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2026-VIL-72-SC-CE | Supreme Court CENTRAL EXCISE

Central Excise - Manufacture - Assembly of Imported Modules – Import of parts and modules of photocopiers in CKD or SKD form classifying as automatic data processing machines. At the warehouse, the Respondent-assessee undertook the activity of grouping and fitting together the imported modules to customer specifications, referred to as kitting, without performing any physical assembly in the warehouse - Revenue of the view that such activity amounted to manufacture under Section 2(f) of the Central Excise Act, 1944, and proposed recovery of excise duty. The Commissioner confirmed the demand. The Tribunal set aside the demand, finding that no physical assembly took place at the warehouse, components were cleared in original packing, and the activity was mere kitting - Whether the activity of grouping and fitting together imported modules of photocopiers into complete sets as per customer specifications amounts to manufacture under Section 2(f) of the CEA, 1944 and Note 6 of Section XVI of the CETA, 1985 - HELD - Manufacture implies a transformation where a new and different article must emerge having a distinctive name, character or use. The test for determining whether an activity amounts to manufacture is- whether a distinct commercial commodity comes into existence with a different character and identity from the original, and whether the transformed goods are marketable - The goods were imported, classified and assessed as complete machines under Tariff Heading 8471. The activity undertaken was one of grouping and fitting different parts together to customer requirement, called kitting, which amounts to mere assembly of parts without any physical transformation. No physical assembly or fitting took place at the warehouse - The Revenue failed to establish that the imported modules were unfinished or semi-finished or that conversion from incomplete to complete article was undertaken. Rule 2(a) of the GRI answers only where an article is to be classified but does not answer whether a process performed upon the article amounts to manufacture - Note 6 of Section XVI requires that the article presented must be incomplete or unfinished but having essential character of the complete article and secondly that conversion of such article into the complete article was carried out by the person sought to be charged, neither of which was established. The Tribunal's findings that no manufacturing activity was undertaken and that the activity amounted only to kitting of modules are based on evidence and material on record and are not perverse - The nomenclature employed by the Respondent for the activity, by itself, is not conclusive and determinative - The activity undertaken by the Respondent does not amount to manufacture under Section 2(f) of the CEA, 1944 - The order passed by the Tribunal is upheld and the appeals filed by the Revenue are dismissed [Read less]

2026-VIL-1395-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax – Invocation of extended period of limitation under proviso to Section 73(1) of Finance Act, 1994 – Show Cause Notice issued on basis of discrepancy between Form 26AS and ST-3 Returns – Whether extended period of limitation could be invoked without establishing fraud, collusion, wilful misstatement, suppression of facts or contravention of statutory provisions with intent to evade Service Tax – HELD – The entire demand has been raised solely on basis of comparison between figures reflected in Form 26AS and those disclosed by Appellant in ST-3 Returns and material constituting very basis of demand was never outside knowledge or reach of Department as both Form 26AS and ST-3 Returns are statutory records maintained under law and available to Department for scrutiny, verification and reconciliation in ordinary course of administration. No independent investigation preceding issuance of Show Cause Notice was undertaken except for noticing alleged difference between figures and Department has not conducted any enquiry to ascertain precise nature of receipts, taxability thereof, contractual arrangements, accounting treatment adopted by Appellant, or whether differential figures represented taxable consideration. No independent evidence has been brought on record to establish any positive act of fraud, collusion, wilful misstatement or deliberate suppression attributable to Appellant. Such approach falls substantially short of statutory threshold required for invocation of extended period as the proviso is in nature of exceptional provision and cannot be pressed into service merely because discrepancy is subsequently noticed during scrutiny of records - Mere existence of variance between Form 26AS and ST-3 Returns without anything more cannot lead to conclusion that Appellant had indulged in fraud, wilful suppression or misstatement so as to justify recourse to extended period. The normal period of limitation expired on 05.03.2020 and the SCN was issued on 30.12.2020, nearly ten months thereafter, thus the demand falls beyond normal period prescribed by law. Delays in filing certain returns though not of such magnitude as to justify inference of deliberate suppression cannot have effect of indefinitely postponing commencement of limitation and normal period in respect of all returns had expired much prior to issuance of SCN – The extended period of limitation is not invokable. The demand of Service Tax, interest and penalty are set aside - Service Tax – Mandatory requirement of pre-show cause notice consultation – Show Cause Notice dated 30.12.2020 proposing demand of Service Tax exceeding fifty lakhs issued without affording opportunity of pre-show cause notice consultation – Whether Show Cause Notice is void ab initio for non-compliance with Board Instructions dated 21.12.2015 read with Circular dated 10.03.2017 mandating pre-show cause notice consultation in all cases involving demands exceeding fifty lakhs except preventive or offence-related matters – HELD – Board Instructions dated 21.12.2015 bearing reference 1080/09/DLA/MISC/15, as clarified by Circular dated 10.03.2017 bearing reference 1053/02/2017-CX, unequivocally mandated pre-show cause notice consultation in all cases involving demands exceeding fifty lakhs save and except preventive or offence-related matters. The present proceedings do not fall within excepted category as they did not arise out of any preventive or offence-related investigation. No pre-show cause notice consultation was undertaken and no opportunity of such consultation was afforded to Appellant prior to issuance of impugned notice. No material has been brought on record evidencing compliance with binding administrative instructions holding field on relevant date - The subsequent Circular No. 1079/03/2021-CX dated 11.11.2021 whereby such consultation was dispensed with in specified suppression-related cases was issued long after issuance of impugned SCN and cannot be pressed into service to validate an action already undertaken contrary to prevailing instructions as subsequent and more onerous circular operates only prospectively – The Show Cause Notice is void ab initio. The demand of Service Tax, interest and penalty are set aside - Service Tax – Penalty under Section 77 of Finance Act, 1994 – Appellant filed certain ST-3 Returns with delay attributable to shortage of staff – Whether penalty is imposable for late filing of returns when delay does not establish fraud, collusion, wilful misstatement or suppression of facts with intent to evade Service Tax warranting invocation of extended period of limitation – HELD – The statutory obligation to furnish returns within prescribed time is independent requirement under Finance Act, 1994 and any breach thereof is amenable to consequences contemplated under Section 77 of the Act. The delay in filing returns is admitted and undisputed factual position borne out from records. Such default, though not of nature warranting invocation of extended period of limitation or sufficient to establish fraud, collusion, wilful misstatement or suppression of facts, cannot altogether be overlooked while considering levy of penalty specifically prescribed for contravention of statutory procedural requirements. The legislative intent underlying Section 77 is to ensure timely compliance with procedural obligations cast upon registered assessees independent of existence of any intention to evade tax – The penalty imposed under Section 77 of Finance Act, 1994 is upheld. [Read less]

2026-VIL-1388-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise – Assessable value of excisable goods – Sales commission paid to selling agents – Appellant manufacturer of Refractory Products engaged selling and commission agents both in foreign countries and in India for promoting exports and domestic sales – Appellant paid sales commission to foreign agents like commission agents based outside India and domestic agents for services rendered including procuring orders for export – Department issued SCN invoking extended period of limitation proposing to demand central excise duty on sales commission – Whether sales commission paid by appellant to selling agents is includable in assessable value as transaction value – HELD – It is not in dispute that buyers and sellers are unrelated parties and price is sole consideration of sale. Sales commission is not part of sale price paid or payable by buyer to seller. Transaction value is actual price paid or payable for goods when sold and includes any amount buyer is liable to pay to or on behalf of assessee by reasons of or in connection with sale – The sales commission sought to be included in transaction value is neither price paid or payable for goods when sold nor any amount buyer is liable to pay to or on behalf of assessee by reason of or in connection with sale. Sales commission is expense of appellant and there is no flow of any additional consideration or amount from buyer to appellant - Revenue has not come up with evidence to show that sales commission paid was recovered from buyer. In fact, sales commission paid by appellant is borne by appellant against sale price received from buyers. There is also no evidence on record showing appellants have received any additional consideration towards sale of goods - Sales commission is already factored into sale price on which appellant has paid duty correctly. Sales commission cannot be treated as part of transaction value or included in assessable value – The demand on account of sales commission is set aside and the appeal is allowed [Read less]

2026-VIL-1389-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs – SAFTA Certificate of Origin – Preferential duty claim – Goods obtained from ship breaking in Bangladesh imported with valid Certificate of Origin issued by designated authority of exporting country under SAFTA rules – Appellant filed Bill of Entry claiming preferential duty under Notification 99/2011 but after prolonged detention of more than one month with mounting demurrage charges, under coercive circumstances, wrote letter dated 04.07.2022 foregoing SAFTA benefit and willing to pay full duty – Customs authorities disallowed SAFTA benefit without following prescribed procedure and imposed differential duty, ordered confiscation with redemption fine and penalty – Whether the letter foregoing SAFTA benefit was voluntary and whether Appellant lost right to file appeal and whether goods were eligible for SAFTA benefit – HELD – The letter was not written voluntarily but was written under forced circumstances of prolonged detention and mounting demurrage which forced the Appellant to write the letter so that goods urgently required for manufacturing could be cleared and demurrage reduced. The circumstances of prolonged detention cannot be envisaged as the circumstances mentioned under Section 28DA(4) of the Customs Act, 1962 for relinquishment of claim and the Appellant has not lost their right to file appeal against the assessment order - The goods imported from Bangladesh were accompanied with Certificate of Origin issued by the designated authority in Bangladesh in terms of Article 1 of Annexure-B of Determination of Origin of Goods under SAFTA. The SAFTA certificate is complete and in accordance with format prescribed by Rules of Origin with no alteration and was produced within validity period. The Customs (Administration of Rules of Origin under Trade Agreement) Rules, 2020 incorporate Rules of Origin notified for trade agreements and SAFTA is a Trade Agreement for which Rules of Origin as notified under Notification No.75/2006-Customs (NT) dated 30.06.2006 have duly been complied with by production of SAFTA certificate issued by Competent Authority - No such step as prescribed under Determination of Origin of Goods under SAFTA agreement has been followed by investigation before denying benefit of duty exemption - There was no misdeclaration or fraud established against Appellant warranting confiscation under Section 111(o) and 111(m) of Customs Act, 1962. The differential duty, confiscation, redemption fine and penalty imposed are not sustainable – The appeal is allowed. The differential duty of assessed amount with interest is set aside. The confiscation order is set aside. The redemption fine is set aside. The penalty under Section 112(a)(ii) is set aside. [Read less]

