equipment or machinery” by quoting convenient meanings just in order to avail ITC. [Read less]

Service Tax - Invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994 - Liability to pay service tax on execution of contract with Railways - Petitioner submitted that the contracts undertaken by it were pertaining to Railways and the same was exempted from payment of service tax under Entry No. 14(a) of the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 - Whether the respondent authorities were justified in invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 and in levying the service tax, interest and penalty on the petitioner – HELD - ... [Read more]

Service Tax - Invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994 - Liability to pay service tax on execution of contract with Railways - Petitioner submitted that the contracts undertaken by it were pertaining to Railways and the same was exempted from payment of service tax under Entry No. 14(a) of the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 - Whether the respondent authorities were justified in invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 and in levying the service tax, interest and penalty on the petitioner – HELD - For invoking the extended period of limitation under Section 73(1), the authorities must arrive at a specific conclusion that the case falls under any of the conditions specified in the proviso to Section 73(1), i.e. fraud, collusion, willful misstatement, suppression of facts or contravention of any provisions of the Act with the intent to evade payment of tax. However, in the present case, the impugned order-in-original did not contain any such finding by the authorities - Mere non-furnishing of documents or information cannot be construed to have given rise to a situation under any or all of these five conditions under the proviso to Section 73(1) to levy service tax by extending the limitation. The authorities had proceeded on the basis of the information available in Form 26AS obtained from the Income Tax Department, without examining whether the services rendered by the petitioner were liable to service tax under the Finance Act, 1994. The tax cannot be imposed on the basis of inferences and analogy, and there must be a declaration of liability under the statute - The invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994 by the respondent authorities is not justified - The impugned order-in-original is quashed and the writ petition is allowed [Read less]

Service Tax - Refund of CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 - Appellant availed CENVAT credit on various input services – Rejection of refund claim alleging that the services have no nexus with the output services - Whether the appellant is eligible for the refund of CENVAT credit claimed under Rule 5 of the CCR, 2004 - HELD - The requirement of proving the nexus between the input services and the output services cannot be applied while considering the refund claim under Rule 5 of CCR, 2004. In case of irregular availment of credit or its utilization, such credit can be recovered from the assessee and... [Read more]

Service Tax - Refund of CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 - Appellant availed CENVAT credit on various input services – Rejection of refund claim alleging that the services have no nexus with the output services - Whether the appellant is eligible for the refund of CENVAT credit claimed under Rule 5 of the CCR, 2004 - HELD - The requirement of proving the nexus between the input services and the output services cannot be applied while considering the refund claim under Rule 5 of CCR, 2004. In case of irregular availment of credit or its utilization, such credit can be recovered from the assessee and not while considering the refund claim under Rule 5 – Further, the rejection of refund claim on the ground of non-submission of invoices is not sustainable, as the details required in the invoices were available in the debit notes submitted by the appellant. The rejection of refund claim on the ground of limitation is also not sustainable, as the refund claim was filed within the time limit specified under Section 11B of the CEA, 1944, made applicable to service tax under Section 83 of the Finance Act, 1944 – Further, the rejection of refund claim on the ground of the address mentioned in the rent invoices not being the registered office of the appellant is not sustainable, as it has been held in various decisions that the benefit of input services cannot be denied on this ground - The authorities are directed to verify the FIRCs to establish the correlation between the export invoices and the FIRCs – The appeal is allowed by remand [Read less]

Service Tax - Manpower Supply Service vs. Job Work Service - Department alleged that the appellant had provided manpower supply service to the service recipient. However, the appellant contended that they had engaged job workers who performed job work at the premises of the service recipient - Whether the service provided by the appellant was manpower supply service or job work service - HELD - The crucial factor in determining whether the service was manpower supply or job work is the issue of effective control and supervision over the workers deployed by the service provider. This parameter needs to be examined based on ... [Read more]

Service Tax - Manpower Supply Service vs. Job Work Service - Department alleged that the appellant had provided manpower supply service to the service recipient. However, the appellant contended that they had engaged job workers who performed job work at the premises of the service recipient - Whether the service provided by the appellant was manpower supply service or job work service - HELD - The crucial factor in determining whether the service was manpower supply or job work is the issue of effective control and supervision over the workers deployed by the service provider. This parameter needs to be examined based on the terms of the contract between the parties, and by determining who bears the statutory responsibilities under the Factories Act and other applicable labour laws in respect of the workers deployed at the premises of the service recipient. In the absence of findings on these crucial factual aspects, the issue cannot be conclusively decided - The matter is remanded to the adjudicating authority to first determine the issue of effective control and supervision over the workers and thereafter, apply the Board's Circular which distinguishes manpower supply service from job work service - The appeals are allowed by way of remand [Read less]