2026-VIL-840-MEG | High Court SGST

GST - Assessment based on Seized Documents - Maintainability of Writ Petition - During an inspection, notepads containing rough estimates and cash memos were seized. Authorities treated these rough estimates as sales memos and issued a demand for tax, interest - The petitioner petition alleging violation of natural justice, arguing that the same officer who authorized the inspection later heard the appeal as Appellate Authority - Whether the High Court should exercise jurisdiction under Article 226 of the Constitution to quash the assessment order when the statutory machinery provides for appeal - HELD - The GST Act provides a complete self-contained appellate machinery. When a statute creates a right and provides a special forum for its enforcement, the machinery created by the statute must ordinarily be resorted to - The High Court should not entertain a writ petition under Article 226 when an alternative remedy is available through statutory machinery which provides an equally efficacious remedy - The allegation of violation of natural justice has not been established as authorization for inspection is distinct from adjudicatory functioning and no material evidence of bias has been placed. The actions taken by the Proper Officer under Section 2(91) read with Sections 3 and 5 of the CGST Act, 2017 cannot be held irregular or illegal - The dispute in the instant case is essentially factual in nature, involving examination of whether the seized notepads represent actual suppressed sales or were mere estimates, whether the goods fall within 5 to 12 percent slab or 18 percent slab, and whether bank deposits and GST returns can be reconciled with seized materials. These questions require elaborate examination and appreciation of documentary and testimonial evidence and cannot be decided purely on questions of law - The principle that writ jurisdiction should not be exercised merely because it is lawful to do so. The statute provides for alternate remedies in the form of appeal before the GSTAT - The writ petition is dismissed. However, the petitioner is permitted to take recourse to alternate remedy for appeal before the GST Appellate Tribunal – The petition is dismissed [Read less]

2026-VIL-130-AAR | Advance Ruling Authority SGST

GST – Gujarat AAR – Classification of Service and applicable GST rate - Job Work Services - Composite Supply or not - Applicant is engaged in providing offset printing services on Kraft Paper and Duplex Paper supplied by packaging industries and corrugated box manufacturers under delivery challan in accordance with specifications and instructions provided by the principals. Upon completion of offset printing, the processed papers are returned to the principals - Applicable GST rate on the job work services on the job work services of offset printing provided on Kraft Paper and Duplex Paper supplied by the Corrugated box manufacturer or Packaging Industries - Whether the job work services of offset printing on Kraft Paper and Duplex Paper constitute a composite supply - HELD - The activities undertaken by the applicant are interconnected with each other and are naturally bundled and supplied in conjunction with each other in the ordinary course of business. These activities constitute a composite supply as defined under Section 2(30) of the CGST Act, 2017, where offset printing is the principal supply and all pre-offset printing and post-offset printing activities are ancillary to the principal supply of offset printing – As per Section 8(a) of the CGST Act, 2017, a composite supply shall be treated as a supply of the principal supply. Entry 26(ii)(f) of Notification No.11/2017-Central Tax (Rate) specifies that GST rate of 5% is applicable on job work services in relation to printing of goods falling under Chapter 48 or 49 of the Customs Tariff Act, 1975 which attract GST at 5% or NIL - Kraft Paper and Duplex Paper are classifiable under CTH 4804 and 4810 respectively and are chargeable at 18% GST under Notification No.09/2025-Central Tax (Rate) dated 17.09.2025 - Since the job work is performed on goods chargeable at 18% GST and not at 5% or NIL, Entry 26(ii)(f) does not apply. Instead, Entry 26(iv) which covers job work services other than those specified in Entry 26(i), (ii) and (iii) becomes applicable, with GST rate of 18% - Ordered accordingly [Read less]

2026-VIL-1383-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax – Relevant date of assignment of the mining rights, Royalty to the State Government for Mining Lease - Point of Taxability - Extended Period of Limitation - Demand-cum-Show Cause Notice alleging that appellant received taxable service of assignment of right to use natural resources but wilfully failed to discharge Service Tax under reverse charge - Appellant contended that issue was interpretational and contentious at the time, extended period of limitation was not invocable, and the mine allotment being prior to 01.04.2016, no Service Tax was leviable - Whether Service Tax can be demanded under extended period of limitation when the issue relating to taxability of royalty was contentious and interpretational in nature, and no suppression or intent to evade was established - HELD - Extended period of limitation cannot be invoked when the issue was interpretational and highly contentious. No allegation of suppression, fraud, collusion, wilful misstatement or intent to evade can be sustained. Appellant paid royalty to the State Government and duly filed statutory VAT returns disclosing transactions - A bona fide belief that no Service Tax was payable cannot constitute suppression with intent to evade. The taxable event is when service is provided or agreed to be provided. The right to use natural resources was allotted and agreed to be provided prior to 01.04.2016, when such services were covered by the negative list. The formal lease deed executed on 29.08.2016 was merely a continuation of the already concluded arrangement. Service Tax cannot be fastened on allotment made prior to 01.04.2016 even if consideration was paid thereafter - In the present case since the right has crystallized on the date when the mining is assigned to the Appellant, in principle, that date is to be taken as the date of assignment of the mining rights to the Appellant - The demand confirmed in the impugned order is set aside on the ground of limitation and also on merits – The appeal is allowed [Read less]

2026-VIL-1385-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Manufacture of Compressed Natural Gas - Compression for Transportation - Appellant is engaged in extraction of natural gas from coal bed methane wells. The natural gas is compressed and transported to customer premises in cascades where Pressure Reducing Skids are installed to decompress the gas. Decompressed natural gas is then delivered to customers at normal pressure. No excise duty was paid on clearances made in cascades – Demand of duty alleging that the activity amounts to manufacture of Compressed Natural Gas under Section 2(f) of the Central Excise Act, 1944 - Appellant contended that compression was only for ease of transportation and that the gas is sold as natural gas at normal pressure, not as CNG - Whether compression of natural gas for transportation purpose amounts to manufacture of CNG under Section 2(f) of the CEA, 1944 and Chapter Note 5 to Chapter 27 - HELD - Chapter Note 5 to Chapter 27 states that compression of natural gas for purpose of marketing as CNG amounts to manufacture. However, the provision must be read to mean that only compression undertaken for purpose of marketing gas as CNG amounts to manufacture - In the present case, the gas is decompressed at customer premises and sold as natural gas at normal pressure, not as CNG. The compression undertaken is only for purpose of transportation through pipelines. The contracts with industrial consumers clearly show that purchase of gas is to be at normal pressure and sales take place at buyer's premises. Marketing of goods is done not as CNG but as natural gas at normal pressure - The process of compression and carriage to premises of industrial consumers is only for ease of transportation and does not amount to manufacture. The Tribunal earlier decision in appellant's own case decided same issue in favor of appellant - The confirmed demand for excise duty, interest and penalty is set aside. The penalties imposed on the Chairman and Chief Executive Director are also set aside as the main demand has been set aside on merits – The appeals are allowed [Read less]

2026-VIL-1382-CESTAT-MUM-CU | CESTAT CUSTOMS

Customs – Levy of Penalty on CHA - Role and Liability of Customs House Agent - Mismatch in the description of goods in the Bill of Entry as against the actual goods imported. Upon observing this mismatch, the appellant-CHA returned the import documents without effecting clearance of goods and intimated the Customs authority of such returning of documents. The appellant was subsequently penalized under Section 112A of the Customs Act, 1962 - Whether a Customs House Agent or G Card holder can be penalized under Section 112A when the agent returned the documents upon observing mismatch in the cargo and goods were not cleare... [Read more]

2026-VIL-1384-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs - Classification of Made-up Textile Articles - Extended Period of Limitation - Appellant imported umbrella panel fabric cut in triangular shape and size through various Bills of Entry, classifying the goods under Chapter Tariff Heading 6307 as made-up textile articles. The classification was accepted by Customs officers at the time of assessment. Approximately two years later, an Audit Consultative Letter was issued alleging misclassification and proposing reclassification under CTH 5407 as woven fabrics of synthetic filament yarn - Whether umbrella panel fabric cut in triangular shape and size should be classified as made-up textile articles under CTH 6307 or as woven fabrics under CTH 5407 and whether extended period of limitation can be invoked for classification disputes without evidence of suppression - HELD - The goods are cut in triangular shape which falls within Section Note 7 of Section XI of the Customs Tariff Act, 1975, defining made-up articles as those cut otherwise than into squares or rectangles. Once fabric is cut into triangular panels, it acquires a distinct identity and character. The essential character of the goods is umbrella panels and not textile fabric. In commercial understanding, the goods are known as and sold as umbrella panels, not as textile fabrics. CTH 6307 specifically covers made-up textile articles whereas CTH 5407 is a general heading for woven fabrics - As per General Rules of Interpretation, a specific heading must be preferred over a general heading. The prior decision of the Tribunal in Karnataka Umbrella Manufacturers directly supports this classification – Further, the extended period of limitation cannot be invoked for classification disputes when there is no suppression or misdeclaration. All imports were made through Bills of Entry, goods were fully described and classification was openly declared. Customs assessed goods without raising any objection at the time of assessment. Show Cause Notice issued after significant time lapse is not sustainable under Section 28(4) of the Customs Act - The impugned order is set aside on both merits and on the ground of limitation. The demand for customs duty, interest and penalty is set aside – The appeal is allowed [Read less]

2026-VIL-1386-CESTAT-CHE-CE | CESTAT CENTRAL EXCISE

Central Excise – Classification of Weld Mesh parts of Poultry Battery Cages – Appellant engaged in manufacture of Weld Mesh which are parts of Poultry Battery Cages namely Upper Portion, Bottom Part and Side Portions manufactured using Galvanized Iron Wire of size 2mm to 4mm using Wire Welding Machines – Appellant classified goods under CETH 84369100 as parts of Poultry Keeping Machinery or Poultry Incubators and Brooders – Department through Show Cause Notice dated 07.07.2017 rejected declared classification and proposed re-classification under CETH 73089090 as structures and parts of structures of iron or steel – Whether goods which are exclusively used in Poultry Battery Cages and are parts of Poultry Keeping equipment should be classified under CETH 84369100 or CETH 73089090 – HELD – The goods under dispute are Top Mesh Part, Side Partition Part, Bottom Mesh Part, Door Part and Centre Partition part for Poultry Battery Cages made from Galvanized Iron Wire and are exclusively used only in Poultry Battery Cages for Poultry keeping and rearing - The goods are identifiable parts of poultry cages and have been manufactured specifically for such use as per customer specifications. The goods are supplied to clients to set up Poultry Farms and are used in three stages of Poultry Cage system. Battery Cage as such is not machinery as it does not have any mechanical functions of its own but Battery Cage is an equipment meant only for Poultry keeping and rearing and hence the goods which are integral components of such equipment should be classified as parts of Poultry Keeping Machinery - The Department seriously erred in rejecting declared classification without proper justification and without placing on record conceivable and convincing reasons as to how goods could become structures or parts under CETH 7308 when goods are made of Galvanized Iron Wire of size 2mm to 4mm exclusively used in Poultry Cages and not used in construction of structures like bridges, lock-gates, towers or roofing wherein heavy iron rods are used. The Department has not demonstrated how tiny Galvanized Iron Wire could be used for such large structures. The competing entries are user specific and industry specific and goods in question are exclusively used for Poultry keeping equipment and not for general structural purposes – The declared classification under CETH 84369100 is correct. The impugned order is set aside and the appeal is allowed [Read less]

2026-VIL-1387-CESTAT-BLR-CE | CESTAT CENTRAL EXCISE

Central Excise – CENVAT Credit on Proforma Invoice – Whether CENVAT credit can be taken on Proforma Invoice which does not fall within specified documents under Rule 9 of CENVAT Credit Rules, 2004 – HELD – When all documents are harmoniously read, there is no dispute that relevant Service Tax has been properly paid by service provider and same has been taken as CENVAT credit by Appellant and credit has also been reflected in ER-1 Return. As long as factual details and provision of service is not in dispute and basic details of Service Tax Registration, service rendered details and Service Tax amount are reflected in invoices, CENVAT credit cannot be denied - Rule 9 of CCR, 2004 clarifies that CENVAT credit on documents as mentioned in Sub Rule (1) shall be available if and only if all particulars as prescribed under respective statute are contained in said documents. Conjoint reading of rules makes it clear that it is not merely specific documents in sub rule but any similar document which may provide all statutory particulars that same shall be admissible for permitting availment of CENVAT credit – The documents required under Rule 9 are not confined to merely invoices but may be any documents like bill or challan as issued in terms of applicable rules. Rule specifies amount of information as required in particular documents for availment of CENVAT credit and any such documents as required can be document under Rule 9 for entitlement of availing CENVAT credit. There is no denial that entire information as required under Rule 9 was available in Proforma invoices on which credit was availed by Appellant. Denial of availment of CENVAT credit on Proforma invoices is absolutely wrong and set aside – The appeal is allowed - CENVAT Credit – Limitation period for issuing Show Cause Notice – Appellant took CENVAT credit in March 2011 and reflected same in ER-1 Return for that month – Department conducted audit during which alleged contravention was quantified – Whether SCN issued after more than three years from taking of credit without further investigation or verification is barred by limitation – HELD – Appellant had taken credit in March 2011 and reflected same in ER-1 Return. Even under self-assessment regime, Tribunal and High Courts have been consistently holding that scrutiny of Return is still to be undertaken by Range Officials. There is nothing to show that any query was raised by Range Officials after taking up ER-1 Return for scrutiny – Further, audit was conducted in 2012 as evident from Audit Report and alleged contravention and Service Tax taken as CENVAT credit has already been quantified in Report itself. However, Department has taken more than three years to issue SCN while there is no evidence that any further investigation or verification was taken up in this case - When no objection was raised by Range Officials during normal course of scrutiny and credit was already quantified during audit in 2012 but SCN was issued only after three years gap, the Department has lost the opportunity to proceed within normal limitation period and cannot rely on extended period of limitation – The entire demand is set aside on account of time bar [Read less]

2026-VIL-1373-CESTAT-CHD-CE | CESTAT CENTRAL EXCISE

Central Excise - CENVAT credit on inputs procured from manufacturers availing exemption notification - Applicability of Rule 12 of CCR, 2004 - Department took the view that CENVAT credit on inputs cleared by exempted units was not admissible before the amendment in Rule 12 by way of Notification No.02/2014-CE dated 20.01.2014 - SCN invoking extended period of limitation demanding denial of CENVAT credit - Appellant contended that Rule 12 does not restrict availment of credit under Rule 3, the amendment is merely a clarification and should apply retrospectively - Whether CENVAT credit is admissible on inputs procured from manufacturers availing exemption notification before the amendment in Rule 12 dated 20.01.2014 - HELD - The scheme of CENVAT credit has to be read in a harmonious manner and not in isolation with reference to one or two Rules. The scheme of CENVAT credit provides that credit of inputs or input service shall be admissible to the manufacturer under the following conditions: the input or input service has suffered duty, such input or input service are used in the manufacture of final products, and such credit is received under the cover of prescribed invoice or document. In the instant case, none of these conditions are disputed - CENVAT credit cannot be denied merely because express provision for credit from exempted supplies came at a later date by amendment. Before the amendment in Rule 12 there was no express prohibition in the CENVAT Credit Rules to deny credit availed by the appellant. The absence of an express permission at an earlier date cannot be construed to mean that credit is only admissible from the date of amendment - The amendment to Rule 12 is in the nature of clarification and does not create a new permission but merely clarifies what was permitted by the scheme - Regarding invocation of extended period, where the issue arises on basis of audit and involves legal interpretation of statutory provisions, extended period cannot be invoked. The fact that Department conducted audits regularly and processed refund claims shows Dept had knowledge of the facts. The appellant succeeds both on merits and on the question of limitation - The impugned order is set aside and the appeal is allowed [Read less]

2026-VIL-1372-CESTAT-ALH-CE | CESTAT CENTRAL EXCISE

Central Excise - Place of removal, Inclusion of transportation cost in assessable value in FOR destination sales - Appellant manufactured and supplied goods to customers on FOR destination basis. Audit revealed that the Appellant had not paid central excise duty on the value of transportation of goods from its factory to buyers' premises resulting in short payment of duty - Whether the place of removal for goods sold on FOR destination basis is the buyer's premises or factory gate - HELD - When goods are sold on FOR destination basis, the place of delivery is the buyer's premises and the cost of transportation up to the bu... [Read more]

2026-VIL-1378-CESTAT-CHD-ST | CESTAT SERVICE TAX

Service Tax – Business Auxiliary Services – Appellant engaged in air travel agency services issued air travel tickets on behalf of domestic and international airlines. When appellant purchased tickets from other GSA/IATA agents, they received commissions or discounts from airlines - Revenue demanded service tax on commission retained by appellant, contending that commission was consideration for BAS rendered by appellant to other GSA/IATA agents - Whether commission retained from purchase of air travel tickets through other GSA/IATA agents constitutes taxable service under Service Tax provisions - HELD – Issue had be... [Read more]

High Court Judgement | High Court SGST

GST - Prosecution of Director for company's offence - Vicarious liability and requirement to implead company - A complaint was filed against Petitioner, a Director, under Section 132 of CGST Act, 2017 for wrongfully availing Input Tax Credit. The Department alleged that M/s NIPL, a registered person and company of which Petitioner was Director, had availed fraudulent ITC without receipt of goods through invoices of dummy firms. Though the Department had issued Show Cause Notice to M/s NIPL and the company had filed appeal, the complaint was filed against the Petitioner individually without arraigning M/s NIPL as an accused. Petitioner contended that prosecution against him without impleading the company was not maintainable - Whether a Director of a company can be prosecuted individually under Section 137 of CGST Act without the company being arraigned as an accused - HELD - Section 137 of CGST Act use the term ‘person’ and refer it to a Company. Applying strict construction of penal statutes and consistent with binding precedent of the Apex Court, the commission of offence by the company is an express condition precedent to attract vicarious liability of others - The words “as well as the company” appearing in Section 137 make it clear that when the company can be prosecuted, only then the persons mentioned in other categories could be vicariously liable. Commission of offence by the company-M/s NIPL is an express condition precedent to attract the vicariously liability of the petitioner, who was the Director of M/s NIPL at the relevant time – Further, it is M/s NIPL, which is a registered person within the meaning of Section 2(94) of the CGST Act. It is M/s NIPL which has availed the ITC fraudulently. It is also the admitted position that demand-cum-show cause notice was issued to M/s NIPL and it was M/s NIPL which filed an appeal before the Appellate Authority – The prosecution of the Director in personal capacity without arraigning the company cannot proceed against settled principles of law - The complaint against petitioner is quashed and all subsequent proceedings are set aside. The respondent is at liberty to proceed for the offence under Section 132 of CGST Act in accordance with law - The petition is allowed [Read less]

2026-VIL-46-GSTAT-THN | Tribunal SGST

GST – Jurisdiction of Tribunal to examine transitioned ITC - Proceedings under pre-GST regime versus GST regime - Appellant transitioned ITC balance by filing Form GST TRAN-1 under Section 140 of CGST Act including credits of CENVAT credit of eligible duties and VAT credit on stock-in-trade goods. Department issued Notice disputing the transitioned ITC alleging non-production of relevant evidence to substantiate eligibility under GST law - Appellant contended that credits were never disputed under erstwhile regime and cannot be questioned under CGST regime - Whether CGST authorities can initiate proceedings under Section 74 of CGST Act to question admissibility of ITC transitioned from pre-GST regime when such credits were never challenged under erstwhile law - HELD - Section 142(6)(a) and Section 174(2)(e) of CGST Act make it clear that recovery proceedings related to inadmissible credit under erstwhile laws can be initiated only under provisions of erstwhile laws even after enactment of CGST Act. The CGST authorities are not empowered to initiate proceedings under CGST Act for determining correctness of credits availed and transitioned from erstwhile regime - Following the ratio of High Court of Jharkhand in Usha Martin Ltd and in Steel Authority of India Ltd cases, the proceedings initiated by respondents to deny transitioned ITC on ground that such credits were inadmissible under erstwhile laws are beyond jurisdictional powers vested under CGST Act - An Appellant under Section 140(1) is entitled to carry forward CENVAT credit of eligible duties reflected in returns preceding 01.07.2017 subject to conditions specified. Since credit was never disputed or challenged under erstwhile regime, same cannot be questioned under CGST Act. Examination of correctness and eligibility of credit availed under erstwhile law under guise of powers under Section 140 is without authority of law - Reliance of the revenue on Section 174 of the CGST Act is also of no avail inasmuch as it only authorizes continuation of the proceedings initiated under the erstwhile law. However, it doesn’t authorize the officers appointed under the CGST Act to examine correctness of ITC availed by the appellant under the erstwhile regime - The ITC transitioned by the appellant is in accordance with law and same is held to be eligible. The impugned order is set aside and the appeal is allowed - Transition of Krishi Kalyan Cess (KKC) – HELD - The Appellant had transitioned the same into the GST regime by filing Form GST TRAN-1. However, due to lack of clarity regarding the availability of ITC in respect of KKC, the Appellant, out of abundant caution, reversed the amount under protest – As per the ratio of Godrej & Boyce Mfg Co Ltd judgment, transitional credit of Krishi Kalyan Cess is in order. Merely because the revenue is before the Hon’ble Supreme Court that cannot be sole reason to hold our decision, particularly when the Apex Court has not granted the stay from the operation of the Bombay High Court judgment. Moreover, the view on the issue of transition of KKC is not only based on the judgment in the case of Godrej & Boyce but also on our independent interpretation of the provision and Board’s Circular dated 02.01.2019. The transition of Krishi Kalyan Cess by the Appellant is in order - Transitioned VAT Credit under Section 140(6) – HELD - With respect to VAT credit transitioned into the GST regime, the Appellant had provided all the details required to claim VAT credit on Stock-in-Trade goods lying in stock as on 30.06.2017. There is no finding to the contrary to deny this amount of transitioned credit. Without giving any specific objection for denial of this credit, the lower authorities have rejected this credit considering it to be part and parcel of the other credits. Thus, in the absence of contrary findings, denial of this credit cannot be countenanced. Moreover, the revenue has not brought any material evidence on record to justify denial of VAT credit and consequent transition thereof to GST regime – Further, certain other reasons given to deny transitional credit such as incorrect address on the invoice, description of service not mentioned, copies of invoice or credit register not produced, etc are not sustainable at this stage especially when at the stage of claiming credit such objections were not raised. [Read less]