GST – Maharashtra AAR - Classification of Masala Paan, Composite Supply - Classification of Masala Paan and whether it can be considered as a Composite Supply with Betel Leaf as the principal supply - HELD – The Chapter Heading 21 covers 'Miscellaneous Edible Preparations' and Heading 2106 includes various edible items not covered elsewhere, with a residual entry 2106 9099 for 'Others'. The Masala Paan, being a product made from different ingredients, would merit classification under this residual entry - The product 'Masala Paan' or 'Meetha Paan' is covered under Chapter Heading 2106 9099 and chargeable to GST at the ... [Read more]

GST – Maharashtra AAR - Classification of Masala Paan, Composite Supply - Classification of Masala Paan and whether it can be considered as a Composite Supply with Betel Leaf as the principal supply - HELD – The Chapter Heading 21 covers 'Miscellaneous Edible Preparations' and Heading 2106 includes various edible items not covered elsewhere, with a residual entry 2106 9099 for 'Others'. The Masala Paan, being a product made from different ingredients, would merit classification under this residual entry - The product 'Masala Paan' or 'Meetha Paan' is covered under Chapter Heading 2106 9099 and chargeable to GST at the rate of 18% under entry No. 23 of Schedule III of Notification No. 1/2017 CT (R) Dated 28.06.2017 – Further, for a supply to be considered as a Composite Supply, it must satisfy the criteria laid down in Section 2(30) of the CGST Act, which includes the requirement of one of the supplies being the 'principal supply'. In the case of Masala Paan, the various ingredients used to prepare the product dissolve into one final product, and what the consumer receives is a single new product. The Masala Paan is not a naturally bundled supply, and all the ingredients cannot be considered to have been supplied in conjunction with each other in the ordinary course of business. Therefore, the supply of Masala Paan cannot be considered as a Composite Supply - The product 'Masala Paan' or 'Meetha Paan' is classifiable under HSN 2106 9099 and chargeable to GST at the rate of 18%, and that the supply of Masala Paan cannot be considered as a Composite Supply – Ordered accordingly [Read less]

GST – Maharashtra AAR – Eligibility to exemption under entry 74 of Notification 12/2017-CT (Rate) for health care services provided by a nursing home to in-patients – Applicant provides health care services to both in-patients and out-patients. For in-patients, the nursing home issues a single bill with detailed bifurcation of various charges like room rent, nursing care, medicines, laboratory tests, doctor's fees, etc. - Whether the charges recovered towards pathological tests, radiological tests, bed charges, and charges for medicines and other consumables during the course of rendering medical treatment to in-pati... [Read more]

GST – Maharashtra AAR – Eligibility to exemption under entry 74 of Notification 12/2017-CT (Rate) for health care services provided by a nursing home to in-patients – Applicant provides health care services to both in-patients and out-patients. For in-patients, the nursing home issues a single bill with detailed bifurcation of various charges like room rent, nursing care, medicines, laboratory tests, doctor's fees, etc. - Whether the charges recovered towards pathological tests, radiological tests, bed charges, and charges for medicines and other consumables during the course of rendering medical treatment to in-patients constitute a single supply of health care services – HELD - The services rendered by the nursing home to in-patients constitute a composite supply, wherein the principal supply is health care services. The various services and goods provided to the in-patients, such as doctor's visit and treatment, stay facility/bed charges, provision of medicines/consumables, care by nurses, and carrying out clinical tests, are naturally bundled and supplied in conjunction with each other in the ordinary course of the business of providing health care services. Therefore, the charges recovered towards these elements during the course of rendering medical treatment to in-patients should be considered as a single supply of health care services - Whether the applicant is eligible for exemption under entry 74 of Notification 12/2017-CT (Rate) for the charges recovered from in-patients under a single contract/invoice – HELD - The applicant, being a "clinical establishment" as defined in the notification, is providing "health care services" as defined in the notification to the in-patients. Consequently, the supply of such health care services, including the supply of medicines, consumables, and other incidental goods and services, is eligible for exemption under entry 74 of Notification 12/2017-CT (Rate), subject to the condition that the room rent charges (other than ICU/CCU, etc.) do not exceed Rs. 5,000 per day per person receiving health care services. [Read less]