2026-VIL-778-CAL | High Court SGST

GST - Cross empowerment, Adjudication by Bureau of Investigation officers - Adjudication order was passed by Deputy Commissioner posted at Bureau of Investigation, State GST, holding that ITC claimed on inward supplies from five suppliers was ineligible - Petitioner contention that respondent officer being vested at Bureau of Investigation Unit lacks jurisdiction to adjudicate and that State Tax Authorities have no jurisdiction when petitioner is administratively assigned to Central Authorities without corresponding notification under Section 6 of CGST Act - Whether officers posted at Bureau of Investigation have power of adjudication under Section 74 of CGST Act, 2017 - HELD - A jurisdictional issue questioning the competence of an authority to exercise power raised in a writ petition may be entertained even when alternative remedy exists if such issue is a pure question of law and does not involve adjudication of disputed facts - The order of adjudication was passed by officer posted at Bureau of Investigation who is vested with enforcement activity and investigation including ITC investigation but it prima facie appears such officers may lack jurisdiction to make adjudication under Section 74. There is divergence of opinion among High Courts on cross empowerment issue - The Madras High Court held that State authorities have no jurisdiction when assessee is administratively assigned to Central authority without corresponding notification under Section 6. However Kerala and Jammu and Kashmir High Courts held that cross empowerment is automatic by legislative mandate and no separate notification is required. Since various jurisdictional issues are involved and have not been decided by the adjudicating authority, the matter should be remanded to allow petitioner to raise all jurisdictional issues - The adjudication order and appellate order and all consequential steps were set aside and quashed. Liberty granted to petitioner to submit comprehensive reply to SCN raising all points including jurisdictional issues. The adjudicating authority was directed to fix date of hearing after expiry of reply period and decide jurisdictional issue as first issue and thereafter other issues afresh in accordance with law - The writ petition is allowed [Read less]

2026-VIL-779-DEL | High Court SGST

GST - Application of amended pre-deposit requirement in cases involving only penalty - Petitioners were issued Show Cause Notice proposing penalties under Section 122(1A) of CGST Act, 2017. Order-in-Original dated 16.12.2025 imposed penalties without accompanying tax demand. By Finance Act 2025 effective 01.10.2025, the proviso to Section 107(6) was substituted to require 10% deposit of penalty in orders demanding only penalty - Petitioners contended the deposit requirement should not apply as proceedings commenced before 01.10.2025 when no such requirement existed - Whether the amended proviso to Section 107(6) requiring ... [Read more]

2026-VIL-1392-CESTAT-HYD-ST | CESTAT SERVICE TAX

Service Tax – Exemption for sub-contractor providing Works Contract Services – Appellant engaged as sub-contractor to main contractor for execution of earth work, site formation and earth excavation for construction of dam and canals for Government of Andhra Pradesh project – Appellant did not take service tax registration nor file any service tax returns – Department issued Show Cause Notice proposing demand of Service Tax for activities classified as Site Formation Services – Whether appellant qualified for exemption under Section No.29(h) when main contractor was providing exempt WCS and whether extended period of limitation was invokable – HELD – The twin criteria under Section No.29(h) are that sub-contractor is providing WCS to main contractor and main contractor is also providing exempt WCS. There is no dispute that main contractor was executing work of construction of dam and canals to Government which is covered by exemption at Section No.12(d) of Notification No. 25/2012-ST and hence main contractor was executing exempt WCS. The essential nature of work awarded to appellant was not simple contract of service but composite contract involving machinery, fuel and materials to be provided by sub-contractor for execution of earth work - Definition of WCS provides that where transfer of property in goods involved in execution of contract is leviable to tax as sale of goods, such contract is WCS. The term used is leviable to VAT not subjected to VAT. If goods or materials leviable to VAT were used in course of execution of contract, said contract is treated as WCS - The fact that VAT was not charged by appellant was because VAT amount was deducted by main contractor from RA bills and later reimbursed and such reimbursement does not mean work was not leviable as WCS. It was leviable as WCS but exempted under applicable VAT laws during material time. Mere reimbursement of deducted VAT does not tantamount to not paying VAT on work. Scope of work clearly prescribed removal of over burden, excavation including cost of machinery, labour, fuel required for finished item of work and included cost of all materials, machinery and labour - It is not necessary that goods transferred in execution of WCS must be transferred in original form but can be transferred in any other form as long as there is clear indication that goods have been actually used for execution of work. Property in materials used in execution of WCS pass to recipient in any form including where goods are incorporated, chemically altered or consumed during execution. In the facts of case, services of site formation and earth work are in nature of WCS and appellant is entitled for benefit under Section No.29(h) of Notification No. 25/2012-ST in respect of work executed to main contractor – Appellant is eligible for exemption under Section No.29(h) - On merit as well as on the ground of limitation, the impugned order cannot be sustained and set aside – The appeal is allowed - Service Tax – Extended period of limitation – Invokability based on bonafide belief – Appellant sub-contractor did not take service tax registration nor file periodical returns based on understanding that services did not attract service tax – Adjudicating Authority invoked extended period holding that appellant deliberately suppressed facts and had intent to evade service tax – Whether extended period of limitation can be invoked when appellant had bonafide belief about interpretation of tax exemptions and statutory provisions – HELD – In given facts there was genuine bonafide belief that work was covered under exemption and reasonable belief could have been formed by appellant about not being required to pay service tax -Provision under VAT laws existed to exempt them from payment of VAT and because of that they were not required to pay VAT and were exempted. Reimbursement was only because of initial deduction by main contractor but subsequently when pointed out that they were exempted from payment of VAT under State VAT laws, said amount was reimbursed. Deduction by main contractor supports view that work was treated as WCS by main contractor and hence he deducted VAT as no VAT was apparently paid. All these facts indicate different interpretations and conflicting views about applicability of VAT - Whole issue is that of interpretation and there was bonafide belief that appellant was not leviable to any service tax and that is why they had not taken registration nor paid any service tax - Case is one where there has been complex interpretation of tax exemptions and statutory entries and in absence of any other strong and cogent grounds, extended period cannot be invoked. SCN has been issued beyond normal period of limitation applicable during material time – Extended period of limitation is not invokable. [Read less]

2026-VIL-1394-CESTAT-MUM-ST | CESTAT SERVICE TAX

Service Tax – Taxability of forfeiture of insurance premiums – Declared Service under Section 66E(e) – Appellant Life Insurance Corporation engaged in provision of life insurance services regularly paid service tax on premium amount received from policy holders – Department identified that where policy holders failed to pay premium for initial three-year period and policies were not revived within two years from first unpaid premium, forfeited premium amounts had not been subjected to service tax – Department interpreted forfeited amount as consideration for tolerating policy holder's breach and classified same as declared service under Section 66E(e) – Whether amount forfeited due to non-payment of premium or mis-declaration by policy holder constitutes taxable consideration for declared service under Section 66E(e) – HELD – Under Insurance Act, 1938 if policy lapses due to non-payment of premium and is not revived then policy does not acquire any surrender value and nothing is payable to policy holder. Similarly, in case of mis-representation by policy holder, insurer can reject claim or terminate policy without any obligation to pay benefit or surrender value. These forms part of regular insurance business between insurer and policy holder and do not involve any specific contract for repudiation or retention of surrender value of premiums paid - Forfeiture of insurance policy is not a separate service but part of insurance contract which becomes void ab initio. There is no service of nature involving arrangement where appellant agreed to obligation to tolerate breach of agreement – CBIC Circular No. 214/1/2023-Service Tax dated 28.02.2023 clarifies that activities contemplated under Section 66E(e) are activities where agreement specifically refers to such activity and there is flow of consideration for such activity. In absence of any contractual obligation or flow of consideration for specific act of tolerating act etc., amount forfeited cannot be treated as another taxable service under declared service category. Forfeiture cannot lead to double taxation as service tax was already paid on original life insurance service – The extended period of limitation is not invokable. Demand of service tax, interest and penalty under Sections 77 and 78 are not sustainable – The impugned order is set aside and appeal is allowed [Read less]

2026-VIL-1393-CESTAT-MUM-ST | CESTAT SERVICE TAX

Service Tax – Reverse Charge Mechanism on Legal Services – Revenue Neutrality – Appellant engaged in hiring construction machinery is registered with service tax authorities for STGU service – During audit department observed that appellant had received legal services from advocates but had not discharged service tax liability on such services under reverse charge mechanism as prescribed in Notification No. 30/2012-ST dated 20.06.2012 – Whether service tax demand on legal services received under reverse charge mechanism is sustainable when appellant is registered for taxable service and is eligible for CENVAT credit on input services – HELD – In respect of services provided by individual advocate or firm of advocates by way of legal services is a taxable service under Sections 65B(44) and 66B of Finance Act, 1994. Payment of service tax was shifted from service provider to service recipient in terms of entry at Section No.5 of Notification No. 30/2012-ST dated 20.06.2012 for administrative expediency. However, appellant is eligible to take CENVAT credit of input services availed in respect of providing taxable output services. Revenue neutral situation arises when service tax is paid on reverse charge mechanism and entire service tax is available as CENVAT credit to registered person. Where appellant could have availed CENVAT credit of service tax paid on reverse charge mechanism, revenue neutral situation arises wherein appellant pays tax and takes credit. By applying principle of revenue neutrality, which is settled in catena of judgments, no demand is sustainable where credit is available to assessee himself as the duty payable is modvatable and there is no revenue implication. Extended period of limitation cannot be invoked based solely on audit objection without establishing suppression of facts or malafide intention. Once demand is not sustainable, interest and penalty under Section 78 of Finance Act, 1994 are not imposable. In case of revenue neutrality, no penalty is imposable under Section 78 – The service tax demand is not sustainable. The impugned order is set aside and the appeal is allowed. [Read less]

2026-VIL-1365-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Beneficiation of coal - Taxability of Activity of beneficiation and washing of coal undertaken by respondent prior to 01.06.2007 - Whether the activity undertaken by respondent is taxable under "Business Auxiliary Service" prior to 01.06.2007 - HELD - It is settled by judicial pronouncements that the activity of beneficiation and washing of coal is a taxable service in relation to mining of minerals only w.e.f. 01.06.2007. Prior to 01.06.2007 the activity undertaken by respondent does not fall under the category of BAS as the same is classified under Mining Service w.e.f. 01.06.2007. Following the principle t... [Read more]

2026-VIL-1363-CESTAT-HYD-ST | CESTAT SERVICE TAX

Service Tax - Scope of Entry No. 9(b) of Notification No. 25/2012-ST dated 20.06.2012 - Services relating to conduct of examination - Appellant conducted various National Level Talent Search Examinations and Olympiad and claimed exemption under Entry No. 9(b) of Notification No. 25/2012-ST as services provided to an educational institution by way of services relating to conduct of examination by such institution - Recovery of service tax on ground that the examinations conducted were optional talent search examinations not forming part of prescribed curriculum of schools and therefore not covered under exemption notification - Whether the services rendered by appellant are covered under Entry No. 9(b) of Notification No. 25/2012-ST or exemption can be denied by importing a condition that examinations should necessarily form part of prescribed curriculum or be Board Examinations - HELD - The Notification uses the expression "services relating to conduct of examination" and not narrower expressions like "services relating to conduct of curriculum examinations" or "Board Examinations". Plain reading shows the legislature consciously employed broad language. The Adjudicating Authority erred in importing an additional condition that examinations should form part of prescribed curriculum which amounts to judicial legislation - The words "relating to" are of wide amplitude and have consistently been interpreted by Courts to include all activities having direct and proximate nexus with principal activity. Preparation of question papers, printing and supply of examination material, OMR sheets, evaluation of answer scripts, tabulation of marks and declaration of results are all integral components of the process of conducting an examination. Once these services are rendered to an educational institution for conducting examinations, they fall squarely within Entry No. 9(b) - The schools are the recipients of service as they identify participating students, collect examination fees, forward list of students, conduct examinations within their premises and deduct tax at source. Merely because benefit of examination ultimately accrues to students cannot alter identity of recipient of service. Recipient is determined by contractual and commercial relationship and not by identifying ultimate beneficiary – Further, the optional nature of participation does not alter identity of recipient of service where educational institution itself engages the service provider for conducting examinations - The exemption notification is beneficial in nature and must be given liberal construction in accordance with object sought to be achieved. When exemption notification speaks of services relating to conduct of examination and not of examinations conducted pursuant to statutory mandate, interpretation limiting its scope is not permissible - The services rendered by appellant are covered by Entry No. 9(b) of Notification No. 25/2012-ST as services provided to educational institutions relating to conduct of examinations. The finding recorded by the Adjudicating Authority denying the exemption is set aside – The appeal is allowed - Service Tax - Extended period of limitation - Invocation on allegation of suppression of facts with intent to evade payment - Whether the extended period of limitation under Section 73(1) of the Finance Act, 1994 was validly invoked on the allegation of suppression of facts with intent to evade payment of Service Tax – HELD - For the Department to invoke extended period of limitation, there must be an active and deliberate act on part of the assessee to evade payment of tax. Mere non-payment of tax without element of intent or suppression is not sufficient to attract extended limitation period - The appellant had maintained regular books of accounts, disclosed receipts in financial statements and Income Tax Returns, and furnished requisite information during investigation. The entire demand was worked out from records maintained by the appellant itself – Further, during the relevant period, divergent judicial opinions existed regarding taxability of examination-related services and the issue travelled to various High Courts. Such divergence of legal opinion itself demonstrates that the dispute was interpretational in nature. Mere adoption of a legal interpretation subsequently found to be incorrect does not amount to suppression of facts or willful mis-statement so as to justify invocation of extended period - The extended period of limitation was wrongly invoked. The demand extending beyond the normal period is liable to be set aside - Service Tax - Penalty - Validity when underlying tax demand is not sustainable - Penalties were imposed under Section 78 (equivalent to tax amount), Section 77 and upon the director of the appellant based on allegation of suppression with intent to evade payment of tax - Whether the penalties imposed under Sections 77 and 78 can survive when the underlying tax demand itself is found to be not sustainable and the extended period invocation is found to be without authority of law - HELD - The penalty under Section 78 was entirely founded upon the allegation of suppression with intent to evade payment of tax. The penalties under Section 77 and upon the Director are only consequential to the principal demand. When the tax demand itself is liable to be set aside, the penalties automatically fall. The material on record clearly establishes that the appellant entertained bonafide belief regarding the applicability of exemption notification. The dispute concerns interpretation of statutory provisions and exemption notifications. There is nothing on record to suggest any deliberate attempt to evade tax. Therefore, even on independent ground, penal consequences would not have been justified - The penalties imposed under Section 77 and 78 as well as upon the Director are not sustainable - Once the demand itself is held to be not sustainable, the penalty cannot survive. [Read less]

2026-VIL-1366-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Manpower supply service - Classification of contract as labour contract or job work - Appellant was engaged to operate plant and machinery and execute the entire manufacturing process by deploying its own labour for production of goods - Whether the activity undertaken by appellant was manpower supply service or contract for job work or manufacture of goods – HELD - The work order must be examined in entirety and not in isolation. Reading the various clauses of the work order as a whole leaves no manner of doubt that it was a work order for labour contract - Though the measure of consideration was on per MT basis, the bills were explicitly stated to be labour bills to be submitted every month and to be paid every month - The settlement of contract clearly reflects consensus ad idem that appellant was appointed as labour contractor. The dominant nature of activity continues to be supply of manpower even when payment is linked to output or productivity - The activity undertaken by appellant constitutes manpower supply service which is taxable under service tax - The impugned order is upheld and the appeal is dismissed - Service Tax - Invocation of extended period on ground of suppression and intent to evade payment - Appellant was well aware of the nature of the contract being labour supply but chose not to disclose and pay service tax - Department seeks to validate demand on basis of Form 16A - Whether extended period of limitation was justified and whether penalty under Section 78 can be upheld - HELD - The appellant was well aware of the nature of contract as labour supply and there was no doubt of any kind. The fact that appellant did not come clean and produce all records justifies that investigation was to be done on basis of accounts available. Form 16A shows that appellant was paid certain sums and tax was deducted from them. The nature of business of appellant is clear from the contract. If the sums received were not for rendering taxable services but for some other purpose, it was for appellant to say so. No such indication was found in the submissions and synopsis of the appellant. The invocation of extended period of limitation was justified as there was willful non-payment of tax with intention to evade. The penalty under Section 78 is also justified - The extended period of limitation was rightly invoked. The penalty under Section 78 imposed by the Adjudicating Authority is sustainable. The impugned order upholding the demand with interest and penalty is upheld. [Read less]

2026-VIL-1376-CESTAT-MUM-CU | CESTAT CUSTOMS

Customs – Majority Order - Valuation of Imported Goods, Renegotiated price – Determination of Transaction Value - Respondent imported polyester chips originally consigned by overseas exporter to another importer at agreed price but the said importer did not clear goods or honour bank letter of credit. Respondent then purchased same goods from overseas exporter at renegotiated price after first import attempt failed. Respondent filed bill of entry declaring assessable value based on price actually paid - Department rejected declared value and assessed goods at original price agreed between overseas exporter and first importer who did not take delivery - Whether value should be determined on basis of original contract price between overseas exporter and initial importer who did not take delivery, or on basis of price actually paid by respondent who took actual delivery and cleared goods from port – HELD – Section 14 of Customs Act, 1962 requires that transaction value shall be price actually paid or payable for goods when sold for export to India for delivery at time and place of importation where buyer and seller are not related and price is sole consideration. Following Supreme Court judgment in Chaudhary Ship Breakers Vs. Commissioner of Customs, Ahmedabad, the adjudicating authority is bound to accept price actually paid or payable as transaction value except where exceptions enumerated in Rule 4(2) are attracted - In present case all parameters of transaction value were satisfied only in transaction between overseas supplier and respondent as initial importer never took delivery, never paid any price to exporter and never filed any bill of entry. Since, the concept of ‘transaction value’ was brought into the statute book w.e.f. 10.10.2007, and the dispute involved in the present case relates to the period January, 2009, it is proper and justifiable in law, that the concept of ‘transaction value’ alone should be adopted for the purpose of ascertaining the customs duty liability. In the case in hand, since all the parameters laid down in the amended Section 14 of the Act of 1962 had been complied with by the respondent, the price actually paid to the overseas supplier for the imported goods should be considered as transaction value. In other words, no interpretation can be placed to upset the declared value as the price paid by the respondent to the overseas supplier is the sole consideration for the sale of the disputed imported goods - The impugned order is upheld and appeal filed by Revenue is dismissed [Read less]

2026-VIL-1391-CESTAT-MUM-CU | CESTAT CUSTOMS

Customs – Customs Broker License Revocation – Violation of Regulations 10(d) and 10(e) of CBLR, 2018 – Appellant Customs Broker holding regular license and customs pass filed B/E for import of goods declared as Yellow Peas under HS Code 0713 1010 with concessional duty – DRI investigation found goods were actually Green Peas which are restricted for import under DGFT Notification dated 18.12.2019 and permitted only through Kolkata port with Minimum Import Price of Rs.200 per Kg CIF – Department initiated action against CB alleging violation of Regulation 10(d) for abetting and colluding with importer to evade DGFT restrictions and of Regulation 10(e) for failing to exercise due diligence – Commissioner of Customs revoked CB license and ordered forfeiture of security deposit along with penalty – HELD – The Appellant-CB filed Bills of Entry as per documents given by importers and approved by them, which included invoices and bill of lading describing goods as Yellow Peas under HS Code 0713 1010. CB cannot be held liable for misdeclaration when filing BOE based on documents provided and approved by importer - Regarding Regulation 10(e), CB did not impart information to clients about description; rather, such information was provided by importers to CB as reflected in invoice and bill of lading. Therefore CB cannot be held liable for failure to exercise due diligence in imparting information as CB merely acted on documents provided by importer - The restrictions on various types of peas created doubts in understanding of import policy; while initially all peas were restricted, subsequently import policy for Yellow Peas was made free subject to IMS registration but other peas remained restricted; such changes through series of amendments could have created doubts in minds of importers or CBs. The misdeclaration was discovered by DRI during investigation after clearance and was not identified by customs officers at port of import prior to clearance, demonstrating that such violation was not identifiable at time of customs clearance by CB or port authorities - CB was not expected to be equipped with knowledge of all DGFT import restrictions and cannot be expected to verify every provision of Foreign Trade Policy beyond documents provided by importer. The impugned order contained inconsistencies with references to different SCN dates and inquiry report dates showing lack of proper appreciation of facts – Violation of Regulation 10(d) is not sustainable. Violation of Regulation 10(e) is not sustainable. Revocation of CB license is set aside. Forfeiture of security deposit and penalty is set aside – The appeal is allowed [Read less]