GST – Maharashtra AAR - Classification of services for mining lease and applicable GST rate - Whether the services of leasing of mines, for which royalty is charged by the Government, merit classification under the heading 9973, specifically under sub-heading 997337 (licensing services for the right to use minerals including its exploration and evaluation) – HELD - The service received by the applicant is not covered under the specific entries for leasing or rental services under Heading 9973, as the transaction involves granting the right to explore, extract, and use minerals, which are natural resources yet to be min... [Read more]

GST – Maharashtra AAR - Classification of services for mining lease and applicable GST rate - Whether the services of leasing of mines, for which royalty is charged by the Government, merit classification under the heading 9973, specifically under sub-heading 997337 (licensing services for the right to use minerals including its exploration and evaluation) – HELD - The service received by the applicant is not covered under the specific entries for leasing or rental services under Heading 9973, as the transaction involves granting the right to explore, extract, and use minerals, which are natural resources yet to be mined. This is different from the transfer of the right to use tangible goods covered under Entry 17(iii) of Notification No. 11/2017-Central Tax (Rate). The Supreme Court's in Mineral Area Development Authority vs. Steel Authority of India Ltd. has held that royalty paid for mining rights is not a tax but a compensatory payment or consideration for parting with the right to extract minerals - The royalty paid in respect of the mining lease is a part of the consideration payable for the licensing services for the right to use minerals, including exploration and evaluation, falling under the Heading 9973, specifically under sub-heading 997337. This service is taxable at 18% GST under the Reverse Charge Mechanism as per Notification No. 13/2017-CT (Rate) – Ordered accordingly - Whether the said service can be classified under Sl. No. 17(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28/06/2017, attracting a rate of 5% (same rate of central tax as on the supply of like goods involving the transfer of title in goods) – HELD - The leasing of mines by the government, where royalty is charged, cannot be classified under Entry 17(iii) of Notification No. 11/2017-Central Tax (Rate), as this entry applies only to the transfer of the right to use tangible goods, where the goods are pre-existing and specific. In the case of mining leases, the service involves granting the right to explore, extract, and use minerals, which are not pre-existing goods but natural resources yet to be mined. There is no transfer of specific goods or title in goods at the time of the lease. [Read less]

GST - Supply of Canteen Services, Scope of Supply - Whether GST would be applicable on the canteen facility provided to employees – HELD - The activity of providing canteen services to employees is in connection with or incidental or ancillary to the principal business activity of the applicant and thus falls within the definition of 'business' under the CGST Act - the volume of transaction is immaterial for the purpose of coverage under ‘business’, therefore, even if supply of food is quite insignificant activity in terms of volume of transaction, still in terms of Section 2(17)(c), the activity of supply of canteen... [Read more]

GST - Supply of Canteen Services, Scope of Supply - Whether GST would be applicable on the canteen facility provided to employees – HELD - The activity of providing canteen services to employees is in connection with or incidental or ancillary to the principal business activity of the applicant and thus falls within the definition of 'business' under the CGST Act - the volume of transaction is immaterial for the purpose of coverage under ‘business’, therefore, even if supply of food is quite insignificant activity in terms of volume of transaction, still in terms of Section 2(17)(c), the activity of supply of canteen services, falls within the definition of ‘business’ - The supply of canteen services by the applicant to its employees amounts to a supply of services under the GST laws - GST is applicable on the supply of canteen services by the applicant to its employees; GST is not applicable if the applicant does not recover any amount from the employees as the entire value is considered a perquisite; and GST is applicable on the amount recovered from the employees, while the portion not recovered is exempt as a perquisite – Ordered accordingly - Whether GST would be applicable if the applicant does not recover any amount from the employees – HELD - The CBIC Circular no. 172/04/2022-GST clarified that perquisites provided by an employer to an employee in terms of a contractual agreement are in lieu of the services provided by the employee to the employer and hence not subject to GST. Therefore, if the applicant does not recover any amount from the employees, the entire value of the canteen services would be considered as a perquisite and not subject to GST - Whether GST would be applicable if the applicant recovers part or full cost from the employees – HELD - If the applicant recovers any amount from the employees, the portion recovered would be liable to GST, while the remaining portion provided as a perquisite would not be taxable. [Read less]

For computation of refund under Rule 89(4) of the CGST Rules, the expression “relevant period” has to be understood and applied consistently in respect of all the terms including ‘ITC’ as well as ‘turnover’ and also the ‘adjusted turnover’.