2026-VIL-1381-CESTAT-HYD-CE | CESTAT CENTRAL EXCISE

Central Excise – Refund of Pre-deposit and Interest Entitlement – Appellant had deposited amount as pre-deposit in year 2009 under Section 35FF of Central Excise Act, 1944. After Tribunal passed final order, appellant sought refund of deposited amount along with interest in January 2025. Original authority and Commissioner (Appeals) sanctioned principal refund amount but denied interest. Ground for denial of interest was that only pre-deposits made on or after 06.08.2014 are entitled to interest from date of deposit, and since refund was paid within three months from date of refund application, no interest was payable ... [Read more]

2026-VIL-1367-CESTAT-BLR-CU | CESTAT CUSTOMS

Customs - Courier service - Liability for connivance in movement of contravened goods - Whether the courier service can be held liable for having connived with movement of contravened goods – HELD - Investigation revealed that three persons were masterminds behind entire smuggling operations and they admitted their role in matter. No evidence has been brought on record to implicate the courier service. The accused persons have not at any stage alleged that the authorized courier was aware of presence of gold in consignment - The contraband could be found out only when subjected to X-ray test on arrival at courier cell of... [Read more]

2026-VIL-1390-CESTAT-BLR-CU | CESTAT CUSTOMS

Customs – Classification and duty rate on Iron Ore Fines export – Determination of Fe (iron) content – Appellant exported Iron Ore Fines via shipping bills declaring Fe content below 62% and paid concessional export duty as per applicable notification – Revenue initiated proceedings for demanding differential duty alleging misdeclaration in Fe content and produced test reports showing Fe content above 62% – Whether determination of Fe content should be based on test reports conducted months after export on dry basis or on condition of goods as exported at the time of shipment – HELD – The issue is no more res integra and settled by Supreme Court judgment in Union of India Vs. Gangadhar Narsingdas Aggarwal wherein it is held that percentage of iron content must be determined in the condition in which goods were exported and duty is relatable to weight of commodity at relevant point of time. Determination of Fe content must be on basis of weight of goods as they existed at time of export and not after ignoring moisture. When goods are tested after considerable lapse of time from export date, moisture content in iron ore gradually evaporates and percentage of iron content would increase, making such delayed test reports unreliable. Test reports conducted on dry basis at considerable time gap after export cannot be accepted as they do not reflect condition of goods at time of export - Appellant had submitted certificates from reputed organizations accredited by NABL which were tested on moist basis and showed Fe content less than 62% at time of export. Test reports from destination port also corroborated Fe content below 62% - Revenue should have accepted test certificates submitted by appellant from recognized testing organizations. Denial of request for re-test was denial of principles of Natural Justice. Assessment should be based on credible test reports corresponding to export goods in condition goods were exported. Revenue has failed to establish that Fe content was above 62% at time of export. Tribunal's earlier decision in Mineral Enterprises Ltd. case on same facts and issues established that test reports should reflect condition of goods as exported – The differential duty demand is not sustainable. The impugned order is set aside and the appeal is allowed [Read less]

2026-VIL-1368-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs - Penalty for mis-declaration and fraudulent importation - Role and liability of Customs Broker - Customs Broker and its G-Card Holder filed Bills of Entry for consignments of baby garments imported by a trader – DRI alleged mis-declaration with respect to quantity of the declared goods and fraudulent importation. The appellant-Customs Broker was proposed for penal action under Sections 112(a), 112(b) and 114AA of the Customs Act, 1962 - Whether penalties under Section 112(a)(ii) of the Customs Act, 1962 could be imposed on the Customs Broker for its role in the alleged mis-declaration and fraudulent importation ... [Read more]

2026-VIL-129-AAR | Advance Ruling Authority SGST

GST – Karnataka AAR - Classification of Service of loading of Ballast into Railway Wagons – Works Contract or Composite Supply – Applicant engaged in executing contracts for Indian Railways including supply and loading of ballast stacked adjacent railway tracks into railway wagons using JCB loader - Whether activity of loading ballast already owned by Railways into railway wagons constitutes works contract or composite supply with ballast, or is independent service subject to separate classification and rate – HELD – The definition of works contract under Section 2(119) of CGST Act, 2017 requires activity to involve building, construction, fabrication, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property with transfer of property in goods. Activity of supplying and loading ballast does not involve any such activity in relation to immovable property and therefore does not satisfy essential conditions of works contract - Supply of ballast and loading activity are separate and independently identifiable supplies since Letter of Acceptance prescribes separate rates for each item, separate invoices are raised at different points in time – The ownership of ballast transferred to Railways at delivery after which applicant has no custody or liability for ballast, and loading activity is executed subsequently only on separate instructions from Railways – The Composite supply under Section 2(30) requires supplies to be naturally bundled and supplied in conjunction with each other in ordinary course of business and one to be principal supply. In the present case, the supplies fail to satisfy requirement of being naturally bundled as contractual arrangement itself treats activities as separate obligations with distinct rates, separate consideration, and separate execution – The activity of ballast at Railway depot or nominated location and loading of Railway’s ballast collected at yard/depot into Railway wagons using Mechanical Loader constitute separate and independent supplies and cannot be regarded as a composite supply merely because both activities emanate from the same work order - From the nature of the activity, the scope of Heading 9967, and the Explanatory Notes to Group 99671 relating to cargo handling services, the activity of loading ballast into Railway wagons by using JCBs is appropriately classifiable under SAC 996719– “Other cargo and baggage handling services” falling under Heading 9967 as “Supporting services in transport”. The said service is liable to GST at the rate of 18% in terms of Entry No. 11 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended – Ordered accordingly [Read less]

2026-VIL-836-CHG | High Court SGST

GST - Input Tax Credit Fraud - Bail Application - Custodial Detention - Applicant was arrested in connection with investigation into alleged Input Tax Credit fraud relating to availing and passing on of fake ITC - Applicant applied for regular bail contending that essential ingredients of offence are not made out, investigation is complete, final complaint has been filed, entire case is based on documentary evidence already in custody of Department, and no further custodial detention is warranted - Whether regular bail should be granted when investigation is completed, final complaint is filed, and entire prosecution case ... [Read more]

2026-VIL-777-RAJ | High Court SGST

GST - Condonation of delay in filing statutory appeal - Non-communication of order and denial of personal hearing - Whether delay in filing statutory appeal beyond prescribed period can be condoned when impugned order was not effectively communicated to the taxpayer and mandatory personal hearing was denied - HELD - While the Appellate Authority is bound by statutory provisions of limitation provided under Section 107 of CGST Act 2017, considering the reasons for non-filing of appeal being beyond the control of the petitioner, non-adjudication of the appeal on merits would cause grave injury and prejudice. The delay is bon... [Read more]

2026-VIL-1380-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise – Valuation of Goods Cleared to Related Parties - During relevant period, Appellant cleared granulated slag to joint venture at lower rates than rates charged from independent buyers. Department issued EA-2000 audit and deficiency memo alleging that Appellant cleared granulated slag at lower rates to joint venture. Subsequently Show Cause Notice was issued invoking extended period of limitation proposing demand alleging that Rule 10(b) of Central Excise Valuation Rules applicable only when goods solely cleared to interconnected units and since Appellant cleared goods to both joint venture and independent b... [Read more]

2026-VIL-1369-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs - Revocation of Customs Broker License and forfeiture of security deposit for alleged violations of KYC and due diligence requirements under Customs Brokers Licensing Regulations – Overvaluation of export goods to avail undue benefits under the MEIS and Duty Drawback Scheme - Whether the Customs Broker License could be revoked and security deposit forfeited for alleged violations of Regulations 10(d), 10(e), 10(m) and 10(n) CBLR, 2018 in relation to alleged overvaluation of exported goods by the exporter - HELD - There is no valid offence report as contemplated under Regulation 17 of CBLR, 2018 and in the absence of a valid offence report, the revocation proceedings initiated under CBLR, 2018 are not sustainable. There is no evidence brought on record showing connivance, knowledge or involvement of the Appellant in the alleged overvaluation - A Customs Broker cannot be expected to function as an investigating agency and verify whether the valuation adopted by the Customs Broker for the goods exported are proper or not. The Customs Broker filed export documents before the Customs authorities on the basis of the documents furnished by the exporter. The shipping bills were assessed by Customs officers and Let Export Orders were issued after examination and clearance by the Customs authorities. The Customs Broker cannot be held responsible if at a later stage, the goods exported were found to be overvalued - The Customs Broker cannot be penalized merely because at a later stage, the exporter is alleged to have indulged in irregularities, particularly when the Appellant had completed KYC verification and acted upon documents appearing genuine on their face. The Customs Broker is a processing agent of documents and is not an inspector to weigh the genuineness of the transaction - The appellant has not violated any of the provisions of Regulations 10(d), 10(e), 10(m) and 10(n) of the CBLR, 2018 - The impugned order revoking the License, forfeiting the security deposit and imposing penalty on the appellant is set aside and the appeal is allowed [Read less]

2026-VIL-45-GSTAT-HYD | Tribunal SGST

GST - Pre-deposit requirement in cases involving only penalty, Validity of Retrospective application of amendment to Section 112(8) of CGST Act, 2017 to period prior to 01.10.2025 - Appellant preferred appeal before Tribunal but Registry pointed defects and raised question of statutory pre-deposit requirement. Appellant contended that the impugned order involved only penalty without any tax demand, and that pre-deposit requirement under proviso to Section 112(8) was introduced by Finance Act 2025 effective from 01.10.2025 whereas impugned order was issued on 12.01.2024, prior to such amendment - Whether statutory pre-deposit is required under Section 112(8) of CGST Act for an appeal against order demanding only penalty when such order was issued prior to 01.10.2025 - HELD – The proviso to Section 112(8) was effective from 01.10.2025 vide Finance Act, 2025 dated 29.03.2025, wherein pre-deposit was prescribed in cases where issue involved is only the penalty - In the present case, the SCN was issued on 29.09.2022, Order-in-Original was issued on 28.08.2023 and impugned order was issued on 12.01.2024. Thus, the impugned order was issued very much before the amendment became effective i.e. 01.10.2025 - The requirement of pre-deposit in cases involving only penalty before the amendment became effective was decided by the High Court of Calcutta which held that where the appeal is carried against an order pertaining only to penalty and there is no amount of tax in dispute, no requirement for making any pre-deposit exists - When a statute provides for a right to prefer appeal, conditions can limit such right but non-existent conditions affecting substantive rights cannot be imported into statute by any authority. The amendment to proviso of Section 112(8) by Finance Act 2025 effective from 01.10.2025 did not indicate any retrospective application or necessary implication - As the impugned order was issued much before 01.10.2025, the requirement of pre-deposit shall not be applicable - No pre-deposit is required to be made for admission of the appeal in the present case – Ordered accordingly [Read less]

2026-VIL-781-KER | High Court SGST

GST – Service of Notice on Common Portal – Petitioner contended that notices issued by uploading in common portal in terms of Section 169(1)(d) of the CGST Act, 2017 were not validly served as common portal was not specifically notified under Section 146 of CGST Act for purpose of serving notice under Section 169(1)(d) - Whether notices uploaded on common portal without specific notification under Section 146 of CGST Act identifying portal for service of notice under Section 169(1)(d) constitute valid service of notice – HELD – Section 169(1)(d) provides for service of notice through common portal but Section 146 o... [Read more]

2026-VIL-783-P&H | High Court VAT

Haryana General Sales Tax Rules, 1975 - Tax Concession – New Industrial Unit vs Expansion Unit – Classification and Eligibility – Appellant established manufacturing unit in 2000-2001 for manufacturing switches and other automobile parts. Appellant applied for tax concession claiming to be a new industrial unit under Rule 28C of the Haryana General Sales Tax Rules, 1975. Department rejected claim on ground that Appellant already had existing unit at Sonepat established in 1989 and that Gurugram unit was expansion of existing unit rather than new unit - Whether separate manufacturing unit at different location manufacturing both same items and different items can be treated as new industrial unit or should be classified as expansion of existing unit – HELD – The Rule 28C(3)(f) defines expansion as industrial capacity set up during operative period creating additional production facilities for manufacture of same product as unit before expansion with additional fixed capital investment exceeding 25% of fixed capital investment of unit before expansion at same or new location. Rule 28C(k) defines new industrial unit as unit set up in State which has come into commercial production during operative period or having come into commercial production under prior Rule has not started availing any tax concessions - Appellant had existing unit at Sonepat since 1989 but had not availed any tax exemption for said unit. The mere fact that Appellant had existing unit earlier does not preclude it from being treated as new industrial unit for purposes of tax concession if it had not availed concession for existing unit. The application was considered on merits and accepted but classified as expansion rather than new unit. Tribunal erred in affirming view restricting tax exemption by treating appellant as existing unit undertaking expansion – The impugned order is set aside and matter is remitted to Tribunal for fresh adjudication - The appeal succeeds and allowed [Read less]

2026-VIL-1379-CESTAT-CHE-CU | CESTAT CUSTOMS

Customs – Valuation of Imported Goods – Related Parties and Administrative Control – Respondent imported bioceramics from Malaysia. Department alleged that Conybio Malaysia was real supplier and had administrative and financial control over Respondent company despite imports shown as from third party suppliers - Respondent contended aborted investment proposal did not materialize and no shares were ever allotted. Whether correspondence and requests for share certificates establish that Conybio Malaysia had administrative and financial control over Respondent – HELD – Adjudicating authority's finding that Conybio Malaysia had active participation rested entirely on correspondence requesting share certificates. In absence of evidence on record that share certificates were actually allotted or requests were complied with, mere requests cannot establish allotment of shares. Assumption that request for share certificate would arise only upon allotment of shares lacks evidentiary foundation. Being limited company registered under Companies Act, it would not be difficult to ascertain whether Malaysian personnel were shareholders if they actually were. Correspondence constituted part of aborted investment proposal which did not fructify and allotted no shares. Finding that Conybio Malaysia had administrative and financial control has no basis – The finding is set aside - Valuation of Imported Goods – Actual Supplier and Parallel Invoices – Department contended that Conybio Malaysia was actual supplier of goods imported and showed as from Bryncoch Malaysia, and alleged that parallel invoices at fifty percent higher prices proved undervaluation. Respondent submitted that parallel invoices were proforma invoices raised during aborted investment proposal and payment was made only to Bryncoch at invoiced prices without any excess remittance - Whether parallel invoices without evidence of actual payment or share allotment can constitute valid evidence of undervaluation – HELD – Adjudicating authority accepted parallel invoices as evidence despite allegation that undervaluation would be adjusted through share allotment which never occurred. Allegations that payments made for suppressed value lack supporting evidence of any remittances in excess of invoiced prices. Tribunal in Oswal Metal Works held that proforma invoices can never be basis for alleging undervaluation without supporting evidence of flowback of consideration. Charge of undervaluation based on proforma invoices without evidence of actual payment or share transfer is not sustainable. Business was at incipient stage and certain mix-ups cannot question legitimacy of transactions without evidence. Non-audited Statement of Accounts cannot lend authenticity to transactions – Confirmation of demand based on parallel invoices is not sustainable - Valuation of Imported Goods – Related Parties – Artificial Persons vs Natural Persons – Department alleged that directors of Rekamacro Resources were brother and mother of Respondent's president and concluded parties were related family members. Respondent contended that concept of members of same family under Rule 2(2)(viii) applies only to natural persons and not to artificial persons. Whether artificial persons like limited companies and Respondent can be related parties based on family connections of their individual directors and shareholders – HELD – Supreme Court in Alembic Glass Industries held that limited company is juridical person separate from its shareholders and directors and common directorship is no ground to treat companies as related. Cooper Pharma case held that limited company cannot be treated as related person based only on blood relations of shareholders/directors. Rule 2(2)(viii) concept of family members applies only to natural persons and not artificial persons. Relationship between Respondent and Malaysian companies through family connections of individuals is not sufficient to establish parties as related under Rule 2(2). Department failed to establish relationship under any clause of Rule 2(2) – Finding that Reka Network and Rekamacro Resources are related parties is not legally sustainable - Customs – Valuation – Retail Selling Price – Post-Import Redetermination – Respondent declared RSP for imported goods but Department redetermined RSP claiming misdeclaration. Respondent submitted details of invoices on which revised RSP was based were not furnished and prior to March 2008 no statutory provision existed for post-import redetermination of RSP. Whether Department can redetermine RSP post-import without statutory mechanism and without furnishing supporting documents to importer – HELD – No statutory machinery existed for redetermining RSP of imported goods prior to 01.03.2008. Section 4A Subsection 4 ascertaining or redetermining RSP was introduced only from 14.05.2003 and prescribed rules were notified only on 01.03.2008. During period prior to March 2008 no methodology was available for reassessing or redetermining RSP. Documentary evidence on which RSP was adopted/revised was not furnished to Respondent despite specific request, causing serious prejudice and negating principles of natural justice. Tribunal in Acer India case held there is no machinery or provisions for ascertaining RSP when RSP not declared by importer on imported articles. Demand based on RSP is unsustainable – Demand for Additional Duty based on RSP is set aside - Classification of Goods – Medicament vs Skin-Care Product – Department reclassified product Cony Takara from CTH 3004 (Medicament) to CTH 3304 (Skin-Care Product). Respondent contended that product possessed therapeutic and curative attributes being a foot-care sheet that promotes blood circulation and detoxification, placing it on skin, thereby meriting classification as medicament. Whether product with curative attributes for treating pain and promoting blood circulation should be classified as skin-care product – HELD – HSN Explanatory Notes for CTH 3004 specifically cover measured doses including in transdermal administrative form as patches for direct application to skin for therapeutic or prophylactic use. Supreme Court in Ciens Labs case held that when product contains pharmaceutical ingredients with therapeutic or curative properties, curative attributes render product a medicament not cosmetic. Product's primary function is cure not care and contains curative ingredients, it must be branded medicament. Adjudicating authority's finding that product is foot-care sheet with therapeutic attributes but classified as skin-care product lacks reasoning and explanation. Product used when person is in pain to ease pain and activate blood circulation is medicament for cure not skin-care product. Reclassification under CTH 3304 is not correct – Product Cony Takara merits classification under CTH 3004 as Medicament - Customs – Cross-Objections – Scope and Maintainability under Customs Act – Appellant Principal Commissioner of Customs challenged non-imposition of redemption fine in common order. Respondent importer filed cross-objections contesting substantive portions of order including charges of undervaluation and reclassification. Revenue raised preliminary objection that cross-objection scope is restricted to points raised in revenue appeal and cannot challenge entire order. Whether cross-objections filed under Section 129A(4) of Customs Act can be used to challenge substantive portions of adjudicating authority order beyond points raised in appeal filed by other party – HELD – Section 129A(4) clearly provides that Respondent in an appeal filed by other party can file cross-objections against any part of order appealed against within 45 days and CESTAT is obliged to dispose of cross-objection as if it were an appeal. Statutory provision employs clear and categorical language conferring right to contest order as whole or part thereof in addition to contesting grounds raised in appeal memorandum. Trib [Read less]

2026-VIL-835-BOM | High Court SGST

GST – Dismissal of Appeal due to shortfall in statutory Pre-deposit - Procedural Defect - Petitioner preferred an appeal before Appellate Authority. However, there was shortfall of pre-deposit of 10%. Petitioner deposited the shortfall amount within the grace period of one month prescribed under statute. Notwithstanding the completion of pre-deposit within the grace period, the Appellate Authority dismissed the appeal on the sole ground that pre-deposit was not made at the time of filing of appeal - Whether an appeal can be dismissed solely on the ground of failure to make statutory pre-deposit of 10% under Section 107(6... [Read more]

2026-VIL-780-KER | High Court SGST

GST – Validity of issue of Composite Notice for Multiple Assessment Years – Whether single consolidated Show Cause Notice covering multiple assessment years can be legally issued or separate notices are required for each assessment year – HELD – In Joint Commissioner (Intelligence & Enforcement) Vs. M/s. Lakshmi Mobiles Accessories and Tharayil Medicals Vs. Deputy Commissioner, Audit Division, Division Bench of Kerala High Court held that issuance of composite notice for multiple assessment years is not legally sustainable. Separate Show Cause Notice is required to be issued for each assessment year - The consolida... [Read more]

2026-VIL-1364-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax – Liability of Sub-contractor, Applicability of Extended Period of Limitation – Whether sub-contractor is liable to pay service tax on services provided to main contractor when principal contractor has already discharged service tax liability and whether extended period of limitation under Section 73(1) proviso can be invoked – HELD – On merits the issue is covered by decision of Larger Bench in CST New Delhi vs Melange Developers Pvt Limited establishing that even if main contractor has discharged service tax liability, it does not discharge sub-contractor of its independent obligation of paying tax on... [Read more]

2026-VIL-838-ALH-ST | High Court SERVICE TAX

Service Tax - Rejection of Refund on new ground – Refund of service tax deposited on sale of flats which were cancelled - Tribunal allowed the appeal and held that the refund applications were proper, that refund was a right that had accrued in favour of the petitioner - When matter came back before adjudicating authority for processing the refund, a fresh impugned order was passed rejecting the refund on a different ground altogether. This ground was never put to the petitioner by way of show cause notice - Whether after Tribunal has decided the substantive issue and directed refund with consequential relief, the adjudi... [Read more]

2026-VIL-837-UTR | High Court SGST

GST - Section 29(2) of the CGST Act, 2017 - Cancellation of registration for filing of NIL returns – Validity of cancellation of registration on the ground of filing NIL returns for several months - HELD – The powers to cancel the registration can be exercised only in the circumstances enumerated under Sub-Section (2) of Section 29, which does not contemplate cancelation of the registration on the ground of filing of NIL return – Since the filing of NIL returns is not a circumstance contemplated by sub-section (2) of section 29 for cancellation of registration, the show-cause notice and the order cancelling registrat... [Read more]

2026-VIL-839-MAD-CE | High Court CENTRAL EXCISE

Central Excise – Manufacture, CENVAT credit of Customs Duty and Countervailing Duty paid through DEPB scrips, Plea of revenue neutrality – Excisability of process of placing imported ready-to-use film rolls in printed cartons with brand name and maximum retail price amounts to manufacture and whether the extended period of limitation is invocable - HELD - The issue of excisability of goods is intrinsically connected with the rate of duty and the question of manufacture was the primary issue raised. The Respondent-assessee having not assailed the findings of the Original Authority on the issue of manufacture and excisability and having only confined its challenge before the Tribunal to the alternate plea of revenue neutrality, thereby accepting the finding on manufacture, the excisability of goods is no longer an issue for determination - For the period upto 31.08.2004, CENVAT credit could not be availed for Customs Duty and Countervailing Duty paid through debit of DEPB scrips and unless duty was paid in cash, CENVAT credit was not available. The value of DEPB scrip, once used, gets extinguished and there would be no question of seeking CENVAT credit thereafter - Since the Respondent pleaded revenue neutrality, the burden was on the Respondent to place supporting materials to establish that CENVAT credit of Customs Duty and Countervailing Duty paid through DEPB scrips was equal to or exceeded the amount of duty demanded. The findings of the Original Authority on deliberate suppression of facts with intention to evade payment of duty and that plea of bona fide belief was not made out are based on evidence and material on record. The extended period of limitation under Section 11A of the Central Excise Act was correctly invoked - The Tribunal's finding that the demand was barred by limitation is patently unreasonable and unsustainable. Penalty and interest imposed by the Original Authority are sustainable - The order passed by the Tribunal is set aside. The Final Order of the Original Authority confirming the demand for Central Excise Duty, interest and penalty is confirmed – The Revenue appeal is allowed [Read less]

2026-VIL-782-RAJ | High Court SGST

GST – Reply of SCN after prescribed due date, Opportunity of Hearing under Section 75(4) of the CGST Act – Petitioner filed reply to Show Cause Notice after due date and requested personal hearing. Authority passed assessment order without considering reply or granting personal hearing, proceeding on ground that no reply was filed within stipulated time - Whether opportunity of personal hearing must be granted where reply and request for hearing are received after prescribed due date but before order is passed – HELD – The Section 75(4) of CGST Act provides that opportunity of hearing shall be granted where written... [Read more]

High Court Judgement | High Court SGST

GST - Discrepancy in place of delivery in E-Way Bill - Evidentiary value of statement of driver not recorded in Form GST MOV-01 – During transit, the vehicle was intercepted by the respondent authorities on the ground that the place of delivery mentioned in the E-Way Bill was different from the place where the goods were being transported - Seizure order was passed under Section 129(1) of the CGST Act, 2017 and a show cause notice was issued under Section 129(3) for imposing penalty - The petitioner contended that the discrepancy was a technical error occurred due to a glitch in the software system and that the statement of the driver relied upon by the authorities was not recorded in the prescribed Form GST MOV-01 and therefore has no evidentiary value - Whether a statement of the driver recorded on a plain sheet of paper and not in the prescribed statutory Form GST MOV-01 can be relied upon to support findings against the taxpayer - HELD - A statement recorded otherwise than in the prescribed Form GST MOV-01 is of very little evidentiary value and cannot be relied upon for making findings adverse to the taxpayer. The statutory scheme specifically prescribes Form GST MOV-01 for recording the statement of the owner, driver or the person in charge of the goods and conveyance. A statement recorded on a plain sheet of paper lacks the prescribed statutory format and sanctity. Such statements devoid of any evidentiary value inasmuch as the statutory scheme specifically prescribes the form for recording such statements - The impugned orders suffered from manifest procedural irregularity and warrant interference - The impugned order is set aside and the matter is remitted to the appellate authority for fresh decision – The petition is allowed - GST - Obligation of the Appellate authority to consider and deal with grounds raised in memorandum of appeal - Petitioner raised specific grounds in the memorandum of appeal assailing the detention and penalty order, including that the discrepancy was a bona fide technical error, there was no intention to evade tax, and the statement of driver had no evidentiary value as it was not recorded in Form GST MOV-01 - Whether the appellate authority was obliged to consider and deal with the grounds raised by the petitioner in the memorandum of appeal - HELD - Once specific grounds are raised in the memorandum of appeal, the appellate authority is duty-bound to accord due consideration to each of them. The authority may either accept or reject the contentions on merits, but it cannot brush them aside without assigning reasons - The right of appeal is a valuable statutory right and the appellate authority is obliged to deal with every material contention raised by the appellant by passing a reasoned and speaking order. The appellate authority cannot conveniently overlook and fail to deal with the grounds raised while affirming the order of the Original Authority. Failure to consider and address the grounds raised constitutes a grave procedural irregularity - The appellate order which failed to deal with the grounds raised warranted interference by the court. The matter is remitted to the appellate authority to pass fresh orders after affording an opportunity of hearing to the petitioner and after taking into consideration each and every contention raised. [Read less]

2026-VIL-786-GUJ-CU | High Court CUSTOMS

Customs - Duty Drawback on importing nuts, bolts, washer, hand tools, etc., that fall under ‘scaffolding items’ - Classification of Scaffolding Items - Limitation Period - Petitioner imported nuts, bolts, washers, hand tools classified under Chapter Headings 7318, 8205, 3926 of Customs Tariff Act and claimed duty drawback. Show cause notice by DRI alleging mis-declaration and wrong classification of goods under Chapter Heading 7308 instead of the claimed headings - Whether show cause notice can be issued after expiry of three years from the date of payment of duty drawback when the proper officer had already cleared th... [Read more]

2026-VIL-1371-CESTAT-MUM-ST | CESTAT SERVICE TAX

Service Tax – Taxability of Leasing of equipment - Deemed sale or supply of taxable service - Appellant collected lease rental charges from dealers and distributors on account of supply of computerized tinting machines used for mixing base paint with colour shades - Department interpreted the leasing activity as taxable service under category of Banking and Other Financial Services for leasing of equipment and raised service tax demand invoking extended period of limitation - Whether the leasing of tinting machines to dealers and distributors constitutes a taxable service or a deemed sale not liable to service tax - HELD - For determining whether a transaction involves transfer of right to use goods, the five-point criteria established by the Supreme Court in BSNL case must be examined. The agreement entered into by the appellant with dealers and distributors satisfied all five conditions laid down by the Supreme Court - The lease agreement specifically provided that goods are identified and delivered to lessee with acknowledgment of receipt, lessee uses equipment without intervention of lessor in daily activities, lease rentals are paid by lessee to lessor, equipment is kept and used only at lessee's premises and is returned upon completion of lease period in same condition - The CBIC Circular No. 198/08/2016-ST dated 17.08.2016 clarified that where goods or equipment is given under lease arrangement wherein both possession and effective control have been handed over to lessee, it would be categorised as deemed sale leviable to VAT and service tax will not be charged on such activities. The fact that VAT was already paid by the Appellant on lease rental charges and reflected in periodical VAT returns acknowledged that these activities are in nature of deemed sale not taxable service - In present case operating lease constitute deemed sale. The activities undertaken by appellant do not amount to taxable service under Finance Act, 1994. Extended period of limitation cannot be invoked for interpretation of law issues. Penalty cannot be imposed when service tax demand is not sustainable on merits - The impugned order is set aside and the appeal is allowed [Read less]

2026-VIL-1375-CESTAT-MUM-CE | CESTAT CENTRAL EXCISE

Central Excise – Demand of amount of 6% of the value of generated electricity - Department initiated proceedings treating electricity as exempted goods and demanded payment of amount equal to six percent of value of electricity sold under Rule 6(3) of CENVAT Credit Rules, 2004 - Whether electricity produced from bagasse and sold should attract payment of six percent under Rule 6(3) of CENVAT Credit Rules, 2004 – HELD – An identical dispute had been decided by the Commissioner in order passed wherein it was held that electricity produced from bagasse by assessees and sold cannot be subjected to payment of amount equal... [Read more]

2026-VIL-1374-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Foreign bank charges and place of provision of service - Appellant had not paid service tax on foreign bank charges and finance cost paid in foreign currency during period 2015 to March 2017 - Department issued notice demanding service tax under Section 66A, 68, 69 and 70 of Finance Act, 1994 - Whether foreign bank charges paid by exporter constitute taxable service in India and leviable under Reverse Charge Mechanism - HELD - The foreign bank of the buyer provided service to its client i.e. the buyer who has a letter of credit facility with the foreign bank after retaining its charges and commission, the net... [Read more]

2026-VIL-785-GUJ-CE | High Court CENTRAL EXCISE

Central Excise - Manufacture - Scope of remand by CESTAT - Petitioner filed appeals before CESTAT challenging levy of excise duty on activity of putting together components of CNG/LPG kit and packing such parts in a box and selling such items under description of automobile conversion kit - CESTAT after hearing the parties on merits, held that the Appellant is entitled to benefit of duty price and remanded the matter to adjudicating authority for re-quantifying the demand, without examining whether the levy of duty itself was justified - Whether the CESTAT can remand the matter for quantification when the levy of the duty ... [Read more]

2026-VIL-1370-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Determination of status as manufacturer vs trader - Applicability of representations made to secure business orders - The appellants were engaged in the business of trading and supplying goods and represented themselves to Power Supply Corporations as manufacturers for the purpose of securing orders – Dept alleged that the appellants were actual manufacturers and demanded duty invoking extended period - Whether the appellants were manufacturers or traders of the goods in question and whether Central Excise duty should be demanded from them based on their representations as manufacturers to Power Supply C... [Read more]

2026-VIL-1377-CESTAT-MUM-ST | CESTAT SERVICE TAX

Service Tax – Limitation and Condonation of Delay, Exclusion of period of insanity – Commissioner (Appeals) rejected appeal on grounds that appeal was filed with delay that could not be condoned as permissible delay of thirty days had also been exhausted - Appellant furnished certificate of Psychiatrist and supporting medical prescriptions, death certificate of Director's mother and WHO guidelines on mental and neurological illness - Whether period of mental incapacity constitutes legal disability under Section 6 of Indian Limitation Act and can be excluded from computation period for condonation of delay – HELD – ... [Read more]

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